ASIA TIGER GROUP LIMITED0ANNUAL REPORT

Transcription

1 ASIA TIGER GROUP LIMITED0ANNUAL REPORT

2 Contents 01 About Us 02 Our Products 04 Financial Highlights 05 Letter to Shareholders 08 Board of Directors 10 Group Structure 11 Corporate Information 12 Financial Contents

3 01 About Us We specialise in the manufacture of offi ce equipment, comprising shredders, laminators, comb binders and electric staplers.

4 Our Products a T er Gro ed Asia r Gro d Asia

5 03 up Lim ge ted Tige e Group up L ge ed Tige a mited p Group Focused on Our Core Business and Products

6 04 Financial Highlights Revenue (in RMB 000) 400, , , , , , ,000 50, Fiscal year Net Profit After Tax (in RMB 000) Shareholders Fund (in RMB 000) 60, ,000 50, ,000 40,000 80,000 30,000 60,000 20,000 40,000 10,000 20, Fiscal year Fiscal year

7 05 Letter to Shareholders Overview The Board of Directors of Asia Tiger Group Limited ( the Company ) hereby present to you the Annual Report and Audited Financial Statements of the Company for the financial year ended 31 March 2007 ( FY 07 ). Corporate Development The Company underwent a change in Substantial Shareholder interests and management control in FY 07. The Substantial Shareholders, Mr Zeng Guoming and Ms Lu Yanning through their holding in Tracker Shine Limited disposed of their entire stake of 180,184,575 shares representing 73.95% of the issued capital of the Company. The disposal was completed in several tranches at the price of S$0.15 and S$0.20 per share, in the form of sale to institutional investors through Daiwa Securities SMBC Singapore Limited, sale in the open market and to Sandalford Capital Limited, on various dates in FY 07 as announced to the SGX. As a result of the change in Substantial Shareholder interests, the Board of Directors retired along with Mr Zeng Guoming and Ms Lu Yanning as the Executive Directors of the Company, and the present Board was appointed in the third and last quarter of FY 07. Having divested its digital camera and PC connectors businesses in FY2006, the Company is able to focus on its line of office equipment Office Equipment Business The Company s main business is in the manufacturing and sale of office equipment products namely paper shredders, laminators, comb binders and electric staplers. Having divested its digital camera and PC connectors businesses in FY 2006, the Company is able to focus on its line of office equipment, particularly its paper shredders ranging from personal shredders suitable for home and small offices to heavy duty shredders for large offices and high security shredders, offering stylish designs and versatile features for multiple uses. The Company operates two manufacturing facilities in China with a total workforce of about 1,500 people. Besides shredders, the Company will focus more on laminators and binders where their contribution to the Company s revenue is increasing. However, the Company is seeking to manage rising raw material cost, which is the main component of its production costs, through more efficient sourcing and utilization of materials.

8 06 Letter to Shareholders Marketing and customer relationship activities will be stepped up to enhance the Company s partnerships with existing customers which include some of the leading brands in the market, with greater promotion to seek out new ones. This will be supported by strengthening our distribution channels to the various markets. All these measures will be undertaken to enable the Company to have a stronger presence in the office equipment manufacturing industry through forming strategic partnerships with the world-leading companies. The Company will also explore opportunities to diversify into other related products which will enable the Company to widen its product range and increase its customer base. Incorporation of Subsidiary Company The Company had incorporated a fully owned subsidiary company, Stiger Investments Pte. Ltd. ( Stiger ) in Singapore on 1 February The principal activities of Stiger will be in the nature of an investment holding company and investments portfolios. Stiger has an initial issued and paid-up capital of S$1.00 comprising of ten ordinary shares fully paid-up to the amount of S$1.00. The Company has appointed its Executive Directors, Mr Tan Kuan Hong and Ms Wong Choy Yin, as its nominees to the Board of Stiger. Financial Performance Review For FY 07, the Company s revenue remained almost consistent at RMB364 million as compared to RMB360 million in the previous financial year. The Company was able to maintain constant sales due to its good relationships with customers. The Company s total cost of sales and expenses increased by approximately RMB9.5 million to RMB353.0 million in FY 07 compared with RMB343.5 million in FY 06. This was mainly due to an increase in prices of raw materials such as plastic, copper, steel, packaging materials and labour cost. However, the increase was mitigated by an improvement of 78.5% in the operating expenses compared to the previous year, which was largely contributed by the decline in amortization of intangible assets and loss on foreign exchange. It was further mitigated by a reduction of 24.5% in the distribution

9 07 costs in FY 07 compared to FY 06 due largely to better control of transportation and shipment expenses. Overall, profit after tax declined to RMB11.5 million compared to RMB16.9 million (before taking into account profit from discontinued operations) in the previous financial year. The decrease in profit after tax was mainly due to the write-off of tax refund of RMB2.4 million which was deemed not recoverable in the financial year ended 31 March As at 31 March 2007, total equity of the Company amounted to RMB100.6 million as compared to RMB100.2 million at the end of the last financial year. Dividends During FY 07, the Company paid an interim dividend of RMB2.59 cents per ordinary share, which was tax-exempt, amounting to RMB6.34 million on 11 January No final dividend has been recommended. Acknowledgement The Board wishes to thank the previous directors who had been instrumental in the establishment of the Company and its subsequent listing on the SGX in January The Board s priority now is to focus on the Company s main business to become a reputable and preferred supplier of office equipment for its customers and diversify into related product lines if such opportunities arise, in order to enhance the Company s financial performance. With the support and cooperation of all the Directors and the Management, the Board is confident that the Company is able to achieve this. The Board of Directors would like to express its sincere appreciation to all shareholders, valued customers and business associates for their support given to the Company. Tan Kuan Hong Executive Director

