SHINING BRIGHT, SHINING BRIGHT, GROWING STRONG. In the recent dimmed moments of the global economical slow run, Tomei is proud to be standing strong and shining bright as a premium

S H I N I N G B R I G H T ,

G R O W I N G S T R O N G .

In the recent dimmed moments of the global economical slow run, Tomei is proud to be standing strong and shining bright as a premium brand in gold and jewellery. Committed to continually excel in our products, services and the quality management system, we will continue to strive and provide the best in quality, design, services and value.

CONTENTS02 Financial Highlights

03 Corporate Information

04 Corporate Structure

06 Corporate Profi le

08 Outlet Listing

12 International Brands and Awards

14 Profi le of the Board of Directors

18 Chairman’s Statement

25 Calendar of Events

27 Statement on Corporate Governance

33 Audit Committee Report

37 Statement on Internal Control

40 Additional Compliance Information

43 Directors’ Responsibility Statement

44 Financial Statement

124 List of Properties

125 Shareholdings Analysis

127 Notice of Annual General Meeting

130 Statement Accompanying Notice of Annual General Meeting

133 Proxy Form

QUALITY POLICY

Committed to continually excel inour products, services and the qualitymanagement system to achieve ‘Total

Customer Satisfaction’ with pride.

OUR MISSION

To establish TOMEI as a premium brand in gold & jewellery, with excellence in quality, design,

services and value.

02

TOMEI CONSOLIDATED BERHAD (692959-W)

2006 2007 2008 2009

Profit Before Tax (RM ' 000) Profit After Tax & Minority Interest (RM ' 000)

Total shareholders' fund (RM ' 000)

Net Earnings Per Share (Sen)

Net Tangible Assets Per Share (RM)

Gross Dividend Per Share (Sen)

138,291

30,298

26,393

93,791

21.70

0.74

5.00

223,832

16,214

12,307

101,710

9.77

0.81

5.00

289,414

21,160

15,174

113,001

12.04

0.90

2.50

Financial Highlights

Revenue (RM ' 000) 300,890

18,239

128,712

14.48

1.02

3.00

26,318

‘06 ‘07 ‘08 ‘09

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Revenue

‘06 ‘07 ‘08 ‘09

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Profit Before Tax

(RM

‘ 0

00

)

(RM

‘ 0

00

)

(RM

‘ 0

00

)

‘06 ‘07 ‘08 ‘09

5,000

10,000

15,000

20,000

25,000

30,000

Profit After Tax &Minority Interest

138,2

91

223,8

32 289,4

14

300,8

90

30,2

98

16,2

14 21,1

60 26,3

18

26,3

93

12,3

07

15,1

74

18,2

39

(RM

‘ 0

00)

‘06 ‘07 ‘08 ‘09

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Total shareholders' fund

93,7

91

101,7

10

113,0

01

128,7

12

(Sen

)

‘06 ‘07 ‘08 ‘09

5.00

10.00

15.00

20.00

25.00

Net Earnings Per Share

21.7

0

9.7

7 12.0

4 14.4

8

(RM

)

‘06 ‘07 ‘08 ‘09

0.20

0.40

0.60

0.80

1.00

1.20

Net Tangible Assets Per Share

0.7

4

0.8

1 0.9

0 1.0

2

(Sen

)

‘06 ‘07 ‘08 ‘09

1.00

2.00

3.00

4.00

5.00

6.00

Gross Dividend Per Share

5.0

0

5.0

0

2.5

0 3.0

0

FINANCIALHIGHLIGHTS

03

ANNUAL REPORT 2009

BOARD OF DIRECTOR

Tan Sri Datuk Ng Teck FongGroup Executive Chairman

Datin Nonadiah Binti AbdullahIndependent Non-Executive Director

Raja Dato’ Seri Aman Bin Raja Haji AhmadIndependent Non-Executive Director

Ng Yih PyngGroup Managing Director

M Chareon Sae Tang @ Tan Whye AunIndependent Non-Executive Director

Lau Tiang HuaIndependent Non-Executive Director

Ng Yih ChenGroup Executive Director

Ng Sheau ChynGroup Executive Director

Ng Sheau YuenGroup Executive Director

Choong Chow MooiGroup Executive Director

AUDIT COMMITTEE

Lau Tiang HuaChairman, Independent Non-Executive Director

M Chareon Sae Tang @ Tan Whye AunIndependent Non-Executive Director

Raja Dato’ Seri Aman Bin Raja Haji Ahmad Independent Non-Executive Director

REMUNERATION COMMITTEE

M Chareon Sae Tang @ Tan Whye Aun Chairman, Independent Non-Executive Director

Lau Tiang Hua Independent Non-Executive Director

Ng Yih Pyng Group Managing Director

NOMINATION COMMITTEE

M Chareon Sae Tang @ Tan Whye Aun Chairman, Independent Non-Executive Director

Lau Tiang Hua Independent Non-Executive Director

Ng Yih Pyng Group Managing Director

COMPANY SECRETARIES

Tan Enk Purn (MAICSA 7045521)Teoh Kok Jong (LS 04719)

