ASIA TIGER GROUP LIMITED - listed companyliongoldcorp.listedcompany.com/misc/ar2007.pdfAsia Tiger Group Limited annual report 2007About Us page 01We specialise in the manufacture of

ASIA TIGER GROUP LIMITED

0ANNUAL REPORT

01 About Us 02 Our Products 04 Financial Highlights 05 Letter to Shareholders

08 Board of Directors 10 Group Structure 11 Corporate Information 12 Financial Contents

Contents

Asia Tiger Group Limited annual report 2007

About Us

page 01

We specialise in the manufacture of offi ce equipment,

comprising shredders, laminators, comb binders and

electric staplers.

er Groed Asia

r Groa Tiger Group Limited Asia

Our Products


Focused on Our Core Business and Products

oup Lim ge teda Tige e Group

oup L ge eda Tige a Tiger Group Limited p Group


page 03

Revenue(in RMB ‘000)

Shareholders’ Fund(in RMB ‘000)

04 05 06 07

Fiscal year

04 05 06 07

Fiscal year

04 05 06 07

Fiscal year

Financial Highlights

Net Profit After Tax(in RMB ‘000)

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

60,000

50,000

40,000

30,000

20,000

10,000

0

120,000

100,000

80,000

60,000

40,000

20,000

0


page 04

OverviewThe Board of Directors of Asia Tiger Group Limited (“the Company”) hereby present to

you the Annual Report and Audited Financial Statements of the Company for the fi nancial

year ended 31 March 2007 (“FY 07”).

Corporate DevelopmentThe Company underwent a change in Substantial Shareholder interests and management

control in FY 07. The Substantial Shareholders, Mr Zeng Guoming and Ms Lu Yanning

through their holding in Tracker Shine Limited disposed of their entire stake of 180,184,575

shares representing 73.95% of the issued capital of the Company. The disposal was

completed in several tranches at the price of S$0.15 and S$0.20 per share, in the form

of sale to institutional investors through Daiwa Securities SMBC Singapore Limited, sale

in the open market and to Sandalford Capital Limited, on various dates in FY 07 as

announced to the SGX. As a result of the change in Substantial Shareholder interests,

the Board of Directors retired along with Mr Zeng Guoming and Ms Lu Yanning as the

Executive Directors of the Company, and the present Board was appointed in the third

and last quarter of FY 07.

Letter to Shareholders

Offi ce Equipment BusinessThe Company’s main business is in the manufacturing and sale of offi ce equipment

products namely paper shredders, laminators, comb binders and electric staplers. Having

divested its digital camera and PC connectors businesses in FY 2006, the Company is

able to focus on its line of offi ce equipment, particularly its paper shredders ranging

from personal shredders suitable for home and small offi ces to heavy duty shredders for

large offi ces and high security shredders, offering stylish designs and versatile features

for multiple uses.

The Company operates two manufacturing facilities in China with a total workforce of

about 1,500 people. Besides shredders, the Company will focus more on laminators and

binders where their contribution to the Company’s revenue is increasing. However, the

Company is seeking to manage rising raw material cost, which is the main component

of its production costs, through more effi cient sourcing and utilization of materials.


page 05

Having divested its digital camera and PC connectors businesses in FY2006, the Company is able to focus on its line of offi ce equipment

Letter to Shareholders

Marketing and customer relationship activities will be stepped up to enhance the

Company’s partnerships with existing customers which include some of the leading brands

in the market, with greater promotion to seek out new ones. This will be supported by

strengthening our distribution channels to the various markets.

All these measures will be undertaken to enable the Company to have a stronger presence

in the offi ce equipment manufacturing industry through forming strategic partnerships

with the world-leading companies.

The Company will also explore opportunities to diversify into other related products

which will enable the Company to widen its product range and increase its customer

base.

Incorporation of Subsidiary CompanyThe Company had incorporated a fully owned subsidiary company, Stiger Investments

Pte. Ltd. (“Stiger”) in Singapore on 1 February 2007. The principal activities of Stiger will

be in the nature of an investment holding company and investments portfolios. Stiger

has an initial issued and paid-up capital of S$1.00 comprising of ten ordinary shares fully

paid-up to the amount of S$1.00. The Company has appointed its Executive Directors, Mr

Tan Kuan Hong and Ms Wong Choy Yin, as its nominees to the Board of Stiger.

Financial Performance ReviewFor FY 07, the Company’s revenue remained almost consistent at RMB364 million as

compared to RMB360 million in the previous fi nancial year. The Company was able to

maintain constant sales due to its good relationships with customers.

The Company’s total cost of sales and expenses increased by approximately RMB9.5

million to RMB353.0 million in FY 07 compared with RMB343.5 million in FY 06. This

was mainly due to an increase in prices of raw materials such as plastic, copper,

steel, packaging materials and labour cost. However, the increase was mitigated by an

improvement of 78.5% in the operating expenses compared to the previous year, which

was largely contributed by the decline in amortization of intangible assets and loss on

foreign exchange. It was further mitigated by a reduction of 24.5% in the distribution


page 06

costs in FY 07 compared to FY 06 due largely to better control of transportation and

shipment expenses.

Overall, profi t after tax declined to RMB11.5 million compared to RMB16.9 million (before

taking into account profi t from discontinued operations) in the previous fi nancial year.

The decrease in profi t after tax was mainly due to the write-off of tax refund of RMB2.4

million which was deemed not recoverable in the fi nancial year ended 31 March 2007.

As at 31 March 2007, total equity of the Company amounted to RMB100.6 million as

compared to RMB100.2 million at the end of the last fi nancial year.

DividendsDuring FY 07, the Company paid an interim dividend of RMB2.59 cents per ordinary

share, which was tax-exempt, amounting to RMB6.34 million on 11 January 2007.

No fi nal dividend has been recommended.

AcknowledgementThe Board wishes to thank the previous directors who had been instrumental in the

establishment of the Company and its subsequent listing on the SGX in January 2005.

The Board’s priority now is to focus on the Company’s main business to become a

reputable and preferred supplier of offi ce equipment for its customers and diversify into

related product lines if such opportunities arise, in order to enhance the Company’s

fi nancial performance. With the support and cooperation of all the Directors and the

Management, the Board is confi dent that the Company is able to achieve this.

The Board of Directors would like to express its sincere appreciation to all shareholders,

valued customers and business associates for their support given to the Company.

Tan Kuan Hong Executive Director


page 07

Tan Kuan Hong

Mr Tan Kuan Hong was appointed Executive Director of the Company on 29 January 2007 and is responsible for the overall management of the Company. He has more than 25 years of experience in management, investment and corporate activities, and has held senior positions in both established and start-up companies across several industries in the region. Prior to this appointment, Mr Tan was managing his own investment and business consultancy fi rm, as well as the Group Executive Director of United Legacy Group, a component and contract manufacturing company. His previous work experience includes also a stint in Temasek Holdings, Lazard Asia and CEF Group. Mr Tan is also a Director of Avenah Consulting Pte Ltd and Sandalford Capital Ltd, which are non-listed companies. Mr Tan has an Honours degree in Accountancy from the University of Malaya and a Diploma in Psychology.

Lu Yanning

Chin Kok Sang

Mr Chin Kok Sang was appointed Non-Executive Independent Director of the Company on 1 December 2006. He is the founding Chief Executive Offi cer of TKC & Associates Sdn Bhd, a consulting fi rm in Malaysia providing corporate advisory services with particular focus in the areas of corporate and debt restructuring. He possesses more than 20 years of experience in corporate fi nance and banking. Mr Chin has also held senior positions at managerial and advisory levels in several listed and unlisted companies involved in the restaurant, property and construction, oil and gas, internet broadband and toll concession businesses. His work experience includes 14 years with an international French bank listed on the Paris Stock Exchange, in various capacities at their offi ces in Australia, Singapore and Malaysia, with his last position as the Managing Director at their Labuan Branch, Malaysia. Mr. Chin holds a Bachelor of Commerce degree from University of Melbourne and is a member of The Institute of Chartered Accountants in Australia. Mr Chin also sits on the Board of TKC & Associates Sdn Bhd which is a non-listed company.

Board of Directors

Wong Choy Yin

Ms Wong Choy Yin was appointed to the Board as Executive Director on 30 January 2007 and is responsible for the Administration function of the Company. She was previously the Financial Consultant of Accentual Consulting Sdn Bhd, a company which provides corporate and management advisory services. Over the last ten years, she has held managerial positions in fi nance in Plantation & Development (Malaysia) Bhd, Ho Wah Genting Bhd and Ekovest Bhd which are listed companies in Malaysia, involved in the plantation and property; coach building, manufacturing and transportation; and construction industries respectively. She has also served as Finance Manager in Articulate Television Sdn Bhd which produces TV programmes and games. Ms Wong has a professional qualifi cation from the Chartered Institute of Management Accountants (CIMA) and also holds a Master of Business Administration from the University of Keele, United Kingdom. Ms Wong also sits on the Board of a non-listed company, Sun-Maxim Sdn Bhd in Malaysia.


page 08

Yoon Wai Nam

Ang Kiam Meng

Mr Ang Kiam Meng was appointed to the Board as Non-Executive Independent Director on 12 December 2006. With more than 20 years of work experience, Mr Ang is the General Manager of the Jumbo Group of restaurants, a position he has held since 1993, and is also the President of the Restaurant Association of Singapore. Prior to this, he was with Singapore Technologies Group for seven years. Mr Ang is also a Director of non-listed companies, Jardine Enterprise Pte Ltd and Jumbo Serangoon Restaurant Pte Ltd.

Anthony Lee Vui Han

Mr Anthony Lee Vui Han was appointed to the Board as Non-Executive Independent Director on 20 April 2007 and has more than 15 years of experience in project management, construction and related industries such as quarry and concrete batching business. As Group General Manager for UF Engineers Sdn Bhd, Onika Quarry Sdn Bhd and Leeka Holdings Sdn Bhd, he is responsible for the business development and growth of these companies which are based in Malaysia. Mr Lee holds a Bachelor degree in Economics majoring in Banking and Finance at La Trobe University, Melbourne, Australia. Mr Lee also sits on the Boards of UF Engineers Sdn Bhd and Leeka Holdings Sdn Bhd as well as Country Parade Sdn Bhd, which are non-listed companies in Malaysia.

