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2 Contents Mission 01 Corporate Profile 01 Chairman s Message Board of Directors Corporate Information 07 Corporate Structure 08 Sales & Distribution Network 09 Significant Events 10 Business Review Year Financial Summary 15 Corporate Governance Statement Financial Statements Statistics of Shareholdings 48 Notice of Annual General Meeting Proxy Form Contents Contents Contents Contents

3 Corporate Profile JK Yaming International Holdings Ltd was incorporated in Singapore on 16 October 1999 and listed on the main board of SGX on 8 August Our Company is an investment holding company with operations based solely in the People s Republic of China ( PRC ). Our subsidiaries are principally engaged in the manufacturing and sales of electrical lighting products, low-voltage electrical accessories and devices that are widely used for infrastructure, industrial, commercial and residential purposes and wire harness products for the automotive manufacturers. We have to date grown rapidly into nine subsidiary companies with seven production facilities located in Nanping, Fuzhou, Anhui Ningguo and Shanghai in PRC. Our distribution is achieved through an extensive network of agents spanning the major cities of the PRC. Our wide ranges of products have received numerous awards and certifications from government and professional bodies. The products are sold to the domestic China market and exported to various countries including Japan, USA and countries in South East Asia. Mission With our presence well established in the PRC, we aspire to be a leading electrical lighting and automotive wire harness manufacturer that create and deliver greater value for our customers, business partners and shareholders through the continued research, development and exploration of innovative products and comprehensive services by leveraging on the strengths of our core businesses. We have established good track record in the PRC and overseas markets through our ability and effort to combine our good services with the high value products at the most competitive prices to meet the needs of our customers and business partners. The good track record has also given us a foothold in the PRC, which shall afford us an edge over the competition from the new entrants to the PRC in this growing economy. Annual Report

4 On behalf of the Board of Directors of JK Yaming International Holdings Ltd, I am pleased to present the Group s annual report and audited accounts for the financial ended 31 December PERFORMANCE REVIEW FY 2003 was another good year for JK Yaming International Holdings Ltd. The Group has continued to perform well in both revenue and profitability in spite of the turbulent period in the first half year due to the outbreak of SARS in Asia and the threat of terrorism and the Iraq war. We achieved a 17.9% increase in our net profit attributable to shareholders to $5.4 million on the back of a 14.9% growth in revenue to $93.9 million. Earnings per share rose to 2.69 cents in FY2003 as compared to 2.28 cents in FY 2002, while the net asset value per share increased to 26.2 cents from 25.1 cents respectively. As a result of the good net earnings in FY 2003, shareholder s funds increased by 4.5% to $53.2 million in FY We would continue to increase value for shareholders in the long term. DIVIDENDS The Board of Directors have recommended a Final Dividend of 2.5% and a Special Dividend of 5.0% in line with the good performance for this financial year 2003, subject to the approval at the forthcoming Annual General Meeting. Chairman Statement STRATEGY FOCUS FOR GROWTH Throughout the whole financial year, the Group continued to seek opportunities to identify, consolidate and strengthen its competencies in its core business, through its in-house research and development efforts, capital investments and strategic alliances. FY 2003 was another fruitful year for our Research and Development Department. We have successfully designed and developed the high-value Electrodeless Lamp and a new improved series of electronic ballast for HID Lamp and Fluorescent Lamp. We expect these products would contribute significantly towards the Group s revenue in the coming years. We shall continue to focus our R&D capabilities in the electrical lighting industry to produce low cost and high quality products to meet customers demands. We have successfully and confidently positioned the Group as a reliable and preferred manufacturer in the People s Republic of China ( PRC ). In December 2003, our joint venture partner, Sumitomo Wiring Systems Ltd ( SWS ), Japan s second largest manufacturer of wire harness, acquired a 20% stake in our wire harness-manufacturing subsidiary, Fujian JK Wire Harness Co. Ltd. Recently, a Taiwan public listed electrical equipment group, Phihong International Corp has also acquired 5.56% of the Company s issued share capital. 02 JK Yaming International Holdings Ltd

5 The Group believes that it will continue to benefit from the business alliances of SWS in terms of increased overseas sales orders and assistance in strengthening our technical knowledge and expertise in the manufacture of wire harness products. The Group would also stand to benefit from Phihong International Corp s interest in a strategic alliance with the Company. To strengthen the Group s growing business in the PRC, the Group recently recruited two experienced electrical lighting experts from a multinational corporation to help formulate marketing strategies and to spearhead the R&D efforts towards commercializing newly developed lighting products. PROSPECT The growth potential of our two major business segments, electrical lighting and wire harness products, driven by the fast pace of infrastructure construction and development and the increasingly popularity of cars in the PRC presents vast opportunities for the Group. With an anticipated economic recovery, we remain optimistic about our outlook for FY We are armed with good strategy focused to meet challenging circumstances and to improve our market share in both the local and overseas markets. We believe that opportunities abound for us to sustain our growth with profitability for FY ACKNOWLEDGMENTS The good performance achieved by the Group amidst the challenging circumstances this year would not have been possible without the valuable support of our customers, suppliers, business associates, bankers and shareholders. I would like to take this opportunity to extend our sincere thanks for their trust and support over the past years. I would also like to express my gratitude and appreciation to my fellow Board members, the management and staff for their hard work, dedication and commitment, whose combined efforts have contributed to the good performance in FY2003. I look forward to your continual support. Chairman Statement Ang Chiong Chai Executive Chairman 30 March 2004 Annual Report

6 04 JK Yaming International Holdings Ltd

7 Annual Report

8 Mr Ang Chiong Chai Executive Chairman First appointed executive director and executive chairman to Board: 16 October 1999 Last re-appointed: 31 May 2002 Appointed member of Nominating Committee: 22 March 2003 Mr Ang Chiong Chai is the Executive Chairman of our Company and is responsible for the overall management and the strategic development of our business. Mr Ang has more than 30 years of experience in the trade, management and manufacturing aspects of the electrical products industry. Prior to joining us in Mr Ang was the Managing Director and founder of Juan Kuang Holdings Sdn Bhd. which in 1995 entered into a joint venture with Nanping Electric Equipment and Shanghai Yaming to establish our operation in the PRC. Mr Ang holds a Bachelor degree in Commerce from the then Nanyang University of Singapore. Mr Chen Min Executive Director First appointed executive director to Board: 6 June 2001 Last re-appointed: 23 May 2003 Mr Chen Min is responsible for the management of our PRC operations and was the pioneer of our research and development division, which has developed various technologically advanced electrical lighting products that have won various awards in China. Mr Chen is also our founder who started Nanping Electric Equipment with a team of technicians, which in 1995 went into a joint venture with Juan Kuang Holdings Sdn. Bhd. headed by our Chairman Mr Ang Chiong Chai. Mr Chen has more than 20 years of experience in the electrical lighting industry. The State Council has recognized his contributions in the technical engineering field with a certificate of commendation in In addition, he has been our representative as an executive member of China Association of Lighting Industry Council, Beijing since Mr Chen was awarded the Fujian Province Excellent Entrepreneur in Mr Tan Boon Tan Ka Seng Executive Director First appointed executive director to Board: 16 October 1999 Last re-appointed: 23 May 2003 Mr Tan Boon Tan Ka Seng is responsible for exploring business opportunities in the Company s overseas markets and has more than 30 years of experience in finance and managerial operations. He is also sitting on Board of Shanghai Lighting Co. Ltd. and Fujian Juan Kuang Wireharness Electric Co. Ltd. Board of Directors Mr Lee Poo Sik Non-Executive Director First appointed non-executive director to Board: 16 July 2001 Proposed for re-appointment: AGM 28 April 2004 Appointed member of Audit Committee: 19 October 2001 Mr Lee Poo Sik was appointed in 1995 as director of our PRC subsidiary Fujian Juan Kuang Yaming Electric Co., Limited. Mr Lee also sits on the board of Juan Kuang Holdings Sdn Bhd and is its senior finance director responsible for its financial operations. Mr Lee holds a Bachelor degree in Commerce (Accountancy) from the then Nanyang University. 06 JK Yaming International Holdings Ltd Mr Ng Kim Poh Non-Executive Director First appointed non-executive director to Board: 16 July 2001 Last re-appointed: 31 May 2002 Appointed member of Nominating Committee: 1 July 2003 Appointed member of Remuneration Committee: 1 July 2003 Mr Ng Kim Poh provides advice and guidance to our operations and strategic directions. He has also been a director of Fujian Juan Kuang Yaming Electric Co., Limited since Currently, Mr Ng also sits on the board of Anhui Juan Kuang Electric Co. Ltd, Shin-Feng Investments Co., Ltd, Amko Industrial Co., Ltd (Taiwan) and Amko Industrial Co., Ltd (British Virgin Islands). Mr Ng holds a Bachelor degree in International Marketing from the National Chengchi University in Taiwan. Mr Yang Lih Shyng Independent Director First appointed independent director to Board: 16 July 2001 Proposed for re-appointment: AGM 28 April 2004 Appointed chairman of Audit Committee: 25 July 2001 Appointed member of Nominating Committee: 22 March 2003 Mr Yang Lih Shyng was appointed an independent director on 16 July 2001 and is also the Chairman of our Audit Committee. He was admitted to the Singapore Bar in 1975 and is a partner of Singapore law firm Khattar Wong & Partners. Mr Yang is a qualified arbitrator and mediator, and is accredited with the Singapore International Arbitration Centre, the Singapore Mediation Centre, and the Qingdao Arbitration Commission. He is a fellow of the Singapore Institute of Arbitrators and an Associate of the Chartered Institute of Arbitrators (UK). As Chief Representative of Khattar Wong s Shanghai office, he divides his time between Singapore and Shanghai. His current professional practice focuses on legal and business issues relevant to China-related investment.

