Moving Forward Accountability - malaysiastock.biz believe thinking “outside the box” leads to innovation. ... is the Chairman of the Executive Committee and a member of the Remuneration

A N N U A L R E P O R T 2 0 1 2

Moving Forward Accountabi l ity

Corporate Vision, Mission, Objectives,Strategies, Core Values and Principal Activities

Corporate Vision

We are dedicated to be the world leading company in providing total machine vision solutions.

Corporate Objectives

We aim to achieve:• Excellent/worldclassproductsandservices• Totalcustomersatisfaction• Continuousgrowthandprofitability• Long-termpartnershipwithourcustomers,alliances

and employees

Corporate Strategies InnovationInitiate new ideas and technological breakthroughs. We believethinking“outsidethebox”leadstoinnovation.

Customer FocusedMake our customers our first priority. We offer ourcustomers the best value products and services in a timelymanner,withoutsacrificingquality.

Continuous ImprovementContinuously improve our products, services, and ourorganization as a whole.

PRINCIPAL ACTIVITIES

ViTroxCorporationBerhad(“ViTrox”)isprincipallyinvolvedininvestmentholdinganddevelopmentof3Dandlinescanvisioninspectionsystem.Asat31December2012,ViTroxhasinoperationthree(3)wholly-owneddirectsubsidiariesandawholly-ownedindirectsubsidiary.Theprincipalactivitiesofthesesubsidiariesaresetoutasfollows:

Name Date of Acquisition/ Place of Incorporation

EffectiveEquityInterest

Principal Activities

ViTroxTechnologiesSdn.Bhd. 15June2005/Malaysia

100% Developmentandproductionofautomatedvision inspection system and digital automated vision inspection equipmentand modules.

ViTroxInternationalSdn.Bhd. 7January2006/Malaysia

100% Investment holding for setting up foreignsubsidiariesandcateringforfutureforeigninvestments.

ViETechnologiesSdn.Bhd. 24February2006/Malaysia

100% Design, development and manufactureof printed circuit board assemblies formicroprocessor applications.

ViTroxTechnologies(Suzhou)Co.,Ltd(Awholly-ownedsubsidiaryofViTroxInternationalSdn.Bhd.)

19January2006(dateofestablishment)/China

100% Assalesandsupportoffice.

Corporate Mission

ViTrox,innovatingvisionforautomation,iscommittedto providing themost innovative, advanced and costeffectivemachinevisionsolutionofexcellentqualitytoourcustomersthrough integrationofourtechnology,our people and our strategic alliances.

Core Values

1ViTrox Corporation Berhad(649966-K)AnnualReport2012

CONTENTS

CorporateVision,Mission,Objectives,Strategies,

CoreValuesandPrincipalActivities

Contents

FinancialHighlights

CorporateInformation/CorporateStructure

BoardofDirectors

ProfileofDirectors

Chairman’sStatement

ChiefExecutiveOfficer'sReviewofOperations

FinancialPerformance

ProductInnovation

Operation

ResearchandDevelopment

Sales&Marketing

BusinessStrategies

OurPeople

CorporateResponsibility

Gratitudes

Highlightsof2012

SponsorAds

CorporateGovernanceStatement

AuditCommitteeReport

InternalControlStatement

StatementofDirectors’Responsibilities

AdditionalComplianceInformation

FinancialStatements

ListofProperties

StatisticsofShareholdings

ShareBuy-BackStatement

NoticeofAnnualGeneralMeeting

NoticeofDividendEntitlementandPayment

AppendixA

ProxyForm

i

1

2

3

4

5-8

9-10

11-18

19-22

23-31

32-44

45-48

49-52

53

54-55

56-108

109

110-111

112-117

118-121

122

123-125

127

Design Rationale

Moving Forward | Accountability

At ViTrox, our dedication towardshigh quality products and totalcustomer satisfaction continues todrive us to achievemore. The antscarrying leaves represent our valuable employees who embrace teamwork - eachplaying their respective rolestowards innovating new products,creating opportunities for growthand building relationships. Thoughthe climb towards excellence maybe anuphill task,we support eachother through our strength and accountability,andkeepourfocusinline with our goals.

2 ViTrox Corporation Berhad(649966-K)AnnualReport2012

FINANCIALHIGHLIGHTS

2008 2009 2010 2011 2012

Revenue (RM'000) 26,413 18,134 87,609 79,203 88,871

Profit Before Tax (RM'000) 8,599 2,070 32,547 23,005 21,556

Profit After Tax (RM'000) 8,324 1,941 31,813 22,226 20,490

Earnings Per Share (EPS) (sen) 3.58 0.85 13.92 9.61 8.85

Total Equity (RM'000) 49,870 49,261 76,334 97,016 114,453

Return on Equity 17% 4% 42% 23% 18%

2008 2009 2010 2011 2012

Earnings Per Share (EPS)(Sen)

16.00

14.00

12.00

10.00

8.00

6.00

4.00

2.00

0

3.58

0.85

13.92

9.618.85

2008 2009 2010 2011 2012

Total Equity(RM’000)

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

49,870 49,261

76,334

97,016

114,453

2008 2009 2010 2011 2012

Revenue(RM’000)

100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

18,134

87,609

26,413

79,203

88,871

2008 2009 2010 2011 2012

Profit Before Tax(RM’000)

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

8,599

2,070

32,547

23,00521,556


CORPORATEINFORMATION

CORPORATESTRUCTURE

BOARD OF DIRECTORS

Dato’ Seri Kiew Kwong SenChairman / Independent Non-Executive Director

Chu Jenn WengManaging Director / President / CEO

Siaw Kok TongExecutive Director / Senior Vice President

Yeoh Shih HoongExecutive Director / Senior Vice President

Chuah Poay NgeeIndependent Non-Executive Director

Prof. Ir. Dr. Ahmad Fadzil Bin Mohamad HaniNon-Independent Non-Executive Director

Chang Mun Kee Independent Non-Executive Director

AUDIT COMMITTEE

Chuah Poay Ngee(Redesignationon16August2012)Chairman

Dato’ Seri Kiew Kwong Sen(Redesignationon16August2012)

Prof. Ir. Dr. Ahmad Fadzil Bin Mohamad Hani

Chang Mun Kee

NOMINATING COMMITTEE

Chuah Poay NgeeChairman

Dato’ Seri Kiew Kwong Sen

Prof. Ir. Dr. Ahmad Fadzil Bin Mohamad Hani

Chang Mun Kee

REMUNERATION COMMITTEE

Chang Mun KeeChairman

Dato’ Seri Kiew Kwong Sen

Chu Jenn Weng

COMPANY SECRETARIES

HowWeeLing(MAICSA7033850)OoiEanHoon (MAICSA7057078)

REGISTERED OFFICE

57-G,PersiaranBayanIndahBayanBay,SungaiNibong11900PenangTel :6046408933Fax :6046438911

HEAD OFFICE

ViTroxInnovationCentrePlot85A,LintangBayanLepas11BayanLepasIndustrialPark,PhaseIV11900BayanLepas,PenangTel :6046466227Fax :6046466327Website : www.vitrox.com

SHARE REGISTRAR

SecuritiesServices(Holdings)Sdn.Bhd.Level7,MenaraMileniumJalanDamanlelaPusatBandarDamansaraDamansaraHeights50490KualaLumpurTel :60320849000Fax :60320949940

AUDITORS

CroweHorwath17.01,MenaraBousteadPenang39,JalanSultanAhmadShah10050Penang,Malaysia

SOLICITORS

ZaidIbrahim&Co

PRINCIPAL BANKERS

HongLeongBankBerhadPublicBankBerhadOCBCBank(Malaysia)BerhadHSBCBankMalaysiaBerhad

STOCK EXCHANGE LISTING

MainMarketofBursaMalaysiaSecuritiesBerhadStockName :VITROXStockCode :0097

ViTrox Corporation Berhad("ViTrox")andSubsidiariesasat2May2013

ViTrox Corporation Berhad

100% ViTrox Technologies Sdn Bhd (Awholly-ownedsubsidiaryofViTrox)

100% ViE Technologies Sdn Bhd (Awholly-ownedsubsidiaryofViTrox)

100% ViTrox International Sdn Bhd ("ViTroxInternational") (Awholly-ownedsubsidiaryofViTrox)

100% ViTrox Technologies (Suzhou) Co Ltd (Awholly-ownedsubsidiaryofViTroxInternational)


BOARD OFDIRECTORS

FROM LEFT TO RIGHT (STANDING)

Prof. Ir. Dr. Ahmad Fadzil Bin Mohamad Hani(Non-IndependentNon-ExecutiveDirector)

Siaw Kok Tong(ExecutiveDirector/SeniorVicePresident)

Chu Jenn Weng(ManagingDirector/President/CEO)

Yeoh Shih Hoong(ExecutiveDirector/SeniorVicePresident)

FROM LEFT TO RIGHT (SITTING)

Chang Mun Kee(IndependentNon-ExecutiveDirector)

Dato’ Seri Kiew Kwong Sen(Chairman/IndependentNon-ExecutiveDirector)

Chuah Poay Ngee(IndependentNon-ExecutiveDirector)


PROFILE OFDIRECTORS

Dato’ Seri Kiew Kwong SenChairman/IndependentNon-ExecutiveDirector“Dato’ Seri Kiew Kwong Sen [Malaysian / Age 65] is the Chairman and Independent Non-Executive Director of ViTrox. He was appointed to the Board of Directors of ViTrox on 8 July 2005. He is a member of the Audit Committee, Nominating Committee and Remuneration Committee of the Company.”

Dato’SerigraduatedfromNationalTaiwanUniversitywithBachelorofScienceinMechanicalEngineeringDegreein1972andreceivedMasterofScienceDegreeinIndustrialEngineeringDegreefromtheUniversityofCalifornia,Berkeley,USA.HeworkedinvarioustechnicalandmanagementpositionsatMulti-NationalCompaniesinMalaysia,SingaporeandUSA.

HeisnowtheChairmanandPresidentofMini-CircuitsTechnologiesMalaysia,PresidentofGibraltarSemiconductor,SanJose,California,PresidentofBlueCellTechnologies,Sacramento,California,andChairmanofMini-CircuitsTaiwanLtd.HeisalsotheDirectorofACXCeramicTaiwan.

Dato’Seriisveryactiveincommunityservicesincludingsponsorofvariouscharitableandeducationalprojects.HeisthefounderandChairmanoftheMini-CircuitsScholarshipFoundation.ThisFoundationhasbeenawardingtwofullscholarshipsayearfordeservingUniversitystudentsforafull4-yeardegreeprogrammeatlocalUniversities.

HehasbeenservingasamemberofPenangCompetitivenessCommitteesince2003.HewasalsotheViceChairmanoftheBoardofInvestPenangBerhaduntilMarch2008.HeisnowChairmanofthePenangSMEManagementCouncil,ChairmanofthePenangScienceCouncilEnterpreneurPillarandChairmanoftheBoardofVisitor,PenangIslandHospital.

HeisalsoanIndependentNon-ExecutiveDirectorofPentamasterCorporationBerhad.


PROFILE OF DIRECTORS

Chu Jenn WengManagingDirector/President/CEO“Chu Jenn Weng [Malaysian / Age 43] is a promoter and substantial shareholder of ViTrox. He is the Managing Director / President / CEO of ViTrox Group and currently oversees the entire operations of the Group. He was appointed to the Board of Directors of ViTrox on 7 July 2005. He is the Chairman of the Executive Committee and a member of the Remuneration Committee of the Company."

Mr.Chuhasmorethan16yearsexperienceinmachinevisionandrelatedfield.Hestartedhisfirstprojectinmachinevisionbackin1992whilehewasstillstudyinginUniversitiSainsMalaysia(USM)majoringinElectricalandElectronicsEngineering.UpongraduationfromtheUniversity,hewasemployedasaninstrumentationengineerinHewlett-PackardMalaysia(HPM)(nowknownasAgilentTechnologiesSdnBhd),whereheinitiatedandledthein-house4-personmachinevisionteamformorethan5years.Duringhis5½yearcareerinHPM,hewasdirectlyinvolvedintheR&Dofmachinevisionsystems,systemset-upandsupport,aswellassettingobjectivesanddevelopmentplanfortheentireteam.

Mr.Chucompletedhispart-timepostgraduatestudyinimageprocessingfromUSMin1998.Whilelearningthefundamentalandrequiredtechniquesinthisfield,hetraveledtocountrieslikeSingaporeandUnitedStatesofAmerica(USA),tostudyandevaluatetheneedofthosetechnologiesanditspotentialforgrowth.HeleftHPMin1998tostart-uphisownbusinesswithhispartner/co-founder,SiawKokTonginmachinevision.Thereafter,thepartnershipwasthenconvertedintoaprivatelimitedcompanyinMarch2000andwasofficiallynamedViTroxTechnologiesSdnBhd(VTSB).

Duringthestart-upphaseofVTSB,Mr.Chuwasinvolvedineveryaspectofthebusiness,startingfromsalesandmarketing,R&Dofvisionsystem,partpurchasing,financeaswellasserviceandsupport.

AstheManagingDirector/President/CEOofViTroxGroup,heoverseestheentireoperationsofthebusinessincludingcompanyobjectives,goalsanddirections.

Mr. Chu received the certificate ofmerit from TheOutstanding YoungMalaysian (TOYM)Award under the Business,Economic and Entrepreneurial Accomplishment category in 2005. Hewas recently awarded the 2011 Ernst & YoungMalaysianTechnologyEntrepreneuroftheYearandalsoreceivedtheOutstandingEntrepreneurAward2011fromtheAsiaPacificEntrepreneurAward(APEA).

Siaw Kok TongExecutiveDirector/SeniorVicePresident“Siaw Kok Tong [Malaysian / Age 42] is a promoter and substantial shareholder of ViTrox. He is the Executive Director / Senior Vice President of ViTrox Group and is primarily responsible for the operations of Machine Vision System (MVS) business unit for ViTrox Group. He was appointed to the Board of Directors of ViTrox on 7 July 2005. He is a member of the Executive Committee of the Company.”

Aco-founderofVTSB,Mr.SiawgraduatedwithaBachelordegree(FirstClassHonours)inComputerSciencefromUSMin1995.Mr.SiawcommencedhiscareerwithHP(Malaysia)asaninstrumentationengineerintheAutomationDepartment,wherehewasinvolvedinthedevelopmentofmachinevisionsystems.Duringhis4½yeartenureinHPM,hewaspromotedtoSeniorEngineerandsubsequentlyleftthecompanyin1999uponcompletionofhisscholarshipbond.

In2000,Mr.Siawco-foundedVTSBwithChuJennWeng,whereduringtheearlystagesofthecompanystart-up,hewasinvolvedinapplicationdevelopment,installation,systemsupportandservicing,aswellasthegeneraladministrationandmanagementofVTSB.Withthesubsequentadditionofnewengineers,hewentontoheadthedevelopmentofnon-standardvisionapplications.

Mr.SiawplayedakeyroleintheestablishmentofViTroxGroup’scustomerbaseinMalaysia,Thailand,Philippines,Singapore,Taiwan,Indonesia,HongKong,China,Korea,Japan,Australia,India,Europe,andUSA.

AsanExecutiveDirector/SeniorVicePresidentofViTroxGroup,Mr.SiawisresponsibleinpromotingViTroxGroup’svisionsystemsandvisionhandlers,bothlocallyandabroad.HealsomanagestheoveralloperationsforMachineVisionSystem(MVS)businessunit.Heispartofthecoremanagementteaminvolvinginstrategicdecisionmakingandplanning.



Yeoh Shih HoongExecutiveDirector/SeniorVicePresident“Yeoh Shih Hoong [Malaysian / Age 41] is a promoter, substantial shareholder and Executive Director / Senior Vice President of ViTrox. He was appointed to the Board of Directors of ViTrox on 7 July 2005. He is a member of the Executive Committee of the Company.”

Mr.YeohgraduatedwithaBachelordegree(FirstClassHonours)inComputerSciencefromUSMin1997.Duringhisthirdyearoftertiarystudy,heunderwentindustrytraininginHP(Malaysia)wherehewasassignedtoworkonmachinevisionprojects.

Mr.YeohjoinedVTSBsinceits inceptionandhasplayedapivotalroleintheproductdevelopmentofthecompany.Hesuccessfullyco-developedmanyproductsforthecompany,suchasMarkLeadInspectionSystem,ICPackageInspectionSystem,ObjectVerificationSystemandDieCountingSystemandthe4-in-1IntegrationSolution.Mr.Yeohplayedakeyroleinthedevelopmentofthesub-pixeltechnologyandVSCLplatformofVTSB.HeiscurrentlyinvolvedintheR&Dofnewmachinevisionproducts,supportingexistingproductsaswellastrainingnewengineersonthemachinevisiontechnologies.

AstheExecutiveDirector/SeniorVicePresidentofViTrox,heisinvolvedinmanagementdecisionmakingandplanning.

Chuah Poay NgeeIndependentNon-ExecutiveDirector“Chuah Poay Ngee [Malaysian / Age 43], is an Independent Non-Executive Director of ViTrox. She was appointed to the Board of Directors of ViTrox on 15 November 2006. She is the Chairman of the Audit Committee and Nominating Committee of the Company.”

Ms.Chuahgraduatedin1994fromtheDeakinUniversity,AustraliawithaBachelorOfBusiness(Accountancy)andqualifiedasCertifiedPracticingAccountantoftheAustralianSocietyOfCertifiedPracticingAccountantsin1996.

Upongraduation,Ms.Chuah joinedMatthew&Partners (formerlyknownasRussOoi&Associates)asTaxandAuditAssistant.She then joinedGrandCircuits IndustrySdnBhd,a subsidiaryofGrandUnitedHoldingsBerhadasAccountsExecutivein1995andwassubsequentlypromotedtoGroupAccountant.

In2001,sheworkedforGoldenFreshSdnBhdasFinance&AdministrationManagerandwaslaterpromotedtoSeniorFinance&AdministrationManager.Sheleftthecompanyin2006tojoinMini-CircuitsTechnologies(M)SdnBhdasFinancialControlleruntil2010.CurrentlysheworksforDynacraftIndustries(M)Sdn.Bhd.asFinanceManager.

Ms.ChuahisaCharteredAccountantoftheMalaysianInstituteofAccountantsandalsoqualifiedasCertifiedCorporateSecretarywiththeUniversityMalayaCentreofContinuingEducationin1998.


Additional Information on DirectorsConflict of interest and family relationships with any Director and/or major shareholder:NoneoftheDirectorshaveanyconflictofinterestwiththeViTroxGroup.NoneoftheDirectorshavefamilyrelationshipwithanyotherdirectorand/ormajorshareholderofViTrox.Material contracts involving Directors:TherewerenomaterialcontractsinvolvingDirectorsduringthefinancialyears.Convictions for offenses (within past 10 years, other than traffic offences, if any):NoneoftheDirectorshaveanyconvictionsforoffencesotherthantrafficoffences.Securities held in the Company:Thedetailsaredisclosedonpage111ofthisAnnualReport.Directorship in other public company:SaveforDato’SeriKiewKwongSenandChangMunKee(asdisclosedintheirprofileabove),noneoftheDirectorshaveanydirectorship in other public company in Malaysia.

Prof. Ir. Dr. Ahmad Fadzil Bin Mohamad HaniNon-IndependentNon-ExecutiveDirector“Prof. Ir. Dr. Ahmad Fadzil Bin Mohamad Hani [Malaysian / Age 53] is a Non-Independent Non-Executive Director of ViTrox. He was appointed to the Board of Directors of ViTrox on 8 July 2005. He is a member of the Audit Committee and Nominating Committee of the Company.”

Prof.Ir.Dr.AhmadFadzilgraduatedin1983fromtheUniversityofEssex,UnitedKingdomwithaBachelordegree(FirstClassHonours)inElectronicEngineering.HecompletedhisMastersdegreeinTelematicsin1984andDoctorateinImageProcessingin1991atthesameuniversity.

Prof.Ir.Dr.AhmadFadzilhasbeenalecturerinsignalprocessingandresearcherinimageprocessingatUSMsince1984.Between1988and1991,hewasaseniorresearchofficerinimageprocessingandsubsequentlyasalecturerathisAlmamatter,UniversityofEssex.UponreturningtoMalaysia,hewasmadetheDeanoftheSchoolofElectricalandElectronicEngineeringatUSMfrom1992till1996.In1997,hebecametheDeanoftheEngineeringFacultyatthenewlyestablishedPetronas University of Technology,Malaysia (UTP). He served as the Director of Academic Studies at UTP from 1999till2003.From2003till2006,heservedastheDirectorofPostgraduateStudies.Heiscurrently leadingtheCentreforIntelligentSignalandImagingResearch.InApril2011,hewasappointedtheDeputyVice-Chancellor(Academic)ofUTP.

Prof. Ir. Dr. Ahmad Fadzil is a Fellowwith the Academy of SciencesMalaysia (ASM) and Fellow of the Institution ofEngineers,Malaysia(IEM).HeservedasaCouncilMemberofIEMfrom2001to2004andalsoasaCouncilMemberofASMfrom2011to2013.HeisaregisteredProfessionalEngineerwiththeBoardofEngineers,MalaysiaandaSeniorMemberoftheInstituteofElectricalandElectronicsEngineers(IEEE),USA.Hisresearchinterestsincludeimagecompression,imageprocessingandcomputervisionapplications inbiomedicalengineering,petroleumexploration,visioninspectionsystemsand intelligent signal and imaging.

Chang Mun KeeIndependentNon-ExecutiveDirector"Chang Mun Kee [Malaysian / Age 48], is an Independent Non-Executive Director of ViTrox. He was appointed to the Board of Directors of ViTrox on 25 June 2010. He is the Chairman of the Remuneration Committee of the Company. He is also a member of the Audit Committee and Nominating Committee of the Company."

Mr.ChangobtainedhisBachelorofScienceinMechanicalEngineeringfromtheUniversityofTexas,Austin,USAin1988andaMasterofScienceinMechanicalEngineeringfromtheMassachusettsInstituteofTechnology,USAin1990.Priorto foundingMOLOnlineSdnBhd in the1995andsubsequently Jobstreet.comSdnBhd in1997,hewaswithKendallInternational, aUShealthcare company for5 years, startingasaprocess engineer in1990beforebeingpromoted tomanufacturingmanager in 1992 and Regional Director of Sales andMarketing forMalaysia in 1994. He left KendallInternationalin1996toestablishJobstreet.comSdnBhdwhichexpandedregionallyunderhisdirection.HecurrentlysitsontheBoardsofInnityCorporationBerhad,JobstreetCorporationBerhadand104CorporationinTaiwan.

HeisanExecutiveDirectorofJobstreetCorporationBerhadandthefounderoftheJobstreetGroup.HeisalsoanalternatedirectorofaNon-IndependentNon-ExecutiveDirectorofInnityCorporationBerhadand104CorporationinTaiwan.



CHAIRMAN'SSTATEMENT

Financial Performance

2012 2011

RM’000 RM’000 Growth

Revenue 88,871 79,203 12.2%

ProfitBeforeTax(“PBT”) 21,556 23,005 -6.3%

ProfitAfterTax(“PAT”) 20,490 22,226 -7.8%

ViTroxGrouprecordedrevenueofRM88.87millionin2012,anincreaseof12.2%overtheRM79.20millioninpreviousfinancialyear.TheincreasewasaresultofhigherdemandofTrayInspectionHandlerandAdvancedX-rayInspectionSystemwiththepositiveacceptanceofourproductsanddemandfromalargerdiversifiedcustomerbase.PATachievedRM20.49millionin2012,adecreaseof7.8%overRM22.23millionrecordedinpreviousyear.Assuch,netearningpersharewere8.85senin2012against9.61senin2011.

Dividend

A tax exempt interim dividend of 1 sen per ordinary share each amounting to RM2,312,597 for financial year ended31December2012waspaidtoshareholderson31January2013.

TheBoardofDirectorshasrecommendedaspecialtaxexemptdividendof0.75senperordinaryshareeachandafinaltaxexemptdividendof0.5senperordinaryshareeachforthefinancialyearended31December2012.IfapprovedattheupcomingAnnualGeneralMeeting,thetotalspecialandfinaltaxexemptdividendsareestimatedamounttoatotaldistributionofRM2,890,746.Asaresult,ViTroxisexpectedtodeclareatotaldividendof2.25senpershare,withatotaldistributionapproximatelyRM5,203,343fortheyear.

Achievements in 2012

New Product Innovation (NPI) Award 2012ViTroxwonthe2012NPIAwardfromCircuitsAssemblymagazineinthecategoryofTest&Inspection-AXIforitsV810In-Line3DAdvancedX-RayInspectionSystem(AXI).

SME Innovation Award 2012 for 1-InnoCERT: ICT & Software Development CategoryViTroxwontheSMEInnovationAward2012underthecategoryof1-InnoCERT:ICT&SoftwareDevelopment.ThisawardisorganizedbySMECorporationMalaysiaandincollaborationwithMIGHT(MalaysianIndustry-GovernmentGroupforHighTechnology).

1-InnoCERT is a certification programme recognizes and certifies innovative enterprises & SMEs and to encourageentrepreneurstoventureintohightechnologyandinnovation-drivenindustries.

Malaysia HR Award 2012 - Gold Award for SME Best Employer AwardViTroxwontheMalaysiaHRAward2012GoldAwardinthecategoryofSMEBestEmployerAward.ThisawardisorganizedbytheMalaysianInstituteofHumanResource(MIHRM)andjointlypresentedbyJobStreet.com,inordertoacknowledgecompaniesandpeoplewhohavetakenHRstrategytothenextlevelintheirorganizations.


CHAIRMAN'SSTATEMENT

Achievements in 2012 (cont'd)

Global Technology Award 2012ViTrox won the Global Technology Award 2012 in the category of Inspection Equipment - X-ray for its V810 In-line 3D Advanced X-ray Inspection System (AXI).

The award was presented to ViTrox during Tuesday, October 16, 2012 ceremony which took place at the Walt Disney World Dolphin Hotel in Orlando, FL during SMTA International 2012.

Ministry of International Trade and Industry (MITI) - The Industry Excellence Award 2011ViTrox successfully swept 2 major awards for The Industry Excellence Award 2011, held in Kuala Lumpur, Malaysia on 24th October 2012.

Award #1 : Winner of Prime Minister Award This award recognizes organisation excellence and quality achievement to encourage production of quality products/services. The winner of this award is selected from among the winners of the Product Excellence Award, Quality Management Award, Export Excellence Award (Merchandise), Export Excellence Award (Services), Brand Excellence Award (Merchandise) and Brand Excellence Award (Services - Professional and Non-Professional).

Award #2 : Winner of Export Excellence Award (Merchandise) This award acknowledges companies on the achievements from export performance, market penetration, product development, market operation, reduction of usage imported components, recognition received and social contribution.

Future Outlook and Focus

Continuous improvement in new technologies & products, we believe that the demand for our product will be sustainable in the new financial year. In addition, we will focus on market expansion activities, customer relationship building and product innovation to grow the business further in the new financial year.

Subject to the external market conditions and macroeconomic factors, we believe that the performance of ViTrox Group will continue to grow favorably.

We are poised to make further progress in new technology while gaining customer loyalty with our demonstrated performance in previous years especially Tray Inspection Handler and Advanced X-ray Inspection System. At the same time, we will focus on undertaking prudent cost control measures in order to maximizing productivity and profitability. This enables us to continue to grow with competitive technologies and products while achieving higher level of customer satisfaction.

In conclusion, I would like to express my gratitude to ViTrox team on the demonstrated technical excellence, product innovations, project execution and teamwork. On behalf of ViTrox, I would also like to extend my appreciation to our valued business partner and Board of Directors for continuing to grow the Company for many years to come.

Dato' Seri Kiew Kwong SenChairman / Independent Non-Executive Director


CHIEF EXECUTIVE OFFICER'SREVIEW OF OPERATIONS

Dear Shareholders,

FINANCIAL PERFORMANCE

I am glad to report our 12th year of consecutive annual profit. Our 2012 revenue and profit before tax (PBT) wereRM88.87millionandRM21.56millionrespectively.Webrokeanewrevenuerecordin2012withadoubledigitgrowthof12.2%comparedtoayearagoamidstasluggisheconomicenvironmentcausedbyprolongedweaknessesinEurope,JapanandUS.,andaslowdownintheChineseeconomy.Thisisaresultofouraggressivemarketexpansionandwellacceptanceofournewvisioninspectionproductsbyworldwidecustomers.Duringthesameperiod,ourprofitbeforetaxwasdecreasedslightlyby6.3%duetopriceerosionandincreaseofoperatingexpensestosupporttheglobalexpansionandnewproductdevelopment.

OurfinancialpositionremainsstrongwithcashandcashequivalentsofRM43.92million,asof31stDecember2012,anincreasedofaboutRM1millioncomparedtoayearago.OurbankborrowingwasRM12.59million,asof31stDecember2012,solelyusedtofinanceourViTroxInnovationcenter,Phase2expansionproject.Ourearningspershare(EPS)decreasedto8.85senfrom9.61senayearagoandourreturnonequitydecreasedslightlyto18%from23%.Despitethechallengingglobaleconomicenvironment,ViTroxcontinueditsphenomenalrecordof12straightyearsofprofitability,thankstothesheerdeterminationoftheboardandmanagementteaminensuringuncompromisedintegrity,payingattentiontobusinessfundamentals,continuouscommitmenttovalueinnovation,globalexpansionandprudentcostmanagement.

PRODUCT INNOVATION

ViTroxanditssubsidiariesdesignandmanufactureinnovative,leading-edgeandcosteffectiveautomatedvisioninspectionequipmentandsystem-on-chipembeddedelectronicsdevices for thesemiconductorandelectronicpackaging industriesworldwide. Our core products are machine vision system (MVS), automated board inspection (ABI) and electronicscommunicationsystem(ECS).

We serve customers from semiconductor Outsourced Assembly and Test (OSAT) companies, printed circuit boardmanufacturers,electronicsassembliescompanies,OriginalEquipmentManufacturers(OEM),OriginalDesignManufacturers(ODM),ElectronicsManufacturingServices(EMS)andContractManufacturers(CM)aroundtheworld.

Weprovidethe‘powerofsight’toindustrialsystemsforproductqualityandyieldsimprovement.Ourinspectionsystemhelpscontaindefectsproducedbyvariousproductionstages,andpreventthemfromescapingdownstream.Ourproductshavebeenwidelyusedintheproductionofsmartphones,tablets,gameconsoles,medicaldevices,automotive,computersandlaptops,serversandstorages,telecommunicationproductssuchas4G&LTEandnetworking&accessproductssuchasrouters,switchesandPBX.

