OUR SEVEN PILLARS

OUR SEVEN PILLARS

RIGHTEOUSNESS

SERVING

OTHERS

INTEGRITY

VALUES

COMMITMENT

COMPASSION

COURAGE

OUR SEVEN PILLARS

RIGHTEOUSNESS

SERVING

OTHERS

INTEGRITY

VALUES

COMMITMENT

COMPASSION

COURAGE

SAM Engineering & Equipment (M) Berhad2

We shall mount up

We shall run and not be wearywith wings like eagles

Annual Report 2021 3

CONTENTS

4 CORPORATE INFORMATION

6 OUR BOARD OF DIRECTORS

10 OUR MANAGEMENT TEAM

13 GROUP STRUCTURE AND ACTIVITIES

14 GROUP FINANCIAL HIGHLIGHTS

16 MANAGEMENT DISCUSSION AND ANALYSIS

20 SUSTAINABILITY STATEMENT

46 PARTICULARS OF PROPERTIES

47 CORPORATE GOVERNANCE OVERVIEW STATEMENT

178 NOTICE OF ANNUAL GENERAL MEETING

184 STATEMENT ACCOMPANYING NOTICE OF AGM

188 NOTIFICATION TO SHAREHOLDERS

189 ADMINISTRATIVE GUIDE

ENCLOSED PROXY FORM

69 OTHER INFORMATION

71 STATEMENT OF DIRECTORS’ RESPONSIBILITY

72 FINANCIAL STATEMENTS

175 ANALYSIS OF SHAREHOLDINGS

65 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

61 AUDIT COMMITTEE REPORT


CORPORATE INFORMATION

Non-Independent Non-Executive ChairmanMr. Tan Kai Hoe

Executive Director and Chief Executive OfficerMr. Goh Wee Keng, Jeffrey

Non-Independent Non-Executive Director Mr. Shum Sze Keong

Independent Non-Executive DirectorsDato’ Seri Wong Siew HaiMr. Lee Hock ChyeDatuk Dr. Wong Lai SumYM Tunku Afwida Binti Dato’ Tunku Abdul MalekMr. Suresh Natarajan

BOARD OF DIRECTORS

Plot 17, Hilir Sungai Keluang Tiga,Bayan Lepas Free Industrial Zone, Phase IV, 11900 Penang.Tel : 604 - 643 6789Fax : 604 - 644 7017

PRINCIPAL PLACE OF BUSINESS

Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar,10200 George Town,Penang.Tel : 604 - 263 1966Fax : 604 - 262 8544

REGISTERED OFFICE

ChairmanMr. Shum Sze Keong

MembersDato’ Seri Wong Siew HaiMr. Suresh Natarajan

RISK & SUSTAINABILITY COMMITTEE

AUDIT COMMITTEE

ChairmanDatuk Dr. Wong Lai Sum

MembersMr. Shum Sze KeongMr. Lee Hock ChyeYM Tunku Afwida Binti Dato’ Tunku Abdul Malek

Securities Services (Holdings) Sdn Bhd197701005827 (36869-T)Suite 18.05, MWE Plaza,No. 8, Lebuh Farquhar,10200 George Town,Penang.Tel : 604 - 263 1966Fax : 604 - 262 8544

SHARE REGISTRAR

KPMG PLT (LLP0010081 - LCA & AF 0758) Level 18, Hunza Tower,163E, Jalan Kelawai, 10250 Penang.Tel : 604 - 238 2288Fax : 604 - 238 2222

AUDITORS

www.sam-malaysia.com

COMPANY WEBSITE

ChairmanDato’ Seri Wong Siew Hai

MembersMr. Tan Kai HoeMr. Lee Hock ChyeDatuk Dr. Wong Lai Sum

NOMINATING & REMUNERATION COMMITTEE

Ms. Thum Sook Fun (SSM PC No. 201908000139, MIA 24701)

Ms. Chew Peck Kheng (SSM PC No. 202008001118, LS0009559)

COMPANY SECRETARIES

Citibank BerhadHong Leong Bank BerhadUnited Overseas Bank (Malaysia) BhdAmBank (M) Berhad

PRINCIPAL BANKERS

RM 212,730,621(As at 31 March 2021)

ISSUED AND PAID-UP CAPITAL


Courage and Might

Run Winto


TAN KAI HOE

Non-Independent Non-Executive Chairman

Present Directorship(s) and/or Appointment(s)• Deputy Chairman & Director, Singapore Aerospace

Manufacturing Pte. Ltd.• Member, Board of Governors, Temasek Polytechnic• President & Chief Executive Officer/Director, Accuron

Technologies Limited• Chairman, Singapore Red Cross Council• Director, WAAM3D Limited• Chairman, Singapore Accreditation Council

• Chairman, SPRING SEEDS Capital Pte. Ltd.• Director, Employment and Employability Institute• Director, Growth Enterprise Fund Pte. Ltd.• Chief Executive, SPRING Singapore

Past Directorship(s) and/or Appointment(s)

Academic / Professional Qualification(s)• Bachelor of Arts (Physics) University of Cambridge, UK• Master of Science (Management) Stanford University,

USA

• Nominating and Remuneration CommitteeBoard Committee Membership(s)

Age 55

Gender Male

Nationality Singaporean

Date of Appointment 26 August 2015

Executive Director & Chief Executive Officer

• President & Chief Executive Officer/Director of Singapore Aerospace Manufacturing Pte. Ltd.

• Chairman & Director, SAM (Suzhou) Co., Ltd.• Chairman & Director, Aviatron (M) Sdn. Bhd.• Director, J W Kane Precision Engineering Limited

Present Directorship(s) and/or Appointment(s)

• Bachelor of Science (First Class Honours) in Aeronautical Engineering Science, Salford University, UK

• Master of Science (Turbine Technology), Cranfield University, UK

Academic / Professional Qualification(s)

Age 62

Gender Male


Date of Appointment 4 March 2008

OUR BOARD OF DIRECTORS

GOH WEE KENG, JEFFREY

Spirit of Wisdom & UnderstandingSpirit of Counsel & Might

Spirit of Knowledge


SHUM SZE KEONG

Non-Independent Non-Executive Director

Age 59

Gender Male


Date of Appointment 4 March 2008

• General Manager, Shum Enterprises Pte. Ltd.• Director, Singapore Aerospace Manufacturing Pte. Ltd.


• Head Aerospace, Industry Development Division, Singapore Economic Development Board

• Executive Director, Grande Holdings Ltd.• Consultant, Grande Group Limited• Independent Non-Executive Director, Lafe Corporation

Limited


• Bachelor of Science in Aeronautical Engineering, Embry Riddle Aeronautical University, USA


• Audit Committee• Risk & Sustainability Committee (Chairman)

Board Committee Membership(s)

DSPN, DMPN, DGPN Independent Non-Executive Director

Age 70

Gender Male

Nationality Malaysian

Date of Appointment 4 June 2007

• Director, Greatech Technology Berhad• Director, Malaysia Venture Capital Management Berhad• Director, Penang Tech Centre Bhd.• Director, Penang Science Cluster• Member, PEMUDAH• Chairman, E&E Productivity Nexus Council• President, Malaysia Semiconductor Industry Association

(MSIA)


• Vice President, Technology and Manufacturing Group (TMG), Intel

• General Manager, Assembly and Test Manufacturing (ATM), Intel

• Vice President and Managing Director, Asia Pacific Customer Center, Dell

• Director, Malaysia External Trade Development Corporation (MATRADE), Ministry of International Trade and Industry (MITI)

• Director, Nation Gate Group Bhd.• Member, National Productivity Council• Chairman, Malaysian American Electronics Industry (MAEI),

AMCHAM


Academic / Professional Qualification(s)• Bachelor of Science in Mechanical Engineering,

University of Leeds, UK• Master of Science in Management Science, Imperial

College of Science & Technology, University of London, UK

• Nominating & Remuneration Committee (Chairman)• Risk & Sustainability Committee



DATO’ SERI WONG SIEW HAI


Independent Non-Executive Director

Academic / Professional Qualification(s)• Bachelor of Laws (Hons), National University of

Singapore, Singapore

• Audit Committee • Nominating & Remuneration Committee


Age 61

Gender Male


Date of Appointment 8 July 2008

LEE HOCK CHYE


• Chief Executive Officer of Malaysia External Trade Development Corporation (MATRADE)

• Director, Malaysia Petroleum Resources Council (MPRC)• Director & Trustee, Malaysia Furniture Promotion Council

(MFPC)• Director, MyCEB (Tourism)• Co-Chairman, Professional Services Development

Council, Malaysia (PSDC)• Adviser, National Export Council (MATRADE)• Director, Port Klang Authority• Economic Adviser, Minister of Transport, Ministry of Transport

Malaysia• Conjoint Professor (Practice), Faculty of Business,

University of Newcastle, Australia• Associate Professor, Faculty of Business, TAR University College• Singapore Business Advisory Group, University of Newcastle• Research Fellow, TAR University College• Director, PRG Holdings Berhad


Academic / Professional Qualification(s)• PhD Business, University Malaya• Master in Public Administration (MPA), University Malaya• Bachelor of Science (Hons) Biochemistry, University

Malaya

• Director, Tasco Berhad• Director, Milux Corporation Berhad• Adviser, Faculty of Business and Accountancy, University

Malaya


• Audit Committee (Chairman)• Nominating & Remuneration Committee


Age 66

Gender Female


Date of Appointment 1 October 2016

DATUK DR. WONGLAI SUM


Spirit of Wisdom & Understanding

Spirit of Counsel & Might

Spirit of Knowledge



* Save as disclosed, the above Directors have no family relationship with any Director and/or major shareholder of SAM Engineering & Equipment (M) Berhad (“SAMEE”), have no conflict of interest with SAMEE, have not been convicted for any offences within the past five years and have no public sanction or penalty imposed by the relevant regulatory bodies during the financial year ended 31 March 2021. Details of the Directors’ attendance at Board Meetings for the financial year ended 31 March 2021 are set out in the Corporate Governance Overview Statement on page 49 of this Annual Report.


Academic / Professional Qualification(s)• Bachelor of Science (Honours) in Economics and

Accountancy, City University London, UK• Member, Malaysian Institute of Accountants (MIA)• Qualified Chartered Accountant, ICAEW

• Independent Non-Executive Director, Telekom Malaysia Berhad

• Independent Non-Executive Director, Gamuda Berhad


• Audit CommitteeBoard Committee Membership(s)

Age 56

Gender Female


Date of Appointment 1 January 2020


• Risk & Sustainability CommitteeBoard Committee Membership(s)


• Principal for the Central Campus, Institute of Technical Education (ITE), Singapore


• Deputy Principal, Institute of Technical Education (ITE), Singapore

• Strategy Officer, Applied Materials Worldwide Operations, Singapore

• Deputy Director, Singapore Economic Development Board


Age 60

Gender Male


Date of Appointment 1 July 2020

YM TUNKUAFWIDA BINTIDATO’ TUNKUABDUL MALEK

SURESH NATARAJAN

• Bachelor of Science in Electrical Engineering, University of Illinois, Urbana-Champaign

• Master of Science in Electrical Engineering, University of Illinois, Urbana-Champaign

• Business Administration and Management, General from University of Michigan – Stephen M. Ross School of Business

• Business Administration and Management, General from Nanyang Technological University/University of California, Berkeley


OUR MANAGEMENT TEAM

Academic / Professional Qualification(s) • Bachelor of Mechanical Engineering (First Class

Honours), Queen’s University Belfast, UK.• Master of Business Administration, University of

Leicester, UK.

Working Experience• Joined SAMEE on 1 January 2017

Present Directorship(s) and/or Appointment(s)• Listed entity: Nil• Other public company(ies): Nil

Vice President – Aerospace, SAM Singapore Group

Age Gender Nationality Date Joined

59 Male Singaporean 1 January 2017

Academic / ProfessionalQualification(s) • Master of Science (Mechatronics Engineering), De Montfort University, Leicester, UK.

Working Experience• Joined SAMEE on 17 April 2006


Chief Operating Officer, SAMEE Group


53 Male Malaysian 17 April 2006

CEO & Executive Director

Details are disclosed in the profile of Directors on page 6.

Academic / Professional Qualification(s) • Bachelor of Accountancy (Honours), Northern University of Malaysia, Malaysia• Chartered Accountant, Malaysian Institute of Accountants

(MIA)

* Save as disclosed, the management team has no family relationship with any Director and/or major shareholder of SAM Engineering & Equipment (M) Berhad (“SAMEE”), has no conflict of interest with SAMEE, has not been convicted for any offences within the past five years and has no public sanction or penalty imposed by the relevant regulatory bodies during the financial year ended 31 March 2021.

Working Experience• Joined SAMEE on 21 August 2017


Chief Financial Officer, SAMEE Group

TEH MUN LING


50 Female Malaysian 21 August 2017

LIM HEE SENG,PETER

NG BOON KEAT

GOH WEE KENG, JEFFREY

Decisiveness, Maturity Consistency&Stewardship with Strength,


All things are Possible for the one who

Believes


planted by the rivers of waterWe are like a tree

always green and bears

good fruits


GROUP STRUCTURE AND ACTIVITIES

SAM ENGINEERING & EQUIPMENT (M) BERHAD

(199401012509 (298188-A))

LKT INTEGRATION SDN. BHD. (199701039756 (455256-X))

Development and production of computer process control system for printed circuit board handling system and component assembly line.

DORMANT

LKT TECHNOLOGY SDN. BHD. (199701002612 (418108-T))

Design and manufacture of precision tools and machinery parts.

DORMANT

SAM TECHNOLOGIES (M) SDN. BHD.(201201023397 (1007889-D))

Design and manufacture of engineering equipment and automation solutions ranging from process test handlers, material handling systems, vision inspection systems and factory automation.

DORMANT

MEERKAT INTEGRATOR SDN. BHD.(199901005092 (479992-T))

Design, manufacture and assembly of metal and non-metal ergonomic workstations and electronic products.

DORMANT

SAM PRECISION (THAILAND) LIMITED(0145543000048)

Manufacture of dies, jigs and parts and cutting tools for disk drives, electronics, semi-conductor and other industries.

ACTIVE

SAM PRECISION (M) SDN. BHD. (197801006200 (43230-K))

Fabrication of precision tools and machinery parts and manufacture of aircraft and other equipment parts, spares, components and precision engineering parts.

ACTIVE

SAM TOOLING TECHNOLOGY SDN. BHD.(199301011085 (265822-D))

Design, development and manufacture of trim and form dies and suspension tooling for hard disk drive parts.

ACTIVE

MEERKAT TECHNOLOGY PTE. LTD. (200008724 Z)

Sales of electronic components

DORMANT

MEERKAT PRECISION SDN. BHD. (199301010852 (265589-V))

Manufacture of aircraft and other related equipment parts, spares, components and precision engineering parts, precision and engineering components.

ACTIVE

LKT AUTOMATION SDN. BHD. (198101009607 (75724-W))

Design and assembly of automation equipment complete with equipment control software. DORMANT

AVITRON PRIVATE LIMITED (201116715M)

Manufacture and assembly of aircraft equipment, spares, components and precision engineering parts.

ACTIVE

SAM MEERKAT (M) SDN. BHD. (199501035687 (364889-X))

Design and assembly of modular or complete machine and equipment.

ACTIVE


0

200,000

400,000

600,000

800,000

1,000,000

(RM’ 000)

20212018 2019 20202017

873,681(RM’ 000)REVENUE

2021

81,848(RM’ 000)PROFIT BEFORE TAX

(RM’ 000)

2018 2019 20202017

20,000

40,000

60,000

100,000

80,000

0

59,699 (RM’ 000)PROFIT FOR THE YEAR

0

20,000

40,000

60,000

80,000

10,000

(RM’ 000)

20202018 20192017 2021

0

20

40

60

80

(Sen)

2018 2019 20202017

44.17(Sen)BASIC EARNINGS PER SHARE

2021

Financial Year Ended

2017 2018 2019 2020 2021

REVENUE (RM’ 000) 537,397 618,959 754,966 938,667 873,681

PROFIT BEFORE TAX (RM’ 000) 55,354 72,550 94,797 99,651 81,848

PROFIT FOR THE YEAR (RM’ 000) 43,607 62,916 78,513 79,823 59,699

BASIC EARNINGS PER SHARE (Sen) 36.33 48.09 58.09 59.06 44.17

DILUTED EARNINGS PER SHARE (Sen) 32.31 48.09 58.09 59.06 44.17

for the financial year ended 31 March 2021

GROUP FINANCIAL HIGHLIGHTS


for the financial year ended 31 March 2021

Financial Year Ended

2017 2018 2019 2020 2021

DIVIDEND PER SHARE (Sen) 17.23 23.36 29.05 14.76 11.03

CASH AND CASH EQUIVALENTS (RM’ 000) 99,001 21,556 23,992 14,792 16,107

NET ASSETS PER SHARE (RM) 3.61 3.49 3.96 4.51 4.63

RETURN ON EQUITY (%) 9.8 13.7 15.6 13.9 9.7

Note: Return on equity is computed based on average opening and closing equity.

GROUP FINANCIAL HIGHLIGHTS

2021

0

2

4

6

(RM)

2018 2019 20202017

4.63(RM)NET ASSETS PER SHARE

2021

0

10

30

20

40

(Sen)

2018 2019 20202017

11.03(Sen)DIVIDEND PER SHARE

16,107(RM’ 000)CASH AND CASH EQUIVALENTS

(RM’ 000)

2018 2019 20202017

25,000

50,000

100,000

75,000

0

2021

0

8

12

4

16

(%)

2018 2019 20202017

9.7(%)RETURN ON EQUITY

2021


MANAGEMENT DISCUSSION AND ANALYSIS

The Group recorded a total revenue of RM873.7 million and Profit Before Tax (PBT) of RM81.8 million in FY2021.

Aerospace

Revenue from the Aerospace business decreased by 61.8% from the previous financial year, to RM171.9 million. The decrease was due to lower demand as a result of COVID-19 pandemic. Our Aerospace business booked a loss before tax of RM22.2 million in FY2021, a drop of RM59.5 million from the previous financial year. The decrease was mainly due to lower sales, offset by higher government grants of RM15.3 million and a net gain on impairment of financial instruments and contract assets of RM8.0 million due to lower forward default rates.

Equipment

The Equipment business achieved 43.5% higher revenue than the previous financial year, to RM701.8 million. The increase was mainly due to stronger demand in the semiconductor and data storage industries. PBT for the Equipment business increased by 66.9% to RM104.0 million compared to previous financial year. The higher PBT was mainly due to higher sales and net gain on impairment of financial instruments and contract assets of RM9.3 million due to lower forward default rates.

Group

The Group’s total revenue of RM873.7 million is 6.9% lower than previous financial year. PBT decreased 17.9% year-on-year to RM81.8 million while Profit After Tax (PAT) decreased by 25.2% to RM59.7 million.

The Group invested RM50.4 million in FY2021, of which RM39.4 million was mainly for new product, manufacturing process modernisation and automation of Aerospace business and RM11.0 million mainly for capacity expansion of Equipment business.

The Group ended the year with a projected order book of RM2.4 billion.

Aerospace Equipment Group

0.0

200.0

100.0

400.0

500.0

700.0

300.0

600.0

800.0

900.0

1,000.0

(RM’ million)

FY2020 FY2021

449.6489.1

938.7

171.9

701.8

873.7

Revenue

FY2020 FY2021

(RM’ million)Profit Before Tax (PBT)

Aerospace Equipment Group

-40.0

-20.0-22.2

0.0

40.0

60.0

100.0

20.0

80.0

120.0

104.099.6

62.3

81.8

37.3



FINANCIAL POSITIONTOTAL ASSETS EMPLOYED

As at 31 March 2021, the Group’s total assets increased 2.3% to RM936.0 million. The increase of total assets was mainly to support on-going operations in the areas of inventories, trade and other receivables and property, plant and equipment.

CAPITAL EXPENDITURE

The Group continued to invest for its long-term growth, with capital expenditure of RM50.4 million for FY2021.

BANKING FACILITIES

As at 31 March 2021, RM94.0 million or 24.9% of facilities had been utilised.

DEBT RATIO

Interest Cover and Net Debt/Equity Ratios

The Group’s interest cover ratio was 30 times in FY2021 and net debt/equity ratio of 0.12 as at 31 March 2021. If the accretion of interest on lease liabilities were excluded, the interest cover ratio would be 76 times in FY2021.

The Group’s total borrowings increased to RM90.3 million as at 31 March 2021 (Borrowings as at 31 March 2020: RM82.2 million). The increase in borrowings was mainly used to finance working capital requirement.

CAPITAL EMPLOYED

The capital employed as at 31 March 2021 was RM673.7 million, a slight decrease of RM5.0 million from RM678.7 million as at 31 March 2020. The decrease in translation reserve arising from the strengthening of the Malaysian Ringgit against United States Dollar and the repayment of lease liabilities and loans were offset by an increase in retained earnings from current year’s profit.

Share capital Reserves Non-current liabilitiesRetained earnings

0.0 200.0100.0 300.0 400.0 500.0 600.0 700.0

FY2021 673.7

FY2020 678.7

(RM’ million)Capital Employed

0.0 200.0 400.0 600.0 800.0 1,000.0

Cash and cash equivalents

Contract assets

Other current assets

Property, plant and equipment

Right-of-use assetsInventories

Trade receivables and other receivables

FY2021 936.0

FY2020 914.6

(RM’ million)Total Assets Employed



FINANCIAL POSITION (Cont’d)

CASH FLOWS

Operating Activities

The Group generated net cash from operating activities of RM86.8 million as compared to RM98.1 million in the previous financial year. The reduction in net cash from operating activities was mainly due to lower PBT.

(RM’ million) FY2020 FY2021Operating activities before changes in working capital 172.6 127.9

Changes in working capital -57.1 -18.4

Income tax paid -17.4 -22.7

Net Cash from Operating Activities 98.1 86.8

Investing Activities

Net cash used in investing activities of RM50.2 million was used primarily for the investment in plant and equipment.

Financing Activities

Net outflow from financing activities of RM21.6 million was attributed to payment of FY2020 interim dividends of RM20.0 million, repayment of term loans of RM7.8 million, payment of lease liabilities of RM6.8 million and payment of interest of RM2.8 million, offset by drawdown of revolving credits of RM15.8 million.

The Group ended the year with cash and cash equivalents of RM16.1 million, an increase of RM1.3 million from FY2020.

FY2021

FY2020

10080604020-20-40-60-80 0

Investing activities

Financing activities

Net cash from operating activities

Cash Flows

DIVIDEND

An interim single-tier dividend of 11.03 sen per ordinary share was declared in May 2021, representing 25% of our net profit. Based on the average share price for the month of June 2021 of RM7.08, the dividend per share of 11.03 sen translates to a dividend yield of 1.56%.

14.76

29.05

23.36

17.23

FY2020FY2019FY2018FY2017

5

10

20

0

15

25

30

35

(sen)Dividend Per Share

FY2021

11.03

(RM’ million)



CUSTOMERS AND PROGRAMMES Aerospace

Demand for our aerospace products was severely affected by the COVID-19 pandemic in FY2021. The Group saw reduction in demand across all aircraft platforms, which resulted in a year-on-year dip of 61.8% in FY2021 aerospace revenue. Although the grounding of the Boeing 737Max aircraft was gradually lifted by aviation safety authorities since late 2020, the increase in demand of Boeing 737Max products was marginal due to the on-going pandemic and high inventory levels in the supply chain.

Equipment

Our Equipment business has been positively affected by the COVID-19 pandemic. Pandemic-induced trends such as Work-from-Home (“WFH”), Home-based Learning and e-commence drove increased investments in data centres and telecommunication infrastructure, which led to increased demand in semiconductor and data storage devices. As a result, we achieved record sales in FY2021 for our Equipment business which grew 43.5% due to increased demand for our products from most of our equipment customers. Our Equipment business also benefited from introduction of new products secured in the previous year. We continued to secure new products and we expect these new products to contribute to the equipment revenue in the coming years.

OPERATION INITIATIVES Aerospace

FY2021 is the year that we put our digitalised network to good use with our WFH arrangement. Production activities and shipments could be performed by our WFH personnel, allowing minimum support staff in our premises. Our team could monitor production data remotely in real-time and initiate corrective feedback actions or improvements.

During this lull period, we re-deployed our existing unused resources to support the Group’s Equipment business. Despite the downturn in the Aerospace business, we took delivery of a new flexible manufacturing system for our small-format machining. The new system, when fully operational in FY2022, will allow us to drive productivity and reduction in labour dependency. We are implementing all our improvement projects to get ourselves ready in anticipation of the recovery of the aerospace industry in the coming years.

Equipment

Our efforts in FY2020 to increase production capacity via our production expansion plan to have more production space (including a newly-set-up cleanroom) and investing in new equipment have paid off. We were able to take in more orders and delivered them on time to our customers in FY2021. Our efficiency has also improved with the enhancement to our Enterprise Resource Planning (ERP) system and Manufacturing Execution System (MES). We are currently embarking on developing our Supplier Portal programme as part of our continuous improvement plan to better manage our supply chain.

We will continue to expand our production capacity and modernise our facilities to grow our Equipment business in tandem with the market growth.

OUTLOOK Aerospace

The commercial aerospace sector has been significantly affected by the COVID-19 pandemic, which has led to a dramatic reduction in passenger traffic, in turn affecting aircraft demand. Commercial air travel is gradually recovering, albeit at a slow pace, led by domestic air travel. The Industry group IATA1 expects global passenger traffic to return to pre-COVID-19 levels by 2024. Many countries have been actively rolling out COVID-19 vaccination programmes, although at varied paces. Effective vaccination against COVID-19 could support the recovery of air passenger traffic.

In 2020, Airbus and Boeing have delivered a total of 723 aircraft, 42% down from the deliveries in 2019. Based on projections by Forecast International Inc.2 in April 2021, the estimated commercial aircraft production in 2021 would be in the order of 900 - 1,000 aircraft. The combined order backlog of Airbus and Boeing commercial aircraft remained healthy at approximately 11,980 units as of March 2021. This translates to a backlog of 8.7 years for Airbus and 6.2 years for Boeing at pre-pandemic 20183 delivery rates. On a positive note, Boeing is gradually increasing its Boeing 737Max production with the goal of reaching 31 aircraft per month by 2022, after the Boeing 737Max grounding has been lifted by Federal Aviation Administration (FAA) in late 2020. The overall impact of the pandemic remains uncertain, as the pace of recovery for air travel, the impact on aerospace supply chain and the impact on future demand remain volatile. 1 IATA (International Air Transport Association) represents some 290

airlines comprising 82% of global air traffic.2 Forecast International Inc is a provider of market intelligence

forecasting, proprietary research and consulting services for the worldwide Aerospace, Defence, Electronics and Power Systems industries.

3 Deliveries in 2019 and 2020 were affected by the Boeing 737Max grounding and the COVID-19 pandemic respectively, hence 2018 delivery rates were used for the comparison.

Equipment

The COVID-19 pandemic continues to accelerate the growth in cloud computing, 5G telecommunications, artificial intelligence (AI) and digitization, which in turn fuelled soaring demand for semiconductor chips. The on-going semiconductor chip shortage situation also fuelled increased demand for semiconductor equipment.

According to Semiconductor Equipment and Material International (SEMI), fab equipment spending hit a record high of about USD65 billion in 2020. SEMI also projected double-digit growth in fab equipment spending in 2021 and 2022. Demand for our equipment products remained strong and we will be expanding our capacity in tandem with customers’ increased demand. The company’s strategy is to stay balanced and supply equipment for semiconductor, Hard Disk Drive (HDD) and Solid State Drive (SSD) applications. This would allow us to ride the change as the industry shifts from one media type to the other. We continue to explore new projects with our customers and actively grow our customer base.


SUSTAINABILITY STATEMENT

OUR SUSTAINABILITY APPROACH

We are proud to say we have embedded sustainability into our business and approach towards all our stakeholders, such as our employees, customers, suppliers, contractors and the community.

We continue to emphasise that our sustainability approach must comply with all relevant regulations and legislation and being sustainable is part of our business decision making process especially in our risk management planning.

In a follow-up to our previous Statement, we continue to place great emphasis on incorporating environmental, social and governance (“ESG”) factors into our day-to-day operations while aligning our initiatives to the SDG of the United Nations. This is timely as the COVID-19 pandemic has played a major role in highlighting the importance of ESG practices while the global investment community has started incorporating ESG practice as one of the key factors in evaluating an investment opportunity. ESG practices are seen to provide a window into the future of a company in the global economy.

REPORTING SCOPE

This Statement covers the sustainability performance of the Group during the financial year ended 31 March 2021, unless stated otherwise. Similar to the previous Statement, it will cover the business operations of SAM Engineering & Equipment (M) Berhad (“SAMEE”) in Malaysia and Singapore. Companies under review are as follow:

TABLE 1: SAMEE’S BUSINESS OPERATIONS

Operating Location Business Units

Malaysia SAM Meerkat (M) Sdn. Bhd.

SAM Tooling Technology Sdn. Bhd.

SAM Precision (M) Sdn. Bhd.

Meerkat Precision Sdn. Bhd.

Singapore Avitron Private Limited

SUSTAINABILITY GOVERNANCE STRUCTURE

SAMEE ensures the governance structure enjoys transparency and accountability in executing its sustainability approach and strategies. The governance structure has clearly defined roles and responsibilities in order for effective decision-making and implementation.

ABOUT THIS STATEMENT

We are proud to present you our 4th Sustainability Statement (“Statement”) for the financial year ended 31 March 2021 (“FY2021”). This Statement demonstrates our commitment towards sustainability and its impact on environmental, social and governance concerns. It provides a clear and concise account of what sustainability means to us, and how we will strive to deliver responsible and long-term value to our shareholders and stakeholders. In addition, this Statement will provide our shareholders and stakeholders an insight into our journey towards sustainability both internally and externally, the challenges we have faced, and our plans for increasing our emphasis on sustainability.

Despite facing the challenges brought upon by the COVID-19 pandemic, we continue to make great progress in our sustainability initiatives by leveraging on our experience and continuous learning from various experts and industry standards. We adhere to the best practice sustainability frameworks, standards and guidelines, such as Bursa Malaysia’s Listing Requirements on Sustainability Reporting, Global Reporting Initiative (“GRI”) Standards and the United Nations Sustainability Development Goals (“SDG”).

We also strongly believe that a safe and healthy environment is a must to ensure the well-being of our employees. Coupled with our strict ethical business practices, we strive to create a workplace where our employees can deliver industry leading products and services to our customers on a timely basis. Our efforts to ensure that the community surrounding us benefit and grow with us on a sustainable basis also helps instil a sense of compassion and empathy within the Company. This helps us better appreciate the essence of sustainability.

FIGURE 1: SUSTAINABILITY GOVERNANCE STRUCTURE OF SAMEE

Human Resources

Business Units

Information Technology

Investor Relations

Facilities

Health & Safety

Finance

Sustainability Committee/Working Group

Risk & SustainabilityCommittee

Board of Directors



The Board of Directors (“BOD”) of SAMEE provides the stewardship and has the ultimate responsibility for the sustainability direction of the Group. It is supported in this effort by the Risk & Sustainability Committee (“RSC”) which is tasked to review and recommend sustainability strategies and performance targets for the Group, while the Sustainability Committee/Working Group (“SCWG”) will spearhead the delivery of the initiatives, such as the implementation and monitoring of the daily sustainability initiatives and performance.

The RSC comprise members of the Board and the SCWG comprise members of key management, business units, various departments, and individuals/employees that have the relevant qualifications and experience in performing the roles and responsibilities effectively.

We continue to provide the relevant sustainability-related workshop to all heads of divisions and departments to ensure we have a consistent and collective understanding of the sustainability initiatives and measures embraced by SAMEE.

STAKEHOLDER ENGAGEMENT

We constantly engage with various groups of stakeholders to update them on our current and latest sustainability initiatives, and most importantly, obtain their feedback on how we can create a win-win-win situation for us, them and the economic, environmental and social (“EES”) aspects around us. At SAMEE, we understand and appreciate the critical role that each stakeholder contributes to our long term strategy and success.

All legitimate concerns and expectations from our stakeholders are taken into consideration through established measures and processes over the years. We consider stakeholders as our business partners. They play an important role in providing solutions to our daily challenges and projected growth amid the various issues we face in the global economy. For example, many of us would not have expected that the COVID-19 pandemic could create a new normal in the way we conduct our business, to the extent that we have had to become more innovative in managing our supply chain.

We have dedicated teams to engage different stakeholder groups through various channels and platforms on an on-going basis and as part of our daily operations. The feedback and results from surveys are channelled to our SCWG before being presented to the RSC and deliberated at the BOD level.

SAMEE conducted a major sustainability engagement survey during the financial year ended 31 March 2018. We plan to initiate another major sustainability engagement survey during the financial year ending 31 March 2022 and to reassess the materiality matters for our sustainability theme and the United Nations Sustainability Development Goals that concern us greatly.

In view of the current COVID-19 situation, we leverage on video conferencing technology to allow discussions and meetings to take place remotely. Our current stakeholder engagement approach is as follows:

TABLE 2: SAMEE’S STAKEHOLDER ENGAGEMENT

Stakeholder Group Engagement Channels

Employees • Workshop discussions• Induction training• Learning and development

programmes• Corporate volunteering programmes• Employee performance appraisal• Corporate memos & letters• Employee meetings• Employee Engagement Surveys• SAMEE eHub App on Smartphones• Value Creation Programme• Employee Quarterly Communications

Session• Computer screensavers

Management • Annual Management Retreat/Conference

• Quarterly management meeting• Monthly operation meeting • Weekly coordinating meeting• Ongoing meetings and interactions

Customers • Customer Satisfaction Form• Ongoing meetings and interactions• Quarterly Business Review (QBR) and

Monthly Operation Review (MOR)

Vendors and Suppliers

• Interviews• Feedback survey• Vendor audits• Supplier Performance Review

Investors and Shareholders

• Annual General Meeting• Investor presentations and meetings• Financial statements and Bursa

Malaysia Announcements• Company Annual Report

Directors • Board and Board Committee meetings• Ongoing meetings and interactions

Community • Initiatives & partnerships with NGOs• Institution/University internship

programme • Corporate volunteering programmes


SUSTAINABILITY THEMES / MATERIALITY MATRIX

We constantly monitor and discuss industry trends, operating challenges and stakeholder expectations, to produce long-term value to shareholders and stakeholders of the Group and the community around us.

We work with industry experts and subject matter experts to devise business plans and strategies according to the most material aspects for business growth and the needs of stakeholders. This is also to ensure that the leadership team of SAMEE continues to lead the Group towards growth that is sustainable.

MATERIALITY ASSESSMENT

The materiality matters presented in this Sustainability Statement are based on our major materiality assessment conducted during the financial year ended 31 March 2018 and subsequently, minor materiality assessments to update the relevancy of the materiality matters over the period under review.

SAMEE plans to conduct a major materiality assessment for the financial year ending 31 March 2022 to ensure that material matters are relevant.

Our top 15 material matters are as follows:

TABLE 3: OUR TOP 15 MATERIAL MATTERS

This year, the top 15 principal risks remain the same as previously-identified material matters, based on the comprehensive materiality assessment conducted in 2018. They were further categorised into sustainability themes as follows:

Our BusinessPerformance

Our EnvironmentalManagement

Our People

Our Outreach

Product and Service Quality

Technology, Innovation and Development

Economic Performance

Customer Satisfaction and Relationship

Cybersecurity and ITResource Management

Ethics and Compliance

Supply Chain Management

Waste and HazardousMaterial Management

Energy Management

Employee Learning and Development

Employee Well-Being,Health and Safety

Labour Practices

Diversity and Inclusion

Local Communities

Indirect Economic Impact




At SAMEE, we strongly support the United Nations Sustainable Development Goals (“SDG”)’s 2030 Global Goals where the 17 identified Goals are meant to lead communities, corporations and governments into creating a better world for all of us.

FIGURE 2: UNITED NATION’S 17 SUSTAINABLE DEVELOPMENT GOALS (“SDG”)’S

We conducted an internal survey with the members of the SCWG to identify the SDGs that are most relevant to SAMEE, by taking into consideration our material matters, business strategies, principal risks, stakeholder influence and effects on our community.

The three SDGs that were identified as the most relevant are as follows:

TABLE 4: SAMEE’S THREE SDGs

SDGs Definition Key Stakeholders Impacted Ensure healthy lives and promote wellbeing for all at all ages • Employees

• Management • Directors• Community

Promote sustainable economic growth, full and productive employment, and decent work for all

• Customers • Investors/Shareholders • Employees • Community • Media

Ensure sustainable consumption and production patterns • Customers• Community• Vendors/Suppliers


OUR BUSINESS PERFORMANCE

SAMEE recognises that the sustainability of our business rests on our ability to achieve the highest standard of quality in our products while meeting the high standards of our customers at the most competitive prices, all while meeting the identified sustainable development goals of the United Nations.

Technological advancement and innovation continues to drive our business in aviation and manufacturing. As a result, strong customer relationships are paramount to us as we place great importance on customer satisfaction by understanding and monitoring their ever-changing needs and expectations. In addition, we continue to stress the importance of a strong and healthy supply chain as we recognise this as a critical factor in meeting the sustainability criteria of our long term growth.

PRODUCT & SERVICE QUALITY


All our operations revolve around the framework prescribed by our Quality Policy and Manual. This proven and stringent internal control measure assures high quality products are received by our customers. All our employees are required to embrace this quality culture at SAMEE that drives high standards of work ethics, procedures and instructions. This is made possible with strict adherence to requirements stipulated in our various measures and guidelines, such as our Product Quality Plan, Work Instructions and Engineering Review Plan.

In our efforts to keep quality defects and issues to the lowest possible level, we place great importance on risk & impact analysis using the Process Failure Mode Effect Analysis methodology. Every potential process failure and risk is evaluated and strategies are developed to mitigate the impact severity on the product. Below are some other measures to maintain product quality at our operations.

TABLE 5: SAMEE’S MEASURES TO MAINTAIN PRODUCT QUALITY

Procedures in maintaining product Quality

Description

Counterfeit Control The materials and parts we use are only sourced from reputable and designated sources

Hazardous Substance Management

We comply with the European Union Directive 2011/65/EU on the Restriction of the use of certain Hazardous Substances in electrical and electronic equipment (“RoHS”). This is also to ensure that our products are free of the currently listed Substances of Very High Concern (“SVHC”) under Registration, Evaluation, Authorisation and Restriction of Chemicals (“REACH”)

Calibration Our machines and tools are calibrated periodically by external parties to ensure our products meet customer requirements and standards.

Material Integrity The materials we use in production undergo the Certificate of Conformance (“COC”)

Product Testing & Buyoff Check

Our products are verified and tested to ensure that all functions meet the stipulated criteria and specifications before shipment.

In addition to the policies, code and manuals that we abide by, we also ensure that our operations are certified with commonly acceptable international industry standards. The certifications further enhance the confidence of our customers in our business.



TABLE 6: SAMEE’S CERTIFICATIONS

Our Certifications

• ISO 9001:2015 • ISO 13485:2018• AS9100 Rev.D.• NADCAP Certification for Non-Destructive Testing, Chemical Processes, Laboratory, Welding, Heat Treatment, Coating

and specialised machining• Civil Aviation Authority of Singapore (“CAAS”) Singapore Airworthiness Requirements 21 (“SAR21”) Production

Organisation Approval

These documents and certifications are complemented by the various types of training undertaken by our employees throughout the year. Documents from our quality management system such as our quality procedures and work instructions provide guidance to employees on processes, practices and operations procedures. Furthermore, regular training is conducted to update employees on key areas to maintain the highest quality standards.