9 Mr Tan Soo Kiat Independent Director First appointed independent director to Board: 16 July 2001 Proposed for re-appointment: AGM 28 April 2004 Appointed member of Audit Committee: 25 July 2001 Appointed chairman of Nominating Committee: 22 March 2003 Appointed member of Remuneration Committee: 22 March 2003 Mr Tan Soo Kiat is currently the director of Intergate Pte Ltd, a company engaged in the provision of corporate advisory services. He was formerly the chief operating officer and executive director of Goodpack Limited from July 1999 to November 2000 and was responsible for the financial functions of the company. He also assisted the managing director of the company in its day-to-day business operations. Mr Tan was formerly the general manager and executive director of Progen Holdings Ltd (from July 1997 to April 1999), vice president (finance) of Pacific Century Regional Developments Limited (from March 1996 to July 1997) and a treasurer with the investment banking arm of DBS Bank (from April 1994 to March 1996). Mr Tan has more than 14 years of experience in the banking and finance industry. Prior to working in Singapore, he was a senior internal auditor and marketing/loan manager for Bank of Western Australia Ltd in Australia from June 1990 to Mr Tan graduated with a degree in Commerce (Accounting) from University of Otago, New Zealand and is a chartered accountant and member of The Institute of Chartered Accountants of New Zealand. Mr Tan is also currently an independent director of a numbers of companies listed on the Singapore Exchange. Dr Ng Eng Hong Independent Director First appointed independent director to Board: 1 March 2003 Last re-appointment: 23 May 2003 Appointed chairman of Remuneration Committee: 22 March 2003 Appointed member of Nominating Committee: 22 March 2003 Dr Ng Eng Hong graduated with a Bachelor of Science (Honours) and Doctor of Philosophy in Mechanical Engineering from the University of Strathclyde, United Kingdom. He is currently the Deputy Director of the School of Mechanical and Manufacturing Engineering, Singapore Polytechnic in charge of the Mechanical Technology Division. Dr Ng is a Fellow of American Society of Heating, Refrigerating and Air-conditioning Engineers Inc. (ASHRAE). He was a member of the Nominating Committee of ASHRAE in and is currently the Regional Vice-Chair in-charge of Technical, Energy and Government Activities (TEGA) of Region 13 (comprises Chapters in Hong Kong, Malaysia, Philippines, Taiwan, Thailand and Singapore) of ASHRAE. Board of Directors Ang Chiong Chai Chen Min Tan Boon Tan Ka Seng Lee Poo Sik Ng Kim Poh Yang Lih Shyng Tan Soo Kiat Dr Ng Eng Hong Audit Committee Yang Lih Shyng Tan Soo Kiat Lee Poo Sik Nominating Committee Tan Soo Kiat Dr Ng Eng Hong Yang Lih Shyng Ang Chiong Chai Ng Kim Poh Remuneration Committee Dr Ng Eng Hong Tan Soo Kiat Ng Kim Poh Executive Chairman Independent Director Independent Director Independent Director Chairman Chairman Chairman Registered Office 160 Paya Lebar Road #08-03 Orion Industrial Building Singapore Tel : (65) Fax : (65) jkyaming@singnet.com.sg Website : http// Share Registrar Lim Associates (Private) Limited 10 Collyer Quay #19-08 Ocean Building Singapore Auditor Pricewaterhouse Coopers 8 Cross Street #17-00 PWC Building Singapore Partner in--charge : Mr Tham Tuck Seng Appointed date : 20 August 2003 Principle Banker United Overseas Bank Limited 80 Raffles Place UOB Plaza Singapore Corporate Information Company Secretaries Foo Soon Soo Sng Yeow Huat FCIS, CPA, LLB(Hons) CPA, B. Comm. Annual Report

10 Corporate Structure 08 JK Yaming International Holdings Ltd

11 Sales & Distribution Network Annual Report

12 Honours & Awards in Year JK Yaming International Holdings Ltd

13 OVERALL REVIEW Year 2003 produced another solid year of growth and reputation building our market segments for JK Yaming. Group revenue for the financial year 2003 increased by 14.9% to $93.9 million as compared to revenue of $81.7 million for the previous financial year. The increased revenue was mainly contributed by the improved turnover of our two major business segments, electrical lighting and wire harness products. Group profit before tax rose by 8.8% from $6.9 million in FY2002 to $7.5 million in FY2003. This can be attributed to the increase in other operating income, net of increase in distribution and administrative costs as compared to the previous financial year. The increase in other operating income was mainly contributed by the gain of about $1.8 million on the disposal of 20% equity share of a subsidiary company to our joint-venture partner, Sumitomo Wiring Systems Ltd. Turnover (S$ 000) 81,735 80,000 70,000 60,000 51,633 50,000 46,925 40,000 39,277 30,000 93,938 The substantial increase in administrative expenses was attributable mainly to the increase in depreciation and manpower costs due to establishment of new production plants in two subsidiaries of the Group, namely, Anhui Juan Kuang Electric Co., Ltd and Shanghai Juan Kuang Lighting Co., Ltd. 20, Electronic Ballasts Business Review Conventional Ballasts Lighting Fixtures Ignitors Semiconductor Components Electrodeless Lamps HID Lamps Capacitors Annual Report

14 ELECTRICAL LIGHTING PRODUCTS Sales of electrical lighting products increased substantially by 24.7% from $24.6 million in FY2002 to $30.6 million in FY2003. The Group registered a significant increase of 50.3% in turnover for its sales of electrical lighting products in the PRC s market, from $15.1 million in FY2002 to 22.7 million in FY2003. The growth was mainly attributed to the substantial increase in sales of capacitors, which contributed to about 32% of total sales. Profit Before Taxation (S$ 000) The export sales to other countries in South East Asia, Europe and USA decreased from $10.3 million in FY2002 to $8.6 million in FY2003, due mainly to the slower demand in a generally sluggish global economy. 8,000 7,000 6,969 6,000 7,653 6,884 7,489 5,000 4,000 Business Review 3,000 2,000 2, JK Yaming International Holdings Ltd

15 WIRE HARNESS Turnover By Product ($ 000) Sales of our wire harness products for automobiles, which were mainly contributed by the export sales to Japan, increased 8.0% from $56.3 million in FY2002 to $60.8 million in FY2003. This was attributable to the marginal increase in export sales of wire harness products to Sumitomo Wiring Systems Ltd, Japan. 80,000 24,556 30,610 70,000 60,816 56,318 60,000 16,984 50,000 23,307 40,000 21,569 33,819 30,000 22,764 17,643 20,000 10, Electronic Lighting Products Wire Harness Business Review Low Voltage Electrical Accessories Semi-conductor Annual Report

16 LOW VOLTAGE ELECTRICAL ACCESSORIES Business Review 80,000 60,000 40,000 19,003 17,387 20,000 Turnover By Geographical Region ($ 000) 2,887 18,877 22,409 5,639 14,574 33,509 3,550 16,435 54,974 10,326 25,701 59,632 8, Sales of low voltage electrical accessories, which represented a smaller percentage of our Group s business, declined marginally by 11.6% from $0.83 million in FY2002 to $0.74 million in FY2003. SEMICONDUCTOR COMPONENTS The semiconductor manufacturing subsidiary company, Fujian Minhang Electronics Co., Ltd, which specializes in developing and producing multi-layer ceramic package products, contributed about $1.8 million towards total revenue in FY2003. The Group acquired the subsidiary Company at the end of last FY2002. China Japan Others 14 JK Yaming International Holdings Ltd

17 Earnings Per Share (Singapore Cents) 4.13 Net Tangible Asset Per Share (Singapore Cents) Shareholders Equity ($ 000) ,000 50,900 53, ,000 34,634 48, ,000 29,900 20,000 10,000 5-Year Financial Summary Note: Earnings Per Share and Net Tangible Asset Per Share have been computed based on the pre-invitation share capital of 150,948,180 shares for year 1999 to 2000, weighted average share capital of 172,614,841 shares for year 2001 and 202,948,180 ordinary shares of S$0.20 each in issue for year 2002 and year The computations for year 1999 to 2001 are based on proforma financial statements of the respective year as though the Group had come into existance at the relevant point in time. Net Tangible Asset and Shareholder Equity were calculated net of Minority Interest. Annual Report

18 Corporate Governance Statement The Company is committed to maintaining a high standard of corporate governance within the Company and its subsidiaries. The Company has been complying with the recommendations of the Code of Corporate Governance ( Code ) through effective self regulatory corporate practices to protect and enhance the interests of its shareholders. This report describes the Company s corporate governance processes and activities in conjunction with the Singapore Securities Exchange Trading Limited s requirement that issuers describe their corporate governance practices with specific reference to the Code in their annual reports. The Board s conduct of its Affairs Principle 1: Every company should be headed by an effective Board to lead and control the company. During the year 2003, four Board Meetings were held, all of which were regular scheduled meetings. Ad hoc meetings will be convened when circumstances require. The Company amended its Articles of Association in 2001 to permit Directors to attend meetings by way of telephonic and videoconference meetings. Details relating to the number of Board and committee meetings and the attendance of the Directors are set out on Page 20 of this Report. In addition to its statutory duties, the Board s principal functions are :- 1. Approving the Group s strategic plans, key operational initiatives, major investments and divestments and funding requirements; 2. Approving the annual budget, reviewing the performance of the business and approving the release of the financial results of the Group to shareholders; 3. Providing guidance in the overall management of the business and affairs of the Group; 4. Overseeing the processes for risk management, financial reporting and compliance; 5. Approving the recommended framework of remuneration for the Board and key executives by the Remuneration Committee. All newly appointed Directors are given briefings by Management on the history and business operations and corporate governance practices of the Group. The Company will, from time to time, organise seminars and briefing sessions for the Directors to enable them to keep pace with regulatory changes, where changes to regulations and accounting standards have a material bearing on the Company. Board Composition and Balance Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board s decision making. The Board currently comprises eight Directors of whom five are non-executive Directors. Of these eight Directors, three of them are independent Directors. The Board is supported by various sub-committees, namely, the Nominating Committee, the Audit Committee and the Remuneration Committee whose functions are described below. The Board is able to exercise objective judgement independently from Management and no individual or small group of individuals dominates the decisions of the Board. The Board is of the opinion that, given the scope and nature of the Group s operations, the present size of the Board, is appropriate for effective decision making. The Board is made up of Directors who are qualified and experienced in various fields including manufacturing, engineering, business administration, accountancy and law. The profiles of each of the Directors is provided in Pages 6 and 7 of this Annual Report. Accordingly, the current Board comprises persons who as a group, have core competencies necessary to lead and manage the Company. Chairman and Chief Executive Officer Principle 3 : There should be a clear division of responsibilities at the top of the company the working of the Board and the executive responsibility of the company s business which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power. Mr Ang Chiong Chai is currently the Executive Chairman of the Board and the Chief Executive Officer of the Company. The Board has not adopted the recommendation of the Code to have different individuals appointed as the Chairman and the Chief Executive Officer. This is because the Board is of the view that there is already a sufficiently strong independent element on the Board to enable the independent exercise of objective judgment on corporate affairs of the Group by members of the Board, taking into account factors such as the number of non-executive and independent directors on the Board, as well as the size and scope of the affairs and operations of the Group. As the Chairman, Mr Ang is responsible for, among others, (a) scheduling meetings of the Board and setting the Board meeting agenda in consultation with the Company s senior management; (b) exercising control over quality, quantity and timeliness of the flow of information between Management and the Board; (c) assisting in ensuring compliance with the Company s guidelines on corporate governance. Prior to Board Meetings, all Directors are provided with board papers so that the Directors have complete and timely information to enable them to be adequately prepared for the meeting. Access to Information Principle 4 : In order to fulfill their responsibilities, board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis. The Board is provided with complete and adequate information prior to Board meetings and on an on-going basis. The Company circulates copies of the Minutes of the Meetings of all Board Committees to all members of the Board to keep them informed of on-going developments within the Group. Board papers are generally sent to Directors at least one week in advance and would include financial management reports, quarterly, half-year and 16 JK Yaming International Holdings Ltd

