Linkers Industries Ltd.

Company Overview

Business Model: Linkers Industries Limited, through its operating subsidiary TEM Electronics (M) Sdn. Bhd., is a manufacturer and supplier of customized, made-to-order wire/cable harnesses. These assemblies of wires/cables are bound together with straps, ties, and electrical tapes to transmit signals or electrical power. The company's business model involves close collaboration with customers through design, prototyping, and production stages. Its primary customers are global brand name manufacturers and Original Equipment Manufacturers (OEMs) in the home appliances, industrial products, and automotive industries.

Market Position: The company has over 20 years of experience in the wire/cable harness industry, serving a diversified customer base that includes renowned global brand name manufacturers and OEMs. Key competitive strengths include long-established customer relationships, extensive understanding of the production process, utilization of up-to-date machinery and automation for high production capacity, and efficient management leading to competitive pricing and quality. The company maintains high quality standards, evidenced by ISO 9001:2015 and IATF 16949:2016 certifications. It operates in a highly competitive industry with low entry barriers, competing on product functionality, quality, reliability, design, technical and manufacturing capabilities, delivery schedules, customer relationships, services, and price.

Recent Strategic Developments: Linkers Industries Limited completed its Initial Public Offering (IPO) on December 6, 2024, listing its Class A Ordinary Shares on Nasdaq Capital Market. The company issued 2,185,000 Class A Ordinary Shares, raising aggregate gross proceeds of US$8,740,000. Net proceeds from the IPO, approximately RM25.7 million (US$6.1 million), are planned for potential acquisitions (30%), machinery purchases (20%), marketing promotion (10%), and working capital (40%). Post-listing, the company has incurred increased professional services fees and D&O insurance expenses. The Malaysian government implemented a monthly minimum wage policy increase from RM1,500 to RM1,700 effective February 1, 2025, impacting labor costs. The company received a Nasdaq notification on March 10, 2025, regarding non-compliance with the minimum bid price rule, with an extended compliance period until March 9, 2026. A new BVI subsidiary, Linkers Asia Pacific Limited, was incorporated on September 11, 2025, for investment holding.

Geographic Footprint: The company's principal executive office and manufacturing operations are located in Malaysia, specifically in Kedah Darul Aman. Its customer base is primarily concentrated in the Asia Pacific Region. Linkers Industries Limited is a British Virgin Islands (BVI) holding company, with subsidiaries in BVI and Malaysia.

Cross-Border Operations: Linkers Industries Limited operates as a BVI holding company with its primary operating subsidiary, TEM Electronics (M) Sdn. Bhd., located in Malaysia. It also has BVI subsidiaries TEM SP Limited and Linkers Asia Pacific Limited, both serving as investment holding companies. Raw materials are sourced from suppliers in Malaysia, the People's Republic of China (PRC), and Europe. The company generates a significant amount of export sales, mainly to customers in the Asia Pacific Region. It is subject to foreign exchange control policies in Malaysia and must comply with anti-corruption laws such as the U.S. Foreign Corrupt Practices Act (FCPA) and Malaysian anti-corruption laws. The company relies on dividends and other payments from its Malaysian subsidiary to fund its cash requirements.

Financial Performance

Revenue Analysis

Profitability Metrics (FY2025):

• Gross Margin: 8.11%
• Operating Margin: -21.27%
• Net Margin: -22.00%

Investment in Growth:

• R&D Expenditure: Not explicitly disclosed as a separate line item.
• Capital Expenditures: RM240,850 (US$57,231) in FY2025, primarily for plant and equipment. This represents a decrease from RM581,327 in FY2024 and RM395,054 in FY2023.
• Strategic Investments: The company plans to allocate IPO net proceeds as follows: approximately 30% for potential acquisitions, 20% for machinery purchases, and 10% for marketing promotion.