10 08 Board of Directors Tan Kuan Hong Mr Tan Kuan Hong was appointed Executive Director of the Company on 29 January 2007 and is responsible for the overall management of the Company. He has more than 25 years of experience in management, investment and corporate activities, and has held senior positions in both established and start-up companies across several industries in the region. Prior to this appointment, Mr Tan was managing his own investment and business consultancy firm, as well as the Group Executive Director of United Legacy Group, a component and contract manufacturing company. His previous work experience includes also a stint in Temasek Holdings, Lazard Asia and CEF Group. Mr Tan is also a Director of Avenah Consulting Pte Ltd and Sandalford Capital Ltd, which are non-listed companies. Mr Tan has an Honours degree in Accountancy from the University of Malaya and a Diploma in Psychology. Wong Lu Yanning Choy Yin Ms Wong Choy Yin was appointed to the Board as Executive Director on 30 January 2007 and is responsible for the Administration function of the Company. She was previously the Financial Consultant of Accentual Consulting Sdn Bhd, a company which provides corporate and management advisory services. Over the last ten years, she has held managerial positions in finance in Plantation & Development (Malaysia) Bhd, Ho Wah Genting Bhd and Ekovest Bhd which are listed companies in Malaysia, involved in the plantation and property; coach building, manufacturing and transportation; and construction industries respectively. She has also served as Finance Manager in Articulate Television Sdn Bhd which produces TV programmes and games. Ms Wong has a professional qualification from the Chartered Institute of Management Accountants (CIMA) and also holds a Master of Business Administration from the University of Keele, United Kingdom. Ms Wong also sits on the Board of a non-listed company, Sun-Maxim Sdn Bhd in Malaysia. Chin Kok Sang Mr Chin Kok Sang was appointed Non-Executive Independent Director of the Company on 1 December He is the founding Chief Executive Officer of TKC & Associates Sdn Bhd, a consulting firm in Malaysia providing corporate advisory services with particular focus in the areas of corporate and debt restructuring. He possesses more than 20 years of experience in corporate finance and banking. Mr Chin has also held senior positions at managerial and advisory levels in several listed and unlisted companies involved in the restaurant, property and construction, oil and gas, internet broadband and toll concession businesses. His work experience includes 14 years with an international French bank listed on the Paris Stock Exchange, in various capacities at their offices in Australia, Singapore and Malaysia, with his last position as the Managing Director at their Labuan Branch, Malaysia. Mr. Chin holds a Bachelor of Commerce degree from University of Melbourne and is a member of The Institute of Chartered Accountants in Australia. Mr Chin also sits on the Board of TKC & Associates Sdn Bhd which is a non-listed company.

11 09 Yoon Wai Nam Mr Yoon Wai Nam was appointed Non-Executive Independent Director of the Company on 12 December He is currently the Chief Finance Officer of Hong Kong-listed Titan Petrochemicals Group Limited. Mr Yoon was previously with Lafarge from 1999 to 2006, serving at different times as Senior Vice President and CFO for Lafarge China, Head of Strategy covering ASEAN countries, and Senior Manager of Regional Corporate Development for Lafarge Asia Pacific. Earlier, he was Deputy Business Development Head for SUTL Corporation in Singapore. Mr Yoon received his Bachelor of Arts degree in Accounting & Finance with Honours from Nottingham Trent University in England and Master of Business Administration from the University of Strathclyde in Scotland. He has also been Fellow of the Chartered Institute of Management Accountants, United Kingdom since Mr Yoon is also a Director of certain subsidiaries of Titan Petrochemicals Group Limited. Ang Kiam Meng Mr Ang Kiam Meng was appointed to the Board as Non-Executive Independent Director on 12 December With more than 20 years of work experience, Mr Ang is the General Manager of the Jumbo Group of restaurants, a position he has held since 1993, and is also the President of the Restaurant Association of Singapore. Prior to this, he was with Singapore Technologies Group for seven years. Mr Ang is also a Director of non-listed companies, Jardine Enterprise Pte Ltd and Jumbo Serangoon Restaurant Pte Ltd. Anthony Lee Vui Han Mr Anthony Lee Vui Han was appointed to the Board as Non-Executive Independent Director on 20 April 2007 and has more than 15 years of experience in project management, construction and related industries such as quarry and concrete batching business. As Group General Manager for UF Engineers Sdn Bhd, Onika Quarry Sdn Bhd and Leeka Holdings Sdn Bhd, he is responsible for the business development and growth of these companies which are based in Malaysia. Mr Lee holds a Bachelor degree in Economics majoring in Banking and Finance at La Trobe University, Melbourne, Australia. Mr Lee also sits on the Boards of UF Engineers Sdn Bhd and Leeka Holdings Sdn Bhd as well as Country Parade Sdn Bhd, which are non-listed companies in Malaysia.

