in full - 早报 · 2013. 5. 13. · yhi international limited annual report 2007 0:0 2000 2003...

In FullYHI INTERNATIONAL LIMITED Listed on the mainboard of the Singapore Exchange

Company Registration Number 200007455H

ANNUAL REPORT 2007

YHI INTERNATIONAL LIMITED ANNUAL REPORT 2007 0:0�

2000 2003 2006

1948

19961999

1970s

Our second alloy wheels manufacturing plant was set up in Shanghai, China

We were officially listed on the Singapore Exchange on 3 July 2003

We expanded our alloy wheels manufacturing capabilities with 2 more facilities located in Suzhou, China and Sepang, Malaysia

For 5 consecutive years from 1995, we were awarded the Enterprise 50 Awards and were presented with the Grand Five-Year Award in 1999

We established our first alloy wheels manufacturing plant in Taiwan

Our story began in 1948, when we started as a sole proprietorship

We acquired the rights to distribute major brands like Yokohama Tyres, Enkei Wheels and Hitachi Batteries

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CONTENTS

Five-Year Financial Highlights 0:02Financial Summary 0:03

Corporate Profile 0:11Group Managing Director’s Message 0:12

Board of Directors 0:16Corporate Structure 0:18

Heads of Subsidiaries & Key Officers 0:22Manufacturing Milestones 0:24

Financial Calendar & Corporate Information 0:26Review of Operations 0:28

Corporate Governance Report 0:32Financial Report 0:39

At YHI, our aim is to continuously provide our customers with quality products and distinctive customer services so as to build strong customer relationships. We also aim to provide growth and opportunities for our employees and to consistently generate stable returns to our shareholders. We will achieve these goals through our organisation-wide commitment to quality, professional and personnel management, sound business practices and teamwork.

MISSION STATEMENT

2008

1990s

1980s

2007Our Group Managing Director, Mr Richard Tay, was presented with the 2007 Ernst & Young Manufacturing Entrepreneur of the Year Award

We will continue to race ahead and work towards expanding our global presence to make YHI an international entity

We expanded our market presence into North East Asia and Oceania

and beyond

We moved from being a retailer to a distributor and penetrated into new markets in the Asean region


Five-Year Financial Highlights

Our Track RecordsSince our listing in 2003, we have been delivering commendable performance in Revenue and Earnings and we will continue to achieve better growth year-on-year.

Distribution Manufacturing

Oceania and others

North East AsiaASEAN

220.

7

291.

3

3

34.8

37

5.2 4

26.9

2003

2004

2005

2006

2007

2003

2004

2005

2006

2007

161.

958

.8

207.

184

.2

237.

097

.8

263.

611

1.6

2003

2004

2005

2006

2007

97.6

85.1

38.0

115.

4 133.

242

.7

123.

5 146.

165

.2

135.

5 150.

789

.0

2003

2004

2005

2006

2007

2003

2004

2005

200

6

2007

9.6

5.0

11.3

9.0

14.7

10.8

15.7

11.8

*

6.4

6.1

2.1

7.0

10.5

2.8

10.4

12.0

3.1

8.1

15.7

*3.

714.6

20.3

25.5 27

.5 *

Group Revenue (S$ ’million)

Revenue byBusiness Segments(S$ ’million)

Revenue byGeographical Markets (S$ ’million)

Group PAT (S$ ’million)

PAT byBusiness Segments(S$ ’million)

PAT byGeographical Markets (S$ ’million)

274.

115

2.8

151.

316

2.3

113.

3

26.3

19.2

7.1

14.6

7.8

3.9

* FY2006 PAT included a one-time gain in negative goodwill effect of S$5.4 million

2003

2004

2005

2006

2007

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Financial Summary

Explanatory Notes:

1 The above table present a summary of our actual and proforma financial data. The proforma data presented in the above table have been prepared as if our Group’s corporate structure as at the date of the proforma financial information had been in existence since 1 January 2003. Our proforma financial information reflects the results of operations and financial position of the businesses and subsidiaries transferred to us pursuant to the Restructuring Exercise as described in our Prospectus dated 24 June 2003. The objective of the proforma financial information is to show what our historical information might have been had our Group, as restructured, existed at an earlier date.

The proforma financial statements of the Group, because of their nature, may not give a true picture of the Group’s financial position or results. The proforma financial statements of the Group are not necessarily indicative of results of the operations or related effects on the financial position that would have been attained had the Group actually existed earlier.

2 The Group’s earnings per share for FY2003 and FY2004 are restated and adjusted for comparative purposes to reflect the share split and the bonus shares as incurred in FY2005.

3 The Group’s net asset value per share for FY2003 and FY2004 are restated and adjusted for comparative purposes to reflect the share split and the bonus shares as incurred in FY2005.

for the financial year ended 31 December

Results of Operations Actual Proforma

FY2007 FY2006 FY2005 FY2004 FY2003

S$ ’000 S$ ’000 S$ ’000 S$ ’000 S$ ’000

Sales 426,887 375,200 334,795 291,325 220,672Profit before income tax 33,789 35,552 32,454 26,275 19,215Net profit attributable to equity holders of the Company

26,256 27,513 25,471 20,347 14,643

Earnings per share (cents) 4.49 4.71 4.36 3.48 2.50

Financial Position Actual

FY2007 FY2006 FY2005 FY2004 FY2003

S$ ’000 S$ ’000 S$ ’000 S$ ’000 S$ ’000

Current assets 210,448 160,675 153,441 130,651 108,015

Non-current assets

Investment in associated companies 16,650 14,174 - - -

Financial assets, available-for-sale 6,830 5,015 3,644 3,612 -

Transferable club membership, at cost 131 131 131 131 128

Property, plant and equipment 88,643 83,512 56,888 51,507 41,924

Intangible assets 5,303 5,303 5,303 861 942

Deferred income tax assets 3,489 2,862 2,378 2,118 1,534

121,046 110,997 68,344 58,229 44,528

Total assets 331,494 271,672 221,785 188,880 152,543

Current liabilities 148,811 110,966 84,208 70,659 51,616

Non-current liabilities

Borrowings 8,307 6,159 2,297 8,867 9,965

Deferred income tax liabilities 1,305 1,784 1,968 1,950 2,304

9,612 7,943 4,265 10,817 12,269

Total liabilities 158,423 118,909 88,473 81,476 63,885

Net assets 173,071 152,763 133,312 107,404 88,658

Capital and reserves attributable to equity holders of the Company

168,109 148,101 129,902 104,698 87,221

Minority interests 4,962 4,662 3,410 2,706 1,437

Total equity 173,071 152,763 133,312 107,404 88,658

Net asset value per share (cents) 28.76 25.33 22.22 17.91 14.92

YHI INTERNATIONAL LIMITED ANNUAL REPORT 2007 0:0� Photo courtesy of Redbull Racing Limited

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All Geared and READY


SET The Pace

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Photo courtesy of Redbull Racing Limited

YHI INTERNATIONAL LIMITED ANNUAL REPORT 2007 0:�

GO The Distance

YHI INTERNATIONAL LIMITED ANNUAL REPORT 2007 0:�0

Corporate Profile

In Full Throttle

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Listed on the Mainboard of the Singapore Exchange Securities Trading Limited (SGX-ST) on 3 July 2003, YHI has successfully diversified its business and carved a niche for itself in the global automotive arena since its humble beginnings as a sole proprietorship established in 1948. YHI International Limited is a recognised distributor of high-quality automotive and industrial products, and a familiar and trusted name in alloy wheels manufacturing as an Original Design Manufacturer providing integrated services from the design and development to the manufacturing, marketing and distribution of alloy wheels.

Today, YHI’s wide international presence can be seen with subsidiaries and associated companies located in Asean, China, Taiwan, Hong Kong, USA, Japan, Canada, the Middle East and Italy. YHI also has 4 alloy wheels manufacturing plants located in Shanghai and Suzhou, China, Taoyuan in Taiwan and Sepang in Malaysia.

With an aim to build YHI into a global brand name where “The World Is Our Market”, we will strengthen and widen the YHI distribution network putting emphasis to promote and develop the market potential of our portfolio of premium and proprietary brands in the global market.

TYRESWe have an extensive range of tyres from passenger cars to commercial and off-the-road vehicles, to cater for different market needs. The key tyre brands we represent are Yokohama, Nankang, Nexen, Pirelli and our own proprietary brand - NEUTON TYRES.

INDUSTRIAL PRODUCTSOur industrial products portfolio includes both automotive batteries and rechargeable batteries for commercial and industrial use as well as golf and utility buggies from EZGO. Some of the key brands we distribute for rechargeable batteries are Hitachi, Trojan, CSB and Benning. We have also launched NEUTON POWER - our own proprietary brand of industrial and automotive batteries.

ALLOY WHEELSOur alloy wheels brand portfolio includes renowned brands like Enkei, O.Z., Konig and ADvANTI RACING. Our own proprietary brand, ADvANTI RACING is an Official Partner to Scuderia Toro Rosso Formula 1 Team.

YHI INTERNATIONAL LIMITED ANNUAL REPORT 2007 0:��

Group Managing Director’s Message

The Leading StewardYHI International Limited has once again triumphed in FY2007 with a sterling performance generating a record turnover of S$426.9 million and achieving a net profit of S$26.3 million.

Read on to find out more from our Group Managing Director, Mr Richard Tay, on how the Group overcame the challenges faced in 2007 and what strategies he has set for the Group’s future growth and expansion.

Q1 Did the Group’s financial performance in FY2007 live up to your expectations?

I am proud to announce that the YHI Group has once again delivered record turnover in FY2007 and we have been delivering double-digit growth in turnover since our listing in FY2003. This has once again demonstrated the hard work and commitment of our YHI Team. If we discount the one-time gain in negative goodwill effect recorded in FY2006, the Group’s profit actually increased by about 19% in FY2007.

Q2. What is the breakdown of turnover and profitability contribution from the distribution and manufacturing business segments?

In FY2007, our distribution business segment accounted for approximately 64% and 73% of the Group’s turnover and net profit respectively. Our manufacturing business segment accounted for approximately 36% and 27% of the Group’s turnover and net profit respectively. Our distribution business segment has exceeded our expectations with its good performance in bringing up the Group’s overall performance.

Q3. What factors contributed to the growth in both business segments?

Turnover from our distribution business segment was primarily driven by stronger sales in our Asean and Oceanic operations. In addition, we also saw growth from our new operations in Thailand, Malaysia, the Middle East and Canada. Our proprietary brand of tyres, NEUTON TYRES, with its additional range of sizes, also helped to boost our distribution business segment. The completion of phase one expansion in our Suzhou and Malaysia alloy wheels manufacturing plants also enhanced the performance of our manufacturing business segment.

Q4. How do you plan to maintain the Group’s competitive edge in today’s competitive business landscape?

We will continue to strengthen and widen our geographical presence to capture a wider market share through new business opportunities to promote our fuller range of tyres, alloy wheels and batteries. We will intensify our focus to develop our portfolio of premium and proprietary brands and to build the YHI brandname to gain global recognition and reputation. In this regard, we will strengthen our proprietary brands of ADvANTI RACING alloy wheels, NEUTON TYRES and NEUTON POWER (for industrial and automotive batteries).

Our manufacturing plants will intensify efforts to embark on various productivity measures to remain competitive through better production processes and enhanced technologies. The introduction of light weight alloy wheels is an example.

Q5. We understand that the phase one expansion of your Suzhou plant has been completed with 6 production lines in operation. Will we be seeing further expansion of the manufacturing business segment?

By end of 2007, we have 4 alloy wheels manufacturing plants and 14 production lines fully operational and our total current annual production capacity is approximately 2.5 million pieces of alloy wheels. By 2010, our aim is to have an annual production capacity of 4.3 million pieces of alloy wheels. That will make YHI one of the largest aftermarket alloy wheels manufacturers. However, we will not stop there as we do intend to explore into the OEM segment.

Q6. Can you share with us what growth strategies you have planned for the Group beyond 2008?

For our distribution business segment, we will continue to focus on expanding our distribution network either through investments or strategic acquisitions. We will also develop our portfolio of premium and proprietary brands to enhance our YHI brand image and broaden our customer base globally to market our tyres, alloy wheels and batteries.

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For our manufacturing business segment, we will build upon the foundation already laid in the global arena by producing and delivering high quality alloy wheels through continual innovation and improvements to our production systems to remain competitive.

A dedicated department will be established to implement technological improvements via the YHI Production System (YPS) to look into increasing efficiency, improve productivity and product innovation and reduce production costs.

Q7. Congratulations on winning the 2007 Ernst & Young

Manufacturing Entrepreneur of the Year Award. In addition to being a recipient of this significant award, what other significant milestones did the Group achieve in FY2007?

It is truly an honour for me to be the recipient of Ernst & Young Manufacturing Entrepreneur of the Year Award which is an affirmation of YHI’s standing and influence in the global automotive arena.

Another significant milestone for the Group was to become an official partner to Scuderia Toro Rosso Formula 1 Team. From 2008 to 2010, our ADvANTI RACING alloy wheels will be supplied to the Scuderia Toro Rosso Formula 1 Team. This partnership is a good opportunity to build the global brand image for ADvANTI RACING as the F1 is an international event. I am proud to say that we are the first Singapore home-grown company to be made an official partner of an international racing team.

Q8. YHI has been rewarding its shareholders with good dividend payments since its listing in 2003. What can your shareholders look forward to in 2008?

As always, we will continue to reward our shareholders with good dividend payments and FY2007 is no exception. The Board of Directors have recommended a final exempt (one-tier) dividend of 1.35 cents per share for FY2007. This represents approximately 30% of our net profit after tax.

Our achievements in 2007 were accomplished by the concerted efforts of the dedicated team at YHI. My sincere appreciation to the YHI Team for their diligence and commitment. I am confident that the YHI Team will once again push forward to scale new heights in years to come since we are targeting “The World Is Our Market”.

To my colleagues on the Board, thank you for your continued support and valuable contribution.

To our stakeholders – our shareholders, customers, suppliers and business associates – thank you for your confidence in YHI and I look forward to seeing you again at our coming shareholders’ meeting.

Yours sincerely,

TAY TIAN HOE, RICHARDGROUP MANAGING DIRECTOR


集团董事长寄语

2007年友发集团再获佳绩，营业额再攀高峰，创造了四亿二千六百

九十万新元的新纪录，并获净利二千六百三十万新元。

请继续从以下与友发集团董事长郑添和先生的访谈中，了解友发是怎

样克服了2007年所面对的挑战，并了解友发未来的发展策略。

问: 请问友发集团在2007年的表现达到了您所期望的

目标吗？

答: 我很荣幸的向大家宣布，2007年友发集团在营业额

上又创高峰，创造了自2003年上市以来持续双位数

增长的奇迹，再次体现了友发成员努力工作，坚持

不懈的精神。如果我们不考虑2006年入账并使当年

利润得到提升的商誉价值，集团净利润事实上在

2007年获得了大约19%的增长。

问: 请分析一下贵集团批发部和制造部在营业额和净利

润上所作出的贡献。

答: 2007年，我们的批发部门超出预计，表现突出，

其销售占了集团总营业额的64%，净利润占了大约

73%。制造部门的销售和净利润则分别占了36%和

27%。

问: 您认为影响这两个部门表现的因素主要有哪些？

答: 批发部的销售主要得益于我们在亚细安和大洋洲分

公司的强劲增长，并且已经看到我们在泰国、马来

西亚、中东和加拿大的分部也已为集团作出了贡

献。另外我们的自有品牌 - NEUTON轮胎，在增

加了多种规格之后，也相应提升了该部门的表现。

苏州厂第一期工程和马来西亚厂的完工，则提升了

制造部门的表现。

问: 请问您计划如何在今天激烈的竞争环境中，保持贵

集团的竞争优势呢？

答: 我们将继续加强和扩充友发在多个国家的网络分

行，实行轮胎、轮圈和电池全面性产品批发，同时

继续寻找商机，进行投资与收购，加强友发网络

的分布。同时我们将致力于建立和推销自主品牌

产品，把雅泛迪轮圈、NEUTON轮胎和NEUTON

POWER电池系列推向国际。

在轮圈制造方面，我们也将采取措施，通过提升生

产系统与技术，来保持竞争优势。生产轻量级的轮

圈就是其中一个很好的例子。

问: 我们已了解到苏州厂已经有6条生产线投入生产，

请问制造部门以后是否还会扩充呢？

答: 截止于2007年12月31日，我们共有4间工厂和14条

生产线，年产能大约是两百五十万个，我们计划到

2010年，把年产能增加到四百三十万个。那时友发

将是世界上最大的售后市场轮圈生产商之一。当

然，我们不会就此停止，事实上我们已有了进军

OEM市场的计划。

问: 请问您是否可以和我们分享一下友发集团在

2008年以后的发展计划？

答: 在批发方面，我们将继续通过投资与收购，致力于

加强和扩充友发在世界上网络的分布。同时我们

将致力于建立和推销自主品牌产品，提升品牌形

象，增加客源，实行轮胎、轮圈和电池全面性产品

批发。

在轮圈制造方面，我们将在现有的工厂推动YPS计

划，通过持续不断的产品研发和提升生产技术，来

降低成本, 保持竞争优势。

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问: 恭喜您获得2007年度安永企业家奖。除了这个奖

项，请问贵集团在2007年还有其他的里程碑吗？

答: 我很荣幸获得安永企业家奖，这是对友发在汽车工

业领域杰出成就的肯定。

另一个里程碑是友发集团有幸成为一级方程式赛

车的赞助商，从2008至2010年，为其中的一支队

伍，Scuderia Toro Rosso提供并装配雅泛迪轮圈。

这对友发来说，无疑是提升自有品牌形象的大好

机会。我可以很骄傲地告诉大家，友发是新加坡

第一家赞助该国际赛事的从家族企业成长起来的公

司。

问: 友发自2003年上市以来一直都向股东派发不错的

股息，今年还会继续派发吗？

答: 我们将以派发股息的形式继续回报股东，2007财政

年度也不例外。董事会已经提出了每股派发1.35分

股息的献议，这相当于净利润的30%。

这里，我要感谢友发成员为集团所作出的贡献，是

他们坚持不懈的努力，使友发在2007年再获佳绩。

我相信友发成员将继续努力工作，本着“世界为我

市场”的策略目标和远景，使友发再攀高峰。

我也要感谢董事会成员，谢谢你们的支持和提出的

宝贵建议。

最后我要感谢各位股东、客户、供应商和商务伙

伴，谢谢你们持续不断的支持和对友发的信心，我

期待着在股东大会上与您见面。

郑添和

集团董事长


Board of Directors

The Marshals

VII: Mr Phua Tin How

I: Mr Tay Tian Hoe, Richard

II: Mr Tay Tiang Guan

III: Mr Yuen Sou Wai

IV: Mr Tay Tiang Chong, Jackson

V: Mr Henry Tan Song Kok

VI: Mr Hee Theng Fong

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ITay Tian Hoe RichardGroup Managing DirectorAged ��, Singaporean

Mr Richard Tay is the Group Managing Director and key founder of our Group. He is a member of our Nominating Committee. Mr Tay has more than 33 years of business experience in the areas of sales and distribution of automotive products. He plays an important role in formulating and setting of overall business strategies and policies for our Group including the development and growth of our Group’s operations. Under his stewardship, Mr Tay has led the development and growth of our alloy wheels manufacturing business. He is a member of the Singapore Institute of Directors. Mr Tay was appointed to the Board on 26 August 2000.

