SANICHI TECHNOLOGY BERHAD

Transcription

1 BS EN ISO 9001 : 2000 SANICHI TECHNOLOGY BERHAD ( K) PLO 135, Jalan Cyber 5, Kawasan Perindustrian Senai Fasa 3, Senai, Johor. Tel: Fax: sanichi@streamyx.com SANICHI TECHNOLOGY BERHAD ( K) Annual Report 2010 Air-craft components Automotive Components Oil & Gas Engineering Components Electronic Components Generating GROWTH Annual Report 2010

2 Contents NOTICE OF ANNUAL GENERAL MEETING 2-3 CORPORATE STRUCTURE 4 CORPORATE INFOATION 5 DIRECTORS PROFILE 6-8 CHAIAN S STATEMENT 9 AUDIT COMMITTEE REPORT CORPORATE GOVERNANCE STATEMENT STATEMENT OF INTERNAL CONTROL 20 FINANCIAL STATEMENTS LIST OF PROPERTIES 60 ANALYSIS OF SHAREHOLDINGS PROXY FO ENCLOSED

3 2 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Notice of Sixth Annual General Meeting NOTICE IS HEREBY GIVEN that the Sixth Annual General Meeting of the Company will be held at PLO 135 Jalan Cyber 5, Kawasan Perindustrian Senai Fasa 3, Senai, Johor on Thursday, 23 December 2010 at a.m. to transact the following business:- AGENDA ORDINARY BUSINESS 1. To receive the Audited Financial Statements for the fi nancial year ended 30 June 2010 together with the Reports of the Directors and Auditors thereon. 2. To approve the payment of Directors Fees for the fi nancial year ended 30 June To re-elect Tan Sri Dato Seri Arshad bin Ayub who retires pursuant to Section 129(2) of the Companies Act, Resolution 1 Resolution 2 Resolution 3 4. To re-elect the following Directors, who retire pursuant to Article 127 of the Company s Articles of Association and being eligible, offer themselves for re-election: (i) (ii) Datin Chen Choon Lee Dato Abd Halim bin Abd Hamid Resolution 4 Resolution 5 5. To re-elect the following Directors, who retire pursuant to Article 132 of the Company s Articles of Association and being eligible, offer themselves for re-election: (i) (ii) (iii) Datuk Nik Ibrahim bin Nik Abdullah Puan Azrina binti Arshad Mr Leong Choon Meng Resolution 6 Resolution 7 Resolution 8 6. To re-appoint Messrs THL Wong & Co as Auditors of the Company and to authorise the Directors to fi x their remuneration. Resolution 9 AS SPECIAL BUSINESS: To consider and if thought fi t, to pass the following resolution: ORDINARY RESOLUTION 7. Ordinary Resolution Authority to Issue Shares THAT, subject always to the Companies Act, 1965, ( the Act ) (as may be amended, modifi ed or re-enacted from time to time), the Articles of Association of the Company and the approvals of relevant government/ regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Act, to issue ordinary shares from the unissued capital of the Company at any time at such price, upon such terms and conditions, for such purposes and to such persons whomsoever the Directors may in their discretion deem fi t and that the Directors be empowered to obtain the approval for the listing and quotation of the additional shares so issued on the Bursa Malaysia Securities Berhad ( Bursa Securities ) provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting ( AGM ) of the Company. Resolution To transact any other business of which due notice shall have been given. By Order of the Board SANICHI TECHNOLOGY BERHAD Siew Suet Wei (MAICSA No.: ) Company Secretary Kuala Lumpur 1 December 2010

4 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT Notice of Sixth Annual General Meeting (Cont d) Note: 1. A member entitled to attend and vote at this meeting is entitled to appoint up to two (2) proxies to attend and vote in his stead. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifi es the proportion of his holdings to be represented by each proxy. 2. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply. 3. Where the Form of Proxy is executed by a corporation, it must be executed under its seal or under the hand of its attorney. 4. The instruments appointing a proxy must be deposited at the Registered Offi ce of the Company, located at A-15-4 Northpoint Offi ces, Medan Syed Putra Utara, 1 Jalan Syed Putra, Mid Valley City, Kuala Lumpur, Malaysia, not less than forty-eight (48) hours before the time for holding the meeting or at any adjournment thereof. Explanatory notes to Special Business Resolution 10 The proposed Ordinary Resolution 10 is a renewal of the general authority for the Directors to issue shares pursuant to Section 132D of the Companies Act, If passed, it will empower the Directors of the Company, from the conclusion of this Annual General Meeting to allot and issue shares in the Company up to and not exceeding in total 10% of the issued and paid-up share capital of the Company for the time being for such purposes as they consider would be in the interests of the Company. This authority will expire at the next Annual General Meeting of the Company, unless revoked or varied at a general meeting. The general authority to issue shares will allow the Company to take advantage of any strategic opportunities, including but not limited to, issuance of new shares for purpose of funding investment project(s), working capital and/or acquisitions which require new shares to be allotted and issued speedily and would also save the cost involved in convening a general meeting to approve such issuance of shares. Statement Accompanying Notice of Annual General Meeting (pursuant to Paragraph 8.29(2) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad) There are no individuals who are standing for election as directors (other than directors standing for re-election).

5 4 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Corporate Structure (Incorporated in (Company No K) Malaysia under the Companies Act, 1965) 100% 100% 100% Sanichi Precision Mould Sdn Bhd Design and fabrication of Advanced Plastic Injection Mould and Conventional Plastic Injection Mould. Asia Pinnacle Sdn Bhd Design and fabrication of Advanced Plastic Injection Mould. Sanichi Mould (Thailand) Co. Ltd Design and fabrication of Advanced Plastic Injection Mould and Conventional Plastic Injection Mould.

