22 - Malaysiastock.biz Nai untuk kedua-dua pasaran tempatan dan luar negara. Setakat ini, Kumpulan kami memilki 7 kiosk runcit jualan yang kebanyakannya tertumpu di bandar Ho Chi Minh

21annual report 2010


PengerusiPENYATA

Bagi pihak Lembaga Pengarah Tomei Consolidated Berhad, saya dengan

sukacitanya membentangkan Laporan Tahunan dan Penyata-penyata Kewangan

Teraudit Kumpulan dan Syarikat kami bagi tahun kewangan yang berakhir pada

31 Disember 2010.

Tomei semenjak penubuhannya pada tahun 1968; telah berkembang daripada

sebuah syarikat kecil kepada pengilang dan peruncit barangan kemas yang

bersepadu. Kini, Tomei memiliki 64 kedai runcit jualan di Malaysia dan 14 kiosk

runcit jualan di Republik Sosialis Vietnam dan Republik Rakyat China. Produk-

produk kami turut dieksport ke negara-negara serantau dan Eropah.

PENILAIAN TAHUN KEWANGANSelama ini, Tomei berjaya mencatatkan rekod peningkatan yang konsisten baik dari segi perolehan mahupun keuntungan; walaupun kian berdepan ketidakstabilan suasana ekonomi. Pendekatan berhemat dalam pengurusan perniagaan membolehkan Kumpulan kami meraih pertumbuhan dua digit dari setahun ke setahun. Pencapaian dalam tahun 2010 juga tidak terkecuali daripada rekod pencapaian yang sebelumnya.

Tahun 2010 menunjukkan pemulihan pasaran ekuiti global dan harga komoditi. Harga dagang emas terus mencecah rekod yang menakjubkan. Sesungguhnya emas diiktiraf sebagai pelaburan pelindung nilai daripada kesan inflasi, kami telah menyaksikan peningkatan permintaan untuk produk-produk emas Tomei.

Kumpulan kami berpegang teguh kepada polisi untuk sentiasa mengetengahkan pengurusan modal yang optimum. Dalam tahun kewangan semasa, kami telah meraih pelaburan baru sebanyak RM 6.3 juta melalui Penempatan Tertutup dan mengurangkan Kertas Perdagangan / Nota Jangka Sederhana Islam dengan kemudahan pinjaman kos yang lebih rendah.

Dalam usaha mengukir kedudukan Tomei sebagai jenama terkemuka di China, Kumpulan kami telah mengembangkan kiosk runcit jualan menjangkaui sempadan Shanghai ke bandar-bandar lain seperti Shaoxin, Changsu, Wuxi dan Guangzhou. Kini, Tomei memiliki 7 kiosk runcit jualan di aneka kompleks membeli-belah tersohor di China.

Di Republik Sosialis Vietnam pula, Kumpulan kami telah mendirikan kilang pembuatan barangan kemas di Dong Nai untuk kedua-dua pasaran tempatan dan luar negara.Setakat ini, Kumpulan kami memilki 7 kiosk runcit jualan yang kebanyakannya tertumpu di bandar Ho Chi Minh dan Hanoi.

Sejak Januari 2010, Kumpulan kami membuka 4 kedai runcit jualan baru di Malaysia sementara menempatkan semula sesetengah kedai ke lokasi yang lebih strategik. Ini sejajar dengan objektif meluaskan pendedahan jenama kepada para pembeli dan pelanggan yang sedia ada. Kini, Kumpulan kami memiliki sejumlah 64 kedai runcit julan di Malaysia yang beroperasi di bawah jenama TOMEI, MY DIAMOND, T.H. JEWELRY, LE LUMIERE dan GOLDHEART.

Kumpulan kami terus memberikan penekanan dalam pembangunan dan perekaan bentuk produk demi memenuhi cita rasa pasaran pelanggan yang luas. Kami telah memperkenalkan koleksi Le Lumiere Diamond Time yang menawarkan kesempurnaan potongan berlian untuk kesemua pelanggan baik lelaki mahupun wanita. Kejayaan koleksi berkenaan turut disusuli pelancaran Le Lumiere Allure Diamond Wallet pada Februari 2010. Koleksi Le Lumiere kami juga disertai aneka reka bentuk terampil dengan tema persendirian masing-masing khususnya Je T’aime, Perfection, Rose, Dreams dan sebagainya.

Kami bertekad menawarkan reka bentuk barangan kemas terbaik kepada para pelanggan dan telah dianugerahkan lesen oleh Warner Bros. Consumer Products Inc., USA untuk membuat dan menjual barangan kemas berwatak Baby Looney Tunes di Malaysia.

Dalam tahun kewangan berakhir 31 Disember 2010, Kumpulan kami mencatatkan rekod perolehan sejumlah RM 356.3 juta; berbanding RM 300.9 juta pada tahun kewangan sebelumnya. Untung bersih selepas cukai dan kepentingan minoriti meningkat sebanyak 17.2% kepada RM 21.4 juta. Peningkatan prestasi berkenaan adalah berikutan daripada peningkatan permintaan barangan kemas kami dan peningkatan harga emas.


ANUGERAH-ANUGERAHBerasaskan kepada pencapaian yang cemerlang dan sumbangan kepada industri, Kumpulan kami telah merangkul aneka anugerah dan pengiktirafan. Pada tahun 2010, Kumpulan kami telah dianugerahkan dengan Malaysian Brand Certification daripada SIRIM QAS International Sdn Bhd.

Tambahan pula, Kumpulan kami secara konsistennya telah diberi Anugerah Kedai Harga Patut daripada Kementerian Perdagangan Dalam Negeri dan Hal Ehwal Pengguna Malaysia sejak tahun 2003.

Seiring dengan penekanan dan komitmen terhadap kualiti, Kumpulan kami telah ditauliah dengan akreditasi ISO dalam sistem pengurusan kualiti untuk penjualan runcit produk emas dan barangan kemas daripada Lloyd’s Register Quality Assurance, Kuala Lumpur.

TANGGUNGJAWAB SOSIAL KORPORATTomei sentiasa mengutamakan peranannya sebagai seorang warga korporat yang penyayang. Kami berpegang teguh kepada semangat tanggungjawab amal melangkaui batasan warna kulit, perbezaan agama dan kepercayaan. Justeru itu, Tomei telah menganjurkan TOMEI 1Malaysia Charity Tea Party pada 7 Februari 2010 dengan penyertaan pelbagai sekolah, persatuan keagamaan dan yayasan pendidikan.

Pada 22 Oktober 2010 pula, Tomei menganjurkan Tomei Charity Night 2010 dengan moto “Disperse the Spirit of Humanity, with Greatest Love for Mankind” dan menyumbangkan sebanyak RM 102,923.00 kepada aneka organisasi amal.

Kami berharap inisiatif- inisiatif kami dapat membantu mereka yang memerlukannya demi membina Malaysia yang lebih gemilang.

PERKEMBANGAN UTAMA Pada Januari 2011, Kumpulan kami telah memeterai perjanjian pengedaran ekslusif dengan Shenzen Batar Jewellery Company Limited untuk mengedar Batar Jewellery di Malaysia.

Pada 2 Mac 2011, Kumpulan kami telah memperoleh sesaham O M Design Sdn Bhd pada harga RM 1.00 sesaham dengan harga RM 1.00. Seterusnya pada 7 Mac 2011, Kumpulan kami melanggan 2,749,999 saham biasa dengan harga RM 1.00 sesaham pada nilai tara secara tunai . Dengan langganan ini, O M Design Sdn Bhd telah menjadi subsidiari Kumpulan dengan hak milik 55%. O M Design Sdn Bhd membawa kepakaran dalam pemborongan barangan kemas emas putih.

Pada 15 Mac 2011, Kumpulan kami telah memeterai sebuah perjanjian jual beli untuk mengambil alih operasi runcit jualan GoldHeart di Malaysia bersama tanda dagangannya untuk jumlah pertimbangan sebanyak RM 5.6 juta.

DIVIDENLembaga pengarah dengan sukacitanya mencadangkan dividen pertama dan terakhir tingkat tunggal sebanyak 3.3 sen sesaham bagi tahun kewangan yang berakhir 31 Disember 2010.

PROSPEK MASA DEPANLangkah-langkah antiinflasi yang diambil oleh negara-negara yang berkembang pesat mungkin membendung perbelanjaan para pengguna. Berikutan dengan pemulihan ekonomi negara-negara maju yang perlahan dan perkembangan terkini di Timur Tengah serta insiden gempa bumi dan tsunami di Jepun, kumpulan kami lebih berwaspada dengan pertumbuhan perniagaan untuk tahun kewangan 2011. Walau bagaimanapun, dengan program transformasi ekonomi pihak kerajaan, Kumpulan menjangka kesan faktor-faktor luaran negatif mampu dikurangkan dan memandang hadapan kepada satu lagi tahun keuntungan.

PENGHARGAANBagi pihak Lembaga Pengarah, saya ingin merakamkan penghargaan ikhlas dan ucapan terima kasih kepada kesemua pelanggan, jurubank, pembekal, badan kerajaan, rakan niaga dan pemegang saham atas sokongan berterusan anda.

Saya juga berterima kasih kepada pihak pengurusan dan kakitangan Kumpulan atas komitmen, dedikasi dan ketekunan anda dalam memastikan kejayaan bersama.

Akhir kata, saya ingin merakamkan terima kasih kepada rakan-rakan pengarah atas nasihat dan sokongan mereka.

TAN SRI DATUK NG TECK FONGPENGERUSI EKSEKUTIF KUMPULAN

kami telah memperoleh d pada harga RM 1.00 .00. Seterusnya pada 7 anggan 2,749,999 saham sesaham pada nilai tara an ini, O M Design Sdn Kumpulan dengan hak hd membawa kepakaran kemas emas putih.

an kami telah n jual beli asi runcit ersama mlah 5.6


CALENDAR

of Events

Global Malaysian Brands Awards (July)

Queen of Rose Media Launch at Sunway Pyramid (August)

Tomei 42 Years of Glitter & Glamour Media Launch & Live Mannequin Shows (November)

Pencarian Citrawanita with Utusan Malaysia (November)

My Lovely Mum Contest at the Mines & Nurturing Tree Planting Ceremony at Tomei, The Mines (May)

Sabah Model Search 2010 (April)

B

A

C

D

F

F

E

B

E

A

C

D

annual report 201025


Your Board of Directors recognises the importance of sound corporate governance and will continue to enhance its role in ensuring that the highest standard of corporate governance is practiced throughout the Group. The principles and best practices set out in the Malaysian Code on Corporate Governance (“Code”) have been fully complied by the Group in observing the highest standard of transparency, accountability and integrity.

Your Board is pleased to report on the application of the Code by the Group during the period under review.

1. BOARD OF DIRECTORS

1.1 Composition and Balance The Group is led by your Board of Directors which comprises of ten (10) members, of whom six (6)

are Executive Directors and four (4) are Independent Non-Executive Directors. Your Board consists of members from a wide range of discipline and background, providing an in-depth and diversity in experience to the Group’s operation. All Independent Non-Executive Directors are free from any material business dealings and other relationship with the Group and therefore play a crucial role in corporate accountability with their independent, unbiased views, advice and judgement in the decision making process.

The profiles of the members of your Board are set out on page 14 to 16 of the Annual Report.

Tan Sri Datuk Ng Teck Fong, the Executive Chairman of the Group plays a crucial role in providing overall business direction while the implementation falls under the leadership and responsibility of your Group Managing Director.

This segregation of role is vital to ensure a balance of power and authority.

1.2 Board Responsibilities and Duties

During the period under review, your Board took full responsibility and retained full and effective control over the affairs of the Group. Your Board’s primary focus is on the overall strategic planning including business plan and annual budget, performing quarterly review of business and financial performance, reviewing risk management, exercising internal controls and enforcing legal and statutory compliance.

The Independent Non-Executive Directors further strengthen your Board in providing unbiased and independent views, advice and judgement. They also contribute to the formulation of policies and decision making through their expertise and experience.

In addition to the above, your Board’s more specific responsibilities include the following:-

a) Reviewing and approving the strategic business plan of the Group;b) Monitoring corporate performance and the conduct of the Group’s business and ensuring

compliance to best practices and principles of corporate governance;c) Identifying and implementing appropriate systems to manage principal risks through the Audit Committee;d) Ensuring succession planning for top management;e) Ensuring a transparent Board nomination and remuneration process;f) Reviewing the adequacy and integrity of the Group’s internal control system and management information system for compliance with applicable standards and laws and regulations; andg) Developing and implementing an investor relation program or shareholders communications

policy for the Company.

STATEMENT

ON

CORPORATE GOVERNANCE


STATEMENT ON CORPORATE GOVERNANCE (con’t)

BOARD MEETINGS

Your Board meets regularly at least four (4) times a year at quarterly intervals with additional meetings to be convened as and when required. Prior to each meeting, every Director is given the complete agenda and a set of Board papers for each agenda item well in advance so that your Directors have ample time to review matters to be deliberated at the meeting and to facilitate informed decision making by your Directors.

During the financial year ended 31 December 2010, there were five (5) Board Meetings held and the details of attendance are as follows:-

Executive Directors AttendanceTan Sri Datuk Ng Teck Fong 5/5Ng Yih Pyng 5/5Ng Yih Chen 5/5Ng Sheau Chyn 5/5Ng Sheau Yuen 5/5Choong Chow Mooi 5/5

Independent Non-Executive DirectorsDatin Nonadiah Binti Abdullah 5/5Raja Dato’ Seri Aman Bin Raja Haji Ahmad 5/5M Chareon Sae Tang @ Tan Whye Aun 5/5Lau Tiang Hua 5/5

In addition, the Executive Directors meet regularly to discuss the corporate strategy, the business operations and the results of the business units in the Group.

3. SUPPLY OF INFORMATION

Your Board has full and unrestricted access to information concerning the Group from the senior management, the external auditors and services of the Company Secretary to enable them to discharge their duties effectively. Your Board may also seek advice of external independent professionals at the Group’s expense.

All information on meetings is disseminated to your Board at least seven (7) days before the date of meeting to enable your Board to make an informed decision. Relevant personnel of the Group could be summoned to the Board meeting to further brief your Board as and when required.

4. BOARD COMMITTEES In order to ensure the effectiveness in the periodic monitoring, deliberating and safeguarding of shareholders’

interest, your Board has delegated certain of its responsibilities to the Board Committees which operates within clearly defined terms of reference to carry out these responsibilities in a supporting role to your Board.

These Committees comprising members of your Board are empowered to deliberate and examine issues delegated to them and report back to your Board with their recommendations and comments.

At present, your Board is assisted by three (3) Board Committees with their respective term of reference as provided below:-



4.1 Audit Committee In accordance with the Best Practices under the Code, the Audit Committee comprises three (3)

members made up of Independent Non-Executive Directors:-

Name Designation Lau Tiang Hua Chairman M Chareon Sae Tang @ Tan Whye Aun Member Raja Dato’ Seri Aman Bin Raja Haji Ahmad Member

The principal function of the Audit Committee is to assist your Board in the effective discharge of its fiduciary responsibilities in relation to corporate governance, ensure timely and accurate financial reporting, proper implementation of risk management policies and strategies in relation to the Group’s business strategies and the development of sound internal control system and effective risk management framework.

In accordance with the best practices of corporate governance, the Audit Committee presents its report set out on pages 33 to 36 of this Annual Report.

4.2 Nomination And Remuneration Committee

In accordance with the Best Practices under the Code, the Nomination and Remuneration Committee comprises three (3) members and have the following term of reference as provided below:-

Name DesignationM Chareon Sae Tang @ Tan Whye Aun ChairmanLau Tiang Hua MemberNg Yih Pyng Member

The Committee’s duties and responsibilities include:-

a) To assist your Board in reviewing on an annual basis, or as required, the correct mix of skills, business and professional experiences that should be added to your Board;

b) To identify core competencies, skills and other qualities required by Independent Non-Executive Directors that is essential to contribute towards the effectiveness and balance of your Board;

c) To review and evaluate on an annual basis, the effectiveness of the Board functions and its Committees based on the corporate governance principles and practices of your Board;

d) To review and evaluate the contributions made by each member of your Board;e) To assist and when required by your Board in the review and evaluation of succession planning

of top management;f) To ensure that a transparent and formal procedure is established in the development and

assessment of the level of compensation that would be sufficient to attract and retain good caliber Directors;

g) To review the composition of the various types of components of remuneration package such as fee, allowances, basic salary, bonus and other benefits-in-kind for Directors; and

h) To ensure that the components of the Directors’ remuneration package are linked to performance, responsibility levels and is comparable with market norm.



4.3 Risk Management Committee

In accordance with the Best Practices under the Code, the Risk Management which was formed on 25 November 2010 comprises four (4) members and have the following term of reference as provided below:-

Name DesignationLau Tiang Hua ChairmanM Chareon Sae Tang @ Tan Whye Aun MemberRaja Dato’ Seri Aman Bin Raja Haji Ahmad MemberNg Yih Pyng Member

The Committee’s duties and responsibilities include:-

a) To review periodic management report on risk exposure, risk portfolio and management strategies;

b) To ensure adequacy of infrastructure, resources and systems for effective risk management;c) To assess adequacy of policies and framework for identifying, measuring and monitoring and

controlling risks; andd) To review the extent to which these are operating effectively.

The Risk Management Committee shall hold at least 2 meetings in each financial year.

5. DIRECTORS’ TRAINING

All Directors of the Group have attended the Mandatory Accreditation Program (MAP) prescribed by Bursa Securities. In addition, your Board is regularly being briefed on the Group’s operation and takes proactive steps to visit both manufacturing and retailing operation to gain indepth understanding of the business.

On 24 February 2011, your Board together with the senior management team of the Group has attended a seminar titled “Understanding Related Party & Conflict of Interest Transactions Reporting Compliance”. Your Board views the ongoing training seriously to keep themselves up to date with the latest development.

Your Board encourages its Directors to attend talks, seminars, workshops and conferences to update and enhance their skills and knowledge to enable them to carry out their roles as directors effectively, more specifically in discharging their responsibilities towards corporate governance and regulatory compliances.

6. RE-ELECTION OF DIRECTORS

According to the Company’s Articles of Association, at least one third of the directors shall retire from office at the Annual General Meeting (AGM), and eligible for re-election provided that each Director shall retire once in every three (3) years.

The Articles also provide that all Directors who are appointed by your Board may only hold office until the next AGM subsequent to their appointment and shall then be eligible for re-election but shall not be taken into account in determining the Directors who are to retire by rotation at that AGM.

In accordance with Section 129(2) of the Companies Act, 1965, any Directors who have attained the age of seventy (70) years and above are required to submit themselves for re-appointment by the shareholders annually.

The re-election of Directors provides shareholders an opportunity to reassess the composition of your Board.



7. DIRECTORS’ REMUNERATION

The Company’s remuneration policy for Directors is tailored towards attracting and retaining Directors with relevant experience and expertise needed to assist in managing the Group effectively. The Nomination and Remuneration Committee carries out the annual review of the overall remuneration for Directors and key Senior Management Officers whereupon recommendations are submitted to your Board for approval.

The details of your Directors’ remuneration paid/payable to all Directors of the Company for the financial year ended 31 December 2010 are set out as follows:-

Remuneration Non - Executive Director Executive Director RM RM

Salaries - 2,322,080Fees 207,000 85,000Benefit-in-Kind - 107,779

Remuneration Non - Executive Director Executive Director

Below RM 50,000 4 -RM 50,001 - RM 100,000 - -RM 100,001 - RM 150,000 - -RM 150,001 - RM 200,000 - -RM 200,001 - RM 250,000 - -RM 250,001 - RM 300,000 - -RM 300,001 - RM 350,000 - 4RM 350,001 – RM 400,000 - -RM 401,001 – RM 450,000 - -RM 451,001 – RM 500,000 - 1RM 501,001 – RM 550,000 - -RM 551,001 – RM 600,000 - -RM 600,001 – RM 650,000 - -RM 651,001 – RM 700,000 - -RM 701,001 – RM 750,000 - 1

The Directors’ fees payable are subject to the approval of the shareholders at the forthcoming Annual

General Meeting of the Company.

8. ACCOUNTABILITY AND AUDIT

8.1 Financial Reporting

Your Board recognizes its role and responsibility to ensure that the Group’s and the Company’s financial statements present a true and fair view of the financial positions and are prepared in accordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia.

Your Board is also committed to provide the highest level of disclosure possible to ensure integrity and consistency of the financial reports.

The Group publishes full financial statements annually and condensed financial statements quarterly as required by Bursa Malaysia’s Listing Requirements.

The Audit Committee assists your Board in scrutinizing the information for disclosure to ensure its accuracy, adequacy and completeness.


8.2 Internal Control

Your Board acknowledges its overall responsibility for maintaining a sound system of internal control to safeguard shareholders’ investment and the Group’s and the Company’s assets.

The Audit Committee through the Internal Audit Department reviews the effectiveness of the system of internal control of the Group periodically. The review covers the financial, operational and compliance controls as well as risk management.

The Statement on Internal Control as set out on pages 37 to 39 in this Annual Report provides an overview of the state of internal control within the Group.

8.3 Relationship with Auditors

The Company’s external auditors continue to provide the independent opinion to shareholders on the Group’s and the Company’s financial statements. Your Board maintains a formal and transparent relationship with the auditors to meet their professional requirements.

The role of the Audit Committee in relation to the internal and external auditors is described in the Audit Committee Report section on pages 33 to 36 of this Annual Report.

8.4 Directors’ Responsibility Statement

Your Board is responsible for ensuring that the financial statements for the financial year which have been drawn up in accordance with the applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the Group and the Company as at 31 December 2010 and of their financial performance and cash flows for the financial year then ended.

In preparing the financial statements, your Board has used appropriate and relevant accounting policies that are consistently used and supported by reasonable as well as prudent judgements and estimates, and that all applicable approved Financial Reporting Standards in Malaysia have been complied with.

Your Board is responsible for ensuring that the Group and the Company keep proper accounting records which disclose with reasonable accuracy the financial position of the Group and the Company and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

Your Board also has the general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group, to detect and prevent fraud and other irregularities.

The Directors’ Responsibility Statement in respect of the Audited Financial Statements for the year ended 31 December 2010 is set out in the Financial Statements section of this Annual Report.



9. COMMUNICATION WITH SHAREHOLDERS AND INVESTORS

Your Board recognizes the importance of maintaining transparency and accountability to its shareholders and investors.

Your Board keeps shareholders informed via announcements, and timely release of quarterly financial results, press releases, annual reports and circulars to shareholders. Your Board also takes effort to meet up with investors on regular basis to provide up to date information about the Group.

Information of the Group is also accessible through the Company’s website at www.tomei.com.my which is updated on regular basis. Information available in the website includes among others the Group Annual Report, quarterly financial announcement, major and significant announcement, press release and latest corporate development of the Group.

The Annual General Meeting (AGM) serves as the principal forum for dialogue and communication between your Directors and the shareholders. At the AGM, shareholders are given direct access to your Board and are encouraged to participate in its proceedings and seek clarification on the performance of the Group.

10. STATEMENT ON COMPLIANCE WITH THE BEST PRACTICES OF THE MALAYSIAN CODE ON CORPORATE GOVERNANCE

Having reviewed the governance structure and practices of the Group, your Board considers that it has complied with the best practices as set out in the Code as well as the items set out in Part A of Appendix 9C of the Listing Requirements of Bursa Securities in relation to the requirement of a separate disclosure in the Annual Report.

This Statement on Corporate Governance is made in accordance with the resolution of the Board of Directors dated 24 February 2011.