2006 2007 2008 2009 2010 2011 2012

50

40

30

20

10

0

ROE(%)

29%32%

17%

4%

42%

23%

18%

2006 2007 2008 2009 2010 2011 2012

50

40

30

20

10

0

Cash & Bank Balances(RM'Mil)

9

19

29 28

43 43 44



PRODUCT INNOVATION (cont'd)

Smaller form factor in semiconductor packaging, denser and complicatedprinted circuits and assemblies coupledwithhighercustomer’sexpectationinqualitycontinuetodrivetheneedformorestringentinspectionfortheseindustries.ThiswillbenefitViTroxinthelongrunaswecontinuetoexpandourpresencegloballywithleadingedgeinspectionproductsandsuperiorservice&support.

Machine Vision System (MVS)

UnderMVS business unit,we design andmanufacture advanced and cost effective 2 dimensional and 3 dimensionalinspectionsystemstodetectsemiconductorandoptoelectroniccomponents’dimensionalandvisualdefectsautomaticallyatsemiconductor’sback-endpackagingandtestprocesses.To-date,morethan10,000MVSproductshavebeeninstalledworldwideatover100customersitesin13countries.

In2012,MVSsuccessfullydevelopedandlaunchedthefollowingnewproducts:-

(a) ODFNVisionSystem:Thevisionapplication is the1st in theworldthat inspects forcoloreddefectsonTranslucentOpticalSensorusedinsmartphone/mobiledevices.Despitethecomplexinspection,thesystemhasthecapabilitytoinspect3DBallandPaddimensionsforBGApackages,achievingahighaccuracyof6um.

(b) 9-in-1 Integrated Vision System:We released a fully integrated vision system that comprised of 9 vision systemsintegratedon1handler, runningsimultaneouslyto inspectforthreedimensional,packageandmarkdefects. It iscolor-enabledandisabletoscreenoutleadandpackagedefectsduetodiscolorationorexposedcopper,forgull-wingtypeICdevices.

(c) TrayVisionHandler InspectionCapabilities:We successfully developed3major inspection functions to extend thecapabilityofourTH1000&TR1000visionhandlers.ThefunctionsincludePostSealInspection(TapeSeal),FullPackageVisual Inspection (PVI) and Double-Unit Detection for stacked IC devices. These functions are useful in handlingadvancedpackage/processrelateddefectsduetoincreasinglystringentproductmanufacturingrequirementsbyourcustomers.

(d) TraytoTape&ReelVisionHandler(TR1000):OuradvancedTR1000(releasedinQ1/2012)waswellacceptedbyourcustomersandisthebest-sellerproductinourtargetmarket,offeringaperformancecompetitiveandviablealternativeto our customers. Key strengths of this product include fast conversion, easymaintenance and extensive in-builtfunctionstohelpourcustomersmaximizethemachineutilization.



Automated Board Inspection (ABI)

ABIgroupconsistsof2businessunitsnamelyPrintedCircuitAssemblies(PCA)andPrintedCircuitBoard(PCB).PCAservestheprintedcircuitassembliesmarketswhilePCBservesthebareprintedcircuitboardandbareflexiblecircuitmarkets.

Our aim for PCA is to be theOne Stop solution provider for AdvancedOptical Inspection (AOI) and Advanced X-rayInspection(AXI).Wearenowonestepclosertothisgoalwiththefollowingnewproductslaunchedin2012:-

a) ConformalCoatinginspection:WesuccessfullydevelopedandlaunchedanewUVlightsourceandinspectionalgorithmfortheV510AOItoinspectforconformalcoatingmaterialwhichisappliedtoelectroniccircuitrytoactasprotectionagainstmoisture,dust,chemicalsandextremetemperature.

b) LargeBoardinspection:WiththereleaseofV510extendedconveyorin2012,V510cannowinspectlongboardwithweightupto15kgandlengthupto800mm.Thedemandforthiscapabilityisincreasingovertimeduetotheadoptionof4Gontelecommunicationmarket.

c) 2ndGenerationAdvancedOpticalInspection,V510G2:Providesthehighestlevelofdefectdetectionandinspectionspeedthroughdeploymentofnewcamerawith3timestheframeratefromthefirstgenerationAOIsystem.Thissystemcanbeupgradedto8Megapixelcameratofurther improvethe inspectionthroughputandaccuracy.ThereleaseofV510G2hasexcitedthemarketandhasassistedViTroxinwinningtheApproveVendorListfromafewTop10EMScustomers.

d) TheenhancedAXIsystem:TheenhancedV810comeswithbetteralignmentmethod,higherperformancescanningpathpattern andnew functionalities to increase test coverage, improveuser-ability, enhance throughput and callaccuracy.TheV810wonthebestAXI/NPIproductawardin2012fromGlobalSMTTechnologyAward(Europe),andCircuitsAssembly’sNPIAward(UnitedStates).

In2012,wecontinuedtoenhanceperformanceofourV2000AutomatedOpticalInspectionsystemforrigidandflexiblePCB.Besides,wealsoexpandedourbusinesscoveragefromSouthernChinatoEasternChina.

Electronics Communication System (ECS)

Wedesign,manufactureandmarketECSproductsviaits100%ownedsubsidiary,ViETechnologiesSdn.Bhd.ViEproducesawidevarietyofECSproductsfororiginalequipmentmanufacturersandautomationcommunities,whouseourproductsforimageacquisition,datacommunicationandmotioncontrol.ViEofferssolutionandsupportforhighspeeddigitalX-raycamera,high speeddigital andanalog inputandoutput interface card,high speed lowcost remote inputandoutputcontrollerPCinterfacecardandremotemodules,highspeedhighresolutionmotioncontrolleranddriverboards,universallightsourcecontrollerandLANbasedinput/outputandmotioninterfacecard.

In2012,wesuccessfullylaunchedanewcustomizedanalogI/Oproductforuseinmedicaldeviceprocessingequipment.



OPERATION

We remain focuson key areas basedonour 2012 corporate theme: “ViTrox2.1 - Speed,Cost&Global, alwayswithcustomer in mind”, setting our priorities to (1) Expand market shares from emerging products with attractive valueproposition,aggressivemarketinganddemo/benchmarking through internal sales teamand strategic channelpartners(2)Sustainprofitabilitybygrowingrevenuefromnewmarketshare&prudentcostmanagement(3)AchieveoperationexcellencethroughpervasivepracticeofLeanmethodology&culturethroughoutViTroxby‘Stabilization’,‘Standardization’and‘Proliferation’.

Webelievethesetransformativeinitiativeswilldrivemorerevenue,reduceoperationcosts,andenableViTroxtoachieveitslongtermvisiontobeatrulyleanworldclassenterpriseinprovidinginnovative,advancedandcosteffectivemachinevisionsystem and embedded system solutions.

Wesuccessfullyexecutedourkeyhoshinstrategiesoffocusingoncustomers,continuouslyenhancingourtechnologyinmachinevisionandembeddedsolution,optimizingourbusinessprocessesandconstantlydeliveringwinningproductstocustomersin2012.

Iamproudtopresentourkeyaccomplishmentsinoperationsasfollow:-

1. EstablishedthemanufacturingfacilitiesforthenewlylaunchedsecondgenerationAdvancedOpticalInspectionsystems(V510G2),Traybasedvisioninspectionhandler(TH1000S)andTraytoTape&Reelvisioninspectionhandler(TR1000S)flawlesslyuponrelease.

2. DoubledthemanufacturingcapabilitiesofAOIandAXItosupportbusinessneeds.3. Successfully developed comprehensive order fulfillment system to optimize inventory purchases while meeting

manufacturingbuiltdemand.4. Expandingsupplierbasethroughstrategicsuppliermanagementprocesses.5. Establishedacentralizedqualityassurance function toachievebest inclassquality in our incomingandoutgoing

products.

Wealwaysputhighprioritytoserveourcustomersbyunderstandingandfulfillingtheirpresentandfutureneeds.Thisenablesustoconsistentlydeliverinnovativesolutionintimelymannertoaddresstheirshortandlongtermobjectiveswithleadingedgetechnologiesandexcellentcustomerservice.

RESEARCH AND DEVELOPMENT

OurrelentlesscommitmentinresearchanddevelopmenthelpsViTroxtogrowmorethan4timesinrevenuesince2009.Tofurtherenhanceourtechnologydifferentiationandstaycompetitiveinthemarketplace,weinvestedRM14.65million,representing16.5%ofourrevenueinFY2012forresearchanddevelopmentactivities.Withthisinvestment,weincreaseourR&Dheadcountfrom109to129,primarytosupportvariouskeyR&DactivitiesforMVS-TandPCAbusiness.

2006 2007 2008 2009 2010 2011 2012

24,0004.9% 6.1%

13.8%

31.9%

14.7%

13.3%

16.5%

36,169

26,413

3,640

18,134

5,783

87,609

12,882

79,203

10,500

88,871

14,648

1,179 2,190

Revenue(RM'000) R&DExpenditure(RM'000) R&D/Revenue%

100,000

80,000

60,000

40,000

20,000

0


RESEARCH AND DEVELOPMENT (cont'd)

Wesuccessfullylaunchedaseriesofwinningproductsandofferedimpressivefeaturestoourcustomers:-

1. High-speedvisionsystemssupportingturret(rotary)-basedtesthandlers,withthroughputupto60KUPH,comprisingintegratedvisionsystemscapableofinspectingmark,leadandpackagerelateddefectsconcurrently.

2. LaunchofnewhighspeedTrayinspectionhandler(TH1000S)andTraytoTape&Reelinspectionhandler(TR1000S).BothnewmodelswillcomewithenhancedinspectionfeaturestohandlenewICpackages,higherthroughputandbettereaseofusefunctionalities.

3. Enhancedinspectionfunctions(forTrayHandler)includeOCR(opticalcharacterrecognition)capabilityandalsoPOP(packageonpackage)3Dinspectionusingadvancedopticalsetupandsoftwarealgorithms.

4. 3DPhaseshiftProfilometryAOIsystemandsidemarkinginspectioncapability.5. ReleaseofenhancedAXIplatformwithmultipleformfactorsthattailorstotheneedofemergingmarketsuchas

automotive,smartphoneandtablet.

OurstrongR&Dteamwhoarecommittedtolaunchatleastthreeinnovativeproducts(oneforeachbusinessunit)every6monthscontinuetostrengthenourleadingpositioninsemiconductorcomponentinspection,3DTrayICinspection,AOIinspectionand3DX-rayinspection.

In2012,wesuccessfullyfiled5patentsand1copyrightforourAOIandAXIproducts.

SALES & MARKETING

ViTrox’sMVS aremaking in-roads in the Taiwanmarket bymore than doubling our customer base comprisingmajorsemiconductorOutsourcedAssemblyandTest(OSAT)companies.Ourparticipation inSemiconTaiwan2012generatedstronginterestsfromnewandpotentialcustomersthere.Inaddition,wehaveappointedanewSalesChannelPartner(SCP)inKoreaandarealsomakingin-roadstoChinaandSouthEastAsia.

In2012,ABI-PCAexpandedthecustomerbasebyalmost100%contributingto40%ofthetotalABIrevenuein2012.ThisisaresultofViTrox’sseamlesseffortinR&D,andsuccessinproductbenchmarkinginmanyTier-1andTier-2EMSandOEMcompaniesaroundtheworld.ManyofthesenewlyaddedcustomerswilllikelytocontributepositivelyinPCA’srevenuein2013.

Furthermore,wehavesuccessfullyadded3newSalesChannelPartnerswiththestrategyintentofpenetratingintonewmarketsegmentandreachingouttothenewterritory.AnestablishedSalesChannelPartner inChinaandTaiwanwasaddedinQ4,2012asourendeavortopenetrateintotheODMmarketwhichwillrequiredifferentapproachtowintheirAVL.Besides,wehaveappointedanewSalesChannelPartnerinIndiatobringinnewsourcesofrevenuetofurthergrowourbusinessin2013.

The advancedX-ray inspection system (AXI) business has grownmore than 40% in 2012with great success inNorthAmerica, SouthAmerica,China andVietnam region. Thegrowthon theAXI Business is agreat testimonyofViTrox’scommitmenttowardsdevelopingtimelyandwellstructureservices&supportfootprint,leadingedgeAXItechnologyandeffectivecollaborationwithourvalueSalesChannelPartner.

Ourefforttoexpandthemarketreachwillnotstophere.Engagementwithagloballyknowncompanytoleveragetheirexpertandskillfultaskforceinsupportingoursophisticatedsystemisundergoingwherewearecomingclosetosignofftheagreementinearly2013.ThiswillhelpustoextendourtechnicalsupportfootprinttouncoverregionssuchasCanadaandcertainpartofEurope.

ForPCB-AOI,themarketfocuswasstillinChinawheremostofthebarePCBmanufacturersareresiding.TheV2000AOIprovidesflexibilitytothecustomersforbothrigidandflexiblecircuits.Besides,ourAOIisabletoinspectartworkanddryfilmstoo.Theseflexibilitiesaresuitabletomediumsizecustomerswhoproducehighmixandlowvolumemanufacturingmode.



BUSINESS STRATEGIES

Weexecutedour‘ViTrox2.1-Speed,Cost,Global,alwayswithcustomerinmind’strategiesin2012withmagnificentsuccess.Despiteourtraditionalmachinevisionsystem’sbusinesswasslightlydownby9%causedbythesluggishsemiconductorbusinessin2012,weachievedimpressiverevenuegrowthof47%and329%respectivelyforouremergingproductsnamelyTraybasedvisioninspectionhandlerandAdvancedX-rayinspectionsystemin2012.

WesuccessfullyexpandedourpresencetonewterritoriesincludeJapan,Europe,SouthAmericaandEastAmerica,Indiaand Indonesia through our sales team and local channel partners. We work closely with our customers to deliver the best valuepropositiontothemacrossdifferentcontinents.Asaresult,ourcustomerbasegrows28%from88customersin2011to113customersin2012.

In2013,wewillremainfocusongrowingtheexistingcorebusinesses,namelyMVS,ABIandECS.Weaimtobuildastrongfoundationforeachbusinesstoachievelongtermsustainability.Withthisinmind,wewillfocusonbusinessfundamental,strategicmarketexpansion,research&developmentinspecifictechnologydifferentiationinmachinevisionandembeddedsystem and human capital development.

OurnewproductsnamelyV510G2,V810,TH1000SandTR1000Shavebeenwellacceptedbymanynewmajorcustomersaroundtheworld,wherewesaw30%ofourrevenuewascontributedfromnewcustomersacquiredinthepast2years.Hence,itisnodoubtthatweshouldputmoreresourcetogrowthestrategicmarketsfurtherthroughourinternalsalesforcesaswellascompetitivesaleschannelpartners.

Movingforwardasweareservingourcustomeracrosswidermarketsegmentsandbroadergeographicalareas,weareexpectedtoimproveourproductsandservicequalitywhilecontinuetoofferinnovativeproductsatattractiveprice.Withthe readinessofour LeanQMS, learningand teaching cultureandour strongcommitment in continuous improvementacrosstheentireorganization,weareconfidentthatViTroxwillbeabletorolloutmoreinnovative,leading-edgeandqualityinspectionproductsthatexceedcustomer’sexpectationinatimelymanner.Inshort,ourcorestrategyfor2013is”ViTrox 2.2 - Profitability Growth with customer first attitude”.Withthis,weexpecttoextendourmarketreachandbroadenourcustomerbaseforallbusinessunitsin2013whiletokeepouroperatingexpenseatreasonablelevelinordertoachieveprofitabilitygrowth.

OUR PEOPLE

OurpeoplemakeViTroxoneofthebesttechnologycompanyintheregion.InViTrox,weareonefamilydedicatedtomakepositivecontributionstoourcustomers,ouremployeesandthecommunitiesweserve.

Toaccelerateourpaceinnewproductintroduction,weareincreasingourR&Dworkforcefrom109peoplein2011to129peoplein2012.Thisisinlinewithourplantorolloutmoreinnovativeproductstocapturebiggermarketsharesandstayaheadofourcompetitorsbylaunchingatleastonenewproductperbusinessunitinevery6months.

Toupliftingourpeople’sskillandcompetencyin2012,ViTroxinvestedmorethan10,900hoursinlearninganddevelopment,equivalentto50hoursinaverageperemployee,invarioustechnicalandsoftskilldevelopmentprograms.99%ofViTroxiansattendedoneormore trainingprogram in2012.Webelieve that skillful and committedViTroxians areour long termcompetitiveadvantageinprovidingthemostinnovative,advancedandcosteffectiveproductsandservicestoourcustomersin the right time.



OUR PEOPLE (cont'd)

Webelievethatinordertomakeourcustomershappywithourproductsandservices,firstthingfirst,weneedtohavehappyemployees,whoarewillingtovolunteer theirbestefforts toserveandsatisfycustomers’needeitherdirectlyorindirectly.Hence, it isouraimtocreateahappy, funandharmonyworkenvironmentwherepeopleare treatedfairly,trusted,respectedandappreciatedbytheirsuperioraswellaspeers.ThevisionofahappyorganizationwillberealizedwhenallViTroxiansliveuptheI.A.C.T.Gspiritinsideandoutsidetheorganization.

TheI.A.C.T.G,whichstandsforIntegrity,Accountability,Courage,TrustandRespect,GratitudeandCare,isasimpleyetpowerfuluniversalvaluesdefinethecharacterofViTroxpeople.Thesecorevalues,whenpracticedwholeheartedly,leadustoliveinharmonywithourselvesandtheoutsideworld.Theyguideourinteractionswithcolleagues,customersandothers,motivateustomakegreatproductsandservices,ultimatelyenableustobuildasustainable,greatandhappyorganization.Thereforeourleadersmustensurethatwealwayssearchforpotentialtalentsandpromotefutureleaderswhopossess,cultivate and embrace these values.

InViTrox,wedomorethanjustbusiness,wedevelopgoodcharactersandbuildgoodcommunity.

CORPORATE RESPONSIBILITY

Westrive tobemuchmore thanabusinessbymakingpositivedifference in thecommunitiesweserve.Wewantourcharitablecontributionstouchasmanylivesaspossible,hencewefocusourcharitabledonationandoutreachactivitiesinfewkeyareasnamelyeducation,charityandenvironmentprotection.

In2012,despitethebusyyear,wecarriedoutvariousCSRprogramsaslistedbelow:-

a. Morethan50ViTroxianssupportedthefundraisingcampaigninaidofBuddhistTzuChiEducationCentercumDialysisCenterBuildingfundwhereViTroxiansco-organizedanddonatedmorethanRM250,000 in the charity seminar titled “TheCorporatePath beginswith Love” jointly organized by ViTrox andMini-Circuits Technologies Sdn. Bhd in Oct 2012. Through theprogram,wesuccessfullyraisedaboutRM1.2millionfromlocalbusinesscommunitiesinsupportingTzuChi’snoblemissionforthe society and the world.

b. Morethan20ViTroxiansparticipatedintheEdenCharityFoodFair2012andhelpedraiseaboutRM2000fromsellingofvariousself-madehandicrafts.

c. Established“AGoodDeedADay”BambooBankPrograminViTroxtoencourageourpeoplehelpingtheneedyinoursocietybydonatingtheirpocketmoney.Withinashortperiodof5months,wesuccessfullycollectedRM56,076fromViTroxiansandViTrox’svisitorsforthecharityprogram.

d. Vegetarian lunch cum charity program. To promote healthy meal and protect the earth, we provide subsidizedvegetarianlunchtoourpeopleoneveryMonday.ForeverymealtakenbyViTroxian,thecompanywilldonateRM1forcharity.TheprogramsuccessfullyattractsabouthalfofourpeopletotakevegetarianlunchoneveryMonday.

Bygivingbacktocommunities,wenotonlymakeotherslifebetterbutalsohelpourselvestobeabetterperson,andhencea better organization.



GRATITUDES

2012wasanother year thatwas fullofgratitudes.We receivednumerousnational and international recognitionsandawardsfortheeffortsthatourpeopleputtogetherovertheyearstomakepositivedifferencestothecompanyandthecommunities.Amongothers,ViTroxwas thewinnerof thePrimeMinister Industrial ExcellentAward2011andExportExcellentAward2011organizedbytheMinistryofInternationalTradeandIndustry(MITI),arecognitionforourstrongsalesgrowth,earningsgrowthandreturnofequityoverthepastfewyears.

Wewouldnothaveachievedtheselevelofsuccesseswithoutthepassionate,committedandcaringViTrox’speople.Theserecognitionsandgloriesentirelybelongedtoourpeoplewhovolunteer theirbestefforts tomakethedifference.WithViTrox’swarriorspiritofnevergiveupattitudecoupledwithI.A.C.T.Gvalues,wecontinuetoconquernewheightsandovercomechallengestobecomeastronger,betterandhappierorganization.

Onbehalfof themanagement team, Iwish to thank theBoard,our customers, shareholders, business associates andrelevantgovernmentalauthoritieswhohavehelpedusonewayoranother in2012. I lookforwardtoyourcontinuoussupport in many years to come.

Iwouldliketoexpressmyhighestgratitudetomyentireteam,whoarepassionate,confident,dedicatedandsharethesamevisiontobuildaworldleadingtechnologycompany.IfeelfortunatethatweareabletoworkasONEfamilyteam,regardlessofrace,religiousandbackgroundtobuildupourbusinessfromveryhumblebeginnings.

Chu Jenn WengManagingDirector/President/CEO



HIGHLIGHTSOF 2012

JANUARY

FEBRUARY

ViTrox's Participation at InterNepcon Japan 2012 (Tokyo, Japan)On18th to20th January2012,ViTroxhad co-exhibitedalongwith its JapaneseSalesChannelPartnerattheInterNepconJapan,heldatTokyoBigSight,Tokyo.InternepconJapan2012isoneofthebiggestandmostnotableexpoaboutadvancedmanufacturing/mountingtechnologiesofIC-package.

Annual Dinner cum Boot Camp 2012On18thFebruary,ViTroxorganized1-daybootcampeventtoofficiateViTrox’snewlyimplementedcorevalues,aptlycalled‘I.A.C.T.G’whichstandsfor‘Integrity’,‘Accountability’,‘Courage’,‘Trust&Respect’,and‘Gratitude&Care’.

Followingbytheannualdinnerduringthenighttime,wherebyalltheemployeesincludingthosewhobasedinoverseasandmajorcustomerswereinvitedtojoininthegrandevent.

Launching of ViTrox's Newly Developed Mobile Application - 'What’s My Heart Rate?'ViTrox has recently launched its latest developedmobileapplication-‘What’sMyHeartRate?’foriOS,AndroidandWindows8platform.

'What'sMyHeartRate?'helpsusertomeasurehis/herheart rate and breath rate through camera.

ViTrox’s Participation at IPC APEX 2012 (San Diego, USA)On 28th February to 1st March, ViTrox hadparticipatedattheIPCAPEXShowatSanDiego,USA.

The award-winning of V810 3D in-line AdvancedX-rayInspectionSystem(AXI)andAdvancedOpticalInspection System (AOI) were displayed and withmajorTier-1andTier-2playersvisitedViTrox’sbooththroughout the show.

ViTrox is Recognized for its AXI Capabilities by Circuits Assembly’s 2012 NPI Award ProgramViTroxwonthe2012NewProductInnovation(NPI)Award from Circuits Assembly magazine in thecategoryofTest& Inspection -AXI for itsV810 In-Line3DAdvancedX-RayInspectionSystem(AXI).


HIGHLIGHTSOF 2012

APRIL

MAY

ViTrox's Participation at Nepcon China 2012 (Shanghai, China)ViTrox had participated at theNepcon China 2012in ShanghaiWorld Expo Exhibition and ConventionCentrefrom25th-27thApril2012.

Duringtheshowdays,overwhelmingresponseswerereceived and with major Tier-1 and Tier-2 playersvisitingViTrox’sbooth.

ViTrox's Participation at Suzhou PCB Show 2012 (Suzhou, China)ViTroxhasparticipatedattheSuzhouPCBShowheldatSuzhouInternationalExpoCenterfrom9th-11thMay2012.ViTroxhasdisplayeditslatestenhancedversionofV2000AutomatedOpticalInspectionSystem(AOI)whichspeciallycaterforthePCBbareboardandflexcircuit inspectionneeds.

JUNE ViTrox's Participation at SMIDEX Exhibition 2012 (Kuala Lumpur, Malaysia)ViTroxexhibitedatSMIDEXExhibition2012whichheldatKLConventionCentre,from20th-22ndJune,2012.ViTrox'scoreproduct-visionsystemandnewlydevelopedmobileapplication-'What'sMyHeartRate'weredemonstratedtothepublicduringshowdays.

ViTrox won the ‘SME Innovation Award 2012’ for 1-InnoCERT: ICT & Software Development CategoryViTrox won the SME Innovation Award 2012under the category of 1-InnoCERT: ICT& SoftwareDevelopment. This award is organized by SMECorporation Malaysia and in collaboration withMIGHT (Malaysian Industry-Government Group forHighTechnology).

1-InnoCERT is a certification programme used torecogniseandcertify innovativeenterprises&SMEsand to encourage entrepreneurs to venture into high technologyandinnovation-drivenindustries.


SEPTEMBER ViTrox’s Participation at Semicon Taiwan 2012 (Taipei, Taiwan)ViTroxhadparticipatedattheSemiconTaiwan2012held successfully from 5th-7th September 2012 atTWTC,NangangExhibitionHall.ViTroxTechnologiespresented its enhanced version of TH1000 VisionHandler inthiseventwhichcomeswiththeDoubleUnitInspectionfeature.

HIGHLIGHTSOF 2012

OCTOBER ViTrox won the 'Industry Excellent Awards 2011'ViTrox has successfully swept 2 major awards forThe Industry ExcellenceAward 2011, held in KualaLumpur,Malaysiaon24thOctober2012.

Award#1 :WinnerofPrimeMinisterAwardAward#2 :WinnerofExportExcellenceAward

(Merchandise)

JULY ViTrox Technologies Releases High Throughput AOI Solution - V510 G2 SeriesViTrox has introduced the V510 G2 Series ofAdvanced Optical Inspection system (AOI) offeringgreaterperformanceforfasterinspection.Ultimately,thesystemwillevolveintoaonestopAOIinspectionsolutionin2013thatisabletosupport3D,conformalcoating and backplane connector inspection. Thesenew features will be field upgradable on existingV510AOIandAgilentSJ50system.

ViTrox Participated at the Eden Charity Food Fair @ PenangViTrox was once again demonstrated its corporatesocial responsibility by taking up 2 stalls withemployeesvolunteerilyhelpingtosellDIYhandicraffeditemsandpotatosandwiches.AllthefundcollectedwasdonatedtoEdenHandicappedCentre.


DECEMBER ViTrox's 1st Image Processing Competition Held at MMU CyberjayaOn7thDecember,ViTroxhassuccessfullyorganizedits very first university-level of image processingcompetition at MMU Cyberjaya, Malaysia. Thecompetitioncamewiththethemeof“ShowUsYourTrue Colors”, andwith the objectives to scope thebest talents in programming on image processing. Therewas a total of 22 teams participating in thecompetition.

OCTOBER ViTrox won the ‘Global Technology Awards 2012’ in the category of Inspection Equipment - X-rayViTroxwontheGlobalTechnologyAward2012inthecategoryofInspectionEquipment-X-rayforitsV810In-line3DAdvancedX-rayInspectionSystem(AXI).

ViTrox won the ‘Malaysia HR Award 2012- Gold Award for SME Best Employer Award’ViTroxwon theMalaysia HR Award 2012Gold Award in the category of SME Best EmployerAward.ThisawardisorganizedbytheMalaysianInstituteofHumanResource(MIHRM)andjointlypresentedbyJobStreet.com,inordertoacknowledgecompaniesandpeoplewhohavetakenHRstrategytothenextlevelintheirorganizations.

Visit by Minister of International Trade and Industry (MITI)On 8th October, Minister of International Tradeand Industry (MITI),Datuk SeriMustapaMohamedpaidacourtesyvisittoViTroxtoappreciateViTrox’srecentwinningof 'SMEInnovationAward2012'for1-InnoCERT.

HIGHLIGHTSOF 2012

With best compliments


CORPORATE GOVERNANCE STATEMENT

TheBoardofDirectors(“theBoard”)ofViTroxCorporationBerhad(“ViTrox”or“theCompany”)iscommittedtoensurehighstandardsofcorporategovernanceareinplaceandpractisedthroughouttheGroup.Sinceobtaininglistingapproval,theCompanyhasprogressivelyimplementedtheprinciplesandbestpracticesasrecommendedbytheMalaysianCodeonCorporateGovernance2012(the“Code”).

ThisStatementsetsoutthemannerinwhichtheGrouphasappliedandtheextentofcompliancewiththeprinciplesandrecommendationsassetoutintheCode.

1. Establish clear roles and responsibilities

1.1 Clear functions of the Board and Management

TheBoardisresponsibleforoversightandoverallmanagementoftheCompany.TheBoardisdelegatingspecificpowersoftheBoardtorelevantBoardCommittees,theCEOandtheSeniorManagementoftheCompany.AllapprovalsaresupportedbytheAuthorityLimits,whichclearlysetsoutrelevantmattersreservedfortheBoard’sapproval,aswellas thosewhich theBoardmaydelegate to theBoardCommittees, theCEOand theSeniorManagement.

KeymattersreservedfortheBoard’sapprovalincludetheannualbusinessplanandbudget,businesscontinuityplan,dividendpayoutproposal,issuanceofnewsecurities,expenditureaboveacertainlimit,disposalofsignificantfixedassetsandtheacquisitionordisposalofcompanieswithintheGroup.

TheBoardhasdirectaccesstoSeniorManagementandhasunrestrictedandimmediateaccesstoinformationrelatingtotheGroup’sbusinessandaffairsinthedischargeoftheirduties.TheBoardwillconsiderinvitingtheSeniorManagementtoattendmeetingsforreportingonmajorissuesrelatingtotheirrespectiveresponsibility.

TheBoardCommitteesareentrustedwithspecificresponsibilitiestooverseetheGroup’saffairs,withauthoritytoactonbehalfoftheBoardinaccordancewiththeirrespectiveTermsofReference(TOR).TheChairmanoftherelevantBoardCommitteesalsoreporttotheBoardonkeyissuesdeliberatedbytheBoardCommitteesattheirrespective meetings.

1.2 Clear roles and responsibilities

1.2.1 Reviewing and adopting the Company’s annual Corporate Hoshin Plan

TheBoardplaysanactiveroleinthedevelopmentoftheCompany’sstrategy.Ithasinplaceastrategyplanningprocess,wherebytheManagementpresentstotheBoarditsrecommendedstrategyannually,togetherwithitsproposedbusinessplansfortheensuingyearatadedicatedsession,fortheBoard’sreview and approval. At this session, the Board deliberates both the Management’s and its ownperspectives,andchallengestheManagement’sviewsandassumptions,toensurethebestoutcome.Inconjunctionwiththis,theBoardalsoreviewsandapprovestheannualbudgetfortheensuingyear,andsets theKeyPerformance Indicators (KPIs)under theCorporateHoshinPlan,ensuring that thetargetscorrespondtotheCompany’sstrategyandbusinessplan,reflectcompetitive industrytrendsandinternalcapabilitiesaswellasprovidesufficientstretchfortheManagement.