6 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT Corporate Information BOARD OF DIRECTORS Tan Sri Dato Seri Arshad Ayub Dato Dr Pang Chow Huat Datin Chen Choon Lee Tan Sri Dato Sri Abdul Halil bin Abdul Mutalif Dato Abd Halim bin Abd Hamid Datuk Nik Ibrahim bin Nik Abdullah Puan Azrina binti Arshad Mr Leong Choon Meng En Mansor bin Ali Mr Teo Kong Wan Chairman/Non-Independent Non-Executive Director Managing Director Executive Director Independent Non-Executive Director Independent Non-Executive Director Non-Independent Non-Executive Director Non-Independent Non-Executive Director Independent Non-Executive Director Alternate Director to Tan Sri Dato Seri Arshad Ayub Alternate Director to Datuk Nik Ibrahim bin Nik Abdullah AUDIT COMMITTEE Tan Sri Dato Sri Abdul Halil bin Abdul Mutalif Chairman/Independent Non-Executive Director Datuk Nik Ibrahim bin Nik Abdullah Member/Non-Independent Non-Executive Director Mr Leong Choon Meng Member/Independent Non-Executive Director REMUNERATION AND NOMINATION COMMITTEE Tan Sri Dato Seri Arshad Ayub Chairman/Non-Independent Non-Executive Director Dato Dr Pang Chow Huat Member/Executive Director Dato Abd Halim bin Abd Hamid Member/Independent Non-Executive Director COMPANY SECRETARY Ms Siew Suet Wei (MAICSA No ) AUDITORS THL WONG & CO. (AF 0942) 10, Lorong Universiti B, Section 16, Petaling Jaya Tel : Fax : STOCK EXCHANGE LISTING ACE Market of Bursa Malaysia Securities Berhad SHARE REGISTRAR Shareworks Sdn Bhd 10-1, Jalan Sri Hartamas 8 Sri Hartamas Kuala Lumpur Tel : Fax : PRINCIPAL BANKERS United Overseas Bank (Malaysia) Berhad 2 Jalan Wong Ah Fook Johor Bahru Tel : WEBSITE REGISTERED OFFICE A-15-4, Northpoint Offi ces, Medan Syed Putra Utara, 1 Jalan Syed Putra, Mid Valley City Kuala Lumpur Tel No Fax No

7 6 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Director s Profile Tan Sri Dato Seri Arshad Bin Ayub Non-Independent Non-Executive Chairman Malaysian, aged 82 Tan Sri Dato Seri Arshad Bin Ayub was appointed as Non-Independent Non-Executive Director and Chairman of the Company on 2 April He is also the Chairman of the Remuneration and Nomination Committee of Sanichi. He graduated with a Diploma in Agriculture from College of Agriculture, Serdang, Selangor in 1954 and later obtained a Bachelor of Science (Hons.) Economics and Statistics from University of Wales, Aberystwyth, United Kingdom in In 1964, he obtained a postgraduate Diploma in Business Administration from Management Development Institute (IMEDE), Lausanne, Switzerland. He has vast experience having served as a member of numerous bodies in the fi elds of industry and trade, education, economic planning, fi nance, regional development, agriculture and science. He was the fi rst Director of Mara Institute of Teknologi from 1965 to He held senior positions with various Ministries in the Malaysian Government, from 1951 to 1983, including his appointment as Deputy Governor of Bank Negara Malaysia from 1975 to 1977, and Deputy Director General of Economic Planning Unit, Prime Minister s Department. He was the immediate past Chairman of Malaysia Rubber Export Promotion Council. He currently serves as President of Malaysian Rubber Products Manufacturers Association, Chairman of University of Malaya Board and a member of Harun s Salary Commission for Statutory Bodies and Local Government and Cooperative College Malaysia. On listed companies, he is currently Chairman of Malayan Flour Mills Bhd, Tomypak Holdings Bhd and LBI Capital Bhd. He is a Director of Kulim Malaysia Bhd, Sindora Bhd, KPJ Healthcare Bhd and Top Glove Corporation Bhd. On unlisted companies, he is a Chairman of PFM Capital Holdings Sdn Bhd, Amanahraya Investment Bank Ltd, Zalaraz Sdn Bhd, a family company and Ladang MOCCIS Sdn Bhd. He is a Director of Pelaburan Johor Bhd, Bata (M) Sdn Bhd, AmanahRaya Investment Management Sdn Bhd and Land Rover (M) Sdn Bhd. Tan Sri recorded 100% attendance at the Board Meetings since his date of appointment for the fi nancial year ended 30 June Dato Dr. Pang Chow Huat Managing Director Malaysian, aged 37 Dato Dr. Pang Chow Huat is the founder and Managing Director of Sanichi and was appointed to the Board on 20 June He is also a member of the Remuneration Committee and Nomination Committee of the Company. Equipped with more than sixteen (16) years of experience in precision engineering in the plastic mould and tool industry, he is currently responsible for the overall strategy and direction of the as well as client relationship management. He was conferred a Doctor of Philosophy in Design Technology from the InterAmerican University, Washington D.C. in December He began his career in 1991 as an apprentice with a local company specializing in the fabrication of plastic moulds and dies as well as plastic injection moulding, and later joined a Singapore-based mould anufacturer as Head of the Mould Fabrication Department. In 1996, with his in-depth knowledge in plastic moulding and fabrication, he founded Sanichi Precision Mould Industries, specializing in the servicing and repair of moulds and tools. He has experience exposure to advanced design and technology of high-quality precision moulds and parts. In February 2000, he established Sanichi Precision Mould Sdn Bhd ( SPMSB ) and ventured into the design, engineering and fabrication of plastic mould products through Research and Development ( R&D ). He is lso the initiator for many of the in-house developed solutions in SPMSB, which is attributed to his hands-on technical know-how garnered in his years of working in the industry. Dato Pang attended all Board Meetings held during the fi nancial year ended 30 June Datin Chen Choon Lee Executive Director Malaysian, aged 37 Datin Chen Choon Lee is the Executive Director of Sanichi and was appointed to the Board on 20 June Equipped with more than fi fteen (15) years of experience in accounts administration and management within a manufacturing environment, she is currently responsible for the overall supporting functions of the, including fi nance, accounting, cash fl ow management, tax planning, human resources and administrative matters. She completed an Accounting Diploma from the London Chamber of Commerce and Industry from Maju Commercial Institute in In 1998, she joined Sanichi Precision Mould Industries as an Accounts Director, and was subsequently promoted to Finance Director in Datin Chen attended all Board Meetings held during the fi nancial year ended 30 June 2010.