Currency Impact Analysis:

• The company's functional currency for its BVI entities is USD, while its Malaysian operating subsidiary's functional currency is Ringgit Malaysia (RM). The financial statements are presented in RM.
• Revenue is substantially denominated in USD, while daily operations and expenses are mainly in RM, USD, and Euro (EUR).
• The company does not have a formal policy for hedging against currency risk but manages net exposure by buying or selling foreign currencies at spot rates for short-term imbalances.
• A 4% strengthening of the Malaysian Ringgit against the USD would decrease profit or loss by approximately RM1,015,200, and against the EUR by approximately RM50,879 (as of June 30, 2025).

Business Segment Analysis

Wire/Cable Harness Manufacturing

Financial Performance:

• Revenue: RM22,421,335 (US$5,327,758) in FY2025, remaining relatively stable compared to RM22,428,825 in FY2024 (-0.03% YoY). This follows a significant decrease of 34.6% in FY2024 from RM34,269,482 in FY2023, primarily due to global economic uncertainties and postponed sales orders.
• Operating Margin: -21.27% in FY2025, a substantial decline from -6.92% in FY2024 and 0.72% in FY2023. This deterioration is mainly attributed to increased general and administrative expenses, particularly professional services fees, and a decrease in gross profit margin due to higher fixed manufacturing overhead absorption from reduced production volume.
• Key Growth Drivers: The company aims to widen its customer base in the home appliance sector and diversify into the automotive industry. It leverages its in-house engineering capabilities, up-to-date machinery, and efficient management to offer competitive pricing and maintain quality. Strategic initiatives include continuous investment in automation and technology to enhance production capacity and meet evolving customer needs.

Product Portfolio:

• The company manufactures and supplies customized, made-to-order wire/cable harnesses. These products are designed and optimized to meet specific technical requirements and applications for customers in the home appliances, industrial products, and automotive industries.
• The production process involves wire cutting/stripping, crimping/termination, assembly, testing, and packing/delivery.

Market Dynamics:

• The company serves global brand name manufacturers and OEMs, primarily in the Asia Pacific Region.
• The market for wire/cable harnesses is highly competitive, characterized by rapid technological change, new product development, product obsolescence, evolving industry standards, and price erosion.
• There is a growing demand for complex and customized solutions, requiring technical expertise and advanced manufacturing capabilities. The company emphasizes innovation and customization to meet these customer needs.

Geographic Revenue Distribution (FY2025):

• Thailand: RM11,018,521 (49.14% of segment revenue)
• Malaysia: RM5,704,747 (25.44% of segment revenue)
• Switzerland: RM5,180,589 (23.10% of segment revenue)
• United States of America: RM97,439 (0.43% of segment revenue)
• Others: RM420,039 (1.87% of segment revenue)
• Growth Markets: The company's focus on the Asia Pacific Region and diversification into the automotive industry indicate a strategy to capture growth in these areas.

International Operations & Geographic Analysis

Revenue by Geography (FY2025):

| Region/Country | Revenue (RM) | % of Total | Growth Rate (YoY) | Key Drivers | |---|---|---|---| | Thailand | 11,018,521 | 49.14% | +1.43% | Stable demand from existing customers. | | Malaysia | 5,704,747 | 25.44% | -14.03% | Decreased sales, potentially impacted by local economic conditions and minimum wage policy. | | Switzerland | 5,180,589 | 23.10% | +58.24% | Strong growth, indicating increased penetration or demand from Swiss-based customers. | | United States of America | 97,439 | 0.43% | -90.00% | Significant decline, possibly due to reduced orders or market shifts. | | Others | 420,039 | 1.87% | -38.46% | Varied performance across smaller markets. |

International Business Structure:

• Subsidiaries:
  • TEM SP Limited: Incorporated in the British Virgin Islands, serves as an investment holding company.
  • TEM Electronics (M) Sdn. Bhd.: Incorporated in Malaysia, is the primary operating subsidiary engaged in manufacturing.
  • Linkers Asia Pacific Limited: Incorporated in the British Virgin Islands on September 11, 2025, for investment holding purposes.
• Joint Ventures: No joint ventures are explicitly mentioned in the filing.
• Licensing Agreements: No specific licensing agreements are mentioned in the filing.

