annual report 2007riverstone.listedcompany.com/misc/ar2007.pdf · korea, taiwan, india, mexico, the...

Annual R

eport 2007

A n n u a l R e p o r t

2 0 0 7

c m y k p306u

awards

group f inancial highl ights

key mi les tones

Awarding authority:

1. Small and Medium Industries Development Corporation Malaysia

2. Small and Medium Industries Association of Malaysia3. Nanyang Siang Pau4. Selangor State Investment Centre

5. Jointly organised by Entrepreneur Development Association Malaysia, Yantai Investment Development Board of Shandong of PRC, Pengtai Municipal Government of Shandong of PRC and Shanghai Business Magazine

6. Malaysia Canada Business Council Business Excellence Award 2006 President’s Award

Enterprise 50 Award

2006 (Top Winner)200520042003

SMB Recognition Award Series

SMB Best Overall Award 2005

Golden Bull Award

200620052003

Selangor Product Excellence Award 2003

The 2nd Asia Pacific International / Malaysia Honesty Enterprise Keris Award 2003

1 2 3

4 5 Malaysia Canada Business CouncilBusiness Excellence Award 2006President’s Award

6

2007

Acquired land in Malaysia in August to expand group business into production of cleanroom facemasks and packaging materials.

Commissioned additional line in Thailand plant in December and increased annual production capacity by 60 million to 780 million gloves.

2006

Succesfully listed on the Mainboard of the Singapore Exchange in November.

Commissioned additional lines in December and increased annual production capacity by 120 million to 720 million gloves.

Acquired new equipment to increase annual production capacity of cleanroom packaging materials to 1,000 tonnes.

China plant commenced operations to provide chlorination and packaging services for customers in China.

Awarded ISO 14001:2004 certification for environmental management system.

2005

Expanded annual production capacity to 601 million gloves and 876 tonnes of cleanroom packaging materials.

Successfully adopted the Six Sigma program to assess product quantity, maintain consistency and reliability in our end-to end manufacturing process.

2004

Expanded annual production capacity to 475 million gloves and 660 tonnes of cleanroom packaging materials.

2002 and 2003

Expanded annual production capacity to 411 million gloves and 475 million finger costs.

2001

Established manufacturing facilities in Thailand with production capacity of 120 gloves and increased the Group’s annual production capacity to 391 million gloves.

Set up sales office in US to service customers in Northern and Central America.

2000

Developed capability to manufacture higher quality Class 10 cleanroom gloves. Installed special dipping line solely for research and development purposes.

Set up office in the Philippines.

Expanded annual production capacity to 271 million gloves.

1999


1998

Expanded annual production capacity for gloves and finger cots to 168 million and 187 million pieces respectively.

Awarded ISO 9001:2000 certifications for quality management system.

Set up sales offices in Penang and Singapore to better service customers directly.

1995-1996

Ventured into production of other non-glove cleanroom consumables such as cleanroom packaging materials and finger cots.

1994


Pioneered the manufacture of nitrile cleanroom gloves in Malaysia.

1991

Incorporated Riverstone Resources Sdn Bhd to manufacture cleanroom gloves.

FY07 FY06 FY05 FY04 FY03For the year (RM’000)Revenue 126,662 122,195 103,522 71,927 60,165 Gross Profit 42,994 42,303 37,060 23,363 18,349 Gross Profit Margin 33.9% 34.6% 35.8% 32.5% 30.5%Profit before tax 26,939 25,542 22,959 13,395 10,150 Net Profit 22,840 22,532 19,881 12,404 9,181 Net Profit Margin 18.0% 18.4% 19.2% 17.2% 15.3%Cashflow from operations 27,367 21,093 16,369 11,853 9,152 At Year End (RM’000) Total Assets 162,180 151,472 92,933 72,041 60,317 Shareholders Equity 138,584 127,994 63,191 50,820 42,449 Cash and Cash Equipvalents 56,949 55,122 9,431 7,982 4,274 Debt* 2,741 4,471 6,191 3,979 4,806 Debt Equity Ratio 0.02 : 1 0.03 : 1 0.10 : 1 0.08 : 1 0.11 : 1Return on Equity 16.5% 17.6% 31.5% 24.4% 21.6%Return on Assets 14.1% 14.9% 21.4% 17.2% 15.2%Per share (RM sen) Earnings 7.4 9.2 8.6 5.4 4.0Net Tangible Asset 44.8 41.4 27.3 22.0 18.3

* Excludes hire purchase creditors** For FY07, EPS is computed based on weighted average number of shares of 309.5 million. For FY06, EPS is computed based on weighted average number of shares of 244.5 million. For FY03 to FY05 is computed based on pre-invitation shares of 231.5 million.

60.2

103.

5 122.

2

71.9

126.

7

03 04 05 06 07

Revenue(RM million)

CAGR20.5%

Gross Profit(RM million)

18.3

37.1

42.3

23.4

43.0

03 04 05 06 07

CAGR23.7%

Net Profit(RM million)

9.2

19.9 22

.5

12.4

22.8

03 04 05 06 07

CAGR25.6%

03 04 05 06 07

EPS**(RM sen)

4.0

8.6 9.

2

5.4

7.4

CAGR16.8%

c m y k p306u

Riverstone’s business is built on a foundation of deep technical knowledge

to meet the exacting standards for particle and static control that the

electronics industry demands. We offer a wide range of products for

all classes of cleanrooms to meet our customers’ unique needs. Our

desire is to provide top quality and innovative products and to do so in

a timely, reliable and efficient manner.

We strive to be a global leader in the manufacture of cleanroom gloves

and the supplier of choice for end-to-end cleanroom consumables and

services for users in the highly controlled and critical environments.

company vis ion, miss ion

corporate prof i le 2

market reach 3

group s tructure 3

R&D and technical exper t ise 4

le t ter to shareholders 5

operat ions and f inancial review 7

board of directors 10

execut ive management 13

corporate informat ion 14

f inancial contents 15

stat is t ics of shareholdings 65

not ice of annual general meet ing 66

proxy form

contents

Riverstone was established in 1991. Over the years, the Group has developed strong formulation and process control know-how in the glove manufacturing industry to meet the most stringent requirements for all classes of cleanrooms. As a result, Riverstone supplies to major global players in the hard disk drive (“HDD”) and semiconductor sectors.

The Group’s strength lies in providing an integrated service to customers; from product development to logistics management and after-sales service.

The Group has three manufacturing facilities, located in Malaysia, Thailand and China. The Group also has a network of sales offices in Singapore, Malaysia, Thailand, the Philippines, China and the US.

Its major export markets include Singapore, Malaysia, Indonesia, Thailand, the Philippines, Vietnam, China, Hong Kong SAR, Japan, Korea, Taiwan, India, Mexico, the US, Northern Ireland, Germany, United Kingdom and Norway.

Riverstone is a leading global supplier of cleanroom gloves for the highly controlled and critical environments.

corporate prof i le

2

R I V E R S T O N E H O L D I N G S L I M I T E D

A N N U A L R E P O R T 2007

market reach

As a global supplier of cleanroom consumables, we have offices and strategic partners in Asia, Americas and Europe.

Singapore ThailandRiverstone Holdings Limited Protective Technology Company LimitedRiverstone Resources (S) Private Limited

Malaysia ChinaRiverstone Resources Sdn Bhd Riverstone Resources (Wuxi) Company LimitedRiverstone Industrial Products Sdn Bhd

group s tructure

AustriaSwitzerland

UK

3



Our customers are major manufacturers in the HDD and semiconductor industries. The production and assembly of electronic products in these industries demand exacting cleanroom standards for particle and static control in order to protect highly sensitive electronic components from contamination.

Our Group has been involved in the manufacturing of cleanroom gloves for more than 17 years. We strive to create an environment rich in technological innovation and manufacturing excellence. Over the years, we have developed deep technical knowledge in formulation and process techniques. We are able to customize gloves to meet our customers’ unique requirements for all classes of cleanrooms.

Our 20-strong R&D and technical team consists of experienced professionals including chemists and chemical engineers. Our focus on research and product development enables us to engage in technical collaborative projects with our customers to deliver customised solutions. This enables us to strengthen our long-standing customer relationships, keeping abreast of industry trends and meeting the specific needs of our customers.

As a testament to our high quality control and production standards, all our manufacturing facilities in Malaysia, Thailand and China have been accorded international manufacturing certifications:

• ISO 9001:2000 Quality management system

• ISO 14001:2004 Environmental management system

• Six Sigma program

• FDA

• Canadian General Standards Board (CGSB)

R&D and technical exper t ise

Our focus on research and product development enables us to engage better in technical collaborative projects with our customers to deliver customised solutions.

4



le t ter to shareholdersDear Shareholders

Riverstone is fast gaining a solid reputation as Asia’s leading high-tech cleanroom gloves manufacturer. Our specialisation and dedication to quality products and services for use within controlled and critical environments are highly valued by our customers, making us their supplier of choice.

Riverstone did well towards the end of 2007 despite challenges from a slowdown of the US economy, depreciation of US currency against the local currencies in markets where Riverstone operates, increase in raw material costs and other operations costs.

We benefited from our expansion program which started in the second half of 2007. Sales volume of cleanroom gloves (in pieces) increased 14.4% year-on-year. We registered 38.2% growth in our sales volume for cleanroom gloves (in pieces) in fourth quarter 2007 compared to the preceding quarter. The increase in sales volume did not, however, translate into significant growth in sales revenues, as the group was affected by the depreciation of US currency.

On the operational front, we enhanced our manufacturing capabilities subsequent to our listing on the Mainboard of the Singapore Exchange. Our investments in 2007 were mainly used to upgrade our R&D facilities and improve our quality control process. We firmly believe that it is our products’ excellent quality that resulted in strong customer confidence. Quality is a key attribute of Riverstone.

We see 2008 as a challenging year for Riverstone. We expect the price of crude oil to remain high. This will result in higher utility and distribution costs that will most likely increase prices for raw materials. Against this backdrop, we will map our expansion plans to capitalise on economies of scale and optimise our utility rate.

Overall, we remain optimistic in 2008. Whilst we anticipate a slower growth rate in some markets, we foresee good opportunities to expand our revenue growth in new geographical regions.

We have allocated part of our planned capital expenditure in 2008 to upgrade existing facilities. This will enable us to produce high-end products to meet our customers’ increasingly stringent requirements.

We will be building new facilities for cleanroom facemasks and packaging materials, full steam, in 2008 and we expect to complete the projects by the third quarter of 2008. These facilities will give us the capacity needed to expand our market share in cleanroom consumables and move a step closer towards being Asia’s leading integrated cleanroom consumables producer. Further, marketing efforts are being strengthened and the company has also diversified in other areas of cleanroom consumables.

We intend to construct new glove production lines and build more cleanroom consumables manufacturing facilities in 2008 and 2009 to boost our capacities so as to be able to meet new market demand.

Internally, we will also constantly improve our efficiency, quality and productivity. We will continue to invest in R&D to entrench our position as Asia’s leading manufacturer of high tech cleanroom gloves. By doing so, we will leverage off our expenses and resources to ensure that our profitability is maintained.

5



le t ter to shareholders (cont ’d)

Resources and marketing efforts will be channeled to focus on penetrating new market segments such as the pharmaceutical and food industries, as well as expanding our geographical footprint to Eastern Europe and India.

Looking forward, we will also be transacting a greater percentage of our sales in local currencies to minimise currency risks.

The group recorded revenue of RM126.7 million for the year 2007. This is the highest absolute figure achieved since its inception. The group’s profit attributable to shareholders after tax was RM22.8 million. Even though the growth figures were not significant, the group maintained gross profit margin at 33.9%. This is in spite the depreciation of the US dollar and increase in prices of raw materials.

In view of the group’s financial performance and strong operating cash flow, we have declared an interim dividend of 1.29 sen/share (RM) (tax exempt, one tier) in third quarter of 2007. I am pleased to announce that the Board of Directors recommended a final dividend of 2.035 sen/share (RM) (tax exempt, one tier) for approval during the forthcoming annual general meeting. This represents a dividend payout ratio of 44.9% of profit attributable to shareholders.

We expect our growth to remain positive, based on the strong demand of cleanroom consumables in the critical environment sector. More cleanrooms are being built by the high-tech manufacturers and as the consumables we develop are a necessity in such operating environments, we anticipate a positive growth. In anticipation of the growth in demand for cleanroom consumables, we have lined up a series of expansion plans:

1) We will continue to expand our glove business by increasing 15.0% in capacity by the end of 2008;

2) We will commence manufacturing of cleanroom wipers in 2008/09;

3) We will increase the variety of cleanroom packaging materials in our packaging business.

We will also continue our lead in addressing the need for re-conditioned gloves so as to uphold our commitment to sustainable development. Riverstone will continue to operate as a socially and environmentally responsible corporation.

I would like to take this opportunity to express my sincere gratitude to all stakeholders and my team for their commitment to Riverstone in the post-IPO period and I look forward to your continuous support. I assure you that we will continue to look for opportunities to add value to all stakeholders.

WONG TEEK SONExecutive Chairman &Chief Executive Officer

6



operat ions and f inancial reviewOperations

Riverstone successfully weathered a deceleration in the global electronics manufacturing sector at the end of 2007. This was attributed to the US economy slowdown and depreciation of the US dollar against local currencies that Riverstone transacts in. Against this environment, the group’s sales volume for cleanroom gloves increased 14.4% in pieces year-on-year.

Notwithstanding the stellar sales volume in cleanroom gloves, revenue figures remained steady compared to the previous financial year because sales were transacted mainly in US dollars. To help maintain group gross profit margins, Riverstone purchased raw materials in US dollars, thus forming a natural hedge.

Manufacturing Review

Since the group’s successful listing on the Singapore Exchange, Riverstone embarked on a series of expansion plans. The group’s expansion in Wuxi, China was completed in the third quarter of 2007. With the new facilities, Riverstone increased the manufacturing capacity of high-tech cleanroom gloves by 40%. The Wuxi plant would now be ready to contribute to the group’s revenue figures.

In Thailand, a new production line for high-tech cleanroom gloves had been established and the plant started trial production towards the end of 2007. In addition, a cleanroom laundry services facility is expected to be ready in April 2008. With these initiatives, the group will complete its expansion in Thailand and will enjoy eight years tax exemption and a further 50% rebate on corporate taxes for the subsequent five years under an incentive offered by the Board of Investment, Thailand.