8 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT Director s Profile (Cont d) Tan Sri Dato Sri Abdul Halil bin Abdul Mutalif Independent Non-Eexcutive Director Malaysian, aged 64 Tan Sri Dato Sri Abdul Halil bin Abdul Mutalif is the Audit Committee Chairman of Sanichi and was appointed to the Board on 20 June He is also a member of the Remuneration Committee and Nomination Committee of the Company. He was formerly the Director-General of the Royal Malaysian Customs for fi ve (5) years before he retired in October After graduating from University Malaya with B.A (Hons) in History in 1970, he began his career as an Administrative and Diplomatic Services Offi cer and served at various government departments and ministries, where he held key positions. From 1990 to 2000, he was seconded to Langkawi Development Authority ( LADA ) which was under the purview of the Ministry of Finance as General Manager. During the secondment to LADA, he was responsible for the overall development of the Langkawi Islands. In 2000, he was subsequently seconded to the Royal Malaysian Customs to assume the position of Director-General of Customs. During his tenure as Director-General of the Royal Malaysian Customs, yearly revenue collections increased from 16 billion prior to his appointment to 25 billion upon his retirement. He also sits on the board of directors of several private limited companies. Tan Sri Dato Sri Halil attended 4 out of 5 Board Meetings held during the fi nancial year ended 30 June Datuk Nik Ibrahim bin Nik Abdullah Non-Independent Non-Executive Director Malaysian, aged 66 Datuk Nik Ibrahim is a member of the Audit Committee of Sanichi and was appointed to the Board on 8 January Dato Nik Ibrahim holds a B.A (Hons) Economics Degree from University of Malaya. He joined Malaysian Industrial Development Authority (MIDA) in 1968 as an Economist and subsequently served as Assistant Secretary in the Ministry of Finance from 1970 to Dato Nik Ibrahim returned to MIDA in 1974 and served as Senior Economist for two years. Thereafter he joined Bank Pembangunan & Infrastruktur Malaysia Berhad as Manager and was promoted to General Manager, Chief Executive Offi cer and lastly as Chief Operating Offi cer until his retirement in March Dato Nik Ibrahim is a Director and a member of the Audit Committee of Muda Holdings Berhad and sits on the board of a few other local companies. He is a committee member of Malaysian Pulp & Paper Manufacturers Association. Datuk Nik recorded 100% attendance of the Board Meetings since his appointment as Director of Sanichi for the fi nancial year ended 30 June 2010.

9 8 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Director s Profile (Cont d) Dato Abd Halim bin Abd Hamid Independent Non-Executive Director Malaysian, aged 61 Dato Abd Halim bin Abd Hamid is an Independent Non- Executive Director of Sanichi and was appointed to the Board on 28 May He is also a member of Remuneration and Nomination Committee of Sanichi. He was formerly a senior police offi cer who had served over a span of 36 years in various parts of Malaysia since Throughout the period of service, he had served at various levels of commanding positions and gained wide range of experiences in management, criminal investigation, as well as administration in the police force. He is a Diploma holder from the Malaysian Armed Forces Staff College and later obtained a Bachelor of Laws (Hons.) from the International Islamic University of Malaysia (IIUM). Besides the academic qualifi cations, he had also attended various training courses organized by the police force and Institut Tadbiran Awam Negara. Since his retirement as the Deputy Commissioner of Police (DCP) in Bukit Aman in September 2005, he was appointed as the Chief Executive Offi cer of UNIKOP College, a private institution of higher learning fully owned by the PD Cooperative with effect from October 2005 until today. Dato Abd Halim attended 4 out of 5 Board Meetings held during the fi nancial year ended 30 June Mr Leong Choon Meng Independent Non-Executive Director Malaysian, aged 46 Mr Leong Choon Meng was appointed to the Board of Sanichi Technology Berhad on 31 December He graduated from the professional body of the Chartered Institute of Management Accountants (CIMA), United Kingdom and is currently an Associate member of the professional body. He was the Senior Vice President (Capital Market) of Alliance Investment Bank Berhad from October 2003 to January Prior to that, he was the General Manager Corporate Finance of a public listed Construction & Property Development where he started as a Senior Executive in The initial year of his career was in tax consulting for 4 years from 1987, of which 2 years were with KPMG Tax Division. He has more than 20 years of experience in investment banking, accounting & taxation, general management, privatisation, construction, property development and manufacturing businesses. Mr Leong is a member of the Audit Committee of Sanichi. He is also the Chairman of the Audit Committee of LCL Corporation Berhad and Limahsoon Berhad. Mr Leong recorded 100% attendance of the Board Meetings since his appointment as a Director of Sanichi for the fi nancial year ended 30 June Puan Azrina binti Arshad Non-Independent Non-Executive Director Malaysian, aged 41 Puan Azrina binti Arshad was appointed as a Director of Sanichi on 8 January She graduated from Institut Teknologi MARA, Shah Alam (now known as UITM). She also has a Post Graduate Diploma in Architecture from Oxford Polytechnic, England (now Oxford Brookes University). She started her career in 1993 as an Assistant Architect in Arca-3 Arkitek in Bukit Damansara and thereafter worked in various capacities in several architectural fi rms such as Focus Architects in Selangor. She is a Director of I-Partnership Sdn Bhd (formerly known as Woods Bagot (M) Sdn Bhd) since She is also the proprietor Azalea Enterprise and a director of The Teapot Café Sdn Bhd, Babymanis Sdn Bhd and Arah Muara Sdn Bhd. Puan Azrina recorded 100% attendance of the Board Meetings since her appointment as a Director of Sanichi for the fi nancial year ended 30 June En Mansor bin Ali Alternate Director to Tan Sri Dato Seri Arshad bin Ayub Malaysian, aged 57 En Mansor bin Ali was appointed as the Alternate Director to Tan Sri Dato Seri Arshad bin Ayub on 2 April He has Bachelor of Economic from University of Malaya and Diploma in Securities Institute of Australia., He sits on the Board of several private limited companies including Land Rover (M) Sdn Bhd, Melewar Leisure Sdn Bhd and Equiti Teroka (M) Sdn Bhd. Currently, he is the Executive Director of PFM Capital Holdings Sdn Bhd. Mr Teo Kong Wan Alternate Director to Datuk Nik Ibrahim bin Nik Abdullah Malaysian, aged 51 Mr Teo Kong Wan was appointed as the Alternate Director to Datuk Nik Ibrahim bin Nik Abdullah on 8 January He graduated from the University of Malaya in 1983 with a degree in Bachelor of Engineering (Mechanical). He passed his Malaysian Futures and Options Registered Representative (MFORR) examination in 1997 and secured his Capital Markets and Services Representative s License in His extensive 24 years of working experience is focused in the fi nance, banking and investment industry. He was a Project/Loan Supervision Offi cer with Malaysian Industrial Development Finance Berhad (MIDF) from 1984 to He left MIDF and joined PFM Capital Sdn. Bhd. (a member of PNB of Companies) in 1991 as a Corporate Planning Offi cer. In PFM Capital Sdn Bhd, he was involved in the economic and stock market research; company analysis and evaluation; and portfolio and private equities management. He was the Quality Management Representative responsible for the company s ISO9001:2000 certifi cation. Currently, he is the Senior Manager of Market Investment Division in PFM Capital Sdn Bhd. Notes: 1. None of the Directors has any family relationship with any Director and/or Major Shareholder of the Company save for : - Tan Sri Dato Seri Arshad bin Ayub and Puan Azrina binti Arshad who are father and daughter respectively; and - Dato Dr Pang Chow Huat and Datin Chen Choon Lee who are husband and wife respectively. 2. None of the Directors has any confl ict of interest with the Company. 3. None of the Directors has been convicted for any offences (other than traffi c offences) within the past 10 years