Cross-Border Trade:

• Export Markets: The company generates a significant amount of export sales, primarily to customers located in the Asia Pacific Region.
• Import Dependencies: Key raw materials, including connectors, terminals, silicon and polyvinyl chloride wires, plastic materials, relays, timers, and thermistors, are sourced from suppliers in Malaysia, the PRC, and Europe. The company also sources wires from an affiliated company.
• Transfer Pricing: The company's international tax strategy includes considerations for transfer pricing policies and documentation requirements, particularly in relation to inter-company transactions.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: The company has not engaged in share repurchases.
• Dividend Payments: Linkers Industries Limited did not declare or pay any dividends or distributions for the years ended June 30, 2024, and June 30, 2025. The company currently intends to retain any future earnings to finance operations and expansion and does not anticipate paying dividends in the foreseeable future.
• Dividend Yield: Not applicable given no dividend payments.
• Future Capital Return Commitments: No authorized programs or amounts for future capital returns are disclosed.

Balance Sheet Position (as of June 30, 2025):

• Cash and Equivalents: RM23,723,687 (US$5,637,222)
• Total Debt: RM1,581,879 (US$375,886) (comprising current and non-current lease liabilities; loans from related parties were fully settled in January 2025).
• Net Cash Position: RM22,141,808 (US$5,261,336)
• Credit Rating: Not disclosed.
• Debt Maturity Profile (as of June 30, 2025):
  • Within 1 year: RM953,807 (lease liabilities)
  • Within 2 to 5 years: RM809,200 (lease liabilities)

Cash Flow Generation (FY2025):

• Operating Cash Flow: RM(2,109,290) (US$501,208), a shift from positive operating cash flows in prior years. This was mainly due to a net loss from operations and a decrease in trade and other payables, partially offset by a decrease in trade and other receivables.
• Free Cash Flow: Not explicitly calculated, but the negative operating cash flow combined with capital expenditures of RM240,850 indicates negative free cash flow.
• Cash Conversion Metrics: Not explicitly provided in the filing.

Currency Management:

• Cash holdings by major currencies (as of June 30, 2025): RM720,016, USD22,387,986, EUR505,794, Thai Baht10,060, Renminbi27,511, Hong Kong Dollar72,320.
• Natural hedging through operational diversification: Not explicitly stated, but the company's multi-currency operations could provide some natural hedging.
• Financial hedging instruments and strategies: The company currently does not have a formal foreign exchange hedging policy. Directors monitor foreign currency exposure and will consider hedging significant exposures if needed, taking into account hedging costs.

Operational Excellence

Production & Service Model: Linkers Industries Limited operates as a manufacturer and supplier of wire/cable harnesses, offering customized and made-to-order products. The operational philosophy involves working closely with customers through all stages of a product's life cycle, from design and prototyping to production. The production process is structured into distinct stages: wire cutting/stripping, crimping/termination, assembly, testing, and final packing and delivery. Quality control is integrated throughout the production process, from raw material inspection to final product testing, to ensure products meet or exceed industry and customer standards.

Global Supply Chain Architecture: Key Suppliers & Partners:

• Raw Material Suppliers: The company sources major raw materials, including connectors, terminals, silicon and polyvinyl chloride wires, plastic materials, relays, timers, and thermistors, from independent third-party suppliers in Malaysia, the PRC, and Europe. Wires are also sourced from an affiliated company. Supplier selection is based on capability to meet specifications, track record, scale, expertise, cost, product quality, reliability, price, delivery punctuality, financial condition, reputation, and after-sales services. No long-term contracts are in place with suppliers.
• Manufacturing Partners: Not explicitly mentioned as external manufacturing partners; the company conducts its own manufacturing.
• Technology Partners: Not explicitly mentioned, but the company emphasizes in-house engineering capabilities and the use of up-to-date machinery and automation.