REGISTERED OFFICE

Level 18, The Gardens North TowerMid Valley City, Lingkaran Syed Putra59200 Kuala LumpurTel : 03-2264 8950Fax : 03-2282 2733

PRINCIPAL PLACE OF BUSINESS

8-1, Jalan 2/131AProject Jaya Industrial EstateBatu 6, Jalan Kelang Lama58200 Kuala LumpurTel : 03-7784 8136Fax : 03-7784 8140Website : www.tomei.com.my

AUDITORS

BDO (AF 0206)

12th Floor, Menara Uni.Asia1008 Jalan Sultan Ismail50250 Kuala Lumpur

PRINCIPAL BANKERS

United Overseas Bank(Malaysia) Berhad (271809-K)

Level 2, Menara UOBJalan Raja Laut50350 Kuala Lumpur

RHB Bank Berhad (6171-M)

2nd Floor, 58-60 Jalan Bukit Bintang55100 Kuala Lumpur

SHARE REGISTRAR

Bina Management (M) Sdn. Bhd. (50164-V)

Lot 10, The Highway CentreJalan 51/20546050 Petaling JayaSelangor

STOCK EXCHANGE LISTING

Main Market, Bursa Malaysia Securities BerhadStock Code 7230Stock Name TOMEI

CORPORATE INFORMATION

04


CORPORATE STRUCTURE


100% Tomei Gold & Jewellery Manufacturing Sdn. Bhd. (184348-V)

100% Yi Xing Goldsmith Sdn. Bhd. (164963-M)

100% Tomei Marketing Sdn. Bhd. (16772-K)

100% Tomei Retail Sdn. Bhd. (701040-P)

100% Tomei International Limited (1069099)

100% Wealthy Concept Limited (1159171)

70% Tomei TI Sdn. Bhd. (763238-K)

61% Gemas Precious Metals Industries Sdn. Bhd. (426096-W)

TOMEI RETAIL SDN. BHD. (701040-P)

100% J&G Collections Sdn. Bhd. (380123-X)

100% TH Jewelry Sdn. Bhd. (590949-K)

100% My Diamond Sdn. Bhd. (555881-V)

100% Cindai Permata Sdn. Bhd. (586915-X)

100% Sinar Raya Trading Sdn. Bhd. (43485-K)

100% Le Lumiere Sdn. Bhd. (758734-W)

100% Tomei Gold & Jewellery Holdings (M) Sdn. Bhd. (33551-H)

100% Tomei Gold & Jewellery (MJ) Sdn. Bhd. (477070-V)

100% Tomei Gold & Jewellery Corp. (K.L) Sdn. Bhd. (73144-H)

100% Tomei Gold & Jewellery (WM) Sdn. Bhd. (526519-X)

100% Tomei Gold & Jewellery (SK) Sdn. Bhd. (548152-K)

100% Tomei Gold & Jewellery (RW) Sdn. Bhd. (597346-T)

100% Tomei Gold & Jewellery (P.T.) Sdn. Bhd. (636726-H)

100% Tomei Gold & Jewellery (JB) Sdn. Bhd. (648828-T)

100% Tomei Worldwide Franchise Sdn. Bhd. (649283-T)

99.99% Tomei Gold & Jewellery (B) Sdn. Bhd. (AGO/RC/6361/05) (under liquidation)

TOMEI GOLD & JEWELLERY HOLDINGS (M) SDN. BHD. (33551-H)

100% Tomei Gold & Jewellery Corp. (KLCC) Sdn. Bhd. (41268-V)

100% Tomei Gold & Jewellery (MK) Sdn. Bhd. (559608-D)

100% Tomei Gold & Jewellery (TS) Sdn. Bhd. (69253-P)

100% Tomei Gold & Jewellery (K.P.) Sdn. Bhd. (559613-P)