AUDITCOMMITTEE REPORT

1. COMPOSITION

The Audit Committee is appointed by your Board of Directors from amongst its members. The Audit Committee comprised the following three (3) members:-

Lau Tiang Hua - Chairman, Independent Non-Executive Director M Chareon Sae Tang @ Tan Whye Aun - Independent Non-Executive Director Raja Dato’ Seri Aman Bin Raja Haji Ahmad - Independent Non-Executive Director

a) The Audit Committee shall comprise at least 3 directors.

b) The alternate directors shall not be appointed as members of the Audit Committee.

c) All the Audit Committee members must be non-executive directors, with majority of them being independent directors.

d) At least one member of the Audit Committee:-(i) Must be a member of the Malaysian Institute of Accountants; or(ii) If he is not a member of the Malaysian Institute of Accountants, he must have at least three

(3) years working experience; and- He must have passed the examinations specified in Part I of the 1st Schedule of the

Accountant’s Act 1967; or- He must be a member of one of the associations of accountants specified in Part II of the

1st Schedule of the Accountant’s Act 1967; or(iii) Fulfils such other requirements as prescribed or approved by Bursa Securities.

e) Members of the Audit Committee shall elect a Chairman, who shall be an Independent Non-Executive Director from among their members.

f) Members of the Audit Committee shall be appointed for a period of 3 years and shall be eligible for re-appointment.

g) In the event of any vacancy in the Audit Committee resulting in the number of members being reduced to below 3, the vacancy must be filled within 3 months.

2. OBJECTIVES

a) The Audit Committee is to serve as a focal point for communication between your Directors, the external auditors, internal auditor and the Management on matters in connection with accounting, reporting and controls.

b) The Audit Committee is to assist your Board in fulfilling its fiduciary responsibilities for ensuring quality, integrity and reliability of the practices of the Group.

c) The Audit Committee will reinforce the independence of the Group’s external and internal auditors.


3. FUNCTIONS

The Audit Committee shall, amongst others, discharge the following functions:-

a) Review the following and report the same to your Board:-

i) With the external auditors the audit plan;ii) With the external auditors their evaluation of the system of internal controls;iii) With the external auditors their audit report;iv) The assistance provided by employees to the external auditors;v) The adequacy of the scope, functions, competency and resources of the internal audit function and

the necessary authority given to the internal auditors in order for them to carry out their work;vi) The internal audit plan and the results of the internal audit undertaken and whether or not

appropriate action has been taken on the recommendations of the internal auditors; vii) Quarterly interim financial reports and year end financial statements prior to the approval of

your Board focusing particularly on:-- changes in significant accounting policies;- significant and unusual events;- the going concern assumption; and- compliance with accounting standards and other legal requirements.

viii) Any related party transactions and conflict of interest situation including any transaction, procedure or course of conduct that raises questions of management integrity;

ix) Any letters of resignation from the external auditors;x) Whether there is any reason, supported by grounds, to believe that the external auditors are

not suitable for re-appointment;xi) The effectiveness of the internal control and management information systems; andxii) All areas of significant financial risk and the arrangements in place to contain those risks to

acceptable levels.

b) Recommend the nomination of a person or persons as external auditors.

c) Report promptly to Bursa Securities any matter that the Audit Committee had reported to your Board, which was not satisfactorily resolved and/or resulted in a breach of the Listing Requirements.

4. AUTHORITY

For the performance of its duties, the Audit Committee shall:- a) Have authority to investigate any matter within its terms of reference;

b) Have the resources required to perform its duties;

c) Have direct communication channels with the external auditors and persons carrying out the internal audit function;

d) Have full and unrestricted access to any information pertaining to the Group;

e) Be able to obtain independent professional or other advice at a cost which is to be approved by your Board;

f) Be able to convene meetings with the external auditors, the internal auditors or both, with the exclusion of other directors and employees, whenever deemed necessary; and

g) Be able to invite outsiders with relevant experience to attend its meetings if necessary.

AUDIT COMMITTEE REPORT (con’t)



5. PROCEDURES

The Audit Committee shall regulate its procedures as follows:-

a) The Audit Committee shall hold at least 4 meetings in each financial year;

b) A member of the Audit Committee may at any time summon a meeting of the Audit Committee;

c) Notice calling for a meeting of the Audit Committee shall be given to its members at least 14 days before the meeting or at shorter notice as the Audit Committee members shall determine or agree;

d) The quorum necessary for the transaction of business at an Audit Committee meeting shall be two and the majority of members present must be independent directors;

e) Questions arising at any Audit Committee meeting shall be decided by the majority vote of its members present. In case of an equality of votes, the Chairman of the meeting shall have a second or casting vote; and

f) Minutes of each Audit Committee meeting shall be kept by the Company Secretary.

6. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The Audit Committee held five (5) meetings during the financial year ended 31 December 2010 and the attendance of each member is as follows:-

Name Attendance Lau Tiang Hua 5/5 M Chareon Sae Tang @ Tan Whye Aun 5/5 Raja Dato’ Seri Aman Bin Raja Haji Ahmad 4/5

The following is a summary of the main activities carried out by the Audit Committee during the financial year ended 31 December 2010:-

a) Reviewing and recommending for your Board’s approval the quarterly results of the Group for announcement to Bursa Securities;

b) Reviewing the audit report and observations made by the external auditors on the annual financial statements that require appropriate actions and the Management’s response thereon and reporting them to your Board;

c) Reviewing and recommending for your Board’s approval the audited annual financial statements;

d) Reviewing and approving the internal audit plan and reviewing the internal audit reports and the recommended actions to be taken by the Management;

e) Reviewing the adequacy of the scope, functions, competency and resources of the internal audit function;

f) Submitting regular reports of matters discussed in the Audit Committee meeting to your Board of Directors for information and review;

g) Having 2 private discussions with the external auditors without the presence of the Management to discuss problems, issues and concerns arising from the interim and final audits, and any other relevant matters;


h) Reviewing the impact of new or proposed changes in accounting standards and regulatory requirements to the Company; and

i) Reviewing any related party transactions and conflict of interest situation that may arise within the Company or Group.

7. INTERNAL AUDIT FUNCTION AND SUMMARY OF ACTIVITIES

The main role of the internal audit is to review the effectiveness of the Group’s system of internal controls and this is performed with impartiality, proficiency and due professional care. Internal audit adopts a risk based auditing approach by focusing on reviewing identified high risk areas for compliance with control policies and procedures, identifying business risk which have not been appropriately addressed and evaluating the adequacy and integrity of controls.

The Group has in place an internal audit function. The Head of the Internal Audit Department reports directly to the Audit Committee. The internal audit activities are guided by a detailed annual Audit Plan. The annual Audit Plan is approved by the Audit Committee and thereafter updated as and when necessary after prior approval of the Audit Committee.

During the period under review, the Internal Audit Department had undertaken the following activities:-

a) Physical verification of inventory and cash maintained at the branches (located in Malaysia), and reviewing the compliance of laid down inventory and cash handling procedures, and to check for strict compliance to business processes and statutory requirements at branches and Head Office Departments. Highlighting control weaknesses and recommending improvements;

b) Performing ad hoc reviews of selected internal control system and procedures as requested by top Management;

c) Discussing audit findings and audit recommendations with Management for resolution and action; and

d) Presenting the internal audit reports at the Audit Committee meetings for the deliberation by its members, and to follow up on the suggestions by its members.

This Audit Committee Report is made in accordance with the resolution of your Board of Directors dated 24 February 2011.



The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of internal control to safeguard shareholders’ investment and the Group’s assets.

In accordance with Paragraph 15.26(b) of the Listing Requirements of the Bursa Securities, the Board of Directors of Listed Companies is required to include a statement about the state of internal control of the listed entity as a group in their annual report.

Pursuant to these requirements, your Board of Directors is committed to its responsibility in maintaining a sound and reliable system of internal control through the process of independent internal audit functions, risk management reviews and the continuous review of its effectiveness by the Audit Committee.

Your Board is pleased to provide the following statement which outlines the nature and scope of internal control of the Group during the period under review.

1. BOARD RESPONSIBILITIES

Your Board acknowledges the importance of maintaining a sound system of internal control and its effectiveness and adequacy in safeguarding the shareholders’ investment and the Group’s assets.

This includes reviewing and ensuring the effectiveness and efficiency of business operations, reliability of financial information, compliance with laws and regulations and risk management policies and procedures.

The internal control system is designed to manage rather than to eliminate the risk of failure to meet the Group’s business objectives. Therefore, it can only provide reasonable, but not absolute assurance against material misstatement, operational failures, fraud or loss.

2. CONTROL STRUCTURE AND ENVIRONMENT

Your Board puts paramount importance in ensuring that an appropriate control environment is established within the organization to govern the conduct within the Group. The key elements of controls are:-

2.1 The Audit Committee

The Group’s Audit Committee comprises only Independent Non-Executive Directors in order to ensure that it is able to carry out its duty without any interference from the Executive Directors and to provide an unbiased view. The Audit Committee members who bring with them a wide variety of experience and expertise in various disciplines reinforce the effectiveness of its role. The Audit Committee meets on a regular basis and has full and unrestricted access to both the internal and external auditors. The Audit Committee operates within its Terms of Reference and ensures that there are effective risk management and compliance to control procedures in order to provide the level of assurance required by your Board.

STATEMENT ON INTERNAL CONTROL


2.2 Internal Audit Function The Group has in place an internal audit function. The Head of the Internal Audit Department reports

directly to the Audit Committee. Your Board of Directors, however, is still responsible for ensuring the adherence of the scope of the internal audit function.

The functions and responsibilities of the Audit Committee and the internal audit function are in accordance with the Internal Audit Charter, the Guidelines on Internal Audit Function issued by The Institute of Internal Auditors, Malaysia and the Listing Requirements of Bursa Securities.

Proper internal audit plan has been set up to assess the adequacy and effectiveness of the internal control and to review potential risk area on a periodical basis. The internal audit activities are guided by a detailed annual Audit Plan. The annual Audit Plan is approved by the Audit Committee and thereafter updated as and when necessary after prior approval of the Audit Committee.

The internal audit includes the physical verification of inventory and cash maintained at the branches (located in Malaysia) and reviewing the compliance of laid down inventory and cash handling procedures, and to check for strict compliance to business processes and statutory requirements at branches and Head Office Departments. Through periodical review, audit findings of any potential risk and non-compliance are highlighted to the Management for resolution and action. The cost incurred for the internal audit function in respect of this financial year stood at RM 555,000.00.

Internal audit independently reviews the risk exposures and control processes implemented by the Management and reports to the Audit Committee on a quarterly basis or as and when required. The Audit Committee meets with the external auditors at least twice a year without the presence of the Management and Executive Directors to discuss problems, issues and concerns arising from the interim and final audits, and any other relevant matters.

The internal audit reports are tabled at the Audit Committee meetings, at which the findings are reviewed with the Management and for the deliberation by the Audit Committee members, and to follow up on the suggestions by the Audit Committee members. Internal auditors follow up with the Management to ensure that recommendations to improve controls are implemented. These initiatives, together with the Management’s adoption of the external auditors’ recommendations for improvement on internal controls noted during their audit, provide reasonable assurance that necessary control procedures are in place. The Audit Committee submits regular reports of their deliberations to your Board of Directors for their information and review.

The system of internal control has been considered by your Board of Directors to be adequate and its risks to be at an acceptable level within the context of the Group’s business environment. However, such system does not eliminate in total the possibility of human error, collusion or deliberate circumvention of control procedures by employees and others. Nevertheless, the system of internal control does provide a level of confidence on which your Board of Directors relies for assurance.

STATEMENT ON INTERNAL CONTROL (con’t)


2.3 Other Key Areas of Internal Control The Group has a clearly defined organization structure with clear defined lines of responsibility and

accountability aligned to the current business and operations requirements. The Group also has in place a set of Operation Manual which has been reviewed by the Audit Committee and approved by Your Board to guide the operation of each business division.

Each departmental head reports directly to the Group Managing Director who in turn reports to your Board under a separate agenda at each Board meeting. The Group Managing Director’s Report will encompass significant development in the Group’s business operations as well as development in the industry as a whole. In addition your Board may call for a review of the strategic planning, budgeting and forecasting of revenue and expenses in the light of changes to the business environment.

Management is required to prepare its comprehensive business plan and annual budgets for tabling to your Board for its deliberation and approval. The Audit Committee will monitor the Group’s performance against the approved budgets through the review of quarterly interim financial reports. In their review of quarterly interim financial reports, the Audit Committee will deliberate on all key financial and operating performance.

The Audit Committee will deliberate on the Internal Auditor’s report every quarter and focus on those major findings to ensure corrective actions are taken by Management.

Your Board remains committed towards operating a sound system of internal control which continuously evolves to support both the type of business and size of operation of the Group as well as to cater to the changing external environment. As such, your Board will, when necessary put in place appropriate action plans to further enhance the Group’s system of internal control.

3. REVIEW OF STATEMENT BY EXTERNAL AUDITOR

The external auditors have reviewed this Statement on Internal Control for the inclusion in the annual report of the Group for the year ended 31 December 2010 and have reported to your Board that nothing has come to their attention that causes them to believe that the Statement is inconsistent with their understanding of the process your Board has adopted in the review of the adequacy and integrity of internal control of the Group.

This statement is made in accordance with the resolution of the Board of Directors dated 6 April 2011.

STATEMENT ON INTERNAL CONTROL (con’t)


UTILIZATION OF PROCEEDS

Except for the following, there was no fund raising exercise implemented during the financial year:

The Company has on 23 February 2010 increased its share capital via the issuance of 12,600,000 ordinary shares of RM 0.50 each to selected investors at an issue price of RM 0.50 per share. The gross proceed raised was RM 6,300,000 and after deducting share issue expenses of RM 41,811, the balance was used for the Group’s working capital.

SHARE BUYBACKS

The Company does not have a scheme to buy back its own shares.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

The Company has not issued any options, warrants or convertible securities for the financial year ended 31 December 2010.

AMERICAN DEPOSITORY RECEIPT OR GLOBAL DEPOSITORY RECEIPT

The Company did not sponsor any depository receipt programme for the financial year ended 31 December 2010.

IMPOSITION OF SANCTIONS AND/OR PENALTIES

There were no sanction and/or penalties imposed on the Company and its subsidiaries, Directors or Management by relevant regulatory bodies during the financial year ended 31 December 2010.

NON–AUDIT FEE

During the financial year ended 31 December 2010, RM 19,681 was paid to the external auditors, Messrs BDO, for non-audit services.

PROFIT GUARANTEE

The Company did not issue any profit guarantee.

VARIATION OF RESULTS

During the financial year, there was no variation of results by more than 10% from any profit estimate, forecast or unaudited results that were announced.

MATERIAL CONTRACTS

Except for the following, there were no material contract entered into by the Company and/or its subsidiaries during the financial year ended 31 December 2010, which involves the interest of Directors and major shareholders:

• The Group has on 28 July 2010 disposed of two subsidiary companies, namely Tomei Gold & Jewellery Corp. (KL) Sdn Bhd and Sinar Raya Trading Sdn Bhd to Yumay Sdn Bhd for cash consideration of RM 300,000 and RM 345,000 respectively. The disposal consideration was based on the net assets value of the respective subsidiary company as at 30 June 2010.

• The Group has on 27 December 2010 disposed of six properties located at Jalan 2/131A, Project Jaya Industrial Estate, Jalan Kelang Lama, 58200 Kuala Lumpur to Oasis Properties Sdn Bhd for RM 4.6 million. The disposal consideration was arrived at based on market valuation of the said properties conducted by an Independent Property Valuer, CH Williams Talhar & Wong Sdn Bhd on 16 December 2010.

TIONALADDI

COMPLIANCE

INFORMATION


ADDITIONAL COMPLIANCE INFORMATION (con’t)

REVALUATION POLICY

The Group adopts a fair value policy in accounting for the value of its investment properties. As such, the fair value of each investment property was determined by way of valuation by an independent professional valuer or based on existing similar market transaction or based on estimated discounted cashflow to be generated from the said investment properties. Any revaluation surplus or deficit is appropriately taken up in the Income Statement in the year they arise.

There is no revaluation policy for property, plant and equipment which are carried at cost less accumulated depreciation and impairment losses.

RECURRENT RELATED PARTY TRANSACTIONS

The aggregate value of the recurrent related party transactions conducted by the Company and/or its subsidiary company with related parties during the financial year are as follows:-

Transacting Parties within Nature of Nature of Amount ofParties the Group transactions relationship transactions (RM)

Ong Tiong Yee & Yi Xing Goldsmith Sales of jewellery Note 1 383,462 Sons Sdn. Bhd. Sdn. Bhd.

Schofer Germany-The Chain Gemas Precious Sales of jewellery Note 2 1,034,668Company Gmbh & Co. KG Metals Sdn. Bhd.

Unique Avenue Tomei Gold & Jewellery Rental of premises Note 3 21,600Sdn. Bhd. Manufacturing Sdn. Bhd.

Best Arcade Tomei Gold & Jewellery Rental of premises Note 4 334,800Sdn. Bhd. (MJ) Sdn. Bhd.

Teck Fong Tomei Gold & Jewellery Rental of premises Note 5 322,800 Property Sdn. Bhd. (MJ) Sdn. Bhd.

Oasis Properties Tomei Gold & Jewellery Rental of premises Note 6 47,500Sdn. Bhd. Manufacturing Sdn. Bhd. Oasis College Tomei Gold & Jewellery Staff trainings and Note 7 44,300Sdn. Bhd. Manufacturing Sdn. Bhd. rental of premises

C.S. Tang & Co Tomei Gold & Jewellery Provision of Note 8 4,648 Manufacturing Sdn. Bhd. legal services


NOTE 1

Ong Kee Liang, the spouse of Ng Sheau Chyn, a Director of the Company is a shareholder and director of Ong Tiong Yee & Sons Sdn. Bhd.

NOTE 2

Schofer Germany-The Chain Company Gmbh & Co. KG is a shareholder of Gemas Precious Metals Industries Sdn. Bhd.

NOTE 3

Tan Sri Datuk Ng Teck Fong, Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen, Directors of the Company are also directors of Unique Avenue Sdn. Bhd.. Tan Sri Datuk Ng Teck Fong and Ng Sheau Chyn are the major shareholders of Unique Avenue Sdn. Bhd.

NOTE 4

Tan Sri Datuk Ng Teck Fong, Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen are directors and major shareholders of Best Arcade Sdn. Bhd.

NOTE 5

Tan Sri Datuk Ng Teck Fong, Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen are directors of Teck Fong Property Sdn. Bhd.

NOTE 6

Tan Sri Datuk Ng Teck Fong, Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen are directors and major shareholders of Oasis Properties Sdn. Bhd.

NOTE 7

Tan Sri Datuk Ng Teck Fong, Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen are directors of Oasis College Sdn. Bhd..

NOTE 8

M Chareon Sae Tang @ Tan Whye Aun is a partner of C.S. Tang & Co.

ADDITIONAL COMPLIANCE INFORMATION (con’t)


Your Board is responsible for ensuring that the financial statements for the financial year which have been drawn up in accordance with the applicable approved Financial Reporting Standards and the provisions of the Company’s Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the Group and the Company as at 31 December 2010 and of their financial performance and cash flows of the Group and the Company for the financial year then ended.

In preparing the financial statements, your Board has used appropriate and relevant accounting policies that are consistently used and supported by reasonable as well as prudent judgements and estimates, and that all applicable approved Financial Reporting Standards (“FRS”) in Malaysia have been complied with.

Your Board is responsible for ensuring that the Group and the Company keep proper accounting records which disclose with reasonable accuracy the financial position of the Group and the Company and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

Your Board also has a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to detect and prevent fraud and other irregularities.

The Statement by Directors pursuant to Section 169(15) of the Companies Act, 1965 is set out on page 50 of the Annual Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

IN RELATION TO THE FINANCIAL STATEMENTS


DIRECTORS’ REPORT 45

STATEMENT BY DIRECTORS 50

STATUTORY DECLARATION 50

INDEPENDENT AUDITORS’ REPORT 51

STATEMENTS OF FINANCIAL POSITION 53

STATEMENTS OF COMPREHENSIVE INCOME 55

STATEMENTS OF CHANGES IN EQUITY 56

STATEMENTS OF CASH FLOWS 58

NOTES TO THE FINANCIAL STATEMENTS 61

FINANCIAL

CONTENTS


DIRECTORS’REPORT

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 December 2010.

PRINCIPAL ACTIVITIES

The Company’s principal activity is investment holding. The principal activities of the subsidiaries are set out in Note 9 to the financial statements. There have been no significant changes in the nature of these activities during the financial year except for those disclosed in Note 9 to the financial statements.

RESULTS

Group Company RM’000 RM’000 Profit for the financial year 22,017 6,338 Attributable to:- Owners of the parent 21,381 6,338 Minority interest 636 - 22,017 6,338

DIVIDENDS

Dividends paid, declared or proposed since the end of the previous financial year were as follows:-

Company RM’000 In respect of financial year ended 31 December 2009: First and final single tier dividend of 3.0 sen per ordinary share, paid on 4 June 2010. 4,158

The Directors proposed a first and final single tier dividend of 3.3 sen per ordinary share, amounting to RM 4,573,800 in respect of the financial year ended 31 December 2010, subject to the approval of shareholders at the forthcoming Annual General Meeting.


DIRECTORS’ REPORT (con’t)

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the issued and paid-up share capital of the Company was increased from RM 63,000,000 to RM 69,300,000 by way of issuance of 12,600,000 new ordinary shares of RM 0.50 each in the Company under private placement to selected investors for cash.

The newly issued shares rank pari passu in all respects with the existing shares of the Company. There were no other issues of shares during the financial year.

DIRECTORS

The Directors who have held office since the date of the last report are as follows:-

Tan Sri Datuk Ng Teck Fong Datin Nonadiah Binti Abdullah Raja Dato’ Seri Aman Bin Raja Haji Ahmad Ng Yih Pyng M Chareon Sae Tang @ Tan Whye Aun Lau Tiang Hua Ng Yih Chen Ng Sheau Chyn Ng Sheau Yuen Choong Chow Mooi



DIRECTORS’ INTERESTS

The Directors holding office at the end of the financial year and their beneficial interests in ordinary shares of the Company during the financial year ended 31 December 2010 as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, were as follows:-

- Number of ordinary shares of RM 0.50 each -

Balance Balance as at as at 1.1.2010 Acquired Sold 31.12.2010

Shares in the Company Direct interests Tan Sri Datuk Ng Teck Fong 13,865,458 100,000 - 13,965,458 Datin Nonadiah Binti Abdullah 2,000,000 - - 2,000,000 Ng Yih Pyng 581,239 - - 581,239 Ng Yih Chen 100,000 - - 100,000 Ng Sheau Chyn 548,700 - - 548,700 Ng Sheau Yuen 100,000 - - 100,000 Choong Chow Mooi 100,000 - - 100,000 Indirect interests Tan Sri Datuk Ng Teck Fong 69,167,441 16,000 - 69,183,441 Ng Yih Pyng 63,065,177 - - 63,065,177 Ng Yih Chen 63,065,177 - - 63,065,177

By virtue of their interest in the ordinary shares of the Company, Tan Sri Datuk Ng Teck Fong, Ng Yih Pyng and Ng Yih Chen are also deemed to have interests in the ordinary shares of all the subsidiaries to the extent that the Company has an interest.

None of the other Directors holding office at the end of the financial year held 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, none of the Directors have received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the 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 other than those as disclosed in Note 35 to the financial statements.