19 Corporate Governance Statement full year results announcement, papers pertaining to matters requiring the Board s decision, updates on key outstanding issues, strategic plans and developments in the Group. The Directors have separate and independent access to the Company s senior management and the Company Secretary at all times. Should the Directors, whether as a group or individually, require independent professional advice, such professionals (who will be selected with the approval of the Executive Chairman or the Chairman of the Committee requiring such advice) will be appointed at the Company s expense. The Company Secretary attends all Board Meetings and is responsible for ensuring that Board procedures are followed. The Company Secretary assists senior management in ensuring that the Company complies with rules and regulations which are applicable to the Company. Board Committees Remuneration Committee Principle 5 : There should be a formal and transparent procedure for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration. Principle 6 : The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more for this purpose. A proportion of the remuneration, especially that of executive directors, should be linked to performance. The Remuneration Committee comprises :- Dr Ng Eng Hong(Chairman) Mr Tan Soo Kiat (Member) Mr Ng Kim Poh (Member) The Remuneration Committee has three members, a majority of whom are directors who are independent of management and free from any business or other relationships, which may materially interfere with the exercise of their independent judgment. The Remuneration Committee s role also includes reviewing and recommending to the Board an appropriate and competitive framework of the remuneration for the Board and key executives of the Group and to ensure that it is appropriate to attract, retain and motivate them to run the Group successfully. In setting remuneration packages, the Remuneration Committee took into account the performance of the Group as well as the Directors and key executives, aligning their interests with those of shareholders and linking rewards to corporate and individual performance as well as industry benchmarks. The review of remuneration packages takes into consideration the longer term interests of the Group. The review covers all aspects of remuneration including salaries, fees, allowances, bonuses, options and benefits-in-kind. The Committee s recommendations are made in consultation with the Chairman of the Board and submitted for endorsement by the entire Board. The payment of Directors fees is subject to the approval of shareholders. Disclosure on Remuneration Principle 7 : Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration, in the company s annual report. The remuneration of the Directors of the Company is set out below :- Allowances Share Directors of the Fee Salary Bonus and Benefits Options Company % % % % % Ang Chiong Chai Chen Min Tan Boon Tan Ka Seng Lee Poo Sik Ng Kim Poh Yang Lih Shyng Tan Soo Kiat Dr Ng Eng Hong Remuneration of Top 5 Key Executives Name and Director s Salary Bonus Allowance and Designation Fee (%) (%) (%) Benefits (%) Below $250,000 Sng Yeow Huat (Group Financial Controller - JKYH) Zheng Qing Fa (General Manager - JKWH) Zhang He Quan (Assistant General Manager - FJKYM) Xu Zhi Gang (Assistant General Manager - FJKYM Wen Hai Bo (General Manager - AHJK) JKYH : JK Yaming International Holdings Ltd JKWH : Fujian J.K. Wire Harness Co., Ltd FJKYM : Fujian Juan Kuang Yaming Electric Limited AHJK : Anhui Juan Kuang Electric Co., Ltd Annual Report

20 Corporate Governance Statement There are no employees who are immediate family members of the Directors or the Chief Executive Officer. Nominating Committee Principle 8 : There should be a formal and transparent process for the appointment of new directors to the Board. As a principle of good corporate governance, all directors should be required to submit themselves for re-nomination and re-election at regular intervals. Principle 9 : There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board. To facilitate a formal and transparent process for the appointment of new Directors, the Board has formed the Nominating Committee. The Nominating Committee comprises :- Mr Tan Soo Kiat Dr Ng Eng Hong Mr Yang Lih Shyng Mr Ang Chiong Chai Mr Ng Kim Poh (Chairman) (Member) (Member) (Member) (Member) Save for Mr Ang Chiong Chai and Mr Ng Kim Poh, the other members of the Committee are independent Directors. The Nominating Committee has written terms of reference and their role includes :- 1. Making recommendations to the Board on all board appointments, including the development of a set of criteria for Director appointments. 2. Re-nominating Directors having regard to the Director s contribution to the Group and his performance at Board Meetings, for example, attendance, participation and critical assessment of issues deliberated upon by the Board. 3. Considering and determining on an annual basis, whether or not a Director is independent. 4. To decide on how the Board s performance may be evaluated and propose objective performance criteria to the Board. 5. Assessing the effectiveness of the Board as a whole. The independence of each Director is reviewed annually by the Nominating Committee ( NC ) based on the Code s definition of what constitutes an independent director. The Nominating Committee is of the view that :- (a) despite some of the other Directors having other Board representations, the Nominating Committee is satisfied that these Directors are able to and have adequately carried out their duties as Directors of the Company. The Board has experienced minimal competing time commitments among its members as Board meetings are planned and scheduled well in advance of the meeting dates. Pursuant to the Articles of Association of the Company :- (a) (b) one third of the Directors except the Managing Director retire from office at every Annual General Meeting; and Directors appointed during the course of the year must submit themselves for reelection at the next Annual General Meeting of the Company. From this year, the Nominating Committee will as an annual exercise conduct a formal assessment of the performance of the Board as a whole in view of the complementary and collective nature of Directors contributions. The Committee will be establishing objective performance criteria by which the Board s performance may be evaluated. Accountability and Audit Principle 10 : The Board is accountable to the shareholders while the Management is accountable to the Board. Accountability In presenting the annual financial statements and announcements of financial results to shareholders, it is the aim of the Board to provide shareholders with a balanced and understandable assessment of the Company s and Group s performance, position and prospects. Management currently provides the Board with appropriately detailed management accounts of the Company s performance, position and prospects on a quarterly basis. Audit Committee Principle 11 : The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties. The Audit Committee comprises :- Mr Yang Lih Shyng Mr Tan Soo Kiat Mr Lee Poo Sik (Chairman) (Member) (Member) Save for Mr Lee Poo Sik, who is not an independent Director, the Committee members are all independent non-executive Directors, appropriately qualified to discharge their responsibilities. The members have had many years of experience in accounting, audit, business, law and financial management. The Board considers that the members of the Audit Committee are appropriately qualified to discharge the responsibilities of the Audit Committee. The Audit Committee has written terms of reference. Specifically, the Audit Committee meets on a periodic basis to perform the following functions :- 18 JK Yaming International Holdings Ltd

21 Corporate Governance (a) (b) (c) (d) (e) (f) (g) To assist the Board of Directors in the identification and monitoring of areas of significant business risks with the help of internal and external auditors. To review compliance with the Listing Manual and the Best Practices Guide of the Singapore Exchange Securities Trading Limited and the Code, effectiveness of financial and accounting control systems and management of exposure to financial and business risks. To review with the external auditors and with effect from 1 April 2004, also with internal auditors their respective audit plans. To review the internal and external auditors reports and their evaluation of the Group s system of internal controls. To recommend the appointment of auditors and to review the level of audit fees. To review the independence of the Company s auditors on an annual basis. To review the adequacy of the internal audit function. Internal controls Principle 12 : The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders investments and the company s assets. The Audit Committee has, during the year, reviewed, with the assistance of the external auditors, the effectiveness of the Company s material internal controls, including financial, operational and administrative controls and risk management. Based on the review of the Audit Committee, the Board is satisfied that the internal controls of the Group are currently adequate to safeguard shareholders investments and the Company s assets, and ensure the integrity of its financial statements. However, the Audit Committee has taken note of the Company s growing need for a dedicated internal audit function, and has appointed an Internal Auditor on 1 April Internal audit Principle 13 : The company should establish an internal audit function that is independent of the activities it audits. (h) (i) (j) (k) To review the assistance given by the Company s officers to the internal and external auditors. To review the Group s quarterly management reports and announcements before they are submitted to the Board for approval. To review the consolidated balance sheet and profit and loss account of the Group and other financial statements and other documents accompanying the same and thereafter to submit the same to the Board for approval. To review and where appropriate, approve interested person transactions. The Audit Committee is also authorised to investigate any matter within its terms of reference. It has full access to and the co-operation of Management and the full discretion to invite any director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly. The Audit Committee meets regularly with the external auditors, without the presence of the Company s management. From 1 April 2004, the Audit Committee will also meet regularly with the internal auditor to review internal control functions and degree of compliance. This is to review Management s degree of co-operation with the internal and external auditors, the adequacy of audit arrangements, with particular emphasis on the scope and quality of their audits, and the independence and objectivity of the internal and external auditors. The Audit Committee has undertaken a review of all non-audit services provided by the auditors and in the Audit Committee s opinion, the provision of these services does not affect the independence of the auditors. In 2002, the Company had commissioned Deloitte & Touche to carry out an internal audit review of the Group s system of internal control and evaluation of the operations of Fujian Juan Kuang Yaming Electric Limited, the core subsidiary of the Group. Deloitte & Touche together with the Group s finance department have formulated a framework of internal control procedures designed to address the areas of internal weaknesses highlighted during the internal audit review. The Company is in the process of establishing an in-house internal audit function to implement the framework of internal control procedures as well as to perform financial audits and other internal audit programmes to ensure reasonable assurance, effectiveness and integrity of the Group s operations and financial accountability. The appointed internal auditor will report directly to the Chairman of the Audit Committee. The internal audit functions would cover: 1. Review current operating and accounting procedures and formalize these into standard policies for the use of all the subsidiaries in the Group. 2. Identify key risks facing the Group s operations and institute annual internal audit plan to address these key risks based on business and control priority. 3. Plan periodic audits for each subsidiary and make recommendations for cost and time saving procedures and techniques after audit review. 4. Carry out independent financial and operational audits for subsidiaries within the Group. 5. Draft reports for timely submission to senior management. 6. Review auditors audit summary findings and follow up to ensure that the internal control weaknesses are rectified. Annual Report

22 Corporate Governance Statement 7. Carry out ad hoc assignments, such as investigation or due diligence, upon request of the Audit Committee or management via the Audit Committee. 8. Co-ordinate work scope and plan with the external auditors. 9. Report to audit committee on audit findings on a quarterly basis. Communications with the Shareholders Principle 14 : Companies should engage in regular, effective and fair communication with shareholders. Principle 15 : Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company. (b) Greater Shareholder Participation At general meetings, shareholders of the Company are given the opportunity to air their views and ask Directors or Management questions regarding the Company. The Board and Management are present at these meetings to address any questions that shareholders may have. The external auditors are also present to assist the Board in addressing queries by shareholders. The Articles allow a member of the Company to appoint a proxy to attend and vote at general meetings. For the time being, the Board is of the view that this is adequate to enable shareholders to participate in general meetings of the Company and is not proposing to amend their Articles to allow votes in absentia. Separate resolutions on each distinct issue are tabled at general meetings. Dealings in Securities (a) Communications with Shareholders The Company ensures that timely and adequate disclosure of information on matters of material impact on the Company are made to shareholders of the Company, in compliance with the requirements set out in the Listing Manual of the Singapore Exchange Securities Trading Limited with particular reference to the Corporate Disclosure Policy set out therein. In this respect, the Company announces its results to shareholders on a quarterly basis. The Company has adopted the Singapore Exchange Securities Trading Limited s Best Practices Guide applicable in relation to dealings in the Company s securities by its officers. The Company has informed its officers not to deal in the Company s shares whilst they are in possession of unpublished material price sensitive information and during the period commencing one month before the announcement of the Company s financial results and ending on the date of announcement of such financial results. The number of Directors and other committees meetings and the record of attendance of each Director during the financial year ended 31 December 2003 is set out below :- Name Board Audit Committee Remuneration Nominating Committee Committee No. of No. of No. of No. of No. of No. of No. of No. of Meetings Meetings Meetings Meetings Meetings Meetings Meetings Meetings Held Attended Held Attended Held Attended Held Attended Ang Chiong Chai Chen Min Tan Boon Tan Ka Seng Lee Poo Sik Ng Kim Poh Yang Lih Shyng Tan Soo Kiat Dr Ng Eng Hong Note : Mr Ng Kim Poh was appointed additional member of the Nominating Committee and a member of the Remuneration Committee in place of Mr Tan Boon Tan Ka Seng on 21 June JK Yaming International Holdings Ltd

23 Financial Statements Contents Directors Report 22 Statement by Directors 24 Auditors Report 25 Consolidated Income Statement 26 Balance Sheets 27 Consolidated Statement of Changes in Equity 29 Consolidated Cash Flow Statement 30 Notes to the Financial Statements 31 Annual Report 2003