Mr Yoon Wai Nam was appointed Non-Executive Independent Director of the Company on 12 December 2006. He is currently the Chief Finance Offi cer of Hong Kong-listed Titan Petrochemicals Group Limited. Mr Yoon was previously with Lafarge from 1999 to 2006, serving at different times as Senior Vice President and CFO for Lafarge China, Head of Strategy covering ASEAN countries, and Senior Manager of Regional Corporate Development for Lafarge Asia Pacifi c. Earlier, he was Deputy Business Development Head for SUTL Corporation in Singapore. Mr Yoon received his Bachelor of Arts degree in Accounting & Finance with Honours from Nottingham Trent University in England and Master of Business Administration from the University of Strathclyde in Scotland. He has also been Fellow of the Chartered Institute of Management Accountants, United Kingdom since 1995. Mr Yoon is also a Director of certain subsidiaries of Titan Petrochemicals Group Limited.


page 09

Asia TigerGroup Limited

Good Prezzie Trading Ltd.(British Virgin Islands)

Ivy Bushes Ltd.(British Virgin Islands)

Group Structure

Stiger Investments Pte. Ltd. (Singapore)

Vigorhood Electronics Technology (Shenzhen) Co. Ltd. (PRC)

Shenzhen Feibao Technologies Co. Ltd. (PRC)

Shenzhen Vigorhood Electronics Co. Ltd. (PRC)

Vigorhood Pacifi c Ltd.(Hong Kong)

Keen Power Technology Ltd. (British Virgin Islands)

Keen Power Technology Ltd. (Hong Kong)

Vigorhood Macao Commercial Offshore Company Ltd. (Macau)

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

as at 31 March 2007


page 10

Corporate Information

Board of Directors

ExecutiveTan Kuan HongWong Choy Yin

Non-ExecutiveAnthony Lee Vui Han (Independent Director) Ang Kiam Meng (Independent Director)Yoon Wai Nam (Independent Director)Chin Kok Sang (Independent Director)

Company SecretarySeah Hai Yang

Bermuda Resident Representative Appleby Corporate Services (Bermuda) Ltd.Canon’s Court22 Victoria StreetHamilton HM12 BermudaTel : +441 295 2244Fax: +441 292 8666

Principal Share RegistrarReid Management LimitedArgyle House41A Cedar AvenueHamilton HM 12, Bermuda

Singapore Share Transfer AgentB.A.C.S Private Limited63 Cantonment RoadSingapore 089758Tel : 6323 6200Fax: 6323 6990

Registered Offi ce Canon’s Court22 Victoria StreetHamilton HM12 BermudaTel : +441 295 2244Fax: +441 292 8666

Singapore Correspondence Address101 Cecil Street#10-07 Tong Eng BuildingSingapore 069533Tel: 6225 0560Fax: 6225 0562

AuditorsMoore Stephens, SingaporeCertifi ed Public Accountants11 Collyer Quay #10-02,The Arcade, Singapore 049317Partner in charge: Neo Keng JinAppointed since fi nancial year ended 31 March 2006

Lau & Au Yeung C.P.A. LimitedCertifi ed Public AccountantsRoom 2701, 27/F, Wing On House71 Des Voeux Road, CentralHong KongPartner in charge: Au Yeung Tin WahAppointed since fi nancial year ended 31 March 2006

Principal Bankers Hang Seng Bank LimitedChina Everbright BankChina Merchants BankStandard Chartered Bank


page 11


13page

Corporate Governance Report

Asia Tiger Group Limited (the “Company”) is committed to maintaining a high standard of corporate governance and transparency within the Company in the spirit of the Code of Corporate Governance (“the Code”) as reviewed by the Council on Corporate Disclosure and Governance, whose recommendations to revise the Code have been accepted by the Ministry of Finance in July 2005. The Company is aware that listed companies are required to disclose their corporate governance practices and explain deviations from the Code in their annual reports for annual general meetings held from January 2007 onwards. In line with the commitment by the Company to maintaining high standards of corporate governance, the Company will continually review its corporate governance processes to strive to fully comply with the Code.

This report describes the Company’s corporate governance processes and activities for the year ended 31 March 2007 and up to the date of this report.

Board of Directors

The Board of Directors (the “Board”) is responsible for setting the strategic direction for the Company. Every Director is expected to act in good faith and always in the best interest of the Company.

The Board currently comprises six directors, four of whom are independent and non-executive and whose collective experience and contributions are valuable to the Company.

The Board members as at the date of this report are:

Mr Tan Kuan Hong Executive DirectorMs Wong Choy Yin Executive DirectorMr Chin Kok Sang Independent DirectorMr Yoon Wai Nam Independent DirectorMr Ang Kiam Meng Independent DirectorMr Anthony Lee Vui Han Independent Director

The profi le of our directors can be found on pages 8 and 9 of this Annual Report.

The Board has examined its size and is of the view that the current arrangement is adequate given that the independent directors form not less than one-third of the Board composition. The criteria of independence is based on the defi nition given in the Code. The independent directors are respected individuals from different backgrounds whose core competencies, qualifi cations, skills and experience are extensive and complementary.

To assist the members of the Board, the Company has arranged for the Board to be updated by the Company Secretary and its other consultants on the continuing obligations and various requirements expected of a public company. When a director is fi rst appointed to the Board, an orientation program is arranged for him to ensure that he is familiar with the Company’s business and governance practices.

In recognition of the high standard of accountability to our shareholders, our Directors have established a Nominating Committee, a Remuneration Committee and an Audit Committee. The Committees are chaired by an independent director and the majority of members are non-executive and independent.


14page


Chairman and Chief Executive Offi cer

The Company is cognizant of the principle that there should be a clear division of responsibility between the Chairman and the Chief Executive Offi cer (“CEO”). The Chairman is responsible for, inter alia, exercising control over quality, quantity and timeliness of fl ow of information between management and the Board, and assisting in ensuring compliance with our Company’s guidelines on corporate governance. The CEO is responsible for strategic planning, business development and generally charting the growth of our Company.

Prior to his resignation, Mr Zeng Guoming was the Chairman and President (equivalent to CEO). Since his resignation, Mr Tan Kuan Hong, Executive Director, has temporarily assumed both roles. The positions of the Chairman and CEO are vacant presently as the Board is evaluating and considering suitable candidates to fi ll both positions. In the event that both the positions are assumed by a single person, the Board is of the view that there is a balance of power and authority with the various committees chaired by the independent directors.

Board Matters

The Board is entrusted with the responsibility for the overall management of the Company. The Board’s primary responsibilities include review and approval of policy guidelines, setting direction to ensure that the strategies undertaken lead to enhanced shareholders’ wealth.

The following matters require the Board’s approval:

Statutory requirements such as approval of annual report and fi nancial statements;

Other requirements such as half year and full year results announcements;

Corporate strategic direction, strategies and action plans;

Issuance of policies and key business initiatives;

Authorization of acquisition/disposal and other material transactions;

Declaration of interim dividends and proposal of fi nal dividends; and

Convening of Shareholders’ Meetings.

The directors have separate and independent access to the Company Secretary and the external auditors at all times. The Company currently does not have a formal procedure to seek independent and professional advice for the furtherance of the Board’s duties. However, the directors may, on a case-to-case basis, propose to the Board for such independent and professional advice, the cost of which will be borne by the Company.

The Board conducts regular scheduled meetings. Ad-hoc meetings are also arranged when the need arises. To facilitate the attendance and participation of Directors at meetings, the Company’s Bye-laws provides for teleconferencing and other electronic means of meetings of the Board as encouraged by the Code.

The Company Secretary assists in the conduct of the Board meetings and ensures that Board procedures are adhered to. The Company Secretary will also ensure that all rules and regulations of the SGX–ST are complied with.


15page


Directors’ Attendance at Board, Audit Committee (“AC”), Nominating Committee (“NC”) and Remuneration Committee (“RC”) Meetings

Meeting of : Board AC NC RC

Total held in FY 2007 and up to the date of this report 4 4 2 1Tan Kuan Hong (appointed on 29 January 2007) 1 – – –Wong Choy Yin (appointed on 30 January 2007) 1 – – –Chin Kok Sang* (appointed on 1 December 2006) 1 1 1 1Yoon Wai Nam* (appointed on 12 December 2006) 1 1 1 1Ang Kiam Meng* (appointed on 12 December 2006) 1 1 1 1Anthony Lee Vui Han* (appointed on 20 April 2007) 1 – – –Zeng Guoming (resigned on 29 January 2007) 3 1 – –Lu Yanning (resigned on 29 January 2007) 2 – 1 –Chua Beng Huat* (resigned on 12 December 2006) 3 3 1 –Tan Gim Soo* (resigned on 12 December 2006) 3 3 – –Chen Li Hua* (resigned on 1 December 2006) 2 1 1 –

* Independent directors

Nominating Committee

The NC comprises the following members:

Ang Kiam Meng (appointed on 12 December 2006) – Chairman* and Independent DirectorChin Kok Sang (appointed on 12 December 2006) – Member, Independent DirectorYoon Wai Nam (appointed on 29 January 2007) – Member, Independent Director

* Mr Ang was appointed Chairman of the NC on 12 December 2006 replacing Ms Chen Li Hua who had resigned on 1 December 2006.

The NC’s principal functions are as follows:

(a) identify suitable candidates and to review all nominations for appointments and re–election to the Board;

(b) determine the independence status of the directors annually;

(c) determine whether or not a director is able to and has been adequately carrying out his duties as a director of the Company; and

(d) evaluate the performance and effectiveness of the Board as a whole and the contribution of each director.

The NC is satisfi ed that the current size and composition of the Board has adequate ability to meet the Company’s existing scope of needs and the nature of operation. From time to time, the NC will review the appropriateness of the current Board size, taking into consideration the changes in the nature and scope of operations as well as the regulatory environment.

In accordance with the requirements of the Code, the NC has reviewed the status of the Independent Directors and is of the view that they are in compliance with the Code’s defi nition on independence.


16page


At the date of this report, the NC has adopted a formal process to assess the effectiveness of the Board and committees of the Board as a whole. The qualitative measures include the effectiveness of the Board in its monitoring role and the attainment of the strategic objectives set by the Board. The evaluation exercise is carried out annually. There was no evaluation carried out for the fi nancial year under review as all the directors were appointed towards the end of the fi nancial year. The period since their appointment was too brief for an effective evaluation to be carried out.

As all the directors were appointed during the fi nancial year, the NC has recommended that all the directors, who hold offi ce till the forthcoming Annual General Meeting (“AGM”) pursuant to Bye-Law 107 of the Company’s Bye-Laws, being eligible and having consented, be nominated for re-appointment at the forthcoming AGM.

Remuneration Committee

The RC comprises the following members:

Yoon Wai Nam (appointed on 12 December 2006) – Chairman* and Independent DirectorAng Kiam Meng (appointed on 29 January 2007) – Member, Independent DirectorChin Kok Sang (appointed on 12 December 2006) – Member, Independent Director

* Mr Yoon was appointed Chairman of the RC on 12 December 2006 replacing Mr Chua Beng Huat who had resigned on 12 December 2006.

Pursuant to the amended Code, the RC comprises entirely of non-executive directors, all of whom are independent.

The RC’s tasks include reviewing and deliberating upon the compensation packages of Board members as well as key personnel in the Company and the Group. All aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses, options and benefi ts in kind shall be covered by the RC. In determining remuneration packages of executive directors and key executives, the RC will ensure that directors are adequately but not excessively rewarded. The RC will also consider, in consultation with the Board, amongst other things, their responsibilities, skills, expertise and contribution to the Company’s performance and whether the remuneration packages are competitive and suffi cient to ensure that the Company is able to attract and retain the best available executive talent.

In discharging their duties, the RC may seek professional advice where necessary. All recommendations of the RC will be submitted for endorsement by the entire Board. The payment of fees to non-executive directors is subject to approval at the general meeting of the Company. No director is involved in deciding his own remuneration.

Presently, none of the executive Directors has entered into a service contract with the Company.