In Malaysia, Riverstone had also started on the first phase of its facemask manufacturing. Its facemask facility in Malaysia was completed at the end of 2007. This is part of a greater strategy in developing a leading position in end-to-end cleanroom consumables manufacturing. Riverstone anticipates a meaningful revenue contribution from the plant as volume production kicks off in the second quarter of 2008.

Internally, our labour costs were kept steady even though wages had increased. This was possible as Riverstone increased the automation component in the manufacturing process. The group also introduced new incentive schemes across the board that led to increases in productivity.

Sales Review

Overall group sales for Riverstone remained strong in 2007. The Group chalked about RM126.7 million in sales across all geographical segments. In Greater China, the group registered RM48.1 million in sales. Thailand’s sales stood at RM30.3 million and Malaysia’s at RM20.5 million. The other parts of South East Asia contributed to RM14.2 million in sales.

Looking forward

We remain optimistic of the industry prospects for 2008. The group will concentrate on R&D as well as to continue expanding capacities to meet market demands. The group will also seek to penetrate into new market segments and new geographical markets to solidify Riverstone’s leadership position as the supplier of choice for cleanroom consumables.

Revenue

The Group recorded revenue for the year that amounted to RM126.7 million, an increase of 3.7% from RM122.2 million in FY2006. Sales contribution from cleanroom gloves increased 4.6% to RM117.4 million (FY2006: RM112.3 million) and contribution from other non-glove cleanroom products reduced 7.0% to RM9.2 million (FY2006: RM9.9 million). Sales from non-glove cleanroom consumables were mainly from finger cots, static shielding bags, packaging materials and other cleanroom consumables.

In 2007, Riverstone continued to focus on nitrile cleanroom gloves. Sales of nitrile gloves contributed RM104.6 million (82.6%) of total sales. Natural latex gloves contributed RM12.9 million (10.1%) of total sales.

7



operat ions and f inancial review (cont ’d)

Geographically, Southeast Asia continued to be a strong sales contributor as the region housed overseas manufacturing operations of key HDD multi-national corporate customers. Sales from Southeast Asia were RM65.0 million, an increase of 5.3% from FY2006. Sales from China continued to grow from RM46.5 million to RM48.1 million and sales contribution from other regions maintained consistent and stable.

Gross Profit

The Group’s gross profit increased from approximately RM42.3 million in FY2006 to approximately RM42.9 million in FY2007. Overall, Riverstone achieved a healthy gross profit margin of 33.9% in FY2007. This is a significant track record as the group consistently achieved gross profit margins of more than 30% since FY2003.

Operating expenses

Operating expenses incurred include selling and distribution expenses, general and administration expenses, other operating expenses and finance costs.

Selling and distribution expenses reduced from RM5.5 million in FY2006 to approximately RM5.2 million in FY2007. Market research expenses and staff costs relating to sales personnel marginally increased to approximately RM0.2 million in total. The figure was offset by the reduction in handling and forwarding charges amounting to approximately RM0.5 million.

General and administrative expenses increased by approximately RM0.9 million or 10.6% from approximately RM7.7 million in FY2006 to approximately RM8.6 million in FY2007. The increase was a result of expenses incurred to meet regulatory and corporate requirements after being listed.

Other operating expenses increased by approximately RM0.6 million or 16.5% from approximately RM3.6 million in FY2006 to approximately RM4.2 million in FY2007. This was mainly due to the increase in research and development expenses of approximately RM0.2 million and increase in foreign exchange losses of approximately RM0.4 million

Finance costs had reduced from RM0.3 million in FY2006 to RM0.2 million in FY2007 as it reflected the lower net debt position of the Group.

Nitrile gloves Natural latex glovesOther clean room products

82.6%

7.3%

10.1%

Southeast Asia ChinaOther parts of Asia Rest of the world

51.2%

6.7%4.1%

38.0%

Revenue by

Products 2007

Revenue by

Region 2007

8



operat ions and f inancial review (cont ’d)

Other Operating Income

The Group recorded other operating income for the year of RM2.2 million as compared to RM0.4 million in FY2006. Other operating income comprised mainly interest income from deposits. The Group had higher fixed deposits in FY2007 compared to FY2006 for the purpose of generating interest income.

Net Profit

The Group’s profit before taxation increased by approximately RM1.4 million or 5.5% from approximately RM25.5 million in FY2006 to approximately RM26.9 million in FY2007. This was mainly due to an increase in gross profit and other operating income and a less than proportional increase in operating expenses of approximately RM1.1 million.

The Group’s profit attributable to shareholders was RM22.8 million, an increase of RM0.3 million or 1.4% from FY2006. This was mainly due to a higher tax expense. The effective tax rate increased from 11.8% in FY2006 to 15.2% in FY2007, mainly due to lower reinvestment allowances claimed by the Group in FY2007.

Financial Position

The Group’s non-current assets had increased by RM5.3 million to RM59.1 million in FY2007. The increase was due to the acquisition of additional property, plant and equipment, namely the purchase of one new gloves manufacturing line in the Thailand plant, a piece of land and additional equipments for plants in Malaysia, Thailand and China.

The Group’s current assets increased by 5.5% from RM97.7 million as at 31 December 2006 to RM103.1 million as at 31 December 2007. Trade receivables increased by 15.3% to RM30.2 million as at 31 December 2007 and there was a slight reduction in inventories level from RM14.8 million as at 31 December 2006 to RM14.6 million as at 31 December 2007, mainly due to the increase in sales.

Cash and cash equivalent included fixed deposits, cash and bank balances. Cash and cash equivalents increased from RM55.1 million to RM57.0 million as at 31 December 2007 mainly due to net cash flows generated from operating activities of RM27.4 million and were offset by net cash used in investing activities of RM11.5 million and net cash flows used in financing activities of RM13.8 million.

The Group’s investing activities were mainly on the purchase of property, plant and equipment of RM11.6 million whereas the financing activities consist of loan repayment of RM1.7 million and dividend payout of RM12.0 million.

Non-current liabilities decreased by 15.8% to RM5.0 million as at 31 December 2007. This was largely due to the repayment of bank borrowings.

Current liabilities increased by 6.0% to RM18.6 million as at 31 December 2007. This was mainly due to an increase in provision of taxation from RM0.4 million as at 31 December 2006 to RM1.3 million as at 31 December 2007.

Net Assets Per Share

The net asset backing per share increased to 44.78 sen (RM) in FY2007 from 41.35 sen (RM) in FY2006 as a result of an 8.3% increase in shareholders’ equity to RM138.6 million in FY2007 from RM128.0 million in FY2006.

9



(From left to right)

Hong Chin Fock, Lee Wai Keong, Wong Teck Choon, Wong Teek Son, Low Weng Keong and Albert Ho Shing Tung

board of directors

1 0



Wong Teek SonExecutive Chairman & Chief Executive Officer

Wong Teek Son is the founder and Chief Executive Officer of Riverstone. He was appointed to the Board as Executive Chairman on 3 August 2005. Mr Wong has been instrumental in expanding the Group’s customer base and cementing business relationships with its international customers. Mr Wong’s executive responsibilities include developing business strategies and overseeing the Group’s operations. Mr Wong holds a Master in Business Administration from Monash University and a Bachelor of Science (Hons) from the University of Malaya.

d i rec tors ’ prof i le

Lee Wai Keong Chief Operating Officer / Executive Director

Lee Wai Keong is the co-founder and Chief Operating Officer of Riverstone. He was appointed to the Board as an Executive Director on 3 August 2005. He has contributed to the Group’s high quality control and production standards required to meet stringent international standards in the highly demanding cleanroom industry. Mr Lee is responsible for the Group’s production facilities in Malaysia, Thailand and China.

Wong Teck Choon Group’s Business Development Manager / Executive Director

Wong Teck Choon joined Riverstone in 1991 and is the Group’s Business Development Manager. He was appointed to the Board as an Executive Director on 2 October 2006. Mr Wong has been involved in various business units of the Group and has contributed to the Group’s expansion of other non-glove cleanroom consumables. Mr Wong is responsible for the production of cleanroom finger cots and exploring business development opportunities for the Group for other cleanroom consumables.

1 1



Albert Ho Shing Tung Non-Independent Non-Executive Director

Albert Ho Shing Tung was appointed to the Board as a Non-Independent Non-Executive Director on 2 October 2006. He is currently a director of Centrum Capital, a management consulting firm. Mr Ho has a background in finance and investment banking having served with various financial institutions. Mr Ho holds a Bachelor of Commerce degree from the Australian National University and is a Fellow CPA (Australia). Mr Ho is a Councillor of CPA Australia’s Singapore Division, Chairman of the Division’s Small and Medium Enterprises Sector Committee and a member of CPA Australia’s Board Committee for Small and Medium Enterprises in Australia.

d i rec tors ’ prof i le (cont ’d)

Low Weng Keong Independent Non-Executive Director

Low Weng Keong was appointed to the Board as an Independent Non-Executive Director on 2 October 2006. Mr Low is also an independent director of listed companies, Unionmet Limited, Hotel Plaza Limited and UOL Group Limited. Mr Low is a Fellow Chartered Accountant (UK), Fellow CPA (Singapore), Fellow CPA (Australia) and Chartered Tax Advisor (UK). Mr Low was a former Country Managing Partner of Ernst & Young and is currently a Deputy President and Board Director of CPA Australia Limited.

Hong Chin Fock Independent Non-Executive Director

Hong Chin Fock was appointed to the Board as an Independent Non-Executive Director on 2 October 2006. In addition to this appointment, Mr Hong is also an independent director of listed companies, ASL Marine Holdings Ltd, Eng Wah Organisations Ltd and Financial One Corp. Mr Hong holds a Bachelor of Social Science from the University of Singapore. Mr Hong was formerly a tax principal at KPMG and is currently a tax consultant at Allen & Gledhill. He is a part time lecturer at the Singapore Management University.

1 2



execut ive managementChee Ting Tuan joined our Group in 1998 and is the General Manager of Riverstone Resources Sdn Bhd. Mr Chee is responsible for marketing, sales and purchasing functions of our Group. He holds a Bachelor of Science and a Post-Graduate Diploma in education from the National University of Singapore, and a Post-Graduate Diploma in Systems Analysis from the Institute of System Science, National University of Singapore.

Dumrongsak Aroonprasertkul joined our Group in 2001 and is the General Manager of our operations in Thailand. Mr Aroonprasertkul is responsible for the business and strategic growth and development of our Group in Thailand. Mr Aroonprasertkul holds a Masters in Business Administration from the Monash Mt. Eliza University and a Bachelor of Business Administration (Accounting) from the Ramkhamhaeng University.

Chee Mei Chuan joined our Group in 1995 and is the head of Riverstone Industrial Products Sdn Bhd where he is in charge of its day-to-day operations including production and scheduling. He is also the Human Resource Manager of Riverstone Resources Sdn Bhd where he is responsible for the development and implementation of human resource policies of our Malaysian subsidiaries. Mr Chee holds a Bachelor of Science with Education (Hons) from the University of Malaya.

Chee Heng Tuan joined our Group in 1998 and has been a Director and Sales Manager of Riverstone Resources (S) Pte Ltd. He was instrumental in developing our business in the Singapore, Indonesia and Korea markets. In January 2006, he was appointed as the Head of our Group’s China operations. Mr Chee holds a Bachelor of Engineering in Electronics and Electrical Engineering from the University of Glasgow and a Diploma in Electrical and Electronics Engineering from the Singapore Polytechnic.

Lim Sing Poew joined our Group as the Chief Financial Officer on 1 November 2006. He is responsible for controlling and managing the finance and accounting functions of our Group. Mr Lim obtained his qualifications as a Chartered Certified Accountants in 1993. He is a Fellow member of the Association of Chartered Certified Accountants, UK and a member of the Malaysian Institute of Accountants.

1 3



corporate informat ion

Board of DirectorsWong Teek Son Executive Chairman & Chief Executive Officer

Lee Wai Keong Executive Director

Wong Teck Choon Executive Director

Albert Ho Shing TungNon-Independent Non-Executive Director

Low Weng Keong Independent Non-Executive Director

Hong Chin Fock Independent Non-Executive Director

Audit CommitteeLow Weng KeongChairman

Hong Chin Fock

Albert Ho Shing Tung

Remuneration CommitteeHong Chin FockChairman

Low Weng Keong

Albert Ho Shing Tung

Nominating CommitteeLow Weng KeongChairman

Hong Chin Fock

Wong Teek Son

Company SecretaryLim Chee YingLLB (Hons), ACIS

Tan Ping PingACIS

Registered Office8 Cross Street#11-00 PWC BuildingSingapore 048424Tel : +65 6236 3333Fax: +65 6236 4399

AuditorsErnst & YoungOne Raffles QuayNorth Tower, Level 18Singapore 048583Partner-in-charge: Yee Woon Yim(since financial year ended 31 December 2006)

Share RegistrarBoardroom Corporate & Advisory Services Pte Ltd(formally known as Lim Associates (Pte) Ltd)3 Church Street#08-01 Samsung HubSingapore 049483

1 4



corporate governance s tatement 16

directors ’ repor t 24

statement by directors 27

independent audi tors ’ repor t 28

consol idated income s tatement 30

balance sheets 31

statements of changes in equi ty 32

consol idated cash f low s tatement 34

notes to the f inancial s ta tements 35

f inancial contents

1 6



corporate governance s tatement

The Board of Directors of Riverstone Holdings Limited (the “Board”) recognises that sound corporate governance practices are important to the proper functioning of the Group and the enhancement of shareholder value. Pursuant to Rule 710(1) of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), this statement outlines the corporate governance practices adopted by the Group, embodying the principles in the Code of Corporate Governance 2005 (“Code”). The Board is pleased to confi rm that for the fi nancial year ended 31 December 2007, the Group has adhered to the principles and guidelines as set out in the Code, except where otherwise stated.

BOARD MATTERS

Principle 1: Board’s Conduct of Affairs

The Board of Directors (“Board”) currently comprises three executive directors, as well as three non-executive directors and two of the three non-executive directors are also independent from management. The six Board members comprise businessmen and professionals with strong fi nancial and business background, providing the necessary experience and expertise to direct and lead the Group.

The primary function of the Board is to protect and enhance long-term value and return for its shareholders. Besides carrying out its statutory responsibilities, the roles of the Board are to:

• guide formulation of the Group’s overall long-term strategic objectives and directions. This include setting the Group’s policies and strategic plans and to monitor the achievement of these corporate objectives;

• establish appropriate risk management system to ensure that key potential risks faced by the Group are properly identifi ed and managed;

• conduct periodic review of the Group’s internal controls, fi nancial performance, compliance practices and resource allocation;

• provide oversight in the proper conduct of the Group’s business and assume responsibility for corporate governance; and

• ensure the management discharges business leadership and management skills with the highest level of integrity.