24 Directors Report For the Financial year ended 31 December 2003 The directors present their report to the members together with the audited financial statements of the Group for the financial year ended 31 December 2003 and the balance sheet of the Company as at 31 December Directors The directors of the Company in office at the date of this report are : Ang Chiong Chai (Executive Chairman) Chen Min Tan Boon Tan Ka Seng Lee Poo Sik Ng Kim Poh Yang Lih Shyng Tan Soo Kiat Ng Eng Hong (Appointed on 1 March 2003) Arrangements to enable directors to acquire shares and debentures Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Directors interests in shares or debentures (a) According to the register of directors shareholdings, none of the directors holding office at the end of the financial year had any interest in the share capital of the Company and related corporations, except as follows : (Ordinary shares of the Company at $0.20 each) Holdings registered in Holdings in which a director name of director or nominee is deemed to have an interest At At or date of or date of appointment, appointment, At if later At if later Ang Chiong Chai 55,965,040 55,965,040 49,022,225 48,722,225 Chen Min ,024,750 23,024,750 Tan Boon Tan Ka Seng Lee Poo Sik 120,000 20, Ng Kim Poh 700, ,000 21,913,155 21,913,155 Ng Eng Hong 20,000 20, JK Yaming International Holdings Ltd

25 Directors Report For the Financial year ended 31 December 2003 Directors interests in shares or debentures (continued) (b) (c) (d) None of the directors holding office at the end of the financial year had interests in the options to subscribe for ordinary shares of the Company. Mr Ang Chiong Chai, who by virtue of his interest of not less than 20% of the issued capital of the Company, is deemed to have an interest in the subsidiaries held by the Company at the end of the financial year. None of the directors of the Company at the end of financial year had any interest in the shares or debentures of the Company or any related corporations. Directors contractual benefits Since the end of the previous financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest, except that Mr Ang Chiong Chai and Mr Tan Boon Tan Ka Seng has an employment relationship with the Company, and has received remuneration in that capacity. Share options There were no options granted during the financial year to subscribe for unissued share of the Company or its subsidiaries. No shares have been issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company or it subsidiaries. Auditors The auditors, PricewaterhouseCoopers, have expressed their willingness to accept re-appointment. On behalf of the directors ANG CHIONG CHAI Executive Chairman TAN BOON TAN KA SENG Executive Director 30 March 2004 Annual Report

26 STATEMENT BY DIRECTORS In the opinion of the directors, (a) (b) the balance sheet of the Company and the financial statements of the Group as set out on pages 26 to 47 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group at 31 December 2003 and of the results of the business, changes in equity and cash flows of the Group for the financial year then ended; and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. On behalf of the directors ANG CHIONG CHAI Executive Chairman TAN BOON TAN KA SENG Executive Director 30 March JK Yaming International Holdings Ltd

27 Auditors Report To The Members Of JK Yaming International Holdings Ltd We have audited the balance sheet of JK Yaming International Holdings Ltd and the consolidated financial statements of the Group for the financial year ended 31 December 2003 set out on pages 26 to 47. These financial statements are the responsibility of the Company s directors. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, (a) (b) the accompanying balance sheet of the Company and consolidated financial statements of the Group are properly drawn up in accordance with the provisions of the Companies Act, Cap 50 ( the Act ) and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company and the Group as at 31 December 2003 and the results, changes in equity and cash flows of the Group for the financial year ended on that date; and the accounting and other records (excluding registers) required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act. We have considered the financial statements and auditors report of the subsidiaries of which we have not acted as auditors, being financial statements included in the consolidated financial statements. The names of the subsidiaries are stated in note 14 to the financial statements. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations as required by us for those purposes. The auditors reports on the financial statements of the subsidiaries were not subject to any material qualification. PricewaterhouseCoopers Certified Public Accountants Singapore, 30 March 2004 Annual Report

28 Consolidated Income Statement For the financial year ended 31 December 2003 The Group Notes $ 000 $ 000 Sales 3 93,938 81,735 Cost of sales (80,203) (69,526) Gross profit 13,735 12,209 Other operating income 3 3,689 1,707 Distribution costs (1,502) (1,300) Administrative costs (7,550) (4,890) Profit from operations 4 8,372 7,726 Finance costs 5 (883) (842) Profit before tax 7,489 6,884 Income tax expense 7 (1,009) (659) Profit from ordinary activities after tax 6,480 6,225 Minority interests (1,031) (1,604) Net profit 5,449 4,621 Earnings per share basic cents 2.28 cents The accompanying notes form an integral part of these financial statements. Auditors Report - Page JK Yaming International Holdings Ltd

29 Balance Sheets As at 31 December 2003 The GroupThe Company Notes $ 000 $ 000 $ 000 $ 000 ASSETS Current Assets Inventories 9 19,025 15, Trade receivables 10 23,816 19, Other receivables 11 8,007 7, Amounts due from subsidiaries, non-trade ,208 6,000 Amounts due from related parties, trade 12 2,131 1, Amounts due from related parties, non-trade 12 4, Cash and cash equivalents 13 9,618 15,344 1,290 3,520 66,682 58,723 4,513 9,536 Non-Current Assets Investments in subsidiaries ,785 30,476 Property, plant and equipment 15 37,019 29,718 1,892 9 Property held for resale 16 5,424 5, Other non-current assets Long-term receivable 18 1,232 1, ,245 37,073 41,677 30,485 Total assets 110,927 95,796 46,190 40,021 LIABILITIES Current Liabilities Borrowings 19 7,028 4, Trade payables 19,568 14, Other payables 20 8,066 6, Amounts due to related parties, trade Provision for taxation 1, Payable to directors ,043 27, Non-Current Liability Borrowings 19 10,031 9,013 1,203 - Total liabilities 47,074 36,499 1, Net assets 63,853 59,297 44,397 39,574 Annual Report

30 Balance Sheets As at 31 December 2003 The GroupThe Company Notes $ 000 $ 000 $ 000 $ 000 SHAREHOLDERS EQUITY Share capital 21 40,590 40,590 40,590 40,590 Share premium Other reserves 6,372 6, Non-distributable reserves Translation adjustment account (2,706) (1,592) - - Retained earnings/(accumulated losses) 8,224 5,142 3,535 (1,288) Total shareholders equity 53,206 50,900 44,397 39,574 Minority interests 10,647 8, ,853 59,297 44,397 39,574 The accompanying notes form an integral part of these financial statements. Auditors Report - Page JK Yaming International Holdings Ltd

31 Consolidated Statement of Changes in Equity For the financial year ended 31 December 2003 Non- Other distributable Translation Share Share reserves reserves adjustment Retained Notes capital premium (Note i) (Note ii) account earnings Total $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 Balance at 1 January , , (1,592) 5,142 50,900 Net gains not recognised in the income statement - Currency translation (1,114) - (1,114) Net profit for the year ,449 5,449 Total recognised gains for the financial year (1,114) 5,449 4,335 Transfer from retained profits to non-distributable reserve (338) - Dividends paid during the year (2,029) (2,029) Balance at 31 December , , (2,706) 8,224 53,206 Balance at 1 January , , , ,964 Net gains not recognised in the income statement - Currency translation (2,679) - (2,679) Net profit for the year ,621 4,621 Total recognised gains for the financial year (2,679) 4,621 1,942 Transfer from retained profits to non-distributable reserve (20) - Expenses in relation to IPO - (6) (6) Balance at 31 December , , (1,592) 5,142 50,900 Note: i)other reserves represent reserve arising from restructuring exercise in 2001 upon listing of the Company. ii)an analysis of the movements in each category within Non-distributable reserves is presented in note 22. The accompanying notes form an integral part of these financial statements. Auditors Report - Page 25 Annual Report

32 Consolidated Income Statement For the financial year ended 31 December 2003 Note $ 000 $ 000 Cash flow from operation activities Profit before tax 7,489 6,884 Adjustment for non-cash items Depreciation of property, plant and equipment 3,954 2,356 Amortisation of other non-current assets Interest expense Interest income (74) (117) (Gain)/Loss on disposal of equity interest in subsidiary (1,844) 300 (Gain)/Loss on disposal of property, plant and equipment 311 (401) Provision for inventories Provision for trade receivables Operating cash flow before working capital changes 11,487 10,710 (Increase)/decrease in - inventories (3,034) (3,361) - trade receivables (5,265) (1,004) - other receivables (258) (2,752) - amount due from related parties (679) (1,158) - long term receivables - (1,677) - other non-current assets (62) (29) Increase/(decrease) in - trade payables 5,141 2,966 - other payables 1, amount due to related parties (12) (12) - payable to directors (153) 289 Cash generated from operations 8,272 4,239 Note $ 000 $ 000 Cash flow from financing activities Proceeds from minority interests Payment of dividends to minority interests (30) (537) Proceed from loans and borrowings 4,953 8,340 Repayment of borrowing (1,027) (9,195) Dividend paid during the year (2,029) - Expenses on issuance of shares in (5) Net cash inflow/(outflow) from financing activities 2,278 (1,259) Exchange differences (1,073) (911) Net decrease in cash and cash equivalents (5,726) (3,865) Cash and cash equivalents at beginning of year 15,344 19,209 Cash and cash equivalents at end of year 13 9,618 15,344 Interest paid (883) (842) Tax refund received ncome tax paid (854) (807) Net cash inflows from operating activities 7,262 2,590 Cash flow from investing activities Acquisition from minority shareholders (1,892) - Proceeds from disposal of property, plant and equipment 1,174 2,138 Acquisition of property, plant and equipment (13,549) (6,506) Interest received Net cash outflow from investing activities (14,193) (4,285) 30 JK Yaming International Holdings Ltd

33 Notes to the Financial Statements For the financial year ended 31 December 2003 These notes form an integral part of and should be read in conjunction with the accompanying financial statements. 1. Corporate information The Company was incorporated and domiciled in Singapore and is listed on the Singapore Exchange. The address of its registered office is as follows: 160 Paya Lebar Road, #08-03 Orion Industrial Building, Singapore The principal activities of the Company is that of an investment holding company. The principal activities of the Company s subsidiaries are set out in Note 14 to the financial statements. 2. Significant accounting policies (a) (b) Effect of changes in Singapore Companies Legislation Pursuant to the Singapore Companies (Amendment) Act 2002, with effect from financial year commencing on or after 1 January 2003, Singaporeincorporated companies are required to prepare and present their statutory accounts in accordance with the Singapore Financial Reporting Standards ( FRS ). Hence, these financial statements, including the comparative figures, have been prepared in accordance with FRS. Previously, the Company and the Group prepared their statutory accounts in accordance with Singapore Statements of Accounting Standard. The adoption of FRS does not have material impact on the accounting policies and figures presented in the statutory accounts for financial year ended 31 December Basis of preparation These financial statements have been prepared under the historical cost convention. The preparation of financial statements in conformity with Singapore Financial Reporting Standards requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial year. Although these estimates are based on management s best knowledge of current event and actions, actual results may ultimately differ from those estimates. (c) (d) Revenue recognition Revenue comprises the invoiced value for the sale of goods and services net of value-added tax, rebates and discounts, and after eliminating sales within the Group. Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer. Interest income is recognised on a time proportion basis, taking into account the principal outstanding and the effective interest rate applicable. Subsidy income from the government are recognised at fair value where there is reasonable assurance that the subsidy will be received and all attaching conditions will be complied with. Group accounting Subsidiaries Subsidiaries are those entities in which the Group has an interest of more than one half of the voting rights or otherwise has power to govern the financial and operating policies. The existence and effect of potential voting rights that are presently exercisable or presently convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the fair value of the net assets of the subsidiary acquired is recorded as goodwill and is amortised using the straight-line basis over five years. On disposal of these businesses, the relevant portion of attributable goodwill previously amortised is written back and included in the calculation of gain or loss on disposal. Inter-company transactions, balances unrealised gains on transactions between group companies 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. Annual Report