17page


Disclosure on Remuneration

The remuneration table for the year under review is appended herewith:

Name DesignationBelow

$250,000$250,001 to

$500,000Exceed

$500,000

DIRECTORSTan Kuan Hong Executive DirectorWong Choy Yin Executive DirectorZeng Guoming Executive DirectorLu Yanning Executive DirectorChua Beng Huat Independent DirectorTan Gim Soo Independent DirectorChen Li Hua Independent DirectorChin Kok Sang Independent DirectorYoon Wai Nam Independent DirectorAng Kiam Meng Independent Director

The Board is of the opinion that details of remuneration for individual key executives are confi dential, and disclosure of such information would not be in the interest of the Company. None of the key executives received remuneration above S$250,000.

The following is the breakdown of the above remuneration received by each director by percentage:

Name of DirectorBase/Fixed

Salary

Variable or Performance

related income/ Bonus

Director’sFee

OtherBenefi ts Total

Tan Kuan Hong 100% – – – 100%Wong Choy Yin 100% – – – 100%Zeng Guoming 100% – – – 100%Lu Yanning 100% – – – 100%Chua Beng Huat – – 100% – 100%Tan Gim Soo – – 100% – 100%Chen Li Hua – – 100% – 100%Chin Kok Sang – – 100% – 100%Yoon Wai Nam – – 100% – 100%Ang Kiam Meng – – 100% – 100%

Non-executive Directors are paid Directors’ fees appropriate to their level of contribution to the Board, taking into account factors such as effort and time spent, responsibilities of the Directors and the need to pay competitive fees to attract, retain and motivate Directors. Directors’ fees are recommended by the Board for approval at the AGM.


18page


Remuneration of other employees related to a director

None of the employees of the Group whose annual remuneration exceeds S$150,000 are immediate family members of the CEO or any other Director of the Company.

Audit Committee

The AC comprises three Board members, all of whom are non-executive and independent directors. The members are:

Chin Kok Sang (appointed on 12 December 2006) – Chairman* and Independent DirectorYoon Wai Nam (appointed on 12 December 2006) – Member, Independent DirectorAng Kiam Meng (appointed on 12 December 2006) – Member, Independent Director

* Mr Chin was appointed Chairman of the AC on 12 December 2006 replacing Mr Tan Gim Soo who had resigned on 12 December 2006.

The AC has been entrusted with the following functions:

(a) review with the auditors the audit plans, their evaluation of the system of internal controls, audit report and management letter;

(b) review the fi nancial statements before release to external and relevant parties;

(c) review the scope and results of the internal audit function and ensuring co-ordination between the internal and external auditors and the Management;

(d) review the co-operation given by the Company’s offi cers to the auditors;

(e) review the legal and regulatory matters that may have a material impact on the fi nancial statements, related exchange compliance policies and programs and reports received from the regulators;

(f) review the cost effectiveness and independence and objectivity of the auditors;

(g) review the nature and extent of non-audit services, if any, provided by the external auditors and seek to balance the maintenance of objectivity and value for money;

(h) nominate the appointment of external auditor; and

(i) review and ratify all interested person transactions to ensure that they comply with the approved internal control procedures and have been conducted at arm’s length basis.

The AC meets at least two times a year and as frequently as is required. In particular, the AC meets to review the fi nancial statements before announcement. In the year under review, the AC has met to review and approve the audit plan, the half year and full year unaudited results for announcement purposes.

The AC may meet with the auditors at any time, without the presence of the Company’s Management. It may also examine any other aspects of the Company’s affairs, as it deems necessary, where such matters relate to exposures or risks of regulatory or legal nature, and monitor the Company’s compliance with its legal, regulatory and contractual obligations. The AC has power to conduct or authorize investigations into any matters within the AC’s scope of responsibility. The AC has full access to the Management and has the discretion to invite any director or executive offi cer to attend its meetings.

The AC has reviewed the non-audit services provided by the external auditors and is of the opinion that such services would not affect the independence of the auditors. The AC has also recommended the re-appointment of the auditors to the Board.

There was no interested party transaction for the year under review.


19page


Internal Controls and Internal Audit

The Board believes in the importance of maintaining a sound system of internal control to safeguard the interests of the shareholders and the Company’s assets. Annual reviews of these controls are conducted by the Company’s internal auditors and any recommendations for improvement are reported to the AC.

In the absence of any evidence to the contrary, the Board believes that the system of internal controls maintained by the Company is in place throughout the year and up to the date of this report. It provides reasonable, but not absolute, assurance against material fi nancial misstatements or losses, and includes the safeguarding of assets, the maintenance of proper accounting records, the reliability of fi nancial information, compliance with appropriate legislation, regulations and best practices, and the identifi cation and containment of fi nancial, operational and compliance risks. However, the Board notes that no system of internal control could provide absolute assurance in this regard, or absolute assurance against the occurrence of material errors, poor judgment in decision-making, human error, losses, fraud or other irregularities.

The appointment of the Internal Auditor had been vacant since the resignation of the in-house Internal Auditor. The AC had reviewed the function and had recommended to the Board to outsource the Internal Audit function to suitable accounting fi rms. The Board is presently procuring for a suitable professional accounting fi rm to undertake the Internal Audit function.

Policy on dissemination of public information

The Company believes that a high standard of disclosure is crucial to raising the level of corporate governance. All information relating to the Company’s new initiatives are fi rst disseminated via SGXNET followed by a news release (if appropriate), which is also available on the SGX–ST website.

The Company does not practise selective disclosure. Price sensitive information is publicly released and results and annual reports are announced or issued within the mandatory period. All shareholders of the Company will receive a copy of the Annual Report or Circular and the Notice of the AGM or Special General Meeting (“SGM”). At the AGM or SGM, shareholders are given opportunities to express their views and ask the Board and Management questions regarding the operations of the Company. The Chairman of the AC, RC and NC will normally be present at the general meetings to answer any questions relating to the work of their respective committees. The external auditors are also present to assist the Directors in addressing any relevant queries from the shareholders during the AGM.

At AGMs and other general meetings, separate resolutions will be set out on distinct issues for approval by shareholders.

Securities Transactions

The Company has procedures in place on dealings in securities, whereby there should be no dealings in the Company’s shares by its offi cers during the period commencing one month prior to the announcement of the Company’s half year and full year results and ending on the date of announcement of the results. Directors and executives are also expected to observe insider trading laws at all times even when dealing in securities within permitted trading periods. The implications of insider trading are clearly set out in the procedures and guidelines.


20page


Interested Person Transactions

The Company has established internal control policies to ensure that transactions with interested persons are reviewed and approved, and are conducted at arm’s length basis.

During the year under review, the Board notes that there is no interested person transaction.

Material Contracts

There is no material contract entered into between the Company and its subsidiaries involving the interests of the Chairman, any director or controlling shareholder during the year under review, and up to the date of this report.

Risk Management and Processes

The Company regularly reviews and improves its business and operational activities to identify areas of signifi cant business risks as well as respond appropriately to control and mitigate these risks. The Company reviews all signifi cant control policies and procedures and highlights all signifi cant matters to the AC and Board.

Statement of Compliance

The Board confi rms that for the fi nancial year ended 31 March 2007, the Company has generally adhered to the principles and guidelines as set out in the Code of Corporate Governance 2005.


21page

Report of the Directors

The directors present their report to the members together with the audited consolidated fi nancial statements of the Group and the balance sheet of the Company for the fi nancial year ended 31 March 2007.

Directors

The directors of the Company in offi ce at the date of this report are as follows:

Executive Directors:

Tan Kuan Hong (Appointed on 29 January 2007)Wong Choy Yin (Appointed on 30 January 2007)

Non–executive Directors:

Chin Kok Sang (Appointed on 1 December 2006)Yoon Wai Nam (Appointed on 12 December 2006)Ang Kiam Meng (Appointed on 12 December 2006)Lee Vui Han Anthony (Appointed on 20 April 2007)

Principal Activities

The principal activity of the Company is investment holding. The principal activities of the Group’s subsidiaries are described in note 14 to the fi nancial statements. There have been no signifi cant changes in the nature of these activities during the fi nancial year.

Acquisitions and Disposals of Subsidiaries

During the fi nancial year, there were no acquisitions or disposals of subsidiaries except as disclosed in note 14 to the fi nancial statements.

Results and Dividends

Details of the results of the Group for the year ended 31 March 2007 and the state of affairs of the Group at that date are set out in the fi nancial statements on pages 26 to 62.

The fi nal dividend proposed during the previous fi nancial year of RMB2.00 cents per ordinary share, amounting to RMB4,873,000 was approved during the Annual General Meeting and subsequently paid on 28 August 2006. An interim dividend of RMB2.59 cents per ordinary share, amounting to RMB6,343,000 was declared during the current fi nancial year on 14 November 2006 and paid on 11 January 2007.

Material Movements or Transfers in Reserves and Provisions

There were no material transfers to or from reserves and provisions during the fi nancial year except as disclosed in the accompanying fi nancial statements.


22page


Issue of Shares and Debentures

During the fi nancial year, there were no shares or debentures issued by the Company and its subsidiaries.

Arrangements To Enable Directors To Acquire Shares And Debentures

Neither at the end of the fi nancial year nor at any time during the fi nancial year did there subsists any arrangement whose object is to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares or debentures of the Company or any other body corporate.

Directors’ Interests in Shares and Debentures

According to the register of directors’ shareholdings, none of the directors holding offi ce at the end of the fi nancial year and as at 21st day after the end of the fi nancial year, had any interest in the shares or debentures of the Company or its related corporations, except as follows:

Direct interest Deemed interest

Name of director and corporation in which interest are held

At the beginning of fi nancial

year or date of appointment

At the end of fi nancial year

At the beginning of fi nancial

year or date of appointment

At the end of fi nancial year

Ordinary sharesThe CompanyTan Kuan Hong* – – 55,765,580 55,765,580

* Tan Kuan Hong is deemed to have an interest of these shares through Sandalford Capital Ltd, which owned about 22.89% equity interest in the Company.

There were no changes in any of the directors’ interests in the Company between the end of the fi nancial year and on 21 April 2007.

Directors’ Contractual Benefi ts

Since the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t by reason of a contract made by the Company or a related corporation with the director or with a fi rm of which he is a member or with a company in which he has a substantial fi nancial interest, except that certain directors have received remuneration from related corporations in their capacity as directors and/or executives of those related corporations and except as disclosed in the fi nancial statements.

Options To Take Up Unissued Shares

During the fi nancial year, no option to take up unissued shares of the Company or any corporation in the Group was granted.


23page


Options Exercised

During the fi nancial year, there were no shares of the Company or any corporation in the Group issued by virtue of the exercise of an option to take up unissued shares.

Options Outstanding

At the end of the fi nancial year, there were no unissued shares of the Company or any corporation in the Group under option.

Interested Person/Related Party Transactions

Save as disclosed in the fi nancial statements, the Directors of the Company confi rmed that there were no other interested person, or related party transactions during the year under review. The Directors confi rm that all of these transactions were carried out in the ordinary and usual course of business of the Group.

Audit Committee, Nominating Committee and Remuneration Committee

Details of the Company’s audit committee, nominating committee and remuneration committee are set out in the Corporate Governance Report on pages 13 to 20 of this annual report.

Auditors

The auditors, Moore Stephens, Singapore and Lau & Au Yeung C.P.A. Limited, Hong Kong, have expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

Tan Kuan Hong Wong Choy Yin

Director Director

30 June 2007

Statement of Directors

24page


In the opinion of the directors, the balance sheet of the Company and the consolidated fi nancial statements of the Group as set out on pages 26 to 62 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 March 2007, and of the results of the business, changes in equity and the cash fl ows of the Group for the fi nancial year then ended.

