Kian Joo Can Factory Be rhad - Tin Can Manufacturer · CORPORATESTRUCTURE ANNUAL REPORT 2005 3 100% Bintang Seribu Sdn. Bhd. 100% Great Asia Tin Cans Factory Company Sdn. Bhd. 100%

(3186-P)(INCORPORATED IN MALAYSIA)

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K i a n J o o C a n F a c t o r y B e r h a d (3186-p)

L o t 1 0 , J a l a n P e r u s a h a a n 1

6 8 1 0 0 B a t u C a v e s

S e l a n g o r D a r u l E h s a n , M a l a y s i a

T + 6 0 3 6 1 8 9 6 3 2 2 F + 6 0 3 6 1 8 9 8 1 8 5

FIVE YEAR FINANCIAL HIGHLIGHTS

2005 2004 2003 2002 2001RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 654,957 575,684 505,068 479,091 494,028

Profit Before Taxations 69,594 56,510 52,492 38,641 41,907

Profit After Taxation And 51,333 49,786 46,039 27,499 30,183 Minority Interest

Dividend Rate 20% 20% 20% 20% 20%

Dividend Net 18,005 17,722 17,451 11,574 11,572

Paid-up Capital 90,709 88,737 87,878 86,831 57,860

Shareholders’ Equity 598,633 556,802 521,019 488,228 493,639

Total Tangible Assets 933,215 823,881 749,151 738,780 723,154

Total Borrowings 209,658 141,279 119,877 150,345 142,468

Earning Per Share (Sen) 28.61 28.14 26.41 15.84 17.39 *

Net Assets Backing Per Share+ 3.30 3.14 2.96 2.81 2.84 *

Borrowings/Shareholders’ Equity (%) 35% 25% 23% 31% 29%

* Based on enlarged capital after 1:2 bonus issue in 2002.+ Based on share capital at the year end.

2005 69,594

2004 56,510

2003 52,492

2002 38,641

2001 41,907

2005 51,333

2004 49,786

2003 46,039

2002 27,499

2001 30,183

2005 933,215

2004 823,881

2003 749,151

2002 738,780

2001 723,154

2005 654,957

2004 575,684

2003 505,068

2002 479,091

2001 494,028

(RM’000) (RM’000)

(RM’000) (RM’000)

PROFIT BEFORE TAXATIONS PROFIT AFTER TAXATION AND MINORITY INTEREST

TOTAL TANGIBLE ASSETS REVENUE

CONTENTS

A N N U A L R E P O R T 2 0 0 5 1

Corporate Information 2

Corporate Structure 3

Profile of Directors 4

Statement of Corporate Governance 8

Responsibility Statement by The Board of Directors 12

Chairman's Statement 13

Audit Committee Report 15

Other Information 18

Statement of Internal Control 19

Financial Statements 21

List of Properties 79

Analysis of Shareholdings 81

Notice of Annual General Meeting 84

Statement Accompanying Notice of Annual General Meeting 86

Proxy Form

CORPORATE INFORMATION

K I A N J O O C A N F A C T O R Y B E R H A D (3186-P)2

AUDITORS

Ernst & YoungChartered Accountants

REGISTERED OFFICE

Lot 10 Jalan Perusahaan 168100 Batu CavesSelangor Darul EhsanTel : 03-6189 6322Fax : 03-6189 8185

SOLICITORS

Shearn Delamore & Co.7th Floor, Wisma Hamzah Kwong Hing1, Leboh Ampang50100 Kuala Lumpur

Shook Lin & Bok20th Floor, AmBank Group Building55, Jalan Raja Chulan50200 Kuala Lumpur

Wan Nadhri Tan 18-1, 1st FloorJalan Kampung Attap50460 Kuala Lumpur

Koh & AssociatesSuite 15-07, 15th FloorWisma Zelan1, Jalan Tasik Permaisuri 2Bandar Tun Razak56000 Kuala Lumpur

BANKERS / FINANCIAL COMPANIES / FINANCIAL INSTITUTIONS

AmBank BerhadBumiputra-Commerce Bank BerhadCitibank BerhadHSBC Bank Malaysia BerhadMalaysia Building Society BerhadOCBC Bank (Malaysia) BerhadPublic Bank BerhadRHB Bank Berhad

REGISTRARS

Symphony Share Registrars Sdn Bhd Level 26, Menara Multi-PurposeCapital SquareNo 8 Jalan Munshi Abdullah50100 Kuala LumpurTel : 03-2721 2222Fax : 03-2721 2530/1

DIRECTORS

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar(Chairman/Independent Non-Executive Director)

Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar(Independent Non-Executive Director)

Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah(Independent Non-Executive Director)

Dato’ See Teow Chuan(Managing Director)

Dato’ Anthony See Teow Guan(Executive Director)

See Teow Koon(Executive Director)

See Tiau Kee(Executive Director)

Dato’ Haji Ismail Bin Lebai Kamat(Independent Non-Executive Director)

Rick Loh Lap Sang(Independent Non-Executive Director)

AUDIT COMMITTEE

Dato’ Haji Ismail Bin Lebai Kamat(Chairman)

Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah

Rick Loh Lap Sang

REMUNERATION COMMITTEE

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar(Chairman)

Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah

Dato’ Haji Ismail Bin Lebai Kamat

NOMINATION COMMITTEE

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar(Chairman)

Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar

Dato’ Haji Ismail Bin Lebai Kamat

SECRETARY

Chia Kwok Why (MAICSA 7005833)

CORPORATE STRUCTURE

A N N U A L R E P O R T 2 0 0 5 3

100% Bintang Seribu Sdn. Bhd.

100% Great Asia Tin Cans FactoryCompany Sdn. Bhd.

100% Box-Pak (Vietnam) Co., Ltd.

100% Box-Pak (Johore) Sdn. Bhd.

100% Kian Joo Packaging Sdn. Bhd.

100% KJM Aluminium Can Sdn. Bhd.

100% Federal Metal Printing Factory Sdn. Bhd.

100% Metal-Pak (M) Sdn. Bhd.

100% KJ Can (Selangor) Sdn. Bhd.

100% KJ Can (Johore) Sdn. Bhd.

100% Kian Joo Can (Vietnam) Co., Ltd.

100% Kian Joo Canpack Sdn. Bhd.

100% Kian Joo Canpack (Shah Alam) Sdn. Bhd.

100% Multi-Pet Sdn. Bhd.

100% Indastri Kian Joo Sdn. Bhd.

100% Canco Engineering & Machinery Sdn. Bhd.

54.83% Box-Pak (Malaysia) Berhad

50% Kian Joo-Visypak Sdn. Bhd.

(INCORPORATED IN MALAYSIA) (3186-P)

19%

81%

PROFILE OF DIRECTORS


Y.A.M. TUNKU NAQUIYUDDIN IBNI TUANKU JA’AFAR

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar, aged 59, a Malaysian, is the Chairman of the Company. He was appointed to the Board on 30 November 1999. He is also the Chairman of Remuneration and Nomination Committee.

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar read International Politics at the University College of Wales in Aberystwyth and graduated with a Bachelor of Science degree with Honours in Economics from the same college.Tunku served in the Ministry of Foreign Affairs and was posted as the 2nd Secretary with the Malaysian Embassy in Paris. Tunku later headed Antah Holdings Berhad as its Chairman, a position held till today, which was vacated fora 5 year period during his tenure as the Regent of Negeri Sembilan from 1994 to 1999. Tunku was also a CouncilMember of the Business Council for Sustainable Development, a Geneva-based organization, Founder and Head of the Federation of Public Listed Companies, Council Member of the Canada-ASEAN Center and CommitteeMember of the Kuala Lumpur Stock Exchange.

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar presently sits on the Boards of Antah Holdings Berhad andMalayawata Steel Berhad.

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar is the brother of Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar.

Y.A.M. TUNKU DATO’ SERI NADZARUDDIN IBNI TUANKU JA’AFAR

Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar, aged 46, a Malaysian, is an Independent Non-ExecutiveDirector of the Company. He was appointed to the Board on 1 June 1994. He is also a member of NominationCommittee. He holds a Bachelor of Science (Honours) degree in Mathematics.

From 1982 to 1983, Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar worked with BritishTelecommunications in London. In 1985, he joined ESSO Production Malaysia Inc. (EPMI) as System Analyst andhe was there until March 1988.

He then left EPMI to become the General Manager of Asia-Pacific Videolab Sdn Bhd until April 1990. In May 1990,he joined Antah Holdings Berhad as Executive Assistant to the Managing Director and in September 1996, was appointed as Director of Antah Holdings Berhad until 22 May 2000. In December 1992, he was appointed as an Executive Director of Hwang-DBS (Malaysia) Berhad. In 1 June 1994, he was appointed as Chairman of Box-Pak (Malaysia) Berhad, a subsidiary company of Kian Joo Can Factory Berhad.

Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar is the Patron and Past President of Persatuan Broker NiagaHadapan Malaysia (Malaysia Futures Brokers Association).

Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar is the brother of Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar.

PROFILE OF DIRECTORS (cONT’D)

A N N U A L R E P O R T 2 0 0 5 5

Y.A.M. RAJA DATO’ SERI ASHMAN SHAH IBNI SULTAN AZLAN SHAH

Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah, aged 47, a Malaysian, is an Independent Non-ExecutiveDirector. He was appointed to the Board on 24 April 1986. He is also a member of Audit and RemunerationCommittee of the Company.

Raja Dato’ Seri Ashman Shah graduated from the University of Nottingham, United Kingdom, with a B.A. in Economics in 1981. In 1982, he obtained a Postgraduate Diploma-in-Law at Westminster University, London andthe following year completed the Bar at Lincoln’s Inn, London. Thereafter he obtained his Masters Degree in Law(L.L.M.) at the University of Cambridge, United Kingdom.

Raja Dato’ Seri Ashman Shah is also a Non-Executive Director of KKB Engineering Berhad. He was an ExecutiveDirector of Kanzen Berhad (formerly known as Dreamland Berhad) from 1986 to 1992.

He does not have any family relationship with any director and/or major shareholder of Company.

DATO’ SEE TEOW CHUAN

Dato’ See Teow Chuan, aged 65, a Malaysian, is the Managing Director of the Company. He was appointed to theBoard on 30 October 1966. He has been with Kian Joo Can Factory Berhad for more than 40 years and has acquired extensive experience and knowledge in can manufacturing and carton manufacturing business. He assumesan active role in the formulation and implementation of the corporate strategy of the Company.

He is the Executive Director of Box-Pak (Malaysia) Bhd since 1975 and also sits on the Board of several private limited companies.

Dato’ See Teow Chuan, Dato’ Anthony See Teow Guan, Mr See Teow Koon and Mr See Tiau Kee are brothers.

DATO’ ANTHONY SEE TEOW GUAN

Dato’ Anthony See Teow Guan, aged 60, a Singaporean, is an Executive Director of the Company. He was appointed to the Board on 1 January 1972. He completed his Senior Cambridge education in Singapore and movedimmediately to Malaysia to work with the Company.

He has over 35 years of experience in the packaging industry. In 1974, he initiated the set up of Box-Pak (Malaysia)Bhd, a subsidiary company of Kian Joo Can Factory Berhad, and serves as the Managing Director. It was listed on theKuala Lumpur Stock Exchange main board in 1996.

In 1993, he was awarded the “Manager of the Year 1992” by Harvard Business School Alumni Club of Malaysia.

He was the President of the Malaysian Tin Can Manufacturers Association (MTCMA) until June 2004. He also sitson the Board of several private limited companies.

Dato’ Anthony See Teow Guan, Dato’ See Teow Chuan, Mr See Teow Koon and Mr See Tiau Kee are brothers.



SEE TEOW KOON

Mr See Teow Koon, age 56, a Malaysian, is an Executive Director of the Company. He was appointed to the Board on 8 October 1974.

He completed his technical studies in Singapore Institute of Technology and in 1967, he furthered his studies in Japanspecializing in metal printing and can manufacturing. Subsequently in 1970 he was appointed as Factory Manager of the Company.

He has over 35 years of experience in the packaging industry in particular metal printing and can manufacturing. He is the Executive Director of Box-Pak (Malaysia) Berhad, since 1983. He also sits on the Board of several privatelimited companies.

Mr See Teow Koon, Dato’ See Teow Chuan, Dato’ Anthony See Teow Guan and Mr See Tiau Kee are brothers.

SEE TIAU KEE

Mr See Tiau Kee, aged 51, a Malaysian, is an Executive Director of the Company. He was appointed to the Board on 15 September 1982.

He started his career as a Quality Executive in Metal-Pak (Malaysia) Sdn. Bhd., a wholly owned subsidiary of theCompany. Subsequently he was promoted to Production Manager in some of the subsidiary companies of Kian JooCan Factory Berhad. He has vast experience in can manufacturing operations and has served the Company for over25 years.

He is the Executive Director of Box-Pak (Malaysia) Berhad since 1983 and also sits on the Board of several privatelimited companies.

Currently he is the President of the Malaysian Tin Can Manufacturers Association (MTCMA).

Mr See Tiau Kee, Dato’ See Teow Chuan, Dato’ Anthony See Teow Guan and Mr See Teow Koon are brothers.


A N N U A L R E P O R T 2 0 0 5 7

DATO’ HAJI ISMAIL BIN LEBAI KAMAT

Dato’ Haji Ismail bin Lebai Kamat, aged 66, a Malaysian, is an Independent Non-Executive Director of the Company.He was appointed to the Board on 9 January 2001. He is also the Chairman of the Audit Committee and member of the Remuneration and Nomination Committee.

He started his career as an Audit Manager with a Chartered Accountant firm, Anderson Shackle & Co, in Melbourne,Australia until 1972. Upon his return to Malaysia, he joined Bank Rakyat (Malaysia) Bhd as Manager of Corporate Affairs.

He was the Chairman of Roxy Electronic Industries (M) Berhad. (now known as Technology Resources Berhad) and Air Hitam Tin Dredging (M) Bhd and was a director of FSBM Holdings Berhad. He was also the ExecutiveDirector of S & P Foods (M) Bhd and Chief Executive Director of HA Securities Sdn Bhd (now known as JupiterSecurities Sdn Bhd).

He was a Senior Partner in a Public Accountant firm, Moore Stephens, Ismail Chong & Associate (Public Accountants). He was a partner of the firm since 1990. He is a member of The Institute of CharteredAccountants in Australia, Malaysian Institute of Certified Public Accountants and Malaysian Institute of Accountants.

He does not have any family relationship with any director and/or major shareholder of the Company.

RICK LOH LAP SANG

Rick Loh Lap Sang, aged 54, a Malaysian, was appointed to the Board on 1 January 2004. He is an Independent Non-Executive Director. He is also a member of the Audit Committee.

He is a graduate in Accountancy and Marketing. Prior to joining the Company he was the Managing Director of Sony Music Entertainment (M) Sdn Bhd from 1985 to 2002. From 1982 to 1985, he was the Marketing Director of Socoil/Socma Corp Bhd and from 1972 to 1982 he was the Retail Group Manager of Fitzpatricks/Food Fair Sdn Bhd.

He does not have any family relationship with any director and/or major shareholder of the Company.

(Save as disclosed, none of the Directors has any conviction of offences within the past 10 years nor has any personal interestin any business arrangement involving the Company).

STATEMENT OF CORPORATE GOVERNANCE


The Board of Directors is committed in ensuring that the Group practices good Corporate Governance in line withthe Malaysian Code on Corporate Governance introduced in March 2000.

A) DIRECTORS

I. The Board

Decisions are made on issues relating to strategy, performance, resources and financial matters at Board’smeetings. The executive directors have vast experience in the packaging industries and are able to lead andguide the Group. A brief profile of each director is presented on pages 4 to 7.

During the year ended 31 December 2005, 4 Board Meetings were held. The following is the record ofattendance of the Board Members:

Directors No. of Meetings attended

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar - Chairman 3/4(Independent Non-Executive Director)

Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar 3/4(Independent Non-Executive Director)

Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah 4/4(Independent Non-Executive Director)

Dato’ See Teow Chuan 4/4(Managing Director)

Dato’ Anthony See Teow Guan 4/4(Executive Director)

See Teow Koon 4/4(Executive Director)

See Tiau Kee 4/4(Executive Director)

Dato’ Haji Ismail Bin Lebai Kamat 3/4(Independent Non-Executive Director)

Rick Loh Lap Sang 3/4(Independent Non-Executive Director)

A N N U A L R E P O R T 2 0 0 5 9

STATEMENT OF CORPORATE GOVERNANCE (cONT’D)

A) DIRECTORS (CONT’D)

In the intervals between Board meetings, decisions are made in the monthly management meetings held togetherwith the operating heads and the executive directors.

The Board is assisted by the following Board Committees:

1. Audit Committee

The Audit Committee was established on 30 June 1994. Please refer to the Audit Committee Report on pages 15 to 17.

2. Remuneration Committee

The Remuneration Committee was established on 19 November 2001 whose members are all non-executivedirectors. There was one (1) meeting held during the year which was attended by all the members.

Members

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar (Chairman)Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah (Independent Non-Executive Director)Dato’ Haji Ismail Bin Lebai Kamat (Independent Non-Executive Director/Audit Committee Chairman)

The Remuneration Committee shall recommend for the Board’s approval, the Executive Director’sremuneration package and to evaluate the effectiveness of the contributions made by each member of theBoard.

Directors’ fees are determined by the Board and are based on standard fixed fee and are subject to the approvalof shareholders at the Annual General Meeting.

Details of the number of Executive and Non-Executive Directors in remuneration bands of RM50,000 for the year ended 31 December 2005 are disclosed in the Statutory Accounts as Note 27 of the Notes to theFinancial Statements.

3. Option Committee

The Board has set up an Option Committee on 27 February 2002 to administer the ESOS which wasapproved by the shareholders at an Extra Ordinary General Meeting held on 31 January 2002.