There were no arrangements during and at the end of the financial year, to which the Company is a party, 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.


OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the statements of comprehensive income and statements of financial positions of the Group and of the Company were made out, the Directors took reasonable steps:-

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts have been written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets other than debts which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values.

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(c) The Directors are not aware of any circumstances:-

(i) which would render the amounts written off for bad debts or the amount of provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any material extent; and

(ii) which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading; and

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

(d) In the opinion of the Directors:-

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made; and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12) months after the end of the financial year which will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financial year.

(g) The Directors are not aware of any circumstances not otherwise dealt with in the report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.




SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Significant events during the financial year are disclosed in Note 36 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

Significant events subsequent to the end of the reporting period are disclosed in Note 37 to the financial statements.

HOLDING COMPANY

The Directors regard Teck Fong Corporation Sdn. Bhd., a company incorporated in Malaysia, as the holding and ultimate holding company.

AUDITORS

The auditors, BDO, have expressed their willingness to continue in office.

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

...................................................................Tan Sri Datuk Ng Teck FongDirector

...................................................................Ng Yih PyngDirector

Kuala Lumpur6 April 2011


STATEMENT

STATUTORY

BY DIRECTORS

DECLARATION

In the opinion of the Directors, the financial statements set out on pages 53 to 136 have been drawn up in accordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2010 and of their financial performance and cash flows of the Group and of the Company for the financial year then ended.

On behalf of the Board,

............................................................... Tan Sri Datuk Ng Teck FongDirector

............................................................... Ng Yih Pyng Director

Kuala Lumpur6 April 2011

I, Tan Sri Datuk Ng Teck Fong, being the Director primarily responsible for the financial management of Tomei Consolidated Berhad, do solemnly and sincerely declare that the financial statements set out on pages 53 to 136 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly )declared by the abovenamed at )Kuala Lumpur this )6 April 2011 )

Before me:-

Agong Sia (No. W460)Commissioner for OathsKuala Lumpur


INDEPENDENTTOMEI CONSOLIDATED BERHAD

Report on the Financial Statements

We have audited the financial statements of Tomei Consolidated Berhad, which comprise the statements of financial positions as at 31 December 2010 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 53 to 136.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the Group and of the Company as of 31 December 2010 and of their financial performance and cash flows for the financial year then ended.

AUDITORS’ REPORT TO THE MEMBERS OF


INDEPENDENT AUDITORS’ REPORT TO THE

MEMBERS OF TOMEI CONSOLIDATED BERHAD (con’t)

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 9 to the financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

Other Reporting Responsibilities

The supplementary information set out in Note 16(c) to the financial statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

BDO Law Kian HuatAF: 0206 2855/06/12 (J)Chartered Accountants Chartered Accountant Kuala Lumpur6 April 2011


Group Company

2010 2009 2010 2009 NOTE RM’000 RM’000 RM’000 RM’000 ASSETS Non-current assets Property, plant and equipment 7 15,035 15,340 - - Investment properties 8 324 1,792 - - Investments in subsidiaries 9 - - 63,945 28,867 Deferred tax assets 10 408 479 - - 15,767 17,611 63,945 28,867 Current assets Inventories 11 253,713 216,420 - - Derivative asset 12 11 - - - Trade and other receivables 13 22,267 17,982 54,049 91,486 Current tax assets 2,179 1,778 2,060 1,720 Cash and cash equivalents 14 9,009 8,292 5,295 5,284 287,179 244,472 61,404 98,490 TOTAL ASSETS 302,946 262,083 125,349 127,357

STATEMENTSOF FINANCIAL POSITION

AS AT 31 DECEMBER 2010


Group Company

2010 2009 2010 2009 NOTE RM’000 RM’000 RM’000 RM’000 EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 15 69,300 63,000 69,300 63,000 Reserves 16 80,521 63,857 13,733 11,595 149,821 126,857 83,033 74,595 Minority interest 2,491 1,855 - - TOTAL EQUITY 152,312 128,712 83,033 74,595 LIABILITIES Non-current liabilities Borrowings 17 22,428 10,841 16,010 10,000 Deferred income 20 6 9 - - Deferred tax liabilities 10 615 446 - - 23,049 11,296 16,010 10,000 Current liabilities Trade and other payables 21 30,658 27,658 2,316 2,762 Borrowings 17 94,474 90,813 23,990 40,000 Current tax liabilities 2,453 3,604 - - 127,585 122,075 26,306 42,762 TOTAL LIABILITIES 150,634 133,371 42,316 52,762 TOTAL EQUITY AND LIABILITIES 302,946 262,083 125,349 127,357

The accompanying notes form an integral part of the financial statements.

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2010 (con’t)


Group Company

2010 2009 2010 2009 NOTE RM’000 RM’000 RM’000 RM’000 Revenue 22 356,286 300,890 12,000 4,692 Cost of sales (241,970) (196,764) - - Gross profit 114,316 104,126 12,000 4,692 Other income 23 6,451 2,051 156 71 Selling and distribution expenses (62,320) (52,772) - - Administrative expenses (18,326) (17,315) (4,840) (4,200) Other expenses (3,030) (3,593) (353) - Finance costs (6,645) (6,179) (325) (126) Profit before tax 24 30,446 26,318 6,638 437 Tax expense 25 (8,429) (7,438) (300) (181) Profit for the financial year 22,017 18,880 6,338 256 Other comprehensive income: Foreign currency translations (517) (11) - - Other comprehensive income, net of tax (517) (11) - - Total comprehensive income 21,500 18,869 6,338 256 Profit attributable to: Owners of the parent 21,381 18,239 6,338 256 Minority interest 636 641 - - 22,017 18,880 6,338 256 Total comprehensive income attributable to: Owners of the parent 20,864 18,228 6,338 256 Minority interest 636 641 - - 21,500 18,869 6,338 256 Earnings per ordinary share attributable to equity holders of the Company (sen) - Basic 26 15.63 14.48

STATEMENTSINCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

OF COMPREHENSIVE



STATEMENTSIN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

OF CHANGES

-Non-distributable- -Distributable-

Total attributable Exchange to owners Share Share translation Retained of the Minority Total capital premium reserve earnings parent interest equity NOTE RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Group Balance as at 1 January 2009 63,000 4,078 (211) 44,599 111,466 1,535 113,001 Total comprehensive income - - (11) 18,239 18,228 641 18,869 Transactions with owners Acquisition of the remaining interest in a subsidiary - - 10 (485) (475) (321) (796) Dividends paid 27 - - - (2,362) (2,362) - (2,362) Total transactions with owners - - 10 (2,847) (2,837) (321) (3,158)

Balance as at 31 December 2009 63,000 4,078 (212) 59,991 126,857 1,855 128,712 Total comprehensive income - - (517) 21,381 20,864 636 21,500 Transactions with owners Issuance of new ordinary shares 15 6,300 - - - 6,300 - 6,300 Share issue expenses - (42) - - (42) - (42) Dividends paid 27 - - - (4,158) (4,158) - (4,158) Total transactions with owners 6,300 (42) - (4,158) 2,100 - 2,100

Balance as at 31 December 2010 69,300 4,036 (729) 77,214 149,821 2,491 152,312


STATEMENTSEQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (con’t)

OF CHANGES IN

-Non-distributable- -Distributable-

Share Share Retained Total capital premium earnings equity NOTE RM’000 RM’000 RM’000 RM’000

Company Balance as at 1 January 2009 63,000 4,078 9,623 76,701 Total comprehensive income - - 256 256 Transactions with owners Dividends paid 27 - - (2,362) (2,362) Total transactions with owners - - (2,362) (2,362) Balance as at 31 December 2009 63,000 4,078 7,517 74,595 Total comprehensive income - - 6,338 6,338 Transactions with owners Issuance of new ordinary shares 15 6,300 - - 6,300 Share issue expenses - (42) - (42) Dividends paid 27 - - (4,158) (4,158) Total transactions with owners 6,300 (42) (4,158) 2,100 Balance as at 31 December 2010 69,300 4,036 9,697 83,033



STATEMENTSOF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Group Company

2010 2009 2010 2009 NOTE RM’000 RM’000 RM’000 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 30,446 26,318 6,638 437 Adjustments for:- Amortisation of government grant 20 (3) (3) - - Depreciation of property, plant and equipment 7 5,203 4,892 - - Dividend income - - (12,000) (4,692) Fair value gains on derivative asset 23 (11) - - - Gain on disposal of investment properties (82) - - - (Gain)/Loss on disposal of property, plant and equipment (1,257) 64 - - Impairment loss on: - investments in subsidiaries 9 - - 122 - - trade and other receivables 13 269 658 - - Loss from fair value adjustments on investment properties 8 - 231 - - Property, plant and equipment written off 7 1,134 559 - - Reversal of impairment loss on trade and other receivables 13 (129) (23) - - Unrealised gain on foreign exchange (1,697) (654) (95) - Unrealised loss on gold price fluctuation 66 884 - - Finance costs 6,645 6,179 325 126 Interest income (67) (11) (61) (7) Operating profit/(loss) before changes in working capital 40,517 39,094 (5,071) (4,136) Increase in inventories (37,779) (20,644) - - (Increase)/Decrease in trade and other receivables (17) 145 (29) 1,338 Increase in trade and other payables 4,317 5,934 546 542

Cash from/(used in) operations 7,038 24,529 (4,554) (2,256)


Group Company

2010 2009 2010 2009 NOTE RM’000 RM’000 RM’000 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES (continued) Cash from/(used in) operations 7,038 24,529 (4,554) (2,256) Interest paid (4,908) (4,557) (13) - Tax paid (10,517) (6,076) - - Tax refunded 778 387 735 140 Net cash (used in)/from operating activities (7,609) 14,283 (3,832) (2,116) CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of additional interest in a subsidiary - (796) - (796) Dividend received - - 10,625 3,519 Interest received 67 11 61 7 Net repayments from subsidiaries - - 6,569 26,344 Purchase of property, plant and equipment 7 (4,538) (2,115) - - Proceeds from disposal of property, plant and equipment 353 20 - - Proceeds from disposal of subsidiaries, net of cash and cash equivalents disposed 29 (1) - - - Placement of fixed deposit as permitted investment (1) (4,617) (1) (4,617) Subscription of shares in existing subsidiaries - - (5,200) - Net cash (used in)/from investing activities (4,120) (7,497) 12,054 24,457

STATEMENTS OF CASH FLOWS



Group Company

2010 2009 2010 2009 NOTE RM’000 RM’000 RM’000 RM’000 CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid 27 (4,158) (2,362) (4,158) (2,362) Interest paid (1,423) (1,350) (312) (126) Repayments to Islamic Commercial Papers/Islamic Medium Term Notes (30,000) (20,000) (30,000) (20,000) Drawdown of short term borrowings 6,233 3,951 - - Proceeds from issuance of share capital, net of share issue expenses 6,258 - 6,258 - Drawdown/(Repayments) of term loans 24,884 (316) 20,000 - Repayments of hire-purchase liabilities (768) (594) - - Net cash from/(used in) financing activities 1,026 (20,671) (8,212) (22,488) Net (decrease)/increase in cash and cash equivalents (10,703) (13,885) 10 (147) Effects of exchange rate changes on cash and cash equivalents (17) (14) - - Cash and cash equivalents at beginning of financial year (12,094) 1,805 96 243

Cash and cash equivalents at end of financial year 14(d) (22,814) (12,094) 106 96

STATEMENTS OF CASH FLOWS




1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at Suite B13A-4, Tower B, Level 13A, Northpoint Offices, Mid Valley City, No. 1, Medan Syed Putra Utara, 59200 Kuala Lumpur.

The principal place of business of the Company is located at No. 8-1, Jalan 2/131A, Project Jaya Industrial Estate, Batu 6, Jalan Kelang Lama, 58200 Kuala Lumpur.

The holding and ultimate holding company is Teck Fong Corporation Sdn. Bhd., a company incorporated in Malaysia.

The financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated.

The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 6 April 2011.

2. PRINCIPAL ACTIVITIES

The Company’s principal activity is investment holding. The principal activities of the subsidiaries are set out in Note 9 to the financial statements. There have been no significant changes in the nature of these activities during the financial year except for those disclosed in Note 9 to the financial statements.

3. BASIS OF PREPARATION

The financial statements of the Group and of the Company have been prepared in accordance with applicable approved Financial Reporting Standards (“FRSs”) and the provisions of the Companies Act, 1965 in Malaysia. However, Note 16(c) to the financial statements has been prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements.

The preparation of financial statements requires the Directors to make estimates and assumptions

that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and contingent liabilities. In addition, the Directors are also required to exercise their judgement in the process of applying accounting policies. The areas involving such judgements, estimates and assumptions are disclosed in Note 6 to the financial statements. Although these estimates and assumptions are based on Directors’ best knowledge of events and actions, actual results could differ from those estimates.

NOTESSTATEMENTS

31 DECEMBER 2010

TO THE FINANCIAL


NOTES TO THE FINANCIAL STATEMENTS

31 DECEMBER 2010 (con’t)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries made up to the end of the financial year using the purchase method of accounting.

Under the purchase method of accounting, the cost of business combination is measured at the aggregate of fair values at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued plus any costs directly attributable to the business combination.

At the date of acquisition, the cost of business combination is allocated to identifiable assets acquired, liabilities assumed and contingent liabilities in the business combination which are measured initially at their fair values at the acquisition date. The excess of the cost of business combination over the Group’s interest of the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill (see Note 4.7(a) to the financial statements on goodwill). If the cost of business combination is less than the interest in the net fair value of the identifiable assets, liabilities and contingent liabilities, the Group will:

(a) reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the business combination; and

(b) recognise immediately in the profit or loss any excess remaining after that reassessment.

When a business combination includes more than one exchange transaction, any adjustment to the fair values of the subsidiary’s identifiable assets, liabilities and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation.

Subsidiaries are consolidated from the acquisition date, which is the date on which the Group effectively obtains control, until the date on which the Group ceases to control the subsidiaries. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the existence and effect of potential voting rights that are currently convertible or exercisable are taken into consideration.

Intragroup balances, transactions and unrealised gains and losses on intragroup transactions are eliminated in full. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. If subsidiaries use accounting policies other than those adopted in the consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to its financial statements in preparing the consolidated financial statements.

The gain or loss on disposal of a subsidiary, which is the difference between the net disposal proceeds and the Group’s share of its net assets as of the date of disposal including the carrying amount of goodwill and the cumulative amount of any exchange differences that relate to the subsidiary, is recognised in the consolidated statement of comprehensive income.

Minority interest is that portion of the profit or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the Group. It is measured at the minority’s share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minority’s share of changes in the subsidiaries’ equity since that date.





4.2 Basis of consolidation (continued)

Where losses applicable to the minority in a subsidiary exceed the minority’s interest in the equity of that subsidiary, the excess and any further losses applicable to the minority are allocated against the Group’s interest except to the extent that the minority has a binding obligation and is able to make additional investment to cover the losses. If the subsidiary subsequently reports profits, such profits are allocated to the Group’s interest until the minority’s share of losses previously absorbed by the Group has been recovered.

Minority interest is presented in the consolidated statement of financial position within equity and is presented in the consolidated statement of changes in equity separately from equity attributable to owners of the Company.

Minority interest in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the total profit or loss for the financial year between minority interest and owners of the Company.

When the Group purchases a subsidiary’s equity from minority interests for cash consideration and the purchase price is established at fair value, the accretion of the Group’s interest in the subsidiary is treated as purchases of equity interest for which the acquisition method of accounting is applied.

However, the changes of the Group’s interest in a subsidiary that does not satisfy the conditions of cash and fair value as described in the preceding paragraph are treated as equity transactions. 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.

4.3 Property, plant and equipment and depreciation

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which has different useful life, is depreciated separately.

After initial recognition, property, plant and equipment except for freehold land are stated at cost less any accumulated depreciation and any accumulated impairment losses.





4.3 Property, plant and equipment and depreciation (continued)

Freehold land has unlimited useful life and is not depreciated. Depreciation is calculated to write off the cost of the assets to its residual value on a straight-line basis over their estimated useful lives. The principal depreciation rates are as follows:-

Buildings 2% Computer equipment and software 20% - 33% Plant and machineries 10% - 20% Motor vehicles 20% Furniture and fittings 20% Office equipment 17% - 33% Renovation and electrical installations 17% - 33% Tools, equipment and moulds 20%

At the end of each reporting period, the carrying amount of an item of property, plant and equipment is assessed for impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A write down is made if the carrying amount exceeds the recoverable amount (see Note 4.8 to the financial statements on impairment of non-financial assets).

The residual values, useful lives and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate.

The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in profit or loss.

4.4 Leases and hire-purchase

(a) Finance leases and hire-purchase

Assets acquired under finance leases and hire-purchase which transfer substantially all the risks and rewards of ownership to the Group are recognised initially at amounts equal to the fair value of the leased assets or, if lower, the present value of minimum lease payments, each determined at the inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the leases, if this is practicable to determine; if not, the Group’s incremental borrowing rate is used. Any initial direct costs incurred by the Group are added to the amount recognised as an asset. The assets are capitalised as property, plant and equipment and the corresponding obligations are treated as liabilities. The property, plant and equipment capitalised are depreciated on the same basis as owned assets.

The minimum lease payments are apportioned between the finance charges and the reduction of the outstanding liability. The finance charges are recognised in profit or loss over the period of the lease term so as to produce a constant periodic rate of interest on the remaining lease and hire-purchase liabilities.





4.4 Leases and hire-purchase (continued)

(b) Operating leases

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.

4.5 Investment properties

Investment properties are properties which are held to earn rental yields or for capital appreciation or for both and are not occupied by the Group. Investment properties are initially measured at cost, which includes transaction costs. After initial recognition, investment properties are stated at fair value. The fair value of the investment properties are the prices at which the properties could be exchanged between knowledgeable, willing parties in an arm’s length transaction. The fair value of investment properties reflect market conditions at the end of the reporting period, without any deduction for transaction costs that may be incurred on sale or other disposal.

Fair values of investment properties are arrived at by reference to market evidence of transaction prices for similar properties. In the absence of such market evidence, the valuation is performed by registered independent valuers with appropriate recognised professional qualification and has recent experience in the location and category of the investment properties being valued.

A gain or loss arising from a change in the fair value of investment properties is recognised in profit or loss for the period in which it arises.

Investment properties are derecognised when either they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The gains or losses arising from the retirement or disposal of investment property is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset and is recognised in profit or loss in the period of the retirement or disposal.

4.6 Investments in subsidiaries

A subsidiary is an entity in which the Group and the Company have the power to exercise control over the financial and operating policies so as to obtain benefits from its activities. The existence and effects of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate financial statements at cost less impairment losses, if any. On disposal of such an investment, the difference between the net disposal proceeds and its carrying amount is included in profit or loss.





4.7 Intangible assets

(a) Goodwill

Goodwill acquired in a business combination is recognised as an asset at the acquisition date and is initially measured at cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. Gain or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(b) Other intangible assets

Other intangible assets are recognised only when the identifiablility, control and future economic benefit probability criteria are met.

The Group recognises at the acquisition date separately from goodwill, an intangible asset of the acquiree if the fair value can be measured reliably, irrespective of whether the asset had been recognised by the acquiree before the business combination.

Intangible assets are initially measured at cost. The cost of intangible assets acquired in a business combination is their fair values as at the date of acquisition.

After initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a straight line basis over the estimated economic useful lives and are assessed for any indication that the asset may be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end. The amortisation expense on intangible assets with finite lives is recognised in profit or loss and is included within the other operating expenses line item.

An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors; there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows to the Group. Intangible assets with indefinite useful lives are tested for impairment annually and wherever there is an indication that the carrying value may be impaired. Such intangible assets are not amortised. Their useful lives are reviewed each period to determine whether events and circumstances continue to support the indefinite useful life assessment for the asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for as a change in accounting estimate in accordance with FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors.

Expenditure on an intangible item that is initially recognised as an expense are not recognised as part of the cost of an intangible asset at a later date.

An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use. The gain or loss arising from the derecognition is the difference between the net disposal proceeds, if any, and the carrying amount of the asset is recognised in profit or loss when the asset is derecognised.





4.8 Impairment of non-financial assets

The carrying amounts of assets, except for financial assets (excluding investments in subsidiaries), inventories, deferred tax assets and investment properties measured at fair value, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment or more frequently if events or changes in circumstances indicate that the goodwill or intangible asset might be impaired.

The recoverable amount of an asset is estimated for every individual asset. Where it is not possible

to estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash generating unit (CGU) to which the asset belongs. Goodwill acquired in a business combination is from the acquisition date, allocated to each of the Group’s CGU or groups of CGU that are expected to benefit from the synergies of the combination giving rise to the goodwill irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units.

Following the adoption of FRS 8 Operating Segments as disclosed in Note 4.21 to the financial statements, the consequential amendment to FRS 136 Impairment of Assets is also mandatory for financial periods beginning on or after 1 July 2009. This amendment requires goodwill acquired in a business combination to be tested for impairment as part of the impairment testing of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest level within the Group at which the goodwill is monitored for internal management purposes and not larger than an operating segment determined in accordance with FRS 8.

The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use.

In estimating value in use, the estimated future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal 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 for which the future cash flow estimates have not been adjusted. An impairment loss is recognised in profit or loss when the carrying amount of the asset or the CGU, including the goodwill or intangible asset, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU.

The impairment loss is recognised in profit or loss immediately except for the impairment on a revalued asset where the impairment loss is recognised directly against the revaluation reserve to the extent of the surplus credited from the previous revaluation for the same asset with the excess of the impairment loss charged to profit or loss.

An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other assets is reversed if, and only if, there has been a change in the estimates used to determine the assets’ 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.





4.8 Impairment of non-financial assets (continued)

Such reversals are recognised as income immediately in profit or loss except for the reversal of an impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation increase and credited to the revaluation reserve account of the same asset. However, to the extent that an impairment loss on the same revalued asset was previously recognised in profit or loss, a reversal of that impairment loss is also recognised in profit or loss.

4.9 Inventories

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

Cost is determined on a weighted average basis or specific identification as appropriate and comprises the original cost of purchase plus the cost of bringing the inventories to their present location and condition.

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

4.10 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or another financial asset from another enterprise, or a contractual right to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially favourable to the Group.

A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially unfavourable to the Group.

Financial instruments are recognised on the statement of financial position when the Group has become a party to the contractual provisions of the instrument. At initial recognition, a financial instrument is recognised at fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issuance of the financial instrument.

An embedded derivative is separated from the host contract and accounted for as a derivative if, and only if the economic characteristics and risks of the embedded derivative is not closely related to the economic characteristics and risks of the host contract, a separate instrument with the same terms as the embedded derivative meets the definition of a derivative, and the hybrid instrument is not measured at fair value through profit or loss.





4.10 Financial instruments (continued)

(a) Financial assets

A financial asset is classified into the following four categories after initial recognition for the purpose of subsequent measurement:

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss comprise financial assets that are held for trading (i.e. financial assets acquired principally for the purpose of resale in the near term), derivatives (both, freestanding and embedded) and financial assets that were specifically designated into this classification upon initial recognition.

Subsequent to initial recognition, financial assets classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial assets classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses.

However, derivatives that is linked to and must be settled by delivery of unquoted equity instruments that do not have a quoted market price in an active market are recognised at cost.

(ii) Held-to-maturity investments

Financial assets classified as held-to-maturity comprise non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity.

Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at amortised cost using the effective interest method. Gains or losses on financial assets classified as held-to-maturity are recognised in profit or loss when the financial assets are derecognised or impaired, and through the amortisation process.

