Growing Our Green Potential - Asian Micro Holdings …asianmicro.listedcompany.com/misc/ar2011.pdfASIAN MICRO HOLDINGS LIMITED AnnuAl RepoRt 2011 ASIAN MICRO HOLDINGS LIMITED No. 1,

ASIAN MICRO HOLDINGS LIMITED

AnnuAl RepoRt 2011

ASIAN MICRO HOLDINGS LIMITED No. 1, Tech Park Crescent,Tuas Tech Park, Singapore 638131Tel: 65 6862 7777Fax: 65 6862 6277Company Registration No. 199701052K

www.asianmicro.com.sg

Supplying CNG to:

Manufacturing Industries

Shipyard Industries

Oil & Gas Industries

Power Generation Test Grids

Growing Our Green Potential

AS

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2011

01 Corporate Information

02 Corporate Profile

04 Chairman’s Message

06 Board of Directors

08 Key Management

09 Financial Highlights

11 Report on Corporate Governance

20 Directors’ Report

26 Statement by Directors

27 Independent Auditors’ Report

29 Balance Sheets

31 Consolidated Statement of Comprehensive Income

32 Statements of Changes in Equity

35 Consolidated Cash Flow Statement

37 Notes to the Financial Statements

93 Statistics of Shareholdings

94 Shareholder’s Information

95 Notice of Annual General Meeting

Proxy Form

CONTENTS

This annual report has been prepared by the Company and its contents have been reviewed by the Company’s sponsor (“Sponsor”), Asian Corporate Advisors Pte. Ltd. for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (“SGX-ST”). The Company’s Sponsor has not independently verified the contents of this annual report including the correctness of any of the figures used, statements or opinions made.

This annual report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this annual report including the correctness of any of the statements or opinions made or reports contained in this annual report.

The contact person for the Sponsor is Mr. Liau H.K.Telephone number: 6221 0271

Annual Report 2011 1

Corporate InformatIon

Board of directorsExecutiveLim Kee Liew @ Victor LimCEO and Group Managing Director

Lin Xianglong WinchesterExecutive Director

Ng Chee WeeExecutive Director and Group Financial Controller

Non-ExecutiveDr. Wang Kai YuenNon-Executive Chairman

Teo Kio Choon @ Chang Chiaw ChoonIndependent Director

Chue Wai TatIndependent Director

audit committeeDr. Wang Kai YuenChairman

Teo Kio Choon @ Chang Chiaw Choon

Chue Wai Tat

NomiNatiNg committeeTeo Kio Choon @ Chang Chiaw ChoonChairman

Dr. Wang Kai Yuen

Chue Wai Tat

remuNeratioN committeeDr. Wang Kai YuenChairman


Chue Wai Tat

compaNy secretaryLee Ellen

registered aNd BusiNess office1 Tech Park CrescentTuas Tech ParkSingapore 638131Tel: 6862 7777 / Fax: 6862 6277Website: http://www.asianmicro.com.sg

BaNkersMalayan Banking BerhadUnited Overseas Bank Limited

share registrarB.A.C.S. Private Limited63 Cantonment RoadSingapore 089758

coNtiNuiNg spoNsorAsian Corporate Advisors Pte Ltd112 Robinson Road#03-02 Singapore 068902

auditorsErnst & Young LLPOne Raffles QuayNorth TowerLevel 18Singapore 048583Partner-in-charge: Philip Ling(Since financial year ended 30 June 2011)

asiaN micro hoLdiNgs Limited

2 Asian Micro Holdings Limited

Asian Micro Holdings Limited (listed in the SGX-SESDAQ in September 1999), provides Compressed Natural Gas (“CNG”) supply related products & services. The Group’s secondary core business is in recycling and precision cleaning of packaging trays and media/disk cassettes used in the hard disk drive and semiconductor industries in Singapore and Thailand. The Group is also serving these industries with clean room grade plastic packaging bags and materials for packaging cleaned finished products.

The Group is supplying CNG skids which are used for storing and transporting CNG to the local industries for gas cutting, heat treatment and power generation. It can also be used for powering of natural gas engines, and off-the-road vehicles. The Group continually explores innovative methods of introducing industrial consumers to the use of natural gas and energy saving methods. Our customers are namely from the oil and gas, marine and offshore, aviation, shipyard and manufacturing industries.

The Group provides natural gas as an alternative fuels which is gaining popularity in the shipyard industries to be used for steel gas cutting, natural gas to the industries for powering up power generator to reduce electricity cost.

The Group also imports, sells or leases specialized vehicles like CNG prime movers, CNG tractors and CNG forklifts which cut down CO2 emission, reduces pollutants PM2.5 and many other hazardous hydrocarbon emissions.

The Group will embark on growth on energy related business and strive to add value to customers, shareholders and its staff.

Corporate profIle


fiNaNciaL performaNce

For FY 2011, the Group’s consolidated revenue decreased 59% or S$12.1 million from S$20.7 million in FY 2010 to S$8.6 million in FY 2011. The decrease in revenue is mainly due to the decrease in sales of Natural Gas Vehicles (“NGV”) in Thailand, cessation of several businesses in China and decrease in sales of plastics bag manufacturing, partially offset by the infrastructure project which the Group has secured with one major industrial aviation customer.

FY 2011 remained competitive for the Group as the global export market for storage devices was badly affected by the drop in demands for the hard disk drives (“HDD”). This ultimately affected our cleaning service and clean room plastic packaging bags manufacturing business. However, our effort to develop a new business based on clean energy has paid off. The Group has secured a contract with one major industrial aviation customer for the Compressed Natural Gas (“CNG”) downloading infrastructure project and the supply of CNG.

Net loss attributable to shareholders after taking into consideration of taxation and minority interest amounted to S$3.9 million or an increase of 29% compared to the net loss of S$3.0 million in FY 2010.

The net loss incurred in FY 2011 is mainly due to weakening of United States Dollar and Thailand Baht against Singapore Dollar and allowance for stocks obsolescence. The poor performance of tray cleaning business which was affected by the HDD downturn has resulted in the disposal of our subsidiaries in the second half of FY 2011. We believe that, with the closure of non-profitable companies, we would be able to reduce our losses and operate more efficiently to improve the Group’s results.

CHaIrman’SmeSSaGe

Dr. Wang Kai Yuen,Chairman


“On behalf of the Board of Directors, I am presenting the Annual Report and the Audited Financial Statements of Asian Micro Holdings Limited and its subsidiaries for the financial year ended 30 June 2011.”

CHaIrman’S meSSaGe


LookiNg ahead

The precision tray cleaning segment in the HDD business will remain challenging and the Group will continue its cost cutting effort to render all the subsidiaries profitable. The Group has renewed a 2-year agreement with its major customer to provide tray washing and transport and logistical support service in Thailand. The Group will also upgrade its plastic bag manufacturing machineries progressively to ensure its quality so as to obtain more orders from our major customers.

The Group will continue to promote the use of natural gas in the manufacturing and service industries for the purposes of gas cutting, heat treatment processes, powering of natural gas tractors and electrical power generation in the marine and offshore industries. The Group had secured a contract with one major industrial aviation customer for the supply of natural gas over a period of up to 5 years and one major shipyard customer in the construction of CNG cylinders storage skids and pressure regulating system skids for the gas-cutting activities.

We will continue to improve on our business strategies to generate new sources of revenue and earnings for the Group, thereby enhancing shareholders’ value in the long run.

corporate goverNaNce

The Group remains committed to maintaining our regime of high standards of corporate governance. We pledge to provide timely and accurate information through announcements and investor relations activities for the benefits of all stakeholders.

appreciatioN

On behalf of the Board, I would like to thank all shareholders for their continued loyalty and support to the Company despite the continued losses.

We also acknowledge the strong support of our customers, bankers and business associates of our Company in 2011 and we are looking forward to your strong support to help us to achieve a better 2012 and beyond.

Last, but not least, I would like to thank all staff and management for their dedicated service and sacrifice in FY 2011 and hope that FY 2012 will yield better results.

dr. Wang kai yuenChairman

30 September 2011

BoarD of DIreCtorS


A B

C

DF

E

A. Dr. WAng KAi YuenDr. Wang Kai Yuen was appointed as the Independent Non-Executive Chairman of the Group on 26 August 2006. He had been an Independent Director of the Group since 1999. He is also the Chairman of the Company’s Audit and Remuneration Committees and a member of the Nominating Committee. He retired as Managing Director of Fuji Xerox Singapore Software Centre in December 2009. He holds several other directorships including directorships in ComfortDelGro Corporation Limited, COSCO Corporation (Singapore) Ltd, Hiap Hoe Ltd, HLH Ltd, EOC Ltd, SuperBowl Holdings Ltd, Xpress Holdings Ltd, Ezion Holdings Ltd, Matex International Ltd, A-Sonic Aerospace Ltd and China Aviation Oil (Singapore) Corporation Ltd.

Dr. Wang holds a Bachelor of Engineering (Electrical Engineering) (Hons) from the University of Singapore and a Masters of Science (Industrial Engineering), a Masters of Science (Electrical Engineering) and a PhD (Engineering) from Stanford University, USA.

B. Mr. liM Kee lieW @ Victor liMMr. Lim Kee Liew @ Victor Lim is the Chief Executive Officer and Group Managing Director of the Company. Victor Lim is the key founder of the Group and currently provides the overall strategic direction and policy decisions of the Group. Prior to setting up the Group, Victor Lim was the Engineering Support Manager in Micropolis Singapore Ltd (a producer of high capacity Hard Disk Drives) from 1983 to 1989. Victor Lim holds a Diploma in Production Engineering from the Singapore Polytechnic and has more than 25 years experience in the electronic and hard disk drive industry.

c. Mr. chue WAi tAtMr. Chue Wai Tat was appointed as an Independent Non-Executive Director of the Company in July 2011. He started his career with the Inland Revenue Department (now known as Inland Revenue Authority of Singapore) for 10 years before joining the private sector. He has accumulated more than 20 years of experience, mainly in senior finance position in MNC and GLC such as Group/Regional/Controller of MNC (Universal Furniture, Seagate Technology, Asia Pacific Resources International Ltd) and VP Group Finance of Media Corporation of Singapore Pte Ltd, before retiring on 31 December 2009. Since March 2011, he has taken up a retirement position with Boxson Packaging Industries Pte Ltd, an SME, assisting in its accounting and administration.

Mr. Chue holds a Bachelor of Social Science (Economics & Political Science) (Hons) from the University of Singapore. He was qualified and admitted as a Fellow member of the Association of Chartered Certified Accountants (ACCA) and a non-practicing Fellow member of the Institute of Certified Public Accountants of Singapore (ICPAS).

D. Mr. teo Kio choon @ chAng chiAW choonMr. Teo Kio Choon @ Chang Chiaw Choon is an Independent Non-Executive Director of the Company since 1999. He is also the Chairman of the Group’s Nominating Committee and a member of the Audit and Remuneration Committees. He is a partner of KC Teo Consultants, a management consultancy firm since 1992. Mr. Chang holds a Bachelor of Science (Hons) degree from the Nanyang University.

e. Mr. ng chee WeeMr. Ng Chee Wee joined the Group in August 2010 as Group Financial Controller and was appointed as an Executive Director of the Company in May 2011. He has the overall responsibility for the Group’s finance, accounting, treasury, legal and tax functions.

Mr. Ng has more than 10 years’ experience in the accounting and finance fields for various industries. He holds a Diploma with Merit in Accountancy from Ngee Ann Polytechnic in Singapore and completed the Association of Chartered Certified Accountants course in 2000. He is a Fellow member of the Association of Chartered Certified Accountants (ACCA) and a non-practising member of the Institute of Certified Public Accountants of Singapore (ICPAS).

F. Mr. lin XiAnglong WinchesterMr. Lin Xianglong Winchester was appointed as an Executive Director of the Company in August 2011. He is the Deputy Managing Director for the Group’s Natural Gas Vehicle (“NGV”) related business division in Thailand. He is also the overall responsible person for marketing department for the Group’s business activities in Singapore and Thailand.

Besides overseeing the operation of the CNG conversion centres in Thailand, he is now responsible for the Clean Room packaging materials business for the Hard Disk Drive industries (“HDD”) in Singapore and Thailand.

Prior to this, Winchester Lin joined the Group as a Sales Executive in June 2007 and was subsequently promoted to Business Development Manager in September 2008 and Deputy Managing Director in October 2008. He holds a Diploma in Marketing from Nanyang Polytechnic.

Winchester Lin is the son of the CEO and Group Managing Director, Victor Lim.


BOARD OF DIRECTORS

ms. LeoNg Lai heNg

Ms. Leong Lai Heng was an Executive Director of the Company since February 1997 and has resigned from the Board in August 2011. She is currently working as an advisor for the Company and director of the subsidiaries. She is the spouse of the CEO and Group Managing Director, Victor Lim, and mother of the Executive Director, Lin Xianglong Winchester.

mr. Lim see Wai

Mr. Lim See Wai is the Assistant Engineering Director for AM NGV (S) Pte Ltd. He is responsible for the development and expansion of CNG-related projects and has more than 3 years’ experience in this field. He joined the company as a Mechanical Engineer and was subsequently promoted to Project Development Manager in October 2008 and Assistant Engineering Director in October 2009. He holds a Bachelor’s degree in Mechanical Industry Engineering (IE) from University Technology Malaysia (UTM).

mr. Ng cher Lek

Mr. Ng Cher Lek is the Production Manager for ACI Industries Pte Ltd. He is responsible for the cleaning and recycling operations in Singapore and supporting the Deputy Managing Director for business development and sales. He has more than 20 years of manufacturing experience in the hard disk drive and semiconductor industries in various operational departments and holding positions of Production/Manufacturing Manager, Senior Engineering Manager & Senior Operation Manager. He holds a Diploma in Mechanical Engineering from Singapore Polytechnic and a Diploma in Management Studies from SIM.

ms. yaNg Lei

Ms. Yang Lei is the Group Accountant responsible and overseeing the group’s accounting, financial and tax functions. She has 10 years’ experience in accounting and finance fields for various industries. She holds a Bachelor of Science in Applied Accounting (Hons) from the Oxford Brookes University and completed the Association of Chartered Certified Accountants course in 2003. She is a member of the Association of Chartered Certified Accountants (ACCA) and a non-practising member of the Institute of Certified Public Accountants of Singapore (ICPAS).

mr. mavet aNg

Mr. Mavet Ang is the Sales and Marketing Executive for ACI Industries Pte Ltd. He is responsible for the marketing and operation for the manufacturing of the Clean Room PE Bags for the Hard Disk Drive industries (“HDD”) and other industries. Besides overseeing the operation, he is also responsible for the business development of the Company. He joined the Company as a Customer Service Officer and was subsequently re-designated to the current position.

KeY manaGement


fInanCIalHIGHlIGHtS


2007 2008 2009 2010 2011S$’000 S$’000 S$’000 S$’000 s$’000

( restated) (reclassified)

resuLts of operatioN

Turnover 14,584 21,115 12,113 20,704 8,575

Profit / (Loss) before taxation andnon-controlling interest (777) (5,496) (7,678) (3,011) (4,640)

Taxation (41) 9 8 (70) 211

Profit / (Loss) from discontinued operation, net of tax 2,372 (145) – – –

Profit / (Loss) after taxation butbefore non-controlling interest 1,554 (5,632) (7,670) (3,081) (4,429)

Attributable to :

Owners of the parent 1,679 (5,445) (7,499) (3,023) (3,897)

Non-controlling interest (125) (187) (171) (58) (532)

fiNaNciaL positioN

Fixed Assets 9,464 5,183 2,066 1,716 1,098

Goodwill on Acquisition 752 – – – –

Investment Property 2,600 3,200 – – –

Associated Company 469 353 326 – –

Current Assets 10,993 12,198 7,953 6,602 4,177

Current Liabilities (8,515) (6,576) (5,023) (6,047) (4,028)

Net Current Assets 2,478 5,622 2,930 555 149

Non Current Liabilities (2,881) (1,750) (184) (105) (469)

represeNtiNg

Shareholders’ Equity 12,576 12,204 4,888 1,997 1,197

Non-controlling interest 306 404 250 170 (419)

EPS before Taxation (S$cents) 0.49 (1.59) (2.17) (0.83) (1.00)

EPS after Taxation & NCI (S$cents) 0.52 (1.59) (2.17) (0.84) (0.96)

NTA per Share (S$cents) 4.00 3.66 1.45 0.60 0.17

Thailand1,118

China/HK357

Singapore7,100

NGV related2,895

Tray recycling3,483

Plastic waste recycling183 Manufacturing

2,014

fInanCIal HIGHlIGHtS

Net profit (Loss) attriButaBLe to sharehoLders (S$’000)

turNover(S$’000)

1,67

9

5,44

5

7,49

9

3,02

3

14,5

84

21,1

15

12,1

13

20,7

04


8,57

5

2011 2010 2009 2008 2007

2011 2010 2009 2008 2007

3,89

7

turnover by business activities(S$’000)

Tray recycling 3,483Manufacturing 2,014Plastic waste recycling 183NGV related 2,895

8,575

turnover by region(S$’000)

Singapore 7,100Thailand 1,118China/HK 357

8,575


REPORT ON CORPORATE GOVERNANCE

Asian Micro Holdings Limited (the “Company”) recognizes the importance of corporate governance and is committed

to uphold the high standards of corporate governance, and to put in place effective self-regulatory corporate

practices to preserve and enhance long term shareholders’ value.

This report outlines the Company’s corporate governance practices with specific reference to the Code of Corporate

Governance 2005 (the “Code”).

BOARD MATTERS

Principle 1 Board’s Conduct of its Affairs

The Board meets regularly, both formally and informally, and as frequent as warranted by particular circumstances.

The principal functions of the Board, apart from its statutory responsibilities are:

(a) to approve the Group’s corporate policies, financial objectives and direction of the Group and monitoring

performance of management;

(b) to approve annual budgets, key operational issues, major funding and investment proposals;

(c) to set overall strategies and supervision of the Group’s business and affairs;

(d) to review the financial performance of the Group;

(e) to approve nominations of Directors and appointment to the various Board committees and key managerial

personnel; and

(f) to assume responsibility for corporate governance.

The Board discharges its responsibilities either directly or indirectly through the various Board committees. The

Board delegates the formulation of business policies and day-to-day management to the Chief Executive Officer.

The Board conducts regular scheduled meetings. In the financial year under review, the Board met twice. Ad-hoc

meetings are convened as and when required. The Articles of Association of the Company allows a Board Meeting

to be conducted by way of a tele-conference or any other electronic means of communications. The attendance of

Directors at meetings of the Board and Board committees, as well as the frequency of such meetings, is disclosed

in this report.