Members

Dato’ Anthony See Teow Guan (Executive Director)Alice See Siew Choo (Group Financial Controller)See Soon Eng (Group Accounts Manager)

Key Responsibilities

The Option Committee is to administer the Employees’ Share Option Scheme (ESOS) in accordance withthe objectives and regulations as stated in the Bye-Laws.



II. Board Balance

The Board currently has 9 members, comprising 5 Non-Executive Directors and 4 Executive Directors. Out of the 9 Directors, 5 are Independent Directors which is in compliance with Para 15.02 of the ListingRequirements of BMSB.

The Chairman holds a Non Executive position and is primarily responsible for matters pertaining to theBoard and overall conduct of the Group.

The Executive Committee (Exco) comprising of Executive Directors and the Group Financial Controlleroversees the running of the Group and the implementation of the Board’s decisions and policies.

III. Appointments to the Board

The Nomination Committee was set up on 26 February 2003 to formalize procedures for appointments to the Board.

Members

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar (Chairman)Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar (Independent Non-Executive Director)Dato’ Haji Ismail Bin Lebai Kamat (Independent Non-Executive Director)

IV. Re-election

The Company’s Articles of Association provide that at least one third of the remaining Directors, save for theManaging Director, be subject to re-election by rotation at each Annual General Meeting. In compliance with the Listing Requirements of BMSB which came into force in 2001, the Managing Director will now also be required to submit himself for re-election by rotation. The amended Articles of Association which was approved by the shareholders at an Extra Ordinary General Meeting held on 31 January 2002 providesfor all Directors to submit themselves for re-election at least once every 3 years.

B) INVESTORS RELATIONS AND SHAREHOLDER COMMUNICATION

To ensure that the shareholders and investors are well informed of the Group, information is available to shareholders and investors through various disclosures and announcements made to the Bursa MalaysiaSecurities Berhad which includes the quarterly financial results, Annual Reports and where appropriate, Circulars and press releases. The quarterly results can be assessed through the BMSB website at http://announcements.bursamalaysia.com.

Key management personnel also hold discussion with analysts to provide information on the Group’s strategy,performance and major developments. A press briefing, attended by the Chairman, is also held after each Annual General Meeting.

Shareholders and the public can also access information on the Group’s background, products and financialperformance through the website at www.kianjoocan.com.my.

A N N U A L R E P O R T 2 0 0 5 11


C) ACCOUNTABILITY AND AUDIT

I. Financial Reporting

The Board takes responsibility for presenting a balanced and understandable assessment of the Group’soperations and prospects each time it releases its quarterly and annual financial statements to shareholders.The Audit Committee reviews the information to be disclosed to ensure its accuracy and adequacy.

A statement by Directors of their responsibilities in preparing the financial statements is set out on page 12of this Annual Report.

II. Internal Controls

The Directors recognize their responsibility for the Group’s system of internal controls and the need to reviewits effectiveness regularly in order to safeguard the Group’s assets and therefore shareholders’ investments in the Group. Since certain risks and threats are externally driven, unforeseen and beyond the Group’s control,the system can only provide reasonable assurance against misstatement or loss.

III. Relationship with Auditors

Ernst & Young, the external auditors report to the Audit Committee with respect to their audit on each year’sstatutory financial statements on matters that require their attention. The annual reappointment of auditorsis by shareholders, via an ordinary resolution at every Annual General Meeting.

D) COMPLIANCE WITH THE CODE

The Group has substantially complied with the Principles and Best Practices of the Code except as disclosed below:

a) Nomination of a Senior Independent Non-Executive Director

The Board does not consider it necessary to nominate a recognized Senior Independent Non-Executive Directorgiven the separation of the roles of Chairman who is a Non-Executive Director and the Managing Director.

b) Details of each director’s remuneration

The Board is of the view that the transparency and accountability aspects applicable to Directors’ Remunerationare appropriately served by the ‘band disclosure of RM 50,000’ as set out under Note 27 of the Notes to theFinancial Statements, which complies with the disclosure requirements under the Bursa Malaysia SecuritiesBerhad’s Listing Requirements.

RESPONSIBILITY STATEMENT BY THE BOARD OF DIRECTORS


Directors are legally responsible to prepare financial statements for each financial year which give a true and fair viewof the state of affairs of the Group and of the Company at the end of the financial year and of the results of the Groupand of the Company for the financial year then ended.

In preparing those financial statements, the directors have:

used appropriate accounting policies and applied them consistently;

made judgements and estimates that are reasonable and prudent;

stated whether applicable accounting standards have been followed, subject to any material departures disclosedand explained in the financial statements.

The Directors are responsible for ensuring that proper accounting records are kept and which disclose with reasonableaccuracy the financial position of the Group and of the Company and to enable them to ensure that the financialstatements comply with the Companies Act, 1965. They have a general responsibility for taking such steps as arereasonably open to them to safeguard the assets of the Group and of the Company, to prevent and detect fraud andother irregularities.

A N N U A L R E P O R T 2 0 0 5 13

cHAIRMAN’S sTATEMENT

It is my pleasure to report to you on behalf of the Board of Directors ofKian Joo Can Factory Berhad (Kian Joo), the Annual Report and AuditedFinancial Statement of the Group and the Company for the year ended31 December 2005.

FINANCIAL PERFORMANCE

During the year ended 31 December 2005, the Group’s revenue increased by 15% to RM654.96 million fromRM575.68 million recorded in 2004. The Group’s profit before tax also improved by 23% to RM69.594 million ascompared to RM56.510 million recorded in 2004. The Group’s after tax and minority interest was slightly higher by 3% to RM51.333 million as compared with RM49.786 achieved in 2004.

REVIEW OF OPERATIONS

The year 2005 had been a very difficult year for the Group and all its subsidiary companies. Due to higher energycosts almost all major raw material prices had escalated during 2005. Tinplate, plastic resin and aluminium prices wererecorded at the highest level together with other raw materials like copper wire (used for welding of cans), lacquer, can coating and ink also followed. Although there were some price adjustments, maximum recovery of price increasecould not be achieved.

All sectors of the packaging business for the Group showed improved results with the exception of the plastic divisionwhich still suffered a loss of RM4.24 million due to the high oil prices in the world market.

The contract packing division also encountered pre-operation losses of RM2.962 million. Kian Joo Visypak Sdn. Bhd., our 50% owned associated company, however showed a better performance as compared to 2004. This PET bottle operation will move to a brand new factory in Shah Alam in March 2006 and is anticipated to achievebetter result with new range of products introduced.

CORPORATE DEVELOPMENT

To position Kian Joo internationally as a world class manufacturer, the Group will be expanding regionally with newmanufacturing facilities in Thailand, Vietnam and Indonesia with the newly acquired ‘‘MICROFLEX” can makingtechnology. In line with this, a newly joint-venture company, KJO Systems Sdn. Bhd. was incorporated with a 50%/50% shareholdings between Kian Joo and Omnitech International Inc. of Colorado USA. This company willalso undertake to produce machines, parts and conveyors for future ‘‘ MICROFLEX ” lines. The first ‘‘MICROFLEX”line producing 2 piece DWI steel cans for sweetened condensed milk (SCM) will be in operation during the thirdquarter of 2006.

During the year 2005, the Group acquired two pieces of industrial land in Nilai 3 known as H.S. (D) 112402, P.T.No. 18086, Mukim Setul, Daerah Seremban, Negeri Sembilan and H.S. (D) 112401, P.T. No. 18085, Mukim Setul,Daerah Seremban, Negeri Sembilan for a total consideration of RM1,517,986.

cHAIRMAN’S sTATEMENT (cONT’D)


DIVIDENDS

The Board has recommended a final tax exempt dividend of 10% (5 sen per share) for approval of shareholders at the Annual General Meeting to be held on 13 June 2006. Together with the interim tax exempt dividend of 10%paid on 28 September 2005, the total dividend declared for financial year ended 31 December 2005 would be 20% (10 sen per share).

PROSPECT

With the continuous escalation of raw material prices particularly aluminium, it is expected margin for 2006 will beaffected accordingly. However, the Group is constantly improving its efficiency and reduce spoilages to cushion the impact.

Being the first to introduce the new ‘‘MICROFLEX” 2 piece DWI steel cans for food in this region, it is expected that the project will contribute positively to the future growth of the Group.

APPRECIATION

I would like to take this opportunity to thank our customers, suppliers, business associates and bankers for theirsupport and loyalty. The Board will also like to thank the Management and staff of the group for their dedicatedcommitment and hard work for the year.

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afarCHAIRMANDate: 21 April 2006

A N N U A L R E P O R T 2 0 0 5 15

AUDIT COMMITTEE REPORT

MEMBERSHIPS AND MEETINGS

The Audit Committee had 4 meetings during the year ended 31 December 2005. The members of the AuditCommittee and the record of their attendance are as follows:

Membership No. of Meetings attended

Dato’ Haji Ismail Bin Lebai Kamat - Chairman 4/4(Independent Non-Executive Director)

Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah 3/4(Independent Non-Executive Director)

Rick Loh Lap Sang 3/4(Independent Non-Executive Director)

TERMS OF REFERENCE

Composition Of Audit Committee

The Committee shall be appointed by the Board from its members and shall consist of not less than 3 members of whom a majority shall be independent directors. The Committee shall elect a chairperson from among its memberswho is not an executive director or employee of the company or any related company.

In this respect, the Board adopts the definition of “independent director” as defined under the Listing Requirementsof Bursa Malaysia Securities Berhad.

At least one member of the Audit Committee must be:

a) a member of the Malaysian Institute of Accountants (“MIA”); or

b) if he is not a member of the MIA, he must have at least 3 years of working experience and:

i) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or

ii) he must be a member of one of the associations of the accountants specified in Part II of the First Scheduleof the Accountants Act 1967; or

c) fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad.

In the event that a member of the Committee resigns, dies or for any other reason ceases to be a member with theresult that the number of members is reduced below 3, the Board of Directors shall, within 3 months of that event,appoint such number of new members as may be required to make up the minimum number of 3 members.

Terms of Membership

Members of the Committee shall be appointed for an initial term of 3 years after which they will be eligible for reappointment.

Meetings

The Committee shall meet at least three times a year. In addition, the chairperson shall convene a meeting of the Committee if requested to do so by any members, the management or the internal or external auditors to consider any matters within the scope and responsibilities of the Committee.

The minutes of the meetings of the Audit Committee shall be tabled at Board Meetings to inform the Board of the activities of the Audit Committee.

Attendance At Meetings

The group financial controller, the head of internal audit, and a representative of the external auditors shall normallyattend meetings. However, the Committee may invite any person to be in attendance to assist in its deliberations.

AUDIT COMMITTEE REPORT (cONT’D)


TERMS OF REFERENCE (CONT’D)

Secretary To Audit Committee

The company secretary shall be the secretary of the Committee and shall be responsible for drawing up the agenda in consultation with the chairperson. The agenda together with relevant explanatory papers and documents shall becirculated to committee members prior to each meeting. The secretary shall be responsible for keeping the minutes of the meeting of the Committee, circulating them to committee members and for ensuring compliance with theListing requirements of BMSB.

Quorum

A quorum shall consist of a majority of committee members who are non-executive directors.

Authority

The committee is authorized by the Board to investigate any activity within its terms of reference. It has free access to all information and documents it requires for the purpose of discharging its functions and responsibilities. The auditcommittee is also authorized to obtain outside legal or other independent professional advice as it considers necessary.

Duties and Responsibilities

The duties and responsibilities of the committee shall be:

a) to review the group’s quarterly and annual financial statements before submission to the Board. The review shallfocus on:

- any changes in accounting policies and practices- major judgemental areas- significant audit adjustments from the external auditors- the going concern assumption- compliance with accounting standards- compliance with stock exchange and legal requirements.

b) to review with the external auditors their plan, scope and nature of audit for the group.

c) to assess the adequacy and effectiveness of the systems of internal control and accounting control procedures of the group by reviewing the external auditors’ management letters and management response.

d) to hear from the external auditors problems and reservations arising from their interim and final audits.

e) to review the internal audit plan, consider the major findings of internal audit, fraud investigations and actionsand steps taken by management in response to audit findings.

f ) to review any related party transactions that may arise within the group.

g) to consider the appointment of the external auditors, the terms of reference of their appointment, and anyquestion of resignation or dismissal.

h) to undertake such other responsibilities as may be agreed to by the Committee and the Board.

i) to report to the Board its activities, significant results and findings.

A N N U A L R E P O R T 2 0 0 5 17

AUDIT COMMITTEE REPORT (cONT’D)

SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION AND THE AUDIT COMMITTEEDURING THE YEAR ENDED 31 DECEMBER 2005

Internal Audit Function

The Group has an internal audit department with the principal responsibility to undertake regular and systematicreviews of the systems of internal controls to provide reasonable assurance that such systems continue to operateeffectively and efficiently.

In attaining such objectives, the following activities were carried out by Internal Audit Department in 2005:

Conducted periodic checks to determine the extent of compliance with established policies, procedures andstatutory requirements.

Carried out ad-hoc investigations and special reviews requested by management.

Recommended improvements to the existing systems of controls by way of issuing audit reports to the appropriatelevel of management for corrective action improvements to be taken.

Taking corrective actions to continuously improve on the controls, processes and operations of the Group basedon feedback from management and recommendations from external auditor.

Coordinating and conducting cross-auditing among the subsidiaries and being part of the Internal Quality Audit Team.

Summary of Activities of the Audit Committee

During the year ended 31 December 2005, the Audit Committee performed its duties as set out in its terms of reference.

The main activities undertaken by the Audit Committee as follows:-

Reviewed with the external auditors their scope of work and audit plan for the year.

Reviewed the results of the external audit, the audit report and the management letter, including management’sresponse.

Reviewed the internal audit department’s resources requirements, program and plan for the year under review.

Reviewed the internal audit reports and actions taken by the management to improve on the internal controlssystem based on internal audit findings.

Reviewed the annual report and audited financial statement of the Group before submission to the Board for theirconsideration and approval. The review was to ensure that the audited financial statements were drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable approved accounting standardsapproved by MASB.

Reviewed the quarterly audited financial result announcements before recommending them for Board’s approval.The review and discussions were conducted with the Group Financial Controller.

Reviewed the Group’s compliance with the Listing Requirements of BMSB, MASB and other relevant legal andregulatory requirements.

Discussed on significant related party transactions entered into by the Group.

Reviewed the extent of the Group’s compliance with the provisions set out under the Malaysian Code on Corporate Governance for the purpose of the Corporate Governance Statements pursuant to the ListingRequirements of BMSB.

Recommended to the Board the prescribed corporate governance principles and best practices under the Code.

OTHER INFORMATION


Family Relationship

Dato’ See Teow Chuan, Dato’ Anthony See Teow Guan, Mr See Teow Koon and Mr See Tiau Kee are siblings.

Share Buybacks

During the financial year, the Company did not enter into any share buyback transactions.

Imposition of Sanctions and Penalties

There were no sanctions or penalties imposed on the Company and its subsidiaries, directors or management by therelevant regulatory bodies during the financial year.

Non-Audit fees

The amount of non audit fees paid to the external auditors by the Group and the Company for the financial year ended2005 amounted to RM10,000 (2004 : RM10,000) and NIL (2004 : RM7,000) respectively.

Material Contracts

There were no material contracts involving Directors’ or major shareholders’ interests that are still subsisting at the endof financial year or since then.

For information on recurrent related party transactions of revenue nature, please refer to page 69 of the Annual report.

Options, Warrants or Convertible Securities

The Company has not issued any options, warrants or convertible securities during the financial year apart from theEmployees’ Share Option Scheme.

Variance From Unaudited Results Announced

During the financial year, there were no significant variances noted between the reported results and the unauditedresults announced.

Profit Estimate, Forecast or Projection

During the financial year, the Company has not made any profit estimate, forecast or projection.

Profit Guarantee

During the financial year, there were no profit guarantees given by the Company.

Revaluation Policy On Landed Properties

The Company does not have a revaluation policy on landed properties.

Utilisation Of Proceeds

There were no proceeds arising from the corporate exercises during the financial year.

REQUIRED BY THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

STATEMENT OF INTERNAL CONTROL

A N N U A L R E P O R T 2 0 0 5 19

Pursuant to paragraph 15.27(b) of the Bursa Malaysia Securities Berhad (“Bursa Malaysia”) Listing Requirements, the Board of Directors (“the Board”) of Kian Joo Can Factory Bhd (“the Company”) is pleased to provide the followingstatement on the state of internal control of the Company and its subsidiaries (“the Group”), which has been preparedin accordance with the “Statement on Internal Control: Guidance for Directors of Public Listed Companies” issued by the Institute of Internal Auditors Malaysia and as adopted by the Bursa Malaysia.

Responsibilities for Internal Control

The Board acknowledges its responsibility for maintaining an effective and sound system of internal controlthroughout the Group and for reviewing its adequacy and integrity in order to safeguard the Group’s assets andshareholders’ investments. The review of the effectiveness of the system of internal control is a continuous processdesigned to monitor and mitigate the effects rather than to eliminate risks of failure to achieve business objectives. In pursuing these objectives, internal controls can only provide reasonable and not absolute assurance against materialmisstatement, fraud or losses. It should also be recognised that the cost of control procedures should not outweigh orexceed the benefits to be expected to arise from such control procedures.

Key Elements of Internal Control

Key elements of internal control that the Board has established in reviewing the adequacy and integrity of the systemof internal control are as follows:

Organisation Structure and Responsibility Levels

The Group has placed competent and responsible personnel to oversee the Group’s operating functions. The Grouphas defined clear lines of accountability and delegation of authority that sets out decisions that need to be takenincluding matters that require Board approval. Key personnel including executive directors are actively involved in thedaily operations.

Audit Committee and Internal Audit

The Audit Committee was established with a view to assist and to provide the Board added focus in discharging the Board’s duties. The key processes undertaken by the Audit Committee in carrying out its review include operationsreviews, review external and internal audit reports and regular review of internal control.

The Audit Committee also ensures there are continuous efforts by management to address and resolve areas withcontrol weaknesses. Reports on findings of the internal audit visits are presented to the Audit Committee. These, together with the External Auditors’ reports provide reasonable assurance that control procedures are in place,and being followed.