12 10 Group Structure as at 31 March 2007 Stiger Investments Pte. Ltd. (Singapore) 100% Vigorhood Pacific Ltd. (Hong Kong) 100% Keen Power Technology Ltd. (British Virgin Islands) Good Prezzie Trading Ltd. (British Virgin Islands) 100% 100% Keen Power Technology Ltd. (Hong Kong) Asia Tiger Group Limited 100% Vigorhood Macao Commercial Offshore Company Ltd. (Macau) 100% Vigorhood Electronics Technology (Shenzhen) Co. Ltd. (PRC) 100% Ivy Bushes Ltd. (British Virgin Islands) 100% Shenzhen Feibao Technologies Co. Ltd. (PRC) 100% Shenzhen Vigorhood Electronics Co. Ltd. (PRC) 100%

13 11 Corporate Information Board of Directors Executive Tan Kuan Hong Wong Choy Yin Non-Executive Anthony Lee Vui Han Ang Kiam Meng Yoon Wai Nam Chin Kok Sang Company Secretary Seah Hai Yang (Independent Director) (Independent Director) (Independent Director) (Independent Director) Bermuda Resident Representative Appleby Corporate Services (Bermuda) Ltd. Canon s Court 22 Victoria Street Hamilton HM12 Bermuda Tel : Fax: Principal Share Registrar Reid Management Limited Argyle House 41A Cedar Avenue Hamilton HM 12, Bermuda Singapore Share Transfer Agent B.A.C.S Private Limited 63 Cantonment Road Singapore Tel : Fax: Registered Office Canon s Court 22 Victoria Street Hamilton HM12 Bermuda Tel : Fax: Singapore Correspondence Address 101 Cecil Street #10-07 Tong Eng Building Singapore Tel: Fax: Auditors Moore Stephens, Singapore Certified Public Accountants 11 Collyer Quay #10-02, The Arcade, Singapore Partner in charge: Neo Keng Jin Appointed since financial year ended 31 March 2006 Lau & Au Yeung C.P.A. Limited Certified Public Accountants Room 2701, 27/F, Wing On House 71 Des Voeux Road, Central Hong Kong Partner in charge: Au Yeung Tin Wah Appointed since financial year ended 31 March 2006 Principal Bankers Hang Seng Bank Limited China Everbright Bank China Merchants Bank Standard Chartered Bank

14 13 Corporate Governance Report Asia Tiger Group Limited (the Company ) is committed to maintaining a high standard of corporate governance and transparency within the Company in the spirit of the Code of Corporate Governance ( the Code ) as reviewed by the Council on Corporate Disclosure and Governance, whose recommendations to revise the Code have been accepted by the Ministry of Finance in July The Company is aware that listed companies are required to disclose their corporate governance practices and explain deviations from the Code in their annual reports for annual general meetings held from January 2007 onwards. In line with the commitment by the Company to maintaining high standards of corporate governance, the Company will continually review its corporate governance processes to strive to fully comply with the Code. This report describes the Company s corporate governance processes and activities for the year ended 31 March 2007 and up to the date of this report. Board of Directors The Board of Directors (the Board ) is responsible for setting the strategic direction for the Company. Every Director is expected to act in good faith and always in the best interest of the Company. The Board currently comprises six directors, four of whom are independent and non-executive and whose collective experience and contributions are valuable to the Company. The Board members as at the date of this report are: Mr Tan Kuan Hong Ms Wong Choy Yin Mr Chin Kok Sang Mr Yoon Wai Nam Mr Ang Kiam Meng Mr Anthony Lee Vui Han Executive Director Executive Director Independent Director Independent Director Independent Director Independent Director The profi le of our directors can be found on pages 8 and 9 of this Annual Report. The Board has examined its size and is of the view that the current arrangement is adequate given that the independent directors form not less than one-third of the Board composition. The criteria of independence is based on the defi nition given in the Code. The independent directors are respected individuals from different backgrounds whose core competencies, qualifi cations, skills and experience are extensive and complementary. To assist the members of the Board, the Company has arranged for the Board to be updated by the Company Secretary and its other consultants on the continuing obligations and various requirements expected of a public company. When a director is fi rst appointed to the Board, an orientation program is arranged for him to ensure that he is familiar with the Company s business and governance practices. In recognition of the high standard of accountability to our shareholders, our Directors have established a Nominating Committee, a Remuneration Committee and an Audit Committee. The Committees are chaired by an independent director and the majority of members are non-executive and independent.