Facility Network:

• Manufacturing: All production operations are conducted at the Malaysia Factory, located in Kedah Darul Aman, Malaysia. This facility comprises three leased properties with a total gross floor area of approximately 48,591 square feet.
• Research & Development: While specific R&D centers are not detailed, the company highlights its "in-house engineering capabilities" for wire harness design and optimization.
• Distribution: Finished products are warehoused at the Malaysia Factory after quality inspection. The company utilizes third-party logistics and transportation companies to deliver products to customer-designated locations.

Operational Metrics:

• The company holds international certifications for its quality management systems, including ISO 9001:2015 and IATF 16949:2016.
• An Enterprise Resource Planning (ERP) system is used in the Malaysia Factory for inventory data management.
• Inventory levels are monitored to facilitate smooth production, avoid stock-outs, and reduce overstocking.
• Obsolete and slow-moving inventories amounted to RM454,936 (US$108,102) in FY2025.
• No specific capacity utilization or efficiency measures are disclosed in the filing.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: The company manages customer relationships through its sales and marketing department, which engages in frequent visits to customer offices and factories, as well as direct contact via phone calls, emails, and meetings.
• Channel Partners: No specific channel partners are explicitly mentioned in the filing.
• Digital Platforms: No online sales channels or e-commerce initiatives are explicitly mentioned.
• Marketing Activities: Sales and marketing personnel participate in industry trade fairs (e.g., Electronica) and seminars to solicit new customers and explore business opportunities. They also assist potential customers with in-depth evaluations for supplier approval.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: The company serves renowned global brand name manufacturers and OEMs across diversified industries, including a New Zealand premium appliance brand, a Swiss leading home appliance brand, an American luxury outdoor cooking brand, a German multinational engineering and technology company, and a Malaysian one-stop engineering solution brand.
• Strategic Partnerships: The company's long-established business relationships with these key customers provide advantages such as frequent selection for new product development, opportunities to understand technological trends, and potential for increased orders.
• Customer Concentration: The company faces significant customer concentration risk. Its top five customers accounted for 89.4% of total revenue in FY2025, 86.2% in FY2024, and 92.4% in FY2023. Purchases are made on an order-by-order basis, with no long-term agreements.
• Customer Relationship Management: Management aims to maintain and enhance long-standing relationships and diversify products and services to reduce customer concentration.

Regional Market Penetration:

• The company's sales are predominantly to customers located in the Asia Pacific Region.
• Thailand: Represents the largest revenue contributor, accounting for 49.14% of total revenue in FY2025.
• Malaysia: Accounts for 25.44% of total revenue in FY2025.
• Switzerland: A significant European market, contributing 23.10% of total revenue in FY2025.
• Growth Markets: The company's strategy includes widening its customer base in home appliances and diversifying into the automotive industry, particularly within the Asia Pacific Region.

Competitive Intelligence

Global Market Structure & Dynamics

Industry Characteristics: The wire/cable harness manufacturing market in Malaysia, where the company primarily operates, is highly competitive with a low entry barrier. The industry is characterized by rapid technological change, frequent new product development, rapid product obsolescence, evolving industry standards, and significant price erosion over a product's life cycle. There is a growing demand for complex and customized solutions, necessitating technical expertise and advanced manufacturing capabilities. Market players are increasingly investing in R&D and advanced technologies, with a strong emphasis on innovation and customization to meet customer needs.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: The filing indicates that the company faces intense competition from a large number of existing domestic and international players in the wire/cable harness manufacturing market. Specific competitor names are not disclosed. Regional Competitive Dynamics: The competitive landscape varies by major geographic markets, with competition primarily based on product functionality, quality, reliability, design and manufacturing capabilities, ability to meet delivery schedules, customer relationships, services, and product price.