Regular internal audits are carried out to review the adequacy and integrity of the internal control system based on audit plan reviewed and approved by the Audit Committee. The internal audit department advises on areas for improvement and conducts follow-up reviews to determine the extent to which its recommendation has been implemented.

Risk Management

The Group’s operations involve management of a wide range of risks. The Board is responsible for identifying businessrisks and in ensuring the implementation of appropriate systems to manage these risks. In doing so, the Board, through the Audit Committee and the internal audit function, reviews the adequacy and integrity of the Group’sinternal control system including compliance with applicable laws, regulations, rules, directives and guidelines.

STATEMENT OF INTERNAL CONTROL (cONT’D)


Reporting and Review

There is a monthly management reporting mechanism to monitor and review the financial results for the Group.

The executive directors meet with the senior management monthly to discuss and resolve operational and keymanagement issues. Meetings are conducted in the presence of an executive director/senior management to address on issues identified during SIRIM, LLOYD’s , BSI’s surveillance audits and the Internal Quality Audits.

Management Review Meetings are conducted at least once every year to review action plans to ensure its continualsuitability, adequacy and effectiveness including opportunities and changes, if any, to be made to its QualityManagement System including Quality Policy and Objectives.

Other Activities

The Company together with its four (4) subsidiaries and one (1) associated company were accredited by SIRIM of Malaysia. Three (3) other subsidiaries were accredited by LLOYD’S of United Kingdom with one (1) subsidiaryaccredited by BSI of United Kingdom. The accreditations are in respect of having implemented a QualityManagement System conforming to ISO 9001: 2000. Two (2) other subsidiaries are in the process of obtainingQuality Management System certification.

The Quality Management System lays down procedures in performing key processes with the aim of achieving and maintaining, consistently high quality products. Internal Quality Audits are conducted regularly on the QualityManagement System and surveillance audits are carried out by SIRIM and LLOYD’S once a year to ensure that the procedures laid down in the Quality Management System have been complied. Issues identified during the auditsare documented and corrective actions taken accordingly.

Conclusion

The Board is satisfied that, during the year under review, there is a continuos process in identifying, evaluating and managing significant risks faced by the Group. The Board is of the opinion that the existing system of internalcontrol is adequate to achieve the above objectives.

The Board recognises the importance of operating a system of internal control that supports the business objectives of the Group. As the Group operates in a dynamic business environment, and continues to grow and evolve, the Boardwill continuously assess the adequacy of the Group’s system of internal control and will take steps to enhance the system, as and when necessary.

FINANCIAL STATEMENTS

A N N U A L R E P O R T 2 0 0 5 21

Directors’ Report 22

Statement by Directors 28

Statutory Declaration 28

Report of the Auditors 29

Balance Sheets 30

Income Statements 31

Consolidated Statement of Changes in Equity 32

Statement of Changes in Equity 33

Consolidated Cash Flow Statement 34

Cash Flow Statement 36

Notes to the Financial Statements 38


DIRECTORS’ REPORT

The directors have pleasure in presenting their report together with the audited financial statements of the Group andof the Company for the financial year ended 31 December 2005.

PRINCIPAL ACTIVITIES

The principal activities of the Company are the manufacture and distribution of tin cans and investment holding.

The principal activities of the Group include the manufacture and distribution of tin cans, 2-piece aluminium beveragecans, polyethelene terephalate products and corrugated fibreboard cartons, letting of property, provision of contractpacking and engineering services.

There have been no significant changes in the nature of these activities during the financial year, other than thecommencement of operation of Kian Joo Canpack Sdn. Bhd. and Kian Joo Canpack (Shah Alam) Sdn. Bhd., which are principally involved in the provision of contract packing services.

RESULTS

Group CompanyRM’000 RM’000

Profit after taxation 51,599 16,766

Minority interest (266) -

Profit for the year 51,333 16,766

Retained profit brought forward 456,572 163,236

Profit available for appropriation 507,905 180,002

Dividends (18,005) (18,005)

Retained profit carried forward 489,900 161,997

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the statements of changes in equity.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financialyear were not substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

The amount of dividends paid by the Company since 31 December 2004 were as follows:-RM’000

In respect of the financial year ended 31 December 2004as reported in the directors’ report of that financial year:-

Final tax exempt dividend of 10%, paid on 8 July 2005 8,953

In respect of the financial year ended 31 December 2005:-

Interim tax exempt dividend of 10%, paid on 28 September 2005 9,052

At the forthcoming Annual General Meeting, a final tax exempt dividend of 10% on 181,418,661 ordinary shares,amounting to a dividend payable of RM9,071,000 (5 sen per share) in respect of the financial year ended 31 December2005, will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflectthis proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in shareholders’ equityas an appropriation of retained profit in the financial year ending 31 December 2006.

DIRECTORS’ REPORT

DIRECTORS’ REPORT (cONT’D)

A N N U A L R E P O R T 2 0 0 5 23

DIRECTORS

The names of the directors of the Company in office since the date of the last report and at the date of this report are:-

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afarY.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afarY.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan ShahDato’ See Teow ChuanDato’ Anthony See Teow GuanSee Teow Koon See Tiau KeeDato’ Haji Ismail Bin Lebai KamatRick Loh Lap Sang

In accordance with Article 108 of the Company’s Articles of Association, Dato’ Anthony See Teow Guan, Y.A.M.Tunku Naquiyuddin Ibni Tuanku Ja’afar, Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah retire byrotation, being eligible, offer themselves for re-election.

DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to whichthe Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in ordebentures of the Company or any other body corporate, other than those arising from the share options grantedunder the Employee Share Options Scheme.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other thanbenefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 21 and Note 27 to the financial statements or the fixed salary of a full-time employee of the Company) byreason of a contract made by the Company or a related corporation with any director or with a firm of which thedirector is a member, or with a company in which the director has a substantial financial interest, except as disclosedin Note 32 to the financial statements.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial yearin shares in the Company and its related corporations during the financial year were as follows:-

Number of ordinary shares of RM0.50 each1.1.2005 Acquired Sold 31.12.2005

The Company

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar 134,625 - - 134,625

*1,530,000 - - 1,530,000

Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar 150,000 - - 150,000

Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah 748,132 - - 748,132

Dato’ See Teow Chuan 1,897,523 128,540 - 2,026,063

* 65,772,419 - - * 65,772,419

Dato’ Anthony See Teow Guan 702,205 40,000 - 742,205

* 64,360,560 1,500 - * 64,362,060

See Teow Koon 383,616 - - 383,616

* 64,285,119 - - * 64,285,119

See Tiau Kee - 200,000 - 200,000

* 64,159,914 - - * 64,159,914



DIRECTORS’ INTERESTS (CONT’D)

SubsidiaryBox-Pak (Malaysia) Berhad

Number of ordinary shares of RM1.00 each1.1.2005 Acquired Sold 31.12.2005

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar 2,649,000 - - 2,649,000

Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar 2,329,500 - - 2,329,500

Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah 15,000 - - 15,000

Dato’ See Teow Chuan 220,500 - - 220,500 * 32,959,000 - - * 32,959,000

Dato’ Anthony See Teow Guan 85,500 - - 85,500 * 32,955,000 - (2,000) * 32,953,000

See Teow Koon * 32,910,000 - - * 32,910,000

See Tiau Kee * 32,910,000 - - * 32,910,000

* Denotes deemed interest which includes interest in shares held by close family members.

Number of options over ordinary shares of RM0.50 eachOption Lapsedgranted to Option due toDirectors price 1.1.2005 Granted Exercised resignation 31.12.2005

RM

Dato’ See Teow Chuan 2.15 360,000 - - - 360,000

Dato’ Anthony See Teow Guan 2.15 360,000 - - - 360,000

See Teow Koon 2.15 240,000 - - - 240,000

See Tiau Kee 2.15 600,000 - (200,000) - 400,000

1,560,000 - (200,000) - 1,360,000

Dato’ See Teow Chuan, Dato’ Anthony See Teow Guan, See Teow Koon and See Tiau Kee are deemed to have interestin shares of all the subsidiary companies to the extent the Company has an interest by virtue of their interests in theCompany as disclosed above.

Except for the above, none of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.

ISSUE OF SHARES

During the financial year, the Company increased its issued and paid-up share capital from RM88,736,831 to RM90,709,331 by way of issuance of 3,945,000 new ordinary shares of RM0.50 each to eligible employees of theGroup under the Employees’ Share Option Scheme at an exercise price of RM2.15 per share for cash.

All the new ordinary shares issued rank pari passu in all respects with the existing ordinary shares of the Company.


A N N U A L R E P O R T 2 0 0 5 25

EMPLOYEES’ SHARE OPTION SCHEME

The Employees’ Share Option Scheme (“Scheme”) was approved by the shareholders at an Extraordinary GeneralMeeting convened on 31 January 2002.

The main features of the Scheme are:-

(a) Eligible persons are employees of the Company and its non-listed Malaysian incorporated subsidiary companieswhich are not dormant (including full-time Executive Directors) in the employment of the Group with at leasttwo years of service as at the offer date. Foreign employees of the Group (save for the Executive Directors) are notentitled to the scheme. No employee and Executive Director shall participate at anytime in more than oneEmployee Share Option Scheme implemented by any company within the Group.

(b) The total number of shares to be offered shall not exceed 10% of the enlarged issued and paid-up ordinary sharecapital of the Company at any point of time during the existence of the Scheme.

(c) No option shall be granted for less than 1,000 ordinary shares and not more than 400,000 ordinary shares beforebonus issue of new ordinary shares during the financial year ended 31 December 2002, to any individual eligibleemployee.

(d) The option price shall be at a discount of not more than 10% from the weighted average market price of the sharesas shown in the daily official list issued by the Bursa Malaysia Securities Berhad for the five trading days precedingthe offer date, or at par value of the shares of the Company, whichever is higher.

(e) The Scheme shall be in force at the discretion of the Committee appointed by the Board of Directors subject to the maximum period of five years from the date of its approval by the Company in a general meeting or thedate of the last approval by relevant authorities, whichever shall be the latest date subject to any extension as maybe approved by the aforesaid authorities.

(f ) The maximum allowable allotment for each eligible employee is based on a predetermined scale of maximumentitlement for each category and grade of employee. The criteria for the basis of allotment would be based onseniority, performance and length of service.

(g) A grantee will be allowed to exercise not more than 20% of the options granted to him per year.

(h) In the event of any alteration in the capital structure of the Company during the option period, whether by wayof a rights issue, bonus issue or other capitalisation issue, consolidation or subdivision of shares or reduction of capital or otherwise howsoever, the Company shall cause such adjustment to be made to:-

(i) the number of shares which a grantee shall be entitled to subscribe for upon the exercise of each option;and/or

(ii) the subscription price

as shall be necessary to give a grantee the same proportion of the issued capital of the Company as that to whichhe was entitled prior to the event giving rise to such adjustment.

As at 31 December 2005, the total number of options granted and the movements in the options to take up theunissued ordinary shares of RM0.50 each of the Company are as follows:-

Number of options over ordinary shares of RM0.50 eachOption Option Lapsedgranted price due toon RM 1.1.2005 Exercised resignation 31.12.2005

8.4.2002 2.15 8,354,000 (3,945,000) (155,000) 4,254,000

Of the above total, Executive Directors of the Company and the subsidiary companies had been granted options to subscribe for 1,360,000 and 42,000 ordinary shares of RM0.50 each respectively.

The Option price for the options granted on 8 April 2002 was subsequently adjusted from RM3.22 per share toRM2.15 per share following a bonus issue in the same financial year.



EMPLOYEES’ SHARE OPTION SCHEME (CONT’D)

Details of share options exercised at RM2.15 during the financial year are as follows:-

Exercise Considerations Number of Date Received Share Options

RM

07/01/05 528,900 246,000

07/02/05 133,300 62,000

07/03/05 279,500 130,000

08/04/05 189,200 88,000

09/05/05 795,500 370,000

08/06/05 1,494,250 695,000

08/07/05 1,249,150 581,000

08/08/05 2,021,000 940,000

08/09/05 956,750 445,000

10/10/05 393,450 183,000

14/11/05 290,250 135,000

09/12/05 150,500 70,000

8,481,750 3,945,000

The interests of directors in office at the end of the financial year in options under the Scheme are disclosed in the“Directors’ Interest” section of this report.

Options exercisable in a particular year but not exercised can be carried forward to subsequent years provided that no options shall be exercised beyond the date of the expiry of the Scheme.

OTHER STATUTORY INFORMATION

(a) Before the balance sheets and income statements of the Group and of the Company were made out, the directorstook reasonable steps:-

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off andthat adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting recordsin the ordinary course of business had been written down to an amount which they might be expected so torealise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:-

(i) the amount written off for bad debts or the amount of the provision for doubtful debts in the financialstatements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Companymisleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would renderadherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleadingor inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this reportor financial statements of the Group and of the Company which would render any amount stated in the financialstatements misleading.


A N N U A L R E P O R T 2 0 0 5 27

OTHER STATUTORY INFORMATION (CONT’D)

(e) As at the date of this report, there does not exist:-

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial yearwhich secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f ) In the opinion of the directors:-

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the periodof twelve months after the end of the financial year which will or may affect the ability of the Group or of theCompany to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of theoperations of the Group or of the Company for the financial year in which this report is made.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Significant events during the financial year are disclosed in Note 28 to the financial statements.

AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors.

DATO’ SEE TEOW CHUAN DATO’ ANTHONY SEE TEOW GUAN

Selangor Darul Ehsan, Malaysia21 April 2006

STATEMENT BY dIRECTORS


PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We, DATO’ SEE TEOW CHUAN and DATO’ ANTHONY SEE TEOW GUAN, being two of the directors ofKIAN JOO CAN FACTORY BERHAD, do hereby state that, in the opinion of the directors, the accompanyingfinancial statements set out on pages 30 to 78 are drawn up in accordance with the provisions of the Companies Act,1965 and applicable MASB Approved Accounting Standards in Malaysia so as to give a true and fair view of thefinancial position of the Group and of the Company as at 31 December 2005 and of the results and the cash flows ofthe Group and of the Company for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors.

DATO’ SEE TEOW CHUAN DATO’ ANTHONY SEE TEOW GUAN

Selangor Darul Ehsan, Malaysia21 April 2006

I, SEE SIEW CHOO, being the officer primarily responsible for the financial management of KIAN JOO CANFACTORY BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages30 to 78 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be trueand by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared bythe abovenamed SEE SIEW CHOO at Kuala Lumpur in the Federal Territory on 21 April 2006 SEE SIEW CHOO

Before me,

TAN BOON CHUA(No. W325)Commissioner of OathsKuala Lumpur

STATUTORY DECLARATIONPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

REPORT OF THE AUDITORS

A N N U A L R E P O R T 2 0 0 5 29

to the members of kian joo can factory berhad (incorporated in malaysia)

We have audited the financial statements set out on pages 30 to 78. These financial statements are the responsibilityof the Company’s directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to reportour opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose.We do not assume responsibility to any other person for the content of this report.

We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used and significantestimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believethat our audit provides a reasonable basis for our opinion.

In our opinion:-

(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act,1965 and applicable MASB Approved Accounting Standards in Malaysia so as to give a true and fair view of:-

(i) the financial position of the Group and of the Company as at 31 December 2005 and of the results and thecash flows of the Group and of the Company for the year then ended; and

(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements;and

(b) the accounting and other records and the registers required by the Act to be kept by the Company and by itssubsidiary companies of which we have acted as auditors have been properly kept in accordance with theprovisions of the Act.

We have considered the financial statements and the auditors’ reports thereon of the subsidiary companies of whichwe have not acted as auditors, as indicated in Note 33 to the financial statements, being financial statements that havebeen included in the consolidated financial statements.

We are satisfied that the financial statements of the subsidiary companies that have been consolidated with thefinancial statements of the Company are in form and content appropriate and proper for the purposes of thepreparation of the consolidated financial statements and we have received satisfactory information and explanationsrequired by us for those purposes.

The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualificationmaterial to the consolidated financial statements and did not include any comment required to be made under Section174(3) of the Act.

Ernst & Young YAP SENG CHONGAF: 0039 No. 2190/12/07(J) Chartered Accountants Partner

Kuala Lumpur, Malaysia21 April 2006

BALANCE SHEETS


as at 31 december 2005

Group Company 2005 2004 2005 2004

Note RM’000 RM’000 RM’000 RM’000

NON-CURRENT ASSETS

Property, plant and equipment 3 446,099 421,511 100,925 103,634Investments in subsidiary companies 4 - - 105,458 94,296Investment in associated company 5 23,629 20,900 10,000 10,000Amounts due from subsidiary companies 4 - - 57,167 203,724Deferred tax assets 6 6,980 14,797 1,309 3,261

476,708 457,208 274,859 414,915

CURRENT ASSETS

Inventories 7 229,718 154,851 43,612 35,221Trade receivables 8 154,072 155,700 21,514 23,968Other receivables, deposits and prepayments 9 18,151 13,302 7,574 831Amount due from associated company 5 1,928 2,518 1,661 2,294Amounts due from subsidiary companies 4 - - 204,128 16,773Short term deposits 10 32,776 25,578 22,070 14,510Cash and bank balances 19,862 14,724 3,105 3,621

456,507 366,673 303,664 97,218

CURRENT LIABILITIES

Trade payables 11 29,070 37,341 4,695 11,053Other payables and accruals 12 31,210 21,764 5,483 4,264Provisions 13 2,407 3,522 1,041 1,337Hire purchase creditor 14 - 8 - -Amounts due to subsidiary companies 4 - - 1,154 49,766Bank borrowings (unsecured) 15 104,804 78,628 60,233 50,787Taxation 485 1,271 - -

167,976 142,534 72,606 117,207

NET CURRENT ASSETS/(LIABILITIES) 288,531 224,139 231,058 (19,989)765,239 681,347 505,917 394,926

FINANCED BY:-

Share capital 16 90,709 88,737 90,709 88,737Reserves 17 507,924 468,065 175,211 169,940

598,633 556,802 265,920 258,677Reserve on consolidation 18 6,466 6,466 - -Minority interest 27,815 27,602 - -Provisions 13 21,031 22,453 8,073 8,308Term loans (unsecured) 19 104,854 62,643 90,000 50,000Amounts due to subsidiary companies 4 - - 141,924 77,941Deferred tax liabilities 6 6,440 5,381 - -

765,239 681,347 505,917 394,926

The accompanying notes form an integral part of the financial statements.