A formal letter of appointment is provided to all new Directors. The letter indicates the amount of time commitment

required and the scope of duties. The Company has adopted a policy that welcomes the Directors to request for

further explanations, briefings or informal discussions on any aspect of the Company’s operations or businesses

from the Management. Newly appointed Directors will receive appropriate training and orientation programmes to

familiarize themselves with the operations of the Company and its major business processes.

The Management monitors changes to regulations and accounting standards closely. To keep pace with accounting,

legal, industry specific knowledge and regulatory changes, where these changes have an important bearing on the

Company or Directors’ disclosure obligations, Directors are briefed either during Board meetings or at specially

convened sessions.



Principle 2 Board Composition and Balance

Currently, the members of the Board are:

Executive Directors

Mr. Lim Kee Liew @ Victor Lim (Chief Executive Officer & Group Managing Director)

Mr. Lin Xianglong Winchester (Executive Director) (Appointed on 24 August 2011)

Mr. Ng Chee Wee (Executive Director & Group Financial Controller) (Appointed on 6 May 2011)

Independent Non-Executive Directors

Dr. Wang Kai Yuen (Chairman)

Mr. Teo Kio Choon @ Chang Chiaw Choon

Mr. Chue Wai Tat (Appointed on 6 July 2011)

The Nominating Committee is of the view that the current Board comprises Directors who, have the appropriate

mix of diversity, expertise and experience, and collectively possess the necessary core competencies for effective

functioning and informed decision-making.

The Board has reviewed its composition of Directors and is satisfied that such composition is appropriate for the

nature and scope of the Group’s operations and facilities effective decision-making. The Board will constantly

examine its size, with the view to determining its impact upon its effectiveness.

Members of the Board are constantly in touch with the Management to provide advice and guidance on strategic

issues and on matters for which their expertise will be constructive to the Group.

Key information on the Directors is set out below and on pages 6 and 7 of this Annual Report.

Name of Director Age

Directorship

(a) Date first appointed

(b) Date last re-elected

Due for re-election

at next AGM

Mr. Lim Kee Liew @ Victor Lim 54(a) 18/2/1997

(b) NA–

Mr. Lin Xianglong Winchester 27(a) 24/8/2011

(b) –

Retiring pursuant to

Article 88

Mr. Ng Chee Wee 38(a) 6/5/2011

(b) –


Article 88

Dr. Wang Kai Yuen 64(a) 20/8/1999

(b) 28/10/2009–

Mr. Teo Kio Choon @ Chang Chiaw Choon 64(a) 20/8/1999

(b) 23/10/2008


Article 89

Mr. Chue Wai Tat 64(a) 6/7/2011

(b) –


Article 88



Principle 3 Chairman and Chief Executive Officer

The roles of the Chairman and Chief Executive Officer are separate to ensure an appropriate balance of power,

increased accountability and greater capacity of the Board for independent decision-making. The Chairman and

the Chief Executive Officer are not related. The Chairman, Dr. Wang Kai Yuen, is an independent Director. The

responsibilities of the Chairman include:

(a) scheduling meetings that enable the Board to perform its duties responsibly while not interfering with the flow

of the Company’s operations;

(b) exercising control over quality, quantity and timeliness of the flow of information between Management and

the Board;

(c) assisting to ensure compliance with the Company’s guidelines on corporate governance;

(d) encourage effective communication with shareholders;

(e) facilitating the effective contribution of non-executive directors; and

(f) encouraging constructive relations between executive, non-executive directors and management.

Mr. Lim Kee Liew @ Victor Lim, the Chief Executive Officer and Group Managing Director, sets business strategies

and directions for the Group and manages the business operations of the Group with Mr. Lin Xianglong Winchester

and Mr. Ng Chee Wee, who are Executive Directors and other management staff.

Principle 4 Board Membership

The Nominating Committee (“NC”) comprises three Directors, of whom, including the Chairman, are independent

non-executive Directors. The members are:

Mr. Teo Kio Choon @ Chang Chiaw Choon (Chairman)

Dr. Wang Kai Yuen

Mr. Chue Wai Tat

The principal functions of the NC are:

(a) to identify candidates, review nominations for both appointment and re-appointment of the Directors to the

Board for its approval. For the appointment of new candidates to the Board, the proposed appointee’s

background, experience and other board memberships will be taken into account;

(b) to review the Board structure and size including the composition of the Board generally and the balance

between executive and non-executive Directors appointed to the Board, and make recommendations to the

Board with regard to any adjustments that are deemed necessary;

(c) to review the independence of each Director annually;

(d) to assess the effectiveness of the Board as a whole, and the contribution by each Director to the

effectiveness of the Board;

(e) to decide how the performance of the Board may be evaluated and to propose objective performance

criteria;

(f) to report to the Board its findings from time to time on matters arising and requiring the attention of the NC;

and

(g) to undertake such other reviews, projects, functions, duties and responsibilities as may be requested by the

Board.

The NC has adopted written terms of reference.



In accordance with Article 88 and Article 89 of the Articles of Association of the Company, new Directors must

submit themselves for re-election at the next Annual General Meeting (“AGM”) of the Company and one-third of the

Directors who are eligible for re-election must retire by rotation at every AGM. The Directors of the Company submit

themselves for re-nomination and re-election at the regular intervals at least every 3 years.

The NC has recommended the nominations of Mr. Lin Xianglong Winchester, Mr. Ng Chee Wee, Mr. Chue Wai Tat

and Mr. Teo Kio Choon @ Chang Chiaw Choon for re-election at the forthcoming AGM.

The Company has in place a system to access the performance of the Board as a whole. The result of the exercise

is reviewed by the NC before submitting to the Board for discussing and determining areas for improvement and

enhancing of the Board effectiveness.

The Board adopts the independence test recommended by the Code. Taking into account the independence test,

the NC considers and determines the independence of directors. Key information regarding the directors is set out

in this Annual Report under the heading titled “Board of Directors.”

Principle 5 Board Performance

In determining the objective performance criteria for evaluation and determination for the FY2011, the NC had

considered the attendance, participation and contribution of individual Directors at Board and Committee meetings

to evaluate each Director’s performance. The attendances of the Directors at meetings of the Board and Board

Committees during the year are as follows:

Board

Meeting

Audit

Committee

Remuneration

Committee

Nominating

Committee

No. of meeting held : 2 2 1 1

Name of Director :

Lim Kee Liew @ Victor Lim 2 NA NA NA

Leong Lai Heng1 2 NA NA NA

Chan Sze Ming2 2 NA NA NA

Dr. Wang Kai Yuen 2 2 1 1

Teo Kio Choon @ Chang Chiaw Choon 2 2 1 1

Tan Siew Bin, Ronnie3 2 2 1 1

1 resigned on 24 August 2011

2 resigned on 1 June 2011

3 resigned on 25 May 2011

Principle 6 Access to Information

Board members are provided with adequate and timely information prior to Board meetings, and on an ongoing

basis, have separate and independent access to the Company’s senior management. Detailed Board Committee/

Board papers are prepared for each Board Committee/Board meeting. The Board papers include sufficient

information on financial, business and corporate issues from Management to enable Directors to be properly

informed on issues to be considered at Board Meetings. The Board has separate and independent access to the

Company’s senior management and the Company Secretary to address any enquires at all times.



The Company Secretary attends Board meetings and is responsible for ensuring that Board procedures are followed.

The Company Secretary ensures that the Company complies with the requirements of the Companies Act Cap. 50.

Together with the management staff of the Company, the Company Secretary is responsible for compliance with all

other SGX-ST rules and regulations, which are applicable to the Company.

In addition, the Board takes independent professional advice as and when necessary to enable it to discharge its

duty and responsibilities effectively. The cost of such professional advice will be borne by the Company.

The appointment and the removal of the Company Secretary are subject to the Board’s approval.

REMUNERATION MATTERS

Principle 7 Procedures for Developing Remuneration Policies

Principle 8 Level and Mix of Remuneration

Principle 9 Disclosure on Remuneration

The Remuneration Committee (“RC”) comprises the following members:



Mr. Chue Wai Tat

The principal responsibilities of the RC are:

to review and recommend to the Board an appropriate and competitive framework of remuneration for the

Board and key executives of the Group to attract, retain and motivate employees of the required caliber to

manage the Company successfully;

to determine and recommend to the Board specific remuneration packages for each Executive Director,

taking into account factors including remuneration packages of Executive Directors in comparable industries

as well as the performance of the Company and that of the Executive Directors;

to review Management’s proposal of the fees for Independent Non-Executive Directors; and

to ensure that the remuneration policies and systems of the Group supports the Group’s objectives and

strategies.

The RC has adopted written terms of reference.

The remuneration package adopted for the Executive Directors is as per the service contract entered into

between the respective Executive Director and the Company. The NC, together with the RC, decides on the

specific remuneration package for an Executive Director upon recruitment. Thereafter, the RC reviews subsequent

increments, bonuses and allowances where these payments are discretionary. No Director or member of the RC is

involved in deciding his or her own remuneration. The RC reviews what compensation commitments the executive

directors’ service contracts would entail in event of early termination and aims to be fair and avoid rewarding

inadequate performance. The service contract may be terminated by either the Company or Executive Directors

giving to the other at least 6 months prior written notice. The RC is of the view that the Directors’ service contracts

are not excessively long or with onerous removal clauses.

Independent Non-Executive Directors do not enter into any Service Contracts with the Company. Save for the

receipt of directors’ fees and participation in the Company’s Employees Share Option Scheme, Independent Non-

Executive Directors do not receive any remuneration from the Company.

Directors’ fees are set in accordance with a remuneration framework comprising basic fees, attendance fees and

additional fees for serving on any of the Board Committees. Directors’ fees are approved by the shareholders of the

Company as a lump sum payment at the Annual General Meeting of the Company.



Other than Ms. Leong Lai Heng, no employees of the company and its subsidiaries are related to Directors or the

Chief Executive Officer whose remuneration exceeded S$150,000 during the financial year ended 30 June 2011.

The following table shows the breakdown of the fees and remuneration of Directors (in percentage terms) for the

year ended 30 June 2011:

Remuneration band and name of

directors Fee Salary

Other

Benefits

including

benefits in

kind Total

% % % %

S$250,000 to below S$500,000 :

Lim Kee Liew @ Victor Lim – 95 5 100

Leong Lai Heng* – 93 7 100

Below S$250,000 :

Chan Sze Ming, William1 – 89 11 100

Dr. Wang Kai Yuen 100 – – 100

Teo Kio Choon @ Chang Chiaw Choon 100 – – 100

Tan Siew Bin, Ronnie2 100 – – 100

Ng Chee Wee3 – 95 5 100

1 resigned on 1 June 2011

2 resigned on 25 May 2011

3 appointed on 6 May 2011

* Winchester Lin was the alternative director to Ms Leong during the financial year and his remuneration is disclosed below

The annual remuneration for key executives (in percentage terms) during the year is as follows:

Key executives Salary Bonus

Other

Benefits Total

% % % %

Below S$250,000 :

Lin Xianglong, Winchester* 66 – 34 100

Han Yee Yen1 96 – 4 100

Lim Kee Hing 95 – 5 100

Lim See Wai 94 – 6 100

Vincent Koh2 90 2 8 100

Ng Chee Wee3 100 – – 100

Ng Cher Lek 100 – – 100

Yang Lei 98 2 – 100

Ang Chee Hao 99 – 1 100

1 resigned as Financial Controller on 8 October 2010

2 resigned as Assistant General Manager on 30 June 2011

3 appointed as Group Financial Controller on 30 August 2010



ACCOUNTABILITY AND AUDIT

Principle 10 Accountability

In presenting the annual financial statements and half-yearly announcements to shareholders, it is the aim of the

Board to provide the shareholders with a detailed analysis, explanation and assessment of the Group’s financial

position and prospects. Management currently provides all members of the Board with appropriately detailed

management accounts of the Group’s performance, position and prospects on a half-yearly and such management

accounts are provided to executive directors on a monthly basis.

Principle 11 Audit Committee

Principle 12 Internal Control

Principle 13 Internal Audit

The Audit Committee (“AC”) comprises the following members, all of whom are Independent Non-Executive

Directors, appropriately qualified to discharge their responsibilities:



Mr. Chue Wai Tat

The AC met twice (2) in FY2011. The principal functions of the AC are:

to recommend to the Board of Directors the External Auditors to be nominated;

to review the scope, audit plans, results and effectiveness of the External Auditors;

to review any related significant findings and recommendations of the External Auditors, together with

Management’s responses thereto;

to review the adequacy of the Group’s system of internal controls, financial and management reporting

systems;

to review with Management on significant risks or exposures that exist and assesses the steps that

Management has taken to minimize such risks to the Group;

to review with Management the announcement of the interim and full-year results of the Group and its

financial statements;

to review interested party transactions as may be required by the regulatory authorities or the provisions of

the Companies Act;

to review legal and regulatory matters that may have a material impact on the financial statements and

reports action and minutes of the AC to the Board of Directors with such recommendations as the AC

considers appropriate; and

to review arrangements by which staff of the Company may, in confidence, raise concerns about possible

improprieties in matters of financial reporting or other matters.

The AC had adopted written terms of reference.

The AC has full access to and receives co-operation from the Management, and has full discretion to invite members

of the management to attend its meetings. Reasonable resources have been given to enable it to discharge its

functions. Minutes of the AC meetings are circulated to the Board for its information.

The AC has conducted an annual review of all non-audit services by the external auditors to satisfy itself that the

nature and extent of such services will not prejudice the independence and objectivity of the external auditors and

has recommended to the Board the re-appointment of Messrs Ernst & Young LLP as the auditors of the Company.

The AC has met with the external auditors annually, without the presence of the Company’s management.



The Board recognizes its responsibility for the Group’s system of internal controls and the need to review its

adequacy and integrity regularly in order to safeguard the Group’s assets and therefore shareholders’ investments in

the Group.

The Company’s senior management has made regular visits to the operating units within the Group. A management

structure with clearly defined lines of responsibility that promotes effective internal control is in place.

To further strengthen the internal control system, the Management will consider the establishment of an independent

internal audit function either on an in-house or outsourced basis.

COMMUNICATION WITH SHAREHOLDERS

Principle 14 Communication with Shareholders

Principle 15 Greater Shareholder Participation

In line with the continuous disclosure obligations of the Company and pursuant to the Listing Manual of the SGX-

ST and the Companies Act, Chapter 50, shareholders shall be informed of all major developments that impact the

Group, in a timely manner.

The Company does not practice selective disclosure. All material and price sensitive information as well as

information on the Company’s new initiatives are publicly released via SGXNET. In addition, the Company also

responds to enquiries from shareholders, investors, analysts, fund managers and the press. All shareholders of

the Company receive a copy of the Annual Report and Notice of Annual General Meeting (“AGM”) annually. The

Notice of the AGM is also advertised in a daily newspaper and made available on the SGX-ST website. At the AGM,

shareholders are given the opportunity to air their views and ask questions regarding the Company and the Group.

The Articles of Association of the Company allows shareholders to appoint one or two proxies to attend and vote in

their stead at the AGM.

Each item of special business included in the Notice of meetings is accompanied, where appropriate, by an

explanation for the proposed resolution. Separate resolutions are proposed for substantially separate issues at

meetings. The Chairmen of the Audit, Remuneration and Nominating Committees are normally available at the AGM

to answer questions relating to the work of these committees. The external auditors are also present to assist the

Directors in addressing any relevant queries from shareholders. The Company Secretary records minutes of every

AGM and the minutes will be made available to the shareholders upon their request.

RISK MANAGEMENT

The Company does not have a Risk Management Committee. However, the Management reviews the Company’s

business and operational activities regularly to identify areas of significant business risks as well as appropriate

measures to control and mitigate these risks. The Management reviews all significant control policies and procedures

and highlights all significant matters to the Board and the Audit Committee.

DEALINGS IN SECURITIES

The Company has a clear policy on the trading of its shares by directors, executives and employees within the

Group. The Company has adopted its own internal Code of Best Practices on Securities Transactions (“the

Securities Transactions Code”); The Securities Transactions Code provides guidance to the directors and executives

of the Group with regard to dealing in the Company’s shares. It emphasizes that the law on insider trading is

applicable at all times, notwithstanding the window periods for dealing in the shares. The Securities Transactions

Code also enables the Company to monitor such share transactions by requiring employees to report to the

Company whenever they deal in the Company’s shares.

The Group issues circulars to its directors, executives and employees informing them that they must not trade in the

listed securities of the Company one month before the announcement of the Group’s half-yearly and full year results

and ending on the date of the announcement of such results.



The directors are required to notify the Company of any dealings in the Company’s securities (during the open

window period) within two (2) business days of the transactions.

The Board is satisfied with the Group’s commitment in compliance with the Code, and on the adequacy of internal

controls within the Group. The Group has complied with its Best Practices on Securities Transactions.

MATERIAL CONTRACTS

Save for the service contracts between the Executive Directors and the Company, and the interested person

transactions described below, there are no other material contracts of the Company or its subsidiaries involving the

interest of the chief executive officer or any director or controlling shareholders which are either still subsisting at the

end of the financial year or entered into since the end of the previous financial year.

INTERESTED PERSON TRANSACTIONS

The Company has established procedures to ensure that all transactions with interested persons are reported on a

timely manner to the Audit Committee and that such transactions are carried out on normal commercial terms and

will not be prejudicial to the interests of the Company and its minority shareholders.

The aggregate value of the interested person transactions entered into FY2011 is as follows: -

Name of interested person

Aggregate value of all interested person

transactions during the financial year under

review (excluding transaction less than S$100,000

and transactions conducted under shareholders’

mandate pursuant to Rule 920)

Ultraline Technology (S) Pte Ltd $208,000

Asian Micro Industries (Thailand) Co., Ltd $126,900

NON-AUDIT FEES AND NON-SPONSOR FEES

The Company is currently under the SGX-ST Catalist sponsor-supervised regime. The Continuing Sponsor of the

Company is Asian Corporate Advisors Pte. Ltd.

KW Capital Pte. Ltd. was the continuing sponsor of the Company up to 31 October 2010. The Company appoints

Asian Corporate Advisors Pte. Ltd. as its continuing sponsor with effect from 1 November 2010.

In compliance with Rule 1204(20) of the Catalist Rule, there was no non-sponsor fee paid by the Company to

the sponsor, for the year ended 30 June 2011. There were no non-audit fees paid to the external auditors for the

financial year concerned.