Aquarterlyreviewofthe2012CorporateHoshinPlanwasconductedbytheBoard,atwhichthetargetssetbytheBoardwerecomparedagainsttheactualperformanceyear-to-date.TheBoardalsodiscussedstrategy implementation processes and requirements together with key transformational initiativesundertaken inthecurrentquarteroftheyeartoachievethetargetssetout inthe2012CorporateHoshinPlan. In thisexercise, theBoard tookcognisanceof internalandexternal factorswhichhadsupportedvariousachievementsaswellaschallengesfacingManagement.TheBoardactivelyengagedwiththeManagementinmonitoringtheprogressofinitiativesidentifiedinthe2012CorporateHoshinPlan and,where required, in identifying alternativemeasures to be taken to ensure the successfulrealisationofthestrategies.



1. Establish clear roles and responsibilities (cont'd)

1.2 Clear roles and responsibilities (cont'd)

1.2.2 Overseeing the conduct of the Company’s business

TheCEOisresponsiblefortheday-to-daymanagementofthebusinessandoperationsoftheGroupin respect of both its regulatory and commercial functions. He is supported by the ManagementCommittees.TheManagement’sperformance,under the leadershipof theCEO, isassessedby theBoard through a status report which is tabled to the Board and which includes a comprehensivesummaryoftheGroup’soperatingdriversanditsfinancialperformanceduringeachreportingperiod.TheBoardisalsokeptinformedofkeystrategicinitiativesandsignificantoperationalissuesandtheGroup’sperformance,basedontheapprovedKPIsintheCorporateHoshinPlan.

TheBoardreviewedtheresultsofthe2012employeesatisfactionsurveytoassessthelevelofemployeesatisfaction.Thesurvey,conductedbyaninternalresource,aimedtoensurecontinuousimprovementin theoperatingenvironmentbymaintainingareasof strengthand improvingareasofopportunityfor its internalstakeholders.Postemployeesatisfactionsurvey, intervention initiativesweretakentoaddress those areas below benchmark norms.

1.2.3 Identifying principal risks and ensuring the implementation of appropriate system to manage them

TheBoardisfullyawareofitsresponsibilitytosafeguardandenhancethevalueofshareholdersintheGroup.SincethelistingoftheCompany,theBoardhascontinuouslyplacedemphasisontheneedformaintainingasoundsystemofinternalcontrol.

Inthisregard,majorinternalcontrolsystemsaredocumentedandfollowedbythemanagementoftheGroup.Toenhancetheeffectivenessofriskmanagementandinternalcontrolsystems,theBoardhasestablishedaninternalauditfunctionwiththeassistanceofanexternalprofessionalfirm.

The internal auditors will be able to provide additional independent review on the state of riskmanagementandinternalcontroloftheGroupandhasanindependentreportingchanneltoAuditCommittee(“AC”).TheACreviews,deliberatesanddecidesonthenextcourseofactionandevaluatestheeffectivenessandefficiencyoftheriskmanagementandinternalcontrolsystemsintheorganization.

Theriskmanagementandinternalcontrolsystemsaredesignedtomanageandmitigateratherthaneliminate the risk of failure in achieving the Company’s corporate objective and safeguarding theCompany’sassetsaswellasinvestorsinterests.

TheInternalControlStatementsetoutonpages49to52ofthisAnnualReportprovidesanoverviewofthestateofriskmanagementandinternalcontrolswithintheGroup.

1.2.4 Succession planning

In FinancialYear Ended (“FYE”)2012, theBoardassumed the role and functionof identifyinganddevelopingthepotentialcandidate(s)tofillkeyleadershippositionintheGroupincludingappointing,training,fixingthecompensationofand,whereappropriate,replacingseniormanagement.




1.2 Clear roles and responsibilities (cont'd)

1.2.4 Succession planning (cont'd)

The Company has on 27 February 2013 established its Nominating Committee (“NC”). The BoardhasentrustedtheNCwiththeresponsibilitytoreviewcandidatesforkeymanagementpositions,todeterminecompensationpackagesfortheseappointments,andtoformulatenomination,selection,compensationandsuccessionpoliciesfortheGroup.TheBoardisbelievedthattheNC,initscurrentform, effectively andefficiently discharges its functions in respectofnominationand remunerationmatterslistedseparatelyinitsTORforthepurposeofclarity.

The NC undertakes yearly evaluation of the performance of key management personnel whoseremunerationsaredirectlylinkedtoperformance,basedontheirKPIs.

1.3 Formalised ethical standards through Code of Ethics

The Company’s Codes of Ethics for Directors continue to govern the standards of ethics and good conductexpectedofDirectors. TheCodeof Ethics forDirectors includes principles relating to their duties, conflict ofinterestanddealingsinsecuritiesareavailableattheCompany’swebsite.

Asameasuretogoverntheconductofitsemployees,theCompanyhasinplaceitsWhistleblowerPolicyandProcedures (“WPP”)andEmployeesHandBook.TheWPPseek to fosteranenvironmentwhere integrityandethicalbehaviouraremaintainedandanyillegalorimproperactionand/orwrongdoingintheCompanymaybeexposed.TheBoardhasoverallresponsibilitytooverseetheimplementationoftheWPPandallwhistle-blowingreportsaretobeaddressedtotherespectivepersonnelasassignedpursuanttotheGroups’WPP.ThismechanismwillallowthestakeholdersofViTroxtoreportconcernsaboutallegedunethicalbehaviour,actualorsuspectedfraudwithin theGroup,or improperbusiness conductaffecting theGroupandaboutbusiness improvementopportunities.

TheWPPofViTroxisavailableatitscorporatewebsite.

Apartfromtheabove,allEmployeesincludedDirectorsarerequiredtosignaNon-DisclosureofInformation(NDI)withCompany.ThisNDI includes(without limitation)confidentialityof informationsuchasbusinessprocessesandmethodologies,tradesecrets,businessplansandstrategies,financialreportandforecasts,employeesalary,bonus,profit sharingandcompanyshare, client lists,matter list, client targets,presentationpapers,uniquelydeveloped products for client (current or potential), employee list, knowledgemanagement systems and itscontent,internallycreatedprecedentsandworkproducts,allcomputersoftwareandlibrariesdevelopedforandbyViTroxGroupwhetherbyitselforbythirdparties,allwebenabledsystemsandmethodsusedtodevelopsuchsystem,allelectronicscircuitdesigns,theViTroxGroup’sdatabasesandaccessrightstothirdpartydatabases,andpresentationsandconceptpapersdevelopedorcreatedfromtimetotime,purchaseorder,invoices,quotationsand work instruction.

1.4 Strategies promoting sustainability

TheBoardpromotesgoodCorporateGovernanceintheapplicationofsustainabilitypracticesthroughoutViTroxGroup, thebenefitsofwhicharebelieved to translate intobetter corporateperformance.Theextractof theLeanProblemSolving(LPS)reportandKaizenprojectonsustainabilityactivities,demonstratingViTroxGroup’scommitmenttotheglobalenvironmental,social,governanceandsustainabilityagenda,isdetailedintheCorporateSocialResponsibilityStatementofthisAnnualReport.



1.5 Access to information and advice

TheBoardissuppliedwithfinancialandoperationalinformation,bothinqualitativeandquantitativeforms,inatimelymannertoassist theBoardmemberstodischargetheir responsibilities.Whereapotentialconflictofinterestmayarise,theDirectorconcernedwillberequiredtodeclarehisinterestandabstainsfromalldeliberationsleading to decision making.

AllDirectorswillhavefullaccesstotheinformationoftheCompanyandareentitledtoobtainfulldisclosurebythemanagementandadviceorservicesfromtheCompanySecretaryorindependentprofessionalsonmattersthatwillbeputforwardtotheBoardfordecisiontoensurethattheyarebeingdiscussedandexaminedinanimpartialmanner that takes intoaccount the longterm interestsofshareholders,employees, suppliers,customersandotherstakeholderswithwhichtheGroupconductitsbusiness.IndividualDirectorsmayalsoobtainindependentprofessionalorotheradviceinfurtheranceoftheirduties,subjecttotheapprovaloftheChairmanortheBoard,dependingonthequantumofthefeesinvolved.

1.6 Qualified and competent Company Secretaries

TheBoard is satisfiedwith theperformanceand support renderedby theCompanySecretaries to theBoardin the discharge of its functions. The Company Secretaries play an advisory role to the Board in relation tothe Company’s constitution, Board’s policies and procedures and compliance with the relevant regulatoryrequirements,codesorguidanceandlegislations.TheCompanySecretariesalsoensurethatdeliberationsattheBoardandBoardCommitteemeetingsarewellcapturedandminuted,andsubsequentlycommunicatedtotherelevantmanagementfornecessaryaction.

The Company Secretaries keep abreast of the evolving capitalmarket environment, regulatory changes anddevelopmentsinCorporateGovernancethroughcontinuoustraining.

1.7 Board Charter

TheBoardhasmadeavailable itsBoardCharteronthecorporatewebsite.ThedocumentclearlysetsouttherolesandresponsibilitiesoftheBoardandBoardCommitteesandtheprocessesandproceduresforconveningtheirmeetings.ItservesasareferenceandprimaryinductionliteratureprovidingprospectiveandexistingBoardmembersandManagementinsightsintothefiduciaryandleadershipfunctionsoftheDirectorsofViTrox.

TheBoardreviewsitscharterregularly,tokeepituptodatewithchangesinregulationsandbestpracticesandensureitseffectivenessandrelevancetotheBoard’sobjectives.

2. Strengthen composition

2.1 Nominating Committee

TheCompanystrivestohaveaBoardcomprisingmemberswithsuitableacademicandprofessionalqualifications,skills,expertiseandwideexposure.InFYE2012,thefunctionoftheNCwasassumedbytheBoardasawhole.




2. Strengthen composition (cont'd)

2.1 Nominating Committee (cont'd)

TheCompanyhason27February2013establishedtheNCandcomprisesexclusivelyofNon-ExecutiveDirectorswithamajorityofwhommustbeindependent,asfollows:-

Chairman: ChuahPoayNgee(Chairman)Member : Dato’SeriKiewKwongSen Prof.Ir.Dr.AhmadFadzilBinMohamadHani ChangMunKee

TheCommitteeistaskedto,amongstothers:-1. AssesstheeffectivenessoftheBoardasawholeandthecontributionofeachDirector2. Reviewthesize,compositionandtherequiredmixofskillsoftheBoard;and3. Recommendthere-electionofretiringDirectorstotheBoard.

TheNCensuresthatallassessmentsandevaluationscarriedoutareproperlydocumented.

DetailsoftheTORforNCareavailableatitscorporatewebsite.

2.2 Develop, maintain and review criteria for recruitment and annual assessment of Directors

2.2.1 Recruitment or appointment of Directors

The Code requires a formal and transparent procedure to be established for appointment of newDirectorstotheBoard.TheCodealsoendorsestheestablishmentofanominatingcommittee,comprisedexclusivelyofNon-ExecutiveDirectors,amajorityofwhomareIndependenttoproposenewnomineestotheBoardandtoassessdirectorsonanon-goingbasis.

TheNCisresponsibleforassessingthenominee(s)fordirectorshipandBoardCommitteemembershipandthereuponsubmittingtheirrecommendationtotheBoardfordecision.

InaccordancewiththeCompany’sArticlesofAssociation(“Articles”),one-thirdoranumbernearesttoone-third(1/3)oftheBoardissubjecttoretirementbyrotationateachAnnualGeneralMeeting.TheDirectorstoretireeachyeararetheDirectorswhohavebeenlongestinofficesincetheirappointmentorre-election.

TheArticlesalsoprovidethatallDirectorsshallretirefromtheirofficeandbeeligibleforre-electionatleastonceineverythree(3)years.AretiringDirectoriseligibleforre-election.TheelectionofeachDirectorisvotedonseparately.

TheArticlesfurtherprovidethatamanagingdirectorcanbeappointedforafixedtermwhichshallnotexceedthree(3)years.

Anypersonappointedby theBoardeither to fill a casual vacancyorasanaddition to theexistingDirectors,shallholdofficeonlyuntilthenextAnnualGeneralMeetingandshallthenbeeligibleforre-election.

Theprofilesofalldirectors,meetingattendanceand the shareholdings in theCompanyhavebeenfurnishedinthisAnnualReport.



2.2 Develop, maintain and review criteria for recruitment and annual assessment of Directors (cont'd)

2.2.2 Annual assessment

TheCompanyhasinplaceitsproceduresandcriteriaforappointmentofnewdirectors.AllcandidatesforappointmentarefirstconsideredbytheNC,takingintoaccountthemixofskills,competencies,experience,professionalismandother relevantqualities required towellmanagethebusiness,withtheaimtomeetthecurrentandfutureneedsoftheBoardcomposition.TheNCalsoevaluatesthecandidates’characterandabilitytocommitsufficienttimetotheGroup.OtherfactorsconsideredforappointmentofIndependentDirectorwillincludethelevelofindependenceofthecandidates.

TheNCwillalsobereviewingthecompositionofrespectiveboardcommitteeoftheGrouptoensureitseffectivenessinfunctioning.

The NC also establish a set of quantitative and qualitative performance criteria to evaluate theperformanceofeachmemberoftheBoard,eachBoardCommitteeandreviewingtheperformanceoftheBoardasawhole.TheBoard’seffectivenessisassessedintheareasofcomposition,administration,accountabilityandresponsibility,conductandtheperformanceoftheChairmanandCEO.ThecriteriaforassessmentofeachDirectororCommitteemembershall includeattendancerecord, intensityofparticipationatmeetings,qualityofinterventions,specialcontributionstodemonstrateahighlevelofprofessionalismandintegrityinthedecision-makingprocess.

Theperformanceof thoseDirectorswhoare subject to re-appointmentand re-electionofDirectorsattheAGMwillbeassessedbytheNCwhereuponrecommendationsaresubmittedtotheBoardfordecisiononthetablingoftheproposedre-appointmentorre-electionoftheDirectorconcernedforshareholders’approvalatthenextAGM.

Ms.ChuahPoayNgee,beingthesolefemaledirectorandalsotheChairmanoftheACandNC,hassinceherappointmentcontributedsignificantlyandactivelyparticipatedintheBoard’sdeliberationanddecisionmaking.Havingsaidso,theBoardispresentlyoftheviewthatthereisnonecessitytofixaspecificgenderdiversitypolicyforthetimebeing.Nevertheless,theBoardwillendeavortotaptalentfromhumancapitalmarketfromtimetotimewiththeaimtohavetherightmixoffemaledirectorinitsBoardinfuture.

2.3 Remuneration policies

ItistheCompany’spolicytoremunerateDirectorsadequatelytoattractandretaintheDirectorsofthenecessarycalibre tomanage its business. The Articles provides that the remuneration of Directors shall not include acommissionorpercentageofturnover. InFYE2012,thefunctionoftheRemunerationCommittee(“RC”)wasassumedbytheBoardasawhole.

ThedeterminationoftheremunerationofeachIndependent,Non-ExecutiveDirectorisdecidedbytheBoardasawhole.TheBoardreimbursesanyreasonableexpenseincurredbytheseDirectorsinthecourseoftheirdutiesasDirectors.

The RC was established on 27 February 2013 and is responsible for recommending to the Board on theremuneration frameworkaswell as the remunerationpackageofExecutiveDirectors toensure that rewardscommensuratewiththeircontributionstotheGroup’sgrowthandprofitabilityinordertoaligntheinterestoftheDirectorswiththoseoftheshareholders.TheCommitteealsoensuresthelevelofremunerationforNon-ExecutiveDirectorsandExecutiveDirectorsarelinkedtotheirlevelofresponsibilitiesundertakenandcontributionstotheeffectivefunctioningoftheBoard.





2.3 Remuneration policies (cont'd)

TheRCcomprisesofnotfewerthan3members,mainlyofNon-ExecutiveDirectorsasfollows:-

Chairman: ChangMunKee(Chairman)Member : Dato’SeriKiewKwongSen ChuJennWeng

The RC will meet at least once in a financial year to formulate and review the remunerating policies andremunerationofmembersoftheBoard,BoardCommitteeandtheCEO/ManagingDirectorandrecommendthesametotheBoardforapproval.

ThecurrentremunerationpolicyoftheGroupissummarisedasfollows:-

a) TheDirectors’salaryforExecutiveDirectorsaresetatacompetitivelevelforsimilarroleswithincomparablemarkets,reflecttheperformanceofthedirector,skillsandexperienceaswellasresponsibilityundertaken.

b) Directors’FeesarebasedonastandardfixedfeeandaresubjecttoapprovalbyitsshareholdersattheAGM.c) MeetingAllowance-AlltheDirectors’areentitledtoafixedamountofallowancepaidinaccordancewith

thenumberofmeetingattendedduringtheyear.d) Benefits-in-kind-onlyExecutiveDirectorsoftheGroupareentitletobenefits-in-kindprovidedbytheGroup.e) The RC may obtain independent professional advice in formulating the remuneration package of its

Directors.

DetailsoftheDirectors’remunerationsforFYE2012areasfollows:-

CategoryFeesRM

Salaries,Bonuses & Employee

Provident FundRM

AllowancesRM

TotalRM

Executive - 705,922 109,500 815,422

Non-Executive 144,000 21,516 5,200 170,716

Total 144,000 727,438 114,700 986,138

TheremunerationbandsoftheDirectorsareasfollows:-

Number of Directors

Range ExecutiveNon

Executive

BelowRM50,000 - 4

RM250,001–RM300,000 3 -

DetailsoftheremunerationofeachDirectorarenotdisclosedastheBoardisoftheviewthatthetransparencyandaccountabilityaspectsofcorporategovernanceondisclosureofDirectors’remunerationareappropriatelyserved by the above disclosures.


3. Reinforce Independence

3.1 Annual assessment of Independence

The Independent Non-Executive Directors are not employees and they do not participate in the day-to-daymanagementaswellasthedailybusinessofViTrox.Theybringanexternalperspective,constructivelychallengeandassisttheCompanytodevelopcorporatestrategy,scrutinizetheperformanceofManagementinthemeetingapprovedgoalsandobjectives,andmonitortheriskprofileoftheCompany’sbusiness.

TheBoardhasupontheirannualassessment,concludedthateachofthe3IndependentNon-ExecutiveDirectorscontinuestodemonstrateconductandbehaviorthatareessentialindicatorofindependence,andthateachofthemcontinuestofulfillthedefinitionofindependenceassetoutintheBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)MainMarketListingRequirements(“LR”).

3.2 Tenure of Independent Directors

NotwithstandingtherecommendationoftheCode,theBoardispresentlyoftheviewthatthereisnonecessitytofixamaximumtenurelimitforDirectorsastherearesignificantadvantagestobegainedfromthelong-servingDirectorswhopossesstremendousinsightandknowledgeoftheCompany’sbusinessesandaffairs.Similarly,theBoarddoesnotsetatime-frameonhowlonganIndependentDirectorshouldserveontheBoard,mainlyforthefollowingreasons:-

• TheabilityofaDirectortoserveeffectivelyasanIndependentDirectorisverymuchdependentonhiscalibre,qualification, experience and personal qualities, particularly his integrity and objectivity, and has no realconnectiontohistenureasanIndependentDirector.

• NCwouldconductanannualassessmentofIndependentDirectorsinrespectofinter aliatheirskills,experienceandcontributions,andwhethertheIndependentDirectorsareabletodischargetheirdutieswithunbiasedjudgement.Furthermore,theNCalsowouldreviewtheDirectorsProfileofIndependentDirectorsandassessitsfamilyrelationship,interestofshareholdingsintheCompanyandrelatedpartytransactionswiththeGroup(ifany).

ThecurrentcomplementofIndependentNon-ExecutiveDirectorsprovidesaneffectiveBoardwithamixofindustryspecificknowledge,broadbasedbusinessandcommercialexperiencetogetherwithindependentjudgmentonmattersofstrategy,operations,resourcesandbusinessconduct.TheIndependentNon-ExecutiveDirectorsalsobringalongthebreadthanddepthofexperiencetoensurethatthestrategiesproposedbymanagementareindependentlyandobjectivelydeliberatedandexamined,takingintoaccounttheinterestsofallstakeholders.

3.3 Shareholders’ approval for the re-appointment of Non-Executive Directors

Currently,alltheIndependentDirectorsoftheCompanyservedlessthanatenureof9yearsintheCompany.

3.4 Separation of positions of the Chairman and CEO

The Company practises a division of responsibilities between the Independent Non-Executive Chairman andtheCEO.Theirrolesareseparatedandclearlydefinedtoensureabalanceofpowerandauthority, increasedaccountabilityandgreatercapacityoftheBoardforIndependentdecision-making.TheChairmanisnotrelatedtotheCEO.TheChairmanisresponsiblefortheBoard’seffectivenessandconduct.Healsopromotesanopenenvironment fordebateandensureseffective contributions fromNon-ExecutiveDirectors. TheChairmanalsoexercisescontroloverthequality,quantityandtimelinessofinformationflowbetweentheBoardandManagement.Atageneralmeeting,theChairmanplaysaroleinfosteringconstructivedialoguebetweenshareholders,Boardand Management.

TheCEO,alsoanExecutiveDirectorisinchargeoftheday-to-dayoperationsofthebusiness,makingstrategicbusinessdecisionandimplementingBoardpolicies.




3. Reinforce Independence (cont'd)

3.5 Composition of the Board

TheBoardcomprises3ExecutiveDirectors,1Non-Independent,Non-ExecutiveDirectorand3Independent,Non-ExecutiveDirectors.ThecompositionoftheBoardreflectsfairlytheinvestmentofallshareholdersintheCompanyandagoodindependentelementontheBoard.ThecompositionoftheBoardcomplieswiththeLRwhichrequiresthatindependentnon-executivedirectorsmakeupatleast2membersor1/3ofthemembershipoftheBoard,whicheverishigher.Currently,theBoardis ledbyDato'SeriKiewKwongSen,anIndependentNon-ExecutiveChairman.TheBoardisconfidentthatitscurrentsizeandcompositionissufficientandeffectiveindischargingtheBoard’sresponsibilitiesandinmeetingtheCompany’scurrentneedsandrequirements.

Thepresenceofthethree(3)IndependentNon-ExecutiveDirectorsisessentialinprovidingguidance,unbiased,fullybalancedandindependentviews,adviceandjudgementtomanyaspectsoftheGroup’sstrategysoastosafeguardtheinterestsofminorityshareholdersandtoensurethathighstandardsofconductandintegrityaremaintained by the Group.

TheBoardhasnotnominatedaSeniorIndependentNon-ExecutiveDirectortowhomconcernsmaybeconveyedastheBoardisoftheopinionthatgiventhestrongindependentelementoftheBoard,anyconcernregardingtheGroupmaybeconveyedbyshareholdersorinvestorstoanyoftheIndependentDirectorsatthefollowingaddressandsuchconcernswillbereviewedandaddressedbytheBoardaccordingly:-

Dato'SeriKiewKwongSenEmail: [email protected]

4. Foster Commitment

4.1 Time Commitment

TheBoardissatisfiedwiththeleveloftimecommitmentgivenbytheDirectorstowardsfulfillingtheirrolesandresponsibilitiesasDirectorsofBursaMalaysia.ThisisevidencedbytheattendancerecordoftheDirectorsatBoardmeetingsforFYE2012,assetoutinthetable.

Director No. of Meetings Held No. of Meetings Attended

Dato’SeriKiewKwongSen 4 2

ChuJennWeng 4 4

SiawKokTong 4 3

YeohShihHoong 4 3

Prof.Ir.Dr.AhmadFadzilBinMohamadHani 4 3

ChuahPoayNgee 4 3

ChangMunKee 4 4 TheDirectorsarerequiredtosubmitanupdateontheirotherdirectorshipsfromtimetotimeformonitoringofthenumberofdirectorshipsheldbytheDirectorsofViTroxandfornotificationtoCompaniesCommissionofMalaysia accordingly.


4. Foster Commitment (cont'd)

4.1 Time Commitment (cont'd)

TofacilitatetheDirectors’timeplanning,anannualmeetingcalendarispreparedandcirculatedtothembeforethebeginningofeveryyear.ItprovidesthescheduleddatesformeetingsoftheBoardandBoardCommittees,theAGM,majorconferenceshostedbytheCompany,aswellastheclosedperiodsfordealingsinsecuritiesbyDirectorsbasedonthetargeteddatesofannouncementsoftheGroup’squarterlyresults.

4.2 Continuing Education Programmes

TheDirectorsaremindfulthattheyshouldcontinuetoattendtrainingprogrammestoenhancetheirskillsandknowledgewhererelevant,aswellastokeepabreastwiththechangingregulatoryandcorporategovernancedevelopments.

TheDirectorsoftheCompanyattendedvariousseminarsandtrainingprogrammesduringFYE2012asfollows:-

1. ViTroxBoothCamp-ThePowerof52. Leadership:GreatLeaders,GreatTeams,GreatResults3. HoshinPlanningWorkshop4. LeanProblemSolving5. SocietyforHumanResourceManagement's64thAnnualConference&Exposition6. ProcessAnalysisTools&Techniques7. CorporateFinancingWorkshop8. ProductRoadMap9. CorporateLeadership10. 34thAnnualInternationalIEEEEMBSConference11. IEEEEMBSForumonGrandChallengesinBiomedicalImaging12. LegalandCorporateTaxUpdate13. IncomeTaxUpdate14. FinancialModeling15. MFRSUpdates16. EugeneShteynCreativeandInnovationSeminar

Inthefuture,theBoardwillcontinuetoidentifytrainingneedsamongsttheDirectorsandenrollthedirectorsfortrainingprograms,asandwhenrequired.

5. Uphold integrity in financial reporting

5.1 Compliance with applicable financial reporting standard TheBoardensuresthatshareholdersareprovidedwithabalancedandmeaningfulevaluationoftheCompany’sfinancial performance, its position and future prospects, through the issuance of Annual Audited FinancialStatementsandquarterlyfinancialreports,andcorporateannouncementsonsignificantdevelopmentsaffectingtheCompanyinaccordancewiththeLR.

Detailsof theDirectors’Responsibility in thepreparationof theGroup’s financial statementsaredisclosed inpage53ofthisAnnualReport2012.

TheBoard isassistedbytheAC inoverseeingtheGroup’s financial reportingprocessesandthequalityof itsfinancialreporting.TheACreviewstheGroup’sannualfinancialstatementsandthequarterlycondensedfinancialstatementsfocusingparticularlyonchangesinaccountingpolicies,Management’sjudgementinapplyingtheseaccountingpoliciesaswellasassumptionsandestimatesappliedinaccountingforcertainmaterialtransactions.




5. Uphold integrity in financial reporting (cont'd)

5.2 Assessment of suitability and independence of external auditors

TheACundertakesanannualassessmentofthesuitabilityandindependenceoftheexternalauditors.TheBoardmaintainsatransparentrelationshipwithexternalauditors.MembersoftheACmeettheexternalauditorsatleasttwiceayearwithoutthepresenceoftheexecutiveBoardmemberstodiscusstheresultsandconcernsarisingfromtheiraudit.

The AC had obtainedwritten assurance from its external auditors,Messrs. Crowe Horwath, confirmed thattheyare,andhavebeenindependentthroughouttheconductoftheauditengagementinaccordancewiththetermsofallrelevantprofessionalandregulatoryrequirements.AfterhavingsatisfiedwiththeperformanceofMessrs.CroweHorwathanditsauditindependence,theACrecommendedthere-appointmentofMessrs.CroweHorwathtotheBoardforapprovalbyitsshareholdersattheforthcoming9thAGM.

6. Recognise and manage risks

6.1 Risk management

TheBoardisfullyawareofitsresponsibilitytosafeguardandenhancethevalueofshareholdersintheGroup.Sincethe listingoftheCompany,theBoardhascontinuouslyplacedemphasisontheneedformaintainingasoundsystemofinternalcontrol.

TheriskmanagementandinternalcontrolsystemsaredesignedtomanageandmitigateratherthaneliminatetheriskoffailureinachievingtheCompany’scorporateobjectiveandsafeguardingtheCompany’sassetsaswellas investors interests.

Inthisregard,majorinternalcontrolsystemsaredocumentedandfollowedbythemanagementoftheGroup.

6.2 Internal Audit Function

Toenhancetheeffectivenessofriskmanagementandinternalcontrolsystems,theBoardhasoutsourcedtheinternalauditfunctiontoFinfieldCorporateServicesSdnBhd,anindependentprofessionalfirmofconsultants.

TheinternalauditorswillbeabletoprovideadditionalindependentreviewonthestateofriskmanagementandinternalcontroloftheGroupandhasanindependentreportingchanneltoAC.TheACreviews,deliberatesanddecidesonthenextcourseofactionandevaluatestheeffectivenessandefficiencyoftheriskmanagementandinternal control systems in the organization.

TheInternalControlStatementsetoutonpages49to52ofthisAnnualReportprovidesanoverviewofthestateofriskmanagementandinternalcontrolswithintheGroup.

7. Ensure timely and high quality disclosure

7.1 Corporate Disclosure Policy

TheBoardismindfulontheimportanceofmaintainingapropercorporatedisclosureprocedureswiththeaimtoprovideshareholdersandinvestorswithcomprehensive,accurateandqualityinformationonatimelybasis.Personnelandworkingteamforpreparingthedisclosurewillconductduediligenceandproperverification,aswellascoordinatetheefficientdisclosureofmaterialinformationtotheinvestingpublic.


7. Ensure timely and high quality disclosure (cont'd)

7.1 Corporate Disclosure Policy (cont'd)

TheCompanyhasinplaceadocumentwhichsetsthepoliciesandstandardoperatingproceduresforemployeesto facilitateandensurecompliancebyViTroxGroup. Italso servesasaguide toenhanceawarenessamongemployeesofcorporatedisclosurerequirements.

TheCompanyhasputinplaceaninternalcontrolpolicyonconfidentialitytoensurethatconfidentialinformationis handledproperly byDirectors, employees and relevant parties to avoid leakage and improper useof suchinformation.

7.2 Leverage on information technology for effective dissemination of information

ViTrox’swebsite incorporatesan InvestorRelations(IR)sectionwhichprovidesall relevant informationontheGroupandisaccessiblebythepublic.ThisIRsectionenhancestheIRfunctionbyincludingallannouncementsmade by the Company, annual reports, board charter aswell as the corporate governance structure of theCompany.

TheCompanywillenhancethedisclosuresonitswebsiteforbroaderandeffectivedisseminationofinformationtoitsstakeholdersfromtimetotime.

8. Strengthen relationship between company and shareholders

8.1 Encourage shareholder participation at general meetings

TheCompanydispatchesitsnoticeofAGMtoshareholdersatleast21daysbeforetheAGM,requirementundertheCompaniesAct,1965andMainLR.Theadditionaltimegiventoshareholdersallowsthemtomakenecessaryarrangementstoattendandparticipateeitherinperson,bycorporaterepresentative,byproxyorbyattorney.

Inadditiontotheabove, timewillbeallocatedduringAGMfordialoguewithshareholderstoaddress issuesconcerning the Group.