It is noteworthy that not only are our operations certified under the ISO 9001:2015, but most of our employees have also undergone the ISO9001 training in order to fulfil the ISO requirements. In fact, all relevant employees have been trained on the requirements of the various certifications highlighted above.

We regularly review our internal processes, including conducting periodic product and process audits, continuous improvement initiatives, and assessing risks and implementing response plans. We also consistently monitor our quality performance with internal indicators that are reported and reviewed regularly. We are dedicated to ensuring Quality is a hallmark of the SAM brand, through our commitment to reliability and pursuance of continuous improvement.

We use visual dashboards to monitor quality performance at each workstation. For the Equipment division, we ensure that all relevant personnel attend a Copy Exact Training – a training by a customer to ensure all their requirements are met. For the Aerospace division, all relevant personnel attend training on Foreign Object Damage, Prevention of Counterfeit Parts and Product Safety.

TECHNOLOGY, INNOVATION & DEVELOPMENT

SAMEE strives to be a leader in innovation and technology developments in the markets that we operate in. We embrace technology to drive efficiency in our businesses and deliver value for our stakeholders through Project ARK. This Project targets Automation in the workplace, Reduction of waste and protection of manufacturing Knowledge.

We also continue to embark on strategic projects to keep us ahead of the competition, such as utilising computer simulation software to optimise production parameters, increasing the use of automation to reduce labour dependency and harnessing the use of robots to assure consistent quality. Coordinated measuring equipment and wireless inspection gauges are networked in our facilities to capture inspection data to enable us to conduct real-time statistical analysis that will allow us to maintain and to improve our product quality. Dashboards are displayed at our workplaces to provide real-time feedback on our production. The above is part of our journey into the digitalisation of our operations.



Promoting Operational Efficiency through Technology & Innovation

SAMEE continues to invest in relevant innovation and technology in its operations to enhance operational efficiency. As part of our journey towards Industry 4.0 and the adoption of the Internet of Things (“IOT”), we utilise the Manufacturing Execution System (“MES”) to digitally track and document the transformation from raw materials to finished goods at a number of our operations, while providing real-time digital data that we can display on the dashboards located around the factories. MES provides visual aids for analysis and optimisation of current manufacturing processes to improve productivity and production yields.

As the utilisation of robotics is proven to improve efficiency, we are intensifying the deployment of robotics in many of our manufacturing processes. This has led to a reduction in our dependency on labour-intensive manufacturing operations, elimination of health and safety concerns and ensuring the consistency of the quality of our products. This includes automated polishing equipment and flexible manufacturing systems. We also introduced a new quick setup technique to improve efficiency and productivity. For our precision tooling business, we developed a polishing technique using FFI carbide blade to meet more stringent cutting-edge requirements.

Driving Technology & Innovation with Our Stakeholders

In our efforts to fully understand the needs and expectations of our customers, SAMEE continues to value the opportunities in collaborating and partnering with our customers and suppliers to achieve higher efficiency and transparency in the supply chain network.

During FY2021, we participated in concurrent engineering activities with our customers which allowed us to fine tune product design for ease of manufacturing while attaining optimum costing. We also worked with our suppliers to develop machine language predictive modelling and quick product transfer methodology. In addition, we collaborated with new and existing vendors to localise some of the special processes, casting parts and complex machining parts in this region. This localisation measure encourages us to remain competitive as the demand for shorter turn-around time has increased dramatically in the semiconductor industry. Furthermore, we are improving the capability of our product development services as we expect an uptick in the demand for Original Design Manufacturing (“ODM”) activities.

As Artificial Intelligence (“AI”), 5G technology and the Internet of Things (“IOT”) continue to drive the semiconductor market and create new business opportunities, we continue to develop higher accuracy and precision turning and milling capabilities to be able to support new requirements in the front end of the semiconductor and communication industries.

CHART 1: CUSTOMER BASE BY REGION

Asia Europe North America

92%

4%4%

ECONOMIC PERFORMANCE

The Group recorded a total revenue of RM874 million in FY2021, with a decrease of 7% compared to the last financial year. Our Aerospace business contracted by RM278 million while our Equipment business grew by RM213 million.

For more information on the Group’s economic performance, please refer to the Management Discussion & Analysis disclosed in this Annual Report.

Our customer base has shifted between regions. This year, our customer base for North America increased by 3% mainly due to the growth in our Equipment business bringing it to a total of 92% of the total share of our customers. Customers in Europe is now at 4% from 7% last year while our customer base for Asia remains at 4%.



We strive to achieve long-term growth through excellent customer relationships and the satisfaction from repeat customers while we continue expanding our customer base. Besides delivering a high standard of quality in our products, we emphasise understanding and meeting the needs and expectations of our customers while maintaining a competitive margin to reward our stakeholders and shareholders. We believe that our Quality Policy plays an important role in guiding us and enabling us to gain the trust and confidence of our customers who demand a very high standard of quality from their suppliers as they operate in critical industries.

We allocate a dedicated programme leader for each of our existing and new customers. This leader is the focal point for any product or programme issue while ensuring issues are resolved satisfactorily and on a timely basis. We also request for customers to provide us with an on-site station as this allows us to build strong rapport with the customer’s working team while we play an active role in their product development. We also constantly participate in improvement programmes and on-site business and production reviews with our customers to reduce the turnaround time in their product development process and issues.

To ensure customer satisfaction, we listen to their feedback by conducting annual customer satisfaction surveys and receiving scorecards from our key customers. We understand the importance of listening to our customers where we enhance the areas where we receive praise while we strive to rectify areas which cause dissatisfaction and work on their constructive suggestions. The scorecards allow us to measure our performance in categories such as quality performance, lead time and commitment participation, responsiveness, cost competitiveness and after sales service and support.

To ensure that we are aware of the needs, expectations and plans of our key customers, we conduct Quarterly Business Reviews with these key customers to review our performance and study their evolving needs and requirements, especially in the foreseeable future. These would allow us to analyse our strengths and weaknesses, in order for us to capture opportunities while avoiding the risks that have been identified in this review. Basically, the reviews guide us on how we could serve our customers better and prepares us for their next growth trajectory with the objective of making SAMEE their supplier of choice.

The COVID-19 pandemic has prevented us from travelling to many of our customers’ sites. Nevertheless, we ensure that communications with our customers are not unduly affected. We constantly initiate conference calls with our customers by utilising all available technologies, to ensure that product developments and issues are addressed accordingly in an effective, efficient and timely manner.

CUSTOMER SATISFACTION

Our Aerospace and Equipment division continues to be the preferred supplier of all our key customers.

FIGURE 3: SAMEE’S INITIATIVES TO MANAGE CUSTOMER SATISFACTION

We maintain an open channel for communications

with our customers andproactively work together on improvement initiatives

We continue to be the preferred supplier of all our key customers. Our

Marketing and Operation teams engage directly

with our customers to nurture and foster relationships for long-

term commitment

We meet the quality, responsiveness and

on-time delivery expectations of our

customers

We continue to maintain a cordial relationship

through regular dialogue on current and potential

opportunities

During FY2021, we continue to receive excellent ratings in our customer satisfaction surveys which were conducted virtually due to the movement controls enforced during the pandemic.


CYBERSECURITY & IT MANAGEMENT

SAMEE has embarked on the journey of digitalisation way before it became the buzzword it is today. We are already on the bandwagon of utilising technology and internet-of-things (“IOT”) to continuously improve our efficiency and effectiveness in our business and operations.

Meanwhile, we remain cautious and vigilant to the growing cybersecurity risks that are ever present in our business especially as our customers are mainly multi-national corporations (“MNC”) and key players in their respective industries.

As a result, we continue to place great importance in our internal control framework to protect the privacy and security of data, information and intellectual properties belonging to us and our stakeholders. We have established a range of policies related to cybersecurity and IT management and we constantly review, upgrade and improvise to ensure that they are up-to-date and our employees are aware of the latest threats. The policies are as follows:

i. Acceptable Use Policyii. IT Cybersecurity and Incident Response Policyiii. Network Security Policyiv. Computing System Usage Policyv. Mobile Device Policyvi. IT Physical Security Policyvii. Data Classification and Protection Policyviii. Identity Access Management Policyix. IT Risk Management Policyx. Personal Data Protection Policy

Our IT team works to ensure the integrity of our IT systems. They protect the system through robust internal controls and engaging external partnerships. Their responsibilities include:


FIGURE 4: ACTIONS BY THE IT DEPARTMENT

Assessing current IT architecture for vulnerabilities,

weakness and for possible upgrades or improvements.

Developing and implementing effective IT security processes.

Managing and configuring physical security, disaster recovery and data backup

procedures.

Implementing technological upgrades, improvements

and major changes in the information security

environment.

Developing IT security related policies, standards

and procedures, testing and security incident reporting

processes.

Serving as a focal point of contact for IT cybersecurity.

Providing cybersecurity awareness training to all

employees of SAMEE Group of Companies.

Overseeing information security audits, whether performed internally or by third-party providers.

In FY2021, SAMEE successfully upgraded the computer and server protection from conventional anti-virus software to next-generation endpoint protection software.

For our day-to-day operations, we continue to emphasise the importance of implementing internal mitigative measures such as antivirus, endpoint protection and firewall protection and 24-hour real time monitoring and detection of malicious network traffic. Our IT team constantly test the effectiveness of our IT processes and systems, while they also conduct regular IT asset management and audits of our systems.



During FY2021, we conducted an internal Cybersecurity Gap Assessment for our factories in Malaysia to help us identify any potential and existing risks and gaps in our cybersecurity measures. The gaps identified from our assessment have all been closed. For instance, we upgraded all firewalls to the latest stable version, disabled the mobile hotspot feature to disallow employees from enabling it to allow connection from a mobile device and we improved USB blocking with new endpoint protection software.

We make cybersecurity training mandatory for all employees at our operations to ensure they are aware of existing and potential cybersecurity risks, precautions implemented and our Standard Operating Procedures (“SOP”) in dealing with such risks. All new hires are also required to be briefed on our IT Policy, procedures and the appropriate use of IT services during their orientation. Cybersecurity news and updates are constantly shared with all employees via our SAM eHub mobile app.

To prevent data loss, we follow the 3-2-1 Backup Rule – to keep at least 3 copies of data, to have 2 copies on different storage platforms and 1 copy offsite. We also ensure that all our systems require identity access to keep our information secure.

During FY2021, SAMEE has performed the following IT Initiatives:

• Upgrade of Internet speed at all sites, to minimum of 600 Mbps from 100 Mbps. This is to provide better, faster connectivity speed and a better Work-from-Home (“WFH”) experience to enable employees to achieve daily business activities from home.

• Setup additional 4 VPN servers to accommodate more WFH connections with load balancing.• Continue the Cybersecurity Awareness Training to all employee via an online training platform.• Created numerous online forms to collect data related to COVID-19, for example:

- Survey on travelling to/from affected states- Employees’ declaration: COVID-19 hotspots (if stay/visited relative)- Declaration form to return to work- Surau check-in form- Vendor health declaration form

• Published digital content to increase awareness of COVID-19 related messages:- Videos, posters, articles and quiz via SAM eHub- Videos and posters via digital signage at common areas like lobby and canteen- Important announcement and updated information about COVID-19 via SAM internal web portal; SAM Portal

ETHICS & COMPLIANCE

We require all our employees to maintain the highest standards of conduct and integrity when conducting business with customers, suppliers and other stakeholders. In addition, we do not tolerate any breach of the company’s Code of Conduct and encourage our employees to highlight any instances of malpractice and non-compliance.

Standards of Conduct, Business Ethics & Conflict of Interest

Our Code of Conduct (“Code”) comprises policies on Standards of Conduct, Business Ethics and Conflicts of Interest. The Code encompasses the following policies:

i) Conflicts of Interest ii) Anti-Bribery & Corruption iii) Gifts and Entertainment iv) Confidential Informationv) Insider Trading vi) Money Laundering vii) Compliance with law and regulationsviii) Whistle Blowing

How our employees behave is also governed by our Core Values which form the foundation of our culture, who we are and aspire to be. They are as follows:

1. Integrity 5. Compassion

2. Righteousness 6. Serving Others

3. Courage 7. Value Creation

4. Commitment



Good Corporate Governance

We believe that good Corporate Governance is a pre-requisite for SAMEE to build sustainable long term value for its shareholders. We are therefore guided by legislative and regulatory requirements, including corporate governance best practices published by the relevant authorities. Our Corporate Governance Overview Statement forms part of our Annual Report and can be found on page 47 to 60.

Whistle Blowing Policy

The Whistle Blower Protection Act 2010 provides the guide in formulating the Whistle Blowing Policy (“WBP”) of SAMEE. This WBP provides the assurance and confidence to our employees and external parties that we have an effective channel to report on any activity that breaches our Code of Conduct and/or any breach of ethics or omission by an employee of SAMEE.

Our WBP can be accessed from our website: [ https://www.sam-malaysia.com/corporate-governance.html ]. Whistle blowers may also use the e-mail address provided in the website to write in. E-mails will be received directly by the Chairman of our Audit Committee where it will be handled at a level appropriate to the complaint being made.

We confirm that there was no complaint received during the period of reporting.

Anti-Bribery & Corruption Policy

As at 1 June 2020, Section 17A of the Malaysian Anti-Corruption (“MACC”) Act 2009 was enforced despite speculation that the enforcement may be delayed due to the COVID-19 pandemic crisis. The implementation of Section 17A of the MACC Act 2009 as promised showed the seriousness and commitment of Malaysia’s stance on corporate liability issues.

The Anti-Corruption Amendments will require Public Listed Companies (“PLCs”) on Bursa to establish and implement policies and procedures on anti-corruption and whistleblowing to prevent corrupt practices, which will enable PLCs to have a measure of defence against corporate liability for corruption under Section 17A of the MACC Act. In addition, the Anti-Corruption Amendments require PLCs and their board of directors to review the policies and procedures periodically or at least once every three years to assess their effectiveness. The Anti-Corruption Amendments also require PLCs to ensure that corruption risks are included in the annual risk assessment of PLCs and their group of companies.

The mantra of management in SAMEE has always been “No Bribery, Zero Corruption” in all aspects of our business, even before the enforcement of Section 17A of the MACC Act 2009. Our policies guide us in our approach on ethical business conduct in our day-to-day operations. Our Anti-Bribery and Corruption Policy can be accessed from our website: [ https://www.sam-malaysia.com/corporate-governance.html ].

As part of our awareness campaign, we engaged an external professional consultant to conduct a workshop for our employees on Section 17A of the MACC Act 2009. In addition, we also invited representatives from the MACC themselves to conduct two special briefing sessions for our Managers and Section Heads on what the changes to the law means for companies and for general awareness on anti-bribery and corruption (“ABC”) initiatives.

SUPPLY CHAIN MANAGEMENT

Sound supply chain management and solid procurement practices ensure our business grows on a solid platform. Suppliers are our valued business partners and we always stress the importance of collaborating with them especially on project and product developments. This is to ensure there is a good understanding of our needs and their ability to meet our product quality expectations.

https://www.sam-malaysia.com





In this area, SAMEE is guided by the following procedures and documents:

• Quality Procedure• Purchasing Policy• New Vendor Selection and Registration• Vendor Performance Review• Approval Authorisation Policy• Quality Surveillance

Supplier Screening

The Procurement Department showcases the integrity and ethical practices of the whole group. Prior to the appointment of a supplier, our Procurement Department will ensure that the supplier agrees to our terms and conditions including our Code of Conduct, governing laws stipulated in our Purchase Order (“PO”) forms, and to our material, product and finishing requirements, specifications and regulatory obligations. Each business segment is required to comply with requirements stipulated by the specific industry, as well as undertake requirements specified by key stakeholders, such as our customers.

Our suppliers are evaluated by a set of stringent criteria, ranging from quality systems, manufacturing process control, relevant system certifications such as AS9100D/ISO9001, equipment suitability and management for the respective industry. We focus primarily on leadership, governance, data protection, product safety, customer privacy and ethics. Our bottom-line is to ensure that we meet the customer’s high product quality requirements.

Our supply chain management standards within the electronics supply chain is based on ESG stipulations set by the Responsible Business Alliance (“RBA”). Therefore, for our direct material suppliers and for suppliers with high PO values in the Equipment division, we assess the quality of their products and their compliance with the Code of Conduct by RBA via their Validated Assessment Process (“VAP”) and Self- Assessment Questionnaire (“SAQ”) score. We also screen suppliers based on the availability of ISO management systems and certifications.

Supplier Engagement

The management of our supply chain gives us the opportunity to build collaborative relationships with our vendors and suppliers.

We constantly present our suppliers with an annual supplier performance score card. This is evaluated against criteria such as On-Time-Delivery and Quality Escape. To keep our suppliers and vendors updated about what is important to us, we send our audit checklist to them annually. We also engage our suppliers to receive and to give feedback on the services rendered.

CHART 2: BREAKDOWN OF SUPPLIER ORIGIN

Local Purchase Foreign Purchase

Local Purchase48%

Local Suppliers

This year, 48% of our total purchase are from local industries, an increase of 1% from FY2020. They are our contractors and suppliers of direct materials and indirect materials.

We acknowledge our duty as a responsible corporate citizen to create business opportunities and giving back to our community.

We perform on-site supplier audits on our top three raw material suppliers and top 5 spending vendors. We use the VAP checklist and Quality Management Systems checklist to perform our supplier audits annually. Findings from the audit are communicated to the supplier for their further action. Suppliers are then required to communicate their action plans and enact them within 2 weeks if any issues of non-conformance are identified.

SAMEE ensures that all its material suppliers declare their supplies are derived from conflict-free nations. We continue to emphasise the practice of conflict-free mineral sourcing as we require our material suppliers to submit the Conflict Minerals Reporting Template (“CMRT”), which states the mineral country of origin and the smelters and refiners being utilised.

Breakdown of Suppliers by Demographic



OUR ENVIRONMENTAL MANAGEMENT

SAMEE has its own Environment Policy that ensures responsible environmental management and the conservation of resources while promoting responsible consumption. SAMEE understands that every step it takes, has an impact on the environment, be it positive or negative. As a result, we make an effort to monitor and manage the output of our activities, to ensure minimal negative impact on the environment and that our activities strictly adhere to the relevant environmental laws and regulations.

WASTE & HAZARDOUS MATERIAL MANAGEMENT

At each of our manufacturing facilities, we have established processes and procedures for handling industrial and hazardous waste comprising sludge, spent activated carbon, contaminated rags and containers and non-hazardous waste such as food and office waste.

SAMEE continues to see a decline in the total amount of scheduled waste being disposed. During FY2021, we disposed a total of 284.66 metric tonnes of hazardous waste. This is a 19.5% drop compared to the just 7% reduction in our revenue compared to FY2020. We have therefore improved on the amount of scheduled waste per ringgit of revenue. This improvement is attributed to our focus on sustainable cost management and the changes in the mix of our Equipment and Aerospace businesses in FY2021.

CHART 3: TOTAL AMOUNT OF SCHEDULED WASTE DISPOSED (MT)

FY2019 FY2021

448.40

FY2020

353.38

284.66



Management of Scheduled Waste

Robust management systems and experienced personnel at our operations effectively monitor and manage hazardous and non-hazardous waste generated. Below we show our key efforts in waste management:

FIGURE 5: MANAGEMENT OF SCHEDULED WASTE

Licensed waste contractors

Appropriate waste storage on-site

Trained and experienced personnel

On-site inspections

Only licensed waste contractors are engaged for collection and disposal of hazardous waste, as authorised by local regulators.

All hazardous waste is stored and appropriately labelled on site to prevent waste contamination and leakage.

Our facility team is experienced and appropriately skilled. Our Facility officer for Scheduled Waste Management attended the following course: Certified Environmental Professional in Scheduled Waste Management (CePSWaM).

Regular inspections performed by facility personnel on waste storage and other facilities to ensure appropriate handling of scheduled waste.

We continue to ensure the wastewater effluent discharged is within the effluent quality standards required by local regulators. As we continue our effort to practice resource efficiency, the total amount of effluent decreased by about 53%. This decrease is also partly due to the changes in the mix of our Equipment and Aerospace businesses in FY2021.

A by-product at our facilities is wastewater effluent. On-site treatment plants ensure wastewater effluent discharged are within the effluent quality parameters required by local regulators. As we continued our effort to practice resource efficiency, the total amount of effluent decreased by about 53%, partly due to the different business composition and lower sales in Aerospace division.

Waste Reduction

We are always seeking ways to practice resource efficiency. Some of the initiatives performed by us are shown below:

CHART 4: TOTAL AMOUNT OF EFFLUENT (LITRES)

FY2019

40,180,670

FY2020

44,723,739

21,194,129

FY2021

Initiatives in improving Resource Efficiency

TABLE 7: SAMEE’S RESOURCE EFFICIENCY INITIATIVES

Focus Area Initiative

Lowering consumption of coolant used

This year, through machinery and process optimisation, coolant was recycled on time, we successfully lowered our consumption of coolant used, thus lowering the volume of spent coolant. As opposed to 313.28MT, we were able to reduce it to 238.56MT.

Waste reduction Wastewater generated from our chemical line was fully treated through our waste water treatment plant and minimum waste was generated. We are also in compliance with the local regulator’s requirements.



SAMEE aims to play an active and significant role in reducing its carbon footprint. We voluntarily monitor greenhouse gas (“GHG”) emissions and energy reduction efforts, in order to play a meaningful role in the reduction of GHG emissions each and every year.

Energy Consumption

It is inevitable that being a manufacturing entity, the consumption of energy will be a significant expense at all our manufacturing facilities.

In FY2021, our facilities consumed 29,554 MWh of electricity, a 7.8% decrease in consumption from FY2020, primarily due to reductions in operating activities. Our energy intensity has also decreased slightly from 34.6 MWh to 34.3 MWh per RM million of net revenue. We continue to focus on improving the energy efficiency in our plants. In our offices, we also encourage our employees to set all air-conditioners to between 22 to 24 degrees Celsius, as per the recommendation by the Malaysian government.

CHART 6: ENERGY INTENSITY (MWh PER RM MILLION NET REVENUE)

FY2021

34.3

FY2020

34.6

FY2019

39.2

CHART 5: ELECTRICITY CONSUMPTION (MWh)

FY2019

29,283

FY2020

32,045

FY2021

29,554

ENERGY MANAGEMENT



OUR PEOPLE

SAMEE believes its human capital is its greatest and most valuable asset. As a result, we emphasise the continued investment in our human capital as we strongly believe that our people are the force that will propel us towards long term growth and success. We encourage our leaders to continuously engage with our employees to ensure that they understand our mission, culture, best practices and most importantly, our commitment to our Sustainability Statement.

We strive to ensure that our employees gain satisfaction from their work while providing them a structured career development path with opportunities for growth within the Group. We also take the health and safety of our employees seriously as we believe that we owe them a duty of care as a responsible employer.

LABOUR PRACTICES

Commitment to Labour Rights

We foster an inclusive and diverse work environment as we emphasise upholding the labour rights of our employees. Our Code of Conduct and other labour policies protect labour rights and is based on local employment regulations, such as the Malaysian Employment Act 1955, and relevant industry standards, such as the RBA Code of Conduct 6.0. Some of the labour rights we uphold include:

ILLUSTRATION 1: LABOUR RIGHTS UPHELD AT SAMEE

HUMANE TREATMENT

SAFE WORKPLACE

NO DISCRIMINATION

NO CHILD LABOUR

FAIR WAGES

WORKED HOURS

NO FORCED LABOUR

In the previous financial year, our Human Resource Department underwent a restructuring where we created a position whose responsibility includes compliance and the oversight of human rights and labour rights issues while seeking ways to strengthen sustainability issues within SAMEE. In addition, we conducted workshops relevant to labour-related laws and regulations. As an example, eight short virtual training sessions were conducted on handling misconduct and the management of other labour practices. These sessions covered a total of 462 participants.

Grievances Mechanism

Employees need to have an avenue to vent their dissatisfaction or grievances so that issues can surface and be addressed at an early stage, before they are able to spread and affect morale.

At SAMEE, we have put in place a grievance mechanism for this purpose. A process flow is in place for any employee to report any grievances, dissatisfaction or even a breach of our Code of Conduct. We also provide an avenue for anonymous complaints.



Migrant Worker Management

All our employees are treated with the same level of respect, regardless of gender or nationality. All deserve equal treatment.

As an example, all our non-Malaysian employees in Malaysia are “permanent” employees on our payroll instead of being hired on a fixed term contract. This means they enjoy the same terms and benefits as our local employees. It is our policy that all our migrant workers do not pay recruitment fees or tie themselves down in debt by joining us. Our migrant workers enjoy having their own bank account in Malaysia and we remit their wages directly into their bank account. In addition, our migrant workers hold on to their own passport.

Independent Verification

SAMEE adopts the standard practice where our operations are independently reviewed via third party verifications on an ad-hoc basis. Independent verifications are conducted by our customers, regulators, and independent auditors and these rigorous audits assess the robustness of our systems to manage potential environmental, social and governance issues, including labour rights and human rights, in accordance to relevant laws and regulations as well as specified best practice.

In FY2021, this practice was maintained, and no major findings were recorded.

DIVERSITY & INCLUSION

Our Employees

CHART 7: EMPLOYEE BREAKDOWN BY AGE GROUP

FY2019 45% 46% 9%

FY2020 45% 46% 9%

FY2021 40% 49% 11%

Below 30 30-50 Over 50

In terms of gender balance, we do not set any targets. However, we do strive to achieve a balance of genders at a departmental and Group level. For example, where departments tend to have more of one gender (e.g. females for support functions), we try to rebalance the numbers accordingly to achieve a better balance. However, at the Group level, where there are more males, we make an effort to identify female candidates, especially for technical positions where female applicants tend to be the minority. This approach has yielded a gradual but steady growth in the female population in general despite the field of engineering being still a male-dominated field. This is true both among our management specifically and among our employee population in general.

TABLE 8: EMPLOYEE BREAKDOWN BY GENDER

Employee byGender FY2019 FY2020 FY2021

Male (All levels) 82% 81% 80%

Female (All levels) 18% 19% 20%

Male (Management level) 71% 72% 70%

Female (Management level) 29% 28% 30%

We believe in investing and giving the younger generation a chance to contribute to the success of our long-term growth. The inclusion of younger staff especially those who are technology savvy allows us to join the forefront of the rapidly changing trends in innovation and technology. This has allowed us to see innovation and improvement in our distinct and quality product offerings.

In terms of age demographics, our mix of employees at different age groups has remained fairly constant over a number of years. However, the effects of the pandemic on our business have led to a change in the mix for FY2021. The competition in the market has led to movements among the younger and potentially more mobile employees. The proportion of our younger employees among our overall employee population has therefore shrunk compared to previous years. Nevertheless, the overall mix remains healthy.



Voluntary Employee Turnover

The improving downward trend of our voluntary turnover rate over recent years changed significantly in FY2021 due mainly to the COVID-19 pandemic and its related consequences in the countries where we operate. Our Equipment business which supports the semiconductor and data storage industry experienced a boom during the reporting period as the pandemic has significantly changed the way businesses operate. This has led to a surge in demand for the profile of employees SAMEE typically hires. Since the Equipment business is a major employer where we have the majority of our employees, there is increased competition in the market for the same pool of resources. The closing of borders and related travel restrictions has also resulted in the inability of companies to replenish their supply of migrant workers. This has forced companies to rely on the local community for their workforce to a much higher degree than usual. These factors above have combined during the pandemic to cause our attrition rate to rise in FY2021.

CHART 8: VOLUNTARY TURNOVER RATE

FY2019

19%

FY2020

16%

24%

FY2021

EMPLOYEE LEARNING & DEVELOPMENT

We believe in investing in our employees at all levels. This investment is important as it would ensure that our employees stay relevant in our ever-evolving business and to push the boundaries of innovation in order to respond to the needs of our customers and shareholders. In this effort we are guided by our Training Policy.

Maintaining a Skilled Workforce

SAMEE conducts an annual Training Needs Analysis to understand the development needs of our employees. This allows us to identify the knowledge and skills gaps within the organisation against external factors, such as industry and regulatory changes, employee expectations and the latest innovation and technological advancements.

We also place great importance on ‘On-the-Job’ training (“OJT”) as we believe that our workforce will be able to gain more from first-hand technical experiences. Because of this, we have traditionally offered more hours of OJT than classroom training.

Employees are trained by internal subject matter experts or external trainers on the application of new methods and on the new machinery and systems used at our company. To ensure that our products and services are of the highest quality, we offer an annual training on Quality Improvement tools to educate and ensure our employees are kept abreast of latest developments in quality management systems. Soft skills training and team building activities are also arranged to build team spirit and ensure our employees are aware of the latest leadership and management thinking, approaches to stress management, and people management.

There has been a significant reduction in training hours and expenditure in FY2021 primarily due to the effects of the pandemic, the movement control orders (MCO) in Malaysia and circuit-breaker in Singapore, together with the enforced absence of physical classroom sessions and the slowdown in some of our businesses. Where programmes were conducted, many moved on to a virtual platform.



TABLE 9: TRAINING CONDUCTED IN FY2021

Type of Training Key areas covered in the training Target Attendees

Technical Training

Statistical Problem-Solving Training

Participants are trained on the statistical tools used, such as Failure Modes and Effects Analysis (“FMEA”), 8D Problem Solving, 7 Basic Quality Tools, Geometric Dimensioning and Tolerancing (“GD&T”), Poka Yoke and Root Cause Analysis

Engineers and Technicians

Soft Skills Training

Management and Development Training

Employees are trained on Project Management, People Management, Communication Skills, Customer Service, Negotiation for Win-Win Deal, Positive Work Attitude and Email Writing Skills

All employees

Quality Management System

Employees are trained on ISO9001:2015 standard and AS9100 standard All employees

Safety and Health Training

Safety Management

Employees are trained on topics relating to safety awareness, such as First Aid and CPR, Forklift Driving, Chemical Handling, Hazard Identification, Risk Assessment and Determine Control (HIRADC), Workplace Ergonomics, Human Behaviour Base Safety, 5S Training, COVID-19 awareness and related briefing

All employees

IT Training

IT Related Training Employees are trained on the functionality of Microsoft Office, such as Microsoft Excel (Intermediate / Advance), Excel Macro and Pivot Table

All employees

On-Job Training

Machinist Training Employees are trained on machine functionality and handling method Machinist

QA Inspector/ Technician Training

Employees are trained to inspect and calibrate machines safely QA inspector/ technician

Engineer training Employees are trained on programming, systems, machineries, process and procedure knowledge

Engineers

OJT also significantly reduced due to a reduction in our hiring activities as OJT is closely linked to new entrants to our workforce. In FY 2021, we spent RM275,807 on training.

Structured OJT Classroom Training

CHART 9: TRAINING HOURS

FY2019 FY2020

39,337

33,926

42,057

34,421

FY2021

12,75417,389



EMPLOYEE HEALTH & SAFETY

We are committed to providing a safe and healthy workplace for all our employees. We rigorously manage the potential risks associated with hazardous activities and processes, such as those with the potential to result in injuries related to fires, explosions and the sudden release of toxic materials.

We emphasise on preventive measures and have a robust safety management system in place. We adhere strictly to the Occupational Safety and Health (“OSH”) Policy which guides our operations and applies to all our facilities and employees at all levels. In addition, we review the OSH Policy annually.

Dedicated Safety Governance

Our Group Environmental Health & Safety (“EHS”) Committee guides and provides direction to all employees on health and safety matters. Each site has a dedicated and qualified EHS Committee which works closely with the Group EHS Committee. On top of assisting in the development of safety and health systems, and reviewing the effectiveness of safety & health programmes, the following are some of the key roles and responsibilities of the EHS Committee:

Responsibility of EHS Committee

Instilling Safety Culture

We believe that each individual employee has a responsibility in cultivating a culture of ensuring workplace safety in achieving our target of “Zero Accident & Zero Compound”. All new employees are briefed on our safety culture and policy. This safety measure is also extended to our contractors during our annual contractors EHS awareness training.

FIGURE 6: RESPONSIBILITIES OF OUR EHS COMMITTEE

Safety officers advise and monitor the Group’s compliance with relevant laws and regulations, and review and

update safety & health policies

Assigned medical services in the vicinity (i.e. 24-hour clinic, specialist

centre & district government hospital)

Carry out studies on accident trends, incidents and diseases

Perform advisory measures on safety & health measures on ergonomic

issues such as lifting aid for manual handling tasks

Meet bi-monthly to review regulatory and license compliance monitoring

programmes

Provide medical surveillance for occupational health monitoring

(i.e. lead monitoring, acid and organic solvent monitoring)


Safety Training Undertaken / Conducted

Below is a list of safety training programmes undertaken by our employees:

TABLE 10: SAFETY TRAINING UNDERTAKEN IN FY2021

Safety Training Programmes in FY2021

Hearing Conservation Training

5S Training

6S Briefing

Amalan Memandu Forklift Yang Selamat

Awareness Briefing on Incident Case

Basic First Aid and CPR

Briefing on How to Fill Up Sanitising Checklist

Briefing on Social Distancing, Wearing Face Mask & Sanitising with Checklist at Workplace

Briefing on the Obligation and Necessity to Wear Safety Goggles at Workplace

COVID-19 Awareness - Correct Method to Wear Face Mask

COVID-19 Awareness - Practicing Social Distancing At Production Floor and Smoking Area

EHS Awareness

Hazard Identification, Risk Assessment and Risk Control (HIRARC)

Kursus Pengendalian dan Keselamatan Overhead Crane

NFPA 70E Standard for Electrical Safety in the Workplace

Safe Chemical Handling

Shaping Human Behavior Through Mindset Alignment in Achieving Safety Goals

Taklimat Berkenaan Selamat, Sihat dan Produktif di Tempat Kerja

Updates on Occupational Safety & Health (Noise Regulation) 2019 & Icop 2019 and Environmental Noise

Workplace Ergonomic Risk Assessment Awareness Training

We also established an emergency response team (“ERT”) who prepare for and respond to any emergency incidents on site. These individuals attend a compulsory competency certification training to ensure that they are prepared for any incidents. To complement their training, we ensure that they are informed of the procedure to report accident and medical cases.

RESPONSE TO COVID-19 PANDEMIC

The COVID-19 pandemic has definitely created a new normal in the way we carry out our work. Our priority is the safety and health of our employees and we make an effort to protect them by ensuring their exposure to the risk of infection is as low as possible, even to the extent of taking punitive action to enforce compliance with all prevailing Standard Operating Procedures (“SOPs”).

In addition to the SOPs by relevant authorities, SAMEE has also developed its own set of SOPs which are strictly enforced at our facilities. These include; 1. Setting Up a Pandemic Management Committee (“PMC”)

A PMC was set up to manage the effects of the Pandemic on a day-to-day basis. It is chaired by the Chief Operating Officer (“COO”) and coordinated by the heads of the HR and Environment, Health & Safety (“EHS”) functions. The PMC is the operational decision-making committee whose members consist of the EHS representatives of the various sites together with senior Operations Managers from these sites. The meeting frequency is dictated by the level of severity of the pandemic situation. In general, it meets about once a week.



2. Being Socially Responsible and Practicing Good Hygiene

The following are good practices that were implemented to help reduce and contain the spread of the virus and other kinds of infectious illnesses. We encouraged our employees to practice them through reminders and publicity material placed at various places around our sites:

- Maintain appropriate social and physical distancing at all times, especially those who are showing symptoms of illness (and to also escalate such cases to management so that they may dealt with appropriately);

- Observe good personal hygiene e.g. practise frequent hand washing with soap;- Wear a mask at all times and to wear it properly according to SOP; and- Seek medical attention promptly if feeling unwell.

3. Reporting Sick

Employees who are feeling unwell with the following symptoms should consult a doctor and not come to the office:

- Registering a body temperature of 37.5 degrees Celsius and above; - Respiratory symptoms like cough, running nose, shortness-of-breath / difficulty breathing;- Loss of taste / sense of smell;

Employees are required to update HR and their immediate supervisor if they have any of the above symptoms and the results of the doctor’s diagnosis.

4. Daily Temperature and MySejahtera Application Scanning

All employees will have their temperature scanned on entering the work site and this will be recorded for reference. Employees are also required to use the MySejahtera app to scan their work location when entering the work premises.

5. Availability of Hand Sanitisers and Oximeters

All sites have arranged hand sanitisers to be placed at various locations, especially at the entrances to various sections. Employees are encouraged to use them regularly.

Oximeters have also been made available at various sites as it has been shown to be able to indicate signs of respiratory distress prior to the onset of any symptoms associated with COVID-19 infections.

6. Lunch / Dinner Procedures

While the Movement Control Order is active, employees are not allowed to leave the premises and packed meals will be available for purchase. Food deliveries are also banned. This is to reduce the risk of contagion from external sources. Our Canteen Operators are also required to wear a face mask and gloves at all times.

7. Social / Physical Distancing

It is recommended that employees maintain a distance of about a meter apart from one another at all times, even when others may not exhibit any symptoms. This is to reduce the risk of infection. As such, arrangements have been made to ensure there is sufficient space between employees in their daily work activities. Employees must stand, aligned with markers on the ground or on tables where applicable.

The size of physical meetings will depend on the size of the rooms. Depending on the level of pandemic severity, sometimes physical meetings are not allowed at all and are conducted virtually. The PMC will dictate what guidelines for meetings apply at any given period.

8. Overseas Travel

All work-related travel abroad was suspended. Approval for unavoidable work-related travel must be obtained from the Chief Executive Officer (“CEO”). Should work-related travel be unavoidable, we will cover the cost of any additional medical insurance, leave-of-absence/stay-home-notice/quarantine requirements imposed by the relevant authorities and the destination countries.



9. Declaration of Direct / Indirect Interaction with Confirmed / Suspected COVID-19 Patients

It is mandatory for employees to declare to HR and their supervisors if they, or any of their family / household members living with them, have been in close contact with the following person(s):

- who have been diagnosed with COVID-19; - who is serving any Quarantine; and- who is pending any COVID-19 test outcome.

Employees are required to declare within 24 hours of awareness, even over a weekend or public holiday. Those who fail to make a timely declaration may be subject to disciplinary action. Such declarations will then be matched against the Company’s Proximity Protocol so that the appropriate decisions on tests, quarantine etc. may be made.

10. Face Masks / Face Shields

All employees/sub-contractors working at our sites are required to wear face masks which are provided. In addition to face masks, security guards and individuals who by their nature of work are unable to maintain appropriate physical distancing at all times, will be required to wear a face shield. Appropriate disciplinary action will be taken against employees who fail to comply with the guidelines. The mandatory use of the masks/face shields will be reviewed from time to time and our policy will adjust to prevailing circumstances.

11. Disinfection and Cleaning at Sites

We consistently undertake disinfection activities at various key areas (e.g. canteen). We also increase the frequency of the cleaning of office areas and frequently touched surfaces like door handles.

12. Visitors / Suppliers / Contractors

Visitors to any SAMEE site will need to undergo temperature scanning on entry and the process will be similar to point #4 above for employees. They will also need to make a health declaration. Security has been briefed to flag any concerns they may have about any visitor.

13. Migrant Workers

Our migrant workers are provided with Company transport and accommodation and must therefore adhere to strict protocols when using such facilities.

Company Transport – Some of the protocols include:

- To queue in an orderly fashion and respect social distancing measures when boarding- Wear a mask during the journey.- To comply with seating arrangements such that social / physical distancing is respected.

The transport will also be arranged to create a “transport bubble” such that employees from different sites do not meet on the bus.