15 14 Corporate Governance Report Chairman and Chief Executive Officer The Company is cognizant of the principle that there should be a clear division of responsibility between the Chairman and the Chief Executive Offi cer ( CEO ). The Chairman is responsible for, inter alia, exercising control over quality, quantity and timeliness of fl ow of information between management and the Board, and assisting in ensuring compliance with our Company s guidelines on corporate governance. The CEO is responsible for strategic planning, business development and generally charting the growth of our Company. Prior to his resignation, Mr Zeng Guoming was the Chairman and President (equivalent to CEO). Since his resignation, Mr Tan Kuan Hong, Executive Director, has temporarily assumed both roles. The positions of the Chairman and CEO are vacant presently as the Board is evaluating and considering suitable candidates to fi ll both positions. In the event that both the positions are assumed by a single person, the Board is of the view that there is a balance of power and authority with the various committees chaired by the independent directors. Board Matters The Board is entrusted with the responsibility for the overall management of the Company. The Board s primary responsibilities include review and approval of policy guidelines, setting direction to ensure that the strategies undertaken lead to enhanced shareholders wealth. The following matters require the Board s approval: Statutory requirements such as approval of annual report and fi nancial statements; Other requirements such as half year and full year results announcements; Corporate strategic direction, strategies and action plans; Issuance of policies and key business initiatives; Authorization of acquisition/disposal and other material transactions; Declaration of interim dividends and proposal of fi nal dividends; and Convening of Shareholders Meetings. The directors have separate and independent access to the Company Secretary and the external auditors at all times. The Company currently does not have a formal procedure to seek independent and professional advice for the furtherance of the Board s duties. However, the directors may, on a case-to-case basis, propose to the Board for such independent and professional advice, the cost of which will be borne by the Company. The Board conducts regular scheduled meetings. Ad-hoc meetings are also arranged when the need arises. To facilitate the attendance and participation of Directors at meetings, the Company s Bye-laws provides for teleconferencing and other electronic means of meetings of the Board as encouraged by the Code. The Company Secretary assists in the conduct of the Board meetings and ensures that Board procedures are adhered to. The Company Secretary will also ensure that all rules and regulations of the SGX ST are complied with.

16 15 Corporate Governance Report Directors Attendance at Board, Audit Committee ( AC ), Nominating Committee ( NC ) and Remuneration Committee ( RC ) Meetings Meeting of : Board AC NC RC Total held in FY 2007 and up to the date of this report Tan Kuan Hong (appointed on 29 January 2007) 1 Wong Choy Yin (appointed on 30 January 2007) 1 Chin Kok Sang* (appointed on 1 December 2006) Yoon Wai Nam* (appointed on 12 December 2006) Ang Kiam Meng* (appointed on 12 December 2006) Anthony Lee Vui Han* (appointed on 20 April 2007) 1 Zeng Guoming (resigned on 29 January 2007) 3 1 Lu Yanning (resigned on 29 January 2007) 2 1 Chua Beng Huat* (resigned on 12 December 2006) Tan Gim Soo* (resigned on 12 December 2006) 3 3 Chen Li Hua* (resigned on 1 December 2006) * Independent directors Nominating Committee The NC comprises the following members: Ang Kiam Meng (appointed on 12 December 2006) Chairman* and Independent Director Chin Kok Sang (appointed on 12 December 2006) Member, Independent Director Yoon Wai Nam (appointed on 29 January 2007) Member, Independent Director * Mr Ang was appointed Chairman of the NC on 12 December 2006 replacing Ms Chen Li Hua who had resigned on 1 December The NC s principal functions are as follows: (a) (b) (c) (d) identify suitable candidates and to review all nominations for appointments and re election to the Board; determine the independence status of the directors annually; determine whether or not a director is able to and has been adequately carrying out his duties as a director of the Company; and evaluate the performance and effectiveness of the Board as a whole and the contribution of each director. The NC is satisfi ed that the current size and composition of the Board has adequate ability to meet the Company s existing scope of needs and the nature of operation. From time to time, the NC will review the appropriateness of the current Board size, taking into consideration the changes in the nature and scope of operations as well as the regulatory environment. In accordance with the requirements of the Code, the NC has reviewed the status of the Independent Directors and is of the view that they are in compliance with the Code s defi nition on independence.

17 16 Corporate Governance Report At the date of this report, the NC has adopted a formal process to assess the effectiveness of the Board and committees of the Board as a whole. The qualitative measures include the effectiveness of the Board in its monitoring role and the attainment of the strategic objectives set by the Board. The evaluation exercise is carried out annually. There was no evaluation carried out for the fi nancial year under review as all the directors were appointed towards the end of the fi nancial year. The period since their appointment was too brief for an effective evaluation to be carried out. As all the directors were appointed during the fi nancial year, the NC has recommended that all the directors, who hold offi ce till the forthcoming Annual General Meeting ( AGM ) pursuant to Bye-Law 107 of the Company s Bye-Laws, being eligible and having consented, be nominated for re-appointment at the forthcoming AGM. Remuneration Committee The RC comprises the following members: Yoon Wai Nam (appointed on 12 December 2006) Chairman* and Independent Director Ang Kiam Meng (appointed on 29 January 2007) Member, Independent Director Chin Kok Sang (appointed on 12 December 2006) Member, Independent Director * Mr Yoon was appointed Chairman of the RC on 12 December 2006 replacing Mr Chua Beng Huat who had resigned on 12 December Pursuant to the amended Code, the RC comprises entirely of non-executive directors, all of whom are independent. The RC s tasks include reviewing and deliberating upon the compensation packages of Board members as well as key personnel in the Company and the Group. All aspects of remuneration, including but not limited to directors fees, salaries, allowances, bonuses, options and benefi ts in kind shall be covered by the RC. In determining remuneration packages of executive directors and key executives, the RC will ensure that directors are adequately but not excessively rewarded. The RC will also consider, in consultation with the Board, amongst other things, their responsibilities, skills, expertise and contribution to the Company s performance and whether the remuneration packages are competitive and suffi cient to ensure that the Company is able to attract and retain the best available executive talent. In discharging their duties, the RC may seek professional advice where necessary. All recommendations of the RC will be submitted for endorsement by the entire Board. The payment of fees to non-executive directors is subject to approval at the general meeting of the Company. No director is involved in deciding his own remuneration. Presently, none of the executive Directors has entered into a service contract with the Company.