(iii) Loans and receivables

Financial assets classified as loans and receivables comprise non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Subsequent to initial recognition, financial assets classified as loans and receivables are measured at amortised cost using the effective interest method. Gains or losses on financial assets classified as loans and receivables are recognised in profit or loss when the financial assets are derecognised or impaired, and through the amortisation process.






(a) Financial assets (continued)

(iv) Available-for-sale financial assets

Financial assets classified as available-for-sale comprise non-derivative financial assets that are designated as available for sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

Subsequent to initial recognition, financial assets classified as available-for-sale are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as available-for-sale are recognised directly in other comprehensive income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised, at which time the cumulative gains or losses previously recognised in other comprehensive income are recognised in profit or loss. However, interest calculated using the effective interest method is recognised in profit or loss whilst dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payment is established.

Cash and cash equivalents include cash and bank balances, bank overdrafts, deposits and other short term, highly liquid investments with original maturities of three (3) months or less, which are readily convertible to cash and are subject to insignificant risk of changes in value.

A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised directly in other comprehensive income shall be recognised in profit or loss.

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or marketplace convention.

(b) Financial liabilities

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. A financial liability is classified into the following two categories after initial recognition for the purpose of subsequent measurement:-

(i) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading, derivatives (both, freestanding and embedded) and financial liabilities that were specifically designated into this classification upon initial recognition.

Subsequent to initial recognition, financial assets classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial assets classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses.






(b) Financial liabilities (continued)

(ii) Other financial liabilities

Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither held for trading nor initially designated as at fair value through profit or loss.

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains or losses on other financial liabilities are recognised in profit or loss when the financial liabilities are derecognised and through the amortisation process.

A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation

specified in the contract is discharged or cancelled or expires. An exchange between an existing borrower and lender of debt instruments with substantially different terms are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

The difference between the carrying amount of a 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.

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.

The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as insurance contracts as defined in FRS 4 Insurance Contracts. The Group recognises these insurance contracts as recognised insurance liabilities when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

At every reporting date, the Group shall assess whether its recognised insurance liabilities are adequate, using current estimates of future cash flows under its insurance contracts. If this assessment shows that the carrying amount of the insurance liabilities is inadequate, the entire deficiency shall be recognised in profit or loss.

Recognised insurance liabilities are only removed from the statement of financial position when, and only when, it is extinguished via a discharge, cancellation or expiration.






(c) Equity

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are classified as equity instruments.

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged to profit or loss.

Dividends to shareholders are recognised in equity in the period in which they are declared. If the Company reacquires its own equity instruments, the consideration paid, including any

attributable transaction costs is deducted from equity as treasury shares until they are cancelled. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Where such shares are issued by resale, the difference between the sales consideration and the carrying amount is shown as a movement in equity.

Following the adoption of FRS 139 during the financial year, the Group reassessed the classification and measurement of financial assets and financial liabilities as at 1 January 2010. There is no material effect arising from the adoption of FRS 139 and hence no opening statement of financial position as at 1 January 2010 was presented.

4.11 Impairment of financial assets

The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of each reporting period.

(a) Loans and receivables

The Group collectively considers factors such as the probability of bankruptcy or significant financial difficulties of the receivable, and default or significant delay in payments to determine whether there is objective evidence that an impairment loss on loans and receivables has occurred. Other objective evidence of impairment include historical collection rates determined on an individual basis and observable changes in national or local economic conditions that are directly correlated with the historical default rates of receivables.

If any such objective evidence exists, the amount of impairment loss is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If in a subsequent period, the amount of the impairment loss decreases and it objectively

relates to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of impairment reversed is recognised in profit or loss.





4.12 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the assets until when substantially all the activities necessary to prepare the asset for its intended use or sale are completed, after which such expense is charged to profit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Capitalisation of borrowing costs are suspended during extended periods in which active development is interrupted.

The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the borrowing during the period less any investment income on the temporary investment of the borrowing.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

4.13 Income taxes

Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other taxes, such as withholding taxes, which are payable by a foreign subsidiary to the Group and Company, and real property gains taxes payable on disposal of properties.

Taxes in the statements of comprehensive income comprise current tax and deferred tax.

4.13.1 Current tax

Current tax is the amount of income taxes payable or receivable in respect of the taxable profit or loss for a period.

Current tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that have been enacted or substantively enacted by the end of the reporting period.

4.13.2 Deferred tax

Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying amount of an asset or liability in the statement of financial position and its tax base.

Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit.

A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits that can be utilised. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be realised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profit.





4.13 Income taxes (continued)

4.13.2 Deferred tax (continued)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income tax relate to the same taxation authority on either:-

i) either the same taxable entity; or

ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax will be recognised as income or expense and included in profit or loss for the period

unless the tax relates to items that are credited or charged, in the same or a different period, directly to equity, in which case the deferred tax will be charged or credited directly to equity.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the reporting period.

4.14 Provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where the effect of the time value of money is material, the amount of a provision will be discounted to its present value at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision will be reversed.

Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

4.15 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements.





4.15 Contingent liabilities and contingent assets (continued)

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the acquisition date, irrespective of the extent of any minority interest.

4.16 Employee benefits

4.16.1 Short term employee benefits

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are recognised as an expense in the financial year when employees have rendered their services to the Group.

Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees render services that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation.

4.16.2 Defined contribution plans

The Company and subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and foreign subsidiaries make contributions to their respective countries’ statutory pension schemes. The contributions are recognised as a liability after deducting any contribution already paid and as an expense in the period in which the employees render their services.

4.17 Foreign currencies

4.17.1 Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Ringgit Malaysia, which is also the Company’s functional and presentation currency.

4.17.2 Foreign currency transactions and balances

Transactions in foreign currencies are converted into the functional currency of each Company in the Group at rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the end of the reporting period are translated into the respective functional currencies at rates of exchange ruling at that date unless hedged by forward foreign exchange contracts, in which case the rates specified in such forward contracts are used. All exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included in profit or loss in the period in which they arise. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition, and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined for presentation currency purposes.





4.17 Foreign currencies (continued)

4.17.3 Foreign operations

Financial statements of foreign operations are translated at financial year end exchange rates with respect to the assets and liabilities, and at exchange rates at the dates of the transactions with respect to the statement of comprehensive income. All resulting translation differences are recognised as a separate component of equity.

In the consolidated financial statements, exchange differences arising from the translation of net investment in foreign operations are taken to equity. When a foreign operation is partially disposed off or sold, exchange differences that were recorded in equity are recognised in profit or loss as part of the gain or loss on disposal.

Exchange differences arising on a monetary item that forms part of the net investment of the Company in a foreign operation shall be recognised in profit or loss in the separate financial statements of the Company or the foreign operation, as appropriate. In the consolidated financial statements, such exchange differences shall be recognised initially as a separate component of equity and recognised in profit or loss upon disposal of the net investment.

Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a foreign operation are treated as assets and liabilities of the acquired entity and translated at the exchange rate ruling at the end of the reporting period.

4.18 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates.

Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group, and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for each of the Group’s activities as follows:-

(a) Sales of goods

Revenue from sale of goods is recognised when significant risk and rewards of ownership of the goods has been transferred to the customer and where the Group retains neither continuing managerial involvement over the goods, which coincides with delivery of goods and services and acceptance by customers.

(b) Rental income

Rental income is accounted for on a straight line basis over the lease term of an ongoing lease.

(c) Interest income

Interest income is recognised as it accrues, using the effective interest method.

(d) Dividend income

Dividend income is recognised when the right to receive payment is established.





4.19 Government grants

Government grants are recognised in the financial statements when there is reasonable assurance that:-

(a) the Group will comply with the conditions attached to the grant; and

(b) the grants will be received.

Government grants relating to assets are accounted for as deferred revenue and are recognised as income in profit or loss on a straight line basis over the remaining estimated useful life of the assets.

4.20 Research costs

Research costs are written off to profit or loss in the financial year in which it is incurred.

4.21 Operating segments

During the previous financial year, segment reporting was presented based on business segments and geographical segments of the Group. Business segments provide products or services that are subject to risks and returns that are different from those of other business segments. Geographical segments provide products or services within a particular economic environment that is subject to risks and returns that are different from those components operating in other economic environments.

Following the adoption of FRS 8 Operating Segments during the current financial year, operating segments are defined as components of the Group that:-

(a) engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group);

(b) whose operating results are regularly reviewed by the Group’s chief operating decision maker (i.e. the Group Managing Director) in making decisions about resources to be allocated to the segment and assessing its performance; and

(c) for which discrete financial information is available.

An operating segment may engage in business activities for which it has yet to earn revenues.

The Group reports separately information about each operating segment that meets any of the following quantitative thresholds:-

(a) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is ten (10) per cent or more of the combined revenue, internal and external, of all operating segments.

(b) The absolute amount of its reported profit or loss is ten (10) per cent or more of the greater, in absolute amount of:

(i) the combined reported profit of all operating segments that did not report a loss; and

(ii) the combined reported loss of all operating segments that reported a loss.





4.21 Operating segments (continued)

Its assets are ten (10) percent or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if the management believes that information about the segment would be useful to users of the financial statements.

Total external revenue reported by operating segments shall constitute at least seventy five (75) percent of the Group’s revenue. Operating segments identified as reportable segments in the current financial year in accordance with the quantitative thresholds would result in a restatement of prior period segment data for comparative purposes.

5. ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs

5.1 New FRSs adopted during the current financial year

(a) FRS 8 and the consequential amendments resulting from FRS 8 are mandatory for annual financial periods beginning on or after 1 July 2009.

FRS 8 sets out the requirements for the disclosure of information on the Group’s operating segments,

products and services, the geographical areas in which it operates and its customers. The requirements of this Standard are based on the information about the components of the

Group that management uses to make decisions about operating matters. This Standard requires the identification of operating segments on the basis of internal reports that are regularly reviewed by the Group’s chief operating decision maker in order to allocate resources to the segment and assess its performance, as elaborated in Note 4.21 to the financial statements.

In accordance with the transitional provisions of FRS 8, segment information for prior years that

is reported as comparative information for the initial year of application has been restated to conform to requirements of FRS 8, as disclosed in Note 30 to the financial statements.

(b) FRS 7 Financial Instruments: Disclosures and the consequential amendments resulting from FRS

7 are mandatory for annual financial periods beginning on or after 1 January 2010. FRS 7 replaces the disclosure requirements of the existing FRS 132 Financial Instruments: Disclosure and Presentation.

This Standard applies to all risks arising from a wide array of financial instruments and requires

the disclosure of the significance of financial instruments for the Group’s financial position and performance.

(c) FRS 123 Borrowing Costs and the consequential amendments resulting from FRS 123 are

mandatory for annual periods beginning on or after 1 January 2010. This Standard removes the option of immediately recognising as an expense borrowing costs

that are directly attributable to the acquisition, construction or production of a qualifying asset. However, capitalisation of borrowing costs is not required for assets measured at fair value, and inventories that are manufactured or produced in large quantities on a repetitive basis, even if they take a substantial period of time to get ready for use or sale.

There is no impact upon adoption of this Standard during the financial year.




5. ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs (continued)

5.1 New FRSs adopted during the current financial year (continued)

(d) FRS 139 Financial Instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 are mandatory for annual financial periods beginning on or after 1 January 2010.

This Standard establishes the principles for the recognition and measurement of financial assets

and financial liabilities including circumstances under which hedge accounting is permitted. There is no impact upon adoption of this Standard during the financial year.

(e) Amendments to FRS 2 Share-based Payment: Vesting Conditions and Cancellations are mandatory for annual financial periods beginning on or after 1 January 2010.

These amendments clarify that vesting conditions comprise service conditions and performance

conditions only. Cancellations by parties other than the Group are accounted for in the same manner as cancellations by the Group itself and features of a share-based payment that are non-vesting conditions are included in the grant date fair value of the share-based payment.

There is no impact upon adoption of these amendments during the financial year. (f) Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated

and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate is mandatory for annual periods beginning on or after 1 January 2010.

These amendments allow first-time adopters to use a deemed cost of either fair value or the

carrying amount under previous accounting practice to measure the initial cost of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements. The cost method of accounting for an investment has also been removed pursuant to these amendments.

There is no impact upon adoption of these amendments during the financial year. (g) IC Interpretation 9 Reassessment of Embedded Derivatives is mandatory for annual financial

periods beginning on or after 1 January 2010. This Interpretation prohibits the subsequent reassessment of embedded derivatives unless there

is a change in the terms of the host contract that significantly modifies the cash flows that would otherwise be required by the host contract.

There is no impact upon adoption of this Interpretation during the financial year. (h) IC Interpretation 10 Interim Financial Reporting and Impairment is mandatory for annual financial

periods beginning on or after 1 January 2010. This Interpretation prohibits the reversal of an impairment loss recognised in a previous interim

period in respect of goodwill or an investment in either an equity instrument or a financial asset carried at cost.

There is no impact upon adoption of this Interpretation during the financial year.






(i) IC Interpretation 11 FRS 2 – Group and Treasury Share Transactions is mandatory for annual periods beginning on or after 1 January 2010.

This Interpretation requires share-based payment transactions in which the Company receives

services from employees as consideration for its own equity instruments to be accounted for as equity-settled, regardless of the manner of satisfying the obligations to the employees.

If the Company grants rights to its equity instruments to the employees of its subsidiaries, this

Interpretation requires the Company to recognise the equity reserve for the obligation to deliver the equity instruments when needed whilst the subsidiaries shall recognise the remuneration expense for the services received from employees.

If the subsidiaries grant rights to equity instruments of the Company to its employees, this

Interpretation requires the Company to account for the transaction as cash-settled, regardless of the manner the subsidiaries obtain the equity instruments to satisfy its obligations.

There is no impact upon adoption of this Interpretation during the financial year. The Group would like to draw attention to the withdrawal of this Interpretation for annual periods

beginning on or after 1 January 2011 as disclosed in Note 5.2(1) to the financial statements. (j) IC Interpretation 13 Customer Loyalty Programmes is mandatory for annual periods beginning on

or after 1 January 2010. This Interpretation requires the separation of award credits as a separately identifiable component

of sales transactions involving the award of free or discounted goods or services in the future. The fair value of the consideration received or receivable from the initial sale shall be allocated between the award credits and the other components of the sale.

If the Group supplies the awards itself, the consideration allocated to the award credits shall only be recognised as revenue when the award credits are redeemed. If a third party supplies the awards, the Group shall assess whether it is acting as a principal or agent in the transaction.

If the Group is acting as the principal in the transaction, it shall measure its revenue as the

gross consideration allocated to the award credits. If the Group is acting as an agent, it shall measure its revenue as the net amount retained on its own account, and recognise the net amount as revenue when the third party becomes obliged to supply the awards and entitled to receive the consideration for doing so.

There is no impact upon adoption of this Interpretation during the financial year.

(k) IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction is mandatory for annual periods beginning on or after 1 January 2010.

This Interpretation applies to all post-employment defined benefits and other long-term employee

defined benefits. This Interpretation clarifies that an economic benefit is available if the Group can realise it at some point during the life of the plan or when the plan liabilities are settled, and that it does not depend on how the Group intends to use the surplus.






(k) IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction is mandatory for annual periods beginning on or after 1 January 2010. (continued)

A right to refund is available to the Group in stipulated circumstances and the economic benefit

available shall be measured as the amount of the surplus at the end of the reporting period less any associated costs. If there are no minimum funding requirements, the economic benefit available shall be determined as a reduction in future contributions as the lower of the surplus in the plan and the present value of the future service cost to the Group. If there is a minimum funding requirement for contributions relating to the future accrual of benefits, the economic benefit available shall be determined as a reduction in future contributions at the present value of the estimated future service cost less the estimated minimum funding required in each financial year.

There is no impact upon adoption of this Interpretation during the financial year. (l) FRS 101 Presentation of Financial Statements is mandatory for annual periods beginning on or

after 1 January 2010. FRS 101 sets out the overall requirements for the presentation of financial statements, guidelines

for their structure and minimum requirements for their content.

This Standard introduces the titles ‘statement of financial position’ and ‘statement of cash flows’ to replace the current titles ‘balance sheet’ and ‘cash flow statement’ respectively. A new statement known as the ‘statement of comprehensive income’ is also introduced in this Standard whereby all non-owner changes in equity are required to be presented in either one statement of comprehensive income or in two statements (i.e. a separate income statement and a statement of comprehensive income). Components of comprehensive income are not permitted to be presented in the statement of changes in equity.

This Standard also introduces a new requirement to present a statement of financial position as at the beginning of the earliest comparative period if there are applications of retrospective restatements that are defined in FRS 108, or when there are reclassifications of items in the financial statements.

Additionally, FRS 101 requires the disclosure of reclassification adjustments and income tax relating to each component of other comprehensive income, and the presentation of dividends recognised as distributions to owners together with the related amounts per share in the statement of changes in equity or in the notes to the financial statements.

This Standard introduces a new requirement to disclose information on the objectives, policies and processes for managing capital based on information provided internally to key management personnel as defined in FRS 124 Related Party Disclosures. Additional disclosures are also required for puttable financial instruments classified as equity instruments.

Following the adoption of this Standard, the Group has reflected the new format of presentation

and additional disclosures warranted in the primary financial statements and relevant notes to the financial statements.






(m) Amendments to FRS 139, FRS 7 and IC Interpretation 9 are mandatory for annual periods beginning on or after 1 January 2010.

These amendments permit reclassifications of non-derivative financial assets (other than those

designated at fair value through profit or loss upon initial recognition) out of the fair value through profit or loss category in rare circumstances. Reclassifications from the available-for-sale category to the loans and receivables category are also permitted provided there is intention and ability to hold that financial asset for the foreseeable future. All of these reclassifications shall be subjected to subsequent reassessments of embedded derivatives.

These amendments also clarifies the designation of one-sided risk in eligible hedged items and

streamlines the terms used throughout the Standards in accordance with the changes resulting from FRS 101.

There is no impact upon adoption of these amendments during the financial year.

(n) Amendments to FRS 132 Financial Instruments: Presentation is mandatory for annual periods beginning on or after 1 January 2010.

These amendments require certain puttable financial instruments, and financial instruments that

impose an obligation to deliver to counterparties a pro rata share of the net assets of the entity only on liquidation to be classified as equity.

Puttable financial instruments are defined as financial instruments that give the holder the right

to put the instrument back to the issuer for cash, or another financial asset, or are automatically put back to the issuer upon occurrence of an uncertain future event or the death or retirement of the instrument holder.


(o) Improvements to FRSs (2009) are mandatory for annual periods beginning on or after 1 January 2010.

Amendment to FRS 5 Non-current Assets Held for Sale and Discontinued Operations clarifies that

the disclosure requirements of this Standard specifically apply to non-current assets (or disposal groups) classified as held for sale or discontinued operations. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 8 clarifies the consistency of disclosure requirement for information about

profit or loss, assets and liabilities. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 107 Statement of Cash Flows clarifies the classification of cash flows arising from operating activities and investing activities. Cash payments to manufacture or acquire assets held for rental to others and subsequently held for sale, and the related cash receipts, shall be classified as cash flows from operating activities. Expenditures that result in a recognised asset in the statement of financial position are eligible for classification as cash flows from investing activities. There is no impact upon adoption of this amendment during the financial year.






(o) Improvements to FRSs (2009) are mandatory for annual periods beginning on or after 1 January 2010. (continued)

Amendment to FRS 108 clarifies that only Implementation Guidance issued by the MASB that

are integral parts of FRSs is mandatory. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 110 Events after the Reporting Period clarifies the rationale for not recognising

dividends declared after the reporting date but before the financial statements are authorised for issue. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 116 Property, Plant and Equipment removes the definition pertaining the

applicability of this Standard to property that is being constructed or developed for future use as investment property but do not yet satisfy the definition of ‘investment property’ in FRS 140 Investment Property. This amendment also replaces the term ‘net selling price’ with ‘fair value less costs to sell’, and clarifies that proceeds arising from routine sale of items of property, plant and equipment shall be recognised as revenue in accordance with FRS 118 Revenue rather than FRS 5. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 117 Leases removes the classification of leases of land and of buildings, and instead, requires assessment of classification based on the risks and rewards of the lease itself. The reassessment of land elements of unexpired leases shall be made retrospectively in accordance with FRS 108. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 118 clarifies reference made on the term ‘transaction costs’ to the definition

in FRS 139. There is no impact upon adoption of this amendment during the financial year. Amendment to FRS 119 Employee Benefits clarifies the definitions in this Standard by consistently

applying settlement dates within twelve (12) months in the distinction between short-term employee benefits and other long-term employee benefits. This amendment also provides additional explanations on negative past service cost and curtailments. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 120 Accounting for Government Grants and Disclosure of Government Assistance streamlines the terms used in this Standard in accordance with the new terms used in FRS 101. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 123 clarifies that interest expense calculated using the effective interest rate

method described in FRS 139 qualifies for recognition as borrowing costs. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 127 Consolidated and Separate Financial Statements clarifies that investments

measured at cost shall be accounted for in accordance with FRS 5 when they are held for sale in accordance with FRS 5. There is no impact upon adoption of this amendment during the financial year.






(o) Improvements to FRSs (2009) are mandatory for annual periods beginning on or after 1 January 2010. (continued)

Amendment to FRS 128 Investments in Associates clarifies that investments in associates held

by venture capital organisations, or mutual funds, unit trusts and similar entities shall make disclosures on the nature and extent of any significant restrictions on the ability of associates to transfer funds to the investor in the form of cash dividends, or repayment of loans or advances. This amendment also clarifies that impairment loss recognised in accordance with FRS 136 Impairment of Assets shall not be allocated to any asset, including goodwill, that forms the carrying amount of the investment. Accordingly, any reversal of that impairment loss shall be recognised in accordance with FRS 136. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 129 Financial Reporting in Hyperinflationary Economies streamlines the terms used in this Standard in accordance with the new terms used in FRS 101. This amendment also clarifies that assets and liabilities that are measured at fair value are exempted from the requirement to apply historical cost basis of accounting. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 131 Interests in Joint Ventures clarifies that venturers’ interests in jointly controlled entities held by venture capital organisations, or mutual funds, unit trusts and similar entities shall make disclosures on related capital commitments. This amendment also clarifies that a listing and description of interests in significant joint ventures and the proportion of ownership interest held in jointly controlled entities shall be made. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 136 clarifies the determination of allocation of goodwill to each cash-generating unit whereby each unit shall not be larger than an operating segment as defined in FRS 8 before aggregation. This amendment also requires additional disclosures if the fair value less costs to sell is determined using discounted cash flow projections. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 138 Intangible Assets clarifies the examples provided in this Standard in measuring the fair value of an intangible asset acquired in a business combination. This amendment also removes the statement on the rarity of situations whereby the application of the amortisation method for intangible assets results in a lower amount of accumulated amortisation than under the straight line method. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 140 clarifies that properties that are being constructed or developed for future use as investment property are within the definition of ‘investment property’. This amendment further clarifies that if the fair value of such properties cannot be reliably determinable but it is expected that the fair value would be readily determinable when construction is complete, the properties shall be measured at cost until either its fair value becomes reliably determinable or construction is completed, whichever is earlier. There is no impact upon adoption of this amendment during the financial year.






(p) Amendments to FRS 132 is mandatory for annual periods beginning on or after 1 January 2010 and 1 March 2010 in respect of the transitional provisions in accounting for compound financial instruments.

These amendments remove the transitional provisions in respect of accounting for compound

financial instruments issued before 1 January 2003 pursuant to FRS 1322004 Financial Instruments: Disclosure and Presentation. Such compound financial instruments shall be classified into its liability and equity components when FRS 139 first applies.