The Board’s approval is required for matters such as corporate restructuring, mergers and acquisitions, major investments and divestments, material acquisitions and disposals of assets, major corporate policies on key areas of operations, acceptances of bank facilities, annual budget, the release of the Group’s quarterly and full year’s results and interested person transaction of a material nature.

The Board conducts scheduled meetings on a quarterly basis to coincide with the announcement of the Group’s quarterly results. Ad-hoc Board meetings are convened as and when they are deemed necessary in between the scheduled meetings. The Articles of Association of the Company provide for directors to convene meetings by teleconferencing or videoconferencing. When a physical Board meeting is not possible, timely communication with members of the Board can be achieved through electronic means.

To assist in the execution of its responsibilities, the Board of Directors has formed three committees: (i) the Audit Committee (“AC”), (ii) the Remuneration Committee (“RC”) and (iii) the Nominating Committee (“NC”). These committees function within clearly defi ned terms of reference and operating procedures, which will be reviewed on a regular basis. The effectiveness of each committee will also be constantly reviewed by the Board.

1 7



corporate governance s tatement (cont ’d)

BOARD MATTERS (cont’d)

The attendance of the Directors at meetings of the Board and Board committees, as well as the frequency of such meetings are as follows:

Attendance at Meetings

Name of Director Board AC RC NC No. of No. of No. of No. of No. of No. of No. of No. of meetings meetings meetings meetings meetings meetings meetings meetings held attended held attended held attended held attended Wong Teek Son 4 4 - - - - 1 1Lee Wai Keong 4 4 - - - - - -Wong Teck Choon 4 4 - - - - - -Low Weng Keong 4 4 5 5 1 1 1 1Hong Chin Fock 4 4 5 5 1 1 1 1Albert Ho Shing Tung 4 4 5 5 1 1 - -

Newly appointed directors will be briefed by the Board to familiarize them with the Group’s business and its strategic directions. Directors will be provided with updates on the latest governance and listing policies as appropriate.

Principle 2: Board Composition and Guidance

The Board comprises six directors of which two are independent directors. They are Mr Low Weng Keong and Mr Hong Chin Fock. The criteria for independence are determined based on the defi nition as provided in the Code. The Board considers an “independent” director as one who has no relationship with the Group, its related companies or its offi cers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independent judgment with a view to the best interest of the Company and Group. With two of the directors deemed to be independent, the Board is able to exercise independent judgment on corporate affairs and provide management with a diverse and objective perspective on issues. Furthermore, the Board is able to interact and work with the management team through robust exchange of ideas and views to help shape the Group’s strategic direction.

The Board is of the view that the current Board members comprise persons whose diverse skills, experience and attributes provide for effective direction for the Group. The Board will constantly examine its size with a view to determining its impact upon its effectiveness.

The profi les of the directors are set out on pages 11 and 12 of this Annual Report. Principle 3: Chairman and Chief Executive Offi cer

Mr Wong Teek Son is both the Executive Chairman and Chief Executive Offi cer (“CEO”) of the Company. The Board believes that there is no need for the role of Chairman of the Board and the CEO to be separated as there is good balance of power and authority with all critical committees chaired by the independent directors. In accordance with the Code, the Board has appointed Mr Low Weng Keong as the Lead Independent Director of the Company, who will be available to shareholders who have concerns which contact through the normal channels of the Executive Chairman and CEO or the Chief Financial Offi cer has failed to resolve or for which such contact is inappropriate.

The CEO together with the Executive Directors have full executive responsibilities over the business directions and operational decisions. The CEO is responsible to the Board for all corporate governance procedures to be implemented by the Group and to ensure conformance by the management to such practices. Directors are given board papers in advance of meetings for them to be adequately prepared for the meeting and senior management staff (who are not executive directors) are in attendance at Board and Board committee meetings, whenever necessary.

1 8



BOARD MATTERS (cont’d)

Principle 4: Board Membership

The NC comprises two independent directors, Mr Low Weng Keong and Mr Hong Chin Fock, as well as the CEO, Mr Wong Teek Son. Mr Low Weng Keong is the chairman of the NC.

The NC’s main functions as defi ned in the written terms of reference are as follows:(a) make recommendations to the Board on all board appointments;(b) assess the effectiveness of the Board as a whole and the effectiveness and contribution of each Director to the Board; and(c) recommend re-nomination and re-election of directors.

The NC is also charged with the responsibility of determining annually whether a director is independent. Each NC member will not take part in determining his own re-nomination or independence. The Company’s Articles of Association require newly appointed director to hold offi ce until the next Annual General Meeting (“AGM”) and at least one third of the directors to retire by rotation at every AGM. A retiring director is eligible for re-election by the shareholders of the Company at the AGM. The NC recommends that Mr Wong Teek Son and Mr Hong Chin Fock who are to retire by rotation, be re-elected at the forthcoming AGM.

Principle 5: Board Performance

The Board performance is ultimately refl ected in the performance of the Group. The Board should ensure compliance with the applicable laws and the Board members should act in good faith, with due diligence and care in the best interests of the Company and its shareholders. An effective Board is able to lend support to management at all times and to steer the Group in the right direction.

More importantly, the Board, through the NC, has used its best effort to ensure that directors appointed to the Board whether individually or collectively possess the background, experience, knowledge in our business, competencies in fi nance and management skills critical to the Group’s business. It has also ensured that each director, with his special contributions, brings to the Board an independent and objective perspective to enable sound, balanced and well-considered decisions to be made.

The NC reviews and evaluates the performance of the Board as a whole, taking into consideration the attendance record at the meetings of the Board and the Board Committees and also the contribution of each Director to the effectiveness of the Board.

Principle 6: Access to information

Directors receive a regular supply of information from management about the Group’s fi nancial and operational performance so that they are equipped to play as full a part as possible in Board meetings. Detailed Board papers will be prepared for each meeting of the Board. The Board papers include suffi cient information on fi nancial, business and corporate issues to enable the Directors to be properly briefed on issues to be considered at Board meetings.

All Directors have unrestricted access to the Group’s records and information to enable them to carry out their duties. Directors also liaise with senior management as and when required. In addition, Directors have separate and independent access to the company secretary. The company secretary administers, attends and prepares minutes of Board and Board committee meetings, and assists the Chairman in ensuring that board procedures are followed and reviewed so that the board functions effectively, and the relevant rules and regulations, including requirements of the Companies Act and the Listing Manual of SGX-ST, are complied with. Where the directors, either individually or as a group, in the furtherance of their duties, require professional advice, the cost of such professional advice will be borne by the Company.


1 9



REMUNERATION MATTERS

Principle 7 - Procedures for Developing Remuneration PoliciesPrinciple 8 - Level and Mix of RemunerationPrinciple 9 - Disclosure on Remuneration

The RC comprises two independent directors, namely Mr Low Weng Keong and Mr Hong Chin Fock and a non-independent non-executive director, namely Mr Albert Ho Shing Tung. Mr Hong Chin Fock is the chairman of the RC.

The RC’s responsibilities include:

(a) ensuring a formal and transparent procedure for developing policy on executive remuneration, and for fi xing the remuneration packages of individual directors and senior management;

(b) reviewing the remuneration packages with the aim of building capable and committed management teams through competitive compensation and focused management and progressive policies; and

(c) recommending to the Board, a framework of remuneration which covers all aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses, share options, benefi ts-in-kind and specifi c remuneration packages for each director.

In carrying out their duties, the RC may obtain independent external legal and other professional advice as it deems necessary. The expenses of such advice will be borne by the Company.

In setting remuneration packages, the Company takes into consideration the remuneration and employment conditions within the same industry and in comparable companies, as well as the Group’s relative performance and the performance of individual directors.

Executive Directors do not receive directors’ fees. Mr Wong Teek Son, the CEO, Mr Lee Wai Keong and Mr Wong Teck Choon, the Executive Directors, are paid a basic salary and a performance-related profi t sharing bonus. No director will be involved in deciding his own remuneration.

Non-executive directors are compensated based on a fi xed annual fee taking into consideration their respective contributions and attendance at meetings. Their fees are recommended to shareholders for approval at the AGM.

The RC also administers the Riverstone Performance Share Plan (“Plan”) which was approved on 4 October 2006 as a share incentive scheme. Any employees of the Group who are entitled to profi t-sharing under any service agreement with the Company or under any profi t-sharing schemes administered by the Group shall not be eligible to participate in this Plan. Currently, Mr Wong Teek Son, the CEO, who is entitled to a share of the Group’s Profi t under his service agreement with the Company, is not eligible to participate in this Plan. Messrs Lee Wai Keong, Wong Teck Choon, Chee Ting Tuan, Chee Mei Chuan and Dumrongsak Aroonprasertkul who are entitled to participate in the profi t-sharing schemes are also not eligible to participate in this Plan. As at the date of this Annual Report, no awards have been granted under the Plan.

Under Mr Wong Teek Son’s service agreement, Mr Wong was appointed as CEO of the Company for a fi xed period of three (3) years (“Initial Term”) with effect from the date of the Company’s admission to the offi cial List of SGX-ST. After the Initial Term, the services agreement shall be automatically renewed unless terminated by either party giving the other not less than 6 months’ prior written notice or terminated in accordance with the terms of the service agreement.


2 0



REMUNERATION MATTERS (cont’d)

The remuneration (including salary, bonus, directors’ fees, performance-related profi t-sharing bonus and benefi ts-in-kind) paid to Directors and top 5 key executives of the Group (who are not also directors) on an individual basis and in remuneration bands during the fi nancial year are as follows:

Salaries,Remuneration Band and allowances and Profi t Directors’Name of Directors benefi ts-in-kind Bonus sharing Fees Total

S$250,000 to below S$500,000Wong Teek Son 74% - 26% - 100%Lee Wai Keong 70% - 30% - 100%

Below S$250,000Wong Teck Choon 54% - 46% - 100%Albert Ho Shing Tung - - - 100% 100%Low Weng Keong - - - 100% 100%Hong Chin Fock - - - 100% 100%

Salaries,Remuneration Band and allowances and Profi t Directors’Name of top 5 key executives benefi ts-in-kind Bonus sharing Fees Total

Below S$250,000Chee Ting Tuan 59% - 41% - 100%Chee Mei Chuan 54% - 46% - 100%Dumrongsak Aroonprasertkul 53% 7% 40% - 100%Chee Heng Tuan 91% 9% - - 100%Lim Sing Poew 90% 10% - - 100%

Mr Wong Teek Son and Mr Wong Teck Choon are brothers. Whereas, Mr Chee Ting Tuan, Mr Chee Mei Chuan and Mr Chee Heng Tuan are also brothers. The Group does not have any employees who are immediate family members of a Director or the CEO, whose remuneration exceeded S$150,000 for the fi nancial year ended 31 December 2007.

ACCOUNTABILITY AND AUDIT

Principle 10: Accountability

The Board is accountable to the shareholders and is mindful of its obligations to furnish timely information and to ensure full disclosure of material information to shareholders in compliance with statutory requirements and SGX-ST Listing Manual.

Price sensitive information will be publicly released either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Financial results and annual reports will be announced or issued within the prescribed periods.


2 1



Principle 11: Audit Committee

The AC comprises two independent directors, namely Mr Low Weng Keong and Mr Hong Chin Fock and a non-independent non-executive director, namely Mr Albert Ho Shing Tung. Mr Low Weng Keong is the chairman of the AC.

All three members bring with them invaluable managerial and professional expertise in the fi nancial, taxation, legal and business management spheres. The AC holds periodic meetings and reviews primarily with the Group’s external auditors and its executive management to review accounting, auditing and fi nancial reporting matters so as to ensure that an effective system of control is maintained in the Group.

The AC carries out the functions set out in the terms of reference which include reviewing the fi nancial statements, the written reports from internal and external auditors, the internal auditors’ evaluation of the system of internal accounting controls, the scope and results of the internal audit procedures, the cost effectiveness independence and objectivity of the external auditors and interested person transactions.

The AC has explicit authority to investigate any matter within its terms of reference, and has full access to, and the co-operation of, the management and resources which are necessary to enable it to discharge its functions properly. It also has full discretion to invite any executive director or executive offi cer to attend its meetings. The AC meets with the internal auditors and the external auditors separately, at least once a year, without the presence of the management, to discuss the reasonableness of the fi nancial reporting process, to review the adequacy of audit arrangements with particular emphasis on the observations and recommendations of the external auditors, the scope and quality of their audits and the independence and objectivity of the external auditors.

The AC had reviewed the non-audit related work carried out by the external auditors, Messrs Ernst & Young, during the current fi nancial year and is satisfi ed that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.

The Company has established a whistle blowing policy to enable persons employed by the Group a channel to report any suspected non-compliance with regulations, policies, fraud and/or other matters to the appropriate authority for resolution, without any prejudicial implications to these employees. The AC is vested with the power and authority to receive, investigate and enforce appropriate action when any such non-compliance matter is brought to its attention.

Principle 12: Internal Controls

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities, as a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.

The AC ensures that a review of the effectiveness of the Group’s material internal controls, including fi nancial, operational, compliance controls and risk management is conducted annually. In this aspect, the AC reviews the audit plans, and the fi ndings of the auditors and ensures that the Group follows up on auditors recommendations raised, if any, during the audit process.

Principle 13: Internal Audit

Currently, the internal audit function of the Group is outsourced to an accounting/audit fi rm. The AC had considered the independence, skills and experience of the fi rm prior to making recommendation to the Board for their appointment.

The AC reviews the audit plan of the internal auditors, ensures that adequate resources are directed to carry out those plans and will review the results of the internal auditors’ examination of the Group’s system of internal controls.


2 2



Principle 14 and 15: Communication with Shareholders

The Board is mindful of the obligation to provide timely and fair disclosure of material information. The Board is accountable to the shareholders while the management is accountable to the Board.

Results and other material information are released through SGX-NET on a timely basis for disseminating to shareholders and the public in accordance with the requirements of the SGX-ST.

The AGM of the Company is a principal forum for dialogue and interaction with all shareholders. All shareholders of the Company will receive the Annual Report, and notice of AGM. Shareholders will be given the opportunity to voice their views and to direct questions regarding the Group to the Directors including the chairpersons of each of the Board committees. The external Auditors are also present to assist the Directors in addressing any relevant queries from the shareholders. Shareholders are encouraged to attend the AGM of the Company to ensure a high level of accountability and to stay informed of the Company’s strategy and goals.