IIMr Tay Tiang GuanExecutive Director Aged ��, Singaporean

Mr Tay Tiang Guan is the Executive Director of our Group. He has more than 30 years of business experience and has extensive knowledge in the automotive and industrial products industry. Mr Tay is responsible for spearheading our Group’s operations in Asean and overseeing our Group’s business development and operational management of our tyre and industrial product distribution business. He is a member of the Singapore Institute of Directors. Mr Tay was appointed to the Board on 26 August 2000.

IIIMr Yuen Sou WaiExecutive Director & CFOAged ��, Singaporean

Mr Yuen Sou Wai is our Executive Director and our Group Chief Financial Officer. In addition to his financial portfolio, Mr Yuen is also responsible for our Group’s operations in Oceania, USA and Canada. Mr Yuen has more than 33 years of broadbased financial management experience in various large local and multinational companies and prior to joining our Group in 1996, he was the Regional Finance Director (Asia Pacific) with Diversey Corporation, Canada, a group owned by Molson Companies Ltd. Mr Yuen holds a Master in Business Administration Degree from the University of Leicester, United Kingdom. He is a Fellow of the Chartered Institute of Management Accountants (UK), a Fellow Certified Public Accountant, Singapore and a member of the Singapore Institute of Directors. Mr Yuen was appointed to the Board on 22 May 2003.

IVMr Tay Tiang Chong JacksonExecutive Director Aged ��, Singaporean

Mr Jackson Tay is the Executive Director of our Group. With more than 30 years of business experience in the sale of automotive products, Mr Tay is responsible for Export Department of YHI Corporation (Singapore) Pte Ltd. He is a member of the Singapore Institute of Directors. Mr Tay was appointed to the Board on 22 May 2003.

VMr Henry Tan Song KokIndependent DirectorAged ��, Singaporean

Mr Henry Tan was appointed to the Board on 22 May 2003. Mr Tan currently chairs the Audit Committee and is a member of our Remuneration Committee and Nominating Committee. He is the Managing Director of Nexia TS Public Accounting Corporation, the Chairman of Nexia China and also the Asia Pacific Regional Chairman and Board member of Nexia International. He is also a director of Raffles Education Corporation, Chosen Holdings Limited, Pertama Holdings Limited and China New Town Development Co Ltd. Mr Tan graduated with a First Class Honours Degree in Accountancy from the National University of Singapore. He is a member of the Institute of Certified Public Accountants of Singapore, Institute of Chartered Accountants in Australia, Institute of Internal Auditors, Inc (Singapore Chapter) and Singapore Institute of Directors.

VIMr Hee Theng FongIndependent DirectorAged ��, Singaporean

Mr Hee Theng Fong was appointed to the Board on 22 May 2003. Mr Hee currently chairs the Remuneration Committee and is a member of our Audit Committee. He is currently a senior partner of a law firm, Hee Theng Fong & Co and has been practicing as an advocate and solicitor of the Supreme Court of Singapore since 1982. Mr Hee is also a director of several companies including Delong Holdings Ltd, Datapluse Technology Limited, Sinomem Technology Limited and NTUC Fairprice Co-operative Limited. His arbitration appointments include being a Fellow of the Chartered Institute of Arbitrators (UK), an Arbitrator of Singapore International Arbitration Centre (SIAC) and China International Economic and Trade Arbitration Commission (CIETAC).

VIIMr Phua Tin HowIndependent DirectorAged ��, Singaporean

Mr Phua Tin How was appointed to the Board on 22 May 2003. Mr Phua currently chairs the Nominating Committee and is a member of our Audit Committee and Remuneration Committee. He is presently the President & CEO of TranSil Corporation Pte Ltd and vice-Chairman of Network China, International Enterprise Singapore. Mr Phua is also a director of several listed companies in Singapore. He holds an MBA from INSEAD, France and a Bachelor of Science (Hons) Degree from the then University of Singapore (now known as National University of Singapore).


Corporate Structureas at 31 December 2007

Distribution

YHI CORPORATION (SINGAPORE) PTE LTDSINGAPORE 100%

YHI (MALAYSIA) SDN BHD MALAYSIA 100%

YHI (HONG KONG) CO LTDHONG KONG 100%

YHI (CHINA) STRATEGY CO LTD HONG KONG 100%

YHI (AUSTRALIA) PTY LTD AUSTRALIA 80%

YHI (NEW ZEALAND) LTD NEW ZEALAND 70%

EvO-TREND CORPORATION (MALAYSIA) SDN BHDMALAYSIA 80%

AUTOTREND CO LTD SHANGHAI, PRC 100%

YHI (MIDDLE EAST) F.Z.E. SHARJAH, U.A.E. 100%

YHI CORPORATION (THAILAND) CO LTDTHAILAND 49%

YOKOHAMA TIRE (SHANGHAI) SALES CO LTD SHANGHAI, PRC 49%

YHI INTERNATIONAL MARKETING (SHANGHAI) CO LTDSHANGHAI, PRC 100%

YHI CORPORATION (GUANGZHOU) CO LTD GUANGZHOU, PRC 100%

YHI POWER PTY LTDAUSTRALIA 80%

TTS INTERNATIONAL CO LTD JAPAN 60%

YHI (AMERICA) PTE LTD SINGAPORE 100%

PAN-MAR CORPORATION dbaKONIG (AMERICAN)USA 51%

YHI (CANADA) INC CANADA 90%

YHI INTERNATIONAL LIMITED

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EvO-TREND CORPORATION (MALAYSIA) SDN BHDMALAYSIA 80%

AUTOTREND CO LTD SHANGHAI, PRC 100%

YHI (MIDDLE EAST) F.Z.E. SHARJAH, U.A.E. 100%

YHI CORPORATION (THAILAND) CO LTDTHAILAND 49%

YOKOHAMA TIRE (SHANGHAI) SALES CO LTD SHANGHAI, PRC 49%

YHI INTERNATIONAL MARKETING (SHANGHAI) CO LTDSHANGHAI, PRC 100%

YHI CORPORATION (GUANGZHOU) CO LTD GUANGZHOU, PRC 100%

Manufacturing

YHI MANUFACTURING (SINGAPORE) PTE LTD SINGAPORE 100%

YHI INTERNATIONAL(TAIWAN) CO LTDTAIWAN 100%

YHI MANUFACTURING (SHANGHAI) CO LTD SHANGHAI, PRC 100%

YHI ADvANTI MANUFACTURING(SHANGHAI) CO LTD SHANGHAI, PRC 100%

YHI PRECISION MOULDING (SHANGHAI) CO LTDSHANGHAI, PRC 100%

YHI ADvANTI MANUFACTURING (SUZHOU) CO LTD SUZHOU, PRC 100%

EASTBOURNE METAL COATINGS CO LTDWUXI, PRC 100%

YHI MANUFACTURING (MALAYSIA) SDN BHD MALAYSIA 100%

O.Z. S.p.A. ITALY 35.51%

The companies marked with the “ ” became part of the YHI Group of Companies in FY2007.


SINGAPOREYHI Corporation (Singapore) Pte LtdYHI Manufacturing (Singapore) Pte LtdYHI (America) Pte LtdNo. 2 Pandan Road Singapore 609254 Tel: (65) 6264 2155Fax: (65) 6265 9927Email: [email protected]: www.yhi.com.sg

MALAYSIAYHI (Malaysia) Sdn BhdNo. 15 Jalan U1/23 Seksyen U1HICOM-Glenmarie Industrial Park40150 Shah Alam Selangor Darul Ehsan Malaysia Tel: (60) 3 7804 9880Fax: (60) 3 7804 9878Email: [email protected]: www.yhimalaysia.com

YHI Manufacturing (Malaysia) Sdn BhdPT 29516 Lengkuk Teknologi Techpark @ Enstek 71760 Bandar Enstek Negeri Sembilan Malaysia Tel: (60) 6 782 2288 Fax: (60) 6 782 2233 Email: [email protected]

Evo-Trend Corporation (Malaysia) Sdn BhdLot 32-B1 Jalan 5/32AOff 61/2 Miles Jalan KepongKepong Industrial Area52100 Kuala Lumpur MalaysiaTel : (60) 3 6257 1333Fax : (60) 3 6257 7393Email: [email protected]

THAILANDYHI Corporation (Thailand) Co LtdNo. 1111 Rama 9 Road Suanluang Bangkok 10250 Thailand Tel: (66) 2319 6526 / 7 Fax: (66) 2319 7062 Email: [email protected]

HONG KONGYHI (Hong Kong) Co LtdYHI (China) Strategy Co LtdUnit A & B 11F Dynamic Cargo Centre 188 Yeung Uk Road Tsuen Wan New Territories Hong Kong Tel: (852) 2727 1883 Fax: (852) 2727 1301 Email: [email protected] Website: www.yhihongkong.com

TAIWANYHI International (Taiwan) Co Ltd(32668) No. 28 Lane 813 Gaoshi Road Youth Industrial District Yang-Mei Taoyuan Taiwan ROC Tel: (886) 3 4966 777 Fax: (886) 3 4966 772 Email: [email protected] Website: www.yhitaiwan.com.tw

AUSTRALIA YHI (Australia) Pty Ltd1044-1046 Canley vale Road Wetherill Park NSW 2164 Sydney Australia Tel: (61) 2 9756 6688 Fax: (61) 2 9756 6288 Email: [email protected] Website: www.yhi.com.au

YHI Power Pty Ltd Unit 2 1002 Canley vale Road Wetherill Park NSW 2164 Sydney Australia Tel: (61) 2 9729 2288 Fax: (61) 2 9756 4066 Email: [email protected] Website: www.batteryguru.com.au

NEW ZEALANDYHI (New Zealand) Ltd260 Puhinui Road Manukau City Auckland New Zealand Tel: (64) 9 278 1712 Fax: (64) 9 279 4855 Email: [email protected] Website: www.yhi.co.nz

U.A.E. YHI (Middle East) FZEP.O. Box 8624 SAIF-ZoneSharjah U.A.E.Tel: (971) 050 162 5802 Fax: (971) 6 531 2708 Email: [email protected]

Our Global Presence

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CHINAYHI Manufacturing (Shanghai) Co LtdYHI Advanti Manufacturing (Shanghai) Co Ltd YHI International Marketing (Shanghai) Co Ltd No. 611 Shen Fu Road Xinzhuang Industrial Zone Shanghai Zip Code : 201108 PRC Tel: (86) 21 6489 6655 Fax: (86) 21 6489 4455 Email: [email protected] [email protected]: www.yhichina.com

YHI Advanti Manufacturing (Suzhou) Co Ltd No. 138 Hong Xi Road Suzhou New District Suzhou Zip Code : 215151 PRC Tel: (86) 512 6616 2288 Fax: (86) 512 6616 2211 Email: [email protected] Website: www.yhichina.com

YHI Corporation (Guangzhou) Co Ltd Room 2708 - 2709 Yan Qiao BuildingNo. 89 Yanling Road Tianhe District Guangzhou Zip Code : 510507 PRC Tel: (86) 20 8763 1313 Fax: (86) 20 8779 1526 Email: [email protected]: www.yhichina.com

YHI Precision Moulding (Shanghai) Co Ltd Factory No. 2 No. 188 Ming Shen Road Song Jiang Industrial Zone Shanghai PRC Tel: (86) 21 5768 5188 Fax: (86) 21 5768 5268 Email: [email protected] Website: www.yhichina.com

Eastbourne Metal Coatings Co Ltd No. 7 Yangshi Industrial Park HuiShan District Wuxi Jiangsu PRC Tel: (86) 510 8355 0988 Fax: (86) 510 8355 7742 Email: [email protected] Website: www.yhichina.com

Autotrend Co Ltd No. 28 1550 Lane Shui Qing RoadMinhang District Shanghai Zip Code : 201100 PRC Tel: (86) 21 6413 8778 Fax: (86) 21 6413 8778 Email: [email protected] Website: www.yhichina.com

Yokohama Tire (Shanghai) Sales Co Ltd Suite 3583 - 3586 Tower B City Centre 100 Zunyi Road Shanghai Zip Code : 200051 PRC Tel: (86) 21 6237 2727 Fax: (86) 21 6237 2577 Email: [email protected]

JAPANTTS International Co Ltd6F Yamada Building1-12-10 Kitahorie Nishi-ku Osaka 550-0014 Japan Tel: (81) 6 4390 0771 Fax: (81) 6 4390 0772 Email: [email protected]

USAKonig (American) 121 Express Street Plainview NY11803 USA Tel: (1) 516 822 5700 Fax: (1) 516 822 5703 Email: [email protected] Website: www.konigwheels.com

CANADA YHI (Canada) Inc#2-100 Granton DriveRichmond Hill ONCanada L4B 1H7Tel: (1) 905 764 8878Fax: (1) 905 764 8101 Email: [email protected] ITALY O.Z. S.p.A. via Monte Bianco 10 35018 San Martino Di Lupari (PD) Italy Tel: (39) 049 942 3001 Fax: (39) 049 946 9176 Email: [email protected]: www.ozracing.com



Heads Of Subsidiaries & Key Officers

Mr Robert TanDeputy General ManagerYHI Corporation (Singapore) Pte Ltd

Mr Alex OngDeputy General ManagerYHI Corporation (Singapore) Pte Ltd

SINGAPORE

NEW ZEALANDMr Christopher TalbotManaging DirectorYHI (New Zealand) Ltd

USAMr Ricardo S. GuevaraPresident/CEOKonig (American)

The day to day operations of our Group are entrusted to an experienced and qualified team of professional managers who are responsible for the operational activities in our Group. The particulars of our Heads of Subsidiaries and Key Officers are set out below.

AUSTRALIAMr Tony SuhanManaging Director YHI (Australia) Pty Ltd

Mr David ChenDirectorYHI Power Pty Ltd

ITALY Mr Claudio BernoniManaging DirectorO.Z. S.p.A.

Mr Lee Teck HockGeneral ManagerYHI (Malaysia) Sdn Bhd

Mr Tham Kong MooGeneral ManagerEvo-Trend Corporation (Malaysia) Sdn Bhd

Mr Alan HsuDeputy General ManagerYHI Manufacturing (Malaysia) Sdn Bhd

CANADAMr Derek ZhangGeneral ManagerYHI (Canada) Inc.

MALAYSIA

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CHINAMr Lu Chun Ya General ManagerAlloy Wheels DivisionChina Operations

Mr Simon HuiGeneral ManagerCommerical DivisionChina Operations

Mr Robert TanDeputy General ManagerYHI Corporation (Singapore) Pte Ltd

Mr Alex OngDeputy General ManagerYHI Corporation (Singapore) Pte Ltd

SINGAPORE

NEW ZEALANDMr Christopher TalbotManaging DirectorYHI (New Zealand) Ltd

USAMr Ricardo S. GuevaraPresident/CEOKonig (American)

Mr Lin Chen WeiDeputy General ManagerYHI Advanti Manufacturing (Suzhou) Co Ltd

AUSTRALIAMr Tony SuhanManaging Director YHI (Australia) Pty Ltd

Mr David ChenDirectorYHI Power Pty Ltd

HONG KONG

THAILAND

TAIWAN

JAPAN

Mr Kevin LeeDeputy General ManagerYHI International (Taiwan) Co Ltd

MIDDLE EASTMr Sean ChiangBranch ManagerYHI (Middle East) FZE

Mr Lee Teck HockGeneral ManagerYHI (Malaysia) Sdn Bhd

Mr Tham Kong MooGeneral ManagerEvo-Trend Corporation (Malaysia) Sdn Bhd

Mr Alan HsuDeputy General ManagerYHI Manufacturing (Malaysia) Sdn Bhd

CANADAMr Derek ZhangGeneral ManagerYHI (Canada) Inc.

Mr Liu De SenDeputy General ManagerYHI Precision Moulding (Shanghai) Co Ltd

Mr Takashi TatemotoManaging DirectorTTS International Co Ltd

Mr Pairoj TayManaging DirectorYHI Corporation (Thailand) Co Ltd

Mr Jacky CokeBranch ManagerYHI (Hong Kong) Co Ltd

Mr Wang Zhan WeiSenior ManagerYHI Corporation (Guangzhou) Co Ltd

Mr Wu MengSenior ManagerAutotrend Co Ltd

Mr Mike ChungDeputy General ManagerYHI Manufacturing (Shanghai) Co Ltd

Mr Peter Zeng Senior ManagerEastbourne Metal Coatings Co Ltd


Manufacturing Milestones

The Chassis of GrowthOur manufacturing business segment started with one production line in Taiwan in 1996. As at 31 December 2007, we have 14 manufacturing lines in operation with an annual production capacity of approximately 2.5 million pieces of alloy wheels.

YHI International (Taiwan) Co Ltd YHI Manufacturing (Shanghai) Co Ltd YHI Manufacturing (Malaysia) Sdn Bhd

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While distribution has been the core business of YHI, we took a bold initiative and ventured into alloy wheels manufacturing with our first plant located in Taoyuan, Taiwan operating on one production line.

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We expanded our manufacturing operations through the setting up of our second manufacturing plant in Shanghai, China where its first production line commenced operations in September 2000. By July 2001, the production capacity in our Shanghai plant expanded with its second production line.

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The second phase expansion in Shanghai was completed in September 2002. By 2003, we had four production lines in operation raising our production capacity further to meet the growing global market demand for alloy wheels.

Our Quality Certificates

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Eastbourne Metal Coatings Co Ltd YHI Precision Moulding (Shanghai) Co Ltd

OUR VALUED PROPOSITION - SEAMLESS SUPPLY CHAIN

Design & Development

ManufacturingAdvertising & Promotion

Distribution& Sales

Moulding production line Chroming production line Alloy wheels production line

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To enhance our capability as an integrated Original Design Manufacturer of alloy wheels, we set up our own chroming facility, Eastbourne Metal Coatings Co Ltd and YHI Precision Moulding (Shanghai) Co Ltd to manufacture and supply alloy wheels moulds for our manufacturing plants.

On 1 November 2005, Konig (American) became part of the YHI Group thus further expanding our geographical presence into the USA.

By end of 2005, our Shanghai plant was operating at full production capacity with 6 production lines bringing our total production lines to 7 (including Taiwan).

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In 2006, we commenced production in both of our 2 new alloy wheels manufacturing plants - YHI Advanti Manufacturing (Suzhou) Co Ltd located in Suzhou, China and YHI Manufacturing (Malaysia) Sdn Bhd located at Sepang, Malaysia.

We were appointed by Enkei Corporation to manufacture their “Enkei Tuning” range of alloy wheels under license in all 4 manufacturing plants. We also acquired 35.51% shareholding in O.Z. S.p.A, which is a premier alloy wheels manufacturer in Italy.

By end of 2007, our total manufacturing capacity was 14 productions lines with both Shanghai and Suzhou plants operating on 6 lines each and Taiwan and Malaysia plants operating on 1 line each.

�00� and the future

We will continue to explore new opportunities to expand our manufacturing business and strive for continual innovation and improvements to our manufacturing production systems.