(q) Amendments to FRS 139 is mandatory for annual periods beginning on or after 1 January 2010. These amendments remove the scope exemption on contracts for contingent consideration

in a business combination. Accordingly, such contracts shall be recognised and measured in accordance with the requirements of FRS 139.


5.2 New FRSs that have been issued, but not yet effective and not yet adopted

(a) Amendments to FRS 132 is mandatory for annual periods beginning on or after 1 March 2010 in respect of classification of rights issues.

The amendments also clarifies that rights, options or warrants to acquire a fixed number of the

Group’s own equity instruments for a fixed amount of any currency shall be classified as equity instruments rather than financial liabilities if the Group offers the rights, options or warrants pro rata to all of its own existing owners of the same class of its own non-derivative equity instruments.

The Group does not expect any impact on the financial statements arising from the adoption

of these amendments.

(b) FRS 1 First-time Adoption of Financial Reporting Standards is mandatory for annual periods beginning on or after 1 July 2010.

This Standard supersedes the existing FRS 1 and shall be applied when the Group adopts FRSs

for the first time via the explicit and unreserved statement of compliance with FRSs. An opening FRS statement of financial position shall be prepared and presented at the date of transition to FRS, whereby:

(i) All assets and liabilities shall be recognised in accordance with FRSs;(ii) Items of assets and liabilities shall not be recognised if FRSs do not permit such

recognition;(iii) Items recognised in accordance with previous GAAP shall be reclassified in accordance with

FRSs; and(iv) All recognised assets and liabilities shall be measured in accordance with FRSs.

All resulting adjustments shall therefore be recognised directly in retained earnings at the date

of transition to FRSs. The Group does not expect any impact on the financial statements arising from the adoption

of this Standard.





5.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued)

(c) FRS 3 Business Combinations is mandatory for annual periods beginning on or after 1 July 2010. This Standard supersedes the existing FRS 3 and now includes business combinations involving

mutual entities and those achieved by way of contract alone. Any non-controlling interest in an acquiree shall be measured at fair value or as the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The time limit on the adjustment to goodwill due to the arrival of new information on the

crystallisation of deferred tax benefits shall be restricted to the measurement period resulting from the arrival of the new information. Contingent liabilities acquired arising from present obligations shall be recognised, regardless of the probability of outflow of economic resources.

Acquisition-related costs shall be accounted for as expenses in the periods in which the costs are incurred and the services are received. Consideration transferred in a business combination, including contingent consideration, shall be measured and recognised at fair value at acquisition date.

In business combinations achieved in stages, the acquirer shall remeasure its previously held

equity interest at its acquisition date fair value and recognise the resulting gain or loss in profit or loss.


of this Standard. (d) FRS 127 Consolidated and Separate Financial Statements is mandatory for annual periods

beginning on or after 1 July 2010. This Standard supersedes the existing FRS 127 and replaces the current term ‘minority interest’

with a new term ‘non-controlling interest’ which is defined as the equity in a subsidiary that is not attributable, directly or indirectly, to a parent. Accordingly, total comprehensive income shall be attributed to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control

are accounted for as equity transactions. If the Group loses control of a subsidiary, any gains or losses are recognised in profit or loss and any investment retained in the former subsidiary shall be measured at its fair value at the date when control is lost.

The Group expects to reclassify this as non-controlling interests and remeasure the non-

controlling interests prospectively in accordance with the transitional provisions of FRS 127

(e) Amendments to FRSs are mandatory for annual periods beginning on or after 1 July 2010. Amendments to FRS 2 Share-based Payments clarifies that transactions in which the Group

acquired goods as part of the net assets acquired in a business combination or contribution of a business on the formation of a joint venture are excluded from the scope of this Standard. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.






(e) Amendments to FRSs are mandatory for annual periods beginning on or after 1 July 2010. (continued)

Amendments to FRS 5 clarifies that non-current asset classified as held for distribution to owners

acting in their capacity as owners are within the scope of this Standard. The amendment also clarifies that in determining whether a sale is highly probable, the probability of shareholders’ approval, if required in the jurisdiction, shall be considered. In a sale plan involving loss of control of a subsidiary, all assets and liabilities of that subsidiary shall be classified as held for sale, regardless of whether the Group retains a non-controlling interest in its former subsidiary after the sale. Discontinued operations information shall also be presented. Non-current asset classified as held for distribution to owners shall be measured at the lower of its carrying amount and fair value less costs to distribute. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to FRS 138 clarifies that the intention of separating an intangible asset is irrelevant in determining the identifiability of the intangible asset. In a separate acquisition and acquisition as part of a business combination, the price paid by the Group reflects the expectations of the Group of an inflow of economic benefits, even if there is uncertainty about the timing or the amount of the inflow. Accordingly, the probability criterion is always considered to be satisfied for separately acquired intangible assets. The useful life of a reacquired right recognised as an intangible asset in a business combination shall be the remaining contractual period of the contract in which the right was granted, and do not include renewal periods. In the case of a reacquired right in a business combination, if the right is subsequently reissued to a third party, the related carrying amount shall be used in determining the gain or loss on reissue. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to IC Interpretation 9 clarifies that embedded derivatives in contracts acquired in a business combination, combination of entities or business under common controls, or the formation of a joint venture are excluded from this Interpretation. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

(f) IC Interpretation 12 Service Concession Arrangements is mandatory for annual periods beginning on or after 1 July 2010.

This Interpretation applies to operators for public-to-private service concession arrangements,

whereby infrastructure within the scope of this Interpretation shall not be recognised as property, plant and equipment of the operator. The operator shall recognise and measure revenue in accordance with FRS 111 Construction Contracts and FRS 118 for the services performed. The operator shall also account for revenue and costs relating to construction or upgrade services in accordance with FRS 111.

Consideration received or receivable by the operator for the provision of construction or upgrade

services shall be recognised at its fair value. If the consideration consists of an unconditional contractual right to receive cash or another financial asset from the grantor, it shall be classified as a financial asset. Conversely, if the consideration consists of a right to charge users of the public service, it shall be classified as an intangible asset.


of this Interpretation.






(g) IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation is mandatory for annual periods beginning on or after 1 July 2010.

This Interpretation applies to hedges undertaken on foreign currency risk arising from net

investments in foreign operations and the Group wishes to qualify for hedge accounting in accordance with FRS 139.

Hedge accounting is applicable only to the foreign exchange differences arising between the

functional currency of the foreign operation and the functional currency of any parent (immediate, intermediate or ultimate parent) of that foreign operation. An exposure to foreign currency risk arising from a net investment in a foreign operation may qualify for hedge accounting only once in the consolidated financial statements.

Hedging instruments designated in the hedge of a net investment in a foreign operation may

be held by any companies within the Group, as long as the designation, documentation and effectiveness requirements of FRS 139 are met. The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation.

(h) IC Interpretation 17 Distributions of Non-cash Assets to Owners is mandatory for annual periods beginning on or after 1 July 2010.

This Interpretation applies to non-reciprocal distributions of non-cash assets by the Group to its

owners in their capacity as owners, as well as distributions that give owners a choice of receiving either non-cash assets or a cash alternative. This Interpretation also applies to distributions in which all owners of the same class of equity instruments are treated equally.

The liability to pay a dividend shall be recognised when the dividend is appropriately authorised

and is no longer at the discretion of the Group. The liability shall be measured at the fair value of the assets to be distributed. If the Group gives its owners a choice of receiving either a non-cash asset or a cash alternative, the dividend payable shall be estimated by considering the fair value of both alternatives and the associated probability of the owners’ selection.

At the end of each reporting period, the carrying amount of the dividend payable shall be

remeasured and any changes shall be recognised in equity. At the settlement date, any difference between the carrying amounts of the assets distributed and the carrying amount of the dividend payable shall be recognised in profit or loss. The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation.

(i) Amendment to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time

Adopters is mandatory for annual periods beginning on or after 1 January 2011. This amendment permits a first-time adopter of FRSs to apply the exemption of not restating

comparatives for the disclosures required in Amendments to FRS 7 (see Note 5.2 (k)) to the financial statements).


of this amendment.





5.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued) (j) Amendments to FRS 1 Additional Exemptions for First-time Adopters are mandatory for annual

periods beginning on or after 1 January 2011. These amendments permits a first-time adopter of FRSs to apply the exemption of not restating

the carrying amounts of oil and gas assets determined under previous GAAP. The Group does not expect any impact on the financial statements arising from the adoption

of these amendments. (k) Amendments to FRS 7 Improving Disclosures about Financial Instruments are mandatory for

annual periods beginning on or after 1 January 2011. These amendments require enhanced disclosures of fair value of financial instruments based

on the fair value hierarchy, including the disclosure of significant transfers between Level 1 and Level 2 of the fair value hierarchy as well as reconciliations for fair value measurements in Level 3 of the fair value hierarchy.

By virtue of the exemption provided under paragraph 44G of FRS 7, the impact of applying these

amendments on the financial statements upon first adoption of FRS 7 as required by paragraph 30(b) of FRS 108 are not disclosed.

(l) Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions are mandatory for annual periods beginning on or after 1 January 2011.

These amendments clarify the scope and the accounting for group cash-settled share-based

payment transactions in the separate financial statements of the entity receiving the goods or services when that entity has no obligation to settle the share-based payment transaction.

Consequently, IC Interpretation 8 Scope of FRS 2 and IC Interpretation 11 have been superseded

and withdrawn. The Group does not expect any impact on the financial statements arising from the adoption

of these amendments.

(m) IC Interpretation 4 Determining whether an Arrangement contains a Lease is mandatory for annual periods beginning on or after 1 January 2011.

This Interpretation requires the determination of whether an arrangement is, or contains, a

lease based on an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset and whether the arrangement conveys a right to use the asset. This assessment shall be made at the inception of the arrangement and subsequently reassessed if certain condition(s) in the Interpretation is met.

The Group does not expect any impact on the financial statements arising from the adoption of

this Interpretation because there are no arrangements dependent on the use of specific assets in the Group.





5.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued) (n) IC Interpretation 18 Transfers of Assets from Customers is mandatory for annual periods

beginning on or after 1 January 2011. This Interpretation applies to agreements in which an entity receives from a customer an item of

property, plant and equipment that must be used to either connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services. The entity receiving the transferred item is required to assess whether the transferred item meets the definition of an asset set out in the Framework. The credit entry would be accounted for as revenue in accordance with FRS 118.


of this Interpretation because there are no such arrangements in the Group. (o) IC Interpretation 15 Agreements for the Construction of Real Estate is mandatory for annual

periods beginning on or after 1 January 2012. This Interpretation applies to the accounting for revenue and associated expenses by entities

undertaking construction or real estate directly or via subcontractors. Within a single agreement, the Group may contract to deliver goods or services in addition to the construction of real estate. Such an agreement shall therefore, be split into separately identifiable components.

An agreement for the construction of real estate shall be accounted for in accordance with

FRS 111 if the buyer is able to specify the major structural elements of the design of the real estate before construction begins and/or specify major structural changes once construction is in progress. Accordingly, revenue shall be recognised by reference to the stage of completion of the contract.

An agreement for the construction of real estate in which buyers only have limited ability to

influence the design of the real estate or to specify only minor variations to the basic designs is an agreement for the sale of goods in accordance with FRS 118. Accordingly, revenue shall be recognised by reference to the criteria in paragraph 14 of FRS 118 (e.g. transfer of significant risks and rewards, no continuing managerial involvement nor effective control, reliable measurement, etc.).



(p) Improvements to FRSs (2010) are mandatory for annual periods beginning on or after 1 January 2011.

Amendments to FRS 1 clarifies that FRS 108 does not apply to changes in accounting policies

made upon adoption of FRSs until after the first FRS financial statements have been presented. If changes in accounting policies or exemptions in this FRS are used, an explanation of such changes together with updated reconciliations shall be made in each interim financial report. Entities whose operations are subject to rate regulation are permitted the use of previously revalued amounts as deemed cost. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.






(p) Improvements to FRSs (2010) are mandatory for annual periods beginning on or after 1 January 2011. (continued)

Amendments to FRS 3 clarifies that for each business combination, the acquirer shall measure at the acquisition date non-controlling interests that consists of the present ownership interests and entitle holders to a proportionate share of the entity’s net assets in the event of liquidation. Un-replaced and voluntarily replaced share-based payment transactions shall be measured using the market-based measurement method in accordance with FRS 2 at the acquisition date. The Group does not expect any impact on the consolidated financial statements arising from the adoption of these amendments.

Amendments to FRS 7 clarifies that quantitative disclosures of risk concentrations are required

if the disclosures made in other parts of the financial statements are not readily apparent. The disclosure on maximum exposure to credit risk is not required for financial instruments whose carrying amount best represents the maximum exposure to credit risk. The Group expects to improve the disclosures on maximum exposure to credit risk upon adoption of these amendments.

Amendments to FRS 101 clarify that a statement of changes in equity shall be presented as part of a complete set of financial statements. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to FRS 121 The Effects of Changes in Foreign Exchange Rates clarify that the accounting treatment for cumulative foreign exchange differences in other comprehensive income for the disposal or partial disposal of a foreign operation shall be applied prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to FRS 128 clarify that the accounting treatment for the cessation of significant

influence over an associate shall be applied prospectively. The Group does not expect any impact on the consolidated financial statements arising from the adoption of these amendments.

Amendments to FRS 131 clarify that the accounting treatment for the cessation of joint control

over an entity shall be applied prospectively. The Group does not expect any impact on the consolidated financial statements arising from the adoption of these amendments.

Amendments to FRS 132 clarify that contingent consideration from a business combination that occurred before the effective date of the revised FRS 3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to FRS 134 clarify that updated information on significant events and transactions since the end of the last annual reporting period shall be included in the Group’s interim financial report. Although the Group does not expect any impact on the financial statements rising from the adoption of these amendments, it is expected that additional disclosures would be made in the quarterly interim financial statements of the Group.






(p) Improvements to FRSs (2010) are mandatory for annual periods beginning on or after 1 January 2011. (continued)

Amendments to FRS 139 clarify that contingent consideration from a business combination that occurred before the effective date of the revised FRS 3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to IC Interpretation 13 clarify that the fair value of award credits takes into account, amongst others, the amount of the discounts or incentives that would otherwise be offered to customers who have not earned award credits from an initial sale. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

(q) Amendments to IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction are mandatory for annual periods beginning on or after 1 July 2011.

These amendments clarify that if there is a minimum funding requirement for contributions

relating to future service, the economic benefit available as a reduction in future contributions shall include any amount that reduces future minimum funding requirement contributions for future service because of the prepayment made.


of these amendments. (r) IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments is mandatory for

annual periods beginning on or after 1 July 2011. This Interpretation applies to situations when equity instruments are issued to a creditor

to extinguish all or part of a recognised financial liability. Such equity instruments shall be measured at fair value, and the difference between the carrying amount of the financial liability extinguished and the consideration paid shall be recognised in profit or loss.



(s) FRS 124 Related Party Disclosures and the consequential amendments to FRS 124 are mandatory for annual periods beginning on or after 1 January 2012.

This revised Standard simplifies the definition of a related party and eliminates certain

inconsistencies within the superseded version. In addition to this, transactions and balances with government-related entities are broadly exempted from the disclosure requirements of the Standard.


of this Standard.




6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

6.1 Critical judgements made in applying accounting policies

The following are the judgements made by management in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements.

(a) Classification between investment properties and property, plant and equipment

The Group has developed certain criteria based on FRS 140 in making judgement whether a property qualifies as an investment property. Investment property is a property held to earn rentals or for capital appreciation or for both.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group would account for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property.

(b) Contingent liabilities

The determination of treatment of contingent liabilities is based on management’s view of the expected outcome of the contingencies for matters in the ordinary course of the business.

6.2 Key sources of estimation uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(a) Depreciation of property, plant and equipment

The cost of property, plant and equipment is depreciated on a straight-line basis over the assets’ useful lives. Management estimates the useful lives of these assets to be three (3) years to fifty (50) years. Changes in the expected level of usage and technological developments could impact the economic useful lives or principal annual rates of depreciation and the residual values of these assets and therefore, future depreciation charges could be revised.

(b) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the tax losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.




6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

6.2 Key sources of estimation uncertainty (continued)

(c) Impairment of receivables

The Group makes impairment of receivables based on an assessment of the recoverability of receivables. Impairment is applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses historical bad debt, customer concentration, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of impairment of receivables. Where expectations differ from the original estimates, the differences will impact the carrying value of receivables.

(d) Fair values of borrowings

The fair values of borrowings are estimated by discounting future contractual cash flows at the current market interest rates available to the Group for similar financial instruments. It is assumed that the effective interest rates approximate the current market interest rates available to the Group based on its size and its business risk.

7. PROPERTY, PLANT AND EQUIPMENT

Depreciation charge Group Balance for the Balance 2010 as at 1 Written financial Translation Reclassi- as at 31 January Additions Disposals off year adjustments fication December Carrying amount RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Freehold land 1,716 - (1,716) - - - - - Buildings 929 - (395) - (23) - - 511 Computer equipment and software 430 221 (1) (5) (151) (3) - 491 Plant and machineries 1,265 405 - (13) (256) - - 1,401 Motor vehicles 1,393 2,460 (34) (409) (689) - - 2,721 Furniture and fittings 5,448 2,620 - (421) (2,299) (17) (9) 5,322 Office equipment 1,336 436 - (92) (565) (12) (17) 1,086 Renovation and electrical installations 2,609 1,944 - (178) (1,118) - (19) 3,238 Tools, equipment and moulds 214 124 - (16) (102) - 45 265 15,340 8,210 (2,146) (1,134) (5,203) (32) - 15,035




7. PROPERTY, PLANT AND EQUIPMENT (continued)

<------ At 31 December 2010------- >

Accumulated Carrying Cost depreciation amount RM’000 RM’000 RM’000 Buildings 594 (83) 511 Computer equipment and software 1,355 (864) 491 Plant and machineries 5,018 (3,617) 1,401 Motor vehicles 4,300 (1,579) 2,721 Furniture and fittings 12,123 (6,801) 5,322 Office equipment 3,240 (2,154) 1,086 Renovation and electrical installations 6,362 (3,124) 3,238 Tools, equipment and moulds 684 (419) 265 33,676 (18,641) 15,035

Depreciation charge Transfer to Group Balance for the investment Balance 2009 as at 1 Written financial Translation properties Reclassi- as at 31 January Additions Disposal off year adjustments (Note 8) fication December Carrying amount RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Freehold land 1,716 - - - - - - - 1,716 Buildings 1,477 - - - (23) - (525) - 929 Computer equipment and software 452 123 - - (145) - - - 430 Plant and machineries 1,288 288 - - (311) - - - 1,265 Motor vehicles 1,552 410 - (6) (563) - - - 1,393 Furniture and fittings 7,044 1,152 (79) (475) (2,190) (4) - - 5,448 Office equipment 1,825 217 - (44) (588) (6) - (68) 1,336 Renovation and electrical installations 2,937 624 - (31) (985) - - 64 2,609 Tools, equipment and moulds 262 38 - (3) (87) - - 4 214 18,553 2,852 (79) (559) (4,892) (10) (525) - 15,340





<------ At 31 December 2009------- >

Accumulated Carrying Cost depreciation amount RM’000 RM’000 RM’000

Freehold land 1,716 - 1,716 Buildings 1,318 (389) 929 Computer equipment and software 1,167 (737) 430 Plant and machineries 4,984 (3,719) 1,265 Motor vehicles 3,967 (2,574) 1,393 Furniture and fittings 10,939 (5,491) 5,448 Office equipment 3,173 (1,837) 1,336 Renovation and electrical installations 5,363 (2,754) 2,609 Tools, equipment and moulds 746 (532) 214 33,373 (18,033) 15,340

(a) During the financial year, the Group made the following cash payments to purchase property, plant and equipment:-

Group

2010 2009 RM’000 RM’000 Purchase of property, plant and equipment 8,210 2,852 Financed by hire-purchase arrangements (3,472) (737) Outstanding balances included in other payables (200) - Cash payments on purchase of property, plant and equipment 4,538 2,115

As at 31 December 2010, the net carrying amount of Group’s property, plant and equipment held under hire-purchase arrangements are as follows:-

Group

2010 2009 RM’000 RM’000 Motor vehicles 1,885 487 Furniture and fittings 1,355 504 Office equipment 219 19 Renovation and electrical installations 879 312 4,338 1,322





(b) The net carrying amount of the property, plant and equipment which have been charged to licensed financial institutions for credit facilities granted to the Group (Note 17 and Note 19 to the financial statements) are as follows:-

Group

2010 2009 RM’000 RM’000

Freehold land - 880 Buildings 511 687 511 1,567

(c) During the financial year, the land and buildings amounted to RM 2,110,526 were disposed of to a company in which certain Directors of the Company have interests for a total consideration of RM 3,050,000.

8. INVESTMENT PROPERTIES Balance Balance Group as at as at 2010 1 January Addition Disposal 31 December RM’000 RM’000 RM’000 RM’000 Carrying amount Freehold land and factory buildings 1,468 - (1,468) - Retail kiosk 324 - - 324 1,792 - (1,468) 324

Transfer from property, Group Balance plant and Balance 2009 as at equipment Fair value as at 1 January (Note 7) adjustment 31 December RM’000 RM’000 RM’000 RM’000 Carrying amount Freehold land and factory buildings 1,498 - (30) 1,468 Retail kiosk - 525 (201) 324 1,498 525 (231) 1,792




8. INVESTMENT PROPERTIES (continued)

Investment properties with an aggregate carrying amount of RM 324,000 (2009: RM 1,081,238) are charged to licensed financial institutions for banking facilities granted to the Group (Note 17 and Note 19 to the financial statements).

During the year, investment properties amounted to RM 1,468,238 were disposed of to a company in which certain Directors of the Company have interests for a total consideration of RM 1,550,000.

The fair value of the investment property of the Group as at 31 December 2010 were estimated by the Directors based on recent prices of similar properties in the same location.

Direct operating expense arising from investment properties generating rental income during the financial year are as follows:-

Group

2010 2009 RM’000 RM’000 Quit rent and assessment 6 8

9. INVESTMENTS IN SUBSIDIARIES

Company

2010 2009 RM’000 RM’000 Unquoted shares - at cost 34,067 28,867 Less: Impairment loss (122) - 33,945 28,867 Equity loan to a subsidiary 30,000 - 63,945 28,867

Equity loan to a subsidiary is unsecured, interest-free and no fixed term of repayment.