At the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board of Directors

Tan Kuan Hong Wong Choy YinDirector Director

30 June 2007


25page

Independent Auditors’ ReportTo The Members of Asia Tiger Group Limited

We have audited the accompanying balance sheet of Asia Tiger Group Limited (the “Company”) as at 31 March 2007 and the consolidated fi nancial statements of the Company and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheet as at 31 March 2007, and the consolidated income statement, consolidated statement of changes in equity and consolidated cash fl ow statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 26 to 62.

Directors’ Responsibility for the Financial Statements

The Company’s directors are responsible for the preparation and fair presentation of these fi nancial statements in accordance with International Financial Reporting Standards. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the fi nancial statements are free of material misstatement.

An audit involves performing procedures to obtain evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risks assessments, the auditors consider internal controls relevant to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made by directors, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the balance sheet of the Company and the consolidated fi nancial statements of the Group give a true and fair view of the state of affairs of the Company and the Group as at 31 March 2007, and the results, changes in equity and cash fl ows of the Group for the year then ended in accordance with International Financial Reporting Standards.

Lau & Au Yeung C.P.A. Limited Moore StephensCertifi ed Public Accountants Certifi ed Public Accountants Hong Kong Singapore

30 June 2007

Consolidated Income StatementYear ended 31 March 2007

26page


The accompanying notes form an integral part of the fi nancial statements

Note 2007 2006RMB’000 RMB’000

Continuing OperationsRevenue 4 364,174 360,132

Cost of sales (327,818) (309,412)

Gross profi t 36,356 50,720

Other income 5 4,151 2,226Selling and distribution expenses (7,710) (10,208)Administrative expenses (15,912) (16,740)Other operating expenses 6 (1,525) (7,098)

Profi t from continuing operating activities 7 15,360 18,900

Finance costs 8 (374) (855)

Profi t from continuing operations before income tax 14,986 18,045

Income tax 10 (3,442) (1,164)

Profi t from continuing operations after income tax 11,544 16,881

Discontinued OperationsProfi t from discontinued operations 11 – 8,479

Profi t attributable to equity holders of the Company 11,544 25,360

Earnings per share from continuing operations 12 – Basic 4.74 6.93

– Diluted 4.74 6.93

Earnings per share from discontinued operations 12 – Basic – 3.48

– Diluted – 3.48


27page

Consolidated Balance SheetAs at 31 March 2007


Note 2007 2006RMB’000 RMB’000

ASSETSCurrent assetsCash and cash equivalents 15 28,347 62,875Pledged deposits 16 16,999 1,033Financial assets at fair value through profi t or loss 17 6,391 274Trade and other receivables 18 70,845 46,549Other current assets 19 6,638 6,516Inventories 20 42,805 25,277

172,025 142,524

Non–current assetsPlant and equipment 21 19,113 19,995Intangible assets 22 879 1,353Deferred tax asset 23 – 65

19,992 21,413

Total assets 192,017 163,937

LIABILITIESCurrent liabilitiesTrade and other payables 24 84,792 55,988Short term bank loans 25 3,514 1,446Obligations under hire purchase creditors 26 – 1,161Tax payable 3,109 2,776

91,415 61,371

Non–current liabilitiesObligations under hire purchase creditors 26 – 2,343

Total liabilities 91,415 63,714

Net assets 100,602 100,223

EQUITYIssued capital and reservesIssued capital 27 80,482 80,482Share premium 27 37,985 37,985Other reserves 28 (17,865) (18,244)

100,602 100,223

Consolidated Statement of Changes in EquityYear ended 31 March 2007

28page


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29page

Consolidated Cash Flow Statement Year ended 31 March 2007


2007 2006RMB’000 RMB’000

Cash Flows From Operating ActivitiesProfi t before income tax 14,986 26,524

Adjustments for:Depreciation of plant and equipment 3,941 3,585Amortisation of intangible assets 645 2,302Intangible assets written off – 479Loss on disposal of plant and equipment 647 122Fair value gain on fi nancial assets at fair value through profi t or loss (164) –Gain on disposal of a subsidiary – (8,663)Interest income (795) (1,005)Interest expense 374 855

Operating cash fl ows before working capital changes 19,634 24,199

Changes in operating assets and liabilities:Inventories (17,528) (6,549)Trade and other receivables (26,734) (8,361)Other current assets (122) (5,274)Trade and other payables 28,804 11,439

Cash generated from operations 4,054 15,454

Interest received 795 1,003Interest paid (374) (855)Income tax paid (520) (1,479)

Net cash generated from operating activities 3,955 14,123

Cash Flows From Investing ActivitiesProceeds from disposal of plant and equipment 367 437Purchase of plant and equipment (4,073) (8,435)Additions to intangible assets (171) (1,590)(Acquisition) / proceeds from disposal of fi nancial assets at fair value through profi t or loss (5,961) 56Net cash fl ow from disposal of a subsidiary (Note 11) – 17,897

Net cash (used in) / generated from investing activities (9,838) 8,365

Cash Flows From Financing Activities(Increase)/decrease in pledged deposits (15,966) 7,171Net proceeds from /(repayment of) short term bank loans 2,068 (25,236)Repayment of hire purchase creditors (3,504) (490)Dividends paid (11,216) (34,009)

Net cash used in fi nancing activities (28,618) (52,564)

Net decrease in cash and cash equivalents (34,501) (30,076)Cash and cash equivalents at the beginning of the year 62,875 92,016Effect of foreign exchange rate changes, net (27) 935

Cash and cash equivalents at the end of the year (Note 15) 28,347 62,875

Balance SheetAs at 31 March 2007

30page



Note 2007 2006RMB’000 RMB’000

ASSETSCurrent assetsDue from subsidiaries 14 57,796 63,708

Non–current assetsInvestment in subsidiaries 14 60,482 60,482

Total assets 118,278 124,190

LIABILITIESCurrent liabilitiesDue to subsidiaries 14 591 2,790Other payables and accruals 615 111

Total liabilities 1,206 2,901

Net assets 117,072 121,289

EQUITYIssued capital and reservesIssued capital 27 80,482 80,482Share premium 27 37,985 37,985Other reserves (1,395) 2,822

Total equity 117,072 121,289


31page

Notes to Financial Statements Year ended 31 March 2007

1 General

The Company was incorporated in Bermuda on 23 June 2004 as an exempt company with limited liability under the Companies Act 1981 of Bermuda with its registered offi ce at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda. Its principal place of business is located at No. 7 Building, Nangang 2nd Industrial Zone, Songbai Road, Nanshan District, Shenzhen, People’s Republic of China (“PRC”). The shares of the Company are listed on the Singapore Exchange Securities Trading Limited (the “SGX–ST”).

The principal activity of the Company is investment holding. The principal activities of the Group’s subsidiaries are described in note 14 to the fi nancial statements. There have been no signifi cant changes in the nature of these activities during the fi nancial year.

The consolidated fi nancial statements of the Group and the balance sheet of the Company for the fi nancial year ended 31 March 2007 were authorised for issue in accordance with a resolution of the Board of Directors of the Company on 30 June 2007.

2 Signifi cant Accounting Policies

(a) Basis of Preparation

The fi nancial statements, which are expressed in Chinese Renminbi, have been prepared in accordance with International Financial Reporting Standards (“IFRS”). These fi nancial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.

The preparation of fi nancial statements in conformity with IFRS requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the fi nancial statements, and the reported amounts of revenues and expenses during the fi nancial year. Although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from these estimates. Critical accounting estimates and assumptions used that are signifi cant to the fi nancial statements and areas involving a higher degree of judgement or complexity, are disclosed in note 3.

(b) Adoption of New/Revised International Financial Reporting Standards

During the current fi nancial year, the Group has adopted all the revised Standards and new Interpretations issued by the International Accounting Standards Board (“IASB”) and the International Financial Reporting Interpretations Committee (“IFRIC”) of the IASB that are relevant to its operations and effective for annual periods beginning on 1 April 2006. The adoption of these new/revised Standards and Interpretations has had no material impact on the fi nancial statements of the Group and on the balance sheet of the Company.


32page


2 Signifi cant Accounting Policies (cont’d)

(b) Adoption of New/Revised International Financial Reporting Standards (cont’d)

IFRS and INT IFRS issued but not yet effective

At the date of authorisation of these fi nancial statements, the Group has not applied the following relevant new IFRS and IFRIC (Interpretations IFRS) that have been issued but only effective for the Group’s annual fi nancial periods beginning on or after 1 April 2007:

IFRS 7 Financial Instruments: Disclosures IFRS 8 Operating Segments IFRIC 10 Interim Financial Reporting and Impairment

The directors anticipate that the adoption of these standards and interpretations in future periods will not have any material impact on the fi nancial statements of the Group except for IFRS 7 and IFRS 8.

IFRS 7 This Standard, effective for annual fi nancial periods beginning on or after 1 January 2007,

requires quantitative disclosures that enable users of the fi nancial statements to evaluate the signifi cance of the Group’s fi nancial instruments, and the nature and extent of risks arising from those fi nancial instruments, in addition to the disclosures currently required under IAS 32.

The Group is in the process of making an assessment of the impact of IFRS 7 upon initial application. It has so far concluded, that while the adoption of IFRS 7 may result in additional and amended disclosures, it is unlikely to have a signifi cant impact on the Group’s operating results and fi nancial position.

IFRS 8

This Standard, effective for annual fi nancial periods beginning on or after 1 January 2009, requires additional disclosures of information about the Group’s operating segments and also about the entity’s products and services, the geographical areas in which it operates, and its major customers.

The Group is unable to assess the impact on its fi nancial statements, following the adoption of IFRIC 10 as at 31 March 2007.

(c) Basis of Consolidation

The consolidated fi nancial statements include the fi nancial statements of the Company and its subsidiaries made up to the end of the fi nancial year. The results of subsidiaries acquired or disposed of during the fi nancial year are included from the effective date of acquisition or up to the effective date of disposal. All signifi cant intra–group transactions, balances, income and expenses are eliminated on consolidation. Accounting policies of subsidiaries have been changed when necessary to ensure consistency with the policies adopted by the Group.


33page



(c) Basis of Consolidation (cont’d)

Subsidiaries are entities over which the Group has power to govern the fi nancial and operating policies so as to obtain benefi ts from its activities. The Group generally has such power when it, directly or indirectly, holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls the composition of the board of directors.

Acquisitions of subsidiaries are accounted for using the purchase method. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.

Goodwill arising on acquisitions of subsidiaries is initially measured at cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities.

Investments in subsidiaries are stated in the Company’s balance sheet at cost less any accumulated impairment losses. An assessment of investments in subsidiaries is performed when there is indication that the asset has been impaired or the impairment losses recognised in the prior years no longer exist.

(d) Plant and Equipment and Depreciation

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Depreciation is calculated on the straight-line method to write off the cost of these assets over their estimated useful lives of the asset or the lease term, after taking into account the estimated residual value at 10% of its cost. The estimated useful lives are as follows:

Leasehold improvements – 3 to 5 years Plant and machinery – 10 years Moulds – 5 years Offi ce and electronic equipment – 5 years Motor vehicles – 5 years

The residual value, useful life and depreciation method are reviewed and adjusted as appropriate at each balance sheet date.