Accommodation – Where our employees are provided with accommodation, the accommodation will also be arranged such that the employees in a specific accommodation are from the same site. This creates an “accommodation-to-site bubble” that reduces the opportunity for cross infections between other sites.

Testing – A sample of our migrant workers will be subject to COVID-19 testing every week so that any potential positive cases can be detected early and any possible spread is arrested in its early stages.

14. Working from Home

Employees who have been scheduled or designated to work from home will need to remain physically present at home during working hours. Working at cafes or some other location is prohibited as one of the main reasons for this arrangement is to keep employees safe and ensure they stay away from others and potentially external sources of contagion.



15. Audits

SAMEE carries out cross-site audits where representatives from one site audits a different site on compliance with SOPs and guidelines. The reports are made, presented at the PMC and follow-up action taken against infringements. CCTVs are also used to monitor compliance.

16. Publicity and Communication

SAMEE engages with employees through a variety of media to ensure everyone is kept updated of the latest situation and measures taken by the Group to ensure their health and safety. E-mails, screensavers, mobile-phone apps, videos and posters are used to reach as many people as possible. Our communications are in both English and Malay whenever possible to improve understanding and compliance with our measures and policies.

The measures undertaken above are part of a comprehensive plan developed over a period of time to address what is an evolving situation. As such, these measures may change to accommodate changing scenarios required to ensure our measures remain relevant and effective.

EMPLOYEE WELL-BEING

Our employee benefits include a range of plans and programmes that are intended to attract, retain and motivate the high performing employees we depend on for growth and success. We are guided by our Human Resource Policies and the laws of the countries in which we operate. Below are descriptions of our efforts.

TABLE 11: TYPES OF EMPLOYEE BENEFITS AT SAMEE

Type of Benefits Description

Life insurance and medical benefits

As we place a great importance on the health of our employees, we ensure that our full-time employees are covered by insurance and medical benefits as follows:a. Outpatient (GP and Specialist) Coverageb. Dental and Health Screening Benefitsc. Hospitalisation and Surgical, Personal Accident and Term Life Insurance coverage which vary by

employee categoryd. Hospitalisation Leave e. Maternity Leave

Health and wellness

a. Our Sports and Recreation Committee periodically organises competitive sports activities (e.g. badminton, futsal and bowling) together with other non-sporting activities like a blood donation drive and a baking competitions.

b. We offer: • flexible work arrangements – we allow employees some flexibility to choose when they start and

end their workday • claims for health screening, lab tests and dental treatments• yearly surveillance tests (for those exposed to chemicals, loud noise, etc.)

Remuneration, rewards and recognition

a. In appreciation of our employees who have achieved the milestone years with SAMEE, we give them Long Service Awards. In FY2021, 79 people received these Awards.

b. To reward our employees for their hard work, we offer:• Annual Increment• Contractual Bonus/Annual Wage Supplement• Performance Bonus• Profit Sharing Bonus• Employee Share Grant Scheme

Other benefits a. Travelling Allowanceb. Supporting symbolic occasions in our employee’s lives, such as wedding celebrations and birth of

children



LOCAL COMMUNITIES & INDIRECT ECONOMIC IMPACT

Promoting Employment of Local Youth

We contribute to developing the next generation of STEM graduates and business leaders through our sought-after internship programme. In FY2021, we hired 48 interns. This was a significant drop from the more than 200 we used to take in in previous years. This was because some schools temporarily froze their internship requirements due to the movement restrictions resulting from the pandemic. The uncertainties linked to the restrictions in the early days of the pandemic also caused us to put the intake of Interns on hold temporarily.

TABLE 12: HIRING OF INTERNS

Hiring of InternsFY2019 FY2020 FY2021

Total Interns Hired 226 214 48

Total Interns Becoming Staff of SAMEE 44 35 12

In FY2021, the hiring of interns has decreased due to the pandemic. However, hiring interns has long been a priority for us because it provides employment opportunities for local youth, increases brand awareness in the market, and ensures that we are able to hire those who are already accustomed with the working culture of our company, increasing the probability that those hires remain committed to us. Hiring candidates who already have a strong knowledge of our culture, processes and systems, and have already built relationships throughout the organisation creates a friendlier and more cordial working environment. The statistics for FY2021 are therefore an aberration and we aim to continue our growth in this area moving forward.

Our Efforts in Education

SAMEE believes in the power of education, hence we run an education sponsorship programme called Titian Harapan. The programme aims to support students from low-income families in Penang, together with children of our Malaysia-based employees and students in the Penang Skills Development Centre (“PSDC”).

To support students from low-income families, SAMEE contributes toward school necessities like purchasing schoolbooks, uniforms and shoes, and payment of tuition fees.

We also provide financial assistance to students at the PSDC. We sponsor course fees and a monthly allowance to students. Upon graduation, the students are placed on a trainee program with SAMEE and are then awarded a full employment contract if the necessary hiring criteria are met.

Titian Harapan expenditure reduced from RM165,500 to RM117,950 because some classes at the Penang Skills Development Centre (PSDC) were impacted due to the pandemic. However, we did take the opportunity to sponsor two fresh graduates under a newly introduced Workforce Reconciliation Action Plan (“WRAP”) which was done in conjunction with the PSDC. The two graduates have subsequently become our employees as Engineers.


OUR COMMUNITIES

SAMEE believes in giving back to society, in this case, the communities in which we are located, while investing in the future of our next generations. The communities around us form a significant pillar in our growth especially when many of our employees come from these same communities. As we perform our social responsibilities, we encourage our employees to volunteer for the causes we believe in as they develop their compassion and empathy towards society.



SAMEE donated 10 Laptops to the Low Risk Covid Centre (LRCC) in Balik Pulau. The laptops are targeted for use for the remote registration of COVID-19 patients and for storage of patient’s X-Ray scans. The total cost was RM32,000.

We also donated 5,000 masks each to Majlis Bandaraya Pulau Pinang and the Penang Chief Minister’s Office.

During FY2021, we also ran two blood donation sessions in Malaysia. One each on the island and mainland of Penang where a total of 85 employees participated.

TABLE 13: TITIAN HARAPAN PROGRAMME

Titian Harapan ProgrammeFY2019 FY2020 FY2021

Number of Students sponsored at Secondary level 156 153 158

Number of Students sponsored at Post-Secondary level 14 12 9

Total number of students sponsored 170 165 167

Total Sponsorship Amount (RM) 162,860 165,500 117,950

Community Programmes

In addition to our long-running programmes, we are active in community engagement, focusing on specific fundraising events and charities. Some of the programmes undertaken this year are shown below:

FIGURE 7: COMMUNITY ENGAGEMENT PROGRAMMES IN FY2021

BLOODDONATIONPROGRAMME

A total of 85 employees participated inthe programme

MASKSDONATION

We donated 5,000 masks to MBPP and CM’s Office

We donated 10 laptops to the Low Risk Covid Centre in Balik Pulau, at a total cost of RM32,000

LAPTOPSPONSORSHIPTO LRCC


PARTICULARS OF PROPERTIESheld as at 31 March 2021

Location Tenure Area(sq. ft.)

Build-uparea

(sq. ft.)

Description Approximateage of

building

Expirydate

Date of revaluation

Net BookValue at31 Mar 2021

(RM’000)

SAM PRECISION (M) SDN. BHD.Plots 31-34 Lengkok Kampung Jawa 2,Bayan Lepas Non-Free Industrial Zone, Phase 3, 11900 Penang, Malaysia.

Leasehold60 years

54,013 33,500 Office &Factory

37 years 22 November

2041

14 August2009

2,313

SAM PRECISION (M) SDN. BHD. / SAM TOOLING TECHNOLOGY SDN. BHD. Plot 77, Lintang Bayan Lepas,Bayan Lepas Industrial Park,Phase IV, Non-Free Industrial Zone,11900 Penang, Malaysia.

Leasehold60 years


21 years 16 June 2057

14 August2009

6,974

MEERKAT PRECISION SDN. BHD. / CORPORATE OFFICE Plot 17, Hilir Sungai Keluang Tiga, Bayan Lepas Free Industrial Zone, Phase IV, 11900 Penang, Malaysia.

Leasehold60 years


25 years 14 May 2051

14 August2009

11,557

SAM MEERKAT (M) SDN. BHD. Plot 103, Hilir Sungai Keluang Lima, Taman Perindustrian Bayan Lepas 4,11900 Penang, Malaysia.

SAM MEERKAT (M) SDN. BHD. Plot 104, Hilir Sungai Keluang Lima, Taman Perindustrian Bayan Lepas 4,11900 Penang, Malaysia.

Leasehold60 years

Leasehold60 years

176,629

148,218

92,500

134,000

Office &Factory

Office &Factory

15 years

14 years

18 December

2074

23 April 2068

17 August2009

17 August2009

9,115

9,556

Note:1. The land area disclosed herein based on the survey conducted by Jabatan Ukur dan Pemetaan Pulau Pinang.

SAM PRECISION (M) SDN. BHD. SAM PRECISION (M) SDN. BHD. / SAM TOOLING TECHNOLOGY SDN. BHD.

MEERKAT PRECISION SDN. BHD. / CORPORATE OFFICE

SAM MEERKAT (M) SDN. BHD.


CORPORATE GOVERNANCE OVERVIEW STATEMENT

The Board of Directors of SAM Engineering & Equipment (M) Berhad (“Company” or “SAMEE”) is committed in ensuring that the Company meets the principles and applies the practices of corporate governance as set out in the Malaysian Code on Corporate Governance 2017 (“Code”).

The Board steadfastly believes that such principles and practices of the Code are essential to uphold the business integrity of the Company and its subsidiaries (collectively, the “Group”) and to enhance shareholder value.

The Group in their conduct of business and management are not just guided by the Code but also by their Core Values which balances the commercial and financial success with the interests of all stakeholders. These Core Values are set out on the Company’s website.

This corporate governance overview outlines the corporate governance practices which have been applied by the Board of the Company during the financial year ended 31 March 2021 (“FY2021”), where possible, and applicable laws to be a dynamic framework within which the Group would conduct its business. Please note that the following statement is to be read together with the Corporate Governance Report, which is available on the Company’s website at http://www.sam-malaysia.com.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

PART 1 - BOARD RESPONSIBILITIES

Intended Outcome 1.0

• EverycompanyisheadedbyaBoard,whichassumesresponsibilityforthecompany’sleadershipandiscollectivelyresponsibleformeetingtheobjectivesandgoalsofthecompany

1.1Strategicaims,valuesandstandards

The Board plays a pivotal role in the stewardship of the Group’s direction and operations, and ultimately the enhancement of long-term shareholder value.

The Board is responsible for the leadership, oversight and overall management of the Group. The Board comprises a combination of the Executive Directors who have intimate knowledge of the business and the Non-Executive Directors with diversified industry/business backgrounds to bring broad business and commercial experience to the Group. The Board has the overall responsibility for corporate governance, establishing goals, strategies and direction, reviewing the Group’s performance and critical business issues and ultimately the enhancement of long term shareholders’ value. It monitors and delegates the implementation of the strategic direction to the Management.

The Board reviews the strategic plan of the Group tabled by Management at its meeting. The review would cover the performance targets and long-term plans for the Group to be met by Management.

Upon the Board being satisfied with the said strategic plan, the Board would endorse the immediate implementation thereof by the Management. The Board would continue to monitor the plan to ensure its implementation.

The Board’s role is to oversee the performance of the Management to determine whether the business is properly managed. The Board gets updates from Management at the quarterly Board meetings when reviewing the unaudited quarterly results. During such meetings, the Board participates actively in the discussion on the performance of the Group.

The Board also has a formal schedule of matters reserved solely for its decisions such as approving acquisitions and divestitures, major capital expenditures, projects and budgets, quarterly and annual financial statements, as well as, monitoring of financial and operating performance of the Group. The oversight of such matters enshrines the Board’s control over the Group.

As part of its efforts to ensure the effective discharge of its duties, the Board has delegated certain functions and responsibilities to the following respective Board Committees:

• Audit Committee (“AC”)• Risk & Sustainability Committee (“RSC”); and• Nominating & Remuneration Committee (“NRC”)

The Chairman of each Board Committee will report to the Board on the outcome of the Committee’s meeting which also includes the key issues deliberated at the Committee’s meetings.

http://www.sam-malaysia.com/


CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (Cont’d)

PART 1 - BOARD RESPONSIBILITIES (Cont’d)

1.1 Strategicaims,valuesandstandards(Cont’d)

Each Committee operates within specific terms of reference that were drawn up with reference to the Code and the Board Committees discharge their duties in accordance to its Terms of Reference.

Notwithstanding the delegation of specific powers, the Board retains full responsibility for the direction and control of the Group. The ultimate responsibility for decision-making on all matters lies with the Board.

1.2 TheChairmanoftheBoard

The Board has elected a Chairman from amongst the members of the Board who is a Non-Executive Director. Mr. Tan Kai Hoe as the Company’s Non-Independent Non-Executive Chairman provides leadership and guidance to the Board and is responsible for ensuring effectiveness of the Board’s performance. Mr. Tan Kai Hoe works closely with the rest of the Board members in forming policies and strategies to align the business activities driven by the Management.

1.3 SeparationofPositionofChairmanandChiefExecutiveOfficer(“CEO”)

There is clear division of responsibilities of the Chairman and the CEO. The Board is led by the Non-Independent Non-Executive Chairman while the executive management are led by the CEO (who, for avoidance of doubt, is also the Executive Director).

The roles and responsibilities of both the Chairman and the CEO are more particularly set out in the Board Charter which is available on the Company’s Website.

1.4QualifiedandCompetentCompanySecretaries

In compliance with Practice 1.4 of the Code, the Board is supported by suitably qualified and competent Company Secretaries. The Company Secretaries play an advisory role to the Board in relation to the Company’s Constitution, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidelines and legislations.

In the event that the Company Secretaries fail to fulfil their functions effectively, the terms of appointment permit their removal and appointment of a successor only by the Board as a whole.

In performing their duties, the Company Secretaries carry out, amongst others, the following tasks:

• Statutory duties as required under the Companies Act 2016, Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”) and Capital Market and Services Act, 2007;

• Facilitating and attending Board Meetings and Board Committee Meetings, respectively;• Facilitating and attending the General Meeting(s);• Ensuring that Board Meetings and Board Committee Meetings, respectively are properly convened and the

proceedings are properly recorded;• Ensuring timely communication of the Board decisions to the Management for further action;• Ensuring that all appointments to the Board and/or Board Committees are properly made in accordance with the

relevant regulations and/or legislations;• Maintaining records for the purpose of meeting statutory obligations of applicable jurisdictions;• Facilitating the provision of information as may be requested by the Directors from time to time in an expeditious

manner and ensuring adherence to Board policies and procedures;• Facilitating the conduct of the assessments to be undertaken by the Board and/or Board Committees as well as to

compile the results of the assessments for the Board and/or Board Committee’s notation; • Assisting the Company on the lodgements of documents with relevant statutory and regulatory bodies;• Assisting the Board with the preparation of announcements for release to Bursa Malaysia Securities Berhad (“Bursa

Securities”) and Securities Commission Malaysia; • Briefed the Board on the latest updates / guidelines issued by Bursa Securities and the Securities Commission

Malaysia; and• Rendering advice and support to the Board and Management.

The Company Secretaries keep the Board abreast with the latest regulatory updates and ensure that deliberations at Board and Board Committee meetings would be well documented.

(Cont’d)




1.5 AccesstoInformationandMeetingMaterials

The Board recognises that the decision-making process is highly contingent on the quality of information furnished. All members of the Board have full unrestricted access to any information pertaining to the Group’s business and affairs.

The Board is furnished with information and documents at least 7 days in advance of meetings (or a shorter time period when unavoidable) to allow them sufficient time to appreciate the issues being deliberated and to expedite the process of decision making. All information and documents furnished to the Board are comprehensive and encompasses both quantitative and qualitative factors to increase the quality of the Board’s understanding and knowledge of the matter.

Management may be invited to attend Board meetings to provide the Board detailed explanations and clarifications on certain matters that are tabled to the Board. The Board has full unrestricted access to any information pertaining to the Group and its business affairs including verbal explanations from Management on related topics being deliberated, and the services of the Company Secretaries to ensure procedures are complied with. The Board may seek (upon approval of the Chairman) independent advice on any related matter at the expense of the Group.

All deliberations and decisions made at the Board meetings are recorded by the Company Secretaries including whether any Director abstained from voting or deliberating on a particular matter. Minutes of the meeting are circulated to the Board and the Management for review and comments in a timely manner before the minutes of the last Board meeting are confirmed at the next Board meeting.

The Board ordinarily meets at least four (4) times a year with additional meetings convened when urgent and important decisions needed to be taken between the scheduled meetings. During FY2021, the Board met on four (4) occasions where it deliberated upon and considered various matters. The attendance record of the Directors for FY2021 was satisfactory. This is evidenced by the attendance record of the Directors at the Board meetings during their tenure in office as set out in the below table:

Directors Attendance

Tan Kai Hoe 4/4

Goh Wee Keng, Jeffrey 4/4

Shum Sze Keong 4/4

Dato’ Seri Wong Siew Hai 4/4

Lee Hock Chye 4/4

Datuk Dr. Wong Lai Sum 4/4

YM Tunku Afwida Binti Dato’ Tunku Abdul Malek 4/4

Suresh Natarajan(Appointed on 1 July 2020)

3/3

Dato’ Mohamed Salleh Bin Bajuri(Retired on 2 September 2020)

2/2

Dato’ Sri Lee Tuck Fook(Resigned on 27 August 2020)

2/2

All the Directors have complied with the minimum 50% attendance requirement in respect of Board Meetings as stipulated in the Listing Requirements. During the intervals between Board Meetings, for any matters requiring Board’s decisions, the Board’s approvals are obtained through circular resolutions. The resolutions passed by way of such circular resolutions are then noted at the next Board Meeting.

It is a policy that Directors devote sufficient time and effort to carry out their responsibilities. This commitment is given to the Board at the time of their appointment as Directors.

The Board was satisfied with the amount of time committed by the Directors towards fulfilling their roles and responsibilities as Directors of the Company.

CORPORATE GOVERNANCE OVERVIEW STATEMENT(Cont’d)





• Thereisdemarcationofresponsibilitiesbetweentheboard,boardcommitteesandmanagement.• Thereisclarityintheauthorityoftheboard,itscommitteesandindividualdirectors.

2.1 BoardCharter

The Board Charter, which is available on the Company’s website, establishes the clear and unambiguous functions and roles of the Board and those delegated to the Chairman, Board Committees, the CEO and the Management as part of initiative to enhance accountability.

The Board reviews the Board Charter from time to time to ensure its relevance in aiding the Board to discharge its duties and responsibilities in view of current laws and regulations. The Board Charter was last reviewed by the Board on 19 August 2020.


• TheBoardiscommittedtopromotinggoodbusinessconductandmaintainingahealthycorporateculturethatengendersintegrity,transparencyandfairness.

• TheBoard,management,employeesandotherstakeholdersareclearonwhatisconsideredacceptablebehaviourandpracticeinthecompany.

3.1 CodeofEthics,WhistleBlowingPolicyandtheAnti-Bribery&CorruptionPolicy

The Standard Code of Conduct, Business Ethics, Conflicts of Interest (collectively referred to as “Code of Ethics”) and Whistle Blowing Policy (“WBP”) of the Group are available on the Company’s website.

The Code of Ethics sets out such standards of ethics and conduct expected from the Board, Management and employees.

The WBP outlines when, how and to whom a concern could be properly raised about the actual or potential corporate fraud and or breach of ethics involving employees, Management or Director(s) of the Group.

The Board practices a zero-tolerance approach to bribery and corruption and this has been enshrined in the Anti-Bribery & Corruption Policy published on the Company’s website.

PRINCIPLEA:PART2-BOARDCOMPOSITION


• Boarddecisionsaremadeobjectivelyinthebestinterestsofthecompanytakingintoaccountdiverseperspectivesandinsights.

4.1 BoardComposition

The following prescribed requirements have been fully complied by the Board: -

• Paragraph 3.04(1) of the Listing Requirements which stipulates that at least 2 directors or 1/3 of the board of directors, whichever is the higher, are independent directors; and

• Practice 4.1 of the Code, where at least half of the board comprises Independent Directors.



PRINCIPLEA:PART2-BOARDCOMPOSITION (Cont’d)

4.1 BoardComposition(Cont’d)

The Board composition as at FY2021, comprises eight (8) members out of which, five (5) are Independent Non-Executive Directors, details are set out below:

Directors Designation

Tan Kai Hoe Non-Independent Non-Executive Chairman

Goh Wee Keng, Jeffrey Executive Director & CEO

Shum Sze Keong Non-Independent Non-Executive Director

Dato’ Seri Wong Siew Hai Independent Non-Executive Director

Lee Hock Chye Independent Non-Executive Director

Datuk Dr. Wong Lai Sum Independent Non-Executive Director

YM Tunku Afwida Binti Dato’ Tunku Abdul Malek Independent Non-Executive Director

Suresh Natarajan(Appointed on 1 July 2020)


Dato’ Mohamed Salleh Bin Bajuri(Retired on 2 September 2020)


Dato’ Sri Lee Tuck Fook(Resigned on 27 August 2020)


The profile of each Director has been set out at the relevant portion of Annual Report.

The Directors, with each of their different background and specialisation, contributes to the Group a wide range of experience and expertise in areas such as finance, engineering, corporate affairs, legal, marketing and operations.

The Independent Non-Executive Directors bring objective and independent judgment to the decision making of the Board and provide a capable check and balance to the Executive Director and Management. They contribute significantly in areas such as policy and strategy development, performance monitoring, allocation of resources as well as improving governance and controls.

Together with the Executive Director who has intimate knowledge of the business, the Board is constituted by individuals who are committed to business integrity and professionalism in all its activities and have proper understanding of and competence to deal with the current and emerging business issues.

4.2 TenureofIndependentNon-Executive Directors

The concept of independence adopted by the Board conforms with the definition of an Independent Director under paragraph 1.01 and Practice Note 13 of the Listing Requirements. An Independent Director is not a member of Management and is free from any business or other relationship which could interfere with the exercise of independent judgment or the ability to act in the best interests of the Group.

On 26 September 2007, Singapore Precision Engineering Limited and Singapore Aerospace Manufacturing Pte Ltd (“SAM Singapore”), collectively, acquired 44.787% of the entire issued share capital of the Company. Thus making SAM Singapore effectively the controlling shareholder.

In view of the foregoing, the NRC and the Board had determined that the period of nine (9) years shall commence with effect from 26 September 2007 or the date of appointment of each Independent Director, whichever shall be the later.

The Board is mindful of the practice in Code, whereby the tenure of an independent director is subject to a cumulative term limit of nine (9) years. Upon completion of the nine (9) year tenure, an independent director may continue to serve on the board as a non-independent director. If the Board intends to retain an independent director beyond the term limit of nine (9) years, it should justify and seek annual shareholders’ approval. The Board is also mindful of Practice 4.2 of the Code which requires the Board to seek annual shareholders’ approval through a two-tier voting process, if the Board continues to retain an independent director after the twelfth (12th) year.




4.2 TenureofIndependentNon-Executive Directors(Cont’d)

In ascertaining the independent status of the Directors, the Board continues to believe that tenure should not form part of the assessment criteria. It is of the view that the fiduciary duties of Directors are the primary concern of all Directors, regardless of their status. In fact, continued tenure brings stability to the Board as the Group benefits from their mix of skills, professional and commercial experience, technical expertise in their relevant fields and competencies for informed and balanced decision-making by the Board.

Both Dato’ Seri Wong Siew Hai and Mr. Lee Hock Chye have served the Company as Independent Non-Executive Directors for a cumulative term of more than twelve (12) years.

The NRC had conducted annual performance evaluation and assessment on these Independent Non-Executive Directors and is of the opinion that the abovenamed Independent Directors, remain objective and independent in expressing their views and in participating in deliberation and decision making of the Board and Board Committees. Their length of service on the Board does not in any way interfere with their exercise of independent judgement and ability to act in the best interests of the Company. In addition, they have also confirmed and declared in writing that they are Independent Directors and have satisfied all the criteria of an Independent Director set out in Paragraph 1.01 of the Listing Requirements.

The Board has accepted the foregoing rationale and has agreed to retain the aforenamed Directors as Independent Non-Executive Directors of the Company, subject to approval of the shareholders at the forthcoming Annual General Meeting.

4.3 DiversityofBoardandSeniorManagement

The Board encourages diversity without discrimination on, amongst others, race, age, ethnicity and gender. The Board, in assessing suitable candidates for appointment, would base their evaluation on objective criteria, merit, and with due regard for diversity in skills, experience, age, cultural background and gender.

4.4 Genderdiversity

As mentioned above, the Board did not set specific targets on gender diversity for the Company and currently, Datuk Dr. Wong Lai Sum and YM Tunku Afwida Binti Dato’ Tunku Abdul Malek are the female Directors on the Board. The Company achieved a 25% in women participation on the Board. Their profile can be found at the relevant section of this Annual report.

4.5 Boardappointment

The Board is responsible for the appointment of new Directors, and the NRC has been delegated with the role of screening and conducting an initial selection, which includes an external search, before making a recommendation to the Board. The NRC has the authority to obtain the services of professional recruitment firms to source for candidates for directorship or seek independent professional advice whenever necessary.

As part of the role of the NRC, the NRC also evaluates the suitability of potential candidates for appointment to the Board based on, amongst others, experience, commitment (including time commitment), competency, and (if applicable) such relevant regulatory criteria for assessing independence. The NRC will then recommend the successful candidates for approval and appointment by the Board.

During FY 2021, the NRC had reviewed and recommended to the Board the appointment of Mr. Suresh Natarajan as an additional Independent Non-Executive Directors to the Board and as part of succession planning.




4.6 NominatingandRemunerationCommittee

The NRC of the Company comprises exclusively of Non-Executive Directors, a majority of whom are Independent Directors.

The Members of the NRC and their meeting attendance during their tenure in office for the financial year under review are set out below.

Designation Directors Attendance

Chairman Dato’ Seri Wong Siew Hai 2/2

Members Mr. Tan Kai Hoe 2/2

Mr. Lee Hock Chye 2/2

Datuk Dr. Wong Lai Sum 2/2

During the year, the NRC carried out the following activities:

(a) Reviewed and assessed the mix of skills, expertise, composition, size and experience of the Board, contribution of each Director, the effectiveness of the Board Committees and Board as a whole.

(b) Reviewed the Board Evaluation Report for FY2021. (c) Reviewed the performance of the Directors and key officers of the Company for FY2021. (d) Reviewed the Directors’ retirement by rotation and recommended to the Board, Directors who are due for retirement

at the Annual General Meeting (“AGM”).(e) Reviewed the independence status of the Independent Non-Executive Directors.(f) Reviewed and recommended the retention of Independent Non-Executive Directors who have served a cumulative

term of more than twelve (12) years to the Board for endorsement and to seek shareholders’ approval at the AGM.(g) Reviewed the term of office and performance of Audit Committee.(h) Reviewed the remuneration package for the Executive Director for FY2021.(i) Reviewed and recommended the Directors’ Fees and benefit payable to the Directors.(j) Reviewed list of trainings attended by the Directors during the financial year.(k) Reviewed and recommended to the Board the appointment of Independent Non-Executive Directors.(l) Reviewed the succession planning of the Directors of the Company.(m) Reviewed and proposed to the Board on the appointment of new Chief Financial Officer upon relinquish position of

out going Chief Financial Officer as part of the Company’s succession planning activity.

The Directors are fully aware of the importance of keeping abreast with the latest changes and developments in the industries in which the Group operates as well as the economic, financial and governance issues in order to enhance the effectiveness in discharging their responsibilities as Directors.

All Directors have attended and completed the Mandatory Accreditation Programme (“MAP”). During the year under review, the Directors attended various briefings, seminars, conferences, and speaking engagements covering areas including corporate governance, relevant industrial developments, financial, risk managements, leadership and global business developments.

Some of the training programmes attended by the Directors during the financial year under review included the following:

Directors TrainingsTan Kai Hoe • The Global Sustainability Journey and 2nd Edition of Bursa’s Guide

• Anti-Money Laundering and Countering the Financing of Terrorism

Goh Wee Keng • The Global Sustainability Journey and 2nd Edition of Bursa’s Guide• Risk Management Review

Shum Sze Keong • The Global Sustainability Journey and 2nd Edition of Bursa’s Guide




4.6 NominatingandRemunerationCommittee(Cont’d)

Some of the training programmes attended by the Directors during the financial year under review included the following:

Directors Trainings

Dato’ Seri Wong Siew Hai • The Global Sustainability Journey and 2nd Edition of Bursa’s Guide• Rethink, Reinvent, Revitalise in the New Normal• Making the Climb Towards Recovery• Growing Business Against the Tides of Disruption• The Future of the E&E Industry amidst the impact of the global supply chain

(National E&E Forum)• Assessing the Effectiveness of Public Research Institutions in Fostering

Knowledge Linkages and Transferring Technology in Malaysia

Lee Hock Chye • The Global Sustainability Journey and 2nd Edition of Bursa’s Guide

Datuk Dr. Wong Lai Sum • The Global Sustainability Journey and 2nd Edition of Bursa’s Guide• Adequate Procedures – S17A MACC Amendment Act 2018• National E&E Forum• Rethink, Reinvent, Revitalise in the New Normal• Making the Climb Towards Recovery• Growing Business Against the Tides of Disruption• Nikkei Forum: Innovative Asia• Accelerated Digital Transformation in Legacy Companies• A Boardroom Simulation – Corporate Strategy Beyond Crisis

YM Tunku Afwida Binti Dato’ Tunku Abdul Malek

• The Global Sustainability Journey and 2nd Edition of Bursa’s Guide• 5G Demonstration Project Launch• Strategic Discussion with TM Directors• Sharing session with T-Mobile US on 600 Mhz 5G• MoU on Forwarding Cloud Alpha• Majlis Pelancaran Kempen Bulan Kebangsaan TM Bersama YB Menteri

Komunikasi Dan Multimedia Malaysia• TM Board Strategy Retreat (II)

i. DNA of A World Class Telco: What They Do And How They Do Itii. Connected World: The Future of 5G, Winning in Cloud and Beyondiii. Lessons from International Telco Transformations (Including Cost

Transformation Programmes)• Adequate Procedures – Section 17A Corporate Liability: T.R.U.S.T Principles• TM Board Strategy Retreat (II)

i. Elements of Great Customer Experienceii. Elements of High Performance Execution Culture

• Cybersecurity Awareness

Suresh Natarajan • The Global Sustainability Journey and 2nd Edition of Bursa’s Guide

The Board had concluded that the Directors’ Trainings for the FY2021 were adequate.




Intended Outcome 5.0• Stakeholdersareabletoformanopinionontheoveralleffectivenessoftheboardandindividualdirectors.

5.1 AnnualassessmentoftheDirectors,BoardasawholeandBoardCommittees

The Board through the NRC conducts an annual evaluation to appraise the effectiveness of the Board as a whole, the effectiveness of the Board Committees and the further required mix of skills and experiences to enhance Board efficacy. The said evaluation on the Board covers board size, mix or composition, conduct of Board meetings and Directors’ skills set matrix.

The Board Committees are assessed based on their roles and scope of work, supply of sufficient and timely information to the Board and also overall effectiveness and efficiency in discharging their duties.

The results of the evaluation are then collated, distilled, summarised and reported to the Board by the NRC Chairman with an aim towards continuous improvement of the Board and Board Committees.

In addition to the foregoing, the NRC also assesses the independence of each of the Independent Non-Executive Directors annually, taking into account the individual Director’s ability to exercise independent judgment at all times and to contribute to the effective functioning of the Board. All findings by the NRC will be reported to the Board.

The NRC conducted an assessment of the Directors who are subject to retirement at the forthcoming AGM in accordance with the provisions of the Constitution of the Company. The NRC had hence, reviewed and proposed re-election of the relevant directors to the Board for their recommendation to the shareholders for re-election of the relevant directors at the forthcoming AGM.


• Thelevelandcompositionofremunerationofdirectorsandseniormanagementtakeintoaccountthecompany’sdesiretoattractandretaintherighttalentintheboardandseniormanagementtodrivethecompany’slong-termobjectives.

• Remunerationpoliciesanddecisionsaremadethroughatransparentandindependentprocess.

6.1 RemunerationPolicy

Each Director would be paid a Director’s fee of RM50,000 per annum for serving as a member of the Board.

The Director serving as the Chairman of the relevant Board Committee receives an additional annual remuneration as set out below:

BoardCommittee Chairman’sAnnualRemuneration

AC RM10,000

NRC RM7,500

RSC RM7,500

The Directors who serve as ordinary members to the relevant Board Committee receives an additional annual remuneration of RM5,000 .

The Directors’ fees and remuneration are appropriate to their contribution, taking into consideration effort, commitment and time spent as well as the responsibilities involved.

All Non-Executive Directors would also be paid a meeting allowance of RM2,000 for each meeting attended. The Executive Director is not entitled to any meeting allowance.

The Board had determined that the remuneration for the Non-Executive Directors was appropriately reflective of

experience and the level of responsibilities and contributions including the number of the scheduled meetings for the Board, and Board Committees; and were competitive compared with the prevailing market practices. Each of the Non-Executive Directors abstained from deliberating and voting on his or her own remuneration.

For FY2021, the NRC had assessed the remuneration package of the Executive Director.




6.1 RemunerationPolicy (Cont’d)

In addition, the NRC had also deliberated on the Directors’ fees and benefits payable to Directors for the financial year ending 31 March 2022 (“FY2022”) which would be subject to the shareholders’ approval at the forthcoming AGM. The NRC recommended that the fees and benefits payable to the Directors shall remain the same as FY2021.


• Stakeholdersareabletoassesswhethertheremunerationofdirectorsandseniormanagementiscommensuratewiththeirindividualperformance,takingintoconsiderationthecompany’sperformance.

7.1 DetailsoftheremunerationofDirectors

Pursuant to Section 230 of the Companies Act 2016, the fees and benefits payable to the directors of a listed company and its subsidiaries shall be approved by a general meeting. The relevant resolutions in relation to the Directors’ remuneration payable to the Directors for FY2022 shall be presented to the shareholders for approval at the forthcoming AGM.

The remuneration of each director for FY2021 is set out as follows:

Name

AmountinRinggitMalaysia(RM)

DirectorsFees MeetingAllowance

Salaries,Bonuses,Benefits-in-kindandotheremoluments

EXECUTIVE DIRECTOR

GohWeeKeng,Jeffrey 50,0001 -

NON-EXECUTIVE DIRECTORS

TanKaiHoe 55,0002 14,000 -

ShumSzeKeong 61,458 22,000 -

Dato’MohamedSallehBinBajuri 31,0423 12,000 4,3255

Dato’SeriWongSiewHai 62,500 18,000 -

Dato’SriLeeTuckFook 27,5003 8,000 4,1465

LeeHockChye 60,000 22,000 -

DatukDr.WongLaiSum 65,000 22,000 -

YMTunkuAfwidaBintiDato’TunkuAbdulMalek 55,000 18,000 -

SureshNatarajan 40,4174 10,000 -

Notes:1. Paid directly to SAM Singapore where he is employed as at the date of this Report.2. Paid directly to Accuron where he is employed as at the date of this Report.3. The fee was prorated from 1 April 2020 up to 30 September 2020.4. Thefeewasproratedfromthedateofappointmenti.e.1July2020,uptothedateoffinancialyearended31March

2021.5. Appreciation gift.

7.2 RemunerationofSeniorManagement

The Company considers the remuneration of the Senior Management to be sensitive and proprietary in view of the competitive nature of the human resource market. Thus, the Company does not intend to adopt the recommendation to disclose the detailed remuneration of each member of Senior Management in bands of RM50,000 on a named basis. Furthermore, this was meant to preserve confidentiality, negative impact arising from the disclosure, and the larger need to maintain a stable work environment to meet long-term strategic goals.

The remuneration package of the employees of the Company has been benchmarked with the industry and remains in line with the industry practice. In addition, their annual increments and bonus payouts would be based on performance.



PRINCIPLEB:EFFECTIVEAUDITANDRISKMANAGEMENT

PART1-AUDITCOMMITTEE


• ThereisaneffectiveandindependentAuditCommittee.• Theboard is able toobjectively review theAuditCommittee’sfindings and recommendations. The company’s

financialstatementisareliablesourceofinformation.

8.1 TheChairmanoftheAuditCommitteeisnottheChairmanoftheBoard

The Company has complied with Practice 8.1 of the Code which stipulates that the Chairman of the AC is not the Chairman of the Board.

The AC is an independent Board Committee, led by an Independent Non-Executive Director, which assists the Board in the discharge of its responsibilities for corporate governance, internal controls and reporting.

The terms of reference of the AC is available on the Company’s website.

The members of the AC possess vast experience and skills in understanding and attending to matters falling under the purview of the AC. They are more than qualified to review the accuracy of the Group’s financial statements from various perspectives in view of each member’s skills and qualifications prior to recommendation of the same to the Board.

Further details pertaining to the AC is set out in the AC Report contained in this Annual Report.

8.2 Formerkeyauditpartner

The Terms of Reference of the AC requires the former key audit partner to observe a cooling-off period of at least two (2) years before being appointed as a member of the AC.

None of the members of the AC were former audit partners.

8.3 Suitability,objectivityandindependenceoftheexternalauditor

The AC, in accordance with its Terms of Reference, would on an annual basis review and monitor the suitability and independence of the External Auditors.

The External Auditors have the obligation to bring to the attention of the Board, the AC and the Management any significant defects in the Group’s systems of reporting, internal control and compliance with approved accounting standards as well as legal and regulatory requirements. The External Auditors of the Company would be invited to attend at least two meetings of the AC a year without the presence of Management.

The AC annually assesses the External Auditors against a set of assessment criteria that has been approved by the Board. The scope of assessment has been described in the AC Report and includes, amongst others, an assessment on the suitability, objectivity and independence of the External Auditors. All findings from the AC would be reported to the Board for further action, if any.

The Board, through the AC, has assessed and affirmed the independence, objectivity and suitability of the External Auditors to continue in office.

In compliance with the by-laws of the Malaysian Institute of Accountants (“MIA”), the Audit Partners would be rotated every seven (7) years to ensure objectivity, independence and integrity of the audit opinions. Such assurance was also given by the External Auditors in the Audit Planning Memorandum and Audit Finding Report presented to the AC.

The AC were satisfied with the competence and independence of the External Auditors and had recommended the re-appointment of the External Auditors for shareholders’ consideration at the AGM.

The Internal Audit function of the Company works with the External Auditors to ensure as complete an audit coverage of the Group’s activities as possible. In view of this, the Company has established a seamless arrangement to meet the professional requirements of the External Auditors.

Details on the audit fees payable to External Auditors; the key features of the relationship between the AC and the External Auditors; and a summary of the activities of the AC during the financial year are set out in the AC Report in this Annual Report.



PRINCIPLEB:EFFECTIVEAUDITANDRISKMANAGEMENT(Cont’d)

PART1-AUDITCOMMITTEE(Cont’d)

8.4 QualificationoftheAuditCommittee

All members of the AC are financially literate with one (1) of them being a member of the MIA thus fulfilling the requirement under paragraph 15.09(1)(c)(i) of the Listing Requirements which requires at least one (1) of the AC members to be a member of the MIA.

The AC members acknowledge the need for continuous education and training. For the year under review, the Company’s Auditors briefed the AC on the developments in accounting and auditing standards, practices and rules.

8.5 CompositionoftheAuditCommittee

The AC comprises of four (4) Non-Executive Directors, of whom three (3) are Independent Directors.