9. INVESTMENTS IN SUBSIDIARIES (continued)

The details of the subsidiaries are as follows:-

Effective equity Country of interest Name of company incorporation 2010 2009 Principal activities Direct subsidiaries Gemas Precious Metals Malaysia 61% 61% Design and manufacturing Industries Sdn. Bhd. of jewellery, including gold and silver chains and refining of gold and jewellery Tomei Marketing Sdn. Bhd. Malaysia 100% 100% Distribution of jewellery Tomei Gold & Jewellery Malaysia 100% 100% Design and manufacturing Manufacturing Sdn. Bhd. (“TGJM”) of jewellery Tomei Retail Sdn. Bhd. Malaysia 100% 100% Investment holding and retailing of jewellery Yi Xing Goldsmith Sdn. Bhd. Malaysia 100% 100% Design and manufacturing of jewellery Tomei TI Sdn. Bhd. Malaysia 70% 70% Manufacturing and retailing of corporate souvenir and premium gift Wealthy Concept Limited (“WC”)@ Hong Kong 100% 100% Investment holding

Tomei International Limited@ Hong Kong 100% 100% Inactive Subsidiary of TGJM Lumiere 2006 Limited@ Hong Kong 100% 100% Dormant Subsidiary of WC

Wealthy Concept Jewellery People’s Republic 100% 100% Distribution and retailing of (Shenzhen) Company of China jewellery Limited@ Subsidiaries of TR Cindai Permata Sdn. Bhd.# Malaysia 100% 100% Rental of motor vehicles to companies of the Group J & G Collections Sdn. Bhd. Malaysia 100% 100% Distribution of jewellery My Diamond Sdn. Bhd. Malaysia 100% 100% Retailing of jewellery





Effective equity Country of interest Name of company incorporation 2010 2009 Principal activities

Subsidiaries of TR (continued)

TH Jewelry Sdn. Bhd. Malaysia 100% 100% Retailing of jewellery

Tomei Gold & Jewellery Holdings (M) Malaysia 100% 100% Investment holding and Sdn. Bhd. (“TGJH”) distribution of jewellery

Le Lumiere Sdn. Bhd. Malaysia 100% 100% Retailing of jewellery

Tomei Gold & Jewellery (MJ) Malaysia 100% 100% Investment holding Sdn. Bhd. (“TGJ (MJ)”)#

Tomei Worldwide Franchise Malaysia 100% 100% Inactive Sdn. Bhd.

Tomei Gold & Jewellery (JB) Malaysia 100% 100% Dormant Sdn. Bhd.#

Tomei Gold & Jewellery (P.T.) Malaysia 100% 100% Dormant Sdn. Bhd.#

Tomei Gold & Jewellery (RW) Malaysia 100% 100% Dormant Sdn. Bhd.#

Tomei Gold & Jewellery (SK) Malaysia 100% 100% Dormant Sdn. Bhd.# Tomei Gold & Jewellery (WM) Malaysia 100% 100% Dormant Sdn. Bhd.# Tomei Gold & Jewellery Corp. (K.L) Malaysia - 100% Dormant Sdn. Bhd.#^

Sinar Raya Trading Sdn. Bhd.^ Malaysia - 100% Dormant Tomei Gold & Jewellery (B) Brunei - 99.99% Inactive Sdn. Bhd.* Darussalam Subsidiaries of TGJH

Tomei Gold & Jewellery (M.V.) Malaysia 100% 100% Retailing of jewellery Sdn. Bhd.

Tomei (Vietnam) Company Socialist Republic 100% 100% Manufacturing and retailing Limited@ of Vietnam of jewellery





Effective equity Country of interest Name of company incorporation 2010 2009 Principal activities Subsidiaries of TGJH (continued) Tomei Gold & Jewellery (B.U.) Malaysia 100% 100% Dormant Sdn. Bhd.# Tomei Gold & Jewellery (K.P.) Malaysia 100% 100% Dormant Sdn. Bhd.#

Tomei Gold & Jewellery (Klang) Malaysia 100% 100% Dormant Sdn. Bhd.# Tomei Gold & Jewellery (MK) Malaysia 100% 100% Dormant Sdn. Bhd.# Tomei Gold & Jewellery (TS) Malaysia 100% 100% Dormant Sdn. Bhd.# Tomei Gold & Jewellery Corp. Malaysia 100% 100% Dormant (KLCC) Sdn. Bhd.# Tomei Gold & Jewellery Corp. Malaysia 100% 100% Dormant (Sunway) Sdn. Bhd.# Subsidiaries of TGJ (MJ) Tomei Gold & Jewellery (Subang) Malaysia 100% 100% Property investment Sdn. Bhd.#

Tomei Gold & Jewellery (IOI) Malaysia 100% 100% Dormant Sdn. Bhd.# Tomei Gold & Jewellery (S.A.) Malaysia 100% 100% Dormant Sdn. Bhd.#

@ Subsidiaries audited by BDO Member Firms.

* The financial statements of this subsidiary is not required to be consolidated for the current financial year as this subsidiary has completed its members voluntary winding up process in accordance with the laws and regulations prevailing in Brunei Darussalam on 22 December 2010.

# These subsidiaries had ceased their retail operations on 1 January 2010, due to the internal restructuring exercise undertaken by the Group and approved by the Board of Directors to transfer all their outlets to their related company, Tomei Gold & Jewellery (M.V.) Sdn. Bhd..

^ These subsidiaries had been disposed to a company in which certain Directors of the Company have interests as disclosed in Note 36.




10. DEFERRED TAX

(a) The deferred tax assets and liabilities are made up of the following:-

Group

2010 2009 RM’000 RM’000 Balance as at 1 January (33) 125 Recognised in profit or loss (Note 25) - current year 215 138 - prior years 25 (296) Balance as at 31 December 207 (33) Presented after appropriate offsetting:- Deferred tax assets, net (408) (479) Deferred tax liabilities, net 615 446

(b) The movements of deferred tax assets and liabilities during the financial year prior to offsetting are as follows:-

Group

2010 2009 RM’000 RM’000

Deferred tax assets Balance as at 1 January 838 919 Recognised in profit or loss Unabsorbed capital allowances - (64) Unused tax losses 133 (132) Other deductible temporary differences 54 115 (187) (81) Deferred tax assets as at 31 December, prior to offsetting 651 838 Set-off of tax (243) (359) Deferred tax assets as at 31 December, net 408 479




10. DEFERRED TAX (continued)

(b) The movements of deferred tax assets and liabilities during the financial year prior to offsetting are as follows (continued):-

Group

2010 2009 RM’000 RM’000

Deferred tax liabilities Balance as at 1 January 805 1,044 Recognised in profit or loss Property, plant and equipment (160) (450) Other taxable temporary differences 213 211 53 (239)

Deferred tax liabilities as at 31 December, prior to offsetting 858 805 Set-off of tax (243) (359) Deferred tax liabilities as at 31 December, net 615 446

(c) The components of deferred tax assets and liabilities as at the end of the financial year comprise tax effect of:-

Group

2010 2009 RM’000 RM’000 Deferred tax assets Unused tax losses 473 668 Other deductible temporary differences 178 170

651 838

Deferred tax liabilities Property, plant and equipment 438 598 Other taxable temporary differences 420 207 858 805




10. DEFERRED TAX (continued)

(d) The amount of temporary differences for which no deferred tax assets have been recognised in the statement of financial position are as follows:-

Group

2010 2009 RM’000 RM’000 Unused tax losses 1,392 1,746 Unabsorbed capital allowances 457 404 1,849 2,150

Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that taxable profits of the subsidiaries will be available against which the deductible temporary differences can be utilised.

The deductible temporary differences do not expire under current tax legislation.

11. INVENTORIES

Group

2010 2009 RM’000 RM’000

At cost Gold ornaments 117,426 98,599 Jewellery 133,498 115,063 Silver 1,498 1,406 Consumables 1,291 1,352 253,713 216,420 Cost of inventories of the Group recognised as an expense during the financial year amounted to RM

231,637,967 (2009: RM 160,692,068).




12. DERIVATIVE ASSET

Contract/ Notional amount Assets Liabilities Group RM’000 RM’000 RM’000 2010 Futures gold contract 435 11 -

Gold contracts are commitments to either purchase or sell gold at a future date for a specified price and are generally settled in cash but may be settled through delivery of gold.

During the financial year, the Group recognised total losses of RM 6,610 arising from fair value changes of derivative asset. The fair value changes are attributable to changes in futures gold contract settlement price. The methods and assumptions applied in determining the fair value of derivative is disclosed in Note 33.

13. TRADE AND OTHER RECEIVABLES

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Trade receivables Trade receivables 9,645 8,671 - - Less: Impairment loss (460) (665) - - 9,185 8,006 - - Other receivables Amounts owing by subsidiaries - - 54,010 91,476 Other receivables 6,143 1,779 - - Deposits 5,309 6,749 2 2 Prepayments 1,630 1,448 37 8 13,082 9,976 54,049 91,486 22,267 17,982 54,049 91,486

(a) Trade receivables are non-interest bearing and the normal trade credit terms granted by the Group range from 7 to 120 days from date of invoice. They are recognised at their original invoice amounts which represent their fair values on initial recognition.




13. TRADE AND OTHER RECEIVABLES (continued)

(b) Amounts owing by subsidiaries represent advances, which are unsecured, interest free and payable upon demand in cash and cash equivalents.

During the financial year, the Company had reduced its issuance of Islamic Commercial Paper/ Islamic Medium Term Note (“ICP/IMTN”) from RM 50 million to RM 20 million. Most of the proceeds are raised on behalf of its subsidiaries. Such share of profits by the financial institution on ICP/IMTN ranged from 5.90% to 7.50% (2009: 5.80% to 7.50%) per annum are therefore passed down to the respective subsidiaries.

(c) Included in Group’s other receivables is an amounts of RM 4,600,000 (2009: Nil) owing from a company in which certain Directors of the Company have interests in respect of sales proceeds from the disposal of freehold lands, buildings and investment properties.

(d) The currency exposure profile of receivables are as follows:-

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000 Ringgit Malaysia 18,453 14,592 54,049 91,115 Chinese Renminbi 2,676 1,178 - - Euro 379 371 - - Hong Kong Dollar 6 843 - 371 Singapore Dollar 88 33 - - UAE Dirham - 177 - - US Dollar 434 387 - - Vietnamese Dong 231 401 - - 22,267 17,982 54,049 91,486

(e) The ageing analysis of trade receivables of the Group are as follows:-

Group

2010 2009 RM’000 RM’000 Neither past due nor impaired 8,385 6,347 Past due, not impaired 91 to 120 days 326 670 121 to 150 days 180 269 More than 151 days 294 720 800 1,659 Past due and impaired 460 665 9,645 8,671




13. TRADE AND OTHER RECEIVABLES (continued)

(e) The ageing analysis of trade receivables of the Group are as follows:- (continued) Receivables that neither past due but nor impaired

Trade receivables that are neither past due nor impaired are creditworthy trade receivables with good payment records with the Group. Trade receivables of the Group of more than 83% (2009: 80%) respectively arise from customers with more than two (2) years of experience with the Group and have never defaulted.

None of the trade receivables of the Group that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM 800,000 (2009: RM 1,659,000) that are past due at the end of the reporting period but not impaired. Trade receivables of the Group that are past due but not impaired are unsecured in nature. The Group closely monitors the financial standing of these counter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk.

Receivables that are past due and impaired

Trade receivables of the Group that are past due and impaired at the end of the reporting period had been individually impaired.

The reconciliation of movement in the impairment loss are as follows:-

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000 At 1 January 665 37 - - Charge for the financial year (Note 24) 269 658 - - Written off (345) (7) - - Reversal of impairment loss (Note 24) (129) (23) - - At 31 December 460 665 - -

Trade receivables that are individually determined to be impaired at the end of the reporting period relate to those trade receivables that exhibit significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

14. CASH AND CASH EQUIVALENTS

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Fixed deposits with licensed banks 5,436 5,431 5,189 5,188 Cash and bank balances 3,573 2,861 106 96 9,009 8,292 5,295 5,284




14. CASH AND CASH EQUIVALENTS (continued)

(a) The fixed deposits as at 31 December 2010 have maturity period ranging from 1 to 6 months (2009: 1 to 6 months). Included in the fixed deposits of the Group and the Company as at 31 December 2010 is an amount of RM 5,188,500 (2009: RM 5,187,500) representing 50% of the redemption amount of IMTN which is due on 3 February 2011, and semi-annual profit payment of IMTN. The fixed deposits are held in the designated accounts and operated by the Security Agent.

(b) Information on financial risks of cash and cash equivalents are disclosed in Note 34 to the financial statements.

(c) The currency exposure profile of cash and cash equivalents are as follows:-

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000 Ringgit Malaysia 8,183 7,657 5,295 5,284 Chinese Renmimbi 416 199 - - US Dollar 46 179 - - Other foreign currencies 364 257 - - 9,009 8,292 5,295 5,284

(d) For the purpose of the statements of cash flows, cash and cash equivalents comprise the following as at the end of the reporting period:-

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000 Fixed deposits with licensed banks 5,436 5,431 5,189 5,188 Cash and bank balances 3,573 2,861 106 96 9,009 8,292 5,295 5,284 Less: Bank overdrafts included in borrowings (Note 17) (26,634) (15,198) - - Placement of fixed deposit as permitted investment (5,189) (5,188) (5,189) (5,188) (22,814) (12,094) 106 96




15. SHARE CAPITAL

Group and Company

2010 2009

Number Number of shares of shares (’000) RM’000 (’000) RM’000

Ordinary shares of RM 0.50 each:- Authorised 200,000 100,000 200,000 100,000

Issued and fully paid:- Balance as at 1 January 126,000 63,000 126,000 63,000 Issued for cash pursuant to placement to selected investors 12,600 6,300 - - 138,600 69,300 126,000 63,000

During the financial year, the paid-up share capital of the Company increased from RM 63,000,000 to RM 69,300,000 by way of issuance of 12,600,000 new ordinary shares of RM 0.50 each in the Company under a private placement to selected investors for cash.

The owners of the parent are entitled to receive dividends as and when declared by the Company and are entitled to one vote per share at meetings of the Company. All ordinary shares rank pari passu with regard to the Company’s residual assets.

16. RESERVES

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Non-distributable:- Share premium 4,036 4,078 4,036 4,078 Exchange translation reserve (729) (212) - - Distributable:- Retained earnings 77,214 59,991 9,697 7,517 80,521 63,857 13,733 11,595




16. RESERVES (continued)

(a) Exchange translation reserve

The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

(b) Retained earnings

Effective 1 January 2008, the Company is given the option to make an irrevocable election to move to a single tier system or continue to use its tax credit under Section 108 of the Income Tax Act, 1967 for the purpose of dividend distribution until the tax credit is fully utilised or latest, by 31 December 2013.

The Company has made the election to move to the single tier system and as a result, there are no longer any restrictions on the Company to frank the payment of dividends out of its entire retained earnings as at the end of the reporting period.

(c) Supplementary information on realised and unrealised profits or losses

The retained earnings as at the end of the reporting period may be analysed as follows:-

2010

Group Company RM’000 RM’000

Total retained profits of Tomei Consolidated Berhad and its subsidiaries: - Realised 91,130 9,602 - Unrealised 1,402 95 92,532 9,697 Less: Consolidation adjustments (15,318) - Total Group/Company retained earnings as per Consolidated/Company accounts 77,214 9,697




17. BORROWINGS

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Current liabilities Secured Bank overdrafts 234 586 - - Bankers’ acceptances 10,715 1,000 - - Hire-purchase creditors (Note 18) 1,314 462 - - Term loans (Note 19) 88 307 - - 12,351 2,355 - - Unsecured Bank overdrafts 26,400 14,612 - - Bankers’ acceptances 29,832 29,090 - - Factoring 523 190 - - Gold loans - 4,566 - - Term loan (Note 19) 5,368 - 3,990 - Islamic Commercial Paper (“ICP”) 10,000 30,000 10,000 30,000 Islamic Medium Term Note (“IMTN”) 10,000 10,000 10,000 10,000 82,123 88,458 23,990 40,000 94,474 90,813 23,990 40,000 Non-current liabilities Secured Hire-purchase creditors (Note 18) 2,369 517 - - Term loan (Note 19) - 324 - - 2,369 841 - - Unsecured Term loan (Note 19) 20,059 - 16,010 - IMTN - 10,000 - 10,000 22,428 10,841 16,010 10,000 Total borrowings Bank overdrafts 26,634 15,198 - - Bankers’ acceptances 40,547 30,090 - - Factoring 523 190 - - Gold loans - 4,566 - - Hire-purchase creditors (Note 18) 3,683 979 - - Term loans (Note 19) 25,515 631 20,000 - ICP 10,000 30,000 10,000 30,000 IMTN 10,000 20,000 10,000 20,000 116,902 101,654 40,000 50,000




17. BORROWINGS (continued)

Group

The bank overdrafts and bankers’ acceptances are secured by a first legal charge over certain land and buildings and investment properties of the Group which had been disposed to a company in which certain Directors of the Company have interests on 27 December 2010 (Note 7 and Note 8 to the financial statements) and the title of the properties is in the process of being transferred to the purchaser.

The bank overdrafts, bankers’ acceptances, factoring and gold loans are guaranteed by the Company and subsidiaries.

ICP has maturity period of six (6) months from September 2010 and can be rollovered for a period of not more than twelve (12) months for each rollover. IMTN has maturity period of three (3) years from February 2008. Both ICP and IMTN had been fully repaid on 18 March 2011 and 2 February 2011 respectively and subsequently ICP/IMTN programme was cancelled on 22 March 2011.

Group and Company

Significant covenants

ICP/IMTN

The ICP/IMTN borrowings are subject to the following significant covenants:-

(i) not to permit a Debt to Equity Ratio of the Group to exceed one point two (1.2) time;(ii) not to create or permit to exist any encumbrance, mortgage, charge, pledge or lien in excess of five

percent (5%) of the Group’s net tangible assets;(iii) not to dispose of any assets in excess of five percent (5%) of the Group’s net tangible assets;(iv) not to add, delete, amend or substitute the Memorandum of Association of the Company in a manner

inconsistent with the provisions of the Trust Deed to the ICP/IMTN;(v) not to reduce the authorised or issued share capital of the Company; (vi) not to obtain or permit to exist any loans or advances from its Directors or shareholders unless they

were subordinated to the ICP/IMTN; and(vii) not to make any payments to its Directors or shareholders in connections with any loans or advances

from its Directors or shareholders.

Other borrowings

Other borrowings are subject to the following significant covenants:-

(i) not to permit a Debt to Equity Ratio of the Group to exceed one point two (1.2) time;(ii) not to permit total bank borrowings to exceed one point five (1.5) time of the Group’s net tangible

assets; (iii) not to permit a Gearing Ratio of the Group to exceed one point five (1.5) time;(iv) not to permit to declare dividend in excess of the Group’s net profit after tax; and (v) not to permit debt servicing coverage ratio less than two point five (2.5) times.

Information of financial risk of borrowings is disclosed in Note 34 to the financial statements.




18. HIRE-PURCHASE CREDITORS

Group

2010 2009 RM’000 RM’000

Minimum hire-purchase payments:- - not later than one year 1,533 515 - later than one year and not later than five years 2,555 547 Total minimum hire-purchase payments 4,088 1,062 Less: Future interest charges (405) (83) Present value of hire-purchase liabilities 3,683 979 Repayable as follows:- Current liabilities:- - not later than one year 1,314 462 Non-current liabilities:- - later than one year and not later than five years 2,369 517 3,683 979

19. TERM LOANS

Group

2010 2009 RM’000 RM’000 Term loan I repayable by 120 equal monthly instalments of RM 2,509 each commencing September 2001 - 52 Term loan II repayable by 84 equal monthly instalments of RM 5,334 each commencing 1 April 2003 - 16 Term loan VI repayable by 120 equal monthly instalments of RM 4,909 each commencing 25 November 2004 - 249

Term loan III repayable by 120 equal monthly instalments of RM 2,846 each commencing September 2001 7 39 Term loan IV repayable by 84 equal monthly instalments of RM 7,337 each commencing 12 May 2004 35 119 Term loan V repayable by 84 equal monthly instalments of RM 9,486 each commencing 12 May 2004 46 156




19. TERM LOANS (continued) Group

2010 2009 RM’000 RM’000

Term loan VII repayable by 48 equal monthly instalments of RM 70,700 each commencing 10 June 2010 2,683 - Term loan VIII repayable by 48 equal monthly instalments of RM 70,700 each commencing 14 June 2010 2,744 - Term loan IX repayable by 15 equal quarterly instalments of RM 1,330,000 each commencing 10 October 2010 20,000 - 25,515 631

Repayable as follows:- - within one year 5,456 307 - later than one year and not later than five years 20,059 324 25,515 631

The term loan are secured by a first legal charge over a building of the Group and certain freehold land, buildings and investment properties, which had been disposed to a company in which certain Directors of the Company have interests on 27 December 2010 (Note 7 and Note 8 to the financial statements).

20. DEFERRED INCOME

Group

2010 2009 RM’000 RM’000 Balance as at 1 January 9 12 Recognised as income during the financial year (3) (3) Balance as at 31 December 6 9

A subsidiary received an E-Manufacturing - ERP grant of RM 27,246 from the Small and Medium Industries Development Corporation (SMIDEC) to fund the purchase of information technology based equipment which is used in the manufacturing of silver and gold jewellery.




21. TRADE AND OTHER PAYABLES Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Trade payables Trade payables 19,414 18,967 - - Other payables Amounts owing to subsidiaries - - 428 1,420 Other payables 1,757 1,563 - - Deposits received 545 360 - - Accruals 8,942 6,768 1,888 1,342 11,244 8,691 2,316 2,762 30,658 27,658 2,316 2,762

(a) Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 180 days from date of invoice.

(b) Amounts owing to subsidiaries represent payments made on behalf, which are unsecured, interest free and payable upon demand in cash and cash equivalents.

(c) Information on financial risks of trade payables is disclosed in Note 34 to the financial statements.

(d) The currency exposure profile of payables are as follows:-

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000 Ringgit Malaysia 13,360 10,992 2,233 2,762 Chinese Renminbi 1,249 576 - - Euro 8 148 - - Hong Kong Dollar 1,880 3,181 83 - Singapore Dollar - 70 - - US Dollar 14,131 12,638 - - Vietnamese Dong 30 53 - - 30,658 27,658 2,316 2,762




22. REVENUE Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000 Sales of goods:- Gold ornaments and jewellery 335,740 292,218 - - Gold bar 19,101 6,776 - - Silver 1,445 1,896 - - Gross dividend income from subsidiaries - - 12,000 4,692 356,286 300,890 12,000 4,692

23. OTHER INCOME

Group Company

2010 2009 2010 2009 Note RM’000 RM’000 RM’000 RM’000 Deposits forfeited 57 93 - - Discount received - 4 - - Gain on disposal of investment properties 82 - - - Fair value gain on derivative asset 12 11 - - - Gain on disposal of property, plant and equipment 1,257 15 - - Gain on foreign exchange - realised 2,167 544 - 64 - unrealised 1,811 892 95 - Gain on gold price fluctuation - realised 3 79 - - - unrealised - 14 - - Interest income 67 11 61 7 Proceeds from insurance claimed 650 156 - - Rental income 155 190 - - Reversal of impairment loss on trade and other receivables 13 129 23 - - Others 62 30 - - 6,451 2,051 156 71




24. PROFIT BEFORE TAX

Group Company

2010 2009 2010 2009 Note RM’000 RM’000 RM’000 RM’000 Profit before tax is arrived at after charging:- Auditors’ remuneration - statutory audit - current year 222 239 32 28 - under provision in prior years 1 - - - - non-statutory audit 20 14 7 7 Depreciation of property, plant and equipment 7 5,203 4,892 - - Directors’ remuneration - fee 292 264 292 264 - other emoluments 2,322 2,362 2,009 2,040 Impairment loss on: - investments in subsidiaries 9 - - 122 - - trade and other receivables 13 269 658 - - Interest expense: - bankers’ acceptances 1,628 1,184 - - - bank overdrafts 1,490 1,029 13 - - gold loan 228 202 - - - hire-purchase 140 81 - - - term loans 425 57 49 - - others 108 109 - - Finance costs: share of profits by financial institution on ICP and IMTN 2,626 3,517 263 126 Loss from fair value adjustments on investment properties 8 - 231 - - Loss on foreign exchange: - realised 382 113 230 - - unrealised 114 238 - - Loss on gold price fluctuation: - realised 971 777 - - - unrealised 66 898 - - Loss on disposal of property, plant and equipment - 79 - - Property, plant and equipment written off 7 1,134 559 - - Rental expense: - exhibition booths 845 759 - - - plant and machinery 24 206 - - - premises 15,781 13,753 - - Research cost 9 30 - -




24. PROFIT BEFORE TAX (continued)

Group Company

2010 2009 2010 2009 Note RM’000 RM’000 RM’000 RM’000

And crediting:- Amortisation of government grant 20 3 3 - - Fair value gain on derivative asset 12 11 - - - Gross dividends received from unquoted subsidiaries - - 12,000 4,692 Gain on disposal of investment properties 82 - - - Gain on disposal of property, plant and equipment 1,257 15 - - Gain on foreign exchange: - realised 2,167 544 - 64 - unrealised 1,811 892 95 - Gain on gold price fluctuation: - realised 3 79 - - - unrealised - 14 - - Interest income 67 11 61 7 Rental income from investment properties 155 190 - - Reversal of impairment loss on trade and other receivables 13 129 23 - -

The estimated monetary value of benefit-in-kind received by the Directors of the Group amounted to RM 107,779 (2009: RM 95,500).