INCOME STATEMENTS

A N N U A L R E P O R T 2 0 0 5 31

for the year ended 31 december 2005

Group Company 2005 2004 2005 2004

Note RM’000 RM’000 RM’000 RM’000

Revenue 20 654,957 575,684 153,616 144,107

Other operating income 11,456 9,773 13,983 13,480

Changes in inventories offinished goods and work-in-progress 24,049 9,059 5,947 4,182

Raw materials and consumables used (414,256) (349,316) (90,818) (72,725)

Staff costs 21 (75,292) (72,501) (23,923) (21,980)

Depreciation of property, plant and equipment 3 (41,296) (39,147) (6,567) (8,744)

Other operating expenses (86,027) (73,069) (21,401) (18,940)

Profit from operations 22 73,591 60,483 30,837 39,380

Finance costs 23 (6,888) (5,560) (4,580) (4,348)

Share of profits from associated company 2,891 1,587 - -

Profit before taxation 69,594 56,510 26,257 35,032

Taxation 24 (17,995) (7,392) (9,491) (9,160)

Profit after taxation 51,599 49,118 16,766 25,872

Minority interest (266) 668 - -

Profit attributable to shareholders 51,333 49,786 16,766 25,872

Earnings per share (sen)

- Basic 25 28.61 28.14

- Diluted 25 28.33 27.82

Net dividends per share (sen) 26 10.00 10.00


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


for the year ended 31 December 2005

Non-Distributable DistributableShare Share Revaluation Capital Exchange Retained

Capital Premium Reserve Reserve Reserve Profit TotalNote RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2004 87,878 3,871 455 4,480 (173) 424,508 521,019Profit for the year - - - - - 49,786 49,786Currency translation

difference - - - - (27) * - (27)Dividends 26 - - - - - (17,722) (17,722) Dilution arising from

issue of shares pursuant to Employees’ Share Option Scheme bya subsidiary company - - 54 - - - 54

Issuance pursuant to Employees’ Share Option Scheme 859 2,833 - - - - 3,692

At 31 December 2004 88,737 6,704 509 4,480 (200) 456,572 556,802

* This represents loss not recognised in the income statement.

At 1 January 2005 88,737 6,704 509 4,480 (200) 456,572 556,802Profit for the year - - - - - 51,333 51,333Currency translation

difference - - - - 21 * - 21Dividends 26 - - - - (18,005) (18,005)Issuance pursuant

to Employees’ Share Option Scheme 1,972 6,510 - - - - 8,482

At 31 December 2005 90,709 13,214 509 4,480 (179) 489,900 598,633

* This represents gain not recognised in the income statement.


STATEMENT OF CHANGES IN EQUITY

A N N U A L R E P O R T 2 0 0 5 33


Non-Distributable Distributable Share Share Retained

Capital Premium Profit Total Note RM’000 RM’000 RM’000 RM’000

At 1 January 2004 87,878 3,871 155,086 246,835

Profit for the year - - 25,872 25,872

Dividends 26 - - (17,722) (17,722)

Issuance pursuant to Employees’

Share Option Scheme 859 2,833 - 3,692

At 31 December 2004 88,737 6,704 163,236 258,677

At 1 January 2005 88,737 6,704 163,236 258,677

Profit for the year - - 16,766 16,766

Dividends 26 - - (18,005) (18,005)

Issuance pursuant to Employees’

Share Option Scheme 1,972 6,510 - 8,482

At 31 December 2005 90,709 13,214 161,997 265,920


CONSOLIDATED CASH FLOW STATEMENT



2005 2004 Note RM’000 RM’000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 666,180 564,925

Payments to suppliers (493,182) (360,999)

Payments for operating expenses (142,321) (139,823)

Other receipts 2,322 1,307

Cash generated from operations 32,999 65,410

Interest paid (6,888) (5,560)

Income tax refunded 1 4,728

Income tax paid (11,400) (14,378)

Net cash generated from operating activities 14,712 50,200

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of property, plant and equipment (a) (69,714) (70,279)

Proceeds from disposal of property, plant and equipment 6,587 2,848

Proceeds from disposal of investment - 150

Interest received 808 1,452

Net cash used in investing activities (62,319) (65,829)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment to hire purchase creditor and lease obligations (8) (9)

Proceeds from drawdown of term loan, bankers’ acceptances and revolving credit 123,400 84,177

Proceeds from issuance of shares of the Company under the Employees’ Share Option Scheme 8,482 3,692

Repayment of term loans and bankers’ acceptances (52,715) (61,435)

Dividends paid (18,005) (17,722)

Dividends paid to minority shareholders of a subsidiary company - (1,950)

Receipts from/(advances to) associated company 590 (1,426)

Net cash generated from financing activities 61,744 5,327

CONSOLIDATED CASH FLOW STATEMENT (cONT’D)

A N N U A L R E P O R T 2 0 0 5 35


2005 2004 Note RM’000 RM’000

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 14,137 (10,302)

EFFECT OF EXCHANGE RATE CHANGES 497 367

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 37,784 47,719

CASH AND CASH EQUIVALENTSAT END OF THE YEAR (b) 52,418 37,784

Notes:-

(a) Acquisition of property, plant and equipment during the financial year was fully paid for in cash.

(b) Cash and cash equivalents comprise the following:-

2005 2004RM’000 RM’000

Cash and bank balances 19,862 14,724

Short term deposits (Note 10) 32,776 25,578

Bank overdrafts (Note 15) (220) (2,518)

52,418 37,784


CASH FLOW STATEMENT



2005 2004 Note RM’000 RM’000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 123,113 101,552

Payments to suppliers (99,621) (76,226)

Payments for operating expenses (37,072) (35,057)

Other receipts 1,574 8,114

Cash used in operations (12,006) (1,617)

Interest paid (4,580) (4,348)

Income tax refunded - 2,607

Income tax paid (578) -

Net cash used in operating activities (17,164) (3,358)

CASH FLOWS FROM INVESTING ACTIVITIES

Dividend received from subsidiary companies 25,957 30,715

Acquisition of property, plant and equipment (a) (4,526) (6,285)

Proceeds from disposal of property, plant and equipment 2,701 2,395

Proceeds from disposal of investment - 150

Investment in subsidiary company (11,162) (2,039)

Interest received 3,590 4,583

Net cash generated from investing activities 16,560 29,519

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of shares of the Company under the Employees’ Share Option Scheme 8,482 3,692

Repayment of term loans and bankers’ acceptances (50,375) (60,000)

Proceeds from drawdown of term loan, bankers’ acceptances and revolving credit 100,233 70,375

Dividends paid (18,005) (17,722)

Receipts from/(advances to) associated company 633 (1,393)

Inter-company receipts 14,972 21,148

Inter-company advances (47,880) (34,791)

Net cash generated from/(used in) financing activities 8,060 (18,691)

CASH FLOW STATEMENT (cONT’D)

A N N U A L R E P O R T 2 0 0 5 37


2005 2004 Note RM’000 RM’000

NET INCREASE IN CASH AND CASH EQUIVALENTS 7,456 7,470

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 17,719 10,249

CASH AND CASH EQUIVALENTSAT END OF THE YEAR (b) 25,175 17,719

Notes:-

(a) Acquisition of property, plant and equipment during the financial year was fully paid for in cash.

(b) Cash and cash equivalents comprise the following:-

2005 2004RM’000 RM’000

Cash and bank balances 3,105 3,621

Short term deposits (Note 10) 22,070 14,510

Bank overdrafts (Note 15) - (412)

25,175 17,719


NOTES TO THE FINANCIAL STATEMENTS


31 December 2005

1. CORPORATE INFORMATION

The principal activities of the Company and its subsidiary companies are as disclosed in the Directors’ Report.

There have been no significant changes in the nature of these activities during the financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on theMain Board of the Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

The registered office and principal place of business is located at Lot 10, Jalan Perusahaan 1, 68100 Batu Caves,Selangor Darul Ehsan.

The financial statements are expressed in Ringgit Malaysia.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution ofthe directors on 21 April 2006.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial statements of the Group and of the Company have been prepared under the historical costconvention modified to include the revaluation of certain assets.

The financial statements comply with the provisions of the Companies Act, 1965 and applicable MASBApproved Accounting Standards in Malaysia.

Certain properties of the Group and of the Company were revalued by the directors in periods prior to 1998.As permitted by FRS 116 Property, Plant and Equipment, these assets are stated at their previous revaluedamount (subject to continuity in depreciation policy and the requirement to write an asset down to itsrecoverable amount) on the basis that the revaluation carried out then, was a one off isolated event and notintended to be an adoption of a revaluation policy in place of historical cost.

(b) Basis of Consolidation

(i) Subsidiaries

The consolidated financial statements include the financial statements of the Company and all itssubsidiaries. Subsidiaries are those entities in which the Group has a long term equity interest and whereit has power to exercise control over the financial and operating policies so as to obtain benefitsthereform.

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition methodof accounting, the results of subsidiaries acquired or disposed of during the financial year are included inthe consolidated income statement from the effective date of acquisition or up to the effective date ofdisposal, as appropriate. The assets and liabilities of the subsidiaries are measured at their fair values atthe date of acquisition. The difference between the cost of an acquisition and the fair value of the Group’sshare of the net assets of the acquired subsidiary at the date of acquisition is included in the consolidatedbalance sheet as goodwill or negative goodwill arising on consolidation.

Acquisition of subsidiaries that meets the conditions of a merger are accounted for using the mergermethod. Under the merger method of accounting, the results of subsidiaries are presented as if the mergerhad been effected throughout the current and previous years. In the consolidated financial statements,the cost of the merger is cancelled with the nominal values of the shares received. Any resulting creditdifference is classified as equity and regarded as a non-distributable reserve. Any resulting debit differenceis adjusted against any suitable reserve.

Intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation and theconsolidated financial stataments reflect external transactions only. Unrealised losses are eliminated onconsolidation unless costs cannot be recovered.

NOTES TO THE FINANCIAL STATEMENTS (cONT’D)

A N N U A L R E P O R T 2 0 0 5 39

31 December 2005

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(b) Basis of Consolidation (Cont’d)

(i) Subsidiaries (Cont’d)

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds andthe Group’s share of its net assets together with any unamortised balance of goodwill and exchangedifferences.

Minority interests in the consolidated balance sheet consist of the minorities’ share of the fair value of theidentifiable assets and liabilities of the acquiree as at acquisition date and the minorities’ share ofmovements in the acquiree’s equity since then.

(ii) Associates

Associates are those entities in which the Group exercises significant influence but not control, throughparticipation in the financial and operating policy decisions of the entities.

Investments in associates are accounted for in the consolidated financial statements by the equity methodof accounting based on the audited or management financial statements of the associates. Under theequity method of accounting, the Group’s share of profits less losses of associates during the financial yearis included in the consolidated income statement. The Group’s interest in associates is carried in theconsolidated balance sheet at cost plus the Group’s share of post-acquisition retained profit oraccumulated loss and other reserves.

Unrealised gains on transactions between the Group and the associates are eliminated to the extent of theGroup’s interest in the associates. Unrealised losses are eliminated unless cost cannot be recovered.

(c) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost/deemed cost less accumulated depreciation and impairmentlosses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(m).

Freehold land and capital work-in-progress are not depreciated. Leasehold land is depreciated to write off thevalue over the unexpired lease terms ranging from 13 to 86 years. All other property, plant and equipment aredepreciated on a straight-line basis calculated to write off the assets over their estimated useful lives at thefollowing annual rates:-

%

Buildings 2 Plant, machinery and equipment 6 2/3 - 20 Furniture, fittings and equipment 6 2/3 - 50 Motor vehicles 10 - 20

Upon the disposal of an item of property, plant and equipment, the difference between the net disposalproceeds and the net carrying amount is recognised in the income statement and the unutilised portion of therevaluation surplus on that item is taken directly to retained profit.

(d) Investments in Subsidiaries and Associates

The Company’s investments in subsidiaries and associates are stated at cost less impairment losses. The policyfor the recognition and measurement of impairment losses is in accordance with Note 2(m).

On disposal of such investments, the difference between net disposal proceeds and their carrying amounts isrecognised in the income statement.

(e) Goodwill

Goodwill represents the excess of the cost of acquisition over the Group’s interest in the fair value of theidentifiable assets and liabilities of a subsidiary or associate at the date of acquisition.



31 December 2005


(e) Goodwill (Cont’d)

Goodwill is stated at cost less accumulated amortisation and impairment losses. The policy for the recognitionand measurement of impairment losses is in accordance with Note 2(m). Goodwill arising on the acquisitionof subsidiaries is presented separately in the balance sheet while goodwill arising on the acquisition ofassociates is included within the respective carrying amount of these investments.

Goodwill on consolidation has been written off against reserve in prior years.

Reserve on consolidation represents the excess of the Group’s interest in the fair value of the identifiable assetsand liabilities of a subsidiary or associate at the date of acquisition over the cost of acquisition.

(f ) Inventories

Inventories are stated at lower of cost and net realisable value.

Raw materials, spare parts and consumables comprise the purchase price including duties and otherattributable expenses and are determined using the first-in first-out method. Work-in-progress and finishedgoods include direct materials, direct labour, other direct costs and appropriate production overheads and arebased on standard cost, which approximates actual cost.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs ofcompletion and the estimated costs necessary to make the sale. In arriving at net realisable value, dueallowance is made for all obsolete and slow moving items.

(g) Financial Instruments

Financial Instruments are recognised in the balance sheet when the Group has become a party to thecontractual provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractualarrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, arereported as expense or income. Distributions to holders of financial instruments classified as equity arecharged directly in equity. Financial instruments are offset when the Group has a legally enforceable right tooffset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

(i) Trade and Other Receivables

Trade and other receivables are carried at anticipated realisable values. Bad debts are written off whenidentified. An estimate is made for doubtful debts based on a review of all outstanding amounts as at thebalance sheet date.

(ii) Trade and Other Payables

Trade and other payables are stated at cost which is the fair value of the consideration to be paid in thefuture for goods and services received.

(iii) Interest-Bearing Borrowings

Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received, net oftransaction costs.

All borrowing costs are recognised as an expense in the income statement in the period in which they areincurred.


A N N U A L R E P O R T 2 0 0 5 41

31 December 2005


(g) Financial Instruments (Cont’d)

(iv) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in theperiod in which they are declared.

(h) Provisions for Liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event andit is probable that an outflow of resources embodying economic benefits will be required to settle theobligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheetdate and adjusted to reflect the current best estimate. Where the effect of the time value of money is material,the amount of a provision is the present value of the expenditure expected to be required to settle theobligation.

Provision for restructuring costs is recognised in the period in which the Group becomes legally orconstructively committed to payment.

(i) Employee Benefits

(i) Short Term Benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year inwhich the associated services are rendered by employees of the Group. Short term accumulatingcompensated absences such as paid annual leave are recognised when services are rendered by employeesthat increase their entitlement to future compensated absences. Short term non-accumulatingcompensated absences such as sick leave are recognised when the absences occur.

(ii) Defined Contribution Plans

As required by law, companies in Malaysia make contributions to the Employees Provident Fund(“EPF”). Some of the Group’s foreign subsidiaries make contributions to their respective countriespension schemes. Such contributions are recognised as an expense in the income statement as incurred.

(iii) Defined Benefit Plans

The Group operates an unfunded, defined benefit Retirement Benefit Scheme (“the Scheme”) for itseligible employees. The Group’s obligations under the Scheme, calculated using the Projected Unit CreditMethod, is determined based on triennial actuarial computations by independent actuaries, throughwhich the amount of benefit that employees have earned in return for their service in the current andprior years is estimated. That benefit is discounted in order to determine its present value. Actuarial gainsand losses are recognised as income or expense over the expected average remaining working lives of theparticipating employees when the cumulative unrecognised actuarial gains or losses for the Scheme exceed10% of the present value of the defined benefit obligations. Past service costs are recognised immediatelyto the extent that the benefits are already vested, and otherwise are amortised on a straight-line basis overthe average period until the amended benefits become vested.

The amount recognised in the balance sheet represents the present value of the defined benefit obligationsadjusted for unrecognised actuarial gains and losses and unrecognised past service cost.



31 December 2005


(i) Employee Benefits (Cont’d)

(iv) Equity Compensation Benefits

The Company’s Employee Share Options Scheme allows the employees of the Company and its non-listed Malaysian incorporated subsidiary companies which are not dormant (including full-timeExecutive Directors) in the employment of the Group with at least two years of service as at the offer date,to acquire ordinary shares of the Company. No compensation cost or obligation is recognised. When theoptions are exercised, equity is increased by the amount of the proceeds received.

(v) Termination Benefits

The Group pays termination benefits in cases of termination of employment within the framework of arestructuring. Termination benefits are recognised as a liability and an expense when the Group has adetailed formal plan for the termination and is without realistic possibility of withdrawal.

(j) Leases

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewardsincident to ownership. All other leases are classified as operating leases.

(i) Finance Leases

Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower oftheir fair values and the present value of the minimum lease payments at the inception of the leases, lessaccumulated depreciation and impairment losses. The corresponding liability is included in the balancesheet as borrowings. In calculating the present value of the minimum lease payments, the discount factorused is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’sincremental borrowing rate is used.

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability.Finance costs, which represent the difference between the total leasing commitments and the fair valueof the assets acquired, are recognised as an expense in the income statement over the term of the relevantlease so as to produce a constant periodic rate of charge on the remaining balance of the obligations foreach accounting period.

The depreciation policy for leased assets is in accordance with that for depreciable property, plant andequipment as described in Note 2(c).