DEALINGS IN SECURITIES(Listing Manual Rule 1207(18))

The Group has adopted an internal code on dealings in securities in its shares that are applicable to all its offi cers including Directors, management staff and employees in possession of confi dential information. The Group’s Directors and affected employees are also expected to observe insider-trading laws at all times and are not allowed to deal in securities while in possession of price-sensitive information or during the embargo period.

This internal code has been disseminated to Directors and affected employees. A copy of the code on dealings in securities is also issued to any new affected employees at the time of them joining the Group.

INTERESTED PERSON TRANSACTIONS(Listing Manual Rule 907)

The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the AC and that the transactions are carried out at arm’s length and on normal commercial terms and will not be prejudicial to the interests of the Company and its shareholders.

The aggregate value of interested person transactions entered into for the fi nancial year ended 31 December 2007 is as follow:

Aggregate value of all interested person transactions during the fi nancial year under review (excluding Aggregate value of all interested transactions less than S$100,000 person transactions conducted and transactions conducted under shareholders’ mandate under shareholders’ mandate pursuant to Rule 920 (excludingName of interested persons pursuant to Rule 920) transactions less than S$100,000)

Hoe Hup Heng Engineering S$323,490.00 -

Sea Transport S$242,918.00 -


2 3



MATERIAL CONTRACTS(Listing Manual Rule 1207(8))

Save for the service agreement between the CEO and the Company, there were no material contracts entered into by the Company or its subsidiaries involving the interests of any director or controlling shareholders subsisting at the end of the fi nancial year ended 31 December 2007.

RISK MANAGEMENT(Listing Manual Rule 1207(4)(b)(iv))

The Company does not have a Risk Management Committee. However, the management regularly reviews the Group’s businesses and operational activities to identify areas of signifi cant business risks as well as appropriate measures to control and mitigates these risks. The management reviews all signifi cant control policies and procedures and highlights all signifi cant matters to the Directors and the AC.

USE OF IPO PROCEEDS

As at 31 December 2007, the use of the total net proceeds of S$17.80 million (after deducting the Initial Public Offering expenses of S$2.50 million) from the S$20.30 million raised from the issuance of 78 million new ordinary shares of S$0.26 each on 20 November 2006 was as follows:

S$’million

To expand production facilities by installing additional production machinery, increasing 5.83 the number of cleanrooms, installing additional cleanroom equipment and adding additional fl oor space to house these equipment

To expand product range and to fund product development 1.29

To upgrade production, laboratory-testing and research and development facilities through 0.66investment in more advanced technology To penetrate new industries, expand sales network and enhance brand awareness 0.03

To invest in information technology and management information systems 0.04

General working capital for the operation and expansion of the Group’s businesses 0.35

8.20


2 4



d i rec tors ’ report

The directors are pleased to present their report to the members together with the audited consolidated fi nancial statements of Riverstone Holdings Limited (the “Company”) and its subsidiary companies (collectively, the “Group”) and the balance sheet and statement of changes in equity of the Company for the fi nancial year ended 31 December 2007.

Directors

The directors of the Company in offi ce at the date of this report are:Wong Teek Son (Chairman)Lee Wai Keong Wong Teck Choon Albert Ho Shing Tung Low Weng Keong Hong Chin Fock In accordance with Article 93 of the Company’s Articles of Association, Wong Teek Son and Hong Chin Fock retire by rotation and being eligible for re-election by the shareholders of the Company at the AGM.

Arrangements to enable directors to acquire shares and debentures

Neither at the end of nor at any time during the fi nancial year was the Company a party to any arrangement whose objects are, or one of whose objects 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’ interest in shares and debentures

The following directors of the Company who held offi ce at the end of the fi nancial year had, according to the register of directors’ shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in shares of the Company as stated below:

Direct interest As at 1 January 2007 As at 31 December 2007Ordinary shares of the Company Wong Teek Son 156,694,400 156,694,400Lee Wai Keong 42,779,250 40,163,250Wong Teck Choon 14,282,567 12,282,567Albert Ho Shing Tung 419,000 419,000Hong Chin Fock 200,000 200,000

There was no change in any of the above-mentioned interests between the end of the fi nancial year and 21 January 2008. By virtue of Section 7 of the Companies Act, Cap. 50, Wong Teek Son is deemed to have interests in shares of the subsidiary companies of the Company.

Except as disclosed in this report, since the end of the previous fi nancial year, no director of the Company who held offi ce at the end of the fi nancial year had interests in shares, share options, warrants or debentures of the Company, or related corporations at the end of the fi nancial year.

2 5



d i rec tors ’ report (cont ’d)

Directors’ contractual benefi t Since the end of the previous fi nancial year, no director of the Company has received or become entitled to receive a benefi t (other than a benefi t included in the aggregate amount of emoluments shown in the fi nancial statements or any emoluments received from related corporations) by reason of a contract made by the Company or a related corporation with the director, or with a fi rm of which the director is a member, or with a company in which the director has a substantial fi nancial interest.

The Riverstone performance share plan

The Riverstone performance share plan (the “Plan”) was approved by the Shareholders pursuant to shareholders’ resolutions in writing dated 4 October 2006. The purpose of the Plan is to provide eligible participants with an opportunity to participate in the equity of the Company and to motivate them towards better performance through increased dedication and loyalty.

The Plan is administered by the Remuneration Committee whose members are Hong Chin Fock, Low Weng Keong and Albert Ho Shing Tung.

The size of the Plan shall not exceed 15% of the issued ordinary share capital of the Company. The Participants are not required to pay for the grant of Awards (“the Grant”) or for the shares allotted or allocated pursuant to an Award.

Directors (including non-executive directors and independent directors) and all confi rmed full-time employees of the Group and associated companies, who have attained the age of twenty-one on or prior to the Date of Grant and are not undischarged bankrupts and have not entered into a composition with their respective creditors and who, in the opinion of the Remuneration Committee, have contributed to the success and development of the Group and its associated companies, are eligible to participate in the Plan. However, any employees of the Group and the associated companies who are entitled to profi t-sharing under any service agreement with the Company or under any profi t-sharing schemes administered by the Group and the associated companies shall not be eligible to participate in this Plan. Controlling Shareholders and their Associates are not eligible to participate in the Plan unless:

(a) written justifi cations have been provided to Shareholders for their participation at the introduction of the Plan or prior to the fi rst grant of Awards to them;

(b) the actual number and terms of any Shares to be granted to them have been specifi cally approved by Shareholders of the Company who are not benefi ciaries of the Grant in a general meeting in separate resolutions for each such Controlling Shareholder or his Associates; and

(c) all conditions for their participation in the Plan as may be required by the regulation of the SGX-ST from time to time are satisfi ed.

The Grant made to grantees, if not accepted within 30 days, will automatically lapse and be null and void. A Participant may accept or refuse the whole but not part of a Grant.

The Plan shall be in force up to a maximum period of 10 years from the date on which the Plan was adopted and may be continued beyond the stipulated period with the approval of shareholders by way of ordinary resolution in general meeting and of such relevant authorities which may then be required.

During the fi nancial year, no options were granted under the Plan.

2 6



d i rec tors ’ report (cont ’d)

Audit Committee

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50. The functions performed are detailed in the Report on Corporate Governance.

Auditors

Ernst & Young have expressed their willingness to accept reappointment as auditors.

On behalf of the Board of Directors:

Wong Teek SonDirector

Lee Wai KeongDirector

Singapore28 March 2008

2 7



s ta tement by directors

We, Wong Teek Son and Lee Wai Keong, being two of the directors of Riverstone Holdings Limited, do hereby state that, in the opinion of the directors:

(a) the accompanying balance sheets, consolidated income statement, statements of changes in equity and consolidated cash fl ow statement together with the notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and the Company as at 31 December 2007, and of the results of the business, changes in equity and cash fl ows of the Group and the changes in equity of the Company for the fi nancial year then ended; and

(b) 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:

Wong Teek SonDirector

Lee Wai KeongDirector


2 8



independent audi tors ’ report

To the Members of Riverstone Holdings Limited

We have audited the accompanying fi nancial statements of Riverstone Holdings Limited (the “Company”) and its subsidiary companies (collectively the “Group”) set out on pages 30 to 64, which comprise the balance sheets of the Group and the Company as at 31 December 2007, the statements of changes in equity of the Group and the Company, the income statement and cash fl ow statement of the Group for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these fi nancial statements in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the“Act”) and Singapore Financial Reporting Standards. This responsibility includes:

(a) devising and maintaining a system of internal accounting controls suffi cient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair income statement and balance sheets and to maintain accountability of assets;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

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

An audit involves performing procedures to obtain audit 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 risk assessments, the auditors consider internal control 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 control. An audit also includes evaluating the appropriateness of accounting policies used and the 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.

2 9



To the Members of Riverstone Holdings Limited

Opinion

In our opinion,

(a) the consolidated fi nancial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2007 and the results, changes in equity and cash fl ows of the Group and the changes in equity of the Company for the year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by the subsidiary company incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

ERNST & YOUNGCertifi ed Public Accountants


independent audi tors ’ report (cont ’d)

3 0



consol idated income s tatementfor the f inancial year ended 31 December 2007

Note 2007 2006 RM’000 RM’000 Revenue 3 126,662 122,195Cost of sales (83,668) (79,892) Gross profi t 42,994 42,303 Other income 4 2,236 436Selling and distribution expenses (5,191) (5,508)General and administrative expenses (8,599) (7,708)Other operating expenses (4,246) (3,643)Finance costs 5 (255) (338) Profi t before taxation 6 26,939 25,542Taxation 7 (4,099) (3,010) Profi t for the year 22,840 22,532 Attributable to: Equity holders of the Company 22,840 22,532Minority interests - (1) - (1)

22,840 22,532 Earnings per share Basic (sen) 8 7.38 9.22 Diluted (sen) 8 7.38 9.22

(1) Denotes amounts less than RM500.

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

3 1



balance sheetsas at 31 December 2007

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000 Property, plant and equipment 9 59,102 53,810 - - Investments in subsidiary companies 10 - - 63,722 63,972 Current assets Inventories 11 14,583 14,788 - - Trade receivables 12 30,199 26,198 - - Other receivables 13 1,148 1,335 - 92Amounts due from a subsidiary company 14 - - 21,887 9,000Prepayments 199 219 4 4Fixed deposits 15 47,591 44,686 31,582 44,686Cash and bank balances 15 9,358 10,436 552 23 103,078 97,662 54,025 53,805 Current liabilities Payables and accruals 16 15,822 15,336 3,099 3,899Hire purchase creditors 17 96 88 - - Bank borrowings (secured) 18 1,340 1,730 - - Provision for taxation 1,340 386 128 - 18,598 17,540 3,227 3,899 Net current assets 84,480 80,122 50,798 49,906 Hire purchase creditors 17 (107) (40) - - Bank borrowings (secured) 18 (1,401) (2,741) - - Deferred taxation 19 (3,490) (3,157) - - Net assets 138,584 127,994 114,520 113,878 Equity attributable to equity holders of the Company Share capital 20 106,788 106,788 106,788 106,788Reserves 31,794 21,204 7,732 7,090 138,582 127,992 114,520 113,878Minority interests 2 2 - - Total equity 138,584 127,994 114,520 113,878


3 2



s ta tements of changes in equi tyfor the f inancial year ended 31 December 2007

Attributable to equity holders of the Company Group Share Other Capital Retained reserves Total Minority Total (Note 20) earnings (Note 21) reserves interests equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Balance at 1 January 2006 (1) 5,404 57,592 193 57,785 2 63,191 Net profi t for the fi nancial year - 22,532 - 22,532 - 22,532Net effect of translation differences (2) - - (545) (545) - (545) Total recognised income/ expenses for the year - 22,532 (545) 21,987 - 21,987Issuance of shares, net of expenses 106,788 - - - - 106,788Adjustment arising from restructuring exercise (5,404) - (58,568) (58,568) - (63,972) Balance at 31 December 2006 and 1 January 2007 106,788 80,124 (58,920) 21,204 2 127,994 Net profi t for the fi nancial year - 22,840 - 22,840 - 22,840 Net effect of translation differences (2) - - (273) (273) - (273) Total recognised income/ expenses for the year - 22,840 (273) 22,567 - 22,567Transfer to statutory reserve - (362) 362 - - - Dividends (Note 22) - (11,977) - (11,977) - (11,977) Balance at 31 December 2007 106,788 90,625 (58,831) 31,794 2 138,584

(1) These balances represent the share capital, retained earnings and other reserves of the subsidiary companies prior to the Restructuring Exercise (Note 20).

(2) These balances represent net income/(loss) recognised directly in equity.


3 3



s ta tements of changes in equi tyfor the f inancial year ended 31 December 2007 (cont ’d)


Share Other capital Retained reserves Total TotalCompany (Note 20) earnings (Note 21) reserves equity RM’000 RM’000 RM’000 RM’000 RM’000 Balance at 1 January 2006 - (1) - - - - (1) Issuance of shares, net of expenses 106,788 - - - 106,788Net profi t for the fi nancial year - 8,449 - 8,449 8,449Net effect of translation differences - - (1,359) (1,359) (1,359) Balance at 31 December 2006 and 1 January 2007 106,788 8,449 (1,359) 7,090 113,878 Net profi t for the fi nancial year - 13,109 - 13,109 13,109Net effect of translation differences - - (490) (490) (490)Dividends (Note 22) - (11,977) - (11,977) (11,977) Balance at 31 December 2007 106,788 9,581 (1,849) 7,732 114,520

(1) Denotes amounts less than RM500.