This is in compliance with Paragraph 15.09 (1) (c) of the Listing Requirements, which stipulates that “all the audit committee members must be non-executive directors, with a majority of them being independent directors”.

In terms of the Step-Up Practice 8.4 of the Code which recommends that the AC should comprise solely of Independent Directors, the Company does not intend to adopt such step-up practice for the time being.

PRINCIPLEB:PART2-RISKMANAGEMENTANDINTERNALCONTROLFRAMEWORK


• Companiesmakeinformeddecisionsaboutthelevelofrisktheywanttotakeandimplementnecessarycontrolstopursuetheirobjectives.

• Theboardisprovidedwithreasonableassurancethatadverseimpactarisingfromaforeseeablefutureeventorsituationonthecompany’sobjectivesismitigatedandmanaged.

9.1 Establishmentofriskmanagementandinternalcontrolframework

The Board undertakes the overall responsibility for risk oversight and risk management. In view of this, the Board has, in place, a structured enterprise risk management framework to identify, monitor, control and report on principal risks faced by the Group on a regular basis.

9.2 Featuresofitsriskmanagementandinternalcontrolframework

Details of the Group’s enterprise-wide risk management framework has been outlined in the Statement on Risk Management and Internal Control portion of the Annual Report.

9.3 Risk&SustainabilityCommittee(“RSC”)

The members of the RSC, comprises of Independent and Non-Independent Non-Executive Directors. The members of the RSC and their meeting attendance for the financial year under review have been set out below.

Designation Directors AttendanceChairman Shum Sze Keong

(Redesignated as RSC Chairman on 2 September 2020)2/2

Dato’ Mohamed Salleh Bin Bajuri(Ceased as RSC Chairman and member on 2 September 2020)

1/1

Members Dato’ Seri Wong Siew Hai 2/2

Suresh Natarajan(Appointed on 2 September 2020)

1/1

Mr. Shum Sze Keong is the representative from the AC to the RSC and serves to keep the AC apprised of any risk management issues of a financial nature that would require the attention of the AC. During the year under review, there was no major financial related issue which required reporting to and deliberation by the AC.



PRINCIPLEB:PART2-RISKMANAGEMENTANDINTERNALCONTROLFRAMEWORK(Cont’d)

9.3 Risk&SustainabilityCommittee(“RSC”) (Cont’d)

In addition, the AC has included, as part of its regular meeting agenda, the identification of risk areas which should be brought to the attention of the RSC.

The RSC has been tasked in line with its Terms of Reference to assist the Board with risk management (i.e., reviewing and recommending the risk management policies and strategies for the Group in managing overall risk exposure of the Group); and sustainability (i.e., reviewing and recommending sustainability strategies and performance in advancing the Group’s sustainability ambition and direction).

During the year under review, the RSC carried out the following activities:

(a) Reviewed measures adopted by the management to address the COVID-19 pandemic in the workplace. (b) Reviewed the report from the Sustainability Management Committee.(c) Reviewed the effectiveness of the Group’s strategies, policies, principles and practices in view of the Sustainability

Policy.(d) Reviewed the Sustainability Statement for disclosure in the Group’s Annual Report for FY2021.(e) Reviewed the Group Insurance Renewal.


• Companieshaveaneffectivegovernance,riskmanagementandinternalcontrolframeworkandstakeholdersareabletoassesstheeffectivenessofsuchaframework.

10.1Internalauditfunction

The key features and state of internal control and risk management of the Group have been set out in the Statement on Risk Management and Internal Control portion of the Annual Report.

An independent Internal Audit function, which reports directly to the AC, has been established in line with the Code and the Listing Requirements. Detailed information on the Internal Audit function has been outlined in the AC Report portion of this Annual Report.

None of the Internal Audit personnel has any relationship or conflict of interest that could impair their objectivity and independence in conducting their Internal Audit functions.

PRINCIPLEC:INTEGRITYINCORPORATEREPORTINGANDMEANINGFULRELATIONSHIPWITHSTAKEHOLDERS

PART1-COMMUNICATIONWITHSTAKEHOLDER


• Thereiscontinuouscommunicationbetweenthecompanyandstakeholderstofacilitatemutualunderstandingofeachother’sobjectivesandexpectations.

• Stakeholdersareabletomake informeddecisionswithrespecttothebusinessofthecompany, itspoliciesongovernance,theenvironmentandsocialresponsibility.

11.1Effective,transparentandregularcommunicationwithitsstakeholders

The key element of the Company’s dialogue with its shareholders is the opportunity to gather views of, and answer questions from, individuals and institutional shareholders, on all issues relevant to the Group through the annual general meetings or the extraordinary general meetings.

At these general meetings, shareholders would be provided with opportunities to seek clarification or provide feedback both about the resolutions being proposed or about the Group’s operations/prospects in general. The Board will respond to all queries and take note of all suggestions put forth by shareholders. In situations whereby answers could not be provided immediately, the Chairman will undertake to furnish the shareholder with a written answer after the meeting.

The Company also holds briefings for fund managers, institutional investors and investment analysts.



PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING ANDMEANINGFUL RELATIONSHIPWITH STAKEHOLDERS (Cont’d)

PART1-COMMUNICATIONWITHSTAKEHOLDER(Cont’d)

11.1Effective,transparentandregularcommunicationwithitsstakeholders(Cont’d)

While the Company endeavours to provide as much information as possible to its shareholders and stakeholders, the Company remains mindful of the legal and regulatory framework governing the release of material and price-sensitive information. Such material and price-sensitive information would not released unless it has been duly announced or made public through the proper channels.

The Board recognises that the Independent Directors are vital towards protecting the interests of shareholders. Shareholders and stakeholders could communicate their concern to the Independent Directors through mail to the Company’s registered address or via e-mail on the Company’s website to [email protected].

PRINCIPLEC:PART2-CONDUCTOFGENERALMEETINGS


• Shareholdersareabletoparticipate,engagetheboardandseniormanagementeffectivelyandmakeinformedvotingdecisionsatGeneralMeetings.

12.1CommunicationwithShareholders

The General meeting serves as the principal platform for the Board and the Management to engage with shareholders pertaining to the Group’s performance, corporate and business developments and any other matter affecting shareholders’ interest. The Company had served the notice of the Twenty-Sixth (26th) AGM to all shareholders more than 28 days prior to the meeting for the purpose of providing the shareholders with sufficient time to consider the relevant proposed AGM resolutions.

During the 26th AGM, the management had presented, amongst others, on the detail of performance, key developments and financial results for the reporting year. The Board was satisfied with the current programme at AGM and there have been no major contentious issues noted.

To further promote participation of members through proxy(ies), which was in line with the insertion of Paragraph 7.21 of the Listing Requirements, the Company’s Constitution includes the right of proxies to speak at general meetings, to allow a member who is an exempt authorised nominee to appoint multiple proxies for each omnibus account it holds and expressly disallows any restriction on proxy’s qualification.

12.2ConductofGeneralMeetings

The Company had leveraged on technology to facilitate voting in absentia and remote participation by shareholders at shareholders’ meetings through hosting its first fully virtual 26th AGM on 2 September 2020.

All nine (9) members of the Board had attended by being either physically present at the broadcast venue or through video conferencing. The Joint Company Secretaries were physically present at the broadcast venue whilst the External Auditors and the senior management were virtually present through video conferencing.

Shareholders were advised by the Joint Companies Secretaries to participate through the remote participation and voting (RPV) facilities via SSES Online website at https://www.sshsb.net.my/login.aspx.

The Chairman for the 26th AGM had responded to queries received from the shareholders prior to the meeting and also other queries received through the RPV facilities during the AGM. Where appropriate, the Chairman had also directed relevant queries to the CEO and other members of the senior management for their responses to the received queries.

COMPLIANCESTATEMENT

The Board is satisfied that, to the best of its knowledge, the Company is substantially in compliance with the principles and practices set out in the Code as well as the relevant Listing Requirements for the financial year under review.

This Statement is approved by the Board of Directors on 25 May 2021.


mailto:[email protected]

https://www.sshsb.net.my/login.aspx


The Audit Committee (“AC”) is an independent Board Committee which assists the Board in the discharge of its responsibilities for corporate governance, internal controls and financial reporting.

OBJECTIVES

The key function of the AC is to assist the Board in fulfilling the following oversight objectives on the Group’s activities:

(a) Oversee financial reporting; (b) Review reports from Internal and External Auditors to validate and evaluate existing policies, establish audit quality and

ensure compliance with Group’s policies;(c) Ensure that proper processes and procedures are in place to comply with all laws, rules and regulations, directives and

guidelines established by the relevant regulatory bodies; (d) Oversee the implementation of the Whistle Blowing Policy and Procedures for the Group;(e) Oversee the implementation of the Anti-Bribery Policies and Procedures for the Group;(f) Investigate any concerns received on possible improprieties within the Group; and(g) Evaluate the internal and external audit processes.

The Board will review the terms of reference (“TOR”) of the AC from time to time (if so required) to ensure that the AC continues to carry out its functions effectively. The Company has uploaded the TOR onto the Company’s website at www.sam-malaysia.com.

COMPOSITION

The AC is comprised solely of Non-Executive Directors with a majority being Independent Directors. Their attendance at the 4 Committee meetings held during the financial year under review is tabulated below.

Designation Designation Attendance

Chairman Datuk Dr. Wong Lai Sum (Independent Non-Executive Director)

4/4

Members Lee Hock Chye(Independent Non-Executive Director)

4/4

Shum Sze Keong(Non-Independent Non-Executive Director)

4/4

YM Tunku Afwida Binti Dato’ Tunku Abdul Malek(Independent Non-Executive Director)

4/4

Dato’ Mohamed Salleh Bin Bajuri(Independent Non-Executive Director)*ceased as AC member on 2 September 2020

2/2

Dato’ Sri Lee Tuck Fook(Independent Non-Executive Director)*resigned on 27 August 2020

2/2

YM Tunku Afwida Binti Dato’ Tunku Abdul Malek is Chartered Accountant registered with the Malaysian Institute of Accountants. The above composition of the AC meets the requirements of paragraph 15.09(1)(c) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”), which stipulates that at least one member of the AC must be a qualified accountant.

All members of the AC are financially literate and are able to analyse and interpret financial statements to effectively discharge their duties and responsibilities as members of the AC.

The Nominating and Remuneration Committee (“NRC”) had on 11 May 2021 reviewed the terms of office and performance of the AC members. Based on its review, the NRC is satisfied that the AC and its members have discharged their functions, duties and responsibilities in accordance with the TOR and supported the Board in ensuring the Group upholds appropriate corporate governance standards.

AUDIT COMMITTEE REPORT

http://www.sam-malaysia.com

http://www.sam-malaysia.com


SUMMARYOFACTIVITIESDURINGTHEFINANCIALYEAR

In line with the TOR, the AC held 4 meetings during the financial year and carried out the following activities:

Financialresults

(a) Reviewed the quarterly interim unaudited financial statements and the annual audited financial statements of the Group prior to submission to the Board for its consideration and approval focusing particularly on changes in or implementation of major accounting policies, significant and unusual events and compliance with applicable accounting standards approved by the Malaysian Accounting Standards Board (“MASB”).

(b) Received verbal assurance from the CFO that adequate processes and controls were in place for an effective and efficient financial statements close process in the preparation of the quarterly consolidated financial statements.

Externalauditors

(a) Reviewed the External Auditors’ scope of work, proposed audit fee and audit plan for the year under review.(b) Approved and adopted policies and procedures to assess the suitability and independence of External Auditors.(c) Met with the External Auditors twice, in the absence of management, to review the adequacy and effectiveness of the

system of internal control and any other areas of concern arising from their interim and final audit. No major concerns were raised by the External Auditors.

(d) Reviewed and assessed the performance of the existing External Auditors for the Group.(e) Reviewed with External Auditors any significant findings in relation to audit.(f) Discussed reservations arising from audit and any other matters the External Auditors had wished to discuss.(g) Reviewed the assistance provided by the Group to the External Auditors and the overall conduct of the audit.(h) Reviewed and evaluated the independence of the External Auditors, obtained assurance of independence from the

External Auditors and recommended the re-appointment of the Group’s External Auditors.

Internalauditors

(a) Reviewed the adequacy and relevance of the scope, function, competency and resources of internal audit function and that it has the necessary authority to carry out its work.

(b) Reviewed the internal audit plan adopted by the Internal Audit function.(c) Reviewed the internal audit reports, audit recommendations made and Management’s responses to these

recommendations and actions taken to improve the system of internal control and procedures. Where appropriate, the AC has directed Management to rectify and improve control procedures and workflow processes based on the Internal Auditors’ recommendations and suggestions for improvement.

(d) Reviewed the implementation of these recommendations through follow up audit reports from the Internal Auditors.(e) Reported to the Board on its activities and significant findings and results.(f) Reviewed any appraisal or assessment of the performance of the outsourced service providers.(g) Reviewed the circular to shareholders on recurrent related party transactions (“RRPT”) of a revenue nature and trading

nature.(h) Reviewed related party transactions (“RPT”) entered into by the Group.(i) Reviewed the RRPT and ensured that these RRPT comply with approved procedures and policies and the mandate from

the shareholders.(j) Reviewed the Statement on Risk Management and Internal Control which provides an overview of the state of internal

controls and risk management within the Group and also the AC’s Report prior to the Board’s approval for inclusion in the Annual Report.

RPTandRRPT

(a) Reviewed the reports of RPT and RRPT to ensure the actual transacted amounts were within the prescribed approved limit.

(b) Reviewed and ensured that proper records are maintained to identify and capture all the RPT and RRPT.(c) Reviewed the proposed renewal of existing and new shareholders’ mandate for RRPT of a revenue and/or trading nature

before recommending to the Board.(d) Reviewed the non-recurrent related party transaction where the transaction is below 0.25% of percentage ratios, and not

subject to announcement to Bursa Malaysia.

Others

(a) Reviewed the following in connection to the Malaysian Anti-Corruption Act 2009 – S. 17A:• Amendment to the Term of Reference of Audit Committee• Introduction of the new Anti-Bribery and Corruption Policy• Enhancements to other policies

(b) Received update on recruitment of Internal Audit Executive (c) Reviewed the Related Party Transaction Procedure.

AUDIT COMMITTEE REPORT(Cont’d)


INTERNAL AUDIT FUNCTION

The internal audit function is outsourced to external service providers. The AC is assisted by in house internal audit personnel on the administrative matters. The Internal Audit plan is approved by the AC covering three main areas namely internal control, risk management and governance process. Based on the audit plan approved by the AC, audit work is conducted by outsourced internal audit service providers. The Group’s Internal Audit function reports directly to the AC.

As part of the audit work, the Internal Audit function would review the adequacy and effectiveness of the internal control system, compliance with rules, regulations, policies and procedures and also evaluates efficiency of key business processes. These processes provide reasonable assurance that such internal control system would continue to operate satisfactorily and effectively in the Group. The Internal Audit function also conducts investigations and interviews when required or at the request of the AC.

The Internal Audit function submits the internal audit report with audit findings and recommendations on areas of concern to the AC for its review and deliberation on a quarterly basis.

During the financial year, internal audit was conducted in the following areas: (a) Production Planning & Control Management (b) Inventory Management (c) Production Planning

The AC is pleased to confirm that the results of each of these audits are satisfactory.

During the financial year, the total costs incurred for the Internal Audit Function was RM113,738.

ACCOUNTABILITY AND AUDIT

Financialreporting

The Board aims to provide and present a balanced and meaningful assessment of the Group’s financial performance and prospects, primarily through the annual financial statements and quarterly announcements of results to shareholders, as well as, the Management Discussion and Analysis and the Sustainability Reporting section of the Annual Report. The Board is assisted by the AC to oversee the Group’s financial reporting processes and the quality of its financial reporting.

Internalcontrol&riskmanagement

The Board undertakes overall responsibility for risk oversight and risk management. In view of this, the Board has in place a structured enterprise risk management framework for the Group which is to identify, monitor, control and report on principal risks faced by the Group on a regular basis.

The AC will identify the risks from the internal audit carried out and report to the Risk & Sustainability Committee (“RSC”) and for RSC’s further action if any.

The RSC reviews and recommends risk management policies and strategies for the Group as well as assist the Board to discharge its risk management and statutory responsibilities in managing the overall risk exposure of the Group.

The key features and state of internal control and risk management of the Group is furnished in the Statement on Risk Management and Internal Control in this Annual Report.

Relationshipwithexternalauditors

The External Auditors of the Company fulfil an essential role on behalf of Company in giving an assurance to the shareholders and others, of the reliability of the financial statements of the Group. The External Auditors have an obligation to bring to the attention of the Board of Directors, the AC and Management any significant defects in the Group’s systems of reporting, deficiencies in internal control and failure to comply with approved accounting standards and legal and regulatory requirements.

The audit fees payable by the Company and by the Group to the External Auditors amounted to RM55,000 and RM238,000 respectively. The non-audit fees payable by the Company and by the Group to the External Auditors and firms or corporations affiliated to the External Auditors amounted to RM20,000 and RM130,095 respectively.



ACCOUNTABILITY AND AUDIT (Cont’d)

Relationshipwithexternalauditors(Cont’d)

The details of non-audit fees for the Company and the Group are stated below:

NatureofServicesCompany

RMGroup

RM

Review of audit work papers done by other auditors 15,000 15,000

Review of Statement on Risk Management and Internal Control 5,000 5,000

Income tax compliance matters for a subsidiary in Singapore - 37,559

Application for licenses and incentives for a subsidiary in Thailand - 72,536

Total 20,000 130,095

The Board, through the AC, has assessed and affirmed the independence and suitability of the External Auditors to continue in office annually. The scope of the assessment covered calibre of the audit firm, team, fees, scope and planning as well as quality of processes and performance, independence and objectivity and client communication. The Board has formalised a set of criteria on assessment on the independence and suitability of External Auditors as well as to govern circumstances under which contracts for provision of non-audit services could be entered into by the External Auditors.

This AC Report was approved by the Board of Directors on 25 May 2021.



BOARD RESPONSIBILITY

The Board of Directors (“Board”) of SAM Engineering & Equipment (M) Berhad (“Company” or “SAMEE”) affirms its overall responsibility for the system of internal control and risk management of the Company and its subsidiaries (“Group”) and for reviewing the adequacy and integrity of the system. The system of internal control covers governance, risk management, financial strategy and organisational, operational, regulatory and compliance control. However, the Board recognises that this system is designed to manage, rather than eliminate, the risk of not adhering to the Group’s policies and achieving its goals and objectives. Therefore, the system provides reasonable, but not absolute, assurance against the occurrence of any material misstatement, loss or fraud.

The adequacy and effectiveness of risk management and internal controls are reviewed by the Audit Committee (“AC”) through internal audits conducted. The internal audits are mainly outsourced to external independent service providers. Internal control issues as well as actions taken by Management to address these issues are tabled by the outsourced service providers for deliberation during the AC meetings.

Each business unit and their supporting departments have implemented its own control processes under the leadership of the Chief Executive Officer (“CEO”), who is responsible for business and regulatory governance.

RISKMANAGEMENT

The Group has in place an Enterprise Risk Management Framework in accordance with the principles and guidelines outlined under the Committee of Sponsoring Organisation of the Treadway Commission’s Enterprise Risk Management Integrated Framework and is embedded in the Group’s management systems. In order to manage risks in our activities and ensure they are aligned with the Group’s strategic objectives and regulatory requirements, we implemented a risk management framework to identify, measure, assess and manage risks faced by the Group.

The Board has delegated authority to the Risk and Sustainability Committee (“RSC”) to undertake the review of the existing risk management framework and risk dashboards, which detail the likelihood and impact of the significant risks and their corresponding action plans.

The functioning of the RSC is supported by the Chief Risk Officer, key management staff and the risk management section of the business units led by the head of each such unit.

RiskManagementFramework

The Group’s overall risk management framework is as illustrated in the diagram below:

InternalEnvironment

• Management sets a philosophy regarding risk and establishes risk appetite.• Management sets organisational tone from the top for risk management.

ObjectiveSetting

• Management sets objectives that support and align with the entity’s mission consistent with its risk appetite.• Management identifies the risk appetite and parameters.

EventIdentification

• Process to identify potential events from internal/external sources affecting achievement of objectives.• Potential industry risks.• Identification of preliminary risks.

RiskAssessment,ResponseandControlActivities

• Risks are associated with objectives that may be affected and are assessed on both an inherent and a residual basis considering both likelihood and impact.

• Evaluate possible responses including avoid, accept, reduce and sharing of the risk.• Align response with risk tolerances and appetite.• Policies and procedures are established and executed to help enable risk response.• Discussions to scrutinise and validate preliminary risks identified as well as new potential risks are held.

InformationandCommunication

• Relevant information for decision-making is captured and communicated timely to enable management to execute appropriate action plans within their respective roles and responsibilities.

• Overall risks discussion with senior management.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


RISKMANAGEMENT(Cont’d)

RiskManagementFramework(Cont’d)

MonitoringandReporting

• Enterprise Risk Management capabilities are continuously monitored and enhanced as necessary to align with dynamic environment.

• Baseline risk profiles for all risks identified and shortlisted principal risks will be presented to Management.• Track and report the outcome of Enterprise Risk Management through risk register dashboards to Management and

Risk and Sustainability Committee.

The framework is reviewed and revised as and when necessary to ensure it remains relevant and adequate to manage SAMEE Group’s risks, which continue to evolve along with the changing business environment.

INTERNAL CONTROL SYSTEM

KeyInternalControlProcesses

1. Authority and Responsibility

(a) Responsibilities are delegated to Board Committees through clearly defined Terms of Reference which are reviewed and revised when necessary.

(b) The Group has a clear organisation structure with well-defined lines of reporting and appropriate levels of responsibility.

(c) The Authority Limits Document is reviewed and revised when necessary to reflect the authorisation limits of Management.

2. Planning, Monitoring and Reporting

(a) An annual planning and budgetary exercise is undertaken, deliberated and approved by the Board before implementation.

(b) Updates on the Group’s business and operations are provided to the Board at every meeting together with the financial performance variances.

(c) The Chief Financial Officer (“CFO”) is required to assure the AC that adequate processes and controls are in place for an effective and efficient financial close process in the preparation of each quarterly consolidated financial statements.

3. Policies and Procedures

Clear, formalised and documented internal policies, standards and procedures are in place to ensure compliance with internal controls and relevant laws and regulations. Reviews are performed to ensure that documents remain current and relevant. The policies and procedures are documented in the Corporate Manual and Quality Manual and are reviewed and updated when applicable. Common Group policies are available on intranet for easy access by employees.

4. Audits

The AC assesses compliance with policies and procedures as well as relevant laws and regulations through internal audits performed. The outsourced service providers report directly to the AC to assist the AC in discharging their duties and responsibilities.

The details of the activities carried out by the AC are reported in the Audit Committee Report in the Annual Report.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL(Cont’d)


INTERNAL CONTROL SYSTEM (Cont’d)

KeyInternalControlProcesses (Cont’d)

5. Conduct of Staff

(a) A Standard of Conduct, Business Ethics and Conflicts of Interest is established for all employees and defines the ethical standards and conduct of work required.

(b) A Whistle Blowing Policy is also established to provide an avenue for staff or any external party to report any breach or suspected breach of any law or regulation in a safe and confidential manner.

(c) A Personnel Data Protection Policy is established for the management, control and protection of confidential information used by the Group to avoid leakage and improper use of such information.

(d) An Anti-Bribery and Corruption Policy is established for the purpose of setting the Group’s “top-down” tone for a zero-tolerance approach towards bribery and corruption.

(e) Segregation of duties is practised whereby conflicting tasks are distributed amongst different employees to reduce the possibility of error and fraud.

6. Business Continuity Management

The Company and its major subsidiaries have established the Business Continuity Management (“BCM”) Policy which sets out the objectives, scope, strategies and emergency response procedures as well as the line of authority and responsibility for effective implementation of business continuity plan throughout the Group. In addition, Business Continuity Plans are established for critical business functions and critical application systems. These plans will be reviewed and updated from time to time when applicable. In addition, a disaster recovery mock run was also carried out on the core information technology systems to ascertain the preparedness in response to business disruption situations. Findings and feedbacks were gathered and analysed for continual improvement.

* Note: SAM Precision (Thailand) Limited was excluded from the BCM.

7. Information Technology (“IT”) Security and Cyber Resilience

The security and resiliency of the Group’s information and technology infrastructure is crucial to maintaining its business operations to meet customers’ and stakeholders’ expectations and in safeguarding its reputation. The Information Technology Cybersecurity and Incident Response Policy together with Information Technology Disaster Recovery Procedures were established to ensure that the Group’s information systems and data are properly safeguarded and adequately protected from major threats such as errors, frauds, privacy violations, service disruptions and natural disasters.

Continuous and systematic reviews are conducted by Group IT Department to identify potential threats including cyber threats and to enhance the technology infrastructure, processes and controls to strengthen the Group’s ability to prevent, detect and respond to any potential business disruptions and systems failures. In addition, external consultants are engaged to carry out targeted assessments on IT core risks such as cyber security and resilience assessments to benchmark the existing IT capabilities against international standards and best practices.



REVIEWOFTHISSTATEMENT

AuditCommittee

The AC has reviewed this Statement and addressed individual lapses in internal controls and risk management via the outsourced service providers. The internal audits conducted throughout the year have not identified any circumstances which suggest any fundamental deficiencies in the Group’s internal control system and risk management.

ExternalAuditors

The External Auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Audit and Assurance Practice Guide (“AAPG”) 3, Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the annual report of the Group for the financial year ended 31 March 2021, and reported to the Board that nothing has come to their attention that causes them to believe that the statement intended to be included in the annual report of the Group, in all material respects:

(a) has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers, or

(b) is factually inaccurate.

AAPG 3 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Board of Directors and management thereon. The auditors are also not required to consider whether the processes described to deal with material internal control aspects of any significant problems disclosed in the annual report will, in fact, remedy the problems.

CONCLUSION

Notwithstanding the fact that the Group’s system of risk management and internal controls do not eliminate the possibility of collusion, deliberate circumvention of procedures by employees, fraud or other unforeseen circumstances, the Board has received assurance from the CEO and CFO that the Group’s risk management and internal control system are operating adequately and effectively, in all material aspects.

The Board is of the view that the system of internal control and risk management which are in place for the year under review, and up to the date of approval of this Statement, is sound and sufficient to safeguard shareholders’ investment, the interest of customers, regulators, employees and other stakeholders, and the Group’s assets.

The Statement on Risk Management and Internal Control was approved by the Board of Directors on 25 May 2021.



RecurrentRelatedPartyTransactions(RRPT)ofrevenueortradingnaturefortheyearended31March2021

Details of RRPT made during the financial year ended 31 March 2021 pursuant to the shareholders’ mandate obtained by the Company at the Annual General Meetings held on 28 August 2019 and 2 September 2020 are as follows:

RelatedPartywithwhomtheGroupistransacting

Natureoftransactions

CompanieswithintheGroupinvolvedinRRPT

AmountinRM’000

InterestedRelatedParty Relationship

SAM SingaporeGroup

Sales of aerospace parts and other precision tools

SAMEE Group 39,015 Tan Kai Hoe, Goh Wee Keng, Shum Sze Keong, Teo Siew GeokN1, Tan Guan ThongN2, Ng Boon Keat, Peter Lim Hee Seng, Temasek, Accuron, SAM Singapore

Tan Kai Hoe is the Non-Independent Non-Executive Chairman of SAMEE, Director and Deputy Chairman of SAM Singapore and Director, President & CEO of Accuron.

Goh Wee Keng is the Executive Director and CEO of SAMEE, the Director/President and CEO of SAM Singapore. He is also a Director of certain subsidiaries of SAMEE and SAM Singapore (including Aviatron and SAM (Suzhou) Co. Ltd) respectively.

Shum Sze Keong is a Non- Independent Non-Executive Director of SAMEE and a Director of SAM Singapore.

Teo Siew Geok is the CFO of SAMEE Group, Director of SAM (Suzhou) Co. Ltd., Director of SAM Technologies (M) Sdn Bhd, a subsidiary of SAMEE.

Tan Guan Thong is the COO of SAM Singapore Group, Director of certain subsidiaries of SAMEE and SAM (Suzhou) Co. Ltd.

Ng Boon Keat, COO of SAMEE Group, Director of certain subsidiaries of SAMEE and Aviatron.

Peter Lim Hee Seng is the Director of SAM (Suzhou) Co. Ltd, certain subsidiaries of SAMEE and Aviatron.

Accuron and Temasek are related corporations to SAM Singapore, the immediate holding company of SAMEE.

Sales of fabrication, machining services & special process

3,011

Provision of corporate management services, engineering and administrative services

396

Purchase of fabrication/ machining services/special process

(1,942)

Purchase of corporate management services, engineering and administrative services/fitting and quality assurance services

(4,979)

Rental of office, factory premises and machines

(5,753)

OTHER INFORMATION


RecurrentRelatedPartyTransactions(RRPT)ofrevenueortradingnaturefortheyearended31March2021(Cont’d)

Notes:

N1 Effective from 21 September 2020, Ms Teo Siew Geok has relinquished her position as CFO of SAMEE Group and was no longer Director of SAM Technologies (M) Sdn Bhd (subsidiary of SAM Malaysia) on 5 October 2020.

N2 Effective from 30 September 2020, Mr Tan Guan Thong was no longer the COO of SAM Singapore Group, Director of certain subsidiaries of SAMEE. He resigned as Director of SAM (Suzhou) Co Ltd on 28 September 2020.

SAMEE : SAM Engineering & Equipment (M) Berhad

SAMEE Group : SAM Engineering & Equipment (M) Berhad and its subsidiaries

SAM Singapore : Singapore Aerospace Manufacturing Pte Ltd, the immediate holding company of SAMEE

SAM Singapore Group : SAM Singapore and its subsidiaries / associates excluding SAMEE Group

Aviatron : Aviatron (M) Sdn Bhd, a subsidiary of SAM Singapore

Accuron : Accuron Technologies Limited, the immediate holding company of SAM Singapore

Temasek : Temasek Holdings (Private) Limited, the immediate holding company of Accuron

MaterialContractsInvolvingInterestsofDirectorsandMajorShareholders

There were no material contracts of the Company and its subsidiaries involving interests of directors and major shareholders for the financial year under review.

OTHER INFORMATION(Cont’d)


STATEMENT OF DIRECTORS’ RESPONSIBILITY IN RELATIONTO THE FINANCIAL STATEMENTS

The Board is responsible for ensuring that the financial statements give a true and fair view of the state of affairs of the Company and of the Group as at the end of the financial year and of their profit or loss and cash flows for the year then ended. In preparing the financial statements, the Directors have ensured compliance with applicable approved accounting standards in Malaysia and the provisions of the Companies Act 2016.

In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies and made reasonable and prudent judgments and estimates.

The Directors also have a general responsibility for taking steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

This statement was approved by the Board of Directors on 25 May 2021.


FINANCIALSTATEMENTS

STATEMENTS OF FINANCIAL POSITION

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EqUITY

STATEMENT OF CHANGES IN EqUITY

STATEMENTS OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

STATEMENT BY DIRECTORS

STATUTORY DECLARATION

INDEPENDENT AUDITORS’ REPORT

DIRECTORS’REPORT73

78808284

8590

169170171


DIRECTORS’ REPORTFor the year ended 31 March 2021

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 March 2021.

Principalactivities

The principal activities of the Company are investment holding and provision of corporate management services.

There has been no significant change in the nature of these activities during the financial year.

Ultimateholdingcompany

The Company is an indirect subsidiary of Temasek Holdings (Private) Limited, of which is incorporated in the Republic of Singapore and regarded by the Directors as the Company’s ultimate holding company, during the financial year and until the date of this report.

Subsidiaries

The details of the Company’s subsidiaries are disclosed in Note 6 to the financial statements.

Results

GroupRM’000

CompanyRM’000

Profit for the year attributable to owners of the Company 59,699 24,813

Reservesandprovisions

There were no material transfers to or from reserves and provisions during the financial year under review except as disclosed in the financial statements.

Dividends

Since the end of the previous financial year, the amount of dividends declared and paid by the Company were as follows:

i) In respect of the financial year ended 31 March 2020:

• a first interim single tier dividend of 14.76 sen per ordinary share totalling RM19,950,644 was declared on 5 June 2020 and paid on 26 August 2020.

ii) In respect of the financial year ended 31 March 2021:

• a first interim single tier dividend of 11.03 sen per ordinary share was declared on 25 May 2021 and to be paid on 18 August 2021.

The Directors do not recommend any other dividend to be paid for the current financial year.


DIRECTORS’ REPORTFor the year ended 31 March 2021 (Cont’d)

DirectorsoftheCompany

Directors who served during the financial year until the date of this report are:

Tan Kai Hoe Goh Wee KengShum Sze KeongDato’ Seri Wong Siew HaiLee Hock ChyeDatuk Dr. Wong Lai Sum YM Tunku Afwida Binti Dato’ Tunku Abdul Malek Suresh Natarajan (Appointed on 1 July 2020)Dato’ Sri Lee Tuck Fook (Resigned on 27 August 2020)Dato’ Mohamed Salleh Bin Bajuri (Retired on 2 September 2020)

Directorsofsubsidiaries

Pursuant to Section 253(2) of the Companies Act 2016, the Directors who served in the Company’s subsidiaries during the financial year until the date of this report are as follows:

Goh Wee KengNg Boon Keat Peter Lim Hee Seng Tan Guan Thong- Meerkat Technology Pte. Ltd. (Resigned on 14 September 2020)- Avitron Private Limited (Resigned on 28 September 2020)- Meerkat Precision Sdn. Bhd. (Resigned on 28 September 2020)Teo Siew Geok- SAM Technologies (M) Sdn. Bhd. (Resigned on 5 October 2020)

Directors’interestsinshares

The interests and deemed interests in the ordinary shares of the Company and of its related corporations of those who were Directors at financial year end (including the interests of the spouses and/or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:

Numberofordinaryshares

Balanceat1.4.2020 Sold

Balanceat31.3.2021

InterestsintheCompany:

Goh Wee Keng

Direct interests:

- own 1,702,523 (300,000) 1,402,523

Dato’ Seri Wong Siew Hai

Indirect interests:

- others* 11,800 (800) 11,000

* Interests pursuant to Section 59(11)(c) of the Companies Act 2016.

None of the other Directors holding office at 31 March 2021 had any interest in the ordinary shares of the Company and of its related corporations during the financial year.


Directors’benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than those fees and other benefits included in the aggregate amount of remuneration received or due and receivable by Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Issueofsharesanddebentures

There were no changes in the issued and paid-up share capital of the Company and no debentures were issued during the financial year.

Optionsgrantedoverunissuedshares

No options were granted to any person to take up unissued shares of the Company during the financial year other than through the Employees’ Share Grant Scheme as disclosed in the financial statements.

Employees’ShareGrantScheme

At an extraordinary general meeting held on 14 August 2018, the Company’s shareholders approved the establishment of the Employees’ Share Grant Scheme (“ESGS”) of up to 5% of the total number of issued shares of the Company to eligible employees of the Group. The ESGS is administered by the ESGS Committee in accordance with the By-Laws of the ESGS.

The salient features of the ESGS are, inter alia, as follows:

(a) The ESGS shall be in force for a period of 5 years from 30 November 2018 (“ESGS Period”) and may be extended at the discretion of the Board upon the recommendation of the ESGS Committee provided that the ESGS Period shall not in aggregate exceed a duration of 10 years from 30 November 2018, or such longer duration as may from time to time be permitted by the relevant authorities.

(b) The total number of shares which may be made available under the ESGS shall not exceed in aggregate 5% of the total number of issued shares of the Company (excluding treasury shares, if any) at any point in time during the ESGS Period.

(c) Eligible employees are employees employed by and are on the payroll of any company in the Group (excluding dormant subsidiaries) and his/her employment has been confirmed by the company, who are at least 18 years of age and is not undischarged bankrupt. The Directors and senior management of the Group will not participate in the ESGS;

(d) Not more than 10% of the aggregate number of shares to be issued under the ESGS shall be allocated to any individual eligible employee who, either singly or collectively through persons connected with the eligible employee, holds 20% or more of the total number of issued shares of the Company (excluding treasury shares, if any); and

(e) The shares issued pursuant to the ESGS shall rank pari passu in all respects with the existing ordinary shares of the Company.



Indemnityandinsurancecosts

During the financial year, the total cost of insurance amounting to RM80,000 was incurred by the Company to cover the Directors and officers of the Group and of the Company for a total sum insured of RM55 million. There was no indemnity given to or insurance effected for the auditors of the Group and of the Company.

Otherstatutoryinformation

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

i) all known bad debts have been written off and adequate provision made for doubtful debts, and

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements that would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report, there does not exist:

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, other than the financial impacts consequent to the disruptions to the Group’s operations and markets where the Group operates due to the outbreak of the Covid-19 pandemic, the financial performance of the Group and of the Company for the financial year ended 31 March 2021 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

Significanteventduringthefinancialyear

The details of such event are disclosed in Note 32 to the financial statements.




Auditors

The auditors, KPMG PLT, have indicated their willingness to accept re-appointment.

The auditors’ remuneration is disclosed in Note 21 to the financial statements.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

……………………………………...…..

TanKaiHoeDirector

Date: 12 July 2021

……………………………………...…..

GohWeeKengDirector


STATEMENTS OF FINANCIAL POSITIONAs at 31 March 2021

Group Company

Note 2021RM’000

2020RM’000

2021RM’000

2020RM’000

Assets

Property, plant and equipment 3 313,883 306,605 845 1,000

Right-of-use assets 4 42,770 53,179 - -

Intangible assets 5 12,641 13,901 397 356

Investments in subsidiaries 6 - - 275,656 276,692

Deferred tax assets 7 2,132 4,104 - -

Prepayments 8 2,943 15,250 - -

Totalnon-currentassets 374,369 393,039 276,898 278,048

Inventories 9 176,501 144,930 - -

Contract assets 10 134,585 139,359 - -

Trade and other receivables 8 234,386 222,371 2,979 3,416

Derivative financial assets 11 41 111 - -

Current tax assets 11 7 5 5

Cash and bank balances 16,107 14,792 981 339

Totalcurrentassets 561,631 521,570 3,965 3,760

Totalassets 936,000 914,609 280,863 281,808

Equity

Share capital 12 212,731 212,731 212,731 212,731

Reserves 13 413,713 397,157 62,446 56,765

EquityattributabletoownersoftheCompany 626,444 609,888 275,177 269,496


Group Company

Note 2021RM’000

2020RM’000

2021RM’000

2020RM’000

Liabilities

Loans and borrowings 14 12,428 19,916 - -

Lease liabilities 26,638 35,658 - -

Deferred income 16 1,051 1,569 - -

Derivative financial liabilities 11 - 48 - -

Provisions 17 220 268 - -

Deferred tax liabilities 7 6,904 11,308 - -

Totalnon-currentliabilities 47,241 68,767 - -

Loans and borrowings 14 77,840 62,323 - -

Lease liabilities 7,548 7,193 - -

Deferred income 16 4,288 2,297 - -

Trade and other payables 18 151,292 138,624 5,686 12,312

Contract liabilities 10 1,268 4,569 - -

Derivative financial liabilities 11 1,213 3,880 - -

Provisions 17 8,566 8,387 - -

Current tax liabilities 10,300 8,681 - -

Totalcurrentliabilities 262,315 235,954 5,686 12,312

Totalliabilities 309,556 304,721 5,686 12,312

Totalequityandliabilities 936,000 914,609 280,863 281,808

The notes on pages 90 to 168 are an integral part of these financial statements.