The Board will consider adopting electronic voting to facilitate greater shareholder participation at generalmeetings,andtoensureaccurateandefficientoutcomesofthevotingprocess.

8.2 Encourage poll voting

Atthe8thAGMoftheCompanyheldon26June2012,nosubstantiveresolutionswereputforthforshareholders’approval,otherthanresolutionspertainingtotheadoptionofAuditedFinancialStatementsfortheyearended31December2011,paymentofspecialandfinaldividend,re-electionofretiringDirectors,paymentofDirectors’fees,re-appointmentofexternalauditorsandsharebuy-backs.Assuch,theresolutionsputforthforshareholders’approvalatthe8thAGMwerevotedonbyashowofhands.




8. Strengthen relationship between company and shareholders (cont'd)

8.3 Effective communication and proactive engagement

Atthe8thAGM,atotalof6outof7Directorswerepresentinpersontoengagedirectlywith,andbeaccountabletotheshareholdersfortheirstewardshipoftheCompany.Theproceedingsofthe8thAGMincludedtheCEO’spresentationoftheCompany’soperatingandfinancialperformancefor2011,thepresentationofthebusinessoutlook2012,andaQ&AsessionduringwhichtheChairmaninvitedshareholderstoraisequestionspertainingtotheCompany’saccountsandotheritemsforadoptionatthemeeting,beforeputtingaresolutiontovote.TheDirectors,CEOandexternalauditorswereinattendancetorespondtotheshareholders’queries.

COMPLIANCE STATEMENT

TheBoardissatisfiedthatin2012,theCompanycompliedwiththeprinciplesandrecommendationsoftheCode.

ThisStatementwasmadeinaccordancewithaboardofdirectorsresolutiondated23May2013.


AUDIT COMMITTEE REPORT

AUDIT COMMITTEE

TheAuditCommittee(“Committee”)wasestablishedbytheBoardofDirectorsofViTroxCorporationBerhad(“Company”)on8July2005asaCommitteeoftheBoard.

COMPOSITION

ThepresentmembersoftheCommitteecomprise:-

ChuahPoayNgeeChairmanIndependent, Non-Executive Director

Dato’SeriKiewKwongSenMember Independent, Non-Executive Director

Prof.Ir.Dr.AhmadFadzilBinMohamadHaniMemberNon-Independent, Non-Executive Director

ChangMunKeeMemberIndependent, Non-Executive Director

TheCommitteeisgovernedbythefollowingtermsofreference:-

1. Membership

TheCommitteeshallbeappointedbytheBoardfromamongstitsmembersandconsistsofnotlessthanthreemembers.AlltheCommitteemembersmustbeNon-ExecutiveDirectors,withamajorityofwhommustbeindependent.ThemembersoftheCommitteeshallelecttheChairmanfromamongtheirnumber,whoshallbeanIndependent,Non-ExecutiveDirector.NoChiefExecutiveOfficerandalternateDirectorshallbeappointedasamemberoftheCommittee.

Ifthenumberofmembersisreducedbelowthree,duetowhatsoeverreasons,theBoardshallwithinthreemonthsofthatevent,appointsuchnumberofnewmembersasmayberequiredtomakeuptheminimumnumberofthreemembers.

2. Meetings

Meetingsshallbeheldnotlessthanfourtimesayear.

Aquorumoftwoindependentmembersshallconstituteavalidmeeting.

TheHeadofFinanceandtheHeadofInternalAudit, ifany,shallbeinvitedtoattendmeetings,astheCommitteedeemsnecessary.Atleasttwiceayear,theCommitteeshallmeetwiththeExternalAuditorswithoutthepresenceoftheExecutiveDirectors.

TheCompanySecretaryshallbethesecretaryoftheCommittee.

TheExternalAuditorsmayrequestameetingiftheyconsiderthatoneisnecessary.



3. Authority

TheCommittee is authorizedby theBoard to investigateanyactivitywithin its termsof referenceand shall havetheresourcesrequiredtoperformitsduties.TheCommitteehasfullandunrestrictedaccesstoall informationanddocumentsrelevanttoitsactivitiesaswellastotheinternalandexternalauditorsandemployeesoftheGroup.

4. Duties and Responsibilities

ThedutiesandresponsibilitiesoftheCommitteeshallinclude:-

a) torecommendtheappointmentoftheExternalAuditors,theirauditfeeandanyquestionsontheirresignationordismissal,totheBoard;

b) todiscussthenatureandscopeoftheexternalauditwiththeExternalAuditorsbeforetheauditcommences;

c) to review the financial statementsof theCompanyand theGroupbefore submission to theBoard, focusingparticularlyon:-

• publicannouncementsofresultsanddividendpayment;• anychangesinaccountingpoliciesandpractices;• majorjudgmentalareas;• significantadjustmentsresultingfromtheexternalaudit;• thegoing-concernassumptions;• compliancewithaccountingstandards;and• compliancewithstockexchangeandlegalrequirements.

d) todiscussproblemsand reservations arising from the interimand final audits andanymatters theexternal/internalauditorsmaywishtodiscuss(excludingtheattendanceofotherdirectorsandemployeesofViTrox);

e) to review the internal audit programme, consider the major findings of internal audit investigations andmanagement’sresponseandensureco-ordinationbetweentheInternalandExternalAuditors;

f) toreviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunctionandtoensurethatithasthenecessaryauthoritytocarryoutitsworks;

g) toreviewandevaluatetheadequacyandeffectivenessoftheGroup’saccountingpolicies,proceduresandinternalcontrols;

h) toreviewtheappraisalorassessmentoftheperformanceofthestaffoftheinternalauditfunction;toapproveanyappointmentorterminationofseniorstaffoftheinternalauditfunction;

i) tokeepunder review theeffectivenessof internal control systemand inparticular, reviewExternalAuditors’managementletterandmanagement’sresponse;

j) toreviewanyrelatedpartytransactionsandconflictofinterestsituationthatmayarisewithintheCompanyorGroupandtomonitoranyinter-companytransactionoranytransactionbetweentheCompanyandanyrelatedpartiesoutsidetheGroup;and

k) tocarryoutsuchotherfunctionsandconsideranyothertopics,asmaybeagreeduponbytheBoard.


5. Reporting Procedures

TheCommitteeisauthorizedtoregulateitsownproceduresandinparticularthecallingofmeetings,thenoticetobegivenofsuchmeetings,thevotingandproceedingsthereat,thekeepingofminutesandthecustody,productionandinspectionofsuchminutes.

TheCompanySecretaryshallcirculatetheminutesofmeetingsoftheCommitteetoallmembersoftheBoard.

6. Attendance at Meetings

TheinformationontheattendanceofeachmemberattheCommitteemeetingsheldduringtheFinancialYear2012isasfollows:-

MemberNo. of

Meetings Held Attendance

Dato’SeriKiewKwongSen 4 2

Prof.Ir.Dr.AhmadFadzilBinMohamadHani 4 3

ChuahPoayNgee 4 3

ChangMunKee 4 4

7. Activities of the Audit Committee

The main activities carried out by the Committee during the Financial Year 2012 in discharge of its duties andresponsibilitieswereasfollows:-

• considered and approved the internal audit plan for the Company and Group for the financial year ended31December2012;

• reviewedtheinternalauditreportsfortheCompanyandGroup;• reviewedtheexternalauditplanfortheCompanyandGroupwiththeExternalAuditors;• reviewedtheexternalauditreportsfortheCompanyandGroupwiththeExternalAuditors;• reviewedthequarterlyresultsoftheGroupandrecommendedthesametotheBoardforapproval;and• reviewed the draft audited Financial Statements of the Company and Group for the financial year ended

31December2012andrecommendedthesametotheBoardforapproval.

8. Internal Audit Function

TheBoardhasengagedanexternalprofessionalfirmtocarryouttheinternalauditfunctionoftheGroup.TheInternalAuditorsreportdirectlytotheCommittee.TheprimaryrolesoftheInternalAuditorsaretoassisttheCommitteeonanongoingbasisto:-

• reviewtheriskmanagementframework;• evaluatethestateofcompliancewiththeBursaMalaysiaSecuritiesBerhadMainMarketListingRequirements,

MalaysianCodeonCorporateGovernanceandotherstatutoryrequirements;• provideindependent,systematicandobjectiveevaluationonthestateofinternalcontrolwithintheGroup;• reviewrecurrentrelatedpartytransaction;and• performsuchotherfunctionsasrequestedbytheCommittee.



8. Internal Audit Function (cont'd)

DuringtheFinancialYear2012,theInternalAuditorshaveassistedtheCommitteetoundertakethefollowing:-

• plantheconductofinternalauditforFinancialYear2012;• reviewtheriskmanagementandthestateofinternalcontrolofcertainoperatingcycleswithintheGroup;and• presentedtheinternalauditreporttotheAuditCommittee.

Thecostincurredfortheinternalauditfunctioninthefinancialyear2012wasmadeupofafeepaidtotheprofessionalinternalauditfirmofRM8,160.



INTERNAL CONTROL STATEMENT

TheBoardofDirectors(“theBoard”)ofViTroxCorporationBerhad(“theCompany”)hasmadethefollowingstatementon the internal control statement of theGroupwhich has been prepared in accordancewith the “Statement on RiskManagement& InternalControl -Guidelines forDirectorsof Listed Issuers” issuedby the Instituteof InternalAuditorsMalaysia.

Internal Control Objectives

TheBoardrecognizestheimportanceofmaintainingasoundsystemofinternalcontroltoachievethefollowingobjectives:-

1. Safeguardtheshareholders’investmentandassetsoftheGroup2. IdentifyandmanagerisksaffectingthebusinessoftheGroup3. Ensurecompliancewithregulatoryrequirements4. EnsuretheeffectivenessandefficiencyofoperationstoachievebusinessobjectivesoftheGroup5. Ensuretheintegrityandreliabilityoffinancialinformation

Responsibility

TheBoardhasestablishedappropriatecontrolstructureandprocessforidentifying,evaluating,monitoring,andmanagingrisksthatmayaffecttheachievementofbusinessobjectives.ThecontrolstructureandprocesswhichhavebeeninstitutedthroughouttheGroupareupdatedandreviewedfromtimetotimetosuitchangesinbusinessenvironment,andthison-goingprocesshasbeeninplaceforwholefinancialyearunderreviewanduptodateofapprovalofthisstatementforinclusion in the annual report.

TheroleofBoardincludes:-

1. Organizationalstructureofeachbusinessunitclearlydefinesoperationalandfinancialresponsibilities2. Keyresponsibilitiesareclearlydefinedandproperlysegregated3. Authoritylevelisproperlydefined4. KeymanagementpersonnelincludingExecutiveDirectorsmeetregularlytoaddresskeybusinessrisksandoperational

issues5. OperationalproceduresaregovernedbyStandardOperatingManualswhicharereviewedandupdatedregularly6. Effectivefinancialreportingsystemisinplacetoensuretimelygenerationoffinancialinformationformanagement’s

review

TheBoardisultimatelyresponsibletoensurethattheGroupmaintainsasoundsystemofinternalcontrol.However,theBoardwishestodrawattentionthatthesystemofinternalcontrolisdesignedtomanageratherthaneliminatetheriskof failure to achieve business objectives and can only provide reasonable but not absolute assurance againstmaterialmisstatements or losses.

PURSUANT TO PARAGRAPH 15.26(b) OF THE BURSA MALAYSIA SECURITIES BERHAD MAIN MARKET LISTING REQUIREMENTS


INTERNAL CONTROL STATEMENT

Internal Control Structure

TheBoardiscommittedtomaintainastrongandrobustcontrolstructureandenvironmentfortheproperconductoftheGroup’sbusinessoperations.TheGroup’scontrolenvironmentcomprisesofthefollowingcomponents:-

Risk Management Framework

TheBoardhasestablishedanorganization structurewith clearlydefined lineof responsibility, authority limitsandaccountabilityalignedtobusinessandoperationrequirementswhichsupportsthemaintenanceofastrongandrobustcontrol environment.

The Group is continuously committed in setting new standardswhilstmaintaining an effective riskmanagementframework to ensure the Group’s objective are achieved and stakeholders interest are protected. The BoardacknowledgesitsresponsibilitytoadoptbestpracticesinriskmanagementandinternalcontrolaspartoftheGroup’sbusiness culture.

Internal Audit Function

The Board has outsourced the internal audit function to Finfield Corporate Services Sdn Bhd, an independentprofessionalfirmofconsultants.

RegularinternalauditsarecarriedoutonanongoingbasistoassesstheadequacyandintegrityoftheinternalcontrolsystemoftheGroupbasedontheinternalauditplanreviewedandapprovedbytheAuditCommittee.Basedontheaudits,the internalauditorswilladvisemanagementonareasof improvementandsubsequently, initiatefollow-upactionstodeterminetheextentofimplementationoftheirrecommendations.

TheinternalauditplanwascirculatedtothemembersoftheAuditCommitteepriortotheexecutionoftheassignment.FindingsarisingfromtheinternalauditexercisewerereportedanddiscussedattheAuditCommitteemeeting.

Duringtheyearunderreview,the internalauditorshavenotreportedanysignificantweaknesses inthesystemofinternalcontrolsoftheGroup.

Board of Directors TheBoardmeetsatleastquarterly,toreviewandevaluatetheGroup’soperationsandperformanceandtoaddresskeypolicymatters.TheManagingDirectorleadsthepresentationofBoardpapersandprovidescomprehensiveexplanationover pertinent issues.

TheprerequisitetodecisionsmakinginthemeetingisthroughdeliberationanddiscussionbytheBoard,togetherwithrecommendationsand feedback fromManagement. Inaddition toquarterly financial results, corporateproposals,progressreportsonbusinessoperationsarealsotabledattheBoard’squarterlymeetings.

PURSUANT TO PARAGRAPH 15.26(b) OF THE BURSA MALAYSIA SECURITIES BERHAD MAIN MARKET LISTING REQUIREMENTS


Internal Control Structure (cont'd)

Independence of the Audit Committee

The Audit Committee is comprised of FOUR (4) Non-Executive Directors who are highly experiences and whoseknowledge,backgroundandjudgmentareinvaluabletotheGroup.TheAuditCommitteehasunimpededaccesstoboththeInternalandExternalAuditors.

TheAuditCommitteereviewstheworkoftheInternalandExternalAuditors,theirfindingsandrecommendationstoensurethatitobtainsthenecessarylevelofassurancewithrespecttotheadequacyoftheinternalcontrols.FurtherdetailsoftheactivitiesundertakenbytheAuditCommitteeduringtheyeararesetoutintheAuditCommitteeReportonpages45to48.

Senior Management Meeting

SeniorManagementmeetingsareheldonamonthlybasistoformulatestrategiesonanon-goingbasisandtoaddressissuesarisingfromchangesinboththeexternalbusinessenvironmentandinternaloperatingconditions.

Hoshin Plan and Budget

HoshinPlanandBudgetsarepreparedbytheCompany’sbusinessunitsandreviewedandapprovedbytheManagementandBoard.TheperformanceofeachbusinessunitisassessedwithexplanationonsignificantvariancesprovidedtoManagementandBoardonperiodicbasis.

Document Policies and Procedures

PoliciesandproceduresofbusinessprocessesaredocumentedandsetoutinaseriesofStandardOperatingManualandimplementedthroughouttheGroup.Thesepoliciesandproceduresaresubjecttoregularreviews,updatesandcontinuousimprovementstoreflectthechangingrisksandoperationalneeds.

AllthedocumentedpoliciesandprocedurescanbeaccessedviatheCompany’sintranet.

Human Resource Policy

TheGrouphas inplace,acomprehensiveHumanResourcePolicyapprovedbytheManagementthatsetthetoneofcontrolconsciousnessandemployeeconduct.Thereisalsoinplace,supportingproceduresforthereportingandresolutionofactioncontraveningthesepolicies.

TheseareproperguidelineswithintheGroupregardingemploymentanddismissal,formaltrainingprogramsaswellasotherrelevantproceduresinplacetoensurethatstaffsarecompetentandadequatelyguidedincarryingouttheirresponsibilities.

TheGrouphasalsoinplaceaPerformanceManagementSystem,whichislinkedtoandguidedbyKeyPerformanceIndicators(KPI)andaccountability.

INTERNAL CONTROL STATEMENTPURSUANT TO PARAGRAPH 15.26(b) OF THE BURSA MALAYSIA SECURITIES BERHAD MAIN MARKET LISTING REQUIREMENTS


Internal Control Structure (cont'd)

Supplier Code of Conduct

TheBoardexpectsallViTroxGroup’ssupplierstoobservehighethicalbusinessstandardofhonestyandintegrityandtoapplythesevaluestoallaspectsoftheirbusinessandprofessionalpractices.

ASupplierCodeofConductisestablishedinwhichtheGroup’sminimumexpectationsonthesuppliersvis-à-vislegalcompliance and ethical business practices are stipulated.

TheCodeappliestoallsuppliers,vendors,contractorsandanyotherpersonsdoingbusinesswithViTroxCorporationBerhadanditssubsidiarycompanies.

Assurance from Management

TheBoardhasalsoreceivedreasonableassurancefromtheChiefExecutiveOfficer(CEO)andtheChiefFinancialOfficer(CFO)thattheGroup’sriskmanagementandinternalcontrolsystemareoperatingadequatelyandeffectivelyinallaspects,basedontheriskmanagementandinternalcontrolsystemoftheGroup.

Thisstatementwasmadeinaccordancewithaboardofdirectorsresolutiondated23May2013.

INTERNAL CONTROL STATEMENTPURSUANT TO PARAGRAPH 15.26(b) OF THE BURSA MALAYSIA SECURITIES BERHAD MAIN MARKET LISTING REQUIREMENTS


STATEMENT OF DIRECTORS’ RESPONSIBILITIES

TheDirectorsarerequiredtoprepareauditedfinancialstatementsthatgiveatrueandfairviewofthestateofaffairs,includingthecashflowsandresults,oftheGroupandoftheCompanyasattheendofeachfinancialyear.

Inpreparingthesefinancialstatements,theDirectorshaveconsideredthefollowing:-

• thattheGroupandtheCompanyhaveusedappropriateaccountingpolicies,andtheseareconsistentlyapplied;• thatreasonableandprudentjudgmentsandestimatesweremade;• thattheapprovedaccountingstandardsinMalaysiahavebeenadopted;and• thatthefinancialstatementshavebeenpreparedonagoingconcernbasis.

TheDirectorsareresponsibleforensuringthattheCompanyandsubsidiarycompaniesmaintainproperaccountingrecordswhichdisclosewithreasonableaccuracythefinancialpositionsoftheGroupandoftheCompany,andwhichenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct,1965.

TheDirectorshavegeneralresponsibilityfortakingsuchstepsthatarereasonablyavailabletothemtosafeguardtheassetsoftheGroupandoftheCompany,andtopreventanddetectfraudandotherirregularities.

Thisstatementwasmadeinaccordancewithaboardofdirectorsresolutiondated23May2013.

PURSUANT TO PARAGRAPH 15.26(a) OF THE BURSA MALAYSIA SECURITIES BERHAD MAIN MARKET LISTING REQUIREMENTS


ADDITIONAL COMPLIANCE INFORMATION

1. Utilization of ProceedsDuringthefinancialyear,therewerenoproceedsraisedbytheCompanyfromanycorporateproposals.

2. Share Buy-backsDuringthefinancialyearended31December2012, thedetailsof thesharespurchasedbytheCompanywereasfollows:-

UnitPrice

TransactiondateNumberof

Shares(Units)Lowest

RMHighest

RMAverage

RMConsiderationpaid*

RM

Feb2012 665,000 0.71 0.79 0.77 511,284

Mar2012 20,000 0.71 0.71 0.71 14,204

May2012 6,100 0.63 0.63 0.63 3,827

Sep2012 124,700 0.62 0.64 0.63 79,121

Oct2012 149,600 0.63 0.67 0.63 94,977

Nov2012 10,000 0.66 0.68 0.67 6,669

Dec2012 34,900 0.65 0.68 0.66 22,947

1,010,300 0.62 0.79 0.73 733,029

*Includingbrokerage,clearinghousefeeandstampduty.

Allthesharessopurchasedduringthefinancialyearwereretainedastreasuryshares.

TherehasbeennocancellationoftreasurysharesbytheCompanyduringthefinancialyearended31December2012.

3. Options, Warrants or Convertible SecuritiesNooptions,warrantsorconvertiblesecuritieswereissuedbytheCompanyduringthefinancialyear.

4. American Depository Receipt (“ADR”) or the Global Depository Receipt (“GDR”) ProgrammeDuringthefinancialyear,theCompanydidnotsponsoranyofsuchprogrammes.

5. Imposition of Sanctions and/or PenaltiesTherewerenomaterialsanctionsand/orpenaltiesimposedontheCompanyanditssubsidiarycompanies,Directorsormanagementbytherelevantregulatoryauthoritiesduringthefinancialyear.

6. Non-Audit FeesNon-auditfeesamountingtoRM10,750wereincurredforservicesrenderedtotheCompanyanditssubsidiariesforthefinancialyearbytheCompany’sexternalauditorandacompanyaffiliatedtotheexternalauditors.


ADDITIONAL COMPLIANCE INFORMATION

7. Profit Forecast and Unaudited Results DeviationTherewasnoprofitforecastissuedbytheGroupduringthefinancialyear.

Theauditedconsolidatedresultsduringthe financialyearof theGroupdidnotdeviatebymore than10%of theunaudited consolidated results of the Group as announced via the BURSALINK on www.bursamalaysia.com on27February2013.

8. Profit GuaranteeTherewasnoprofitguaranteeissuedbytheGroupduringthefinancialyear.

9. Recurrent Related Party Transactions of a Revenue or Trading NatureTheCompanydoesnothaveanyrecurrentrelatedpartytransactionsofrevenueortradingnatureduringthefinancialyear.

10. Employee Share SchemeTherewasnoEmployeeShareSchemeimplementedbytheCompanyduringthefinancialyear.

11. Material ContractsTherewerenomaterial contractsentered intoby theCompanyand its subsidiaries involvingDirectors’andmajorshareholders’ interestseitherstillsubsistingasat31December2012orenteredintosincetheendofthepreviousfinancialyear.

12. Corporate Social Responsibility (“CSR”)TheGroupsubscribestothebeliefthatpursuitofbusinessobjectivesneedstobebalancedwithsocialandenvironmentalresponsibilitiesforanybusinesstoremainsustainable.Assuch,theGroupusesitsbestendeavouronongoingbasisto integrateCSRpractices into itsdaytodaybusinessoperations.These includedevisingstaffwelfareschemestoenhancethequalityoflifeofitsemployees,demonstratingcareforthecommunitythroughmonetarydonationstoschoolsandothercharitablecauses,encouragingitsemployeestodonateblood,andadoptingeco-friendlypracticessuchasminimizingtheuseofhazardouscompoundinitsmanufacturingprocesstoprotecttheenvironment.

FINANCIAL STATEMENTS

Directors’Report

StatementbyDirectors

StatutoryDeclaration

IndependentAuditors’Report

ConsolidatedStatementofFinancialPosition

ConsolidatedStatementofComprehensiveIncome

ConsolidatedStatementofChangesinEquity

ConsolidatedStatementofCashFlows

StatementofFinancialPosition

StatementofComprehensiveIncome

StatementofChangesinEquity

StatementofCashFlows

NotestotheFinancialStatements

SupplementaryInformation-RealisedandUnrealisedProfitsorLosses

57-61

62

62

63-64

65

66

67

68-69

70

71

72

73

74-107

108



DIRECTORS' REPORT

Thedirectors hereby submit their report and the audited financial statementsof theGroupand theCompany for thefinancialyearended31December2012.

PRINCIPAL ACTIVITIES

The principal activities of the Company are those of investment holding and development of 3D and line scan visioninspectionsystem.TheprincipalactivitiesofthesubsidiariesaredisclosedinNote7tothefinancialstatements.TherehavebeennosignificantchangesinthenatureoftheprincipalactivitiesoftheGroupandtheCompanyduringthefinancialyear.

RESULTS

TheGroupRM

TheCompanyRM

Profitforthefinancialyear 20,489,782 5,172,359

DIVIDENDS

Duringthefinancialyear,theCompanypaidthefollowingdividendsinrespectofthefinancialyearended31December2011:-

RM

Interimtaxexemptdividendof1senpershare 2,322,700

Finaltaxexemptdividendof0.5senpershare 1,157,895

Specialtaxexemptdividendof0.5senpershare 1,157,895

4,638,490

In January 2013, the Company declared and paid an interim tax exempt dividend of 1 sen per share amounting toRM2,312,597inrespectofthefinancialyearended31December2012.

RESERVES AND PROVISIONS

Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearapartfromthosedisclosedinthefinancialstatements.

ISSUE OF SHARES OR DEBENTURES

TherewasnoissueofsharesordebenturesbytheCompanyduringthefinancialyear.

OPTIONS GRANTED OVER UNISSUED SHARES

NoshareoptionsweregrantedbytheCompanyduringthefinancialyear.


DIRECTORS' REPORT

PURCHASE OF OWN SHARES

TheshareholdersoftheCompany,byaresolutionpassedattheExtraordinaryGeneralMeetingheldon21November2008,approved theCompany’splan topurchase itsown shares. Thedirectorsare committed toenhancing the valueof theCompanytoitsshareholdersandbelievethatthepurchaseplancanbeappliedinthebestinterestsoftheCompanyanditsshareholders.Thedetailsofthesharespurchasedfromtheopenmarketusinginternallygeneratedfundsandheldastreasurysharesduringthefinancialyearareasfollows:-

UnitCost

Month NumberofSharesLowest

RMHighest

RMAverage

RMTotalCost

RM

February2012 665,000 0.71 0.79 0.77 511,284

March2012 20,000 0.71 0.71 0.71 14,204

May2012 6,100 0.63 0.63 0.63 3,827

September2012 124,700 0.62 0.64 0.63 79,121

October2012 149,600 0.63 0.67 0.63 94,977

November2012 10,000 0.66 0.68 0.67 6,669

December2012 34,900 0.65 0.68 0.66 22,947

1,010,300 0.62 0.79 0.73 733,029

ThemandategivenbytheshareholdersattheAnnualGeneralMeetingheldon26June2012willexpireattheforthcomingAnnualGeneralMeetingatwhicharesolutionwillbetabledforshareholderstograntafreshmandateforanotheryear.

BAD AND DOUBTFUL DEBTS

BeforethefinancialstatementsoftheGroupandtheCompanyweremadeout,thedirectorstookreasonablestepstoascertainthatactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofallowancefordoubtfuldebtsandsatisfied themselves that therewerenoknownbaddebtsandthatadequateallowancehadbeenmadefordoubtfuldebts.

Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichwouldrequirethewritingoffofbaddebtsorrendertheamountoftheallowancemadefordoubtfuldebtsinadequatetoanysubstantialextent.

CURRENT ASSETS

BeforethefinancialstatementsoftheGroupandtheCompanyweremadeout,thedirectorstookreasonablestepstoascertainwhetheranycurrentassetswhichwouldbeunlikelytorealisetheirbookvaluesintheordinarycourseofbusinesshave been written down to their estimated realisable values.

Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesthatwouldrenderthevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandtheCompanymisleading.


VALUATION METHODS

Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichhavearisenwhichrenderadherencetotheexistingmethodsofvaluationofassetsorliabilitiesoftheGroupandtheCompanymisleadingorinappropriate.

CONTINGENT AND OTHER LIABILITIES

Atthedateofthisreport,theredoesnotexist:-

(i) anychargeontheassetsoftheGrouportheCompanythathasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or

(ii) anycontingentliabilityinrespectoftheGrouportheCompanythathasarisensincetheendofthefinancialyear.

No contingent liability or other liability of theGroupor theCompany has become enforceable, or is likely to becomeenforceablewithintheperiodoftwelvemonthsaftertheendofthefinancialyearwhich,intheopinionofthedirectors,willormaysubstantiallyaffecttheabilityoftheGroupandtheCompanytomeettheirobligationsasandwhentheyfalldue.

CHANGE OF CIRCUMSTANCES

Atthedateofthisreport,thedirectorsarenotawareofanycircumstances,nototherwisedealtwithinthisreportorinthefinancialstatementsoftheGroupandtheCompanythatwouldrenderanyamountstatedintherespectivefinancialstatements misleading.

ITEMS OF AN UNUSUAL NATURE

TheresultsoftheoperationsoftheGroupandtheCompanyforthefinancialyearwerenot,intheopinionofthedirectors,substantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.

Therehasnotarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportanyitem,transactionoreventofamaterialandunusualnaturelikely,intheopinionofthedirectors,toaffectsubstantiallytheresultsoftheoperationsoftheGrouportheCompanyforthefinancialyearinwhichthisreportismade.

DIRECTORS' REPORT


DIRECTORS OF THE COMPANY

Thedirectorswhoservedsincethedateofthelastreportare:-

Dato’SeriKiewKwongSenProf.Ir.Dr.AhmadFadzilBinMohamadHaniChuJennWengSiawKokTongYeohShihHoongChuahPoayNgeeChangMunKee

ParticularsoftheinterestsinsharesintheCompanyofthedirectorsinofficeattheendofthefinancialyear,asshownintheRegisterofDirectors’Shareholdings,areasfollows:-

NumberofOrdinarySharesofRM0.10Each

NameofDirectorBalanceat1.1.2012 Bought Sold

Balanceat31.12.2012

Dato’SeriKiewKwongSen

-Direct 3,750,000 0 0 3,750,000

Prof.Ir.Dr.AhmadFadzilBinMohamadHani

-Direct 750,000 0 0 750,000

ChuJennWeng

-Direct 71,710,768 0 (573,400) 71,137,368

SiawKokTong

-Direct 51,324,214 0 (417,000) 50,907,214

YeohShihHoong

-Direct 27,283,585 0 (209,600) 27,073,985

ChuahPoayNgee

-Direct 15,000 0 0 15,000

ChangMunKee

-Direct 150 0 0 150

-Indirect 6,367,149 0 0 6,367,149

ByvirtueoftheirinterestsinsharesintheCompany,ChuJennWengandSiawKokTongarealsodeemedtohaveinterestsinsharesinthesubsidiariestotheextentoftheCompany’sinterests,pursuanttoSection6AoftheCompaniesAct1965.

DIRECTORS' REPORT


DIRECTORS’ BENEFITS

Sincetheendofthepreviousfinancialyear,nodirectoroftheCompanyhasreceivedorbecomeentitledtoreceiveanybenefit(otherthanthedirectors’remunerationdisclosedinthefinancialstatements)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththedirectororwithafirmofwhichthedirectorisamember,orwithacompanyinwhichthedirectorhasasubstantialfinancialinterest.

Neitherduringnorattheendofthefinancialyear,wastheCompanyapartytoanyarrangementwhoseobjectistoenablethedirectorstoacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporate.