3 4



consol idated cash f low s tatementfor the f inancial year ended 31 December 2007

2007 2006 RM’000 RM’000Cash fl ows from operating activities Profi t before taxation 26,939 25,542Adjustments for: Depreciation of property, plant and equipment 6,403 5,750 Property, plant and equipment written off 35 115 Gain on disposal of property, plant and equipment (95) (3) Provision for doubtful debts 4 - Bad debts written off 7 - Interest expense 255 338 Interest income (1,216) (264) Operating cash fl ow before working capital changes 32,332 31,478Decrease/(increase) in inventories 205 (3,640)Increase in receivables and prepayments (3,805) (3,898)Increase in payables and accruals 486 879 Cash generated from operations 29,218 24,819Income taxes paid (2,812) (3,652)Interest paid (255) (338)Interest received 1,216 264 Net cash generated from operating activities 27,367 21,093 Cash fl ows from investing activities Proceeds from disposal of property, plant and equipment 134 4Purchase of property, plant and equipment (11,606) (10,777) Net cash used in investing activities (11,472) (10,773) Cash fl ows from fi nancing activities Proceeds from issuance of new shares - 42,072Repayment of loans from directors - (1,190)Proceeds from banker’s acceptances - 659Proceeds from term loans - 1,454Repayment of term loans (1,730) (2,643)Repayment of hire purchase creditors (125) (221)Dividends paid (11,977) (4,521) Net cash (used in)/generated from fi nancing activities (13,832) 35,610 Net increase in cash and cash equivalents 2,063 45,930Effect of foreign currency exchange rates (236) (239)Cash and cash equivalents at beginning of year (Note 15) 55,122 9,431 Cash and cash equivalents at end of year (Note 15) 56,949 55,122


3 5



1. Corporate information

Riverstone Holdings Limited (the “Company”) is a limited liability company, which was incorporated in the Republic of Singapore on 3 August 2005 and admitted to the offi cial list of the Singapore Exchange Securities Trading Limited (“SGX-ST”) on 20 November 2006.

The Company’s registered offi ce is at 8 Cross Street, #11-00, PWC Building, Singapore 048424. The Company’s principal place of business is located at 362 Upper Paya Lebar Road, #03-14 Da Jin Factory Building, Singapore 534963. The principal activity of the Company is that of investment holding. The principal activities of the subsidiary companies are set out in Note 10.

2. Summary of signifi cant accounting policies

2.1 Basis of preparation

The consolidated fi nancial statements of the Group and the balance sheet and statement of changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).

The fi nancial statements have been prepared on a historical cost basis. The fi nancial statements are presented in Ringgit Malaysia (“RM”) and all values are rounded to the nearest thousand (“RM’000”) except when otherwise indicated.

2.2 FRS and Interpretation of Financial Reporting Standard (“INT FRS”) not yet effective

The Group has not applied the following FRS and INT FRS that have been issued but not yet effective:

Effective date (Annual periods beginning on or after)

(a) FRS 23 : Amendment to FRS 23, Borrowing costs 1 January 2009 (b) FRS 108 : Operating Segments 1 January 2009 (c) INT FRS 111 : Group and Treasury Share Transactions 1 March 2007 (d) INT FRS 112 : Service Concession Arrangements 1 January 2008

The directors expect that the adoption of the above pronouncements will have no impact to the fi nancial statements in the period of initial application, except for FRS 108 as indicated below.

FRS 108 requires entities to disclose segment information based on information reviewed by the entity’s chief operating

decision maker. The impact of this Standard on the other segment disclosures is still to be determined. As this is a disclosure standard, it will have no impact on the fi nancial position or fi nancial performance of the Group when implemented.

2.3 Signifi cant accounting estimates and judgements

Estimates and assumptions concerning the future and judgements 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 on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

notes to the f inancial s ta tements 31 December 2007

3 6



notes to the f inancial s ta tements 31 December 2007 (cont ’d)

2. Summary of signifi cant accounting policies (cont’d)

2.3 Signifi cant accounting estimates and judgements (cont’d)

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

(a) Depreciation of plant and machinery

The cost of plant and machinery for the manufacture of gloves, fi nger cots and plastic products is depreciated on a straight-line basis over the machineries’ useful lives. Management estimates the useful lives of these plant and machinery to be 10 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amount of the Group’s plant and machinery at 31 December 2007 was RM31,747,000 (2006: RM32,153,000).

(b) Income taxes

The Group has exposure to income taxes in several 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 provision for taxation and deferred tax at 31 December 2007 was RM4,830,000 (2006: RM3,543,000).

2.4 Functional and foreign currency

(a) Functional and presentation currency

The Company’s functional currency is Singapore dollars. The fi nancial statements are presented in RM as the Group’s principal operations are conducted in Malaysia and the functional currency of the substantive company in the Group is RM.

The fi nancial statements of the Company are translated from Singapore dollars to RM based on Note 2.4(c).

(b) Foreign currency transactions Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiary

companies and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate of exchange ruling at the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date

when the fair value was determined. Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet

date are recognised in the income statement except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign subsidiary companies, which are recognised initially in a separate component of equity as foreign currency translation adjustment reserve in the consolidated balance sheet and recognised in the consolidated income statement on disposal of the subsidiary company.

3 7





2.4 Functional and foreign currency (cont’d) (c) Foreign currency translation

The assets and liabilities of the Company and foreign entities, whose functional currencies are not in RM, are translated into RM equivalents using year-end spot foreign exchange rates for the year. Revenues and expenses are translated monthly at average exchange rates. The effects of translating these operations are included in foreign currency translation reserve.

2.5 Subsidiary companies

A subsidiary company is an entity over which the Group has the 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.

In the Company’s separate fi nancial statements, investments in subsidiary companies are accounted for at cost less impairment losses.

The formation of the Group has been accounted for as a reorganisation of companies under common control using the pooling-of-interest method. Assets and liabilities of these companies were brought into the consolidated balance sheets at its existing values. Such manner of reorganisation refl ects the economic substance of the combining companies as a single economic enterprise, although the legal parent-subsidiary relationship was not established until after 4 October 2006, the date of the Restructuring Exercise.

The consolidated fi nancial statements comprise the fi nancial statements of the Company and its subsidiary companies as at the balance sheet date. The fi nancial statements of the subsidiary companies used in the preparation of the consolidated fi nancial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, transactions, income and expenses and profi ts and losses resulting from intra-Group transactions that are recognised in assets, are eliminated in full.

Minority interests represent the portion of profi t or loss and net assets in subsidiary companies not held by the Group. They are presented in the consolidated balance sheets, separately from the Company shareholders’ equity, and are disclosed in the consolidated income statement.

2.6 Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value. All items of property, plant and equipment are initially recorded at cost.

The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use, any trade discounts and rebates are deducted in arriving at the purchase price. Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance and overhaul costs, is normally charged to the income statement in the period in which the costs are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefi ts expected to be obtained from the use of an item of property, plant and equipment beyond its originally assessed standard of performance, the expenditure is capitalised as an additional cost of property, plant and equipment.

3 8




2. Summary of signifi cant accounting policies (cont’d) 2.6 Property, plant and equipment and depreciation (cont’d)

Depreciation is calculated on the straight-line method to write off the cost of the assets over their estimated useful lives as follows:

Buildings 20 years Plant and machinery 10 years Offi ce equipment and computers 5 to 10 years Furniture and fi ttings 5 to 10 years Motor vehicles 5 years

No depreciation is provided on freehold land and capital work-in-progress.

Fully depreciated assets are retained in the fi nancial statements until they are no longer in use and no further charge for depreciation is made in respect of these assets.

The residual values, useful life and depreciation method are reviewed at each fi nancial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefi ts embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefi ts are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the income statement in the year the asset is derecognised.

2.7 Financial assets

Financial assets within the scope of FRS 39 Financial Instruments: Recognition and Measurement are classifi ed as either fi nancial assets at fair value through profi t or loss, held-to-maturity investments, loans and receivables or available-for-sale fi nancial assets, as appropriate. Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the fi nancial instrument.

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial assets not at fair value through profi t or loss, directly attributable transaction costs.

A fi nancial asset is derecognised where the contractual right to receive cash fl ows from the asset has expired. On derecognition of a fi nancial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that has been recognised directly in equity is recognised in the income statement.

(a) Financial assets at fair value through profi t or loss

Financial assets at fair value through profi t or loss are fi nancial assets classifi ed as held for trading. Financial assets classifi ed as held for trading are derivatives (including separated embedded derivatives) or are acquired principally for the purpose of selling or repurchasing it in the near term.

Subsequent to initial recognition, fi nancial assets at fair value through profi t or loss are measured at fair value. Any

gains or losses arising from changes in fair value of the fi nancial assets are recognised in the income statement. Net gains or net losses on fi nancial assets at fair value through profi t or loss include exchange differences, interest and dividend income.

3 9





2.7 Financial assets (cont’d)

(b) Loans and receivables Non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market are

classifi ed as loans and receivables. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

The Group/ Company classifi es the following fi nancial assets as loans and receivables:-

• Trade and other receivables, including amounts due from subsidiary company • Cash and cash equivalents

2.8 Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and in hand and bank overdrafts.

2.9 Inventories

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

Cost of raw materials is determined using the fi rst in, fi rst out method. Cost of raw materials comprises original costs of purchase and the costs of bringing the inventories to its present location and condition.

Cost of fi nished goods and work-in-progress include raw materials, direct labour, other direct costs and an appropriate proportion of manufacturing overheads.

Net realisable value represents the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale.

2.10 Financial liabilities

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

Financial liabilities are initially recognised at fair value, plus, in the case of fi nancial liabilities other than derivatives, directly attributable transaction costs.

Subsequent to initial recognition, all fi nancial liabilities are measured at amortised cost using the effective interest method,

except for derivatives, which are measured at fair value.

Gains and losses are recognised in the income statement when the fi nancial liabilities other than derivatives are derecognised or impaired as well as through the amortisation process. Any gains or losses arising from changes in fair value of derivatives are recognised in the income statement. Net gains or losses on derivatives include exchange differences. The liabilities are derecognised when the obligation under the liability is extinguished.

4 0





2.11 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outfl ow of economic resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are reviewed at each balance sheet date and adjusted to refl ect the current best estimate. If it is no longer probable that an outfl ow of economic resources will be required to settle the obligation, the provision is reversed.

2.12 Income taxes

(a) Current tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

(b) Deferred tax

Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for fi nancial reporting purposes.

Deferred tax assets and liabilities are recognised for all taxable temporary differences. The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to the extent that it is

no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profi t will allow the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxable income in the years

in which those temporary differences are expected to be recovered or settled based on the tax rates enacted or substantively enacted at the balance sheet date.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.13 Impairment

(a) Impairment of fi nancial assets

The Group assesses at each balance sheet date whether there is any objective evidence that a fi nancial asset or group of fi nancial assets is impaired.

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows (excluding future credit losses that have not been incurred) discounted at the fi nancial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in the income statement.

4 1





2.13 Impairment (cont’d)

(a) Impairment of fi nancial assets (cont’d)

When the asset becomes uncollectible, the carrying amount of impaired fi nancial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the fi nancial asset.

To determine whether there is objective evidence that an impairment loss on fi nancial assets has been incurred, the Group considers factors such as the probability of insolvency or signifi cant fi nancial diffi culties of the debtor and default or signifi cant delay in payments.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the income statement, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

(b) Impairment of non fi nancial assets

The carrying amounts of the Group’s non fi nancial assets, other than inventories, are reviewed at each balance sheet date to determine whether there is any indication of any impairment. If any such indication exists, or when annual impairment testing for an asset (i.e. an intangible asset with an indefi nite useful life, an intangible asset not yet available for use, or goodwill acquired in a business combination) is required, the Group makes an estimate of the asset’s recoverable amount.

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

value in use and is determined for an individual asset, unless the asset does not generate cash infl ows that are largely independent of those from other assets or groups of assets. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations are recognised in the income statement as ‘impairment losses’.

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

impairment losses recognised for an asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

Reversal of an impairment loss is recognised in the income statement. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

4 2





2.14 Leases

(a) Finance leases

Finance leases, which effectively transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the lower of their fair values and the present value of the minimum lease payments at the inception of the lease. In calculating the present value of the minimum lease payments, the discount factor is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’s incremental borrowing rate is used.

Lease payments are apportioned between the fi nance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are charged directly to the income statement over the term of the lease.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term.

(b) Operating leases

Leases where the lessor effectively retains substantially all the risk and benefi ts of ownership of the leased items are classifi ed as operating leases.

Operating lease payments are recognised as an expense in the income statement on a straight line basis over the lease term.

2.15 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to the Group/ Company and the revenue can be reliably measured. The following specifi c recognition criteria must also be met before revenue is recognised:

(a) Sale of goods

Revenue is recognised upon the transfer of signifi cant risk and rewards of ownership of the goods to the customer, which generally coincides with delivery and acceptance of the goods sold. Revenue is not recognised to the extent where there are signifi cant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(b) Interest income

Interest income is recognised as interest accrues (using the effective interest method). (c) Dividends

Dividends is recognised when the Group’s right to receive the payment is established.

4 3





2.16 Employee benefi ts

(a) Defi ned contribution plan

The Group participates in the national pension schemes as defi ned by the laws of the countries in which it has operations. Contributions to national pension schemes are recognised as an expense in the period in which the related service is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for estimated liability for leave as a result of services rendered by employees up to the balance sheet date.

(c) Employee share option plans

Employees (including senior executives) of the Group receive remuneration in the form of share options as consideration for services rendered.

The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date on which the share options are granted.

The cost of equity-settled transactions is recognised in the income statement, together with a corresponding increase in the employee share option reserve, over the vesting period. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date refl ects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit to the income statement for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market condition, which are treated as vested irrespective of whether or not the market condition is satisfi ed, provided that all other performance conditions are satisfi ed.

The employee share option reserve is transferred to retained earnings upon expiry of the share options. When the options are exercised, the employee share option reserve is transferred to share capital if new shares are issued.

2.17 Research and development costs

Research costs are expensed as incurred. An intangible asset arising from development expenditure on an individual project is recognised only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefi ts, the availability of resources to complete and the ability to measure reliably the expenditure during the development.

2.18 Borrowing costs

Borrowing costs are generally expensed as incurred. Borrowing costs are capitalised if they are directly attributable to the acquisition, construction or production of a qualifying asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are ready for their intended use or sale.

4 4





2.19 Segment reporting

A business segment is a distinguishable component of the Group that is engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is a distinguishable component of the Group that is engaged in providing products or services within a particular economic environment and that is subject to risks and returns that are different from those of components operating in other economic environments.

2.20 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confi rmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group. Contingent liabilities and assets are not recognised in the balance sheet of the Group.

2.21 Financial guarantee

A fi nancial guarantee contract is a contract that requires the issuer to make specifi ed payments to reimburse the holder for a loss it incurs because a specifi ed debtor fails to make payment when due.

Financial guarantees are recognised initially at fair value. Subsequent to initial recognition, fi nancial guarantees are recognised as income in the income statement over the period of the guarantee. If it is probable that the liability will be higher than the amount initially recognised less amortisation, the liability is recorded at the higher amount with the difference charged to the income statement.

3. Revenue

Revenue represents the invoiced value of goods, less returns inward and discounts allowed.