Our brand building efforts will be further strengthened with our portfolio of premium brands like Enkei, OZ and Konig and our own proprietary brand - ADvANTI RACING.

With ADvANTI RACING being appointed as an Official Partner of Scuderia Toro Rosso Formula 1 Team, we believe this partnership will enhance the global brand image for ADvANTI RACING and YHI.

We will continue with our brand building efforts to further secure our global market position.

YHI Advanti Manufacturing (Suzhou) Co Ltd


Financial Calendar

�� May �00� Announcement of first quarter unaudited results

�� August �00� Announcement of half year unaudited results

�� November �00� Announcement of third quarter unaudited results

�� December �00� Financial year-end

�� February �00�Announcement of full year unaudited results

�0 April �00� Annual General Meeting

Corporate Information

BOARD OF DIRECTORS Tay Tian Hoe RichardGroup Managing Director

Tay Tiang GuanExecutive Director

Tay Tiang Chong JacksonExecutive Director

Yuen Sou WaiExecutive Director & CFO

Henry Tan Song KokIndependent Director

Hee Theng FongIndependent Director

Phua Tin HowIndependent Director

AUDIT COMMITTEE Henry Tan Song KokChairman

Hee Theng FongMember

Phua Tin HowMember

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REMUNERATION COMMITTEEHee Theng FongChairman

Phua Tin HowMember

Henry Tan Song KokMember

NOMINATING COMMITTEE Phua Tin HowChairman

Tay Tian Hoe RichardMember

Henry Tan Song KokMember

COMPANY SECRETARY Gn Jong Yuh GwendolynLLB Hons

AUDITORPricewaterhouseCoopers8 Cross Street PWC Building Level 17 Singapore 048424

Partner-in-charge :Tham Tuck SengYear of appointment : 2003

SHARE REGISTRARTricor Barbinder Share Registration Services8 Cross Street PWC Building Level 11 Singapore 048424

PRINCIPAL BANKERSDBS Bank Standard Chartered BankMalayan Banking Berhad

REGISTERED OFFICE2 Pandan Road Singapore 609254Tel: (65) 6264 2155 Fax: (65) 6265 9927 Email: [email protected]: www.yhi.com.sg Company Registration No.: 200007455H



Review Of OperationsIt has been another good year for the YHI Group as we managed to achieve S$26.3 million in net profit on the back of record revenue of S$426.9 million. Despite the pressures of rising raw material costs as well as intense competition in the market faced by the Group, we achieved good growth in both the distribution and manufacturing business segments.

PERFORMANCE OVERVIEW

The Group’s turnover for FY2007 was S$426.9 million, up S$51.7 million or 14% over the previous year. This was attributable to the increase in sales for both the distribution and manufacturing business segments.

The Group’s net profit after tax decreased by S$1.2 million or 4% from S$27.5 million in FY2006 to S$26.3 million in FY2007. Excluding the recognition of the one-time gain in negative goodwill effect of S$5.4 million in FY2006, the Group’s net profit after tax would have increased by approximately S$4.2 million or 19% in FY2007 as compared to FY2006.

DISTRIBuTION BuSINESS

Sales Performance (S$ ’million)

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PAT Performance (S$ ’million)

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MANuFACTuRING BuSINESS

Sales Performance (S$ ’million)

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PAT Performance (S$ ’million)

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One-time gain effect in negative goodwill

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DISTRIBuTION BuSINESS

Our distribution business segment, which accounted for approximately 64% of the Group’s total revenue in FY2007, increased by S$10.5 million or 4% from S$263.6 million in FY2006 to S$274.1 million in FY2007. The increase in revenue was mainly due to stronger sales in the Asean and Oceanic operations and new sales from subsidiaries previously not included in FY2006.

Net profit after tax from our distribution business segment, which accounted for approximately 73% of the Group’s overall profit in FY2007 increased by S$3.5 million or 22% to $19.2 million in FY2007 from S$15.7 million in FY2006.

MANuFACTuRING BuSINESS

Our manufacturing business segment, which accounted for approximately 36% of our Group’s total revenue in FY2007, increased by S$41.2 million or 37% from S$111.6 million in FY2006 to S$152.8 million in FY2007. The increase in revenue was primarily due to increased output from additional production capacity in Suzhou, China.

Net profit after tax from our manufacturing business segment, which accounted for approximately 27% of the Group’s overall profit in FY2007 decreased from S$11.8 million in FY2006 to S$7.1 million in FY2007. Excluding the recognition of the one-time gain in negative goodwill effect of S$5.4 million in FY2006, the net profit after tax would have increased by approximately S$0.7 million.

Our manufacturing business segment was operating in a challenging business environment in FY2007. Our manufacturing gross profit margin was affected by higher energy costs and volatility in global aluminium prices. In FY2007, our Suzhou plant in China was on track to operate profitably with six production lines. However, our Sepang plant in Malaysia was still facing operational challenges due to diseconomies of scale from operating on one production line.


LOOKING AHEAD

2008 will be a year of consolidation for the Group to propel our growth and future direction. We will intensify focus on our core objective to build YHI into a global brand. We will continue to strengthen and widen our distribution network and seek new business opportunities including investments and acquisitions to expand our network further.

Our distribution business segment will continue to grow as we will actively seek out opportunities to expand the product ranges especially in tyres and batteries in all existing and new geographical network.

In FY2007, sales of NEUTON TYRES, our proprietary brand, have been successful and we will be expanding the product range by increasing the sizes for both passenger car and commercial vehicles. This will bode well for penetration into the global automotive market within the YHI network. In addition, we will be launching NEUTON POWER, another of our proprietary brand for batteries both in the industrial and automotive sectors to complement our tyres and alloy wheels throughout our distribution network.

We will intensify our focus to develop the market potential of YHI’s portfolio of premium and proprietary brands of tyres, alloy wheels and batteries. We will continue to participate in key international trade exhibitions to leverage on the exposure to international customers and enhance our YHI brand image.

Our manufacturing business segment is expected to operate in a challenging environment. We shall consolidate and strive for continual innovations and improvements to our production systems. To mitigate the increase in production costs, our manufacturing plants are currently embarking on various productivity measures through better production processes and technologies.

We believe that our initiative to sponsor our proprietary brand, ADvANTI RACING wheels to Scuderia Toro Rosso Formula 1 Team from the 2008 season will bring future benefits to the Group. We believe this initiative will help to enhance and elevate the ADvANTI RACING and YHI brand name internationally.

Going forward, we will continue to build YHI into a global brand name by working towards achieving our goals where “The World Is Our Market”.

Review Of Operations

YHI INTERNATIONAL LIMITED ANNUAL REPORT 2007 0:032

CORPORATE Governance Report

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Corporate Governance Report

REPORT ON CORPORATE GOVERNANCE

The Board of Directors (the “Board”) of YHI International Limited (the “Company”) recognises the importance of corporate governance in ensuring greater transparency, protecting the interests of its shareholders as well as strengthening investors’ confidence in its management and financial reporting and is committed to maintaining a high standard of corporate governance within the Group. The Board has also established various internal control measures and monitoring mechanisms, where applicable, to ensure that effective corporate governance is practised. The Board is also responsible for the overall corporate governance of the Group.

The Listing Manual of the SGX-ST requires that an issuer who holds its Annual General Meeting (“AGM”) on or after 1 January 2007 (the “effective date”) should describe its corporate governance practices with specific reference to the Code of Corporate Governance 2005 (“Code”) in its annual report.

This statement outlines the main corporate governance practices that were in place throughout the financial year, with specific references made to each of the principles of the Code in the annual report.

A. BOARD MATTERS

Principle 1: Board’s Conduct of its Affairs

The Board comprises four executive Directors and three independent Directors, all having the right competencies and diversity of experience enabling them to effectively contribute to the Group.

The principal functions of the Board are:

1. reviewing and approving key business strategies and financial plans and monitoring the organisational performance;

2. reviewing the adequacy and integrity of the company’s internal controls, risk management systems and financial reporting and compliance;

3. approving major investments and divestments and funding proposals; and

4. ensuring accurate, adequate and timely reporting to, and communication with shareholders.

The Board has adopted a set of internal controls and guidelines which set out approval limits for investments and divestments, capital expenditure and business contracts at the Board level.

The Board holds regular scheduled meetings on a quarterly basis to review the Group’s key activities, business strategies, funding decisions, financial performance and to approve the release of quarterly and annual results of the Group. When circumstances require, ad-hoc meetings are arranged. If and when authority to make decisions is delegated by the Board to a Board Committee, such delegation is disclosed. The Directors are also constantly kept updated on the Group’s development via email correspondence which allows them to participate and to share their views. Board meetings are conducted in Singapore and attendance by Directors are regular either in person or via telephone conference if the Directors are traveling overseas.

The attendance of the Directors at meetings of the Board and Board committees, as well as the frequency of such meetings is disclosed in Table 1 below.

Principle 2: Board Composition and Balance

The Board comprises four executive Directors and three independent non-executive Directors. Key information regarding the Directors is given in the “Corporate Information” section of this annual report. The independence of each Director will be reviewed annually by the Nominating Committee. The Nominating Committee is of the view that the current Board, with independent non-executive Directors making up at least one-third of the Board, has a strong and independent element that is able to exercise objective judgement on corporate affairs independently from the management. The Nominating Committee is also of the view that no individual or small group of individuals dominates the Board’s decision making process.

TABlE 1: ATTENDANCE Of DiRECTORS AT BOARD AND BOARD COMMiTTEE MEETiNGS

Attendance at Meetings in FY2007

BoardAudit

CommitteeRemuneration

CommitteeNominating Committee

Name Number of meetingsHeld : 4

Number of meetingsHeld : 4



Tay Tian Hoe Richard 4 N.A. N.A. 1Tay Tiang Guan 4 N.A. N.A. N.A.Tay Tiang Chong Jackson 4 N.A. N.A. N.A.Yuen Sou Wai 4 N.A. N.A. N.A.Henry Tan Song Kok 4 4 1 1Hee Theng Fong 4 4 1 N.A.Phua Tin How 4 4 1 1


The Board is of the view that the current board size of seven Directors is appropriate, taking into account the nature and scope of the Company’s operations.

The Board considers that its composition of independent non-executive Directors provide an effective Board with a mix of knowledge, business contacts and successful business and commercial experience as well as core competencies including accounting, finance, business and management. This balance is important in ensuring that the strategies proposed by the executive management are fully discussed and examined, taking into account the long term interests of the Group. Non-executive Directors are actively involved in strategy decisions. We also encourage our non-executive Directors to meet without management present to review management’s performance and monitor reports thereof.

All Directors are updated regularly concerning any changes in company policies, risk management and accounting standards. The Company also provides ongoing education on Board processes, governance and best practices.

There has been no appointment of new Directors since our listing.

Principle 3: Role of Chairman and Group Managing Director

Currently, we do not have a Chairman of the Board. However, a Chairman is usually appointed for our Board meetings and the Chairman exercises control over quality, quantity and timeliness of the flow of information between management and the Board.

Our Group Managing Director is Mr Tay Tian Hoe Richard. He has full executive responsibilities of the overall business directions and operational decisions of our Group. All major decisions made by our Group Managing Director are reviewed by the Audit Committee.

Our Group Managing Director’s performance and appointment to the Board is reviewed annually by the Nominating Committee and his remuneration package is reviewed periodically by the Remuneration Committee.

Principle 4: Board Membership

Mr Phua Tin How, an independent non-executive Director, is the Chairman of the Nominating Committee. The Nominating Committee comprises two independent Directors, Messrs Phua Tin How and Henry Tan Song Kok and an executive Director, Mr Tay Tian Hoe Richard.

We believe that Board renewal must be an ongoing process which ensures both good governance and maintains relevance to the changing needs of the Company and business. Our Articles require at least one-third of our Directors (excluding the Group Managing Director) to retire from office by rotation and submit

themselves to re-nomination and re-election by shareholders at every AGM. In other words, no Director stays in office for more than three years without being re-elected by shareholders.

The Nominating Committee recommended to the Board that Messrs Phua Tin How, Tay Tiang Chong Jackson and Yuen Sou Wai be nominated for re-appointment at the forthcoming Annual General Meeting (“AGM”). In making the recommendation, the Nominating Committee had considered the Directors’ contribution to the Group.

The responsibilities of the Nominating Committee are contained in written terms of reference and are as follows:

a. reviewing and recommending to the Board annually, the Board’s structure, size and composition;

b. identifying and making recommendations to the Board as to which Directors are to retire by rotation and to be put forward for re-election at each AGM of the Company, having regard to the Directors’ contribution and performance, including independent Directors;

c. determining the criteria (in particular, taking into account a Director’s independence and competing time commitments) for identifying candidates and reviewing nominations for the appointment of Directors to the Board; and

d. deciding how the Board’s performance may be evaluated and proposing objective performance criteria for the Board’s approval.

Principle 5: Board Performance

The Nominating Committee will use its best efforts to ensure that Directors appointed to our Board possess the relevant necessary background, experience and knowledge and that each Director brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.

A formal review of the Board’s performance will be undertaken collectively by the Board annually and informally by the Nominating Committee with inputs from the other Board members and the Group Managing Director.

We believe that apart from the fiduciary duties (i.e. acting in good faith, with due diligence and care and in the best interests of the Company and its shareholders), the Board’s key responsibilities are to set strategic directions and ensure that the long term objective of enhancing shareholders’ wealth is achieved.

For the year under review, the Nominating Committee assessed the effectiveness of the Board as a whole. The Board’s performance was measured by its ability to support the management especially in times of crisis and to steer the Company towards profitable directions and the attainment of strategic and long-term objectives set by the Board. Hence, the Nominating Committee adopted a formal policy to evaluate the Board’s performance as a whole.


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Principle 6: Access to Information

In order to ensure that the Board is able to discharge its responsibilities, the management is required to provide adequate and timely information to the Board on Board affairs and issues that require the Board’s decision as well as ongoing reports relating to the operational and financial performance of the Company.

In order to properly prepare Directors for Board meetings, all Directors are issued a Board report prior to any Board meeting to provide contextual information that enables them to obtain further information, where necessary.

The Board has separate and independent access to the senior management and the Company Secretary at all times. Should Directors, whether as a group or individually, need independent professional advice, the Company Secretary will, upon directions by the Board, appoint a professional advisor selected by the group or the individual to render the advice. The cost of such professional advice will be borne by the Company.

The Company Secretary attends all meetings of the Board and ensures that board procedures are followed and applicable rules and regulations are complied with. The Company Secretary also attends all meetings of the Audit Committee, Nominating Committee and Remuneration Committee. The appointment and removal of the Company Secretary is a matter for the Board as a whole.

Please refer to the “Corporate Information” section of the annual report for the composition of the Company’s Board of Directors and Board committees.

B. REMUNERATiON MATTERS

Principle 7: Procedures for Developing Remuneration PoliciesPrinciple 8: Level and Mix of Remuneration

The function of the Remuneration Committee is to review the remuneration of the executive Directors of the Company and to provide a greater degree of objectivity and transparency in the setting of remuneration.

Mr Hee Theng Fong, an independent Director, is the Chairman of the Remuneration Committee. The Remuneration Committee comprises three independent Directors, Messrs Hee Theng Fong, Henry Tan Song Kok and Phua Tin How.

The responsibilities of the Remuneration Committee are:

a. to recommend to the Board a framework of remuneration for the executive Directors of the Group on all aspects of remuneration such as Directors’ fees, salaries, allowances, bonuses, options and benefits-in-kind; and

b. to determine the specific remuneration packages and terms of employment for each executive Director.

The Remuneration Committee has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, the Remuneration Committee takes into consideration industry practices and norms in compensation in addition to the Company’s relative performance and the performance of the individual Directors. No Director will be involved in deciding his own remuneration.

The performance-related elements of remuneration should form a significant proportion of the total remuneration package of the executive Director. Each executive Director has a service contract with a fixed appointment period and the Remuneration Committee reviews in particular termination provisions. The remuneration of each non-executive Director is determined by his contribution to the Company, taking into account factors such as efforts and time spent as well as his responsibilities on the Board. The Board will recommend the remuneration of the non-executive Directors for approval at the AGM.

TABlE 2: ThE BREAkDOwN Of ThE DiRECTORS’ REMUNERATiON fOR fY2007

Remuneration BandsBelow

S$500,000

S$500,001to

S$1,000,000Above

S$1,000,000

% ofVariable

Remuneration

% of Fixed

Remuneration

Tay Tian Hoe Richard - - • 79% 21%

Tay Tiang Guan - - • 81% 19%

Tay Tiang Chong Jackson - • - 68% 32%

Yuen Sou Wai - • - 71% 29%

Henry Tan Song Kok • - - - -

Hee Theng Fong • - - - -

Phua Tin How • - - - -



The YHI Share Option Scheme (“Scheme”) was put in place on 22 May 2003. However, we have not granted any share options pursuant to the YHI Share Option Scheme in past financial years. The Scheme will be administered by a committee comprising the following members:

• Hee Theng Fong (Chairman)• Henry Tan Song Kok• Phua Tin How

Principle 9: Disclosure of Remuneration

Our executive Directors’ remuneration consists of their salary, allowances, bonuses, and profit sharing awards conditional upon their meeting certain profit before tax targets.

Our independent non-executive Directors have remuneration packages which consist of a Directors’ fee component. The Directors’ fees are based on a scale of fees divided into basic retainer fees as a Director and additional fees for serving on Board committees as the chairman of the committee. Directors’ fees for independent non-executive Directors are subject to the approval of shareholders at the AGM.

The report on Directors’ remuneration for financial year 2007 is disclosed in Table 2.

Remuneration of Key Employees

Details of remuneration paid to the top three executives (who are not Directors of the Company) of the Group for the financial year 2007 are set out below:

Name of Key Executive* Below S$250,000

Heng Koon Seng Colin # •

Tan Yong Quan Robert •

Lu Chun Ya •

* Remuneration amounts are inclusive of salary, bonus, allowances and Central Provident Fund contributions. There were no share options granted to employees during the financial year.

# Mr Heng Koon Seng Colin resigned from the Group in April 2007.

Details of employees whose remuneration exceed S$150,000 and are immediate family members of our executive Directors are set out below:

Name of Employee Below S$250,000

Tay Thiam Seng + •

Tay Soek Eng Margaret + •

+ Mr Tay Thiam Seng and Mdm Tay Soek Eng Margaret are related to our executive Directors, Mr Tay Tian Hoe Richard, Mr Tay Tiang Guan and Mr Tay Tiang Chong Jackson.

C. ACCOUNTABiliTY AND AUDiT

Principle 10: Accountability

The Board believes that it should promote best practices as a means to build an excellent business for our shareholders as they are accountable to shareholders for the Company’s and the Group’s performance.

The Board is mindful of its obligations to provide timely and fair disclosure of material information in compliance with statutory reporting requirements. Price sensitive information is first publicly released, either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Financial results and annual reports will be announced or issued within the mandatory period. The Board will provide reports to regulators when required. The management will provide the Board with monthly management accounts when required.

Principle 11: Audit Committee

Mr Henry Tan Song Kok, an independent Director is the Chairman of the Audit Committee. The Audit Committee comprises three independent Directors, Messrs Henry Tan Song Kok, Hee Theng Fong and Phua Tin How. At least two members of the Audit Committee have the appropriate accounting or related financial management expertise or experience. The Audit Committee has explicit authority and reasonable resources, as well as full access to the Directors and executives.