10 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT Chairman s Statement Dear Shareholders, On behalf of the Board of Directors of Sanichi Technology Berhad (Sanichi), I would like to present the Annual Report, incorporating the Financial Statements of the and the company, for the financial year ended 30 June 2010 (FY2009/2010). FINANCIAL HIGHLIGHTS The registered a marginal net profi t of million in FY2009/2010 against a net loss of million in FY2008/2009. The net profi t was on the back of a 13.8 percent increase in revenue of million in FY2009/2010 against million in FY2008/2009. The improved fi nancial performance were merely due to the lower total cumulative depreciation charge of million in FY2009/2010 against million in FY2008/2009, total bad debt recovery of million in FY2009/2010 and lower total allowance for doubtful debts of million in FY2009/2010 against million in FY2008/2009. Despite the enlarged share capital in FY2009/2010, the continues to operate on a tight cashfl ow due to the long production cycle and slow collectibles. CORPORATE DEVELOPMENT During the year under review, the has successfully undertaken a Private Placement of 50,000,000 new ordinary shares of 0.10 each on 15 September 2009 and was completed following the listing and quotation of these new shares on 12 January The gross proceeds of million raised were utilized for general working capital (2.850 million), repayment of bank borrowings (2.0 million) and estimated expenses relating to Private Placement (0.150 million). MIMB Investment Bank Berhad completed as sponsor of the with effect on 30 June The has fulfi lled the requirement under Rule 3.21 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad which provides for a company listed on ACE Market of Bursa Securities to secure and maintain the services of sponsor for at least 3 full fi nancial years after its listing on the MESDAQ Market of Bursa Securities on 7 September Datuk Nik Ibrahim bin Nik Abdullah as Non Independent Non Executive Director (Mr Teo Kong Wan as Alternate); Pn. Azrina binti Arshad as Non Independent Non Executive Director and Mr Leong Choon Meng as Independent Non Executive Director. The Audit Committee and Remuneration and Nomination Committee were also reorganised to include the new members for enhancement of their duties and responsibilities. CORPORATE GOVERNANCE The is driven by the commitment of the enlarged Board and Management and we continuously strive to build a culture of responsibility, accountability, transparency, excellence and trust in our people. The internal controls systems and policies are being strengthened to ensure the s viability. Further information can be obtained in the statement on Corporate Governance found in the Annual Report. OUTLOOK AND PROSPECTS Economic prospects in emerging economies continue to be favourable while the developed economies remain weak. Nonetheless, we have experienced increase in demand from both local and overseas markets, both from consumer electronic industry and automotive industry. We expect the sales of moulds and tooling to these industries to remain favourable. Notwithstanding this, we have to realign ourselves to face challenges arising from the current fi nancial constraints. ACKNOWLEDGEMENTS On behalf of the Board, we would like to thank the Management, staff, customers, business associates and partners, fi nancial institutions, regulatory authorities and last but not least, the shareholders for their support and contributions. BOARD AND COMMITTEE CHANGES Following the successful conclusion of the Private Placement, the Board composition was strengthened in April 2010 with the appointment of Tan Sri Datuk Arshad Ayub as Chairman / Non Independent Executive Director (En. Mansor Ali as Alternate); TAN SRI DATO SERI ARSHAD AYUB NOVEMBER 2010