AUDITORS

Theauditors,Messrs.CroweHorwath,haveexpressedtheirwillingnesstocontinueinoffice.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 18 APRIL 2013

Chu Jenn Weng

Siaw Kok Tong

DIRECTORS' REPORT


STATEMENT BY DIRECTORS

We,ChuJennWengandSiawKokTong,beingtwoofthedirectorsofViTroxCorporationBerhad,doherebystatethatintheopinionofthedirectors,thefinancialstatementssetoutonpages65to107giveatrueandfairviewofthefinancialpositionoftheGroupandtheCompanyasat31December2012andoftheirfinancialperformanceandcashflowsforthefinancialyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct1965inMalaysia.

Intheopinionofthedirectors,thesupplementaryinformationsetoutonpage108isprepared,inallmaterialrespects,inaccordancewithGuidanceonSpecialMatterNo.1Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issuedby theMalaysianInstituteofAccountantsandthedirectiveofBursaMalaysiaSecuritiesBerhad.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 18 APRIL 2013

Chu Jenn Weng Siaw Kok Tong

STATUTORY DECLARATION

I,ChuJennWeng,beingthedirectorprimarilyresponsibleforthefinancialmanagementofViTroxCorporationBerhad,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages65to107are,tothebestofmyknowledgeandbelief,correctandImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct1960.

Subscribed and solemnly declared byChuJennWengatGeorgetownintheStateofPenangonthis18April2013

Chu Jenn Weng

Beforeme

Nachatar Singh A/L Bhag Singh, PKT, PJK, PKCommissionerforOaths


INDEPENDENT AUDITORS' REPORT

Report on the Financial Statements

WehaveauditedthefinancialstatementsofViTroxCorporationBerhad,whichcomprisethestatementsoffinancialpositionasat31December2012oftheGroupandtheCompany,andthestatementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandtheCompanyforthefinancialyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,assetoutonpages65to107.

Directors’ Responsibility for the Financial Statements

ThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementsthatgiveatrueandfairviewinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct1965inMalaysia.Thedirectorsarealsoresponsibleforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditors’ Responsibility

Our responsibility is to express anopinionon these financial statements basedonour audit.We conductedour auditin accordancewith approved standards on auditing inMalaysia. Those standards require thatwe complywith ethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements.Theproceduresselecteddependonourjudgement,includingtheassessmentofrisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,weconsiderinternalcontrolrelevanttotheentity’spreparationoffinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebythedirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandtheCompanyasat31December2012andoftheirfinancialperformanceandcashflowsforthefinancialyearthenendedinaccordancewithMalaysian Financial ReportingStandards, International Financial ReportingStandards and the requirementsof theCompaniesAct1965inMalaysia.

TOTHEMEMBERSOFVITROXCORPORATIONBERHAD


INDEPENDENT AUDITORS' REPORT

Report on Other Legal and Regulatory Requirements

InaccordancewiththerequirementsoftheCompaniesAct1965inMalaysia,wealsoreportthefollowing:-

(i) Inouropinion,theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyanditssubsidiariesofwhichwehaveactedasauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.

(ii) Wehaveconsideredthefinancialstatementsandtheauditors’reportofthesubsidiaryofwhichwehavenotactedasauditors,whichisindicatedinNote7tothefinancialstatements.

(iii) WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancial statements are in form and content appropriate and proper for the purposes of the preparation of thefinancialstatementsoftheGroupandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthose purposes.

(iv) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adversecommentmadeunderSection174(3)oftheAct.

Thesupplementary informationsetoutonpage108 isdisclosed tomeet the requirementofBursaMalaysiaSecuritiesBerhadandisnotpartofthefinancialstatements.Thedirectorsareresponsibleforthepreparationofthesupplementaryinformation inaccordancewithGuidanceonSpecialMatterNo.1Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements,asissuedbytheMalaysian InstituteofAccountants (“theMIAGuidance”) and thedirectiveofBursaMalaysiaSecuritiesBerhad. Inouropinion,thesupplementaryinformationisprepared,inallmaterialrespects,inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.

Other Matters

(i) AsstatedinNote2.1tothefinancialstatements,theGroupandtheCompanyadoptedMalaysianFinancialReportingStandardson1January2012withatransitiondateof1January2011.Thesestandardswereappliedretrospectivelybydirectorstothecomparativeinformationinthesefinancialstatements,includingthestatementsoffinancialpositionasat31December2011and1January2011,andthestatementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsforthefinancialyearended31December2011andrelateddisclosures.Wewerenotengagedtoreportontherestatedcomparativeinformationanditisunaudited.OurresponsibilitiesaspartofourauditofthefinancialstatementsoftheGroupandtheCompanyforthefinancialyearended31December2012have,inthesecircumstances,includedobtainingsufficientappropriateauditevidencethattheopeningbalancesasat1January2012donotcontainmisstatementsthatmateriallyaffectthefinancialpositionasat31December2012andfinancialperformanceandcashflowsforthefinancialyearthenended.

(ii) ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection174oftheCompaniesAct1965inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

Crowe Horwath Chan Kheng Hoe

FirmNo:AF1018 ApprovalNo:2979/03/14(J)

CharteredAccountants CharteredAccountant

Date:18April2013

Penang

TOTHEMEMBERSOFVITROXCORPORATIONBERHAD(cont'd)


CONSOLIDATED STATEMENT OF FINANCIAL POSITIONASAT31DECEMBER2012

Note31.12.2012

RM 31.12.2011

RM 1.1.2011

RM

NON-CURRENTASSETS

Property,plantandequipment 4 30,060,175 27,917,565 13,411,867

Investment property 5 600,000 600,000 600,000

Developmentexpenditure 6 2,602,123 3,653,358 3,941,093

Investmentsinclubmemberships-atcost 91,250 91,250 91,250

33,353,548 32,262,173 18,044,210

CURRENTASSETS

Assetsheldforsale 8 0 887,388 0

Inventories 9 27,972,481 22,990,783 14,053,179

Tradeandotherreceivables 10 39,202,919 21,599,531 18,133,724

Financialassetsatfairvaluethroughprofitorloss 11 14,110 0 0

Prepayments 1,078,412 1,212,959 311,009

Currenttaxassets 75,249 63,016 21,406

Cashandcashequivalents 12 43,915,205 42,739,240 43,403,278

112,258,376 89,492,917 75,922,596

CURRENTLIABILITIES

Tradeandotherpayables 13 16,775,448 10,925,613 11,275,422

Dividendpayable 0 2,322,700 4,568,559

Termloan-secured 14 1,249,430 423,609 0

Financialliabilitiesatfairvaluethroughprofitorloss 11 0 322,983 0

Advancepaymentsfromcustomers 335,000 925,100 696,304

Currenttaxliabilities 43,771 0 169,072

18,403,649 14,920,005 16,709,357

NETCURRENTASSETS 93,854,727 74,572,912 59,213,239

NON-CURRENTLIABILITIES

Termloan-secured 14 11,339,161 8,195,860 0

Deferredtaxliabilities 15 635,000 800,000 400,000

Deferredincomeongovernmentgrants 16 781,274 822,869 523,153

12,755,435 9,818,729 923,153

NETASSETS 114,452,840 97,016,356 76,334,296

EQUITY

Sharecapital 17 23,250,000 23,250,000 15,500,000

Treasuryshares 17 (909,802) (176,773) (1,021,498)

Sharepremium 4,662,738 4,662,738 1,222,055

Currencytranslationreserve 3,998 8,477 (4,022)

Retainedprofits 87,445,906 69,271,914 60,637,761

TOTALEQUITY 114,452,840 97,016,356 76,334,296

Theannexednotesformanintegralpartofthesefinancialstatements.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFORTHEFINANCIALYEARENDED31DECEMBER2012

Note2012RM

2011RM

Revenue 18 88,870,691 79,202,576

Otherincome 7,923,173 4,639,070

Amortisationofdevelopmentexpenditure (928,641) (790,509)

Changesinwork-in-progressandfinishedgoods (1,595,533) 2,185,674

Depreciationofproperty,plantandequipment (1,756,050) (1,134,558)

Directors'remuneration 19 (986,138) (890,224)

Employeebenefitsexpense 20 (16,999,960) (12,552,981)

Raw materials consumed (34,585,300) (34,343,348)

Financecosts (274,154) (58,152)

Otherexpenses (18,112,294) (13,252,549)

Profitbeforetax 21 21,555,794 23,004,999

Taxexpense 22 (1,066,012) (778,542)


Othercomprehensiveincome:-

Currencytranslationdifferencesforforeignoperation (4,479) 12,499

Othercomprehensiveincomeforthefinancialyear (4,479) 12,499

Totalcomprehensiveincomeforthefinancialyear 20,485,303 22,238,956

Earningspershare:- 23

-Basic(sen) 8.85 9.61

-Diluted(sen) 8.85 9.61



CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFORTHEFINANCIALYEARENDED31DECEMBER2012

Non-distributable Distributable

Sharecapital

RM

Treasuryshares

RM

Sharepremium

RM

Currencytranslation

reserveRM

Retainedprofits

RM

Total equity

RM

Balanceat1January2011 15,500,000 (1,021,498) 1,222,055 (4,022) 60,637,761 76,334,296

Profitforthefinancialyear 0 0 0 0 22,226,457 22,226,457Currencytranslationdifferencesforforeignoperation(representingothercomprehensiveincomeforthefinancialyear) 0 0 0 12,499 0 12,499Totalcomprehensiveincomeforthefinancialyear 0 0 0 12,499 22,226,457 22,238,956

Issueofshares 7,750,000 0 (1,130,396) 0 (6,619,604) 0

Shareissuetransactioncosts 0 0 (91,659) 0 0 (91,659)

Purchaseofownshares 0 (427,467) 0 0 0 (427,467)

Reissueoftreasuryshares 0 1,272,192 4,662,738 0 0 5,934,930

Dividends(Note24) 0 0 0 0 (6,972,700) (6,972,700)

Totaltransactionswithowners 7,750,000 844,725 3,440,683 0 (13,592,304) (1,556,896)

Balanceat31December2011 23,250,000 (176,773) 4,662,738 8,477 69,271,914 97,016,356

Profitforthefinancialyear 0 0 0 0 20,489,782 20,489,782Currencytranslationdifferencesforforeignoperation(representingothercomprehensiveincomeforthefinancialyear) 0 0 0 (4,479) 0 (4,479)Totalcomprehensiveincomeforthefinancialyear 0 0 0 (4,479) 20,489,782 20,485,303

Purchaseofownshares 0 (733,029) 0 0 0 (733,029)

Dividends(Note24) 0 0 0 0 (2,315,790) (2,315,790)

Totaltransactionswithowners 0 (733,029) 0 0 (2,315,790) (3,048,819)

Balanceat31December2012 23,250,000 (909,802) 4,662,738 3,998 87,445,906 114,452,840



CONSOLIDATED STATEMENT OF CASH FLOWSFORTHEFINANCIALYEARENDED31DECEMBER2012

Note2012RM

2011RM

CASHFLOWSFROMOPERATINGACTIVITIES

Profitbeforetax 21,555,794 23,004,999

Adjustmentsfor:-

Allowanceforslowmovinginventories 2,388,215 2,418,197

Amortisation and depreciation 2,684,691 1,925,067

Amortisationofdeferredincome (181,178) (331,783)

Developmentexpenditurewrittenoff 146,971 0

Gainondisposalofassetsheldforsale (1,912,612) 0

Gainondisposalofproperty,plantandequipment (1,136) (10,500)

Impairment loss on loans and receivables 459,896 792,598

Interestexpense 274,154 58,152

Interest income (917,435) (766,434)

Reversalofallowanceforslowmovinginventories (2,418,197) (2,513,989)

Reversalofimpairmentlossonloansandreceivables (355,451) (31,500)

Unrealised(gain)/lossonfinancialinstrumentsatfairvaluethroughprofitorloss (14,110) 322,983

Unrealisedloss/(gain)onforeignexchange 555,718 (250,056)

Operatingprofitbeforeworkingcapitalchanges 22,265,320 24,617,734

Changesin:-

Inventories (4,951,716) (8,841,812)

Receivables and prepayments (17,956,835) (4,572,643)

Payablesandadvancepayments 5,242,680 (122,263)

Financialinstrumentsatfairvaluethroughprofitorloss (322,983) 0

Cashgeneratedfromoperations 4,276,466 11,081,016

Taxpaid (1,227,993) (632,544)

Taxrefunded 28,519 43,320

Netcashfromoperatingactivities 3,076,992 10,491,792

CASHFLOWSFROMINVESTINGACTIVITIES

Additionsofdevelopmentexpenditure (24,377) (502,774)

Grants received 261,682 599,987

Interest received 911,086 766,163

Proceedsfromdisposalofassetsheldforsale 2,800,000 0

Proceedsfromdisposalofproperty,plantandequipment 2,570 10,500

Purchaseofproperty,plantandequipment (3,900,350) (16,526,862)

Netcashfrom/(usedin)investingactivities 50,611 (15,652,986)



Note2012RM

2011RM

CASHFLOWSFROMFINANCINGACTIVITIES

Dividendspaid (4,638,490) (9,218,559)

Drawdownoftermloan 4,405,627 8,312,368

Interest paid (268,441) (37,877)

Purchaseofownshares (733,029) (427,467)

Reissueoftreasuryshares 0 5,934,930

Repaymentoftermloan (101,948) 0

Shareissuetransactioncosts 0 (91,659)

Netcash(usedin)/fromfinancingactivities (1,336,281) 4,471,736

Currencytranslationdifferences (615,357) 25,420

Netincrease/(decrease)incashandcashequivalents 1,175,965 (664,038)

Cashandcashequivalentsbroughtforward 42,739,240 43,403,278

Cashandcashequivalentscarriedforward 12 43,915,205 42,739,240


CONSOLIDATED STATEMENT OF CASH FLOWSFORTHEFINANCIALYEARENDED31DECEMBER2012(cont'd)


Note31.12.2012

RM31.12.2011

RM1.1.2011

RM

NON-CURRENTASSETS

Property,plantandequipment 4 757,643 849,269 166,291

Investments in subsidiaries 7 8,042,013 8,042,013 8,042,013

8,799,656 8,891,282 8,208,304

CURRENTASSETS

Tradeandotherreceivables 10 10,442,731 13,882,739 15,533,216

Dividendsreceivable 5,800,000 0 0

Prepayments 21,283 27,395 27,609

Currenttaxassets 17,570 1,468 0

Cashandcashequivalents 12 8,834,432 10,854,364 8,655,353

25,116,016 24,765,966 24,216,178

CURRENTLIABILITIES

Tradeandotherpayables 13 2,045,993 1,547,708 1,936,995

Dividendpayable 0 2,322,700 4,568,559

Currenttaxliabilities 0 0 807

2,045,993 3,870,408 6,506,361

NETCURRENTASSETS 23,070,023 20,895,558 17,709,817

NON-CURRENTLIABILITIES

Deferredincomeongovernmentgrants 16 346,361 387,062 82,540

NETASSETS 31,523,318 29,399,778 25,835,581

EQUITY

Sharecapital 17 23,250,000 23,250,000 15,500,000

Treasuryshares 17 (909,802) (176,773) (1,021,498)

Sharepremium 4,662,738 4,662,738 1,222,055

Retainedprofits 4,520,382 1,663,813 10,135,024

TOTALEQUITY 31,523,318 29,399,778 25,835,581

STATEMENT OF FINANCIAL POSITIONASAT31DECEMBER2012



2012 2011

Note RM RM

Revenue 18 11,600,000 10,820,000

Otherincome 3,456,280 2,381,956

Depreciationofproperty,plantandequipment (320,782) (257,996)

Directors'remuneration 19 (467,124) (447,812)

Employeebenefitsexpense 20 (6,644,792) (5,015,105)

Otherexpenses (2,439,332) (2,334,950)

Profitbeforetax 21 5,184,250 5,146,093

Taxexpense 22 (11,891) (25,000)


Othercomprehensiveincomeforthefinancialyear 0 0

Totalcomprehensiveincomeforthefinancialyear 5,172,359 5,121,093

STATEMENT OF COMPREHENSIVE INCOMEFORTHEFINANCIALYEARENDED31DECEMBER2012



Non-distributable Distributable

Sharecapital

RM

Treasuryshares

RM

Sharepremium

RM

Retainedprofits

RM

Totalequity

RM

Balanceat1January2011 15,500,000 (1,021,498) 1,222,055 10,135,024 25,835,581

Profit(representingtotalcomprehensiveincome)forthefinancialyear 0 0 0 5,121,093 5,121,093

Issueofshares 7,750,000 0 (1,130,396) (6,619,604) 0

Shareissuetransactioncosts 0 0 (91,659) 0 (91,659)

Purchaseofownshares 0 (427,467) 0 0 (427,467)

Reissueoftreasuryshares 0 1,272,192 4,662,738 0 5,934,930

Dividends(Note24) 0 0 0 (6,972,700) (6,972,700)

Totaltransactionswithowners 7,750,000 844,725 3,440,683 (13,592,304) (1,556,896)

Balanceat31December2011 23,250,000 (176,773) 4,662,738 1,663,813 29,399,778

Profit(representingtotalcomprehensiveincome)forthefinancialyear 0 0 0 5,172,359 5,172,359

Purchaseofownshares 0 (733,029) 0 0 (733,029)

Dividends(Note24) 0 0 0 (2,315,790) (2,315,790)

Totaltransactionswithowners 0 (733,029) 0 (2,315,790) (3,048,819)

Balanceat31December2012 23,250,000 (909,802) 4,662,738 4,520,382 31,523,318

STATEMENT OF CHANGES IN EQUITYFORTHEFINANCIALYEARENDED31DECEMBER2012



2012 2011

Note RM RM

CASHFLOWSFROMOPERATINGACTIVITIES

Profitbeforetax 5,184,250 5,146,093

Adjustmentsfor:-

Amortisationofdeferredincome (146,800) (124,832)

Depreciation 320,782 257,996

Dividendincome (11,600,000) (10,450,000)

Interest income (248,866) (181,105)

Unrealisedgainonforeignexchange (5) (387)

Operatinglossbeforeworkingcapitalchanges (6,490,639) (5,352,235)

Changesin:-

Receivables and prepayments 3,528,212 1,663,380

Payables 498,290 (389,083)

Cashabsorbedbyoperations (2,464,137) (4,077,938)

Taxpaid (27,993) (27,275)

Net cash used in operating activities (2,492,130) (4,105,213)

CASHFLOWSFROMINVESTINGACTIVITIES

Dividendsreceived 5,800,000 10,450,000

Grants received 26,052 419,044

Interest received 246,821 178,909

Purchaseofproperty,plantandequipment (229,156) (940,974)

Netcashfrominvestingactivities 5,843,717 10,106,979

CASHFLOWSFROMFINANCINGACTIVITIES

Dividendspaid (4,638,490) (9,218,559)

Purchaseofownshares (733,029) (427,467)

Reissueoftreasuryshares 0 5,934,930

Shareissuetransactioncosts 0 (91,659)

Netcashusedinfinancingactivities (5,371,519) (3,802,755)

Net(decrease)/increaseincashandcashequivalents (2,019,932) 2,199,011

Cashandcashequivalentsbroughtforward 10,854,364 8,655,353

Cashandcashequivalentscarriedforward 12 8,834,432 10,854,364

STATEMENT OF CASH FLOWSFORTHEFINANCIALYEARENDED31DECEMBER2012



1. GENERAL INFORMATION

TheCompanyisapubliccompanylimitedbyshares,incorporatedanddomiciledinMalaysia.TheCompanyislistedontheMainMarketofBursaMalaysiaSecuritiesBerhad.

TheprincipalactivitiesoftheCompanyarethoseofinvestmentholdinganddevelopmentof3Dandlinescanvisioninspectionsystem.TheprincipalactivitiesofthesubsidiariesaredisclosedinNote7.

TheregisteredofficeoftheCompanyis locatedat57-G,PersiaranBayanIndah,BayanBay,SungaiNibong,11900PenanganditsprincipalplaceofbusinessislocatedatPlot85A,LintangBayanLepas11,BayanLepasIndustrialParkPhaseIV,11900BayanLepas,Penang.

Theconsolidatedfinancialstatementssetoutonpages65to69togetherwiththenotestheretocovertheCompanyand its subsidiaries (“theGroup”). The separate financial statements of theCompany set out onpages 70 to 73togetherwiththenotestheretocovertheCompanysolely.

ThepresentationcurrencyisRinggitMalaysia(“RM”).

ThefinancialstatementswereauthorisedforissuebytheBoardofDirectorsinaccordancewitharesolutionofthedirectorsdated18April2013.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation of Financial Statements

The financial statements of theGroup and the Company are prepared under the historical cost convention,modified to includeother bases ofmeasurement as disclosed in other sections of the significant accountingpolicies, and in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International FinancialReportingStandardsandtherequirementsoftheCompaniesAct1965inMalaysia.

ThesearethefirstMFRSfinancialstatementsoftheGroupandtheCompany,andMFRS1First-time Adoption of Malaysian Financial Reporting Standardshasbeenapplied.TheGroupandtheCompanyadoptedMFRSson1January2012withatransitiondateof1January2011.Thesestandardswereappliedretrospectivelybydirectorstothecomparativeinformationinthesefinancialstatements,includingthestatementsoffinancialpositionasat31December2011and1January2011,andthestatementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsforthefinancialyearended31December2011andrelateddisclosures.TheGroupandtheCompanypreparedtheirpreviousfinancialstatementsinaccordancewithFinancialReportingStandards(“FRSs”).TheeffectsoftransitionfromFRSstoMFRSsaredisclosedinNote2.2.

NOTES TO THE FINANCIAL STATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2012


2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.1 Basis of Preparation of Financial Statements (cont’d)

TheGroupandtheCompanyhavenotappliedthefollowingMFRSswhichhavebeenissuedasattheendofthereportingperiodbutarenotyeteffective:-

MFRS (Issued as at the end of the reporting period)

Effective for annual periods beginning

on or after

MFRS9Financial Instruments 1January2015

MFRS10Consolidated Financial Statements 1January2013

MFRS11Joint Arrangements 1January2013

MFRS12Disclosure of Interests in Other Entities 1January2013

MFRS13Fair Value Measurement 1January2013

MFRS119Employee Benefits(amendedin2011) 1January2013

MFRS127Separate Financial Statements(amendedin2011) 1January2013

MFRS128Investments in Associates and Joint Ventures (amendedin2011) 1January2013

ICInterpretation20Stripping Costs in the Production Phase of a Surface Mine 1January2013

AmendmentstoMFRS1Government Loans 1January2013

AmendmentstoMFRS7Disclosures - Offsetting Financial Assets and Financial Liabilities 1January2013

AmendmentstoMFRS10,MFRS11andMFRS12Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance

1January2013

AmendmentstoMFRS101Presentation of Items of Other Comprehensive Income 1July2012

AmendmentstoMFRS132Offsetting Financial Assets and Financial Liabilities 1January2014

AmendmentstoMFRSscontainedinthedocumententitled“Annual Improvements 2009 - 2011 Cycle”

1January2013

ManagementforeseesthattheinitialapplicationoftheaboveMFRSswillnothaveanysignificantimpactsonthefinancialstatementsexceptasfollows:-

MFRS9Financial Instruments

MFRS 9 replaces the guidance in MFRS 139 Financial Instruments: Recognition and Measurement on the classificationandmeasurementof financial assetsbydividing them into3 classifications: (1) thosemeasuredatamortisedcost;(2)thosemeasuredatfairvaluethroughprofitorloss;and(3)thosemeasuredatfairvaluethroughothercomprehensiveincome.ManagementforeseesthattheadoptionofthesenewclassificationswillnotresultinanysignificantchangestotheexistingmeasurementbasesoffinancialassetsoftheGroupandtheCompany.




2.1 Basis of Preparation of Financial Statements (cont’d)

MFRS10Consolidated Financial Statements

MFRS10replacestheconsolidationguidanceinMFRS127Consolidated and Separate Financial Statements and IC Interpretation112Consolidation - Special Purpose Entities by introducinga singleconsolidationmodel forallentitiesbasedoncontrol.UnderMFRS10,controlisbasedonwhetheraninvestorhas(1)powerovertheinvestee;(2)exposure,orrights,tovariablereturnsfromitsinvolvementwiththeinvestee;and(3)theabilitytouseitspowerovertheinvesteetoaffecttheamountofthereturns.ManagementforeseesthattheadoptionofthesenewcontrolcriteriawillnotresultinanysignificantchangestotheexistingcompositionoftheGroup.

2.2 Transition to MFRSs

TheeffectsoftransitionfromFRSstoMFRSsonthereportedfinancialpositionareasfollows:-

FRSsRM

Effectsoftransition

RMMFRSs

RM

ConsolidatedStatementofFinancialPosition(Extract)

Asat1January2011

Deferredtaxliabilities 450,000 (50,000) 400,000

Retainedprofits 60,587,761 50,000 60,637,761

Totalequity 76,284,296 50,000 76,334,296

Asat31December2011

Deferredtaxliabilities 850,000 (50,000) 800,000

Retainedprofits 69,221,914 50,000 69,271,914

Totalequity 96,966,356 50,000 97,016,356

UpontransitiontoMFRSs,theGroupappliedMFRS112Income Taxes which presumes that the carrying amount of investment property stated at fair value will be recovered entirely through sale. Accordingly, unless thepresumptionisrebutted,themeasurementofdeferredtaxshallreflectthetaxconsequencesofrecoveringthecarryingamountoftheinvestmentpropertyentirelythroughsale.Thedeferredtaxliabilitiesasat1January2011and31December2011inrelationtotheinvestmentpropertywerereducedbyRM50,000.

ThetransitionfromFRSstoMFRSsdidnothaveanysignificanteffectsonthereportedfinancialperformanceandcashflows.




2.3 Basis of Consolidation

AsubsidiaryisanentitythatiscontrolledbytheGroup.Controlisthepowertogovernthefinancialandoperatingpoliciesoftheentitysoastoobtainbenefitsfromitsactivities.

TheconsolidatedfinancialstatementsincorporatethefinancialstatementsoftheCompanyanditssubsidiariesmadeuptotheendofthereportingperiodusingtheacquisitionmethod.Undertheacquisitionmethod,theconsideration transferred, the identifiable assets acquired and the liabilities assumed are measured at theiracquisition-datefairvalues.Thecomponentsofnon-controllingintereststhatarepresentownershipinterestsaremeasuredatthepresentownershipinstruments’proportionateshareintherecognisedamountsoftheidentifiablenet assets acquired.All other components of non-controlling interests aremeasured at their acquisition-datefair values. In a business combination achieved in stages, the previously held equity interest in the acquireeisremeasuredat itsacquisition-datefairvalueandanyresultinggainor loss isrecognisedinprofitor loss.Allacquisition-relatedcosts,otherthanthecoststoissuedebtorequitysecurities,arerecognisedinprofitorlossasincurred.

Goodwillattheacquisitiondateismeasuredastheexcessof(a)over(b)below:-

(a) theaggregateof:-(i) theacquisition-datefairvalueoftheconsiderationtransferred;(ii) theamountofanynon-controllinginterests;and(iii) inabusinesscombinationachievedinstages,theacquisition-datefairvalueofthepreviouslyheldequity

interestintheacquiree.

(b) thenetoftheacquisition-datefairvaluesoftheidentifiableassetsacquiredandtheliabilitiesassumed.

Goodwill isrecognisedasanassetattheaforementionedamountlessaccumulatedimpairmentlosses, ifany.TheimpairmentpolicyisdisclosedinNote2.10.Whentheabove(b)exceeds(a),theexcessrepresentsabargainpurchasegainand,afterreassessment,isrecognisedinprofitorloss.

Asubsidiaryisconsolidatedfromtheacquisitiondate,beingthedateonwhichcontrolisobtained,andcontinuestobeconsolidateduntilthedatewhencontrolislost.Intragroupbalances,transactions,incomeandexpensesareeliminatedinfullonconsolidation.Totalcomprehensiveincomeisattributedtotheownersoftheparentandtothenon-controlling interestseven if this results inthenon-controlling interestshavingadeficitbalance.Allchangesintheparent’sownershipinterestinasubsidiarythatdonotresultinalossofcontrolareaccountedforasequitytransactions.

Uponlossofcontrolofasubsidiary,theassets(includinganygoodwill)andliabilitiesof,andanynon-controllinginterests in the subsidiary are derecognised. All amounts recognised in other comprehensive income in relation tothesubsidiaryareaccountedforonthesamebasisaswouldberequirediftherelatedassetsorliabilitieshadbeendirectlydisposedof.Anyconsiderationreceivedandanyinvestmentretainedintheformersubsidiaryarerecognisedattheirfairvalues.Theresultingdifferenceisthenrecognisedasagainorlossinprofitorloss.




2.4 Property, Plant and Equipment

Property,plantandequipmentarestatedatcost lessaccumulateddepreciationandaccumulated impairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.

Capitalwork-in-progressisnotdepreciated.Leaseholdlandisdepreciatedonastraight-linebasisovertheleasetermof60years.Otherproperty,plantandequipmentaredepreciatedonastraight-linebasisovertheestimatedusefullivesoftheassetsusingthefollowingannualrates:-

Buildings 2%

Furniture,fittingsandequipment 20%-25%

Motor vehicles 25%

Renovation and electrical installation 25%

The residual value,useful lifeanddepreciationmethodofanassetare reviewedat leastat theendofeachreportingperiodandanychanges inexpectations frompreviousestimatesareaccountedforprospectivelyaschanges in accounting estimates.

2.5 Investment Property

Investmentproperty,beingapropertyheldtoearnrentalsand/orforcapitalappreciation,isstatedatfairvalue.Anygainorlossarisingfromachangeinthefairvalueofinvestmentpropertyisrecognisedinprofitorloss.

2.6 Research and Development Expenditure

Researchexpenditureisrecognisedinprofitorlosswhenincurred.

ExpenditureincurredonprojectstodevelopnewproductsiscapitalisedanddeferredonlywhentheGroupcandemonstratethetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale,itsintentiontocompleteanditsabilitytouseorselltheasset,howtheassetwillgeneratefutureeconomicbenefits,theavailabilityof resources tocomplete thedevelopmentand theability tomeasure reliably theexpenditureduringthedevelopment.Productdevelopmentexpenditurewhichdoesnotmeetthesecriteriaisrecognisedinprofitorlosswhenincurred.

Capitaliseddevelopmentexpenditure,consideredtohavefiniteuseful lives, isstatedatcost lessaccumulatedamortisation and accumulated impairment losses, if any. The impairment policy is disclosed in Note 2.10.Amortisationiscalculatedonastraight-linebasisovertheestimatedcommerciallivesoftheunderlyingproductsofnotmorethan5years.Theamortisationperiodandmethodarereviewedatleastattheendofeachreportingperiodandanychangesinexpectationsfrompreviousestimatesareaccountedforprospectivelyaschangesinaccounting estimates.




2.7 Investments in Subsidiaries

AsrequiredbytheCompaniesAct1965,theCompanypreparesseparatefinancialstatementsinadditiontotheconsolidatedfinancialstatements.IntheseparatefinancialstatementsoftheCompany,investmentsinsubsidiariesarestatedatcostlessimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.