The Audit Committee holds periodic meetings and reviews primarily the following:

(a) the audit plan of our Company’s external auditor;(b) the external auditor’s reports;(c) the co-operation given by our officers to the external auditor;(d) the scope and results of the internal audit procedures;(e) the financial statements of our Company and our Group

before their submission to our Board;(f) the independence of the external auditor;(g) nomination of external auditor for appointment;(h) our Group’s compliance with such functions and duties as

may be required under the relevant statutes or the Listing Manual of the SGX-ST, and by such amendments made thereto from time to time;

(i) interested persons transactions; and(j) capital expenditure transactions.

The Audit Committee meetings are attended by the Group Managing Director, executive Directors and Internal Auditor. The presence of the external auditor has been requested during these meetings. During this financial year, the Audit Committee has also met up with the external auditor and with the Internal Auditor, without any executives of the Group being present.


0:37

The Audit Committee has in financial year 2007 implemented whistle blowing arrangements, which allow staff and shareholders of the Company to confidentially report violations of the Group’s Code of Ethics and Business Conduct (see the Company’s Management Manual), complaints and/or questionable accounting, control or auditing practices. The reports can be made on an anonymous basis, but the Company recommends that the informant(s) put their name(s) to the allegations. The Group has a policy of “no-retaliation” against good-faith informants.

The Internal Auditor shall investigate any allegations and reports to the Audit Committee, and depending on various factors, including the seriousness of the matter, may also involve the external auditor, the Independent Inquiry Committee, and/or the police.

Within 14 days of completion of the investigations (which should usually take no longer than 14 days) the informant (if not anonymous) will be informed of the results of the investigations, but any disciplinary action taken will remain confidential. The Group will protect the informant unless the allegations are found to have been false and made maliciously, in which event the informant’s behaviour will be treated as gross misconduct and handled accordingly. The Audit Committee ensures that the investigations conducted are independent and the follow-up action(s) appropriate.

In addition to the above, the Audit Committee shall commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material impact on our Group’s operating results and/or financial position. Each member of the Audit Committee shall abstain from voting on any resolutions and making any recommendations and/or participating in any deliberations of the Audit Committee in respect of matters in which he is interested.

The Audit Committee has nominated PricewaterhouseCoopers for re-appointment as auditor of the Company at the forthcoming AGM.

The Audit Committee has conducted an annual review of the volume of non-audit services to satisfy itself that the nature and extent of such services will not prejudice the independence and objectivity of the auditor before confirming their re-nomination.

Principle 12: Internal Controls

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities, as a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. During the year, the Audit Committee, on behalf of the Board, has reviewed the effectiveness of the internal

control system put in place by the management and is satisfied that there are adequate internal controls in the Company. The Directors regularly review the effectiveness of all internal controls, including operational controls.

Principle 13: Internal Audits

The Audit Committee’s responsibility in overseeing that the Company’s internal controls and risk management systems are adequate will be complemented by the work of the Internal Auditor (“IA”). The IA reports directly to the chairman of the Audit Committee on audit matters. The Audit Committee meets with the IA at least once during the year without the presence of management. The Audit Committee also reviews the IA’s reports on a quarterly basis. The Audit Committee also reviews and approves the annual IA plans and resources to ensure that the IA has the necessary resources to adequately perform its functions. The IA has adopted the Standards for Professional Practice of Internal Auditing set by The Institute of Internal Auditors.

To ensure the adequacy of the internal audit functions, the Audit Committee has reviewed the IA’s activities, the IA’s resources and standing in the Company, on a half yearly basis.

D. COMMUNiCATiON wiTh ShAREhOlDERS

Principle 14: Communication with ShareholdersPrinciple 15: Greater Shareholder Participation

We believe in regular and timely communication with shareholders as part of our organisation development to build systems and procedures that will enable us to operate globally.

We believe that a high level of disclosure on a timely basis is essential to enhance the standard of corporate governance. Hence, the Company does not practise selective disclosure. In line with the provisions of the Listing Manual of the SGX-ST and the Companies Act (Cap 50, Singapore), the Board’s policy is that all shareholders should be equally and timely informed of all major developments that impact the Company or the Group. It is also the Board’s policy that all corporate news, strategies and announcements be promptly disseminated through the SGXNET system, press releases, annual reports, and other various media including our corporate website (http://www.yhi.com.sg).

The Group Managing Director and executive Directors meet up with analysts and investors when our quarterly results are announced through the SGXNET system, to explain our financial performance, Group’s strategy and major developments. However, any information that may be regarded as undisclosed material information about the Group will not be given.

We support the Code’s principle to encourage shareholder participation. Shareholders are encouraged to attend the AGM and to stay informed of the Company’s strategy and goals, to ensure a high level of accountability. Notice of the AGM is



despatched to shareholders, together with explanatory notes or a circular on items of special business (if necessary), at least 14 working days before the meeting. Shareholders may vote in person or by proxy. The Board welcomes questions from shareholders who wish to raise issues either informally or formally before or at the AGM. The Chairpersons of the Audit, Remuneration and Nominating Committees, and the external auditors, are normally available at the meeting to answer questions relating to the work of their committees.

E. DEAliNG iN SECURiTiES

The Company has adopted internal codes pursuant to the SGX-ST Best Practices Guide applicable to all its officers in relation to dealings in the Company’s securities. Its officers are not allowed to deal in the Company’s shares during the period commencing two weeks before the announcement of the Company’s quarterly, half-yearly and one month before the announcement of the Company’s full year results and ending on the date of the announcement of these results.

Directors and executives are also expected to observe insider trading laws at all times even when dealing with securities within permitted trading period(s).

f. BEST PRACTiCES GUiDE

The Board confirms that during the financial year ended 31 December 2007, the Company has complied materially with the Best Practices Guide issued by SGX-ST and that internal controls are adequate for its current operations.

G. MATERiAl CONTRACTS

There were no material contracts entered into by the Company or its subsidiaries for the benefit of the Directors or controlling shareholders during the financial year ended 31 December 2007.

h. iNTERESTED PERSONS TRANSACTiONS

The Company has adopted an internal policy in respect of any transaction with interested persons and has set out the procedures for review and approval of the Company’s interested persons transactions.

In order to ensure that the Company complies with Chapter 9 of the Listing Manual of the SGX-ST on interested persons transactions, the Audit Committee meets quarterly to review all interested persons transactions of the Company. However, if the Company enters into an interested persons transaction, the Audit Committee ensures compliance with the relevant rules under Chapter 9.

There were no interested persons transactions conducted under the shareholders’ mandate pursuant to Rule 920 of the Listing Manual of the SGX-ST.

There were no interested persons transactions entered between the Group and interested persons during the financial period from 01 January 2007 to 31 December 2007.

Interested Persons

Aggregate value of all interested persons

transactions during the financial year under review (excluding transactions less

than S$100,000 and transactions conducted

under Shareholders’ Mandate)

Aggregate value of all interested persons

transactions conducted under shareholders’ Mandate (excluding transactions less

than S$100,000) TotalNA NIL NIL NIL


0:39

FINANCIAL Report

contents 0:40 Directors’Report 0:43 StatementbyDirectors 0:44 IndependentAuditor’sReport 0:45 ConsolidatedIncomeStatement 0:46 BalanceSheets 0:47 ConsolidatedStatementofChangesinEquity 0:48 ConsolidatedCashFlowStatement 0:49 NotestotheFinancialStatements 0:94 StatisticsofShareholdings 0:96 NoticeofAnnualGeneralMeeting ProxyForm


Directors’ ReportFor the financial year ended 31 December 2007

The directors present their report to the members together with the audited financial statements of the Group for the financial year ended 31 December 2007 and the balance sheet of the Company at 31 December 2007.

Directors

The directors of the Company in office at the date of this report are as follows:

Tay Tian Hoe Richard Tay Tiang Guan Tay Tiang Chong JacksonYuen Sou WaiHenry Tan Song KokHee Theng FongPhua Tin How

Arrangements to enable directors to acquire shares or debentures

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate, other than as disclosed under “Share Options” on page 41 of this report.

Directors’ interests in shares or debentures

According to the register of directors’ shareholdings, none of the directors holding office at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations, except as follows:

Holdings registeredin name of director or nominee

Holdings in whicha director is deemed to have an interest

At21.1.2008

At31.12.2007

At1.1.2007

At21.1.2008

At31.12.2007

At1.1.2007

The Company

Ordinary shares

Tay Tian Hoe Richard 13,240,000 13,234,000 8,600,000 342,423,628 342,423,628 341,391,628

Tay Tiang Guan 600,000 600,000 600,000 400,000 400,000 -

Yuen Sou Wai 240,000 240,000 240,000 - - -

Hee Theng Fong 120,000 120,000 120,000 - - -

Henry Tan Song Kok 40,000 40,000 40,000 - - -

Phua Tin How 110,000 110,000 240,000 - - -

YHI Holdings Pte Ltd

Ordinary shares

Tay Tian Hoe Richard 388,967 388,967 388,967 - - -

Tay Tiang Guan 170,450 170,450 170,450 - - -

Tay Tiang Chong Jackson 159,000 159,000 159,000 - - -

0:41

Directors’ contractual benefits

Since the end of the previous financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest, except as disclosed in the accompanying financial statements and in this report.

Share options

YHI Share Option Scheme

The YHI Share Option Scheme (the “Scheme”) in respect of unissued shares of the Company was approved by the shareholders of the Company at an Extraordinary General Meeting on 22 May 2003. The purpose of the Scheme is to provide an opportunity for executive directors and employees of the Group to participate in the equity of the Company so as to motivate them towards better performance through increased dedication and loyalty. The members of the Remuneration Committee administering the Scheme are Phua Tin How, Hee Theng Fong and Henry Tan Song Kok.

The aggregate number of shares issuable under the Scheme shall not exceed 15% of the issued shares of the Company. The number of Shares comprised in any options to be offered to a participant in the Scheme shall be determined at the absolute discretion of the Remuneration Committee, who shall take into account criteria such as the rank, the past performance, years of service, potential for future development and contribution of the participant.

Offers of options made to grantees, if not accepted by the grantees within 30 days will lapse. The Scheme shall continue in operation for a maximum of 10 years commencing on the date which the Scheme is adopted by the Company in general meeting, unless otherwise extended by the shareholders by ordinary resolution in general meeting.

There were no options granted during the financial year to subscribe for unissued shares of the Company or its subsidiaries.

No shares were issued during the year by virtue of the exercise of options to take up unissued shares of the Company or its subsidiaries.

There were no unissued shares of the Company under the option at the end of the financial year.




Audit Committee

The members of the Audit Committee at the end of the financial year were as follows:

Mr Henry Tan Song Kok (Chairman)Mr Hee Theng FongMr Phua Tin How

All members of the Audit Committee were non-executive directors.

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act. In performing those functions, the Committee reviewed:

- the scope and the results of internal audit procedures with the internal auditor;

- the audit plan of the Company’s independent auditor and its report on the weaknesses of internal accounting controls arising from the statutory audit;

- the assistance given by the Company’s management to the independent auditor; and

- the balance sheet of the Company and the consolidated financial statements of the Group for the financial year ended 31 December 2007 before their submission to the Board of Directors, as well as the independent auditor’s report on the balance sheet of the Company and the consolidated financial statements of the Group.

The Audit Committee has recommended to the Board that the independent auditor, PricewaterhouseCoopers, be nominated for re-appointment at the forthcoming Annual General Meeting of the Company.

Independent auditor

The independent auditor, PricewaterhouseCoopers, has expressed its willingness to accept re-appointment.

On behalf of the directors

TAY TIAN HOE RICHARDDirector

YUEN SOU WAIDirector

10 March 2008

0:43

In the opinion of the directors,

(a) the balance sheet of the Company and the consolidated financial statements of the Group as set out on pages 45 to 93 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group at 31 December 2007 and of the results of the business, changes in equity and cash flows of the Group for the financial year then ended; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the directors

TAY TIAN HOE RICHARDDirector

YUEN SOU WAIDirector

10 March 2008

Statement By DirectorsFor the financial year ended 31 December 2007


We have audited the accompanying financial statements of YHI International Limited (the “Company”) and its subsidiaries (the “Group”) set out on pages 45 to 93 which comprise the balance sheets of the Company and of the Group as at 31 December 2007, and the consolidated income statement, the consolidated statement of changes in equity and the consolidated cash flow statement of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

The Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of the Singapore Companies Act (Cap. 50) (the "Act") and Singapore Financial Reporting Standards. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 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,

(a) the balance sheet of the Company and the consolidated financial statements of the Group are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2007, and the results, changes in equity and cash flows of the Group for the financial year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditor, have been properly kept in accordance with the provisions of the Act.

PricewaterhouseCoopersCertified Public Accountants

Singapore, 10 March 2008

Independent Auditor’s Report To The Members Of YHI International Limited

0:45

Note 2007 2006

$’000 $’000

Sales 4 426,887 375,200

Cost of sales (327,954) (287,500)

Gross profit 98,933 87,700

Other income 4 1,959 2,289

Expenses

- Distribution (30,693) (24,863)

- Administrative (34,042) (31,784)

- Finance 6 (4,844) (3,322)

Share of profit of associated companies 16 2,476 5,532

Profit before income tax 33,789 35,552

Income tax expense 8 (5,950) (6,557)

Net profit 27,839 28,995

Attributable to:

Equity holders of the Company 26,256 27,513

Minority interests 1,583 1,482

27,839 28,995

Earnings per share attributable to the equity holders of the Company 9

- Basic 4.49 cents 4.71 cents

- Diluted 4.49 cents 4.71 cents

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

Consolidated Income StatementFor the financial year ended 31 December 2007


The Group The CompanyNote 2007 2006 2007 2006

$’000 $’000 $’000 $’000ASSETSCurrent assetsCash and cash equivalents 10 23,360 19,890 471 529Trade and other receivables 11 84,253 66,627 50,164 47,541Inventories 12 92,971 67,746 - -Derivative financial instruments 13 - 283 - -Other current assets 14 9,864 6,129 39 31

210,448 160,675 50,674 48,101Non-current assetsFinancial assets, available-for-sale 15 6,830 5,015 - -Transferable club membership, at cost 131 131 - -Investment in associated companies 16 16,650 14,174 - -Investment in subsidiaries 17 - - 72,917 66,226Property, plant and equipment 18 88,643 83,512 351 531Intangible assets 19 5,303 5,303 - -Deferred income tax assets 8 3,489 2,862 - -

121,046 110,997 73,268 66,757

Total assets 331,494 271,672 123,942 114,858

LIABILITIESCurrent liabilitiesTrade and other payables 20 59,837 54,091 5,053 4,478Current income tax liabilities 8 3,765 3,398 843 1,259Borrowings 21 85,209 53,267 - -Derivative financial instruments 13 - 210 - -

148,811 110,966 5,896 5,737Non-current liabilitiesBorrowings 21 8,307 6,159 - -Deferred income tax liabilities 8 1,305 1,784 - -

9,612 7,943 - -

Total liabilities 158,423 118,909 5,896 5,737

NET ASSETS 173,071 152,763 118,046 109,121

EQUITYCapital and reserves attributable to

equity holders of the CompanyShare capital 23 77,001 77,001 77,001 77,001Other reserves 24 1,125 (290) - -Retained earnings 25 89,983 71,390 41,045 32,120

168,109 148,101 118,046 109,121Minority interests 4,962 4,662 - -Total equity 173,071 152,763 118,046 109,121


Balance SheetsAs at 31 December 2007

0:47

Attributable to equity holders of the Company

NoteSharecapital

Otherreserves

Retained earnings Sub-total

Minorityinterests Total

$’000 $’000 $’000 $’000 $’000 $’000

2007

Beginning of financial year 77,001 (290) 71,390 148,101 4,662 152,763

Income and losses recognised directly in equity - currency translation differences - 767 - 767 (711) 56

Net profit - - 26,256 26,256 1,583 27,839

Total recognised income and losses - 767 26,256 27,023 872 27,895

Transfer to other reserves - 648 (648) - - -

Dividends relating to 2006 paid 26 - - (7,015) (7,015) (572) (7,587)

End of financial year 77,001 1,125 89,983 168,109 4,962 173,071

2006

Beginning of financial year 77,001 3,040 49,861 129,902 3,410 133,312

Losses recognised directly in equity - currency translation differences - (3,469) - (3,469) 246 (3,223)

Net profit - - 27,513 27,513 1,482 28,995

Total recognised income and losses - (3,469) 27,513 24,044 1,728 25,772

Transfer to general reserve - 139 (139) - - -

Dividends relating to 2005 paid 26 - - (5,845) (5,845) (476) (6,321)

End of financial year 77,001 (290) 71,390 148,101 4,662 152,763


Consolidated Statement of Changes in EquityFor the financial year ended 31 December 2007


Consolidated Cash Flow StatementFor the financial year ended 31 December 2007

Note 2007 2006$’000 $’000

Cash flows from operating activitiesTotal profit 27,839 28,995

Adjustments for: - Income tax expense 5,950 6,557 - Depreciation of property, plant and equipment 9,739 7,511 - Interest expense 4,844 3,322 - Interest income (343) (365) - Gain on disposal of property, plant and equipment (110) (1,157) - Share of profit of associated companies (2,476) (5,532) - Changes in fair values of derivatives 73 (34) - Exchange differences (309) (256)Operating cash flow before working capital changes 45,207 39,041

Changes in operating assets and liabilities, net of effects from acquisition and disposal of subsidiary: - Trade and other receivables (17,626) (7,009) - Inventories (25,225) (6,923) - Other current assets (3,735) (958) - Trade and other payables 6,835 6,191Cash generated from operations 5,456 30,342

Interest received 343 365Income tax paid (6,685) (6,574)Net cash (used in)/provided by operating activities (886) 24,133

Cash flows from investing activitiesAcquisition of investments in associated companies - (8,642)Proceeds from disposal of property, plant and equipment 2,098 2,269Purchase of property, plant and equipment (17,197) (35,962)Purchase of financial assets, available-for-sale (1,815) (1,371)Net cash used in investing activities (16,914) (43,706)

Cash flows from financing activitiesDividends paid (7,015) (5,845)Dividends paid to minority interests (572) (476)Interest paid (4,802) (3,312)Proceeds from borrowings 53,245 37,697Repayment of borrowings (21,291) (11,300)Repayment of loan from holding corporation - (5,250)Repayment of finance lease liabilities (327) (300)Net cash provided by financing activities 19,238 11,214

Net increase/(decrease) in cash and cash equivalents held 1,438 (8,359)Cash and cash equivalents at the beginning of financial year 18,568 27,596Effects of currency translation on cash and cash equivalents (56) (669)Cash and cash equivalents at the end of financial year 10 19,950 18,568


0:49

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. General information

YHI International Limited (the “Company”) is incorporated and domiciled in Singapore. The address of its registered office is No. 2 Pandan Road, Singapore 609254.

The Company is listed on the Singapore Exchange.

The principal activity of the Company is that of an investment holding company. The principal activities of its subsidiaries are set out in Note 17 to the financial statements.

2. Significant accounting policies

2.1 Basis of preparation

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3.