STATEMENTS OF FINANCIAL POSITIONAs at 31 March 2021 (Cont’d)



For the year ended 31 March 2021

Group Company

Note 2021RM’000

2020RM’000

2021RM’000

2020RM’000

Revenue 19 873,681 938,667 39,442 56,787

Cost of sales (786,856) (790,850) - -

Grossprofit 86,825 147,817 39,442 56,787

Other operating income 26,405 15,426 63 31

Distribution expenses (1,221) (2,101) (10) (32)

Administrative expenses (31,069) (40,302) (10,772) (14,681)

Net gain/(loss) on impairment of financial instruments and contract assets 21 8,121 (9,141) (14) (3)

Other operating expenses (4,438) (7,598) (3,856) (1,583)

Resultsfromoperatingactivities 84,623 104,101 24,853 40,519

Interest income 41 84 - -

Finance costs 20 (2,816) (4,534) (40) -

Net finance costs (2,775) (4,450) (40) -

Profitbeforetax 21 81,848 99,651 24,813 40,519

Tax expense 23 (22,149) (19,828) - -

Profitfortheyear 59,699 79,823 24,813 40,519


Group CompanyNote 2021

RM’0002020

RM’0002021

RM’0002020

RM’000Items that are or may be reclassified subsequently to profit or loss

Cash flow hedge 601 756 - -

Foreign currency translation differences (24,612) 32,281 - -

Totalothercomprehensive(expense)/incomefortheyear,netoftax (24,011) 33,037 - -

Totalcomprehensiveincomefortheyear 35,688 112,860 24,813 40,519

Profitfortheyearattributableto:

Owners of the Company 59,699 79,823 24,813 40,519

Totalcomprehensiveincomefortheyearattributableto:

Owners of the Company 35,688 112,860 24,813 40,519

Basic/Dilutedearningsperordinaryshare(sen) 24 44.17 59.06



For the year ended 31 March 2021 (Cont’d)


AttributabletoownersoftheCompany

Non-distributable Distributable

SharecapitalRM’000

Employees’ShareGrant

SchemereserveRM’000

HedgingreserveRM’000

TranslationreserveRM’000

RetainedearningsRM’000

Totalequity

RM’000

At1April2019 212,731 - (1,393) 61,591 262,701 535,630

Other comprehensive income for the year

- Cash flow hedge - - 756 - - 756

- Foreign currency translation differences - - - 32,281 - 32,281

Totalothercomprehensiveincomefortheyear - - 756 32,281 - 33,037

Profit for the year - - - - 79,823 79,823

Totalcomprehensiveincomefortheyear - - 756 32,281 79,823 112,860

Transactions with owners of the Company

- Dividends to owners of the Company (Note 25) - - - - (39,266) (39,266)

- Share-based payment transactions - 664 - - - 664

- 664 - - (39,266) (38,602)

At31March2020 212,731 664 (637) 93,872 303,258 609,888

Note 12 Note 13

CONSOLIDATED STATEMENT OF CHANGES IN EqUITYFor the year ended 31 March 2021







HedgingreserveRM’000

TranslationreserveRM’000


Totalequity

RM’000

At1April2020 212,731 664 (637) 93,872 303,258 609,888

Other comprehensive (expense)/income for the year

- Cash flow hedge - - 601 - - 601

- Foreign currency translation differences - - - (24,612) - (24,612)

Totalothercomprehensiveincome/(expense)fortheyear - - 601 (24,612) - (24,011)

Profit for the year - - - - 59,699 59,699

Totalcomprehensiveincome/(expense)fortheyear - - 601 (24,612) 59,699 35,688


- Dividends to owners of the Company (Note 25) - - - - (19,951) (19,951)

- Share-based payment transactions - 819 - - - 819

- 819 - - (19,951) (19,132)

At31March2021 212,731 1,483 (36) 69,260 343,006 626,444

Note 12 Note 13


CONSOLIDATED STATEMENT OF CHANGES IN EqUITYFor the year ended 31 March 2021 (Cont’d)


STATEMENT OF CHANGES IN EqUITYFor the year ended 31 March 2021







Totalequity

RM’000

At1April2019 212,731 - 54,848 267,579

Profit for the year representing total comprehensive income for the year - - 40,519 40,519

Transaction with owners of the Company

- Share-based payment transactions - 664 - 664

- Dividends to owners of the Company (Note 25) - - (39,266) (39,266)

- 664 (39,266) (38,602)

At31March2020/1April2020 212,731 664 56,101 269,496

Profit for the year representing total comprehensive income for the year - - 24,813 24,813


- Share-based payment transactions - 819 - 819

- Dividends to owners of the Company (Note 25) - - (19,951) (19,951)

- 819 (19,951) (19,132)

At31March2021 212,731 1,483 60,963 275,177

Note 12 Note 13



Group Company

Note 2021RM’000

2020RM’000

2021RM’000

2020RM’000

Cashflowsfromoperatingactivities

Profit before tax 81,848 99,651 24,813 40,519

Adjustments for:


- depreciation 3 43,570 42,188 303 187

- gain on disposal (222) (45) - -

- written off 15 2,143 15 -

Right-of-use assets

- depreciation 4 8,211 7,704 - -

- gain on derecognition (4) - - -

Amortisation of intangible assets 5 2,769 2,771 91 64

Amortisation of government grant (2,216) (370) - -

Fair value (gain)/loss on derivatives 21 (2,044) 3,714 - -

Interest income (41) (84) (1) (31)

Interest expense 20 1,098 3,364 40 -

Accretion of interest on lease liabilities 20 1,718 1,170 - -

Dividend income 19 - - (27,325) (44,400)

Employees’ Share Grant Scheme expenses 15 819 664 28 59

Net (gain)/loss on impairment on

- trade receivables (5,801) 6,297 - -

- contract assets (2,320) 2,844 - -

- amount due from a subsidiary - - 14 3

- investments in subsidiaries 21 - - 1,036 -

Provision for warranties 17 2,575 2,192 - -

Reversal of provision for

- warranties 17 (1,970) (924) - -

- onerous contracts 17 (109) (657) - -

Operatingprofit/(loss)beforechangesinworkingcapital 127,896 172,622 (986) (3,599)

STATEMENTS OF CASH FLOWSFor the year ended 31 March 2021


STATEMENTS OF CASH FLOWSFor the year ended 31 March 2021 (Cont’d)

Group Company

Note 2021RM’000

2020RM’000

2021RM’000

2020RM’000

Changes in working capital:

Trade and other receivables (6,149) (27,915) 1,214 12,706

Inventories (30,872) (31,742) - -

Contract assets 7,094 (15,773) - -

Trade and other payables 12,977 11,608 (6,626) 4,503

Contract liabilities (3,301) 4,107 - -

Provisions (488) (45) - -

Deferred income 2,287 2,630 - -

Cashgeneratedfrom/(usedin)operations 109,444 115,492 (6,398) 13,610

Dividends received B - - 27,325 36,000

Income tax (paid)/refunded (22,656) (17,428) - 42

Netcashfromoperatingactivities 86,788 98,064 20,927 49,652

Cashflowsfrominvestingactivities

Purchase of plant and equipment C (48,385) (60,997) (163) (581)

Additions to intangible assets (2,063) (815) (132) (110)

Interest received 41 84 1 31

Investment in a subsidiary A - - - (10,000)

Proceeds from disposal of plant and equipment 222 49 - -

Netcashusedininvestingactivities (50,185) (61,679) (294) (10,660)


Group Company

Note 2021RM’000

2020RM’000

2021RM’000

2020RM’000

Cashflowsfromfinancingactivities

Dividends paid (19,951) (39,266) (19,951) (39,266)

Interest paid (2,816) (4,534) (40) -

Repayment of term loans (7,780) (5,047) - -

Drawdown/(Repayment) of revolving credit 15,809 (12,522) - -

Payment of lease liabilities (6,848) (6,827) - -

Netcashusedinfinancingactivities (21,586) (68,196) (19,991) (39,266)

Netincrease/(decrease)incashandcashequivalents 15,017 (31,811) 642 (274)

Cash and cash equivalents at beginning of year 14,792 23,992 339 613

Effect of exchange rate fluctuations (13,702) 22,611 - -

Cashandcashequivalentsatendofyear D 16,107 14,792 981 339

Cash outflows for leases as a lessee

Group Company

Note 2021RM’000

2020RM’000

2021RM’000

2020RM’000

Includedinnetcashfromoperatingactivities:

Payment relating to:

- short-term leases 21 380 1,436 58 80

- leases of low-value assets 21 124 113 25 17

- interest on lease liabilities 20 1,718 1,170 - -

Includedinnetcashusedinfinancingactivities:

Payment of lease liabilities 6,848 6,827 - -

Total cash outflows for leases 9,070 9,546 83 97



NOTES

A. During the financial year, amount due from subsidiaries of Nil (2020 : RM10,000,000) was capitalised into cost of investments in subsidiaries via the issuance of Nil (2020 : 10,000,000) new ordinary shares to the Company.

B. Dividend income

During the financial year, the Company received dividends by way of the following:

Company

2021RM’000

2020RM’000

Cash received 27,325 36,000

Contra with amount due to a subsidiary - 8,400

Total dividend income 27,325 44,400

C. Purchase of plant and equipment

During the financial year, the Group and the Company acquired plant and equipment by way of the following:

Group Company

2021RM’000

2020RM’000

2021RM’000

2020RM’000

Acquired in cash 48,385 60,997 163 581

Capitalised from prepayment 12,307 9,773 - -

Amount unpaid 2,804 - - -

Total additions 63,496 70,770 163 581

D. Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise cash and bank balances as shown on the statements of financial position.



NO

TES

(Con

t’d)

E.

Reco

ncili

atio

n of

mov

emen

ts o

f lia

bilit

ies

to c

ash

flow

s ar

isin

g fro

m fi

nanc

ing

activ

ities

At

1April

2019

RM’000

Netchanges

from

financing

cashflows

RM’000

Acquisition

ofnew

lease

RM’000

Effectof

movem

ent

inexchange

rates

RM’000

At

31March

2020/

1April2021

RM’000

Net

changesfrom

financingcash

flows

RM’000

Acquisition

ofnew

lease

RM’000

Derecognition

oflease

RM’000

Effectof

movem

ent

inexchange

rates

RM’000

At

31March

2021

RM’000

Group

Revo

lvin

g cr

edit

67,9

03(1

2,52

2) -

-55,381

15,809

--

-71,190

Term

loan

s 31

,905

(5,0

47)

- -

26,858

(7,780)

--

-19,078

Leas

e lia

bilit

ies

43,5

04(6

,827

)6,

130

4442,851

(6,848)

87(103)

(1,801)

34,186

143,

312

(24,

396)

6,13

044

125,090

1,181

87(103)

(1,801)

124,454

The

note

s on

pag

es 9

0 to

168

are

an

inte

gral

par

t of t

hese

fina

ncia

l sta

tem

ents

.



NOTES TO THE FINANCIAL STATEMENTS

SAM Engineering & Equipment (M) Berhad is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of the Company are as follows:

Principalplaceofbusiness

Plot 17, Hilir Sungai Keluang TigaBayan Lepas Free Industrial ZonePhase 411900 Penang

Registeredoffice

Suite 18.05, MWE PlazaNo.8, Lebuh Farquhar10200 Penang

The consolidated financial statements of the Company as at and for the financial year ended 31 March 2021 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”). The principal activities of the Company are investment holding and provision of corporate management services. The principal activities of the subsidiaries are stated in Note 6 to the financial statements.

The immediate holding company is Singapore Aerospace Manufacturing Pte. Ltd. and the penultimate holding company is Accuron Technologies Limited. The ultimate holding company is Temasek Holdings (Private) Limited. All the above companies are incorporated in the Republic of Singapore.

These financial statements were authorised for issue by the Board of Directors on 12 July 2021.

1. Basisofpreparation

(a) Statementofcompliance

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

The following are accounting standard and amendments that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:

MFRSs and amendments effective for annual periods beginning on or after 1 June 2020• Amendment to MFRS 16, Leases – Covid-19-Related Rent Concessions

MFRSs and amendments effective for annual periods beginning on or after 1 January 2021• Amendments to MFRS 9, Financial Instruments, MFRS 139, Financial Instruments: Recognition and Measurement,

MFRS 7, Financial Instruments: Disclosures, MFRS 4, Insurance Contracts and MFRS 16, Leases – Interest Rate Benchmark Reform – Phase 2

MFRSs and amendments effective for annual periods beginning on or after 1 April 2021• Amendment to MFRS 16, Leases – Covid-19-Related Rent Concessions beyond 30 June 2021


1. Basisofpreparation (Cont’d)

(a) Statementofcompliance(Cont’d)

MFRS and amendments effective for annual periods beginning on or after 1 January 2022• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements

to MFRS Standards 2018-2020) • Amendments to MFRS 3, Business Combinations - Reference to the Conceptual Framework• Amendments to MFRS 9, Financial Instruments (Annual Improvements to MFRS Standards 2018-2020)• Amendments to Illustrative Examples accompanying MFRS 16, Leases (Annual Improvements to MFRS

Standards 2018-2020) • Amendments to MFRS 116, Property, Plant and Equipment - Proceeds before Intended Use• Amendments to MFRS 137, Provisions, Contingent Liabilities and Contingent Assets - Onerous Contracts -

Cost of Fulfilling a Contract• Amendments to MFRS 141, Agriculture (Annual Improvements to MFRS Standards 2018-2020)

MFRSs and amendments effective for annual periods beginning on or after 1 January 2023• MFRS 17, Insurance Contracts• Amendments to MFRS 101, Presentation of Financial Statements – Classification of Liabilities as Current or

Non-current and Disclosures of Accounting Policies• Amendments to MFRS 108, Accounting Policies, Changes in Accounting Estimates and Errors – Definition of

Accounting Estimates • Amendments to MFRS 112, Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single

Transaction

MFRSs and amendments effective for annual periods beginning on or after a date yet to be confirmed• Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and

Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The Group and the Company plan to apply the abovementioned amendments, where applicable, in the respective financial years when the abovementioned amendments become effective.

The Group and the Company do not plan to apply MFRS 17, Insurance Contracts that is effective for annual periods beginning on or after 1 January 2023 as it is not applicable to the Group and the Company.

The initial application of the amendments is not expected to have any material financial impacts to the current period and prior period financial statements of the Group and of the Company.

(b) Basisofmeasurement

The financial statements have been prepared on the historical cost basis other than as disclosed in the financial statements.

(c) Functionalandpresentationcurrency

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.

(d) Useofestimatesandjudgements

The preparation of the financial statements in conformity with MFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

NOTES TO THE FINANCIAL STATEMENTS(Cont’d)


1. Basisofpreparation (Cont’d)

(d) Useofestimatesandjudgements(Cont’d)

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes:

• Note 3.1 - Assessment of impairment of property, plant and equipment, right-of-use assets and intangible assets (aerospace business)

• Note 9.1 - Valuation of inventories;• Note 17 - Provision for warranty; and• Note 29.4 - Recognition and measurement of impairment loss on trade receivables and contract assets

2. Significantaccountingpolicies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements and have been applied consistently by the Group entities, unless otherwise stated.

(a) Basisofconsolidation

(i) Subsidiaries

Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing equity interest in the

acquiree; less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

(iii) Acquisitions of non-controlling interests

The Group accounts for all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.



2. Significantaccountingpolicies(Cont’d)

(a) Basisofconsolidation(Cont’d)

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(v) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

(b) Foreigncurrency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date, except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.

(ii) Operations denominated in functional currencies other than Ringgit Malaysia

The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated to RM at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign currency translation reserve (“FCTR”) in equity. However, if the operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.

When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests.



2. Significantaccountingpolicies (Cont’d)

(c) Financialinstruments

(i) Recognition and initial measurement

A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without significant financing component) or a financial liability is initially measured at fair value plus or minus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issuance. A trade receivable without a significant financing component is initially measured at the transaction price.

An embedded derivative is recognised separately from the host contract where the host contract is not a financial asset, and accounted for separately if, and only if, the derivative is not closely related to the economic characteristics and risks of the host contract and the host contract is not measured at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.

(ii) Financial instrument categories and subsequent measurement Financialassets

Categories of financial assets are determined on initial recognition and are not reclassified subsequent to their initial recognition unless the Group or the Company changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change of the business model.

(a) Amortised cost

Amortised cost category comprises financial assets that are held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The financial assets are not designated as fair value through profit or loss. Subsequent to initial recognition, these financial assets are measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Interest income is recognised by applying effective interest rate to the gross carrying amount except for credit impaired financial assets (see Note 2(g)(i)) where the effective interest rate is applied to the amortised cost.

(b) Fair value through profit or loss

All financial assets not measured at amortised cost are measured at fair value through profit or loss. This includes derivative financial assets (except for a derivative that is a designated and effective hedging instrument). On initial recognition, the Group or the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets categorised as fair value through profit or loss are subsequently measured at their fair value. Net gains or losses, including any interest or dividend income, are recognised in profit or loss.

All financial assets, except for those measured at fair value through profit or loss, are subject to impairment assessment (see Note 2(g)(i)).




(c) Financialinstruments(Cont’d)

(ii) Financial instrument categories and subsequent measurement (Cont’d)

Financialliabilities

The categories of financial liabilities at initial recognition are as follows:

(a) Amortised cost

Other financial liabilities not categorised as fair value through profit or loss are subsequently measured at amortised cost using the effective interest method.

Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gains or losses on derecognition are also recognised in profit or loss.

(b) Fair value through profit or loss

Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument), contingent consideration in a business combination and financial liabilities that are specifically designated into this category upon initial recognition.

On initial recognition, the Group or the Company may irrevocably designate a financial liability that otherwise meets the requirements to be measured at amortised cost as at fair value through profit or loss:

(a) if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise;

(b) a group of financial liabilities or assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the Group is provided internally on that basis to the Group’s key management personnel; or

(c) if a contract contains one or more embedded derivatives and the host is not a financial asset in the scope of MFRS 9, Financial Instruments where the embedded derivative significantly modifies the cash flows and separation is not prohibited.

Financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair value with gains or losses, including any interest expense are recognised in profit or loss.

For financial liabilities where it is designated as fair value through profit or loss upon initial recognition, the Group and the Company recognise the amount of change in fair value of the financial liability that is attributable to change in credit risk in the other comprehensive income and remaining amount of the change in fair value in the profit or loss, unless the treatment of the effects of changes in the liability’s credit risk would create or enlarge an accounting mismatch.

(iii) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantees issued are initially measured at fair value. Subsequently, they are measured at higher of:

• the amount of the loss allowance; and• the amount initially recognised less, when appropriate, the cumulative amount of income recognised in

accordance to the principles of MFRS 15, Revenue from Contracts with Customers.

Liabilities arising from financial guarantees are presented together with other provisions.





(c) Financialinstruments (Cont’d)

(iv) Hedge accounting

At inception of a designated hedging relationship, the Group and the Company document the risk management objective and strategy for undertaking the hedge. The Group and the Company also document the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

Cashflowhedge

A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, a recognised asset or liability or a highly probable forecast transaction and could affect the profit or loss. In a cash flow hedge, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income and accumulated in equity and the ineffective portion is recognised in profit or loss. The effective portion of changes in the fair value of the derivative that is recognised in other comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge.

Subsequently, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss in the same period or periods during which the hedged forecast cash flows affect profit or loss. If the hedge item is a non-financial asset or liability, the associated gain or loss recognised in other comprehensive income is removed from equity and included in the initial amount of the asset or liability. However, loss recognised in other comprehensive income that will not be recovered in one or more future periods is reclassified from equity into profit or loss immediately.

The Group designates only the change in fair value of the spot element of forward contracts as the hedging instrument in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts (“forward points”) and/or the foreign currency basis spread are separately accounted for as cost of hedging and recognised in a cost of hedging reserve within equity.

Cash flow hedge accounting is discontinued prospectively when the hedging instrument expires or is sold, terminated or exercised, the hedge is no longer highly effective, the forecast transaction is no longer expected to occur or the hedge designation is revoked. If the hedge is for a forecast transaction, the cumulative gain or loss on the hedging instrument remains in equity until the forecast transaction occurs. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedging reserve and the cost of hedging reserve remains in equity until, for a hedge of a transaction resulting in recognition of a non-financial item, it is included in the non-financial item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified to profit or loss.

(v) Derecognition

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or transferred, or control of the asset is not retained or substantially all of the risks and rewards of ownership of the financial asset are transferred to another party. On derecognition of a financial asset, the difference between the carrying amount of the financial asset and the sum of consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged, cancelled or expires. A financial liability is also derecognised when its terms are modified and the cash flows of the modified liability are substantially different, in which case, a new financial liability based on modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.



(c) Financialinstruments (Cont’d)

(vi) Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group or the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and liability simultaneously.

(d) Property,plantandequipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Costs also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net within “other operating income” and “other operating expenses” respectively in profit or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment from the date that they are available for use. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.





(d) Property,plantandequipment (Cont’d)

(iii) Depreciation (Cont’d)

The estimated useful lives for the current and comparative periods are as follows:

Years

Buildings 30

Electrical installation and fittings 3 - 50

Factory equipment 5 - 10

Motor vehicles 5

Office equipment, furniture and fittings 3 - 10

Plant and machinery 5 - 10

Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period, and adjusted as appropriate.

(e) Leases

(i) Definition of a lease

A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

• the contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;

• the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

• the customer has the right to direct the use of the asset. The customer has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the customer has the right to direct the use of the asset if either the customer has the right to operate the asset; or the customer designed the asset in a way that predetermines how and for what purpose it will be used.

At inception or on reassessment of a contract that contains a lease component. The Group allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. However, for leases of properties in which the Group is a lessee, it has elected not to separate non-lease components and will instead account for the lease and non-lease components as a single lease component.

(ii) Recognition and initial measurement

Asalessee

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the respective Group entities’ incremental borrowing rate. Generally, the Group entities use their incremental borrowing rate as the discount rate.



(e) Leases(Cont’d)

(ii) Recognition and initial measurement (Cont’d)

Asalessee(Cont’d)

Lease payments included in the measurement of the lease liability comprise the following:

• fixed payments, including in-substance fixed payments less any incentives receivable; and• penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(iii) Subsequent measurement

Asalessee

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a revision of in-substance fixed lease payments, or if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

(f) Intangibleassets

(i) Computer software

Computer software are measured at cost less any accumulated amortisation and any accumulated impairment losses.

(ii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred.

Expenditure on development activities, whereby the application of research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete development and to use or sell the asset.

The expenditure capitalised includes the cost of materials, direct labour and overheads costs that are directly attributable to preparing the asset for its intended use. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Other development expenditure is recognised in profit or loss as incurred.

Capitalised development expenditure is measured at cost less any accumulated amortisation and any accumulated impairment losses.




(f) Intangibleassets(Cont’d)

(iii) Amortisation

Amortisation is based on the cost of the asset less its residual value. Computer software are amortised on a straight-line basis over a period of 2 to 6 years while development expenditure are amortised on a straight-line basis over a period of 5 to 10 years. Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted, if appropriate.

(g) Impairment

(i) Financial assets

The Group and the Company recognise loss allowances for expected credit losses on financial assets measured at amortised cost and contract assets. Expected credit losses are a probability-weighted estimate of credit losses.

The Group and the Company measure loss allowances at an amount equal to lifetime expected credit loss, except for cash and bank balance for which credit risk has not increased significantly since initial recognition, which are measured at 12-month expected credit loss. Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime expected credit loss.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit loss, the Group and the Company consider reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information, where available.

Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of the asset, while 12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within the 12 months after the reporting date. The maximum period considered when estimating expected credit losses is the maximum contractual period over which the Group and the Company are exposed to credit risk.

The Group and the Company estimate the expected credit losses on trade receivables using a provision matrix with reference to historical credit loss experience.

An impairment loss in respect of financial assets measured at amortised cost is recognised in profit or loss and the carrying amount of the asset is reduced through the use of an allowance account.

At each reporting date, the Group and the Company assess whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

The gross carrying amount of a financial asset is written off (either partially or full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group or the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s or the Company’s procedures for recovery amounts due.





(g) Impairment(Cont’d)

(ii) Other assets

The carrying amounts of other assets (except for inventories, contract assets and deferred tax assets) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amounts of the assets in the cash-generating unit (groups of cash-generating units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are recognised.

(h) Inventories

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

The cost of inventories is calculated using the first-in, first-out method and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of work-in-progress and manufactured inventories, cost includes an appropriate share of production overheads based on normal operating capacity.

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

(i) Contractasset/Contractliability

A contract asset is recognised when the Group’s or the Company’s right to consideration is conditional on something other than the passage of time. A contract asset is subject to impairment in accordance to MFRS 9, Financial Instruments (see Note 2(g)(i)).

A contract liability is stated at cost and represents the obligation of the Group or the Company to transfer goods or services to a customer for which consideration has been received (or the amount is due) from the customers.

(j) Cashandcashequivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks which have an insignificant risk of changes in fair value with original maturities of three months or less, and are used by the Group and the Company in the management of their short term commitments.




(k) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

(i) Warranties

A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

(ii) Onerous contracts

A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.

(l) Revenueandotherincome

(i) Revenue from contracts with customers

Revenue is measured based on the consideration specified in a contract with a customer in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties. The Group or the Company recognises revenue when (or as) it transfers control over a product or service to customer. An asset is transferred when (or as) the customer obtains control of the asset.

The Group or the Company transfers control of a good or service at a point in time unless one of the following over time criteria is met:

(a) the customer simultaneously receives and consumes the benefits provided as the Group or the Company performs;

(b) the Group’s or the Company’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or

(c) the Group’s or the Company’s performance does not create an asset with an alternative use and the Group or the Company has an enforceable right to payment for performance completed to date.

(ii) Dividend income

Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

(iii) Interest income

Interest income is recognised as it accrues using the effective interest method in profit or loss.

(iv) Government grants

Government grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and that the Group will comply with the conditions associated with the grant; they are then recognised in profit or loss as other income on a systematic basis over the useful life of the asset.

Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a systematic basis in the same periods in which the expenses are recognised.



(m) Borrowingcosts

Borrowing costs are recognised in profit or loss using the effective interest method.

(n) Incometax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax assets and liabilities on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(o) Employeebenefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) State plans

The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(iii) Employees’ Share Grant Scheme

The Company established an Employees’ Share Grant Scheme (“ESGS”) to eligible employees of the Group. The amount granted under the ESGS is a fixed sum as determined by the ESGS Committee and is recognised as an employee expense with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards.

The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the ultimate amount recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.




(o) Employeebenefits(Cont’d)

(iv) Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the end of the reporting period, then they are discounted.

(p) Earningsperordinaryshare

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own share held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held and for the effects of all dilutive potential ordinary shares, where applicable.

(q) Operatingsegments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Operating segment results are reviewed regularly by the chief operating decision maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

(r) Equityinstruments

Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.

(i) Issue expenses

Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from equity.

(ii) Ordinary shares Ordinary shares are classified as equity.

(s) Contingentliabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(t) Fairvaluemeasurements

Fair value of an asset or a liability, except for lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.




(t) Fairvaluemeasurements (Cont’d)

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value are categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.Level 3: unobservable inputs for the asset or liability.

The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances that caused the transfers.




3.Property,plantandequipment

At

1April2020

RM’000

Additions

RM’000

Disp

osals

RM’000

Written

off

RM’000

Reclassification

RM’000

Effectof

movem

entsin

exchange

rates

RM’000

At

31March

2021

RM’000

Group

Cost

2021

Bui

ldin

gs52,470

--

--

(2,211)

50,259

Elec

tric

al in

stal

latio

n an

d fit

tings

14,132

2,747

--

-(485)

16,394

Fact

ory

equi

pmen

t30,966

1,638

(589)

(134)

29(1,196)

30,714

Mot

or v

ehic

les

2,230

--

--

(51)

2,179

Offi

ce e

quip

men

t, fu

rnitu

re a

nd fi

ttin

gs

30,056

1,375

-(202)

-(996)

30,233

Plan

t and

mac

hine

ry529,856

49,563

(3,740)

-8,236

(21,800)

562,115

Cap

ital e

xpen

ditu

re-in

-pro

gres

s8,921

8,173

--

(8,265)

(375)

8,454

668,631

63,496

(4,329)

(336)

-(27,114)

700,348


3.Property,plantandequipment(

Con

t’d)

At

1April2019

RM’000

Additions

RM’000

Disp

osals

RM’000

Written

off

RM’000

Reclassification

RM’000

Effectof

movem

entsin

exchange

rates

RM’000

At

31March

2020

RM’000

Group

Cost

2020

Bui

ldin

gs49

,526

--

--

2,94

452

,470

Elec

tric

al in

stal

latio

n an

d fit

tings

13

,324

159

--

-64

914

,132

Fact

ory

equi

pmen

t28

,503

1,86

8(1

4)(9

76)

301,

555

30,9

66

Mot

or v

ehic

les

2,15

0-

--

-80

2,23

0

Offi

ce e

quip

men

t, fu

rnitu

re a

nd fi

ttin

gs

25,3

423,

710

(22)

(160

)-

1,18

630

,056

Plan

t and

mac

hine

ry43

2,20

764

,885

(340

)(3

,637

)11

,757

24,9

8452

9,85

6

Cap

ital e

xpen

ditu

re-in

-pro

gres

s19

,407

148

--

(11,

787)

1,15

38,

921

570,

459

70,7

70(3

76)

(4,7

73)

-32

,551

668,

631





Con

t’d)

At

1April

2020

RM

’000

Depreciation

fortheyear

RM’000

Disp

osals

RM’000

Written

off

RM’000

Effectof

movem

ents

inexchange

rates

RM’000

At31March2021

Totalat

31March

2021

RM’000

Accum

ulated

depreciation

RM’000

Accum

ulated

impairm

ent

RM’000

Group

Depreciationandimpairm

entloss

2021

Bui

ldin

gs20,299

1,828

--

(864)

21,263

-21,263

Elec

tric

al in

stal

latio

n an

d fit

tings

11,690

795

--

(395)

11,936

154

12,090

Fact

ory

equi

pmen

t 22,499

2,730

(589)

(134)

(868)

23,580

5823,638

Mot

or v

ehic

les

1,977

29-

-(41)

1,965

-1,965

Offi

ce e

quip

men

t, fu

rnitu

re a

nd fi

ttin

gs

24,071

2,731

-(187)

(800)

25,773

4225,815

Plan

t and

mac

hine

ry281,490

35,457

(3,740)

-(11,513)

301,694

-301,694

362,026

43,570

(4,329)

(321)

(14,481)

386,211

254

386,465



Con

t’d)

At

1April

2019

RM’000

Depreciation

fortheyear

RM’000

Disp

osals

RM’000

Written

off

RM’000

Effectof

movem

ents

inexchange

rates

RM’000

At31March2020

Totalat

31March

2020

RM’000

Accum

ulated

depreciation

RM’000

Accum

ulated

impairm

ent

RM’000

Group

Depreciationandimpairm

entloss

2020

Bui

ldin

gs17

,361

1,82

9-

-1,

109

20,2

99-

20,2

99

Elec

tric

al in

stal

latio

n an

d fit

tings

10,7

0146

4-

-52

511

,536

154

11,6

90

Fact

ory

equi

pmen

t18

,637

3,12

8(1

0)(3

74)

1,11

822

,441

5822

,499

Mot

or v

ehic

les

1,83

873

--

661,

977

-1,

977

Offi

ce e

quip

men

t, fu

rnitu

re a

nd fi

ttin

gs

20,8

532,

365

(22)

(158

)1,

033

24,0

2942

24,0

71

Plan

t and

mac

hine

ry23

4,91

434

,329

(340

)(2

,098

)14

,685

281,

490

-28

1,49

0

304,

304

42,1

88(3

72)

(2,6

30)

18,5

3636

1,77

225

436

2,02

6




3. Property,plantandequipment(Cont’d)

At 31March2021

RM’000

At 31March2020

RM’000

At 1April2019

RM’000

Group

Carryingamounts

Buildings 28,996 32,171 32,165

Electrical installation and fittings 4,304 2,442 2,623

Factory equipment 7,076 8,467 9,866

Motor vehicles 214 253 312

Office equipment, furniture and fittings 4,418 5,985 4,489

Plant and machinery 260,421 248,366 197,293

Capital expenditure-in-progress 8,454 8,921 19,407

313,883 306,605 266,155

At 1AprilRM’000

AdditionsRM’000

WrittenoffRM’000

At 31MarchRM’000

Company

Cost

2021

Motor vehicles 523 - - 523

Office equipment, furniture and fittings 2,907 163 (151) 2,919

Electrical installation and fittings 1,018 - - 1,018

Factory equipment 13 - - 13

4,461 163 (151) 4,473

2020



Electrical installation and fittings 1,002 16 - 1,018


3,884 581 (4) 4,461



At 1AprilRM’000

Depreciationfortheyear

RM’000Writtenoff

RM’000

At 31MarchRM’000

Company

Depreciation

2021



Electrical installation and fittings 768 7 - 775


3,461 303 (136) 3,628

Depreciation

2020

Motor vehicles 483 40 - 523


Electrical installation and fittings 761 7 - 768

Factory equipment 12 1 - 13

3,278 187 (4) 3,461

At 31March2021

RM’000

At31March2020

RM’000

At 1April2019

RM’000

Carryingamounts

Motor vehicles - - 40

Office equipment, furniture and fittings 602 750 324

Electrical installation and fittings 243 250 241

Factory equipment - - 1

845 1,000 606





3.1 Significant judgements and assumptions

The Group’s aerospace business was impacted by the outbreak of the Covid-19 pandemic where the reduction in passenger traffic in the commercial aerospace sector has led to a significant drop in aircraft demand. Accordingly, the Group carried out an impairment assessment on the property, plant and equipment, right-of-use assets comprising the lease of buildings as disclosed in Note 4 and intangible assets comprising development expenditure as disclosed in Note 5 used in its aerospace business (collectively known as “aerospace non-current assets”) during the year.

The recoverable amount of the aerospace non-current assets was determined based on value-in-use calculations by discounting future cash flows covering periods that approximate the remaining useful life of the assets. The values assigned to key assumptions (i.e. future sales growth and gross profit margin) represent the Director’s assessment of future trends and customer demand which are based on both external and internal sources (historical data). A post-tax discount rate of 10% was applied to the calculations in determining the recoverable amount of the Group’s aerospace non-current assets.

The recoverable amount was noted to be higher than the carrying amount of the Group’s aerospace non-current assets.

4. Right-of-useassets

LeaseholdlandRM’000

BuildingsRM’000

Officeequipment

RM’000Total

RM’000

At 1 April 2019 10,925 43,222 282 54,429

Addition - 6,130 - 6,130

Depreciation (283) (7,354) (67) (7,704)

Effect of movements in exchange rates 638 (312) (2) 324

At 31 March 2020/1 April 2020 11,280 41,686 213 53,179

Addition - - 87 87

Derecognition - - (99) (99)

Depreciation (287) (7,853) (71) (8,211)

Effect of movements in exchange rates (474) (1,703) (9) (2,186)

At 31 March 2021 10,519 32,130 121 42,770

The Group leases land, factory buildings and office equipment. The leases for land is for a period of 60 years, whereas the leases for factory buildings run between 3 to 10 years and office equipment for 5 years. Lease payments for factory buildings are subject to increase every 2 to 3 years to reflect current market rentals.


4. Right-of-useassets(Cont’d)

4.1 Extension options

One of the lease of factory building contains extension option exercisable by the Group 3 years before the end of the non-cancellable contract period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant change in circumstances within its control.

Leaseliabilitiesrecognised(discounted)

RM’000

Potentialfuturelease

paymentsnotincludedin

leaseliabilities(discounted)

RM’000

Historicalrateofexercise

ofextensionoptions

%

2021

Group

Buildings 10,683 19,251 100

2020

Group

Buildings 10,814 19,343 100

4.2 Significant judgements and assumptions in relation to leases

The Group assesses at lease commencement by applying significant judgement whether it is reasonably certain to exercise the extension options. Group entities consider all facts and circumstances including their past practice and any cost that will be incurred to change the asset if an option to extend is not taken, to help them determine the lease term.

The Group applied judgement and assumptions in determining the incremental borrowing rate of the respective leases. Group entities first determine the closest available borrowing rates before using significant judgement to determine the adjustments required to reflect the term, security, value or economic environment of the respective leases.

4.3 Restriction imposed by lease

The lease contracts for certain buildings and office equipment prohibits the Group to sublease the leased assets. While for land, the Company is allowed to sublease the land with the approval from local authorities.




5. Intangibleassets

At 1April2020

RM’000AdditionsRM’000

Effectofmovementsinexchangerates

RM’000

At 31March2021

RM’000

Group

2021

Cost

Development expenditure 16,298 1,241 (684) 16,855

Computer software 10,262 822 (319) 10,765

26,560 2,063 (1,003) 27,620

At 1April2019

RM’000AdditionsRM’000

Effectofmovementsinexchangerates

RM’000

At 31March2020

RM’000

Group

2020

Cost

Development expenditure 14,743 680 875 16,298

Computer software 9,700 135 427 10,262

24,443 815 1,302 26,560


5.Intangibleassets

(Con

t’d)

At

1April2020

RM’000

Amortisation

fortheyear

RM’000

Effectof

movem

entsin

exchangerates

RM’000

At31March2021

Totalat

31March2021

RM’000

Accum

ulated

amortisation

RM’000

Accum

ulated

Impairm

ent

RM’000

2021

Accum

ulatedamortisationandimpairm

entloss

Dev

elop

men

t exp

endi

ture

4,862

1,706

(212)

6,356

-6,356

Com

pute

r sof

twar

e 7,797

1,063

(237)

8,369

254

8,623

12,659

2,769

(449)

14,725

254

14,979

At

1April2019

RM’000

Amortisation

fortheyear

RM’000

Effectof

movem

entsin

exchangerates

RM’000

At31March2020

Totalat

31March2020

RM’000

Accum

ulated

amortisation

RM’000

Accum

ulated

Impairm

ent

RM’000

2020

Accum

ulatedamortisationandimpairm

entloss

Dev

elop

men

t exp

endi

ture

2,83

61,

784

242

4,86

2-

4,86

2

Com

pute

r sof

twar

e 6,

513

987

297

7,54

325

47,

797

9,34

92,

771

539

12,4

0525

412

,659




5. Intangibleassets (Cont’d)

At 31March2021

RM’000

At 31March2020

RM’000

At 1April2019

RM’000Group

Carryingamounts

Development expenditure 10,499 11,436 11,907

Computer software 2,142 2,465 3,187

12,641 13,901 15,094

ComputersoftwareRM’000

Company

Cost

At 1 April 2019 2,821

Additions 110

At 31 March 2020/1 April 2020 2,931

Additions 132

At 31 March 2021 3,063

Amortisation

At 1 April 2019 2,511

Amortisation for the year 64

At 31 March 2020/1 April 2020 2,575

Amortisation for the year 91

At 31 March 2021 2,666

Carryingamounts

At 1 April 2019 310

At 31 March 2020 356

At 31 March 2021 397


6. Investmentsinsubsidiaries-Company

2021RM’000

2020RM’000

Cost of investments 315,560 315,560

Less : Impairment (39,904) (38,868)

275,656 276,692

During the current financial year, the Company recorded an impairment of RM1,036,000 (2020 : Nil) on its investment cost in a subsidiary after having assessed the recoverable amount of the said subsidiary.

During the last financial year, the Company subscribed for 10,000,000 new ordinary shares in a subsidiary for RM10,000,000 through the capitalisation of an equivalent amount due from the said subsidiary.