(ii) Operating Leases

Operating lease receipts or payments are recognised as income or expense in the income statement on astraight-line basis over the term of the relevant lease.

(k) Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expectedamount of income taxes payable in respect of the taxable profit for the year and is measured using the tax ratesthat have been enacted at the balance sheet date.


A N N U A L R E P O R T 2 0 0 5 43

31 December 2005


(k) Income Tax (Cont’d)

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet datebetween the tax bases of assets and liabilities and their carrying amounts in the financial statements. Inprinciple, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets arerecognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent thatit is probable that taxable profit will be available against which the deductible temporary differences, unusedtax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary differencearises from goodwill or reserve on consolidation or from the initial recognition of an asset or liability in atransaction which is not a business combination and at the time of the transaction, affects neither accountingprofit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised orthe liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheetdate. Deferred tax is recognised in the income statement, except when it arises from a transaction which isrecognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when itarises from a business combination that is an acquisition, in which case the deferred tax is included in theresulting goodwill or reserve on consolidation.

(l) Foreign Currencies

(i) Foreign Currency Transactions

Transactions in foreign currencies are initially converted into Ringgit Malaysia at rates of exchange rulingat the date of transaction. At each balance sheet date, foreign currency monetary items are translated intoRinggit Malaysia at exchange rates ruling at that date. Non-monetary items initially denominated inforeign currencies, which are carried at historical cost are translated using the historical rate as of the dateof acquisition and non-monetary items which are carried at fair value are translated using the exchangerate that existed when the values were determined.

All exchange differences are recognised in the income statement.

(ii) Foreign Entities

Financial statements of foreign consolidated subsidiaries are translated at year-end exchange rates withrespect to the assets and liabilities, and at exchange rates at the dates of the transactions with respect tothe income statement. All resulting translation differences are included in the foreign exchange reserve inshareholders’ equity.

The principal exchange rates used for every unit of foreign currency ruling at the balance sheet date are asfollows:-

2005 2004RM RM

One (1) United States Dollar 3.7670 3.8000

One (1) Vietnam Dong 0.0002 0.0002

One (1) Singapore Dollar 2.2602 2.3258

One (1) Hong Kong Dollar 0.4828 0.4888

One (1) Sterling Pound 6.4887 7.3169

One (1) Swiss Franc 2.8623 3.3517

One (1) Japanese Yen 0.0319 0.0370

One (1) Euro 4.4613 5.1729




(m) Impairment of Assets

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether thereis any indication of impairment. If any such indication exists, impairment is measured by comparing thecarrying values of the assets with their recoverable amounts. Recoverable amount is the higher of net sellingprice and value in use, which is measured by reference to discounted future cash flows.

An impairment loss is recognised as an expense in the income statement immediately, unless the asset iscarried at a revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease tothe extent of any unutilised previously recognised revaluation surplus for the same asset.

(n) Revenue Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flowto the enterprise and the amount of the revenue can be measured reliably.

Revenue from sale of goods is recognised when the goods are delivered and accepted by customer.

Rental income is recognised on an accrual basis unless collectibility is in doubt, in which case it is recognisedon a receipt basis.

Dividend income from subsidiary and associated companies are recognised as and when the right to receivepayment is established while dividends from other investments are recognised when received.

(o) Cash and Cash Equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank,deposit at call and short term highly liquid investments which have an insignificant risk of changes in value,net of outstanding bank overdrafts.

31 December 2005


A N N U A L R E P O R T 2 0 0 5 45

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n

At

1 Ja

nuar

y

6,11

7

21,5

76

989

37

3,35

1

21,5

91

5,41

1 -

429,

035

39

5,06

5

Cha

rge

for

the

year

1,

315

1,89

5

82

34,0

95

2,21

4

1,69

5 -

41,2

96

39,1

47

Dis

posa

ls

- (3

,271

)

(468

)

(3,9

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(1

8)

(794

) -

(8,5

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(5

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tten

off

-

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-(3

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hang

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s -

- -

40

49

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89

(40)

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31 D

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7,

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23

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312

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8

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035

Net

Boo

k Va

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31 D

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ber

2005

10

3,99

1

103,

394

1,

907

17

8,20

1

11,4

85

4,49

7 42

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44

6,09

9

At

31 D

ecem

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2004

99

,760

99

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2,

579

17

5,52

7 9,

274

5,10

3

29,4

80

421,

511



3.P

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:

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- 23

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-

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--

23,7

05

23,7

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cost

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0,68

3

58,9

59

1,41

0

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35

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83

8,43

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784,

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3,59

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578,

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35

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6

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at 3

1 D

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2005

, the

net

boo

k va

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of fr

eeho

ld la

nd a

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land

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ldin

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dee

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rica

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ss d

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ld h

ave

been

:-

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seho

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and

and

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ldin

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t 32

3 42

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9

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dep

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(12,

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(3

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k va

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323

29,8

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boo

k va

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of m

otor

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icle

s of

the

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re p

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ase

and

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ce le

ase

arra

ngem

ent

is R

M N

il (2

004:

RM

20,3

28).

31 December 2005


A N N U A L R E P O R T 2 0 0 5 47

3.P

RO

PE

RT

Y, P

LA

NT

AN

D E

QU

IPM

EN

T (

CO

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and

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d an

d

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t

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d

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tal

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Term

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ipm

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Equ

ipm

ent

Ve

hicl

es

Pro

gres

s

2005

20

04R

M'0

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M'0

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pany

Cos

t

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33,1

63

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06

2,46

8

92,2

20

11,1

78

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4

1,42

1

182,

980

18

1,64

7

Add

itio

ns

744

--

1,14

6

497

31

6

1,82

3

4,52

6

6,28

5

Tran

sfer

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m s

ubsi

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y co

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nies

-

--

15

--

- 15

1,

099

Tran

sfer

to

subs

idia

ry c

ompa

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-

--

(337

)

--

- (3

37)

(3

,675

)

Dis

posa

ls

--

(1,0

58)

(3,2

96)

(7)

(4

15)

- (4

,776

)

(2,3

76)

At

31 D

ecem

ber

33

,907

38

,206

1,

410

89

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11

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225

3,24

4

182,

408

18

2,98

0

Acc

umul

ated

Dep

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atio

n

At

1 Ja

nuar

y

1,58

3

4,33

1 65

4 61

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8,

651

2,

296

-79

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73

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for

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year

34

2 31

0 65

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873

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0 -

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7

8,74

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-

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(244

) -

--

(244

)

(1,4

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--

(468

) (3

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)(7

) (4

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- (4

,186

) (1

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At

31 D

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1,92

5 4,

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Net

Boo

k Va

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At

31 D

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ber

2005

31

,982

33

,565

1,

159

27,1

10

2,15

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4

100,

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At

31 D

ecem

ber

2004

31

,580

33

,875

1,

814

30

,389

2,

527

2,02

8

1,42

1

103,

634

31 December 2005



31 December 2005

3.P

RO

PE

RT

Y, P

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NT

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D E

QU

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199

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At

cost

33

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at 3

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2005

, the

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ter

m le

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d th

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3 12

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nd b

uild

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of

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up a

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f th

e C

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ny r

eval

ued

in 1

990

and

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on

an o

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valu

e ba

sis

are

now

car

ried

at

deem

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ost

aspe

rmit

ted

by F

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116

Prop

erty

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nt a

nd E

quip

men

t.


A N N U A L R E P O R T 2 0 0 5 49

31 December 2005

4. SUBSIDIARY COMPANIES

Company 2005 2004

RM’000 RM’000

Quoted shares at cost in Malaysia At 1 January/31 December 19,155 19,155

Unquoted shares: - in Malaysia, at cost

At 1 January 66,688 65,688Incorporation of new subsidiary companies - 1,000Subscription of additional shares 10,000 -

At 31 December 76,688 66,688Less: Accumulated impairment loss (1,000) (1,000)

At 31 December 75,688 65,688

- outside Malaysia, at cost

At 1 January 9,453 8,414Subscription of additional shares 1,162 1,039

At 31 December 10,615 9,453

Total unquoted shares 86,303 75,141

Total investments in subsidiary companies 105,458 94,296

Market value of quoted shares in Malaysia 35,544 53,314

Notes:-

(a) The details of the subsidiary companies are disclosed in Note 33 to the financial statements.

(b) Amounts due from/(to) subsidiary companies

Company 2005 2004

RM’000 RM’000

Amounts due from subsidiary companies 271,970 223,997

Allowance for doubtful debts (10,675) (3,500)

261,295 220,497

Less: Portion in current assets (204,128) (16,773)

57,167 203,724

Amounts due to subsidiary companies 143,078 127,707

Less: Portion in current liabilities (1,154) (49,766)

141,924 77,941

The amounts due from/(to) subsidiary companies are unsecured, non-interest bearing and have no fixed termsof repayment, except for amounts of RM80,455,000 (2004: RM77,570,000) due from certain subsidiarycompanies, which bear interest at 1.0% to 5.5% (2004: 1.0% to 5.5%) per annum.



31 December 2005

5. ASSOCIATED COMPANY

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

In Malaysia:-

Unquoted shares, at cost 10,000 10,000 10,000 10,000

Share of post-acquisition reserves (Note (a)) 13,629 10,900 - -

23,629 20,900 10,000 10,000

Represented by:-

Share of net assets 23,629 20,900

Notes:-

(a) Share of post-acquisition reserves

Group 2005 2004

RM’000 RM’000

As at 1 January 10,900 9,756

Share of profit after tax 2,729 1,144

As at 31 December 13,629 10,900

(b) Share of capital commitments (Note 29) 1,398 2,046

(c) The details of the associated company are set out in Note 33 to the financial statements.

(d) The amount due from associated company is trade related, unsecured, non-interest bearing and has no fixedterm of repayment.

6. DEFERRED TAXATION

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

At 1 January (9,416) (3,485) (3,261) (3,551)

Recognised in the income statement (Note 24) 8,876 (5,931) 1,952 290

At 31 December (540) (9,416) (1,309) (3,261)

Presented after appropriate offsetting as follows:-

Deferred tax assets (6,980) (14,797)

Deferred tax liabilities 6,440 5,381

(540) (9,416)


A N N U A L R E P O R T 2 0 0 5 51

31 December 20056.

DE

FER

RE

D T

AX

ATIO

N (

CO

NT

’D)

The

com

pone

nts

and

mov

emen

ts o

f de

ferr

ed t

ax li

abili

ties

and

ass

ets

duri

ng t

he f

inan

cial

yea

r pr

ior

to o

ffse

ttin

g ar

e as

fol

low

s:-

Def

erre

d Ta

x L

iabi

litie

s of

the

Gro

up:-

Cap

ital

R

eval

uati

on

Allo

wan

ce a

nd

of F

reeh

old/

U

nuti

lised

D

epre

ciat

ion

Lea

seho

ld

Cap

ital

U

nabs

orbe

d D

iffe

renc

es

Lan

d P

rovi

sion

s A

llow

ance

s Ta

x L

osse

s O

ther

s To

tal

RM

'000

RM

'000

RM

'000

RM

'000

RM

'000

RM

'000

RM

'000

At

1 Ja

nuar

y 20

04

9,89

3

5,99

2 (6

,674

)(7

,828

)

(2,7

34)

(2,1

34)

(3,4

85)

R

ecog

nise

d in

the

inco

me

stat

emen

t

8,03

7 (9

3)

(802

) (1

3,15

4)

(2,0

64)

2,

145

(5

,931

)

At

31 D

ecem

ber

2004

17

,930

5,89

9(7

,476

) (2

0,98

2)

(4,7

98)

11

(9

,416

)

Rec

ogni

sed

in t

he in

com

e st

atem

ent

4,78

5(7

19)

1,41

8

5,14

9(2

,519

) 76

2 8,

876

A

t 31

Dec

embe

r 20

05

22,7

15

5,18

0

(6,0

58)

(15,

833)

(7

,317

) 77

3

(540

)

Def

erre

d Ta

x L

iabi

litie

s/(A

sset

s) o

f th

e C

ompa

ny:-

C

apit

al

Allo

wan

ce a

nd

Rev

alua

tion

U

nuti

lised

A

llow

ance

D

epre

ciat

ion

of F

reeh

old

C

apit

al

for

doub

ful

Dif

fere

nces

L

and

Pro

visi

ons

A

llow

ance

s

debt

s O

ther

s To

tal

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

At

1 Ja

nuar

y 20

04

1,36

1 2,

065

(2,5

20)

(2

,682

) -

(1,7

75)

(3,5

51)

R

ecog

nise

d in

the

inco

me

stat

emen

t

1,19

2 (3

2)

(180

)

(1,4

85)

(980

) 1,

775

290

A

t 31

Dec

embe

r 20

04

2,55

3

2,03

3 (2

,700

) (4

,167

) (9

80)

-

(3,2

61)

R

ecog

nise

d in

the

inco

me

stat

emen

t

1,18

5

(32)

26

2

(260

) 79

7

- 1,

952

A

t 31

Dec

embe

r 20

05

3,73

8

2,00

1(2

,438

) (4

,427

) (1

83)

- (1

,309

)



6. DEFERRED TAXATION (CONT’D)

Deferred tax assets have not been recognised in respect of the following items:-

Group2005 2004

RM’000 RM’000

Unabsorbed tax losses 16,502 15,996

Unutilised capital allowances 11,740 13,128

Provisions - 364

28,242 29,488

The unabsorbed tax losses, unutilised capital allowances and provisions are available indefinitely for offsetagainst future taxable profits of the respective subsidiaries.

7. INVENTORIES

Group Company2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

At Cost:-

Raw materials 155,261 103,928 22,438 19,994

Work-in-progress 27,313 17,582 17,049 11,373

Finished goods 37,674 20,713 4,125 3,854

Spare parts and consumables 7,925 7,716 - -

Goods in transit 1,434 374 - -

At Net Realisable Value:-

Raw materials - 1,784 - -

Finished goods 111 2,754 - -

229,718 154,851 43,612 35,221

8. TRADE RECEIVABLES

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Trade receivables 156,687 157,104 22,517 24,318

Less: Allowance for doubtful debts (2,615) (1,404) (1,003) (350)

154,072 155,700 21,514 23,968

The Group’s normal trade credit term ranges from 30 to 120 days. Other credit terms are assessed and approvedon a case-by-case basis.

The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or togroups of debtors.

31 December 2005


A N N U A L R E P O R T 2 0 0 5 53

9. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Other receivables 8,452 5,242 2,249 297

Deposits and prepayments 6,170 6,096 4,944 193

Tax recoverable 2,267 611 381 341

Value added tax recoverable 1,262 1,353 - -

18,151 13,302 7,574 831

The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or togroups of debtors.

10. SHORT TERM DEPOSITS

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Deposits placed with:

- licensed banks 20,670 17,121 19,725 14,510

- licensed finance companies - 662 - -

- other financial institutions 12,106 7,795 2,345 -

32,776 25,578 22,070 14,510

The range of interest rates during the financial year and the maturities of deposits at the financial year end wereas follows:-

Group Company Interest Interest

Rates Maturities Rates Maturities % Days % Days

2005

Licensed banks 2.35 to 2.99 5 to 30 2.35 to 2.99 5 to 30

Other financial institutions 2.42 to 4.00 7 2.42 to 4.00 7

2004

Licensed banks 2.60 to 4.05 5 to 365 2.70 to 4.05 5 to 28

Licensed finance companies 3.00 to 3.70 31 to 365 - -

Other financial institutions 3.10 31 to 365 - -

Other financial institutions are unit trust company and building societies in Malaysia.

11. TRADE PAYABLES

The normal trade credit term granted to the Group ranges from 30 to 90 days.

31 December 2005



31 December 2005

12. OTHER PAYABLES AND ACCRUALS

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Other payables 14,820 8,429 2,093 705

Value added tax payable 186 159 - -

Accrued expenses 16,204 13,176 3,390 3,559

31,210 21,764 5,483 4,264

13. PROVISIONS

Retirement Solid Waste Restructuring Benefit Disposal Costs Total

RM’000 RM’000 RM’000 RM’000Group

At 1 January 2004 23,135 723 - 23,858

Underprovision in previous years 554 - - 554

Additional provision during the year 2,563 283 315 3,161

Utilisation of provision during the year (620) (366) - (986)

Net curtailment gain recognised during the year (612) - - (612)

At 31 December 2004 25,020 640 315 25,975

Underprovision in previous years - (5) - (5)

Additional provision during the year 2,548 334 - 2,882

Utilisation of provision during the year (1,439) (478) (315) (2,232)

Net curtailment gain recognised during the year (3,182) - - (3,182)

At 31 December 2005 22,947 491 - 23,438

Retirement Benefit

RM’000 Company

At 1 January 2004 9,001

Underprovision in previous years 62

Additional provision during the year 866

Utilisation of provision during the year (284)

At 31 December 2004 9,645

Net curtailment gain recognised during the year (1,025)

Additional provision for the year 919

Utilisation of provision during the year (425)

At 31 December 2005 9,114


A N N U A L R E P O R T 2 0 0 5 55

31 December 2005

13. PROVISIONS (CONT’D)

Analysed as:-Group Company

2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000

Current

Retirement benefit 1,916 2,567 1,041 1,337

Solid waste disposal 491 640 - -

Restructuring Cost - 315 - -

2,407 3,522 1,041 1,337

Non-current

Retirement benefit 21,031 22,453 8,073 8,308

23,438 25,975 9,114 9,645

Notes:-

(a) Retirement Benefit

The Group operates an unfunded, defined retirement benefit scheme and provision is made at contractedrates for benefits that would become payable on retirement of eligible employees. Under the Scheme, eligibleemployees are entitled to retirement benefits varying between 18 days and 52 days per year of final salary uponattainment of the retirement age of 55.

The amounts recognised in the balance sheet are determined as follows:-

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000 Present value of unfunded defined

benefit obligations 23,062 25,177 9,147 9,762

Unrecognised actuarial gains (115) (157) (33) (117)

22,947 25,020 9,114 9,645

Included in provision for retirement benefit are amounts payable to directors of RM6,542,000 (2004:RM6,528,000) for the Group and RM2,252,000 (2004: RM2,230,000) for the Company.