4. Other operating income Group 2007 2006 RM’000 RM’000 Interest income from bank balances 1,216 264 Gain on disposal of property, plant and equipment 95 3 Foreign exchange gain 547 118 Sales of scrap 240 30 Others 138 21 2,236 436

4 5




5. Finance costs Group 2007 2006 RM’000 RM’000 Bankers’ acceptance interest - (4) Term loan interest (245) (321) Hire purchase interest (10) (13) (255) (338) 6. Profi t before taxation

Profi t before taxation is stated after charging: Group 2007 2006 RM’000 RM’000 Inventories recognised as an expense in cost of sales (52,964) (49,584) Depreciation of property, plant and equipment (6,403) (5,750) Staff costs (1) (19,179) (19,636) Rental expenses (731) (533) Other operating expenses: Foreign exchange loss (1,712) (1,268) Property, plant and equipment written off (35) (115) Research and development expenses (1,656) (1,491) Bad debts written off (trade) (7) - Provision for doubtful debts (trade) (4) -

(1) Included in staff costs are contributions to defi ned contribution schemes of RM884,000 (2006: RM890,000).

7. Taxation

The major components of income tax expense for the year ended 31 December: Group 2007 2006 RM’000 RM’000 Current income taxation Current income taxation (3,751) (2,326) Under provision in respect of prior years (15) (235) Deferred income tax Movement in temporary difference (330) (586) Change in tax rate (6) 184 Over/(under) provision in respect of prior years 3 (47) (4,099) (3,010)

4 6




7. Taxation (cont’d)

The reconciliation of the tax expense and the product of accounting profi t multiplied by the statutory tax rates are as follows:

Group 2007 2006 RM’000 RM’000 Profi t before taxation 26,939 25,542 Tax at domestic statutory tax rates applicable to profi ts in the countries where the Group operates (7,400) (7,195) Effects of expenses not deductible for tax purposes (234) (172) Effects of non-taxable income 2,471 1,829 Effect of future reduction of statutory tax rate applicable to companies in Malaysia 5 243 Effects of utilisation of reinvestment allowances 515 1,900 Under provision in respect of prior years (12) (282) Effects of double deduction of expenses 543 483 Others 13 184 Taxation (4,099) (3,010)

During the fi nancial year ended 31 December 2007, Riverstone Resources Sdn Bhd and Riverstone Industrial Products Sdn Bhd were granted and utilised reinvestment allowances of approximately RM1,904,000 (2006: RM6,797,000). The reinvestment allowances are subject to the agreement of the tax authorities and compliance with certain provisions of tax legislation in Malaysia. As at 31 December 2006 and 2007, the companies do not have unutilised reinvestment allowances. The companies are also entitled to a 200% deduction on certain qualifying expenses. The statutory income tax rate applicable to the companies incorporated in Malaysia was reduced to 26% for year of assessment 2008 from 27%.

Protective Technology Co. Ltd is exempted from corporate income tax in Thailand on net profi t of promoted operations for a period of 8 years, commencing from the fi rst revenue generating year in 2002.

The corporate income tax rate applicable to the companies incorporated in Singapore was reduced to 18% for the year of assessment 2008 onwards from 20%.

As at 31 December 2007, certain companies in the Group have unutilised tax losses of approximately RM110,000 (2006: RM730,000), available for offset against future taxable profi ts subject to the agreement of the respective local tax authorities and compliance with certain provisions of the respective local tax legislations. No deferred tax asset is recognised due to uncertainty of its recoverability.

There is no income tax consequences attached to the dividends to the shareholder proposed by the Company but not recognised as a liability in the fi nancial statements (Note 22).

8. Earnings per share (sen)

Earnings per share for the fi nancial year ended 31 December 2007 is calculated based on profi t after taxation of RM22,840,000 (2006: RM22,532,000) divided by weighted average of 309,500,000 (2006: 244,500,000) ordinary shares.

As there were no share options and other potential issuance granted, the basic and diluted earnings per share are the same.

4 7




9. Property, plant and equipment

Offi ce Freehold equipment Furniture Capital land and Plant and and and Motor work-in- Group buildings machinery computers fi ttings vehicles progress Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Cost Balance at 1 January 2006 24,094 38,520 876 1,126 2,775 1,979 69,370 Additions 66 1,584 278 80 61 8,708 10,777 Disposals - - (4) - (53) - (57) Transfer - 10,454 - - - (10,454) - Written off - (345) (72) (7) - - (424) Translation adjustments 304 269 (6) 12 12 2 593 Balance at 31 December 2006 24,464 50,482 1,072 1,211 2,795 235 80,259 Additions 48 1,482 228 126 807 9,115 11,806 Disposals - (264) (5) - (419) - (688) Transfer 1,728 3,037 18 - - (4,783) - Written off (2) (88) (4) - - - (94) Translation adjustments 2 (3) - * - * (1) (45) (47) Balance at 31 December 2007 26,240 54,646 1,309 1,337 3,182 4,522 91,236 Accumulated depreciation Balance at 1 January 2006 3,625 14,212 465 548 2,023 - 20,873 Charge for the year 921 4,241 132 158 298 - 5,750 Disposals - - (3) - (53) - (56) Written off - (242) (62) (5) - - (309) Translation adjustments 51 118 (1) 10 13 - 191 Balance at 31 December 2006 4,597 18,329 531 711 2,281 - 26,449 Charge for the year 929 4,862 155 129 328 - 6,403 Disposals - (228) (3) - (418) - (649) Written off (1) (57) (1) - - - (59) Translation adjustments (3) (7) - * - * - * - (10) Balance at 31 December 2007 5,522 22,899 682 840 2,191 - 32,134 Net carrying amount At 31 December 2007 20,718 31,747 627 497 991 4,522 59,102 At 31 December 2006 19,867 32,153 541 500 514 235 53,810 * Denotes amounts less than RM500.

4 8




9. Property, plant and equipment (cont’d)

(a) Included in freehold land and buildings is freehold land amounting to RM8,204,000 (2006: RM6,507,000). (b) During the fi nancial year, the Group acquired property, plant and equipment at aggregate costs of RM11,806,000

(2006: RM10,777,000) of which RM200,000 (2006: NIL) were acquired by means of hire purchase and fi nance lease arrangement. Net carrying amount of motor vehicles under hire purchase and fi nance lease amounted to RM338,000 (2006: RM261,000).

(c) In addition to assets held under fi nance leases, the following property, plant and equipment of the Group is subject to a fi rst

charge to secure two of the Group’s bank loans and other credit facilities (Note 18). Group 2007 2006 RM’000 RM’000 Freehold land 4,055 4,055 Buildings 4,728 5,091 Plant and machinery 3,048 3,428 11,831 12,574 10. Subsidiary companies Company 2007 2006 RM’000 RM’000 Unquoted equity shares, at cost 63,722 63,972 Details of subsidiary companies are as follows:

Name of company Percentage of (Country of equity held by incorporation) Principal activities Cost of investment the Group 2007 2006 2007 2006 RM’000 RM’000 % % (1) Riverstone Resources Manufacturer and distributor of 48,921 49,113 100 100 Sdn Bhd (Malaysia) cleanroom gloves and fi nger cots (1) Riverstone Industrial Products Manufacturer of plastic bags and 1,404 1,409 100 100 Sdn Bhd (Malaysia) trader in latex products (2) Protective Technology Manufacturer and distributor of Co. Ltd (Thailand) cleanroom gloves 12,779 12,829 99.99 99.99 (3) Riverstone Resources Distributor of cleanroom products 618 621 100 100 (S) Pte Ltd (Singapore) 63,722 63,972

4 9




10. Subsidiary companies (cont’d)

Subsidiary company held by Riverstone Resources Sdn Bhd:-

Name of company Percentage of (Country of equity held by incorporation) Principal activities the Group 2007 2006 % %

(4) Riverstone Resources (Wuxi) Co. Ltd Washing and packing of gloves 100 100 (People’s Republic of China)

(1) Audited by Ernst & Young, Malaysia(2) Audited by Thai-Audit The Truth Limited(3) Audited by Ernst & Young, Singapore(4) Audited by Wuxi Jiayu Certifi ed Public Accountants Co., Ltd

11. Inventories Group 2007 2006 RM’000 RM’000 Raw materials 4,628 4,372 Work-in-progress 4,577 3,982 Finished goods 5,378 6,434 Total inventories at lower of cost and net realisable value 14,583 14,788 12. Trade receivables Group 2007 2006 RM’000 RM’000 Trade receivables 30,203 26,198 Less: Allowance for impairment (4) - 30,199 26,198

Trade receivables are unsecured, non-interest bearing and are generally on 30 to 90 days’ terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

5 0




12. Trade receivables (cont’d) Group 2007 2006 RM’000 RM’000 Movements in the allowance account are as follows: Impairment for the year and end of year (4) - The table below is an analysis of trade receivables as at the end of the fi nancial year: Not past due and not impaired 27,149 22,899 Past due but not impaired 3,046 3,299 30,195 26,198 Impairment receivables – individually assessed: Past due more than 24 months - - Past due more than 12 months 8 - Past due within 12 months - - Less: Provision for impairment (4) - 4 - Total trade receivables, net 30,199 26,198 Aging of receivables that are past due but not impaired: - Less than 3 months 2,847 3,216 - 3 months to 6 months 81 83 - 6 months to 12 months 113 - - more than 12 months 5 - 3,046 3,299 Trade receivables are denominated in the following currencies:

Group 2007 2006 RM’000 RM’000 United States dollars 8,841 9,562 Ringgit Malaysia 5,352 5,045 Hong Kong dollars 5,363 4,514 Thai Baht 5,976 4,723 Singapore dollars 404 645 Renminbi 4,267 1,709 30,203 26,198

5 1




13. Other receivables Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Deposits 128 156 - - Tax recoverable - 64 - - VAT recoverable 155 544 - - Sundry debtors 757 571 - 92 Advances to suppliers 108 - - - 1,148 1,335 - 92

14. Amounts due from a subsidiary company

The amounts due from a subsidiary company relates to dividend receivable and is expected to be repaid within the next 12 months in cash.

15. Cash and cash equivalents

Cash and cash equivalents comprise the following as at 31 December:

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Fixed deposits 47,591 44,686 31,582 44,686 Cash at banks and in hand 9,358 10,436 552 23 56,949 55,122 32,134 44,709

Cash at banks earns interest at fl oating rates based on daily bank deposit rates ranging from 0.25% to 4.06% per annum (2006: 0.25% to 4.2% per annum). Fixed deposits are made for varying periods of between one day and one month depending on the immediate cash requirements of the Group, and earn interest at the respective fi xed deposit rates. The weighted average effective interest rate of fi xed deposits is 3.20% per annum (2006: 3.46% per annum).

Cash and cash equivalents are denominated in the following currencies:

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Singapore dollars 32,812 45,213 32,129 44,709 Ringgit Malaysia 11,977 3,182 - - Thai Baht 4,511 2,940 - - Renminbi 1,662 1,769 - - United States dollars 5,030 1,997 5 - Hong Kong dollars 934 - - - Philippines peso 23 21 - - 56,949 55,122 32,134 44,709

5 2




16. Payables and accruals Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Trade payables 10,556 10,440 2,918 3,435 Payables for purchase of plant and equipment 2,393 2,664 - - Accruals for operating expenses 2,873 2,232 181 464 15,822 15,336 3,099 3,899 Trade payables and payables for purchase of plant and equipment are interest-free and are normally settled on 30 – 60 days’

terms.

Payables and accruals are denominated in the following currencies: Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Ringgit Malaysia 8,266 8,682 - - United States dollars 4,644 855 2,873 - Thai Baht 2,069 1,227 - - Renminbi 490 236 - - Singapore dollars 304 4,272 226 3,899 Hong Kong dollars 29 61 - - Philippine peso 20 3 - - 15,822 15,336 3,099 3,899 17. Hire purchase creditors The Group has fi nance leases for certain motor vehicles (Note 9). Future minimum lease payments under fi nance leases together with the present value of the net minimum lease payments are as

follows: Group 2007 2006 RM’000 RM’000 Total minimum lease payments Within 1 year 105 92 After 1 year but not later than 5 years 111 44 216 136 Less: Amounts representing fi nance charges (13) (8) Present value of minimum lease payments 203 128 Present value of payments Within 1 year 96 88 After 1 year but not later than 5 years 107 40 Present value of minimum lease payments 203 128 Effective interest rates per annum implicit in the leases 2.3% to 3.3% 2.5% to 3.65% The hire purchase creditors are denominated in Ringgit Malaysia.

5 3




18. Bank borrowings (secured) Group 2007 2006 RM’000 RM’000

Bankers’ acceptances - 169 Fixed rate term loans 1,076 2,074 Floating rate term loans 1,665 2,228 2,741 4,471 Amount repayable within one year 1,340 1,730 Amount repayable between two and fi ve years 1,401 2,741 2,741 4,471

The fi xed rate term loans are repayable in monthly instalments up to 1 May 2009 and bear interest at 6% (2006: 6%) per annum which approximates the effective interest rates. The fl oating rate term loans are repayable in monthly instalments up to 11 July 2008 and 5 May 2011 and bear interest at between the licensed bank’s base lending rate per annum and 1% (2006: 1%) respectively per annum above that rate.

The bank borrowings are secured by the following:

(a) First legal charge over certain of the Group’s freehold land and buildings as disclosed in Note 9; and(b) A corporate guarantee of the Company.

The bank borrowings are denominated in Ringgit Malaysia.

19. Deferred taxation

Deferred taxation relates to the following: Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Deferred tax liabilities Differences in depreciation (3,490) (3,157) - -

20. Share capital Group Company 2007 2006 2007 2006 No. of shares No. of shares RM’000 RM’000 Balance at beginning of year 309,500,000 2 106,788 - (1)

Issuance during the year - On restructuring (Note 1) - 27,779,998 - 64,716 - On share split and share consolidation (Note 1) - 203,720,000 - - - On initial public offering - 78,000,000 - 47,394 Expenses on initial public offering - - - (5,322) Balance at end of year 309,500,000 309,500,000 106,788 106,788 (1) Denotes amounts less than RM500.

5 4




20. Share capital (cont’d)

Note 1

The Group was formed on 4 October 2006 pursuant to a restructuring exercise (the “Restructuring Exercise”) as set out below for the purpose of the Company’s listing on SGX-ST (the “Initial Public Offering”).