11 10 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Audit Committee Report The Board of Sanichi Technology Berhad is pleased to present the report on the Audit Committee ( AC ) for the fi nancial year ended 30 June COMPOSITION OF MEMBERS AND MEETINGS The Audit Committee of Sanichi Technology Berhad ( the Committee ) comprise of three (3) Directors, two (2) of whom are Independent Non-Executive Directors. During the fi nancial year ended 30 June 2010, changes were made to the composition of the members of the Audit Committee as follows:- Name Position Tan Sri Dato Sri Abdul Halil Bin Abdul Mutalif Chairman / Independent No Change Non-Executive Director Dato Abd Halim Bin Abd Hamid Member / Independent & Resigned as member of Non-Executive Director Audit Committee on 11 January 2010 Mr Er Soon Lock Member / Independent & Resigned as Director Non-Executive Director on 31 December 2009 Mr Leong Choon Meng Member / Independent Appointed as Director Non-Executive Director on 31 December 2009 Datuk Nik Ibrahim Bin Nik Abdullah Member / Non-Independent Non-Executive Director Appointed as Director on 8 January 2010 During the fi nancial year, 6 AC meetings were held and details of the attendance of the AC members are as follows: (i) Tan Sri Dato Sri Abdul Halil Bin Abd Mutalif [5/6] (ii) Dato Abd Halim Bin Abd Hamid (*) [3/3] (iii) Er Soon Lock (resigned on 31 December 2009) [3/3] (iv) Leong Choon Meng (appointed on 31 December 2009) [3/3] (v) Datuk Nik Ibrahim Bin Nik Abdullah (appointed on 11 January 2010) [3/3] (*) Resigned as member of Audit Committee on 11 January 2010 TES OF REFERENCE OF THE AUDIT COMMITTEE Objective The objective of the AC is to assist the Board to discharge its responsibilities by reviewing the adequacy and integrity of the Company and the s fi nancial statements as well as the internal control systems including compliance with applicable laws, regulations, directives and guidelines. The presence of the AC is also to reinforce the independence of both the internal and external auditors and thereby helps to assure that they will have rein in the audit process and to provide, by way of regular meetings and a line of communication between the Board and both the external and internal auditors. Membership The committee shall be appointed by the Board and fulfi ls the following requirements: (1) The AC must compose of no fewer than 3 members; (2) Majority of the AC shall be independent; (3) At least one member of the AC must be a member of the MIA or any other equivalent qualifi cations recognized by the MIA; and (4) All members should be non-executive directors.

12 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT Audit Committee Report (Cont d) Retirement and Resignation In the event of any vacancy resulting in the number of members being reduced to below 3, the vacancy must be fi lled within 3 months. The Chairman, who shall be elected by the AC, must be an Independent Director. Attendance At Meeting 1. The Company Secretary of Sanichi Technology Berhad shall be the secretary of the AC and will be responsible for the coordination of administrative details including calling the meeting and the keeping of minutes. 2. The agenda for AC meetings shall be circulated before each meeting to members of the committee. The committee may require the internal and external auditors and any offi cer of the Company or to attend any of its meetings as it deems fi t. 3. The external auditors shall have the right to appear and be heard at any of the AC meeting and shall appear before the committee when required to do so by the committee. The external auditors normally attend meetings at the invitation of the AC. 4. In addition, the Chairman may call a meeting of the AC if a request is made by any committee member, the s Managing Director or the internal or external auditors. Duties and Responsibilities of Audit Committee ( AC ) The following are the main duties and responsibilities of the AC: 1. To recommend to the Board on the appointment and annual reappointment of both the external and the internal auditors and the review of their fees, after taking into consideration the independence and objectivity of the external and internal auditors and cost effectiveness. 2. Discuss with the external auditors before the audit commences, the nature and scope of the audit. 3. To review the quarterly interim results and annual fi nancial statements of the Company and the prior to approval by the Board whilst ensuring that they are prepared in a timely and accurate manner complying with all accounting and regulatory requirements and are promptly published. 4. Discuss issues arising from the interim and fi nal audits and any matter the external auditors may wish to discuss in the absence of the Management where necessary. 5. Review the external auditor s management letter and management s response. 6. Evaluate the standards of internal controls and fi nancial reporting of the Sanichi of Companies. 7. Consider the major fi ndings of internal audits and/or investigations and Management s response. 8. Review any related party transactions and confl ict of interest situation that may arise within Sanichi, including any transaction, procedure or source of conduct that raises questions of management integrity. 9. Consider other issues as defi ned by the Board. Power of Audit Committee 1. Have explicit authority to investigate any matter within its terms of reference. 2. Have the resources required to perform its duties. 3. Have full and unrestricted access to any information, records and personnel of Sanichi Technology Berhad and any of other companies within the. 4. Have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity. 5. Be able to obtain independent professional or other advice and to invite outsiders with relevant experience and expertise to attend the AC s meeting (if required) and to brief the AC. 6. Be able to convene meetings with external auditors without the presence of the executive board members, whenever deemed necessary.

13 12 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Audit Committee Report (Cont d) Frequency of Meetings The AC shall hold a minimum of at least 4 meetings in a fi nancial year. The number of AC meetings held during a fi nancial year and the details of attendance of each individual member in respect of meetings held shall be disclosed annually. The meeting shall be chaired by the Chairman of AC or in the absence of the chairman, another committee member nominated by the committee members. The quorum of the meeting shall consist of at least 2 members. The Chairman also has the discretion to call for additional meetings at any time. Reporting Procedures The Company Secretary shall circulate the minutes of meetings of the AC to all members of the Board. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE During the fi nancial year, the AC carried out the following activities to discharge their duties and responsibilities: 1. Reviewed the unaudited quarterly fi nancial results and the annual audited fi nancial statements for the Board s approval prior to their release to Bursa Malaysia Securities Berhad. 2. Reviewed the audit plan of the external auditors. 3. Reviewed report and fi ndings of the external auditor s. 4. Reviewed and recommended the reappointment of the external auditors for the Board s consideration. 5. Reviewed the AC Report and Statement on Internal Control before recommending for Board approval for the purpose of inclusion in the Annual Report. 6. Reviewed the status report of Internal Audit ( IA ) activities for the fi nancial year ended 30 June 2010 to ensure all the planned activities were properly carried out. 7. Reviewed the recommendations by the IA and correction action taken by management in addressing and resolving issues. Internal Audit Function The has engaged an external independent internal audit service provider to carry out the internal audit function to assist the AC. Amongst the responsibilities of the internal auditors were to assist the AC in reviewing and identifying and evaluating the existing internal control system of the s. Internal audit report, incorporating the audit recommendations and management responses with regards to audit fi ndings relating to the weaknesses in the internal control systems were issue to the AC. This statement is made in accordance with a Board s resolution adopted by the Board at its meeting held on 25 November 2010.