100% Tomei Gold & Jewellery (B.U.) Sdn. Bhd. (479114-A)

100% Tomei Gold & Jewellery (M.V.) Sdn. Bhd. (480795-A)

100% Tomei Gold & Jewellery Corp. (Sunway) Sdn. Bhd. (401355-H)

100% Tomei Gold & Jewellery (Klang) Sdn. Bhd. (176665-W)

100% Tomei (Vietnam) Company Limited (473042000013)

TOMEI GOLD & JEWELLERY (MJ) SDN. BHD. (477070-V)

100% Tomei Gold & Jewellery (S.A.) Sdn. Bhd. (180429-D)

100% Tomei Gold & Jewellery (Subang) Sdn. Bhd. (514337-X)

100% Tomei Gold & Jewellery (IOI) Sdn. Bhd. (513267-X)

TOMEI GOLD & JEWELLERY MANUFACTURING SDN BHD (184348-V)

100% Lumiere 2006 Limited (1068733)

WEALTHY CONCEPT LIMITED (1159171)

100% Wealthy Concept Jewellery (Shenzhen) Company Limited (440301503321095)

04

WITH RAGING

PASSION,

WE STRIVE.

06


CORPORATE PROFILE

“TOMEI” TIMELESS THROUGH THE YEARSTomei was founded way back in 1968 with the

commencement of business in design and manufacturing of

jewellery supplying to local jewellers. As the business grew,

Tomei ventured into the establishment of first retail outlet under

the brand name TOMEI in Campbell Shopping Complex

in Kuala Lumpur in the early seventies and subsequently

commenced its wholesale and distribution of jewellery.

07

ANNUAL REPORT 2009

Today, Tomei Group is an Integrated Manufacturer and Retailer in Gold & Jewellery. The needs to cater for the demand of young and trendy lifestyle propels the Group to introduce My Diamond, specializing in trendy white gold and diamond collection to the market in year 2002. The following year, the Group set up its own boutique under the name T.H. Jewelry to display its high end range of collections. Following the successful acquisition of Le Lumiere, a renowned international brand for Hearts & Arrows Diamond in year 2007, the Group set up its fi rst Le Lumiere boutique in 2008.

As part of the Group continuous effort and commitment to quality, the Group was accredited with ISO in Quality Management System for its retailing in jewellery from Lloyd’s Register Quality Assurance Kuala Lumpur since year 2003.

During the same year, the Group was awarded with the status Superbrands Malaysia 2003/2004, being the fi rst jeweller in Malaysia to receive the award. Since year 2004, the Group has been consistently awarded with the Fair Price Shop Awards by the Ministry of Domestic Trade and Consumer Affairs, Malaysia for its excellent customer service at its retail outlets. In the year 2004, the Group secured the right to distribute Prima Gold, a 24k gold jewellery in Malaysia. In the following year, it was granted the licence to manufacture, distribute and sell gold products under Baby Looney Tunes copyright character in Malaysia from Warner Bros. Consumer Product Inc, USA. During the year 2006, the Group further expanded its product range upon the granting of licence to manufacture and sell the Hello Kitty gold character in Malaysia. Following its excellent track record, the Group was also appointed distributor for Fior Drissage-Floating Diamonds in Malaysia in the same year.

Year 2006 opened up a new chapter in the Group history with the quotation of Tomei Consolidated Berhad on the Main Market, Bursa Malaysia Securities Berhad.

The Group was granted the Investment licence to set up its manufacturing activities in Socialist Republic of Vietnam in the year 2006, marking its maiden overseas venture and currently has 7 retail kiosks in Vietnam located in various shopping complexes. In year 2009, the Group also has successfully applied for a trading licence which allowed it to import and distribute ready made jewellery to distributor in Vietnam.

In the year 2008, the Group was granted a Certifi cate of Approval to establish an Enterprise in People’s Republic of China by Shenzhen Registrar of Trading and Industries. Following the approval, the Group commenced its own Tomei retail kiosks, retailing various type of jewellery in China. Today, the Group has 3 retail kiosks in Shanghai, China.

To date, the Group has 59 jewellery retail outlets and 10 retail kiosks within 4 major umbrella brands namely TOMEI, MY DIAMOND, T.H. JEWELRY and LE LUMIERE.