Interpretations and amendments to published standards effective in 2007

On 1 January 2007, the Group adopted the new or amended FRS and Interpretations to FRS ("INT FRS") that are mandatory for application from that date. Changes to the Group’s accounting policies have been made as required, in accordance with the relevant transitional provisions in the respective FRS and INT FRS.

Notes To The Financial StatementsFor the financial year ended 31 December 2007


2. Significant accounting policies (continued)

2.1 Basis of preparation (continued)

The following are the new or amended FRS and INT FRS that are relevant to the Group:

Amendments to FRS 1 Presentation of Financial Statements - Capital DisclosuresFRS 107 Financial Instruments: DisclosureINT FRS 110 Interim Financial Reporting and Impairment

The adoption of the above new or revised FRS or INT FRS did not result in any substantial changes to the Group’s accounting policies nor any significant impact on these financial statements. FRS 107 and the complementary amended FRS 1 introduce new disclosures relating to financial instruments and capital respectively.

2.2 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Group’s activities. Revenue is presented, net of value-added tax, rebates and discounts, and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that future economic benefits will flow to the entity and when the specific criteria for each Group’s activities are met as follows:

(a) Sale of goods – automotive and industrial products; and alloy wheels

Revenue from sales of goods is recognised when a Group entity has delivered the products to locations specified by its customers, the customers have accepted the products in accordance with the sales terms and the collectibility of the related receivables is reasonably assured.

(b) Interest income

Interest income is recognised on a time-proportion basis using the effective interest method.

(c) Dividend income

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


0:51


2.3 Group accounting

(a) Subsidiaries

Subsidiaries are entities (including special purpose entities) over which the Group has power to govern the financial and operating policies, generally accompanying by a shareholding giving rise to the majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition, irrespective of the extent of any minority interest. Please refer to the paragraph “Intangible assets – Goodwill” for the accounting policy on goodwill on acquisition of subsidiaries.

Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Minority interests are that part of the net results of operations and of net assets of a subsidiary attributable to interests which are not owned directly or indirectly by the Group. They are measured at the minorities’ share of the fair values of the subsidiaries’ identifiable assets and liabilities at the date of acquisition by the Group and the minorities’ share of changes in equity since the date of acquisition, except when the minorities’ share of losses in a subsidiary exceeds its interests in the equity of that subsidiary. In such cases, the excess and further losses applicable to the minorities are attributed to the equity holders of the Company, unless the minorities have a binding obligation to, and are able to, make good the losses. When that subsidiary subsequently reports profits, the profits applicable to the minority interests are attributed to the equity holders of the Company until the minorities’ share of losses previously absorbed by the equity holders of the Company are fully recovered.

Please refer to the paragraph “Investments in subsidiaries and associated companies” for the accounting policy on investments in subsidiaries in the separate financial statements of the Company.

(b) Transactions with minority interests

The Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group. Disposals to minority interests result in gains and losses for the Group that are recognised in the income statement. The difference between any consideration paid to minority interests for purchases of additional equity interest in a subsidiary and the incremental share of the carrying value of the net assets of the subsidiary is recognised as goodwill.

(c) Associated companies

Associated companies are entities over which the Group has significant influence, but not control, generally accompanied by a shareholding giving rise to between and including 20% and 50% of the voting rights. Investments in associated companies are accounted for in the consolidated financial statements using the equity method of accounting. Investments in associated companies in the consolidated balance sheet includes goodwill (net of any accumulated impairment losses) identified on acquisition. Please refer to the paragraph “Intangible assets – Goodwill” for the Group’s accounting policy on goodwill.




2.3 Group accounting (continued)

(c) Associated companies (continued)

Investments in associated companies are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

In applying the equity method of accounting, the Group’s share of its associated companies’ post-acquisition profits or losses is recognised in the income statement and its share of post-acquisition movements in reserves is recognised in equity directly. These post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has incurred obligations or has made payments on behalf of the associated company.

Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group's interest in the associated companies. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associated companies have been changed where necessary to ensure consistency with the accounting policies adopted by the Group.

Please refer to the paragraph “Investment in subsidiaries and associated companies” for the accounting policy on investments in associated companies in the separate financial statements of the Company.

2.4 Property, plant and equipment

(a) Measurement

(i) Property, plant and equipment

Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses.

(ii) Component of costs

The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. The projected cost of dismantlement, removal or restoration is also included as part of the cost of property, plant and equipment if the obligation for the dismantlement, removal or restoration is incurred as a consequence of either acquiring or using the asset for purpose other than to produce inventories.


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2.4 Property, plant and equipment (continued)

(b) Depreciation

Freehold land is not depreciated. Depreciation on other items of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

Useful livesFreehold buildings 50 yearsLeasehold properties 3 to 50 yearsOffice equipment, plant and machinery 2 to 5 yearsMotor vehicles 3 to 7 yearsRenovation 5 to 10 yearsComputers 2 to 5 yearsFurniture and fittings 2 to 10 years

The residual values, estimated useful lives and deprecation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are included in the income statement for the financial year in which the changes arise.

(c) Subsequent expenditure

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost can be reliably measured. All other repair and maintenance expense is recognised in the income statement during the financial year in which it is incurred.

(d) Disposal

On disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and its carrying amount is taken to the income statement.

2.5 Intangible assets

(a) Goodwill

Goodwill represents the excess of the cost of an acquisition of subsidiaries or associated companies over the fair value of the Group’s share of their identifiable net assets of the acquired subsidiaries or associated companies at the date of acquisition.

Goodwill on acquisitions of subsidiaries is included in intangible assets and carried at cost less accumulated impairment losses.

Goodwill on acquisition of associated companies is included in the carrying amount of investments in associated companies.

The excess of identifiable net assets at acquisition over the purchase consideration is recognised in the income statement.

Gains and losses on the disposal of subsidiaries and associated companies include the carrying amount of goodwill relating to the entity sold, except for goodwill arising from acquisitions prior to 1 January 2001. Such goodwill was adjusted against retained earnings in the year of acquisition and not recognised in the income statement on disposal.




2.5 Intangible assets (continued) (b) Trademarks

Trademarks acquired as part of business combinations are initially recognised at their fair values at the acquisition date and are subsequently carried at cost (i.e. the fair values at initial recognition) less accumulated amortisation and impairment losses. These costs are amortised to the income statement using the straight-line method over 30 years.

The amortisation period and amortisation method of trademarks are reviewed at least at each balance sheet date. The effects of any revision are included in the income statement for the financial year in which the changes arise.

2.6 Investments in subsidiaries and associated companies

Investments in subsidiaries and associated companies are stated at cost less accumulated impairment losses in the Company’s balance sheet. On disposal of investments in subsidiaries and associated companies, the difference between net disposal proceeds and the carrying amounts of the investments are recognised in the income statement.

2.7 Impairment of non-financial assets

(a) Goodwill

Goodwill is tested for impairment annually and whenever there is any indication that the goodwill may be impaired. Goodwill included in the carrying amount of an investment in associated company is tested for impairment as part of the investment, rather than separately.

For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating-units (“CGU”) expected to benefit from synergies arising from the business combination.

An impairment loss is recognised when the carrying amount of CGU, including the goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.

The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.

An impairment loss on goodwill is recognised in the income statement and is not reversed in a subsequent period.

(b) Intangible assets Property, plant and equipment Investment in subsidiaries and associated companies

Intangible assets, property, plant and equipment and investments in subsidiaries and associated companies are tested for impairment whenever there is any objective evidence that these assets may be impaired.

For the purpose of impairment testing, recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the CGU to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The impairment loss is recognised in the income statement.


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2.7 Impairment of non-financial assets (continued)

(b) Intangible assets Property, plant and equipment Investment in subsidiaries and associated companies (continued)

An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in the income statement.

2.8 Financial assets

(a) Classification

The Group classifies financial assets in the following categories: loans and receivables, and financial assets, available-for-sale. The classification depends on the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this designation at every reporting date.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except those maturing later than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are presented as “trade and other receivables” on the balance sheet.

(ii) Financial assets, available-for-sale

Financial assets, available-for-sale are non-derivatives that are either designated in this category or not classified in any of the other categories. They are presented as non-current assets unless management intends to dispose of the assets within 12 months after the balance sheet date.

(b) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset.

Financial assets are derecognised when the right to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

On disposal of a financial asset, the difference between the net sale proceeds and its carrying amount is taken to the income statement. Any amount in the fair value reserve relating to that asset is also taken to the income statement.

(c) Initial measurement

Financial assets are initially recognised at fair value plus transaction costs.

(d) Subsequent measurement

Financial assets, available-for-sale are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method.

Interest and dividend income on financial assets, available-for-sale are recognised separately in the income statement. Changes in the fair values of available-for-sale debt securities (i.e. monetary items) denominated in foreign currencies are analysed into currency translation differences on the amortised cost of the securities and other changes; the currency translation differences are recognised in the income statement and the other changes are recognised in the fair value reserve. Changes in fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised in the fair value reserve, together with the related currency translation differences.




2.8 Financial assets (continued)

(e) Impairment

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists.

(i) Loans and receivables

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delay in payments are objective evidence that these financial assets are impaired.

The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in the income statement.

The allowance for impairment loss account is reduced through the income statement in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost had no impairment been recognised in prior periods.

(ii) Financial assets, available-for-sale

Significant or prolonged declines in the fair value of the security below its cost and the disappearance of an active trading market for the security are objective evidence that the security is impaired.

The cumulative loss that was recognised in the fair value reserve is transferred to the income statement. The cumulative loss is measured as the difference between the acquisition cost (net of any principal repayments and amortisation) and the current fair value, less any impairment loss previously recognised in the income statement on debt securities. The impairment losses recognised in the income statement on equity securities are not reversed through the income statement.

2.9 Financial guarantees

The Company has issued corporate guarantees to banks for bank borrowings of its subsidiaries. These guarantees are financial guarantee contracts as they require the Company to reimburse the banks if the subsidiaries fail to make principal or interest payments when due in accordance with the terms of their borrowings.

Financial guarantees are initially recognised at their fair values plus transaction costs in the Company's balance sheet.

Financial guarantees are subsequently amortised to the income statement over the period of the subsidiaries’ borrowings, unless it is probable that the Company will reimburse the bank for an amount higher than the unamortised amount. In this case, the financial guarantee shall be carried at the expected amount payable to the bank in the Company's balance sheet.

Intragroup transactions are eliminated on consolidation.

2.10 Borrowings

Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date.

Borrowings are initially recognised at fair value, (net of transaction costs) and are subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.


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2. Significant accounting policies (continued) 2.11 Trade and other payables

Trade and other payables are initially recognised at fair value, and subsequently measured at amortised cost using the effective interest method.

2.12 Derivative financial instruments and hedging activities

A derivative financial instrument is initially recognised at fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The Group has entered into currency forwards for currency risk arising from its firm commitments for purchases and sales denominated in foreign currencies. These contracts do not qualify for hedge accounting and consequently, the changes in fair values of these contracts are recognised in the income statement.

2.13 Fair value estimation

The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter securities and derivatives) are based on quoted market prices at the balance sheet date. The quoted market prices used for financial assets are the current bid prices; the appropriate quoted market prices for financial liabilities are the current ask prices. The fair values of forward currency contracts are determined using actively quoted forward currency rates at the balance sheet date.

The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used. Valuation techniques, such as estimated discounted cash flows, are also used to determine the fair values of the financial instruments.

The fair values of financial liabilities carried at amortised cost are estimated by discounting the future contractual cash flows at the current market interest rates that are available to the Group for similar financial liabilities.

The carrying amounts of current financial assets and liabilities carried at amortised cost approximated their fair values.

2.14 Leases

The Group leases certain property, plant and equipment from non-related parties.

Finance leases

Leases of property, plant and equipment where the Group assumes substantially all risks and rewards incidental to ownership of the lease assets are classified as finance leases.

The leased assets and the corresponding lease liabilities (net of finance charges) under finance leases are recognised on the balance sheet as property, plant and equipment and borrowings respectively, at the inception of the leases based on the lower of the fair values of the leased assets and the present values of the minimum lease payments.

Each lease payment is apportioned between the finance expense and the reduction of the outstanding lease liability. The finance expense is recognised in the income statement on a basis that reflects a constant periodic rate of interest on the finance lease liability.




2.14 Leases (continued)

Operating leases

Leases of property, plant and equipment where all risks and rewards incidental to ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessors) are taken to the income statement on a straight-line basis over the period of the lease.

2.15 Inventories

Inventories are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. The cost of finished goods and work-in-progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

2.16 Income taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arise from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting nor taxable profit or loss.

Deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries and associated companies, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences and tax losses can be utilised.

Deferred income tax is measured:

(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expenses in the income statement, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax on temporary differences arising from the fair value gains and losses on financial assets, available-for-sale are charged or credited directly to equity in the same period the temporary differences arise. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.


0:59

2. Significant accounting policies (continued) 2.17 Provisions

Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

2.18 Employee compensation

(a) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The Group’s contributions are recognised as employee compensation expense when they are due, unless they can be capitalised as an asset.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.

2.19 Currency translation

(a) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Singapore Dollar, which is the Company’s functional currency.

(b) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Currency translation differences from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in the income statement, unless they arise from borrowings in foreign currencies, other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations. Those currency translation differences are recognised in the current transaction reserves in the consolidated financial statements and transferred to the income statement as part of the gain or loss on disposal of the foreign operation.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

(c) Translation of Group entities’ financial statements

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing rates at the date of that balance sheet;

(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) All resulting exchange differences are taken to the foreign currency translation reserve.

Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2005 are treated as assets and liabilities of the foreign operations and translated at the closing rates at the date of the balance sheet. For acquisitions prior to 1 January 2005, the exchange rates at the dates of acquisition are used.




2.20 Segment reporting

A business segment is a distinguishable component of the Group engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is a distinguishable component of the Group engaged in providing products or services within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments.

2.21 Cash and cash equivalents

For the purpose of presentation in the consolidated cash flow statement, cash and cash equivalents include cash on hand, deposits with financial institutions and bank overdrafts. Bank overdrafts are presented as current borrowings on the balance sheet.

2.22 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.

2.23 Dividends

Interim dividends are recorded during the financial year in which they are declared payable. Final dividends are recorded during the financial year in which the dividends are approved by the shareholders.

3. Critical accounting estimates, assumptions and judgements

Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(i) Estimated impairment of goodwill

Goodwill is tested for impairment annually and whenever there is indication that goodwill may be impaired. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates (see Note 19).

(ii) Impairment of property, plant and equipment

Property, plant and equipment are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired. The Group considers the guidance of FRS 36 in assessing whether there is any indication that an item of the above assets may be impaired. This assessment requires significant judgement.

If any objective evidence or indication of impairment exists, the recoverable amount of the assets is estimated to ascertain the amount of impairment loss. The recoverable amount is defined as the higher of the fair value less cost to sell and value-in-use.

In determining the value-in-use of assets, the Group applies a discounted cash flow model where the future cash flows derived from such assets are discounted at an appropriate rate. Forecasts of future cash flow are estimated based on financial budgets and forecasts approved by the management.

(iii) Estimated useful lives and residual values of property, plant and equipment

The Group reviews the appropriateness of the estimated useful lives and residual values of property, plant and equipment at each balance sheet date. Changes in the expected level of usage and technological advancements could impact the economic useful lives and residual values of these assets. Where there is a material change in the estimated useful lives and residual values of property, plant and equipment, such a change will impact the future depreciation charges in the financial period in which the change arises.


0:61

3. Critical accounting estimates, assumptions and judgements (continued)

(iv) Impairment of loans and receivables

Management reviews its loans and receivables for objective evidence of impairment monthly. Significant financial difficulties of the debtor, the probability that the debtor will enter bankruptcy, and default or significant delay in payments are considered objective evidence that a receivable is impaired. In determining this, management makes judgements as to whether there is observable data indicating that there has been a significant change in the payment ability of the debtor, or whether there have been significant changes with adverse effect in the technological, market, economic or legal environment in which the debtor operates in.

Where there is objective evidence of impairment, management makes judgements as to whether an impairment loss should be recorded in the income statement. In determining this, management uses estimates based on historical loss experience for assets with similar credit risk characteristics. The methodology and assumptions used for estimating both the amount and timing of future cash flows are reviewed regularly to reduce any differences between the estimated loss and actual loss experience.

4. Revenue and other income

The Group

2007 2006

$’000 $’000

Sale of automotive and industrial products 274,134 263,551

Sale of alloy wheels 152,753 111,649

Total sales 426,887 375,200

Other income:

- Changes in fair value of financial assets and liabilities held for trading (73) 34

- Gain on disposal of property, plant and equipment 110 1,157

- Interest income 343 365

- Bad debt recovery 548 -

- Other 1,031 733

Total other income 1,959 2,289

428,846 377,489



5. Expenses by nature

The Group

2007 2006

$’000 $’000

Raw materials, finished goods and consumables 337,874 286,426

Changes in inventories of raw materials, work-in-progress and finished goods (25,225) (10,528)

Depreciation of property, plant and equipment (Note 18) 9,739 7,511

Employee compensation (Note 7) 33,803 30,611

Advertising expenses 2,018 4,510

Carriage outwards 7,712 6,346

Commission 3,381 2,359

Rental on operating leases 2,921 2,047

Research expense 2,303 1,656

Transportation and travelling expenses 3,876 3,762

Other expenses 14,240 9,392

Other fees paid/payable to:

- auditor of the Company 20 18

- other auditors 27 37

Total cost of sales, distribution and administrative expenses 392,689 344,147

6. Finance expenses

The Group

2007 2006

$’000 $’000

Interest expense:

- Bank loans 3,138 2,131

- Bank overdrafts 561 326

- Trust receipt loans 1,017 670

- Finance leases 128 92

- Loan from holding corporation - 103

4,844 3,322

7. Employee compensation

The Group

2007 2006

$’000 $’000

Wages and salaries 31,070 28,122

Employer’s contribution to defined contribution plans

including Central Provident Fund 2,733 2,489

33,803 30,611


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8. Income tax

(a) Income tax expense

The Group

2007 2006

$’000 $’000

Tax expense attributable to profit is made up of:

Current income tax

- Singapore 2,450 3,206

- Foreign 5,187 4,454

7,637 7,660

Deferred income tax (1,186) (415)

6,451 7,245

Over provision of current income tax in the previous financial years (547) (320)

Over/(under) provision of deferred income tax assets in the previous financial years 46 (368)

5,950 6,557

The tax expense on profit differs from the amount that would arise using the Singapore standard rate of income tax due to the following:

The Group

2007 2006

$’000 $’000

Profit before income tax 33,789 35,552

Tax calculated at a tax rate of 18% (2006: 20%) 6,082 7,110

Effects of:

- Change in Singapore tax rate (7) -

- Singapore statutory stepped income exemption (70) (32)

- Effects of different tax rates in other countries (247) 310

- Income not subject to tax (213) (23)

- Excess of share of net identifiable assets of an associated company over the purchase consideration - (1,078)

- Expenses not deductible for tax purposes 991 1,118

- Exempt income (104) (117)

- Other 19 (43)

6,451 7,245



8. Income tax (continued)

(b) Movements in current income tax liabilities

The Group The Company

2007 2006 2007 2006

$’000 $’000 $’000 $’000

Beginning of financial year 3,398 2,651 1,259 596

Currency translation differences (38) (19) - -

Income tax paid (6,685) (6,574) (439) (1,788)

Tax expense on profit from the current financial year 7,637 7,660 545 2,451

Over provision in previous financial years (547) (320) (522) -

End of financial year 3,765 3,398 843 1,259

(c) Deferred income taxes

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current income tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts, determined after appropriate offsetting, are shown on the balance sheets as follows:

The Group

2007 2006

$’000 $’000

Deferred income tax assets:

- To be recovered within one year (290) (338)

- To be recovered after one year (3,199) (2,524)

(3,489) (2,862)

Deferred income tax liabilities:

- To be settled within one year 578 161

- To be settled after one year 727 1,623

1,305 1,784

The movement in the deferred income tax account is as follows:

The Group

2007 2006

$’000 $’000

Beginning of financial year (1,078) (410)

Effects of change in Singapore tax rate (7) -

Currency translation differences 41 115

Credited to income statement (1,186) (415)

Over/(under) provision of deferred tax assets in previous financial years 46 (368)

End of financial year (2,184) (1,078)


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8. Income tax (continued)

(c) Deferred income taxes (continued)

The movement in the deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the financial year is as follows:

Deferred income tax liabilities

Accelerated tax depreciation

$’000

2007

Beginning of financial year 1,784

Effect of change in Singapore tax rate (7)

Currency translation differences (16)

Credited to income statement (474)

Under provision in previous financial years 18

End of financial year 1,305

2006

Beginning of financial year 1,968

Currency translation differences (13)

Credited to income statement (173)

Under provision in previous financial years 2

End of financial year 1,784

Deferred income tax assets

ProvisionImpairment of assets Tax losses Other Total

$’000 $’000 $’000 $’000 $’000

2007

Beginning of financial year (2,508) (3) (202) (149) (2,862)

Currency translation differences 14 1 11 32 58

Charged/(credited) to income statement (673) - (5) (34) (712)

Over provision in previous financial years 27 - - - 27

End of financial year (3,140) (2) (196) (151) (3,489)

2006

Beginning of financial year (2,163) (8) (131) (76) (2,378)

Currency translation differences 86 - 13 29 128

Charged/(credited) to income statement (91) 5 (84) (72) (242)

Under provision in preceding financial year (340) - - (30) (370)

End of financial year (2,508) (3) (202) (149) (2,862)



9. Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year.