TREASURY SHARES

There are no treasury shares held by the Company.

DIRECTORS’ REPORT


The directors present their report to the members together with the audited consolidated financial statements of

Asian Micro Holdings Limited (the “Company”) and its subsidiaries (collectively, the “Group”) and the balance sheet

and statement of changes in equity of the Company for the financial year ended 30 June 2011.

Directors

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

Dr. Wang Kai Yuen

Lim Kee Liew @ Victor Lim

Lin Xianglong Winchester (appointed on 24 August 2011)

Ng Chee Wee (appointed on 6 May 2011)


Chue Wai Tat (appointed on 6 July 2011)

Arrangements to enable directors to acquire shares and debentures

Except for the Asian Micro Holdings Limited Employees’ Share Option Plan as described below, neither at the end of

nor at any time during the financial year was the Company a party to any arrangement whose object is to enable the

directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company

or any other body corporate.

Directors’ interests in shares and debentures

The following directors, who held office at the end of the financial year, had, according to the register of directors’

shareholdings required to be kept under section 164 of the Companies Act, Cap. 50, an interest in shares of the

Company and related corporations (other than wholly-owned subsidiaries), as stated below:

Direct interest Deemed interest

At

1 July 2010

or date of

appointment

At

30 June

2011

At

21 July

2011

At

1 July

2010

At

30 June

2011

At

21 July

2011

The Company

Asian Micro Holdings Limited

(Ordinary shares)

Lim Kee Liew @

Victor Lim 46,808,217 104,741,217 104,741,217 117,151,304 159,218,304 159,218,304

Leong Lai Heng * 76,579,760 118,646,760 118,646,760 87,379,761 145,312,761 145,312,761

Ng Chee Wee 100,000 100,000 100,000 – – –

Dr. Wang Kai Yuen 1,526,000 1,526,000 1,526,000 – – –

Teo Kio Choon @

Chang Chiaw Choon 600,000 600,000 600,000 – – –

DIRECTORS’ REPORT


Directors’ interests in shares and debentures (cont’d)

Direct interest

At

beginning

of the year

or date of

appointment

At

end of the

year

At

21 July

2011

Exercise

price

$

Exercise period

The Company

Asian Micro Holdings Limited

(Options to subscribe for ordinary shares)

Lim Kee Liew @

Victor Lim – 2,000,000 2,000,000 0.015 November 2011 – October 2020

Leong Lai Heng * – 2,000,000 2,000,000 0.015 November 2011 – October 2020

Ng Chee Wee 1,500,000 1,500,000 1,500,000 0.015 November 2011 – October 2020

– – 1,500,000 0.010 July 2012 – October 2020

Dr. Wang Kai Yuen 574,000 574,000 574,000 0.070 August 2004 – September 2011

1,180,000 1,180,000 1,180,000 0.090 October 2004 – September 2011

1,500,000 1,500,000 1,500,000 0.030 December 2010 – September 2011

– 4,000,000 4,000,000 0.015 November 2011 – October 2020

– – 1,000,000 0.010 July 2012 – October 2020

Teo Kio Choon @

Chang Chiaw Choon

1,500,000

900,000

1,500,000

900,000

1,500,000

900,000

0.090

0.030

October 2004 – September 2011

December 2010 – September 2011

– 2,500,000 2,500,000 0.015 November 2011 – October 2020

– – 500,000 0.010 July 2012 – October 2020

* Resigned as director of the Company on 24 August 2011.

By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Lim Kee Liew @ Victor Lim and Leong Lai Heng

are deemed to have an interest in shares of the subsidiaries of the Company.

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares,

share options, warrants or debentures of the Company or of related corporations either at the beginning or end of

the financial year or 21 July 2011.

Directors’ contractual benefits

Except as disclosed in the financial statements, since the end of the previous financial year, no director of the

Company 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 the director is a member, or with a company in which

the director has a substantial financial interest, except for significant transactions with related parties as disclosed in

Note 27 to the accompanying financial statements.

DIRECTORS’ REPORT


Share options

Asian Micro Employees’ Share Option Scheme

1. Asian Micro Employees’ Share Option Scheme (the “ESOS 2001”) was approved by the shareholders at an

extraordinary general meeting held on 28 September 2001. The ESOS 2001 was subsequently terminated

by shareholders at an extraordinary general meeting held on 28 October 2010.

2. Members who administered the ESOS 2001 during the financial year are:


Leong Lai Heng


3. No option has been granted during the financial year.

4. Details of the balance of the options to subscribe for ordinary shares of the Company pursuant to the ESOS

2001 as at 30 June 2011 are as follows:

Grant date Expiry date

Exercise price

(S$) Number of options

October 2001 September 2011 0.050 800,000

November 2001 September 2011 0.060 152,000

May 2002 September 2011 0.180 56,000

June 2002 September 2011 0.165 68,000

August 2003 September 2011 0.065 21,000

August 2003 September 2011 0.070 574,000

October 2003 September 2011 0.090 2,646,000

October 2005 September 2011 0.090 525,000

May 2007 September 2011 0.090 550,000

June 2007 September 2011 0.100 230,000

June 2007 September 2011 0.105 200,000

July 2008 September 2011 0.050 675,000

September 2008 September 2011 0.050 50,000

December 2009 September 2011 0.030 7,960,000

14,507,000

DIRECTORS’ REPORT


Share options (cont’d)

5. Details of the options to subscribe for ordinary shares of the Company granted to directors of the Company

pursuant to the ESOS 2001 are as follows:

Name of directors

Options

granted

during the

financial

year

Aggregate

options

granted

since

commence-

ment of

ESOS 2001

Aggregate

options

cancelled

since

commence-

ment of

ESOS 2001

Aggregate

options

exercised

since

commence-

ment of

ESOS 2001

Aggregate

options

outstanding

as at end of

financial

year

Dr. Wang Kai Yuen – 6,380,000 (2,000,000) (1,126,000) 3,254,000

Teo Kio Choon @

Chang Chiaw Choon – 4,300,000 (200,000) (1,700,000) 2,400,000

Ronnie Tan Siew Bin – 916,000 (16,000) – 900,000

Chan Sze Ming – 3,900,000 – (100,000) 3,800,000

6. Apart from the following who have in aggregate received 5% or more of the total number of options available

under the ESOS 2001, none of the other executive directors and employees of the Group who participated in

the ESOS 2001 has received 5% or more of the total number of options available under the ESOS 2001:

Total options

granted

Total % of options

under the ESOS 2001

Dr. Wang Kai Yuen 6,380,000 9.17%

Teo Kio Choon @ Chang Chiaw Choon 4,300,000 6.18%

Chan Sze Ming * 3,900,000 5.61%

* Resigned as director of the Company on 1 June 2011.

Except for the above, no options have been granted to other directors, controlling shareholders of the

Company or their associates.

The options do not entitle the holder to participate, by virtue of the options, in any share issue of any other

corporation.

No options had been exercised from the financial year end to the date of this report. No unissued shares,

other than those referred to above, are under option as at the date of this report.

None of the options were granted at a discount during the financial year.

DIRECTORS’ REPORT


Asian Micro Employees’ Share Option Scheme 2010

1. Asian Micro Employees’ Share Option Scheme 2010 (the “ESOS 2010”) was approved by shareholders at an

extraordinary general meeting held on 28 October 2010.

2. Members who administered the ESOS 2010 during the financial year are:


Leong Lai Heng


3. During the financial year ended 30 June 2011, the Company granted 25,950,000 share options under the

ESOS 2010. These options are only exercisable after the first anniversary of the Date of Grant of options.

These options expire on 28 October 2020 and are exercisable if the employee remains in service.

4. Details of the balance of the options to subscribe for ordinary shares of the Company pursuant to the ESOS

2010 as at 30 June 2011 are as follows:

Grant date Expiry date

Exercise price

(S$) Number of options

November 2010 October 2020 0.015 19,450,000

5. Details of the options to subscribe for ordinary shares of the Company granted to directors of the Company

pursuant to the ESOS 2010 are as follows:

Options

granted

during the

financial

year

Aggregate

options

granted

since

commence-

ment of

ESOS 2010

Aggregate

options

cancelled

since

commence-

ment of

ESOS 2010

Aggregate

options

exercised

since

commence-

ment of

ESOS 2010

Aggregate

options

outstanding

as at end of

financial

year

Name of Directors

Lim Kee Liew @

Victor Lim 2,000,000 2,000,000 – – 2,000,000

Leong Lai Heng 2,000,000 2,000,000 – – 2,000,000

Ng Chee Wee 1,500,000 1,500,000 – – 1,500,000

Dr. Wang Kai Yuen 4,000,000 4,000,000 – – 4,000,000

Teo Kio Choon @

Chang Chiaw Choon 2,500,000 2,500,000 – – 2,500,000

Name of Associates

of controlling

shareholders

Lim Kee Hing 2,000,000 2,000,000 – – 2,000,000

Lin Xianglong Winchester 2,000,000 2,000,000 – – 2,000,000

DIRECTORS’ REPORT


Share options (cont’d)

6. Save as disclosed, none of the directors and employees of the Group who participated in the ESOS 2010

has received 5% or more of the total number of options available under the ESOS 2010.

The options do not entitle the holder to participate, by virtue of the options, in any share issue of any other

corporation.

No options had been exercised from the financial year end to the date of this report. No unissued shares,

other than those referred to above, are under option as at the date of this report.

None of the options were granted at a discount during the financial year.

Audit committee

The audit committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act,

Cap. 50. The functions performed are detailed in the Report on Corporate Governance.

Auditors

Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.

On behalf of the Board of directors,


Director

Lin Xianglong Winchester

Director

Singapore

7 October 2011

STATEMENT BY DIRECTORS


We, Lim Kee Liew @ Victor Lim and Lin Xianglong Winchester, being two of the directors of Asian Micro Holdings

Limited, do hereby state that, in the opinion of the directors,

(i) the accompanying balance sheets, consolidated statement of comprehensive income, statements of changes

in equity and consolidated cash flow statement together with notes thereto are drawn up so as to give a true

and fair view of the state of affairs of the Group and of the Company as at 30 June 2011 and the results of

the business, changes in equity and cash flows of the Group and the changes in equity of the Company for

the year ended on that date, and

(ii) 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 the assumption that, as stated in Note 2.1 to the financial statements,

the Group and the Company will generate adequate cash flows from operations and continue to receive

continuing financial support from two major shareholders of the Company.

On behalf of the Board of directors,


Director

Lin Xianglong Winchester

Director

Singapore

7 October 2011

INDEPENDENT AUDITORS’ REPORTFor the fi nancial year ended 30 June 2011


To the Members of Asian Micro Holdings Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Asian Micro Holdings Limited (the “Company”) and its

subsidiaries (collectively “the Group”) set out on pages 29 to 92, which comprise the balance sheets of the Group

and the Company as at 30 June 2011, the statements of changes in equity of the Group and the Company and the

consolidated statement of comprehensive income and consolidated cash flow statement of the Group for the year

then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance

with the provisions of the Singapore Companies Act, Cap. 50 (the Act) and Singapore Financial Reporting Standards,

and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable

assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are

properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss

accounts and balance sheets and to maintain accountability of assets.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our

audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,

the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true

and fair view 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 control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,

as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinion.

Opinion

In our opinion, the consolidated financial statements of the Group and the balance sheet and statement of changes

in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore

Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the

Company as at 30 June 2011 and the results, changes in equity and cash flows of the Group and the changes in

equity of the Company for the year ended on that date.

Emphasis of matter

We draw attention to Note 2.1 to the financial statements. The Group and the Company incurred a net loss after

taxation of $4,429,060 and $3,723,773, respectively, for the financial year ended 30 June 2011 and as at that

date, the Company’s current and total liabilities exceeded its current and total assets by $2,112,381 and $635,870

respectively. These factors indicate the existence of an uncertainty which may cast significant doubt about the

Group and the Company’s ability to continue as going concerns. As discussed more fully in Note 2.1 to the financial

statements, these financial statements have been prepared on a going concern basis on the assumption that the

Group and the Company will generate adequate cash flows from operations and continue to receive continuing

financial support from two major shareholders of the Company (one of whom is also a director of the Company).

Our opinion is not qualified in respect of this matter.

INDEPENDENT AUDITORS’ REPORTFor the fi nancial year ended 30 June 2011


Report on other legal and regulatory requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those

subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the

provisions of the Act.

Ernst & Young LLP

Public Accountants and

Certified Public Accountants

Singapore

7 October 2011

BALANCE SHEETSAs at 30 June, 2011


Group Company

Note 2011 2010 2011 2010

$ $ $ $

Non-current assets

Property, plant and equipment 3 1,097,899 1,716,515 33,805 37,835

Investments in subsidiaries 4 – – 1,459,031 2,059,077

Investments in associate 5(a) – – – –

Other investments 5(b) – – – –

Current assets

Inventories 6 1,380,055 2,598,789 – –

Trade and other receivables 7 1,636,371 2,111,314 4,335 16,815

Prepayments 353,334 460,312 13,502 7,716

Due from subsidiaries

(non-trade) 8 – – – 522,085

Due from related parties

(non-trade) 8 108,333 5,136 2,561 –

Fixed deposits 9 427,033 376,972 25,666 76,151

Cash and bank balances 9 271,807 1,050,113 955 8,550

4,176,933 6,602,636 47,019 631,317

Total assets 5,274,832 8,319,151 1,539,855 2,728,229

Current liabilities

Trade and other payables 10 1,777,647 2,228,286 149,488 200,669

Accrued expenses 13 920,001 1,913,654 582,277 1,129,431

Loan from directors (non-trade) 8 – 400,472 – –

Provision 14 – 51,797 – –

Due to subsidiaries (non-trade) 8 – – 1,420,451 –

Due to related parties

(non-trade) 8 784,828 161,706 – –

Bills payable to bank 11 455,833 916,353 – –

Obligations under finance lease 12 72,884 129,424 7,184 6,555

Provision for taxation 17,036 245,515 – –

4,028,229 6,047,207 2,159,400 1,336,655

Net current assets/(liabilities) 148,704 555,429 (2,112,381) (705,338)

Non-current liabilities

Obligations under finance lease 12 168,393 104,815 15,740 22,925

Deferred tax liabilities 23 585 581 585 581

Loan from related party

(non-trade) 8 300,000 – – –

468,978 105,396 16,325 23,506

Total liabilities 4,497,207 6,152,603 2,175,725 1,360,161

Net assets/(liabilities) 777,625 2,166,548 (635,870) 1,368,068

BALANCE SHEETSAs at 30 June, 2011


Group Company

Note 2011 2010 2011 2010

$ $ $ $

Equity attributable to owners

of the Company

Share capital 15 38,673,928 37,173,928 38,673,928 37,173,928

Share option reserve 16 389,987 212,944 389,987 212,944

Foreign currency translation

reserve 1,524,093 147,417 – –

Premium paid on acquisition

of non-controlling interests 17 – (638,162) – –

Other reserve 96,189 96,189 96,189 96,189

Accumulated losses (39,487,296) (34,995,336) (39,795,974) (36,114,993)

1,196,901 1,996,980 (635,870) 1,368,068

Non-controlling interests (419,276) 169,568 – –

Total equity 777,625 2,166,548 (635,870) 1,368,068

Total equity and liabilities 5,274,832 8,319,151 1,539,855 2,728,229

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 30 June 2011


Note 2011 2010

$ $

(Reclassified)

Revenue 18 8,575,068 20,703,625

Cost of sales (6,970,665) (18,719,494)

Gross profit 1,604,403 1,984,131

Other operating income 19(a) 459,666 836,761

Distribution and selling expenses (267,126) (445,920)

Administrative expenses (3,857,170) (4,027,106)

Other operating expenses 19(b) (2,515,885) (1,258,463)

Loss from operations (4,576,112) (2,910,597)

Financial expenses 21 (67,341) (125,687)

Financial income 21 3,290 3,590

Share of results of associated companies – 21,657

Loss before taxation 20 (4,640,163) (3,011,037)

Taxation 23 211,103 (70,621)

Net loss for the year (4,429,060) (3,081,658)

Other comprehensive income

Foreign currency translation 1,720,577 (2,170)

Foreign currency reserve realised on disposal of subsidiaries 4 (400,275) (518,142)

Other comprehensive income/(loss) for the year, net of tax 1,320,302 (520,312)

Total comprehensive loss for the year (3,108,758) (3,601,970)

Loss attributable to:

Owners of the parent (3,896,590) (3,023,458)

Non-controlling interests (532,470) (58,200)

(4,429,060) (3,081,658)

Total comprehensive income attributable to:

Owners of the parent (2,519,914) (3,521,939)

Non-controlling interests (588,844) (80,031)

(3,108,758) (3,601,970)

Loss per share attributable to owners of the parent

(cents per share)

Basic 24 (0.94) (0.84)

Diluted 24 (0.94) (0.84)

STATEMENTS OF CHANGES IN EQUITYFor the year ended 30 June 2011


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98

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630,8

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Company

Share

capital

Accumulated

losses

Other

reserve

Share option

reserve Total equity

$ $ $ $ $

Balance as at 1 July 2009 36,653,215 (32,186,383) 96,189 255,580 4,818,601

Total comprehensive loss for

the year – (4,081,345) – – (4,081,345)

Contribution by and distributions

to owners

Grant of equity-settled share

options to employees (Note 16) – – – 110,099 110,099

Expiry of employee share options

(Note 16) – 152,735 – (152,735) –

Capitalisation of payables to

certain directors and a trade

creditor 520,713 – – – 520,713

Total transactions with owners in

the capacity as owners 520,713 152,735 – (42,636) 630,812

Balance as at 30 June 2010 37,173,928 (36,114,993) 96,189 212,944 1,368,068

Balance as at 1 July 2010 37,173,928 (36,114,993) 96,189 212,944 1,368,068

Total comprehensive loss for

the year – (3,723,773) – – (3,723,773)

Grant of equity-settled share

options to employees (Note 16) – – – 219,835 219,835

Expiry of employee share options

(Note 16) – 42,792 – (42,792) –

Capitalisation of payables to

certain directors 1,500,000 – – – 1,500,000

Total transactions with owners in

the capacity as owners 1,500,000 42,792 – 177,043 1,719,835

Balance as at 30 June 2011 38,673,928 (39,795,974) 96,189 389,987 (635,870)


CONSOLIDATED CASH FLOW STATEMENTFor the year ended 30 June 2011


Note 2011 2010

$ $

Cash flow from operating activities

Loss before taxation (4,640,163) (3,011,037)