Risk Assessment Framework

Strategic & Market Risks

• Global Market Dynamics: The company's business is highly correlated with the global home appliances, industrial products, and automotive industries, with sales mainly to the Asia Pacific Region. Economic downturns or slower-than-expected growth in these regions or industries could diminish demand for its products. Global economic uncertainties, such as the ongoing conflict between Gaza and Israel and the war in Ukraine, have already influenced customer sales order postponements and could continue to adversely impact the business.
• Technology Disruption: The markets for the company's products are characterized by rapid technological changes and the frequent emergence of new technologies. Failure to anticipate and respond to changes in industry standards and customer needs, or to develop and introduce new products in a timely and cost-effective manner, could lead to loss of market share and adverse effects on business.
• Customer Concentration: A significant portion of the company's revenue is derived from a limited number of major customers (top five customers accounted for 89.4% of total revenue in FY2025). The absence of long-term agreements means customers are not obligated to continue placing orders, and demand can fluctuate significantly, posing a substantial risk.

Operational & Execution Risks

• Global Supply Chain Vulnerabilities: The company is exposed to price volatility of major raw materials (e.g., metal, plastic, copper) due to global demand, supply disruptions, and political influence on trade. Reliance on third-party suppliers without long-term contracts means terms can fluctuate, and delays or increased costs in raw material procurement could adversely affect production and customer relationships.
• Regional Disruptions: Operations are dependent on the uninterrupted performance of its production facility in Malaysia, which is subject to risks such as equipment failures, power supply disruptions, industrial accidents, labor shortages, and natural calamities. The COVID-19 pandemic has previously caused disruptions, including movement control orders and lockdowns, impacting business development and consumer purchasing power, and future outbreaks could have similar effects.
• Trade Restrictions: While not explicitly detailed as a specific risk, general changes in laws, regulations, or their interpretation, and the imposition of capital controls, could affect the company's ability to conduct business and its profitability.

Financial & Regulatory Risks

• Currency & Financial Risks: The company is exposed to fluctuations in the value of the Malaysian Ringgit (RM) against the U.S. Dollar (USD) and Euro (EUR), with no formal hedging policy. Foreign exchange control policies in Malaysia could restrict the ability of its subsidiary to repatriate dividends. As a BVI holding company, it relies on subsidiary dividends for cash requirements. The company may require additional capital for expansion, which may not be available on favorable terms, potentially leading to increased interest expenses or dilution.
• Regulatory & Compliance Risks: Operations are subject to various Malaysian laws and regulations concerning business licenses, intellectual property rights, employment, personal data, dividends, and cybersecurity. Non-compliance could result in fines, penalties, reputational damage, or operational suspension. Environmental regulations and safety standards also pose compliance risks, with potential for increased operating costs or liabilities from industrial accidents. Failure to renew leases for its production facility could disrupt operations.
• Nasdaq Listing Risk: The company received a notification from Nasdaq regarding non-compliance with the minimum bid price rule, and while an extension has been granted, there is no assurance of regaining compliance, which could lead to delisting and reduced liquidity for its Class A Ordinary Shares.

Geopolitical & External Risks

• Country-Specific Risks: The company's business, financial condition, and results of operations are susceptible to social, political, regulatory, and economic developments in Malaysia. Changes in government policies, political instability, or economic uncertainties (e.g., interest rates, taxation, capital controls) could adversely affect its interests.
• Economic Risk: The Malaysian economy's growth rate and consumer purchasing power directly impact demand for the company's products. A slowdown or recession in Malaysia or the broader Asia Pacific Region could diminish demand and profitability.
• War in Ukraine: While the company currently has no direct business with Russian or Ukrainian entities and has not been materially impacted, the conflict's uncertain resolution could cause protracted damage to the global economy, affecting global markets, customer businesses, and potentially the company's operations.