The Restructuring Exercise included the following transactions:-

(a) The sale by Wong Teek Son, Lee Wai Keong, Wong Teck Choon and Chee Mei Chuan of the entire issued and paid-up share capital of Riverstone Resources Sdn Bhd to the Company for a consideration of S$21,327,557. The purchase consideration was satisfi ed by the allotment and issuance of an aggregate of 21,327,557 new ordinary shares in the capital of the Company;

(b) The sale by Wong Teek Son and Lee Wai Keong of the entire issued and paid-up share capital of Riverstone Industrial Products Sdn Bhd to the Company for a consideration of S$611,858. The purchase consideration was satisfi ed by the allotment and issuance of an aggregate of 611,858 new ordinary shares in the capital of the Company;

(c) The sale by Wong Teek Son and Lee Wai Keong of the entire issued and paid-up share capital of Riverstone Resources (S) Pte Ltd to the Company for a consideration of S$269,520. The purchase consideration was satisfi ed by the allotment and issuance of an aggregate of 269,520 new ordinary shares in the capital of the Company; and

(d) The sale by Wong Teek Son, Lee Wai Keong, Wong Teck Choon and Chee Mei Chuan, Chee Heng Tuan, Chee Ting Tuan, Wong Ah Lee, Dumrongsak Aroonprasertkul, Putthipong Aroonprasertkul and Nanthiya Aroonprasertkul of 99.988% of the issued and paid up capital of Protective Technology Co, Ltd, to the Company for a consideration of S$5,571,063. The purchase consideration was satisfi ed by the allotment and issuance of an aggregate of 5,571,063 new ordinary shares in the capital of the Company.

Pursuant to the Restructuring Exercise as set out above, the Company issued 27,779,998 ordinary shares. Subsequent to the

Restructuring Exercise, each ordinary share of the Company was subdivided into 50 ordinary shares (“the Share Split”) and every 6 ordinary shares were then consolidated into 1 ordinary share (“the Share Consolidation”).

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions.

The Riverstone performance share plan (the “Plan”) was approved by the Shareholders pursuant to shareholders’ resolutions in writing dated 4 October 2006. The Plan is administered by the Remuneration Committee. During the fi nancial year, no options were granted under the Plan.

21. Other reserves Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

(a) Foreign currency translation reserve Balance at beginning of year (486) 67 (1,359) - Movement for the year (520) (553) (490) (1,359) Balance at end of year (1,006) (486) (1,849) (1,359)

5 5




21. Other reserves (cont’d) Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 (b) Statutory reserve Balance at beginning of year 134 126 - - Movement during the year 362 - - - Translation adjustment (3) 8 - - Balance at end of year 493 134 - - (c) Merger reserve Balance at beginning of year (58,568) - - - Movement during the year - (58,568) - - Translation adjustment 250 - - - Balance at end of year (58,318) (58,568) - - Total other reserves (58,831) (58,920) (1,849) (1,359) Note:

The currency translation reserve is used to record translation differences arising from the translation of the fi nancial statements of the Company from Singapore dollars to RM and of foreign entities whose functional currencies are different from that of the Company’s presentation currency.

The statutory reserve relates to appropriation of funds from the net profi t of a subsidiary company established in Thailand. In accordance with the local laws, before dividends for a particular year are declared, companies are required to appropriate 5% of their profi t before taxation reported in the statutory accounts for that year to a statutory reserve. The maximum balance of the reserve is capped at 10% of the registered capital. This reserve can only be distributed to the shareholders upon liquidation of the company or utilised in the event of a reduction in share capital.

The merger reserve represents the difference between the nominal value of shares issued by the Company over the nominal value of the shares acquired in exchange for those shares, accounted for using the pooling-of-interest method.

The above reserves are non-distributable.

22. Dividends

(a) Declared and paid during the fi nancial year Group and Company 2007 2006 RM’000 RM’000 Final exempt (one-tier) dividend for 2006 at 2.58 sen per ordinary share 7,985 - Interim exempt (one-tier) dividend for 2007 at 1.29 sen per ordinary share 3,992 -

11,977 -

5 6




22. Dividends (cont’d)

(b) Proposed dividends on ordinary shares of the Company but not recognised as a liability as at 31 December:-

Group and Company 2007 2006 RM’000 RM’000 Final exempt (one-tier) dividend for 2007 of 2.035 sen (2006: 2.58 sen) per ordinary share 6,300 7,985

23. Related party transactions

An entity or individual is considered a related party of the Group for the purposes of the fi nancial statements if: (i) it possesses the ability (directly or indirectly) to control or exercise signifi cant infl uence over the operating and fi nancing decisions of the Group or vice versa; or (ii) it is subject to common control or common signifi cant infl uence.

In addition to the related party information disclosed elsewhere in the fi nancial statements, the following signifi cant transactions between the Group and its related parties took place on terms agreed between the parties.

Group 2007 2006 RM’000 RM’000 Directors’ remuneration (1) 1,746 2,129 Key executive offi cers’ remuneration (2) 1,581 1,478 Purchases from related parties 554 551 Purchases of plant and equipment from a related party 3,115 1,074 Consultancy fees paid to a director related company 157 183

(1) Included in directors’ remuneration are contributions to defi ned contribution schemes of RM107,112 (2006: RM99,216) and profi t sharing schemes of RM546,577 (2006: RM914,257).

(2) Included in key executive offi cers’ remuneration are contributions to defi ned contribution schemes of RM77,324 (2006: RM64,706) and profi t sharing schemes of RM436,999 (2006: RM450,257).

The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

24. Commitments and contingencies

(a) Operating lease commitments

The Group has entered into operating lease agreements for offi ce and factory premises. These non-cancellable leases have remaining lease terms of between 2 to 5 years. Future minimum lease payments under non-cancellable operating leases payable are as follows:

Group 2007 2006 RM’000 RM’000 Within one year 210 103 After one year but not more than fi ve years 175 - 385 103

5 7




24. Commitments and contingencies (cont’d)

(b) Capital commitments Group 2007 2006 RM’000 RM’000 Amounts contracted for but not provided for in the fi nancial statements 5,990 124

(c) Contingent liabilities Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 Secured: Corporate guarantee given to a bank for credit facilities granted to a subsidiary, Riverstone Resources Sdn Bhd - - 2,741 -

(d) Contingencies

A wholly owned subsidiary, Riverstone Resources Sdn Bhd, has been named as one of 39 respondents in United States International Trade Commission (“ITC”) investigation, which the complainant Tillotson Corporation instituted on 30 May 2007, for alleged infringement of nitrile gloves patent.

The outcome of the abovementioned investigation is not presently determinable. The ITC, however, cannot award monetary damages and the subsidiary’s appointed solicitors, have opined that the subsidiary has meritorious defenses.

25. Segment information

A segment is a distinguishable component of the Group that is engaged either in providing products or services, or in providing products or services within a particular economic environment, which is subject to risks and rewards that are different from those of other business segments.

Segment information is presented in respect of the Group’s segments. The primary format, by geographical segments is based on the Group’s management and internal reporting structure. Inter-segment pricing, if any, is determined on an arm’s length basis.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets which are expected to be used for more than one period.

(a) Geographical segments

The Group operates mainly in four geographical areas namely Malaysia, Thailand, Singapore and China. The presentation of information on the basis of geographical segments is based on the geographical location of the assets. Fixed deposits held by the Company, representing unutilised proceeds from the Initial Public Offering as at 31 December 2007, are unallocated.

5 8




25. Segmental information (cont’d)

(a) Geographical segments (cont’d)

2007 Malaysia Thailand China Others Eliminations Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Revenue: External 88,123 21,210 13,879 3,450 - 126,662 Inter segment 12,787 3,035 - 16,230 (32,052) - Total revenue 100,910 24,245 13,879 19,680 (32,052) 126,662 Results: Segment result 18,830 6,474 1,890 16,436 (16,436) 27,194 Finance costs (255) Profi t before taxation 26,939 Taxation (4,099) Profi t for the year 22,840 Assets and liabilities: Segment assets 90,219 23,494 10,429 14,996 (24,549) 114,589 Unallocated assets 47,591 162,180 Segment liabilities 21,746 4,489 5,437 4,145 (19,996) 15,821 Unallocated liabilities 7,775 23,596 Other segment information: Capital expenditure 7,399 4,035 371 1 - 11,806 Depreciation 5,164 926 312 1 - 6,403

5 9





(a) Geographical segments (cont’d)

2006 Malaysia Thailand China Others Eliminations Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue: External 91,778 18,647 6,238 5,532 - 122,195 Inter segment 10,966 3,855 - - (14,821) - Total revenue 102,744 22,502 6,238 5,532 (14,821) 122,195 Results: Segment result 19,961 5,911 116 (132) 24 25,880 Finance costs (338) Profi t before taxation 25,542 Taxation (3,010) Profi t for the year 22,532 Assets and liabilities: Segment assets 90,166 22,329 7,676 2,446 (15,895) 106,722 Unallocated assets 44,750 151,472 Segment liabilities 14,312 2,846 4,580 5,140 (11,582) 15,296 Unallocated liabilities 8,182 23,478 Other segment information: Capital expenditure 9,660 396 721 - - 10,777 Depreciation 4,470 980 263 37 - 5,750

(b) Business segments

The following table presents the revenue information regarding the business segments for the years ended 31 December 2006 and 2007. The Group predominantly manufactures and sells gloves. It is not meaningful to show the total assets employed and capital expenditure by business activities as the assets and liabilities are generally shared and not identifi able by business segments.

Gloves Others Total RM’000 RM’000 RM’000 Revenue: Sales to external customers - 2007 117,417 9,245 126,662 - 2006 112,252 9,943 122,195

6 0





(c) Geographical location of customers

The following table presents the revenue information by geographical location of customers.

Other parts of Other Greater South parts of Rest of Malaysia Thailand China East Asia Asia the world Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Revenue: Sales to external customers - 2007 20,486 30,310 48,096 14,158 5,178 8,434 126,662 - 2006 18,219 28,191 46,450 15,273 4,163 9,899 122,195 26. Financial risk management and policies

The Group is exposed to fi nancial risks arising from its operations and the use of fi nancial instruments. The key fi nancial risks include interest rate risk, foreign currency risk, liquidity risks, credit risk and commodity price risk. The Board of directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Chief Financial Offi cer. The Audit Committee provides independent oversight to the effectiveness of the risk management process. It is, and has been throughout the current and previous fi nancial years the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-effi cient. The Group does not apply hedge accounting.

The following sections provide details regarding the Group’s exposure to the above-mentioned fi nancial risks and the objectives,

policies and principal fi nancial instruments comprise bank loans and overdraft, hire purchase contracts, and cash and short term processes for the management of these risks.

(a) Interest rate risk

The Group’s primary interest rate risk relates to hire purchase liabilities and bank borrowings. The Group monitors the interest rate on borrowings closely to ensure that the borrowings are maintained at favourable rates.

Information relating to the Group’s interest rate exposure is disclosed in the notes on hire purchase and bank borrowings.

Sensitivity analysis for interest rate risk

As at 31 December 2007, assuming the market interest rate at that date had been lower by 1% with all other variables held constant, profi t for the fi nancial year would have been higher by RM20,000 (31 December 2006 : RM25,000), arising mainly as a result of lower interest expense on fl oating rate borrowings.

If the market interest rate is higher by 1% with all other variables held constant, profi t for the fi nancial year would have been lower by RM20,000 (31 December 2006 : RM25,000), arising mainly as a result of a higher interest expense on the fl oating rate borrowings.

6 1




26. Financial risk management and policies (cont’d)

(b) Foreign currency risk

The companies in the Group primarily transact in their respective functional currencies. The exposure of the Group to foreign currency risk arises from certain transactions denominated in foreign currencies, primarily in United States dollars and Hong Kong dollars and fi xed deposits denominated in Singapore dollars. From time to time, the Group may enter into forward foreign exchange contracts to manage its foreign currency risk. There were no outstanding foreign exchange contracts as at balance sheet date.

Sensitivity analysis for foreign currency risk

At 31 December 2007, with every 1 % of RM strengthened against the major foreign currency with all other variables held constant, profi t for the fi nancial year would have been RM697,000 (31 December 2006 : RM766,000) lower. Conversely, if with every 1% of RM weakening against the major foreign currency with all other variables held constant, profi t for the fi nancial year would have been RM697,000 (31 December 2006 : RM766,000) higher. The foreign currency exchange rate sensitivity in profi t is mainly due to sales transactions in USD and HKD currencies.

(c) Liquidity risk

Liquidity risk is the risk that the Group will encounter diffi culty in meeting fi nancial obligations due to shortage of funds. There is no signifi cant exposure to liquidity risk. The Group actively manages its operating cash fl ows and the availability of funding so as to ensure that all refi nancing, repayment and funding needs are met. The Group maintains suffi cient levels of cash and cash equivalents to meet its working capital requirements. The Group’s liquidity risk management policy is to match maturities of fi nancial assets and liabilities and to maintain available banking facilities of a reasonable level to its overall debt position.

The table summarises the maturity profi le of the Group’s and the Company’s fi nancial liabilities as at the balance sheet date based on contractual undiscounted payments.

2007 2006 1 year 1 to 5 1 year 1 to 5 Group or less years Total or less years Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Trade payables 10,556 - 10,556 10,440 - 10,440 Bank borrowings 1,340 1,401 2,741 1,730 2,741 4,471 Hire purchase creditors 96 107 203 88 40 128 11,992 1,508 13,500 12,258 2,781 15,039 Company Trade payables 2,918 - 2,918 3,435 - 3,435 Bank borrowings - - - - - - Hire purchase creditors - - - - - - 2,918 - 2,918 3,435 - 3,435

6 2





(d) Credit risk

The carrying amounts of trade and other receivables, fi xed deposits and cash and bank balances represent the Group’s maximum exposure to credit risk. No other fi nancial assets carry a signifi cant exposure to credit risk.

The Group trades with recognised and credit worthy third parties. It is the Group’s policy that local customers who wish to trade on credit terms are subject to credit verifi cation procedures, and hence there is no requirement for collateral. New overseas customers will be required either to trade in advance telegraphic transfer or letter of credits issued by reputable banks in countries where the customer are based. Once they become regular customers and proven to be creditworthy, these customers will be assigned a credit term approved by management and letter of credit will no longer be required.

The Group manages its credit risk through regular review on collectibility of receivables. Cash and deposits are placed with reputable fi nancial institutions.