The amounts recognised in the income statement are as follows:-

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Current service cost 1,401 1,221 514 386

Interest cost 1,147 1,342 405 480

Underprovision in previous years - 554 - 62

Net curtailment gain recognised during the year (3,182) (612) (1,025) -

Total, included in staff cost (Note 21) (634) 2,505 (106) 928

Principal actuarial assumptions used:-

2005 2004 % %

Discount rate 7 7 Expected rate of salary increases 3 - 6 3 - 6



31 December 2005

13. PROVISIONS (CONT’D)

(b) Solid Waste Disposal

The Group has to dispose of solid waste in accordance with environmental requirements. A provision hasbeen made for estimated solid waste based on service provider’s price quotation.

(c) Restructuring Cost

The restructuring cost relates to the merging of the operations of certain subsidiary companies and consiststhe dismantling cost of the production lines.

14. HIRE PURCHASE CREDITOR

Details of the hire purchase balance are as follows:-

Group Group 2005 2004

Present Present Minimum Value of Minimum Value of Payments Payments Payments Payments

RM’000 RM’000 RM’000 RM’000

Amount repayable within:-

1 year after balance sheet date - - 10 8

Less: Unexpired interest - - (2) -

- - 8 8

15. BANK BORROWINGS (UNSECURED)

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Bank borrowings:

- bankers’ acceptances 55,206 23,272 20,233 375

- bank overdrafts 220 2,518 - 412

- revolving credit 30,000 - 30,000 -

- term loans

- current portion (Note 19) 19,378 52,838 10,000 50,000

104,804 78,628 60,233 50,787

Certain bankers’ acceptances and bank overdrafts of the Group are secured by a corporate guarantee from theCompany and a negative pledge on the assets of certain subsidiary companies.

The effective interest rates per annum at the balance sheet date for bank borrowings, excluding term loans, wereas follows:-

Group Company 2005 2004 2005 2004

% % % %

Bank overdraft 5.73 - 6.50 6.50 - 8.50 - 6.50

Bankers’ acceptances 2.79 - 2.83 2.55 - 3.13 2.79 - 2.83 2.55

Revolving credit 3.95 - 3.95 -


A N N U A L R E P O R T 2 0 0 5 57

31 December 2005

16. SHARE CAPITAL

Group/Company Number of Ordinary

Shares of RM0.50 each Amount 2005 2004 2005 2004

RM’000 RM’000

Authorised:-

At 1 January/31 December 200,000,000 200,000,000 100,000 100,000

Issued and fully paid:-

At 1 January 177,473,661 175,756,661 88,737 87,878

Issuance persuant to Employees’ Share Option Scheme (Note b) 3,945,000 1,717,000 1,972 859

At 31 December 181,418,661 177,473,661 90,709 88,737

Notes:-

(a) During the financial year, the Company increased its issued and paid-up share capital from RM88,736,831to RM90,709,331 by way of issuance of 3,945,000 new ordinary shares of RM0.50 each to eligible employeesof the Group under the Employees’ Share Option Scheme at an exercise price of RM2.15 per share for cash.

All the new ordinary shares issued rank pari passu in all respects with the existing ordinary shares of theCompany.

(b) The Employees’ Share Option Scheme (“Scheme”) was approved by the shareholders at an ExtraordinaryGeneral Meeting convened on 31 January 2002.

The main features of the Scheme are:-

(i) Eligible persons are employees of the Company and its non-listed Malaysian incorporated subsidiarycompanies which are not dormant (including full-time Executive Directors) in the employment of theGroup with at least two years of service as at the offer date. Foreign employees of the Group (save for theExecutive Directors) are not entitled to the scheme. No employee and Executive Director shall participateat anytime in more than one Employee Share Option Scheme implemented by any company within theGroup.

(ii) The total number of shares to be offered shall not exceed 10% of the enlarged issued and paid-upordinary share capital of the Company at any point of time during the existence of the Scheme.

(iii) No option shall be granted for less than 1,000 ordinary shares and not more than 400,000 ordinary sharesbefore bonus issue of new ordinary shares during the financial year ended 31 December 2002, to anyindividual eligible employee.

(iv) The option price shall be at a discount of not more than 10% from the weighted average market price ofthe shares as shown in the daily official list issued by the Bursa Malaysia for the five trading dayspreceding the offer date, or at par value of the shares of the Company, whichever is higher.

(v) The Scheme shall be in force at the discretion of the Committee appointed by the Board of Directorssubject to the maximum period of five years from the date of its approval by the Company in a generalmeeting or the date of the last approval by relevant authorities, whichever shall be the latest date subjectto any extension as may be approved by the aforesaid authorities.

(vi) The maximum allowable allotment for each eligible employee is based on a predetermined scale ofmaximum entitlement for each category and grade of employee. The criteria for the basis of allotmentwould be based on seniority, performance and length of service.

(vii)A grantee will be allowed to exercise not more than 20% of the options granted to him per year.



31 December 2005

16. SHARE CAPITAL (CONT’D)

(b) (viii)In the event of any alteration in the capital structure of the Company during the option period, whetherby way of a rights issue, bonus issue or other capitalisation issue, consolidation or subdivision of sharesor reduction of capital or otherwise howsoever, the Company shall cause such adjustment to be made to:-

- the number of shares which a grantee shall be entitled to subscribe for upon the exercise of eachoption; and/or

- the subscription price

as shall be necessary to give a grantee the same propotion of the issued capital of the Company as that towhich he was entitled prior to the event giving rise to such adjustment.

As at 31 December 2005, the total number of options granted and the movements in the options to take upthe unissued ordinary shares of RM0.50 each of the Company are as follows:-

Number of options over ordinary shares of RM0.50 each Option Lapsed granted Option due to on price 1.1.2005 Exercised resignation 31.12.2005

RM

8.4.2002 2.15 8,354,000 (3,945,000) (155,000) 4,254,000

Of the above total, Executive Directors of the Company and the subsidiary companies had been grantedoptions to subscribe for 1,360,000 and 42,000 ordinary shares of RM0.50 each respectively.

The option price for the options granted on 8 April 2002 was subsequently adjusted from RM3.22 per shareto RM2.15 per share following a bonus issue in the same financial year.

Details of share options exercised at RM2.15 during the financial year and the fair value of shares issued atexercise date, are as follows:-

Considerations Number of Fair Value ofExercise Received Share Options Shares Issued Date RM RM

07/01/05 528,900 246,000 2.78

07/02/05 133,300 62,000 2.74

07/03/05 279,500 130,000 2.67

08/04/05 189,200 88,000 2.67

09/05/05 795,500 370,000 2.56

08/06/05 1,494,250 695,000 2.71

08/07/05 1,249,150 581,000 3.26

08/08/05 2,021,000 940,000 3.28

08/09/05 956,750 445,000 3.24

10/10/05 393,450 183,000 3.03

14/11/05 290,250 135,000 3.09

09/12/05 150,500 70,000 3.00

8,481,750 3,945,000


A N N U A L R E P O R T 2 0 0 5 59

31 December 2005

16. SHARE CAPITAL (CONT’D)

The interests of directors in office at the end of the financial year in options under the Scheme are disclosed inthe “Directors’ Interest” section of the Directors’ Report.

Options exercisable in a particular year but not exercised can be carried forward to subsequent years provided thatno options shall be exercised beyond the date of the expiry of the Scheme.

17. RESERVES

Group Company 2005 2004 2005 2004

Note RM’000 RM’000 RM’000 RM’000

Non-distributable:-

Share premium a 13,214 6,704 13,214 6,704

Revaluation reserve b 509 509 - -

Capital reserve c 4,480 4,480 - -

Exchange reserve d (179) (200) - -

18,024 11,493 13,214 6,704

Distributable:-

Retained profit e 489,900 456,572 161,997 163,236

At 31 December 507,924 468,065 175,211 169,940

Notes:-

(a) The increase in the share premium arose from the 3,945,000 ordinary shares of RM0.50 each issued atRM2.15 each pursuant to the Employees’ Share Option Scheme as disclosed in Note 16 to the financialstatements.

(b) The revaluation reserve arose as a result of the revaluation of land and buildings of the Company and certainsubsidiary companies, as disclosed in Note 3 to the financial statements, net of deferred taxation effect.

(c) The capital reserve arose as a result of capitalisation of retained profit and revaluation reserve for bonus issueby a subsidiary company, Box-Pak (Malaysia) Berhad, in 1996.

(d) The exchange reserve arose from the translation of the financial statements of the foreign subsidiarycompanies.

(e) As at 31 December 2005, the Company has tax exempt profits available for distribution of approximatelyRM69,254,000 (2004: RM79,301,000), subject to the agreement of the Inland Revenue Board.

The Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and the balance inthe tax-exempt income account to frank the payment of dividends out of its entire retained profit as at 31December 2005.

18. RESERVE ON CONSOLIDATION

Group 2005 2004

RM’000 RM’000

At 1 January/31 December 6,466 6,466



31 December 2005

19. TERM LOANS (UNSECURED) Group Company

2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000

Term loan (unsecured): - Type 1 - 30,000 - 30,000 - Type 2 926 2,804 - -- Type 3 838 1,300 - -- Type 4 12,537 11,377 - -- Type 5 50,000 50,000 50,000 50,000 - Type 6 - 20,000 - 20,000 - Type 7 6,344 - - -- Type 8 3,587 - - -- Type 9 50,000 - 50,000 -

124,232 115,481 100,000 100,000 Amount repayable within 12 months (Note 15) (19,378) (52,838) (10,000) (50,000)

Amount repayable after 12 months 104,854 62,643 90,000 50,000

Term loan balances are analysed as follows:-

Amount payable within:- 1 year after balance sheet date 19,378 52,838 10,000 50,000 More than 1 year but not later than 2 years 58,010 4,614 - - More than 2 years but not later than 5 years 46,844 58,029 90,000 50,000

124,232 115,481 100,000 100,000

Details of the term loans are as follows:-

Interest Rate Commencing Repayment

Loan % Date Term

* Type 1 5.50 Dec-01 Bullet repayment on 12 December 2005# Type 2 2.03 - 2.19 Jul-02 48 equal instalments commencing from the date

of drawdown # Type 3 2.13 - 2.28 Nov-02 60 equal instalments commencing from the date

of drawdown Type 4 4.70 - 5.20 Apr-04 14 equal instalments commencing 18 months from the

date of drawdown * Type 5 3.60 Nov-04 Bullet repayment on 24 November 2007

Type 6 3.60 Dec-04 Bullet repayment on 15 December 2005Type 7 4.80 - 5.80 Feb-05 16 equal instalments commencing 12 months from the

date of drawdown Type 8 4.80 - 5.80 Sep-05 16 equal instalments commencing 12 months from the

date of drawdown Type 9 4.10 Sep-05 5 equal annual instalments commencing from the date of

first drawdown

* These term loans are secured by a negative pledge on the assets of the Company.

# These term loans are secured by a corporate guarantee from the Company and a charge on the asset of a subsidiary company.


A N N U A L R E P O R T 2 0 0 5 61

31 December 2005

20. REVENUE

Revenue of the Group and of the Company consists of the following:-

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Sales of goods 654,836 575,560 120,659 105,470 Dividend income: - from quoted subsidiary company - - - 3,291 - from unquoted subsidiary companies - - 32,957 35,346 Others 121 124 - -

654,957 575,684 153,616 144,107

21. STAFF COSTS

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Wages and salaries 61,821 59,706 18,378 18,507 Termination benefits arising from

restructuring exercise 5,258 1,517 3,334 - Social security costs 671 614 207 197 Short term accumulating compensated absences 33 (113) - (24) Pension cost - defined

contribution plan 5,437 5,398 1,684 1,707 Balance carried forward 73,220 67,122 23,603 20,387

Balance brought forward 73,220 67,122 23,603 20,387 Pension cost - defined

benefit plan (Note 13): - Underprovision in previous year - 554 - 62 - Additional provision during the year 2,548 2,563 919 866

- Net curtailment gain recognised during the year (3,182) (612) (1,025) -

Other staff related expenses 2,706 2,874 426 665 75,292 72,501 23,923 21,980

Notes:-

(a) Employee Information

Group Company 2005 2004 2005 2004

Number of employees (excluding directors) 2,522 2,514 548 624



31 December 2005

21. STAFF COSTS (CONT’D)

(b) Directors’ Remuneration

The directors’ remuneration included in staff costs of the Group and of the Company is analysed as follows:-

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Directors’ emolument payable to directors of: - the Company 3,784 3,710 1,377 1,295 - subsidiary companies who are not

directors of the Company 1,668 954 - -Directors’ fees payable to directors of: - the Company 374 389 322 322 - subsidiary companies who are not

directors of the Company 65 50 - -

Further information on directors’ remuneration is disclosed in Note 27 to the financial statements.

22. PROFIT FROM OPERATIONS

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

This is arrived at after charging/(crediting):-

Auditors’ remuneration: - audit fee 191 182 38 38 - non audit fee 10 10 - 7 - underprovision in prior year’s audit fee 9 - - - Allowance for doubtful debts 1,333 34 7,881 3,500 Impairment of investments in subsidiay companies - - - 1,000 Rental on: - buildings 319 359 23 27 - machinery 323 355 - - Provision for solid waste disposal 329 283 - - Property, plant and equipment written off 10 20 - - Foreign exchange loss/(gain): - realised 291 (339) 141 193 - unrealised 209 (151) - -

Gain on disposal of property, plant and equipment (2,212) (1,779) (2,114) (1,259)

Interest income (808) (1,452) (3,590) (4,583) Rental income (4,245) (4,229) (6,146) (6,120) Inventories written (up)/down (350) 620 - - Writeback of allowance for doubtful debts (122) (91) (53) - Bad debts recovered (7) (30) (7) (30)


A N N U A L R E P O R T 2 0 0 5 63

31 December 2005

23. FINANCE COSTS

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Interest on: - term loans 5,013 4,694 4,251 4,318 - bank overdrafts 867 278 329 30 - bankers’ acceptances and trust receipts 1,006 586 - - - others 2 2 - -

6,888 5,560 4,580 4,348

24. TAXATION

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Income tax: - Malaysian income tax 8,970 12,654 7,504 8,645 - (Over)/under provision in prior years (13) 226 35 225

8,957 12,880 7,539 8,870

Deferred tax (Note 6): - Relating to origination and reversal of

temporary difference 7,988 (8,095) (411) (1,974) - Over recognition of deferred tax asset

in prior years - 1,777 2,363 1,777 - Underprovision of deferred tax liabilities

in prior years 888 387 - 487 8,876 (5,931) 1,952 290

Share of taxation of associated company 162 443 - - 17,995 7,392 9,491 9,160

Domestic income tax is calculated at the Malaysian statutory tax rate of 28% (2004: 28%) of the estimatedassessable profit for the year, except for the tax incentive of 8% exempted for the first RM500,000 (2004:RM500,000) taxable profit to certain subsidiary companies of the Company by the Authority.

(a) A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate toincome tax expense at the effective income tax rate of the Group and of the Company is as follows:-

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Profit before taxation 69,594 56,510 26,257 35,032

Taxation at Malaysian statutory tax rateof 28% (2004: 28%) 19,486 15,823 7,352 9,809

Effect of lower tax rates for small and medium scale companies (15) 364 - -

Effect of income not subject to tax - (37) (2,228) (3,919)



31 December 2005

24. TAXATION (CONT’D)

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Effect of expenses not deductiblefor tax purposes 1,103 1,480 1,968 1,166

Deferred tax assets not recognised during the financial year 3,327 1,901 - -

Effect of utilisation of prior yearunrecognised deferred tax assets (38) - - -

Effect of utilisation of reinvestment allowances (3,106) (525) - -

Deferred tax assets recognised on:

- unabsorbed tax losses (1,524) - - -

- unutilised capital allowances (2,114) (13,247) - -

Balance carried forward 17,119 5,759 7,092 7,056

Balance brought forward 17,119 5,759 7,092 7,056

Deferred tax assets recognised on:

- other temporary differences - (128) - -

Recognition of deferred tax liabilites arising from control transfer of property, plant and equipment - - - 244

Reversal of deferred tax liabilites arising from control transfer of property, plant and equipment to foreign subsidiary company 1 (629) 1 (629)

Over recognition of deferred tax asset in prior years - 1,777 - 1,777

(Over)/underprovision in prior years:

- income tax (13) 226 35 225

- deferred tax liabilities 888 387 2,363 487

Tax expense for the year 17,995 7,392 9,491 9,160

25. EARNINGS PER SHARE

(a) Basic earnings per share

Basic earnings per ordinary share is calculated by dividing the net profit after taxation by the weighted averagenumber of ordinary shares in issue during the financial year.

Group2005 2004

Profit after taxation and minority interest (RM’000) 51,333 49,786

Weighted average number of ordinary shares in issue (‘000) 179,425 176,893

Basic earnings per share (sen) 28.61 28.14


A N N U A L R E P O R T 2 0 0 5 65

31 December 2005

25. EARNINGS PER SHARE (CONT’D)

(b) Diluted earnings per share

The Group’s diluted earnings per ordinary share is calculated by dividing the Group’s net profit after taxationby the weighted average number of ordinary shares that would be in issue at the end of the financial year hadall the exercisable share options as at the end of the financial year under the Company’s Employees’ ShareOption Scheme been exercised.

Group2005 2004

Profit after taxation and minority interest (RM’000) 51,333 49,786

Weighted average number of ordinary shares in issue (‘000)

- as above 179,425 176,893

- adjusted for assumed exercise of share option 1,768 2,033

Weighted average number of ordinary shares for diluted earnings per share 181,193 178,926

Diluted earnings per share (sen) 28.33 27.82

26. DIVIDENDS

(i) Paid and proposed dividends

Dividends per share as disclosed in the income statements is computed as follows:-

Group/Company 2005 2004

Sen Sen

Paid:-

Interim tax exempt dividend of 10% (a) 5 5

Proposed:-

Final tax exempt dividend of 10% (b) 5 5

10 10

Notes:-

(a) Interim dividend per share is calculated by dividing the interim dividend declared for the year ofRM9,052,000 (2004: RM8,866,000) by the number of ordinary shares of RM0.50 each in issue of181,030,661 (2004: 177,328,661). The number of ordinary shares in issue is calculated after taking intoaccount 3,557,000 (2004: 1,572,000) ordinary shares issued pursuant to the Employees’ Share OptionScheme.