25. TAX EXPENSE

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Current year tax expense based on profit for the financial year 8,095 7,705 303 188 Deferred tax (Note 10) 215 138 - - 8,310 7,843 303 188 Under/(Over) provision in prior years: - Tax expense 94 (109) (3) (7) - Deferred tax (Note 10) 25 (296) - - 8,429 7,438 300 181

The Malaysian income tax is calculated at the statutory tax rate of 25% (2009: 25%) of the estimated taxable profit for the fiscal year.

Tax expense for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions.




25. TAX EXPENSE (continued)

The reconciliation between the average effective tax rate and the applicable tax rate of the Group and of the Company are as follows:-

Group Company

2010 2009 2010 2009 % % % % Applicable tax rate 25.0 25.0 25.0 25.0 Tax effects in respect of:- Non-allowable expenses 4.2 4.2 4.1 18.0 Non-taxable income (0.9) - (24.5) - Tax allowance (1.1) (1.2) - - Movement in deferred tax assets not recognised 0.1 1.8 - - 27.3 29.8 4.6 43.0 Under/(Over) provision in prior years 0.4 (1.5) (0.1) (1.6) Average effective tax rate 27.7 28.3 4.5 41.4

26. EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share

The basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year.

Group

2010 2009 RM’000 RM’000 Consolidated profit for the financial year attributable to equity holders of the parent 21,381 18,239

Weighted average number of ordinary shares outstanding (’000) 136,770 126,000

Basic earnings per ordinary share (sen) 15.63 14.48

Diluted earnings per ordinary share

There is no diluted earnings per ordinary share as the Company does not have any convertible financial instruments as at the end of the reporting period.




27. DIVIDENDS Group and Company

2010 2009

Single tier Amount of Gross Amount of dividend single tier dividend dividend per share dividend per share net of tax sen RM’000 sen RM’000 First and final dividend paid:- In respect of financial year ended 31 December 2009 3.0 4,158 - - In respect of financial year ended 31 December 2008 - - 2.5 2,362

A first and final single tier dividend of 3.3 sen per ordinary share, in respect of the financial year ended 31 December 2010, amounting to RM 4,573,800 has been proposed by the Directors after the reporting period for shareholders’ approval at the forthcoming Annual General Meeting. The financial statements for the current financial year do not reflect this proposed dividend. This dividend is subject to approval by shareholders, and if approved, will be accounted for as appropriation of retained earnings in the financial year ending 31 December 2011.

28. EMPLOYEE BENEFITS

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000 Directors’ emoluments 2,322 2,362 2,009 2,040 Salaries, wages, overtime and allowances 25,775 22,049 1,247 1,135 Defined contribution plan 3,237 2,875 181 163 Staff commissions 4,020 3,705 - - Other employee benefits 3,820 3,204 282 242 39,174 34,195 3,719 3,580




29. DISPOSAL OF SUBSIDIARIES

(a) Disposal of Sinar Raya Trading Sdn. Bhd. (“SRT”)

On 28 July 2010, Tomei Retail Sdn. Bhd., a wholly owned subsidiary of the Company, disposed of its 345,000 ordinary shares of RM 1 each in SRT, to a company in which certain Directors of the Company have interests, representing the entire shareholding by Tomei Retail Sdn. Bhd., for a cash consideration of RM 345,000.

Details of fair value of the net assets and cash inflow on disposal of the subsidiary were as follows:-

Group 2010 RM’000 Trade and other receivables 360 Cash and bank balances 1 Trade and other payables (14) Current tax liabilities (2) Net assets disposed 345 Net proceeds from disposal (345) Gain on disposal - Cash consideration for the disposal 345 Less: Cash and cash equivalent of subsidiary disposed (1) Less: Amount receivable from the purchaser (345) Proceeds from disposal of a subsidiary, net of cash and cash equivalent disposed (1)

(b) Disposal of Tomei Gold & Jewellery Corp. (KL) Sdn. Bhd. (“Tomei KL”)

On 28 July 2010, Tomei Retail Sdn. Bhd., a wholly owned subsidiary of the Company, disposed of its 300,000 ordinary shares of RM 1 each in Tomei KL, to a company in which certain Directors of the Company have interests, representing the entire shareholding by Tomei Retail Sdn. Bhd., for a cash consideration of RM 300,000.

Details of fair value of the net assets and cash inflow on disposal of the subsidiary were as follows:-

Group 2010 RM’000 Trade and other receivables 301 Deferred tax liabilities (1) Net assets disposed 300 Net proceeds from disposal (300) Gain on disposal - Cash consideration for the disposal 300 Less: Amount receivable from the purchaser (300) Proceeds from disposal of a subsidiary, net of cash and cash equivalent disposed -




30. OPERATING SEGMENTS

Tomei Consolidated Berhad and its subsidiaries are principally engaged in retailing and manufacturing and wholesales of gold ornaments and jewellery.

Tomei Consolidated Berhad has arrived at two (2) reportable segments that are based on information reported internally to the Group Managing Director. The reportable segments are summarised as follows:-

(i) Manufacturing and wholesales (ii) Retail

The accounting policies of operating segments are the same as those described in the summary of significant accounting policies. The Group evaluates performance on the basis of profit or loss from operations before tax.

Inter-segment revenue is priced along the same lines as sales to external customers and is eliminated in the consolidated financial statements. These policies have been applied consistently throughout the current and previous financial years.

Segment assets exclude tax assets and Segment liabilities exclude tax liabilities. Even though loans and borrowings arise from financing activities rather than operating activities, they are allocated to the segments based on relevant factors. Details are provided in the reconciliations from segment assets and liabilities to the group position.

Manufacturing and wholesales Retail Total 2010 RM’000 RM’000 RM’000 Revenue Total revenue 77,771 282,214 359,985 Inter-segment sales (3,424) (275) (3,699) Revenue from external customers 74,347 281,939 356,286 Interest income 5 62 67 Finance costs (753) (5,892) (6,645) Net finance expense (748) (5,830) (6,578) Depreciation 569 4,634 5,203 Segment profit before tax 6,068 24,378 30,446 Tax expense (1,204) (7,225) (8,429)

Other material non-cash items: - Impairment loss on trade and other receivables (152) (117) (269) - Property, plant and equipment written off (29) (1,105) (1,134) - Unrealised loss on foreign exchange (85) (29) (114) - Unrealised loss on gold price fluctuation (26) (40) (66) - Unrealised gain on foreign exchange - 1,811 1,811 Capital expenditure 494 7,716 8,210 Segment assets 42,495 257,864 300,359 Segment liabilities 11,163 136,403 147,566




30. OPERATING SEGMENTS (continued)

Manufacturing and wholesales Retail Total 2009 RM’000 RM’000 RM’000 Revenue Total revenue 57,473 246,870 304,343 Inter-segment sales (3,208) (245) (3,453) Revenue from external customers 54,265 246,625 300,890 Interest income 4 7 11 Finance costs (590) (5,589) (6,179) Net finance expense (586) (5,582) (6,168) Depreciation 658 4,234 4,892 Segment profit before tax 5,549 20,769 26,318 Tax expense (963) (6,475) (7,438)

Other material non-cash items: - Impairment loss on trade and other receivables (340) (318) (658) - Loss from fair value adjustments on investment properties - (231) (231) - Property, plant and equipment written off (1) (558) (559) - Unrealised loss on foreign exchange - (238) (238) - Unrealised loss on gold price fluctuation (249) (649) (898) - Unrealised gain on foreign exchange 62 830 892 - Unrealised gain on gold price fluctuation 14 - 14 Capital expenditure 575 2,277 2,852 Segment assets 34,978 224,848 259,826 Segment liabilities 8,173 121,148 129,321

Reconciliations of reportable segment assets and liabilities to the Group’s corresponding amounts are as follows:-

2010 2009 RM’000 RM’000 Assets Total assets for reportable segments 300,359 259,826 Tax assets 2,587 2,257

Group’s assets 302,946 262,083

Liabilities Total liabilities for reportable segments 147,566 129,321 Tax liabilities 3,068 4,050

Group’s liabilities 150,634 133,371

Geographical information

No geographical information is presented as the Group’s overseas operations are still insignificant.




31. COMMITMENTS

(i) Rental commitments

The Group had entered into several tenancy agreements for the rental of retail space, office blocks and staff housing, resulting in future rental commitments which may, subject to certain terms in the agreements, be revised accordingly or upon its maturity based on prevailing market rates.

The Group has aggregate future commitments as at the end of the reporting period as follows:-

Group

2010 2009 RM’000 RM’000 Not later than one year 12,827 10,802 Later than one year and not later than five years 11,013 5,215 23,840 16,017

Certain lease rentals are subject to contingent rental which are determined based on a percentage of sales generated from outlets.

(ii) Capital commitments

Capital expenditure in respect of purchase of property, plant and equipment:-

Group

2010 2009 RM’000 RM’000 Contracted but not provided for 391 559 Approved but not contracted for 4,546 - 4,937 559

32. CONTINGENT LIABILITIES - UNSECURED

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Corporate guarantees given to financial institutions for credit facilities granted to:- - subsidiaries - - 73,208 50,495 - third party - 752 - 752 - 752 73,208 51,247

The Directors are of the view that the chances of the financial institutions to call upon the corporate guarantees are remote.




33. FINANCIAL INSTRUMENTS

(a) Capital management

The primary objective of the Group’s capital management is to safeguard the Group’s ability to continue in operations as a going concern in order to provide fair returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain the optimal capital structure, the Group may, from time to time, adjust the dividend payout to shareholders, return capital to shareholders, issue new shares, redeem debts or sell assets to reduce debts, where necessary.

For capital management purposes, the Group considers shareholders’ equity, minority interest and total debt to be the key components in the Group’s capital structure. The Group monitors capital on the basis of the net gearing ratio. The ratio is calculated as the total debt net of cash and cash equivalents to total equity. Total equity is the sum of total equity attributable to shareholders and minority interests. The net gearing ratios as at 31 December 2010 and 31 December 2009, which are within the Group’s objectives for capital management, are as follows:-

Group Company

2010 2009 2010 2009 Note RM’000 RM’000 RM’000 RM’000 Cash and cash equivalents 14 (9,009) (8,292) (5,295) (5,284) Total borrowings 17 116,902 101,654 40,000 50,000 Net debt 107,893 93,362 34,705 44,716 Total equity 152,312 128,712 83,033 74,595 Gearing ratio 0.71 0.73 0.42 0.60

(b) Financial instruments

Certain comparative figures have not been presented for 31 December 2009 by virtue of the exemption given in paragraph 44AA of FRS 7.

(i) Categories of financial instruments

Total Group RM’000 2010 Financial assets Trade and other receivables - loan and receivables 22,267 Derivative assets - fair value through profit and loss 11 Cash and cash equivalents 9,009 31,287

Financial liabilities Borrowings - other financial liabilities 116,902 Trade and other payables - other financial liabilities 30,658 147,560




33. FINANCIAL INSTRUMENTS (continued)

(b) Financial instruments (continued)

(i) Categories of financial instruments (continued)

Total Company RM’000 2010 Financial assets Trade and other receivables - loan and receivables 54,049 Cash and cash equivalents 5,295 59,344

Financial liabilities Borrowings - other financial liabilities 40,000 Trade and other payables - other financial liabilities 2,316 42,316

(ii) Fair value of financial instruments

The carrying amounts of financial assets and financial liabilities of the Group and Company as at the end of the reporting period approximate their fair values due to the relatively short term maturity of these financial instruments except for the following:-

Group Company

Carrying Fair Carrying Fair amount value amount value RM’000 RM’000 RM’000 RM’000

2010

Recognised

Financial liabilities:- Hire-purchase creditors 2,369 2,290 - - 2009

Recognised

Financial liabilities:-

IMTN 10,000 10,021 10,000 10,021 Hire-purchase creditors 517 499 - -




33. FINANCIAL INSTRUMENTS (continued)

(b) Financial instruments (continued)

(iii) Determination of fair value

Methods and assumptions used to estimate fair value

The fair values of financial assets and financial liabilities are determined as follows:-

(a) Financial instruments that are not carried at fair value and whose carrying amounts are a reasonable approximation of fair value

The carrying amounts of financial assets and liabilities, such as trade and other receivables, trade and other payables and term loans, are reasonable approximation of fair value, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.

The carrying amounts of the current position of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

(b) Obligations under finance lease and fixed rate bank loans

The fair value of these financial instruments are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the end of the reporting period.

(c) Derivatives

The fair values of derivative instruments are calculated using quoted prices. The fair value of a futures gold contract is the amount that would be payable or receivable upon termination of the outstanding position arising and is determined by reference to the difference between the contracted rate and the future gold rate as at the end of the reporting period applied to a contract of similar amount and maturity profile.

(iv) Fair value hierarchy

Fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. As at 31 December 2010, the Group held the following financial instrument carried at fair value on the statement of financial position:-

31 December 2010 Asset measured at fair value RM’000 Financial asset at fair value through profit or loss - Futures gold contract 11




34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s financial risk management objectives are to optimise value creation for its shareholders whilst minimising the potential adverse impact arising from interest rate risk, foreign currency risk, credit risk, liquidity and cash flow risk and market price risk.

The financial risk management is carried out through risk review programmes, internal control systems, insurance programmes and adherence to the Group’s financial risk management policies. The Group’s exposure to financial risks and the management of the related exposures are as follows:-

(a) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s

financial instruments will fluctuate because of changes in market interest rates.

The Group’s exposure to interest rates related primarily to the Group’s bank borrowings. The Group does not use derivative financial instruments to hedge its risk.

As at 31 December 2010, the Company’s ICP and IMTN of RM 20 million serve as one of the measures to manage its interest rate risk exposure of its borrowings. The proceeds from ICP and IMTN which were at fixed interest rate for a specific tenure were used by the Group to minimise the risk of change in interest rate.

Sensitivity analysis for interest rate risk

At 31 December 2010, if interest rates at the date had been lower 25 basis points with all other variables held constant, post-tax profit for the year would have been RM 175,000 higher, arising mainly as a result of lower interest expense on variable borrowings. If interest rates had been higher 25 basis points with all other variables held constant, post-tax profit would have been RM 175,000 lower, arising mainly as a result of higher interest expense on variable borrowings.




34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(a) Interest rate risk (continued)

The following table sets out the carrying amounts, the weighted average effective interest rates (“WAEIR”) as at the end of the reporting period and the remaining maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:-

Within 1 1 - 2 2 - 3 3 - 4 4 - 5 More than WAEIR year years years years years 5 years Total Group % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 As at 31 December 2010 Fixed rate Hire-purchase creditors 7.24% (1,314) (1,074) (918) (293) (84) - (3,683) ICP 5.90% (10,000) - - - - - (10,000) IMTN 7.50% (10,000) - - - - - (10,000) Fixed deposits with licensed banks 2.76% 5,436 - - - - - 5,436 Floating rate Bank overdrafts 7.59% (26,634) - - - - - (26,634) Bankers’ acceptances 4.72% (40,547) - - - - - (40,547) Factoring 8.30% (523) - - - - - (523) Term loans 7.31% (5,456) (6,793) (6,894) (6,372) - - (25,515) As at 31 December 2009 Fixed rate Hire-purchase creditors 7.31% (462) (391) (77) (42) (7) - (979) ICP 5.80% (30,000) - - - - - (30,000) IMTN 7.33% (10,000) (10,000) - - - - (20,000) Fixed deposits with licensed banks 1.82% 5,431 - - - - - 5,431 Floating rate Bank overdrafts 6.84% (15,198) - - - - - (15,198) Bankers’ acceptances 3.93% (30,090) - - - - - (30,090) Factoring 7.55% (190) - - - - - (190) Gold loans 4.50% (4,566) - - - - - (4,566) Term loans 6.86% (307) (165) (50) (53) (56) - (631)





(a) Interest rate risk (continued)

Within 1 1 - 2 2 - 3 3 - 4 4 - 5 More than WAEIR year years years years years 5 years Total Company % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 As at 31 December 2010 Fixed rate ICP 5.90% (10,000) - - - - - (10,000) IMTN 7.50% (10,000) - - - - - (10,000) Fixed deposits with licensed bank 2.76% 5,189 - - - - - 5,189 Floating rate Term loans 7.50% (3,990) (5,320) (5,320) (5,370) - - (20,000) As at 31 December 2009 Fixed rate ICP 5.80% (30,000) - - - - - (30,000) IMTN 7.33% (10,000) (10,000) - - - - (20,000) Fixed deposits with licensed bank 1.81% 5,188 - - - - - 5,188

(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Transactional currency exposures mainly arise from transactions that are denominated in currencies other than functional currencies of the operating entities.

The Group also holds cash and cash equivalents denominated in foreign currencies for working capital purposes. At the end of the reporting period, such foreign currencies balances amount to RM 826,000 (2009: RM 635,000) for the Group.

The Group’s transactional currency exposures mainly arise from substantial purchase of gold and jewellery from countries outside Malaysia which are invoiced in foreign currencies. The Group does not use derivative financial instruments to hedge its risk. The Group monitors the movements in foreign currency exchange rates closely to ensure that its risk to transactional currency exposures is minimal.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the USD, RMB, and HKD exchange rates against the respective functional currencies of the Group entities, with all other variable held constant.





(b) Foreign currency risk (continued)

Group 2010 RM’000 profit net of tax

RM/USD -strengthen by 5% + 558 -weaken by 5% - 558 RM/RMB -strengthen by 5% + 42 -weaken by 5% - 42 RM/HKD -strengthen by 5% + 64 -weaken by 5% - 64

(c) Credit risk

Cash deposits and trade receivables may give rise to credit risk which requires the loss to be recognised if a counter party fails to perform as contracted. In order to manage this risk, it is the Group’s policy to monitor the financial standing of these counter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk.

The Group has no major concentration of credit risk as at 31 December 2010. The Group’s past experience in collection of trade receivables falls within the recorded allowances. The Directors believe that no additional credit risk beyond the amounts provided for impairment loss is inherent to the Group’s trade receivables.

As at the end of the reporting period, the Company has significant exposure in respect of amounts owing by subsidiaries.

Deposits with banks and other financial institutions and derivatives that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

The Group’s major classes of financial assets are trade and other receivables. Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 13.

(d) Liquidity and cash flow risk

The Group is actively managing its operating cash flow to ensure that all operating and financing needs are met. It is the Group’s policy to ensure its ability to service its cash obligations by maintaining a level of cash and cash equivalents deemed adequate to the Group’s operations. The Group also maintains flexibility in funding by keeping committed credit lines available.

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end of the reporting period based on contractual undiscounted repayment obligations.





(d) Liquidity and cash flow risk (continued)

2010

On demand or within One to one year five years Total RM’000 RM’000 RM’000 Group Financial liabilities:- Trade and other payables 30,658 - 30,658 Loans and borrowings 94,474 22,428 116,902

Total undiscounted financial liabilities 125,132 22,428 147,560 Company Financial liabilities:- Trade and other payables 2,316 - 2,316 Loans and borrowings 23,990 16,010 40,000

Total undiscounted financial liabilities 26,306 16,010 42,316

(e) Market price risk

Market price risk is the risk that the fair value of future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group is exposed to the fluctuation of gold price risk arising from sales and purchases of gold with customers and suppliers. In managing the risk, the Group from time to time enters into gold contracts with the objective of managing its exposure to price volatility in gold.

Sensitivity analysis for gold price risk

At the end of the reporting period, if the gold price had been 5% higher or lower, with all other variables held constant, the Group’s profit net of tax would have been RM 1,463,000 higher or lower.

35. RELATED PARTY DISCLOSURES

(a) Identities of related parties

Parties are considered to be related to the Group if the Group has the ability directly or indirectly to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individual or other entities.

The Company has controlling related party relationship with its direct and indirect subsidiaries and its ultimate holding company.




35. RELATED PARTY DISCLOSURES (continued)

(a) Identities of related parties (continued) The Group also has related party relationships with the following parties:-

Related parties Relationships Ong Tiong Yee & Sons Sdn. Bhd. Related by connected person - Ong Kee Liang, a director(“OTY”) and shareholder of OTY, is the spouse of Ng Sheau Chyn. Schofer Germany - A shareholder of a subsidiary, Gemas Precious MetalsThe Chain Company Gmbh & Co. Kg. Industries Sdn. Bhd..(“Schofer”) Unique Avenue Sdn. Bhd. (“UASB”) Related by common Directors, Tan Sri Datuk Ng Teck Fong,

Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen. Tan Sri Datuk Ng Teck Fong and Ng Sheau Chyn are also substantial shareholders of UASB.

Best Arcade Sdn. Bhd. (“BASB”) Related by common Directors and substantial shareholders,

Tan Sri Datuk Ng Teck Fong, Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen.

Teck Fong Property Sdn. Bhd. (“TFP”) Related by common Directors, Tan Sri Datuk Ng Teck Fong, Ng

Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen. Oasis College Sdn. Bhd. Related by common Directors, Tan Sri Datuk Ng Teck Fong,(“Oasis College”) Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau

Yuen. Oasis Properties Sdn. Bhd. (“Oasis”) Related by common Directors and substantial shareholders,

Tan Sri Datuk Ng Teck Fong, Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen.

Persekutuan Persatuan-Persatuan Related by the Director, Tan Sri Datuk Ng Teck Fong whoHakka Malaysia (“Persatuan Hakka”) is the President of Persatuan Hakka. (Resigned on 3 August

2009) C. S. Tang & Co. (“CS Tang”) Related by the Director, M Chareon Sae Tang @ Tan Whye

Aun who is the partner of CS Tang. Permata Sagu Sdn. Bhd. Related by the common Directors and substantial(“Permata Sagu”) shareholders, Tan Sri Datuk Ng Teck Fong, Ng Sheau Yuen,

Ng Yih Chen and Ng Sheau Chyn. B-Two Technology Sdn. Bhd. Related by common Directors, Tan Sri Datuk Ng Teck Fong(“B-Two”) and Ng Sheau Chyn. Yu May Sdn. Bhd. (“Yu May”) Related by the common Directors and substantial

shareholders, Tan Sri Datuk Ng Teck Fong, Ng Yih Pyng, Ng Sheau Yuen, Ng Yih Chen and Ng Sheau Chyn.





(b) Significant related party transactions

In addition to the transactions detailed elsewhere in the financial statements, the Group had the following transactions with related parties during the financial year.

