19 Additional Compliance Information. 20 Statement on Internal Control. 22 Directors Responsibilities Statement

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3 Contents 2 Corporate Information 3 Corporate Structure 4 Notice of Annual General Meeting 6 Directors Profile 8 Chairman s Statement 10 Audit Committee Report 14 Corporate Governance Statement 19 Additional Compliance Information 20 Statement on Internal Control 22 Directors Responsibilities Statement 22 Corporate Social Responsibility Statement 23 Financial Statements 71 List of Properties 73 Analysis of Ordinary Shareholdings Form of Proxy

4 resintech berhad ( X) 2 Annual Report Corporate Information BOARD OF DIRECTORS Dato Abu Sujak bin Mahmud (Independent Non-Executive Chairman) Dato Dr. Teh Kim Poo, DSSA, PJK, JP (Managing Director) Datin Gan Jew, PJK (Executive Director) Teh Leng Kang, PJK (Executive Director) Khairul Anuar bin Shaharudin (Independent Non-Executive Director) Wei Hwei Hong (Executive Director) Kok Wee Wah (Independent Non-Executive Director) (Re-designated on 15 June ) AUDIT COMMITTEE Chairman Dato Abu Sujak bin Mahmud (Independent Non-Executive Chairman) Members Khairul Anuar bin Shaharudin (Independent Non-Executive Director) Kok Wee Wah (Independent Non-Executive Director) (Re-designated on 15 June ) NOMINATION COMMITTEE Chairman Dato Abu Sujak bin Mahmud (Independent Non-Executive Chairman) Member Khairul Anuar bin Shaharudin (Independent Non-Executive Director) REMUNERATION COMMITTEE Chairman Dato Dr. Teh Kim Poo, DSSA, PJK, JP (Managing Director) Members Dato Abu Sujak bin Mahmud (Independent Non-Executive Chairman) Khairul Anuar bin Shaharudin (Independent Non-Executive Director) COMPANY SECRETARIES Masharum Binti Abdul Wahab (MAICSA ) Lim Ming Tong (MAICSA ) REGISTERED OFFICE Lot 3 & 5, Jalan Waja 14 Kawasan Perindustrian Telok Panglima Garang Telok Panglima Garang Selangor Darul Ehsan Tel : Fax : CORPORATE OFFICE Lot 3 & 5, Jalan Waja 14 Kawasan Perindustrian Telok Panglima Garang Telok Panglima Garang Selangor Darul Ehsan Tel : Fax : AUDITORS Messrs Crowe Horwath Chartered Accountants Level 16, Tower C Megan Avenue II No. 12, Jalan Yap Kwan Seng Kuala Lumpur SHARE REGISTRAR Symphony Share Registrars Sdn Bhd Level 6, Symphony House Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/ Petaling Jaya Selangor Darul Ehsan Tel : Fax : PRINCIPAL BANKERS EON Bank Berhad No. 90, Jalan Persiaran Raja Muda Musa Port Klang Selangor Darul Ehsan United Overseas Bank (Malaysia) Berhad 80-84, Jalan 3/6D Medan Putra Business Centre Sri Manjalara Off Jalan Damansara Kuala Lumpur AmBank (M) Berhad No 42 & 44, Wisma SH Ng Persiaran Sultan Ibrahim Klang Selangor Darul Ehsan STOCK EXCHANGE LISTING Main Board Bursa Malaysia Securities Berhad Stock Name : RESINTC Stock Code : 7232

5 Annual Report 3 resintech berhad ( X) Corporate structure RKSB Resintech- Kapar Sdn Bhd RPSB 100% 100% Resintech Plastics (M) Sdn Bhd LEGEND: Direct subsidiaries Indirect subsidiaries ELSB VMSSB RESB RPMSB RSSB Resintech (Sabah) Sdn Bhd Resintech Products Marketing Sdn Bhd Resintech Engineering Sdn Bhd Vision Mould Specialist (M) Sdn Bhd Exact Link Sdn Bhd 100% 100% RTWSB 100% 60% 100% 100% RT Water Technology Sdn Bhd

6 resintech berhad ( X) 4 Annual Report notice of annual general meeting NOTICE IS HEREBY GIVEN that the Fifteenth Annual General Meeting of RESINTECH BERHAD will be held at Concorde III, Level 2, Concorde Hotel, 3 Jalan Tengku Ampuan Zabedah C9/C, Shah Alam, Selangor Darul Ehsan on Monday, 30 August at a.m. for the following purposes: AGENDA As Ordinary Business 1. To receive the Audited Financial Statements for the financial year ended 28 February together with the Reports of Directors and Auditors thereon. 2. To re-elect the following Directors, who retire pursuant to Article 126 of the Articles of Association of the Company: 2.1 Datin Gan Jew Ordinary Resolution Kok Wee Wah Ordinary Resolution 2 3. To approve the payment of the Directors Fees for the financial year ended 28 February. Ordinary Resolution 3 4. To re-appoint Messrs Crowe Horwath (Formerly known as Horwath) as Auditors of the Company and to authorise the Directors to fix their remuneration. Ordinary Resolution 4 As Special Business 5. To consider and, if thought fit, pass the following resolution: 5.1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965 Ordinary Resolution 5 THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to allot and issue shares in the Company, at any time, at such price, until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares does not exceed 10% of the issued share capital of the Company at the time of issue and THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued, subject to the Companies Act, 1965, the Articles of Association of the Company and approval from the Bursa Malaysia Securities Berhad and other relevant bodies where such approval is necessary. BY ORDER OF THE BOARD LIM MING TOONG (MAICSA ) MASHARUM BINTI ABDUL WAHAB (MAICSA ) COMPANY SECRETARIES Selangor Darul Ehsan 5 August

7 Annual Report 5 resintech berhad ( X) notice of annual general meeting (cont d) Notes: 1. Member entitled to attend and vote at the meeting may appoint another person as his proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. If the proxy is not a member, he need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies. 2. A Member may appoint up to two (2) proxies to attend the same meeting. Where a Member appoints two (2) proxies, the appointment shall not be valid unless the Member specifies the proportion of his shareholding to be represented by each proxy. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the company standing to the credit of the said securities account. 3. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised. 4. The instrument appointing a proxy and the power of attorney or other attorney, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Company Secretaries Office at 10th Floor, Menara Hap Seng, No. 1 & 3, Jalan P. Ramlee, Kuala Lumpur not less than forty-eight (48) hours before the time for holding of the meeting or adjourned meeting. Explanatory Note to Special Business: Ordinary Resolution 6 Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965 The proposed Ordinary Resolution 6, if passed, will empower the Directors of the Company, from the date of the Annual General Meeting, to issue shares (other than bonus or rights issue) of the Company up to and not exceeding in total 10% of the issued share capital of the Company at the time of issue for such purpose as they considered would be in the best interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company. The rationale for this resolution is to eliminate the need to convene general meeting(s) from time to time to seek shareholders approval as and when the Company issues new shares for future business opportunities and thereby reducing administrative time and cost associated with the convening of such meeting(s). No shares had been issued and allotted by the Company since obtaining the said authority from its shareholders at the last Annual General Meeting held on 22 May. The Directors would utilise the proceeds raised from this mandate for working capital or such other applications they may in their absolute discretion deem fit. Statement Accompanying Notice of Annual General Meeting (Pursuant to Paragraph 8.28(2) of the Listing Requirements of Bursa Malaysia Securities Berhad) Directors standing for re-election The Directors who are standing for re-election at the Fifteenth Annual General Meeting of the Company are as follows:- i) Datin Gan Jew; and ii) Kok Wee Wah. The details of the above Directors who are standing for re-election are set out in the Directors Profile appearing on pages 6 to 7 of this Annual Report and their attendance of Board Meeting are set out on page 14 of this Annual Report. Shareholdings of Directors who are standing for re-election and/or re-appointment Shareholdings of Directors who are standing for re-election and/or re-appointment are set out in the Analysis of Shareholdings on page 75 of this Annual Report.

8 Annual Report resintech berhad ( X) 6 directors profile Y. Bhg. Dato Abu Sujak bin Mahmud DSSA, KMN, PPT, PJK, a Malaysian aged 71, is the Independent Non-Executive Chairman of the Company and was appointed to the Board on 25 July He is also the Chairman of the Audit Committee and Nomination Committee and a member of the Remuneration Committee. He began his career as an audit clerk in Jabatan Pembangunan Koperasi Malaysia in He then joined the Maktab Perguruan Bahasa in 1960 and then taught for a period of five (5) years before pursuing his degree in the University of Malaya. He obtained a Bachelor of Arts in Malay Studies in In 1971, he joined Dewan Bandaraya Kuala Lumpur and subsequently was appointed as Secretary of Majlis Perbandaran Klang and Majlis Perbandaran Shah Alam. In 1986, he was chosen to stand for the election, which marked his career as a politician. He served as a member of the Selangor State Legislative Council for three (3) terms and was also a member of the Selangor State Executive Council from 1986 to He was also appointed as Timbalan Menteri Besar Selangor in 1990 until In the year 2000, he was appointed as the Datuk Bandar Majlis Bandaraya Shah Alam and was in office until He also sits on the Board of Brem Holding Berhad. Y. Bhg. Dato Dr. Teh Kim Poo, DSSA, PJK, JP, a Malaysian aged 59, is the founder and Managing Director of the Company. He was appointed to the Board on 24 April 1995 and he is also the Chairman of the Remuneration Committee. He obtained his PhD in Total Quality Management (TQM) from Newport University USA in He also possesses a Diploma in Accounting (LCCI), Post Graduate Diploma in Marketing (CIM, UK) and Master in Business Administration in Marketing from University of Hull, UK. He is also a chartered marketer of the Chartered Institute of Marketing (CIM, UK). Dato Dr. Teh possesses in-depth knowledge and vast experience in the plastics industry and has successfully built up the Group into one of the more prominent plastic pipe manufacturers in Malaysia. As the Managing Director, he is responsible for the overall management and strategic direction of the Group. Y. Bhg. Dato Dr. Teh Kim Poo was the State Assemblyman of Kawasan Pandamaran Selangor from 2004 to He is currently the Chairman of Barisan Nasional Bahagian Klang and Chairman of Malaysia Chinese Association (MCA) Klang Division. He is also the Deputy Chairman MCA Selangor, the Committee Member of Barisan Nasional Selangor and the Central Working Committee of MCA Malaysia. Y. Bhg. Datin Gan Jew, PJK, a Malaysian aged 56, is the co-founder and Executive Director of the Company. She was appointed on the Board on 24 April She has vast experience in the handling of manufacturing operations of the Group. She is well versed with all the operations on the production floor and her management style encompasses a very hands-on approach. She is also experienced in human resource matters and she has been very much involved in the selection and co-ordination of the Group s employees. She currently oversees the cost savings operations of the Group, a role where she is able to leverage upon her experience of over twenty (20) years in the industry. Y. Bhg. Datin Gan is currently the Vice Chairman of Wanita MCA Selangor, Chairman of Wanita MCA Klang Division, Chairman of Wanita Gan Association Selangor, Chairman of Rukun Tetangga Southern Park Selangor, Treasurer of Rukun Tetangga Klang Division and Adviser to Wanita Hin Ann Association Selangor.

9 Annual Report 7 resintech berhad ( X) directors profile (cont d) Teh Leng Kang, a Malaysian aged 34, was appointed to the Board on 25 July 2006 as an Executive Director. He graduated from Western Michigan University with a degree in Mechanical Engineering. He joined Resintech Plastics (M) Sdn Bhd in He was in the Production Department during the first two (2) years of his service, where he gained invaluable knowledge and experience in the machineries and production processes. Subsequently, he joined the Group s Sales and Marketing Department, wherein he expanded his knowledge in our sales and marketing activities. He was one of the key persons involved in the launching and marketing of the HDPE corrugated sewer pipe in Over the years, he has continued to play a significant role in the managing our production operations and he has set his sights now on expanding our business. He currently oversees the Group s entire operation. He is also a member of the Research & Development team, where he plays an important role in defining the scope of research and its objectives. He was appointed as the Management Representative position of Resintech Plastics (M) Sdn Bhd s ISO team in 2003 and leads us through the ISO renewal audit. Khairul Anuar bin Shaharudin, a Malaysian aged 36, was appointed to the Board on 25 July 2006 as an Independent Non Executive Director of the Company. He is also a member of the Audit Committee and Nomination Committee. He obtained a LL.B (Hons) from the Universiti Kebangsaan Malaysia in 1998 and was duly admitted as an Advocate and Solicitor to the High Court of Malaya in He began his career by chambering in Messrs. Azmah & Maishiah during the period of 1998 to Subsequent to that, he progressed in his career and was made a partner in the legal firms of Messrs. Hanif Hassan & Co and Messrs. Khairul Anuar, Suhaila & Co. in the year 1999 and 2000 respectively. In 2001, he was appointed as the Managing Partner in the legal firm of Messrs. Jefrizal & Co. and this was followed by a stint as a Managing Partner in Messrs. Khairul, Suhaila & Hazlina in Wei Hwei Hong, a Malaysian aged 34, is an Executive Director and also Financial Controller. She was appointed to the Board on 25 July 2006 and was previously one of the members of the Audit Committee. She graduated from the University of Sheffield with a Bachelor of Arts (Hons) and has also obtained her membership in Association of Certified Chartered Accountants (ACCA). She is currently Fellow Member of ACCA. She also holds a membership in Malaysia Institute of Accountants (MIA). She possesses hands-on audit experience in one of the big four (4) accounting firms for a period of three (3) years, working on a vast array of projects. She joined Resintech Plastics (M) Sdn Bhd in May 2003 and currently is responsible for overseeing the Accounts and Finance Department of the Group. Kok Wee Wah, a Malaysian aged 44, is a Independent Non-Executive Director. He was appointed to the Board on 22 February He was recently re-designated as Independent Non-Executive Director on 15 June. He is also a member of the Audit Committee. He obtained his membership in Association of Certified Chartered Accountants (ACCA) in He is now a Fellow Member of ACCA. He is also a member of Malaysia Institute of Accountants (MIA). He has many years experience in one of the big four (4) accounting firms and has worked in many other industries before he joined Resintech-Kapar Sdn. Bhd. in In February 2008, he resigned as the General Manager of Resintech-Kapar Sdn. Bhd. and took on the position in the Board of Directors as Non-Independent Non-Executive Director as well as a member of Audit Committee. Notes to Directors Profile 1. Family Relationship Dato Dr. Teh Kim Poo, DSSA, PJK, JP is the spouse to Datin Gan Jew, PJK, a director and major shareholder of the Company. He is also a father to Mr Teh Leng Kang, a director and major shareholder of the Company. Teh Leng Kang is the spouse of Wei Hwei Hong. 2. Conflict of Interest None of the Directors have any conflict of interest with the Company. 3. Directorship in other Public Listed Companies The Directors do not have directorship in other public listed companies, except as disclosed for Dato Abu Sujak bin Mahmud. 4. Conviction of Offences None of the Directors have been convicted any offences (other than traffic offences) within the past 10 years. 5. Attendances at Board Meetings The details of the Directors attendance at the Board Meetings are set out on page 14 of this Annual Report. 6. Shareholdings The details of the Directors interest in the securities of the Company are set on page 75 of this Annual Report.