Construction in progress is stated at cost less any impairment losses, and is not depreciated. Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowed funds during the period of construction. Construction in progress is reclassifi ed to the appropriate category of plant and equipment when completed and ready for use.


34page



(e) Intangible Assets

Computer software

Acquired computer software licences are initially capitalised at cost which includes the purchase price and other directly attributed cost of preparing the asset for its intended use. Capitalised computer software licences are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to the income statement using the straight-line method over their estimated useful lives of fi ve years.

Research and development costs

Research costs are recognised as expense as incurred. Development costs incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Capitalised development costs are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to the income statement using the straight-line method over their estimated useful lives of three years, from the date when the products are put into commercial production.

Patents

Patents are stated at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised using the straight-line method over their estimated useful lives of fi ve years.

(f) Impairment of Non–Financial Assets

Plant and equipment, intangible assets and investment in subsidiaries are reviewed for impairment whenever there is any indication that these assets have been impaired. If any such indication exists, the recoverable amount (i.e. the higher of the fair value less cost to sell and value in use) of the asset is estimated to determine the amount of impairment loss.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash fl ows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash generating units (CGU) to which the asset belongs to. If the recoverable amount of the asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is reduced to its recoverable amount. The impairment loss is recognised in the income statement unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease.

An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the assets’ recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss have been recognised for the asset in prior years.


35page



(f) Impairment of Non–Financial Assets (cont’d)

A reversal of impairment loss for an asset is recognised in the income statement, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.

(g) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost includes the cost of raw materials as determined on the weighted average basis and, in the case of work in progress and fi nished goods, comprises direct materials, direct labor and an appropriate proportion of production overheads. Net realisable value is determined either by reference to the selling prices of items sold in the ordinary course of business subsequent to the year-end date, or to management estimates, less any further costs expected to be incurred to completion and disposal.

(h) Investments in Financial Assets

Management determines the classifi cation of its fi nancial assets at initial recognition and re-evaluates this designation at every reporting date, with the exception that the designation of fi nancial assets at fair value through profi t or loss is not revocable.

Financial asset is classifi ed as fi nancial assets at fair value through profi t or loss if acquired principally for the purpose of selling in the short term or if so designated by management. Assets in this category are classifi ed as current assets if they are either held for trading or are expected to be realised within 12 months after the balance sheet date.

Purchases and sales of investments are recognised on trade-date - the date on which the Company commits to purchase or sell the asset. Investments are derecognised when the rights to receive cashfl ows from the fi nancial assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

Financial assets at fair value through profi t or loss are initially and subsequently recognised at fair value. Realised and unrealised gains and losses arising from the changes in fair value are included in the income statement in the period in which they arise. The fair values of quoted fi nancial assets are based on quoted market prices, which are the current bid prices.

(i) Financial Instruments

Financial assets and fi nancial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument.


36page



(i) Financial Instruments (cont’d)

Trade and other receivables

Trade and other receivables, which are normally settled on 60 to 90 days term and amounts due from subsidiaries are recognised initially at fair value and subsequently measured at amortised costs using the effective interest method, less allowance for impairment. An allowance for impairment of receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash fl ows, discounted at the original effective interest rate. The amount of the allowance is recognised in the income statement.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and at banks or fi nancial institutions, including fixed deposits. Cash and cash equivalents are short-term and highly liquid investments that are readily convertible to known amounts of cash and that are subject to insignifi cant risk of changes in value.

For the purposes of the cash fl ow statement, cash and cash equivalents are shown net of fi xed deposits pledged.

Trade and other payables

Trade and other payables, which are normally settled on 75 to 90 days term and amounts due to subsidiaries, are initially measured at fair value and are subsequently measured at amortised cost using the effective interest method.

Borrowings

Borrowings are initially recognised at fair value of the consideration received less directly attributable transaction costs.

After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is taken to the income statement over the period of the borrowings.

(j) Provisions

Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.


37page



(k) Financial Guarantees

Financial guarantee contracts are arrangements drawn between the Company and fi nancial institutions for the issuance of corporate guarantees for bank facilities obtained by its subsidiaries.

Financial guarantee contracts are initially recognised at their fair values plus transaction costs, and subsequently amortised to the income statement over the period of the subsidiaries’ borrowings, unless the Company has incurred an obligation to reimburse the bank for an amount higher than the unamortised amount. In this case, the fi nancial guarantee contracts shall be carried at the expected amount payable to the fi nancial institutions.

(l) Income and Deferred Income Taxes

Current income tax liabilities for current and prior periods are recognised at the amounts expected to be paid to the tax authorities, using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profi t or loss, it is not accounted for.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profi t will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

(m) Leases

Hire purchase

Assets acquired on hire purchase arrangements are capitalised and the corresponding obligations treated as a liability. The total interest, being the difference between the total instalments payable and the capitalised amount, is charged to the income statement over the period of such hire purchase arrangements in equal monthly instalments to produce a constant rate of charge on the balance of capital repayments outstanding.


38page



(m) Leases (cont’d)

Operating leases

Leases of plant and equipment where a signifi cant portion of the risks and rewards of ownership are retained by the lessor are classifi ed as operating leases. Payments made under operating leases are charged to income statement on a straight-line basis over the period of the leases.

(n) Revenue Recognition

Revenue for the Group comprises the fair value of the consideration received or receivable for the sale of goods, net of valued-added tax, rebates and discounts, and after eliminating sales within the Group. Revenue is recognised as follows:

– Revenue from the sale of goods is recognised when the signifi cant risks and rewards of ownership of the goods have been transferred to the customer and collectibility of the related receivables is reasonably assured.

– Interest income is recognised on a time proportion basis using the effective interest method.

– Government grants, when there is reasonable assurance that the grant will be received and all attaching conditions have been complied with.

– Service income is recognised as income when the services are rendered.

(o) Employee Benefi ts

Defi ned contribution plans

Defi ned contribution plans are post-employment benefi ts plans under which the Group pays fi xed contributions into separate entities. The Group participates in the national schemes as defi ned by the laws of the countries in which it operates. The Group’s contributions are recognised as expense in the income statement as and when they are incurred.

Termination benefi ts

Termination benefi ts are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefi ts. The Group recognised termination benefi ts when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefi ts as a result of an offer made to encourage voluntary redundancy.


39page



(p) Borrowing Costs

Borrowing costs incurred to fi nance the development of plant and equipment are capitalised during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are recognised on a time-proportion basis in the income statement using the effective interest method. The amount of borrowing cost capitalised on that asset is the actual borrowing costs incurred during the period less any investment income on the temporary investment of those borrowings.

(q) Dividends

Interim dividends are recorded in the fi nancial year in which they are declared payable. Final dividends are recorded in the fi nancial year in which the dividends are approved by the shareholders.

(r) Segment Information

A business segment is a distinguishable component of the Group engaged in providing products that are subject to risks and returns that are different from those of other business segments. A geographical segment is based on the location of customers regardless of where the goods are produced. The assets and capital expenditure are based on the location of those assets.

Segment revenue, expenses and results include transfers between business segments and between geographical segments. Such transfers are accounted for on an arm’s length basis.

(s) Related Parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party, or exercise signifi cant infl uence over the other party in making fi nancial and operating decisions. Parties are also considered to be related if they are subject to common control or common signifi cant infl uence. Related parties may be individuals or corporate entities.

(t) Statutory Reserve

Subsidiaries which are incorporated in the PRC appropriates 10% of the profi t arrived at in accordance with PRC regulations for each year to statutory reserve. The profi t arrived at must be used to set off against any accumulated losses. The appropriation to statutory reserve after offsetting against any accumulated losses must be made before the distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered share capital. The statutory reserve is not distributable in the form of cash dividends.


40page



(u) Currency Translation

Functional and presentation currency

Items included in the fi nancial statements of each of the entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The fi nancial statements are presented in RMB, which is the Group’s functional currency, as it best refl ects the economic substance of the underlying events and circumstances relevant to the Group.

Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Currency translation gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except for currency translation differences on net investment in foreign entities and borrowings and other currency instruments qualifying as net investment hedges for foreign operations in the fi nancial statements.

Non–monetary items that are measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

Currency translation differences on non-monetary items, whereby the gains or losses are recognised in the income statement, such as equity instruments held at fair value through profi t or loss, are reported as part of the fair value gain or loss.

Translation of Group entities’ fi nancial statements

The results and fi nancial position of all the group entities (none of which has the currency of a hyperinfl ationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

– Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet;

– Income and expenses for the income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

– All resulting exchange differences are taken to the foreign currency translation reserve within equity.


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(u) Currency Translation (cont’d)

Consolidation adjustments

On consolidation, currency translation differences arising from the net investment in foreign entities and borrowings and other currency instruments designated as hedges of such investments are taken to foreign currency translation reserve. When a foreign operation is disposed of, such currency translation differences are recognised in the income statement as part of the gain or loss on disposal.

3 Critical Accounting Estimates and Judgements

Estimates and assumptions concerning the future are made in the preparation of the fi nancial statements. They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

(i) Key Sources of Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year are discussed below.

Depreciation of plant and equipment

Plant and equipment are depreciated on a straight–line basis over their estimated useful lives. Management estimates the useful lives of these plant and equipment to be within 3 to 10 years. The carrying amount of the Group’s plant and equipment as at 31 March 2007, excluding construction in progress, was RMB17,288,000 (2006: RMB18,966,000). Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these plant and equipment, therefore future depreciation charges could be revised.

Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Signifi cant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the fi nal tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amount of the Group’s tax payables at 31 March 2007 was RMB3,109,000 (2006: RMB2,776,000).


42page


3 Critical Accounting Estimates and Judgements (cont’d)

(ii) Critical Judgements made in Applying Accounting Policies In the process of applying the Group’s accounting policies, management has made certain

judgements, apart from those involving estimations, which have signifi cant effect on the amounts recognised in the fi nancial statements.

Impairment of investments and fi nancial assets

The Group follows the guidance of IAS 39 on determining when an investment or fi nancial asset is other-than-temporarily impaired. This determination requires signifi cant judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment or fi nancial asset, including factors such as industry and sector performance, changes in technology and operational and fi nancing cash fl ow.

Inventories

The Group states its inventories at the lower of cost and net realisable value, where cost is calculated using the weighted average method. Judgement has to be exercised on assessing the net realisable value of the inventories, which is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. The carrying amount of the Group’s inventories at 31 March 2007 was RMB42,805,000 (2006: RMB25,277,000).

4 Revenue

Revenue of the Group represents the aggregate value of goods sold, net of goods returns and trade discounts.