2.8 Investments in Club Memberships

Investments in clubmemberships are stated at cost less impairment losses, if any. The impairment policy isdisclosedinNote2.10.

2.9 Non-current Assets (or Disposal Groups) Held for Sale

Anon-currentasset(ordisposalgroup)isclassifiedasheldforsaleifitscarryingamountwillberecoveredprincipallythroughasaletransactionratherthanthroughcontinuinguse.Immediatelybeforetheinitialclassificationasheldforsale,thecarryingamountsoftheasset(oralltheassetsandliabilitiesofthedisposalgroup)aremeasuredinaccordancewithapplicableMFRSs.Uponclassificationasheldforsale,theasset(ordisposalgroup),otherthanfinancialassetswithinthescopeofMFRS139Financial Instruments: Recognition and Measurement and investmentpropertystatedatfairvalue,ismeasuredatthelowerofitscarryingamountandfairvaluelesscoststo sell.Any initial or subsequentwrite-down to,or any subsequent increase in, fair value less costs to sell isrecognisedinprofitorloss.

2.10 Impairment of Non-financial Assets

Attheendofeachreportingperiod,theGroupandtheCompanyassesswhetherthereisanyindicationthatanon-financialasset,otherthan inventories, investmentpropertystatedatfairvalueandnon-currentassets(ordisposalgroups)classifiedasheldforsale,maybeimpaired.Ifanysuchindicationexists,therecoverableamountoftheasset,beingthehigherofitsfairvaluelesscoststosellanditsvalueinuse,isestimated.Irrespectiveofwhether there isany indicationof impairment,goodwill is tested for impairmentannually.Anyexcessof thecarryingamountof theassetover its recoverableamountrepresentsan impairment lossand is recognised inprofitorloss.

Animpairmentlossonanasset,otherthangoodwill,isreversediftherehasbeenachangeintheestimatesusedtodeterminetherecoverableamountanditisreversedonlytotheextentthattheincreasedcarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationoramortisation,hadnoimpairmentlossbeenrecognised.Thereversalisrecognisedinprofitorloss.Animpairmentlossongoodwillis not reversed.

2.11 Inventories

Inventories ofmaterials and goods are valued at the lower of cost (determined principally on theweightedaveragebasis)andnetrealisablevalue.Costconsistsofallcostsofpurchase,costsofconversionandothercostsincurred in bringing the inventories to their present location and condition. Net realisable value is the estimated sellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandcostsnecessarytomakethe sale.




2.12 Financial Assets

FinancialassetsoftheGroupandtheCompanyconsistofreceivables,derivativesandcashandcashequivalents.

Recognition and Measurement

Afinancialasset is recognised in thestatementof financialpositionwhen,andonlywhen, theGroupor theCompanybecomesaparty to the contractualprovisionsof the financial instrument.A regularwaypurchaseorsaleoffinancialassets isrecognisedorderecognisedusingsettlementdateaccounting.Afinancialasset isinitiallyrecognisedatfairvalueplus,inthecaseofafinancialassetnotatfairvaluethroughprofitorloss,directlyattributabletransactioncosts.Thesubsequentmeasurementofafinancialassetdependsonitsclassificationasfollows:-

(i) Financial assets at fair value through profit or loss

Allderivatives,exceptforthosedesignatedashedges,areclassifiedasheldfortradingunderthiscategory.After initial recognition, such financialassetsaremeasuredat fairvalue.Anygainor lossarising fromachangeinthefairvalueisrecognisedinprofitorloss.

(ii) Held-to-maturity investments

TheGroupandtheCompanydonothaveanyfinancialassetsclassifiedunderthiscategory.

(iii) Loans and receivables

All receivablesandcashandcashequivalentsare classifiedunder this category.After initial recognition,suchfinancialassetsaremeasuredatamortisedcostusingtheeffectiveinterestmethod.Anygainorlossisrecognisedinprofitorlosswhenthefinancialassetisderecognisedorimpairedaswellasthroughtheamortisation process.

(iv) Available-for-sale financial assets

TheGroupandtheCompanydonothaveanyfinancialassetsclassifiedunderthiscategory.

Afinancialassetisderecognisedwhen,andonlywhen,thecontractualrightstothecashflowsfromthefinancialassethaveexpiredoralltherisksandrewardsofownershiphavebeensubstantiallytransferred.




2.12 Financial Assets (cont’d)

Impairment

Attheendofeachreportingperiod,theGroupandtheCompanyassesswhetherthereisanyobjectiveevidencethatafinancialassetorgroupoffinancialassetsclassifiedunderloansandreceivablesisimpaired.Ifanysuchevidenceexists, the impairment loss ismeasuredas thedifferencebetween theasset’s carryingamountandthepresent valueof estimated future cash flowsdiscountedusing theasset’soriginal effective interest rate.Theasset’s carryingamount is reduced through theuseofanallowanceaccountand the impairment loss isrecognisedinprofitorloss.Thegrosscarryingamountandtheassociatedallowancearewrittenoffwhenthereisnorealisticprospectoffuturerecovery.

If,inasubsequentperiod,theimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurring after the impairmentwas recognised, the previously recognised impairment loss is reversed to theextentthattheincreasedcarryingamountdoesnotexceedwhattheamortisedcostwouldhavebeenhadnoimpairmentlossbeenrecognisedatthereversaldate.Thereversalisrecognisedinprofitorloss.

Determination of Fair Values Thecarryingamountsofreceivablesandcashandcashequivalentswhichareshort-terminnatureorrepayableondemandareassumedtobereasonableapproximationsoffairvalues.

Fairvaluemeasurementsrecognisedinthestatementoffinancialpositionarecategorisedintothefollowinglevelsoffairvaluehierarchy:-

Level1- Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;Level2- InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,

eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices);andLevel3- Inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs).

Thefairvaluesofforwardexchangecontractsarequotedbythefinancialinstitutions.Ifsuchquotationisnotavailable,thefairvalueisestimatedbydiscountingthedifferencebetweenthecontractualforwardpriceandthecurrentforwardpricefortheresidualmaturityofthecontractusingarisk-freeinterestrate(i.e.Level2).

2.13 Financial Liabilities

Financial liabilitiesof theGroupand theCompany consistofpayables, loansandborrowingsandderivatives(includingfinancialguaranteecontracts).




2.13 Financial Liabilities (cont'd)

Recognition and Measurement

Afinancialliabilityisrecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGrouportheCompanybecomesapartytothecontractualprovisionsofthefinancialinstrument.Afinancialliabilityisinitiallyrecognisedat fairvalue less, in thecaseofa financial liabilitynotat fairvaluethroughprofitor loss,directlyattributabletransactioncosts.Afterinitialrecognition,allfinancialliabilities,exceptforfinancialliabilitiesatfairvaluethroughprofitorlossandfinancialguaranteecontracts,aremeasuredatamortisedcostusingtheeffectiveinterestmethod.Anygainorlossisrecognisedinprofitorlosswhenthefinancialliabilityisderecognisedaswellas through the amortisation process.

(i) Financial liabilities at fair value through profit or loss

Allderivatives,exceptforfinancialguaranteecontractsorthosedesignatedashedges,areclassifiedasheldfortradingunderthiscategory.Afterinitialrecognition,suchfinancialliabilitiesaremeasuredatfairvalue.Anygainorlossarisingfromachangeinthefairvalueisrecognisedinprofitorloss.

(ii) Financial guarantee contracts

Afterinitialrecognitionatfairvalue,ifany,financialguaranteecontractsaremeasuredatthehigheroftheamountinitiallyrecognisedlessappropriateamortisationandtheestimateofanyprobableobligation.

Afinancialliabilityisderecognisedwhen,andonlywhen,theobligationspecifiedinthecontractisdischargedorcancelledorexpires.

Determination of Fair Values

Thecarryingamountsofpayablesand loansandborrowingswhichare short-term innatureor repayableondemandareassumedtobereasonableapproximationsoffairvalues.

Thefairvaluesoflong-termloansandborrowingsareestimatedbydiscountingtheexpectedfuturecashflowsusingthecurrentmarketinterestratesforsimilarliabilities.

Fairvaluemeasurementsrecognisedinthestatementoffinancialpositionarecategorisedintothefollowinglevelsoffairvaluehierarchy:-

Level1- Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;Level2- InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,

eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices);andLevel3- Inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs). Thefairvaluesofforwardexchangecontractsarequotedbythefinancialinstitutions.Ifsuchquotationisnotavailable,thefairvalueisestimatedbydiscountingthedifferencebetweenthecontractualforwardpriceandthecurrentforwardpricefortheresidualmaturityofthecontractusingarisk-freeinterestrate(i.e.Level2).

Thefairvaluesoffinancialguaranteecontractsareestimatedbasedonprobability-adjusteddiscountedcashflowanalysisafterconsideringtheprobabilityofdefaultbythedebtors(i.e.Level3).




2.14 Foreign Currency Transactions and Translation

The consolidated financial statements and separate financial statements of the Company are presented inRinggitMalaysia,whichisalsotheCompany’sfunctionalcurrency,beingthecurrencyoftheprimaryeconomicenvironment inwhich theentityoperates. Items included in the financial statementsofeach individualentitywithintheGrouparemeasuredusingtheindividualentity’sownfunctionalcurrency.

Aforeigncurrencytransactionisrecordedinthefunctionalcurrencyusingtheexchangerateattransactiondate.Attheendofthereportingperiod,foreigncurrencymonetaryitemsaretranslatedintothefunctionalcurrencyusingtheclosingrate.Foreigncurrencynon-monetaryitemsmeasuredatcostaretranslatedusingtheexchangerateattransactiondatewhereasthosemeasuredatfairvaluearetranslatedusingtheexchangerateatvaluationdate.Exchangedifferencesarisingfromthesettlementortranslationofmonetaryitemsarerecognisedinprofitorloss.Anyexchangecomponentofthegainorlossonanon-monetaryitemisrecognisedonthesamebasisasthatofthegainorloss,i.e.inprofitorlossorinothercomprehensiveincome.

In translating the financial position and results of a foreign operationwhose functional currency is not thepresentationcurrency, i.e.RinggitMalaysia,assetsand liabilitiesare translated into thepresentationcurrencyusingtheclosingratewhereasincomeandexpensesaretranslatedusingtheexchangeratesattransactiondates.Allresultingexchangedifferencesarerecognisedinothercomprehensiveincomeandaccumulatedinequityascurrencytranslationreserveuntiltheforeignoperationisdisposedof,atwhichtimethecumulativeexchangedifferencespreviouslyrecognisedinothercomprehensiveincomearereclassifiedfromequitytoprofitorlossasareclassificationadjustment.

2.15 Share Capital

Ordinarysharesareclassifiedasequity.Transactioncoststhatrelatetotheissueofnewsharesareaccountedforasadeductionfromequity.

OwnsharespurchasedareheldastreasurysharesinaccordancewiththerequirementsofSection67AoftheCompaniesAct1965.Thetotalamountofconsiderationpaid,includingdirectlyattributablecosts,isrecogniseddirectlyinequity.Whentreasurysharesarereissuedbyre-saleintheopenmarket,thedifferencebetweenthesalesconsiderationandthecarryingamountofthetreasurysharesisadjustedtosharepremium.

Dividendsonsharesdeclaredandunpaidattheendofthereportingperiodarerecognisedasaliabilitywhereasdividendsproposedordeclaredafterthereportingperiodaredisclosedinthenotestothefinancialstatements.

2.16 Income Recognition

Incomefromthesaleofgoods is recognisedwhenthesignificant risksandrewardsofownershiphavebeentransferredtothebuyer.

Dividendincomeisrecognisedwhentheshareholder’srighttoreceivepaymentisestablished.

Interestincomeisrecognisedusingtheeffectiveinterestmethod.




2.17 Government Grants

Government grants are recognised when there is reasonable assurance that the Group will comply with the conditions attaching to the grants and that the grants will be received. Government grants are recognised in profitorlossonasystematicbasisovertheperiodsinwhichtheGrouprecognisesasexpensestherelatedcostsforwhichthegrantsare intendedtocompensate.Grantsrelatedtoassetsarepresented inthestatementoffinancialpositionasdeferredincomewhichisamortisedonastraight-linebasisovertheestimatedusefullivesoftheassets.Grantsrelatedtoincomearepresentedunder“otherincome”inthestatementofcomprehensiveincome.

2.18 Employee Benefits

Short-term Employee Benefits

Short-termemployeebenefitssuchaswages,salaries,bonusesandsocialsecuritycontributionsarerecognisedinprofitorlossorincludedindevelopmentexpenditure,whereappropriate,intheperiodinwhichtheassociatedservices are rendered by the employee.

Defined Contribution Plans

As required by law, employers inMalaysiamake contributions to the statutory pension scheme, EmployeesProvidentFund (“EPF”).TheGroup’s foreign subsidiarymakescontributions to its country’s statutorypensionscheme.Contributionstodefinedcontributionplansarerecognisedinprofitorlossorincludedindevelopmentexpenditure,whereappropriate,intheperiodinwhichtheassociatedservicesarerenderedbytheemployee.

2.19 Borrowing Costs

Borrowingcoststhataredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingasset,whichisanassetthatnecessarilytakesasubstantialperiodoftimetogetreadyforitsintendeduseorsale,arecapitalisedaspartofthecostoftheasset,untilsuchtimeastheassetissubstantiallyreadyforitsintendeduseorsale.Allotherborrowingcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.

2.20 Income Taxes

Incometaxesfortheyearcomprisecurrenttaxanddeferredtax.

Currenttaxrepresentstheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.




2.20 Income Taxes (cont'd)

Deferredtaxisprovidedforundertheliabilitymethodinrespectofalltemporarydifferencesbetweenthecarryingamountofanassetorliabilityanditstaxbaseexceptforthosetemporarydifferencesassociatedwithgoodwillortheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandaffectsneitheraccountingnortaxableresultsatthetimeofthetransaction.

Adeferredtaxliabilityisrecognisedforalltaxabletemporarydifferenceswhereasadeferredtaxassetisrecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedortheliabilityissettled,basedonthetaxratesthathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.

2.21 Cash and Cash Equivalents

Cashandcashequivalents comprise cash inhand,bankbalances,demanddeposits, termdeposits (includingthosepledgedassecurity),bankoverdraftsandshort-term,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.

3. JUDGEMENTS AND ESTIMATION UNCERTAINTY Judgements Made in Applying Accounting Policies

In theprocessof applying theaccountingpoliciesof theGroupand theCompany,management is not awareofanyjudgements,apartfromthoseinvolvingestimations,thatcansignificantlyaffecttheamountsrecognisedinthefinancialstatements.

Sources of Estimation Uncertainty

Thekeyassumptionsaboutthefuture,andothermajorsourcesofestimationuncertaintyattheendofthereportingperiod,thathaveasignificantriskofresultinginamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow:-

Allowanceforinventories

Reviewsaremadeperiodicallybymanagementoninventoriesforexcessinventories,obsolescenceanddeclineinnetrealisablevaluebelowcost.Thesereviewsrequiretheuseof judgementsandestimates.Possiblechanges intheseestimatesmayresultinrevisionstothevaluationofinventories.ThecarryingamountsofinventoriesaredisclosedinNote9.

Impairmentofloansandreceivables

TheGroupandtheCompanymakeallowanceforimpairmentbasedonanassessmentoftherecoverabilityofloansand receivables.Allowance is applied to loansand receivableswhen there isobjectiveevidence that thebalancesmaynotbe recoverable.Management specificallyanalyseshistoricalbaddebts, customerconcentration, customercreditworthiness,currenteconomic trendsandchanges incustomerpaymenttermswhenmakinga judgementtoevaluatetheadequacyoftheallowanceforimpairment.Whereexpectationsaredifferentfrompreviousestimates,thedifferencewillimpactonthecarryingamountsofloansandreceivablesasdisclosedinNote10.



4.

PRO

PER

TY, P

LAN

T A

ND

EQ

UIP

MEN

T

The

Gro

up

Sh

ort

-ter

m

leas

eho

ld

lan

d R

M

Lo

ng

-ter

m

leas

eho

ld

lan

d R

M

Bu

ildin

gs

RM

Fu

rnit

ure

, f

itti

ng

s an

d

eq

uip

men

t R

M

Mo

tor

veh

icle

s R

M

Ren

ova

tio

n

and

ele

ctri

cal

inst

alla

tio

n R

M

Cap

ital

wo

rk-in

- p

rog

ress

RM

To

tal

RM

Cost

Balanceat1January2011

255,10

22,69

1,10

37,22

1,38

65,01

0,12

98,39

6162,315

2,874,597

18,223,028

Add

ition

s0

00

1,79

1,56

299

,578

100,006

14,535,716

16,526,862

Dispo

sals/W

rite-offs

00

0(20,70

0)(8,396

)0

0(29,096)

Reclassification

00

17,410

,313

0

00

(17,410,313)

0

Transfertoassetsheldforsale

(255,102

)0

(888

,116

)0

00

0(1,143,218)

Currencytranslationdifferences

00

02,06

80

00

2,068

Balanceat31Decem

ber2011

02,69

1,10

323

,743

,583

6,78

3,05

999

,578

262,321

033,579,644

Add

ition

s0

082

5,66

91,79

4,28

40

01,280,397

3,900,350

Dispo

sals/W

rite-offs

00

0(20,13

0)0

00

(20,130)


00

0(693

)0

00

(693)

Balanceat31Decem

ber2012

02,69

1,10

324

,569

,252

8,55

6,52

099

,578

262,321

1,280,397

37,459,171



4.

PRO

PER

TY, P

LAN

T A

ND

EQ

UIP

MEN

T (c

on

t'd

)

The

Gro

up

Sh

ort

-ter

m

leas

eho

ld

lan

d R

M

Lo

ng

-ter

m

leas

eho

ld

lan

d R

M

Bu

ildin

gs

RM

Fu

rnit

ure

, f

itti

ng

s an

d

eq

uip

men

t R

M

Mo

tor

veh

icle

s R

M

Ren

ova

tio

n

and

ele

ctri

cal

inst

alla

tio

n R

M

Cap

ital

wo

rk-in

- p

rog

ress

RM

To

tal

RM

Accum

ulatedDepreciation


43,934

22

0,52

172

6,83

03,73

6,45

48,39

675,026

04,811,161

Depreciation

3,18

944

,852

22

9,00

480

9,14

112

,447

35,925

01,134,558

Dispo

sals/W

rite-offs

00

0(20,70

0)(8,396

)0

0(29,096)

Transfertoassetsheldforsale

(47,12

3)0

(208

,707

)0

00

0(255,830)


00

01,28

60

00

1,286

Balanceat31Decem

ber2011

026

5,37

374

7,12

74,52

6,18

112

,447

110,951

05,662,079

Depreciation

044

,851

48

2,42

51,15

7,45

324

,894

46,427

01,756,050

Dispo

sals/W

rite-offs

00

0(18,69

6)0

00

(18,696)


00

0(437

)0

00

(437)

Balanceat31Decem

ber2012

031

0,22

41,22

9,55

25,66

4,50

137

,341

157,378

07,398,996

CarryingAmount


211,16

82,47

0,58

26,49

4,55

61,27

3,67

50

87,289

2,874,597

13,411,867

Balanceat31Decem

ber2011

02,42

5,73

022

,996

,456

2,25

6,87

887

,131

151,370

027,917,565

Balanceat31Decem

ber2012

02,38

0,87

923

,339

,700

2,89

2,01

962

,237

104,943

1,280,397

30,060,175

Thelong

-term

leaseholdlandandbuildingshavebeenpledg

edassecurityforcreditfacilitiesgrantedtotheGroup.



4. PROPERTY, PLANT AND EQUIPMENT (cont’d)

The Company

Furniture, fittings andequipment

RMRenovation

RMTotalRM

Cost

Balanceat1January2011 97,057 85,700 182,757

Additions 940,974 0 940,974

Balanceat31December2011 1,038,031 85,700 1,123,731

Additions 229,156 0 229,156

Balanceat31December2012 1,267,187 85,700 1,352,887

AccumulatedDepreciation


Depreciation 236,571 21,425 257,996

Balanceat31December2011 246,041 28,421 274,462

Depreciation 299,357 21,425 320,782


CarryingAmount




5. INVESTMENT PROPERTY

The Group

FairValueShoplots

RM

Balanceat1January2011 600,000

Movement during the year 0

Balanceat31December2011 600,000

Movement during the year 0


Thefairvaluesofinvestmentpropertyweredeterminedbasedonthemarketvaluesgivenbyindependentprofessionalvaluers using the comparison method.



6. DEVELOPMENT EXPENDITURE

The Group

RM

Cost

Balanceat1January2011 4,042,474

Additions-internaldevelopment 502,774

Balanceat31December2011 4,545,248

Additions-internaldevelopment 24,377

Write-offs (146,971)


Accumulated Amortisation

Balanceat1January2011 101,381

Amortisation 790,509


Amortisation 928,641


CarryingAmount

Balanceat1January2011 3,941,093



7. INVESTMENTS IN SUBSIDIARIES

The Company

2012 2011

RM RM

Unquotedshares,atcost 8,542,012 8,542,012

Impairment loss (499,999) (499,999)

8,042,013 8,042,013



7. INVESTMENTS IN SUBSIDIARIES (cont'd)

Thedetailsofthesubsidiariesareasfollows:-

Name of SubsidiaryCountry of

Incorporation

Effective Ownership Interest

2012 2011 Principal Activity

ViTroxTechnologiesSdn.Bhd. Malaysia 100% 100% Developmentandproductionofautomatedvisioninspectionsystem and digital automated visioninspectionequipmentandmodules

ViETechnologiesSdn.Bhd. Malaysia 100% 100% Design,developmentandmanufactureofprintedcircuitboardassembliesformicroprocessor applications

ViTroxInternationalSdn.Bhd. Malaysia 100% 100% Investment holding

ViTroxTechnologies(Suzhou)Co.,Ltd.* China **100% **100% Assalesandsupportoffice

* Not audited by Crowe Horwath** Interest held through ViTrox International Sdn. Bhd.

8. ASSETS HELD FOR SALE

The Group

Short-termleasehold land

RMBuildings

RMTotalRM

Balanceat1January2011 0 0 0

Transferfromproperty,plantandequipment 207,979 679,409 887,388


Disposals (207,979) (679,409) (887,388)

Balanceat31December2012 0 0 0



9. INVENTORIES

The Group

2012RM

2011RM

Raw materials 21,188,617 14,611,386

Work-in-progress 690,935 424,167

Finishedgoods 6,092,929 7,955,230

27,972,481 22,990,783

10. TRADE AND OTHER RECEIVABLES

The Group The Company

2012RM

2011RM

2012RM

2011RM

Tradereceivables 37,769,081 20,446,126 0 0

Allowanceforimpairment (796,076) (691,631) 0 0

36,973,005 19,754,495 0 0

Grants receivable 2,044,885 1,516,246 2,044,885 923,610

Otherreceivables:-

-Subsidiaries 0 0 8,341,818 12,949,364

-Unrelatedparties 285,996 429,757 56,028 9,765

-Allowanceforimpairment (100,967) (100,967) 0 0

185,029 328,790 8,397,846 12,959,129

39,202,919 21,599,531 10,442,731 13,882,739

Thecurrencyprofileoftradeandotherreceivablesisasfollows:-


2012RM

2011RM

2012RM

2011RM

Ringgit Malaysia 6,764,100 4,720,952 10,442,731 13,879,880

USDollar 32,425,051 16,857,393 0 2,859

Others 13,768 21,186 0 0

39,202,919 21,599,531 10,442,731 13,882,739



10. TRADE AND OTHER RECEIVABLES (cont’d)

Trade Receivables

Tradereceivablesareunsecured,non-interestbearingandgenerallyon30to270dayterms.

Themovementsinallowanceforimpairmentareasfollows:-

The Group

2012RM

2011RM

Balanceat1January 691,631 31,500

Impairment loss recognised 459,896 691,631

Impairment loss reversed (355,451) (31,500)

Balanceat31December 796,076 691,631

Alltheaboveimpairmentlosseswereindividuallydeterminedafterconsideringtheadversefinancialconditionsofthedebtorswhohavedefaulted/delayedinpayments.

Theageinganalysisoftradereceivablesnotimpairedisasfollows:-

The Group

2012RM

2011RM

Not past due 24,615,106 11,953,572

Pastdue1to30days 6,175,491 2,423,394

Pastdue31to120days 4,199,532 3,614,647

Pastduemorethan120days 1,982,876 1,762,882

36,973,005 19,754,495

Tradereceivablesthatareneitherpastduenorimpairedmainlyrelatetocreditworthycustomerswhohaveregulartransactions and good payment records with the Group.



10. TRADE AND OTHER RECEIVABLES (cont’d)

Trade Receivables (cont'd)

Management determines credit risk concentrations in terms of counterparties and geographical areas. As at31December2011,therewas1majorcustomerthataccountedfor10%ormoreoftheGroup’stradereceivablesandthetotaloutstandingbalanceduefromthismajorcustomeramountedtoRM6,609,045.Asat31December2012,theGroupdidnothaveanymajorcreditriskconcentrationrelatingtoanyindividualcustomerorcounterparty.Thecreditriskconcentrationprofilebygeographicalareasoftradereceivablesisasfollows:-

The Group

2012RM

2011RM

Malaysia 6,516,018 2,983,241

China 8,068,328 398,709

Mexico 310,459 3,047,162

Singapore 1,793,868 6,609,045

Taiwan 5,377,238 4,146,659

UnitedStatesofAmerica 10,677,553 2,563,880

Others 4,229,541 5,799

36,973,005 19,754,495

Other Receivables

Otherreceivablesareunsecuredandnon-interestbearing.Theamountsowingbysubsidiariesarerepayableondemand.Theamountsowingbyunrelatedpartiesmainlyconsistofrefundabledepositswhichhavenofixedrepaymentterms.

Themovementsinallowanceforimpairmentareasfollows:-

The Group

2012RM

2011RM

Balanceat1January 100,967 0

Impairment loss recognised 0 100,967


Alltheaboveimpairmentlosseswereindividuallydeterminedafterconsideringtheadversefinancialconditionsofthedebtorswhohavedefaulted/delayedinpayments.



11. FINANCIAL ASSETS/(LIABILITIES) AT FAIR VALUE THROUGH PROFIT OR LOSS

The Group

2012RM

2011RM

Derivativesclassifiedasheldfortrading,atfairvalue(Level2) 14,110 (322,983)

Derivativesconsistofforwardexchangecontractswhichareusedtohedgetheexposuretocurrencyrisk.TheGroupdoes not apply hedge accounting.As at 31December 2012, theGroup had contracts duewithin 1 year to buyRM3,684,000(2011:RM6,053,000)andsellUSD1,200,000(2011:USD1,993,000)atcontractualforwardrates.

12. CASH AND CASH EQUIVALENTS


2012RM

2011RM

2012RM

2011RM

Highlyliquidinvestments 12,706,509 12,327,397 5,668,044 5,511,517

Termdepositswithlicensedbanks(fixedrate) 16,244,197 22,340,198 3,028,246 5,163,823

Cashandbankbalances 14,964,499 8,071,645 138,142 179,024

43,915,205 42,739,240 8,834,432 10,854,364

AtermdepositoftheGroupamountingtoRM187,621(2011:RM182,177)hasbeenpledgedassecurityforcreditfacilitiesgrantedtotheGroup.Accordingly,thistermdepositisnotfreelyavailableforuse.

Theeffectiveinterestratesoftermdepositsasat31December2012rangedfrom2.6%to3.6%(2011:2.7%to3.6%)perannum.

Thecurrencyprofileofcashandcashequivalentsisasfollows:-


2012RM

2011RM

2012RM

2011RM


USDollar 13,599,617 6,590,418 0 0

Others 115,508 106,784 0 0

43,915,205 42,739,240 8,834,432 10,854,364



13. TRADE AND OTHER PAYABLES


2012RM

2011RM

2012RM

2011RM

Tradepayables:-

-Subsidiary 0 0 5,995 0

-Unrelatedparties 6,793,955 3,498,178 23,769 17,885

6,793,955 3,498,178 29,764 17,885

Otherpayables:-

-Subsidiary 0 0 9,854 0

-Unrelatedparties 9,981,493 7,427,435 2,006,375 1,529,823

9,981,493 7,427,435 2,016,229 1,529,823

16,775,448 10,925,613 2,045,993 1,547,708 Thecurrencyprofileoftradeandotherpayablesisasfollows:-


2012RM

2011RM

2012RM

2011RM


USDollar 1,844,563 547,531 2,015 0

Others 575,220 152,603 0 7,393

16,775,448 10,925,613 2,045,993 1,547,708

Tradeandotherpayablesaregenerallyshort-terminnatureorrepayableondemandandtheircarryingamountswillapproximatetotheremainingcontractualundiscountedcashflows.

Trade Payables

Tradepayablesareunsecuredandnon-interestbearing.Theamountowingtosubsidiaryisrepayableondemand.Thecredittermsgrantedbyunrelatedpartiesrangefrom30to90days.

Other Payables

Otherpayablesareunsecuredandnon-interestbearing.Theamountowingtosubsidiaryisrepayableondemand.Theamountsowingtounrelatedpartiesmainlyconsistofsundrypayablesandaccrualsforoperatingexpenseswhicharegenerallyduewithin30to60days.



14. TERM LOAN - SECURED

The Group

2012RM

2011RM

Termloan(floatingrateanddenominatedinUSDollar) 12,588,591 8,619,469

Disclosedas:-

-Currentliabilities 1,249,430 423,609

-Non-currentliabilities 11,339,161 8,195,860

12,588,591 8,619,469

Term loan issecuredagainst the long-term leasehold landandbuildings (Note4).Theeffective interest rateasat31December2012was2.4%(2011:2.8%)perannum.

Termloanisrepayableover10years.Therepaymentanalysisisasfollows:-

2012RM

2011RM

Grossloaninstalments:-

-Within1year 1,515,129 502,574

-Laterthan1yearandnotlaterthan2years 1,485,002 1,500,310

-Laterthan2yearsandnotlaterthan5years 4,278,493 4,287,430

-Laterthan5years 6,897,585 3,267,264

Totalcontractualundiscountedcashflows 14,176,209 9,557,578

Futurefinancecharges (1,587,618) (938,109)

Presentvalueoftermloan:-

-Within1year 1,249,430 423,609

-Laterthan1yearandnotlaterthan2years 1,223,345 1,270,825

-Laterthan2yearsandnotlaterthan5years 3,670,033 3,812,476

-Laterthan5years 6,445,783 3,112,559

12,588,591 8,619,469

Thecarryingamountoftermloanisreasonableapproximationoffairvalueasitseffectiveinterestratealsoapproximatestothecurrentmarketinterestratesforsimilarliabilities.