10 Annual Report resintech berhad ( X) 8 chairman s statement Dear Shareholders, On behalf of the Board of Directors of Resintech Berhad, I am pleased to present this Annual Report and Financial Statements of the Group for the financial year ended 28 February. FINANCIAL AND OPERATIONAL HIGHLIGHTS recorded a total revenue of RM78.6 million ( RM85.0 million) for the financial year under review and a corresponding profit before taxation of RM3.9 million ( RM2.8 million). The improvements were results from more stable crude oil price as well as lower finance costs. DIVIDENDS did not recommend any payment of dividend during the financial year.

11 Annual Report 9 resintech berhad ( X) chairman s statement (cont d) OUTLOOK At the moment, the local economy is facing a lot of challenges. The cutting of certain subsidies by the Government will definitely has some effect on the cost of inputs although some are of the view that the impact may not be too hard on the people. However, the Management hopes to be able to tap into other available opportunities in the market. Despite this, liberalization of the world import and export activities is bringing more positive effects than ever and this is definitely good news to us. The Management anticipates to undertake further market development this year in order to spread the Company s brand names further ahead other than also undertake products development. As always, the Group continues to take mitigating steps to ensure the impact of such is minimized whilst still focusing on improving operational efficiency and cost effectiveness. ACKNOWLEDGEMENT Last but not least, I, on behalf of the Board, wish to thank our team of management and staff and all stakeholders for their continued support and loyalty. Y. Bhg. Dato Abu Sujak Bin Mahmud Chairman

12 resintech berhad ( X) 10 Annual Report audit committee report 1. COMPOSITION AND MEETINGS During the financial year ended 28 February, a total of five (5) Audit Committee meetings were conducted and the members of the Audit Committee and details of their attendance of the meetings during the financial year are as follows: Chairman: Members: Dato Abu Sujak bin Mahmud (Independent Non-Executive Chairman) Khairul Anuar bin Shaharudin (Independent Non-Executive Director) Kok Wee Wah (Independent Non-Executive Director - Re-designated on 15 June ) Attendance of meetings The agenda of the meetings and relevant information are distributed to the Audit Committee members with sufficient notification. The Company Secretaries are also responsible for recording the proceedings of the Audit Committee meetings. The senior Management staff, internal auditors and external auditors were invited to attend the Audit Committee meetings. 2. TERMS OF REFERENCE a) Composition The Audit Committee shall be appointed from amongst the Board and shall comprise no fewer than three (3) members who are Non- Executive Directors and majority of whom are Independent Directors. No alternate director shall be appointed as a member of the Audit Committee. All members of the Audit Committee should be financially literate and at least one (1) member of the Audit Committee must be a member of the Malaysian Institute of Accountants or if he is a not a member of the Malaysian Institute of Accountants, he must have at least 3 years working experience and; (i) (ii) (iii) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or he must be a member of one of the associations of accountants as specified in Part II of the 1st Schedule of the Accountants Act 1967; or fulfills such other requirements as prescribed by Bursa Malaysia Securities Berhad. In the event of any vacancy with the result that the number of members is reduced to below three, the vacancy shall be filled within two (2) months but in any case not later than three (3) months. Therefore a member of the Audit Committee who wishes to retire or resign should provide sufficient written notice to the Company so that a replacement may be appointed before he leaves. The Board shall review the term of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether the Audit Committee and its members have carried out their duties in accordance with their terms of reference. b) Chairman The Chairman, who shall be elected by the Audit Committee, shall be an Independent Director. In the event of the Chairman s absence, the meeting shall be chaired by another Independent Director.

13 Annual Report 11 resintech berhad ( X) audit committee report (cont d) 2. TERMS OF REFERENCE (Cont d) c) Secretary The Company Secretary shall be the Secretary of the Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it prior to each meeting. The Secretary and / or such other person as authorised by the Audit Committee shall also be responsible for keeping the minutes of meetings of the Committee and circulating them to the Committee members. The Committee members may inspect the minutes of the Audit Committee at the Registered Office or such other place as may be determined by the Audit Committee. d) Meetings The Audit Committee shall meet at least four (4) times in each financial year and may regulate its own procedure in lieu of convening a formal meeting by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting. The quorum for a meeting shall be two (2) members, provided that the majority of members present shall be Independent Directors. The Audit Committee may call for a meeting as and when required with reasonable notice as the Committee members may deem fit. All decisions at such meeting shall be decided on a show of hands on a majority of votes. The external auditors and internal auditors (if any) have the right to appear at any meeting of the Audit Committee and shall appear before the Committee when required to do so by the Committee. The external auditors may also request a meeting if they consider it necessary. e) Rights The Audit Committee shall: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) have authority to investigate any matter within its terms of reference; have the resources which are required to perform its duties; have full and unrestricted access to any information pertaining to the Group; have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity; have the right to obtain legal or independent professional or other advice at the Company s expense; have the right to convene meetings with the external auditors, excluding the attendance of the executive members of the audit committee, whenever deemed necessary; promptly report to the Bursa Malaysia Securities Berhad, or such other name(s) as may be adopted by Bursa Malaysia Securities Berhad, matters which have not been satisfactorily resolved by the Board of Directors resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad; have the right to pass resolutions by a simple majority vote from the Committee and that the Chairman shall have the casting vote should a tie arise; meet as and when required on a reasonable notice; have the right to request the Chairman to call for a meeting upon the request of the internal auditors and external auditors; and have the right to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other Directors and employees of the Company, whenever deemed necessary.

14 resintech berhad ( X) 12 Annual Report audit committee report (cont d) 2. TERMS OF REFERENCE (Cont d) f) Duties The duties of the Audit Committee shall include a review of: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) To review with the external auditors on: the audit plan, its scope and nature; the audit report; the results of their evaluation of the accounting policies and systems of internal accounting controls within the Group; and the assistance given by the officers of the Company to external auditors, including any difficulties or disputes with Management encountered during the audit. To review the adequacy of the scope, functions, competency and resources and set the standards of the internal audit function. To recommend such measures as to be taken by the Board of Directors on the effectiveness of the system of internal control, management information and risk management practices of the Group. To review the internal audit programme and the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function. To review with Management: audit reports and management letter issued by the external auditors and the implementation of audit recommendations; interim financial information; and the assistance given by the officers of the Company to external auditors. To monitor related party transactions entered into by the Company or the Group and to determine if such transactions are undertaken on an arm s length basis and normal commercial terms and on terms not more favourable to the related parties than those generally available to the public, and to ensure that the Directors report such transactions annually to shareholders via the annual report, and to review conflicts of interest that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of Management integrity. To review the quarterly reports on consolidated results and annual financial statements prior to submission to the Board of Directors, focusing particularly on: changes in or implementation of major accounting policy and practices; significant and / or unusual matters arising from the audit; the going concern assumption; compliance with accounting standards and other legal requirements; and other major areas. To consider the appointment and / or re-appointment of auditors, the audit fee and any questions of resignation or dismissal including recommending the nomination of person or persons as auditors to the Board of Directors. To review the allocation of options pursuant to a share scheme, if any, for employees as being in compliance with the criteria for allocation of options under the employees share option scheme, at the end of each financial year. To approve any appointment or termination of senior staff members of the internal audit function. To consider the major findings of internal investigations and Management s response. The Audit Committee should meet regularly, with due notice of issues to be discussed, and should record its conclusions in discharging its duties and responsibilities.

15 Annual Report 13 resintech berhad ( X) audit committee report (cont d) 3. SUMMARY OF ACTIVITIES In line with the Terms of Reference of the Audit Committee, the following activities were undertaken by the Audit Committee during the financial year ended 28 February, in the discharge of its functions and duties, included the deliberation and: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Reviewed the unaudited quarterly reports on the consolidated results of the Group; Reviewed the audited financial statements and ensured that the financial reporting and disclosure requirements of relevant authorities had been complied with before recommending to the Board for approval; Reviewed the Statement on Internal Control and Audit Committee Report for inclusion in the Annual Report; Considered related party transactions and conflict of interest situation that may arise within the Group; Considered the re-appointment of the external auditors after they have expressed their willingness to continue in office with the consultation of the Management and recommended to the Board of Directors for approval; Considered the external audit fees and recommended the same for the approval of the Board of Directors; Reviewed the external auditors report in relation to audit and accounting issues arising from the audit, new development and updates on the Financial Reporting Standards issued by the Malaysian Accounting Standards Board and their impact on the Group; Meeting with the external auditors without the presence of the executive Board members and Management; Reviewed and follow-up reports presented by the internal auditors to ensure adequate scope and coverage of the activities of the Group; and Considered the appointment of the existing internal auditors and recommended to the Board members for approval. 4. INTERNAL AUDIT FUNCTION The Company s internal audit function is outsourced to an external professional services firm. The principal objective of the internal audit function is to assist the Board to monitor the risks and to periodically review the system of internal control to ensure that the system of internal control established by the Management is functioning effectively and satisfactorily in the Group. As an independent function, the professional services firm reported directly to the Audit Committee. An internal audit plan for the year was prepared by the professional services firm and was approved by the Audit Committee. In carrying out the internal audit plan for the year under review, the independent professional services firm carried out internal audit reviews on the Sales and Receipt Cycle of Resintech Plastics (M) Sdn Bhd and Sales and Receipt Cycle of Resintech Products Marketing Sdn Bhd. These reviews were coordinated by the Group s Management and staff. Arising from these reviews, recommendations for improvement to the system of internal control were provided to the Management. The Audit Committee was also updated on the implementation status of action plans agreed to be taken by the Management. 5. EMPLOYEES SHARE OPTION SCHEME During the financial year, no allocation of share options was made by the Company pursuant to the Employees Share Option Scheme.

16 resintech berhad ( X) 14 Annual Report corporate governance statement The Board of Directors ( the Board ) of Resintech Berhad recognises the importance of establishing and maintaining good corporate governance within the Group. The Board is committed to ensure the adoption of the principles and best practices of the Malaysian Code on Corporate Governance ( the Code ) to safeguard the Group s assets and shareholders interests. This statement sets out the manner in which the Group has applied the Principles and the extent of compliance with the Best Practices in Corporate Governance as set out in Part 1 and Part 2 respectively of the Code. The best practices that were not adopted during the financial year are explained in the relevant paragraphs. THE BOARD OF DIRECTORS Composition is led by an effective and experienced Board with members from different backgrounds possessing a wide range of expertise. Together they bring a broad range of skills, experience and knowledge which give added strength to the leadership in managing and directing the Group s operations. The Board recognises its key role in charting the strategic direction, development and control of the Group which would include the reviewing and monitoring of matters relating to strategy, performance, resource allocation, standards of conduct, financial matters, succession planning, effectiveness and adequacy of the Group s system of internal controls and risk management practices. Board Balance The Board comprises seven (7) members, of whom, three (3) are Independent Non-Executive Directors and four (4) are Executive Directors. The profiles of the members of the Board are set out on page 6 to page 7 of this Annual Report. The Executive Directors are primarily responsible for the implementation of policies and decisions of the Board, overseeing the Group s operations and developing the Group s business strategies. The role of the Independent Non-Executive Directors is to provide objective and independent judgment to the decision making of the Board and as such, provide an effective check and balance to the Board s decision making process. With this composition of members, the Board is satisfied that it fairly reflects the investment of the minority shareholders and represents the mix of skills and experiences required for the effective discharge of Board s duties and responsibilities. There is a clear division of responsibilities between the roles of the Chairman and Managing Director to ensure that there is equilibrium of power and authority in managing and directing the Group. The Chairman is primarily responsible for the effective and efficient conduct and working of the Board whilst the Managing Director oversees the day-to-day management of the Group s business operations and implementation of policies and strategies adopted by the Board. Board Meetings During the financial year ended 28 February, a total of five (5) Board meetings were conducted and the attendance details of individual Board members are shown below: Name of Director Designation No. of meetings attended Dato Abu Sujak bin Mahmud Independent Non-Executive Chairman 5 Dato Dr. Teh Kim Poo, DSSA, PJK, JP Managing Director 5 Datin Gan Jew, PJK Executive Director 5 Teh Leng Kang, PJK Executive Director 4 Khairul Anuar bin Shaharudin Independent Non-Executive Director 5 Wei Hwei Hong Executive Director 5 Kok Wee Wah Independent Non-Executive Director 5