14 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT Corporate Governance Statement The Board of Director ( the Board ) of Sanichi Technology Berhad ( or Company ) recognizes the importance of good corporate governance and is committed to adopting the principles and practices in corporate governance as a fundamental in discharging its duties and responsibilities, to safeguard the interest of its shareholders as well and enhance shareholders value and the fi nancial performance of the Company. Pursuant to paragraph of the Ace Market Listing Requirement ( AMLR ) of Bursa Malaysia Securities Berhad ( Bursa Securities ), the Board is pleased to outline below the manner in which the has applied and complied with the principles of the Best Practices in Corporate Governance set out in Part 1 and Part 2 of the Malaysian Code on Corporate Governance. A. BOARD OF DIRECTORS 1. Principal Responsibilities of the Board The Board affi rms its overall responsibility for the direction, risk management, fi nancial performance, internal control and investment decision of the. The Board had delegated certain responsibilities to its Board committees. The Board Committee operates within clearly defi ned terms of reference and has full authority to examine and clarify issues delegated to them. The Board Committees comprises of a wide spectrum of skills, knowledge and experiences from various business and educational backgrounds vital to the continued success of the s business. 2. Board Composition and Balance The Board is structured where at least one third of the Board is independent which is in compliance with the AMLR. During the fi nancial year, the following changes were made to the Board s composition and structure: (a) Appointment of Tan Sri Dato Seri Arshad bin Ayub as Non Executive Non Independent Chairman on 2 April 2010; (b) Re-designation of Dato Dr Pang Chow Huat from Chairman and remaining as Managing Director on 2 April 2010; (c) Resignation and appointment of Mr Er Soon Lock and Mr Leong Choon Meng respectively as Independent Non- Executive Director on 31 December 2009: (d) Appointment of Datuk Nik Ibrahim bin Nik Abdullah and Puan Azrina Arshad as Non-Independent Non-Executive Directors on 8 January 2010; (e) Appointment of Mr Teo Kong Wan as Alternate Director of Datuk Nik Ibrahim bin Nik Abdullah on 8 January 2010; and (f) Appointment of En Mansor bin Ali as Alternate Director to Tan Sri Dato Seri Arshad bin Ayub on 2 April Currently, the Board comprises eight (8) members of whom two (2) are Executive Directors (ED), four (4) are Non- Independent Non Executive Directors and two (2) are Independent Non-Executive Directors. The Board comprises various backgrounds and industries which are provide broader and independent views, advice and judgment and ultimately the enhancement of shareholders value. A brief profi le of each Director is set out on pages 6 to 8 of this Annual Report.

15 14 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Corporate Governance Statement (Cont d) 3. Board Meetings The Board meetings are scheduled on a quarterly basis with additional meetings convened as and when necessary. Agenda and Board papers are circulated to the Board members prior to the meetings so as to give Directors suffi cient time to consider and deliberate on the issues to be raised at Board meeting. During the fi nancial year under review, the Board met fi ve (5) times and details of each Director s attendance are tabled below: Attendance at Board meetings Dato Dr. Pang Chow Huat 5/5 Datin Chen Choon Lee 5/5 Tan Sri Dato Sri Abdul Halil Bin Abd Mutalif 4/5 Dato Abd Halim Bin Abd Hamid 4/5 Er Soon Lock 2/2 Tan Sri Dato Seri Arshad Ayub 1/1 Datuk Nik Ibrahim Bin Nik Abdullah 3/3 Puan Azrina Binti Arshad 3/3 Leong Choon Meng 3/3 Note : Number of meetings attended by each Director vary according to their dates of resignation and appointment. 4. Supply and Access to Information The Board has fully, unrestricted and timely access to all information necessary for the discharge of its responsibilities. The Board is supplied with all relevant information and reports on s fi nancial result, strategic and business plan by way of board papers effective discharge of their duties. All Board members have direct access to the advice and services of the Company Secretaries, senior management and where necessary, to seek independent professional advice if require. 5. Appointment and Re-election to the Board The appointment of new Directors is carried out in a formal and transparent manner under the purview of the Nomination Committee, which is responsible for making the necessary recommendations to the Board on suitable candidates for appointment. The Company Secretary is responsible for ensuring that all appointments are properly made, and that all legal and regulatory obligations are met. In accordance with the Company s Articles of Association, an election of the Directors shall take place every year and all Directors shall retire from offi ce once at least in every three (3) years at its Annual General Meetings but shall be eligible for re-election. Directors who are appointed by the Board during the fi nancial year are subject to retirement and offer themselves for re-election by the shareholders at the Annual General Meeting following their appointment.

16 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT Corporate Governance Statement (Cont d) 6. Director s Training Continuous learning and training are part of the Directors development programme. The Board recognized the needs to attend trainings to enable them to discharge their duties more effective. All Directors have attended the Mandatory Accreditation Programme (MAP) and are mindful that they shall receive appropriate training which may be required from time to time to keep abreast with current developments of the industry as well as new statutory and regulatory requirements. During the fi nancial year ended 30 June 2010, some of the Directors have undergone the following training/seminars programmes to enhance their ability in discharging their duties and responsibilities more effectively: Directors Dato Dr. Pang Chow Huat Datin Chen Choon Lee Tan Sri Dato Seri Arshad Ayub Datuk Nik Ibrahim Bin Nik Abdullah Puan Azrina Binti Arshad Mr. Leong Choon Meng Training / Seminar Corporate strategy and planning. Corporate strategy and planning. Seminar Pengurusan Perubahan Tambahan Lanskap Politik : Cabaran kepada Perkhidmatan Awam The 6th Asia Pacifi c Audit & Governance Summit nd Annual Corporate Governance Summit 2010 World Congress of Accountants 2010 Shaping the Future Corporate Professional Overview of Selected New and Revised FRSs Mandatory Accreditation Programme for Directors of Public Listed Companies Reviewing and Timely Submission of Financial Statements 7. Board Committees In order for the Board to function effectively, the Board has delegated certain of its responsibilities to its committees which operate within clearly defi ned terms of reference as follow: a) Audit Committee The Board is also assisted by the Audit Committee whose members, terms of reference and summary of activities for fi nancial year under review are set out under the Audit Committee Report in this Annual Report. b) Nomination and Remuneration Committee The Nomination and Remuneration Committee which comprises a majority of whom are Non-Executive Directors, are as follows: Remuneration and Nomination Committee: (1) Tan Sri Dato Seri Arshad Ayub - Chairman/Non-Independent Non-Executive Director (2) Dato Dr Pang Chow Huat - Member/Executive Director (3) Dato Abd Halim bin Abd Hamid - Member/Independent Non-Executive Director The Nomination Committee is empowered by the Board through its terms of reference to assist the Board in fulfi lling its responsibilities to make recommendations in regards to appointment of new candidates to the Board. The Remuneration Committee was formed to assist the Board in review and recommending remuneration packages for the Board and shareholders approval at the Annual General Meeting. No Directors will participate in the deliberation and decision in respect of their own remuneration.