Innovation & Technology Leadership

Research & Development Focus: The company emphasizes its in-house engineering capabilities for designing and optimizing wire harnesses to meet specific customer applications and electrical designs. It continuously invests in evolving its production processes by utilizing up-to-date machinery, automation, and technology to achieve high and speedy production capacity. The broader market for wire/cable harnesses also sees players investing in R&D and advanced technologies, with a strong focus on innovation and customization.

Intellectual Property Portfolio: The company relies on trademark laws and other methods to protect its intellectual property rights. However, it acknowledges the difficulty and expense of policing unauthorized use of intellectual property, including technologies, trademarks, and trade names. There is a risk of infringement or misappropriation claims by third parties, which could lead to significant damage awards, licensing requirements, product redesigns, or injunctions against manufacturing and sales.

Technology Partnerships: No specific technology partnerships or strategic alliances are explicitly mentioned in the filing.

Leadership & Governance

Executive Leadership Team

International Management Structure: The management team, including the CEO and Chairman, possesses extensive experience and long-established presence in the manufacturing industry, enabling optimization of production processes, cost reduction, and improved operational efficiency. Regional leadership and reporting relationships are not explicitly detailed, but the management team's diverse backgrounds (Hong Kong, Malaysia) suggest experience in cross-border operations.

Board Composition: The board of directors consists of 9 directors, comprising 4 executive directors and 5 independent directors. The company aims for board diversity considering gender, skills, age, professional experience, knowledge, cultural and educational background, ethnicity, and length of service. The board includes two female independent directors. An Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee have been established. Mr. Wai Kuen Cheung is designated as an "audit committee financial expert" and chairs the Audit Committee. The company qualifies as a foreign private issuer, allowing it to follow home country corporate governance practices that may differ from Nasdaq standards.

Clawback Policy: On December 8, 2023, the board adopted a clawback policy. This policy permits the company to seek recoupment of incentive compensation from current and former executive officers (and other senior executives/employees deemed subject to the policy) if such compensation was erroneously awarded based on financial results that are subsequently restated. The recoverable amount is the excess incentive compensation paid based on erroneous data over what would have been paid based on restated results.

Regulatory Environment & Compliance

Multi-Jurisdictional Regulatory Framework: Primary Regulatory Environments:

• Malaysia: The company's operating subsidiary, TEM Electronics (M) Sdn. Bhd., is subject to a comprehensive set of Malaysian laws and regulations. These include the Industrial Co-ordination Act 1975 (manufacturing licenses), Customs Act 1967 (Licensed Manufacturing Warehouse status for duty exemptions), Local Government Act 1976 (business licenses), Occupational Safety and Health Act 1994 (workplace safety, health policies, safety committees, plant certification), Fire Services Act 1988 (fire certificates), Environmental Quality Act 1974 (pollution control), Street, Drainage and Building Act 1974 (building safety, Certificate of Completion and Compliance), National Land Code (land use conditions), Trademarks Act 2019 (IP protection), Companies Act 2016 (dividend distribution solvency test), Financial Services Act 2013 (foreign exchange controls), Income Tax Act 1967 (corporate income tax, withholding tax), Sales Tax Act 2018 and Service Tax Act 2018 (indirect taxes), and various employment laws (Employment Act 1955, EPF Act 1991, SOCSO Act 1969, EIS Act 2017, Employment (Restriction) Act 1968, Immigration Act 1959/63, EMSHAAA 1990, PSMBA 2001).
• British Virgin Islands (BVI): Linkers Industries Limited and its BVI subsidiaries (TEM SP Limited, Linkers Asia Pacific Limited) are incorporated under BVI law and are not subject to income tax in the BVI. Cross-Border Compliance:
• Export Controls: The company must comply with export controls and technology transfer restrictions, although specific details are not provided.
• Sanctions Compliance: The company monitors multi-jurisdictional sanctions, particularly in light of geopolitical events like the war in Ukraine, to ensure compliance.
• Anti-Corruption: The company is required to comply with the U.S. Foreign Corrupt Practices Act (FCPA) and Malaysian anti-corruption laws, which prohibit improper payments to officials. Non-compliance could lead to substantial fines and reputational damage.