The Group

2007 2006

Net profit attributable to equity holders of the Company ($’000) 26,256 27,513

Weighted average number of ordinary shares in issue

for basic earnings per share (’000) 584,592 584,592

Basic earnings per share 4.49 cents 4.71 cents

Diluted earnings per share is the same as basic earnings per share. There are no dilutive potential ordinary shares as there are no outstanding share options at the beginning and end of the financial year.

10. Cash and cash equivalents


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Cash at bank and on hand 22,356 19,890 471 529

Short-term bank deposits 1,004 - - -

23,360 19,890 471 529

The carrying amounts of cash and cash equivalents approximated their fair values at the balance sheet date.

For the purposes of the consolidated cash flow statement, the consolidated cash and cash equivalents comprise the following:

The Group

2007 2006

$’000 $’000

Cash and bank balances (as above) 23,360 19,890

Less: Bank overdrafts (Note 21) (3,410) (1,322)

Cash and cash equivalents per consolidated cash flow statement 19,950 18,568


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11. Trade and other receivables


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Trade receivables - non-related parties 87,408 69,108 - -

Less: Allowance for impairment of receivables - non-related parties (5,790) (6,495) - -

Trade receivables - net 81,618 62,613 - -

Due from associated companies (trade) 64 - - -

Due from subsidiaries (non-trade) - - 50,164 47,541

Other receivables 2,571 4,014 - -

84,253 66,627 50,164 47,541

Concentration of credit risk with respect to trade receivables are limited due to the Group’s large number of customers who are widely dispersed. Accordingly, management believes that no anticipated additional credit risk beyond the amount of allowance for impairment made is inherent in the Group’s trade receivables.

The non-trade amounts due from subsidiaries are unsecured, interest-free and are repayable on demand.

At the balance sheet date, the carrying amounts of trade and other receivables approximated their fair values.

12. Inventories

The Group

2007 2006

$’000 $’000

Materials and supplies 8,387 8,579

Work-in-progress 4,058 4,097

Finished goods 80,526 55,070

92,971 67,746

The cost of inventories recognised as an expense and included in “cost of sales” amounted to $312,649,000 (2006: $275,898,000).

Inventories of $20,351,000 (2006: $15,902,000) of the Group have been pledged as security for bank borrowings (Note 21).



13. Derivatives

Forward foreign exchange contracts

Forward currency contracts are entered into to manage exposure to fluctuations in foreign currency exchange rate on specific transactions. Financial assets and liabilities held for trading are accounted in accordance with the accounting policy as set out in Note 2.12.

The table below sets out the notional principal amounts of the outstanding forward currency contracts of the Group, and their corresponding favourable and unfavourable fair values at the balance sheet date:

Notional principalFavourable fair value

Unfavourable fair value

2007 2006 2007 2006 2007 2006

$’000 $’000 $’000 $’000 $’000 $’000

The Group

United States Dollar - 5,974 - 283 - 210

At 31 December 2007, there are no outstanding forward foreign exchange contracts. For the previous year ended 31 December 2006, the settlement dates of these contracts ranged from 1 to 3 months.

14. Other current assets


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Prepayments 9,387 5,470 35 30

Deposits 477 659 4 1

9,864 6,129 39 31

The carrying amounts of deposits approximated their fair values at the balance sheet date.

15. Financial assets, available-for-sale

The Group

2007 2006

$’000 $’000

Beginning of financial year 5,015 3,644

Additional investment in equity securities 1,815 1,371

End of financial year 6,830 5,015


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15. Financial assets, available-for-sale (continued)

At the balance sheet date, financial assets, available-for-sale included the following:

The Group

2007 2006

$’000 $’000

Unlisted Securities:- Equity securities 6,830 5,015

There is no active market for the equity interest. In addition, the purchase agreements of the equity securities stipulated the requirement to sell all interests to the main shareholders, when the need arises. As such, it is not practicable to determine with sufficient reliability the fair value of the securities.

16. Investment in associated companies

The Group

2007 2006

$’000 $’000

Beginning of financial year 14,174 -

Acquisitions during the financial year, at cost - 8,642

Excess of share of identifiable net assets over the purchase consideration - 5,390

Share of profits 2,476 142

2,476 5,532

16,650 14,174

The summarised financial information of associated companies are as follows:

The Group

2007 2006

$’000 $’000

- Assets 99,033 116,334

- Liabilities 70,719 86,825

- Revenues 222,171 152,571

- Net profits 7,065 1,996

In the previous financial year, the excess of share of identifiable net assets over the purchase consideration of $5,390,000 arising from acquisition of an associated company during that financial year was included in “Share of profits of associated companies” in the income statement.



16. Investment in associated companies (continued)

Details of associated companies are as follows:

Name of companies Principal activitiesCountry of business/

incorporation Effective

equity holding2007 2006

% %Held by subsidiaries:

OZ S.p.A * Investment holding, manufacturer, importer, exporter and distributor of alloy wheels

Italy 36 36

Yokohama Tire (Shanghai) Sales Co. Ltd **

Distributor of tyres and related goods

The People’s Republic of China

49 49

* Audited by Deloitte and Touche, Italy.

** Audited by Shanghai Maiyizi CPA Firm, China.

17. Investments in subsidiaries

The Company

2007 2006

$’000 $’000


Addition 6,691 -


Details of subsidiaries are as follows:

Name of Companies Principal activitiesCountry of business/

incorporationEffective


% %Held by the Company:

(a) YHI Manufacturing (Singapore) Pte Ltd

Investment holding, importer, exporter and distributor of alloy wheels and related goods

Singapore 100 100

(a) YHI Corporation (Singapore) Pte Ltd

Importer, exporter and distributor of tyres, alloy wheels and related goods and industrial batteries

Singapore 100 100

(b) YHI (Malaysia) Sdn Bhd Importer and distributor of tyres, alloy wheels and related goods and industrial batteries

Malaysia 100 100

(c) YHI (China) Strategy Company Limited

Investment holding, trading of golf car accessories and related goods

Hong Kong 100 100

(c) YHI (Hong Kong) Co Limited Importer, exporter and distributor of tyres, alloy wheels and related goods

Hong Kong 100 100


0:71

17. Investments in subsidiaries (continued)




% %

Held by the Company:

(d) YHI International (Taiwan) Co., Ltd.

Manufacturing, distribution and export of alloy wheels

Taiwan 100 100

(e) YHI (Australia) Pty Limited Importer and distributor of tyres, alloy wheels and related goods

Australia 80 80

(f) YHI (New Zealand) Limited Importer and distributor of tyres, alloy wheels and related goods

New Zealand 70 70

Held by subsidiaries:

(g) YHI Manufacturing (Shanghai) Co., Ltd (1)



100 100

(g) YHI Advanti Manufacturing (Shanghai) Co., Ltd (1)



100 100

(g) Eastbourne Metal Coatings Co., Ltd (1)

Metal finishing services for aluminium wheels and accessories


100 100

(g) YHI Precision Moulding (Shanghai) Co., Ltd (1)

Manufacturing and supply of alloy wheels moulds


100 100

(g) YHI Advanti Manufacturing (Suzhou) Co Ltd (1)



100 100

(b) YHI Manufacturing (Malaysia) Sdn Bhd (1)


Malaysia 100 100

(a) YHI (America) Pte Ltd (1) Investment holding Singapore 100 100

(h) Pan-Mar Corporation D/B/A Konig (American) (4)

Importer, exporter and distributor of tyres, alloy wheels and related goods

The United States of America

51 51

(i) TTS International Co., Ltd (1) Importer, exporter and distributor of alloy wheels and related goods

Japan 60 60

(g) YHI International Marketing (Shanghai) Co., Ltd (2)

Distribution of tyres, alloy wheels and related goods


100 100



17. Investments in subsidiaries (continued)




% %

Held by subsidiaries:

(e) YHI Power Pty Limited (3) Importer and distributor of industrial batteries

Australia 64 64

(j) YHI Corporation (Thailand) Co Ltd (5)


Thailand 49 49

(g) Autotrend Co Ltd (5) Retail of tyres, alloy wheels, industrial batteries and related goods


100 100

(b) Evo-Trend Corporation (Malaysia) Sdn Bhd (5)


Malaysia 80 80

(k) YHI (Middle East) FZE (5) (6) Distribution of tyres, alloy wheels and related goods

United Arab Emirates 100 -

(l) YHI Corporation (Guangzhou) Co Ltd (2) (6)


The People’sRepublic of China

100 -

(m) YHI (Canada) Inc. (4) (6) Distribution of tyres, alloy wheels and related goods

Canada 90 -

(a) Audited by PricewaterhouseCoopers, Singapore.

(b) Audited by SE Lai Associates, Malaysia. *

(c) Audited by Wilson Ho & Co., Hong Kong. *

(d) Audited by KPMG, Taiwan. *

(e) Audited by Lamb Lowe & Partners, Australia. *

(f) Audited by PricewaterhouseCoopers, New Zealand.

(g) Audited by Shanghai Da Long Certified Public Accountants Co., Ltd for local statutory purposes. For the purpose of preparing the consolidated financial statements,

these financial statements have been audited by PricewaterhouseCoopers, Shanghai.

(h) Audited by J.P. Marsala & Co., United States of America. *

(i) Not required to be audited under the laws of the country of incorporation. For the purpose of preparing the consolidated financial statements, certain review procedures

have been carried out on these financial statements by PricewaterhouseCoopers, Japan.

(j) YHI Corporation (Thailand) Co Ltd is regarded as a subsidiary on the basis that the Group has power to govern its financial and operating policies. This subsidiary is

audited by Navamin Dherakasatechai, Thailand. *

(k) Audited by N.R. Doshi & Co., UAE. *

(l) Audited by Shanghai Da Long Public Accountants Co., Ltd for local statutory purposes. For the purpose of preparing the consolidated financial statements, these

financial statements have been audited by Wilson Ho & Co., Hong Kong. *

(m) Audited by Henderson Tse Chartered Accountants, Canada. *

* The net assets as at 31 December 2007 and net profit before tax for the financial year ended 31 December 2007 of the entities not audited by PricewaterhouseCoopers

are individually less than 20% of the Group.

(1) These shares are held by YHI Manufacturing (Singapore) Pte Ltd.

(2) These shares are held by YHI (China) Strategy Company Limited.

(3) These shares are held by YHI (Australia) Pty Limited.

(4) These shares are held by YHI (America) Pte Ltd.

(5) These shares are held by YHI Corporation (Singapore) Pte Ltd.

(6) These subsidiaries were incorporated/registered during the financial year.


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18. Property, plant and equipment

Freehold land

Freehold buildings

Leasehold properties

Office equipment,plant and machinery

Motorvehicles Renovation Computers

Furnitureand fittings Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

The Group

2007

Cost

Beginning of financial year 4,103 8,684 33,926 52,806 4,449 1,247 2,269 1,000 108,484

Currency translation differences (319) 486 (54) 163 96 (1) 15 275 661

Additions - 52 84 14,730 958 74 477 65 16,440

Disposals (353) (1,500) (2) (109) (456) (56) (5) (5) (2,486)

End of financial year 3,431 7,722 33,954 67,590 5,047 1,264 2,756 1,335 123,099

Accumulated depreciation

Beginning of financial year - 273 5,258 14,689 1,869 636 1,646 601 24,972

Currency translation differences - 8 (65) (29) 55 (21) 18 277 243

Depreciation charge - 162 1,449 6,793 868 70 311 86 9,739

Disposals - (77) - (3) (399) (14) (4) (1) (498)

End of financial year - 366 6,642 21,450 2,393 671 1,971 963 34,456

Net book value atEnd of financial year 3,431 7,356 27,312 46,140 2,654 593 785 372 88,643

The Group

2006

Cost

Beginning of financial year 2,945 5,092 29,764 34,761 3,458 1,128 2,068 853 80,069

Currency translation differences (39) (116) (1,280) (1,740) (90) (31) (83) (49) (3,428)

Additions 1,197 3,708 6,812 23,424 1,250 190 607 262 37,450

Disposals - - (1,370) (3,639) (169) (40) (323) (66) (5,607)

End of financial year 4,103 8,684 33,926 52,806 4,449 1,247 2,269 1,000 108,484

Accumulated depreciation

Beginning of financial year - 190 5,070 13,872 1,267 650 1,517 615 23,181

Currency translation differences - (3) (219) (821) (35) (27) (63) (57) (1,225)

Depreciation charge - 86 1,329 4,704 752 53 478 109 7,511

Disposals - - (922) (3,066) (115) (40) (286) (66) (4,495)

End of financial year - 273 5,258 14,689 1,869 636 1,646 601 24,972

Net book value atEnd of financial year 4,103 8,411 28,668 38,117 2,580 611 623 399 83,512



18. Property, plant and equipment (continued)

Motor vehicles$’000

The Company2007CostBeginning of financial year 900Additions -End of financial year 900

Accumulated depreciationBeginning of financial year 369Depreciation charge 180End of financial year 549

Net book value at end of financial year 351

2006CostBeginning financial year 600Additions 300End of financial year 900

Accumulated depreciationBeginning of financial year 203Depreciation charge 166End of financial year 369

Net book value at end of financial year 531

(a) Additions in the consolidated financial statements include $374,000 (2006: $649,000) of motor vehicles acquired under finance leases.

The carrying amount of motor vehicles, and office equipment, plant and machinery held under finance leases at 31 December 2007 amounted to $1,104,000 (2006: $1,080,000) and $85,000 (2006: $121,000) respectively.

(b) At the balance sheet date, the carrying amounts of property, plant and equipment of the Group pledged as securities for borrowings (Note 21) are as follows:

The Group

2007 2006

$’000 $’000

Freehold land 3,431 3,735

Freehold buildings 6,899 8,279

Leasehold properties 2,471 3,173

Office equipment, plant and machinery 8,059 7,990

20,860 23,177


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19. Intangible assets

Composition:

The Group

2007 2006

$’000 $’000

Goodwill arising on consolidation, at cost 3,442 3,442

Trademark 1,861 1,861

5,303 5,303

Impairment tests for goodwill

Goodwill is allocated to the Group’s cash generating units (CGUs) identified according to countries of operation and business segment.

A segmental-level summary of the goodwill allocation is presented below.

2007 2006

Distribution of automotive

products and industrial

products

Manufacturing of alloy wheels Total

Distribution of automotive products and

industrialproducts

Manufacturing of alloy wheels Total

$’000 $’000 $’000 $’000 $’000 $’000

Singapore 881 - 881 881 - 881

Malaysia 505 - 505 505 - 505

China/Hong Kong 59 1,141 1,200 59 1,141 1,200

New Zealand 86 - 86 86 - 86

USA 770 - 770 770 - 770

2,301 1,141 3,442 2,301 1,141 3,442

The recoverable amount of a CGU was determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a five-year period.

Key assumptions used for value-in-use calculations:

Distribution ofautomotive

products andindustrialproducts

Manufacturing of alloy wheels

Gross margin 23% 18%

Growth rate 8% 12%

Discount rate 8% 11%



19. Intangible assets (continued)

These assumptions were used for the analysis of each CGU within the business segment. Management determined weighted average gross margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The weighted average discount rates used are pre-tax and reflect specific risks relating to the relevant segments.

If the management’s estimated weighted average gross margin and growth rate had been lower by 10% and 5% respectively, the carrying values of goodwill remain unchanged.

If the management’s estimated weighted average discount rate applied to the discounted cash flows had been raised by 1%, the carrying values of goodwill remain unchanged.

20. Trade and other payables


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Trade payables to non-related parties 35,953 30,709 - -

Due to a related party (non-trade) 186 196 - -

Due to associated companies (trade) 121 - - -

Accrued operating expenses 8,678 7,828 613 609

Other payables 6,490 7,388 370 236

Payable for purchase of property, plant and equipment 807 3,459 - -

Advance payments received 3,532 878 - -

Payables to directors* 4,070 3,633 4,070 3,633

59,837 54,091 5,053 4,478

* This relates primarily to performance bonus payable to the executive directors of the Company based on the result of the financial year ended 31 December 2007 pursuant to the service agreements entered between the executive directors and the Company.

The non-trade amount due to a related party is unsecured, interest-free and is repayable on demand. The related party is a company in which certain directors have financial interest.

The carrying amounts of trade and other payables approximated their fair values at the balance sheet date.


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21. Borrowings

The Group

2007 2006

$’000 $’000

Current

Short-term bank loans 51,801 26,984

Trust receipt loans 21,732 15,947

Bank overdrafts (Note 10) 3,410 1,322

Current portion of long-term bank loans 7,815 8,678

Finance lease liabilities (Note 22) 451 336

85,209 53,267

Non-current

Long-term bank loans 7,416 5,200

Finance lease liabilities (Note 22) 891 959

8,307 6,159

Total borrowings 93,516 59,426

(a) Security granted

Trust receipt loans, bank overdrafts, short-term bank loans and long-term bank loans granted to the Group, are secured by the following: (i) a first legal mortgage on certain subsidiaries’ freehold and leasehold properties [Note 18 (b)];

(ii) a first legal charge on office equipment, plant and machinery of a subsidiary [Note 18 (b)];

(iii) a first and floating charge on all the assets of a subsidiary amounting to $60,440,000 (2006: $51,212,000);

(iv) corporate guarantee from the Company; and

(v) banker’s guarantees, up to $20.1 million (2006: $11.6 million), given as security to other financial institutions which granted banking facilities to certain subsidiaries. The banker’s guarantees are in turn secured by a first and floating charge on all the assets of a subsidiary as referred to in paragraph (iii) above.