34 Notes to the Financial Statements For the financial year ended 31 December Significant accounting policies (continued) (e) Property, plant and equipment All property, plant and equipment are initially recorded at cost. All property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Depreciation is calculated on a straight line basis to write off the cost of property, plant and equipment over their expected useful lives. The estimated useful lives are as follows : Land use rights Buildings Plant and equipment Motor vehicles Office equipment term of land use rights 20 years 10 years 5 to 10 years 3 to 10 years No depreciation is provided on freehold land and building. Repairs and maintenance are taken to the income statement during the financial period in which they are incurred. The cost of major renovations and restorations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group, and depreciated over the remaining useful life of the asset. Interest on borrowings to finance the construction of property, plant and equipment is capitalised during the period of time that is required to complete and prepare each asset for its intended use. All other borrowing costs are expensed. Construction in progress represents costs incurred in the construction of property, plant and equipment and other tangible assets. Cost comprises direct costs of construction, including interest costs incurred during the period of construction, installation and testing. Construction in progress is transferred to property, plant and equipment when it is ready for its intended use. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and are ready for its intended use or put into use. Where an indication of impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverable amount. (f) (g) Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in profit/(loss) from operations. On disposal of revalued assets, amounts in revaluation reserve relating to those assets are transferred to retained earnings. Property held for resale Property held for resale of the Group is held for long-term rental yields and is not occupied by the Group. Property held for resale is treated as longterm investments and is stated at fair value, representing open market value determined periodically by external valuers and annually by the directors. Property held for resale is not subject to annual depreciation. Increases in the carrying amount arising from the revaluation of property held for resale are taken to an asset revaluation reserve in shareholders equity, unless they are directly related to previous decreases in carrying amount that were taken to the income statement. Such increases are taken to income statement to the extent that they offset previously recorded decreases. Decreases in the carrying amount that offset previous increases of the same class of asset are taken to asset revaluation reserve; all other decreases are taken to the income statement. On disposal of property held for resale, the difference between the net disposal proceeds and the carrying amount is taken to the income statement; any amount in revaluation reserve relating to that property are transferred to the consolidated income statement. Other non-current assets Goodwill Goodwill represents the excess of the cost of an acquisition of subsidiary companies over the fair value of the Group s share of their identifiable net assets at the date of acquisition. Goodwill is amortised using the straight-line method over 5 years. Management determines the estimated useful life of goodwill based on its evaluation of the respective companies at the time of the acquisition, considering factors such as existing market share, potential growth and other factors inherent in the acquired companies. 32 JK Yaming International Holdings Ltd

35 Notes to the Financial Statements For the financial year ended 31 December Significant accounting policies (continued) (j) Research costs (g) Other non-current assets (continued) Research costs are recognised as an expense as incurred. Goodwill (continued) (k) Trade and other receivables At each balance sheet date, the Group assesses whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of goodwill is fully recoverable. A write-down is made if the carrying amount exceeds the recoverable amount. Patent rights Trade and other receivables are stated at original invoice amount less allowance made for doubtful receivables based on a review of all outstanding amounts at the year end. An allowance for doubtful receivables is made when there is objective evidence that the Group will not be able to collect all amounts due according to original terms of receivables. Bad debts are written off when identified. This represents costs incurred to obtain patent rights. They are stated at costs less accumulated amortisation. Patent rights are amortised using the straight-line method over 5 years. At each balance sheet date, the Group assesses whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of patent rights is fully recoverable. A write-down is made if the carrying amount exceeds the recoverable amount. (l) (m) Borrowings Borrowings are recognised initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective yield method; any difference between proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings. Leases (h) (i) Investments in subsidiaries Investments in subsidiary companies are stated at cost less impairment losses in the Company s balance sheet. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is taken to the income statement. Impairment of long lived assets Property, plant and equipment and other non-current assets, including goodwill and patent rights are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount which is the higher of an asset s net selling price and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. (n) Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. Allowance for obsolete, slow-moving or defective inventories is made where necessary. Annual Report

36 Notes to the Financial Statements For the financial year ended 31 December Significant accounting policies (continued) (o) (p) (q) Deferred income taxes Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Currently enacted tax rates are used in the determination of deferred income tax. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associated companies and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Provisions Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. Employee benefits Employee leave entitlement Employee entitlements to annual leave and long service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long-service leave as a result of services rendered by employees up to the balance sheet date. Defined contribution plan As required by law, the Company makes contributions to the state pension scheme, the Central Provident Fund ( CPF ). CPF contributions are recognised as compensation expense in the same period as the employment that gives rise to the contribution. (r) In accordance with the regulations of the People s Republic of China ( PRC ), the Group s subsidiary companies in the PRC are required to contribute employee retirement benefits to the labour bureaus of the respective municipality. Retirement benefits are charged to the income statement as and when incurred. Foreign currency translation (1) Measurement currency Items included in the financial statements of each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity ( the measurement currency ). The consolidated financial statements and balance sheet of the Company are presented in Singapore dollars, which is the measurement currency of the Company. The measurement currency of the subsidiaries is Renminbi. (2) Transactions and balances Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing at the date of transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement. Foreign currency monetary assets and liabilities are translated into Singapore dollars ( $ ) at the rates of exchange prevailing at the balance sheet date or at contracted rates where they are covered by forward exchange contracts. Exchange differences arising are taken to the income statement. (3) Group companies In respect of subsidiaries whose operations are not an integral part of the Company s operations, the balance sheets are translated into Singapore dollars at the exchange rates prevailing at the balance sheet date, and the results are translated using the average monthly exchange rates for the financial year. The exchange differences arising on translation of foreign subsidiaries, are taken directly to the translation adjustment account. On disposal, accumulated translation differences are recognised in the consolidated income statement as part of the gain or loss on sale. 34 JK Yaming International Holdings Ltd

37 Notes to the Financial Statements For the financial year ended 31 December Significant accounting policies (continued) (s) (t) Segment reporting Business segments provide products and services that are subject to risks and returns that are different from those of other business segments. Geographical segments provide products or services within a particular economic environment that is subject to risks and returns that are different from those of components operating in other economic environments. Cash and cash equivalents Cash and cash equivalents are stated in the balance sheet at cost. For the purposes of the consolidated cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are included under borrowings in current liabilities on the balance sheet. 3. Revenue The Group $ 000 $ 000 Sale of goods 93,938 81,735 Other operating income: Subsidy income 940 1,189 Interest income on cash at bank Gain on disposal of property, plant and equipment Gain on disposal of equity interest in a subsidiary 1,844 - Others Total other operating income 3,689 1,707 97,627 83,442 (u) (v) (w) Share capital Incremental external costs directly attributable to the issue of new shares, other than on a business combination, are shown in equity as a deduction, net of tax, from the proceeds. Share issue costs incurred directly in connection with a business combination are included in the cost of acquisition. Dividend Dividends are recorded in the Group s financial statements in the period in which they are approved by the Group s shareholders. Comparatives Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. 4. Profit from operations The following items have been included in arriving at profit from operations: The Group $ 000 $ 000 Charging/(crediting): Depreciation of property, plant and equipment - Buildings and land use rights 1, Plant and equipment 1, Motor vehicles Office equipment Amortisation of intangible assets Auditors remuneration - Auditor of the Company Other auditors Other fees paid/payable to auditors - 45 Research costs Foreign exchange gain net (77) (1,435) Rental expenses operating lease Gain on disposal of property, plant and equipment (174) (401) Loss on disposal of property, plant and equipment Annual Report

38 Notes to the Financial Statements For the financial year ended 31 December Finance costs The Group $ 000 $ 000 Interest expenses on bank loans Staff costs The Group $ 000 $ 000 Wages and salaries 4,859 4,682 Employer s contribution to defined contribution plan including Central Provident Fund ,734 4,985 During the year, an amount of $3,490,000 (2002: $3,120,000) included under the Group s staff costs has been included as cost of sales and capitalised under inventories, being the direct production costs incurred by certain subsidiaries with the Group. The number of persons employed at the end of financial year: The Group Full time 2,344 2, Income tax expense The Group $ 000 $ 000 Tax expense attributable to profit is made up of: Current income tax - Foreign (Note a) 1, Tax refund - Foreign (Note b) (727) - Under-provision in preceding financial years - Current income tax 291-1, (a) (b) (c) A reconciliation of the statutory tax rate to the effective tax rate applicable in PRC, where the Group s major operations are, to profit before tax is as follows: $ 000 $ 000 Profit before tax 7,489 6,884 Tax calculated at a tax rate of 33% (2002: 33%) 2,471 2,272 Effect of preferential tax rate (1,630) (1,850) Effect of different tax rate in Singapore Expenses not deductible for tax purposes Income not subject to tax (25) (681) Deferred tax benefit not recognised Tax charge 1, Pursuant to the Income Tax Law of the PRC concerning Foreign Investment Enterprises and Foreign Enterprises and various local income tax laws (the Income Tax Laws ), the subsidiary companies in PRC are subject to statutory income tax rate of 33% (30% state income tax plus 3% local income tax) unless the enterprise is located in specially designated region or cities for which more favorable effective tax rates apply. Accordingly, certain subsidiaries enjoy concessionary enterprise income tax of between 10% to 15%. In accordance with the Income Tax Laws, qualified enterprises will be exempted from taxation for the first two year commencing from the first profitable year, and a 50% reduction for the three years thereafter. During the financial year, the Company received a dividend payout net of PRC tax of $7,110,000 (RMB34,632,000) from its subsidiary, Fujian Juan Kuang Yaming Electric Limited ( FJKYM ). This dividend was subsequently reinvested into FJKYM in the form of additional share capital. Pursuant to the Income Tax Law of the PRC, the Company is entitled to tax refund of $727,000 (RMB3,462,918) upon reinvestment of dividends. As at 31 December 2003, the Group had unrecognised tax losses of approximately $604,000 (2002: $170,000). These unabsorbed tax losses are available for carry forward and set off against future taxable income of the subsidiary companies. The use of these tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operate. No deferred tax asset is recognised for these losses due to uncertainty of its recoverability. 36 JK Yaming International Holdings Ltd

39 Notes to the Financial Statements For the financial year ended 31 December Earnings per share Earnings per share is calculated by dividing the net profit after taxation and minority interest for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. The Group Net profit attributable to ordinary shareholders ($ 000) 5,449 4,621 Weighted average number of ordinary shares on issue applicable to basic earnings per share ( 000) 202, ,948 Basic earnings per share 2.69 cents 2.28 cents There have been no transactions involving ordinary shares since the reporting date and before the completion of these financial statements. Diluted earnings per share for the year ended 31 December 2003 is not presented because there were no dilutive potential ordinary shares in existence during the year. 9. Inventories The Group $ 000 $ 000 At cost Raw materials 10,131 7,771 Work-in-progress 3,166 1,745 Finished goods 6,119 6,433 19,416 15,949 Provision for obsolete, slow-moving inventories (391) (340) 10. Trade receivables The Group $ 000 $ 000 Trade receivables 29,696 24,432 Less: Allowance for doubtful trade receivables (5,880) (5,418) 11. Other receivables 23,816 19,014 The Group The Company $ 000 $ 000 $ 000 $ 000 Advances to suppliers 4,303 2, Tax recoverable Prepaid expenses Subsidy income receivable Advance to contractor Amount receivable from sale of property (note 18) 410 2, Other receivables ,007 7, Amounts due from subsidiaries and amount due from/(to) related parties Amounts due from subsidiaries are non-trade, unsecured, interest-free and are payable on demand. Amounts due from/due to related parties, trade and non-trade, are unsecured, interest-free and has no fixed terms of repayment. These related parties comprise of corporations related to the company through common directors and a corporation who is minority share holder of a subsidiary. See note 26 for more details. 19,025 15,609 Annual Report