(b) Final dividend per share is calculated by dividing the final dividend proposed for the year 2005 ofRM9,071,000 (2004: RM8,953,000) by the number of ordinary shares of RM0.50 each in issue of181,418,661 (2004: 179,064,661). The number of ordinary shares in issue is calculated after taking intoaccount 1,591,000 (2004: 1,348,000) ordinary shares issued pursuant to the Employees’ Share OptionScheme.



31 December 2005

26. DIVIDENDS (CONT’D)

(ii) Dividends accounted for in the financial statements Group/Company

2005 2004 RM’000 RM’000

Dividend payment:

- Interim dividend 9,052 8,866

- Final dividend proposed in 2003 paid in 2004 - 8,856

- Final dividend proposed in 2004 paid in 2005 8,953 -

18,005 17,722

At the forthcoming Annual General Meeting, a final tax exempt dividend of 10% on 181,418,661 ordinaryshares, amounting to a dividend payable of RM9,071,000 (5 sen per share) in respect of the financial yearended 31 December 2005, will be proposed for shareholders’ approval. The financial statements for thecurrent financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders,will be accounted for in shareholders’ equity as an appropriation of retained profit in the financial year ending31 December 2006.

27. DIRECTORS’ REMUNERATION

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Directors of the Company

Executive:-

Salaries and other emoluments 3,033 2,881 1,128 1,055

Fees 172 172 120 120

Bonus 328 296 122 119

Pension cost - defined contribution plan 282 293 105 100

Pension cost - defined benefit plan 141 240 22 21

3,956 3,882 1,497 1,415

Non-Executive:-

Fees 202 217 202 202

4,158 4,099 1,699 1,617

Other Directors

Executive:-

Salaries and other emoluments 1,315 737 - -

Fees 15 10 - -

Bonus 100 84 - -

Pension cost - defined contribution plan 99 73 - -

Pension cost - defined benefit plan 154 60 - -

1,683 964 - -

Non-Executive:-

Fees 50 40 - -

Total directors’ remuneration 5,891 5,103 1,699 1,617


A N N U A L R E P O R T 2 0 0 5 67

31 December 2005

27. DIRECTORS’ REMUNERATION (CONT’D)

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Analysis:-

Total executive directors’ remuneration 5,639 4,846 1,497 1,415

Total non-executive directors’ remuneration 252 257 202 202

Total directors’ remuneration 5,891 5,103 1,699 1,617

The number of directors of the Group whose total remuneration falls within the respective bands are analysed asfollows:-

Number of Directors 2005 2004

Executive directors:-

RM100,001 - RM150,000 1 -

RM150,001 - RM200,000 - 2

RM250,001 - RM300,000 1 -

RM450,001 - RM500,000 1 -

RM550,001 - RM600,000 - 1

RM600,001 - RM650,000 1 -

RM750,001 - RM800,000 - 2

RM800,001 - RM850,000 2 -

RM1,050,001 - RM1,100,000 1 2

RM1,100,001 - RM1,150,000 1 -

Non Executive directors:-

Below RM50,000 8 8

28. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

A. COMPLETED EVENTS

1. On 10 November 2005, the Company announced that it has entered into two Sale and Purchase Agreements(“SPA”) with:-

(a) Sin Keong Fatt Sdn. Bhd. on 26 April 2005 for an acquisition of a freehold vacant industrial land heldunder H.S.(D) 112402, P.T. No. 18086, Mukim Setul, Daerah Seremban, Negeri Sembilan, measuringapproximately 4,074.1 square meters for a purchase consideration of RM701,648; and

(b) Max Prints Sdn. Bhd. on 27 October 2005 for an acquisition of a freehold vacant industrial land heldunder H.S.(D) 112401, P.T. No 18085, Mukim Setul, Daerah Seremban, Negeri Sembilan, measuringapproximately 4,461.2 square meters for a purchase consideration of RM816,338.

2. On 10 November 2005, the Company announced that it has on 25 October 2005 entered into a Sale of LeaseAgreement (“SLA”) with Ye Chiu Metal Smelting Berhad for the disposal of the remainder of the 30 yearslease (“Lease”) of a leasehold vacant industrial land held under H.S.(D) 212963, PTD 109031, MukimPlentong, Daerah Johor Bahru, Negeri Johor Darul Takzim, measuring approximately 3 acres, at a disposalsum of RM1,176,120.



31 December 2005

28. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT’D)

A. COMPLETED EVENTS (CONT’D)

2. The Lease was formally signed on 4 September 1991 between Perbadanan Kemajuan Ekonomi Negeri Johor(“PKENJ”) and KJCF.

On 17 October 2005, KJCF has received a no objection letter from PKNEJ with regard to the transfer of theLease to Ye Chiu Metal Smelting Berhad.

B. EVENT PENDING COMPLETION

1. On 8 November 2005, the Group announced its intention to embark on an up-stream technology integrationprogramme by teaming up with Omnitech International, Inc. (OII). In line with this, a newly incorporatedjoint-ventured company KJO Systems Sdn Bhd was incorporated on 26 October 2005 with an authorisedshare capital of RM5 million and having 50% : 50% ownership from KJCF and OII. KJO will be located inNilai, Negeri Sembilan, Malaysia.

The newly incorporated joint venture will introduce a new can making system called “MICROFLEX”, whichis suitable for both aluminium and steel and is very mobile. With this new system, KJCF will venture intothe production of aluminium “Bottle” can.

The complete manufacturing line, capable of the most sophisticated metal can production at a much lowerinvestment cost, will be installed in Malaysia and expected to be in operation by 2nd quarter of 2006.

29. CAPITAL COMMITMENTS

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Capital expenditure Approved and contracted for:-

Property, plant and equipment 21,333 34,711 3,556 79 Investments in Vietnam - 8,845 - 8,807

Share of capital commitments of associated company (Note 5 (b)) 1,398 2,046 - -

22,731 45,602 3,556 8,886

30. OPERATING LEASE PAYABLES

The future minimum lease payable under non-cancellable operating leases are summarised as follows:-

Group2005 2004

RM’000 RM’000

1 year after balance sheet date 166 255 More than 1 year but not later than 5 years 36 195

The above lease payables are in respect of the rental of staff quarters, warehouse and machinery, on terms andconditions mutually agreed by both parties.


A N N U A L R E P O R T 2 0 0 5 69

31 December 2005

31. OPERATING LEASE RECEIVABLES

The future minimum lease receivable under non-cancellable operating leases are summarised as follows:-

Group2005 2004

RM’000 RM’000

1 year after balance sheet date 3,082 2,482 More than 1 year but not later than 5 years 106 698

3,188 3,180

The above lease receivable is in respect of the rental income from letting of factory building and industrial land.

Included in the future minimum lease receiveables are rental income of RM1,095,000 (2004: RM1,095,000),receivable from letting of factory building to an associated company. The rental income is determined based onper square foot basis pursuant a to rental agreement dated 20 June 2001. The agreement shall expire on 30 June2006.

32. SIGNIFICANT RELATED PARTY TRANSACTIONS

Group Company 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Sales to subsidiary companies - - (43,995) (33,781) Sales to an associated company - (698) - -Rental receivable from subsidiary companies - - (4,230) (4,140) Rental receivable from an associate company (2,191) (2,191) - -Management fees receivable from

an associated company (1,573) (1,393) (1,573) (1,392) Interest income receivable from subsidiary companies - - (3,045) (3,664) (Sale)/purchase of property, plant and

equipment (to)/from subsidiary companies - - (78) (1,274) Purchases from subsidiary companies - - 7,487 8,374 Purchases from an associated company - 15 - -

Apart from the above, the Group also entered into the following related party transactions:-

(a) Nature of transaction Identity of related party 2005 2004 RM’000 RM’000

Sales of trading (i) Hercules Sdn. Bhd. 152 312inventories by asubsidiary company (ii) Metal Closure & Seals Sdn. Bhd. 318 277

The parties are deemed related to the Group by virtue of common directorship held by See Leong Chye @Sze Leong Chye in these parties and a subsidiary company.

The above transactions were entered into in the normal course of business on terms that the directors considercomparable to those had the transactions been entered into with third parties.



31 December 2005

33. SUBSIDIARY AND ASSOCIATED COMPANIES

Details of the Company’s subsidiary and associated companies are as follows:-

Country of Nature of Effective Interest Held Company Incorporation Business 2005 2004

% %

(a) Subsidiary companies of the Company

Box-Pak (Malaysia) Malaysia Corrugated 54.83 54.83 Berhad (“BP”) fibre board carton

manufacturer

Canco Engineering & Malaysia Industrial and 100 100Machinery Sdn. Bhd. mechanical engineering

services

Federal Metal Printing Malaysia Metal printing 100 100 Factory Sdn. Bhd. and can manufacturer

Indastri Kian Joo Malaysia Letting out of 100 100 Sdn. Bhd. factory building

^ Kian Joo Can Vietnam Can manufacturer 100 100 (Vietnam) Co., Ltd.

Kian Joo Packaging Malaysia 2-piece 100 100Sdn. Bhd. aluminium beverage

cans manufacturer

Kian Joo Canpack Malaysia Provision of 100 100 Sdn. Bhd. contract packing services

Kian Joo Canpack Malaysia Provision of 100 100(Shah Alam) Sdn. Bhd. contract packing services

KJ Can (Johore) Malaysia Can manufacturer 100 100 Sdn. Bhd.

KJ Can (Selangor) Malaysia Can manufacturer 100 100 Sdn. Bhd.

^ KJ Can (Singapore) Singapore Dormant 100 100 Pte. Ltd.

KJM Aluminium Can Malaysia 2-piece aluminium 100 100 Sdn. Bhd. retortable can manufacturer

Metal-Pak (Malaysia) Malaysia Can manufacturer 100 100 Sdn. Bhd. (“MP”)

Multi-Pet Sdn. Bhd. Malaysia Polyethelene terephalate 100 100 products manufacturer

(b) Subsidiary companies of BP

Box-Pak (Johore) Malaysia Corrugated fibre board 54.83 54.83 Sdn. Bhd. carton manufacturer

^ Box-Pak (Vietnam) Vietnam Corrugated fibre board 54.83 54.83 Co., Ltd. carton manufacturer


A N N U A L R E P O R T 2 0 0 5 71

31 December 2005

33. SUBSIDIARY AND ASSOCIATED COMPANIES (CONT’D)

Country of Nature of Effective Interest Held Company Incorporation Business 2005 2004

% %

(c) Subsidiary companies of MP

Bintang Seribu Malaysia Tinplate cutting 100 100 Sdn. Bhd. and metal printing operations

Great Asia Tin Cans Malaysia Letting out of 100 100 Factory Company factory building Sdn. Bhd.

(d) Associated company of the Company

Kian Joo-Visypak Malaysia Polyethelene terephalate 50 50 Sdn. Bhd. products manufacturer

^ Audited by firms of auditors other than Ernst & Young

34. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policies

The Group’s financial risk management policy seeks to ensure that adequate financial resources are availablefor the development of the Group’s businesses whilst managing its interest rate, foreign exchange, liquidityand credit risks. The Group operates within clearly defined guidelines that are approved by the Board and theGroup’s policy is not to engage in speculative transactions.

(b) Interest Rate Risk

The Group’s primary interest rate risk relates to interest-bearing debt. The Group had no substantial long-term interest-bearing assets as at 31 December 2005 other than amounts due from subsidiary companieswhich bear interest at a fixed rate. The investments in other financial assets are mainly short term in natureand they are not held for speculative purposes but have been mostly placed in fixed deposits which yield betterreturns than cash at bank.

The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rateborrowings. The Group actively reviews its debt portfolio, taking into account the investment holding periodand nature of its assets. This strategy allows it to capitalise on cheaper funding in a low interest rateenvironment and achieve a certain level of protection against rate hikes.

The information on maturity dates and effective interest rates of financial assets and liabilities are disclosedin their respective notes.

(c) Foreign Exchange Risk

The Group is not significantly exposed to foreign currency risk as the majority of the Group’s transactions,assets and liabilities are denominated in Ringgit Malaysia except for foreign exchange risks arising fromimports and exports and from a country in which foreign subsidiary companies operate. The currencies givingrise to this risk are primarily United States Dollar (“USD”), Singapore Dollar (“SGD”), Euro (“EURO”),Swiss Franc (“CHF”), Japanese Yen (“JPY”) and Vietnam Dong (“VND”).

The Group is not engaged in any hedging transactions.



34. FINANCIAL INSTRUMENTS (CONT’D)

(c) Foreign Exchange Risk

The net unhedged financial assets and financial liabilities of the Group as at 31 December 2005 that are notdenominated in their functional currencies are as follows:-

Functional currency JPY SGD EURO CHF USD of the Group RM’000 RM’000 RM’000 RM’000 RM’000

31 December 2005:-

Trade receivablesRinggit Malaysia - 4,528 - - 4,235Vietnam Dong - - - - 11,699

- 4,528 - - 15,934

Trade payables Ringgit Malaysia (14) (215) (63) (97) (1,460) Vietnam Dong - - - - (6,257)

(14) (215) (63) (97) (7,717)

Other payables Ringgit Malaysia - - - - (130) Vietnam Dong - - - - (873)

- - - - (1,003)

Term loans (unsecured) Vietnam Dong - - - - (24,233)

Net exposure (14) 4,313 (63) (97) (17,019)

31 December 2004:- Trade receivables

Ringgit Malaysia - 6,996 - - 16,882 Vietnam Dong - - - - 5,079

- 6,996 - - 21,961

Trade payables Ringgit Malaysia (86) (116) (92) (7) (690) Vietnam Dong - - - - (6,293)

(86) (116) (92) (7) (6,983)

Other payables Ringgit Malaysia - - - - (4) Vietnam Dong - - - - (702)

- - - - (706)

Term loans (unsecured) Vietnam Dong - - - - (17,538)

Net exposure (86) 6,880 (92) (7) (3,266)

31 December 2005


A N N U A L R E P O R T 2 0 0 5 73

31 December 2005

34. FINANCIAL INSTRUMENTS (CONT’D)

(d) Liquidity Risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding soas to ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquiditymanagement, the Group maintains sufficient levels of cash or cash convertible investments to meet itsworking capital requirements. In addition, the Group strives to maintain available banking facilities of areasonable level to its overall debt position. As far as possible, the Group raises committed funding from bothcapital markets and financial institutions and prudently balances its portfolio with some short term fundingso as to achieve overall cost effectiveness.

(e) Credit Risk

Credit risks, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limitsand monitoring procedures. Credit risks are minimised and monitored via strictly limiting the Group’sassociations to business partners with high creditworthiness. Trade receivables are monitored on an ongoingbasis via Group management reporting procedures.

The Group does not have any significant exposure to any individual customer or counterparty nor does ithave any major concentration of credit risk related to any financial instruments.

(f ) Fair Values

The aggregate net fair values of financial assets and financial liabilities which are not carried at fair value onthe balance sheets of the Group and of the Company are represented as follows:-

Group Company Carrying Carrying Amount Fair Value Amount Fair Value RM’000 RM’000 RM’000 RM’000

Financial Liabilities:-

Term loans (Note 19)

At 31 December 2005 124,232 153,849 100,000 129,617

At 31 December 2004 115,481 116,130 100,000 104,100

The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables,short term borrowings and contingent liabilities approximate their fair values due to the relatively short termnature of these financial instruments.

It is not practicable to determine the fair value of amounts due from/(to) subsidiary and associated companiesdue principally to a lack of fixed repayment term entered by the parties involved and without incurringexcessive costs. However, the Group and the Company do not anticipate the carrying amounts recorded atthe balance sheet date to be significantly different from the values that would eventually be received or settled.

The fair values of all other financial assets and liabilities of the Group and the Company as at 31 December2005 are not materially different from their carrying values.



31 December 2005

35.

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A N N U A L R E P O R T 2 0 0 5 75

31 December 200535

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A N N U A L R E P O R T 2 0 0 5 77

31 December 200535

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.



35. SEGMENT INFORMATION (CONT’D)

(b) Geographical Segments:-

The Group’s five major business segments are operated in Malaysia and Vietnam. Performance and positionsof respective countries are as follows:-

Malaysia Vietnam 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Total revenue from external customers 603,339 556,725 51,618 18,959

Segment assets 806,659 716,310 84,024 60,926

Capital expenditure 60,065 41,234 9,649 29,045

36. COMPARATIVES FIGURES

The following comparative amounts as at 31 December 2004 have been reclassified to conform with current year’spresentation.