Adjustments:

Allowance for doubtful debts (trade) 12,639 187,384

Allowance for doubtful debts (non-trade) 3,253 12,453

Write-off of doubtful debts 543 175,835

Allowance for stocks obsolescence 714,397 248,037

Write-back of allowance for doubtful debts (6,207) (262,266)

Write-back of allowance for stock obsolescence (8,066) –

(Write-back)/write-off of stocks – 123,494

Gain on disposal of subsidiaries (163,214) (221,480)

Depreciation of property, plant and equipment 499,662 695,333

Property, plant and equipment written off 52,393 15,368

Gain on disposal of property, plant and equipment (91,000) (13,084)

Impairment loss on property, plant and equipment 166,153 528,287

Waiver of payables (2,050) (230,806)

Write-back of provision for warranty (51,797) –

Interest expense 47,704 79,124

Interest income (3,290) (3,590)

Share of results of associated companies – (21,657)

Share-based payment expenses 219,835 110,099

Operating loss before working capital changes (3,249,208) (1,588,506)

Decrease in stocks 664,349 1,368,584

Decrease/(increase) in trade and other receivables 580,415 (113,591)

Decrease/(increase) in prepayments 128,819 (10,505)

(Increase)/decrease in amount due from /(to) related parties 680,899 98,858

Decrease in amount due from affiliated companies – 96,128

Increase in trade and other payables 817,537 201,127

Increase in accrued expenses – 865,663

(Decrease)/Increase in provision (51,797) 51,797

(Decrease)/increase in bills payable to bank (460,520) 151,879

Increase in amount due to directors (non-trade) – 550,472

Cash (used in)/generated from operations (889,506) 1,671,906

Interest paid (47,704) (79,124)

Interest income received 3,290 3,590

Income taxes paid (38,836) (141,606)

Income taxes refunded – 82,198

Net cash (used in)/generated from operating activities (972,756) 1,536,964

CONSOLIDATED CASH FLOW STATEMENTFor the year ended 30 June 2011


Note 2011 2010

$ $

Cash flow from investing activities

Net cash flow from disposal of subsidiaries 4 (13,948) (763)

Proceeds from disposal of property, plant and equipment 336,977 169,949

Purchase of property, plant and equipment 3 (381,270) (1,013,376)

Net cash used in investing activities (58,241) (844,190)

Cash flows from financing activities

Loan from related party 300,000 –

Drawdown of finance lease obligations 155,455 –

Repayment of finance lease obligations (145,290) (240,250)

Fixed deposits pledged (51,837) (9,582)

Net cash generated from/(used in) financing activities 258,328 (249,832)

Net (decrease)/increase in cash and cash equivalents (772,669) 442,942

Effect of exchange rate changes in cash and cash equivalents (5,637) 812

Cash and cash equivalents at beginning of year 1,050,113 606,359

Cash and cash equivalents at end of year 9 271,807 1,050,113


NOTES TO THE FINANCIAL STATEMENTS30 June 2011


1. Corporate information

Asian Micro Holdings Limited is a limited liability company incorporated in Singapore and is listed on the

Stock Exchange of Singapore Catalist Sponsor-Supervised regime (“Catalist”).

The registered office and principal place of business of Asian Micro Holdings Limited is located at 1 Tech

Park Crescent, Tuas Tech Park, Singapore 638131.

The principal activity of the Company is that of investment holding.

The principal activities of the subsidiaries are those of natural gas vehicles conversion, tray-recycling services,

manufacturing of clean room grade polythene packaging materials and trading in clean room supplies.

Details of these subsidiaries are disclosed in Note 4 to the financial statements. There have been no

significant changes in the nature of these activities during the financial year.

2. Summary of significant accounting policies

The consolidated financial statements of the Group and the balance sheet and statement of changes in

equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards

(“FRS”). The financial statements have been prepared on the historical cost basis. The financial statements

are presented in Singapore Dollars (SGD or $).

2.1 Fundamental accounting concept

The Group and the Company incurred a net loss after taxation of $4,429,060 (2010: $3,081,658) and

$3,723,773 (2010: $4,081,345), respectively for the financial year ended 30 June 2011 and as at that date,

the Company’s current and total liabilities exceeded current and total assets by $2,112,381 (2010: $705,338)

and $635,870 respectively. These factors indicate the existence of an uncertainty which may affect the

validity of the going concern assumption on which the accompanying financial statements are prepared.

Two of the Company’s major shareholders (one of whom is also a director of the Company) have agreed to

provide continuing financial support to the Group and the Company to enable the Group and the Company

to meet their obligations as and when the need arises. In addition, they have given a commitment to (i) not to

recall for payment of salaries due to them as at 30 June 2011 and deferring payment of future salaries, and

(ii) allow the Group to defer payments of rental payable to companies controlled by them until such time as

the Group’s cash flow enables such payment.

The Directors are of the view that it is appropriate to prepare these financial statements on a going concern

basis on the assumption that the Group and the Company will generate adequate cash flows from operations

and continue to receive continuing financial support from the two major shareholders.

If the Group and the Company are unable to continue in operational existence for the foreseeable future, the

Group and the Company may be unable to discharge their liabilities in the normal course of business and

adjustments may have to be made to reflect the situation that assets may need to be realised other than

in the normal course of business and at amounts which could differ from the amounts at which they are

currently recorded in the balance sheets. In addition, the Group and the Company may have to reclassify

non-current assets and liabilities as current assets and liabilities. No such adjustments have been made to

these financial statements.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except in the current

financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (INT FRS)

that are effective for annual periods beginning on or after 1 January 2010. Except for the revised FRS 103

and the amendments to FRS27, adoption of these standards and interpretations did not have any effect on

the financial performance or position of the Group. They did however give rise to additional disclosures,

including, in some cases, revisions to accounting policies.



2. Summary of significant accounting policies (cont’d)

2.2 Changes in accounting policies (cont’d)

The principal effects of these changes are as follows:

FRS 103 Business Combinations (revised) and FRS 27 Consolidated and Separate Financial Statements

(revised)

The revised FRS 103 Business Combinations and FRS 27 Consolidated and Separate Financial Statements

are applicable for annual periods beginning on or after 1 July 2009. As of 1 January 2010, the Group

adopted both revised standards at the same time in accordance with their transitional provisions.

FRS 103 Business Combinations (revised)

The revised FRS 103 introduces a number of changes to the accounting for business combinations that will

impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and

future reported results. Changes in significant accounting policies resulting from the adoption of the revised

FRS 103 include:

– Transaction costs would no longer be capitalised as part of the cost of acquisition but will be

expensed immediately;

– Consideration contingent on future events are recognised at fair value on the acquisition date and any

changes in the amount of consideration to be paid will no longer be adjusted against goodwill but

recognised in profit or loss;

– The Group elects for each acquisition of a business, to measure non-controlling interest at fair value,

or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets, and

this impacts the amount of goodwill recognised; and

– When a business is acquired in stages, the previously held equity interests in the acquiree is

remeasured to fair value at the acquisition date with any corresponding gain or loss recognised in

profit or loss, and this impacts the amount of goodwill recognised.

According to its transitional provisions, the revised FRS 103 has been applied prospectively. Assets and

liabilities that arose from business combinations whose acquisition dates are before 1 January 2010 are not

adjusted.

FRS 27 Consolidated and Separate Financial Statements (revised)

Changes in significant accounting policies resulting from the adoption of the revised FRS 27 include:

– A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted

for as an equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give

rise to a gain or loss recognised in profit or loss;

– Losses incurred by a subsidiary are allocated to the non-controlling interest even if the losses exceed

the non-controlling interest in the subsidiary’s equity; and

– When control over a subsidiary is lost, any interest retained is measured at fair value with the

corresponding gain or loss recognised in profit or loss.

According to its transitional provisions, the revised FRS 27 has been applied prospectively, and does not

impact the Group’s consolidated financial statements in respect of transactions with non-controlling interests,

attribution of losses to non-controlling interests and disposal of subsidiaries before 1 January 2010. The

changes will affect future transactions with non-controlling interests.




2.3 Standards issued but not yet effective

The Group has not adopted the following standards and interpretations that have been issued but not yet

effective:

Description

Effective for annual

periods beginning

on or after

Revised FRS 24 Related Party Disclosures 1 January 2011

Amendments to INT FRS 114 Prepayments of a Minimum Funding Requirement 1 January 2011

INT FRS 115 Agreements for the Construction of Real Estate 1 January 2011

Amendments to FRS 107 Disclosures – Transfers of Financial Assets 1 July 2011

Amendments to FRS 12 Deferred Tax – Recovery of Underlying Assets 1 January 2012

Except for the revised FRS 24, the directors expect that the adoption of the other standards and

interpretations above will have no material impact on the financial statements in the period of initial

application. The nature of the impending changes in accounting policy on adoption of the revised FRS 24 is

described below.

Revised FRS 24 Related Party Disclosures

The revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships

and to eliminate inconsistencies in its application. The revised FRS 24 expands the definition of a related

party and would treat two entities as related to each other whenever a person (or a close member of that

person’s family) or a third party has control or joint control over the entity, or has significant influence over the

entity. The revised standard also introduces a partial exemption of disclosure requirements for government-

related entities. The Company is currently determining the impact of the changes to the definition of a related

party has on the disclosure of related party transaction. As this is a disclosure standard, it will have no

impact on the financial position or financial performance of the Company when implemented in 2011.

2.4 Significant accounting estimates and judgements

The preparation of the Group’s financial statements requires management to make estimates, judgements

and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and

disclosures at the end of each reporting period.

However, uncertainty about these assumptions and estimates could result in outcomes that could require a

material adjustment to the carrying amount of the asset or liability affected in the future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance

sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets

and liabilities within the next financial year are discussed below.

(i) Depreciation of plant and equipment

The costs of plant and equipment for the manufacturing activities are depreciated on a straight-line

basis over the useful lives of the plant and equipment. Management estimates the useful lives of

the plant and equipment to be within 1 to 10 years. These are common life expectancies applied

in the industry. The carrying amount of the Group’s plant and equipment at 30 June 2011 is stated

in Note 3 to the financial statements. Changes in the expected level of usage and technological

developments could impact the economic useful lives and the residual values of these assets,

therefore future depreciation charges could be revised.




2.4 Significant accounting estimates and judgements (cont’d)

(ii) Impairment of non-financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at each

reporting date. Property, plant and equipment are tested for impairment when there are indicators

that the carrying amounts may not be recoverable.

When value in use calculations are undertaken, management estimates the expected future cash

flows from the asset or cash-generating unit and chooses a suitable discounted rate in order to

calculate the present value of those cash flows.

(iii) Impairment of loans and receivables

The Group assesses at each balance sheet date whether there is any objective evidence that a

financial asset is impaired. To determine whether there is objective evidence of impairment, the Group

considers factors such as the probability of insolvency or significant financial difficulties of the debtor

and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are

estimated based on historical loss experience for assets with similar credit risk characteristics. The

carrying amounts of the Group’s loans and receivables at the balance sheet date are disclosed in

Note 7 to the financial statements.

(iv) Income taxes

The Group has exposure to income taxes in a number of jurisdictions. Significant judgement is

involved in determining the group-wide provision for income taxes. There are certain transactions

and computations for which the ultimate tax determination is uncertain during the ordinary course

of business. The Group recognises liabilities for expected tax issues based on estimates of whether

additional taxes will be due. Where the final tax outcome of these matters is different from the

amounts that were initially recognised, such differences will impact the income tax and deferred tax

provisions in the period in which such determination is made.

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that

taxable profit will be available against which the losses can be utilised. Significant management

judgement is required to determine the amount of deferred tax assets that can be recognised, based

upon the likely timing and level of future taxable profits. The carrying value of the unrecognised tax

losses at 30 June 2011 was $19,961,000 (2010: $15,909,000).

(v) Employee share options

The Group measures the cost of equity-settled transactions with employees by reference to the fair

value of the equity instruments at the date at which they are granted. Estimating fair value for share-

based payment transactions requires determining the most appropriate valuation model, which is

dependent on the terms and conditions of the grant. This estimate also requires determining the

most appropriate inputs to the valuation model including the expected life of the share option, volatility

and dividend yield and making assumptions about them. The assumptions and models used for

estimating fair value for share-based payment transactions are disclosed in Note 25.




2.4 Significant accounting estimates and judgements (cont’d)

(vi) Impairment of investment in subsidiary and associated companies

The Group assesses at each balance sheet date whether there is any objective evidence that the

investments in a subsidiary is impaired. To determine whether there is objective evidence of

impairment, the Group considers factors such as the industry/sector performance, operational

and financing cash flow. Management will exercise significant judgement to evaluate the financial

conditions and business prospects of the investments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are

estimated based on the forecasted performance of the subsidiary company. The carrying amounts

of the Group’s investments in subsidiary and associated companies at the balance sheet date are

disclosed in Notes 4 and 5 to the financial statements.

(vii) Provision for warranty

The Group recognises provision for warranty in accordance with the accounting policy stated in Note

2.18. The Group has made assumptions in relation to the expected costs of repair and maintenance.

At 30 June 2011, the provision of $51,797 had been reversed as the warranty period has lapsed

during the year.

2.5 Basis of consolidation

Business combinations from 1 January 2010

Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired

and liabilities assumed in a business combination are measured initially at their fair values at the acquisition

date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred

and the services are received.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate

classification and designation in accordance with the contractual terms, economic circumstances and

pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host

contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the

acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to

be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as a change to

other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured until

it is finally settled within equity.

In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured

to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if

any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share

of the acquiree’s identifiable net assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the

amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held

equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities

is recorded as goodwill. The accounting policy for goodwill is set out in Note 2.9. In instances where the

latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on

the acquisition date.




2.5 Basis of consolidation (cont’d)

Business combinations prior to 1 January 2010

In comparison to the above mentioned requirements, the following differences applied:

Business combinations are accounted for by applying the purchase method. Transaction costs directly

attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly

known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net assets.

Business combinations achieved in stages were accounted for as separate steps. Adjustments to those

fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any

additional acquired share of interest did not affect previously recognised goodwill.

When the Group acquired a business, embedded derivatives separated from the host contract by the

acquiree were not reassessed on acquisition unless the business combination resulted in a change in the

terms of the contract that significantly modified the cash flows that otherwise would have been required

under the contract.

Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic

outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the

contingent consideration were recognised as part of goodwill.

2.6 Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners

of the Company, and are presented separately in the consolidated statement of comprehensive income

and within equity in the consolidated balance sheet, separately from equity attributable to owners of the

Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control

are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and

non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any

difference between the amount by which the non-controlling interest is adjusted and the fair value of the

consideration paid or received is recognised directly in equity and attributed to owners of the parent.

2.7 Foreign currency

The Group’s consolidated financial statements are presented in Singapore Dollars, which is also the

Company’s functional currency. Each entity in the Group determines its own functional currency and items

included in the financial statements of each entity are measured using that functional currency.

(a) Transactions and balances

Transactions in foreign currencies are measured in the respective functional currencies of the Company

and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange

rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated

in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated

using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at

fair value in a foreign currency are translated using the exchange rates at the date when the fair value

was determined.




2.7 Foreign currency (cont’d)

(a) Transactions and balances (cont’d)

Exchange differences arising on the settlement of monetary items or on translating monetary items at

the end of the reporting period are recognised in profit or loss except for exchange differences arising

on monetary items that form part of the Group’s net investment in foreign operations, which are

recognised initially in other comprehensive income and accumulated under foreign currency translation

reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of

the Group on disposal of the foreign operation.

(b) Consolidated financial statements

For consolidation purpose, the assets and liabilities of foreign operations are translated into SGD at

the rate of exchange ruling at the end of the reporting period and their profit or loss are translated at

the exchange rates prevailing at the date of the transactions. The exchange differences arising on the

translation are recognised in other comprehensive income. On disposal of a foreign operation, the

component of other comprehensive income relating to that particular foreign operation is recognised

in profit or loss.

In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation,

the proportionate share of the cumulative amount of the exchange differences are re-attributed to non-

controlling interest and are not recognised in profit or loss. For partial disposals of associates that are

foreign operations, the proportionate share of the accumulated exchange differences is reclassified to

profit or loss.

The Group has elected to recycle the accumulated exchange differences in the separate component

of other comprehensive income that arises from the direct method of consolidation, which is the

method the Group uses to complete its consolidation.

2.8 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of

replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the

acquisition of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set

out in Note 2.20. The cost of an item of property, plant and equipment is recognised as an asset if, and only

if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of

the item can be measured reliably.

Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less

accumulated depreciation and any accumulated impairment losses.

Depreciation is computed on a straight-line basis over the estimated useful life of the asset as follows:

Years

Furniture and fittings 5 - 10

Air conditioners 3 - 10

Machinery, equipment and motor vehicles 3 - 10

Office equipment and computers 1 - 10

Communications equipment 2

Renovations and electrical installations 3 - 10




2.8 Property, plant and equipment (cont’d)

Assets under construction included in plant and equipment are not depreciated as these assets are not yet

available for use.

Fully depreciated assets are retained in the financial statements until they are no longer in use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in

circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted

prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits

are expected from its use or disposal. Any gain or loss on de-recognition of the asset is included in the

income statement in the year the asset is derecognised.

2.9 Intangible assets

Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less

accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition

date, allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies

of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those

units.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and

whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying

amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the

cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying

amount, an impairment loss is recognised in the income statement. Impairment losses recognised for

goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating

unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount

of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this

circumstance is measured based on the relative fair values of the operation disposed of and the portion of

the cash-generating unit retained. The Group’s goodwill was fully impaired in prior year.

2.10 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If

any such indication exists, or when annual impairment assessment for an asset is required, the Group makes

an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to

sell and its value in use and is determined for an individual asset, unless the asset does not generate cash

inflows that are largely independent of those from other assets. Where the carrying amount of an asset

or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written

down to its recoverable amount. In assessing value in use, the estimated future cash flows expected to

be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects

current market assessments of the time value of money and the risks specific to the asset.




2.10 Impairment of non-financial assets (cont’d)

Impairment losses are recognised in profit or loss.

An assessment is made at each reporting date as to whether there is any indication that previously

recognised impairment losses may no longer exist or may have decreased. A previously recognised

impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s

recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount

of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that

would have been determined, net of depreciation, had no impairment loss be recognised previously. Such

reversal is recognised in the profit or loss.

2.11 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies

so as to obtain benefits from its activities.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less

impairment losses.

