LETTER OF ENGAGEMENT - STATUTORY AUDIT

Date :

The Board of Directors

HUB POWDER COATINGS SDN BHD
15, JALAN METRO PERDANA BARAT 11,
TAMAN USAHAWAN KEPONG,
52100 KUALA LUMPUR,
WILAYAH PERSEKUTUAN, MALAYSIA

Dear Sirs / Madam,

Following our appointment as auditors of HUB POWDER COATINGS SDN BHD (“the Company”),
you have requested that we audit the financial statements of the Company, which comprise the
statement of financial position as at 31-Dec-2021, and the statement of profit or loss and other
comprehensive income, statement of changes in equity and statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting policies.
We are pleased to confirm our acceptance and the terms of our engagement.

The objectives of our audit are to obtain reasonable assurance about whether the financial
statements 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.

1. Responsibilities of Directors

1.1 As laid down in the Companies Act, 2016 (“the Act”), the directors are responsible for the
maintenance of the Company's accounting and other records and the preparation of annual financial
statements which give a true and fair view in accordance with Malaysian Private Entities Reporting
Standards (“approved accounting standard in Malaysia”) and comply with the requirements of the
Act.
1.2 The directors are also responsible for making available to us, as and when required:

a. access to all the Company's accounting records and all other records and related
information, including minutes of all management and shareholders' meetings;
b. additional information that we may request from the directors and management for the
purpose of the audit; and
c. unrestricted access to persons within the Company from whom we determine it
necessary to obtain audit evidence.

1.3 Responsibility for the prevention and detection of fraud and error remains with the directors and
management of the Company mainly through the implementation and continued operation of an
adequate system of internal control.

1.4 The directors are also responsible for the preparation of other information comprising financial
or non-financial information included in the directors’ report/annual report containing the financial
statements and the auditors’ report thereon (“the other information”). The directors agree to provide
us the other information in sufficient time for us to read regardless whether it is given to us before
or after the date of the auditors’ report.

2. Responsibilities of Auditors

2.1 The objectives of the audit are to examine in accordance with approved standards on auditing in
Malaysia as promulgated by the Malaysian Institute of Accountants (“MIA”) and International
Standards on Auditing and report to the members of the Company on the financial statements
produced by the directors. We shall, as required by the Act, report to the members of the Company
whether in our opinion, the financial statements have been properly drawn up in accordance with
Malaysian Private Entities Reporting Standards and the requirements of the Act so as to give a true
and fair view of:

a. the financial position of the Company as at the end of the financial year; and
b. the financial performance and the cash flows of the Company for the financial year then
ended.

2.2 Where, in our opinion, the financial statements have not been drawn up in accordance with a
particular applicable approved accounting standard in Malaysia, we are required to state in
accordance with the Act:

a. whether in our opinion, the financial statement would, if drawn up in accordance with that
approved accounting standard in Malaysia, have given a true and fair view of the matters
required by the Act to be dealt with in the financial statement;
b. whether in our opinion, the financial statements would not, if drawn up in accordance with
that approved accounting standard in Malaysia, have given a true and fair view of the matters
required by the Act and the reasons for holding that opinion;
c. if the directors have given the particulars of the quantified financial effect, our opinion
concerning the particulars; and
d. in a case to which neither subparagraph (b) nor (c) applies, particulars of the quantified
financial effect on the financial statements of the failure to so draw up the financial
statements.
2.3 We are required by the Act to state in our auditors’ report any defect or irregularity in the
financial statements and any matter not set in the financial statements without regard to which a
true and fair view of the matters dealt with by the financial statements would not be obtained.

2.4 In arriving at our opinion, we are required by the Act to consider the matters set out below and
to state in our report particulars of any deficiency, failure or shortcoming arising thereof:

a. whether we have obtained all the information and explanations which we required for the
purpose of our audit;
b. whether proper accounting and other records, including registers, have been kept by the
Company as required by the Act; and
c. whether the returns received from branch offices of the Company are adequate for the
purpose of our audit.