Finance lease liabilities are secured by the rights to the leased property, plant and equipment [Note 18(a)], which will revert back to the lessor in the event of default by the Group.

(b) Maturity of borrowings

The current borrowings (excluding finance lease liabilities) have an average maturity of 6 months (2006: 6 months) from the end of the financial year. The non-current borrowings [excluding finance lease liabilities (Note 22)] have the following maturity:

The Group

2007 2006

$’000 $’000

Between two and five years 7,010 4,777

Later than five years 406 423

7,416 5,200



21. Borrowings (continued)

(c) Interest rate risk

The weighted average effective interest rates of total borrowings at the balance sheet date are as follows:

The Group

2007 2006

AUD NZD MYR SGD USD RMB Other AUD NZD MYR SGD USD RMB Other

% % % % % % % % % % % % % %

Trust receipt loan 7.9 - 4.2 3.8 5.8 - 3.9 7.7 - 4.0 4.7 5.4 - -

Bank overdrafts 10.3 - 7.7 - - - - 9.8 - 7.6 - - - 6.2

Bank loans 8.4 9.7 5.1 3.8 5.6 6.0 3.3 8.3 8.6 4.9 4.7 6.2 5.8 2.8

Finance lease liabilities 9.4 - 3.7 - 6.5 - 3.9 9.3 - 3.3 - 5.5 - 7.8

The exposure of borrowings of the Group to interest rate changes and the periods in which the borrowings reprice or the repayment date whichever is earlier, are as follows:

Less than 6 months

6 to 12months

1 to 5years

Later than 5 years Total

$’000 $’000 $’000 $’000 $’000

The Group

At 31 December 2007

Total borrowings 83,540 1,669 7,901 406 93,516

At 31 December 2006

Total borrowings 52,762 505 5,736 423 59,426

(d) Carrying amounts and fair values

The carrying amounts of total borrowings approximated their fair values. The fair values were determined from cash flow analyses, discounted at the borrowing rates which the directors expected to be available to the Group at the balance sheet date.


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22. Finance lease liabilities

The Group

2007 2006

$’000 $’000

Minimum lease payments due:

- Not later than one year 557 432

- Between two and five years 1,015 1,110

1,572 1,542

Less: Future finance charges (230) (247)

Present value of finance lease liabilities 1,342 1,295

The present value of finance lease liabilities is analysed as follows:

The Group

2007 2006

$’000 $’000

Not later than one year (Note 21) 451 336

Between two and five years (Note 21) 891 959

1,342 1,295

23. Share capital

No. of shares Amount

Authorised share capital

Issued share capital

Authorised share capital

Share capital

Share premium

Total share capital

and share premium

’000 ’000 $’000 $’000 $’000 $’000

2007

Beginning of financial year - 584,592 - 77,001 - 77,001

End of financial year - 584,592 - 77,001 - 77,001

2006

Beginning of financial year 1,000,000 584,592 100,000 58,459 18,542 77,001

Effect of Companies (Amendment) Act 2005 (1,000,000) - (100,000) 18,542 (18,542) -

End of financial year - 584,592 - 77,001 - 77,001

Under the Companies (Amendment) Act 2005 that came into effect on 30 January 2006, the concepts of par value and authorised share capital were abolished and the amount in the share premium account as at 30 January 2006 became part of the Company’s share capital.

All issued shares are fully paid.



24. Other reserves

The Group

2007 2006

$’000 $’000

(a) Composition:

General reserve 3,485 2,853

Foreign currency translation reserve (2,360) (3,143)

1,125 (290)

The general reserve represents amounts set aside in compliance with local laws in certain overseas subsidiaries and is non-distributable.

The Group

2007 2006

$’000 $’000

(b) Movements:

(i) General reserve


Currency translation differences (16) (92)

Transfer from retained earnings 648 139


(ii) Foreign currency translation reserve

Beginning of financial year (3,143) 234

Currency translation differences 783 (3,377)

End of financial year (2,360) (3,143)

Subsidiaries established in the PRC (the "PRC Subsidiaries") are required to maintain certain statutory reserves by transferring from their profit after taxation in accordance with the relevant laws and regulations and, if applicable, Articles of Association of the PRC Subsidiaries, before any dividend is declared and paid.

(i) General reserve fund

The PRC Subsidiaries are required to transfer at least 10% of their profit after taxation calculated in accordance with the PRC Accounting Standards and Systems, to the general reserve fund until the balance reaches 50% of their respective registered capital, where further transfers will be at their directors' recommendation. The general reserve fund can only be used to make up prior year losses or to increase share capital, provided that the fund does not fall below 25% of the registered capital.

For the current financial year, the Board of Directors of the PRC Subsidiaries approved to appropriate 10% of their profit after taxation to general reserve fund amounted to $648,000 (2006: $139,000).


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25. Retained earnings

(a) Retained profits of the Group are distributable except for retained profits of associated companies amounting to $2,618,000 (2006: $142,000). Retained profits of the Company are distributable.

(b) Movement in retained profits for the Company is as follows:

The Company

2007 2006

$’000 $’000


Net profit 15,940 15,510

Dividends paid (Note 26) (7,015) (5,845)


Movement in retained profits for the Group is shown in the Consolidated Statement of Changes in Equity.

26. Dividends

The Group and the Company

2007 2006

$’000 $’000

Ordinary dividends paid or proposedFinal exempt (one-tier) dividend paid in respect of the previous financial year of 1.2 cents (2006: 1.0 cent) per share 7,015 5,845

At the Annual General Meeting to be held on 30 April 2008, a final exempt (one-tier) dividend of 1.35 cents per share amounting to a total of $7,892,000 will be recommended. These financial statements do not reflect this dividend, which will be accounted for in the shareholders’ equity as an appropriation of retained earnings in the financial year ending 31 December 2008.



27. Commitments

(a) Capital commitments

Capital expenditures contracted for at the balance sheet date but not recognised in the financial statements are as follows:

The Group

2007 2006

$’000 $’000

Property, plant and equipment 988 225

The future aggregate minimum lease payments payable under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities are as follows:

The Group

2007 2006

$’000 $’000

Not later than one year 3,044 1,828

Between two and five years 7,929 6,651

Later than five years 1,816 303

12,789 8,782

(b) Significant lease arrangements

Included in the above are the Group’s lease commitments in respect of leases of land which are as follows:

(i) lease of land up to 31 August 2009 for a monthly rental presently of $5,930; and

(ii) lease of land up to 30 September 2014 for a monthly rental presently of $9,187.

The above lease rentals are subject to annual revision up to 5.5% per annum.


0:83

28. Financial risk management

The Group's activities expose it to interest rate risk, currency risk, credit risk and liquidity risk that arise in its normal course of business. The Group's overall risk management strategy seeks to minimise adverse effects from the unpredictability of financial markets on the Group's financial performance. The Group’s risk management policies and guidelines are set to monitor and control the potential material adverse impact of these exposures.

(a) Cash flow and fair value interest rate risks

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rates. The Group has no significant interest-bearing assets.

The Group’s policy is to maintain 80 - 90% of its borrowings in fixed rate instruments.

The Group’s and Company’s borrowings at variable rates are denominated mainly in AUD and MYR. If the AUD and MYR interest rates increase/decrease by 0.50% (2006: 0.50%) with all other variables including tax rate being held constant, the profit after tax will be lower/higher by $19,000 (2006: Nil) and $14,000 (2006: $19,000) as a result of higher/lower interest expense on these borrowings.

(b) Currency risk

The Group operates in Asia with dominant operations in Singapore, and the People’s Republic of China. Entities in the Group regularly transact in currencies other than their respective functional currencies (“foreign currencies”) such as the United States Dollar (“USD”), Renminbi ("RMB"), Malaysian Ringgit ("MYR"), Australian Dollar ("AUD") and New Zealand Dollar ("NZD").

Currency risk arises when transactions are denominated in foreign currencies. To manage the currency risk, individual Group entities enter into currency forwards, where appropriate. The Group's exposures to foreign currencies are primarily managed by natural hedges of matching financial assets and financial liabilities denominated in foreign currencies. The Group does not utilise currency forwards or other arrangements for trading or speculative purposes.

The Group’s currency exposure based on the information provided to key management is as follows:

SGD USD RMB AUD MYR NZD Other Total$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 31 December 2007Financial assetsCash and cash equivalents and financial assets, available-for-sale 3,553 13,173 5,831 4,620 1,335 118 1,560 30,190Trade and other receivables 14,644 20,497 15,636 16,222 6,994 4,708 5,552 84,253Other financial assets 149 75 6,446 338 1,196 297 1,363 9,864

18,346 33,745 27,913 21,180 9,525 5,123 8,475 124,307

Financial liabilitiesBorrowings 7,481 9,542 42,399 15,353 10,651 3,781 4,309 93,516Other financial liabilities 9,775 5,203 29,782 3,251 5,934 1,675 4,217 59,837

17,256 14,745 72,181 18,604 16,585 5,456 8,526 153,353

Net financial assets/(liabilities) 1,090 19,000 (44,268) 2,576 (7,060) (333) (51) (29,046)

Less: Net financial assets/(liabilities)denominated in the respective entities' functional currencies 1,090 (922) (45,055) 1,826 (7,052) (333) 193 (50,253)

Currency exposure - 19,922 787 750 (8) - (244) 21,207



28. Financial risk management (continued)

(b) Currency risk (continued)

SGD USD RMB AUD MYR NZD Other Total$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 31 December 2006Financial assetsCash and cash equivalents and financial assets, available-for-sale 3,290 9,780 6,501 1,291 969 363 2,711 24,905Trade and other receivables 18,138 14,766 8,037 11,730 4,968 4,431 4,557 66,627Other financial assets 97 95 3,979 260 784 302 612 6,129

21,525 24,641 18,517 13,281 6,721 5,096 7,880 97,661

Financial liabilitiesBorrowings 2,900 17,354 21,792 1,388 8,555 4,213 3,224 59,426Other financial liabilities 11,909 1,769 27,587 2,677 4,413 1,639 4,097 54,091

14,809 19,123 49,379 4,065 12,968 5,852 7,321 113,517

Net financial assets/ (liabilities) 6,716 5,518 (30,862) 9,216 (6,247) (756) 559 (15,856)

Less: Net financial assets/(liabilities) denominated inthe respective entities’ functional currencies 6,535 (1,630) (30,382) 9,216 (6,247) (756) 458 (22,806)

Currency exposure 181 7,148 (480) - - - 101 6,950

The Company’s currency exposure based on the information provided to key management is as follows:

2007 2006SGD USD AUD Other Total SGD USD AUD Other Total$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Financial AssetsCash and cash equivalents 421 50 - - 471 385 144 - - 529Trade and other receivables 46,268 - 2,604 1,292 50,164 44,945 - 1,543 1,053 47,541Other financial assets 39 - - - 39 31 - - - 31

46,728 50 2,604 1,292 50,674 45,361 144 1,543 1,053 48,101

Financial LiabilitiesOther financial liabilities 5,053 - - - 5,053 4,478 - - - 4,478

5,053 - - - 5,053 4,478 - - - 4,478

Net financial assets 41,675 50 2,604 1,292 45,621 40,883 144 1,543 1,053 43,623

Less: Net financial assets denominated in functional currency 41,675 - - - 41,675 40,883 - - - 40,883

Currency exposure - 50 2,604 1,292 3,946 - 144 1,543 1,053 2,740


0:85


(b) Currency risk (continued)

If the USD and RMB change against the SGD by 5% (2006: 4%) and 1% (2006: 2%) respectively with all other variables including tax rate being held constant, the effects arising from the net financial liability/asset position will be as follows:

2007 2006Increase/(decrease)

Profitafter tax Equity

Profitafter tax Equity

$’000 $’000 $’000 $’000GroupUSD against SGD - strengthened 996 56 285 34 - weakened (996) (56) (285) (34)RMB against SGD - strengthened 8 145 (10) 315 - weakened (8) (145) 10 (315)

CompanyUSD against SGD - strengthened 2 - 6 - - weakened (2) - (6) -

(c) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. For trade receivables, the Group adopts the policy of dealing only with customers of appropriate credit history, and obtaining sufficient security where appropriate to mitigate credit risk.

Credit exposure to an individual counterparty is restricted by credit limits that are approved by the respective Heads of the various subsidiaries based on ongoing credit evaluation. The counterparty’s payment profile and credit exposure are continuously monitored at the entity level by the respective management and at the Group level by the Head of Finance.




(c) Credit risk (continued)

As the Group and Company do not hold any collateral, the maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the balance sheet, except as follows:

The Company

2007 2006

$’000 $’000

Corporate guarantees provided to banks on subsidiaries’ loans 72,043 58,692

The Group’s and Company’s major classes of financial assets are bank deposits and trade receivables.

The credit risk for trade receivables based on the information provided to key management is as follows:

The Group

2007 2006

$’000 $’000

By geographical areas

Singapore 18,468 16,296

Malaysia 7,634 5,193

Taiwan 1,876 1,491

Australia 16,428 11,692

New Zealand 4,707 4,554

United States 6,384 4,593

United Kingdom 1,041 415

Italy 2,892 2,203

Indonesia 2,468 2,288

Sweden 1,731 1,573

The People’s Republic of China 6,692 5,790

Other countries 11,297 6,525

81,618 62,613


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(c) Credit risk (continued)

The Group2007 2006$’000 $’000

By types of customersNon-related parties

- Multi-national companies - 159- Other companies 81,618 62,454

81,618 62,613

(i) Financial assets that are neither past due nor impaired

Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are substantially companies with a good collection track record with the Group.

The Group and Company do not have any receivables that would have been past due or impaired if the terms were not re-negotiated during the financial year.

(ii) Financial assets that are past due and/or impaired

There is no other class of financial assets that is past due and/or impaired except for trade receivables.

The age analysis of trade receivables past due but not impaired is as follows:

The Group2007 2006$’000 $’000

Past due 1 to 30 days 5,714 5,549Past due 31 to 60 days 1,418 1,509Past due 61 to 90 days 408 845Past due over 91 days 1,363 1,090

8,903 8,993

The carrying amount of trade receivables individually determined to be impaired and the movement in the related allowance for impairment are as follows:

The Group2007 2006$’000 $’000

Gross amount 5,790 6,495Less: Allowance for impairment (5,790) (6,495)

- -

Beginning of financial year 6,495 7,691Currency translation differences 297 (148)Allowance made 711 1,789Allowance utilised (1,713) (2,837)End of financial year 5,790 6,495

The impaired trade receivables are long outstanding and are not expected to be recovered.




(d) Liquidity risk

The table below analyses the maturity profile of the Group’s and Company’s financial liabilities (including derivative financial liabilities) based on contractual undiscounted cash flows.

Lessthan

1 year

Between1 and 5years

Over 5 years Total

$’000 $’000 $’000 $’000GroupAt 31 December 2007Trade and other payables 59,837 - - 59,837Borrowings 85,209 7,901 406 93,516

145,046 7,901 406 153,353

At 31 December 2006Trade and other payables 54,091 - - 54,091Borrowings 53,267 5,736 423 59,426Derivative financial instruments 210 - - 210

107,568 5,736 423 113,727

The Group and Company manage the liquidity risk by maintaining sufficient cash to enable them to meet their normal operating commitments and having an adequate amount of committed credit facilities (Note 21).

(e) Capital risk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings.

Management monitors capital based on a gearing ratio. The Group’s and Company’s strategies, which were unchanged from 2006, are to maintain gearing ratios within 50% to 70% .

The gearing ratio is calculated as total borrowings divided by total capital and reserves attributable to equity holders of the Company.


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Total borrowings 93,516 59,426 - -

Total capital and reserves attributable to equity holders 168,109 148,101 118,046 109,121

Gearing ratio 56% 40% - -


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29. Immediate and ultimate holding company

The immediate and ultimate holding company is YHI Holdings Pte Ltd, incorporated in Singapore.

30. Related party transactions

In addition to related party transactions disclosed elsewhere in the financial statements, the following related party transactions took place between the Group and related parties at terms agreed between the parties during the financial year:

(a) Sales and purchases of goods and services

The Group

2007 2006

$’000 $’000

Interest paid to holding corporation - 103

Legal fees paid to Hee Theng Fong & Co 3 11

Hee Theng Fong & Co is a firm owned by a director of the Company, Mr Hee Theng Fong.

(b) Key management personnel compensation

The key management personnel compensation is analysed as follows:

The Group

2007 2006

$’000 $’000

Salaries and other short-term employee benefits 8,228 7,829

Post-employment benefits – contribution to CPF 143 136

8,371 7,965

Included in the above was total compensation to directors of the Company amounted to $5,467,000 (2006: $5,026,000).



31. Segment information

Primary reporting format – business segments


industrial products

Manufacturingof alloy wheels Elimination Group

$’000 $’000 $’000 $’000

Financial year ended 31 December 2007

Sales:- external sales 274,134 152,753 - 426,887- inter-segment sales - 34,769 (34,769) -

274,134 187,522 (34,769) 426,887

Segment result 28,888 7,450 - 36,338Unallocated costs (180)Profit from operations 36,158Finance costs (4,845)Share of profit of associated companies (121) 2,597 - 2,476Profit before income tax 33,789Income tax expense (5,950)Net profit 27,839

Other segment itemsCapital expenditure – Property, plant and equipment 2,577 13,863 - 16,440Depreciation 2,371 7,368 - 9,739

Segment assets 169,196 172,588 (14,639) 327,145Unallocated assets 4,349Consolidated total assets 331,494

Segment liabilities (89,665) (46,759) 78,222 (58,202)

Unallocated liabilities (100,221)Consolidated total liabilities (158,423)


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31. Segment information (continued)

Primary reporting format – business segments (continued)


industrial products

Manufacturingof alloy wheels Elimination Group

$’000 $’000 $’000 $’000

Financial year ended 31 December 2006

Sales:- external sales 263,551 111,649 - 375,200- inter-segment sales - 26,958 (26,958) -

263,551 138,607 (26,958) 375,200

Segment result 24,615 8,892 - 33,507Unallocated costs (165)Profit from operations 33,342Finance costs (3,322)Share of profit of associated companies 1 5,531 - 5,532Profit before income tax 35,552Income tax expense (6,557)Net profit 28,995

Other segment itemsCapital expenditure – Property, plant and equipment 2,552 34,898 - 37,450Depreciation 1,938 5,573 - 7,511

Segment assets 127,662 153,216 (12,926) 267,952Unallocated assets 3,720Consolidated total assets 271,672

Segment liabilities (73,121) (49,111) 69,495 (52,737)

Unallocated liabilities (66,172)Consolidated total liabilities (118,909)

At 31 December 2007, the Group is organised into two main business segments:

(a) Distribution of automotive products and industrial products.