17 16 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Corporate Governance Statement (Cont d) B. DIRECTORS REMUNERATION The Board established and with the assistance from the Remuneration Committee to review and recommend the appropriate level of remuneration for all the Directors. The proposed fees for the Company are presented to shareholders at its Annual General Meeting for their approval. A summary of the Directors remuneration for the fi nancial year ended 30 June 2010, distinguishing between the Executive and Non-Executive Directors in aggregate with categorization into appropriate components and the number of Directors whose remuneration falling into each successive band of 50,000, is shown below: Executive Director Non-Executive Director Total Fees Salary and other remuneration Total Remuneration Band Executive Director Non-Executive Director Total Below 50, , , Total The Board is of the opinion that the non disclosure of the individual remuneration of each Director will not signifi cantly affect the understanding and evaluation of the s corporate governance structure. C. SHAREHOLDERS AND INVESTORS 1. Investors Relation and Shareholders Communication The Board ensured timely dissemination of information on the s performance and other related matters affecting shareholders and investors interest through appropriate announcement, quarterly announcements, relevant circulars and distribution of annual report. Shareholders and investors can also obtain information from the s offi cial website at as accessible by all its stakeholders and the public in general, which containing essential corporate information about the and its products. 2. Annual General Meeting ( AGM ) The principal forum for dialogue with shareholders remains at AGM. The shareholders are encouraged to attend the AGM and participate in the proceedings and take the opportunity to raise questions in relation to the operation of the. The Directors and senior management are available to respond to those queries. Shareholders who are unable to attend the AGM are allowed to appoint proxies to attend and vote on their behalf.

18 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT Corporate Governance Statement (Cont d) D. ACCOUNTABILITY AND AUDIT 1. Financial Reporting The Board acknowledges its responsibilities to ensure that there is a clear, balanced, understandable and meaningful assessment of the s fi nancial position and prospects primarily through the quarterly report to Bursa Securities, annual audited fi nancial statements as well as the Chairman s statement and review of operations in the Annual Report. In presenting fi nancial statements, the had used the appropriate accounting policies, made reasonable and prudent judgments and estimates, and applied them consistently, to enable that the fi nancial statements comply with the Companies Act, 1965 ( The Act ) and approved Financial Reporting Standards ( FRS ). The s quarterly and annual Audited Financial Statements are reviewed by Audit Committee and approved by the Board prior to their release to the Bursa Securities within the stipulated time frame. 2. Internal Control The Board is responsible for the s system of internal controls encompassing fi nancial, operational and compliance controls as well as risk management to maintain a sound system of internal control to safeguard the shareholders investment and the s assets. The s Statement on Internal Control is set out under the relevant section in this Annual Report. 3. Relationship with Auditors The Board through the establishment of AC to maintains a formal and transparent relationship with both internal and external auditors in seeking their professional advice and ensuring compliance with applicable approved accounting standards. The Audit Committee meets the external auditors at least once a year to discuss on their audit plan, audit fi ndings and the fi nancial statements. 4. Directors Responsibility Statement The Directors are required to prepare the fi nancial statements of the and of the Company, are drawn up in accordance with the provision of the Companies Act, 1965 and requirement of the applicable approved accounting standards in Malaysia and the Bursa Securities Listing Requirement. The Board is responsible for ensuring that the fi nancial statements give a true and fair view of the state of affairs of the and Company at the end of the fi nancial year, and of the results and cash fl ows for the fi nancial year then ended. In preparing the fi nancial statements, the Board have ensured: Applied the appropriate and relevant accounting policies on a consistent basis; Made reasonable and prudent judgments and estimates; and Applicable approved accounting standards in Malaysia have been followed. The Directors are also responsible for taking reasonable steps to safeguard the assets of the, to prevent and detect fraud and other irregularities. 5. Corporate Social Responsibilities ( CSR ) The Board acknowledges the signifi cance of CSR and views it as an extension to the s efforts in promoting a strong social relationship and responsibilities. The is committed to the welfare of its employees, the community and environment.

19 18 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Corporate Governance Statement (Cont d) ADDITIONAL COMPLIANCE INFOATION Utilisation Of Proceeds From Private Placement The Private Placement which was announced on 15 September 2009 has been completed on 12 January The gross proceeds of 5,000,000 raised from the Private Placement of 50,000,000 new ordinary shares of 0.10 each in Sanichi ( Placement Shares ) at an issue price of 0.10 per share has been fully utilized in the fi nancial year ended 30 June Recurrent Related Party Transaction There were no recurrent related party transactions involved in the fi nancial year ended 30 June Share Buy-backs There were no share buy-backs transactions involved in the fi nancial year ended 30 June Options, Warrants of Convertible Securities Exercised The Company has not issued any options, warrants or convertible securities in respect of the fi nancial year ended 30 June American Depository Receipt ( ADR ) of Global Depository Receipt ( GDR ) The Company has not sponsored any ADR or GDR programme for the fi nancial year ended 30 June Sanctions and/or Penalties The Company and its subsidiaries, Directors and management have not been imposed with any sanctions and/or penalties by regulatory bodies. Material Contracts Involving Directors and Major Shareholders Interest There were no material contracts entered into by the Company and its subsidiaries involving Directors and major shareholders interests. Revaluation of Landed Properties The does not revalue its landed properties as these are stated at cost less amortization, if applicable. Non-Audit Fees During the fi nancial year under review, there is no non-audit fee being paid to the external auditors of the. Variation in results There were no signifi cance variance between the reported results for the fi nancial year and the unaudited results previously announced by the Company for the fi nancial year ended 30 June Profit Guarantee There was no profi t guarantee given by the in respect of the fi nancial year.