5 Other Income

Group2007 2006

RMB’000 RMB’000

Gain from sales of raw materials 1,872 877Interest income 795 1,005Fair value gains on fi nancial assets at fair value through profi t or loss 164 –Write back of business tax over–provided in prior years 531 –Government grants – 44Service income – 221Others 789 79

4,151 2,226


43page


6 Other Operating Expenses

Group2007 2006

RMB’000 RMB’000

Loss on foreign exchange 1,185 3,605Amortisation of intangible assets 645 159(Write back) / Provision for impairment on trade receivables (305) 1,481Research and development costs written off – 479Others – 1,374

1,525 7,098

7 Profi t from Continuing Operating Activities

The profi t from continuing operating activities is arrived at after charging:

Group2007 2006

RMB’000 RMB’000

Cost of inventories sold 327,818 309,412Depreciation of plant and equipment 3,941 2,985Operating lease rental on offi ces and staff quarters 6,952 3,667Impairment for inventories 454 1,436Loss on disposal of plant and equipment 647 122

8 Finance Costs

Group2007 2006

RMB’000 RMB’000

Hire purchase interest 94 41Interest expense on short term loans 126 216Trust receipt interest 136 598Others 18 –

374 855


44page


9 Employee Benefi ts Costs

Group2007 2006

RMB’000 RMB’000

Staff costsSalaries and related costs 26,095 24,959Defi ned contribution plans 4,006 353Termination benefi ts 162 –

30,263 25,312

Directors’ remuneration included in salaries and related costs 1,589 1,518Directors’ fees 316 478

10 Income Tax

Group2007 2006

RMB’000 RMB’000

Current income taxCurrent year- PRC – 1,431- Macau 820 2,424

Under/(over) provision in prior years- PRC 2,557 (747)- Macau – (1,873)

3,377 1,235Deferred income taxCurrent year 65 (71)

3,442 1,164

A reconciliation of income tax calculated at the applicable corporate tax rate with income tax expense is as follows:

Profi t before income tax 14,986 26,524

Tax calculated at domestic tax rates applicable to profi ts in the respective countries 3,300 7,030Tax effect on income not subject to income tax (4,495) (4,746)Tax effect on expense not deductible for income tax 2,080 1,500Under/(over) provision in prior years 2,557 (2,620)

3,442 1,164


45page


10 Income Tax (cont’d)

Summary of tax rates in the Group’s respective operating jurisdictions are as follows:

Group2007 2006

% %

Hong Kong 17.5 17.5Macau 12 12PRC 10 – 15 7.5 – 15Singapore 18 –

Shenzhen Feibao Technologies Co. Ltd, a subsidiary of the Company, is subject to a national tax rate of 15% which is a concession rate for enterprises located in special economic zones.

In accordance with the applicable corporate income tax law of the PRC, both Shenzhen Vigorhood Electronics Co. Ltd and Vigorhood Electronics Technology (Shenzhen) Co. Ltd, subsidiaries of the Company, are established as wholly foreign–owned enterprises in the PRC, and are exempted from corporate income tax for its fi rst two profi table calendar years of operations. Thereafter, they are entitled to a 50% relief from the state corporate income tax and exempted from the local corporate income tax for the following three years.

The tax exemption for Shenzhen Vigorhood Electronics Co. Ltd expired on 31 December 2001. From

1 January 2002 to 31 December 2002, a special tax concession for export enterprises was granted. It subsequently obtained the high technology enterprise accreditation which further extended the 50% relief entitlement for another three years. It is subject to a national tax rate of 7.5% from 1 January 2003 to 31 December 2005 and 10% thereafter.

The two years tax exemption period for Vigorhood Electronics Technology (Shenzhen) Co. Ltd commenced in the year ended 31 December 2006 and will expire during the year ending 31 December 2007. Upon expiry of the full tax exemption, it will be subjected to a reduced tax rate of 12% for three fi nancial years from 1 January 2008 to 31 December 2010.

As at 31 March 2007, no deferred tax has been provided as the Group did not have any signifi cant

temporary differences which gave rise to a deferred tax asset or liability. As at 31 March 2006, the Group recognised deferred tax asset of RMB65,000.

11 Profi t from Discontinued Operations

During the previous fi nancial year, the Group divested Vigorhood Photoelectric Shenzhen Co Ltd (“Vigorhood Photoelectric”), the subsidiary company which was engaged in the digital camera business, to the former controlling shareholder at the original investment cost of RMB20,000,000. The rationale of the divestment is primarily due to:

(i) severe pricing competition which resulted in an erosion of the gross margins signifi cantly more than the management’s expectation; and

(ii) lower than anticipated production volume caused by unforeseen production ineffi ciencies that resulted in lower than expected actual production volume.


46page


11 Profi t from Discontinued Operations (cont’d)

The disposal of Vigorhood Photoelectric was approved by the shareholders at the Special Shareholders’ Meeting convened on 9 November 2005 and the disposal was completed on the same date. The results of the discontinued operations are presented below:

RMB’000

Revenue 86,363Expenses (86,547)Loss before tax (184)Tax –Loss after tax (184)Gain on disposal of investment in a subsidiary 8,663Profi t for the year from discontinued operations 8,479

The impact of the discontinued operations on the cash fl ows of the Group is as follows:

RMB’000

Operating cash fl ows 1,256Investing cash fl ows (460)Total cash fl ows 796

The Group disposed of Vigorhood Photoelectric at the original investment costs of RMB20,000,000 and the disposal consideration was fully settled in cash.

The fair value of assets and liabilities of Vigorhood Photoelectric recorded in the consolidated fi nancial statements as at 9 November 2005, and the cash fl ow effect of the disposal were as follows:

RMB’000

Plant and machinery 4,358Intangible assets 404Trade and other receivables 16,613Inventories 20,297Cash and cash equivalents 2,103

43,775Trade and other payables (32,438)Fair value of net assets 11,337

Total considerationCash and cash equivalents of the subsidiary 2,103Net cash infl ow on disposal of the subsidiary 17,897

20,000


47page


12 Earnings per Share

Basic earnings per share is calculated by dividing the net profi t attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.

Group2007 2006

For continuing operationsNet profi t attributable to equity holders of the Company (RMB’000) 11,544 16,881

Weighted average number of ordinary shares in issue (‘000) 243,670 243,670

Basic earnings per share (RMB cent per share) 4.74 6.93

For discontinued operationsNet profi t attributable to equity holders of the Company (RMB’000) – 8,479

Weighted average number of ordinary shares in issue (‘000) – 243,670

Basic earnings per share (RMB cent per share) – 3.48

There were no potential dilutive shares for the fi nancial years ended 31 March 2007 and 31 March 2006.

13 Dividends

Group2007 2006

RMB’000 RMB’000

Ordinary dividends declared and paidOn 243,670,000 shares in issue Interim dividend of RMB 2.59 cents per ordinary share (2006: RMB 7.387 cents per share) 6,343 18,009 Final dividend of RMB 2 cents per ordinary share (2006: RMB 6.57 cents per share) 4,873 16,000

11,216 34,009

Proposed for approval at AGM (not recognised as a liability as at 31 March)Final dividend of 2006: RMB 2 cents per share – 4,873


48page


14 Investment in Subsidiaries

Company2007 2006

RMB’000 RMB’000

Unquoted shares, at cost 60,482 60,482Due from subsidiaries 57,796 63,708Due to subsidiaries (591) (2,790)

117,687 121,400

The amounts due from/(to) subsidiaries are non–trade, unsecured, interest free and repayable in cash on demand. The carrying amounts of these balances approximate their fair value.

Details of the subsidiaries are as follows:

Name of company andcountry of incorporation/operation Principal activities

Issued and fully paid

capital

Percentage of equity

held directly

Percentage of equity

held indirectly

RMB 2007 2006 2007 2006% % % %

Stiger Investments Pte. Ltd. * Singapore Investment holding 5 100 – – –

Ivy Bushes Ltd. ** British Virgin Islands Investment holding 411,000 100 100 – –

Good Prezzie Trading Ltd. ** British Virgin Islands Investment holding 349,511 100 100 – –

Shenzhen Vigorhood Electronics Co. Ltd. ** PRC

Manufacturing of offi ce equipment 60,000,000 – – 100 100

Shenzhen Feibao Technologies Co. Ltd.** PRC


Vigorhood Electronics Technology ** (Shenzhen) Co. Ltd. PRC


Vigorhood Macao Commercial Offshore ** Company Ltd. Macau Trading 96,620 – – 100 –

Keen Power Technology Ltd. ** British Virgin Islands Trading 411,000 – – 100 100

Keen Power Technology Ltd. ** Hong Kong Trading 2 – – 100 100

Vigorhood Pacifi c Ltd. ** Hong Kong Trading 10,000 – – 100 100

* audited by Moore Stephens, Singapore ** audited by Moore Stephens, Singapore and Lau & Au Yeung C.P.A. Limited

Stiger Investments Pte. Ltd. and Vigorhood Macao Commercial Offshore Company Ltd. were incorporated on 1 February 2007 and 20 April 2006 respectively.


49page


15 Cash and Cash Equivalents

Group2007 2006

RMB’000 RMB’000

Cash at bank and on hand 28,347 62,875

At the balance sheet date, the carrying values of cash and cash equivalents approximated their fair value. Bank balances bear interest at an effective interest rate of about 3.06% (2006: 3.3%) per annum.

Cash and cash equivalents are denominated in the following currencies:

Group2007 2006

RMB’000 RMB’000

United States Dollar 13,910 35,626Chinese Renminbi 5,280 20,072Hong Kong Dollar 3,938 6,463Euro 4,662 36British Pound 3 669Singapore Dollar 554 9

28,347 62,875

The conversion of the Group’s cash denominated in Chinese RMB, into foreign currencies is subject to the foreign exchange control rules and regulations promulgated by the PRC Government.

16 Pledged Deposits

At the balance sheet date, short term bank deposits of RMB16,999,000 (2006: RMB1,033,000) were pledged to fi nancial institutions for banking facilities granted to subsidiaries of the Group. Short term bank deposits which have an average maturity of less than 12 months (2006: less than 12 months), bear interest at a weighted average effective rate of about 3.15% (2006: 3.5%) per annum.

Pledged deposits are denominated in the following currencies:

Group2007 2006

RMB’000 RMB’000

United States Dollar 7,768 –Chinese Renminbi 8,190 –Hong Kong Dollar 1,041 1,033

16,999 1,033


50page


17 Financial Assets at Fair Value Through Profi t or Loss

Group2007 2006

RMB’000 RMB’000

Quoted investments 6,391 274

18 Trade and Other Receivables

Group2007 2006

RMB’000 RMB’000

Trade receivables– third parties 56,540 32,973– related parties – 1,028

56,540 34,001Less: Provision for impairment on trade receivables – (3,243)

56,540 30,758Due from related parties – 9,733Tax recoverable 9,275 6,058Sundry debtors 5,030 –

70,845 46,549

The carrying amounts of trade and other receivables approximate their fair values at the balance sheet date. As at 31 March 2006, the amounts due from related parties (entities with common directors as the Company) were unsecured, interest–free and repaid during the current fi nancial year.

Included in sundry debtors, is an amount of RMB3,555,000 (2006: nil) which relates to advances made to a fi nancial institution for the trading of quoted investments.

Trade and other receivables are denominated in the following currencies:

Group2007 2006

RMB’000 RMB’000

United States Dollar 44,591 33,317Euro 11,999 –Chinese Renminbi 10,649 8,365Hong Kong Dollar 51 4,867Singapore Dollar 3,555 –

70,845 46,549


51page


18 Trade and Other Receivables (cont’d)

Movement of provision for impairment on trade receivables:

Group2007 2006

RMB’000 RMB’000

At beginning of the year 3,243 1,762(Write back) / Provision during the year (305) 1,481Write off against provision (2,938) –

At end of the year – 3,243

19 Other Current Assets

Group2007 2006

RMB’000 RMB’000

Deposits 6,061 4,795Prepayments 577 1,721

6,638 6,516

Deposits and prepayments are denominated in the following currencies:

Group2007 2006

RMB’000 RMB’000

United States Dollar 482 669Chinese Renminbi 6,142 5,811Hong Kong Dollar 14 36

6,638 6,516

The carrying amounts of deposits and prepayments approximate their fair values.