40 Notes to the Financial Statements 13. Cash and cash equivalents The Group The Company $ 000 $ 000 $ 000 $ 000 Fixed deposits with financial institutions 1,204 5,102 1,189 2,500 Cash at bank and on hand 8,414 10, ,020 9,618 15,344 1,290 3,520 Bank balances totaling approximately $8,312,000 (RMB40,489,000) as at 31 December 2003 [2002: $11,824,000 (RMB56,412,000)] were placed with banks in the PRC. The remittance of these funds out of the PRC is subject to the exchange restrictions imposed by the PRC government. The fixed deposits with financial institutions mature on varying dates within 1 month (2002: 6 months) from the financial year end. The weighted average effective interest rate of these deposits as at 31 December 2003 was 0.52% (2002: 0.94%) per annum. 14. Investments in subsidiaries The Company $ 000 $ 000 Unquoted investments, at cost 39,785 30,476 Details of the subsidiaries at the end of the financial year are as follows: Principal Country of Equity Name of company activities incorporation holding % % Subsidiary companies + * Fujian Juan Kuang Manufacture and PRC Yaming Electric sale of ballast, Limited ( FJKYM ) ignitors, capacitors, electrical lighting products, fixtures and accessories + Shanghai Juan Kuang Manufacture of PRC Lighting Fixture Co., electrical lighting Ltd (formerly known as products, fixtures Ningbo Juan Kuang and accessories Electrical Lighting Co., Ltd) 14. Investments in subsidiaries (continued) Principal Country of Equity Name of company activities incorporation holding % % Subsidiary companies of Fujian Juan Kuang Yaming Electric Limited ( FJKYM ) + Shanghai Juan Kuang Manufacture and PRC Lighting Co., Ltd sale of lighting products + Shanghai JK & YM Trading of lighting PRC International Trade products Ltd + * Fujian J.K. Wire Process and sale PRC Harness Co., Ltd. of wire harness products + Fujian Juan Kuang Manufacture and PRC Wireharness Electric sale of wire Limited harness products and low-voltage electrical accessories + Fujian Min Hang Manufacture, PRC Electronics Co., Ltd assemble and sales of semiconductors + Shanghai Yuan Design, consulting PRC Ya Lighting and sale of electrical Engineering lighting products Co., Ltd and accessories + Anhui Juan Manufacture and PRC Kuang Electric sale of capacitors Co.,Ltd electrical lighting and related products + Audited by Fujian Huaxing Certified Public Accountants Ltd, PRC for statutory purpose. * Audited by PricewaterhouseCoopers Singapore for the purposes of expressing an opinion on the consolidated financial statements. 38 JK Yaming International Holdings Ltd

41 Notes to the Financial Statements For the financial year ended 31 December Property, plant and equipment Buildings and land Plant and Motor Office Construction use rights equipment vehicles equipment in progress Total $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 The Group Cost As at 1 January ,516 11,115 1,784 5, ,859 Additions 2,223 5, ,214 3,836 13,549 Transfers 3, (4,516) - Reclassifications - (6) - (1,176) - (1,182) Disposals (1,867) (329) - (97) - (2,293) Exchange differences (438) (308) (46) (112) (3) (907) As at 31 December ,431 16,193 2,485 5, ,026 Accumulated depreciation As at 1 January ,627 2, ,431 7,141 Charge for the year 1,184 1, ,954 Reclassifications - (3) - (747) (750) Disposals (596) (122) - (90) (808) Exchange differences (427) (28) (25) (50) (530) As at 31 December ,788 3,678 1,127 2,414 9,007 Net book value 31 December ,643 12,515 1,358 3, ,019 Net book value 31 December ,889 8, , ,718 As at 31 December 2003, the Group has not obtained ownership certificates of certain buildings and land use rights: (a) Two industrial buildings at Nanping Changsha High-Tech Zone, Nanping City, PRC with a net book value of approximately $6,368,000 (RMB28,167,000). (b) An industrial building and a piece of land at Baoshan Industrial Park, Shanghai City, PRC with a net book value of approximately $1,605,000 (RMB7,817,000). (c) An industrial building and land use rights at Shanmen Road, Ningguo City, PRC with a net book value of approximately $1,900,000 (RMB9,253,000). (d) Land use rights at Touhu Road, Fuzhou City, PRC with a net book value of approximately $267,000 (RMB1,300,000). The Group is still in the process of registering with the relevant authorities the ownership of the buildings and lands. According to legal opinions obtained by the Directors, these ownership rights rest with the Group as of 31 December The buildings and land use rights can only be transferred or mortgaged when the Group has obtained the relevant ownership certificates. Annual Report

42 Notes to the Financial Statements For the financial year ended 31 December Property, plant and equipment (continued) Freehold Motor Office building vehicles equipment Total $ 000 $ 000 $ 000 $ 000 The Company Cost At 1 January Additions 1, ,938 At 31 December , ,974 Accumulated depreciation At 1 January Depreciation charge At 31 December Net book value At 31 December , ,892 Net book value At 31 December The freehold building has been pledged as security for a bank loan obtained during the year ended 31 December 2003 [note 19(a)]. 17. Other non-current assets Patent Goodwill rights Total $ 000 $ 000 $ 000 The Group Cost: As at 1 January Additions Currency realignment - (3) (3) As at 31 December , ,294 Accumulated amortisation: As at 1 January Amortisation for the year Currency realignment - (2) (2) As at 31 December Net carrying value: As at 31 December As at 31 December Property held for resale The Group $ 000 At 1 January ,538 Exchange differences (114) At 31 December ,424 The property held for resale is stated at directors valuations on an open market value basis. The property was last valued on 20 March 2002 by DTZ Debenham Tie Leung Limited, professional valuers. The Group is still in the process of registering with the relevant authorities the ownership of this property. According to legal opinions obtained by the Directors, the Group is the legal owner of the property. The property can only be transferred or mortgaged when the Group has obtained the relevant ownership certificates. 18. Long-term receivable The Group $ 000 $ 000 Long-term receivable 1,642 4,192 Less: Current portion (Note 11) (410) (2,515) Non-current receivables 1,232 1,677 This relates to receivables for the sale of property in the prior year. The balance is unsecured, bears interest at 5.31% (2002: 5.31%). The receivable will be payable in annual instalments over the next 4 years. The carrying amounts of long-term receivables approximate its fair value. 40 JK Yaming International Holdings Ltd

43 Notes to the Financial Statements For the financial year ended 31 December Borrowings (a) (b) (c) The Group The Company $ 000 $ 000 $ 000 $ 000 Current Bank loans Secured (Note a) Unsecured 6,959 4, (Note b) 7,028 4, Non-current Bank loans Secured (Note a) Unsecured 9,101 9, (Note b) 10,031 9,013 1,203-17,059 13,414 1,321 - Included in bank loans of the Company is an amount of approximately $999,000, which is secured by a first legal mortgage over the Company s freehold building. As at 31 December 2003, bank loans of approximately $ million (RMB64 million) [2002: $ million (RMB59 million)] were guaranteed by Nanping City Electric Equipment Factory in which one of the Directors of the company has a significant equity interest. Interest rate risk The weighted average effective interest rate at the balance sheet date are as follows: The Group The Company $ 000 $ 000 $ 000 $ 000 (d) (e) The carrying amounts of current and non-current borrowings approximate their fair values. Maturity of non-current borrowings Maturity of non-current borrowings is as follows: The Group The Company $ 000 $ 000 $ 000 $ 000 Between 1 and 2 years 8, Between 2 and 5 years - 9, Over 5 years 1,203-1,203-10,031 9,013 1, Other payables The Group The Company $ 000 $ 000 $ 000 $ 000 Advance from customers 1,386 1, Accruals and other payable 5,693 5, Staff bonus and welfare fund (Note) ,066 6, Note: Pursuant to the relevant laws and regulations in the PRC for foreign investment enterprises, appropriations to staff bonus and welfare fund are made from subsidiaries profits after taxation as reported in the PRC statutory accounts, determined in accordance with the PRC accounting standards and regulations applicable to these subsidiaries. Appropriations to this fund are determined at the discretion of the Board of Directors of each subsidiary. Bank loans 4.56% 5.59% 3.63% - Annual Report

44 Notes to the Financial Statements For the financial year ended 31 December Share capital of JK Yaming International Holdings Ltd Authorised: No. of Issued and shares fully paid-up 000 $ 000 At the beginning and end of financial year 250,000,000 ordinary shares of $0.20 each 250,000 50,000 Issued and fully paid: At the beginning and end of financial year 202,948,180 ordinary shares of $0.20 each 202,948 40, Non-distributable reserves The Group $ 000 $ 000 Enterprise expansion fund 184 (6) General reserve fund Non-distributable reserves represent amounts set aside in compliance with local laws in the PRC where the subsidiaries operates. The amounts comprise enterprise expansion fund and general reserve fund. Movements in non-distributable reserves Enterprise expansion fund The Group $ 000 $ 000 At beginning of year (6) (6) Transfer from retained profits At end of year 184 (6) General reserve fund 22. Non-distributable reserves (continued) According to the Company Law of the PRC and Article of Association of the subsidiaries, the subsidiaries are required to provide the above statutory reserves which are appropriated from the net profit as reported in the PRC statutory financial statements. 23. Dividends Ordinary dividends paid The Group and the Company $ 000 $ 000 Interim dividend of 1 cents (2002: Nil) per share, exempted from tax 2,029 - A final dividend of 0.5 cents per share and a special dividend of 1 cents per share amounting to a total of $3,044,000, exempted from tax is to be recommended at the Annual General meeting. These financial statements do not reflect this dividend payable, which will be accounted for in the shareholders equity as an appropriation of retained earnings in the year ending 31 December Commitments (a) Capital commitments Capital expenditure contracted for at the balance sheet date but not recognised in the financial statements is as follows: The Group $ 000 $ Approved and contracted for 3,329 1,304 - Approved but not contracted for ,329 1,667 At beginning of year Transfer from retained profits At end of year JK Yaming International Holdings Ltd