(b) Manufacturing of alloy wheels.

Inter-segment transactions are recorded at their transacted price which is generally at fair value. Unallocated costs represent corporate expenses. Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating cash, and exclude deferred tax assets. Segment liabilities comprise operating liabilities and exclude items such as tax liabilities and borrowings. Capital expenditure comprises additions to property, plant and equipment and intangible assets, including those acquired through business combinations.



31. Segment information (continued)

Secondary reporting format - geographical segments

The Group’s two business segments operate in following geographical areas:

(a) Singapore, Malaysia, Thailand, Japan, USA, Australia and New Zealand- the areas of operation mainly arise from distribution of automotive and industrial products.

(b) China/Hong Kong- the areas of operation mainly arise from both distribution of automotive products and manufacturing of alloy wheels.

(c) Taiwan- the areas of operation mainly arise from manufacturing of alloy wheels.

Sales Total assets Capital expenditure

2007 2006 2007 2006 2007 2006

$’000 $’000 $’000 $’000 $’000 $’000

Singapore 99,031 99,552 54,756 46,952 607 940

Malaysia 50,413 35,716 27,899 19,325 1,059 11,566

Thailand 1,844 297 1,158 544 8 40

China/Hong Kong 169,342 151,499 184,311 150,384 13,233 21,531

Taiwan 27,724 26,149 10,498 13,473 551 2,306

Australia 65,911 44,600 46,731 31,562 510 869

New Zealand 21,302 15,853 13,624 14,010 342 110

Japan 5,056 4,875 1,299 1,434 14 38

USA 20,566 23,617 10,493 9,511 6 50

Canada 235 - 411 - 78 -

Middle East 232 - 600 - 32 -

Unallocated corporate assets - - 12,150 10,420 - -

461,656 402,158 363,930 297,615 16,440 37,450

Eliminations (34,769) (26,958) (32,436) (25,943) - -

426,887 375,200 331,494 271,672 16,440 37,450


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32. New or revised accounting Standards and Interpretations

Certain new standards, amendments and interpretations to existing standards have been published and are mandatory for the Group’s accounting periods beginning on or after 1 January 2008 or later periods and which the Group has not early adopted. The Group’s assessment of the impact of adopting those standards, amendments and interpretations that are relevant to the Group is set out below:

(a) FRS 108 Operating Segments (effective for annual periods beginning on or after 1 January 2009)

FRS 108 supersedes FRS 14 Segment Reporting and requires the Group to report the financial performance of its operating segments based on the information used internally by management for evaluating segment performance and deciding on allocation of resources. Such information may be different from the information included in the financial statements, and the basis of its preparation and reconciliation to the amounts recognised in the financial statements shall be disclosed.

The Group will apply FRS 108 from 1 January 2009 and provide comparative information that conforms to the requirements of FRS 108 where appropriate.

(b) Revised FRS 23 Borrowing Costs (effective for annual periods beginning on or after 1 January 2009)

The revised standard removes the option to recognise immediately as an expense borrowing costs that are attributable to qualifying assets, except for those borrowing costs on qualifying assets that are measured at fair value or inventories that are manufactured or produced in large quantities on a repetitive basis.

The Group will apply the revised FRS 23 from 1 January 2009.

33. Authorisation of financial statements

These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of YHI International Limited on 10 March 2008.



ANAlYSiS Of ShAREhOlDiNGS

Number of shares 584,591,628Class of shares ordinary sharesVoting rights one vote per share

No. of % of % ofSize of Shareholdings Shareholders Shareholders No. of Shares Shareholdings

1 - 999 73 3.86 29,210 - 1,000 - 10,000 653 34.53 4,182,390 0.72 10,001 - 1,000,000 1,143 60.45 57,540,626 9.84 1,000,001 - and above 22 1.16 522,839,402 89.44

Grand Total 1,891 100.00 584,591,628 100.00

PUBliC ShAREhOlDERS %

Non-public shareholders 58.4Public shareholders 41.6

Pursuant to Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited, it is confirmed that at least 10% of the issued ordinary shares of the Company is at all times held by the public.

SUBSTANTiAl ShAREhOlDERS

No. of Shares Direct Interest Deemed Interest %

YHI Holdings Pte Ltd 341,391,628 - 58.40Tay Tian Hoe Richard 18,674,000 342,423,628 61.77 (1)

Note

(1) Mr Tay Tian Hoe Richard is deemed to have an interest in the 341,391,628 shares held in the name of YHI Holdings Pte Ltd and 1,032,000 shares held by his spouse, Mdm Lee Suat Kwan, by virtue of Section 7 of the Companies Act, Cap. 50. Mr Tay’s 61.77% interest includes his direct and deemed interest in the Company.

Statistics of ShareholdingsAs at 13 March 2008

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Statistics of ShareholdingsAs at 13 March 2008

TwENTY lARGEST ShAREhOlDERS AS AT 13 MARCh 2008

% of Name of Shareholder No. of Shares Shareholdings

1 YHI HOLDINGS PTE LTD 341,391,628 58.40

2 HSBC (SINGAPORE) NOMINEES PTE LTD 38,760,000 6.63

3 MORGAN STANLEY ASIA (SINGAPORE) SECURITIES PTE LTD 29,114,000 4.98

4 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 20,879,400 3.57

5 TAY TIAN HOE RICHARD 18,674,000 3.19

6 DBS NOMINEES PTE LTD 17,278,200 2.96

7 DB NOMINEES (SINGAPORE) PTE LTD 7,380,200 1.26

8 NTUC THRIFT & LOAN CO-OPERATIVE LIMITED 6,340,000 1.09

9 PHILLIP SECURITIES PTE LTD 5,747,774 0.98

10 CITIBANK NOMINEES SINGAPORE PTE LTD 5,476,000 0.94

11 KIM ENG SECURITIES PTE LTD 4,990,000 0.85

12 ORIX INVESTMENT AND MANAGEMENT PTE LTD 4,800,000 0.82

13 ING NOMINEES (SINGAPORE) PTE LTD 4,050,000 0.69

14 NG CHWEE CHENG 3,847,000 0.66

15 UOB KAY HIAN PTE LTD 3,085,400 0.53

16 TAY THIAM SENG 3,000,000 0.51

17 LEE LING LING 1,832,000 0.31

18 UNITED OVERSEAS BANK NOMINEES PTE LTD 1,528,400 0.26

19 LIM & TAN SECURITIES PTE LTD 1,463,000 0.25

20 TAN YONG CHIANG OR TAN HUI LIANG 1,151,000 0.20

Total: 520,788,002 89.08


Notice of Annual General Meeting

AS ORDINARY BUSINESS

1. To receive and, if approved, to adopt the Audited Accounts for the financial year ended 31 December 2007 together with the Directors’ Report and Auditor’s Report thereon

2. To declare a first and final exempt (one-tier) dividend of 1.35 cents per share for the financial year ended 31 December 2007 as recommended by the Directors

3. To approve Directors’ fees of S$135,000 for the financial year ended 31 December 2007

(2006: S$135,000)

4. To re-elect Mr Phua Tin How who is retiring under Article 107 of the Articles of Association 5. To re-elect Mr Tay Tiang Chong Jackson who is retiring under Article 107 of the Articles of Association

6. To re-elect Mr Yuen Sou Wai who is retiring under Article 107 of the Articles of Association

7. To re-appoint Messrs PricewaterhouseCoopers, Certified Public Accountants as auditor of the Company and to authorise the Directors to fix their remuneration

8. To transact any other ordinary business which may be properly transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass the following resolutions (with or without amendments) as Ordinary Resolutions:

9. THAT approval be and hereby given to the Directors to offer and grant options under the YHI Share Option Scheme (the “Scheme”) and to allot and issue from time to time such number of shares in the Company as may be required to be issued pursuant to the exercise of options under the Scheme, provided always that the aggregate number of shares to be issued pursuant to the Scheme shall not exceed 15 per cent (15%) of the total issued share capital of the Company from time to time.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

NOTICE IS HEREBY GIVEN THAT the Annual General Meeting of YHI International Limited will be held at Jurong Country Club, 9 Science Centre Road Singapore 609078 on Wednesday, 30 April 2008 at 10.00 a.m. for the following purposes:

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10. THATtheDirectorsbeandherebyauthorisedpursuanttotheprovisionsofSection161oftheCompaniesAct,Cap.50(the“Act”)andRule806oftheListingManualoftheSingaporeExchangeSecuritiesTradingLimited(“SGX-ST”)toallotandissuesharesandconvertiblesecuritiesoftheCompanyonsuchtermsandconditionsandwithsuchrightsorrestrictionsastheymaydeemfitPROVIDEDALWAYSTHATtheaggregatenumberofsharesandconvertiblesecuritiestobeissuedpursuanttothisresolutionshallnotexceedfiftypercent(50%)oftheissuedsharecapitaloftheCompany,ofwhichtheaggregatenumberofsharesandconvertiblesecuritiestobeissuedotherthanonaproratabasistoexistingshareholdersshall not exceed twenty per cent (20%) of the issued share capital of the Company and that suchauthorityshallcontinueinforceuntiltheconclusionofthenextAnnualGeneralMeetingortheexpirationoftheperiodwithinwhichthenextAnnualGeneralMeetingoftheCompanyisrequiredbylawtobeheld,whicheveristheearlier,unlesstheauthorityispreviouslyrevokedorvariedatageneralmeeting.Forthepurposesofthisresolution,thepercentageof issuedsharecapitalshallbebasedontheCompany’sissuedsharecapitalatthetimeofthepassingofthisresolutionafteradjustingfor:

(a) newsharesarisingfromtheconversionorexerciseofconvertiblesecuritiesorfromexercisingshareoptionsforvestingofshareawardsoutstandingorsubsistingatthetimeofthepassingofthisresolutionprovidedtheoptionsorawardsweregrantedincompliancewiththelistingmanual;and

(b) anysubsequentconsolidationorsubdivisionofshares

NOTICE IS ALSO HEREBY GIVEN THATtheTransferBookandtheRegisterofMembersoftheCompanywillbeclosedon8May2008forthepurposeofpreparingdividendwarrants.DulycompletedtransfersreceivedbytheCompany’sShareRegistrar,TricorBarbinderShareRegistrationServices,at8CrossStreet#11-00PWCBuilding, Singapore 048424 up to 5.00 p.m. on 7 May 2008 will be registered to determine shareholders’entitlementtotheproposeddividend.

Members whose Securities Accounts with The Central Depository (Pte) Ltd are credited with shares at5.00p.m.on7May2008willbeentitledtotheproposeddividend.Thefirstandfinalexempt(one-tier)dividendof1.35centspershare,ifapprovedbymembersattheAnnualGeneralMeetingwillbepaidon23May2008.

BY ORDER OF THE BOARD

MsGnJongYuhGwendolynCOMPANYSECRETARY

9April2008SINGAPORE

Resolution 9



Explanatory Notes:

(i) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote in his stead. A member of the Company, which is a corporation, is entitled to appoint its authorised representative or proxy to vote on its behalf. A proxy need not be a member of the Company. The instrument appointing a proxy must be deposited at the Company’s registered office at No. 2 Pandan Road, Singapore 609254 at least 48 hours before the time of the Annual General Meeting.

(ii) If re-elected under Resolution 4, Mr Phua Tin How will remain as Chairman of the Nominating Committee and will also continue to be a member of the Audit Committee and Remuneration Committee. Mr Phua Tin How will be considered an independent Director of the Company.

(iii) If re-elected under Resolution 5, Mr Tay Tiang Chong Jackson will remain as an executive Director of the Company.

(iv) If re-elected under Resolution 6, Mr Yuen Sou Wai will remain as an executive Director of the Company.

(v) Resolution 8, if passed, will empower the Directors of the Company, from the date of the above meeting until the next Annual General Meeting, to issue shares up to an amount in aggregate not exceeding 15 per cent (15%) of the issued share capital of the Company from time to time pursuant to the exercise of the options under the Scheme.

(vi) Resolution 9, if passed, will empower the Directors from the date of the above meeting until the date of the next Annual General Meeting, to allot and issue shares and convertible securities in the Company. The number of shares and convertible securities that the Directors may allot and issue under this resolution would not exceed fifty per cent (50%) of the issued share capital of the Company at the time of passing of this resolution. For issues of shares and convertible securities other than on a pro rata basis to all shareholders, the aggregate number of shares and convertible securities to be issued shall not exceed twenty per cent (20%) of the issued share capital of the Company.

The percentage of issued share capital is based on the Company’s issued capital at the time of passing of the resolution after adjusting for (a) new shares arising from the conversion or exercise of convertible securities, (b) new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time of the passing of the resolution approving the mandate, and (c) any subsequent consolidation or subdivision of shares.

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AS ORDINARY BUSINESS

1. To receive and, if approved, to adopt the Audited Accounts for the financial year ended 31 December 2007 together with the Directors’ Report and Auditors’ Report thereon

2. To declare a first and final dividend of 1.35 cents per share tax exempt (one-tier) for the financial year ended 31 December 2007 as recommended by the Directors

3. To approve Directors’ fees of S$135,000 for the financial year ended 31 December 2007 (2006: S$135,000)

4. To re-elect Mr Phua Tin How who is retiring under Article 107 of the Articles of Association 5. To re-elect Mr Tay Tiang Chong Jackson who is retiring under Article 107 of the Articles of Association

6. To re-elect Mr Yuen Sou Wai who is retiring under Article 107 of the Articles of Association

7. To re-appoint Messrs PricewaterhouseCoopers, Certified Public Accountants as auditors of the Company and to authorise the Directors to fix their remuneration

8. To transact any other ordinary business which may be properly transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass the following resolutions (with or without amendments) as Ordinary Resolutions:

9. THAT approval be and hereby given to the Directors to offer and grant options under the YHI Share Option Scheme (the “Scheme”) and to allot and issue from time to time such number of shares in the Company as may be required to be issued pursuant to the exercise of options under the Scheme, provided always that the aggregate number of shares to be issued pursuant to the Scheme shall not exceed 15 per cent (15%) of the total issued share capital of the Company from time to time.

10. THAT the Directors be and hereby authorised pursuant to the provisions of Section 161 of the Companies Act, Cap. 50 (the “Act”) and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”) to allot and issue shares and convertible securities of the Company on such terms and conditions and with such rights or restrictions as they may deem fit PROVIDED ALWAYS THAT the aggregate number of shares and convertible securities to be issued pursuant to this resolution shall not exceed fifty per cent (50%) of the issued share capital of the Company, of which the aggregate number of shares and convertible securities to be issued other than on a pro rata basis to existing shareholders shall not exceed twenty per cent (20%) of the issued share capital of the Company and that such authority shall continue in force until the conclusion of the next Annual General Meeting or the expiration of the period within which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier, unless the authority is previously revoked or varied at a general meeting. For the purposes of this resolution, the percentage of issued share capital shall be based on the Company’s issued share capital at the time of the passing of this resolution after adjusting for:

(a) new shares arising from the conversion or exercise of convertible securities or from exercising share options for vesting of share awards outstanding or subsisting at the time of the passing of this resolution provided the options or awards were granted in compliance with the listing manual; and

(b) any subsequent consolidation or subdivision of shares

NOTICE IS ALSO HEREBY GIVEN THAT the Transfer Book and the Register of Members of the Company will be closed on 8 May 2008 for the purpose of preparing dividend warrants. Duly completed transfers received by the Company’s Share Registrar, Tricor Barbinder Share Registration Services, at 8 Cross Street #11-00 PWC Building, Singapore 048424 up to 5.00 p.m. on 7 May 2008 will be registered to determine shareholders’ entitlement to the proposed dividend.

Members whose Securities Accounts with The Central Depository (Pte) Ltd are credited with shares at 5.00 p.m. on 7 May 2008 will be entitled to the proposed dividend. The first and final dividend of 1.35 cents per share tax exempt (one-tier), if approved by members at the Annual General Meeting will be paid on 23 May 2008.

BY ORDER OF THE BOARD

Ms Gn Jong Yuh Gwendolyn COMPANY SECRETARY

PROXY FORMFor Annual General Meeting

I/We of

being a member/members of YHI INTERNATIONAL LIMITED, hereby appoint:-

Name Address NRIC/Passport No. Proportion of Shareholdings (%)

and/or (delete as appropriate)

as my/our proxy/proxies to attend and to vote for me/us on my/our behalf at the Annual General Meeting of the Company to

be held at Jurong Country Club, 9 Science Centre Road Singapore 609078 on Wednesday, 30 April 2008 at 10.00 a.m. and at

any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as

hereunder indicated.

No. Ordinary Resolutions For Against

Ordinary Business

1. To adopt the Audited Accounts, Directors’ Report and Auditor’s Report

2. To declare a first and final exempt (one-tier) dividend of 1.35 cents per share

3. To approve the payment of Directors’ Fees

4. To re-elect Mr Phua Tin How as a Director under Article 107

5. To re-elect Mr Tay Tiang Chong Jackson as a Director under Article 107

6. To re-elect Mr Yuen Sou Wai as a Director under Article 107

7. To re-appoint Messrs PricewaterhouseCoopers, Certified Public Accountants as auditor of

the Company and to authorise the Directors to fix their remuneration

Special Business

8. To authorise Directors to allot and issue shares in connection with the exercise of options granted

pursuant to YHI Share Option Scheme

9. To authorise Directors to allot shares pursuant to Section 161 of the Companies Act, Cap. 50

Dated this day of 2008.

Signature(s) of member(s) or Common Seal No. of Shares Held

IMPORTANT: PLEASE READ NOTES OVERLEAF

IMPORTANT:

1. For investors who have used their CPF monies to buy YHI International Limited shares, this Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

YHI International Limited(Company No: 200007455H) (Incorporated in the Republic of Singapore on 26 August 2000)


Notes to the Proxy Form

1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50), you should insert that number of shares. If you have shares registered in your name in the Register of Members, you should insert that number of shares. If you have shares entered against your name in the Depository Register and shares registered in your name in the Register of Members, you should insert the aggregate number of shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the shares held by you.

2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote in his stead.

3. Where a member appoints two proxies, he shall specify the percentage of his shares to be represented by each proxy and if no percentage is specified, the first named proxy shall be deemed to represent 100 per cent of his shareholding and the second named proxy shall be deemed to be an alternate to the first named.

4. A proxy need not be a member of the Company.

5. The instrument appointing a proxy or proxies together with the letter of power of attorney, if any, under which it is signed or a duly certified copy thereof, must be deposited at the registered office of the Company at 2 Pandan Road, Singapore 609254 at least 48 hours before the time appointed for the Annual General Meeting.

6. A corporation which is a member may authorise by resolution of its directors or other governing body such a person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50.

7. Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be for or against the Resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.

8. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies.

9. In the case of a member whose shares are entered against his name in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.

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2 PANDAN ROAD SINGAPORE 609254TEL: (65) 6264 2155 FAX: (65) 6265 9927 / 6266 5368 EMAIL: [email protected] WEBSITE www.yhi.com.sg

LISTED ON THE MAINBOARD OF THE SINGAPORE EXCHANGECOMPANY REGISTRATION NUMBER: 200007455H

in full - 早报 · 2013. 5. 13. · yhi international limited annual report 2007 0:0 2000 2003...

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