International Tax Strategy:

• Corporate Income Tax: The standard corporate tax rate in Malaysia is 24%. For resident small and medium-sized companies, a tiered rate applies (15% on the first RM150,000, 17% on RM150,001 to RM600,000, and 24% thereafter).
• Withholding Tax: Payments to non-resident contractors for services in Malaysia are subject to withholding tax (e.g., 10% for royalties, 15% for interest, 10% for technical fees, 0% for dividends).
• Capital Gains Tax: Effective January 1, 2024, Malaysia introduced a capital gains tax on the disposal of capital assets. For unlisted Malaysian shares, an exemption applied until February 29, 2024, with disposals from March 1, 2024, subject to a 10% tax on chargeable income (or 2% on gross disposal price for assets acquired before Jan 1, 2024).
• BVI Taxation: The company and its BVI subsidiaries are exempt from all forms of taxation in the BVI, including income tax, capital gains tax, and withholding tax on dividends, interest, and other payments to non-residents.

Environmental & Social Impact

Global Sustainability Strategy: The company's operations are subject to various environmental, occupational health, and safety laws and regulations in Malaysia, primarily governed by the Environmental Quality Act 1974 and the Occupational Safety and Health Act 1994. Compliance with these regulations is a key aspect of its operational framework. Environmental Commitments:

• Climate Strategy: No specific global emissions targets or climate strategies are explicitly detailed in the filing.
• Carbon Neutrality: No net-zero commitments are mentioned.
• Renewable Energy: No specific renewable energy adoption initiatives are disclosed. Regional Sustainability Initiatives:
• Malaysia: The company is required to comply with the Environmental Quality Act 1974, which sets provisions for the prevention, abatement, and control of pollution. This includes regulations on the emission or discharge of environmentally hazardous substances, pollutants, wastes, and noise.
• Supply Chain: While not explicitly framed as an ESG requirement, the company's stringent supplier selection criteria include product quality and quality control effectiveness, which can indirectly contribute to sustainability standards.

Social Impact by Region:

• Community Investment: No specific local community programs or regional priorities for community investment are detailed.
• Labor Standards: The company adheres to Malaysian labor laws, including the Employment Act 1955 (basic terms and conditions of employment), Minimum Wages Order 2024 (RM1,700 per month), Employees Provident Fund Act 1991 (mandatory retirement savings contributions), Employees’ Social Security Act 1969 (social security contributions), Employment Insurance System Act 2017 (unemployment benefits), Employment (Restriction) Act 1968 (employment permits for non-citizens), Immigration Act 1959/63 (foreign worker entry), and Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (minimum housing and amenities standards for employees). The company had 190 employees as of June 30, 2025, and states it maintains good working relationships with its employees.

Currency Management & Financial Strategy

Multi-Currency Operations (as of June 30, 2025): Currency Exposure:

| Currency | Revenue Exposure | Cost Exposure | Net Exposure (RM) | Hedging Strategy | |---|---|---|---| | United States Dollar | Substantial | Significant | 25,380,011 | No formal policy; spot rates for short-term imbalances. | | Euro | Significant | Significant | 1,271,978 | No formal policy; spot rates for short-term imbalances. | | Malaysian Ringgit | Significant | Substantial | N/A (functional currency for operating entity) | Natural hedge through local operations. |

Hedging Strategies:

• Transaction Hedging: The company currently does not have a formal policy for hedging against currency risk. It addresses short-term imbalances by buying or selling foreign currencies at spot rates when necessary.
• Translation Hedging: Not explicitly mentioned.
• Economic Hedging: Not explicitly mentioned, but the company's operational diversification across currencies for revenue and costs may provide some natural economic hedging.
• Future Considerations: The directors continuously monitor foreign currency exposure and will consider implementing hedging strategies for significant exposures if the need arises, taking into account the associated hedging costs.