18 17 Corporate Governance Report Disclosure on Remuneration The remuneration table for the year under review is appended herewith: Name Designation Below $250,000 $250,001 to $500,000 Exceed $500,000 DIRECTORS Tan Kuan Hong Executive Director Wong Choy Yin Executive Director Zeng Guoming Executive Director Lu Yanning Executive Director Chua Beng Huat Independent Director Tan Gim Soo Independent Director Chen Li Hua Independent Director Chin Kok Sang Independent Director Yoon Wai Nam Independent Director Ang Kiam Meng Independent Director The Board is of the opinion that details of remuneration for individual key executives are confi dential, and disclosure of such information would not be in the interest of the Company. None of the key executives received remuneration above S$250,000. The following is the breakdown of the above remuneration received by each director by percentage: Name of Director Base/Fixed Salary Variable or Performance related income/ Bonus Director s Fee Other Benefits Total Tan Kuan Hong 100% 100% Wong Choy Yin 100% 100% Zeng Guoming 100% 100% Lu Yanning 100% 100% Chua Beng Huat 100% 100% Tan Gim Soo 100% 100% Chen Li Hua 100% 100% Chin Kok Sang 100% 100% Yoon Wai Nam 100% 100% Ang Kiam Meng 100% 100% Non-executive Directors are paid Directors fees appropriate to their level of contribution to the Board, taking into account factors such as effort and time spent, responsibilities of the Directors and the need to pay competitive fees to attract, retain and motivate Directors. Directors fees are recommended by the Board for approval at the AGM.

19 18 Corporate Governance Report Remuneration of other employees related to a director None of the employees of the Group whose annual remuneration exceeds S$150,000 are immediate family members of the CEO or any other Director of the Company. Audit Committee The AC comprises three Board members, all of whom are non-executive and independent directors. The members are: Chin Kok Sang (appointed on 12 December 2006) Chairman* and Independent Director Yoon Wai Nam (appointed on 12 December 2006) Member, Independent Director Ang Kiam Meng (appointed on 12 December 2006) Member, Independent Director * Mr Chin was appointed Chairman of the AC on 12 December 2006 replacing Mr Tan Gim Soo who had resigned on 12 December The AC has been entrusted with the following functions: (a) (b) (c) (d) (e) (f) (g) (h) (i) review with the auditors the audit plans, their evaluation of the system of internal controls, audit report and management letter; review the fi nancial statements before release to external and relevant parties; review the scope and results of the internal audit function and ensuring co-ordination between the internal and external auditors and the Management; review the co-operation given by the Company s offi cers to the auditors; review the legal and regulatory matters that may have a material impact on the fi nancial statements, related exchange compliance policies and programs and reports received from the regulators; review the cost effectiveness and independence and objectivity of the auditors; review the nature and extent of non-audit services, if any, provided by the external auditors and seek to balance the maintenance of objectivity and value for money; nominate the appointment of external auditor; and review and ratify all interested person transactions to ensure that they comply with the approved internal control procedures and have been conducted at arm s length basis. The AC meets at least two times a year and as frequently as is required. In particular, the AC meets to review the fi nancial statements before announcement. In the year under review, the AC has met to review and approve the audit plan, the half year and full year unaudited results for announcement purposes. The AC may meet with the auditors at any time, without the presence of the Company s Management. It may also examine any other aspects of the Company s affairs, as it deems necessary, where such matters relate to exposures or risks of regulatory or legal nature, and monitor the Company s compliance with its legal, regulatory and contractual obligations. The AC has power to conduct or authorize investigations into any matters within the AC s scope of responsibility. The AC has full access to the Management and has the discretion to invite any director or executive offi cer to attend its meetings. The AC has reviewed the non-audit services provided by the external auditors and is of the opinion that such services would not affect the independence of the auditors. The AC has also recommended the reappointment of the auditors to the Board. There was no interested party transaction for the year under review.