20 Inventories

Group2007 2006

RMB’000 RMB’000

Raw materials 22,229 16,732Work in progress 8,073 3,579Finished goods 12,503 4,966

42,805 25,277 Inventories are stated after provision for impairment of RMB2,198,000 (2006: RMB1,744,000).


52page


21 Plant and Equipment

Leasehold improve-

mentsPlant andmachinery Moulds

Offi ce andelectronicequipment

Motor vehicles

Construc-tion in

progress TotalRMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

2007Cost At 1 April 2006 1,331 12,031 8,771 2,254 2,312 1,029 27,728 Additions 7 304 498 68 66 3,130 4,073 Transfers – 437 1,558 (4) – (1,991) – Disposals/write off – (58) (615) (18) (1,180) (343) (2,214)

At 31 March 2007 1,338 12,714 10,212 2,300 1,198 1,825 29,587

Accumulated depreciation At 1 April 2006 79 2,021 4,138 724 771 – 7,733 Charge for the year 506 1,138 1,509 366 422 – 3,941 Disposals/write off – (20) (440) (14) (726) – (1,200)

At 31 March 2007 585 3,139 5,207 1,076 467 – 10,474

Net book value At 31 March 2007 753 9,575 5,005 1,224 731 1,825 19,113

2006Cost At 1 April 2005 674 7,084 9,183 2,477 2,206 373 21,997 Additions 1,231 6,024 1,394 1,152 727 1,904 12,432 Transfers – 159 1,089 – – (1,248) – Disposals/write off – (778) (5) (3) (253) – (1,039) Disposal of a subsidiary (574) (458) (2,890) (1,372) (368) – (5,662)

At 31 March 2006 1,331 12,031 8,771 2,254 2,312 1,029 27,728

Accumulated depreciation At 1 April 2005 157 1,384 3,045 650 692 – 5,928 Charge for the year 201 965 1,626 417 376 – 3,585 Disposals/write off – (283) (4) (3) (186) – (476) Disposal of a subsidiary (279) (45) (529) (340) (111) – (1,304)

At 31 March 2006 79 2,021 4,138 724 771 – 7,733

Net book value At 31 March 2006 1,252 10,010 4,633 1,530 1,541 1,029 19,995

At 31 March 2007, net book value of plant and equipment of the Group under hire purchase arrangements amounted to nil (2006: RMB3,785,000).


53page


22 Intangible Assets

Development Computercosts software Patent Total

RMB’000 RMB’000 RMB’000 RMB’000

2007Cost At 1 April 2006 957 592 – 1,549 Additions – 48 123 171

At 31 March 2007 957 640 123 1,720

Accumulated amortisation At 1 April 2006 59 137 – 196 Charge for the year 485 140 20 645

At 31 March 2007 544 277 20 841

Net book value At 31 March 2007 413 363 103 879

2006Cost At 1 April 2005 3,225 558 – 3,783 Additions 1,436 154 – 1,590 Write off (479) – – (479) Disposal of a subsidiary (3,225) (120) – (3,345)

At 31 March 2006 957 592 – 1,549

Accumulated amortisation At 1 April 2005 792 43 – 835 Additions 2,194 108 – 2,302 Disposal of a subsidiary (2,927) (14) – (2,941)

At 31 March 2006 59 137 – 196

Net book value At 31 March 2006 898 455 – 1,353


54page


23 Deferred Tax Asset

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fi scal authority. The amounts, determined after offsetting, are as follows:

Group2007 2006

RMB’000 RMB’000

Deferred tax assets to be recovered after one year – 70Deferred tax liabilities to be recovered after one year – (5)

– 65

The movements on the Group’s net deferred tax position are as follows:

Group2007 2006

RMB’000 RMB’000

Deferred tax liabilities- Accelerated Tax DepreciationAt beginning of the year (5) (6)Credited to income statement 5 1

At end of the year – (5)

Deferred tax assets- Unutilised Tax LossesAt beginning of the year 70 –(Charged) / credited to income statement (70) 70

At end of the year – 70

Net positionAt beginning of the year 65 (6)(Charged) / credited to income statement (65) 71

At end of the year – 65

Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefi ts through future taxable profi ts is probable.


55page


24 Trade and Other Payables

Group2007 2006

RMB’000 RMB’000

Trade payables to third parties 73,097 51,861Trust receipts 2,427 –Other payables and accruals 8,415 3,783Advances from customers 853 344

84,792 55,988

The carrying amounts of trade and other payables approximate their fair values at the balance sheet date.

As at 31 March 2007, trust receipts incur an average effective interest rate of approximately 6.138% (2006: nil) per annum and is determined based on LIBOR + 2.5%. It is secured by a corporate guarantee from Asia Tiger Group Limited and a personal guarantee given by a former director of the Company.

Trade and other payables are denominated in the following currencies:

Group2007 2006

RMB’000 RMB’000

Chinese Renminbi 57,280 25,589Hong Kong Dollar 22,294 26,522United States Dollar 5,166 3,877Singapore Dollar 52 –

84,792 55,988

25 Short Term Bank Loans

As at 31 March 2006, the loans were secured by a corporate guarantee from the Company, and incurred an average effective interest rate of approximately 8% per annum (determined based on Hong Kong Dollar prime lending interest rate + 0.5%). These loans were repaid during the current fi nancial year.

As at 31 March 2007, the loans were secured by a personal guarantee from a former director of the Company and a corporate guarantee from a third party, and incurred an average effective interest rate of approximately 6.38% per annum.

These loans are denominated in United States Dollar and their carrying values approximate their fair values.


56page


26 Obligations under Hire Purchase Creditors

Group2007 2006

RMB’000 RMB’000

Finance lease liabilities – minimum lease payments:Within one year – 1,362Between two to fi ve years – 2,498

– 3,860Less: Finance charges – (356)

– 3,504

Present value of hire purchase may be analysed as follows:Within one year – 1,161Between two to fi ve years – 2,343

– 3,504

As at 31 March 2006, hire purchase was charged at an effective interest rate of 6.5% per annum. All obligations under hire purchase were repaid during the current fi nancial year.

27 Issued Capital and Share Premium

Group and Company2007 2006

US$’000 US$’000

Authorised:500,000,000 (2006: 500,000,000) ordinary shares of US$0.04 each 20,000 20,000

RMB’000 RMB’000

Issued and fully paid:243,670,000 (2006: 243,670,000) ordinary shares of US$0.04 eachAt beginning and end of the year 80,482 80,482

Share premium:At beginning of the year 37,985 37,933Overprovision of listing expenses – 52

At end of the year 37,985 37,985


57page


28 Other Reserves

The amounts of the Group’s reserves and the movements therein for the current and prior year are presented in the consolidated statement of changes in equity.

Contributed surplus

The Group’s contributed surplus represents the difference between the nominal value of the shares of the subsidiaries acquired pursuant to the Group Reorganisation, over the nominal value of the Company’s shares issued in exchange therefore.

Statutory reserve

In accordance with relevant PRC regulations, the relevant subsidiaries of the Company, being wholly-owned foreign entities established in the PRC, are required to appropriate not less than 10% of their profi ts after tax to the respective statutory reserves, until the respective balances of the fund reach 50% of the respective registered capitals. Subject to certain restrictions as set out in the relevant PRC regulations, these statutory reserves may be used to offset against their respective accumulated losses, if any.

Exchange fl uctuation reserve

The foreign currency translation reserve is used to record exchange difference arising from the translation of the fi nancial statements of foreign subsidiaries whose functional currency is different from that of the Group’s presentation currency.

29 Related Party Transactions

The following were transactions entered into by the Group with related parties on terms agreed as follows:

Group2007 2006

RMB’000 RMB’000

With related parties (entities with common former directors as the Company)Disposal of a subsidiary – 20,000Advances extended – 6,969Subcontracting income – 677

With a former directorSale of a motor vehicle 360 –

Compensation of key management personnel of the Group

Salaries and other short term employee benefi ts 2,132 1,996Termination benefi ts 162 –


58page


30 Commitments

(a) Operating Lease Receivable

At the balance sheet date, the Group has minimum lease receivable under non-cancelable operating leases agreement in respect of its production facilities as follows:

Group2007 2006

RMB’000 RMB’000

Within one year 187 –Between two to fi ve years 63 –

250 –

(b) Operating Lease Commitments

At the balance sheet date, the Group has minimum lease payments under non-cancelable operating leases in respect of its staff quarters and production facilities as follows:

Group2007 2006

RMB’000 RMB’000

Within one year 6,855 4,242Between two to fi ve years 4,749 4,303

11,604 8,545

The above operating leases do not contain any escalation clauses and do not provide for contingent rents.

(c) Capital Commitments

At the balance sheet date, the Group has capital commitments as follows:

Group2007 2006

RMB’000 RMB’000

Contracted, but not provided for:Purchase of plant and equipment 303 1,302


59page


31 Segment Information

(a) Business Segments

Offi ce Equipment ConsolidatedRMB’000 RMB’000

31 March 2007Segment revenueSales to external customers 364,174 364,174Cost of goods sold (327,818) (327,818)

Gross profi t 36,356 36,356Other income 3,987 3,987Operating expenses (25,470) (25,470)

Profi t before unallocated items 14,873 14,873Unallocated income 164Unallocated expenses (51)

Profi t before income tax 14,986Income tax (3,442)

Profi t for the year 11,544

Other segment informationSegment assets 181,790 181,790Unallocated assets 10,227

192,017

Segment liabilities 85,422 85,422Unallocated liabilities 5,993

91,415

Capital expenditure- plant and equipment 4,073 4,073- intangible assets 171 171Depreciation of plant and equipment 3,941 3,941Amortisation of intangible assets 645 645Write back of provision for impairment on trade receivables 305 305

Impairment for inventories 454 454


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31 Segment Information (cont’d)

(a) Business Segments (cont’d)

Continued operations

Offi ce equipment

Discontinued operations

Digital cameras Consolidated

RMB’000 RMB’000 RMB’000

31 March 2006Segment revenueSales to external customers 360,132 86,363 446,495Cost of goods sold (309,412) (79,054) (388,466)

Gross profi t 50,720 7,309 58,029Other income 2,226 15 2,241Operating expenses (31,570) (7,508) (39,078)

Profi t/(loss) before unallocated items 21,376 (184) 21,192

Unallocated income 8,663Unallocated expenses (3,331)

Profi t before income tax 26,524Income tax (1,164)

Profi t for the year 25,360

Other segment informationSegment assets 163,872 – 163,872Unallocated assets 65

163,937

Segment liabilities 60,938 – 60,938Unallocated liabilities 2,776

63,714

Capital expenditure:- plant and equipment 11,972 460 12,432- intangible assets 1,590 – 1,590Depreciation of plant and equipment 2,985 600 3,585Amortisation of intangible assets 159 2,143 2,302Provision for impairment on trade receivables 1,481 – 1,481Impairment for inventories 1,436 177 1,613


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31 Segment Information (cont’d)

(b) Geographical Segments

The Group operates in three main geographical segments by location of customers, namely USA, Europe and Japan. Other geographical areas mainly comprise PRC, Hong Kong, Korea, India, Australia, New Zealand, South Africa and other countries, none of which constitute a separately reportable segment.