As previously As restated reported

RM RM

Group Balance Sheet

Taxation 1,271 1,488

Deferred tax liabilities 5,381 5,164

6,652 6,652

31 December 2005

LIST OF PROPERTIES

A N N U A L R E P O R T 2 0 0 5 79

as at 31 December 2005

NBV Age of Land &

Area Expiry Buildings BuildingLocation Description (sq.m) Tenure Date (Years) (RM'000)

Lot PT 2Jalan Perusahaan 4 Land & 11,713 Leasehold 05.09.2074 25 5,488Batu Caves, Selangor Building

Lot No 28833 to 28836 Land &Batu Caves, Selangor Building 7,299 Freehold - 11 4,158

Lot No 28829 to 28832 Land &Batu Caves, Selangor Building 16,895 Freehold - 10 8,676

Lot 6 Jalan Perusahaan 1 Land &Batu Caves, Selangor Building 8,514 Leasehold 05.09.2074 17 5,474



Lot PT 765, Mukim of Land forKuala Lumpur Development 1,963 Freehold - - 740

Lot No 3846, Chembong Land forRembau, Negeri Sembilan Development 4,249 Leasehold 27.06.2049 - 173

Lot 123, Phase 3Arab-Malaysian Industrial Park Land for 12,553 Freehold - - 2,254Nilai, Negeri Sembilan Development

Lot 146Arab-Malaysian Industrial Park Land forNilai, Negeri Sembilan Development 9,007 Freehold - - 1,803

Lot 147Arab-Malaysian Industrial Park Land forNilai, Negeri Sembilan Development 9,007 Freehold - - 1,925

Lot 107Arab-Malaysian Industrial Park Land &Nilai, Negeri Sembilan Building 11,785 Freehold - 01 13,804

Lot 22 & 24, Sec 16Town of Shah Alam Land &Selangor Building 3,902 Leasehold 31.10.2070 33 2,607

Lot 21, Section 16Town of Shah Alam Land &Selangor Building 1,951 Leasehold 31.10.2070 21 750

PT No 14350Mukim of Damansara Land &Shah Alam, Selangor Building 19,777 Freehold - 07 12,945

Lot 10, Lorong 2ACheras Jaya Ind Estate Land &Balakong, Selangor Building 6,028 Leasehold 14.05.2088 28 1,722

LIST OF PROPERTIES (cONT’D)


NBV Age of Land &

Area Expiry Buildings BuildingLocation Description (sq.m) Tenure Date (Years) (RM'000)

Lot 135 Jalan Kawat 15/18Tapak PerusahaanShah Alam, Town of Shah Alam Land &Selangor Building 11,427 Leasehold 12.06.2073 29 4,231

Lot 3 Jalan Kawat 15/18Tapak PerusahaanShah Alam, Town of Shah Alam Land &Selangor Building 12,140 Leasehold 16.07.2074 14 5,425

Lot 18 Jalan Pengapit 15/19 Land &Shah Alam, Selangor Building 7,641 Leasehold 04.11.2080 14 3,142



2736 & 2737Mukim of Ulu Kinta Land &District of Kinta, Perak Building 5,344 Leasehold 13.07.2036 27 741

733 Jalan Tampoi Land &81200 Johor Bahru, Johor Building 16,709 Freehold - 37 15,416

23 Jalan Dewani, Lorong 1Johor Bahru, Johor Shophouse 180 Freehold - 25 489

Lot 104, 105 & 106Arab-Malaysian Industrial Park Land &Nilai, Negeri Sembilan Building 39,603 Freehold - 08 29,481

HS (D) 80122 PT No 5141Mukim Damansara Land &Daerah Petaling, Selangor Building 31,142 Freehold - 13 13,657

17 Dai Lo Doc Lap, VSIPThuan An DistrictBinh Duong Province Land &Vietnam Building 22,201 Leasehold 11.02.2046 03 8,301

HS (D) 54826, No PT 15637Mukim Petaling Land &Daerah Petaling, Selangor Building 40,468 Leasehold 02.09.2090 04 17,434

HS (D) 187255, PTD 62907 &HS (D) 187256, PTD 62908 &Mukim Tebrau Land & Daerah Johor Bahru, Johor Building 18,483 Freehold - 11 9,727

22 Dai Lo Huu NghiVietnam Singapore Industrial ParkThuan An DistrictBinh Duong Province Land & Vietnam Building 29,900 Leasehold 11.02.2046 02 7,786

HS (D) 112402, PT No 18086 Land forMukim Setul, Daerah Seremban Development 4,074 Freehold - - 717 Negeri Sembilan

as at 31 December 2005

ANALYSIS OF SHAREHOLDINGS

A N N U A L R E P O R T 2 0 0 5 81

as at 24 april 2006

Authorised Share Capital RM 100,000,000Issued & Fully Paid-up Capital RM 90,854,830.50Class of Shares Ordinary share of RM 0.50 eachVoting Rights One vote per ordinary shareNumber of Shareholders 3,688

DISTRIBUTION OF SHAREHOLDINGS

Size of Shareholdings No of Holders % of Holders No of Shares % of Shares

1 – 1,000 538 14.59 435,976 0.241,001 – 10,000 2,533 68.68 8,998,550 4.9610,001 – 100,000 504 13.67 15,176,064 8.35100,001 – to less than 5% of issued shares 111 3.01 71,706,993 39.465% and above of issued shares 2 0.05 85,392,078 46.99

3,688 100.00 181,709,661 100.00

THIRTY LARGEST SHAREHOLDERS AS AT 24 APRIL 2006

Name No of Shares % of Shares

1 Kian Joo Holdings Sdn Bhd – in liquidation 64,111,914 35.28

2 Employees Provident Fund Board 21,280,164 11.71

3 Malaysia Nominees (Tempatan) Sendirian BerhadAmanah SSCM Asset Management Berhad for Amanah Millenia Fund Berhad (JM730) 4,700,000 2.59

4 Malaysian Assurance Alliance Berhad 4,454,500 2.45

5 Permodalan Nasional Berhad 3,988,500 2.19

6 Lembaga Tabung Haji 2,809,500 1.55

7 Cartaban Nominees (Tempatan) Sdn BhdExempt An for Amanah SSCM Nominees (Tempatan) Sdn Bhd (Account 1) 2,518,100 1.39

8 Dato’ See Teow Chuan 2,466,163 1.36

9 Yong Har Chye 2,000,000 1.10

10 Amanah Raya Nominees (Tempatan) Sdn BhdAmanah Saham Malaysia 1,957,400 1.08

11 Citigroup Nominees (Tempatan) Sdn BhdING Insurance Berhad (INV-IL PAR) 1,915,900 1.05

12 HSBC Nominees (Tempatan) Sdn BhdHSBC (M) Trustee Bhd for OSK-UOB Small Cap Opportunity Unit Trust (3548) 1,561,400 0.86

13 HSBC Nominees (Tempatan) Sdn BhdHSBC (M) Trustee Bhd for The Hwang-DBS Select Opportunity Fund (3969) 1,417,000 0.78

14 H.N. Holdings Sdn Bhd 1.348,750 0.74

15 Lembaga Tabung Angkatan Tentera 1,348,500 0.74

ANALYSIS OF SHAREHOLDINGS (cONT’D)


as at 24 april 2006

THIRTY LARGEST SHAREHOLDERS AS AT 24 APRIL 2006 (CONT’D)

Name No of Shares % of Shares

16 Pertubuhan Keselamatan Sosial 1,290,000 0.71

17 Amanah Raya Nomiees (Tempatan) Sdn BhdAUTB Progress Fund 1,204,000 0.66

18 BHLB Trustee BerhadPrugrowth Fund 1,202,000 0.66

19 See Leong Chye @ Sze Leong Chye 1,086,889 0.60

20 See Teow Chuan Holdings Sdn Bhd 1,057,900 0.58

21 Manulife Insurance (Malaysia) Berhad 1,010,000 0.56

22 Amanah Raya Nomiees (Tempatan) Sdn BhdKumpulan Wang AM 1,000,000 0.55

23 HSBC Nominees (Tempatan) Sdn BhdHSBC (M) Trustee Bhd for Hwang-DBS Select Small Caps Fund (4579) 943,300 0.52

24 AMMB Nominees (Tempatan) Sdn BhdAmanah SSCM Asset Management Berhad for Tenaga Nasional Berhad Retirement Benefit Trust Fund (7/893-1) 939,100 0.52

25 Universal Trustee (Malaysia) BerhadMayban Unit Trust Fund 910,000 0.50

26 Citigroup Nominees (Asing) Sdn BhdCBNY for DFA Emerging Markets Fund 902,000 0.50

27 Alliancegroup Nonimees (Tempatan) Sdn BhdPheim Asset Management Sdn Bhd for Employees Provident Fund 836,100 0.46

28 Rengo Malay Estate Sendirian Berhad 787,500 0.43

29 Cartaban Nominees (Tempatan) Sdn BhdAmanah SSCM Nominees (Tempatan) Sdn Bhd for Kumpulan Wang Amanah Pencen (JG442) 784,000 0.43

30 Bidor Tahan Estates Sdn Bhd 750,000 0.41

SUBSTANTIAL SHAREHOLDERS AS AT 24 APRIL 2006

Name Direct Interest Indirect InterestNo of Shares % No of Shares %

1 Kian Joo Holdings Sdn Bhd – in liquidation 64,111,914 35.28 - -

2 Employees Provident Fund Board 21,280,164 11.71 - -

3 Dato’ See Teow Chuan 2,466,163 1.36 65,872,419 36.25

4 Dato’ Anthony See Teow Guan 742,205 0.41 64,362,060 35.42

5 Mr See Teow Koon 383,616 0.21 64,285,119 35.38

6 Mr See Tiau Kee 200,000 0.11 64,210,914 35.34

ANALYSIS OF SHAREHOLDINGS (cONT’D)

A N N U A L R E P O R T 2 0 0 5 83

as at 24 april 2006

DIRECTORS’ SHAREHOLDINGS AS AT 24 APRIL 2006

Direct interest Indirect interest No. ofName of Director No of Shares % No of Shares % Options *

1 Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afar 134,625 0.07 1,559,250 0.86 -

2 Y.A.M. Tunku Dato’ Seri Nadzaruddin Ibni Tuanku Ja’afar 150,000 0.08 - - -

3 Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shah 748,132 0.41 - - -

4 Dato’ See Teow Chuan 2,466,163 1.36 65,872,419 36.25 360,000

5 Dato’ Anthony See Teow Guan 742,205 0.41 64,362,060 35.42 360,000

6 Mr See Teow Koon 383,616 0.21 64,285,119 35.38 240,000

7 Mr See Tiau Kee 200,000 0.11 64,210,914 35.34 400,000

8 Dato’ Haji Ismail Bin Lebai Kamat - - - - -

9 Mr Rick Loh Lap Sang - - - - -

Note: * Options granted pursuant to the Company’s Employee Share Option Scheme.

NOTICE OF ANNUAL GENERAL MEETING


NOTICE IS HEREBY GIVEN that the 48th Annual General Meeting of Kian Joo Can Factory

Berhad will be held at the Conference Room, Lot 6 Jalan Perusahaan 1, 68100 Batu Caves,

Selangor Darul Ehsan on Tuesday, 13 June 2006 at 3.00 p.m. for the following purposes:-

AGENDA

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report, Auditors’ Report and the Financial Statements forthe year ended 31 December 2005.

2. To declare a 10% Tax Exempt Final Dividend in respect of financial year ended 31 December 2005.

3. To approve the payment of Directors’ Fees amounting to RM322,000 for the financial yearended 31 December 2005.

4. To re-elect the following directors retiring by rotation in accordance with Article 108 of theArticles of Association, and being eligible, offer themselves for re-election:-

i.) Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afarii.) Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shahiii.) Dato’ Anthony See Teow Guan

5. To re-appoint Messrs Ernst & Young as Auditors and to authorise the Directors to fix theirremuneration.

AS SPECIAL BUSINESS

6. To consider and, if thought fit, to pass the following Ordinary Resolutions:

Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

“THAT, the shareholders’ Mandate obtained at last year’s annual general meeting 13 June 2005,pursuant to paragraph 10.09 of Bursa Malaysia’s Listing Requirements, be hereby renewed toauthorise the Company and/or its subsidiaries to enter into or transact all recurrent related partytransactions of a revenue or trading nature which are necessary in the day-to-day operations ofthe Company and its subsidiaries, the nature and the contracting parties are set out in a tableunder Section 2.2 of the Circular to Shareholders dated 18 MAY 2006 and on normalcommercial terms which are no more favourable to the related parties than those generallyavailable to the public and are not detrimental to the minority shareholders of the Company:

AND THAT the authority conferred by such renewed mandate shall continue in force until -

(a) the conclusion of next AGM of the Company, at which time it will lapse, unless by a resolution passed at the said AGM, the authority is renewed;

(b) the expiration of the period within which the next AGM after the date it is required to beheld pursuant to Section 143(1) of the Act but shall not extend to such extension as maybe allowed pursuant to Section 143(2) of the Act; or

(c) revoked or varied by resolution passed by the shareholders in general meeting, whichever is the earlier.

AND THAT authority be and is hereby given to the Directors of the Company to completeand do all such acts and things (including executing such documents as may be required) to giveeffect to the transaction contemplated and/or authorised by this Ordinary Resolution.”

Resolution 1

Resolution 2

Resolution 3

Resolution 4Resolution 5Resolution 6

Resolution 7

Resolution 8

NOTICE OF ANNUAL GENERAL MEETING (cONT’D)

A N N U A L R E P O R T 2 0 0 5 85

7. To transact any other business of which due notice have been given.

By order of the Board,

CHIA KWOK WHY (MAICSA 7005833)Company Secretary

Batu Caves, SelangorDate: 18 May 2006

Notes :

1. A member of the Company entitled to attend and vote at the Meeting may appoint a proxy to attend and vote inhis stead. A proxy may but need not be a member of the Company and the provision of Section 149(1)(a) and(b) of the Companies Act, 1965 shall not apply to the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney dulyauthorised in writing or, if such appointor is a corporation, under its common seal or the hands of its attorney.

3. Duly completed forms of proxy should be deposited to Symphony Share Registrars Sdn Bhd at Level 26, MenaraMulti Purpose, Capital Square, No.8, Jalan Munshi Abdullah, 50100, Kuala Lumpur not less than 48 hours beforethe time appointed for holding the meeting or any adjournment thereof.

4. EXPLANATORY NOTES ON SPECIAL BUSINESS

Resolution 8, seek to renew the Shareholders’ Mandate to enable the Company and its subsidiaries to enter intorecurrent related party transactions of revenue or trading nature in the day-to-day operations. The Shareholders’Mandate is on an annual basis and subject to renewal at the next AGM.

Relevant information on the Renewal of Shareholders’ Mandate are set out in the Circular to Shareholders dated18 MAY 2006 which is dispatched together with the Company’s annual report 2005.

STATEMENT ACCOMPANYING


1. Directors who are standing for re-election are:-

Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afarY.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan ShahDato’ Anthony See Teow Guan

The details of the above Directors are set on pages 4 to 7.

2. Details of Attendance of Directors at Board Meetings:-

There were a total of four (4) board meetings held during the financial year ended 31 December 2005 and the attendance of the Directors are set out on page 8.

3. Date, Time and Place of the 48th Annual General Meeting:-

Date : Tuesday, 13 June 2006Time : 3.00pmPlace : Conference Room

Lot 6, Jalan Perusahaan 168100 Batu CavesSelangor Darul Ehsan

Notice of Annual General Meeting

PROXY FORM

A N N U A L R E P O R T 2 0 0 5

(INCORPORATED IN MALAYSIA) (3186-P)

I/We, (Full Name)

of (Address)

being a member of Kian Joo Can Factory Berhad hereby appoint *The Chairman of the meeting or

(Full Name)

of or failing(Address)

him (Full Name)

of (Address)

as my/our proxy to vote for me/us and on my/our behalf at 48th Annual General Meeting of Kian Joo Can FactoryBerhad will be held at the Conference Room, Lot 6 Jalan Perusahaan 1, 68100 Batu Caves, Selangor Darul Ehsan on Tuesday, 13 June 2006 at 3.00 p.m. and at any adjournment thereof.

Please indicate with an ‘X’ in the spaces provided below how you wish your vote to be cast.on the resolutions specifiedin the Notice of Meeting.

Resolution For Against

AS ORDINARY BUSINESS1. To receive and adopt the Directors’ Report, Auditors’ Report and

the Financial Statements for the year ended 31 December 2005.

2. To declare a 10% Tax Exempt Final Dividend in respect offinancial year ended 31 December 2005.

3. To approve the payment of Directors’ Fees amounting toRM322,000 for the financial year ended 31 December 2005.

4. To re-elect the following directors retiring by rotation inaccordance with Article 108 of the Articles of Association, andbeing eligible, offer themselves for re-election:-

i.) Y.A.M. Tunku Naquiyuddin Ibni Tuanku Ja’afarii.) Y.A.M. Raja Dato’ Seri Ashman Shah Ibni Sultan Azlan Shahiii.) Dato’ Anthony See Teow Guan

5. To re-appoint Messrs Ernst & Young as Auditors and to authorisethe Directors to fix their remuneration.

AS SPECIAL BUSINESS6. To consider and, if thought fit, to pass the following Ordinary

Resolutions:Proposed Renewal of Shareholders’ Mandate for RecurrentRelated Party Transactions of a Revenue or Trading Nature

Signed this day of 2006.

Signature of Member(s)

Resolution 1

Resolution 2

Resolution 3

Resolution 4Resolution 5Resolution 6

Resolution 7

Resolution 8

The Share Registrars

KIAN JOO CAN FACTORY BERHADLevel 26, Menara Multi-Purpose

Capital Square

No. 8, Jalan Munshi Abdullah

50100 Kuala Lumpur

Affix

stamp

here

Please fold here

Please fold here

(3186-P)

Notes :

1. A member of the Company entitled to attend and vote at the Meeting may appoint a proxy to attend and vote in his stead. A proxy may but need not be a memberof the Company and the provision of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or, if such appointor is a corporation, under its common seal or the hands of its attorney.

3. Duly completed forms of proxy should be deposited to Symphony Share Registrars Sdn Bhd at Level 26, Menara Multi Purpose, Capital Square, No.8, JalanMunshi Abdullah, 50100, Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

4. EXPLANATORY NOTES ON SPECIAL BUSINESS

Resolution 8, seek to renew the Shareholders’ Mandate to enable the Company and its subsidiaries to enter into recurrent related party transactions of revenue ortrading nature in the day-to-day operations. The Shareholders’ Mandate is on an annual basis and subject to renewal at the next AGM.

Relevant information on the Renewal of Shareholders’ Mandate are set out in the Circular to Shareholders dated 18 MAY 2006 which is dispatched together withthe Company’s annual report 2005.

Kian Joo Can Factory Be rhad - Tin Can Manufacturer · CORPORATESTRUCTURE ANNUAL REPORT 2005 3 100% Bintang Seribu Sdn. Bhd. 100% Great Asia Tin Cans Factory Company Sdn. Bhd. 100%

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