20 19 Corporate Governance Report Internal Controls and Internal Audit The Board believes in the importance of maintaining a sound system of internal control to safeguard the interests of the shareholders and the Company s assets. Annual reviews of these controls are conducted by the Company s internal auditors and any recommendations for improvement are reported to the AC. In the absence of any evidence to the contrary, the Board believes that the system of internal controls maintained by the Company is in place throughout the year and up to the date of this report. It provides reasonable, but not absolute, assurance against material fi nancial misstatements or losses, and includes the safeguarding of assets, the maintenance of proper accounting records, the reliability of fi nancial information, compliance with appropriate legislation, regulations and best practices, and the identifi cation and containment of fi nancial, operational and compliance risks. However, the Board notes that no system of internal control could provide absolute assurance in this regard, or absolute assurance against the occurrence of material errors, poor judgment in decision-making, human error, losses, fraud or other irregularities. The appointment of the Internal Auditor had been vacant since the resignation of the in-house Internal Auditor. The AC had reviewed the function and had recommended to the Board to outsource the Internal Audit function to suitable accounting fi rms. The Board is presently procuring for a suitable professional accounting fi rm to undertake the Internal Audit function. Policy on dissemination of public information The Company believes that a high standard of disclosure is crucial to raising the level of corporate governance. All information relating to the Company s new initiatives are fi rst disseminated via SGXNET followed by a news release (if appropriate), which is also available on the SGX ST website. The Company does not practise selective disclosure. Price sensitive information is publicly released and results and annual reports are announced or issued within the mandatory period. All shareholders of the Company will receive a copy of the Annual Report or Circular and the Notice of the AGM or Special General Meeting ( SGM ). At the AGM or SGM, shareholders are given opportunities to express their views and ask the Board and Management questions regarding the operations of the Company. The Chairman of the AC, RC and NC will normally be present at the general meetings to answer any questions relating to the work of their respective committees. The external auditors are also present to assist the Directors in addressing any relevant queries from the shareholders during the AGM. At AGMs and other general meetings, separate resolutions will be set out on distinct issues for approval by shareholders. Securities Transactions The Company has procedures in place on dealings in securities, whereby there should be no dealings in the Company s shares by its offi cers during the period commencing one month prior to the announcement of the Company s half year and full year results and ending on the date of announcement of the results. Directors and executives are also expected to observe insider trading laws at all times even when dealing in securities within permitted trading periods. The implications of insider trading are clearly set out in the procedures and guidelines.

21 20 Corporate Governance Report Interested Person Transactions The Company has established internal control policies to ensure that transactions with interested persons are reviewed and approved, and are conducted at arm s length basis. During the year under review, the Board notes that there is no interested person transaction. Material Contracts There is no material contract entered into between the Company and its subsidiaries involving the interests of the Chairman, any director or controlling shareholder during the year under review, and up to the date of this report. Risk Management and Processes The Company regularly reviews and improves its business and operational activities to identify areas of signifi cant business risks as well as respond appropriately to control and mitigate these risks. The Company reviews all signifi cant control policies and procedures and highlights all signifi cant matters to the AC and Board. Statement of Compliance The Board confi rms that for the fi nancial year ended 31 March 2007, the Company has generally adhered to the principles and guidelines as set out in the Code of Corporate Governance 2005.

22 21 Report of the Directors The directors present their report to the members together with the audited consolidated fi nancial statements of the Group and the balance sheet of the Company for the fi nancial year ended 31 March Directors The directors of the Company in offi ce at the date of this report are as follows: Executive Directors: Tan Kuan Hong (Appointed on 29 January 2007) Wong Choy Yin (Appointed on 30 January 2007) Non executive Directors: Chin Kok Sang (Appointed on 1 December 2006) Yoon Wai Nam (Appointed on 12 December 2006) Ang Kiam Meng (Appointed on 12 December 2006) Lee Vui Han Anthony (Appointed on 20 April 2007) Principal Activities The principal activity of the Company is investment holding. The principal activities of the Group s subsidiaries are described in note 14 to the fi nancial statements. There have been no signifi cant changes in the nature of these activities during the fi nancial year. Acquisitions and Disposals of Subsidiaries During the fi nancial year, there were no acquisitions or disposals of subsidiaries except as disclosed in note 14 to the fi nancial statements. Results and Dividends Details of the results of the Group for the year ended 31 March 2007 and the state of affairs of the Group at that date are set out in the fi nancial statements on pages 26 to 62. The fi nal dividend proposed during the previous fi nancial year of RMB2.00 cents per ordinary share, amounting to RMB4,873,000 was approved during the Annual General Meeting and subsequently paid on 28 August An interim dividend of RMB2.59 cents per ordinary share, amounting to RMB6,343,000 was declared during the current fi nancial year on 14 November 2006 and paid on 11 January Material Movements or Transfers in Reserves and Provisions There were no material transfers to or from reserves and provisions during the fi nancial year except as disclosed in the accompanying fi nancial statements.

23 22 Report of the Directors Issue of Shares and Debentures During the fi nancial year, there were no shares or debentures issued by the Company and its subsidiaries. Arrangements To Enable Directors To Acquire Shares And Debentures Neither at the end of the fi nancial year nor at any time during the fi nancial year did there subsists any arrangement whose object is to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares or debentures of the Company or any other body corporate. Directors Interests in Shares and Debentures According to the register of directors shareholdings, none of the directors holding offi ce at the end of the fi nancial year and as at 21st day after the end of the fi nancial year, had any interest in the shares or debentures of the Company or its related corporations, except as follows: Name of director and corporation in which interest are held At the beginning of financial year or date of appointment Direct interest At the end of financial year At the beginning of financial year or date of appointment Deemed interest At the end of financial year Ordinary shares The Company Tan Kuan Hong* 55,765,580 55,765,580 * Tan Kuan Hong is deemed to have an interest of these shares through Sandalford Capital Ltd, which owned about 22.89% equity interest in the Company. There were no changes in any of the directors interests in the Company between the end of the fi nancial year and on 21 April Directors Contractual Benefits Since the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t by reason of a contract made by the Company or a related corporation with the director or with a fi rm of which he is a member or with a company in which he has a substantial fi nancial interest, except that certain directors have received remuneration from related corporations in their capacity as directors and/or executives of those related corporations and except as disclosed in the fi nancial statements. Options To Take Up Unissued Shares During the fi nancial year, no option to take up unissued shares of the Company or any corporation in the Group was granted.