Details of the subsidiaries are as follows:

Nameofentity

Principalplaceofbusiness/

Countryofincorporation

Effectiveownershipinterestandvoting

interest

Principalactivities2021

%2020

%SAM Meerkat (M) Sdn. Bhd.

Malaysia 100 100 Design and assembly of modular or complete machine and equipment

SAM Tooling Technology Sdn. Bhd. (“SAMTT”)

Malaysia 100 100 Design, development and manufacture of trim and form dies and suspension tooling for hard disk drive parts

Avitron Private Limited* Republic of Singapore

100 100 Manufacture and assembly of aircraft equipment, spares, components and precision engineering parts

SAM Precision (M) Sdn. Bhd. (“SAMPM”)

Malaysia 100 100 Fabrication of precision tools and machinery parts and manufacture of aircraft and other equipment parts, spares, components and precision engineering parts




6. Investmentsinsubsidiaries-Company(Cont’d)

Details of the subsidiaries are as follows: (Cont’d)

Nameofentity

Principalplaceofbusiness/

Countryofincorporation

Effectiveownershipinterestandvotinginterest

Principalactivities2021

%2020

%

Meerkat Precision Sdn. Bhd. Malaysia 100 100 Manufacture of aircraft and other related equipment parts, spares, components and precision engineering parts, precision and engineering components

SAM Technologies (M) Sdn. Bhd.

Malaysia 100 100 Dormant

Meerkat Integrator Sdn. Bhd.

Malaysia 100 100 Dormant

LKT Automation Sdn. Bhd. Malaysia 100 100 Dormant

LKT Integration Sdn. Bhd. Malaysia 100 100 Dormant

LKT Technology Sdn. Bhd. Malaysia 100 100 Dormant

Held by SAMTT

SAM Precision (Thailand) Limited*

Thailand 100 100 Manufacture of dies, jigs and parts and cutting tools for disk drives, electronics, semi-conductor and other industries

Held by SAMPM

Meerkat Technology Pte. Ltd.*

Republic of Singapore

100 100 Dormant

* Not audited by member firms of KPMG International.



7.Deferredtaxassets/(liabilities)

R

eco

gni

sed

def

erre

d t

ax a

sset

s/(li

abili

ties

)

D

efer

red

tax

asse

ts a

nd li

abili

ties

are

attr

ibut

able

to th

e fo

llow

ing:

Assets

Liabilities

Net

2021

RM’000

2020

RM’000

2021

RM’000

2020

RM’000

2021

RM’000

2020

RM’000

Group

Prop

erty

, pla

nt a

nd e

quip

men

t - c

apita

l allo

wan

ce

1,182

959

(10,694)

(12,

299)

(9,512)

(11,

340)

Righ

t-of

-use

ass

ets

- -

(5,005)

(6,2

78)

(5,005)

(6,2

78)

Leas

e lia

bilit

ies

5,320

6,43

2-

-5,320

6,43

2

Prov

isio

ns

2,776

3,89

6-

-2,776

3,89

6

Tax

loss

car

ry-f

orw

ards

1,649

86-

-1,649

86

Deferredtaxassets/(liabilities)

10,927

11,3

73(15,699)

(18,

577)

(4,772)

(7,2

04)

Set-

off o

f tax

(8,795)

(7,2

69)

8,795

7,26

9 -

-

Netdeferredtaxassets/(liabilities)

2,132

4,10

4(6,904)

(11,

308)

(4,772)

(7,2

04)

D

efer

red

tax

asse

ts a

nd li

abili

ties

are

offs

et w

hen

the

entit

y ha

s a

lega

lly e

nfor

ceab

le r

ight

to

set

off

curr

ent

tax

asse

ts a

gain

st c

urre

nt t

ax li

abili

ties

and

whe

n th

e de

ferr

ed ta

xes

rela

te to

the

sam

e au

thor

ity. D

efer

red

tax

asse

ts a

re re

cogn

ised

to th

e ex

tent

it is

pro

babl

e th

at fu

ture

taxa

ble

profi

ts w

ill b

e av

aila

ble

agai

nst w

hich

the

Gro

up e

ntiti

es c

an u

tilis

e th

e be

nefit

s th

eref

rom

.



7.Deferredtaxassets/(liabilities)(C

ont’d

)

M

ovem

ents

in te

mpo

rary

diff

eren

ces

durin

g th

e ye

ar

At

1April2019

RM’000

Recognised

inprofitorloss

(Note23)

RM’000

Exchange

difference

RM’000

At

31March2020

RM’000

Recognised

inprofitorloss

(Note23)

RM’000

Exchange

difference

RM’000

At

31March2021

RM’000

Group

Deferredtaxassets/(liabilities)

Prop

erty

, pla

nt a

nd e

quip

men

t

- cap

ital a

llow

ance

(7

,543

)(2

,537

)(1

,260

)(1

1,34

0)2,

769

(941

)(9,512)

Righ

t-of

-use

ass

ets

(7,3

96)

1,38

3(2

65)

(6,2

78)

1,30

7(3

4)(5,005)

Leas

e lia

bilit

ies

7,39

6(1

,192

)22

86,

432

(1,1

72)

605,320

Prov

isio

ns2,

169

665

1,06

23,

896

(2,1

91)

1,07

12,776

Tax

loss

car

ry-f

orw

ards

908

(822

)-

861,

570

(7)

1,649

(4,4

66)

(2,5

03)

(235

)(7

,204

)2,

283

149

(4,772)



7. Deferredtaxassets/(liabilities)(Cont’d)

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items (stated at gross):

2021RM’000

2020RM’000

Group

Tax loss carry-forwards 54,879 52,499

Capital allowance carry-forwards 10,388 9,501

Provisions and others 2,111 3,943

67,378 65,943

Company

Tax loss carry-forwards 9,368 6,988

Capital allowance carry-forwards 2,537 2,101

Provisions and others 2,110 3,943

14,015 13,032

The tax loss carry-forwards will expire in the following year of assessments under the current tax legislation of Malaysia as shown below:

Group Company

2021RM’000

2020RM’000

2021RM’000

2020RM’000

- Expire in YA2025 45,274 45,274 4,829 4,829

- Expire in YA2026 2,159 2,159 2,159 2,159

- Expire in YA2027 2,380 - 2,380 -

49,813 47,433 9,368 6,988

The capital allowance carry-forwards and the tax loss carry-forwards in certain foreign jurisdiction do not expire under the current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits will be available against which the Group entities can utilise the benefits therefrom.



8. Tradeandotherreceivables

Note 2021RM’000

2020RM’000

Group

Non-current

Prepayments 8.1 2,943 15,250

Current

Trade

Amount due from:

- immediate holding company 8.2 4,499 9,517

- related companies 8.2 959 2,115

Trade receivables 204,279 182,589

209,737 194,221

Non-trade

Amount due from immediate holding company 8.2 4 231

Other receivables 5,093 5,541

Deposits 1,894 1,415

Prepayments 17,658 20,963

24,649 28,150

234,386 222,371

237,329 237,621



8. Tradeandotherreceivables (Cont’d)

Note 2021RM’000

2020RM’000

Company

Trade

Amount due from:

- subsidiaries 8.2 1,374 2,250

- a related company 8.2 12 135

1,386 2,385

Non-trade

Amount due from:

- immediate holding company 8.2 - 231

- subsidiaries 8.2 23 632

Other receivables 1,396 4

Deposits 10 10

Prepayments 164 154

1,593 1,031

2,979 3,416

8.1 Prepayments - Group The non-current prepayments of the Group were paid for the purchase of plant and machinery.

8.2 Amounts due from immediate holding company, subsidiaries and related companies

The trade amounts due from immediate holding company, subsidiaries and related companies are subject to normal trade terms.

The non-trade amounts due from immediate holding company and subsidiaries are unsecured, interest-free and repayable on demand.



9. Inventories-Group

2021RM’000

2020RM’000

Raw materials 134,109 102,201

Work-in-progress 40,458 37,015

Manufactured inventories 1,934 5,714

176,501 144,930

Recognised in profit or loss:

Inventories recognised as cost of sales 767,258 771,216

Write down of inventories included in cost of sales 425 3,344

9.1 Significant judgements and assumptions

The Directors review inventories for obsolescence and decline in net realisable value to below cost. The review involves judgements and estimates.

In determining the amount of inventories to be written down or reversed, the Directors took into consideration the age of the inventories, likelihood of future consumption, rework and customer acceptance. Possible changes to those estimates could result in a revision to the carrying amount of the Group’s inventories and profit or loss.

10.Contractassets/(liabilities)

2021RM’000

2020RM’000

Group

Contract assets 134,585 139,359

Contract liabilities (1,268) (4,569)

The contract assets primarily relate to the Group’s rights to consideration for work completed but not yet billed at the reporting date for the manufacture of aircraft components, design and assembly of modular for equipment and related components and precision engineering parts. Typically, the amount will be billed within 12 months and will be collected based on the normal credit period extended to customers.

The contract liabilities primarily relate to advance consideration received from customers in both the aerospace and equipment segments where revenue is recognised over time.



10.Contractassets/(liabilities)(Cont’d)

Significant changes to contract assets and contract liabilities during the year are as follows:

2021RM’000

2020RM’000

Group

Contract liabilities at the beginning of the period recognised as revenue 4,569 462

11. Derivativefinancialassets/(liabilities)-Group

NominalvalueRM’000

CurrentassetsRM’000

Non-currentliabilitiesRM’000

CurrentliabilitiesRM’000

2021

Derivatives used for hedging

- Forward exchange contracts 65,447 41 - (1,213)

2020

Derivatives used for hedging

- Forward exchange contracts 126,723 111 (48) (3,880)

Forward exchange contracts are used to manage foreign currency exposures arising from the Group’s receivables and payables denominated in currencies other than the functional currencies of Group entities. The majority of the forward exchange contracts have maturities of less than one year after the end of the reporting period save for the ones used to hedge the purchase of plant and machinery.

12. Sharecapital-Group/Company

2021 2020

AmountRM’000

Numberofshares(’000)

AmountRM’000

Numberofshares(’000)

Issued and fully paid ordinary shares with no par value classified as equity instruments 212,731 135,167 212,731 135,167

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.



13. Reserves

Note

2021RM’000

2020RM’000

Group

Non-distributable

Employees’ Share Grant Scheme reserve 13.1 1,483 664

Hedging reserve 13.2 (36) (637)

Translation reserve 13.3 69,260 93,872

70,707 93,899

Distributable

Retained earnings 343,006 303,258

413,713 397,157

Company

Non-distributable

Employees’ Share Grant Scheme reserve 13.1 1,483 664

Distributable

Retained earnings 60,963 56,101

62,446 56,765

The movements in the reserves are disclosed in the statements of changes in equity.

13.1 Employees’ Share Grant Scheme reserve

The reserve relates to the performance-based Employees’ Share Grant Scheme operated by the Company as disclosed in Note 15 and is based on the cumulative fair value of the services received from the Group’s eligible employees over the vesting period.

13.2 Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedges related to hedged transactions that have not yet occurred.



13. Reserves(Cont’d)

13.3 Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations and financial statements of certain subsidiaries from functional currency, USD to the presentation currency.

14. Loansandborrowings-Group

2021RM’000

2020RM’000

Non-current

Unsecured

Term loans - variable rate 12,428 19,916

Current

Unsecured

Term loans - variable rate 6,650 6,942

Revolving credit 71,190 55,381

77,840 62,323

90,268 82,239

Certain loans and borrowings of the Group are granted with corporate guarantee given by the Company.

15. Employeebenefits

At an extraordinary general meeting held on 14 August 2018, the Company’s shareholders approved the establishment of the Employees’ Share Grant Scheme (“ESGS”) of up to 5% of the total number of issued shares of the Company to eligible employees of the Group. The ESGS is administered by the ESGS Committee in accordance with the By-Laws of the ESGS.

The salient features of the ESGS are, inter alia, as follows:

(a) The ESGS shall be in force for a period of 5 years from 30 November 2018 (“ESGS Period”) and may be extended at the discretion of the Board upon the recommendation of the ESGS Committee provided that the ESGS Period shall not in aggregate exceed a duration of 10 years from 30 November 2018, or such longer duration as may from time to time be permitted by the relevant authorities.

(b) The total number of shares which may be made available under the ESGS shall not exceed in aggregate 5% of the total number of issued shares of the Company (excluding treasury shares, if any) at any point in time during the ESGS Period.



15. Employeebenefits (Cont’d)

(c) Eligible employees are employees employed by and are on the payroll of any company in the Group (excluding dormant subsidiaries) and his/her employment has been confirmed by the company, who are at least 18 years of age and is not undischarged bankrupt. The Directors and senior management of the Group will not participate in the ESGS;

(d) Not more than 10% of the aggregate number of shares to be issued under the ESGS shall be allocated to any individual eligible employee who, either singly or collectively through persons connected with the eligible employee, holds 20% or more of the total number of issued shares of the Company (excluding treasury shares, if any); and

(e) The shares issued pursuant to the ESGS shall rank pari passu in all respects with the existing ordinary shares of the Company.

ValueofemployeeservicesreceivedforissueofESGS

Group

2021RM’000

2020RM’000

ESGS granted during the year 1,062 1,500

Amount recognised as employee expense over vesting period as determined by ESGS Committee 819 664

ESGS granted during the year 75 119

Amount recognised as employee expense over vesting period as determined by ESGS Committee 28 59

RM791,000 (2020 : RM605,000) of the ESGS expense were re-charged by the Company to the subsidiaries which benefited from the services of the employees.

16. Deferredincome-Group

2021RM’000

2020RM’000

Non-current

Government grant 1,051 1,569

Current

Government grant 4,288 2,297

5,339 3,866

Governmentgrant

The Group received government grants for the purchase of plant and machinery and wage support to retain local employees during the period of economic uncertainty. The grants are amortised on a systematic basis over the useful life of the plant and machinery or the period in which the Group benefits from the services of the employees. During the financial year, RM2,216,000 (2020 : RM370,000) was amortised and recognised as other income in profit or loss.



17. Provisions-Group

ProvisionforwarrantiesRM’000

ProvisionforonerouscontractsRM’000

TotalRM’000

At 1 April 2019 6,520 1,051 7,571

Provision made during the year 2,192 - 2,192

Reversed to profit or loss (924) (657) (1,581)

Effect of movements in exchange rates 439 34 473

At 31 March 2020/1 April 2020 8,227 428 8,655

Provision made during the year 2,575 - 2,575

Reversed to profit or loss (1,970) (109) (2,079)

Effect of movements in exchange rates (349) (16) (365)

At 31 March 2021 8,483 303 8,786

Presented as:

Non-current - 671 671

Current 6,520 380 6,900

At 1 April 2019 6,520 1,051 7,571


Current 8,227 160 8,387

At 31 March 2020 8,227 428 8,655


Current 8,483 83 8,566

At 31 March 2021 8,483 303 8,786

Warranties

Provision for warranties represent estimated liability for defects arising from products sold under warranty. The provision is based on management’s estimate made from historical warranty data associated with the products and judgement on the probability of a defect arising from products sold.



17. Provisions-Group (Cont’d)

Onerouscontracts

A provision for onerous contracts is recognised when the costs of meeting the obligations under the contract exceed the economic benefits expected to be derived. The provision is measured at the present value of the expected costs required to fulfil the requirements of the contract in excess of the contracted revenue.

18. Tradeandotherpayables

Note 2021RM’000

2020RM’000

Group

Trade

Amount due to related companies 18.1 552 433

Trade payables 97,122 74,219

Trade accruals 11,616 20,882

109,290 95,534

Non-trade

Amount due to:

- immediate holding company 18.1 468 113

- related companies 18.1 417 451

Other payables 3,707 2,241

Accrued expenses 37,410 40,285

42,002 43,090

151,292 138,624

Company

Non-trade

Amount due to:

- immediate holding company 18.1 377 -

- subsidiaries 18.1 1,898 6,496

- a related company 18.1 2 -

Other payables 80 106

Accrued expenses 3,329 5,710

5,686 12,312



18. Tradeandotherpayables (Cont’d)

18.1 Amounts due to immediate holding company, subsidiaries and related companies

The trade amount due to related companies is subject to normal trade terms.

The non-trade amounts due to immediate holding company, subsidiaries and related companies are unsecured, interest-free and payable on demand.

19. Revenue

2021RM’000

2020RM’000

Group

Revenue from contracts with customers 873,681 938,667

Company

Revenue from contracts with customers - management fee 12,116 12,356

Otherrevenue

- Dividend income from subsidiaries 27,325 44,400

- Interest income 1 31

39,442 56,787



19.Revenue

(Con

t’d)

19.1

Dis

agg

reg

atio

n o

f re

venu

e

Aerospace

Equipm

ent

Total

Group

2021

RM’000

2020

RM’000

2021

RM’000

2020

RM’000

2021

RM’000

2020

RM’000

Primarygeographicalmarkets

Mal

aysi

a3,992

14,3

4235,964

30,4

3739,956

44,7

79

Asi

a (e

xclu

ding

Mal

aysi

a)35,848

69,8

68268,646

209,

420

304,494

279,

288

Nor

th A

mer

ica

128,062

356,

818

395,566

247,

021

523,628

603,

839

Latin

Am

eric

a3,994

8,54

641

-4,035

8,54

6

Euro

pe-

-1,568

2,21

51,568

2,21

5

171,896

449,

574

701,785

489,

093

873,681

938,

667

Majorproductsandservicelines

Man

ufac

ture

of a

ircra

ft c

ompo

nent

s, o

ther

airc

raft

rela

ted

equi

pmen

t par

ts,

sp

ares

and

pre

cisi

on e

ngin

eerin

g pa

rts

171,828

449,

256

--

171,828

449,

256

Des

ign

and

asse

mbl

y of

mod

ular

for e

quip

men

t; m

anuf

actu

re o

f com

pone

nts

an

d pr

ecis

ion

engi

neer

ing

part

s fo

r mod

ular

or c

ompl

ete

mac

hine

and

equi

pmen

t-

-630,982

414,

144

630,982

414,

144

Man

ufac

ture

of c

ompo

nent

s, s

pare

s an

d pr

ecis

ion

engi

neer

ing

part

s, d

esig

n

and

asse

mbl

y of

mod

ular

or c

ompl

ete

mac

hine

and

equ

ipm

ent,

trim

and

form

die

s, ji

gs a

nd s

uspe

nsio

n to

olin

g-

-70,532

74,5

9870,532

74,5

98

Supp

ort s

ervi

ces

6831

827

135

133

966

9

171,896

449,

574

701,785

489,

093

873,681

938,

667


19.Revenue

(Con

t’d)

19.1

Dis

agg

reg

atio

n o

f re

venu

e (C

ont’d

)

Aerospace

Equipm

ent

Total

Group

2021

RM’000

2020

RM’000

2021

RM’000

2020

RM’000

2021

RM’000

2020

RM’000

Timingandrecognition

At a

poi

nt in

tim

e-

-544,801

357,

106

544,801

357,

106

Ove

r tim

e171,896

449,

574

156,984

131,

987

328,880

581,

561

Tota

l rev

enue

from

con

trac

ts w

ith c

usto

mer

s171,896

449,

574

701,785

489,

093

873,681

938,

667

Company

2021

RM’000

2020

RM’000

Primarygeographicalmarkets

Mal

aysi

a11,881

12,1

12

Asi

a (e

xclu

ding

Mal

aysi

a)23

524

4

12,116

12,3

56

Majorservicelineandtimingofrecognition

Man

agem

ent f

ee re

cogn

ised

at a

poi

nt in

tim

e12,116

12,3

56




19.Revenue

(Con

t’d)

19.2

Nat

ure

of

go

od

s an

d s

ervi

ces

Th

e fo

llow

ing

info

rmat

ion

refle

cts

the

typi

cal t

rans

actio

ns o

f the

Gro

up:

Natureofgoodsorservices

Timingofrecognitionor

methodusedtorecognise

revenue

Significant

paym

entterms

Variableelem

ent

inconsid

eration

Obligation

forreturnsor

refunds

Warranty

Man

ufac

ture

of a

ircra

ft

co

mpo

nent

s an

d ot

her

ai

rcra

ft re

late

d eq

uipm

ent

pa

rts,

spa

res

and

prec

isio

n

engi

neer

ing

part

s

Reve

nue

is re

cogn

ised

ove

r tim

e

as c

osts

are

incu

rred

. Con

trol

of g

oods

are

tran

sfer

red

over

time

as th

e go

ods

have

no

al

tern

ativ

e us

e an

d th

ere

is a

n

enfo

rcea

ble

right

to p

aym

ent

fo

r per

form

ance

com

plet

ed to

date

.

Cre

dit p

erio

d

with

in th

e in

dust

ry

st

anda

rd.

Dis

coun

ts m

ay

be

offe

red

for

ce

rtai

n co

ntra

cts

de

term

ined

on

a

case

to c

ase

ba

sis.

Retu

rns

only

appl

icab

le fo

r

prod

ucts

that

do n

ot m

eet

cu

stom

er’s

sp

ecifi

catio

ns.

Prod

uct w

arra

ntie

s ar

e

assu

ranc

e ty

pe w

arra

nty

an

d do

not

form

a

se

para

te p

erfo

rman

ce

ob

ligat

ion.

Des

ign

and

asse

mbl

y of

mod

ular

for e

quip

men

t;

man

ufac

ture

of c

ompo

nent

s

and

prec

isio

n en

gine

erin

g

part

s fo

r mod

ular

or

co

mpl

ete

mac

hine

and

equi

pmen

t

Reve

nue

is re

cogn

ised

ove

r tim

e

as c

osts

are

incu

rred

. The

se

co

ntra

cts

wou

ld m

eet t

he n

o

alte

rnat

ive

use

crite

ria a

nd th

e

Gro

up h

as ri

ghts

to p

aym

ent

fo

r wor

k pe

rfor

med

.

Cre

dit p

erio

d

with

in th

e in

dust

ry

st

anda

rd.

Not

app

licab

le.

Retu

rns

only

appl

icab

le fo

r

prod

ucts

that

do n

ot m

eet

cu

stom

er’s

sp

ecifi

catio

ns.

Prod

uct w

arra

ntie

s ar

e

assu

ranc

e ty

pe w

arra

nty

an

d do

not

form

a

se

para

te p

erfo

rman

ce

ob

ligat

ion.

Man

ufac

ture

of c

ompo

nent

s,

sp

ares

and

pre

cisi

on

en

gine

erin

g pa

rts,

des

ign

an

d as

sem

bly

of m

odul

ar

or

com

plet

e m

achi

ne a

nd

eq

uipm

ent,

man

ufac

ture

of tr

im a

nd fo

rm d

ies

and

su

spen

sion

tool

ing

Reve

nue

is re

cogn

ised

at a

poi

nt

in

tim

e w

hen

the

prod

ucts

/

part

s or

mac

hine

are

del

iver

ed

an

d ac

cept

ed b

y th

e

cust

omer

s.

Cre

dit p

erio

d

with

in th

e in

dust

ry

st

anda

rd.

Not

app

licab

le.

Retu

rns

only

appl

icab

le fo

r

prod

ucts

that

do n

ot m

eet

cu

stom

er’s

sp

ecifi

catio

ns.

Prod

uct w

arra

ntie

s ar

e

assu

ranc

e ty

pe w

arra

nty

an

d do

es n

ot fo

rm a

sepa

rate

per

form

ance

oblig

atio

n.

Supp

ort s

ervi

ces

and

m

anag

emen

t ser

vice

s

Reve

nue

is re

cogn

ised

at a

poin

t in

time

whe

n th

e se

rvic

e

is p

erfo

rmed

or r

ende

red.

Cre

dit p

erio

d

with

in th

e in

dust

ry

st

anda

rd.

Not

app

licab

le.

Not

app

licab

le.

Not

app

licab

le.



19. Revenue (Cont’d)

19.3 Transaction price allocated to the remaining performance obligations

The following table shows revenue from performance obligations that are unsatisfied (or partially unsatisfied) at the reporting date. The disclosure is only providing information for contracts that have a duration of more than one year.

2022RM’000

2023RM’000

2024RM’000

TotalRM’000

Group

Design and assembly of modular for equipment 92,946 70,583 2,027 165,556

The above revenue does not have variable consideration.

The Group applies the practical expedient in paragraph 121(a) of MFRS 15 and did not disclose information on transaction price allocated to remaining performance obligations that have original expected durations of one year or shorter.

20.Financecosts

Group Company

2021RM’000

2020RM’000

2021RM’000

2020RM’000

Interest expense of financial liabilities that are not at fair value through profit or loss 1,098 3,364 40 -

Interest expense on lease liabilities 1,718 1,170 - -

2,816 4,534 40 -

21. Profitbeforetax

Group Company

Note2021

RM’0002020

RM’0002021

RM’0002020

RM’000Profit before tax is arrived at after charging/(crediting):

Auditors’ remuneration

- Audit fees

- KPMG PLT 238 244 55 65

- Other auditors 192 192 - -

- Non-audit fees

- KPMG PLT 5 5 5 5

- Affiliates of KPMG PLT 125 115 15 115



21. Profitbeforetax (Cont’d)

Group Company

Note2021

RM’0002020

RM’0002021

RM’0002020

RM’000

Profit before tax is arrived at after charging/(crediting) (Cont’d):

Materialexpenses/(income)

Impairment on investments in subsidiaries 6 - - 1,036 -

Personnel expenses:

- Wages, salaries and others (including Directors’ emoluments) 93,269 114,592 7,799 10,587

- Employees’ Provident Fund contributions 8,697 10,413 699 885

- Termination benefits - 194 - 194

Fair value (gain)/loss on derivatives (2,044) 3,714 - -

Foreign exchange loss/(gain):

- Unrealised 616 (593) 25 52

- Realised 332 (830) (62) -

Government grants a (16,210) - - -

Expensesarisingfromleases

Expenses relating to short-term leases b 380 1,436 58 80

Expenses relating to leases of low-value assets b 124 113 25 17

Net(gain)/lossonimpairmentoffinancialinstrumentsandcontractassets

Financial assets at amortised cost (5,801) 6,297 14 3

Contract assets (2,320) 2,844 - -

(8,121) 9,141 14 3

Notea

Wages subsidy from governments that compensate the Group for expenses incurred are recognised in profit or loss as other income on a systematic basis in the same period in which the expenses are recognised.

Noteb

The Group and the Company lease IT equipment and apartments with contract terms ranging from 1 to 5 years. These leases are either short-term or for low-value items. The Group and the Company has elected not to recognise right-of-use assets and lease liabilities for such leases.



22. Keymanagementpersonnelcompensation

Key management personnel compensation are as follows:

Group Company

2021RM’000

2020RM’000

2021RM’000

2020RM’000

Directors of the Company

- Fees 508 485 508 485

- Other emoluments 146 108 146 108

654 593 654 593

Other key management personnel

- Remuneration 1,868 4,263 1,762 1,762

- Employees’ Provident Fund contributions 215 317 205 205

2,083 4,580 1,967 1,967

2,737 5,173 2,621 2,560

Other key management personnel comprise persons other than Directors of the Company, having authority and responsibility for planning and controlling the activities of the Group either directly or indirectly.

The estimated monetary value of benefits-in-kind receivable by key management personnel of the Group and of the Company amounted to RM3,067 and RM3,067 (2020 : RM1,964 and RM902) respectively.

23. Taxexpense

Major components of tax expense include:

Group Company

2021RM’000

2020RM’000

2021RM’000

2020RM’000

Incometaxexpense

Malaysia

- current year 23,140 16,627 - -

- prior year 1,199 (2,348) - -

24,339 14,279 - -



23. Taxexpense(Cont’d)

Major components of tax expense include (Cont’d):

Group Company

2021RM’000

2020RM’000

2021RM’000

2020RM’000

Incometaxexpense(Cont’d)

Overseas

- current year 327 2,814 - -

- prior year (234) 232 - -

93 3,046 - -

Total income tax expense 24,432 17,325 - -

Deferredtaxexpense

- (reversal)/origination of temporary differences (2,531) 1,532 - -

- prior year 248 971 - -

(2,283) 2,503 - -

Total tax expense 22,149 19,828 - -



23. Taxexpense(Cont’d)

Reconciliationoftaxexpense

Group Company

2021RM’000

2020RM’000

2021RM’000

2020RM’000

Profit for the year 59,699 79,823 24,813 40,519

Total tax expense 22,149 19,828 - -

Profit excluding tax 81,848 99,651 24,813 40,519

Income tax calculated using Malaysian tax rate at 24% (2020 : 24%) 19,644 23,916 5,955 9,724

Effect of different tax rates in foreign jurisdictions 1,515 (2,287) - -

Non-deductible expenses 1,577 2,268 367 290

Tax exempt income (1,812) (101) (6,558) (10,656)

Effect of tax incentives (383) (3,551) - -

Effect of deferred tax assets not recognised 344 643 236 642

Other items 51 85 - -

20,936 20,973 - -

Under/(Over) provided in prior years 1,213 (1,145) - -

22,149 19,828 - -

24. Earningsperordinaryshare-Group

Basic earnings per ordinary share

The calculation of basic earnings per ordinary share is based on the profit attributable to ordinary shareholders of RM59,699,000 (2020 : RM79,823,000) and the weighted average number of ordinary shares outstanding, calculated as follows:

2021 2020

Weighted average number of ordinary shares at 31 March 135,166,967 135,166,967

Basic earnings per ordinary share (sen) 44.17 59.06

Diluted earnings per ordinary share The diluted earnings per ordinary share is the same as basic earnings per ordinary share as there are no dilutive potential

ordinary shares.



25. Dividends-Company

2021

A first interim single tier dividend of 14.76 sen per ordinary share totalling RM19,950,644 for the financial year ended 31 March 2020 was declared on 5 June 2020 and paid on 26 August 2020.

Subsequent to the end of the financial year, the Company declared a first interim single tier dividend of 11.03 sen per ordinary share in respect of the financial year ended 31 March 2021 to be paid on 18 August 2021.

2020

A first interim single tier dividend of 17.43 sen and a special single tier dividend of 11.62 sen per ordinary share totalling RM39,266,005 for the financial year ended 31 March 2019 was declared on 28 May 2019 and paid on 13 August 2019.

26. Relatedparties

Identityofrelatedparties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control. Related parties may be individuals or other entities.

The Group has related party relationship with its holding companies and subsidiaries as disclosed in the financial statements.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel include all the Directors of the Group.

Significantrelatedpartytransactions

The significant related party transactions of the Group and the Company are shown below. The transactions were entered in the normal course of business and established under negotiated terms. The balances related to the below transactions are shown in Note 8 and Note 18.

i) Subsidiaries

Company2021

RM’0002020

RM’000Subscription of shares in a subsidiary - 10,000

Allocation of share-based payments 791 605

Dividend income 27,325 44,400

Management fee income 12,116 12,356



26. Relatedparties (Cont’d)

Significantrelatedpartytransactions (Cont’d)

ii) Immediateholdingcompany

2021RM’000

2020RM’000

Group

Sales of aerospace parts and other precision tools 37,373 71,004

Dividend paid (14,299) (28,152)

Provision of corporate management services, engineering and administrative services 57 580

Purchase of corporate management services, engineering and administrative services/fitting and quality assurance services (4,074) (2,405)

Rental of office, factory premises and machines (3,807) (3,794)

Company

Dividend paid (14,299) (28,152)

Purchase of corporate management services, engineering and administrative services/fitting and quality assurance services (3,155) (1,480)

iii) Relatedcompanies

2021RM’000

2020RM’000

Group

Sales of fabrication, machining services and special services 3,027 9,126

Sales of aerospace parts and other precision tools 1,642 3,009

Purchase of corporate management services, engineering and administrative services/fitting and quality assurance services (905) (880)

Purchase of fabrication/machining services/special process (1,942) (4,611)

Rental of office, factory premises and machines (1,946) (2,080)


Purchase of equipment - (495)

Company


iv) There were no transactions with key management personnel other than the remuneration package paid to them in accordance with the terms and conditions of their appointment as disclosed in Note 22 to the financial statements.



27. Operatingsegment-Group

The Group has two reportable segments, as described below, which are the Group’s strategic business units. The strategic business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Chief Operating Decision Maker (“CODM”) (i.e. the Group’s Chief Executive Officer) reviews internal management reports at least on a quarterly basis. The following summary describes the operations in each of the Group’s reportable segments:

Aerospace Provides a dedicated end-to-end manufacturing solutions on critical engine parts and other related equipment parts

Equipment Provides an array of equipment engineering and solutions for commercial, semiconductor and other industries

Performance is measured based on segment profit or loss before tax as included in the internal management reports that are reviewed by the CODM. Segment profit or loss is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

Other non-reportable segment comprise investment holding activities and provision of intra-group management services which did not meet the quantitative thresholds for reportable segments.

Segmentassets

The total of segment asset is measured on all assets of a segment, as included in the internal management reports that are reviewed by the CODM. Segment total asset is used to measure the return on assets of each segment.

Segmentliabilities

Segment liabilities information is neither included in the internal management reports nor provided regularly to the CODM. Hence, no disclosure is made on segment liabilities.



27. Operatingsegment-Group (Cont’d)

AerospaceRM’000

EquipmentRM’000

EliminationRM’000

TotalRM’000

2021

Revenue from external customers 171,896 701,785 - 873,681

Inter-segment revenue 2,181 - (2,181) -

Totalrevenue 174,077 701,785 (2,181) 873,681

Profit/(Loss) before tax (segment profit) (22,133) 103,981 - 81,848

Included in the measure of segment profit are:

- Write-down of inventories (100) (325) - (425)

- Depreciation and amortisation (45,963) (8,587) - (54,550)

- Amortisation of government grant 2,216 - - 2,216

- Gain on disposal of property, plant and equipment - 222 - 222- Reversal of impairment of financial instruments and contract assets 3,477 4,644 - 8,121

Segmentassets 589,444 346,556 - 936,000

Included in the measure of segment assets are: Additions to non-current assets other than financial instruments and deferred tax assets

- Additions to property, plant and equipment 52,031 11,465 - 63,496

- Additions to right-of-use assets 87 - - 87

- Additions to intangible assets 1,826 237 - 2,063




AerospaceRM’000

EquipmentRM’000

EliminationRM’000

TotalRM’000

2020

Revenue from external customers 449,574 489,093 - 938,667

Inter-segment revenue 1,288 - (1,288) -

Totalrevenue 450,862 489,093 (1,288) 938,667

Profit before tax (segment profit) 37,341 62,310 - 99,651

Included in the measure of segment profit are:

- Write-down of inventories (2,890) (454) - (3,344)

- Depreciation and amortisation (45,890) (6,773) - (52,663)

- Amortisation of government grant 370 - - 370

- (Loss)/Gain on disposal of property, plant and equipment (4) 49 - 45

- Loss on impairment of financial instruments and contract assets (4,528) (4,613) - (9,141)

Segmentassets 672,201 242,408 - 914,609

Included in the measure of segment assets are: Additions to non-current assets other than financial instruments and deferred tax assets

- Additions to property, plant and equipment 64,644 6,126 - 70,770

- Additions to right-of-use assets 5,811 319 - 6,130

- Additions to intangible assets 701 114 - 815




Geographicalsegments

In presenting information on the basis of geographical segments, segment revenue is based on geographical location of the customers. Segment assets are based on the geographical location of the assets.

RevenueRM’000

Non-currentassets

RM’000

Geographicalinformation

2021

Malaysia 39,956 218,708

Asia (excluding Malaysia) 304,494 155,661

North America 523,628 -

Latin America 4,035 -

Europe 1,568 -

873,681 374,369

2020

Malaysia 44,779 229,032


North America 603,839 -

Latin America 8,546 -

Europe 2,215 -

938,667 393,039

Majorcustomers

The following are major customers with revenue equal to or more than 10% of the Group’s total revenue:

Revenue

Customer2021

RM’0002020

RM’000 Segment

Customer A 366,259 204,320 Equipment

Customer B 155,334 129,279 Equipment

Customer C 98,819 65,900 Equipment

Customer D 87,891 219,633 Aerospace

708,303 619,132



28. Capitalcommitments-Group

2021RM’000

2020RM’000


Contracted but not provided for 5,455 47,337

29. Financialinstruments

29.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(a) Amortised cost (“AC”)(b) Fair value through profit or loss (“FVTPL”)

- Designated upon initial recognition (“DUIR”)(c) Derivatives used for hedging

CarryingamountRM’000

ACRM’000

FVTPL- DUIRRM’000

DerivativesusedforhedgingRM’000

Financialassets

2021

Group

Trade and other receivables (excluding prepayments) 216,728 216,728 - -

Cash and bank balances 16,107 16,107 - -

Derivative financial assets 41 - - 41

232,876 232,835 - 41

2020

Group

Trade and other receivables (excluding prepayments) 201,408 201,408 - -

Cash and bank balances 14,792 14,792 - -

Derivative financial assets 111 - 107 4

216,311 216,200 107 4



29. Financialinstruments (Cont’d)

29.1 Categories of financial instruments (Cont’d)


ACRM’000

Financialassets

2021

Company

Other receivables (excluding prepayments) 2,815 2,815

Cash and bank balances 981 981

3,796 3,796

2020

Company

Other receivables (excluding prepayments) 3,262 3,262

Cash and bank balances 339 339

3,601 3,601






ACRM’000

FVTPL- DUIRRM’000

DerivativesusedforhedgingRM’000


2021

Group

Loans and borrowings 90,268 90,268 - -

Trade and other payables 151,292 151,292 - -

Derivative financial liabilities 1,213 - 1,142 71

242,773 241,560 1,142 71

2020

Group

Loans and borrowings 82,239 82,239 - -

Trade and other payables 138,624 138,624 - -

Derivative financial liabilities 3,928 - 3,191 737

224,791 220,863 3,191 737






ACRM’000


2021

Company


2020

Company


29.2 Net gains and losses arising from financial instruments

Group Company

2021RM’000

2020RM’000

2021RM’000

2020RM’000

Net gains/(losses) on:

Financial assets at amortised cost 6,275 (5,792) (34) 47

Financial liabilities measured at amortised cost (2,176) (2,701) 17 (71)

Financial assets and financial liabilities at fair value through profit or loss:

- Designated upon initial recognition - Recognised in profit or loss 2,044 (3,714) - -

Derivatives used for hedging:- Recognised in other comprehensive expense 601 756 - -

6,744 (11,451) (17) (24)

29.3 Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

• Credit risk• Liquidity risk• Market risk




29.4 Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from the individual characteristics of each customer. The Company’s exposure to credit risk arises principally from advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries.

Tradereceivablesandcontractassets

Risk management objectives, policies and processes for managing the risk Management monitors the exposure to credit risk on an ongoing basis. Credit evaluations are performed on

customers as needed.

At each reporting date, the Group or the Company assesses whether any of the trade receivables and contract assets are credit impaired.

The gross carrying amounts of credit impaired trade receivables and contract assets are written off (either partially or full) when there is no realistic prospect of recovery. This is generally the case when the Group or the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. Nevertheless, trade receivables and contract assets that are written off could still be subject to enforcement activities.

There are no significant changes as compared to previous year.

Exposure to credit risk, credit quality and collateral As at the end of the reporting period, the maximum exposure to credit risk arising from trade receivables and

contract assets are represented by the carrying amounts in the statements of financial position.