2.5 In the course of our audit, we are required by the Act to report in writing to the Registrar of
Companies if we are satisfied that:

a. there has been a breach or non-observance of any of the provisions of the Act;
b. the circumstances are such that in our opinion the matter has not been or will not be
adequately dealt with by comment in our auditors’ report or by bringing the matter to the
notice of the directors of the Company or, if the Company is a subsidiary, of the directors of its
holding company; and
c. a serious offence involving fraud or dishonesty is being or has been committed against the
Company or the Act by officers of the Company.

3. Scope of Audit

3.1 We will conduct our audit in accordance with approved standards on auditing in Malaysia and
International Standards on Auditing. Those standards require that we comply with ethical
requirements. 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 skepticism throughout the audit. We also:

a. Identify and assess the risks or material misstatement of the financial statements of the
Company, where 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.
b. 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 Company’s in internal control.
c. Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
d. 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 Company’s ability 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
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 Company to cease to continue as a going concern.
 b. Evaluate the overall presentation, structure and content of the financial statements of the
Company, including the disclosures, and whether the financial statements of the Company
represent the underlying transactions and events in a manner that achieves fair presentation.

3.2 Approved standards on auditing in Malaysia and International Standards on Auditing require
that we determine key audit matters and communicate those matters by describing them in the
auditors’ report, except in very limited circumstances. Key audit matters are those matters that, in
our professional judgement, are of most significance in the audit of the financial statements of the
Company of the current financial year. Our communication of key audit matters in our auditors’
report will be in the context of our audit of the financial statements as a whole. We will not provide a
separate opinion on these matters. The communication of key audit matters applies to listed entities
and in circumstances when we otherwise decide to communicate key audit matters in our auditors’
report. We will communicate with you if we decide to do so.

3.3 We are required to read the other information. This responsibility applies regardless of whether
the other information is obtained by the auditor prior to, or after, the date of auditors’ report. We
will consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained during the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is an uncorrected material
misstatement of this other information, we are required to include that fact in the auditors’ report.
Our opinion on the financial statements of the Company does not cover the other information and we
do not express any form of assurance conclusion thereon. If we conclude that a material
misstatement exists in other information obtained after the date of the auditors’ report and the other
information is not corrected after communicating with the directors, we will take appropriate actions
considering our legal rights and obligations.

3.4 In addition, we will communicate all relationships and other matters between ChengCo Plt, other
member firms of the ChengCo Plt organisation (“network firms”) and the Company that, in our
professional judgement, may reasonably be thought to bear on independence (including total fees
charged during the period covered by the financial statements for audit and non-audit services
provided by the ChengCo Plt and network firms to the Company and components controlled by the
Company) and the related safeguards that have been applied to eliminate identified threats to
independence or reduce them to an acceptable level.

3.5 Our audit is not designed to identify all significant deficiencies in the Company’s systems or
matters of governance interest. However, we shall bring to the attention of the directors if such
matters come to our notice during the course of our audit and shall report accordingly. We will
communicate to you in writing concerning any significant deficiencies in accounting and internal
control systems or matters of governance interest relating to the financial reporting process that we
have identified during the audit.

3.6 Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, there is an unavoidable risk that some material misstatements may not be detected, even
though the audit is properly planned and performed in accordance with approved standards on
auditing in Malaysia and International Standards on Auditing.
3.7 Because our responsibility is to report on the financial statements as a whole, rather than those
individual units or divisions, the nature and extent of our tests and enquiries at each unit or division
will vary according to our assessment of its circumstances.

3.8 Our audit opinion is intended for the benefit of those to whom it is addressed. The audit will not
be planned or conducted in contemplation of reliance by any third party or with respect to any
specific transaction. Therefore, items of possible interest to a third party will not be specifically
addressed and matters may exist that would be assessed differently by a third party, possibly in
connection with a specific transaction.

3.9 As part of our audit process, we will request from management written confirmation concerning
representations made to us in connection with the audit.

3.10 In order to assist us with the audit of your financial statements, we look forward to full co-
operation with your staff and we trust that they will make available to us whatever records,
documentation and other information requested in connection with our audit.