CORPORATE PROFILE(CON’T)

08


OUTLET LISTING

NO LOCATION ADDRESS TEL FAX

1 1 BORNEO HYPERMALL Lot G-344, Ground Floor, 1 Borneo Hypermall, Jalan Sulaiman, 088-448 609 088-448 608 88400 Kota Kinabalu, Sabah

2 AEON BUKIT INDAH Lot G32, Aeon Bukit Indah Shopping Centre, 07-236 7806 07-236 7815 No. 8, Jalan Indah 15/2,Taman Bukit Indah, 81200 Johor Bahru, Johor Darul Takzim

3 AEON BANDAR MELAKA G76, Ground Floor, Aeon Bandar Melaka Shopping Centre, 06-286 8980 06-286 8910 No. 2, Jalan Lagenda, Taman I-Lagenda, 75400 Melaka

4 AEON BUKIT TINGGI G57A, Ground Floor, Aeon Bukit Tinggi Shopping Center, 03-3326 2931 03-3326 2930 No. 1, Persiaran Batu Nilam 1/KS 6, Bandar Bukit Tinggi 2, 41200 Klang, Selangor

5 AEON TEBRAU CITY Lot F47, First Floor, Aeon Tebrau City Shopping Centre, 07-355 0671 07-355 0514 No. 1, Jalan Desa Tebrau, Taman Desa Tebrau, 81100 Johor Bahru, Johor

6 AEON SEBERANG PRAI Lot G62, Ground Floor, Aeon Seberang Prai City Shopping Centre, 04-538 2579 04-538 1469 Perdana Mall, Jalan Perda Timur, 14000 Bukit Mertajam, Seberang Perai Tengah, Pulau Pinang

7 ALAMANDA PUTRAJAYA Lot LG 09, Lower Ground Floor, Alamanda Putrajaya Shopping Centre, 03-8889 4667 03-8889 4568 SHOPPING CENTRE Jalan Alamanda Precinct 1, 62000 Putrajaya, Wilayah Persekutuan

8 BERJAYA MEGAMALL G23B, Ground Floor, Berjaya Megamall Kuantan, 09-513 4626 09-513 4625 KUANTAN Jalan Tun Ismail, 25000 Kuantan, Pahang

9 BERJAYA LG 26 & 27, Lower Ground Floor, Berjaya Times Square, 03-2143 4668 03-2143 3667 TIMES SQUARE No. 1, Jalan Imbi, 55100 Kuala Lumpur

10 BUKIT BINTANG PLAZA GC4, Ground Floor, Bukit Bintang Plaza, Jalan Bukit Bintang, 03-2141 7987 03-2141 7985 55100 Kuala Lumpur

11 CARREFOUR Lot F2.20 & F2.21b, Ground Floor, Carrefour Wangsa Maju, 03-4149 8271 03-4149 8279 WANGSA MAJU No. 6, Jalan 8/27a, Section 5, Wangsa Maju, 53300 Kuala Lumpur

12 CITY MALL Unit M-0-48 & M-0-49, Ground Floor, City Mall, 088-484 278 088-484 279 Jalan Lintas, Luyang, 88300 Kota Kinabalu, Sabah

13 GIANT BANDAR PUTERI Lot G6, Ground Floor, Giant Superstore Bandar Puteri, 03-8060 3667 03-8062 3667 No. 7, Jalan Puteri 1/1, Bandar Puteri, 47100 Puchong, Selangor

14 GIANT IPOH Lot A18, Ground Floor, Giant Superstore Sunway City, 05-545 9202 05-545 2308 No. 2, Jalan SCI 2/2, Sunway City Ipoh, 31150 Ipoh, Perak

15 GIANT KELANA JAYA Lot G34 & G35, Giant Mall Kelana Jaya, No. 33, Jalan SS 6/12, 03-7880 0667 03-7880 7661 SS 6 Kelana Jaya, 47301 Petaling Jaya, Selangor

16 GIANT KLANG Lot A-19, Persiaran Batu Nilam, Giant Hypermarket Klang, 03-3323 4668 03-3323 8667 Jalan Langat, Bandar Bukit Tinggi, 41200 Klang, Selangor

BRANCHES IN MALAYSIA

09

ANNUAL REPORT 2009

OUTLET LISTING(CON’T)


17 GIANT PENANG Lot G6 & G7, Ground Floor, Giant Hypermarket Bayan Baru, 04-643 1668 04-646 0668 11900 Bayan Baru, Penang

18 GIANT PUTRA HEIGHTS Lot F40 & F41, First Floor, Giant Hypermarket Putra Heights, 03-5191 2381 03-5191 2377 No. 3, Persiaran Putra Perdana, 47650 Putra Heights, Selangor Darul Ehsan