Concentration of credit risk

The exposure to credit risk for trade receivables and contract assets as at the end of the reporting period by geographical region was:

Group

2021RM’000

2020RM’000

Malaysia 8,165 10,049


North America 232,808 221,198

Latin America 2,352 2,377

Europe 565 417

344,322 333,580




29.4 Credit risk (Cont’d)

Tradereceivablesandcontractassets (Cont’d)

Concentration of credit risk (Cont’d)

Company

2021RM’000

2020RM’000

Malaysia 1,290 2,264

Asia (excluding Malaysia) 96 121

1,386 2,385

Recognition and measurement of impairment losses

The Group uses an allowance matrix to measure Expected Credit Loss (“ECLs”) of trade receivables and contract assets for all segments. Consistent with the debt recovery process, invoices which are past due more than 90 days will be considered as credit impaired.

The Group will initiate appropriate debt recovery procedures on past due balances which are monitored by the sales management team. Where necessary, the Group will also commence legal proceeding against the customers.

Loss rates are based on published industry default rates, adjusted as necessary to reflect the Group’s credit risk. The Group also considers differences between (a) economic conditions during the period over which the historic data has been collected, (b) current conditions and (c) the Group’s view of economic conditions over the expected lives of the receivables.

The following table provides information about the exposure to credit risk and ECLs for trade receivables and

contract assets as at year end which are grouped together as they are expected to have similar risk nature.

GrossRM’000

LossallowanceRM’000

Net balanceRM’000

Group

2021

Current (Not past due) 336,655 (3,485) 333,170

1 - 30 days past due 8,444 (91) 8,353

31 - 60 days past due 989 (8) 981

61 - 90 days past due 745 (11) 734

346,833 (3,595) 343,238






Recognition and measurement of impairment losses (Cont’d)

GrossRM’000


Net balanceRM’000

Group

2021

Creditimpaired

More than 90 days past due 1,094 (10) 1,084

347,927 (3,605) 344,322

Trade receivables 211,992 (2,255) 209,737Contract assets 135,935 (1,350) 134,585

347,927 (3,605) 344,322

2020

Current (Not past due) 316,031 (11,089) 304,942

1 - 30 days past due 25,255 (892) 24,363

31 - 60 days past due 3,400 (124) 3,276

61 - 90 days past due 837 (50) 787

345,523 (12,155) 333,368

Creditimpaired

More than 90 days past due 227 (15) 212

345,750 (12,170) 333,580

Trade receivables 202,580 (8,359) 194,221

Contract assets 143,170 (3,811) 139,359

345,750 (12,170) 333,580






Recognition and measurement of impairment losses (Cont’d)

GrossRM’000


Net balanceRM’000

Company

2021

Current (Not past due) 1,386 - 1,386

Trade receivables 1,386 - 1,386

2020

Current (Not past due) 2,301 - 2,301

1 - 30 days past due 31 - 31

31 - 60 days past due 53 - 53

Trade receivables 2,385 - 2,385






The movements in the allowance for impairment in respect of trade receivables and contract assets during the year are shown below.

Tradereceivables

LifetimeECLRM’000

Contractassets

RM’000Total

RM’000Group

Balance at 1 April 2019 1,723 801 2,524

Net remeasurement of loss allowance 6,297 2,844 9,141

Effect of movement in exchange rates 339 166 505

Balance at 31 March 2020/1 April 2020 8,359 3,811 12,170

Net remeasurement of loss allowance (5,801) (2,320) (8,121)

Effect of movement in exchange rates (303) (141) (444)

Balance at 31 March 2021 2,255 1,350 3,605

As at the end of the reporting period, the Company did not recognise any allowance for impairment losses.

Cashandbankbalances

The cash and bank balances are held with banks and financial institutions. As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statements of financial position.

These banks and financial institutions have low credit risks. In addition, some of the bank balances are insured by

government agencies.

Otherreceivables

Credit risk on other receivables are mainly from the amounts recoverable from material suppliers for defective materials claimed by the Group.

As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts

in the statements of financial position.

As at the end of the reporting period, the Company did not recognise any allowance for impairment losses.

Inter-companyadvances

Risk management objectives, policies and processes for managing the risk

The Company provides unsecured advances mainly to subsidiaries. The Company monitors the ability of the subsidiaries to repay the advances on an individual basis.





Inter-companyadvances (Cont’d)

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.

The advances provided are not secured by any collateral or supported by any other credit enhancements.

Recognition and measurement of impairment loss

Generally, the Company considers advances to subsidiaries to have low credit risk. The Company assumes that there is a significant increase in credit risk when the subsidiary’s financial position deteriorates significantly. As the Company is able to determine the timing of payment of these advances, the Company considers the advances to be in default when the subsidiaries are not able to pay when demanded. The Company considers such advances to be credit impaired when:

• The subsidiary is unlikely to repay its advance to the Company in full; or• The subsidiary is continuously loss making and is having a deficit shareholders’ fund.

The Company determines the probability of default for these advances individually using internal information available.

The following tables provide information about the exposure to credit risk and ECLs for inter-company advances as at year end.

GrosscarryingamountRM’000


Net balanceRM’000

Group

2021

Low credit risk 4 - 4

2020






Inter-companyadvances(Cont’d)

Recognition and measurement of impairment loss (Cont’d)

GrosscarryingamountRM’000


Net balanceRM’000

Company

2021


Credit impaired 42 (42) -

65 (42) 23

2020


Credit impaired 28 (28) -

891 (28) 863

The movements in the allowance for impairment of related company advances during the year are as follows:

LifetimeECLRM’000

Company

Balance at 1 April 2019 25

Net remeasurement of loss allowance 3

Balance at 31 March 2020/1 April 2020 28

Net remeasurement of loss allowance 14

Balance at 31 March 2021 42





Financialguarantees


The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors the ability of the subsidiaries to service their loans on an individual basis.

Exposure to credit risk, credit quality and collateral

The maximum exposure to credit risk amounted to RM61.1 million (2020 : RM43.3 million) representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period.

The financial guarantees are provided as credit enhancements to the subsidiaries’ loans and borrowings.

Recognition and measurement of impairment loss The Company assumes that there is a significant increase in credit risk when a subsidiary’s financial position

deteriorates significantly. The Company considers a financial guarantee to be credit impaired when:

• The subsidiary is unlikely to repay its credit obligation to the bank in full; or• The subsidiary is continuously loss making and is having a deficit shareholders’ fund.

The Company determines the probability of default of the guaranteed loans and borrowings individually using internal information available.

As the end of the reporting period, the Company did not recognise any allowance for impairment in respect of financial guarantees.

29.5 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.

The Group maintains a level of cash and bank balances and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.



29.Financialinstrum

ents

(Con

t’d)

29.5

Liq

uid

ity

risk

(Con

t’d)

M

atur

ity a

naly

sis

Th

e ta

ble

belo

w s

umm

aris

es th

e m

atur

ity p

rofil

e of

the

Gro

up’s

and

the

Com

pany

’s fin

anci

al li

abili

ties

as a

t the

end

of t

he re

port

ing

perio

d ba

sed

on u

ndis

coun

ted

cont

ract

ual p

aym

ents

:

Carrying

amount

RM’000

Contractual

interestrates/

discountrates

perannum %

Contractual

cashflow

sRM

’000

Under

1year

RM’000

1 - 2

years

RM’000

2 - 5

years

RM’000

Morethan

5years

RM’000

2021

Group

Non

-der

ivat

ive

finan

cial

liab

ilitie

s

Trad

e an

d ot

her p

ayab

les

151,292

-151,292

151,292

--

-Le

ase

liabi

litie

s 34,186

2.9

5 - 1

3.00

35,490

7,815

7,111

14,682

5,882

Term

loan

s - v

aria

ble

rate

19,078

1.81

- 2.

0719,597

6,953

6,822

5,822

-Re

volv

ing

cred

it71,190

0.66

- 0.

7571,190

71,190

--

-

275,746

277,569

237,250

13,933

20,504

5,882

Der

ivat

ive

finan

cial

liab

ilitie

s

Forw

ard

exch

ange

con

trac

ts

(g

ross

set

tled)

:

Out

flow

1,172

-66,619

66,619

--

-In

flow

--

(65,447)

(65,447)

--

-

276,918

278,741

238,422

13,933

20,504

5,882



29.Financialinstrum

ents

(Con

t’d)

29.5

Liq

uid

ity

risk

(Con

t’d)

M

atur

ity a

naly

sis

(Con

t’d)

Carrying

amount

RM’000

Contractual

interestrate

perannum %

Contractual

cashflow

sRM

’000

Under

1year

RM’000

1 - 2

years

RM’000

2 - 5

years

RM’000

Morethan

5years

RM’000

2021

Company

Non

-der

ivat

ive

finan

cial

liab

ilitie

s

Oth

er p

ayab

les

5,686

-5,686

5,686

--

-

Fina

ncia

l gua

rant

ees

-61,123

61,123

--

-

5,686

66,809

66,809

--

-



29.Financialinstrum

ents

(Con

t’d)

29.5

Liq

uid

ity

risk

(Con

t’d)

M

atur

ity a

naly

sis

(Con

t’d)

Carrying

amount

RM’000

Contractual

interestrates/

discountrates

perannum %

Contractual

cashflow

sRM

’000

Under

1year

RM’000

1 - 2

years

RM’000

2 - 5

years

RM’000

Morethan

5years

RM’000

2020

Group

Non

-der

ivat

ive

finan

cial

liab

ilitie

s

Trad

e an

d ot

her p

ayab

les

138,

624

-13

8,62

413

8,62

4-

--

Leas

e lia

bilit

ies

42,8

51 2

.95

- 13.

0048

,179

9,10

613

,696

15,7

189,

659

Term

loan

s - v

aria

ble

rate

26,8

583.

10 -

3.35

28,9

977,

905

7,61

913

,473

-

Revo

lvin

g cr

edit

55,3

811.

37 -

2.69

55,3

8155

,381

--

-

263,

714

271,

181

211,

016

21,3

1529

,191

9,65

9

Der

ivat

ive

finan

cial

liab

ilitie

s

Forw

ard

exch

ange

con

trac

ts

(g

ross

set

tled)

:

Out

flow

3,81

7-

130,

540

130,

540

--

-

Inflo

w

--

(126

,723

)(1

26,7

23)

--

-

267,

531

274,

998

214,

833

21,3

1529

,191

9,65

9



29.Financialinstrum

ents

(Con

t’d)

29.5

Liq

uid

ity

risk

(Con

t’d)

M

atur

ity a

naly

sis

(Con

t’d)

Carrying

amount

RM’000

Contractual

interestrate

perannum %

Contractual

cashflow

sRM

’000

Under

1year

RM’000

1 - 2

years

RM’000

2 - 5

years

RM’000

Morethan

5years

RM’000

2020

Company

Non

-der

ivat

ive

finan

cial

liab

ilitie

s

Oth

er p

ayab

les

12,3

12-

12,3

1212

,312

--

-

Fina

ncia

l gua

rant

ees

--

43,2

7143

,271

--

-

12,3

1255

,583

55,5

83-

--




29.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect the Group’s financial position or cash flows.

29.6.1 Currencyrisk

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of the Group entities. The currencies giving rise to this risk are primarily U.S. Dollar (“USD”), Singapore Dollar (“SGD”) and Ringgit Malaysia (“RM”).


The Group uses forward exchange contracts to hedge its foreign currency risk arising mainly from sales and purchases denominated in foreign currency. Most of the forward exchange contracts have maturities of less than two years after the end of the reporting period. Where necessary, the forward exchange contracts are rolled over at maturity.

Exposure to foreign currency risk

The Group’s exposure to foreign currency (a currency which is other than the functional currency of the Group entities) risk, based on carrying amounts as at the end of the reporting period are as follows:

Denominatedin

USDRM’000

SGDRM’000

RMRM’000

Group

2021

Balancesrecognisedinthestatementoffinancialposition

Trade and other receivables 2,865 2,640 6,592

Cash and bank balances 319 3,047 1,947

Trade and other payables (626) (5,114) (42,174)

Lease liabilities - (18,780) (2,690)

Net exposure 2,558 (18,207) (36,325)




29.6 Market risk (Cont’d)

29.6.1 Currencyrisk (Cont’d)

Exposure to foreign currency risk (Cont’d)

Denominatedin

USDRM’000

SGDRM’000

RMRM’000

Group

2020

Balancesrecognisedinthestatementoffinancialposition

Trade and other receivables 3,991 2,162 5,382

Cash and bank balances 242 5,612 1,621

Trade and other payables (278) (9,879) (32,072)

Lease liabilities - (21,672) (4,719)

Net exposure 3,955 (23,777) (29,788)

Currency risk sensitivity analysis

A 5% (2020 : 5%) strengthening of the functional currency of Group entities against the following currencies at the end of the reporting period would have increased/(decreased) post-tax profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remained constant and ignores any impact on forecasted sales and purchases. There is no impact to equity arising from exposure to currency risk.

Profitorloss

2021RM’000

2020RM’000

Group

USD (97) (150)

SGD 692 904

RM 1,380 1,132

1,975 1,886

A 5% (2020 : 5%) weakening of the functional currency of Group entities against the above currencies at the end of the reporting period would have had equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remained constant.




29.6 Market risk (Cont’d)

29.6.2 Interestraterisk

The Group’s fixed rate borrowings are exposed to a risk of change in their fair values due to changes in interest rate. The Group’s variable rate borrowings are exposed to a risk of change in their cash flows due to changes in interest rates. Short term receivables and payables are not significantly exposed to interest rate risk.


Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Group’s income and operating cash flows are substantially independent of changes in market interest rates.

Exposure to interest rate risk

The interest rate profile of the Group’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period are as follows:

Group Company

2021RM’000

2020RM’000

2021RM’000

2020RM’000

Fixedrateinstruments

Financial liabilities

- Lease liabilities 34,186 42,851 - -

Floatingrateinstruments

Financial liabilities

- Term loan 19,078 26,858 - -

- Revolving credit 71,190 55,381 - -

90,268 82,239 - -

(a) Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

(b) Sensitivity analysis for interest rate risk

At the reporting date, if interest rates had been 50 basis points lower/higher, with all other variables held constant, the Group’s post-tax profit or loss would have been RM343,018 (2020 : RM312,508) higher/lower, arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.



29.Financialinstrum

ents

(Con

t’d)

29.7

Fai

r va

lue

info

rmat

ion

Th

e ca

rryi

ng a

mou

nts

of c

ash

and

bank

bal

ance

s, s

hort

term

rece

ivab

les

and

paya

bles

and

sho

rt te

rm b

orro

win

gs re

ason

ably

app

roxi

mat

e th

eir f

air v

alue

s du

e to

th

e re

lativ

ely

shor

t ter

m n

atur

e of

thes

e fin

anci

al in

stru

men

ts.

Th

e ta

ble

belo

w a

naly

ses

othe

r fina

ncia

l ins

trum

ents

at f

air v

alue

.

Fairvalueoffinancialinstrum

entscarriedatfair

value


entsnotcarriedat

fairvalue

Total

fair

value

RM’000

Carrying

amount

RM’000

Level1

RM’000

Level2

RM’000

Level3

RM’000

Total

RM’000

Level1

RM’000

Level2

RM’000

Level3

RM’000

Total

RM’000

2021

Group

Financialassets

Forw

ard

exch

ange

cont

ract

s-

41-

41-

--

-41

41


Term

loan

s

- var

iabl

e ra

te-

--

--

-(19,078)

(19,078)

(19,078)

(19,078)

Forw

ard

exch

ange

cont

ract

s-

(1,213)

-(1,213)

--

--

(1,213)

(1,213)

-(1,213)

-(1,213)

--

(19,078)

(19,078)

(20,291)

(20,291)



29.Financialinstrum

ents

(Con

t’d)

29.7

Fai

r va

lue

info

rmat

ion

(Con

t’d)


entscarriedatfair

value


entsnotcarriedat

fairvalue

Total

fair

value

RM’000

Carrying

amount

RM’000

Level1

RM’000

Level2

RM’000

Level3

RM’000

Total

RM’000

Level1

RM’000

Level2

RM’000

Level3

RM’000

Total

RM’000

2020

Group

Financialassets

Forw

ard

exch

ange

cont

ract

s-

111

-11

1-

--

-11

111

1


Term

loan

s

- var

iabl

e ra

te-

--

--

-(2

6,85

8)(2

6,85

8)(2

6,85

8)(2

6,85

8)

Forw

ard

exch

ange

cont

ract

s-

(3,9

28)

-(3

,928

)-

--

-(3

,928

)(3

,928

)

-(3

,928

)-

(3,9

28)

--

(26,

858)

(26,

858)

(30,

786)

(30,

786)




29.7 Fair value information (Cont’d)

Policyontransferbetweenlevels

The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.

There has been no transfer between the levels in fair value during the financial year (2020 : no transfer in either direction).

Level2fairvalue

Derivatives

The fair value of the forward exchange contracts is estimated by reference to the market rate for similar contracts obtained from the banks which the Group contracted with.

Level3fairvalue

Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.

Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. The carrying amount of floating rate term loans approximate fair value as their effective interest rates change accordingly to movements in the market interest rate.

30. Capitalmanagement

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity equal to or not less than 25 percent of the issued and paid-up capital and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

There was no change in the Group’s approach to capital management during the financial year.

31. Contingentliabilities,unsecured-Company

The Company has issued corporate guarantees to financial institutions for borrowings granted to certain subsidiaries of RM228,450,000 (2020 : RM234,631,000) of which, RM61,123,000 (2020 : RM43,271,000) were utilised at the end of the reporting period.



32. Significanteventduringthefinancialyear The Group’s aerospace business was significantly affected by the COVID-19 pandemic. Border closures in many countries

have led to a dramatic reduction in passenger traffic, which in turn affected new aircraft demand. Over the past year, the Group had taken actions to preserve capital to protect the long-term needs of its business including cutting discretionary spending, deferring capital expenditures, deferring merit payroll increases and freezing non-essential hiring. Excess resources were also being re-deployed from the Group’s aerospace business to support the Group’s equipment business.

The Group’s equipment business, on the other hand, has been positively affected by the COVID-19 pandemic.

The COVID-19 pandemic continues to accelerate the growth in cloud computing, 5G telecommunications, artificial intelligence and digitisation, which in turn fuels strong demand for semi-conductor chips and storage devices. Demand for the Group’s equipment products remain strong and we are expanding our manufacturing capacity in tandem with customers’ increased demand.

The Group has considered the market conditions (including the impact of COVID-19) at the end of the reporting period, in making estimates and judgements on the recoverability of assets as at 31 March 2021. The Group continues to monitor the situation, engage with the customers regularly and take appropriate actions to mitigate risks.


STATEMENT BY DIRECTORSPursuant to Section 251(2) of the Companies Act 2016

In the opinion of the Directors, the financial statements set out on pages 78 to 168 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 March 2021 and of their financial performance and cash flows for the financial year then ended.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

……………………………………...…..

TanKaiHoeDirector

……………………………………...…..

GohWeeKengDirector

Date: 12 July 2021


STATUTORY DECLARATIONPursuant to Section 251(1)(b) of the Companies Act 2016

I, TehMunLing, the officer primarily responsible for the financial management of SAM Engineering & Equipment (M) Berhad, do solemnly and sincerely declare that the financial statements set out on pages 78 to 168 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the declaration to be true, and by virtue of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by the abovenamed TehMunLing, MIA CA16317, at George Town in the State of Penang on 12 July 2021.

….….…..….….….….….….TehMunLing

Before me: Tan Cheng Kuan(No.P195)Commissioner for OathsPenang


INDEPENDENT AUDITORS’ REPORTTo The Members of SAM Engineering & Equipment (M) Berhad

(Registration No. 199401012509 (298188 - A)) (Incorporated in Malaysia)

ReportontheAuditoftheFinancialStatements

Opinion

We have audited the financial statements of SAM Engineering & Equipment (M) Berhad, which comprise the statements of financial position as at 31 March 2021 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 78 to 168.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 March 2021, and of their financial performance and their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

BasisforOpinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our auditors’ report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

IndependenceandOtherEthicalResponsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

KeyAuditMatters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuationofinventories-Group

Refer to the accounting policy in Note 2(h), Note 1(d) – Use of estimates and judgements and Note 9 - Inventories to the financial statements.

Thekeyauditmatter HowthematterwasaddressedinourauditThe Group’s inventories amounted to RM177 million as at 31 March 2021 in the statement of financial position which represented 19% of the Group’s total assets.

The inventories are measured at the lower of cost and net realisable value. Identifying and determining the appropriate write down for the inventories to net realisable value required judgement by the Group.

We have identified valuation of inventories as a key audit matter because the judgements made by the Group may be affected by external and market considerations which are inherently uncertain.

We have performed the following audit procedures, among others:

•Attended the year end physical inventory counts to identify the existence of any damaged inventories;

•Tested the age profile of the inventories to receiving documents and production reports;

•Evaluated the Group’s basis of writing down slow-moving inventories based on the age of the inventory relative to past and present sales or consumption;

•Agreed the quality affected inventories that were written down to the Group’s Non-conformance Reports and Material Disposition Reports; and

•Compared the carrying value of inventories-in-progress and manufactured inventories to sales made subsequent to the year end and checked that they were sold at prices higher than the carrying amount.


INDEPENDENT AUDITORS’ REPORTTo The Members of SAM Engineering & Equipment (M) Berhad (Cont’d)(Registration No. 199401012509 (298188 - A)) (Incorporated in Malaysia)

KeyAuditMatters (Cont’d)

Valuationofproperty,plantandequipment,right-of-useassetsandintangibleassets(AerospaceSegment)-Group

Refer to the accounting policy in Note 2(g)(ii) - Impairment of other assets, Note 1(d) – Use of estimates and judgements, Note 3 - Property, plant and equipment, Note 4 - Right-of-use assets and Note 5 - Intangible assets.

Thekeyauditmatter HowthematterwasaddressedinourauditAs at 31 March 2021, the property, plant and equipment, right-of-use assets and intangible assets in the Group’s aerospace business (collectively known as aerospace “non-current assets”) amounted to RM298 million which represented 32% of the Group’s total assets.

In determining the recoverable amount of the aerospace non-current assets, the Group assigned values to key assumptions such as sales growth, gross profit margin and discount rate.

The recoverable amount of the Group’s aerospace non-current assets was determined based on value-in-use calculations by discounting future cash flows, which are inherently uncertain.

Changes to those estimates can impact the carrying amount of the Group’s aerospace non-current assets and the profit or loss recognised.

•Evaluated the impairment model based on discounted future cash flows with management and compared the appropriateness of the key assumptions and estimates with reference to internally derived sources as well as external benchmarks;

•Performed a range of sensitivities across the different elements in the impairment model to identify which assumptions are key and were most sensitive in management’s assessment;

•Compared the recoverable amount to the carrying amount of the Group’s aerospace non-current assets to ascertain if any impairment is required.

•Considered the adequacy of the disclosures in the financial statements in describing the inherent uncertainties and the key assumptions used in the estimation of the recoverable amount.

We have determined that there are no key audit matters in the audit of the separate financial statements of the Company to be communicated in our auditors’ report.

InformationOtherthantheFinancialStatementsandAuditors’ReportThereon

The Directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the annual report and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the annual report and, in doing so, consider whether the annual report is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of the annual report, we are required to report that fact. We have nothing to report in this regard.

ResponsibilitiesoftheDirectorsfortheFinancialStatements

The Directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the ability of the Group and of the Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.


Auditors’ResponsibilitiesfortheAuditoftheFinancialStatements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 internal control of the Group and of the Company.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.

• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group or of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that gives a true and fair view.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our auditors’ report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

ReportonOtherLegalandRegulatoryRequirements

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors are disclosed in Note 6 to the financial statements.



OtherMatter

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMGPLT RaymondChongCheeMon(LLP0010081-LCA & AF 0758) Approval Number: 03272/06/2022 JChartered Accountants Chartered Accountant

Penang

Date: 12 July 2021



ANALYSIS OF SHAREHOLDINGSAs at 30 June 2021

Issued Share Capital : 135,349,897 Ordinary Shares

Class of Equity Securities : Ordinary Shares (“Shares”)

Voting Rights : One vote per Share

DistributionScheduleofShareholders

No.ofHolders SizeofShareholdings No.ofIssuedShares %

249 Less than 100 8,893 0.01

835 100 - 1,000 565,968 0.42

1,204 1,001 - 10,000 4,398,715 3.25

271 10,001 to 100,000 shares 7,945,416 5.87

54 100,001 to less than 5% of issued shares 25,595,679 18.91

1 5% and above of issued shares 96,835,226 71.54

2,614 Total 135,349,897 100.00

30LargestSecuritiesAccountHoldersBasedonRecordofDepositors(without aggregating the securities from different securities accounts belonging to the same person)

No. Name No.ofSharesheld %

1 AFFIN HWANG NOMINEES (ASING) SDN BHDDBS VICKERS SECS (S) PTE LTD FOR SINGAPORE AEROSPACE MANUFACTURING PTE LTD

96,835,226 71.54

2 CARTABAN NOMINEES (TEMPATAN) SDN BHDICAPITAL.BIZ BERHAD

4,738,600 3.50

3 AMANAHRAYA TRUSTEES BERHADPUBLIC SMALLCAP FUND

1,645,800 1.22

4 AMANAHRAYA TRUSTEES BERHADPUBLIC STRATEGIC SMALLCAP FUND

1,637,604 1.21

5 UOBM NOMINEES (ASING) SDN BHDUNITED OVERSEAS BANK NOMINEES (PTE) LTD FOR GOH WEE KENG

1,402,523 1.04

6 AMANAHRAYA TRUSTEES BERHADPB ISLAMIC SMALLCAP FUND

1,042,000 0.77

7 AMANAHRAYA TRUSTEES BERHADPUBLIC ISLAMIC OPPORTUNITIES FUND

940,400 0.69

8 MAYBANK NOMINEES (TEMPATAN) SDN BHDNATIONAL TRUST FUND (IFM MAYBANK) (412183)

875,800 0.65

9 CARTABAN NOMINEES (TEMPATAN) SDN BHDTMF TRUSTEES MALAYSIA BERHAD FOR AFFIN HWANG WHOLESALE EQUITY FUND

828,300 0.61

10 AFFIN HWANG NOMINEES (ASING) SDN BHDDBS VICKERS SECS (S) PTE LTD FOR TEO SIEW GEOK

781,333 0.58

11 AMANAHRAYA TRUSTEES BERHADPB SMALLCAP GROWTH FUND

779,600 0.58

12 CITIGROUP NOMINEES (TEMPATAN) SDN BHDEMPLOYEES PROVIDENT FUND BOARD (AMUNDI)

621,400 0.46

13 CITIGROUP NOMINEES (TEMPATAN) SDN BHDURUSHARTA JAMAAH SDN. BHD. (AMUNDI 2)

613,200 0.45

14 RAJESH SINGH BHINDER A/L PRETAM SINGH 577,700 0.43


ANALYSIS OF SHAREHOLDINGS(Cont’d)

30LargestSecuritiesAccountHoldersBasedonRecordofDepositors(Cont’d)(without aggregating the securities from different securities accounts belonging to the same person)

No. Name No.ofSharesheld %

15 MAYBANK NOMINEES (TEMPATAN) SDN BHD MAYBANK TRUSTEES BERHAD FOR PUBLIC INDUSTRY GROWTH FUND (N14011930270)

549,200 0.41

16 AMANAHRAYA TRUSTEES BERHADPUBLIC SELECT TREASURES EQUITY FUND

546,400 0.40

17 MAYBANK NOMINEES (TEMPATAN) SDN BHDMTRUSTEE BERHAD FOR TENAGA NASIONAL BERHAD RETIREMENT BENEFIT TRUST FUND (RB-TNB-AHAM) (420317)

418,300 0.31

18 MAYBANK NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TAY ONG NGO @ TAY BOON FANG

401,000 0.30

19 CIMB COMMERCE TRUSTEE BERHADPUBLIC FOCUS SELECT FUND

400,900 0.30

20 CARTABAN NOMINEES (ASING) SDN BHDEXEMPT AN FOR LGT BANK AG (FOREIGN)

383,457 0.28

21 HONG LEONG MSIG TAKAFUL BERHADAS BENEFICIAL OWNER (FAMILY FUND)

364,900 0.27

22 HSBC NOMINEES (TEMPATAN) SDN BHDHSBC (M) TRUSTEE BHD FOR PERTUBUHAN KESELAMATAN SOSIAL (UOB AMM6939-406)

357,200 0.26

23 CITIGROUP NOMINEES (TEMPATAN) SDN BHDURUSHARTA JAMAAH SDN. BHD. (AFFIN 2)

311,500 0.23

24 NG BOON KEAT 303,809 0.22

25 HONG LEONG ASSURANCE BERHADAS BENEFICIAL OWNER (S’HOLDERS NPAR)

279,700 0.21

26 CITIGROUP NOMINEES (ASING) SDN BHDEXEMPT AN FOR UBS AG SINGAPORE (FOREIGN)

275,000 0.20

27 CGS-CIMB NOMINEES (ASING) SDN BHDEXEMPT AN FOR CGS-CIMB SECURITIES (SINGAPORE) PTE. LTD. (RETAIL CLIENTS)

264,450 0.20

28 AMANAHRAYA TRUSTEES BERHADPUBLIC EMERGING OPPORTUNITIES FUND

222,800 0.16

29 UOB KAY HIAN NOMINEES (ASING) SDN BHDEXEMPT AN FOR UOB KAY HIAN PTE LTD ( A/C CLIENTS )

222,800 0.16

30 MAYBANK NOMINEES (TEMPATAN) SDN BHDCAPITAL DYNAMICS ASSET MANAGEMENT SDN BHD FOR KESM INDUSTRIES BERHAD (CDAM30-990472)

217,000 0.16


ANALYSIS OF SHAREHOLDINGS(Cont’d)

SubstantialShareholders’Shareholdings

No.ofSharesbeneficiallyheld

No. Name DirectInterest % IndirectInterest % Note

1 Singapore Aerospace Manufacturing Pte Ltd 96,835,226 71.54 - -

2 Accuron Technologies Limited - - 96,835,226 71.54 (a)

3 Temasek Holdings (Private) Limited - - 96,835,226 71.54 (b)

Note:a) Deemed interested via Singapore Aerospace Manufacturing Pte. Ltd. pursuant to Section 8(4) of the Companies Act,

2016 (“Act”).b) Deemed interested via Accuron Technologies Limited pursuant to Section 8(4) of the Act.

Directors’Shareholdings

No.ofSharesbeneficiallyheld

No. NameofDirectors DirectInterest % IndirectInterest % Note

1 Tan Kai Hoe - - - -

2 Goh Wee Keng 1,402,523 1.04 - -

3 Shum Sze Keong - - - -

4 Dato’ Seri Wong Siew Hai - - 11,000 0.01 (i)

5 Lee Hock Chye - - - -

6 Datuk Dr Wong Lai Sum - - - -

7 YM Tunku Afwida Binti Dato’ Tunku Abdul Malek - - - -

8 Suresh Natarajan - - - -

Note:i) Dato’ Seri Wong Siew Hai is deemed interested through his children pursuant to Section 59(11)(c) of the Act.


NOTICE OF 27TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Twenty-Seventh (27th) Annual General Meeting (“AGM”) of SAM Engineering & Equipment (M) Berhad (“SAMEE” or the “Company”) will be conducted on a fully virtual basis via the Online Meeting Platform hosted on Securities Services e-Portal at https://sshsb.net.my/login.aspx for the purpose of considering and if thought fit, passing with or without modifications, the resolutions set out in this notice:- DayandDate : Tuesday, 24 August 2021

Time : 10.00 a.m.

OnlineMeetingPlatform/Venue

: Securities Services e-Portal https://sshsb.net.my/login.aspx (Domain Registration No. with MyNIC Berhad: D4A004360) at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan, Malaysia

ModesofCommunication : 1. Typed text in the Online Meeting Platform 2. Email your questions to [email protected] prior to 27th AGM by 17 August 2021

AGENDA AS ORDINARY BUSINESS:-

1. To receive the Audited Financial Statements for the financial year ended 31 March 2021 together with the Reports of the Directors and Auditors thereon.

(Please refer to Explanatory Note (B)(1))

2. To re-elect the following Directors who retire in accordance with Regulation 95 of the Company’s Constitution and being eligible, offered themselves for re-election:-

2.1 Dato’ Seri Wong Siew Hai2.2 Mr. Lee Hock Chye

Resolution1Resolution2

3. To approve the payment of Directors’ fee as tabulated below, payable to each Director, as applicable, for the period from the conclusion of this AGM until the next AGM of the Company:-

Fee for each Director RM50,000

Fee for the Chairman of the Audit Committee RM10,000

Fee for the Chairman of the following Board Committees:-- Nominating & Remuneration Committee- Risk & Sustainability Committee

RM7,500

Fee for each Member of Board Committees RM5,000 Resolution3

4. To approve the payment of the following benefits to Directors (excluding Directors’ fee), payable to each Director, as applicable, for the period from the conclusion of this AGM until next AGM of the Company:-

Meeting Allowance for each Director RM2,000 per meeting

Benefits-In-Kind (for all Directors) RM50,000 per annum Resolution4

5. To re-appoint Messrs. KPMG PLT as Auditors of the Company, to hold office until the conclusion of the next AGM, at a remuneration to be determined by the Directors. Resolution5

https://sshsb.net.my/login.aspx



AS SPECIAL BUSINESS:-

To consider and if thought fit, to pass the following as resolutions, with or without any modifications:-

6. OrdinaryResolutionAuthoritytoissueandallotshares

“THAT subject always to the Companies Act, 2016 (“Act”), the Constitution of the Company and approvals of the relevant governmental and/or regulatory authorities, if applicable, the Directors be and are hereby empowered to issue and allot shares in the Company, pursuant to Section 75 and Section 76 of the Act, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this Resolution does not exceed ten per centum (10%) of the issued and paid-up share capital (excluding treasury shares) of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad;

AND THAT such authority shall commence immediately upon the passing of this Resolution and continue to be in force until:-

(a) the conclusion of the Company’s next AGM, at which time it will lapse, unless the authority is renewed by a resolution passed at the general meeting;

(b) the expiration of the period within which the next AGM after that date is required to be held pursuant to Section 340(2) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Act); or

(c) revoked or varied by resolution passed by the Company’s shareholders in a general meeting,

whichever is earlier.” Resolution6

7. OrdinaryResolutionProposed Renewal of Existing Shareholders’ Mandate for Recurrent Related PartyTransactions(“RRPT”)

“THAT subject to the provisions of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and/or its subsidiaries (“SAMEE Group”) to enter into recurrent related party transactions of a revenue or trading nature as specified in Section 2.5 of the Circular to Shareholders dated 26 July 2021 which transactions are necessary for the day-to-day operations in the ordinary course of business of SAMEE Group on terms not more favourable to the related parties than those generally available to the public or unrelated third parties and are not to the detriment of the minority shareholders of the Company and the shareholders mandate is subject to annual renewal and disclosure being made in the Annual Report of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year and that such approval shall continue to be in force until:-

(a) the conclusion of the Company’s next AGM, at which time it will lapse, unless the authority is renewed by a resolution passed at the general meeting;

(b) the expiration of the period within which the next AGM after that date is required to be held pursuant to Section 340(2) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Act; or

(c) revoked or varied by resolution passed by the Company’s shareholders in a general meeting,

whichever is earlier.

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the RRPT.” Resolution7

NOTICE OF 27TH ANNUAL GENERAL MEETING(Cont’d)



AS SPECIAL BUSINESS:- (Cont’d)

8. OrdinaryResolutionMandatefortheDirectorswhohaveservedasIndependentNon-ExecutiveDirectorsoftheCompanyforacumulativetermofmorethantwelve(12)years,tocontinuetoactasanIndependentNon-ExecutiveDirectoroftheCompany

“THAT subject to the passing of Resolution 1 and Resolution 2 above, approval be and is hereby given to the following Directors who have served as Independent Non-Executive Directors of the Company for a cumulative term of more than twelve (12) years, to continue to act as Independent Non-Executive Directors of the Company in compliance with the Malaysian Code on Corporate Governance 2017:-

(a) Dato’ Seri Wong Siew Hai(b) Mr. Lee Hock Chye”

Resolution8Resolution9

9. SpecialResolutionProposedAmendmentstotheConstitutionoftheCompany

“THAT the amendments to the Constitution of the Company, as set out in Appendix A be and are hereby approved and adopted with immediate effect.

AND THAT the Directors of the Company be and are hereby authorised to assent to any modification, variation and/or amendment in any manner as may be required or imposed by the relevant authorities (if any) and to take all steps and do all acts and things as may be considered necessary or expedient in order to implement, finalise and give full effect to the Proposed Adoption.” Resolution10

10. To transact any other business of which due notice shall have been given.

By Order of the Board,

THUM SOOK FUN, SSM PC NO. 201908000139 (MIA 24701)CHEW PECK KHENG, SSM PC NO. 202008001118 (LS 0009559)Company Secretaries

Date: 26 July 2021Penang (A) Notes:-

1. As part of the initiatives and the safety measures to curb the spread of Coronavirus Disease 2019 (“COVID-19”), and having regard to the well-being and the safety of our shareholders, the 27th AGM will be conducted on a fully virtual basis via Remote Participation and Voting (“RPV”) facilities provided by SS E Solution Sdn Bhd via its Securities Services e-Portal (“SSeP”) at https://sshsb.net.my/login.aspx.

Please follow the procedures provided in the Administrative Guide for the 27th AGM in order to register, participate and vote remotely via RPV facilities.

2. According to the Guidance Note and Frequently Asked questions on the Conduct of General Meetings for Listed Issuers revised by the Securities Commission Malaysia on 1 June 2021 (“Revised Guidance Note and FAqs”), an online meeting platform can be recognised as the meeting venue or place under Section 327(2) of the Act provided that the meeting online platform is registered with MyNIC Berhad or hosted in Malaysia.

By utilising the RPV facilities at Securities Services e-Portal (prior registration as a User is required), shareholders are to remotely attend, participate, speak (by way of posing questions to the Board via real time submission of typed texts) and cast their votes at the 27th AGM. Please refer to the Administrative Guide for procedures to utilise the RPV facilities in order to participate and vote remotely at the 27th AGM.


(A) Notes:- (Cont’d)

3. As the 27th AGM will be conducted via a fully virtual meeting, a member entitled to participate and vote at the meeting may appoint up to two (2) proxies or the Chairman of the Meeting as his/her proxy(ies) to participate and vote in his or her stead, by indicating the voting instruction in the Form of Proxy:-

(a) A proxy may but need not to be a member of the Company. There shall be no restriction as to the qualification of the proxy.

(b) Where a member appoints more than one (1) proxy, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

(c) A proxy appointed to participate and vote at the meeting shall have the same rights as the member to speak at the meeting.

As guided by the Securities Commission Malaysia’s Revised Guidance Note and FAqs, the right to speak is not limited to verbal communication only but includes other modes of expression. Therefore, all shareholders and proxies shall communicate with the main venue of the AGM via real time submission of typed texts through a text box within Securities Services e-Portal’s platform during the live streaming of the AGM as the primary mode of communication. In the event of any technical glitch in this primary mode of communication, shareholders and proxies may email their questions to [email protected] during the AGM. The questions and/or remarks submitted by the shareholders and/or proxies will be broadcasted and responded by the Chairman/Board/relevant adviser during the AGM.

4. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depository) Act, 1991 (“SICDA”), it may appoint up to two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. The appointment of two (2) proxies in respect of any particular securities account shall be invalid unless the authorised nominee specifies the proportion of its shareholding to be represented by each proxy.

5. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. Where an Exempt Authorised Nominee appoints more than one (1) proxy in respect of each Omnibus Account, the appointment shall be invalid unless the Exempt Authorised Nominee specifies proportion of its shareholding to be represented by each proxy.