USA Europe Japan Others ConsolidatedRMB’000 RMB’000 RMB’000 RMB’000 RMB’000

31 March 2007Total sales to external customers 137,046 140,680 52,818 33,630 364,174

31 March 2006Total sales to external customers- continued operations 171,851 97,668 67,913 22,700 360,132- discontinued operations 20,182 20,267 – 45,914 86,363

The turnover by geographical segments is based on the location of customers regardless of where the goods are produced. The assets and capital expenditure are based mainly in PRC, Hong Kong and Macau where the Group operates.

China Hong Kong Macau Singapore ConsolidatedRMB’000 RMB’000 RMB’000 RMB’000 RMB’000

31 March 2007Segment assets 156,911 1,064 23,815 10,227 192,017Capital expenditure:- plant and equipment 4,073 – – – 4,073- intangible assets 171 – – – 171

31 March 2006Segment assets 105,061 18,195 40,681 – 163,937Capital expenditure:- plant and equipment 12,421 11 – – 12,432- intangible assets 1,590 – – – 1,590


62page


32 Financial Instruments

Financial risk management objective and policies

The Group’s activities exposed it to a variety of fi nancial risks, including the effects of interest rate risk, credit risk, currency risk, market risk and liquidity risk arising in the normal course of the Group’s business. The Group’s risk management seeks to minimise the potential adverse effects from these exposures. The management reviews and agrees policies for managing each of these risks and they are summarised below.

(i) Interest rate risk

The Group’s exposures to market risk for changes in interest rates mainly arise from current borrowings and short-term bank deposits. Interest rate risk is managed by the Group on an on-going basis with the primary objective of limiting the extent to which net interest expense could be impacted from an adverse movement in interest rates.

(ii) Credit risk

Credit risk refers to the risk that counter-parties may be unable to meet their obligations resulting in fi nancial loss to the Group. The Group has a signifi cant concentration of credit risk from trade receivables as approximately 75% of the trade receivables as at 31 March 2007 are owing from three customers. It is the Group’s policy to enter into transactions with credit-worthy parties to mitigate any signifi cant concentration of credit risk. Potential exposures are monitored and reported to management on a timely basis. Provision for impairment of receivables are made when deemed necessary.

Bank balances are placed in fi nancial institutions of high credit rating.

The maximum exposure to credit risk is represented by the carrying amount of each fi nancial asset in the balance sheet.

(iii) Currency risk

The Group incurs foreign currency risk on sales and purchases that are denominated in currencies other than Chinese Renminbi. The currencies giving rise to this risk are primarily the US dollar, Japanese Yen, Euro, Singapore and Hong Kong dollars. The Group does not use derivative fi nancial instruments to manage the foreign currency risk. This exposure to currency risk is managed so far as possible by monitoring on an on-going basis and the Group endeavors to keep the net exposure at an acceptable level.

(iv) Market risk

The Group’s exposure to market risk is the volatility to specifi c market factors that would cause the fl uctuations in the prices of quoted shares held by the Group. However, management monitors and reviews these fl uctuations on a regular basis.

(v) Liquidity risk

The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to fi nance the Group’s operations and mitigate the effects of fl uctuations in cash fl ows.


63page

Shareholders’ InformationAs at 8 June 2007

STATISTICS OF SHAREHOLDERS

Authorised Capital US$20,000,000Issued and fully Paid–up Capital US$9,746,800Number of Shares 243,670,000Class of Shares Ordinary share of US$0.04 eachVoting Rights On show of hands : One vote for each member On a poll : One vote for each ordinary share

SHAREHOLDINGS HELD BY THE PUBLIC

Based on information available to the Company as at 8 June 2007, 77.11% of the issued ordinary shares of the Company is held by the public, and therefore, Rule 723 of the Listing Manual issued by the SGX–ST is complied with.

ANALYSIS OF SHAREHOLDINGS BY RANGE

Size of ShareholdingsNo. of

Shareholders %No. of Shares %

1 – 999 1 0.08 425 0.001,000 – 10,000 373 29.16 2,878,000 1.1810,001 – 1,000,000 890 69.59 59,904,000 24.591,000,001 and above 15 1.17 180,887,575 74.23

1,279 100.00 243,670,000 100.00

SUBSTANTIAL SHAREHOLDERS

Shareholder’s Name Direct Interest Deemed Interest

Sandalford Capital Ltd 55,765,580 –Tan Kuan Hong * – 55,765,580On Wang Sang Wilson * – 55,765,580

* Through their shareholding in Sandalford Capital Ltd

Shareholders’ InformationAs at 8 June 2007

64page


LIST OF TWENTY LARGEST SHAREHOLDERS

S/N Name of Shareholders No. of Shares %

1 RAFFLES NOMINEES PTE LTD 53,390,580 21.912 OCBC SECURITIES PRIVATE LTD 21,979,000 9.023 UNITED OVERSEAS BANK NOMINEES PTE LTD 16,337,000 6.704 LIM & TAN SECURITIES PTE LTD 12,594,345 5.175 PHILLIP SECURITIES PTE LTD 12,355,000 5.076 MAGNUS ENERGY GROUP LTD 10,875,000 4.467 BNP PARIBAS NOMINEES SINGAPORE PTE LTD 10,675,000 4.388 KIM ENG SECURITIES PTE LTD 10,297,150 4.239 UOB KAY HIAN PTE LTD 9,362,500 3.84

10 DBS VICKERS SECURITIES (S) PTE LTD 7,049,000 2.8911 MAYBAN NOMINEES (S) PTE LTD 5,407,000 2.2212 NUEVIZ INVESTMENT PRIVATE LIMITED 5,000,000 2.0513 CIMB–GK SECURITIES PTE LTD 3,236,000 1.3314 YAP KOK WA 1,320,000 0.5415 HONG LEONG FINANCE NOMINEES PTE LTD 1,010,000 0.4216 AZLIN BIN KHALID 1,000,000 0.4117 FRIENDSHIP BRIDGE HOLDING COMPANY PTE LTD 1,000,000 0.4118 MA KAH WOH, PAUL 1,000,000 0.4119 TAN KIEN GIAP 920,000 0.3820 TAN LING NA 900,000 0.37

185,707,575 76.21

DIRECTORS’ INTEREST

Director’s Name Direct Interest Deemed Interest

Tan Kuan Hong – 55,765,580


65page

Notice of Annual General Meeting

ASIA TIGER GROUP LIMITED(the “Company”)

(incorporated in Bermuda)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of ASIA TIGER GROUP LIMITED (“the Company”) will be held at REPUBLIC OF SINGAPORE YACHT CLUB, 52 West Coast Ferry Road, Singapore 126887 on Tuesday, 31 July 2007 at 9.30 am, for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the audited accounts for the fi nancial year ended 31 March 2007 and the reports of the Directors and Auditors thereon. (Resolution 1)

2. To approve the payment of Directors’ fees of S$85,000 for the year ending 31 March 2008, to be payable quarterly in arrears (previous year FY07: S$80,000). (Resolution 2)

3. To re-elect the following Directors retiring pursuant to Bye-Law 107 of the Bye-Laws of the Company:

i) Mr Chin Kok Sang (Resolution 3) ii) Mr Yoon Wai Nam (Resolution 4) iii) Mr Ang Kiam Meng (Resolution 5) iv) Mr Anthony Lee Vui Han (Resolution 6) v) Mr Tan Kuan Hong (Resolution 7) vi) Ms Wong Choy Yin (Resolution 8)

Notes to re-election of Directors:

i) Mr Chin Kok Sang, if re-elected, will be considered an independent non-executive Director and will remain as the Chairman of the Audit Committee and a member of both the Nominating Committee and the Remuneration Committee.

ii) Mr Yoon Wai Nam, if re-elected, will be considered an independent non-executive Director and will remain as the Chairman of the Remuneration Committee and a member of both the Nominating Committee and the Audit Committee.

iii) Mr Ang Kiam Meng, if re-elected, will be considered an independent non-executive Director and will remain as the Chairman of the Nominating Committee and a member of both the Audit Committee and the Remuneration Committee.

iv) Mr Anthony Lee Vui Han, if re-elected, will be considered an independent non-executive Director.

4. To re-appoint Messrs Moore Stephens, Singapore and Lau & Au Yeung C.P.A. Limited, Hong Kong as Joint Auditors of the Company and to authorise the Directors to fi x their remuneration.

(Resolution 9)


66page


AS SPECIAL BUSINESS

To consider and, if thought fi t, to pass the following resolutions as an Ordinary Resolution, with or without any modifi cations;

5. Authority to allot and issue shares

“THAT pursuant to Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), authority be and is hereby given to the Directors of the Company to issue and allot new shares in the capital of the Company (whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fi t, PROVIDED ALWAYS that

(i) the aggregate number of shares to be issued pursuant to this Resolution does not exceed

50% of the issued shares of the Company (as calculated in accordance with sub-paragraph (ii) below), of which the aggregate number of shares to be issued other than on a pro-rata basis to shareholders of the Company does not exceed 20% of the issued shares of the Company (as calculated in accordance with sub-paragraph (ii) below);

(ii) (subject to such manner of calculation as may be prescribed by the SGX-ST), for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (i) above, the percentage of issued share capital shall be based on the issued shares of the Company at the time this Resolution is passed, after adjusting for:-

(a) new shares arising from the conversion or exercise of any convertible securities or share options which are outstanding or subsisting at the time this Resolution is passed; and

(b) any subsequent consolidation or subdivision of shares; and

(iii) unless revoked or varied by the Company in general meeting, such authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or by the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.” (Resolution 10)

6. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

By Order of the Board

Seah Hai YangCompany SecretarySingapore, 07 July 2007


67page


NOTES TO SPECIAL BUSINESS :

The effects of the resolutions under the heading “As Special Business” in the Notice of the Annual General Meeting are :

Resolution 10 is to empower the Directors of the Company from the date of this Meeting until the date of the next Annual General Meeting, to issue shares in the Company. The number of shares which the Directors may issue under this Resolution would not exceed 50% of the issued shares of the Company at the time of passing this Resolution. For issue of shares other than on a pro–rata basis to all shareholders of the Company, the aggregate number of shares to be issued shall not exceed 20% of the issued shares of the Company. This authority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company.

Notes:

(a) A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) may appoint not more than two proxies to attend and vote in his/her stead. Where a Member appoints more than one proxy, he/she shall specify the proportion of his/her shareholding to be represented by each proxy. A proxy need not be a Member of the Company.

(b) If the appointer is a corporation, the proxy must be executed under seal or the hand of its duly authorised offi cer or attorney.

(c) The instrument appointing a proxy must be deposited at the Offi ce of the Singapore Shares Transfer Agent, B.A.C.S. Private Limited at 63 Cantonment Road, Singapore 089758 not less than 48 hours before the time appointed for holding the Meeting.

This page has been intentionally left blank.



Statement of Directors

Independent Auditors’ Report

Consolidated Income Statement

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Balance Sheet

Notes to Financial Statements

Shareholders’ Information


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ASIA TIGER GROUP LIMITED

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ASIA TIGER GROUP LIMITED - listed companyliongoldcorp.listedcompany.com/misc/ar2007.pdfAsia Tiger Group Limited annual report 2007About Us page 01We specialise in the manufacture of