45 Notes to the Financial Statements For the financial year ended 31 December Commitments (continued) 26 Significant related party transactions (continued) (b) Operating lease commitments (a) Sales and purchases of goods and services and bank guarantee Future minimum lease payments for properties under lease agreements that are non-cancellable leases are as follows: The Group The Company $ 000 $ 000 $ 000 $ 000 Within a year Within 2-5 years Contingent liabilities As at 31 December 2003, the Group provided guarantees of approximately $4.6 million (RMB22.25 million) [2002: $5.2 million (RMB24.75 million)] to Nanping City Electric Equipment Factory in which one of the Company s directors has a significant equity interest. The company, in return has guaranteed approximately $ million (RMB64 million) [2002: $ million (RMB59 million)] of the Group s bank borrowings (Note 19). 26 Significant related party transactions Related parties refer to corporations that have the ability, directly or indirectly, to control the other party or exercise significant influence in making financial and operating decisions. Related parties also refer to corporations in which directors or shareholders of the Company or Group have control or significant influence. During the year, group companies entered into transactions with related parties who are not members of the Group. Those transactions for the year ended are presented in the following table: (b) Sumitomo Juan Kuang Nanping City Wiring Systems Juan Kuang Holdings Electric Equipment Ltd (1) (Pte) Ltd (2) Sdn Bhd (2) Factory (2) $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 Sales of goods 59,632 54, ,127 5, Purchase of raw materials 54,456 44, Purchase of property, plant and equipment - 1, Bank guarantee provided to ,600 5,200 Bank guarantee provided by ,125 12,366 (1) Sumitomo Wiring Systems Ltd is a minority shareholder of one of the Company s subsidiaries, Fujian J.K Wire Harness Co., Ltd ( JKW ). (2) Juan Kuang (Pte) Ltd, Juan Kuang Holdings Sdn Bhd and Nanping City Electric Equipment Factory are related to the Company and the Group through common directors. During the year, Sumitomo Wiring Systems Ltd acquired 20% equity interest in one of the Company s subsidiaries for approximately $4,085,000 (RMB19,900,000). The share of net tangible assets of the subsidiary was approximately $2,241,000 (RMB10,473,000). Through this disposal, the Group has an effective interest of 53.2% in the subsidiary. The consideration of approximately $4,085,000, recorded as due from related parties (non-trade), was outstanding as of 31 December 2003 and was subsequently received after year-end. Annual Report

46 Notes to the Financial Statements For the financial year ended 31 December Significant related party transactions (continued) 27. Financial risk management (continued) (c) Directors remuneration (i) Foreign currency risk Directors remuneration included fees, salary, bonus, commission and other emoluments (including benefits-in-kind) computed based on the cost incurred by the Group and the Company. In 2003, the total directors remuneration is as follows: The Group and Company $ 000 $ 000 Directors remuneration - Directors of the Company The following information relates to remunerations of directors of the Group and Company: The Group and Company $ 000 $ 000 Number of directors of the Group and Company in remuneration bands: - $250,000 to below $500, Below $250, Total Financial risk management Financial risk factors The Company s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. The Group s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group operates primarily in the PRC and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to Japanese yen as sales and purchases to a major customer is in Japanese yen. At the current stage, the Group does not have a formal policy with respect to the abovementioned foreign exchange transactions and have not undertaken any hedging activities as the Group believes that the practice of using the same currencies for sales and purchases as far as possible provides a natural hedge and reduces the exposure to foreign exchange fluctuations. If the Group s business volumes grow in the future, the Directors may consider hedging the foreign exchange currency risks. The financial statements of Chinese subsidiaries are translated from Reminbi( RMB ) to Singapore dollar in the preparation of the Group s consolidated financial statements. Therefore, depreciation and appreciation of RMB against Singapore dollar may have an impact on the Group s operating results. (ii) Interest rate risk The Group s income and operating cash flows are substantially independent of changes in market interest rates. The Group has no significant interestbearing assets. The Group obtains additional financing through bank borrowings arrangements. The Group s policy is to obtain the most favorable interest rates available without increasing its foreign currency exposure. Surplus funds are placed with reputable banks. Information relating to the Group s interest rate exposure is disclosed in the Note JK Yaming International Holdings Ltd

47 Notes to the Financial Statements For the financial year ended 31 December Financial risk management (continued) (iii) Credit risk The group companies, except for Fujian J.K Wire Harness Co., Ltd, does not have a significant exposure to any individual customer or counterpart. Fujian J.K Wire Harness Co., Ltd is a contract manufacturer of Sumitomo Wiring Systems Ltd, a company established in Japan, being the only customer of Fujian J.K Wire Harness Co., Ltd. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. (iv) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, the Group aims at maintaining flexibility in funding by keeping committed credit lines available. Fair value 28. Segment information Primary reporting format business segment At 31 December 2003, the Group is organised into four main business segments: - Electric lighting products manufacture and sale of electrical lighting products, fixtures and accessories - Wire Harness manufacture and sale of wire harness products - Low voltage manufacture and sale of low voltage electrical accessories - Semiconductor manufacture, assemble and sale of semiconductor and multi-layer packages Inter-segment transactions are determined on an arm s length basis. Segment assets consist primarily of property, plant and equipment, property held for resale, inventories, trade and other receivables, amount due from related parties, cash and cash equivalents, and mainly exclude investments and inter-segment balances. Segment liabilities comprise operating liabilities and exclude inter-segment balances. Capital expenditures comprises additions to property, plant and equipment (note 15). The carrying amounts of trade and other receivables, amount due from subsidiaries, amount due from/to related parties, cash and cash equivalents, trade and other payables, current borrowings, provision for taxation and payable to directors approximate their fair values. Information on the fair values of long-term receivable and borrowings is included in Note 18 and Note 19 respectively. Annual Report

48 Notes to the Financial Statements For the financial year ended 31 December Segment information (continued) Primary reporting format business segment (continued) Segment accounting policies are the same as the policies described in Note 2. The Company generally accounts for inter-segment sales and transfers as if the sales or transfers were to third parities at current market prices. Revenues are attributed to geographic areas based on the location of customers. The following tables present revenue and profit information regarding industry segments for the year ended 31 December 2003 and 31 December 2002 and certain asset and liability information regarding industry segments at 31 December 2003 and 31 December Electric lighting products Wire Harness Low Voltage Semiconductor Eliminations Group $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 Revenue - Sales to external customers 30,610 24,556 60,816 56, , ,938 81,735 - Inter-segment sales 5,331 5, (6,033) (6,010) 35,941 29,825 60,816 56,318 1,437 1,572 1, (6,033) (6,010) 93,938 81,735 Segment result 4,111 3,060 1,897 4,540 (112) (7) 6,528 7,726 Unallocated gain from disposal of equity interest 1,844 - Profit from operations 8,372 7,726 Finance costs (883) (842) Profit before tax 7,489 6,884 Income tax expense (1,009) (659) Profit from ordinary activities after tax 6,480 6,225 Minority interests (1,031) (1,604) Net profit 5,449 4,621 Segment assets 67,006 25,585 30,301 58,669 3, ,117 7, ,494 92,251 Unallocated assets 3,433 3,545 Total assets 110,927 95,796 Segment liabilities 29,965 11,301 14,448 26, ,318 3,464 (3,208) (6,000) 45,484 36,052 Unallocated liabilities 1, Total liabilities 47,074 36,499 Other segment information: Capital expenditures 7,775 2,452 3,238 2, ,314 1,065 13,549 6,506 Depreciation and amortisation 1, ,318 1, ,075 2, JK Yaming International Holdings Ltd

49 Notes to the Financial Statements For the financial year ended 31 December Segment information (continued) Secondary reporting format geographical segment The Group s four business segments operate in the following geographical areas: PRC China the area of operations mainly arise from low voltage electrical, low voltage and semiconductor activities. Japan the area of operations mainly arise from wire harness activities. Others the area of operations mainly arise from low voltage electrical and low voltage activities in United States and Southeast Asia regions. The Company, which is located in Singapore, is an investment holding company and is the headquartered of the Group. PRC Japan Others Eliminations Group $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 $ 000 Segment revenue Sales to external customers 25,701 16,435 59,632 54,974 8,605 10, ,938 81,735 Inter-segment sales 6,033 6, (6,033) (6,010) - - Total revenue 31,734 22,445 59,632 54,974 8,605 10,326 (6,033) (6,010) 93,938 81,735 Other geographical information: Segment assets 107,494 92, ,042 3, ,536 95,796 Unallocated assets Total assets 110,927 95,796 Capital expenditures 11,603 6, , ,549 6,506 Sales are based on the country in which the customer is located. Total assets and capital expenditure are shown by the geographical area where the assets are located 29. Authorisation of financial statements These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of JK Yaming International Holdings Ltd on 30 March Annual Report

50 Statistics of Shareholdings As At 16 March 2004 Authorised share capital : $50,000,000 Issued and fully paid-up share capital : $40,589,636 Class of shares : Ordinary Shares of $0.20 each fully paid with equal voting rights Shareholding held in hands of public : Based on the information available to the Company as at 16 March 2004, 17.66% of the issued ordinary shares of the Company is held by the public and therefore. Rule 723 of the Listing Manual issued by the SGX-ST is complied with. DISTRIBUTION OF SHAREHOLDINGS No. of Size of Shareholdings Shareholders % No. of Shares % ,000-10, ,415, ,001-1,000, ,550, ,000,001 and above ,983, Total ,948, TWENTY LARGEST SHAREHOLDERS No. Name No. of Shares % 1 HL Bank Nominees (S) Pte Ltd 40,487, Juan Kuang Holdings Sdn Bhd 38,822, Nanping Holdings Ltd 23,024, Amko Industrial Co., Ltd 21,913, SBS Nominees Pte Ltd 16,000, United Overseas Bank Nominees Pte Ltd 10,449, Raffles Nominees Pte Ltd 6,852, Citibank Nominees Singapore Pte Ltd 4,964, Citibank Consumer Nominees Pte Ltd 3,220, Ang Chiong Chai 2,965, Michael Ng 2,765, Morgan Stanley Asia (S pore) Securities Pte Ltd 2,755, DBS Vickers Securities (S) Pte Ltd 2,640, UOB Kay Hian Pte Ltd 2,351, OCBC Securities Private Ltd 1,472, G K Goh Stockbrokers Pte Ltd 1,256, Kao Shin Ping 1,047, Teo Huay Siong 805, Hua Hui (H.K) Developments Limited 695, Ng Ah Ng Kim Poh 500, Total 184,983, Substantial Shareholders as per Register of Substantial Shareholders as at 16 March 2004 No. of shares in which shareholder has a direct interest No. of shares in which shareholder is deemed to have an interest Name No. of Shares % No. of Shares % Ang Chiong Chai * 55,965, ,022, Juan Kuang Holdings Sdn Bhd 48,822, Amko Industrial Co., Ltd 21,913, Nanping Holdings Ltd 23,024, Ng Kim Poh ** 700, ,913, Juan Kuang (Pte) Ltd ^^ 200, ,822, Nexgen Capital Limited ^ 2,195, ,000, Phihong International Corporation 11,283, Zheng Qingfa V ,024, Chen Min V ,024, Nexgen Re Limited V V ,195, Nexgen Financial Holdings Limited V V ,195, Singapore Technologies Capital Services Pte Ltd V V ,195, Singapore Technologies Pte Ltd V V ,195, Singapore Technologies Holdings Pte Ltd V V ,195, Temasek Holdings (Private) Limited V V ,195, CDC Ixis V V ,195, CDC Holding Finance V V ,195, Caisse des Wepots et Consignations V V ,195, Notes: * Deemed interest arising from 5.5% direct interest and 40.6% indirect interest in Juan Kuang Holdings Sdn Bhd ** Deemed interest arising from 96% direct interest in Amko Industrial Co., Ltd ^ A charge over shares in the Company has been created in favour of Nexgen Capital Limited ^^ Deemed interest arising from 40.6% direct interest in Juan Kuang Holdings Sdn Bhd V Deemed interest arising from 50% direct interest in Nanping Holdings Ltd V V Deemed interested in the shares deemed to be interested by Nexgen Capital Limited by virtue of Section 7 of the Companies Act. Cap JK Yaming International Holdings Ltd