6. The appointment of proxy(ies) may be made in hardcopy form or by electronic means as follow:-

(a) In Hardcopy Form

The instrument appointing a proxy or representative and the duly registered power of attorney or other authority (if any), under which it is signed or a duly notarized certified copy of that power or authority, shall be deposited at the Registered Office of the Company at Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 George Town, Pulau Pinang.

(b) By SSeP

The Form of Proxy may also be lodged electronically via SSeP at https://sshsb.net.my/login.aspx

(Please refer to the Administrative Guide for more details)

in either case, not less than 48 hours before the time appointed for holding the meeting or at any adjournment thereof.

7. The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the instrument of proxy.

8. In respect of deposited securities, only members whose names appear on the Record of Depositors on 17 August 2021 (General Meeting Record of Depositors) shall be eligible to participate, speak and vote at the meeting or appoint proxy(ies) to participate, speak and vote on his/her behalf.

9. Pursuant to Paragraph 8.29A(1) of the Listing Requirements, all resolutions set out in this notice will be put to vote by way of a poll.




(B) Explanatory Notes to Ordinary Business:-

1. The first agenda of this meeting is meant for discussion only, as the provision of Section 340(1)(a) of the Act does not require a formal approval for the Audited Financial Statements from the shareholders. Hence, this Agenda is not put forward to shareholders for voting.

2. Resolution1 and2 –Re-electionofDirectorswho retires in accordancewithRegulation95of theCompany’sConstitution

Regulation 95 of the Company’s Constitution states that all directors shall retire from office once at least in each 3 years,

but shall be eligible for re-election. An election of directors shall take place each year. A retiring Director shall retain office until the close of the meeting at which he retires.

In determining the eligibility of the Directors to stand for re-election at the forthcoming AGM, the Nominating &

Remuneration Committee’s (“NRC”) has assessed the Directors and was satisfied with the assessment. The Board approved the NRC’s recommendation for the re-election of the retiring Directors pursuant to Regulation

95 of the Company’s Constitution at the forthcoming AGM of the Company. The retiring Directors had abstained from deliberation as well as decision on their own eligibility to stand for re-election at the relevant NRC and Board meetings.

3. Resolution3and4–ProposedpaymentofDirectors’Remuneration Section 230(1) of the Act provides amongst others, that the fee of the Directors and any benefits payable to the Directors

of a listed company shall be approved at the general meeting. Pursuant thereto, shareholders’ approval is sought for the payment of fees and benefits payable to Directors, in two separate resolutions as follows:-

Resolution 3 – Payment of Directors’ fees in respect of the period from the conclusion of this AGM until the next AGM; and

Resolution 4 – Payment of Benefit to Directors for the period from the conclusion of this AGM until the next AGM.

The Board of Directors at its meeting held on 25 May 2021 approved the NRC’s recommendation for the proposed Directors’ fees for the period from the conclusion of this AGM until the next AGM. There is no revision to the proposed Directors’ fees as compared to the previous 26th AGM of the Company.

The benefits payable to each Director pursuant to Section 230(1)(b) of the Act have been reviewed by the Board of Directors of the Company, all of whom have recognised that the benefits payable are in the best interest of the Company. As for the meeting allowance it will be accorded based on the attendance of the Director at meetings.

In the event, the proposed amount is insufficient, e.g. due to enlarged Board size, approval will be sought at the next AGM for the shortfall.

4. Resolution5–Re-appointmentofAuditors Pursuant to Section 271(3)(b) of the Act, shareholders shall appoint auditors who shall hold office until the conclusion of

the next AGM in year 2022. The current auditors, Messrs. KPMG PLT has expressed their willingness to continue in office.

The Board and Audit Committee of the Company have considered the re-appointment of Messrs. KPMG PLT as auditors of the Company and collectively agreed that Messrs. KPMG PLT has met the relevant criteria prescribed by Paragraph 15.21 of Main Market Listing Requirements of Bursa Securities (“Listing Requirements”).

The Board of Directors recommends the re-appointment of Messrs. KPMG PLT as External Auditors of the Company to hold the office until the conclusion of the next AGM.


(C) Explanatory Notes to Special Business:-

1. Resolution6–Authoritytoissueandallotshares The Ordinary Resolution proposed herein is primarily to seek for the renewal of the Previous Mandate (as defined herein)

to give flexibility to the Board of Directors to issue and allot shares up to 10% of the total number of issued share (excluding treasury shares) of the Company for the time being, at any time in their absolute discretion for such purposes as the Board of Directors considers to be in the best interests of the Company (hereinafter referred to as the “General Mandate”). This General Mandate is sought to avoid any delays and costs involved with the convening of a general meeting. This General Mandate, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next AGM of the Company.

The Company had been granted a general mandate by its shareholders at the last AGM held on 2 September 2020 of which will lapse at the conclusion of the 27th AGM (hereinafter referred to as the “Previous Mandate”).

As at the date of this Notice, the Previous Mandate granted by the shareholders had not been utilised and hence, no proceeds were raised therefrom.

The General Mandate, upon renewal, will provide flexibility to the Company for any possible fund-raising activities, including but not limited to placing of shares for the purpose of funding future investment project(s), working capital and/or acquisitions.

2. Resolution7–ProposedRenewalofShareholders’Mandate The proposed Ordinary Resolution 7, if approved by shareholders, will authorise the Proposed Renewal of Existing

Shareholders’ Mandate for RRPT of a revenue or trading nature and allow the Company and its subsidiaries to enter into RRPT of a revenue or trading nature as set out in Section 2.5 of the Circular dated 26 July 2021, with the related parties in the ordinary course of business which are necessary for the day-to-day operations based on terms which are not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company. This approval shall continue to be in force until the conclusion of the next AGM of the Company at which time it will lapse unless the authority is renewed by a resolution passed at the meeting; or the expiration of the period within which the next AGM after the date it is required to be held pursuant to Section 340(2) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Act); or revoked/varied by resolutions passed by the shareholders of the Company in general meeting; whichever is the earlier. Further information on the Proposed Renewal of Existing Shareholders’ Mandate is set out in the Circular dated 26 July 2021.

3. Resolution 8 and9 –Mandate for theDirectorswho have served as IndependentNon-ExecutiveDirectors of

theCompanyforacumulativetermofmorethantwelve(12)years,tocontinuetoactasanIndependentNon-ExecutiveDirectorsoftheCompany

The proposed resolution is to seek the shareholders’ approval to retain Dato’ Seri Wong Siew Hai and Mr. Lee Hock Chye

(“Independent Non-Executive Directors”) as Independent Non-Executive Directors of the Company. Both the NRC and the Board have at the annual assessment assessed the independence of these Independent Non-

Executive Directors, and recommended them to continue to serve as Independent Non-Executive Directors of the Company based on the following justifications:-

(a) they have fulfilled the criteria under the definition of Independent Director as stated in the Main Market Listing Requirements, and thus, would, amongst others, be able to function as check and balance, provide relevant expert views and bring element of objectivity;

(b) their independence was not impaired despite their long tenure in office; and

(c) their continuous tenure brings stability and the Group benefits from their mix of skills, professional and commercial experience, technical expertise in their relevant fields and competencies that have contributed towards the Board making informed and balanced decisions.

Subject to the passing of Resolution 1 and Resolution 2, the proposed Ordinary Resolutions 8 and 9 if passed, will enable the Company to retain Dato’ Seri Wong Siew Hai and Mr. Lee Hock Chye as Independent Non-Executive Directors of the Company.

The approval of shareholders will be sought through two-tier voting process as described in the Guidance to Malaysian Code on Corporate Governance.




(C) Explanatory Notes to Special Business:- (Cont’d) 4. Resolution10–ProposedAmendmentstotheConstitutionoftheCompany The proposed amendments to the Constitution of the Company (“Proposed Amendments”) are mainly to align with

the Companies Act 2016 and to facilitate the participation of Directors in virtual meetings without being present at the meeting.

Based on the foregoing, the approval of shareholders will be sought under a Special Resolution for the Company to

incorporate the Proposed Amendments into its existing Constitution, in accordance with Section 36(1) of the Act. The Proposed Amendments as per Appendix A, which is circulated together with the Notice of the 27th AGM dated 26 July 2021, shall take effect once the proposed Special Resolution has been passed by a majority of not less than seventy-five per centum (75%) of the members who are entitled to vote in person or by proxy at the 27th AGM.

IMPORTANTNOTES:-

ThisNoticeof27thAGMtakesintoaccountthelatestmeasuresto-datetodealwiththeCOVID-19situationannouncedand/orimplementedinMalaysiawhichaffecttheholdingorconductofgeneralmeetings.TheCompanywillcloselymonitor the situation and reserves the right to take further measures or short-notice arrangements as and whenappropriate.AnymaterialdevelopmentswillbeannouncedonBursaMalaysiaandShareholdersareadvisedtochecktheCompany’sannouncementsmadeonBursaMalaysiaregularlyforthelatestupdatesonthestatusoftheAGM.

Personaldataprivacy:

By submitting an instrument appointing a proxy(ies) and/or representative(s) to participate, speak and vote at the AGM and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.

STATEMENT ACCOMPANYING NOTICE OF AGM(Pursuant to Paragraph 8.27(2) of the Listing Requirements)

1. Details of individuals who are standing for election as Directors

As at date of this notice, there are no individuals who are standing for election as Directors (excluding the above Directors who are standing for re-election or re-appointment) at this forthcoming 27th AGM.

2. General mandate for issue of securities in accordance with Paragraph 6.03(3) of the Listing Requirements

Details of the general mandate to issue securities in the Company pursuant to Section 75 and Section 76 of the Act are set out in Explanatory Note (C)(1) of the Notice of the 27th AGM.



APPENDIX A

PROPOSEDAMENDMENTSTOTHECONSTITUTIONOFTHECOMPANY

The Regulations of the Constitution of the Company are proposed to be amended in the following manner:-

RegulationNo.

ExistingRegulation

ProposedAmendments

87. The instrument appointing a proxy or representative and the duly registered power of attorney or other authority, if any, under which it is duly signed or notarially certified copy of that power or authority duly made in accordance with the Powers of Attorney Act 1949 or in such other ways as the Board may approve shall be deposited at the Office or at such other place within Malaysia or in such other manner as is specified for that purpose in the notice convening the meeting, not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting as the case may be, which the person named in the instrument proposes to vote, or, in the case of a poll, not less than twenty-four (24) hours before the same appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid.

The instrument appointing a proxy or representative and the duly registered power of attorney or other authority, if any, under which it is duly signed or notarially certified copy of that power or authority duly made in accordance with the Powers of Attorney Act 1949 or in such other ways as the Board may approve shall be deposited at the Office or at such other place within Malaysia or in such other manner as is specified for that purpose in the notice convening the meeting,. notlessthanforty-eight(48)hoursbeforethetimeappointedforholdingthemeetingoradjournedmeetingasthecasemaybe,whichthepersonnamedintheinstrumentproposestovote,or,inthecaseofapoll,notlessthantwenty-four(24)hoursbeforethe sameappointed for the takingof thepoll,andindefaulttheinstrumentofproxyshallnotbetreatedasvalid.

For the abovementioned instrument(s) to bevalid,thesaidinstrument(s)mustbedeposited:

(i) not less than forty-eight (48)hoursbeforethe time for holding the meeting oradjournedmeetingassetoutinthenoticeconveningthemeeting;or;

(ii) inthecaseofapoll,not lessthantwenty-four (24)hoursbefore the timeappointedforthetakingofthepoll.

For the avoidance of doubt, Regulation 87(ii)shallonlybeapplicablewhereupontheChairmanof the meeting had decided to hold the poll-taking (whichwouldordinarilybe takenduringameetingoradjournedmeeting)atalatertimeand/ordate.

89. (a) Subject to the Act and the Listing Requirements, the Directors or any agent of the Company so authorised by the Directors, may accept the appointment of proxy received by Electronic Communication on such terms and subject to such conditions as they consider fit. The appointment of proxy by Electronic Communication shall be in accordance with this Constitution and shall not be subject to the requirements of Regulation 87.

(a) Subject to the Act and the Listing Requirements, the Directors or any agent of the Company so authorised by the Directors, may accept the appointment of proxy received by Electronic Communication on such terms and subject to such conditions as they consider fit. The appointment of proxy by Electronic Communication shall be in accordance with this Constitution and shall not be subject to the requirements of Regulation 87.



APPENDIX A

PROPOSEDAMENDMENTSTOTHECONSTITUTIONOFTHECOMPANY(Cont’d)

RegulationNo.

ExistingRegulation

ProposedAmendments

89. (b) For the purposes of this Regulation, the Directors may require such reasonable evidence they consider necessary to determine and verify:-(i) the identity of the Member and the proxy;

and(ii) where the proxy is appointed by a

person acting on behalf of the Member, the authority of that person to make the appointment.

(c) Without prejudice to Regulation 89(a), the appointment of a proxy by Electronic Communication must be received at the Electronic Address specified by the Company in any of the following sources and shall be subject to any terms, conditions or limitations specified therein:(i) Notice calling the meeting;(ii) Instrument of proxy sent out by the

Company in relation to the meeting;or(iii) Website maintained by or on behalf of the

Company.

(d) An appointment of proxy by Electronic Communication must be received at the Electronic Address specified by the Company pursuant to Regulation 89(c) not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the form of appointment of proxy proposes to vote, or in the case of a poll, not less than twenty-four (24) hours before the time appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid,

(e) An appointment of proxy by Electronic Communication which is not made in accordance with this Constitution shall be invalid.

(b) For the purposes of this Regulation, the Directors may require such reasonable evidence they consider necessary to determine and verify:-(i) the identity of the Member and the

proxy; and(ii) where the proxy is appointed by a

person acting on behalf of the Member, the authority of that person to make the appointment.

(c) Without prejudice to Regulation 89(a), the appointment of a proxy by Electronic Communication must be received at the Electronic Address specified by the Company in any of the following sources and shall be subject to any terms, conditions or limitations specified therein:(i) Notice calling the meeting;(ii) Instrument of proxy sent out by the

Company in relation to the meeting;or(iii) Website maintained by or on behalf of

the Company.

(d) An appointment of proxy by Electronic Communication must be received at the Electronic Address specified by the Company pursuant to Regulation 89(c) not less than 48 hours before the time for holding the meeting or adjourned meeting pursuanttoRegulation87(i) at which the person named in the form of appointment of proxy proposes to vote, or in the case of a poll, not less than twenty-four (24) hours before the time appointed for the taking of the poll pursuant to Regulation87(ii), failingwhich the instrument of proxy shall not be treated as valid,

(e) An appointment of proxy by Electronic Communication which is not made in accordance with this Constitution shall be invalid.

95. All directors shall retire from office once at least in each 3 years, but shall be eligible for re-election. An election of directors shall take place each year. A retiring Director shall retain office until the close of the meeting at which he retires.

At every annual general meeting, one-thirdof the Directors shall subject to retirement byrotationonceatleastineachthree(3)yearsandbeeligibleforre-election.Iftheirnumberisnotthree(3)oramultipleofthree(3),thenumbernearesttoone-thirdshallretirefromoffice.


APPENDIX A

PROPOSEDAMENDMENTSTOTHECONSTITUTIONOFTHECOMPANY(Cont’d)

RegulationNo.

ExistingRegulation

ProposedAmendments

138. Directors or members of a committee of Directors (as the case may be) may participate in a meeting of Directors or a committee of Directors (as the case may be) by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute the presence of a quorum at such meeting. Any meeting held in such manner shall be deemed to be held at such place as shall be agreed upon by the Directors attending the meeting PROVIDED that at least one of the Directors present at the meeting was at such place for the duration of that meeting. All information and documents must be made equally available to all participants prior to or at/during the meeting.

Directors or members of a committee of Directors (as the case may be) may participate in a meeting of Directors or a committee of Directors (as the case may be) by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute the presence of a quorum at such meeting. AnymeetingheldinsuchmannershallbedeemedtobeheldatsuchplaceasshallbeagreeduponbytheDirectorsattendingthemeetingPROVIDEDthatatleastoneoftheDirectorspresentatthemeetingwas at such place for the duration ofthatmeeting. All information and documents must be made equally available to all participants prior to or at/during the meeting.



NOTIFICATION TO SHAREHOLDERS

Dear Valued Shareholders,

TWENTY-SEVENTHANNUALGENERALMEETING(“27THAGM”)

We are pleased to invite you to the fully virtual 27th AGM of SAM Engineering & Equipment (M) Berhad (“the Company”) that will be conducted via Remote Participation and Voting (“RPV”) facilities. The details of 27th AGM are as follows:-

DayandDate : Tuesday, 24 August 2021 Time : 10.00 a.m.Online Meeting Platform/Venue

: Securities Services e-Portal https://sshsb.net.my/login.aspx(Domain Registration No. with MyNIC Berhad: D4A004360)at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan, Malaysia

ModesofCommunication : 1. Typed text in the Online Meeting Platform 2. Email your questions to [email protected] prior to 27th AGM by 17 August 2021

SHAREHOLDERS(S)/PROXY(IES)/CORPORATEREPRESENTATIVES from the public are NOTALLOWED to be physically present at the Meeting Venue on the day of the 27th AGM.

Shareholders who wish to participate the fully virtual 27th AGM are advised to register with Securities Services e-Portal at https://sshsb.net.my/login.aspx to be able to use the RPV facilities. Further details on how to register, participate and vote remotely using the RPV facilities are set out in the Administrative Guide, which is despatched together with this notification letter. There will be a business presentation after the conclusion of the 27th AGM, you may stay with us after the conclusion of meeting.

Please note that the following documents relating to 27th AGM are available for download from Bursa Malaysia and the Company’s website at https://www.sam-malaysia.com/agm-2021.html from 26 July 2021 onward:-

1) Notice of 27th AGM;2) Proxy Form;3) Administrative Guide for the 27th AGM; 4) Annual Report 2021;5) Corporate Governance Report 2021; and6) Circular to Shareholders in relation to the proposed renewal of existing shareholders’ mandate for recurrent related party

transactions of a revenue or trading nature dated 26 July 2021 (“Circular to Shareholders”).

If you wish to receive a printed copy of the Annual Report 2021 and/or Circular to Shareholders, please submit your request at https://www.sshsb.com.my/new/requestarep.aspx. We will endeavour to post the printed copy to you as soon as reasonably practicable after the receipt of your written request.

Should you require any assistance, kindly contact our secretarial agent, Securities Services (Holdings) Sdn. Bhd., Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 George Town, Pulau Pinang during office hours at 604-2631966.

In view of the current unprecedented situation, the Company may be required to make changes to the administration and arrangement of the 27th AGM on short notice as it deems necessary. Please check the Company’s website at https://www.sam-malaysia.com/agm-2021.html or Company announcements published on Bursa Malaysia for the latest updates regarding the 27th AGM.

We thank you for your continued support to the Company and look forward to connecting with you via the RPV facilities on the day of the 27th AGM.

By order of the Board,

Thum Sook Fun (SSM PC No. 201908000139, MIA 24701)Chew Peck Kheng (SSM PC No. 202008001118, LS 0009559)Company Secretaries

PenangDate: 26 July 2021

SAMENGINEERING&EQUIPMENT(M)BERHADCompany Registration No. 199401012509 (298188-A)

(Incorporated in Malaysia)


https://www.sam-malaysia.com/

https://www.sshsb.com.my/new/requestarep.aspx


ADMINISTRATIVE GUIDE

Twenty-SeventhAnnualGeneralMeeting(“27thAGM”)ofSAMEngineering&Equipment(M)Berhad(“SAMEE”OrThe“Company”)

Day and Date : Tuesday, 24 August 2021Time : 10.00 a.m.Online Meeting Platform/ Venue

: Securities Services e-Portal https://sshsb.net.my/login.aspx(Domain Registration No. with MyNIC Berhad: D4A004360)at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan, Malaysia

INTRODUCTION

The 27th AGM of SAMEE will be conducted on a fully virtual basis via Remote Participation and Voting (“RPV”) Facilities.

Through the RPV Facilities, you may exercise your right as a member of the Company to participate and vote at the 27th AGM. Alternatively, you may also appoint the Chairman of the Meeting as your proxy to attend and vote on your behalf at the 27th AGM. Details of the procedures for RPV and e-proxy submission are set out in this Administrative Guide.

Please note that shareholders/proxies/corporate representatives from the public are NOT ALLOWED to be present in-person at the Meeting Venue on the day of the 27th AGM.

Kindly note that it is your responsibility to maintain your own connection to the internet at all times during your participation at the fully virtual AGM. Kindly note that the quality of the live stream is dependent on the bandwidth and stability of your internet connection.

REMOTEPARTICIPATIONANDVOTINGFACILITIES(“RPV”)

Members may attend, speak (including posting questions to the Board via real time submission of typed texts) and vote (collectively, “participate”) remotely at the 27th AGM using RPV provided by SS E Solutions Sdn. Bhd. via its Securities Services e-Portal (“SSeP”) at https://sshsb.net.my/login.aspx.

Members who wish to appoint proxies to participate on their behalf via RPV in the 27th AGM must ensure that the duly executed Proxy Form or other instruments of appointment are deposited at the Company’s Registered Office at Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 George Town, Pulau Pinang or by electronic lodgement via SSeP at https://sshsb.net.my/login.aspx not later than Sunday, 22 August 2021 at 10:00 a.m.

Corporate representatives of corporate members must deposit their original or duly certified certificate of appointment of corporate representative at the Company’s registered office not later than Sunday, 22 August 2021 at 10:00 a.m. to participate via RPV in the 27th AGM.

Attorneys appointed by power of attorney must deposit their power of attorney at the Company’s Registered Office no later than Sunday, 22 August 2021 at 10:00 a.m. to participate 27th AGM.

Amemberwhohasappointedaproxyorattorneyorauthorisedrepresentativetoparticipateatthe27thAGMviaRPVmustrequesthis/herproxytoregisterasUserofSecuritiesServicese-Portalathttps://sshsb.net.my/login.aspxonorbefore19August2021,ifhis/herproxyisnotregisteredUserofthee-portal.









ADMINISTRATIVE GUIDE(Cont’d)

As the 27th AGM of SAMEE is a fully virtual meeting, members who are unable to participate in this AGM may appoint the Chairman of the meeting as his/her proxy and indicate the voting instructions in Proxy Form.

PROCEDURESFORREMOTEPARTICIPATIONANDVOTINGVIARPVFACILITIES

Members/proxies/corporate representatives/attorneys who wish to participate at the 27th AGM remotely using the RPV are to follow the requirements and procedures as stated in the Administrative Guide for the Securities Services e-Portal as annexed hereto.

GENERALMEETINGRECORDOFDEPOSITORS(“ROD”)

Only a depositor whose name appears on the RODasat17August2021 shall be entitled to attend, speak and vote at the 27th AGM or appoint proxies to attend and/or vote on his/her behalf.

APPOINTMENTOFPROXY/CORPORATEREPRESENTATIVES/ATTORNEYS

• If you are unable to attend the meeting via RPV on 24 August 2021, you may appoint the Chairman of the meeting as proxy and indicate the voting instructions in the Proxy Form.

• The Proxy Form and/or document relating to the appointment of proxy/corporate representative/attorney for the 27th

AGM whether in hard copy or by electronic means must be deposited or submitted in the following manner not later than 22 August 2021 at 10:00 a.m.:

(i) InHardCopy:

By hand or post to the Company’s Registered Office at Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 George Town, Pulau Pinang not less than forty-eight (48) hours before the time appointed for holding the 27th AGM or any adjournment thereof, otherwise the Proxy Form shall not be treated as valid.

(ii) ByElectronicForm:

All members can have the option to submit Proxy Form electronically via SSeP Online at https://sshsb.net.my/login.aspx and you may refer to the details as stated in the Administrative Guide for the Securities Services e-Portal as annexed hereto.

COMMUNICATIONGUIDANCE

Members are advised to check the Company’s website at https://www.sam-malaysia.com/agm-2021.html and announcements at Bursa Malaysia’s website from time to time for any changes to the administration of the 27th AGM that may be necessitated by changes to the directives, safety and precautionary requirements and guidelines prescribed by the Government of Malaysia, the Ministry of Health, the Malaysian National Security Council, Securities Commission Malaysia and/or other relevant authorities.

ENQUIRY

If you have any enquiries on the above, please contact the following during office hours on Monday to Friday from 9.00 a.m. to 5.00 p.m. (except on public holidays):

SS E Solutions Sdn. Bhd.c/o Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 George Town, Pulau Pinang

General Line : 604-263 1966Fax Number : 604-262 8544Email : [email protected]



https://www.sam-malaysia.com/


WHATISSecuritiesServicese-Portal?

SecuritiesServicese-Portal is an online platform that will allow both individual shareholders and body corporate shareholders through their appointed representatives, to -• Submit proxy form electronically – paperless submission• Register for remote participation and voting at meetings• Participate in meetings remotely via live streaming • Vote online remotely on resolution(s) tabled at meetings (referred to as “e-Services”)

The usage of the e-Portal is dependent on the engagement of the relevant e-Services by SAM Engineering & Equipment (M) Berhad and is by no means a guarantee of availability of use, unless we are so engaged to provide. Allusersaretoread,agreeandabidetoalltheTermsandConditionsofUseandPrivacyPolicyasrequiredthroughoutthee-Portal.

Pleasenotethatthee-PortalisbestviewedonthelatestversionsofChrome,Firefox,EdgeandSafari.

REQUIREASSISTANCE?Please contact Ms. Chew Peck Kheng (ext. 194), or Ms. Esther Tan (ext. 216) or Ms. Stephanie Tan (ext. 186) at our general line (Tel: +604 263 1966) to request for e-Services Assistance during our office hours on Monday to Friday from 9.00 a.m. to 12.30 p.m. and from 1.30 p.m. to 5.30 p.m. (except on public holiday). Alternatively, you may email us at [email protected].:

AND


(A)RegisterasaUserofSecuritiesServicese-PortalOnly if you are not an existing registered user

(B)RegisterforRemoteParticipationWhere you wish to participate remotely at the meeting

(C)Submite-ProxyFormWhere you wish to appoint proxy(ies) to participate

remotely on your behalf (you may also submit the hard copy Proxy Form)

ONTHEDAYOFTHEMEETING

(D)JointheLiveStreamMeeting(eLive)

(E)VoteOnlineRemotelyduringtheMeeting(eVoting)

BEFORETHEMEETING

OR

SECURITIES SERVICES e-PORTAL




BEFORETHEMEETING

(A)RegisterasaUserofSecuritiesServicese-PortalStep 1 Visit https://sshsb.net.my/login.aspxStep 2 Register as a user Step 3 Wait for our notification email that will be sent within one (1) working dayStep 4 Verify your user account within seven (7) days of the notification email and log in

• This is a ONE-TIME registration. If you are already a registered user of Securities Services e-Portal, you

need not register again. • Your email address is your User ID.• Please proceed to either (B) or (C) below once you are a registered user.

ALLSHAREHOLDERSMUSTREGISTERASAUSERBY19 AUGUST 2021

(B)RegisterforRemoteParticipationMeetingDateandTime RegistrationforRemoteParticipation

ClosingDateandTime

Tuesday, 24 August 2021 at 10:00 a.m. Sunday, 22 August 2021 at 10:00 a.m.

Log in to https://sshsb.net.my/login.aspx with your registered email and passwordLook for SAMEngineering&Equipment(M)Berhad under Company Name and 27thAGMon24August2021at

10:00a.m.–Registration forRemoteParticipation under Corporate Exercise / Event and click “>” to register for remote participation at the meeting.

Step 1 Check if you are attending as –• Individual shareholder• Corporate or authorised representative of a body corporate For body corporates, the appointed corporate/authorised representative has to upload the evidence of

authority (e.g. Certificate of Appointment of Corporate Representative, Power of Attorney, letter of authority or other documents proving authority). All documents that are not in English or Bahasa Malaysia have to be accompanied by a certified translation in English in 1 file. The original evidence of authority and translation thereof, if required, have to be submitted to SS E Solutions Sdn. Bhd. at Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 George Town, Pulau Pinang for verification before the registration closing date and time above.

Step 2 Submit your registration.• A copy of your e-Registration for remote participation can be accessed via My Records (refer to the left navigation

panel).• Your registration will apply to all the CDS account(s) of each individual shareholder / body corporate shareholder

that you represent. If you are both an individual shareholder and representative of body corporate(s), you need to register as an individual and also as a representative for each body corporate.

• As the meeting will be conducted on a fully virtual basis, we highly encourage all shareholders to remotely participate and vote at the meeting, failing which, please appoint the Chairman of the meeting as proxy or your own proxy(ies) to represent you.




(C)Submite-ProxyForm

MeetingDateandTime ProxyFormSubmissionClosingDateandTimeTuesday, 24 August 2021 at 10:00 a.m. Sunday, 22 August 2021 at 10:00 a.m.

Log in to https://sshsb.net.my/login.aspx with your registered email and password.Look for SAMEngineering&Equipment(M)Berhad under Company Name and 27thAGMon24August2021at

10:00a.m.–SubmissionofProxyForm under Corporate Exercise / Event and click “>” to submit your proxy forms online for the meeting by the submission closing date and time above.

Step 1 Check if you are submitting the proxy form as –• Individual shareholder• Corporate or authorised representative of a body corporate For body corporates, the appointed corporate / authorised representative has to upload the evidence of

authority (e.g. Certificate of Appointment of Corporate Representative, Power of Attorney, letter of authority or other documents proving authority). All documents that are not in English or Bahasa Malaysia have to be accompanied by a certified translation in English in 1 file. The original evidence of authority and translation thereof, if required, have to be submitted to SS E Solutions Sdn. Bhd. at Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 George Town, Pulau Pinang for verification before the proxy form submission closing date and time above.

Step 2 Enter your CDS account number or the body corporate’s CDS account number. Then enter the information of your proxy(ies) and the proportion of your securities to be represented by your proxy(ies). YouarestronglyencouragedtoappointtheChairmanofthemeetingasyourproxywhereyouarenotable toparticipateremotely.

Step 3 Proceed to indicate how your votes are to be casted against each resolution.

Step 4 Review and confirm your proxy form details before submission.

• A copy of your submitted e-Proxy Form can be accessed via My Records (refer to the left navigation panel).• You need to submit your e-Proxy Form for everyCDSaccount you have or represent.

PROXIES

Allappointedproxiesneednotregisterforremoteparticipationunder(B)abovebutiftheyarenotregisteredUsersofthee-Portal,theywillneedtoregisterasUsersofthee-Portalunder(A)aboveby19 AUGUST 2021. PLEASE NOTIFYYOURPROXY(IES)ACCORDINGLY. Upon processing the proxy forms, we will grant the proxy access to remote participation at the meeting to which he/she is appointed for instead of the shareholder, provided the proxy must be a registered user of the e-Portal, failing which, the proxy will not be able to participate at the meeting as the meeting will be conducted on a fully virtual basis.





ONTHEDAYOFTHEMEETING

Logintohttps://sshsb.net.my/login.aspxwithyourregisteredemailandpassword

(D)JointheLiveStreamMeeting(eLive)

MeetingDateandTime eLiveAccessDateandTime

Tuesday, 24 August 2021 at 10:00 a.m. Tuesday, 24 August 2021 at 9:15 a.m.

Look for SAMEngineering&Equipment(M)Berhad under Company Name and 27thAGMon24August2021at10:00a.m.–LiveStreamMeeting under Corporate Exercise / Event and click “>” to join the meeting.

• The access to the live stream meeting will open on the abovementioned date and time.• If you have any questions to raise, you may use the text box to transmit your question. The Chairman/Board/ Management/

relevant adviser(s) will endeavour to broadcast your question and their answer during the meeting. Do take note that the quality of the live streaming is dependent on the stability of the internet connection at the location of the user.

(E)VoteOnlineRemotelyduringtheMeeting(eVoting)

MeetingDateandTime eVotingAccessDateandTime

Tuesday, 24 August 2021 at 10:00 a.m. Tuesday, 24 August 2021 at 10:00 a.m.

If you are already accessing the Live Stream Meeting, click Proceed to Vote under the live stream player.OR

If you are not accessing from the Live Stream Meeting and have just logged in to the e-Portal, look for SAMEngineering&Equipment(M)Berhad under Company Name and 27thAGMon24August2021at10:00a.m.–RemoteVoting under Corporate Exercise / Event and click “>” to remotely cast and submit the votes online for the resolutions tabled at the meeting.

Step 1 Cast your votes by clicking on the radio buttons against each resolution.Step 2 Review your casted votes and confirm and submit the votes.

• The access to eVoting will open on the abovementioned date and time. • Your votes casted will apply throughout all the CDS accounts you represent as an individual shareholder, corporate /

authorised representative and proxy. Where you are attending as a proxy, and the shareholder who appointed you has indicated how the votes are to be casted, we will take the shareholder’s indicated votes in the proxy form.

• The access to eVoting will close as directed by the Chairman of the meeting.• A copy of your submitted e-Voting can be accessed via MyRecords(refer to the left navigation panel).

Note: There will be a business presentation after the conclusion of the 27th AGM, you may stay with us after the conclusion of meeting.


I/We (Full Name in Block Letters) ................................................................................................... (Tel:) ...........................................

NRIC No./Passport No./Company No. ...................................................................................... of ......................................................

.................................................................................................................................................................................... being a member

/members of SAMENGINEERING&EQUIPMENT(M)BERHAD (“Company”), hereby appoint the following person(s):-

FirstProxy

Name NRIC/PassportNo.:No.ofsharesor%ofsharestobepresented

and

SecondProxy

Name NRIC/PassportNo.:No.ofsharesor%ofsharestobepresented

or the Chairman of the meeting as *my/our proxy to vote in *my/our name(s) on my/our behalf at the Twenty-Seventh Annual General Meeting (“AGM”) of the Company to be conducted on a fully virtual basis via the Online Meeting Platform hosted on Securities Services e-Portal at https://sshsb.net.my/login.aspx on Tuesday, 24 August 2021 at 10.00 a.m. and at any adjournment thereof.

*My/Our proxy is to vote on the resolution referred to in the Notice of AGM as indicated below:-

No. RESOLUTIONS For AgainstORDINARY BUSINESS1. To re-elect Dato’ Seri Wong Siew Hai as Director.

2. To re-elect Mr. Lee Hock Chye as Director.

3. To approve the payment of Directors’ fee.

4. To approve the payment of benefits to Directors (excluding Directors’ fee).

5. To re-appoint Messrs. KPMG PLT as auditors.

SPECIAL BUSINESS6. Ordinary Resolution - Authority for Directors to issue and allot shares.

7. Ordinary Resolution - Proposed renewal of shareholders’ mandate for RRPT.

8. Ordinary Resolution - Mandate to retain Dato’ Seri Wong Siew Hai as an Independent Non-Executive Director of the Company.

9. Ordinary Resolution - Mandate to retain Mr. Lee Hock Chye as an Independent Non-Executive Director of the Company.

10. Special Resolution - Proposed Amendments to the Constitution of the Company.

(Please indicate with an “X” in the appropriate box how you wish your proxy to vote. If no instruction is given, the proxy will vote or abstain at his/her discretion).

* Strike out whichever not applicable.



FORM OF PROXY

NUMBER OF SHARES HELD

CDS ACCOUNT NO.

___________________________________________Signature of Shareholder / Common Seal

Signed this______________day of _______________2021.

Notes:-1. As part of the initiatives and the safety measures to curb the spread of Coronavirus Disease 2019 (“COVID-19”), and having regard to the well-being and the safety of our shareholders,

the 27th AGM will be conducted on a fully virtual basis via Remote Participation and Voting (“RPV”) facilities provided by SS E Solution Sdn Bhd via its Securities Services e-Portal (“SSeP”) at https://sshsb.net.my/login.aspx.

Please follow the procedures provided in the Administrative Guide for the 27th AGM in order to register, participate and vote remotely via RPV facilities.2. According to the Guidance Note and Frequently Asked Questions on the Conduct of General Meetings for Listed Issuers revised by the Securities Commission Malaysia on 1 June 2021

(“Revised Guidance Note and FAQs), an online meeting platform can be recognised as the meeting venue or place under Section 327(2) of the Act provided that the meeting online platform is registered with MyNIC Berhad or hosted in Malaysia.

By utilising the RPV facilities at Securities Services e-Portal (prior registration as a User is required), shareholders are to remotely attend, participate, speak (by way of posing questions to the Board via real time submission of typed texts) and cast their votes at the 27th AGM. Please refer to the Administrative Guide for procedures to utilise the RPV facilities in order to participate and vote remotely at the 27th AGM.

3. As the 27th AGM will be conducted via a fully virtual meeting, a member entitled to participate and vote at the meeting may appoint up to two (2) proxies or the Chairman of the Meeting as his/her proxy(ies) to participate and vote in his or her stead, by indicating the voting instruction in the Form of Proxy:-a) A proxy may but need not to be a member of the Company. There shall be no restriction as to the qualification of the proxy.b) Where a member appoints more than one (1) proxy, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.c) A proxy appointed to participate and vote at the meeting shall have the same rights as the member to speak at the meeting.

As guided by the Securities Commission Malaysia’s Revised Guidance Note and FAQs, the right to speak is not limited to verbal communication only but includes other modes of expression. Therefore, all shareholders and proxies shall communicate with the main venue of the AGM via real time submission of typed texts through a text box within Securities Services e-Portal’s platform during the live streaming of the AGM as the primary mode of communication. In the event of any technical glitch in this primary mode of communication, shareholders and proxies may email their questions to [email protected] during the AGM. The questions and/or remarks submitted by the shareholders and/or proxies will be broadcasted and responded by the Chairman/Board/relevant adviser during the AGM.

4. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depository) Act, 1991 (“SICDA”), it may appoint up to two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. The appointment of two (2) proxies in respect of any particular securities account shall be invalid unless the authorised nominee specifies the proportion of its shareholding to be represented by each proxy.

5. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. Where an Exempt Authorised Nominee appoints more than one (1) proxy in respect of each Omnibus Account, the appointment shall be invalid unless the Exempt Authorised Nominee specifies proportion of its shareholding to be represented by each proxy.

6. The appointment of proxy(ies) may be made in hardcopy form or by electronic means as follow:-a) In Hardcopy Form The instrument appointing a proxy or representative and the duly registered power of attorney or other authority (if any), under which it is signed or a duly notarized certified copy

of that power or authority, shall be deposited at the Registered Office of the Company at Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 George Town, Pulau Pinang.b) By SSep The Form of Proxy may also be lodged electronically via SSeP at https://sshsb.net.my/login.aspx (Please refer to the Administrative Guide for more details)in either case, not less than 48 hours before the time appointed for holding the meeting or at any adjournment thereof.

7. The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the instrument of proxy.

8. In respect of deposited securities, only members whose names appear on the Record of Depositors on 17 August 2021 (General Meeting Record of Depositors) shall be eligible to participate, speak and vote at the meeting or appoint proxy(ies) to participate, speak and vote on his/her behalf.

9. Any alteration in this form must be initialled.

The Company SecretariesSAMEngineering&Equipment(M)Berhad

Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar,10200 George Town, Penang, Malaysia.

Company Registration No. 199401012509 (298188-A)(Incorporated in Malaysia)

STAMP

Please fold across the line and close

Please fold across the line and close

https://www.sshsb.net.my/login.aspx

not beneathAlways above and

ConquerorsWe are more than

w w w . s a m - m a l a y s i a . c o m

SAM ENGINEERING & EQUIPMENT (M) BERHAD(199401012509 (298188-A))

Plot 17, Hilir Sungai Keluang Tiga, Bayan Lepas Free Industrial Zone, Phase IV, 11900 Penang, Malaysia.Tel: 604-643 6789 Fax: 604-644 7017

OUR SEVEN PILLARS

Documents

Transcript of OUR SEVEN PILLARS