17 Annual Report 15 resintech berhad ( X) corporate governance statement (cont d) THE BOARD OF DIRECTORS (Cont d) Board Meetings Board meetings are scheduled every quarter and additional meetings are convened as and when necessary. During the meetings, Board members will deliberate on and consider matters relating to the Group s financial performance, significant investments, corporate development, strategic issues and business plans. All meetings of the Board are duly recorded in the Board Minutes by the Company Secretaries. All Directors have full access to the advice and services of the Company Secretaries who ensures that Board procedures are adhered to at all times during meetings and advises the Board on matters including corporate governance issues and the Directors responsibilities in complying with the relevant legislation and regulations. Supply of Information to Board Members Directors are provided with sufficient notices for each Board meeting and board papers are distributed prior to the meetings to enable the Directors to review and consider the agenda items that will be discussed in the Board Meeting. The board papers providing updates on operations, financial, corporate developments and minutes of the Board Committees are circulated prior to each meeting. This is to provide the Directors with sufficient time to enable them to participate in the deliberations of the issues to be raised at the meetings and to make informed decisions. Appointment and Re-election of Directors The appointment of Directors is undertaken by the Board as a whole guided by formal recommendations by the Nomination Committee. In accordance with the Company s Articles of Association, all Board members who are appointed by the Board shall be subject to election by shareholders at the first opportunity of their appointment. The Company s Articles of Association also provide that at least one-third (1/3) of the Directors shall retire by rotation at each Annual General Meeting and that all Directors shall retire once every three (3) years. A retiring Director shall be eligible for re-election. Directors Training All members of the Board have attended and successfully completed the Mandatory Accreditation Programme ( MAP ) as prescribed by Bursa Malaysia Securities Berhad ( Bursa Securities ). The Directors will continue to undergo other relevant training programmes to further enhance their skills and knowledge. During the year, the Directors were also briefed by the Company Secretaries on the various amendments to the Listing Requirements of the Bursa Securities, Companies Act, 1965 as well as the Code. Amongst the training programmes and seminars or courses attended by members of the Board in and were: Directors Date of Course Seminar / Course Dato Abu Sujak bin Mahmud 18 June Technical Briefing, Main Market Listing Requirements Dato Dr. Teh Kim Poo, DSSA, PJK, JP April ChinaPlas 2 4 September Injection Moulding Datin Gan Jew, PJK April ChinaPlas Khairul Anuar bin Shaharudin 18 June Technical Briefing, Main Market Listing Requirements Wei Hwei Hong 24 March Analytical Procedures 29 October Deloitte TaxMax- the 35th Series Kok Wee Wah 22 February The Challenges in Implementing FRS 139 Mr. Teh Leng Kang has not attended any training during the financial year due to busy business schedule.

18 resintech berhad ( X) 16 Annual Report corporate governance statement (cont d) BOARD COMMITTEES Apart from the Audit Committee, there are two additional committees established to assist the Board of Directors in the execution of its responsibilities. All the committees are provided with written terms of reference. Details of the Board committees are provided below. Nomination Committee The Nomination Committee has two (2) members, all of whom are Independent Non-Executive Directors. The members of the Nomination Committee are: Chairman Dato Abu Sujak bin Mahmud Independent Non-Executive Chairman Member Khairul Anuar bin Shaharudin Independent Non-Executive Director The Nomination Committee is empowered by the Board of Directors and its terms of reference to assist the Board of Directors in their responsibilities in nominating new candidates for the Board and Board Committees and also assess their effectiveness. Remuneration Committee The Remuneration Committee comprises one (1) Executive Director and two (2) Independent Non-Executive Directors. The members of the Remuneration Committee are: Chairman Dato Dr. Teh Kim Poo, DSSA, PJK, JP Managing Director Members Dato Abu Sujak bin Mahmud Independent Non-Executive Chairman Khairul Anuar bin Shaharudin Independent Non-Executive Director The responsibility of the Remuneration Committee is to recommend the remuneration policy for Executive Directors. This includes recommending remuneration packages to attract, retain and motivate the Directors, which are reflective of the Directors experience and level of responsibilities. None of the Executive Directors participate in any way in determining their individual remuneration. The remuneration of the Executive Directors is to be reviewed annually. The remuneration and entitlements of the Non-Executive Directors is a matter of the Board of Directors as a whole. The Remuneration Committee held one (1) meeting during the financial year with the full attendance of its members.

19 Annual Report 17 resintech berhad ( X) corporate governance statement (cont d) DIRECTORS REMUNERATION The aggregate remuneration of Directors for the financial year ended 28 February are categorised as follows: (a) Total Remuneration Executive Directors RM Non-Executive Directors RM Basic Salary 724, ,000 Bonuses & incentives 61,500-61,500 Fees - 105, ,000 Benefits-in-kind 96,739-96,739 Total 882, , ,239 Total RM (b) Directors remuneration by bands Executive Non-Executive Total Below RM50, RM100,001 to RM150, RM150,001 to RM200, RM400,001 to RM450, Total number of Directors The details of individual Director s remuneration are not disclosed as the Board considers the above disclosures on the Directors remuneration are sufficient to cater to the transparency and accountability aspects of the Code. Relation with Shareholders and Investors Shareholders and Investors Relations recognises the importance of timely and thorough dissemination of information to shareholders. In this regard, the information that is disseminated to the investment community conforms strictly with the Bursa Securities disclosure rules and regulations. Care is taken to ensure that no market sensitive information such as corporate proposals, financial results and other material information is disseminated to any party without first making an official announcement through Bursa Securities. The annual report has comprehensive information pertaining to the Group, while various disclosures on quarterly and annual results provide investors with financial information. has also established a website at and from which shareholders as well as members of the public may access for the latest information on operations and activities of the Group. Annual General Meeting The Annual General Meeting ( AGM ) is the principal platform for dialogue with the shareholders. At the AGM, the Board presents the progress and performance of the Group to provide shareholders with the opportunity to question the business issues, concerns and operations in general. The Board will also ensure that each item of special business is included in the notice of the AGM and will be accompanied by an explanation of the effects of the proposed resolutions.

20 resintech berhad ( X) 18 Annual Report corporate governance statement (cont d) ACCOUNTABILITY AND AUDIT Financial Reporting In presenting the annual audited financial statements and interim financial statements on a quarterly basis to the shareholders, the Board is responsible to present a clear, balanced and understandable assessment of the Group s performance and position. The Audit Committee assists the Board in reviewing the information to be disclosed, to ensure the completeness, accuracy and adequacy of financial disclosures. Internal Controls In relation to the internal audit function, having considered the Group s operational requirements, the Board is of the view that the Group should still continue to outsource its internal audit function to external consultants. Nevertheless, this outsourcing arrangement shall be reviewed annually to ensure that it continues to meet the Group s requirements. The outsourced internal auditors assist the Board and the Audit Committee in providing independent assessment of the adequacy, efficiency and effectiveness of the Group s internal control systems. They report directly to the Audit Committee. The Statement on Internal Control is set out on pages 20 to 21 of this Annual Report provides an overview of the state of internal controls within the Group. Relationship with Auditors Through the Audit Committee, the Board maintains a formal and transparent relationship with the external auditors in seeking professional advice and ensuring compliance with the appropriate accounting standards. The external auditors will highlight to the Audit Committee and the Board on matters that require their attention. Information on the role of Audit Committee in relation to the external auditors is set out in the Audit Committee Report on pages 10 to 13 of this Annual Report.

21 Annual Report 19 resintech berhad ( X) additional compliance information 1. SHARE BUY-BACK During the financial year, the Company did not carry out any share buy-back transactions. 2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES The Company has not issued any warrants, options or convertible securities during the financial year. 3. AMERICAN DEPOSITORY RECEIPTS ( ADR ) OR GLOBAL DEPOSITORY RECEIPT ( GDR ) The Company did not participate in any ADR or GDR Programme during the financial year. 4. SANCTIONS AND/OR PENALTIES There were no material sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by any regulatory bodies during the financial year. 5. NON-AUDIT FEES During the financial year, the non-audit fees paid by the Company to the external auditors amounted to RM5, VARIATION IN RESULTS FOR THE FINANCIAL YEAR There was no material variance between the audited results for the financial year ended 28 February and the unaudited results previously announced. 7. PROFIT GUARANTEE No profit guarantees were given by the Company during the financial year. 8. MATERIAL CONTRACTS There were no material contracts entered into by the Company and its subsidiaries involving the Company s Directors and major shareholders interests, either still subsisting at the end of the financial year, or which were entered into since the end of the previous financial year. 9. UTILISATION OF PROCEEDS There were no proceeds raised from any corporate proposals during the financial year. 10. REVALUATION POLICY ON LANDED PROPERTIES The Company and its subsidiaries did not adopt any revaluation policy on landed properties during the financial year. 11. Recurrent Related Party Transactions The Company and its subsidiaries did not entered into any recurrent related party transactions during the financial year ended 28 February which exceeded the value prescribed by the Listing Requirements of Bursa Malaysia Securities Berhad.

22 resintech berhad ( X) 20 Annual Report statement on internal control In accordance with the Paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Bhd., the Board is pleased to presents herewith its Statement on Internal Control. BOARD RESPONSIBILITY The Board of Directors recognizes the importance of sound system of internal control to safeguard shareholders investment and the Group s assets against potential shortcomings. The Board is also aware of the limitations inherent in any internal control systems. As such, a sound internal control system manages the potential risk of failure to achieve corporate objectives rather than totally eliminating it. Therefore, the system of internal control can only provide reasonable assurance, not absolute assurance, against any material misstatements or losses. With such benefits and limitations, due consideration was given to weigh the cost as compared to the expected benefits from the devising and implementing the control procedures. RISK MANAGEMENT The Board acknowledges that there is an underlying and ongoing process in the Group for the identification, evaluation and mitigation of its significant risks. Management from each department identifies their risks within the defined parameters and standards. Such process was exercised through periodic management meetings held to communicate and deliberate key issues and risks amongst Management team members. Where appropriate, controls are devised, revised, improved and implemented. INTERNAL AUDIT FUNCTION In carrying out the internal audit function, the Board has continued to be assisted by the outsourced external consultants and the Management team to review and evaluate the adequacy and integrity of the Group s internal audit systems. The presence of ISO auditors in the Group also helps the Management in carrying out the assessment. The results of ISO auditors review are brought to the attention of the Management with followup reviews being conducted to ensure that the recommendations for improvement are implemented on a timely basis. During the financial year under review, the cost incurred for the internal audit function amounted to RM41,300.

23 Annual Report 21 resintech berhad ( X) statement on internal control (cont d) OTHER KEY ELEMENTS OF INTERNAL CONTROLS The other key elements of the Group s internal control system are as follows:- a) Well Defined Organisational Structure Key responsibilities are clearly defined and authorization policy sets out appropriate authorization limit. Operational issues are highlighted during management meetings. b) Operating Manual Internal policies and procedures are properly documented in the Standard Operating Procedures manuals. c) Management Meetings Regular management meetings are conducted and chaired by the Group s Managing Director. Relevant progress and reports are presented for review and discussion. d) Internal Audit Activities Audit activities are conducted to assess adequacy of controls and monitor of compliance with the Group s Policies and Procedures. During the financial year, 2 reviews were carried out. e) Management Visits Regular inspections of operations are performed by members of the senior management team. f) Financial Results Financial results are reviewed quarterly by the Audit Committee and the Board. CONCLUSION During the financial year under review, a number of internal control weaknesses were identified and presented for improvement discussion. While these are not expected to result in any material loss, management had deliberated on these weaknesses and proposed action plans to address them. Moving forward, the Group will continue improving and enhancing the existing system of internal control pertaining to the identified risks with the anticipation of changing business environment.

24 resintech berhad ( X) 22 Annual Report directors responsibilities statement The Directors of the Company are required to prepare the financial statements for each financial year which gives a true and fair view of the state of affairs and results of the Company and the Group. The Directors are responsible for ensuring that the Company and the Group keep proper accounting records to enable the Company and the Group to disclose, with reasonable accuracy and without any material misstatement, the financial position of the Company and the Group as at 28 February and the profit and loss of the Company and the Group for the financial year ended on that date. In preparing the financial statements for the financial year ended 28 February, the Directors have: a) adopted the relevant and appropriate accounting policies consistently; b) made judgements and estimates that are reasonable and prudent; c) adopted applicable accounting standards, subjects to any material departures, if any, which will be disclosed and explained in the financial statements; and d) prepared the financial statements on the assumption that the Company and the Group will operate as going concern. In assessing the adequacy and effectiveness of the system of internal control and accounting control procedures of the Group, the Audit Committee reports to the Board its activities, significant results, findings and the necessary recommendations or changes. corporate social responsibility statement The RB Group is fully aware of its corporate responsibilities for the community, employees, the environment, community and other stakeholders. RB undertakes to incorporate corporate social responsibilities ( CSR ) concepts into its operations and decision making through a transparent approach by communicating to its stakeholders and encouraging their feedback through prompt and detail disclosure. constantly review its employees well-being by ensuring continuous learning through training and seminars as well as condusive work environment. As we do so, our actions improve the quality of life for the people of the RB Group as well as the community at large. In short, RB strongly supports CSR practices as a contribution to society, environment and human resource which would enable the organization to generate value and hope to continue contributing actively in future.

25 Financial Statements 24 Directors Report 29 Statement by Directors 29 Statutory Declaration 30 Independent Auditors Report 32 Balance Sheets 34 Income Statements 35 Statements of Changes in Equity 36 Cash Flow Statements 38 Notes to the Financial Statements

26 Annual Report resintech berhad ( X) 24 directors report The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 28 February. Principal Activities The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are disclosed in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. Results The Company Profit/(Loss) after taxation 2,996 (22) Attributable to: Equity holders of the Company 3,025 (22) Minority interests (29) - 2,996 (22) Dividends No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year. Reserves And Provisions All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements. Issues Of Shares And Debentures During the financial year, (a) (b) there were no changes in the authorised and issued and paid-up share capital of the Company; and there were no issues of debentures by the Company. Options Granted Over Unissued Shares During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company.

27 Annual Report 25 resintech berhad ( X) directors report (cont d) Employees Share Option Scheme ( ESOS ) The Company established an ESOS which was governed by the ESOS By-laws adopted by the shareholders on 16 October The ESOS involved the grant of Options to Eligible Persons (an employee or a director of the Company and its subsidiaries on the date of the offer) to subscribe for new ordinary shares of up to 15% of the issued and paid-up ordinary share capital of the Company at any time during the existence of the scheme in accordance with the provisions of the ESOS By-laws. The ESOS is effective for a period of 5 years. No options have been granted todate. (a) In order to exercise an Option, the Grantee must deliver to the ESOS Committee a written notice stating the number of shares in respect of which the Option is being exercised, which number:- (i) (ii) (iii) shall not exceed the number of shares or the remaining number of shares comprised in the Option, as the case may be; shall not be less than 100 shares or the minimum board lot for shares; and shall be in the multiple of 100 shares or the minimum board lot for shares. In the event of an Option being exercised in part only, the balance of the Option not thereby exercised shall continue to be exercisable in accordance with the By-laws until the expiry of the Option Period. All Options unexercised on the expiry of the Option period shall lapse. (b) (c) (d) The ESOS s Option price for each new share at which the Eligible Person is entitled to subscribe shall be based on the weighted average market price of the Company s shares as shown in the daily official list issued by Bursa Malaysia for the five market days immediately preceding the date of offer of the Options, subject to a discount of not more than 10% (if deemed appropriate by the ESOS Committee) subject to such adjustments in accordance with the By-laws, provided that the price at which the Eligible Person shall be entitled to subscribe for the new shares shall be in no event less than the par value of the ordinary shares of the Company. The Option is personal to the grantee and shall not be transferred, assigned or otherwise disposed of by the grantee. The Options granted may be exercised by the grantee during his lifetime and whilst he is in the employment or being appointed as the director of the Group and within the Option period subject to the provisions of the By-laws. The Options granted shall not carry any right to vote at any general meeting of the Company. The new shares to be allocated and issued upon any exercise of the options will upon such allotment and issuance, rank pari passu in all respects with the then existing issued and fully paid-up shares of the Company except that the new shares so allocated and issued will not be entitled to any dividends, rights, allotments and/or other distributions declared, the entitlement date of which is prior to the date of allotment and issuance of the new shares. Bad And Doubtful Debts Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts. At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for doubtful debts in the financial statements of the Group and of the Company. Current Assets Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their values as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected so to realise. At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

28 resintech berhad ( X) 26 Annual Report directors report (cont d) Valuation Methods At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. Contingent And Other Liabilities The contingent liabilities are disclosed in Note 39 to the financial statements. At the date of this report, there does not exist:- (a) (b) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability of the Group and of the Company which has arisen since the end of the financial year. No contingent or other liability of the Group and of the Company has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations when they fall due. Change Of Circumstances At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. Items Of An Unusual Nature The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature. There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year. Directors The directors who served since the date of the last report are as follows:- Dato Dr. Teh Kim Poo, DSSA, PJK, JP Datin Gan Jew, PJK Dato Abu Sujak Bin Mahmud Khairul Anuar Bin Shaharudin Teh Leng Kang Wei Hwei Hong Kok Wee Wah

29 Annual Report 27 resintech berhad ( X) directors report (cont d) Directors Interests According to the register of directors shareholdings, the interests of directors holding office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:- Number Of Ordinary Shares Of RM0.50 Each At 1.3. Bought Sold At The Company Direct Interests Dato Dr. Teh Kim Poo, DSSA, PJK, JP 40,290, ,290,000 Datin Gan Jew, PJK 6,891, ,891,000 Dato Abu Sujak Bin Mahmud 3,264, ,264,000 Teh Leng Kang 3,000, ,000,000 Deemed Interests Dato Dr. Teh Kim Poo, DSSA, PJK, JP 9,966, ,966,000 Datin Gan Jew, PJK 43,365, ,365,000 By virtue of their interests in shares in the Company, Dato Dr. Teh Kim Poo, DSSA, PJK, JP and Datin Gan Jew, PJK are deemed to have interests in shares in its related corporations to the extent of the Company s interest, in accordance with Section 6A of the Companies Act The other directors holding office at the end of the financial year had no interest in shares in the Company and its related corporations during the financial year. Directors Benefits Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with a company in which certain directors have substantial financial interests as disclosed in Note 37 to the financial statements. Neither during nor at the end of the financial year was the Company or its subsidiaries a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Significant Events During The Financial Year The significant events during the financial year are disclosed in Note 42 to the financial statements. Significant Event Subsequent To The Balance Sheet Date The significant event subsequent to the balance sheet date is disclosed in Note 43 to the financial statements.

30 resintech berhad ( X) 28 Annual Report directors report (cont d) Auditors The auditors, Messrs. Crowe Horwath (formerly known as Messrs. Horwath), have expressed their willingness to continue in office. Signed In Accordance With A Resolution Of The Directors Dated 28 June Dato Dr. Teh Kim Poo, DSSA, PJK, JP Teh Leng Kang

31 Annual Report 29 resintech berhad ( X) statement by directors We, Dato Dr. Teh Kim Poo, DSSA, PJK, JP and Teh Leng Kang, being two of the directors of Resintech Berhad, state that, in the opinion of the directors, the financial statements set out on pages 11 to 67 are drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company at 28 February and of their results and cash flows for the financial year ended on that date. Signed In Accordance With A Resolution Of The Directors Dated 28 June Dato Dr. Teh Kim Poo, DSSA, PJK, JP teh Leng Kang statutory declaration I, Wei Hwei Hong, I/C No , being the director primarily responsible for the financial management of Resintech Berhad, do solemnly and sincerely declare that the financial statements set out on pages 11 to 67 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act Subscribed and solemnly declared by Wei Hwei Hong, I/C No , at Kuala Lumpur in the Federal Territory on this Before me Datin Hajah Raihela Wanchik (No. W275) Wei Hwei Hong

32 resintech berhad ( X) 30 Annual Report independent auditors report To The Members Of RESINTECH BERHAD (Incorporated in Malaysia) Company No : X Report on the Financial Statements We have audited the financial statements of Resintech Berhad, which comprise the balance sheets as at 28 February of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 11 to 67. Directors Responsibility for the Financial Statements The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. 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. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company 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 Company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 28 February and of their financial performance and cash flows for the financial year then ended.

33 Annual Report 31 resintech berhad ( X) independent auditors report (cont d) To The Members Of RESINTECH BERHAD Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:- (a) (b) (c) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. Our audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Crowe Horwath Firm No: AF 1018 Chartered Accountants lee Kok Wai Approval No: 2760/06/12 (J) Chartered Accountant Kuala Lumpur 28 June

34 resintech berhad ( X) 32 balance sheets At 28 February Annual Report Note The Company (Restated) The Company ASSETS NON-CURRENT ASSETS Investments in subsidiaries ,060 43,060 Property, plant and equipment 7 72,299 76, Prepaid lease payments 8 13,554 13, Investment properties Intangible asset ,407 91,166 43,060 43,060 CURRENT ASSETS Inventories 11 26,088 24, Amount due from contract customers Trade receivables 13 17,464 17, Other receivables, deposits and prepayments 14 1,711 2, Amount owing by subsidiaries ,075 7,685 Tax refundable 1, Fixed deposit with a licensed bank Cash and bank balances 1,015 2, ,208 48,548 7,652 7,698 TOTAL ASSETS 134, ,714 50,712 50,758 EQUITY AND LIABILITIES EQUITY Share capital 17 49,000 49,000 49,000 49,000 Share premium 18 1,274 1,274 1,274 1,274 Revaluation reserves 19 3, Retained profits 20 23,013 19, SHAREHOLDERS EQUITY 76,901 70,262 50,628 50,650 Minority interests TOTAL EQUITY 76,967 70,357 50,628 50,650

35 Annual Report 33 resintech berhad ( X) balance sheets (cont d) At 28 February Note The Company (Restated) The Company NON-CURRENT LIABILITIES Long-term borrowings 21 9,729 8, Deferred tax liabilities 24 9,417 9, ,146 17, CURRENT LIABILITIES Trade payables 25 7,342 6, Other payables and accruals 2,786 3, Amount owing to a related party Provision for taxation 1, Short-term borrowings 27 20,614 31, Bank overdrafts 28 5,654 9, ,502 51, TOTAL LIABILITIES 57,648 69, TOTAL EQUITY AND LIABILITIES 134, ,714 50,712 50,758 The annexed notes form an integral part of these financial statements.

36 Annual Report resintech berhad ( X) 34 income statements For The Financial Year Ended 28 February Note The Company REVENUE 29 78,565 85,166-2,000 COST OF SALES (61,400) (70,319) - - GROSS PROFIT 17,165 14,847-2,000 OTHER INCOME ,149 15, ,240 SELLING AND DISTRIBUTION EXPENSES (2,341) (2,229) - - ADMINISTRATIVE EXPENSES (5,981) (5,468) (222) (277) OTHER EXPENSES (3,673) (1,640) - - (11,995) (9,337) (222) (277) 6,154 6, ,963 FINANCE COSTS (2,172) (3,309) - - PROFIT BEFORE TAXATION 31 3,982 2, ,963 INCOME TAX EXPENSE 32 (986) (974) (40) (54) PROFIT/(LOSS) AFTER TAXATION 2,996 1,779 (22) 1,909 ATTRIBUTABLE TO:- Equity holders of the Company 3,025 1,826 (22) 1,909 Minority interests (29) (47) - - 2,996 1,779 (22) 1,909 EARNINGS PER SHARE - basic (sen) diluted (sen) 33 Not Applicable Not Applicable The annexed notes form an integral part of these financial statements.

37 Annual Report 35 resintech berhad ( X) statements of changes in equity For The Financial Year Ended 28 February Share Capital Share Premium Retained Profits Revaluation Reserves Total Minority Interests Total Equity Balance at / ,000 1,274 20,122-70, ,538 Interim tax-exempt dividend of 2.0 sen per ordinary share - - (1,960) - (1,960) - (1,960) Profit attributable to equity holders - - 1,826-1,826 (47) 1,779 Balance at 28.2./ ,000 1,274 19,988-70, ,357 Profit attributable to equity holders - - 3,025-3,025 (29) 2,996 Revaluation surplus arising during the financial year ,614 3,614-3,614 Balance at ,000 1,274 23,013 3,614 76, ,967 The Company Balance at / ,000 1, ,701-50,701 Interim tax-exempt dividend of 2.0 sen per ordinary share - - (1,960) - (1,960) - (1,960) Profit attributable to equity holders - - 1,909-1,909-1,909 Balance at 28.2./ ,000 1, ,650-50,650 Loss attributable to equity holders - - (22) - (22) - (22) Balance at ,000 1, ,628-50,628 The annexed notes form an integral part of these financial statements.

38 resintech berhad ( X) 36 Annual Report cash flow statements For The Financial Year Ended 28 February The Company CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES Profit before taxation 3,982 2, ,963 Adjustments for:- Allowance for doubtful debts Amortisation of intangible asset Amortisation of prepaid lease payments Bad debts written off Depreciation for property, plant and equipment 7,977 7, Equipment written off Fair value adjustments of investment properties Impairment loss on property 1, Interest expense 2,170 3, Unrealised loss on foreign exchange Dividend income (2,000) Allowance for doubtful debts written back (16) (141) - - Net gain on disposal of plant and equipment (413) Operating profit/(loss) before working capital changes 16,192 13, (37) (Increase)/Decrease in inventories (1,120) 1, Decrease/(Increase) in trade and other receivables 1,058 10,951 (517) 7 Increase/(Decrease) in other payables and accruals 79 (148) (24) 41 Decrease in amount owing by contract customers CASH FROM/(FOR) OPERATIONS 16,235 26,068 (523) 11 Income tax paid (1,410) (1,026) (73) (41) Interest paid (2,170) (3,305) - - NET CASH FROM/(FOR) OPERATING ACTIVITIES CARRIED FORWARD 12,655 21,737 (596) (30)

39 Annual Report 37 resintech berhad ( X) cash flow statements (cont d) For The Year Ended 28 February Note The Company NET CASH FROM/(FOR) OPERATING ACTIVITIES BROUGHT FORWARD 12,655 21,737 (596) (30) CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES Proceeds from disposal of plant and equipment Repayment from/(advances to) subsidiaries (39) Dividend received ,000 Prepayment of leases (67) (856) - - Purchase of property, plant and equipment 34 (1,456) (8,313) - - NET CASH (FOR)/FROM INVESTING ACTIVITIES (719) (9,169) 610 1,961 CASH FLOWS FOR FINANCING ACTIVITIES Advances from a related party Repayment of bills payable (9,561) (6,200) - - Drawdown of term loans 6,064 1, Repayment of hire purchase payables (313) (286) - - Repayment of term loans (5,290) (5,711) - - Dividend paid - (1,960) - (1,960) NET CASH FOR FINANCING ACTIVITIES (8,890) (12,714) - (1,960) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 3,046 (146) 14 (29) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR (7,615) (7,469) CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 35 (4,569) (7,615) The annexed notes form an integral part of these financial statements.

40 resintech berhad ( X) 38 Annual Report notes to the financial statements For The Financial Year Ended 28 February 1. General Information The Company is a public company limited by shares and is incorporated under the Companies Act The domicile of the Company is Malaysia. The registered office, which is also the principal place of business, is at Lot 3 & 5, Jalan Waja 14, Kawasan Perindustrian Telok Panglima Garang, Telok Panglima Garang, Selangor Darul Ehsan. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 28 June. 2. Principal Activities The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are disclosed in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. 3. Financial Risk Management Policies s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group s business whilst managing its market, credit, liquidity and cash flow risks. The policies in respect of the major areas of treasury activity are as follows:- (a) Market Risk (i) Foreign Currency Risk is exposed to foreign exchange risk on sales that are denominated in currencies other than Ringgit Malaysia. Foreign currency risk is monitored closely and managed to an acceptable level. (ii) Interest Rate Risk obtains financing through banking and hire purchase facilities. Its policy is to obtain the most favourable interest rates. Surplus funds are placed with licensed banks at the most favourable interest rates. (iii) Price Risk does not have any quoted investments and hence is not exposed to price risk. (b) Credit Risk s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from receivables. The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the balance sheet reduced by the effects of any netting arrangements with counterparties. s concentration of credit risk relates to the amount owing by a customer which constituted 12% of its trade receivables at the balance sheet date. manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. (c) Liquidity and Cash Flow Risks s exposure to liquidity and cash flow risks arises mainly from general funding and business activities. It practises prudent liquidity risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.

41 Annual Report 39 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 4. Basis Of Preparation The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Financial Reporting Standards ( FRS ) and the Companies Act 1965 in Malaysia. has not applied in advance the following accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board ( MASB ) but are not yet effective for the current financial year: FRSs/IC Interpretations Effective date Revised FRS 1 () First-time Adoption of Financial Reporting Standards 1 July Revised FRS 3 () Business Combinations 1 July FRS 4 Insurance Contracts 1 January FRS 7 Financial Instruments: Disclosures 1 January FRS 8 Operating Segments 1 July Revised FRS 101 () Presentation of Financial Statements 1 January Revised FRS 123 () Borrowing Costs 1 January Revised FRS 127 () Consolidated and Separate Financial Statements 1 July Revised FRS 139 () Financial Instruments: Recognition and Measurement 1 January Amendments to FRS 1 and FRS 127: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate 1 January Amendment to FRS 1: Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters 1 January 2011 Amendments to FRS 2: Vesting Conditions and Cancellations 1 January Amendments to FRS 2: Scope of FRS 2 and Revised FRS 3 () 1 July Amendments to FRS 5: Plan to Sell the Controlling Interest in a Subsidiary 1 July Amendments to FRS 7, FRS 139 and IC Interpretation 9 1 January Amendments to FRS 7: Improving Disclosures about Financial Instruments 1 January 2011 Amendments to FRS 101 and FRS 132: Puttable Financial Instruments and Obligations Arising on Liquidation 1 January Amendments to FRS 132: Classification of Rights Issues and the Transitional Provision In Relation To Compound Instruments 1 January / 1 March Amendments to FRS 138: Consequential Amendments Arising from Revised FRS 3 () 1 July

42 resintech berhad ( X) 40 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 4. Basis Of Preparation (cont d) FRSs/IC Interpretations Effective date IC Interpretation 9 Reassessment of Embedded Derivatives 1 January IC Interpretation 10 Interim Financial Reporting and Impairment 1 January IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions 1 January IC Interpretation 12 Service Concession Arrangements 1 July IC Interpretation 13 Customer Loyalty Programmes 1 January IC Interpretation 14: FRS The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction 1 January IC Interpretation 15 Agreements for the Construction of Real Estate 1 July IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July Amendments to IC Interpretation 9: Scope of IC Interpretation 9 and Revised FRS 3 () 1 July Annual Improvements to FRSs () 1 January The above FRSs, IC Interpretations and amendments are not relevant to the Group s operations except as follows: (i) (ii) (iii) (iv) (v) The revised FRS 3 () introduces significant changes to the accounting for business combinations, both at the acquisition date and post acquisition, and requires greater use of fair values. In addition, all transaction costs, other than share and debt issue costs, will be expensed as incurred. This revised standard will be applied prospectively and therefore there will not have any financial impact on the financial statements of the Group for the current financial year but may impact the accounting for future transactions or arrangements. considers financial guarantee contracts entered into to be insurance arrangements and accounts for them under FRS 4. In this respect, the Group treats the guarantee contract as a contingent liability until such a time as it becomes probable that the Group will be required to make a payment under the guarantee. The adoption of FRS 4 is expected to have no material impact on the financial statements of the Group. The possible impacts of FRS 7 (including the subsequent amendments) and the revised FRS 139 () on the financial statements upon their initial applications are not disclosed by virtue of the exemptions given in these standards. FRS 8 replaces FRS Segment Reporting and requires a management approach, under which segment information is presented on the same basis as that used for internal reporting purposes. The adoption of this standard only impacts the form and content of disclosures presented in the financial statements of the Group. This FRS is expected to have no material impact on the financial statements of the Group upon its initial application. The revised FRS 101 () has introduced terminology changes (including revised titles for the financial statements) and changes in the format and content of the financial statements. In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the reclassification of items in the financial statements. The adoption of this revised standard will only impact the form and content of the presentation of the Group s financial statements in the next financial year.

43 Annual Report 41 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 4. Basis Of Preparation (cont d) (vi) The revised FRS 127 () requires accounting for changes in ownership interests by the group in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the group loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profit or loss. The revised standard also requires all losses attributable to the minority interest to be absorbed by the minority interest instead of by the parent. will apply the major changes of the revised FRS 127 () prospectively and therefore there will not have any financial impact on the financial statements of the Group for the current financial year but may impact the accounting for future transactions or arrangements. (vii) Amendments to FRS 1 and FRS 127 remove the definition of cost method currently set out in FRS 127, and instead require an investor to recognise all dividend from subsidiaries, jointly controlled entities or associates as income in its separate financial statements. In addition, FRS 127 has also been amended to deal with situations where a parent reorganises its group by establishing a new entity as its new parent. Under this circumstance, the new parent shall measure the cost of its investment in the original parent at the carrying amount of its share of the equity items shown in the separate financial statements of the original parent at the reorganisation date. The amendments will be applied prospectively and therefore there will not have any financial impact on the financial statements of the Group for the current financial year but may impact the accounting for future transactions or arrangements. (viii) Amendments to FRS 2: Vesting Conditions and Cancellation clarify the definition of vesting conditions for the purposes of FRS 2, introduce the concept of non-vesting conditions, and clarify the accounting treatment for cancellations. These amendments are expected to have no material impact on the financial statements of the Group upon their initial application. (ix) (x) (xi) Amendments to FRS 2: Scope of FRS 2 and Revised FRS 3 () clarify that business combination among entities under common control and the contribution of a business upon the formation of a joint venture will not be accounted for under FRS 2. These amendments are expected to have no material impact on the financial statements of the Group upon their initial application. Amendments to FRS 101 and FRS 132 require puttable financial instruments that would normally be classified as liabilities to be classified as equity if and only if they meet certain conditions, with retrospective application. These amendments are expected to have no material impact on the financial statements of the Group upon their initial application. Amendments to FRS 138 clarify the requirements under the revised FRS 3 () regarding accounting for intangible assets acquired in a business combination. These amendments are expected to have no material impact on the financial statements of the Group upon their initial application. (xii) IC Interpretation 9 requires embedded derivatives to be separated from the host contract and accounted for as a derivative on the basis of the conditions that existed at the later of the date the entity first became a party to the contract. The possible impacts of IC Interpretation 9 on the financial statements upon its initial application are not disclosed by virtue of the exemptions given under the revised FRS 139 (). (xiii) IC Interpretation 10 prohibits the impairment losses recognised in an interim period on goodwill, investments in equity instruments and financial assets carried at cost to be reversed at a subsequent balance sheet date. This interpretation is expected to have no material impact on the financial statements of the Group upon its initial application. (xiv) IC Interpretation 11 provides guidance on whether share-based transactions involving treasury shares or involving group entities (for example, options over a parent s shares) should be accounted for as equity-settled or cash settled share-based payment transactions in the separate financial statements of the parent and group companies. This interpretation is expected to have no material impact on the financial statements of the Group upon its initial application. (xv) Amendments to IC Interpretation 9 are a consequential amendment from the revised FRS 3 (). These amendments are expected to have no material impact on the financial statements of the Group upon its initial application. (xvi) Annual Improvements to FRSs () contain amendments to 21 accounting standards that result in accounting changes for presentation, recognition or measurement purposes and terminology or editorial amendments. These amendments are expected to have no material impact on the financial statements of the Group upon their initial application except for leasehold land where in substance a finance lease will be reclassified from prepaid lease payments to property, plant and equipment and measured as such retrospectively.

44 resintech berhad ( X) 42 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (a) Critical Accounting Estimates and Judgements Estimates and judgements are continually evaluated by the Directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are as follows: (i) Depreciation of Property, Plant and Equipment The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial and production factors which could change significantly as a result of technical innovations and competitors actions in response to market conditions. anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and commercial factors could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (ii) Income Taxes There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the year in which such determination is made. (iii) Impairment of Assets When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the Group is required to make an estimate of the expected future cash flows from the cashgenerating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows. (iv) Construction Contracts Construction contracts accounting requires reliable estimation of the costs to complete the contract and reliable estimation of the stage of completion. (i) Contract Revenue Construction contracts accounting requires that variation claims and incentive payments only be recognised as contract revenue to the extent that it is probable that they will be accepted by the customers. As the approval process often takes some time, a judgement is required to be made of its probability and revenue recognised accordingly. (ii) Contract Costs Using experience gained on each particular contract and taking into account the expectations of the time and materials required to complete the contract, management estimates the profitability of the contract on an individual basis at any particular time.

45 Annual Report 43 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (cont d) (a) Critical Accounting Estimates and Judgements (Cont d) (v) Classification between Investment Properties and Owner-Occupied Properties determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions can be sold separately (or leased out separately under a finance lease), the Group accounts for the portions separately. If the portions cannot be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. (vi) Allowance for Doubtful Debts of Receivables makes allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyses historical bad debt, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the allowance for doubtful debts of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables. (vii) Allowance for Inventories Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories. (viii) Fair Value Estimates for Certain Financial Assets and Liabilities carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and equity. (ix) Revaluations of Properties s properties which are reported at valuation are based on valuation performed by independent professional valuers. The independent professional valuers have exercised judgement in determining discount rates, estimates of future cash flows, capitalisation rate, terminal year value, market freehold rental and other factors used in the valuation process. Also, judgement has been applied in estimating prices for less readily observable external parameters. Other factors such as model assumptions, market dislocations and unexpected correlations can also materially affect these estimates and the resulting valuation estimates.

46 resintech berhad ( X) 44 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (cont d) (b) Financial Instruments Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instruments. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously. Financial instruments recognised in the balance sheet are disclosed in the individual policy statement associated with each item. (c) Functional and Foreign Currencies (i) Functional and Presentation Currency The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency. The consolidated financial statements are presented in Ringgit Malaysia ( RM ) which is the Company s functional and presentation currency. (ii) Transactions and Balances Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the balance sheet date are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are taken to the income statement. (d) Basis of Consolidation The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to 28 February. A subsidiary is defined as a company in which the parent company has the power, directly or indirectly, to exercise control over its financial and operating policies so as to obtain benefits from its activities. All subsidiaries are consolidated using the purchase method. Under the purchase method, the results of the subsidiaries acquired or disposed of are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries net assets are determined and these values are reflected in the consolidated financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group. Minority interests in the consolidated balance sheets consist of the minorities share of fair values of the identifiable assets and liabilities of the acquiree as at the date of acquisition and the minorities share of movements in the acquiree s equity. Minority interests are presented in the consolidated balance sheet of the Group within equity, separately from the Company s equity holders, and are separately disclosed in the consolidated income statement of the Group.

47 Annual Report 45 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (cont d) (e) Goodwill Goodwill on consolidation represents the excess of the fair value of the purchase consideration over the Group s share of the fair values of the identifiable net assets of the subsidiaries at the date of acquisition. Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually. The impairment value of goodwill is recognised immediately in the consolidated income statement. An impairment loss recognised for goodwill is not reversed in a subsequent period. If, after reassessments, the Group s interest in the fair values of the identifiable net assets of the subsidiaries exceeds the cost of the business combinations, the excess is recognised immediately in the consolidated income statement. (f) Intangible Assets An intangible asset shall be recognised if, and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and that the cost of the asset can be measured reliably. An entity shall assess the probability of the expected future economic benefits using reasonable and supportable assumptions that represent management s best estimate of the set of economic conditions that will exist over the useful life of the asset. An intangible asset shall be measured initially at cost. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the income statement in the expense category consistent with the function of the intangible asset. The principal amortisation rate used for this purpose is:- Licence fee 10 years Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis. (g) Investments in Subsidiaries Investments in subsidiaries are stated at cost in the balance sheet of the Company, and are reviewed for impairment at the end of the financial year if events or changes in circumstances indicate that their carrying values may not be recoverable. On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is taken to the income statement.

48 resintech berhad ( X) 46 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (cont d) (h) Property, Plant and Equipment Property, plant and equipment, other than freehold land and buildings, are stated at cost less accumulated depreciation and impairment losses, if any. Freehold land is stated at revalued amount less any impairment losses and is not depreciated. Buildings are stated at revalued amounts less accumulated depreciation and impairment losses, if any. Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:- Buildings 2% Plant and machinery 10% Tools and equipment 10% - 20% Moulds 10% Furniture and fittings 10% Office equipment 10% - 12% Motor vehicles and forklifts 20% Electrical installation 10% Renovation 10% Store 20% Properties are revalued periodically, at least once in every five years. Surpluses arising from the revaluation of the properties are credited to a revaluation reserve. Deficits arising from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are charged to the income statement. The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each balance sheet date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment. Capital work-in-progress represents assets under construction, and which are not ready for commercial use at the balance sheet date. Capital work-in-progress is stated at cost, and is transferred to the relevant category of assets and depreciated accordingly when the assets are completed and ready for commercial use. Cost of capital work-in-progress includes direct cost, related expenditure and interest cost on borrowings taken to finance the construction or acquisition of the assets till the date that the assets are completed and put into use, net of interest income on the temporary investment of those borrowings. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is included in the income statement in the year the asset is derecognised. (i) Impairment of Assets The carrying values of assets, other than those to which FRS Impairment of Assets does not apply, are reviewed at each balance sheet date for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets net selling price and their value-in-use, which is measured by reference to discounted future cash flow. An impairment loss is charged to the income statement immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset.

49 Annual Report 47 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (cont d) (i) Impairment of Assets (Cont d) In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to the revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognised as income in the income statement. (j) Assets Under Hire Purchase Assets acquired under hire purchase are capitalised in the financial statements and are depreciated in accordance with the policy set out in Note 5(h) above. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are allocated to the income statement over the periods of the respective hire purchase arrangements. (k) Prepaid Lease Payments Leases of land under which the lessor has not transferred all the risks and benefits of ownership are classified as operating leases. Lease prepayment for land use right is stated at cost less accumulated amortisation and impairment losses, if any. Amortisation is charged to the income statement on a straight-line basis over the lease terms. (l) Investment Properties Investment properties are properties held either to earn rental income or for capital appreciation or for both. Initially investment properties are measured at cost including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Gains or losses arising from changes in the fair values of investment properties are included in the income statement in the year in which they arise. Investment properties are derecognised when they have either been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. On the derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount is charged to the income statement; any amount in the revaluation reserve relating to that investment property is transferred to retained earnings. (m) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis, and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Cost of finished goods and work-in-progress includes cost of materials, labour and an appropriate proportion of production overheads. Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale. Where necessary, allowance is made for obsolete, slow-moving and defective inventories. (n) Amounts Due From Contract Customers The amounts due from contract customers are stated at cost plus profits attributable to contracts in progress less progress billings and provision for foreseeable losses, if any. Cost includes direct materials, labour and applicable overheads.

50 resintech berhad ( X) 48 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (cont d) (o) Receivables Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date. (p) Revaluation Reserve Surpluses arising from the revaluation of properties are credited to the revaluation reserve account. Deficits arising from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are charged to the income statement. In the year of disposal of the revalued asset, the attributable remaining revaluation surplus is transferred from the revaluation reserve account to retained profits. (q) Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. (r) Income Tax Income tax for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the period and is measured using the tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred taxation is provided for, using the liability method, on temporary differences arising between tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over the business combination cost or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or excess of the acquirer s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over the business combination cost. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised. (s) Interest-bearing Borrowings Interest-bearing bank borrowings are recorded at the amount of proceeds received, net of transaction costs. Borrowing costs that are directly attributable to the construction of property, plant and equipment are capitalised as part of the cost of those assets until time the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted. All other borrowing costs are charged to the income statement as expenses in the period in which they are incurred.

51 Annual Report 49 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (cont d) (t) Equity Instruments Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation. (u) Research and Development Expenditure Research expenditure is written off to the income statement when incurred. Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as long-term assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure capitalised comprises costs incurred for development including direct and attributable indirect costs. Development costs initially recognised as an expense are not recognised as assets in the subsequent period. Development costs that have been capitalised are amortised on a straight-line basis over the period of their expected benefit, but not exceeding 5 years, from the commencement of the commercial production of the products. (v) Segmental Information Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of property, plant and equipment (net of accumulated depreciation, where applicable), intangible asset, inventories, receivables, and cash and bank balances. Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets and liabilities do not include income tax assets and liabilities respectively. Segment revenues, expenses and results include transfers between segments. The prices charged on intersegment transactions are based on normal commercial terms. These transfers are eliminated on consolidation. (w) Cash and Cash Equivalents Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financial institutions, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. (x) Employee Benefits (i) Short-term Benefits Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group. (ii) Defined Contribution Plans s contributions to defined contribution plans are charged to the income statement in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

52 resintech berhad ( X) 50 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (cont d) (y) Related Parties A party is related to an entity if:- (i) directly, or indirectly through one or more intermediaries, the party:- controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries); has an interest in the entity that gives it significant influence over the entity; or has joint control over the entity; (ii) the party is an associate of the entity; (iii) the party is a joint venture in which the entity is a venturer; (iv) the party is a member of the key management personnel of the entity or its parent; (v) the party is a close member of the family of any individual referred to in (i) or (iv); (vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or (vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity. Close members of the family of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity. (z) Revenue Recognition (i) Sale of Goods Revenue is recognised upon delivery of goods and customers acceptance and where applicable, net of returns and trade discounts. (ii) Contract Income Income on contracts is recognised on the percentage of completion method unless the outcome of the contract cannot be reliably determined, in which case the income on contracts will only be recognised to the extent of contract costs incurred that are recoverable. Foreseeable losses, if any, are provided for in full as and when it can be reasonably ascertained that the contract will result in a loss. The stage of completion is determined based on the proportion that the contract costs incurred for work performed to date bear to the estimated total contract costs. (iii) Services Revenue is recognised upon rendering of services and when the outcome of the transaction can be estimated reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable. (iv) Interest Income Interest income is recognised on an accrual basis, based on the effective yield on the investment. (v) Dividend Income Dividend income from investment is recognised when the right to receive dividend payment is established. (vi) Rental Income Rental income is recognised on an accrual basis.

53 Annual Report 51 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 5. Significant Accounting Policies (cont d) (aa) Contingent Liabilities and Contingent Assets A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably. A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision. A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Company. 6. Investments In Subsidiaries The Company Unquoted shares, at cost 43,060 43,060 Details of the subsidiaries, all of which are incorporated in Malaysia are as follows:- Name of Company Effective Equity Interest Principal Activities Direct subsidiaries:- Resintech Plastics (M) Sdn. Bhd. 100% 100% Designing, manufacturing, trading and marketing of a diversified range of plastic pipes, water tanks and fittings, and investment holding. Resintech-Kapar Sdn. Bhd. 100% 100% Designing, manufacturing, trading and marketing of a diversified range of PP, PE and ABS pipes and fittings. Indirect subsidiaries:- Resintech Engineering Sdn. Bhd.^ 100% 100% Providing engineering services and general contracting works and investment holding. Resintech (Sabah) Sdn. Bhd.^ 100% 100% Trading and marketing of a diversified range of plastic pipes, water tanks and fittings. Resintech Products Marketing Sdn. Bhd.^ 100% 100% Trading and marketing of a diversified range of plastic pipes, water tanks, fittings and children s playground equipment. Vision Mould Specialist (M) Sdn. Bhd.^ 100% 100% Fabrication of plastic moulds and roto-moulding moulds. Exact Link Sdn. Bhd.^ 100% 100% Property holding. RT Water Technology Sdn. Bhd.# 60% 60% Designing and contracting for sewerage treatment plants and the provision of consultancy services including survey, design and project management. ^ Interest held by Resintech Plastics (M) Sdn. Bhd. # Interest held by Resintech Engineering Sdn. Bhd.

54 resintech berhad ( X) 52 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 7. Property, Plant And Equipment At 1.3. Net Book Value RM'000 (Restated) Revaluation Disposals/ Impairment Depreciation At Surplus Additions Written Off Loss Transfers Charge RM'000 RM'000 RM'000 RM'000 RM'000 Freehold land and buildings 28,909 4, (1,872) 1,748 (581) 32,723 Plant, machinery, tools, equipment and moulds 36, (309) - - (6,677) 30,036 Furniture, fittings and office equipment (3) - - (74) 373 Motor vehicles and forklifts 1, (80) - - (453) 870 Electrical installation and renovation (167) 790 Store (25) 60 Capital work-inprogress 9, (1,948) - 7,447 76,746 4,288 1,506 (392) (1,872) - (7,977) 72,299 Net Book Value At (Restated) Additions Written Off Transfers Depreciation Charge At Freehold land and buildings 23,252 1,765-4,455 (563) 28,909 Plant, machinery, tools, equipment and moulds 38,590 3,714 (1) - (5,975) 36,328 Furniture, fittings and office equipment (77) 334 Motor vehicles and forklifts 1, (671) 1,297 Electrical installation and renovation (176) 489 Store (22) 57 Capital work-in-progress 11,179 2,608 - (4,455) - 9,332 75,688 8,543 (1) - (7,484) 76,746

55 Annual Report 53 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 7. Property, Plant And Equipment (cont d) At At Cost At Valuation Accumulated Depreciation Net Book Value Freehold land and buildings - 36,841 (4,118) 32,723 Plant, machinery, tools, equipment and moulds 81,722 - (51,686) 30,036 Furniture, fittings and office equipment 2,004 - (1,631) 373 Motor vehicles and forklifts 4,207 - (3,337) 870 Electrical installation and renovation 3,180 - (2,390) 790 Store (78) 60 Capital work-in-progress 7, ,447 98,698 36,841 (63,240) 72,299 At (Restated) At Cost Accumulated Depreciation Net Book Value Freehold land and buildings 32,446 (3,537) 28,909 Plant, machinery, tools, equipment and moulds 81,399 (45,071) 36,328 Furniture, fittings and office equipment 1,891 (1,557) 334 Motor vehicles and forklifts 4,886 (3,589) 1,297 Electrical installation and renovation 2,712 (2,223) 489 Store 110 (53) 57 Capital work-in-progress 9,332-9, ,776 (56,030) 76,746 (a) The net book values of the freehold land and buildings at the balance sheet date were as follows:- (Restated) Freehold land 6,625 4,991 Buildings 26,098 23,918 32,723 28,909 (b) The net book values of the property, plant and equipment at the balance sheet date pledged as security with the banks for credit facilities were as follows:- Freehold land and building 30,560 27,644 Plant and machinery 13,619 15,429 44,179 43,073

56 resintech berhad ( X) 54 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 7. Property, Plant And Equipment (cont d) (c) Included in the net book values of property, plant and equipment at the balance sheet date were the following assets acquired under hire purchase terms:- Motor vehicles (d) The title to the following asset has not yet been issued by the relevant authorities:- At Net Book Value:- Freehold land 4,840 3,150 Freehold land and buildings have been revalued during the financial year. The valuation was based on professional appraisals by independent valuers using the open market value basis. The deferred tax on the revaluation surplus has been accounted for in the financial statements, as disclosed in Note 24 to the financial statements. The carrying amount, had the revalued freehold land and building of the Group been carried at cost less accumulated depreciation, would have been RM30,308,000 ( RM28,909,000). 8. Prepaid Lease Payments Long leasehold land, at surrogate cost 14,118 14,051 Accumulated amortisation (564) (353) At valuation/cost 13,554 13,698 Accumulated amortisation:- At 1.3./2008 (353) (175) Amortisation during the financial year (211) (178) At 28.2./ (564) (353) Long leasehold land with a total carrying value of approximately RM13,116,000 ( - RM13,199,000) has been pledged as security with the bank for the credit facilities granted to the subsidiaries of the Company. The titles of the long leasehold land with a total carrying amount of approximately RM10,813,000 ( - RM10,876,000) have not yet been issued by the relevant authorities.