4. Confidentiality

4.1 The conduct of our audit in accordance with approved standards of auditing in Malaysia and
International Standards on Auditing means that information acquired by us in the course of our
audit is subject to strict confidentiality requirements.

4.2 Neither of us will disclose to any third party without the prior written consent of the other party
any confidential information which is given, for the purposes of providing or receiving the services
herein, by the other party. Information shall be deemed to be confidential which if disclosed in
writing is marked confidential or if disclosed orally is confirmed in writing as being confidential or
otherwise, is manifestly confidential (“Confidential Information”). This restriction will not apply to
any information which:

a. is or becomes generally available to the public other than as a result of a breach of an

obligation under this clause; or
b. is acquired from a third party who owes no obligation of confidence in respect of the
information; or
c. is in possession of the receiving party without restriction before the date of receipt from the
other party; or
d. is or has been independently developed by the receiving party.

4.3 Notwithstanding the above, we may disclose any Confidential Information:

a. to our insurers or lawyers provided that the Confidential Information remains confidential; or
b. to other ChengCo Plt entities in relation to the provision of the services herein or to assist in
quality reviews or for independence and conflict checks; or
c. if required to do so by law or rule or regulation applicable to us, provided that (and without
breaching any legal or regulatory requirement) where reasonably practicable not less than 7
days business days’ notice in writing is first given to you.
4.4 You agree that we may disclose, transfer and process Confidential Information as reasonably
required for internal business purposes including client relationship management, account
management, internal financial reporting, information technology (“IT”) support (such as storage,
hosting, maintenance, support, etc) including outsourcing of the same.

4.5 With respect to personal data:

a. that you provide to us, you confirm that processing such data in accordance with the terms of
this letter will not place us in breach of any applicable data privacy legislation;
b. that we provide to you, you agree to keep such data confidential, secure and in accordance
with any applicable data privacy legislation.

4.6 Subject to Clause 4.2 above and once the services herein and the deliverables herein have been
provided, we may cite the performance of our services herein to our clients and prospective clients,
or include a reference in other electronic or printed marketing materials or publications as an
indication of our experience.

4.7 "ChengCo Plt entity(ies)" means any entity (whether or not incorporated) which carries on
business under a name which includes all or part of the ChengCo Plt name or is otherwise within (or
associated or connected with an entity within) or is a correspondent firm of the world-wide network
of ChengCo Plt firms.

5. Other Matters

5.1 The working papers and files for this engagement created by us during the course of the audit,
including electronic documents and files, are the sole property of our firm.

5.2 We shall not be liable in any way for failure or delay in performing our obligations under this
engagement if the failure or delay is due to causes outside our reasonable control.

6. Governing Law and Jurisdiction

6.1 These terms of business shall be governed by and construed in accordance with the laws of
Malaysia and any dispute arising out of this engagement or these terms shall be subject to the
exclusive jurisdiction of the Malaysian courts.

7. Reporting

7.1 We will issue a written report upon completion of our audit of the financial statements of the
Company. Our report will be addressed to the members of the Company. We cannot provide
assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is
necessary for us to modify our report.

7.2 The form and content of our report may need to be amended in the light of our audit findings.
8. Fees

8.1 Our fees are based upon the degree of responsibility and skill involved and the time spent by the
partners and our staff necessarily occupied on the work, and shall be reviewed from time to time.
The fees will be billed as work progress and shall include all disbursements and other out-of-pocket
expenses. The invoice will due on presentation.

9. Agreement of Terms

9.1 Once it has been agreed, this letter will remain effective for subsequent reappointment unless it
is terminated, amended or superseded. We shall be grateful if you would confirm your agreement to
the terms of this letter by signing and returning the duplicate copy.

9.2 If the contents are not in agreement with your understanding of our term of engagement, we
shall be pleased to receive your comments and to give you any further information you require.

Yours faithfully,
CHENGCO PLT

__________________________

______________________________________________________________________________________________

Acknowledged, and in agreement with the terms of engagement as set out above:

___________________________________
Chan Chue Fong
Director