Credit risk concentration profi le

Concentration of credit risk exists when changes in economic, industry or geographic factors similarly affect groups of counterparties whose aggregate credit exposure is signifi cant in relation to the Group’s total credit exposure. The Group is principally involved in manufacturing activities associated with the semi-conductor and electronics industries. Consequently, the risk of non-payment from its trade receivables is affected by any unfavourable economic changes to these industries. The credit risk concentration profi le of the Group’s trade receivables at the balance sheet date is as follows:

Group 2007 2006 RM’000 % of total RM’000 % of total By Country: Greater China 11,660 39% 7,785 30% Thailand 7,542 25% 7,607 29% Malaysia 5,341 18% 5,043 19% Other countries 5,660 18% 5,763 22% 30,203 100% 26,198 100%

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash and cash equivalents, investment securities and derivatives that are neither past due nor impaired are placed with or entered into with reputable fi nancial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding trade receivables that are either past due or impaired is disclosed in Note 12.

6 3





(e) Commodity price risk

The Group’s raw materials are mainly latex and nitrile. Latex is a traded commodity and its price is subject to the fl uctuations of the commodity market. Nitrile is a petroleum-based product and is affected by the increase in the prices of crude oil. Any signifi cant increase in the prices of latex and nitrile will have a material adverse impact on the fi nancial position and results of the operations. The Group monitors price fl uctuations closely and evaluates alternative sources of supply and pricing policies.

As at 31 December 2007, if the raw materials price had been 2% (2006: 2%) higher/ lower with all other variables held constant, the Group’s profi t net of tax would have been lower/ higher by RM1,059,000 (31 December 2006: RM992,000).

27. Fair values

The following methods and assumptions are used to estimate the fair values of the following classes of fi nancial instruments:

(a) Cash and cash equivalents, other receivables, other payables, amount due to related party

The carrying amounts approximate fair values due to the relatively short term maturity of these fi nancial instruments.

(b) Trade receivables and trade payables

The carrying amounts approximate fair values because these are subject to normal trade credit terms.

(c) Hire purchase creditors

The fair value of hire purchase creditors is determined by their present value of minimum lease payments (Note 17).

(d) Bank borrowings

The fair value of fl oating rate term loans approximates its carrying value as it is based on fl oating interest rates and terms that continue to be available to the Group. The fair value of fi xed rate term loans, estimated using discounted cash fl ow analysis, approximates the carrying value.

28. Capital management

The main objective of the Group’s capital management is to ensure that it maintains a healthy capital ratio to support its operations and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Group monitors capital using the net tangible asset value of the Group, which is total tangible assets less total liabilities of the Group. The net tangible assets values of the Group as at 31 December 2006 and 2007 were RM127,992,000 and RM 138,582,000 respectively.

6 4




29. Categories of fi nancial assets and liabilities

The table below is an analysis of the carrying amounts of fi nancial instruments by categories. Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000 (a) Loans and receivables Trade receivables 12 30,199 26,198 - - Other receivables 13 1,148 1,335 - 92 Amounts due from a subsidiary company 14 - - 21,887 9,000 Fixed deposits 15 47,591 44,686 31,582 44,686 Cash and bank balances 15 9,358 10,436 552 23 88,296 82,655 54,021 53,801 (b) Financial liabilities measured at amortised cost Payables and accruals 16 15,822 15,336 3,099 3,899 Hire purchase creditors 17 203 128 - - Bank borrowings 18 2,741 4,471 - - 18,766 19,935 3,099 3,899

30. Authorisation of fi nancial statements

The consolidated fi nancial statements for the fi nancial year ended 31 December 2007 were authorised for issue in accordance with a resolution of the directors on 28 March 2008.

6 5



Statistics of shareholdings as at 12 March 2008 Issued and fully paid-up capital : S$48,060,000.00Total no. of issued share excluding treasury shares : 309,500,000Total no. of treasury shares : NILClass of shares : Ordinary shares fully paidVoting rights : One Vote per share

Distribution of Shareholdings

Size of Shareholdings No. of Shareholders % No. of Shares %

1 - 999 0 0.00 0 0.001,000 - 10,000 305 67.48 1,282,000 0.4110,001 - 1,000,000 129 28.54 16,841,000 5.441,000,001 AND ABOVE 18 3.98 291,377,000 94.15

TOTAL : 452 100.00 309,500,000 100.00

Substantial Shareholders (as per the Register of Substantial Shareholder as at 12 March 2008)

Direct Interest Deemed Interest No. of Shares % No. of Shares %

Wong Teek Son 156,694,400 50.63 - - Lee Wai Keong 40,163,250 12.98 - -

Twenty Largest Shareholders

No. Name No. of Shares %

1. Wong Teek Son 156,694,400 50.632. Lee Wai Keong 40,163,250 12.983. Citibank Nominees Singapore Pte Ltd 26,648,000 8.614. Wong Teck Choon 12,282,567 3.975. HSBC (Singapore) Nominees Pte Ltd 11,542,000 3.736. DB Nominees (S) Pte Ltd 8,979,000 2.907. HL Bank Nominees (S) Pte Ltd 5,474,000 1.778. Yong Swee Khim 5,316,000 1.729. Dumrongsak Aroonprasertkul 4,477,850 1.4510. Chee Mei Chuan 4,138,603 1.3411. BNP Paribas Nominees Singapore Pte Ltd 3,953,000 1.2812. Kong Francis 2,400,000 0.7813. Chee Ting Tuan 2,320,000 0.7514. Tang Loon Seng 2,153,330 0.7015. Lam Yoon Chan 1,480,000 0.4816. Tan Siew Booy 1,168,000 0.3817. DBS Nominees Pte Ltd 1,110,000 0.3618. Ho Sao Ha 1,077,000 0.35 19. Chee Heng Tuan 1,000,000 0.3220. Ho Yep Man 951,000 0.31

Total 293,328,000 94.81

Shareholdings Held in the Hands of the Public

Based on information available to the Company as at 12 March 2008, approximately 28.2% of the total number of issued shares excluding treasury shares of the Company was held by the public and, therefore, Rule 723 of the Listing Manual is complied with.

s ta t is t ics of shareholdings as at 12 March 2008

6 6



NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Gallery Hotel, 1 Nanson Road, Singapore 238909, on Friday, 25 April 2008, at 2.00 p.m. for the following purposes:

Ordinary Business

1. To receive and adopt the Directors’ Report and Audited Accounts of the Company for the fi nancial year ended 31 December 2007 together with the Auditors’ Report thereon. (Resolution 1)

2. To declare a fi nal tax exempt (1-tier) dividend of 2.035 sen (RM) per ordinary share for the fi nancial year ended 31 December 2007. (Resolution 2)

3. To re-elect the following Directors retiring pursuant to Article 93 of the Articles of Association of the Company:

Mr. Wong Teek Son (Resolution 3) Mr. Hong Chin Fock (Resolution 4)

Mr. Wong Teek Son will, upon re-election as a Director of the Company, remain as member of Nominating Committee.

Mr. Hong Chin Fock will, upon re-election as a Director of the Company, remain as Chairman of the Remuneration Committee and member of the Audit Committee and Nominating Committee and will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

4. To approve the payment of the Directors’ fees of RM366,400 (approximately SGD160,000 based on the rate of exchange of SGD1: RM2.2900) for the fi nancial year ending 31 December 2008 to be paid on a quarterly basis. (2007: RM369,472) (Resolution 5)

5. To re-appoint Messrs Ernst & Young as the Company’s Auditors and to authorise the Directors to fi x their remuneration. (Resolution 6)

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

As Special Business

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

7. Authority to allot and issue shares up to fi fty per cent. (50%) of Company’s total number of issued shares excluding treasury shares – Ordinary Resolution

“That, pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806(2) 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:-

(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fi t; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

not ice of annual general meet ing

6 7



provided that:

(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed fi fty per cent. (50%) of the Company’s total number of issued shares excluding treasury shares (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro-rata basis to existing shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed twenty per cent. (20%) of the Company’s total number of issued shares excluding treasury shares (as calculated in accordance with sub-paragraph (2) below). Unless prior shareholder approval is required under the Listing Manual of the SGX-ST, an issue of treasury shares will not require further shareholder approval, and will not be included in the aforementioned limits.

(2) (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 (1) above, the total number of issued shares excluding treasury shares is based on the Company’s total number of issued shares excluding treasury shares at the time this Resolution is passed, after adjusting for:

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

(ii) any subsequent bonus issue, consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and

(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. [See Explanatory Note (i)]

(Resolution 7)

8. Authority to allot and issue shares under the Riverstone Performance Share Plan – Ordinary Resolution

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be and are hereby authorised to grant awards in accordance with the provisions of the Riverstone Performance Share Plan (the “Plan”) and to allot and issue such number of fully paid shares from time to time as may be required to be issued pursuant to the vesting of awards under the Plan provided always that the aggregate number of new shares to be allotted and issued pursuant to the Plan shall not exceed fi fteen per cent. (15%) of the total number of issued shares excluding treasury shares of the Company from time to time and that such authority shall, unless revoked or varied by the Company in general meeting, shall continue in full force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (ii)] (Resolution 8)

By Order of the Board

Lim Chee Ying Tan Ping PingCompany SecretariesSingapore, 8 April 2008

not ice of annual general meet ing (cont ’d)

6 8



Explanatory Notes:

(i) The Resolution 7 proposed in item 7 above, if passed, will empower the Directors from the date of the above Meeting until the date of the next Annual General Meeting, to allot and issue shares and convertible securities in the Company. The aggregate number of shares (including any shares issued pursuant to the convertible securities) which the Directors may allot and issue under this Resolution will not exceed fi fty per cent. (50%) of the Company’s total number of issued shares excluding treasury shares of the Company. For issues of shares other than on a pro rata basis to all shareholders, the aggregate number of shares to be issued will not exceed twenty per cent. (20%) of Company’s total number of issued shares excluding treasury shares of the Company. This authority will, unless previously revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. However, notwithstanding the cessation of this authority, the Directors are empowered to issue shares pursuant to any Instrument made or granted under this authority.

(ii) The Ordinary Resolution 8 proposed in item 8 above, if passed, will empower the Directors of the Company, to grant awards and to allot and issue such number of fully paid shares from time to time as may be required to be issued pursuant to the Riverstone Performance Share Plan.

Notes:

1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote instead of him. A proxy need not be a member of the Company.

2. If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly authorised offi cer or attorney.

3. The instrument appointing a proxy must be deposited at the registered offi ce of the Company at 8 Cross Street #11-00 PWC Building Singapore 048424 not less than forty-eight hours (48) before the time for holding the Annual General Meeting.

NOTICE OF BOOK CLOSURE

NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of Riverstone Holdings Limited (the “Company”) will be closed on 13 May 2008 for the preparation of dividend warrants for the proposed fi nal tax exempt (1-tier) dividend of 2.035 sen (RM) per ordinary share for the fi nancial year ended 31 December 2007.

Duly completed registrable transfers received by the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. of 3 Church Street #08-01 Samsung Hub, Singapore 049483 up to 5.00 p.m. on 12 May 2008 will be registered to determine shareholders’ entitlements to the said proposed dividend. Members whose securities accounts with The Central Depository (Pte) Limited are credited with shares at 5.00 p.m. on 12 May 2008 will be entitled to the said proposed dividend.

Payment of the said proposed dividend, if approved by the members at the Annual General Meeting to be held on 25 April 2008, will be made on 30 May 2008.

By Order of the Board

Lim Chee Ying Tan Ping PingCompany SecretariesSingapore, 8 April 2008

not ice of annual general meet ing (cont ’d)

RIVERSTONE HOLDINGS LIMITED(Company Registration No. 200510666D)(Incorporated in the Republic of Singapore)

IMPORTANT: FOR CPF INVESTOR ONLY

1. This Annual Report 2007 is forwarded to you at the request of your CPF Approved Nominee and is send SOLELY FOR YOUR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

3. CPF Investors who wish to attend the Meeting as an observer must summit their requests through their CPF Approved Nominees within the time frame specifi ed. If they also wish to vote, they must summit their voting instructions to the CPF Approved Nominees within the time frame specifi ed to enable them to vote on their behalf.

ANNUAL GENERAL MEETING

PROXY FORM

Name Address NRIC/Passport Number Proportion of Shareholdings No. of Shares %

Name Address NRIC/Passport Number Proportion of Shareholdings No. of Shares %

and/or (delete as appropriate)

or failing him/her, the Chairman of the Annual General Meeting as my/our proxy/proxies to vote for me/us on my/our behalf, at the Annual General Meeting of the Company (the “Meeting”) to be held at Gallery Hotel, 1 Nanson Road, Singapore 238909, on Friday, 25 April 2008, at 2.00 p.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as indicated hereunder. If no specifi c direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any matter arising at the Meeting.

(Please indicate your vote “For” or “Against” with a tick [ ] within the box provided.)

No. Resolutions relating to: For Against

1. Directors’ Report and Audited Accounts for the fi nancial year ended 31 December 2007

2. Payment of proposed fi nal tax exempt (1-tier) dividend

3. Re-election of Mr. Wong Teek Son as director

4. Re-election of Mr. Hong Chin Fock as director

5. Approval for payment of Directors’ fees of RM366,400 (approximately SGD160,000

based on the rate of exchange of SGD1 : RM2.2900) for the fi nancial year ending

31 December 2008 to be paid on a quarterly basis.

6. Re-appointment of Messrs Ernst & Young as Auditors

7. Authority to allot and issue shares pursuant to Section 161 of the Companies Act, Cap. 50

8. Authority to allot and issue shares under the Riverstone Performance Share Plan

Total No. of Shares No. of Shares

In CDP Register

In Register of Members

I/We

of

being a member/members of Riverstone Holdings Limited (the “Company”) hereby appoint:

Dated this day of 2008.

Signature(s) of Member(s)or, Common Seal of Corporate Member

Fold the fl ap for sealing

2nd fold

3rd fold

The Company Secretary

Riverstone Holdings Limited8 Cross Street

#11-00 PWC Building

Singapore 048424

Pleaseaffi x

stamphere

NOTES

1. A member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote in his stead.

2. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifi es the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.

3. A proxy need not be a member of the Company.

4. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defi ned in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register and registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all shares held by the member.

5. The instrument appointing a proxy or proxies must be deposited at the Company’s registered offi ce at 8 Cross Street #11-00 PWC Building Singapore 048424, not less than 48 hours before the time set for the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised offi cer.

7. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the power of attorney or a duly certifi ed copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.

GENERAL:

The Company shall be entitled to reject a proxy form which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed on the proxy form. In addition, in the case of shares entered in the Depository Register, the Company may reject a proxy form if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.

annual report 2007riverstone.listedcompany.com/misc/ar2007.pdf · korea, taiwan, india, mexico, the...

Documents