2.12 Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant

influence. An associate is equity accounted for from the date the Group obtains significant influence until the

date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method,

the investment in associates is carried in the balance sheet at cost plus post-acquisition changes in the

Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying

amount of the investment and is neither amortised nor tested individually for impairment. Any excess of the

Group’s share of the net fair value of the associate’s identifiable asset, liabilities and contingent liabilities over

the cost of the investment is included as income in the determination of the Group’s share of results of the

associate in the period in which the investment is acquired.

The profit or loss reflects the share of the results of operations of the associates. When the Group’s share of

losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further

losses, unless it has incurred obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an

additional impairment loss on the Group’s investment in its associates. The Group determines at each

balance sheet date whether there is any objective evidence that the investment in the associate is impaired.

If this is the case, the Group calculates the amount of impairment as the difference between the recoverable

amount of the associate and its carrying value and recognises the amount in the profit or loss.

The financial statements of the associate are prepared as of the same reporting date as the Company.

Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

Upon loss of significant influence over the financial and operation decision in the associate, the Group

measures and recognises any retained investment at its fair value. Any difference between the carrying

amount of the associate upon loss of significant influence and the fair value of the aggregate of the retained

investment and proceeds from disposal is recognised in profit or loss.




2.13 Affiliated companies

An affiliated company is a company, not being a subsidiary or an associated company, in which one or

more of the directors or shareholders of the Company have a significant equity interest or exercise significant

influence.

2.14 Financial assets

Initial recognition and measurement

Financial assets are recognised when, and only when, the Group becomes a party to the contractual

provisions of the financial instrument. The Group determines the classification of its financial assets at initial

recognition.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial

assets not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurement

Loans and receivables

Non-derivatives financial assets with fixed or determinable payments that are not quoted in an active market

are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured

at amortised cost using the effective interest method, less impairment. Gains and losses are recognised

in profit or loss when the loans and receivables are derecognised or impaired, as well as through the

amortisation process.

Available-for-sale financial assets

Available-for-sale financial assets include equity investments, which are neither classified as held for trading

nor designated at fair value through profit or loss.

After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any gains

or losses from changes in fair value of the financial asset are recognised in other comprehensive income,

except that impairment losses, foreign exchange gains and losses on monetary instruments and interest

calculated using the effective interest method are recognised in profit or loss. The cumulative gain or

loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a

reclassification adjustment when the financial asset is derecognised.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less

impairment loss.

De-recognition

A financial asset is derecognised where the contractual right to receive cash flows from the asset has

expired. On de-recognition of a financial asset in its entirety, the difference between the carrying amount and

the sum of the consideration received and any cumulative gain or loss that has been recognised directly in

other comprehensive income is recognised in profit or loss.

All regular way purchases and sales of financial assets are recognised or derecognised on the trade date,

ie the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are

purchases or sales of financial assets that require delivery of assets within the period generally established by

regulation or convention in the marketplace concern.




2.15 Impairment of financial assets

The Group assesses at each balance sheet date whether there is any objective evidence that a financial

asset is impaired.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses individually whether objective evidence

of impairment exists individually for financial assets that are individually significant, or collectively for financial

assets that are not individually significant. If the Group determines that no objective evidence of impairment

exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group

of financial assets with similar credit risk characteristics and collectively assesses them for impairment.

Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be

recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has

been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount

and the present value of estimated future cash flows discounted at the financial asset’s original effective

interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The

amount of the loss is recognised in profit or loss.

When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly

or if an amount was charged to the allowance account, the amounts charged to the allowance account are

written off against the carrying value of the financial asset.

To determine whether there is objective evidence that an impairment loss on financial assets has been

incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of

the debtor and default or significant delay in payments.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related

objectively to an event occurring after the impairment was recognised, the previously recognised impairment

loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the

reversal date. The amount of reversal is recognised in profit or loss.

Available-for-sale financial assets

In the case of equity investments classified as available-for-sale, objective evidence of impairment include (i)

significant financial difficulty of the issuer or obligor, (ii) information about significant changes with an adverse

effect that have taken place in the technological, market, economic or legal environment in which the issuer

operates, and indicates that the cost of the investment in equity instrument may not be recovered; and (iii)

a significant or prolonged decline in the fair value of the investment below its costs. ‘Significant’ is to be

evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value

has been below its original cost.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its acquisition

cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss

previously recognised in profit or loss, is transferred from other comprehensive income and recognised in

profit or loss. Reversals of impairment losses in respect of equity instruments are not recognised in profit or

loss; increase in their fair value after impairment are recognised directly in other comprehensive income.




2.16 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and at bank and demand deposits. These also include

bank overdrafts that form an integral part of the Group’s cash management.

2.17 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories

to their present location and condition are accounted for as follows:

Raw materials – purchase costs on a first-in, first-out basis;

Finished goods and work-in-progress – costs of direct materials and labour and a proportion of

manufacturing overheads based on normal operating capacity.

Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying

value of inventories to the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of

completion and the estimated costs necessary to make the sale.

2.18 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a

past event, it is probable that an outflow of resources embodying economic benefits will be required to settle

the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it

is no longer probable that an outflow of economic resources will be required to settle the obligation, the

provision is reversed. If the effect of the time value of money is material, provisions are discounted using

a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is

used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provision for warranty

Provisions for warranty-related costs are recognised when the product is sold or service provided.

2.19 Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual

provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial

recognition.

All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value

through profit or loss, directly attributable transaction costs.

Subsequent measurement

After initial recognition, other financial liabilities are subsequently measured at amortised cost using the

effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are

derecognised, and through the amortisation process.




2.19 Financial liabilities (cont’d)

De-recognition

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or

expires. When an existing financial liability is replaced by another from the same lender on substantially

different terms, or the terms of an existing liability are substantially modified, such an exchange or

modification is treated as a de-recognition of the original liability and the recognition of a new liability, and the

difference in the respective carrying amounts is recognised in profit or loss.

2.20 Borrowing costs

Borrowing costs are recognised as expenses in the period in which they are incurred. Borrowing cost

consists of interest and other costs that an entity incurs in connections with the borrowing of funds.

2.21 Employee benefits

(i) Defined contribution plan

The Group participates in the national pension schemes as defined by the laws of the countries in

which it has operations. In particular, the Singapore companies in the Group make contributions

to the Central Provident Fund scheme in Singapore, a defined contribution pension scheme.

Contributions to defined contribution pension schemes are recognised as an expense in the period in

which the related service is performed.

(ii) Employee share option plans

Employees and directors of the Group receive remuneration in the form of share options as

consideration for services rendered. The cost of these equity-settled transactions with employees is

measured by reference to the fair value of the options at the date on which the options are granted.

This cost is recognised in profit or loss, with a corresponding increase in the employee share option

reserve, over the vesting period. The cumulative expense recognised at each reporting date until

the vesting date reflects the extent to which the vesting period has expired and the Group’s best

estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for

a period represents the movement in cumulative expense recognised as at the beginning and end of

that period and is recognised in employee benefits expense.

No expense is recognised for options that do not ultimately vest, except for options where vesting

is conditional upon a market or non-vesting condition, which are treated as vested irrespective of

whether or not the market condition or non-vesting condition is satisfied, provided that all other

performance and/or service conditions are satisfied. In the case where the option does not vest

as the result of a failure to meet a non-vesting condition that is within the control of the Group or

the employee, it is accounted for as a cancellation. In such case, the amount of the compensation

cost that otherwise would be recognised over the remainder of the vesting period is recognised

immediately in profit or loss upon cancellation. The employee share option reserve is transferred to

retained earnings upon expiry of the share option. When the options are exercised, the employee

share option reserve is transferred to share capital if new shares are issued.




2.22 Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the

arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific

asset or assets or the arrangement conveys a right to use the asset.

For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January

2005 in accordance with the transitional requirements of INT FRS 104.

(i) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to

ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased

asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also

added to the amount capitalised. Lease payments are apportioned between the finance charges and

reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of

the liability. Finance charges are charged to profit or loss.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and

the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of

the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis

over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a

reduction of rental expense over the lease term on a straight-line basis.

(ii) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset

are classified as operating leases. Initial direct costs incurred in negotiating an operating leases are

added to the carrying amount of the leased asset and recognised over the lease term on the same

bases as rental income. The accounting policy for rental income is set out in Note 2.23(vi).

2.23 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and

the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or

receivable, excluding sales taxes or duty. The Group assesses its revenue arrangements to determine if it

is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue

arrangements. The following specific recognition criteria must also be met before revenue is recognised:

(i) Sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of

ownership of the goods to the customer, usually on delivery of goods. Revenue is not recognised

to the extent where there are significant uncertainties regarding recovery of the consideration due,

associated costs or the possible return of goods.

(ii) Tray recycling services

Revenue on tray recycling services is recognised when the work is completed and the recycled items

are delivered to the customer.




2.23 Revenue recognition (cont’d)

(iii) Compressed natural gas supply products and services

Revenue on compressed natural gas supply products is recognised upon the completion of installation

and commissioning of the equipment, and transfer of title and risk of the compressed natural gas to

the customer, usually on delivery. Revenue on services is recognised when services are rendered.

(iv) Interest income

Interest income is recognised using the effective interest method.

(v) Management fees

Management fees are recognised when services are rendered.

(vi) Rental income

Rental income is accounted for on a straight-line basis over the leased terms.

2.24 Taxes

(i) Current tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount

expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to

compute the amount are those that are enacted or substantively enacted at the end of the reporting

period, in the countries where the Group operates and generates taxable income.

Current income taxes are recognised in profit or loss except to the extent that the tax relates to

items recognised outside profit or loss, either in other comprehensive income or directly in equity.

Management periodically evaluates positions taken in the tax returns with respect to situations

in which applicable tax regulations are subject to interpretation and establishes provisions where

appropriate.

(ii) Deferred tax

Deferred income tax is provided using the liability method on temporary differences at the balance

sheet date between the tax bases of assets and liabilities and their carrying amounts for financial

reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except where the deferred income

tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that

is not a business combination and, at the time of the transaction, affects neither the accounting profit

nor taxable profit or loss.

Deferred income tax assets are recognised for all deductible temporary differences, carry forward of

unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be

available against which the deductible temporary differences, and the carry forward of unused tax

credits and unused tax losses can be utilised except where the deferred income tax liability arises

from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business

combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit

or loss.




2.24 Taxes (cont’d)

(ii) Deferred tax (cont’d)

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and

reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow

all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed

at the end of each reporting period and are recognised to the extent that it has become probable that

future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year

when the asset is realised or the liability is settled, based on tax rates and tax laws that have been

enacted or substantively enacted at the balance sheet date.

Deferred income tax relating to items recognised outside profit or loss is recognised outside profit or

loss.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off

current income tax assets against current income tax liabilities and the deferred taxes relate to the

same taxable entity and the same taxation authority.

(iii) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

Where the sales tax incurred in a purchase of assets or services is not recoverable from the

taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of

the asset or as part of the expense item as applicable; and

Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part

of receivables or payables in the balance sheet.

2.25 Segment reporting

For management purposes, the Group is organised into operating segments based on their products

and services which are independently managed by the respective deputy managers responsible for the

performance of the respective segments under their charge. The deputy managers report directly to the CEO

of the Company who regularly reviews the segment results in order to allocate resources to the segments

and to assess the segment performance. Additional disclosures on each of these segments are shown

in Note 31, including the factors used to identify the reportable segments and the measurement basis of

segment information.

2.26 Share capital and share issue expenses

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs

directly attributable to the issuance of ordinary shares are deducted against share capital.

2.27 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose

existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly

within the control of the Group.

Contingent liabilities and assets are not recognised on the balance sheet of the Group.




2.28 Related parties

A party is considered to be related to the Group if:

(a) The party, directly or indirectly through one or more intermediaries,

(i) controls, is controlled by, or is under common control with, the Group;

(ii) has an interest in the Group that gives it significant influence over the Group; or

(iii) has joint control over the Group;

(b) The party is an associate;

(c) The party is a member of the key management personnel of the Group or its parent;

(d) The party is a close member of the family of any individual referred to in (a) or (c); and

(e) The party is an entity that is controlled, jointly controlled or significantly influenced by or for which

significant voting power in such entity resides with, directly or indirectly, any individual referred to in (c)

or (d).

2.29 Government grants

The Group received cash grant from government relating to the Jobs Credit Scheme. Government grant is

recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses

the related costs for which the grants are intended to compensate. Grants related to income are presented

as a credit in profit or loss as “Other operating income”.



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3. Property, plant and equipment (cont’d)

Assets under finance lease

During the year, the Group acquired property, plant and equipment with an aggregate cost of approximately

$155,455 (2010: $89,510) using finance leases.

The carrying amount of machinery, equipment and motor vehicles held under finance leases as at 30 June

2011 was approximately $279,088 (2010: $185,645).

Leased assets are pledged as security for the related finance lease liabilities.

Assets under construction

During the year, the CNG refilling station has been fully constructed and disposed to a customer following the

change in the intention of use. The gain on disposal amounting to $32,232 has been recognised in revenue.

Impairment loss

During the financial year, a subsidiary of the Group within the Natural Gas Vehicle (“NGV”) related business

segment made impairment of its motor vehicles as this subsidiary had been making losses. The impairment

loss amounting to $166,153 has been recognised in administrative expenses.

In 2010, subsidiaries of the Group within the tray recycling segment made impairment of their machinery and

equipment as these subsidiaries had been making losses. The impairment loss amounting to $528,287 has

been recognised in administrative expenses.

Company

Office

equipment

and

computer

Motor

vehicles

Furniture

and fittings Total

$ $ $ $

Cost

At 1 July 2009 and 30 June 2010 – 37,835 6,136 43,971

Additions 699 – – 699

At 30 June 2011 699 37,835 6,136 44,670

Accumulated depreciation

At 1 July 2010 and 30 June 2010 – – 6,136 6,136

Depreciation charge for the year – 4,729 – 4,729

At 30 June 2011 – 4,729 6,136 10,865

Net book value

At 30 June 2010 – 37,835 – 37,835

At 30 June 2011 699 33,106 – 33,805



4. Investments in subsidiaries

Company

2011 2010

$ $

Unquoted equity investments, at cost 9,264,170 9,264,170

Less: Impairment loss (7,805,139) (7,205,093)

Carrying amount of investments 1,459,031 2,059,077

During the financial year, management performed an impairment test for the investments in AM NGV (S) Pte

Ltd and SO NGV (S) Pte Ltd as these subsidiaries had been persistently making losses. Full impairment

losses of $600,000 and $46, respectively, were recognised to fully write down the carrying amount of these

subsidiaries as based on the financial budgets approved by the management, these subsidiaries are unable

to generate sufficient operating cash flows.

For the year ended 30 June 2010, an impairment loss of $1,431,142 was written-off as a result of disposal of

subsidiaries.

(i) Details of the subsidiaries held by the Company at the end of the financial year are as follows:

Name of company

Country of

incorporation

and place of

business Principal activities

Effective

equity interest

held by the

Group

Cost of investment

by the Company

2011 2010 2011 2010

% % $ $

Held by the Company

Asian Micro (S) Pte

Ltd (“AMS”) (1)

Singapore Precision tray cleaning

services

100 100 3,865,290 3,865,290

Asian Micro

(Thailand) Co., Ltd.

(“AMT”) (2)

Thailand Precision tray cleaning

services and

manufacturer of clean

room grade polythene

packaging materials

100 100 1,510,101 1,510,101

AM NGV (S) Pte Ltd

(“AM NGV (S)”) (1)

Singapore Trading in natural gas

vehicle (“NGV”) and

compressed natural

gas (“CNG”) supplies

100 100 600,000 600,000

ACI Industries Pte

Ltd (“ACI”) (1)

Singapore Trading in clean room

supplies

100 100 168,387 168,387

Asian Micro Sdn.

Bhd. (“AMM”) (3)

Malaysia Currently inactive 100 100 2,765,013 2,765,013



4. Investments in subsidiaries (cont’d)

(i) Details of the subsidiaries held by the Company at the end of the financial year are as follows (cont’d):

Name of company

Country of

incorporation

and place of


Effective

equity interest

held by the

Group

Cost of investment

by the Company

2011 2010 2011 2010

% % $ $

Held by the Company

A-P Engineering Pte

Ltd (“APE”) (3)

Singapore Currently under

liquidation

80.1 80.1 105,263 105,263

SO NGV (S) Pte Ltd

(“SO NGV (S)”) (1)

Singapore Currently inactive 74 74 74 74

AM NGV (T) Co., Ltd.

(“AM NGV (T)”) (6)

Thailand Currently under

liquidation

74 74 250,000 250,000

AM NGV Auto Sales

(Thailand) Co., Ltd.

(“AM NGV Autosales

(T)”) (2)

Thailand Trading of NGV

supplies

49

(Note a)

49 42 42

9,264,170 9,264,170

(ii) Details of the subsidiaries held by subsidiary companies at the end of the financial year are as follows:

Name of company

Country of

incorporation

and place of


Effective

equity interest

held by the

Group

Cost of investment

by the Company

2011 2010 2011 2010

% % $ $

Held by subsidiary companies

Micro Brite

Technology Pte Ltd

(“MBT”) (4)

Singapore Investment holding – 100 – –

Asian Micro

Technology (Wuxi)

Co., Ltd (“AMW”) (3)

People’s

Republic of

China

Currently inactive 100 100 – –




(ii) Details of the subsidiaries held by subsidiary companies at the end of the financial year are as follows

(cont’d):

Name of company

Country of

incorporation

and place of


Effective

equity interest

held by the

Group

Cost of investment

by the Company

2011 2010 2011 2010

% % $ $

Held by subsidiary companies

Wuxi Asian Brite

Technology Co., Ltd

(“ABT”) (3)

People’s

Republic of

China

Precision tray

cleaning services and

manufacture of clean


packaging materials

100 100 – –

Asian Micro

Technology (Suzhou)

Co., Ltd

(“AMSuzhou”) (5)

People’s

Republic of

China

Precision tray

cleaning services and

manufacture of clean


packaging materials

– 100 – –

Suzhou Asian Micro

Recovery Technology

Co., Ltd

(“SAMRT”) (4)

People’s

Republic of

China

Plastic waste collecting

and recycling, and

sales of scrap

– 51 – –

(1) Audited by Ernst & Young LLP, Singapore

(2) Audited by J.C. Accounting Office, Thailand

(3) Not required to be audited by the laws of its country of incorporation

(4) Disposed off during the year

(5) AM Suzhou is a subsidiary of MBT, which has been disposed off

(6) Audited by local auditors in Thailand

Note (a): While the Group holds 49% of issued share capital in AM NGV Autosales (T), it has control over the financial

and operational policies via the majority representation on the board of directors of AM NGV Autosales (T).