24 23 Report of the Directors Options Exercised During the fi nancial year, there were no shares of the Company or any corporation in the Group issued by virtue of the exercise of an option to take up unissued shares. Options Outstanding At the end of the fi nancial year, there were no unissued shares of the Company or any corporation in the Group under option. Interested Person/Related Party Transactions Save as disclosed in the fi nancial statements, the Directors of the Company confi rmed that there were no other interested person, or related party transactions during the year under review. The Directors confi rm that all of these transactions were carried out in the ordinary and usual course of business of the Group. Audit Committee, Nominating Committee and Remuneration Committee Details of the Company s audit committee, nominating committee and remuneration committee are set out in the Corporate Governance Report on pages 13 to 20 of this annual report. Auditors The auditors, Moore Stephens, Singapore and Lau & Au Yeung C.P.A. Limited, Hong Kong, have expressed their willingness to accept re-appointment. On behalf of the Board of Directors Tan Kuan Hong Director Wong Choy Yin Director 30 June 2007

25 24 Statement of Directors In the opinion of the directors, the balance sheet of the Company and the consolidated fi nancial statements of the Group as set out on pages 26 to 62 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 March 2007, and of the results of the business, changes in equity and the cash fl ows of the Group for the fi nancial year then ended. 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 Board of Directors Tan Kuan Hong Director Wong Choy Yin Director 30 June 2007

26 25 Independent Auditors Report To The Members of Asia Tiger Group Limited We have audited the accompanying balance sheet of Asia Tiger Group Limited (the Company ) as at 31 March 2007 and the consolidated fi nancial statements of the Company and its subsidiaries (collectively referred to as the Group ), which comprise the consolidated balance sheet as at 31 March 2007, and the consolidated income statement, consolidated statement of changes in equity and consolidated cash fl ow statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 26 to 62. Directors Responsibility for the Financial Statements The Company s directors are responsible for the preparation and fair presentation of these fi nancial statements in accordance with International Financial Reporting Standards. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the fi nancial statements are free of material misstatement. An audit involves performing procedures to obtain evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risks assessments, the auditors consider internal controls relevant to the entity s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made by directors, as well as evaluating the overall presentation of the fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the balance sheet of the Company and the consolidated fi nancial statements of the Group give a true and fair view of the state of affairs of the Company and the Group as at 31 March 2007, and the results, changes in equity and cash fl ows of the Group for the year then ended in accordance with International Financial Reporting Standards. Lau & Au Yeung C.P.A. Limited Certifi ed Public Accountants Hong Kong Moore Stephens Certified Public Accountants Singapore 30 June 2007

27 26 Consolidated Income Statement Year ended 31 March 2007 Note RMB 000 RMB 000 Continuing Operations Revenue 4 364, ,132 Cost of sales (327,818) (309,412) Gross profi t 36,356 50,720 Other income 5 4,151 2,226 Selling and distribution expenses (7,710) (10,208) Administrative expenses (15,912) (16,740) Other operating expenses 6 (1,525) (7,098) Profi t from continuing operating activities 7 15,360 18,900 Finance costs 8 (374) (855) Profit from continuing operations before income tax 14,986 18,045 Income tax 10 (3,442) (1,164) Profit from continuing operations after income tax 11,544 16,881 Discontinued Operations Profi t from discontinued operations 11 8,479 Profit attributable to equity holders of the Company 11,544 25,360 Earnings per share from continuing operations 12 Basic Diluted Earnings per share from discontinued operations 12 Basic Diluted The accompanying notes form an integral part of the fi nancial statements

28 27 Consolidated Balance Sheet As at 31 March 2007 Note RMB 000 RMB 000 ASSETS Current assets Cash and cash equivalents 15 28,347 62,875 Pledged deposits 16 16,999 1,033 Financial assets at fair value through profi t or loss 17 6, Trade and other receivables 18 70,845 46,549 Other current assets 19 6,638 6,516 Inventories 20 42,805 25, , ,524 Non current assets Plant and equipment 21 19,113 19,995 Intangible assets ,353 Deferred tax asset ,992 21,413 Total assets 192, ,937 LIABILITIES Current liabilities Trade and other payables 24 84,792 55,988 Short term bank loans 25 3,514 1,446 Obligations under hire purchase creditors 26 1,161 Tax payable 3,109 2,776 91,415 61,371 Non current liabilities Obligations under hire purchase creditors 26 2,343 Total liabilities 91,415 63,714 Net assets 100, ,223 EQUITY Issued capital and reserves Issued capital 27 80,482 80,482 Share premium 27 37,985 37,985 Other reserves 28 (17,865) (18,244) 100, ,223 The accompanying notes form an integral part of the fi nancial statements

29 28 Consolidated Statement of Changes in Equity Year ended 31 March 2007 Issued capital Share premium account Contributed surplus Capital reserve Statutory reserve Exchange fluctuation reserve Retained profits Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 As at 1 April ,482 37,985 (59,916) ,061 1,372 25, ,223 Gains recognised directly in equity Foreign currency translation differences Profi t for the year 11,544 11,544 Total recognised gains for the year 51 11,544 11,595 Dividends (Note 13) (11,216) (11,216) Transfer from capital reserve to retained profi ts (426) 426 Transfer from retained profi ts to statutory reserve 2,357 (2,357) As at 31 March ,482 37,985 (59,916) 16,418 1,423 24, ,602 As at 1 April ,482 37,933 (59,916) 426 9, , ,938 Gains recognised directly in equity Foreign currency translation differences Profi t for the year 25,360 25,360 Total recognised gains for the year ,360 26,242 Dividends (Note 13) (34,009) (34,009) Transfer from retained profi ts to statutory reserve 4,100 (4,100) Overprovision of listing expenses As at 31 March ,482 37,985 (59,916) ,061 1,372 25, ,223 The accompanying notes form an integral part of the fi nancial statements