Group

2010 2009 RM’000 RM’000 Sales of goods to: - OTY 383 180 - Schofer 803 919 Purchase of goods from: - Schofer 231 183 - B-Two - 3 Office rental paid to: - UASB 22 22 - BASB 335 306 - TFP 323 290 - Oasis 48 48 - Persatuan Hakka - 11 - Permata Sagu - 2 Office rental received from: - Oasis College 32 34 - B-Two - 36 Fees paid to: - CS Tang 5 17 Staff training expenses paid to: - Oasis College 12 14 Disposal of investment properties to Oasis (Note 8) 1,550 - Disposal of freehold lands and buildings to Oasis (Note 7) 3,050 - Disposal of subsidiaries, SRT and Tomei KL to Yu May (Note 29) 645 -

The related party transactions described above were carried out on negotiated commercial terms.





(c) Compensation of key management personnel

The remuneration of Directors during the financial year are as follows:-

Group Company

2010 2009 2010 2009 RM’000 RM’000 RM’000 RM’000

Short term employee benefits 2,144 2,183 1,864 1,896 Contribution to defined contribution plans 178 179 145 144 2,322 2,362 2,009 2,040

The estimated monetary value of benefit-in-kind received by the Directors from the Group amounted to RM 107,779 (2009: RM 95,500).

(d) Inter-company transactions

Company

2010 2009 RM’000 RM’000 Gross dividend income received from subsidiaries 12,000 4,692

36. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) Further subscription of shares in Tomei Consolidated Berhad

On 13 January 2010, the Company announced a proposed private placement of up to 10% of the issued and paid up share capital of the Company.

The Company had obtained the approval of the Company’s shareholders at the Company’s Annual General Meeting held on 27 May 2009 pursuant to Section 132D of the Companies Act, 1965, that empowered the Board to allot and issue new shares from time to time and upon such terms and conditions and for such purpose as the Board deem fit provided the aggregate number of the shares to be issued shall not exceed ten percent (10%) of the issued and paid up share capital of the Company.

The proposed private placement was approved in principle by Bursa Malaysia vide its letter dated 26 January 2010.

On 10 February 2010, the Board fixed the issue price for the placement of 12,600,000 new ordinary shares of RM 0.50 each in the Company at RM 0.50 per share. The said shares were fully allotted on 23 February 2010. The newly issued shares rank pari passu in all respects with the existing shares of the Company.

The said shares were listed on Main Market of Bursa Malaysia on 1 March 2010.




36. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued)

(b) Disposal of Tomei Gold & Jewellery Corp. (KL) Sdn. Bhd. (“Tomei KL”)

On 28 July 2010, Tomei Retail Sdn. Bhd., a wholly owned subsidiary of the Company, disposed of its 300,000 ordinary shares of RM 1 each in Tomei KL, to a company in which certain Directors of the Company have interests, representing the entire shareholding by Tomei Retail Sdn. Bhd., for a cash consideration of RM 300,000.

(c) Disposal of Sinar Raya Trading Sdn. Bhd. (“SRT”)

On 28 July 2010, Tomei Retail Sdn. Bhd., a wholly owned subsidiary of the Company, disposed of its 345,000 ordinary shares of RM 1 each in SRT, to a company in which certain Directors of the Company have interests, representing the entire shareholding by Tomei Retail Sdn. Bhd., for a cash consideration of RM 345,000.

(d) Disposal of freehold lands, buildings and investment properties

On 27 December 2010, certain subsidiaries of the Group had disposed of their freehold lands, buildings and investment properties to a company in which certain Directors of the Company have interests for a total consideration of RM 4,600,000. The consideration was based on valuation reports by an Independent Professional Valuer dated 17 December 2010. The consideration is to be settled in cash and utilised for working capital purpose of the Group.

37. SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

(a) Acquisition of O M Design Sdn. Bhd. (“OM Design”)

On 2 March 2011, the Company had acquired 1 ordinary share of RM 1 each representing 50% equity interest in OM Design for a total cash consideration RM 1. The principal activity of OM Design is wholesales of jewellery.

On 7 March 2011, the Company subscribed additional 2,749,999 ordinary shares of RM 1 each in OM Design. Upon the share subscription, the Company has a 55% shareholdings interest in OM Design.

(b) Acquisition of retail operations of Goldheart Jewelry Sdn. Bhd. (“Goldheart”) in Malaysia

On 15 March 2011, the Company via its wholly owned subsidiary company, Tomei Gold & Jewellery Holdings (M) Sdn. Bhd. (“Tomei Holdings”) had entered into a Sale and Purchase Agreement with Goldheart Jewelry Sdn. Bhd. to acquire Goldheart retail operations in Malaysia for a total cash consideration of RM 5.6 million.


Net Book/ Existing Market PurchaseProperty Address Property Description Use Value Built Up Status Age Date

1 RK1.20,RK1.21, 3 Blocks of 33 storey Commercial 324,000 248 sq ft Freehold 2 years 25-Jun-01 RK1.22,RK1.23 condotel/serviced Complex Rhythm Avenue Axis apartments, Persiaran Kewajipan, 3 1/2 levels of USJ 19, basement car 47620 Subang Jaya, park area, Selangor Darul Ehsan. 3 levels of retail units.

2 Parcel No.G23, Lot No. 14193, A Stratified 511,222 529 sq ft Freehold 22 years 14-May-01 Ground Floor, Geran 55365, Retail Lot Subang Parade Mukim of Subang Jaya, No. 5, Jalan SS 16/1, District of Petaling, 47500 Subang Jaya, Selangor. Selangor Darul Ehsan.

LISTPROPERTIES

OF

AS AT 31 DECEMBER 2010


SHAREHOLDINGSANALYSIS

ANALYSIS OF SHAREHOLDINGS

Authorised Share Capital : RM100,000,000Issued & Fully Paid up Capital : RM 69,300,000Class of Shares : Ordinary shares of RM 0.50Voting Rights : One (1) vote per ordinary share

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

Less than 100 21 1.05 727 0.00 100 to 1,000 235 11.70 191,997 0.14 1,001 to 10,000 1,205 60.01 6,657,300 4.80 10,001 to 100,000 477 23.75 15,685,309 11.32 100,001 to 1,000,000 61 3.04 16,398,166 11.83 1,000,000 and above issued shares 9 0.45 99,666,501 71.91

2,008 100.00 138,600,000 100.00

SUBSTANTIAL SHAREHOLDERS

Name No. of Shares %

Teck Fong Corporation Sdn. Bhd. 63,132,177 45.55 Ng Teck Fong 13,932,658 10.05 Lembaga Tabung Amanah Warisan Negeri Terengganu 10,000,000 7.22

DIRECTORS’ SHAREHOLDINGS

Name Direct % Indirect %

Tan Sri Datuk Ng Teck Fong 13,965,458 10.08 69,283,441* 49.97 Datin Nonadiah Binti Abdullah 2,000,000 1.44 - - Ng Yih Pyng 581,239 0.42 63,165,177** 45.50 Ng Yih Chen 100,000 0.07 63,165,177** 45.50 Ng Sheau Chyn 548,700 0.40 - - Ng Sheau Yuen 100,000 0.07 - - Choong Chow Mooi 100,000 0.07 - -

* Deemed interested by virtue of his shareholdings in Teck Fong Corporation Sdn. Bhd., Ng Teck Fong Holdings Sdn. Bhd., Tropical Bliss Sdn. Bhd. and his wife Puan Sri Datin Gan Sao Wah’s shareholding pursuant to Section 134 of the Act.

** Deemed interested by virtue of his shareholdings in Teck Fong Corporation Sdn. Bhd. and Ng Teck Fong Holdings Sdn. Bhd. pursuant to Section 134 of the Act.

AS AT 31 MARCH 2011


THIRTY (30) LARGEST SHAREHOLDERS

Name No. of Shares %

1. Teck Fong Corporation Sdn. Bhd. 63,132,177 45.55 2. Ng Teck Fong 13,932,658 10.05 3. Lembaga Tabung Amanah Warisan Negeri Terengganu 10,000,000 7.22 4. Tropical Bliss Sdn. Bhd. 3,595,964 2.59 5. Koperasi Permodalan Felda Malaysia Berhad 3,000,000 2.16 6. Nonadiah Binti Abdullah 2,000,000 1.44 7. Tropical Bliss Sdn. Bhd. 1,531,400 1.10 8. Teo Chiang Hong 1,349,000 0.97 9. Choong Yee Kong 1,125,302 0.81 10. Gan Sao Wah @ Gan Sao Eng 990,900 0.71 11. Chen Yen Ling 808,200 0.58 12. Dato’ Teo Soo Cheng 700,000 0.51 13. HLG Nominee (Tempatan) Sdn. Bhd. Beneficiary: Pledged Securities Account for Seh Choi Hoo 608,000 0.44 14. Ng Yih Pyng 581,239 0.42 15. Lee Sau Kuan 564,400 0.41 16. Mah Yoke Lian 470,500 0.34 17. Kan Siew Kee 465,000 0.34 18. Ng Sheau Chyn 448,700 0.32 19. HLG Nominee (Tempatan) Sdn. Bhd. Beneficiary: Hong Leong Bank Bhd. for Kan Siew Kee 431,400 0.31 20. Choong Siew Mooi 412,007 0.30 21. Alliancegroup Nominees (Tempatan) Sdn. Bhd. Beneficiary: Pledged Securities Account for Wong Tet Fui 385,800 0.28 22. Eng Watt Ya @ Eng Watt Ying 350,000 0.25 23. Patricia Lim Poh Gaik 350,000 0.25 24. Yeo Jui Heok @ Yeo Wei Seng 348,800 0.25 25. Ambank (M) Berhad Beneficiary: Pledged Securities Account for Mohd Karim Bin Abdullah Omar 321,000 0.23 26. Choong Kwei Mooi 312,007 0.23 27. Mayban Securities Nominees (Tempatan) Sdn. Bhd. Beneficiary: UOB Kay Hian Pte Ltd for Choong Yock Mooi 312,007 0.23 28. Choong Yee Vooi 312,006 0.23 29. Gan Ah Huat 278,000 0.20 30. Gerald John Richards 274,000 0.20

109,390,467 78.92

SHAREHOLDINGS ANALYSIS AS AT

31 MARCH 2011 (con’t)


1. To receive the Audited Financial Statements for the financial year ended 31 December 2010 and the Reports of Directors’ and Auditors’ thereon.

2. To declare a First and Final Single Tier Dividend of 3.3 sen per ordinary share for the financial year ended 31 December 2010.

3. To approve the payment of Directors’ Fees amounting to RM292,000.00 in respect of

the financial year ended 31 December 2010.

4. To re-elect the following Directors retiring in accordance with Article 84 of the Articles of Association of the Company:-

(i) Ms Ng Sheau Chyn

(ii) Datin Nonadiah Binti Abdullah (iii) Ms Ng Sheau Yuen

5. To re-appoint the following Directors retiring in accordance with Section 129 (2) of the Companies Act, 1965:-

(i) Tan Sri Datuk Ng Teck Fong (ii) Mr M Chareon Sae Tang @ Tan Whye Aun

6. To re-appoint BDO as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration.

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions with or without amendments or modifications:

7. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE

COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue shares in the Company at any time and upon such terms and conditions, for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares issued in any one financial year of the Company does not exceed ten per centum (10%) of the issued share capital of the Company for the time being and that the Directors be and are hereby also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

NOTICEGENERAL MEETINGOF ANNUAL

NOTICE IS HEREBY GIVEN THAT the Sixth Annual General Meeting of the Company will be held at the Dillenia & Eugenia, Ground Floor, Sime Darby Convention Centre, No. 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 12 May 2011 at 10.30 a.m. for the following purposes:-

(Please refer to explanatorynotes below)

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9


8. ORDINARY RESOLUTION 2 PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS

(“RRPT”) OF A REVENUE OR TRADING NATURE WITH RELATED PARTY (“PROPOSED SHAREHOLDERS’ MANDATE”)

“THAT subject to provisions of the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of the Company, Bursa Malaysia Securities Berhad Main Market Listing Requirements or other regulatory authorities, approval be and is hereby given to the Company and/or its subsidiaries to enter into category of RRPT as set out in Section 2.1 of the Circular to Shareholders dated 18 April 2011, subject to the following:

(i) the RRPTs are:

(a) necessary for the day-to-day operations;(b) undertaken in the ordinary course of business and at arm’s length basis and

are on terms not more favourable to the related parties than those generally available to the public; and

(c) are not detrimental to the shareholders of the Company; and

(ii) the disclosure is made in the Annual Report of the Company of the aggregate value of the RRPTs based on the type of transactions, the names of the Related Parties and their relationship with the Company pursuant to the Proposed Shareholders’ Mandate during the financial year and in the Annual Report of the Company in the subsequent year during which the Proposed Shareholders’ Mandate is in force; and

(iii) the Proposed Shareholders’ Mandate is subject to annual renewal and will continue to be in full force until:

(a) conclusion of the next Annual General Meeting (“AGM”) of the Company at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed;

(b) the expiration of the period within which the next AGM after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

(c) revoked or varied by resolution passed by the shareholders in general meeting,

whichever is the earlier.

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things as they may consider expedient or necessary (including executing such documents as may be required) to give effect to the RRPTs contemplated and/or authorised by this Ordinary Resolution.”

9. SPECIAL RESOLUTION AMENDMENT TO THE ARTICLES OF ASSOCIATION

“THAT the proposed amendment to the Articles of Association of the Company as contained in the Appendix A attached to the Annual Report 2010 be and is hereby approved.”

NOTICE OF ANNUAL GENERAL MEETING (con’t)

Resolution 10

Special Resolution 1



10. To transact any other ordinary business of which due notice shall have been given in accordance with the Companies Act, 1965.

BY ORDER OF THE BOARD

TEOH KOK JONG (LS 04719)Company Secretary

Kuala Lumpur

Date: 18 April 2011

NOTICE OF DIVIDEND PAYMENT

NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the Sixth Annual General Meeting, the First and Final Single Tier Dividend of 3.3 sen per ordinary share in respect of the financial year ended 31 December 2010 shall be paid on 6 June 2011 to the shareholders registered in the Record of Depositors at the close of business on 19 May 2011.

A Depositor shall qualify for the entitlement to the dividend only in respect of:-

a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 19 May 2011 in respect of ordinary transfers; and

b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

Notes:

1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.

2. To be valid this form duly completed must be deposited at the Registered Office of the Company at Suite B13A-4, Tower B, Level 13A Northpoint Offices, Mid Valley City, No.1, Medan Syed Putra Utara, 59200 Kuala Lumpur, Malaysia, not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.

3. A Member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting.

4. Where a Member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

5. If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

6. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint more than one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.


EXPLANATORY NOTES ON ORDINARY BUSINESS

Item 1

This agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

Resolution 2

It is proposed that the fee for each of the Non-Executive Directors of the Company be increased from RM 36,000.00 per annum to RM 42,000.00 per annum. The proposed increased in fee for Non-Executive Directors is for the purpose of attaining closer parity after comparing the Company’s practice against market benchmarks and considering their increased responsibilities and accountability in respect of corporate governance.

EXPLANATORY NOTES ON SPECIAL BUSINESS

Resolution 9

The proposed Resolution 9, is a renewal of the previous years mandate and if passed, is to empower the Directors to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting provided that the aggregate number of shares issued does not exceed 10% of the issued share capital of the Company for the time being.

The previous mandate approved on 18 May 2010 was not utilized and accordingly no proceeds were raised except for on 23 February 2010, under the mandate passed on 27 May 2009, the Company allotted 12,600,000 ordinary shares of RM 0.50 each via a private placement. The gross proceeds raised from the private placement was RM 6,300,000.00 and after deducting share issue expenses of RM 41,811.00, the balance was used for working capital purposes.

The purpose of this general mandate is for possible fund raising exercise including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital, repayment of borrowings and/or acquisitions.

Resolution 10

The proposed Resolution 10 is seeking Shareholders’ Mandate to allow the Company and its subsidiaries to enter into Recurrent Related Party Transactions of a Revenue or Trading Nature is to enable the Company to comply with Paragraph 10.09 of Chapter 10 and Practice Note 12 of the Listing Requirements. The mandate will take effect from the date of the passing of the Ordinary Resolution until the next Annual General Meeting of the Company.

Further information on the Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature is set out in the Circular to Shareholders of the Company dated 18 April 2011 which is despatched together with the Company’s Annual Report 2010.

Special Resolution 1

The proposed Special Resolution 1, if passed, will enable the Company to implement the Electronic Dividend payment (“eDividend”) to comply with the directive of Bursa Malaysia Securities Berhad and also for administrative purpose.



Article

To amend Article 149

Amended Provisions Any dividend, interest or other money payable in cash in respect of shares may be paid by cheque or warrant sent through the post directed to the registered address of the holder who is named on the Register of Members or Record of Depositors or to such person and to such address as the holder may in writing direct or by way of telegraphic transfer or electronic transfer or remittance to such account as designated by such holder or the person entitled to such payment. Every such cheque or warrant or telegraphic transfer or electronic transfer or remittance shall be made payable to the order of the person to whom it is sent and the payment of any such cheque or warrant or telegraphic transfer or electronic transfer or remittance shall operate as a good and full discharge to the Company in respect of the payment represented thereby, notwithstanding that in the case of payment by cheque or warrant, it may subsequently appear that the same has been stolen or that the endorsement thereon has been forged. Every such cheque or warrant or telegraphic transfer or electronic transfer or remittance shall be sent at the risk of the person entitled to the money thereby represented.

Existing Provisions

Any dividend, interest or other money payable in cash in respect of shares may be paid by cheque or warrant sent through the post directed to the registered address of the Holder as shown in the Register of Members or the Record of Depositors (as the case may be) or to such person and to such address as the Holder may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent, and the payment of any such cheque or warrant shall operate as a good discharge to the Company in respect of the dividend represented thereby, notwithstanding that it may subsequently appear that the same has been stolen or that the endorsement thereon has been forged. Every such cheque or warrant shall be send at the risk of the person entitled to the money thereby represented.

Rationale To enable the Company to implement the Electronic Dividend payment (“eDividend”) to comply with the directive of Bursa Malaysia Securities Berhad.

APPENDIX A


STATEMENTGENERAL MEETINGACCOMPANYING NOTICE OF ANNUAL

Pursuant to Paragraph 8.27(2) of the Listing Requirements of Bursa Malaysia Securities Berhad

1. DIRECTORS WHO ARE STANDING FOR RE-ELECTION AT THE SIXTH ANNUAL GENERAL MEETING

Pursuant to Article 84 of the Articles of Association of the Company:-

i) MS NG SHEAU CHYN ii) DATIN NONADIAH BINTI ABDULLAH iii) MS NG SHEAU YUEN

Pursuant to Section 129(2) of the Companies Act, 1965:-

i) TAN SRI DATUK NG TECK FONG ii) MR M CHAREON SAE TANG @ TAN WHYE AUN

The profiles of the above Directors are set out in pages 14 to 16.

2. THE DETAILS OF ATTENDANCE OF THE DIRECTORS AT BOARD MEETINGS

The details of attendance of each Director at the Board Meetings for the financial year ended 31 December 2010 (a total of 5 were held for the financial year).

DIRECTORS ATTENDANCE

i) TAN SRI DATUK NG TECK FONG 5/5 ii) DATIN NONADIAH BINTI ABDULLAH 5/5 iii) RAJA DATO’ SERI AMAN BIN RAJA HAJI AHMAD 5/5 iv) MR NG YIH PYNG 5/5 v) MR M CHAREON SAE TANG @ TAN WHYE AUN 5/5 vi) MR LAU TIANG HUA 5/5 vii) MR NG YIH CHEN 5/5 viii) MS NG SHEAU CHYN 5/5 ix) MS NG SHEAU YUEN 5/5 x) MS CHOONG CHOW MOOI 5/5

The profiles of the above Directors are set out in the section entitled “Profile of the Board of Directors” on pages 14 to 16. Their respective shareholding in the Company are set out in the section entitled “Directors’ Shareholding” on page 138.


STATEMENT ACCOMPANYING NOTICE

OF ANNUAL GENERAL MEETING (con’t)

3. THE DATE, TIME AND VENUE OF THE BOARD MEETINGS

The date, time and venue of the Board Meetings are as follows:-

DATE TIME VENUE

24 th February 2010 2.00 p.m. Menara Uni.Asia 8 th April 2010 11.30 a.m. Menara Uni.Asia 18 th May 2010 1.00 p.m. Sime Darby Convention Centre 26 th August 2010 12.30 p.m. Menara Uni.Asia 25 th November 2010 12.30 p.m. Menara Uni.Asia

Note:

MENARA UNI.ASIA: The Boardroom, 12th Floor, Menara Uni.Asia, 1008, Jalan Sultan Ismail, 50250 Kuala Lumpur.

SIME DARBY CONVENTION CENTRE: Ficus, Ground Floor, Sime Darby Convention Centre, No. 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur.

4. VENUE, DATE AND TIME OF THE SIXTH ANNUAL GENERAL MEETING

VENUE: Dillenia & Eugenia, Ground Floor, Sime Darby Convention Centre, No. 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur.

DATE: 12th May 2011

TIME: 10.30 a.m.


TOMEI CONSOLIDATED BERHAD (692959-W)

PROXY FORM

I/We _______________________________________________________________________________________ (BLOCK LETTERS)

of___________________________________________________________________________________________

being a member/members of TOMEI CONSOLIDATED BERHAD hereby appoint ______________________

__________________________________ (I/C No.:_____________________ ) of _________________________

______________________________________________________________________________________________

or failing whom__________________________________________________ of__________________________

______________________________________________________________________________________________as my/our proxy to vote for me/us on my/our behalf, at the Sixth Annual General Meeting of the Company to be held at the Dillinea & Eugenia, Ground Floor, Sime Darby Convention Centre, No.1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 12 May 2011 at 10.30 a.m. or at any adjournment thereof, as indicated below:-

No. Ordinary Resolutions For Against 1. Declaration of First and Final Single Tier Dividend 2. Approval for the payment of Directors’ Fees 3. Re-election of Ms Ng Sheau Chyn as Director 4. Re-election of Datin Nonadiah Binti Abdullah as Director 5. Re-election of Ms Ng Sheau Yuen as Director 6. Re-appointment of Tan Sri Datuk Ng Teck Fong as Director 7. Re-appointment of Mr M Chareon Sae Tang @ Tan Whye Aun as Director 8. Re-appointment of Auditors, BDO

Special Business 9. Ordinary Resolution 1 Authority to Allot & Issue Shares 10. Ordinary Resolution 2 Proposed Shareholders’ Mandate for Recurrent Related Party Transactions 11. Special Resolution Amendment To the Articles of Association

No. of Shares CDS Account No.

Signature/Seal of the Shareholder

Date

Please indicate with a (√ ) in the appropriate box against the resolution how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his discretion.

Notes:

1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.

2. To be valid this form duly completed must be deposited at the Registered Office of the Company at Suite B13A-4, Tower B, Level 13A Northpoint Offices, Mid Valley City, No.1 Medan Syed Putra Utara, 59200 Kuala Lumpur, Malaysia, not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.

3. A Member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meetings.

4. Where a Member appoints more than one (1) proxy the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

5. If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

6. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint more than one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

Fold this flap for sealing

fold here

fold here

AFFIX STAMP

THE COMPANY SECRETARY

TOMEI CONSOLIDATED BERHAD (692959-W)

SUITE B13A-4, TOWER B, LEVEL 13A,NORTHPOINT OFFICES, MID VALLEY CITY,NO 1, MEDAN SYED PUTRA UTARA, 59200 KUALA LUMPUR

Tomei_246041_cover_M5.ai 1 13/04/11 9:11 AM

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