Accordingly, AM NGV Autosales (T) is accounted for as a subsidiary of the Group.




Disposals of MBT Group and SAMRT

During the financial year, the Group disposed off its equity interests in Micro Brite Technology Pte Ltd (“MBT”)

and its subsidiary, Asian Micro Technology (Suzhou) Co. Ltd (the “MBT Group”) and Suzhou Asian Micro

Recovery Technology (“SAMRT”) for cash consideration of $1 and forgiveness of trade and other payables of

$302,985 respectively.

The disposals resulted in a gain on disposal amounting to $163,214. Values of the assets and liabilities of

MBT Group and SAMRT at the date of disposal and cash flow effects were:

2011

$

SAMRT

Cash and cash equivalents 13,948

Plant and equipment 69,772

Other assets 671,498

Total liabilities (500,307)

Carrying values of net liabilities 254,911

Less: Forgiveness of trade and other payables (1) (302,985)

(48,074)

Foreign currency reserve realised on disposal 5,962

Gain on disposal of SAMRT (42,112)

MBT Group

Other assets 317,417

Total liabilities (1,144,797)

Carrying values of net liabilities (827,380)

Less: Sale consideration (1)

(827,381)

Foreign currency reserve realised on disposal (406,237)

Allowance for doubtful trade and other receivables (2) 1,112,516

Gain on disposal of MBT Group (121,102)

MBT Group

Sale consideration 1

Less: Cash and cash equivalents –

Cash inflow 1

Net gain on disposal of subsidiaries (Note 19(a)) (163,214)

Net cash outflow (13,948)

(1) As at date of disposal, the Group recorded trade payables of $302,985 due to SAMRT. The buyer of SAMRT agreed

to forgo the payables in exchange of the 51% equity interest in SAMRT.

(2) Upon disposal of MBT Group, the Group assessed the recoverability of the receivables from MBT Group and full

allowance for doubtful trade and other receivables has been made.




Disposals of APP and AMPI

In 2009, the Company disposed off its equity interest in A-P Precision Plastic Pte Ltd (“APP”) and Asian

Micro Manufacturing Phils. Inc. (“AMPI”) for cash considerations of $1 and $3 (Peso 100) respectively.

The disposals resulted in a loss on disposal of APP amounting to $329,251 and a gain on disposal of AMPI

amounting to $550,731. Values of the assets and liabilities of APP and AMPI at the date of disposal and

cash flow effects were:

2010

$

APP

Cash and cash equivalents 767

Non-current assets 347,496

Liabilities (51,597)

Carrying values of net assets 296,666


296,665

Foreign currency reserve realised on disposal 32,586

Loss on disposal of APP 329,251

Sale consideration 1

Less: Cash and cash equivalents (767)

Cash outflow (766)

AMPI

Carrying value of net assets –


(3)

Foreign currency reserve realised on disposal (550,728)

Gain on disposal of AMPI (550,731)

Cash inflow 3

Net gain on disposal of subsidiaries (Note 19(a)) (221,480)

Net cash outflow (763)



5(a) Investment in associated company

Group Company

2011 2010 2011 2010

$ $ $ $

Unquoted equity investments, at cost 127,389 127,389 84,926 84,926

At 1 July

Share of post acquisition reserves (59,283) (59,283) – –

68,106 68,106 84,926 84,926

Reclassified to other investments (68,106) – (84,926) –

At 30 June – 68,106 – 84,926

Impairment loss

At 1 July (68,106) (68,106) (84,926) (84,926)

Reclassified to other investments 68,106 – 84,926 –

At 30 June – (68,106) – (84,926)

Carrying value at 30 June – – – –

Details of associated company is as follows:

Name of company Principal activities

Country of

incorporation

and place of

business

Effective

equity interest

held by the

Group Cost of investment

2011 2010 2011 2010

% % $ $

Suria Professional

Service Centre

Sdn. Bhd.

(“Suria”) (1)

Conversion of natural

gas vehicles

Malaysia

Held by the Company – 20 – 84,926

Held by a subsidiary – 7 – 42,463

– 27 – 127,389

(1) Audited by a local firm in Malaysia.

During the financial year, the Group and the Company reclassified investment in associated company to other

investments as the Group no longer has significant influence over the financial and operational decisions in

this entity.



5(a) Investment in associated company (cont’d)

The summarised financial information of the associate for 2010, not adjusted for the proportion of ownership

interest held by the Group, is as follows:

2010

$

Assets and liabilities

Current assets 139,150

Non-current assets 492,359

Total assets 631,509

Current liabilities (1,215,766)

Total liabilities (1,215,766)

Results:

Revenue 350,135

Loss for the year (110,538)

5(b) Other Investments

Group and

Company

2011

$

Available for sale financial assets

Unquoted equity investment

At 1 July –

Reclassified from investment in associated company 68,106

Impairment loss (68,106)

At 30 June –

The Group has 27% effective equity interest in Suria Professional Service Centre Sdn. Bhd.

Further details of the associated company are given in Note 5(a) to the financial statements.



6. Inventories

Group

2011 2010

$ $

Raw materials 131,151 286,035

Work-in-progress 8,310 37,611

Finished goods 1,240,594 2,275,143

Total inventories at lower of cost and net realisable value 1,380,055 2,598,789

During the financial year, the Group wrote down $714,397 (2010: $248,037) of inventories which are

recognised as expenses in the income statement. The Group also wrote off $Nil (2010: $123,494) of

inventories which are recognised as expenses in the income statement.

During the year, the Group reversed $8,066 being part of an inventory write-down made previously, as the

inventories were sold to customers above their carrying amounts.

7. Trade and other receivables

Group Company

2011 2010 2011 2010

$ $ $ $

Trade and other receivables (current):

Trade receivables 1,029,166 1,723,990 – –

Other debtors 508,282 199,317 4,335 5,824

Deposits 98,923 188,007 – 10,991

1,636,371 2,111,314 4,335 16,815

Due from subsidiaries (non-trade)

(Note 8) – – – 522,085

Due from related parties (non-trade)

(Note 8) 108,333 5,136 2,561 –

Add: Cash and bank balances

(Note 9) 698,840 1,427,085 26,621 84,701

Total loans and receivables 2,443,544 3,543,535 33,517 623,601

Trade receivables

Trade receivables are non-interest bearing and are generally on 30 to 90 days’ terms. They are recognised at

their original invoice amounts which represent their fair values on initial recognition.

During the financial year, the Group wrote off $543 (2010: $175,835) of trade receivables which are

recognised as expenses in the income statement.



7. Trade and other receivables (cont’d)

Allowance for doubtful trade and other receivables

For the year ended 30 June 2011, the impairment loss recognised in the profit or loss for trade and other

receivables was $12,639 (2010: $187,384) and $3,253 (2010: $12,453), respectively.

As at 30 June 2011, trade receivables of the Group denominated in foreign currencies are as follows:

Group

2011 2010

$ $

Singapore dollars 24,415 230,259

United States dollars 409,193 72,857

433,608 303,116

As at 30 June 2011, other receivables and deposits of the Group denominated in the foreign currencies are

as follows:

Group

2011 2010

$ $


United States dollars 7,248 –

80,948 77,354

Other receivables and deposits of the Company were denominated in its functional currency.

The Group’s trade and other receivables that are impaired at the balance sheet date and the movement of

the allowance accounts are as follows:

Group

2011 2010

$ $

Movement in trade receivables allowance accounts:

At 1 July 452,899 882,540

Charge for the year 12,639 187,384

Write-back (6,207) (262,266)

Write-off (167,859) (351,525)

Exchange differences (17,025) (3,234)

At 30 June 274,447 452,899

Movement in other receivables allowance accounts:

At 1 July 321,979 357,646

Charge for the year 3,253 12,453

Write-off (245,000) (48,120)

At 30 June 80,232 321,979



7. Trade and other receivables (cont’d)

The above represents a provision for individually impaired trade and other receivables whose carrying values

aggregate $274,447 (2010: $452,899) and $80,232 (2010: $321,979) respectively as at year end.

Trade and other receivables that are individually determined to be impaired at the balance sheet date relate

to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are

not secured by any collateral or credit enhancements.

Receivables that are past due but not impaired

The Group has trade receivables amounting to $341,342 (2010: $602,818) that are past due at the balance

sheet date but not impaired. These receivables are unsecured and the analysis of their aging at the balance

sheet date is as follows:

Group

2011 2010

$ $

Trade receivables past due:

Less than 30 days 228,219 293,442

30 to 60 days 52,015 136,792

61 to 90 days 6,697 43,616

91 to 120 days 1,825 47,065

More than 120 days 52,586 81,903

341,342 602,818

8. Due from/(to) subsidiaries (non-trade)

Due from/(to) related parties (non-trade)

Loan from directors (non-trade)

Loan from related party (non-trade) (non-current)

These amounts are unsecured and are to be settled in cash. These amounts are interest-free and are

repayable on demand except for the loan from related party. The loan from related party bears interest at

prevailing market interest rate of 5.25% as at year end and the related party has agreed not to recall for

repayment until end of October 2012.

During the financial year, the Company entered into an agreement with two executive directors to capitalise a

portion of the loan from directors of $367,584 by the issuance of new ordinary shares at $0.015 each in the

share capital of the Company. (See Note 15)

Due from subsidiaries (non-trade) are stated after deducting the following allowance for doubtful receivables:

Company

2011 2010

$ $

Movement of allowance for doubtful receivables

Balance at 1 July 20,060,499 18,862,457

Provision during the year 3,019,677 8,165,295

Write back during the year – (4,171,215)

Written-off during the year – (2,796,038)

Balance at 30 June 23,080,176 20,060,499



8. Due from/(to) subsidiaries (non-trade)

Due from/(to) related parties (non-trade)

Loan from directors (non-trade)

Loan from related party (non-trade) (non-current) (cont’d)

Due from related parties (non-trade) are stated after deducting the following allowance for doubtful

receivables:

Group

2011

$

Movement of allowance for doubtful receivables

Balance at 1 July –

Provision during the year 1,511,316

Written-off during the year (398,800)

Balance at 30 June 1,112,516

There is no allowance for doubtful debts for amount due from related parties (non-trade) being recorded in

2010. Movement of allowance for doubtful debts for amount due from related parties are recognised in other

operating income as gain on disposal of subsidiaries.

9. Cash and cash equivalents

Cash and cash equivalents as at 30 June were as follows:

Group Company

2011 2010 2011 2010

$ $ $ $

Cash and bank balances 271,807 1,050,113 955 8,550

Fixed deposits 427,033 376,972 25,666 76,151

698,840 1,427,085 26,621 84,701

Less: Fixed deposits pledged* (427,033) (376,972) (25,666) (76,151)

Cash and cash equivalents 271,807 1,050,113 955 8,550

* This relates to fixed deposits pledged in connection with credit facilities granted by banks (Note 11).

Cash at bank earns interest at rates based on daily bank deposit rates ranging from 0.00% to 0.25% (2010:

0.00% to 0.25%) per annum.

As at 30 June 2011, cash and bank balances of the Group and the Company denominated in foreign

currencies are as follows:

Group

2011 2010

$ $



107,354 381,276



9. Cash and cash equivalents (cont’d)

Cash and cash equivalents of the Company were denominated in its functional currency.

Fixed deposits are placed with financial institutions for varying periods of between 1 month to 1 year

depending on the immediate cash requirements of the Group. The fixed deposits earn interest at fixed

deposit rates ranging from 0.00% to 0.625% (2010: 0.75% to 0.94%) per annum for SGD fixed deposits and

from 2.25% to 2.5% (2010: 0.50% to 0.75%) per annum for Thai Baht (THB) fixed deposits.

10. Trade and other payables

Group Company

2011 2010 2011 2010

$ $ $ $

Trade and other payables:

Trade payables 707,690 988,060 – –

Other payables 1,069,957 1,240,226 149,488 200,669

Total trade and other payables 1,777,647 2,228,286 149,488 200,669

Add:

- Loan from directors (non-trade)

(Note 8) – 400,472 – –

- Due to subsidiaries (non-trade)

(Note 8) – – 1,420,451 –

- Due to related parties (non-trade)

(Note 8) 784,828 161,706 – –

- Bills payable to bank (Note 11) 455,833 916,353 – –

- Accrued expenses (Note 13) 920,001 1,913,654 582,277 1,129,431

Obligation under finance lease

(Note 12)

- current 72,884 129,424 7,184 6,555

- non-current 168,393 104,815 15,740 22,925

Loan from related party (non-trade)

(non-current) (Note 8) 300,000 – – –

Total financial liabilities carried

at amortised cost 4,479,586 5,854,710 2,175,140 1,359,580

Trade payables

Trade payables are non-interest bearing and are normally settled on 30 to 90 day terms.

In 2010, the Company entered into an agreement with a creditor to capitalise the debts of $370,713 owing

to the creditor by a subsidiary, by the issuance of new ordinary shares of $0.028 each in the share capital of

the Company.



10. Trade and other payables (cont’d)

Trade payables (cont’d)

As at 30 June 2011, trade payables of the Group denominated in foreign currencies are as follows:

Group

2011 2010

$ $

Singapore dollars – 18,672


Euro dollar – 2,737

122,837 255,631

Other payables

Other payables are non-interest bearing and are normally settled on 30 to 90 day terms.

As at 30 June 2011, other payables of the Group and the Company denominated in foreign currencies are as

follows:

Group

2011 2010

$ $


Other payables of the Company were denominated in its functional currency.

11. Bills payable to banks

The bills payable are secured and have repayment terms of less than 12 months.

As at 30 June 2011, bills payable of the Group denominated in foreign currency are as follows:

Group

2011 2010

$ $


Interest on bills payable to banks was charged at 2.88% to 6.75% (2010: 5.25%) per annum.

The Group’s trading facilities are secured by:

(i) corporate guarantee of $2,540,000 (2010: $2,100,000) from the Company;

(ii) fixed deposits from the Group and the Company of $427,033 (2010: $376,972) and $25,666 (2010:

$76,151) respectively;

(iii) a legal mortgage over a property of an affiliated company, American Converters Industries Pte Ltd

(owned by two directors of the Company); and

(iv) joint and several guarantee of $440,000 from the two directors of the Company.



12. Obligations under finance leases

Average

effective

interest

rate

% p.a. Maturity Group Company

2011 2010 2011 2010

$ $ $ $

Current:

Obligations under finance

leases (secured)

(Note 26(b)) 7.19% 2012 72,884 129,424 7,184 6,555

Non-current:

Obligations under finance

leases (secured)

(Note 26(b)) 7.19% 2013 - 2016 168,393 104,815 15,740 22,925

Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 3).

13. Accrued expenses

Group Company

2011 2010 2011 2010

$ $ $ $

Accrued expenses 578,864 866,400 332,477 284,520

Accrued personnel expenses 341,137 1,047,254 249,800 844,911

920,001 1,913,654 582,277 1,129,431

Accrued personnel expenses include executive directors’ salaries payable of $246,637 (2010: $842,343) to

two executive directors of the Company (See Note 2.1).

During the financial year, the Company entered into an agreement with two executive directors to capitalise

the directors’ salaries payable of $1,132,416 (2010: $150,000), by the issuance of new ordinary shares at

$0.015 (2010: $0.027) each in the share capital of the Company.



14. Provision

Group

Provision for warranty

2011 2010

$ $

At 1 July 51,797 –

Arose during the financial year – 51,797

Unused amount reversed (51,797) –

At 30 June – 51,797

During the financial year, the Group reversed the provision for warranty as the warranty period has lapsed.

15. Share capital

Number of shares Group and Company

2011 2010 2011 2010

$ $

Issued and fully paid ordinary

shares:

At 1 July 363,591,043 344,795,487 37,173,928 36,653,215

Capitalisation of

Trade payables – 13,240,000 – 370,713

Directors’ salaries 75,494,400 5,555,556 1,132,416 150,000

Loan from directors 24,505,600 – 367,584 –

At 30 June 463,591,043 363,591,043 38,673,928 37,173,928

During the financial year, the Company capitalised the directors’ salaries payable to certain executive directors

and a portion of the loan from directors of $1,132,416 (2010: $150,000), and $367,584, respectively, by the

issuance of new ordinary shares at $0.015 (2010: $0.027) each in the share capital of the Company.

In 2010, the Company capitalised trade payables of $370,713 by the issuance of new ordinary shares at

$0.028 each in the share capital of the Company.

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All

ordinary shares carry one vote per share without restriction. The ordinary shares have no par value.

The Company has an employee share option plan (Note 25) under which options to subscribe for the

Company’s ordinary shares have been granted to employees.



16. Share option reserve

Share option reserve represents the equity-settled share options granted to employees (Note 25). The

reserve is made up of the cumulative value of services received from employees recorded over the vesting

period commencing from the grant date of equity-settled share options, and is reduced by the expiry of the

share options to retained earnings.

Group and Company

2011 2010

$ $

At 1 July 212,944 255,580

Grant of equity-settled share options 219,835 110,099

Expiry of share options (42,792) (152,735)

At 30 June 389,987 212,944

17. Premium paid on acquisition of non-controlling interests

The Group adopted the entity concept method to account for additional shares in subsidiary acquired from

a minority shareholder. The acquisition of additional shares from the minority shareholder is treated as a

transaction between owners and the difference between the cost of the additional interests in the subsidiary

acquired and the share of the assets and liabilities acquired from the non-controlling interests is reflected as

premium arising from the acquisition of the non-controlling interests.

Upon disposal of the subsidiary in the financial year, the Group transferred the premium arising from the

acquisition of non-controlling interests in prior year to accumulated losses.

18. Revenue

Group

2011 2010

$ $

(Reclassified)

Natural Gas Vehicle (“NGV”) related business 2,895,005 12,721,499

Sales of manufactured goods 2,013,949 2,424,104

Tray recycling services 3,483,007 4,972,419

Plastic scrap recovery 183,107 585,603

8,575,068 20,703,625



19. Other operating (income)/expenses

(a) Other operating income comprises the following:

Group

2011 2010

$ $

(Reclassified)

Gain on disposal of property, plant and equipment (91,000) (13,084)

Write back of allowance for doubtful debts (6,207) (262,266)

Write back of allowance for stocks obsolescence (8,066) –

Gain on disposal of subsidiaries (163,214) (221,480)

Write back of provision of warranty (51,797) –

Sales of scrap (101,441) (73,831)

Waiver of payables (2,050) (230,806)

Claim from insurance (35,891) –

Jobs credit – (35,294)

(459,666) (836,761)

In 2009, the Singapore Finance Minister announced the introduction of a Jobs Credit Scheme

(“Scheme”). Under the Scheme, the Group received a 12% cash grant on the first $2,500 of each

month’s wages for each employee on their Central Provident Fund payroll. The Scheme ceased with

the final payment in June 2010. During the financial year ended 30 June 2010, the Group received its

grant income of $35,294 under the Scheme.