30 29 Consolidated Cash Flow Statement Year ended 31 March 2007 The accompanying notes form an integral part of the fi nancial statements RMB 000 RMB 000 Cash Flows From Operating Activities Profi t before income tax 14,986 26,524 Adjustments for: Depreciation of plant and equipment 3,941 3,585 Amortisation of intangible assets 645 2,302 Intangible assets written off 479 Loss on disposal of plant and equipment Fair value gain on fi nancial assets at fair value through profi t or loss (164) Gain on disposal of a subsidiary (8,663) Interest income (795) (1,005) Interest expense Operating cash fl ows before working capital changes 19,634 24,199 Changes in operating assets and liabilities: Inventories (17,528) (6,549) Trade and other receivables (26,734) (8,361) Other current assets (122) (5,274) Trade and other payables 28,804 11,439 Cash generated from operations 4,054 15,454 Interest received 795 1,003 Interest paid (374) (855) Income tax paid (520) (1,479) Net cash generated from operating activities 3,955 14,123 Cash Flows From Investing Activities Proceeds from disposal of plant and equipment Purchase of plant and equipment (4,073) (8,435) Additions to intangible assets (171) (1,590) (Acquisition) / proceeds from disposal of fi nancial assets at fair value through profi t or loss (5,961) 56 Net cash fl ow from disposal of a subsidiary (Note 11) 17,897 Net cash (used in) / generated from investing activities (9,838) 8,365 Cash Flows From Financing Activities (Increase)/decrease in pledged deposits (15,966) 7,171 Net proceeds from /(repayment of) short term bank loans 2,068 (25,236) Repayment of hire purchase creditors (3,504) (490) Dividends paid (11,216) (34,009) Net cash used in financing activities (28,618) (52,564) Net decrease in cash and cash equivalents (34,501) (30,076) Cash and cash equivalents at the beginning of the year 62,875 92,016 Effect of foreign exchange rate changes, net (27) 935 Cash and cash equivalents at the end of the year (Note 15) 28,347 62,875

31 30 Balance Sheet As at 31 March 2007 Note RMB 000 RMB 000 ASSETS Current assets Due from subsidiaries 14 57,796 63,708 Non current assets Investment in subsidiaries 14 60,482 60,482 Total assets 118, ,190 LIABILITIES Current liabilities Due to subsidiaries ,790 Other payables and accruals Total liabilities 1,206 2,901 Net assets 117, ,289 EQUITY Issued capital and reserves Issued capital 27 80,482 80,482 Share premium 27 37,985 37,985 Other reserves (1,395) 2,822 Total equity 117, ,289 The accompanying notes form an integral part of the fi nancial statements

32 31 Notes to Financial Statements Year ended 31 March General The Company was incorporated in Bermuda on 23 June 2004 as an exempt company with limited liability under the Companies Act 1981 of Bermuda with its registered offi ce at Canon s Court, 22 Victoria Street, Hamilton HM 12, Bermuda. Its principal place of business is located at No. 7 Building, Nangang 2nd Industrial Zone, Songbai Road, Nanshan District, Shenzhen, People s Republic of China ( PRC ). The shares of the Company are listed on the Singapore Exchange Securities Trading Limited (the SGX ST ). The principal activity of the Company is investment holding. The principal activities of the Group s subsidiaries are described in note 14 to the fi nancial statements. There have been no signifi cant changes in the nature of these activities during the fi nancial year. The consolidated fi nancial statements of the Group and the balance sheet of the Company for the fi nancial year ended 31 March 2007 were authorised for issue in accordance with a resolution of the Board of Directors of the Company on 30 June Significant Accounting Policies (a) Basis of Preparation The fi nancial statements, which are expressed in Chinese Renminbi, have been prepared in accordance with International Financial Reporting Standards ( IFRS ). These fi nancial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below. The preparation of fi nancial statements in conformity with IFRS requires management to exercise its judgement in the process of applying the Group s accounting policies. It also requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the fi nancial statements, and the reported amounts of revenues and expenses during the fi nancial year. Although these estimates are based on management s best knowledge of current events and actions, actual results may ultimately differ from these estimates. Critical accounting estimates and assumptions used that are signifi cant to the fi nancial statements and areas involving a higher degree of judgement or complexity, are disclosed in note 3. (b) Adoption of New/Revised International Financial Reporting Standards During the current fi nancial year, the Group has adopted all the revised Standards and new Interpretations issued by the International Accounting Standards Board ( IASB ) and the International Financial Reporting Interpretations Committee ( IFRIC ) of the IASB that are relevant to its operations and effective for annual periods beginning on 1 April The adoption of these new/revised Standards and Interpretations has had no material impact on the fi nancial statements of the Group and on the balance sheet of the Company.