20 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT Corporate Governance Statement (Cont d) COMPLIANCE STATEMENT As at end of the fi nancial year, the Board is of the opinion that the following Principles and Best Practices of the Code ( Code ) have not been complied with: Reference to Summary of the Principle / Best Practice Board Comments the Code Part Bill Disclosure of each Director s remuneration Details of the remuneration of each Director are not disclosed in the Annual Report as the Board is of the opinion this infringes on the privacy of the individual Directors. As an alternative, the Annual Report discloses the annual remuneration of Directors in bands of 50,000 and the number of Executive / Non-Executive Directors receiving Annual remuneration in that particular band. Part 2 AA1 Part 2 CCI Part 2 AAVIII Part 2 AAIX Part AAX Part 2 AAXIII Board to develop, implement and maintain an investor relations programme and communications policy to communicate effectively with shareholders, stakeholders and the public. Nomination Committee to comprise exclusively of non-executive Directors and to evaluate the effectiveness of members of the Board Company to provide orientation and education programme for new Board members The Board does not have a formal investor relations programme and shareholder communications policy at present, Any important announcement is made through Bursa Securities which in the opinion of the Board is adequate. The Board is of the view that it is suffi cient for the Nomination Committee to assess the effectiveness of the Board and the committees of the Board as a whole. It is the Board s opinion that individual Directors should be exempted from this process. The Board is also of the opinion that the participation of Dato Dr. Pang Chow Huat is important in the Nomination Committee meetings. The does not have a formal process for the orientation of newly appointed Board members as orientation is conducted on an informal basis by the Executive Directors. The Board is of the opinion that the activities of the are not complex as to require a formal training. Part 2 AAXVII Provision for non-quantitative information At present, the s information system generates information which are predominantly fi nancial based. Part 2 BBVII Establishment of the internal audit function The Board had outsourced its internal audit function to a professional service provider fi rm. This statement is made in accordance with a Board s resolution adopted by the Board at its meeting held on 25 November 2010.

21 20 SANICHI TECHNOLOGY BERHAD ( K) ANNUAL REPORT 2010 Statement on Internal Control INTRODUCTION Pursuant to paragraph 15.26(b) of Bursa Malaysia Securities Berhad ( Bursa Securities ) ACE Market Listing Requirements, the Board of Sanichi Technology Berhad ( Sanichi and Board ) is committed to maintaining a sound system of internal controls to safeguard shareholders investment and the s assets. During the fi nancial year under review, Sanichi s continued to enhance the system of internal controls in order to better quantify its compliance with the Malaysian Code on Corporate Governance ( Code ). The Board of Sanichi is pleased to provide the following Statement on Internal Controls ( Statement ) which outlines the nature and scope of internal controls of Sanichi and its subsidiary companies ( ). BOARD RESPONSIBILITY The Board acknowledges that it has overall responsibility for the adequacy and integrity of the s system of internal controls including the review of its effectiveness. However, the Board recognizes that reviewing the s system of internal controls is a continuing process, designed to minimize the likelihood of fraud and error, and to manage rather than eliminate the risk of failure. The system of internal controls can only provide reasonable but not absolute assurance against material misstatement, fraud and fi nancial loss. RISK MANAGEMENT FRAMEWORK The Board is committed in strengthening the s risk management and process. The Board is committed to the ongoing processes for identifying, evaluating, monitoring and managing any signifi cant risks faced by the in respect of its business objectives. The Board is ultimately responsible for identifying the s risks, the implementation of risk management system and the establishment of the s internal controls framework is delegated to the executive management and each Head of Department is responsible for managing its individual department risks. REVIEW MECHANISM Independent review of system of internal controls is essential in order to provide an objective assurance to the Board. The existing review mechanism is overseen by the AC which supports by the presence of the internal audit functions. The AC also reviews the fi nancial information and reports produced by the management including quarterly fi nancial results, annual report and audited fi nancial statements. Upon consultation with the management, deliberates on the integrity of the information and data before recommending to the Board for presenting to the shareholders and public investors. OTHER KEY ELEMENTS OF INTERNAL CONTROLS The other key features of the s internal controls system are as follows: The maintains a set of clearly defi ned and structured lines of reporting to ensure clarity in the division of responsibilities which promotes appropriate levels of accountability. Clearly defi ned and structured responsibilities within the organization, including segregation of duties and authorization levels for all divisions within the. Assets are safeguarded from unauthorized and improper use. Adequate insurance and physical security of major assets are in place to ensure that the assets of the are suffi ciently covered against any mishap that will result in material losses to the. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS The external auditors have reviewed this Statement for the inclusion in the Annual Report for the fi nancial year ended 30 June 2010, and reported to the Board that nothing has come to their attention that cause them to believe that this Statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal controls within the in compliance with Paragraph of Bursa Securities ACE Market Listing Requirements. INTERNAL AUDIT FUNCTION The review of the adequacy and effectiveness of the s internal controls system is delegated to the Audit Committee( AC ) on behalf of the Board. The internal audit function is outsourced to an independent professional consulting fi rm which reviews the s system of internal controls. Internal audits are carried out in accordance with the approved internal audit plan and the results of the internal audit reviews are tabled at the AC meeting. The cost incurred for the internal audit function in respect of the fi nancial year was approximately 18,000. CONCLUSION The Board remains committed towards continuous improvement and effectiveness of the s internal controls system and risk management framework in order to meet its corporate objective and maximize the returns to the shareholders. Issues highlighted by Management and internal audit functions as well as the External Auditors in relation to the s system of internal controls have been adequately addressed for the fi nancial year under review. The Board is satisfi ed that the s internal controls system is adequate, effective and suffi cient to safeguard the shareholders investment and its assets. This statement is made in accordance with a Board s resolution adopted by the Board at its meeting held on 25 November 2010.

22 Financial Statements DIRECTORS REPORT 25 STATEMENT BY DIRECTORS 25 STATUTORY DECLARATION INDEPENDENT AUDITORS REPORT 28 BALANCE SHEETS 29 INCOME STATEMENTS 30 STATEMENTS OF CHANGES IN EQUITY CASH FLOW STATEMENTS NOTES TO THE FINANCIAL STATEMENTS