19 GURNEY PLAZA Lot 170-02-21 & Lot 170-02-42, Plaza Gurney, 04-229 2286 04-229 3287 Persiaran Gurney, 10250 Penang

20 IOI MALL G-33A, Ground Floor, IOI Mall, Batu 9 Jalan Puchong, 03-5882 1688 03-5882 1388 Bandar Puchong Jaya, 47100 Puchong, Selangor

21 JUSCO 1 UTAMA Lot G16, Ground Floor, Jusco 1 Utama Shopping Centre, 03-7722 4726 03-7722 4725 SHOPPING CENTRE No. 1, Lebuh Bandar Utama, Bandar Utama Damansara,

47800 Petaling Jaya, Selangor

22 JUSCO BUKIT RAJA Lot G8, Ground Floor, Jusco Bukit Raja Shopping Centre, 03-3344 1257 03-3344 1261 SHOPPING CENTRE Persiaran Bukit Raja 2, Bandar Baru Klang, 41150 Klang

23 JUSCO SEREMBAN 2 Lot G26, Ground Floor, Jusco Seremban 2 Shopping Centre, 06-601 5868 06-601 5869 SHOPPING CENTER 112 Persiaran S2 B1, Seremban 2, 70300 Seremban, Negeri Sembilan

24 KLANG PARADE Lot G30, Ground Floor, Klang Parade, 03-3345 1711 03-3345 1699 No. 2112, KM 2, Jalan Meru, 41050 Klang, Selangor

25 KOMPLEKS PKNS 12A, Tingkat Bawah, Kompleks PKNS Shah Alam, 03-5513 9113 03-5513 9112 SHAH ALAM 40000 Shah Alam, Selangor

26 MAHKOTA PARADE Lot G12, Ground Floor, Mahkota Parade, No. 1, Jalan Merdeka, 06-281 2667 06-281 3667 75000 Melaka

27 MESRA MALL Lot 6, Ground Floor, Mesra Mall, Lot 6490, Jalan Kemaman, 09-864 2051 09-864 2034 Dungun, 24200 Kemasik, Terengganu

28 MID VALLEY MEGAMALL Lot G010, Ground Floor, Mid Valley Megamall, 03-2282 1668 03-2282 1667 Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur

29 MINES SHOPPING FAIR Lot L3-08(P), Level 3, Mines Shopping Fair, Jalan Dulang, 03-8945 6711 03-8942 3291 Mines Resort City, 43300 Seri Kembangan, Selangor

30 PAVILION KUALA LUMPUR Lot 2.59, Level 2, Pavilion Kuala Lumpur, 03-2141 2667 03-2143 2667 168 Jalan Bukit Bintang, 55100 Kuala Lumpur

31 QUEENSBAY MALL LG 53 & 53A, Lower Ground Floor, Queensbay Mall, 04-642 1667 04-642 0667 100 Persiaran Bayan Indah, 11900 Bayan Lepas, Pulau Pinang

32 SHAW CENTREPOINT GL-02 & GL-03, Ground Floor, Shaw Centrepoint, 03-3345 3310 03-3342 2206 Jalan Raja Hassan, 41400 Klang, Selangor

33 SUBANG PARADE Lot G22b & G23, Ground Floor, Subang Parade, 03-5638 8892 03-5632 1431 No. 5, Jalan SS 16/1, 47500 Subang Jaya, Selangor

34 SUNGEI WANG PLAZA G50, Groung Floor, Sungei Wang Plaza, Jalan Sultan Ismail, 03-2148 1653 03-2144 3120 55100 Kuala Lumpur

35 SUNWAY CARNIVAL MALL Lot UG-05, Upper Ground Floor, Sunway Carnival Mall, 04-398 6252 04-398 6249 3068, Jalan Todak, Pusat Bandar Seberang Jaya, 13700 Seberang Jaya, Pulau Pinang

36 SUNWAY PYRAMID G1.82 & G1.83, Ground Floor, Sunway Pyramid Shopping Mall, 03-5622 1285 03-5622 1284 SHOPPING MALL No. 3, Jalan PJS 11/15, Bandar Sunway,

46150 Petaling Jaya, Selangor

37 SURIA KLCC Lot C56, Concourse Floor, Suria KLCC, Kuala Lumpur City Centre, 03-2382 6188 03-2382 6618 50088 Kuala Lumpur