51 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Aerides Room 2, Level 1, Copthorne Orchid Hotel Singapore, 214 Dunearn Road, Singapore on 28 April 2004 at a.m. to transact the following business:- AS ORDINARY BUSINESS 1. To receive and consider the Audited Accounts of the Company for the financial year ended 31 December 2003 and the Directors Report and the Auditors Report thereon. (Resolution 1) 2. To declare a tax exempt Final Dividend of 2.5% (or S$0.005 per share) for the financial year ended 31 December (Resolution 2) 3. To declare a tax exempt Special Dividend of 5% (or S$0.01 per share) for the financial year ended 31 December (Resolution 3) 4. To approve the Directors fees of S$ 133,000 for the financial year ended 31 December 2003 [2002 : S$123,600]. (Resolution 4) 5. To re-elect the following Directors retiring pursuant to Article 91 of the Company s Articles of Association:- Mr Lee Poo Sik (Resolution 5) Mr Yang Lih Shyng (Resolution 6) Mr Tan Soo Kiat (Resolution 7) Mr Lee Poo Sik will, upon re-election as a Director of the Company, remain as a member of the Audit Committee. Mr Yang Lih Shyng will, upon re-election as a Director of the Company, remain as Chairman of the Audit Committee and a member of the Nominating Committee. He will be considered independent for the purposese of Rule 704(8) of the Listing Manual of The Singapore Exchange Securities Trading Limited. Mr Tan Soo Kiat will, upon re-election as a Director of the Company, remain as Chairman of the Norminating Committee and a member of the Audit and Remuneration Committees. He will be considered independent for the purposes of Rule 704(8) of the Listing Manual of The Singapore Exchange Securities Trading Limited. 6. To re-appoint Messrs PricewaterhouseCoopers as auditors of the Company and to authorise the Directors to fix their remuneration. (Resolution 8) AS SPECIAL BUSINESS To consider and, if thought fit, to pass the following ordinary resolutions with or without modifications:- 7. Authority to allot and issue shares (a) That, pursuant to Section 161 of the Companies Act, Chapter 50, and the listing rules of the Singapore Exchange Securities Trading Limited, approval be and is hereby given to the Directors of the Company at any time to such persons and upon such terms and for such purposes as the Directors may in their absolute discretion deem fit, to: (i) issue shares in the capital of the Company whether by way of rights, bonus or otherwise; (ii) make or grant offers, agreements or options that might or would require shares to be issued or other transferable rights to subscribe for or purchase shares (collectively, Instruments ) including but not limited to the creation and issue of warrants, debentures or other instruments convertible into shares; (iii) issue additional Instruments arising from adjustments made to the number of Instruments previously issued in the event of rights, bonus or capitalisation issues; and (b) (Notwithstanding the authority conferred by the shareholders may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while the authority was in force, provided always that (i) the aggregate number of shares to be issued pursuant to this resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this resolution) does not exceed 50% of the Company s issued share capital, of which the aggregate number of shares (including shares to be issued in pursuance of Instruments made or granted pursuant to this resolution) to be issued other than on a pro rata basis to shareholders of the Company does not exceed 20% of the issued share capital of the Company, and for the purpose of this resolution, the issued share capital shall be the Company s issued share capital at the time this resolution is passed, after adjusting for; a) new shares arising from the conversion or exercise of convertible securities, or b) new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time this resolution is passed provided the options or awards were granted in compliance with Part VIII of Chapter 8 of the Listing Manual of the Singapore Exchange Securities Trading Limited, and c) any subsequent consolidation or subdivision of the Company s shares, and (ii) such authority shall, unless revoked or varied by the Company at a general meeting, continue in force until the conclusion of the next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. (Resolution 9) (See Explanatory Note 1) Annual Report

52 Notice of Annual General Meeting 8. Renewal of Share Purchase Mandate That the Directors of the Company be and are hereby authorised to make purchases from time to time of up to a maximum of 10% of the issued ordinary share capital of the Company as at the date of this resolution at any price up to but not exceeding the Maximum Price as defined in the Circular, in accordance with the guidelines on Share Purchases as set out in paragraph 2 of the Company s Circular dated 13 April 2004 ( Circular ) and this mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the date on which the next Annual General Meeting of the Company is or is required by law to be held, whichever is the earlier. (Resolution 10) 9. Renewal of Interested Person Transactions Mandate That for the purposes of Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited:- (a) approval be given for the renewal of the mandate for the Company, its subsidiaries and target associated companies or any of them to enter into any of the transactions falling within the types of Interested Person Transactions as set out in paragraph 3 of the Company s Circular dated 13 April 2004 ( Circular ) with any party who is of the class of Interested Persons described in the Circular, provided that such transactions are carried out in the normal course of business, at arm s length and on commercial terms and in accordance with the normal commercial terms and in accordance with the guidelines of the Company for Interested Person Transactions as set out in the Company s Circular (the Shareholders Mandate ); (b) the Shareholders Mandate shall, unless revoked or varied by the Company in a general meeting, continue to be in force until the conclusion of the next Annual General Meeting of the Company; and (c) authority be given to the Directors of the Company to complete and do all such acts and things (including executing all such documents as may be required) as they may consider necessary, desirable or expedient to give effect to the Shareholders Mandate as they may think fit. (Resolution 11) (See Explanatory Note 2) 10. To transact any other ordinary business which may be properly transacted at an Annual General Meeting. NOTICE OF BOOKS CLOSURE NOTICE IS HEREBY GIVEN that subject to approval being obtained at the Annual General Meeting to be held on 28 April 2004 at a.m. 1. Tax Exempt Final Dividend of 2.5% (or S$0.005 per share) and Special Dividend of 5% (or S$0.01 per share) for the financial year ended 31 December 2003 will be paid on 24 May The Share Transfer Books and Registrar and Register of Members of the Company will be closed on 7 May 2004 for preparation of dividend warrants. Duly completed and stamped transfers received by the Company s Share Registrar, Lim Associates (Private) Limited, 10 Collyer Quay, #19-08 Ocean Building, Singapore , up to 5.00 p.m. on 6 May 2004 will be registered to determine members entitlements to the proposed dividends. Members (being depositors) whose securities account with the Central Depository (Pte) Limited are credited with shares as at 5.00 p.m. on 6 May 2004 will be entitled to the payment of the proposed dividends. BY ORDER OF THE BOARD Foo Soon Soo Sng Yeow Huat Company Secretaries 13 April 2004 Notes: 1) A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy in his stead. 2) A proxy need not be a member of the Company. 3) If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly authorised officer or attorney. 4) The instrument appointing a proxy must be deposited at the registered office of the Company at 160 Paya Lebar Road, #08-03 Orion Industrial Building, Singapore not later than 48 hours before the time appointed for the Meeting. Explanatory Notes:- 1. The ordinary resolution in item no. 7 is to authorise the Directors of the Company from the date of the above Meeting until the next Annual General Meeting to issue shares and convertible securities in the Company up to an amount not exceeding in aggregate 50% of the issued share capital of the Company of which the total number of shares and convertible securities issued other than on a pro-rata basis to existing shareholders shall not exceed 20% of the issued share capital of the Company at the time the resolution is passed, for such purposes as they consider would be in the interests of the Company. This authority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company. 2. The Ordinary Resolution 11 proposed in item 9 above, if passed, will authorise the Interested Person Transactions as described in the Circular and recurring in the year and will empower the Directors to do all acts necessary to give effect to the Shareholders Mandate. This authority will, unless previously revoked or varied by the Company at a general meeting, expire at the conclusion of the next Annual General Meeting of the Company. 50 JK Yaming International Holdings Ltd

53 JK YAMING INTERNATIONAL HOLDINGS LTD (Incorporated in the Republic of Singapore) PROXY FORM *I/We of Proxy Form IMPORTANT 1. For investors who have used their CPF monies to buy JK Yaming International Holdings Ltd shares, the Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent FOR INFORMATION ONLY. being *a member/members of JK Yaming International Holdings Ltd (the Company ), hereby appoint *and/or NRIC/ Proportion of shareholdings to Name Address Passport No. be represented by proxy (%) as *my/our *proxy/proxies to vote for *me/us on *my/our behalf and, if necessary, to demand a poll, at the Annual General Meeting of the Company to be held at Aerides Room 2, Level 1, Copthorne Orchid Hotel Singapore, 214 Dunearn Road, Singapore on 28 April 2004 at a.m. and at any adjournment thereof. *I/we direct *my/our *proxy/proxies to vote for or against the Ordinary Resolutions to be proposed at the Annual General Meeting as indicated with an X in the spaces provided hereunder. If no specified directions as to voting are given, the *proxy/proxies will vote or abstain from voting at *his/their discretion. No. Ordinary Resolutions For Against 1. To receive and consider the Accounts for the financial year ended 31 December 2003 and the Reports of Directors and Auditors thereon. 2. To declare a tax exempt Final Dividend of 2.5% (or S$0.005 per share) for the financial year ended 31 December To declare a tax exempt Special Dividend of 5% ( or S$0.01 per share) for the financial year ended 31 December To approve the Directors fees of S$133,000 for the financial year ended 31 December To re-elect Mr Lee Poo Sik pursuant to Article 91 of the Company s Articles of Association. 6. To re-elect Mr Yang Lih Shyng pursuant to Article 91 of the Company s Articles of Association. 7. To re-elect Mr Tan Soo Kiat pursuant to Article 91 of the Company s Articles of Association. 8. To re-appoint Messrs PricewaterhouseCoopers as auditors of the Company and to authorise the Directors to fix their remuneration. 9. To authorise Directors to issue shares pursuant to Section 161 of the Companies Act, Chapter To authorise the renewal of Share Purchase Mandate 11. To authorise the renewal of Interested Person Transactions Mandate Dated this day of 2004 Signature(s) of Member(s)/Common Seal * Delete accordingly IMPORTANT. Please read notes overleaf Total Number of Shares Held 2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them. Notes:- 1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. Such proxy need not be a member of the Company. 2. Where a member of the Company appoints two proxies, he shall specify the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each such proxy. 3. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal or under the hand of its attorney or duly authorised officer. 4. A corporation which is a member of the Company may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the Companies Act, Chapter 50 of Singapore. 5. The instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or notarially certified copy thereof, must be deposited at the registered office of the Company at 160 Paya Lebar Road, #08-03 Orion building, Singapore not later than 48 hours before the time set for the Annual General Meeting. 6. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert the number of shares. If the member has shares entered against his name in the Depository Register and shares registered in his name in the Register of Members of the Company, he should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by the member of the Company. 7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members of the Company whose shares are entered against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against their names in the Depository Register 48 hours before the time appointed for holding the Annual General Meeting as certified by The Central Depository (Pte) Limited to the Company. 8. A Depositor shall not be regarded as a member of the Company entitled to attend the Annual General Meeting and to speak and vote thereat unless his name appears on the Depository Register 48 hours before the time set for the Annual General Meeting.

54 The Company Secretary JK YAMING INTERNATIONAL HOLDINGS LTD 160 Paya Lebar Road #08-03 Orion Industrial Building Singapore AFFIX STAMP

55 JK Yaming International Holdings Ltd 160 Paya Lebar Road #08-03 Orion Industrial Building Singapore Tel: Fax: