Chairman's Statement

Dear Shareholders,

I am pleased to report that better economic conditions during FY2011 helped the Group to enjoy higher than expected performance, as net profit increased by 31.79% to $10.82 million from $8.21 million.

Total Group revenue for the year reached $246.76 million, a rise of 23.13% from $200.40 million in the previous year. Increase in revenue is attributed to higher volume sales arising from more projects in the residential and commercial, and industrial sectors such as the electronics, process and other manufacturing industries, as well as to the increase in copper prices.

However, higher staff costs and operating expenses, necessitated by the increased sales efforts, resulted in administrative expenses rising by $1.93 million and selling and distribution expenses climbing by $1.30 million.

Earnings per share rose to 2.66 cents from 2.05 cents in FY2010. Net asset value per share was also lifted to 26.07 cents from 25.40 cents previously. In recognition of the loyal support of our shareholders, the Board proposed a final dividend of 1.0 cent, bringing the total payout to 1.6 cent for the 2011 financial year.

OPERATIONS REVIEW

Cable and Wire Segment

Revenue for this segment rose 21.72% to $143.77 million, attributable primarily to higher copper prices and sales volume. Average copper price during FY2011 was $11,140 per tonne, an increase of 18.38% from the average of $9,410 a year ago. Sales were derived primarily from the commercial and residential, and the industrial sectors.

The cable and wire segment met expectations and will continue to pursue the strategy of manufacturing in the geographical location with comparative advantage. With three factories located strategically along the Singapore, Malaysia and Vietnam axis, the segment has been able to capitalise on the different cost-efficient strengths of the locations to manufacture customised products at competitive prices for buyers in various South East Asian countries.

Overall, the established strong relationship with customers and Tai Sin's reputation for quality and reliability helped to keep customers engaged and generate repeat orders.

Electrical Material Distribution (EMD) Segment

The revenue for EMD segment achieved a commendable gain of 27.32% during the year. Increase in demand from the electronics manufacturing and the oil & gas sectors helped lift sales during the year under review.

Past years' investments in capability enhancement, particularly in people, processes and products, as well as in IT infrastructure, further bolstered customer service that contributed to repeat orders. Over the last two years, the segment had also acquired new products that are key to effective energy monitoring in an increasingly green conscious environment.

Our subsidiary Vynco Industries (NZ) Limited in Christchurch, New Zealand, which had its buildings destroyed during the February 22 earthquake managed to fully resume operation at the new premises in less than three weeks following the incident. As a result, the electrical components and switchboard manufacturing business there did not affect the segment result. This is a commendable achievement especially when this earthquake was the worst natural disaster since the Hawke's Bay earthquake in 1931, as most parts of the central business district in Christchurch are still inaccessible.

EMD will continue to focus its efforts on strategic business areas with emphasis on “profitability, continuity and liquidity”. It expects business in the new financial year to come more from upgrading contracts in the light of the anticipated economic slowdown. The segment will also continue to acquire new and relevant product lines that can further enhance its capability to provide one-stop solutions to customers.

Highlights of Financial Position and Cash Flow

The Cable and Wire segment's sales increase during the year resulted in trade receivables rising by $7.18 million to $64.91 million. Higher receipts from customers also saw cash and bank balances increasing by $2.57 to $18.02 million.

Trade payables rose by $3.56 million to $22.72 million, due to higher volume purchase and copper prices. Inventories were up by $10.80 million to reach $65.91 million for facilitating on-going business in the prevailing environment. The higher copper prices and bigger volume transactions during the year necessitated higher bank overdrafts and short-term bank borrowings, which rose $10.29 million to $37.22 million.

During the year, the net cash used in operating activities of $1.28 million was mainly due to increase in trade receivables, inventories, trade payables and other payables. This was the result of higher copper prices and increase in sales and purchases.

The net cash used in investing activities of $1.87 million was mainly for purchase of plant and equipment. The net cash from financing activities of $5.35 million was primarily from net proceeds of short-term bank borrowings, offset by repayment of long-term bank borrowings, dividend and interest payment.

At the end of the financial year, cash and cash equivalent were higher by 17.91% at $16.66 million, compared to $14.13 million previously.

OUTLOOK & STRATEGY

With economic growth worldwide being revised downwards in the second half of 2011, and the spectre of a double dip recession resulting from the US and Europe financial turmoil, the year ahead looks daunting. We expect our markets to reflect the uncertainties of the world. We are concerned that global uncertainties and rising costs might slowdown the pace of economic expansion resulting in the cancellation or delay of capital investments.

Singapore, being our major market, will continue to figure large in our marketing efforts, especially in the public works sector. We look forward to opportunities from the additional $60 billion investment in the country's MRT rail network and other public infrastructure projects in the years ahead.

The Group's push over the last few years to upgrade its resources, including marketing and sales staff, product line extension, as well as IT system, have put us in good stead to face the challenges going forward.

We have successfully rebuilt and improved the capabilities of our EMD segment through people and process development, systems improvement that included a Customer Relationship Management System and new product solutions for customers. Our Cable and Wire segment, with its established reputation for quality and reliability, has been very successful in the continual development of its responsive customer base and relationships.

One of the strategies of the EMD segment is to focus on the growing green movement, especially in Singapore where the government has initiated the ISO 50001, which will drive demand for more energy monitoring and measuring products. It will step up its overall marketing efforts, including sourcing for more new products and systems to offer total solutions for green-conscious customers.

Material cost management will continue to receive our close and careful attention. The Cable and Wire manufacturing facilities in Singapore, Malaysia and Vietnam have been able to work together to respond proactively to the dynamics of the marketplace. The Group will continue to leverage on the purchasing synergy of the three production locations to achieve higher yields in the future. They will be positioned as a manufacturing tripod to provide customised solutions to customers in neighbouring markets in the region with competitive pricing, quality and timely delivery. In the light of unpredictable copper price fluctuations, the Cable and Wire segment will continue to pursue its current purchasing and inventory control strategy, to minimise risk and maximise returns.

CONCLUSION

In the face of future economic uncertainties, we will continue with the strategic initiatives that have worked for us. We will focus our energies and resources on the domestic and regional markets, and capitalise on the Tai Sin brand as well as its market presence and business networks, to achieve sustainable and long-term business growth.

Having invested substantially in our human resource development and IT infrastructure over the years, we are confident that we will be able to further leverage on them to realise higher productivity and competitive price advantage for the Group's business.

On behalf of the Board, I extend our sincere appreciation to all our valued customers and business partners for their support and co-operation over the years. We also thank our management and staff for their continued dedication and hard work and look forward to their further contribution to the success of the company in the years ahead. We remain committed to deliver value for our stakeholders and shareholders, and would like to thank them for their continued support.

Professor Lee Chang Leng Brian

Chairman

September 15, 2011
Singapore