57 Annual Report 55 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 9. Investment Properties Net Book Value At 1.3. RM Fair Value Adjustments RM At RM Leasehold land 68 (23) 45 Buildings 294 (99) (122) 240 Net Book Value (Restated) At RM Fair Value Adjustments RM At RM Leasehold land 71 (3) 68 Buildings 296 (2) (5) 362 Investment properties have been revalued during the financial year based on professional appraisals by independent valuers using the open market value basis. Direct operating expenses arising from the investment properties are as follows:- The Company Properties that did not generate income: - assessment Intangible Asset Licence fee Accumulated amortisation:- At 1.3./2008 (100) (54) Amortisation during the financial year (46) (46) At 28.2./ This represents the licensing right to use a design patent acquired from KWH Pipe Ltd. (146) (100)

58 resintech berhad ( X) 56 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 11. Inventories At Cost:- Raw materials 4,587 5,851 Work-in-progress Finished goods 21,489 19,052 None of the inventories were stated at net realisable value at the balance sheet date. 26,088 24, Amount Due From Contract Customers Contract costs incurred Attributable profits Progress billings - 1, ,670 - (1,644) Net amount due from contract customers Trade Receivables Trade receivables 18,820 19,081 Allowance for doubtful debts:- At 1.3./2008 (1,152) (1,203) Addition during the financial year (220) (90) Writeback during the financial year At 28.2./ (1,356) (1,152) 17,464 17,929 s normal credit terms range from 30 to 120 days. Other credit terms are assessed and approved on a case-by-case basis. The foreign currency exposure profile of the trade receivables is as follows:- Singapore Dollar United States Dollar 1,

59 Annual Report 57 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 14. Other Receivables, Deposits And Prepayments Included in other receivables, deposits and prepayments of the Group and of the Company are the following:- The Company Deposits for purchase of property, plant and machinery 344 1, Prepayments to contractors for construction work-in-progress Share application monies for acquisition of unquoted shares ,085 1, Amount Owing By Subsidiaries The amount owing is non-trade in nature, unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash. 16. Fixed Deposit With A Licensed Bank The effective interest rate of the deposit with a licensed bank at the balance sheet date was 2.75% per annum. The fixed deposit has a maturity period of 12 months. The fixed deposit has been pledged as security for banking facilities granted to a subsidiary of the Company. 17. Share Capital The Company Number Of Shares ( 000) ORDINARY SHARES OF RM0.50 EACH AUTHORISED 200, , , ,000 ISSUED AND FULLY PAID-UP 98,000 98,000 49,000 49, Share Premium The share premium is not distributable by way of cash dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act 1965.

60 resintech berhad ( X) 58 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 19. Revaluation Reserves At 1.3./ Revaluation surplus arising during the financial year, net of deferred taxation 3,614 - At 28.2./ 3,614 - The revaluation reserve represents the surplus arising from the revaluation of the freehold land and buildings and is not distributable by way of cash dividends. 20. Retained Profits Subject to agreement with the tax authorities, at the balance sheet date, the Company has tax-exempt income available to distribute the entire retained profits without incurring any additional tax liability. 21. Long-Term Borrowings Secured: Hire purchase payables (Note 22) Term loans (Note 23) 9,654 7,973 9,729 8, Hire Purchase Payables Minimum hire purchase payments: - not later than one year later than one year and not later than five years Future finance charges (27) (52) Present value of hire purchase payables Current: - not later than one year (Note 27) Non-current: - later than one year and not later than five years (Note 21) The hire purchase payables of the Group at the balance sheet date bore effective interest rates ranging from 4.31% to 6.25% ( % to 8.10%) per annum.

61 Annual Report 59 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 23. Term Loans Secured: Not later than one year (Note 27) 5,088 5,996 Later than one year and not later than five years (Note 21) 9,654 7,973 14,742 13,969 Term Number Of Monthly Monthly Effective Date Of Loan Instalments Instalment Repayment RM ,879 March ,840 May ,147 3, ,300 August ,791 2, ,000 October ,150 4, ,000 November , ,897 March 1,212 1, ,420 May ,364 May ,000 October 3, ,700 November 1,925-14,742 13,969 The term loans of the Group at the balance sheet date bore effective interest rates ranging from 4.18% to 8.30% ( % to 7.20%) per annum and are secured in the same manner as the bills payable disclosed in Note 27 to the financial statements. 24. Deferred Tax Liabilities At 1.3./2008 9,161 8,933 Recognised in the income statement (Note 32) (418) 228 Arising from revaluation of properties At 28.2./ 9,417 9,161

62 resintech berhad ( X) 60 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 24. Deferred Tax Liabilities (cont d) The deferred tax consists of the tax effects of the following items:- Deferred tax liabilities:- Accelerated capital allowances 8,845 9,327 Revaluation of properties 674-9,519 9,327 Deferred tax assets:- Unabsorbed capital allowances - (8) Unutilised tax losses - (24) Other temporary differences (102) (134) No deferred tax assets/(liabilities) are recognised on the following items:- (102) (166) 9,417 9,161 Allowance for doubtful debts Unabsorbed capital allowances Unutilised tax losses Accelerated capital allowances (596) (691) 510 (45) Subject to agreement with the tax authorities, the Group has unutilised reinvestment allowances of approximately RM7,639,400 ( - RM12,406,400) at the balance sheet date available to be carried forward for offset against future taxable business income. 25. Trade Payables The normal trade credit terms granted to the Group range from 30 to 90 days. 26. Amount Owing To A Related Party The amount owing is non-trade in nature, unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.

63 Annual Report 61 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 27. Short-Term Borrowings Secured: Bills payable 15,323 24,884 Hire purchase payables (Note 22) Term loans (Note 23) 5,088 5,996 20,614 31,160 The bills payable of the Group at the balance sheet date bore effective interest at rates ranging from 2.23% to 7.00% ( % to 7.45%) per annum and are secured by:- (a) (b) (c) (d) (e) (f) legal charges over certain long leasehold land and buildings of the subsidiaries and of a related party; legal charges over certain freehold land and buildings of the subsidiaries; legal charges over certain investment property of a subsidiary; a debenture over certain plant and machinery of a subsidiary; a joint and several guarantee of certain directors and a related party; and a corporate guarantee from the Company. 28. Bank Overdrafts The bank overdrafts of the Group at the balance sheet date bore effective interest at rates ranging from 6.55% to 7.05% ( % to 7.70%) per annum and are secured in the same manner as the bills payable disclosed in Note 27 to the financial statements. 29. Revenue The Company Sale of goods 78,565 84, Contract revenue - 1, Dividend income ,000 78,565 85,166-2,000

64 resintech berhad ( X) 62 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 30. Other Income The Company Allowance for doubtful debts written back Net gain on disposal of plant and equipment Management fee Realised gain on foreign exchange Sundry income Profit Before Taxation In addition to those disclosed in Note 30 to the financial statements, profit before taxation is arrived at after charging:- The Company Allowance for doubtful debts Amortisation of intangible asset Amortisation of prepaid lease payments Audit fee: - statutory audit (over)/underprovision in the previous financial year (1) other non-statutory services Bad debts written off Depreciation of property, plant and equipment 7,977 7, Directors fee Directors non-fee emoluments Equipment written off Fair value adjustments of investment properties Impairment loss on property 1, Interest expense: - bank overdrafts bills payable 760 1, hire purchase term loans Rental of premises Research expenses Staff costs 6,226 5, Unrealised loss on foreign exchange

65 Annual Report 63 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 32. Income Tax Expense The Company Current tax expense: - for the financial year 1, under/(over)provision in the previous financial year 326 (110) - (1) 1, Real property gains tax: - underprovision in the previous financial year Deferred tax expense (Note 24): - relating to origination and reversal of temporary differences (182) change in statutory tax rate - (196) (over)/underprovision in the previous financial year (236) During the financial year, the statutory tax rate remained at 25%. (418) As gazetted in the Finance Act, all the subsidiaries of the Company will no longer enjoy the preferential tax rate of 20% on their chargeable income of up to RM500,000 effective from year of assessment. Therefore, the corporate tax rate applicable to these subsidiaries for the current financial year is 25%. A reconciliation of the income tax expense applicable to the profit before taxation at the statutory tax rate to the income tax expense at the effective tax rate of the Group and the Company is as follows:- The Company Profit before taxation 3,982 2, ,963 Tax at the statutory tax rate of 25% Tax effects of:- Non-taxable gains/income (110) (62) - (500) Non-deductible expenses 1, Deferred tax assets not recognised during the financial year Utilisation of reinvestment allowances (1,192) (116) - - Utilisation of deferred tax assets not recognised in the previous financial year (90) (74) - - Under/(Over)provision in the previous financial year: - current tax 326 (110) - (1) - deferred tax (236) real property gains tax Effect of change in tax rate on deferred tax - (196) - - Income tax expense for the financial year

66 resintech berhad ( X) 64 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 33. Earnings Per Share The basic earnings per share ( EPS ) is arrived at by dividing the Group s profit attributable to the equity holders of the Company of RM3,025,000 ( - RM1,826,000) by the number of ordinary shares in issue during the financial year of 98,000,000 ( - 98,000,000). The fully diluted earnings per share for the Group is not presented as there were no potential dilutive ordinary shares outstanding at the balance sheet date. 34. Purchase Of Property, Plant And Equipment Cost of property, plant and equipment purchased (Note 7) 1,506 8,543 Amount financed through hire purchase (50) (230) Cash disbursed for the purchase of property, plant and equipment 1,456 8, Cash And Cash Equivalents For the purpose of the cash flow statements, cash and cash equivalents comprise the following:- The Company Fixed deposit with a licensed bank (Note 16) Cash and bank balances 1,015 2, Bank overdrafts (Note 28) (5,654) (9,771) - - (4,569) (7,615) Directors Remuneration The aggregate amount of remuneration received and receivable by directors during the financial year are as follows:- The Company Executive directors: - non-fee emoluments Non-Executive directors: - fee

67 Annual Report 65 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 36. Directors Remuneration (cont d) The remuneration received/receivable by directors from the Group and the Company during the financial year falls within the following bands:- The Company Executive directors: RM100,001 - RM150, RM150,001 - RM200, RM400,001 - RM450, Non-Executive directors: Below RM50, Related Party Disclosures (a) Identities of related parties (i) (ii) (iii) the Company has related party relationships with its subsidiaries as disclosed in Note 6 to the financial statements; the directors who are the key management personnel; and an entity controlled by certain key management personnel. (b) In addition to the information disclosed elsewhere in the financial statements, the Group and the Company carried out the following transactions with its related parties during the financial year: The Company (i) (ii) Subsidiaries Management fee received/receivable Key management personnel Short-term employee benefits (iii) Entity controlled by certain key management personnel Rental paid/payable

68 resintech berhad ( X) 66 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 38. Capital Commitments Approved and contracted for: - Purchase of property 2,610 2,610 Approved and not contracted for: - Purchase of unquoted shares 103-2,713 2, Contingent Liabilities The Company Unsecured:- Corporate guarantees given to licensed bank for banking facilities granted to the subsidiaries ,126 16,335 Corporate guarantees given to a supplier as security for the supply of materials to a subsidiary ,598 17, Foreign Exchange Rates The principal closing foreign exchange rates used (expressed on the basis of one unit of foreign currency to RM equivalent) for the translation of the foreign currency balances at the balance sheet date are as follows:- Singapore Dollar United States Dollar

69 Annual Report 67 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 41. Segmental Reporting Manufacturing Contract Investment and trading Services revenue holding Elimination Group GROUP REVENUE External sales 78, ,565 Inter-segment sales 27, (27,480) - 105, (27,480) 78,565 RESULTS Segment results 6, (71) 18 (429) 6,154 Finance costs (2,126) (46) (2,172) Profit/(Loss) before taxation 4, (71) 18 (429) 3,982 Income tax expense (986) Profit after taxation 2,996 ASSETS Segment assets 146,936 13, ,679 (77,816) 133,411 Unallocated corporate assets 1,860 Consolidated total assets 135,271 LIABILITIES Segment liabilities 68,910 1, (24,052) 46,991 Unallocated corporate liabilities 11,313 Consolidated total liabilities 58,304 OTHER INFORMATION Allowance for doubtful debts Amortisation of intangible asset Amortisation of prepaid lease payments Bad debts written off Capital expenditure 1, ,506 Depreciation of property, plant and equipment 7, ,977 Equipment written off Fair value adjustments of investment properties Impairment loss on property, plant and equipment 1, ,872 Allowance for doubtful debts written back (16) (16) Net gain on disposal of plant and equipment (413) (413)

70 resintech berhad ( X) 68 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 41. Segmental Reporting (Cont d) Manufacturing Contract Investment and trading Services revenue holding Elimination Group GROUP REVENUE External sales 84, ,166 Inter-segment sales 18, ,000 (21,024) - 102, ,000 (21,024) 85,166 RESULTS Segment results 6, (116) 1,963 (2,759) 6,062 Finance costs (3,236) (73) (3,309) Profit/(Loss) before taxation 3, (116) 1,963 (2,759) 2,753 Income tax expense (974) Profit after taxation 1,779 ASSETS Segment assets 152,378 11, ,758 (76,575) 138,773 Unallocated corporate assets 941 Consolidated total assets 139,714 LIABILITIES Segment liabilities 78,326 3, (23,488) 59,215 Unallocated corporate liabilities 10,142 Consolidated total liabilities 69,357 OTHER INFORMATION Allowance for doubtful debts Amortisation of intangible asset Amortisation of prepaid lease payments Bad debts written off Capital expenditure 8, ,543 Depreciation of property, plant and equipment 7, ,484 Equipment written off Fair value adjustment of investment properties Allowance for doubtful debts written back (141) (141)