(b) Other operating expenses comprises the following:

Group

2011 2010

$ $

(Reclassified)

Allowance for doubtful debts (non-trade) 3,253 12,453

Stocks written off – 123,494

Foreign exchange loss 1,672,237 403,046

Allowance for doubtful debts (trade) 12,639 187,384

Allowance for stocks obsolescence 714,397 248,037

Write off of doubtful debts 543 175,835

Fixed assets written off 52,393 15,368

Provision for warranty – 51,797

Others 60,423 41,049

2,515,885 1,258,463



20. Loss before taxation

The following items have been included in arriving at loss before tax from operations:

Group

2011 2010

$ $

Cost of inventories sold 3,146,094 10,851,699

Depreciation of property, plant and equipment 499,662 695,333

Operating lease expense 639,566 671,873

Salaries and bonuses 2,789,118 2,562,978

Central Provident Fund contributions 164,943 220,225

Share-based payments 219,835 110,099

Other personnel expenses 91,601 44,469

Impairment of property, plant and equipment 166,153 528,287

Included in the above is compensation of key management personnel as disclosed in Note 27(b).

21. Financial expenses/(income)

Group

2011 2010

$ $

Financial expenses

Interest expense on:

- bank overdrafts 2,267 14

- finance leases 16,910 40,288

- short term bank loans – 16,879

- late interest charges 1,524 –

- bills payable to banks 21,783 21,943

- others 5,220 –

47,704 79,124

Bank charges 19,637 46,563

67,341 125,687

Financial income

Interest income from

- fixed deposits and bank balances (3,290) (3,590)



22. Directors’ remuneration

The number of directors of the Company whose emoluments fall within the following bands:

2011 2010

$ $

$500,000 and above – 1

$250,000 to $499,999 2 1

Below $250,000 6* 5*

8 7

* Includes directors resigned during the year.

23. Taxation

Major components of income tax expense for the year ended 30 June were:

Group

2011 2010

$ $

Current income tax

- (over)/under provision in respect of prior years (211,103) 70,621

A reconciliation of the tax expense and the product of accounting profit multiplied by the applicable tax rate

is as follows:

Group

2011 2010

$ $

Loss before tax (4,640,163) (3,011,037)

Tax at the applicable tax rate of 17% (788,828) (511,876)

Tax effect of expenses not deductible for tax purposes 519,957 217,695

Tax effect on income not subject to tax (47,466) (40,068)

(Over)/under provision of tax in respect of prior year (211,103) 70,621

Utilisation of deferred tax assets previously not recognised – (31,804)

Deferred tax assets not recognised 688,744 431,342

Effects of different tax rates in other countries (372,407) (65,289)

Tax expense (211,103) 70,621



23. Taxation (cont’d)

Deferred taxation at 30 June relate to the following:

Group Company

2011 2010 2011 2010

$ $ $ $

Deferred tax liabilities

- excess of net book value over tax

written down value of fixed assets (585) (581) (585) (581)

Deferred tax liabilities (585) (581) (585) (581)

The Group

As at 30 June 2011, the Group has unutilised tax losses and unutilised capital allowances of approximately

$19,961,000 (2010: $15,909,000) and $28,000 (2010: $28,000), which are available for offset against future

taxable profits, subject to agreement by the tax authorities and compliance with certain provisions of the tax

legislation of the respective countries in which the Group operates. No deferred tax is recognised on these

losses and unutilised capital allowances in accordance with the accounting policy as set out in Note 2.24(ii).

Management intends to transfer unabsorbed capital allowances and trade losses of $193,000 (2010: $ Nil)

from a subsidiary to a certain other subsidiary under the group relief system, subject to compliance with

relevant rules and procedures and agreement of the Inland Revenue Authority of Singapore.

24. Loss per share

Basic loss per share is calculated by dividing the loss for the year, net of tax, attributable to equity holders of

the parent by the weighted average number of ordinary shares outstanding during the financial year.

Diluted loss per share amounts is calculated by dividing the loss for the year, net of tax, attributable to owners

of the parent by the weighted average number of ordinary shares outstanding during the year plus weighted

average number of ordinary shares that would be issued on the conversion of all the dilution potential shares

into ordinary shares.

The following table reflects the loss and share data used in the computation of basic and diluted loss per

share for the years ended 30 June:

Group

2011 2010

$ $

Net loss attributable to owners of the parent used in the computation

of basic and diluted loss per share (3,896,590) (3,023,458)

Weighted average number of ordinary shares for basic and diluted

loss per share 414,275,975 360,690,124

For the year ended 30 June 2011, 33,957,000 (2010: 22,307,000) of share options granted to employees

under the existing employee share option scheme have not been included in the calculation of diluted loss

per share because they are anti-dilutive for the current financial year presented.



25. Employee benefits

The Company has 2 employee share option schemes, Asian Micro Holdings Limited Employees’ Share

Option Scheme (“the ESOS 2001”), and Asian Micro Holdings Limited Employees’ Share Option Scheme

2010 (“the ESOS 2010”) to confirmed staff.

Asian Micro Holdings Limited Employees’ Share Option Scheme (“the ESOS 2001”)

The exercise price of the options is set above the average market price for the 5 consecutive trading days

immediately preceding the offering date of the option. The options may be exercisable immediately or at

any time from 1 to 3 years beginning on the first anniversary of the date of grant up to 28 September 2011.

Options granted are cancelled when the option holder ceases to be under full time employment of the

Company or any corporation in the Group subject to certain exceptions at the discretion of the Company.

There are no cash settlement alternatives. There has been no modification to the scheme during both 2011

and 2010.

Asian Micro Holdings Limited Employees’ Share Option Scheme (2010) (“the ESOS 2010”)

The exercise price of the options is set at the average market price for the 5 consecutive trading days

immediately preceding the offering date of the option. The options may be exercisable immediately or at

any time from 1 to 10 years beginning on the first anniversary of the date of grant up to 28 October 2020.

Options granted are cancelled when the option holder ceases to be under full time employment of the

Company or any corporation in the Group subject to certain exceptions at the discretion of the Company.

There are no cash settlement alternatives. There has been no modification to the scheme during the year.

Information with respect to the number of options granted under both schemes is as follows:

Date granted

Option exercise

period

Exercise

price

Balance

at

1 July

2010

Options

issued

during

the year

Options

forfeited

during

the year

Options

exercised

during

the year

Balance

at

30 June

2011

ESOS 2001

October 2001 October 2002 -

September 2011

$0.050 800,000 – – – 800,000

November

2001

November 2002 -

September 2011

$0.060 152,000 – – – 152,000

May 2002 May 2003 -

September 2011

$0.180 56,000 – – – 56,000

June 2002 June 2003 -

September 2011

$0.165 68,000 – – – 68,000

August 2003 August 2004 -

September 2011

$0.065 21,000 – – – 21,000



25. Employee benefits (cont’d)

Date granted

Option exercise

period

Exercise

price

Balance

at

1 July

2010

Options

issued

during

the year

Options

forfeited

during

the year

Options

exercised

during

the year

Balance

at

30 June

2011

August 2003 August 2004 -

September 2011

$0.070 574,000 – – – 574,000

October

2003

October 2004 -

September 2011

$0.090 2,646,000 – – – 2,646,000

October

2005

October 2006 -

September 2011

$0.090 525,000 – – – 525,000

May 2007 May 2008 -

September 2011

$0.090 550,000 – – – 550,000

June 2007 June 2008 -

September 2011

$0.100 230,000 – – – 230,000

June 2007 June 2008 -

September 2011

$0.105 200,000 – – – 200,000

July 2008 July 2009 -

September 2011

$0.050 675,000 – – – 675,000

September

2008

September 2009 -

September 2011

$0.050 50,000 – – – 50,000

December

2009

December 2010 -

September 2011

$0.030 15,760,000 – (7,800,000) – 7,960,000

22,307,000 – (7,800,000) – 14,507,000

ESOS 2010

November

2010

November 2011 -

November 2020 $0.015 – 25,450,000 (6,000,000) – 19,450,000



25. Employee benefits (cont’d)

Movement of share options during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements

in, share options during the year.

No. WAEP($) No. WAEP($)

2011 2011 2010 2010

ESOS 2001

Outstanding at beginning of year (1) 22,307,000 0.04 9,538,000 0.08

Granted during the year – – 16,400,000 0.03

Forfeited during the year (7,800,000) 0.03 (3,631,000) 0.08

Outstanding at end of year (2) 14,507,000 0.06 22,307,000 0.04

ESOS 2010

Granted during the year (3) 25,450,000 0.02 – –

Forfeited during the year (6,000,000) 0.02 – –

Outstanding at end of year (4) 19,450,000 0.02 – –

(1) Included within these balances are equity-settled options that were not recognised in accordance with FRS102

as these equity-settled options were granted on or before 22 November 2002. These options have not been

subsequently modified and therefore do not need to be accounted for in accordance with FRS102.

(2) The range of exercise prices for options outstanding at the end of the year was $0.03 to $0.18 (2010: $0.03 to

$0.18). The weighted average remaining contractual life for these options approximates 3 months (2010: 1 year).

(3) The weighted average fair value of options granted during the year was $0.015.

(4) The exercise price for options outstanding at the end of the year was $0.015. The weighted average remaining

contractual life for these options is 9 years.

Fair value of share options granted

The fair value of share options as at the date of grant is estimated using the Binomial Option Pricing Model,

taking into account the terms and conditions upon which the options were granted. The inputs to the model

used for the years ended 30 June 2011 and 30 June 2010 are shown below.

2011 2010

Dividend yield % (year) 0.0 0.0

Expected volatility (%) 121 60

Risk-free interest rate (%) 1.6 5.0

Expected life of option (years) 5.5 1.8

Share price ($) 0.02 0.02

The expected life of the options is based on historical data and is not necessarily indicative of exercise

patterns that may occur. The expected volatility reflects the assumption that the historical volatility is

indicative of future trends, which may also not necessarily be the actual outcome.



26. Commitments and contingencies

(a) Operating lease commitments – as lessee

The Group leases certain properties under lease agreements. These leases have an average life of

between 1 and 5 years with no renewal option or escalation clauses included in the contracts. There

are no restrictions placed upon the Group or the Company by entering into these leases. Operating

lease payments recognised in the consolidated profit or loss during the year amounted to $639,566

(2010: $671,873).

Future minimum lease payments under non-cancellable operating leases as at 30 June are as follows:

Group

2011 2010

$ $

Within one year 569,155 683,136

After one year but not more than five years 105,300 717,986

674,455 1,401,122

The Group has not entered into any non-cancellable leases as lessee. Rental income is generated on

an adhoc basis.

(b) Finance lease commitments

The Group has finance leases for certain items of machinery, equipment and motor vehicles (Note 3).

There are no restrictions placed upon the Group by entering into these leases. The average discount

rate implicit in the leases is 7.19% (2010: 4.46%) per annum.

Future minimum lease payments under finance leases together with the present value of the net

minimum lease payments are as follows:

Group

Minimum

lease

payments

Present

value of

payments

Minimum

lease

payments

Present

value of

payments

2011 2011 2010 2010

$ $ $ $

Not later than one year 87,187 72,884 142,048 129,424

Later than one year but not

later than five years 183,951 168,393 113,813 104,815

Total minimum lease payments 271,138 241,277 255,861 234,239

Less: Amounts representing

finance charges (29,861) – (21,622) –

Present value of minimum

lease payments 241,277 241,277 234,239 234,239



26. Commitments and contingencies (cont’d)

(b) Finance lease commitments (cont’d)

Company

Minimum

lease

payments

Present

value of

payments

Minimum

lease

payments

Present

value of

payments

2011 2011 2010 2010

$ $ $ $

Not later than one year 8,928 7,184 8,928 6,555

Later than one year but not

later than five years 17,100 15,740 26,028 22,925

Total minimum lease payments 26,028 22,924 34,956 29,480

Less: Amounts representing

finance charges (3,116) – (5,476) –

Present value of minimum

lease payments 22,912 22,924 29,480 29,480

(c) Continuing financial support

As at 30 June 2011, the Company had given undertakings to certain subsidiaries to provide financial

support to enable them to operate as going concerns and to meet their obligations for at least 12

months from the respective date of their directors’ report.

27. Related party disclosures

An entity or individual is considered a related party of the Group for the purposes of the financial statements

if: (i) it possesses the ability (directly or indirectly) to control or exercise significant influence over the operating

and financial decisions of the Group or vice versa; or (ii) it is subject to common control or common

significant influence.

The following are the significant intercompany transactions entered into by the Group with its related parties:

(a) Sales and purchases of goods and services

Group

2011 2010

$ $

Rental expense paid/payable to affiliated companies * 419,382 489,960

Sale of goods 97,035 11,673

* The Group has entered into contracts with affiliated companies, Asian Micro Industries (Thailand) Co., Ltd,

Ultraline Technology Pte Ltd, American Converters Industries Pte Ltd and Ultraline Holdings (Thailand) Co. Ltd,

all three companies owned by two directors, for the lease of factories on a time cost reimbursement basis.



27. Related party disclosures (cont’d)

(b) Compensation of key management personnel

Group

2011 2010

$ $

Short-term employee benefits 1,186,983 1,427,494

Central provident fund contributions 89,296 47,201

Share-based payments 87,397 87,257

Total compensation paid to key management personnel 1,363,676 1,561,952

Comprise amounts for:

- Directors of the Company 935,085 1,118,715

- Other key management personnel 428,591 443,237

1,363,676 1,561,952

28. Financial risk management objectives and policies

The Group and the Company is exposed to financial risks arising from its operations and the use of financial

instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency

risk. The Board of directors reviews and agrees policies and procedures for the management of these risks.

The Audit Committee provides independent oversight to the effectiveness of the risk management process.

The following sections provide details regarding the Group’s and Company’s exposure to the above-

mentioned financial risks and the objectives, policies and processes for the management of these risks.

There has been no change to the Group’s exposure to these financial risks or the manner to which it

manages and unearned the risks.

Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty

default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade

and other receivables. For other financial assets (including cash and cash equivalents), the Group and the

Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased

credit risk exposure. The Group trades only with recognised and creditworthy third parties. Trade and other

receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad

debts is not significant.

Exposure to credit risk

At the balance sheet date, the Group’s and the Company’s maximum exposure to credit risk is represented

by:

– the carrying amount of each class of financial assets recognised in the balance sheets and

– a nominal amount of $2,540,000 (2010: $2,100,000) relating to a corporate guarantee provided by

the Company to a bank on a subsidiary’s bank facility.



28. Financial risk management objectives and policies (cont’d)

Credit risk (cont’d)

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the country and industry sector profile of its

trade receivables on an on-going basis. The credit risk concentration profile of the Group’s trade receivables

at the balance sheet date is as follows:

Group

2011 2010

$ % of total $ % of total

By country:

Singapore 860,961 84 1,361,475 79

Thailand 168,205 16 252,974 15

People’s Republic of China – – 109,541 6

1,029,166 100 1,723,990 100

At the balance sheet date, approximately 38% (2010: 28%) of the Group’s trade receivables were due from 3

major customers.

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good

payment record with the Group. Cash and bank balances, that are neither past due nor impaired, are placed

with or entered into with reputable financial institutions or companies with high credit ratings and no history

of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 7 (Trade and

other receivables).

Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations

due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from

mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is

to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.




Liquidity risk (cont’d)

The table below summarises the maturity profile of the Group’s and the Company’s financial assets and

liabilities at the balance sheet date based on contractual undiscounted repayment obligations.

2011

1 year

or less

1 to 5

years

Over

5 years Total

$ $ $ $

Group

Financial assets

Trade and other receivables 1,636,371 – – 1,636,371

Due from related parties (non-trade) 108,333 – – 108,333

Fixed deposits 427,074 – – 427,074

Cash and bank balances 271,766 – – 271,766

Total undiscounted financial assets 2,443,544 – – 2,443,544

Financial liabilities

Trade and other payables 1,777,647 – – 1,777,647

Accrued expenses (non-trade) 920,001 – – 920,001

Due to related parties 784,828 – – 784,828

Bills payable to bank 455,833 – – 455,833

Obligations under finance lease 87,187 183,951 – 271,138

Loan from related party (non-trade) – 300,000 – 300,000

Total undiscounted financial liabilities 4,025,496 483,951 – 4,509,447

Total net undiscounted financial

liabilities (1,581,952) (483,951) – (2,065,903)

Company

Financial assets

Trade and other receivables 4,335 – – 4,335


Fixed deposits 25,666 – – 25,666

Cash and bank balances 955 – – 955

Total undiscounted financial assets 33,517 – – 33,517


Trade and other payables 149,488 – – 149,488

Accrued expenses 582,277 – – 582,277

Due to subsidiaries (non-trade) 1,420,451 – – 1,420,451




liabilities (2,127,627) (17,100) – (2,144,727)




Liquidity risk (cont’d)

2010

1 year

or less

1 to 5

years

Over

5 years Total

$ $ $ $

Group

Financial assets

Trade and other receivables 2,111,314 – – 2,111,314


Fixed deposits 376,972 – – 376,972

Cash and bank balances 1,050,113 – – 1,050,113

Total undiscounted financial assets 3,543,535 – – 3,543,535


Trade and other payables 2,228,286 – – 2,228,286

Accrued expenses 1,913,654 – – 1,913,654

Loan from directors (non-trade) 400,472 – – 400,472

Due to related parties (non-trade) 161,706 – – 161,706

Bills payable to bank 916,353 – – 916,353




liabilities (2,218,984) (113,813) – (2,332,797)

Company

Financial assets

Trade and other receivables 16,815 – – 16,815

Due from subsidiaries (non-trade) 522,085 – – 522,085

Fixed deposits 76,151 – – 76,151

Cash and bank balances 8,550 – – 8,550

Total undiscounted financial assets 623,601 – – 623,601


Trade and other payables 200,669 – – 200,669

Accrued expenses 1,129,431 – – 1,129,431




liabilities (715,427) (26,028) – (741,455)




Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial

instruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s

exposure to interest rate risk arises primarily from their obligations under finance lease.