15. DEFERRED TAX LIABILITIES

The Group

2012RM

2011RM

Balanceat1January 800,000 400,000

Deferredtax(income)/expenserelatingtooriginationandreversaloftemporarydifferences (123,000) 363,000

Deferredtaxliabilities(over)/underprovidedinprioryear (42,000) 37,000


Inrespectoftaxabletemporarydifferencesof:-

-Property,plantandequipment 512,000 513,000

-Developmentexpenditure 123,000 287,000

635,000 800,000

16. DEFERRED INCOME ON GOVERNMENT GRANTS


2012RM

2011RM

2012RM

2011RM

Balanceat1January 822,869 523,153 387,062 82,540

Grantsrelatedto:-

-Property,plantandequipment 110,387 485,139 106,099 429,354

-Capitaliseddevelopmentexpenditure 29,196 146,360 0 0

139,583 631,499 106,099 429,354

Amortisation (181,178) (331,783) (146,800) (124,832)

Balanceat31December 781,274 822,869 346,361 387,062

TheGroupandtheCompanyreceivedgrantsfromthelocalgovernmentforcertainresearchanddevelopmentprojects.Thegrantscovered50%oftheprojectbudgetsasapprovedbythelocalgovernment.



17. SHARE CAPITAL

2012 2011

No. of Ordinary Shares of

RM0.10 each RM

No.ofOrdinarySharesofRM0.10each RM

Authorised 250,000,000 25,000,000 250,000,000 25,000,000

Issuedandfullypaid-up:-

Balanceat1January 232,500,000 23,250,000 155,000,000 15,500,000

Bonusissue 0 0 77,500,000 7,750,000

Balanceat31December 232,500,000 23,250,000 232,500,000 23,250,000

Purchase of Own Shares

The shareholders of the Company, by a resolution passed at the Extraordinary General Meeting held on21 November 2008, approved the Company’s plan to purchase its own shares. The directors are committed toenhancingthevalueoftheCompanyto itsshareholdersandbelievethatthepurchaseplancanbeapplied inthebestinterestsoftheCompanyanditsshareholders.Thedetailsofthesharespurchasedfromtheopenmarketusinginternallygeneratedfundsandheldastreasurysharesareasfollows:-

2012 2011

No. of Shares RM No.ofShares RM

Balanceat1January 230,000 176,773 2,714,700 1,021,498

Sharespurchased 1,010,300 733,029 427,900 427,467

Sharesreissued 0 0 (2,912,600) (1,272,192)

Balanceat31December 1,240,300 909,802 230,000 176,773

Averageunitcostfortheyear 0.73 1.00

Thenumberofoutstandingsharesinissueafterexcludingthetreasurysharesisasfollows:-

2012 2011

No. of Shares No.ofShares

Balanceat1January 232,270,000 152,285,300

Bonusissue 0 77,500,000

Sharespurchased (1,010,300) (427,900)

Sharesreissued 0 2,912,600

Balanceat31December 231,259,700 232,270,000



18. REVENUE


2012RM

2011RM

2012RM

2011RM

Incomefromsaleofgoods 88,870,691 79,202,576 0 370,000

Grossdividendsfromsubsidiaries 0 0 11,600,000 10,450,000

88,870,691 79,202,576 11,600,000 10,820,000

19. DIRECTORS’ REMUNERATION


2012RM

2011RM

2012RM

2011RM

Fees 144,000 144,000 144,000 144,000

Othershort-termemployeebenefits 659,410 596,218 243,678 235,429

Definedcontributionplans 182,728 150,006 79,446 68,383

986,138 890,224 467,124 447,812

20. EMPLOYEE BENEFITS EXPENSE


2012RM

2011RM

2012RM

2011RM

Short-termemployeebenefits 15,202,878 11,245,868 5,969,178 4,441,561

Definedcontributionplans 1,797,082 1,307,113 675,614 573,544

16,999,960 12,552,981 6,644,792 5,015,105

21. PROFIT BEFORE TAX


2012RM

2011RM

2012RM

2011RM

Profitbeforetaxisarrivedataftercharging:-

Allowanceforslowmovinginventories 2,388,215 2,418,197 0 0

Auditors’remuneration 39,500 39,500 12,000 12,000

Developmentexpenditurewrittenoff 146,971 0 0 0



21. PROFIT BEFORE TAX (cont’d)


2012RM

2011RM

2012RM

2011RM

Directoperatingexpenditureforinvestmentproperty:-

-Generatingrentalincome 0 2,462 0 0

-Notgeneratingrentalincome 2,582 0 0 0

Feeexpenseforfinancialinstrumentsnotatfairvaluethroughprofitorloss 59,181 54,360 3,284 1,984

Impairment loss on loans and receivables 459,896 792,598 0 0

Interestexpenseforfinancialliabilitiesnotatfairvaluethroughprofitorloss 274,154 58,152 0 0

Lossonfinancialinstrumentsatfairvaluethroughprofitorloss(classifiedasheldfortrading):-

-Realised 0 181,541 0 0

-Unrealised 0 322,983 0 0

Lossonforeignexchange:-

-Realised 375,328 7,420 0 991

-Unrealised 555,723 0 0 0

Rentalofpremises 119,872 476,129 44,574 267,868

Researchanddevelopmentexpenditure 13,716,181 10,792,708 8,572,605 5,570,244

andcrediting:-

Amortisationofdeferredincome 181,178 331,783 146,800 124,832

Gainondisposalofassetsheldforsale 1,912,612 0 0 0

Gainondisposalofproperty,plantandequipment 1,136 10,500 0 0

Gainonfinancialinstrumentsatfairvaluethroughprofitorloss(classifiedasheldfortrading):-

-Realised 277,782 0 0 0

-Unrealised 14,110 0 0 0

Gainonforeignexchange:-

-Realised 82,803 749,559 4,623 0

-Unrealised 5 250,056 5 387

Grants related to income 4,044,402 2,463,221 3,055,986 2,075,632



21. PROFIT BEFORE TAX (cont’d)


2012RM

2011RM

2012RM

2011RM

Interestincomeforfinancialassetsnotatfairvaluethroughprofitorloss 917,435 766,434 248,866 181,105

Rentalincome:-

-Investmentproperty 0 32,853 0 0

-Others 0 4,800 0 0

Reversalofallowanceforslowmovinginventories 2,418,197 2,513,989 0 0

Reversalofimpairmentlossonloansand receivables 355,451 31,500 0 0

22. TAX EXPENSE


2012RM

2011RM

2012RM

2011RM

Taxbasedonresultsfortheyear:-

Malaysianincometax 1,226,335 366,000 23,085 25,000

Overseasincometax 0 30,429 0 0

Deferredtax (123,000) 363,000 0 0

1,103,335 759,429 23,085 25,000

Taxunder/(over)providedinprioryear:-

Malaysianincometax 4,677 (17,887) (11,194) 0

Deferredtax (42,000) 37,000 0 0

1,066,012 778,542 11,891 25,000

Thenumericalreconciliationbetweentheapplicabletaxrate,whichisthestatutoryincometaxrate,andtheaverageeffectivetaxrateonresultsfortheyearisasfollows:-


2012%

2011%

2012%

2011%

Applicabletaxrate 25.00 25.00 25.00 25,00

Non-deductibleexpenses 5.89 3.80 16.15 11.64

Non-taxableincome (7.44) (2.55) (71.31) (61.85)

Pioneerincomeexempted (30.50) (27.26) 0.00 0.00

Effectofdifferentialtaxrates 12.17 4.31 30.61 25.70

Averageeffectivetaxrate 5.12 3.30 0.45 0.49



22. TAX EXPENSE (cont’d)

Asat31December2012,theCompanyhassufficienttaxcreditsandtaxexemptincometofrank/distributeitsentireretainedprofitsifpaidoutasdividends.Itmayalsodistributeitsentireretainedprofitsasat31December2012astaxexemptdividendsunderthesingletiertaxsystem.

23. EARNINGS PER SHARE

The Group

ThebasicearningspershareiscalculatedbydividingtheGroup’sprofitforthefinancialyearbytheweightedaveragenumberofordinarysharesinissueduringtheyearasfollows:-

2012 2011

Profitforthefinancialyear(RM) 20,489,782 22,226,457

Numberofsharesinissueasat1January 232,270,000 152,285,300

Effectofbonusissue 0 77,140,914

Effectofsharespurchased (713,274) (217,435)

Effectofsharesreissued 0 2,194,428

Weightedaveragenumberofsharesinissue 231,556,726 231,403,207

Basicearningspershare(sen) 8.85 9.61

ThedilutedearningspershareequalsthebasicearningspershareastheCompanydidnothaveanydilutivepotentialordinarysharesduringthefinancialyear.



24. DIVIDENDS

TheGroupandtheCompany

2012RM

2011RM

Inrespectoffinancialyearended31December2010:-

-Finaltaxexemptdividendof0.5senpershare 0 775,000

-Specialtaxexemptdividendof2.5senpershare 0 3,875,000

Inrespectoffinancialyearended31December2011:-

-Interimtaxexemptdividendof1senpershare 0 2,322,700

-Finaltaxexemptdividendof0.5senpershare 1,157,895 0

-Specialtaxexemptdividendof0.5senpershare 1,157,895 0

2,315,790 6,972,700

InJanuary2013,theCompanydeclaredandpaidaninterimtaxexemptdividendof1senpershareamountingtoRM2,312,597inrespectofthefinancialyearended31December2012.

25. RELATED PARTY DISCLOSURES

Significanttransactionswithrelatedpartiesduringthefinancialyearareasfollows:-


2012RM

2011RM

2012RM

2011RM

Keymanagementpersonnelcompensation:-

-Short-termemployeebenefits 909,147 858,202 387,678 379,429

-Definedcontributionplans 194,172 167,488 79,446 68,383

1,103,319 1,025,690 467,124 447,812

Dividendsdeclaredfromsubsidiaries 0 0 11,600,000 10,450,000

Purchaseofgoodsfromsubsidiary 0 0 5,450 0

Purchaseofproperty,plantandequipmentfromsubsidiary 0 0 0 644,408



26. SEGMENT REPORTING

The Group

Operating Segments

InformationaboutoperatingsegmentshasnotbeenreportedseparatelyastheGroup’srevenue,profitorloss,assetsandliabilitiesaremainlyconfinedtoasingleoperatingsegment,namelythedevelopmentandproductionofvisioninspectionsystemandprintedcircuitboardassembliesformicroprocessorapplications.

Geographical Information

In presenting information about geographical areas, segment revenue is based on the geographical location ofcustomerswhereassegmentassetsarebasedonthegeographicallocationofassets.

External Revenue Non-current Assets

2012RM

2011RM

2012RM

2011RM

Malaysia 28,059,211 24,231,373 33,347,215 32,252,352

China 10,838,466 1,524,966 6,333 9,821

Singapore 12,540,389 29,044,277 0 0

Taiwan 11,752,115 4,451,392 0 0

UnitedStatesofAmerica 17,792,044 11,618,592 0 0

Others 7,888,466 8,331,976 0 0

88,870,691 79,202,576 33,353,548 32,262,173

Major Customers

Themajorcustomersthatcontributed10%ormoreoftheGroup’stotalrevenueareasfollows:-

External Revenue

2012 2011

RM RM

CustomerI* 12,384,636 29,043,123

CustomerII* 19,404,350 19,084,924

* The identity of the major customer has not been disclosed as permitted by MFRS 8 OperatingSegments.



27. COMMITMENT FOR PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

The Group


2012RM

2011RM

2012RM

2011RM

Contractedbutnotprovidedfor 4,764,000 269,000 2,691,000 0

28. CONTINGENT LIABILITIES - UNSECURED

The Company

TheCompanyhasenteredintofinancialguaranteecontractstoprovidefinancialguaranteestofinancialinstitutionsforcreditfacilitiesgrantedtoasubsidiaryuptoatotallimitofapproximatelyRM28,179,000(2011:RM24,179,000).The total utilisation of these credit facilities as at 31December 2012 amounted to approximately RM16,935,000(2011:RM14,987,000).

Theaforementionedfinancialguaranteecontractsshouldhavebeenrecognisedinthestatementoffinancialpositionin accordancewith the recognition andmeasurement policies as stated in Note 2.13. After considering that theprobabilityofthesubsidiarydefaultingonthecreditlinesisremote,thefinancialguaranteecontractshavenotbeenrecognisedasthefairvaluesoninitialrecognitionarenotexpectedtobematerial.

29. FINANCIAL RISK MANAGEMENT

Theactivitiesof theGroupexpose it to certain financial risks, including credit risk, liquidity risk, currency riskandinterestraterisk.TheoverallfinancialriskmanagementobjectiveoftheGroupistoensurethatadequatefinancialresourcesareavailableforbusinessdevelopmentwhilstminimisingthepotentialadverseimpactsoffinancialrisksonitsfinancialposition,performanceandcashflows.

Theaforementionedfinancialriskmanagementobjectiveanditsrelatedpoliciesandprocessesexplainedbelowhaveremainedunchangedfromthepreviousfinancialyear.

Credit Risk

TheGroup’sexposuretocreditriskarisesmainlyfromreceivables,derivativefinancialassetsanddepositsplacedwithfinancialinstitutions.Themaximumcreditriskexposureofthesefinancialassetsisbestrepresentedbytheirrespectivecarryingamountsinthestatementoffinancialposition.TheCompanyisalsoexposedtocreditriskinrespectofitsfinancialguaranteesprovidedforcreditfacilitiesgrantedtoasubsidiary.ThemaximumcreditriskexposureofthesefinancialguaranteesisthetotalutilisationofthecreditfacilitiesgrantedasdisclosedinNote28.



29. FINANCIAL RISK MANAGEMENT (cont’d)

Credit Risk (cont’d)

AstheGrouponlydealswithreputablefinancialinstitutions,thecreditriskassociatedwithderivativefinancialassetsanddepositsplacedwith them isminimal.TheGroupmanages itscredit riskexposureof receivablesbyassessingcounterparties’financialstandingsonanongoingbasis,settingandmonitoringcounterparties’limitsandcreditterms.

Liquidity Risk

TheGroup’sexposuretoliquidityriskrelatestoitsabilitytomeetobligationsassociatedwithfinancialliabilitiesasandwhentheyfalldue.Theremainingcontractualmaturitiesoffinancialliabilitiesaredisclosedintheirrespectivenotes.

TheGrouppractisesprudent liquidity riskmanagement tominimise themismatchof financialassetsand liabilitieswhilstmaintainingsufficientcashandtheavailabilityoffundingthroughstandbycreditfacilities.

Currency Risk

TheGroup’sexposuretocurrencyriskarisesmainlyfromtransactionsentered intoby individualentitieswithintheGroupincurrenciesotherthantheirfunctionalcurrencies.ThemajorfunctionalcurrencywithintheGroupisRinggitMalaysia(“RM”)whereasthemajorforeigncurrencytransactedisUSDollar(“USD”).

TheGroupobserves themovements in exchange rates and acts accordingly tominimise its exposure to currencyrisk.Wherenecessary,theGroupentersintoderivativecontractstohedgetheexposure.Suchexposureisalsopartlymitigatedinthefollowingways:-

(i) The Group’s foreign currency sales and purchases provide a natural hedge against fluctuations in foreigncurrencies.

(ii) TheGroupmaintainspartofitscashandcashequivalentsinforeigncurrencyaccountstomeetfutureobligationsinforeigncurrencies.

Basedonasymmetricbasiswhichusestheforeigncurrencyasastabledenominator,thefollowingtabledemonstratesthesensitivityofprofitorlosstochangesinexchangeratesthatwerereasonablypossibleattheendofthereportingperiod,withallothervariablesheldconstant:-

The Group

Increase/(Decrease)

in Profit

Increase/(Decrease)inProfit

2012RM

2011RM

AppreciationofUSDagainstRMby10% 3,159,353 1,427,795

DepreciationofUSDagainstRMby10% (3,159,353) (1,427,795)



29. FINANCIAL RISK MANAGEMENT (cont’d)

Interest Rate Risk

The Group’s exposure to interest rate risk arisesmainly from interest-bearing financial instruments, namely termdeposits and loans and borrowings.

TheGroupobservesthemovementsininterestratesandalwaysstrivestoobtainthemostfavourableratesavailablefornewfinancingorduringrepricing.ItisalsotheGroup’spolicytomaintainamixoffixedandfloatingratefinancialinstruments.

As the Group does not account for its fixed rate financial instruments at fair value through profit or loss or asavailable-for-sale,anychangein interestratesattheendofthereportingperiodwouldnotaffect itsprofitor lossorothercomprehensiveincome.Forfloatingratefinancialinstrumentsstatedatamortisedcost,thefollowingtabledemonstratesthesensitivityofprofitorlosstochangesininterestratesthatwerereasonablypossibleattheendofthereportingperiod,withallothervariablesheldconstant:-

The Group

Increase/(Decrease)

in Profit

Increase/(Decrease)inProfit

2012RM

2011RM

Increaseininterestratesby50basispoints (62,144) (42,706)

Decreaseininterestratesby50basispoints 62,144 42,706

30. CAPITAL MANAGEMENT

TheoverallcapitalmanagementobjectiveoftheGroupistosafeguarditsabilitytocontinueasagoingconcernsoastoprovidefairreturnstoownersandbenefitstootherstakeholders.Inordertomeetthisobjective,theGroupalwaysstrivestomaintainanoptimalcapitalstructuretoreducethecostofcapitalandsustainitsbusinessdevelopment.

TheGroupconsidersitstotalequityandtotalloansandborrowingstobethekeycomponentsofitscapitalstructureandmay,fromtimetotime,adjustthedividendpayouts,purchaseownshares,issuenewshares,sellassets,raiseorredeemdebts,wherenecessary,tomaintainanoptimalcapitalstructure.TheGroupmonitorscapitalusingadebt-to-equityratio,whichiscalculatedastotalloansandborrowingsdividedbytotalequityasfollows:-

The Group

2012RM

2011RM

Totalloansandborrowings 12,588,591 8,619,469

Totalequity 114,452,840 97,016,356

Totalcapital 127,041,431 105,635,825

Debt-to-equityratio 11% 9%

The aforementioned capital management objective, policies and processes have remained unchanged from thepreviousfinancialyear.




2012RM

2011RM

2012RM

2011RM

TotalretainedprofitsoftheCompanyanditssubsidiaries:-

-Realised 94,895,313 75,973,921 4,520,377 1,663,426

-Unrealised (1,136,608) (509,944) 5 387

93,758,705 75,463,977 4,520,382 1,663,813

Consolidationadjustmentsandeliminations (6,312,799) (6,192,063) 0 0

Totalretainedprofitsasperstatementoffinancialposition 87,445,906 69,271,914 4,520,382 1,663,813

Theabove supplementary information isdisclosed tomeet the requirementofBursaMalaysiaSecuritiesBerhadand isnotpartofthefinancialstatements.ThedirectorsareresponsibleforthepreparationofthesupplementaryinformationinaccordancewithGuidanceonSpecialMatterNo.1Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issuedby theMalaysianInstituteofAccountantsandthedirectiveofBursaMalaysiaSecuritiesBerhad.

SUPPLEMENTARY INFORMATION- REALISED AND UNREALISED PROFITS OR LOSSES


No

Name of Registered Owner /Postal Address / Title

Identification

Approx Age of Building /Tenure /

Date of Expiry of Lease

Description /Existing

Use

Land Area /Build Up Area Sq Metre

Net Book Value as at

31 December 2012RM

Year of Valuation /Acquisition

1. ViTrox Technologies Sdn. Bhd.

HSD21704,LotNo.PT5286,Mukim12,DaerahBaratDaya,PulauPinang

BearingPostalAddressNo.85A,LintangBayanLepas11BayanLepasIndustrialParkPhaseIV,11900BayanLepasPenang

6years/60years lease expiringon

December26,2066

ViTroxInnovation

Centre

12,152/13,510

25,720,579 July27,2004(Dateof

Acquisition)


Lot1241,Mukim12,DaerahBaratDaya,PulauPinang

BearingPostalAddressLevelNo.04,UnitNo.20, KristalPointII,LebuhBukitKecil6,11900BayanLepas,Penang

8years/99years lease

upon issuance ofstratatitle

Shoplotforinvestment

purposes

-/96 300,000 December31,2012(Dateof

Valuation)


Lot1241,Mukim12,DaerahBaratDaya,PulauPinang

BearingPostalAddressLevelNo.04,UnitNo.21, KristalPointII,LebuhBukitKecil6,11900BayanLepas,Penang

8years/99years lease

upon issuance ofstratatitle

Shoplotforinvestment

purposes

-/96 300,000 December31,2012(Dateof

Valuation)

LIST OF PROPERTIES


SHARE CAPITAL AS AT 2 MAY 2013

AuthorisedCapital :RM25,000,000.00IssuedandPaid-upCapital :RM23,125,970.00*ClassofShares :OrdinarySharesofRM0.10eachVotingRights :Onevotingrightforoneordinaryshare*Excluding1,240,300OrdinarySharesheldasTreasuryShares

DISTRIBUTION OF SHAREHOLDERS AS AT 2 MAY 2013

Size of Holdings No. of Holders No. of Shares %

1-99 35 1,958 0.00

100-1,000 450 104,023 0.04

1,001-10,000 497 2,510,695 1.09

10,001-100,000 372 12,156,133 5.26

100,001-11,562,984 100 69,425,624 30.02

11,562,985andabove 3 147,061,267 63.59

TOTAL 1,457 231,259,700 100.00

THIRTY LARGEST SECURITIES HOLDERS AS AT 2 MAY 2013

No. Name Shareholdings %

1 ChuJennWeng 70,034,868 30.28

2 SiawKokTong 50,115,914 21.67

3 YeohShihHoong 26,910,485 11.64

4 HSBCNominees(Asing)SdnBhdQualifier:HSBCTrustee(S)LtdforVoyagerAssetsLimited

6,367,149 2.75

5 TengSooFong 6,008,199 2.60

6 SimAhYoong 4,971,649 2.15

7 KiewKwongSen 3,750,000 1.62

8 TanHongSoon 3,750,000 1.62

9 DB(Malaysia)Nominee(Tempatan)SendirianBerhadQualifier:ExemptanforKumpulanSentiasaCemerlangSdnBhd(TSTAC/CLNT)

3,120,000 1.35

10 TanBooiCharn 2,175,000 0.94

11 WongTingLik 2,035,394 0.88

12 CitigroupNominees(Tempatan)SdnBhdQualifier:PledgedSecuritiesAccountforCheongSiewChyuan(470322)

2,000,000 0.86

13 ChuaSiewKim 1,754,749 0.76

14 Ang Nya @ Ang Ah Nya 1,500,000 0.65

15 ChongKokCheng 1,500,000 0.65

16 KoaySooMing 1,495,793 0.65

17 ChuaSiewKim 1,345,000 0.58

18 LimYee@LimWeiYee 1,307,900 0.57

STATISTICS OF SHAREHOLDINGS


THIRTY LARGEST SECURITIES HOLDERS AS AT 2 MAY 2013 (cont’d)

No. Name Shareholdings %

19 AmanahrayaTrusteesBerhadQualifier:PublicSmallcapFund

1,114,400 0.48

20 SuPeikHoon 1,110,116 0.48

21 CitigroupNominees(Tempatan)SdnBhdQualifier:PledgedSecuritiesAccountforTanBooiCharn(471694)

1,000,000 0.43

22 GohThongBeng 900,000 0.39

23 WixtaliSdn.Bhd. 900,000 0.39

24 KenangaNominees(Tempatan)SdnBhdQualifier:PledgedSecuritiesAccountforMakTianMeng

780,000 0.34

25 AhmadFadzilBinMohamadHani 750,000 0.32

26 GohSiewEng 750,000 0.32

27 MalaysiaNominees(Tempatan)SendirianBerhadQualifier:PHEIMAssetManagementSdnBhdforPintarasJayaBerhad(00-10032-000)

728,000 0.31

28 SuPekFuen 721,099 0.31

29 PangKinWai 651,100 0.28

30 CIMBGroupNominees(Asing)Sdn.Bhd.Qualifier:CIMBCommerceTrusteeBerhadforGlobalStrategicGrowthFund(KSC2)

600,000 0.26

TOTAL 200,146,815 86.53

SUBSTANTIAL SHAREHOLDERS AS AT 2 MAY 2013

Name Direct Shareholding % Indirect Shareholding %

ChuJennWeng 70,034,868 30.28 - -

SiawKokTong 50,154,314 21.69 - -

YeohShihHoong 26,910,485 11.64 - -

DIRECTORS’ SHAREHOLDING AS AT 2 MAY 2013

Name Direct Shareholding % Indirect Shareholding %

ChuJennWeng 70,034,868 30.28 - -

SiawKokTong 50,154,314 21.69 - -

YeohShihHoong 26,910,485 11.64 - -

Dato’SeriKiewKwongSen 3,750,000 1.62 - -

Prof.Ir.Dr.AhmadFadzilBinMohamadHani 750,000 0.32 - -

ChuahPoayNgee 15,000 0.01 - -

ChangMunKee 150 - 6,367,149* 2.75

* Registered in the name of HSBC Trustee (S) Ltd for Voyager Assets Limited. HSBC Trustee (S) Ltd for Voyager Assets Limited is the trustee of a discretionary trust, for charity and estate planning purpose, where the beneficiaries of which are members of Mr Chang Mun Kee's family and himself.

STATISTICS OF SHAREHOLDINGS


1. Disclaimer Statement

BursaMalaysiaSecuritiesBerhad(“BursaSecurities”)hasnotperusedthisShareBuy-BackStatementprioritsissuance,andhence,takenoresponsibilityforthecontentsofthisStatement,makesnorepresentationastoitsaccuracyorcompletenessandexpresslydisclaimsanyliabilitywhatsoeverforanylosshowsoeverarisingfromorinrelianceuponthewholeoranypartofthecontentoftheStatement.

2. Rationale For the Share Buy-Back By ViTrox Corporation Berhad (“ViTrox” or “the Company”) Of its Own Ordinary Shares of RM0.10 Each (“Shares”) of up to 10% of its Existing Issued and Paid-Up Share Capital at any given point in time (“Proposed Share Buy-Back”)

TheProposedShareBuy-Back,ifexercised,wouldpotentiallybenefittheCompanyanditsshareholdersasfollows:-

a. ToallowtheCompanytotakepreventivemeasuresagainstspeculationparticularlywhenitsSharesareundervaluedwhichwouldinturnstabilisethemarketpriceoftheSharesandhence,enhanceinvestors’confidence;

b. To allow the Company flexibility in achieving the desired capital structure, in terms of the debt and equitycomposition,andthesizeofequity;and

c. ThePurchasedSharesmaybeheldastreasurysharesanddistributedtoshareholdersasdividendsand/orresoldintheopenmarketwiththeintentionofrealisingapotentialcapitalgainifthePurchasedSharesareresoldatprice(s)higherthantheirpurchaseprice(s).

3. Retained Profits and Share Premium

BasedontheauditedfinancialstatementsofViTroxasat31December2012,theretainedprofitsandsharepremiumoftheCompanystoodatRM4,520,382andRM4,662,738respectively.

4. Funding for the Proposed Share Buy-Back

TheProposedShareBuy-Backwillbefundedfrominternallygeneratedfunds.TheCompanyhasadequateresourcestoundertaketheProposedShareBuy-BackastheCompanyhasnetcashandcashequivalentbalanceofapproximatelyofRM8.83millionbasedontheauditedfinancialstatementsofViTroxasat31December2012.ThefundutilisedbytheCompanyfortheProposedShareBuy-BackwillreducetheresourcesavailabletoViTroxfor itsoperationsbyacorrespondingamountforsharesboughtback.

5. Interests of Directors’ and Substantial Shareholders’ and Persons Connected to them

Save for the inadvertent increase in thepercentage shareholdingsand/or voting rightsof the shareholders in theCompanyasaconsequenceoftheProposedShareBuy-Back,noneoftheDirectorsandSubstantialShareholdersofViTroxnorpersonsconnectedtothemhasanyinterest,directorindirect,intheProposedShareBuy-Backand,ifany,theresaleoftreasuryshares.

SHARE BUY-BACK STATEMENT


5. Interests of Directors’ and Substantial Shareholders’ and Persons Connected to them (cont'd)

BasedontheRegisterofDirectorsandRegisterofSubstantialShareholdersofViTroxasat2May2013andassumingthat ViTrox implements the Proposed Shares Buy-Back in full, the effects of the Proposed Share Buy-Back on theshareholdingsoftheDirectors,SubstantialShareholdersandPersonConnectedtothemofViTroxareasfollows:-

As at 2 May 2013(a) After Proposed Share Buy-Back(b)

Direct Direct Indirect Indirect Direct Direct Indirect Indirect

No. of Shares

% No. of Shares

% No. of Shares

% No. of Shares

%

Directors and Substantial Shareholders

ChuJennWeng1 70,034,868 30.28 - - 70,034,868 33.47 - -

SiawKokTong 50,154,314 21.69 - - 50,154,314 23.97 - -

YeohShihHoong 26,910,485 11.64 - - 26,910,485 12.86 - -

Directors

Dato’SeriKiewKwongSen 3,750,000 1.62 - - 3,750,000 1.79 - -

ProfIr.Dr.AhmadFadzilBinMohamadHani 750,000 0.32 - - 750,000 0.36 - -

ChuahPoayNgee 15,000 0.01 - - 15,000 0.01 - -

ChangMunKee2 150 Negligible 6,367,149 2.75 150 Negligible 6,367,149 3.04

Person Connected to Director/Substantial Shareholder

SuPekFuen1 721,099 0.31 - - 721,099 0.34 - -

HSBCTrustee(S)LtdforVoyagerAssetsLimited2 6,367,149 2.75 - - 6,367,149 3.04 - -

Notes:-

(a) Based on the existing issued and paid-up share capital of 231,259,700 Ordinary Shares excluding 1,240,300 Ordinary Shares held as treasury shares from the total issued and paid-up capital of 232,500,000 Ordinary Shares of RM0.10 each.

(b) Based on the issued and paid-up share capital of 209,250,000 Ordinary Shares after the Proposed Share Buy-Back is carried out in full and all the shares purchased are held as treasury shares.

1 Being spouse to the Director/Substantial Shareholder.2 HSBC Trustee (S) Ltd for Voyager Assets Limited is the trustee of a discretionary trust, for charity and estate

planning purpose, where the beneficiaries of which are members of Mr. Chang Mun Kee’s family and himself.



6. Potential Advantages and Disadvantages of the Proposed Share Buy-Back

6.1 Potential Advantages of the Proposed Share Buy-Back

ThePotentialAdvantagesoftheProposedShareBuy-BackaresetoutinSection2ofthisStatement.

6.2 Potential Disadvantages of the Proposed Share Buy-Back

a. TheProposedShareBuy-Back, if implemented,will reducethefinancial resourcesoftheGroupandmayresultintheGroupforegoinginterestincomeand/orbetterinvestmentopportunitiesthatmayemergeinthefuture;and

b. AstheProposedShareBuy-BackcanonlybemadeoutofretainedprofitsandsharepremiumaccountsoftheCompany,itmayresultinthereductionoffinancialresourcesavailablefordistributiontoshareholdersintheimmediatefuture.