71 Annual Report 69 resintech berhad ( X) notes to the financial statements (cont d) For The Year Ended 28 February 42. Significant Events During The Financial Year The details of the significant events during the financial year are as follows:- (a) On 21 December, the Company acquired 600,000 ordinary shares of RM1.00 each, representing a 30% equity interest in Asia Herbal Biotech Sdn. Bhd. for a total consideration of RM600,000. The transaction has not yet been completed as at the date of this report. (b) On 15 January, the Company incorporated a wholly-owned subsidiary in The Republic of China, Resintech Plastics (China) Co., Ltd ( RP China ) with a registered capital of USD10 million. As at the balance sheet date, the Company has not yet injected any capital into RP China. The Company shall further monitor the market development in The Republic of China before making any capital injection. 43. Significant Event Subsequent To The Balance Sheet Date On 14 June, a wholly-owned subsidiary of the Company, Resintech Plastics (M) Sdn. Bhd. ( RPSB ), gave consent to Modern Storage Sdn. Bhd. ( MSSB ) to facilitate RPSB to dispose of the parcel of construction work-in-progress erected on the piece of land owned by MSSB for a total consideration of approximately RM8,400,000. The transaction is expected to be completed during the financial year ending 28 February Fair Values of Financial Instruments Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm s length transaction, other than in a forced sale or liquidation. The following methods and assumptions are used to estimate the fair value of each class of financial instruments:- (a) Long-Term Borrowings The carrying amounts approximated the fair values of these instruments. The fair values of the long-term borrowings are determined by discounting the relevant cash flows using the current interest rates for similar instruments at the balance sheet date. (b) Bank Balances and Other Short-Term Receivables/Payables The carrying amounts approximated their fair values due to the relatively short-term maturity of these instruments. (c) Contingent Liabilities The nominal amount and net fair value of financial instruments not recognised in the balance sheets of the Company are as follows:- 28 February 28 February Nominal Net Nominal Net Note Amount Fair Value Amount Fair Value In respect of corporate guarantee given to a supplier as security for the supply of materials to a subsidiary * 711 *

72 resintech berhad ( X) 70 Annual Report notes to the financial statements (cont d) For The Year Ended 28 February 44. Fair Values of Financial Instruments (cont d) (c) Contingent Liabilities (Cont d) 28 February 28 February Nominal Net Nominal Net Note Amount Fair Value Amount Fair Value The Company In respect of corporate guarantees given to licensed banks for banking facilities granted to subsidiaries 39 21,126 * 16,335 * In respect of corporate guarantee given to a supplier as security for the supply of materials to a subsidiary * 711 * * The net fair values of the contingent liabilities are estimated to be minimal as the subsidiaries are expected to fulfill their obligations. 45. Comparative Figures The following comparative figures have been reclassified to conform with the presentation of the current financial year:- As Restated RM As Previously Reported RM Balance Sheet (Extract):- Property, plant and equipment 76,746 77,108 Investment properties 362 -

73 Annual Report 71 resintech berhad ( X) list of properties At 30 June Location Description/ Existing Use Build-up Area/ Land Area* (sq.ft.) Tenure Registered Owner Approximate Age of Buildings Net Book Value (RM) Date of Last valuation Lot 5, Jalan Waja 14 Kawasan Perindustrian Telok Panglima Garang Telok Panglima Garang Selangor Darul Ehsan Single-storey detached factory, a 3-storey office block and single storey hall with additional 2 floors 177,139 / 237,185* To be issued with a 99-year leasehold qualified title. RPSB 11 years 15,666, February No 21 Jalan Taming 7, Taman Taming Jaya Balakong Selangor Darul Ehsan Intermediate 1½ storey terrace light industrial factory 2,970 / 2,160* Freehold RPSB 13 years 462, February Lot PT Pandamaran Port Klang Selangor Darul Ehsan Vacant commercial land 1,600* Leasehold 99 years expiring on 26 August 2087 RPSB n/a 103, February Lot PT Pandamaran Jaya Industrial Mukim Klang Selangor Darul Ehsan Single-storey semi-detached warehouse 6,000 / 9,075* Leasehold 60 years expiring on 16 Mac 2068 RPSB 2 years 641, February Lot PT Pandamaran Jaya Industrial Mukim Klang Selangor Darul Ehsan Single-storey semi-detached warehouse 6,000 / 9,075* Leasehold 60 years expiring on 16 Mac 2068 RPSB 2 years 392, February Lot 1851 Jalan Camp, Port Klang Selangor Darul Ehsan Vacant industrial land 215,056* Leasehold 99 years expiring on 7 April 2090 RPSB n/a 2,545, February Lot 107 Block 14 Batu 24, Kuching/Serian Road Sentah/ Segu Land District Kuching Division Sarawak Single-storey detached factory 12,680 / 150,898* Leasehold 60 years expiring on 6 January 2012 RPSB 1 year 973, February Lot 24 & 25 Export Oriented Industrial Zone Phase 2 Kota Kinabalu Industrial Park Sabah Single-storey detached warehouse and a double-storey office block 36,152 / 175,547* To be issued with a 99-year leasehold qualified title RPSB 1 year 4,827, February

74 resintech berhad ( X) 72 Annual Report list of properties (cont d) At 30 June Location Description/ Existing Use Build-up Area/ Land Area* (sq.ft.) Tenure Registered Owner Approximate Age of Buildings Net Book Value (RM) Date of Last valuation Lot 3 Jalan Waja 15 Kaw Perindustrian Telok Panglima Garang Telok Panglima Garang Selangor Darul Ehsan 4 single-storey warehouses 117,600 / 240,508* Leasehold 99 years expiring on 9 September 2103 ELSB 11 years 11,279, February Lot 6461 Batu 5¾ Jalan Kapar Kapar Selangor Darul Ehsan Double-storey factory building cum office block, a double storey canteen block cum store, a guard house and a motorcycle shed 41,924 / 219,978* Freehold RPSB 18 years 6,499, February No 9 Jalan MJ 49 Taman Merdeka Jaya Batu Berendam Melaka Single-storey terrace shopoffice 1,200 / 1,195* Leasehold 99 years expiring on 31 October 2097 RPSB 12 years 80, February No 7 Jalan MJ 49 Taman Merdeka Jaya Batu Berendam Melaka Single-storey terrace shopoffice 1,200 / 1,195* Leasehold 99 years expiring on 31 October 2097 RPSB 12 years 80, February No 5 Jalan MJ 49 Taman Merdeka Jaya Batu Berendam Melaka Single-storey terrace shopoffice 1,200 / 1,195* Leasehold 99 years expiring on 31 October 2097 RPSB 12 years 80, February Sub-Lot 298, Kawasan Perindustrian Gebeng, Mukim Sungai Karang, Daerah Kuantan, Pahang Vacant industrial land 27,975* Leasehold 99 years expiring on 15 January 2102 RPMSB n/a 410, February Sub-Lot 302, Kawasan Perindustrian Gebeng, Mukim Sungai Karang, Daerah Kuantan, Pahang Vacant industrial land 28,363* Leasehold 99 years expiring on 15 January 2102 RPMSB n/a 416, February No 906, Jalan IKS Juru, Taman Perindustrian Ringan Juru, Juru, Pulau Pinang Single-storey store and office 6,000 / 47,899* Freehold RPMSB 1 year 1,798, February

75 Annual Report 73 resintech berhad ( X) analysis of ordinary shareholdings As at 19 July Authorised Share Capital : RM100,000, divided into 200,000,000 ordinary shares of RM0.50 each Issued and Fully Paid-Up Share Capital : RM 49,000, divided into 98,000,000 ordinary shares of RM0.50 each Class of Shares : Ordinary shares of RM0.50 each Voting Rights : Every member of the Company, present in person or by proxy or by attorney or other duly authorised representative, shall have on a show of hands, one (1) vote or on a poll, one (1) vote for each ordinary share held Number of Shareholders : 1,100 DISTRIBUTION OF SHAREHOLDINGS Size of Shareholdings No. of Holders % No. of Shares % Less than to 1, , ,001 to 10, ,960, ,001 to 100, ,789, ,001 to 4,899,999 shares* ,362, ,900,000 shares and above** ,743, Notes: * Less than 5% of issued shares ** 5% and above of issued shares 1, ,000, THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS FOR ORDINARY SHARES (without aggregating securities from different securities accounts belonging to the same person) No. Name No. of Shares Held % 1 Dato Dr. Teh Kim Poo, DSSA, PJK, JP 25,701, EB Nominees (Tempatan) Sendirian Berhad Pledged Securities Account for Dato Dr. Teh Kim Poo, DSSA, PJK, JP (PKG) 14,588, Tema Evolusi Sdn Bhd 11,562, Datin Gan Jew, PJK 6,891, UBB (Malaysia) Trustee Berhad For Dato Abu Sujak bin Mahmud (Trust) 3,264, Techvilla Engineering Sdn Bhd 3,245, Teh Leng Kang, PJK 3,000, Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Ei Kim Hock) 2,526, Chee Kwai Heong 1,602, Techvilla Engineering Sdn Bhd 1,251,

76 resintech berhad ( X) 74 Annual Report analysis of ordinary shareholdings (cont d) As at 19 July THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS FOR ORDINARY SHARES (cont d) (without aggregating securities from different securities accounts belonging to the same person) No. Name No. of Shares Held % 11 Lim Chai Beng 885, Lim Boon Siong 602, Mayban Securities Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Raja Zainal Abidin Bin Raja Hussin (REM 672) 497, Tee Chee Chong 485, Yip Kum Fook 466, Ong Pick Shya 465, RHB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Goh Kheng Peow 420, Lim Siew Hwa 410, Tew Shau Yeng 388, Teo Chow Seng 337, Affin Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Ong Chee Kean (ONG1135M) 22 Affin Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Ng Teh Ate (NGT0039C) 320, , Mohamad Nizam bin Yaakob 293, Tan Ah Lan 291, UBB (Malaysia) Trustee Berhad For Beh Hang Kong (Trust) 278, How Thong Guan 277, Khoo Ting Hock 260, Tan Hai Kiang 215, Kenanga Nominees (Tempatan) Sdn bhd Pledged Securities Account for Khoo Tew Choon 30 HLB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Chai Beng 200, ,

77 Annual Report 75 resintech berhad ( X) analysis of ordinary shareholdings (cont d) As at 19 July SUBSTANTIAL SHAREHOLDERS ACCORDING TO THE REGISTER OF SUBSTANTIAL SHAREHOLDERS No. Substantial Shareholders Direct Interest % Indirect Interest % 1 Dato Dr. Teh Kim Poo, DSSA, PJK, JP 40,290, ,966,000* Tema Evolusi Sdn Bhd 11,562, Datin Gan Jew, PJK 6,891, ,365,000* * Deemed interest by virtue of family relationship. DIRECTORS SHAREHOLDING ACCORDING TO THE REGISTER OF DIRECTORS SHAREHOLDINGS Directors Direct Interest % Indirect Interest % Dato Abu Sujak bin Mahmud 3,264, Dato Dr. Teh Kim Poo, DSSA, PJK, JP 40,290, ,966,000* Datin Gan Jew, PJK 6,891, ,365,000* Teh Leng Kang, PJK 3,000, Khairul Anuar bin Shaharudin Wei Hwei Hong - - 3,000,000* 3.06 Kok Wee Wah * Deemed interest by virtue of family relationship. DIRECTORS SHARE OPTIONS HELD UNDER THE EMPLOYEES SHARE OPTION SCHEME OF THE COMPANY AS AT 19 JULY Directors No. of Share Options Dato Abu Sujak bin Mahmud - Dato Dr. Teh Kim Poo, DSSA, PJK, JP - Datin Gan Jew, PJK - Teh Leng Kang, PJK - Khairul Anuar bin Shaharudin - Wei Hwei Hong - Kok Wee Wah - Note: No options have been granted as at to-date.

78 Notes:

79 form of proxy CDS Account No. (i) No. of Shares held *I/We (FULL NAME IN BLOCK CAPITALS) of (FULL ADDRESS) being a member/members of RESINTECH BERHAD ( X), hereby appoint NRIC No./Company No. of or failing *him/her, NRIC No. (FULL NAME IN BLOCK CAPITALS) NRIC No. (FULL ADDRESS) (FULL NAME IN BLOCK CAPITALS) of (FULL ADDRESS) or failing *him/her, *the Chairman of the Meeting as *my/our proxy to attend and vote on *my/our behalf at the Fifteenth Annual General Meeting of the Company to be held at Concorde III, Level 2, Concorde Hotel, 3 Jalan Tengku Ampuan Zabedah C9/C, Shah Alam, Selangor Darul Ehsan on Monday, 30 August at a.m. and at any adjournment thereof and to vote as indicated below: Ordinary Resolutions For Against 1 To re-elect Datin Gan Jew 2 To re-elect Kok Wee Wah 3 To approve the payment of Directors Fees 4 To re-appoint Messrs Crowe Horwath (Formerly known as Horwath) as Auditors of the Company 5 Special Business Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965 (Please indicate with an X in the appropriate boxes on how you wish your vote to be cast. Unless voting instructions are indicated in the space above, the proxy will vote as he/she thinks fit.) (i) Applicable to shares held through a nominee account. * Delete where applicable For appointment of two proxies, percentage if shareholdings to be represented by the proxies: Signed this day of Signature/Common Seal of Member No. of shares Percentage Proxy 1 Proxy 2 Total 100% Notes: 1. Member entitled to attend and vote at the meeting may appoint another person as his proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. If the proxy is not a member, he need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies. 2. A Member may appoint up to two (2) proxies to attend the same meeting. Where a Member appoints two (2) proxies, the appointment shall not be valid unless the Member specifies the proportion of his shareholding to be represented by each proxy. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the company standing to the credit of the said securities account. 3. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised. 4. The instrument appointing a proxy and the power of attorney or other attorney, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Company Secretaries Office at 10th Floor, Menara Hap Seng, No. 1 & 3, Jalan P. Ramlee, Kuala Lumpur not less than forty-eight (48) hours before the time for holding of the meeting or adjourned meeting.