The Group’s and the Company’s policy is to manage interest cost using fixed rate debts.

Foreign currency risk

The Group has transactional currency exposures arising from sales or purchases that are denominated in

a currency other than the respective functional currencies of Group entities, primarily SGD, THB, USD and

Renminbi (RMB). The foreign currencies in which these transactions are denominated are mainly U.S Dollars

(USD). Approximately 37% (2010: 24%) of the Group’s sales are denominated in foreign currencies whilst

54% (2010: 14%) of purchases are denominated in the respective functional currencies of the Group entities.

The Group has trade receivables, trade payables and bills payable to bank denominated in foreign currency.

At the balance sheet date, trade receivables, trade payables and bills payable to bank denominated in

foreign currency balances (mainly in USD) amounted to $433,608, $122,877 and $354,547 (2010: $303,116,

$255,631 and $759,716) respectively.

The Group and the Company also hold cash denominated in foreign currencies for working capital purposes.

At the end of the reporting period, such foreign currency balances are mainly in USD.

The Group is also exposed to currency translation risk arising from its net investments in foreign operations,

including Malaysia, People’s Republic of China (“PRC”) and Thailand. The Group’s net investments in

Malaysia, PRC and Thailand are not hedged.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity to a reasonably possible change in the USD and RMB, with

all other variables held constant, of the Group’s loss net of tax.

Group

Loss net of tax

2011 2010

$’000 $’000

USD

- strengthened 12% (2010: 3%) (22) –

- weakened 12% (2010: 3%) 22 –

RMB

- strengthened 8% (2010: 3%) 9 (24)

- weakened 8% (2010: 3%) (9) 24



29. Fair value of financial instruments

(a) Fair value of financial instruments that are carried at fair value

Fair value hierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects the significance

of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the

asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices),

and

Level 3 – Inputs for the asset or liability that are not based on observable market data

(unobservable inputs)

The Group has not classified any financial instrument under Level 1 and Level 2.

(b) Fair value of financial instruments by classes that are not carried at fair value and whose

carrying amounts are reasonable approximation of fair value

Current trade and other receivables (Note 7), due from subsidiaries/related parties (Note 8), trade

and other payables (Note 10), accrued expenses (Note 13), due to directors/related parties (Note

8), loan from directors (Note 8), obligations under finance leases (Note 12) and bills payable to bank

(Note 11).

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair

values, either due to their short-term nature or that they are floating rate instruments that are re-priced

to market interest rates on or near the balance sheet date.

(c) Fair value of financial instruments by classes that are not carried at fair value and whose

carrying amounts are not reasonable approximation of fair value

Total carrying amount Aggregate fair value

2011 2010 2011 2010

$ $ $ $

Group

Finance lease obligations repayable

after 1 year but within 5 years 168,393 104,815 157,327 94,074

Determination of fair value

The fair value has been determined using discounted estimated cash flows. The discount rates

used are the current market incremental lending rates for similar types of leasing arrangements at the

balance sheet date.



30. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains adequate funds to

support its business activities and to continue as a going concern.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic

conditions. To maintain or adjust the capital structure, the Group may issue new shares. No changes were

made in the objectives, policies or processes during the years ended 30 June 2011 and 30 June 2010.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.

Group

2011 2010

$ $

Trade and other payables (Note 10) 1,777,647 2,228,286

Accrued expenses (Note 13) 920,001 1,913,654

Loan from directors (Note 8) – 400,472

Provision (Note 14) – 51,797

Due to related parties (Note 8) 784,828 161,706

Bills payable to bank (Note 11) 455,833 916,353

Obligations under finance leases (Note 12) 241,277 234,239

Loan from related party (non-current) (Note 8) 300,000 –

Less: Cash and bank balances (Note 9) (698,840) (1,427,085)

Net debt 3,780,746 4,479,422

Equity attributable to the equity holders of the parent 1,196,901 1,996,980

Capital and net debt 4,977,647 6,476,402

Gearing ratio 76% 69%

31. Segment information

For management purposes, the Group is organised into business units based on their product and services,

and has five reportable operating segments as follows:

Tray recycling

Tray recycling segment provides services of recycling and precision cleaning of packaging trays and media/

disk cassettes used in the hard disk drive and semiconductor industries. This segment also includes

precision parts cleaning and parts visual inspection as well as clean room laundry cleaning services.

Manufacturing

Manufacturing segment refers to manufacturing of clean room grade packaging products such as LDPE/

HDPE bags, ESD bags and aluminum moisture barrier bags for the electronics and hard disk drive industries.

Corporate

The corporate segment is involved in Group-level corporate services.



31. Segment information (cont’d)

Natural Gas Vehicle (“NGV”) related business

NGV related business segment refers to the trading of NGV related products such as bi-fuel conversion kits

and cylinders and provision of vehicle conversion services. For vehicle conversion services, the segment

provides services for the conversion of petrol vehicles to run on Bi-Fuel system where natural gas can be

used to replace petrol and services for the conversion of heavy duty diesel vehicles using Dual Diesel Fuel

(“DDF”) system to cut down the usage of diesel for diesel vehicles.

Except as indicated above, no operating segments have been aggregated to form the above reportable

operating segments.

Management monitors the operating results of its business units separately for the purpose of making

decisions about resource allocation and performance assessment. Segment performance is evaluated based

on operating profit or loss which in certain respects, as explained in the table below, is measured differently

from operating profit or loss in the consolidated financial statements. Group financing (including finance

costs) and income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions

with third parties.

Geographical information

The Group’s geographical information are based on the location of the Group’s assets. Sales to external

customers disclosed in geographical segments are based on the geographical location of its customers.

Information about major customers

Revenues from one major customer in the tray recycling segment amounted to $1,235,886 (2010:

$1,924,730).

Revenues from one major customer in the NGV related business segment amounted to $2,140,487 (2010:

$10,446,262).



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32. Comparatives

The following comparative figures in the statement of comprehensive income have been reclassified to allow

a more appropriate presentation and better reflect the nature of the transactions. Details of comparative

figures reclassified in the statement of comprehensive income for the year ended 30 June 2010 are as

follows:

Group

As

reclassified

As previously

classified

$ $

Revenue 20,703,625 20,608,586

Other operating income 836,761 896,506

Other operating expenses (1,258,463) (1,233,169)

33. Events occurring after the reporting period

On 4 July 2011, the Company granted 5,400,000 share options, with an exercise price of S$0.01 for each

option, pursuant to the Asian Micro Employees Share Option Scheme 2010 (“the ESOS 2010”) to employees

of the Group. 3,000,000 of the share options were granted to the directors of the Company.

34. Authorisation of financial statements

The financial statements for the year ended 30 June 2011 were authorised for issue in accordance with a

resolution of the directors on 7 October 2011.

STATISTICS OF SHAREHOLDINGSAs at 16 September 2011


NO. OF SHARES ISSUED : 463,591,043

CLASS OF SHARES : ORDINARY SHARES

VOTING RIGHTS : 1 VOTE PER SHARE

The Company does not hold any treasury shares.

SIZE OF SHAREHOLDINGS

NO. OF

SHAREHOLDERS % NO. OF SHARES %

1 – 999 4 0.10 1,222 0.00

1,000 – 10,000 2,686 66.65 10,038,000 2.17

10,001 – 1,000,000 1,311 32.53 114,838,300 24.77

1,000,001 & ABOVE 29 0.72 338,713,521 73.06

TOTAL 4,030 100.00 463,591,043 100.00

TOP TWENTY SHAREHOLDERS AS AT 16 SEPTEMBER 2011

NAME OF SHAREHOLDERS NO. OF SHARES %

LIM KEE LIEW @ VICTOR LIM 138,741,217 29.93

LEONG LAI HENG 118,646,760 25.59

LIN XIANGLONG WINCHESTER 11,550,000 2.49

LEE DEH KHUAN 9,883,000 2.13

KELVIN CHNG BOON KIAN 7,840,000 1.69

LIN MEIJUAN SOPHIA 7,756,000 1.67

AMERICAN CONVERTERS INDUSTRIES PTE LTD 3,866,439 0.83

UNITED OVERSEAS BANK NOMINEES (PTE) LTD 3,351,000 0.72

DBS NOMINEES PTE LTD 3,305,000 0.71

TAN CHENG SOI 2,674,000 0.58

FOO MEI YIEN JOANNE 2,650,000 0.57

CHAN SZE MING 2,487,000 0.54

DBS VICKERS SECURITIES (S) PTE LTD 2,481,000 0.54

ZHANG JILEI 2,142,000 0.46

CHOO CHEE KIONG 2,000,000 0.43

TAY KIM CHAI JOHNSON 2,000,000 0.43

CHERN SIANG SIN @ CHENG SIANG SIN 1,688,000 0.36

PIYAWAT JIRAWATOPHAT 1,664,000 0.36

LIM KEE HING 1,595,000 0.35

WANG KAI YUEN 1,526,000 0.33

327,846,416 70.71

36.38% of the Company’s shares are held in the hands of public. Accordingly, the Company has complied with

Rule 723 of the Listing Manual, Section B: Rules of Catalist.

SHAREHOLDERS’ INFORMATIONAs at 16 September 2011


SUBSTANTIAL SHAREHOLDERS

(As recorded in the Register of Substantial Shareholders)

NAME OF SHAREHOLDER DIRECT INTEREST DEEMED INTEREST

LIM KEE LIEW @ VICTOR LIM (a) 138,741,217 29.93% 125,218,304 27.01%

LEONG LAI HENG (b) 118,646,760 25.59% 145,312,761 31.35%

Notes:

(a) Mr. Lim Kee Liew @ Victor Lim's deemed interest arose through 496,000 shares held by DBS Nominees (Private) Limited,

1,449,105 shares held by Ultraline Technology (S) Pte Ltd and 3,866,439 shares held by American Converters Industries Pte

Ltd. He is also deemed to have an interest in the 119,406,760 shares held by his spouse, Ms. Leong Lai Heng.

(b) Ms. Leong Lai Heng's deemed interest arose through 760,000 shares held by United Overseas Bank Nominees (Private)

Limited, 1,449,105 shares held by Ultraline Technology (S) Pte Ltd and 3,866,439 shares held by American Converters

Industries Pte Ltd. She is also deemed to have an interest in the 139,237,217 shares held by her spouse, Mr. Lim Kee Liew

@ Victor Lim.

* Mr. Lim Kee Liew @ Victor Lim and Ms. Leong Lai Heng each own 50% of the entire issued and paid-up share capital

of Ultraline Technology (S) Pte Ltd and American Converters Industries Pte Ltd.

NOTICE OF ANNUAL GENERAL MEETING


NOTICE IS HEREBY GIVEN that the Annual General Meeting of Asian Micro Holdings Limited (“the Company”) will

be held at Raffles Marina, 10 Tuas West Drive, Singapore 638404 on Friday, 28 October 2011 at 10.00 a.m. for the

following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 30

June 2011 together with the Auditors’ Report thereon.

(Resolution 1)

2. To re-elect the following Directors of the Company retiring pursuant to Articles 88 and 89 of the Articles of

Association of the Company:

(a) Mr. Ng Chee Wee (Retiring under Article 88) (Resolution 2)

(b) Mr. Chue Wai Tat (Retiring under Article 88) (Resolution 3)

(c) Mr. Lin Xianglong Winchester (Retiring under Article 88) (Resolution 4)

(d) Mr. Teo Kio Choon @ Chang Chiaw Choon (Retiring under Article 89) (Resolution 5)

Mr. Ng and Mr. Lin are Executive Directors of the Company.

Mr. Chue will, upon re-election as a Director of the Company, remain as a member of the Audit Committee,

Nominating Committee and Remuneration Committee and will be considered independent.

Mr. Teo will, upon re-election as a Director of the Company, remain as Chairman of Nominating Committee

and a member of the Audit Committee and Remuneration Committee and will be considered independent.

3. To approve the payment of Directors’ fees of S$50,663.23 for the year ended 30 June 2011. (2010:

S$51,840).

(Resolution 6)

4. To re-appoint Messrs Ernst & Young LLP as the Auditors of the Company and to authorise the Directors of

the Company to fix their remuneration.

(Resolution 7)

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

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any

modifications:

6. Authority to issue shares

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of Section B of the Singapore

Exchange Securities Trading Limited Listing Manual: Rules of Catalist (the “Catalist Rules”), the Directors of

the Company be authorised and empowered to:

(a) (i) issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would

require shares to be issued, including but not limited to the creation and issue of (as well as

adjustments to) options, warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the

Directors of the Company may in their absolute discretion deem fit; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue

shares in pursuance of any Instruments made or granted by the Directors of the Company while this

Resolution was in force,



provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made

or granted pursuant to this Resolution) to be issued pursuant to this Resolution shall not exceed one

hundred per centum (100%) of the total number of issued shares in the capital of the Company (as

calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to

be issued other than on a pro rata basis to shareholders of the Company shall not exceed fifty per

centum (50%) of the total number of issued shares in the capital of the Company (as calculated in

accordance with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading

Limited) for the purpose of determining the aggregate number of shares that may be issued under

sub-paragraph (1) above, the total number of issued shares shall be based on the total number

of issued shares in the capital of the Company at the time of the passing of this Resolution, after

adjusting for:

(a) new shares arising from the conversion or exercise of any convertible securities;

(b) new shares arising from exercising share options or vesting of share awards which are

outstanding or subsisting at the time of the passing of this Resolution; and

(c) any subsequent consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions

of the Catalist Rules for the time being in force (unless such compliance has been waived by the

Singapore Exchange Securities Trading Limited) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force

until the conclusion of the next Annual General Meeting of the Company or the date by which the next

Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (i)]

(Resolution 8)

7. Authority to issue shares under the Asian Micro Employees’ Share Option Scheme 2010

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised

and empowered to offer and grant options under the Asian Micro Employees’ Share Option Scheme (“the

Scheme”) and to issue from time to time such number of shares in the capital of the Company as may

be required to be issued pursuant to the exercise of options granted by the Company under the Scheme,

whether granted during the subsistence of this authority or otherwise, provided always that the aggregate

number of additional ordinary shares to be issued pursuant to the Scheme shall not exceed twenty five per

centum (25%) of the total number of issued shares in the capital of the Company from time to time and that

such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until

the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual

General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (ii)]

(Resolution 9)

By Order of the Board

Lee Ellen

Secretary

Singapore, 13 October 2011



Explanatory Notes:

(i) The Ordinary Resolution 8 in item 6 above, if passed, will empower the Directors of the Company, effective until the

conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of

the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting,

whichever is the earlier, to issue shares, make or grant Instruments convertible into shares and to issue shares pursuant to

such Instruments, up to a number not exceeding, in total, 100% of the total number of issued shares in the capital of the

Company, of which up to 50% may be issued other than on a pro-rata basis to shareholders.

(ii) The Ordinary Resolution 9 in item 7 above, if passed, will empower the Directors of the Company, effective until the

conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of

the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting,

whichever is the earlier, to issue shares in the Company pursuant to the exercise of options granted or to be granted under

the Scheme up to a number not exceeding in aggregate (for the entire duration of the Scheme) twenty five per centum (25%)

of the total number of issued shares in the capital of the Company from time to time.

Notes:

1. A member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint not more than two

proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2. The instrument appointing a proxy must be deposited at the registered office of the Company at 1 Tech Park Crescent,

Singapore 638131 not less than 48 hours before the time appointed for holding the Meeting.

This page has been intentionally left blank.

ASIAN MICRO HOLDINGS LIMITED(Company Registration No.199701052K)

(Incorporated In The Republic of Singapore with limited liability)

PROXY FORM(Please see notes overleaf before completing this Form)

I/We,

of

being a member/members of Asian Micro Holdings Limited, hereby appoint:

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

or failing the person, or either or both of the persons, referred to above, the Chairman of the Meeting as my/our proxy/

proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on

28 October 2011 at 10.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against

the Resolutions proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or in the

event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain

from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to

vote on a poll.

(Please indicate your vote “For” or “Against” with a tick [√] within the box provided.)

No. Resolutions relating to: For Against

1 Directors’ Report and Audited Accounts for the year ended 30 June 2011

2 Re-election of Mr. Ng Chee Wee as a Director

3 Re-election of Mr. Chue Wai Tat as a Director

4 Re-election of Mr. Lin Xianglong Winchester as a Director

5 Re-election of Mr. Teo Kio Choon @ Chang Chiaw Choon as a Director

6 Approval of Directors’ fees amounting to S$50,663.23

7 Re-appointment of Messrs Ernst & Young LLP as Auditors

8 Authority to issue new shares

9Authority to issue shares under the Asian Micro Employees’ Share Option

Scheme 2010

Dated this day of 2011

Signature of Shareholder(s)

or, Common Seal of Corporate Shareholder

Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members

IMPORTANT:

1. For investors who have used their CPF monies to buy Asian Micro

Holdings Limited’s shares, this Report is forwarded to them at the

request of the CPF Approved Nominees and is sent solely FOR

INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be

ineffective for all intents and purposes if used or purported to be used

by them.

3. CPF investors who wish to attend the Meeting as an observer must

submit their requests through their CPF Approved Nominees within

the time frame specified. If they also wish to vote, they must submit

their voting instructions to the CPF Approved Nominees within the

time frame specified to enable them to vote on their behalf.

Notes:

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as

defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have

Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered

against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert

the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register

of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held

by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to

attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her

shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting.

Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such

event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the

Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 1 Tech Park Crescent,

Singapore 638131 not less than 48 hours before the time appointed for the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing.

Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under

the hand of an officer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney

on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument.

7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to

act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

General:

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 Shares entered in the Depository Register, the Company may reject any

instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his

name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository

(Pte) Limited to the Company.

ASIAN MICRO HOLDINGS LIMITED

AnnuAl RepoRt 2011

ASIAN MICRO HOLDINGS LIMITED No. 1, Tech Park Crescent,Tuas Tech Park, Singapore 638131Tel: 65 6862 7777Fax: 65 6862 6277Company Registration No. 199701052K

www.asianmicro.com.sg

Supplying CNG to:

Manufacturing Industries

Shipyard Industries

Oil & Gas Industries

Power Generation Test Grids

Growing Our Green Potential

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Documents

Growing Our Green Potential - Asian Micro Holdings …asianmicro.listedcompany.com/misc/ar2011.pdfASIAN MICRO HOLDINGS LIMITED AnnuAl RepoRt 2011 ASIAN MICRO HOLDINGS LIMITED No. 1,