Nevertheless,theProposedShareBuy-BackisnotexpectedtohaveanypotentialmaterialdisadvantagetotheshareholdersoftheCompanyaswellastheGroupasitwillbeimplementedonlyaftercarefulconsiderationofthefinancialresourcesoftheGroupandtheresultantimpactontheshareholdersoftheCompany.

7. Material Financial Effects of The Proposed Share Buy-Back

ThematerialfinancialeffectsoftheProposedShareBuy-Backonthesharecapital,consolidatedNetTangibleAssets(NTA),workingcapital,earnings,dividendsandthesubstantialshareholders’shareholdingsinViTroxaresetoutbelow:-

a. Share Capital

Asat2May2013,theissuedandpaid-upcapitalofViTroxwasRM23,250,000comprising232,500,000Sharesincluding1,240,300sharesheldastreasuryshares.Intheeventthatthe23,250,000Sharesrepresenting10%oftheissuedandpaid-upsharecapitaloftheCompanyarepurchasedandcancelled,theeffectonthesharecapitaloftheCompanyareillustratedasfollows:-

No. of Shares

Issuedandfullypaid-upsharecapitalasat2May2013AssumedtheSharespurchasedandcancelled

232,500,000(23,250,000)*

Resultantissuedandpaid-upcapital 209,250,000

* Inclusive of the 1,240,300 Shares already purchased and retained as Treasury Shares as at 2 May 2013.

IfthePurchasedSharesareretainedastreasuryshares,theProposedShareBuy-Backwillnothaveanyeffectontheissuedandpaid-upsharecapitaloftheCompany.However,therightsattachedtotheminrelationtovoting,dividends and participation in any other distribution or otherwise will be suspended and the treasury shares shallnotbetakenintoaccountincalculatingthenumberorpercentageofSharesorofaclassofsharesforanypurposesincluding,withoutlimitingthegeneralityofSection67A(3C)oftheCompaniesAct,1965,theprovisionsofanylaworrequirementsoftheArticlesorthelistingrulesofastockexchangeonsubstantialshareholding,take-overs,notices,therequisitioningofmeetings,thequorumforameetingandtheresultofavoteontheresolution at a meeting.



7. Material Financial Effects of The Proposed Share Buy-Back (cont'd)

b. Earnings

TheeffectsoftheProposedShareBuy-BackontheearningsoftheGroupwilldependon,interalia,thepurchasepricesoftheShares,thenumberofSharespurchased,theeffectivefundingcosttoViTroxtofinancethepurchaseofSharesoranylossininterestincometotheGroupandtheproposedtreatmentofthePurchasedShares.

IfthePurchasedSharesaretoberetainedastreasurysharesorcancelledsubsequently,thenumberofSharesappliedinthecomputationoftheEPSwillbereduced,andaccordingly,allotherthingsbeingequal,theProposedShareBuy-BackwillhaveapositiveimpactontheEPSoftheGroup.

IntheeventthePurchasedSharesareresoldsubsequently,dependingonthepriceatwhichthesaidSharesareresold,theProposedShareBuy-BackmayhaveapositiveeffectontheEPSoftheGroupifthereisagainonthedisposalandvice-versa.

c. NTA

TheeffectoftheProposedShareBuy-BackontheconsolidatedNTAoftheGroupwoulddependonthepurchasepricesoftheShares,thenumberofSharespurchasedandtheeffectivefundingcosttotheGrouptofinancethepurchaseofSharesoranylossininterestincometotheGroup.

TheProposedShareBuy-Backwill reduce theconsolidatedNTAperShareof theGroup if thepurchasepriceexceedstheconsolidatedNTAperShareatthetimeofthepurchase,andviceversa.

IntheeventthetreasurysharesareresoldonBursaSecurities,theconsolidatedNTAperSharewillincreaseiftheCompanyrealizesagainfromtheresale,andviceversa.Ifthetreasurysharesaredistributedassharedividends,theconsolidatedNTAperSharewilldecreasebythecostofthetreasuryshares.

d. Working Capital

TheProposedShareBuy-BackislikelytoreducetheworkingcapitalandcashflowoftheGroup,thequantumofwhichwilldependonthepurchasepricesoftheShares,thenumberofSharespurchasedandanyassociatedcosts incurred in making the purchase.

e. Substantial Shareholders

SharesboughtbackbytheCompanyundertheProposedShareBuy-Backthatareretainedastreasuryshareswill result inaproportionate increase in thepercentage shareholdingsof theSubstantial Shareholders in theCompany.PleaserefertoSection5ofthisStatementforfurtherdetails.



7. Material Financial Effects of The Proposed Share Buy-Back (cont'd)

f. Dividends

AssumingtheProposedShareBuy-Backisimplementedinfull,dividendswouldbepaidontheremainingissuedandpaid-upsharecapitalofViTrox(excludingtheSharesalreadypurchased).TheProposedShareBuy-BackmayhaveanimpactontheCompany’sdividendpolicyforthefinancialyearending31December2013asitwouldreducethecashavailablewhichmayotherwisebeusedfordividendpayments.Nonetheless,thetreasurysharespurchasedmaybedistributedasdividendstoshareholdersoftheCompany,iftheCompanysodecides.

AnydividendstobedeclaredbyViTroxinthefuturewoulddependon,inter-alia,theprofitabilityandcashflowpositionoftheGroup.

8. Implication of the Proposed Share Buy-Back Relating to the Malaysian Code on Take-overs and Mergers, 2010 ("Code")

PursuanttoParagraph10.1ofPracticeNote9oftheCode,amandatoryofferobligationariseswhen:-(a) aperson*obtainscontrolsinacompanyasaresultofabuybacksschemebythecompany;(b) aperson*(holdingmorethan33%butnotmorethan50%ofthevotingsharesorvotingrightsofacompany),

asaresultofabuybackschemebythecompany,increaseshisholdingofthevotingsharesorvotingrightsofthecompanybymorethan2%inanysix-monthperiod;

(c) aperson*(holdingmorethan33%butnotmorethan50%ofthevotingsharesorvotingrightsofacompany),acquiresmorethan2%ofthevotingsharesorvotingrightsofthecompanywhenheknowsorreasonablyoughtto know that the company would carry out a buy back scheme.

"aperson"includespersonsactinginconcert.

PursuanttotheCode,theaffectedSubstantialShareholderand/ortheGroupofPersonsActinginConcertmayapplyforawaiverfromtheobligationtomakeamandatoryofferfromtheSecuritiesCommissionundertheParagraph24.1ofPracticeNote9oftheCode.

TheBoardisawareoftherequirementsoftheCodeandwillbemindfuloftherequirementwhenmakinganypurchaseofViTroxSharespursuanttotheProposedShareBuy-Back.

9. Purchases made by the Company of its own shares in financial year ended 31 December 2012

The information on purchases made by the Company of its own shares during the financial year ended31December2012isassetoutonpage54ofthisannualreport.

10. Public Shareholding Spread

Asat2May2013,theRecordofDepositorsofViTroxshowedthat72,556,635Sharesrepresentingapproximately31.37% of the issued and paid-up share capital were held by the public shareholders. In this regard, the BoardundertakesthattheProposedShareBuy-BackwillbeconductedtotheextentthatthepublicshareholdingspreadofViTroxshallnotfallbelow25%oftheissuedandpaid-upsharecapitaloftheCompany(excludingtreasuryshares)atalltimesinaccordancewiththelawsandregulationsprevailingatthetimeofthepurchaseasstipulatedinParagraphs8.02(1)and12.14oftheBursaSecuritiesMainMarketListingRequirements(LR).



11. Directors’ Statement

TheBoardofDirectors,havingtakenintoconsiderationtherationalefortheProposedShareBuy-Back,isoftheopinionthatProposedShareBuy-BackisinthebestinterestoftheCompany.

12. Directors’ Recommendation

TheBoardrecommendsthatyouvoteinfavouroftheordinaryresolutionpertainingtotheProposedShareBuy-BacktobetabledattheforthcomingAGMtogiveeffecttotheProposedShareBuy-Back.

13. Further Information

ThereisnootherinformationconcerningtheProposedShareBuy-BackasshareholdersandotherprofessionaladviserswouldreasonablyrequireandexpecttofindintheStatementforthepurposeofmakinginformedassessmentastothemeritsofapprovingtheProposedShareBuy-Backandtheextentoftherisksinvolvedindoingso.



NOTICEISHEREBYGIVENthattheNinthAnnualGeneralMeetingoftheCompanywillbeheldattheAuditoriumofViTroxInnovationCentre,85A,LintangBayanLepas11,BayanLepasIndustrialPark,PhaseIV,11900BayanLepas,PenangonFriday,21June2013at10.30a.m.forthefollowingpurposes:-

A G E N D A

1. ToreceivetheAuditedFinancialStatementsfortheyearended31December2012togetherwiththereportsoftheDirectorsandAuditorsthereon.

(PleaserefertoNoteA)

2. TodeclarethefollowingDividendsfortheyearended31December2012:-

a) ASpecialDividendof0.75senpershareexemptfromIncomeTax; (Resolution1)

b) AFinalDividendof0.50senpershareexemptfromIncomeTax. (Resolution2)

3. ToapprovethepaymentofDirectors’FeeofuptoRM144,000forthefinancialyearending31December2013.

(Resolution3)

4. Tore-electthefollowingdirectorsretiringundertheArticle85oftheArticlesofAssociationoftheCompany,andwhobeingeligible,offeredthemselvesforre-election:-

a) SiawKokTong (Resolution4)

b) ChuahPoayNgee (Resolution5)

5. Tore-appointMessrs.CroweHorwathasAuditorsoftheCompanyfortheensuingyearandtoauthorisetheDirectorstofixtheirremuneration.

(Resolution6)

6.

a)

ASSPECIALBUSINESSES

Toconsiderandifthoughtfit,topassthefollowingresolution:-

ORDINARYRESOLUTIONS

AuthoritytoIssueShares

“ThatpursuanttoSection132DoftheCompaniesAct,1965andapprovalsfromtheBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)andotherrelevantgovernmental/regulatoryauthoritieswheresuchauthorityshallbenecessary,theBoardofDirectorsbeauthorisedtoissueandallotsharesintheCompanyfromtimetotimeuntiltheconclusionofthenextAnnualGeneralMeetinganduponsuch termsandconditionsand for suchpurposesastheBoardofDirectorsmay,initsabsolutediscretion,deemfitprovidedthattheaggregatenumberofsharestobeissuedshallnotexceedtenpercentum(10%)oftheissuedsharecapital(excludingtreasuryshares)oftheCompanyforthetimebeing,andthattheBoardofDirectorsbeempoweredtoobtaintheapprovalforthelistingofandquotationfortheadditionalsharessoissuedontheBursaSecurities.”

(Resolution7)

NOTICE OF ANNUAL GENERAL MEETING


6. ASSPECIALBUSINESSES(cont'd)

b) RenewalofAuthoritytoPurchaseitsownShares

“ThatsubjecttotheCompaniesAct,1965,provisionsoftheCompany’sMemorandumandArticlesofAssociation (“M&A”) and the requirementsof theBursa Securities andotherrelevantgovernmentalandregulatoryauthoritieswheresuchauthorityshallbenecessary,theBoardofDirectorsbeauthorisedtopurchaseitsownsharesthroughBursaSecurities,subjecttothefollowing:-

i) ThemaximumaggregatenumberofshareswhichmaybepurchasedbytheCompanyshallnotexceedtenpercentum(10%)oftheissuedandpaid-upordinarysharecapitaloftheCompanyatanypointintime;

ii) ThemaximumfundtobeallocatedbytheCompanyforthepurposeofpurchasingtheCompany’ssharesshallnotexceedtheretainedprofitsandsharepremiumaccountoftheCompany.Asatthelatestfinancialyearended31December2012,theauditedretainedprofitsandsharepremiumaccountoftheCompanystoodatRM4,520,382andRM4,662,738respectively;

iii) The authority conferred by this resolution will be effective immediately upon thepassingofthisresolutionandshallcontinuetobeinforceuntiltheconclusionofthenextAGMoftheCompany,atwhichtimeitshalllapseunlessbyordinaryresolutionpassed at thatmeeting, the authority is renewed either unconditionally or subjecttoconditionsortheexpirationoftheperiodwithinwhichthenextAGMisrequiredby law to be held or unless revoked or varied by ordinary resolution passed by the shareholdersinageneralmeeting,whicheveroccursfirst;

iv) Uponcompletionofthepurchase(s)ofthesharesbytheCompany,thesharesshallbedealtwithinthefollowingmanner:-

• tocancelthesharessopurchased;or• toretainthesharessopurchasedintreasuryfordistributionasdividendtothe

shareholdersand/orresellonthemarketoftheBursaSecuritiesorsubsequentlycancelled;or

• retainpartofthesharessopurchasedastreasurysharesandcanceltheremainder.

TheDirectorsoftheCompanybeandareherebyauthorisedtotakeallsuchstepsasarenecessary and entering into all other agreements, arrangements and guarantees withanypartyorparties to implement, finaliseandgive fulleffect to theaforesaidpurchasewithfullpowerstoassenttoanyconditions,modifications,revaluations,variationsand/oramendments,ifany,asmaybeimposedbytherelevantauthoritiesfromtimetotimetoimplementortoeffectthepurchaseofitsownsharesinaccordancewiththeCompaniesAct,1965,provisionsoftheCompany’sM&A,therequirementsoftheBursaSecuritiesandanyotherregulatoryauthorities,andotherrelevantapprovals.”

(Resolution8)

c) SPECIALRESOLUTION

ProposedAlterationtotheArticlesofAssociation

“ThattheProposedAlterationtotheArticlesofAssociationoftheCompanyassetoutintheAppendixAattachedtogetherwiththeAnnualReport2012beandareherebyapproved.”

(Resolution9)



7. TotransactanyotherbusinessofwhichduenoticeshallhavebeengiveninaccordancewiththeCompaniesAct,1965.

ByOrderoftheBoardHOWWEELING(MAICSA7033850)OOIEANHOON(MAICSA7057078)Secretaries

PenangDate:30May2013

NOTES:

A. This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 and the Company’s Articles of Association do not require a formal approval of the shareholders and hence, is not put forward for voting.

Proxy

1. For the purpose of determining a member who shall be entitled to attend and vote at the AGM, the Company shall be requesting the Record of Depositors as at 17 June 2013. Only a depositor whose name appears on the Record of Depositors as at 17 June 2013 shall be entitled to attend, speak and vote at the said meetings as well as for appointment of proxy(ies) to attend and vote on his/her stead.

2. A member shall be entitled to appoint more than two (2) proxies to attend and vote at the same meeting. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

The instrument appointing a proxy shall be in writing, executed by or on behalf of the appointor. In the case of a corporate member, the instrument appointing a proxy must be either under its common seal or under the hand of its officer or attorney duly authorised.

The instrument appointing a proxy must be deposited at the Registered Office, 57-G Persiaran Bayan Indah, Bayan Bay, Sungai Nibong, 11900 Penang, Malaysia at least 48 hours before the time for holding the Meeting or any adjournments thereof.

Explanatory Note On Special Business:

1. ResolutionpursuanttotheAuthoritytoissueShares

TheproposedResolutionNo.7[Item6(a)], ifpassed,willgrantarenewedgeneralmandate(Mandate2013)andempowertheDirectorsof theCompanyto issueandallotsharesuptoanamountnotexceeding in total tenpercentum(10%)oftheissuedsharecapitaloftheCompanyfromtimetotimeandforsuchpurposesastheDirectorsconsiderwouldbe in the interestof theCompany. Inorder toavoidanydelayandcosts involved inconveningageneralmeeting,itisthusappropriatetoseekshareholders’approval.Thisauthoritywill,unlessrevokedorvariedbytheCompanyingeneralmeeting,expireatthenextAnnualGeneralMeetingoftheCompany.



Explanatory Note On Special Business: (cont'd)

1. ResolutionpursuanttotheAuthoritytoissueShares(cont'd)

TheMandate2013willprovideflexibilitytotheCompanyforallotmentofsharesforanypossiblefundraisingactivities,includingbutnotlimitedforfurtherplacingofshares,forthepurposeoffundingfutureinvestment(s),acquisition(s)and/orworkingcapital.

AsatthedateofthisNotice,theCompanydidnotissueanysharespursuanttothemandategrantedtotheDirectorsat the Eighth Annual GeneralMeeting. The Company did not issue any share pursuant to themandate grantedbecausetherewasnoinvestment,acquisitionorworkingcapitalthatrequiredfundraisingactivity.

2. ResolutionpursuanttotheAuthoritytoPurchaseitsownShares

TheproposedResolutionNo.8[Item6(b)],ifpassed,willgivetheDirectorsoftheCompanyauthoritytopurchaseitsownsharesuptotenpercentum(10%)oftheissuedandpaid-upsharecapitaloftheCompany.Inordertoavoidanydelayandcostsinvolvedinconveningageneralmeeting,it isthusappropriatetoseekshareholders’approval.Thisauthority,unlessrevokedorvariedbytheshareholdersoftheCompany ingeneralmeeting,willexpireattheconclusionofthenextAnnualGeneralMeeting.

3. ResolutionpursuanttotheAlterationtotheArticlesofAssociation

TheproposedResolution9[Item6(c)]ismadetocomplywiththeprovisionsoftheBursaMalaysiaSecuritiesBerhadMainMarketListingRequirements.FurtherinformationontheProposedAlterationtotheArticlesofAssociationoftheCompanyissetoutintheAppendixAattachedtotheAnnualReport2012.



NOTICEISHEREBYGIVENthatthefollowingDividendsfortheyearended31December2012,ifapproved,willbepaidon24July2013todepositorsregisteredintheRecordsofDepositorson26June2013:-

a) ASpecialDividendof0.75senpershareexemptfromIncomeTax;andb) AFinalDividendof0.50senpershareexemptfromIncomeTax.

ADepositorshallqualifyforentitlementtotheDividendsinrespectof:-

a) sharestransferredintotheDepositor’sSecuritiesAccountbefore4.00p.m.on26June2013inrespectofordinarytransfers;

b) sharesboughtontheBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)onacumentitlementbasisaccordingtotherulesofBursaSecurities.

ByOrderoftheBoard,

HOWWEELING (MAICSA7033850)OOIEANHOON (MAICSA7057078)Secretaries

PenangDate:30May2013

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT


APPENDIX A

Proposed Alteration to the Articles of Association of the Company

1. THATArticle2oftheCompany’sArticlesofAssociationbealteredbydeletinginfulltheundermentionedDefinitionandsubstitutedinlieuthereofwiththenewDefinition(whereapplicable)assetoutbelow:-

Existing Definitions New Definition

“Approved Market Place” - a stock Exchange which isspecifiedtobeanapprovedmarketplace intheSecuritiesIndustry (Central Depositories) (Exemption) (No.2) Order,1998.

Deleted

“Listing Requirements” - The Listing Requirements of theExchange for theMESDAQMarket as amended,modifiedandsupplementedfromtimetotime.

“Listing Requirements” - The Listing RequirementsoftheExchangefortheMainMarketasamended,modifiedandsupplementedfromtimetotime.

“Securities” -Anydebenture,note, stockandshare in theCompanyandincludesanyrightoroptioninrespectthereofand any interest in a unit trust scheme.

“Securities”-hasthemeaninggiveninsection2(1)oftheCapitalMarketsandServicesAct2007.”

2. THATtheexistingArticle4(c)oftheArticlesofAssociationbedeletedinitsentiretyandsubstitutedinlieuthereofwiththefollowing:-

“NoDirectorshallparticipateinashareissuanceschemeunlessshareholdersingeneralmeetinghaveapprovedthespecificallotmenttobemadetosuchDirector.”

3. THATtheword“accounts”asappearedinArticles5(2),63,135,144and158oftheCompany’sArticlesofAssociationrespectively,tobeamendedas“financialstatements“accordingly.

4. THATtheexistingArticle15oftheArticlesofAssociationtobeamendedfrom:-

“TheCompanyshallhaveafirstandparamountlienoneveryshareanddividendfromtimetotimedeclaredinrespectofsuchshareforallunpaidcallsandinstalmentsuponthespecificsharesinrespectofwhichsuchmoneysaredueandunpaid,iftheshareswereacquiredunderanemployee share option scheme,amountswhichareowedtotheCompanyforacquiringthemandtosuchamountsastheCompanymaybecalleduponbylawtopayandhaspaidinrespectofthesharesoftheholderordeceasedformerholder,theCompanyshallbeentitledtochargeinterestthereon,nothigherthantheoverdraftratechargedforthetimebeingbytheCompany’sprincipalbankersorsuchotherreasonablerateastheDirectorsmaydetermine.TheDirectorsmayatanytimedeclareanysharetobewhollyorinpartexemptfromtheprovisionsofthisArticle.”

to:

“TheCompanyshallhaveafirstandparamountlienoneveryshareanddividendfromtimetotimedeclaredinrespectofsuchshareforallunpaidcallsandinstalmentsuponthespecificsharesinrespectofwhichsuchmoneysaredueandunpaid,iftheshareswereacquiredunderanemployee share issuance scheme,amountswhichareowedtotheCompanyforacquiringthemandtosuchamountsastheCompanymaybecalleduponbylawtopayandhaspaidinrespectofthesharesoftheholderordeceasedformerholder,theCompanyshallbeentitledtochargeinterestthereon,nothigherthantheoverdraftratechargedforthetimebeingbytheCompany’sprincipalbankersorsuchotherreasonablerateastheDirectorsmaydetermine.TheDirectorsmayatanytimedeclareanysharetobewhollyorinpartexemptfromtheprovisionsofthisArticle.”



“ThetransferofanylistedSecuritiesorclassoflistedSecuritiesoftheCompany,shallbebywayofbookentrybytheBursaDepositoryinaccordancewiththeRulesand,notwithstandingsections103and104oftheAct,butsubjecttosubsection107C(2)oftheActandanyexemptionthatmaybemadefromcompliancewithsubsection107C(1)oftheAct,theCompanyshallbeprecludedfromregisteringandeffectinganytransferofsuchlistedSecurities.”

to:

“ThetransferofanylistedSecurityorclassoflistedSecurityoftheCompany,shallbebywayofbookentrybytheBursaDepositoryinaccordancewiththeRulesand,notwithstandingSections103and104oftheAct,butsubjecttoSection107C(2)oftheActandanyexemptionthatmaybemadefromcompliancewithSection107C(1)oftheAct,theCompanyshallbeprecludedfromregisteringandeffectinganytransferofsuchlistedSecurity.”


“Intheeventthat:-

(a) theSecuritiesarelistedonanApprovedMarketPlace;and(b) theCompanyisexemptedfromcompliancewithsection14oftheCentralDepositoriesActorsection29ofthe

SecuritiesIndustry(CentralDepositories)(Amendment)(No.2)Act,1998,asthecasemaybe,undertheRulesinrespectofsuchSecurities,

theCompanyshall,upontherequestofasecuritiesholder,permitatransmissionofSecuritiesheldbysuchsecuritiesholderfromtheregisterofholdersmaintainedbytheRegistraroftheCompanyinthejurisdictionoftheApprovedMarketPlace(hereinafterreferredtoas“theForeignRegister”),totheregisterofholdersmaintainedbytheregistraroftheCompanyinMalaysia(hereinafterreferredtoas“theMalaysianRegister”)providedthatthereshallbenochangeinownershipofsuchSecurities.”

to:

“Where:-(a) theSecuritiesoftheCompanyarelistedonanotherstockexchange;and(b) theCompanyisexemptedfromcompliancewithsection14oftheCentralDepositoriesActorsection29ofthe

SecuritiesIndustry(CentralDepositories)(Amendment)Act1998,asthecasemaybe,undertheRulesinrespectofsuchSecurities,

theCompanyshall,uponrequestofasecuritiesholder,permita transmissionofSecuritiesheldbysuchsecuritiesholderfromtheregisterofholdersmaintainedbytheregistrarofthecompanyinthejurisdictionoftheotherstockexchange,totheregisterofholdersmaintainedbytheregistrarofthecompanyinMalaysiaandviceversaprovidedthatthereshallbenochangeintheownershipofsuchSecurities.”

7. THATtheexistingArticle37oftheArticlesofAssociationasfollows:-

“TheCompanyshallnotallowanytransmissionofSecuritiesfromtheMalaysianRegistertotheForeignRegister.”

to be deleted in its entirety.

APPENDIX A



“IneverynoticecallingameetingoftheCompanythereshallappearwithreasonableprominence,astatementthataMemberentitledtoattendandvoteisentitledtoappointtwo(2)ormoreproxiestoattendandvoteinhisstead,andthataproxymaybutneednotbeaMemberoraqualifiedlegalpractitioneroranapprovedcompanyauditororapersonapprovedbytheRegistrarandtheprovisionsofSection149(1)(b)oftheActshallnotapplytotheCompany.WhereaMemberappointstwo(2)ormoreproxies,heshallspecifytheproportionofhisholdingstoberepresentedbyeachproxy,failingwhichtheappointmentshallbeinvalid.WhereaMemberisanauthorisednomineeasdefinedundertheCentralDepositoriesAct1991,itmayappointatleastoneproxyinrespectofeachsecuritiesaccountitholdswithordinarysharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.”

to:

“IneverynoticecallingameetingoftheCompanythereshallappearwithreasonableprominence,astatementthataMemberentitledtoattendandvoteisentitledtoappointtwo(2)ormoreproxiestoattendandvoteinhisstead,andthataproxymaybutneednotbeaMemberoraqualifiedlegalpractitioneroranapprovedcompanyauditororapersonapprovedbytheRegistrarandtheprovisionsofSection149(1)(b)oftheActshallnotapplytotheCompany.WhereaMemberappointstwo(2)ormoreproxies,heshallspecifytheproportionofhisholdingstoberepresentedbyeachproxy,failingwhichtheappointmentshallbeinvalid.A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the Member to speak at the meeting. Where a Member is an authorised nomineeasdefinedundertheCentralDepositoriesAct,itmayappointatleastoneproxyinrespectofeachsecuritiesaccountitholdswithordinarysharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.”

9. THATthefollowingbeinsertedasArticle64AoftheArticlesofAssociation:-

“(1) Whereamemberofthecompanyisanexemptauthorisednomineewhichholdsordinarysharesinthecompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorizednomineemayappointinrespectofeachomnibusaccountitholds.

(2) An exempt authorisednominee refers to an authorisednomineedefinedunder theCentralDepositoriesActwhichisexemptedfromcompliancewiththeprovisionsofsubsection25A(1)ofCentralDepositoriesAct.”

APPENDIX A


Thispageintentionallyleftblank

PROXY FORM 127ViTrox Corporation Berhad(649966-K)

Noofordinarysharesheld

I/We, of beingaMemberoftheaboveCompanyherebyappoint(Proxy1) ___________________of ______________________ and*/orfailinghim*(Proxy2), of and*/orfailinghim*,theChairmanoftheMeeting,asmy/ourproxy(ies),tovoteforme/usonmy/ourbehalfattheNINTHANNUALGENERALMEETINGof theCompany to be held at theAuditoriumofViTrox InnovationCentre, 85A,LintangBayanLepas11,BayanLepasIndustrialPark,PhaseIV,11900BayanLepas,PenangonFriday,21June2013at10.30a.m.andatanyadjournmentthereofasindicatedbelow:-

Theproportionsofmy/ourholdingstoberepresentedbymy/ourproxy(ies)areasfollows:-

Proxy1 - % Incaseofavotebyshowofhands,Proxy1*/Proxy2*shallvoteonmy/ourbehalf.

Proxy2 - %

100%

* Strikeoutwhicheverisinapplicable

I/We hereby indicatewith an “X” in the spaces provided how I/wewishmy/our votes to be cast. (Unless otherwiseinstructed,theproxymayvote,ashethinksfit)

Resolutions For Against

1. TodeclareaSpecialDividendof0.75senpershareexemptfromIncomeTaxfortheyearended31December2012.

2. TodeclareaFinalDividendof0.50senpershareexemptfromIncomeTaxfortheyearended31December2012.

3. ToapprovethepaymentofDirectors’FeeofuptoRM144,000forthefinancialyearending31December2013.

Tore-electthefollowingdirectorsretiringundertheArticle85oftheArticlesofAssociationoftheCompany,andwhobeingeligible,offeredthemselvesforre-election:-

4. SiawKokTong5. ChuahPoayNgee

6. Tore-appointMessrs.CroweHorwathasAuditorsoftheCompanyfortheensuingyearandtoauthorisetheDirectorstofixtheirremuneration.

7.

SpecialBusinessOrdinaryResolutionsToapprovetheresolutionpursuanttoSection132DoftheCompaniesAct,1965.

8. ToapprovetheresolutionpursuanttoRenewalofAuthoritytoPurchaseitsownShares.

9.SpecialResolutionToapprovetheProposedAlterationtotheArticlesofAssociationoftheCompanyassetoutintheAppendixAattachedtogetherwiththeAnnualReport2012.

SignatureofMember:……………………..…………….. Signedthis:….........………………………..............……

Notes

1. For the purpose of determining a member who shall be entitled to attend and vote at the AGM, the Company shall be requesting the Record of Depositors as at 17 June 2013. Only a depositor whose name appears on the Record of Depositors as at 17 June 2013 shall be entitled to attend, speak and vote at the said meetings as well as for appointment of proxy(ies) to attend and vote on his/her stead.

2. A member shall be entitled to appoint more than two (2) proxies to attend and vote at the same meeting. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

The instrument appointing a proxy shall be in writing, executed by or on behalf of the appointor. In the case of a corporate member, the instrument appointing a proxy must be either under its common seal or under the hand of its officer or attorney duly authorised.

The instrument appointing a proxy must be deposited at the Registered Office, 57-G Persiaran Bayan Indah, Bayan Bay, Sungai Nibong, 11900 Penang, Malaysia at least 48 hours before the time for holding the Meeting or any adjournments thereof.

AnnualReport2012

TheCompanySecretariesVITROX CORPORATION BERHAD

(Company No. 649966-K)57-G,PersiaranBayanIndahBayanBay,SungaiNibong

11900Penang.

Stamp

Fold along this line

Fold along this line

ViTrox Corporation Berhad (649966-K)No.85-A,LintangBayanLepas11,BayanLepasIndustrialPark,Phase4,11900BayanLepas,Penang,Malaysia.Tel:6046466227Fax:6046466327

ViTrox Vision LabGroundFloor,FacultyofComputingandInformatics,MultimediaUniversity,63100Cyberjaya,Selangor.Tel:60383125451

China DivisionViTroxTechnologies(Suzhou)Co.Ltd.No.5XingHanStreet,BlockA,#06-16TSC2,RoomD2,SectionAIndustrialParkSuzhou,China215021.Tel:8651262519891Fax:8651262519892

ViTrox USA1460KollCircleSuiteA,SanJose,CA95112,USA.Tel:19704813663

Email:[email protected]

www.vitrox.com

Documents

Moving Forward Accountability - malaysiastock.biz believe thinking “outside the box” leads to innovation. ... is the Chairman of the Executive Committee and a member of the Remuneration