38 TESCO IPOH Lot 20, First Floor, Tesco Ipoh, No. 2, Jalan Jambu, 05-548 0667 05-548 5667 31400 Ipoh, Perak

10OUTLET LISTING

(CON’T)


39 TESCO KOTA BAHRU Lot G9, Ground Floor, Tesco Kota Bahru, Lot 1828, Seksyen 17, 09-747 4559 09-747 4561 Bandar Kota Bahru, 15050 Kota Bahru, Kelantan

40 TESCO PENANG Lot S50 & S51, Second Floor, Tesco Penang, 04-655 1667 04-659 5693 No. 1, Lebuh Tengku Kudin 1,Bukit Jelutong, 11700 Pulau Pinang

41 TESCO SETIA ALAM Lot G24, Ground Floor, Tesco Setia Alam, 03-3343 2725 03-3343 2729 No. 2, Jalan Setia Prima S U13/S, Bandar Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor

42 TESCO SUNGAI PETANI Lot 11, Tesco Sungai Petani, 300 Jalan Lagenda 1, 04-423 2667 04-423 4667 Lagenda Heights, 08000 Sungai Petani, Kedah Darul Aman

43 THE MALL Lot G05, Ground Floor, The Mall, 100 Jalan Putra, 03-4043 9110 03-4043 9112 50350 Kuala Lumpur

44 THE SPRING Lot G57, Ground Floor, The Spring, Jalan Simpang Tiga 082-236 326 082-236 926 93300 Kuching, Sarawak

1 PARKSON CT PLAZA Ho Chi Minh City, Vietnam +84 862 9971939 - Lot No. F1-0018, Parkson CT Plaza, 60A,Truong Son Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam

2 PARKSON FLEMINGTON Ho Chi Minh City, Vietnam +84 39651 390 - Parkson at Bao Gia Building, 182 Le Dai Hanh Street, Ward 15, District 11, Ho Chi Minh City, Vietnam

3 PARKSON HAI PHONG Hai Phong City, Vietnam +84 03 1385 2530 - TD PLAZA Counter 5, Jewellery Area 1st Floor, Parkson TD Plaza, New Urban Area, Nga Nam Catbi Airport Dong Khe Ward, Ngo Quyen District

4 PARKSON HUNG VUONG Ho Chi Minh City, Vietnam +84 08 2220 266 - Lot No. 1008, Parkson Hung Vuong Plaza, No. 126, Hung Vuong Street, Ward 12, District 5, Ho Chi Minh City, Vietnam

5 PARKSON VIET TOWER Hanoi, Vietnam +86 04 8575 054 - F2, 00012, 198B Tay Son Street, Trung Liet Ward, Dong Da District, Hanoi, Vietnam

6 PARKSON SAIGON Ho Chi Minh City, Vietnam +84 822 125543 - TOURIST PLAZA 136-144 Dong Khoi, Phuong Ben Nghe, Quan 1, TP, Ho Chi Minh City, Vietnam

7 THE GARDEN MALL Hanoi, Vietnam +86 43787 6643 - 1st Floor, The Garden Mall - Me Tri Street, My Dinh, My Tri Commune, Tu Liem District, TP Hanoi

1 SHANGHAI HONGQIAO 1st Floor, Shanghai Hongqiao Parkson, +86 215257 4518 - PARKSON No. 100, Shunyi Road, Changning District, Shanghai 200051

2 SHANGHAI NINE SEA 4th Floor, Shanghai Nine Sea Parkson, +86 216415 4859 - PARKSON No. 918, Huaihaizhong Road, Ruwan District, Shanghai 200020

3 SHANGHAI XINZHUANG 1st Floor, Shanghai Xinzhuang Parkson, +86 213463 3175 - PARKSON No. 5001, Dushi Road, Minhang District, Shanghai 201100

BRANCHES IN VIETNAM

BRANCHES IN CHINA


11

ANNUAL REPORT 2009

OUTLET LISTING(CON’T)


1 1 UTAMA SHOPPING Lot 347 & 348, Lower Ground Floor, 1 Utama Shopping Center, 03-7726 5668 03-7725 3667 No. 1, Lebuh Bandar Utama, Bandar Utama Damansara, 47800 Petaling Jaya, Selangor


1 THE GARDENS G207, Ground Floor, The Gardens, Mid Valley City, 03-2287 4668 03-2287 1667 Lingkaran Syed Putra, 59200 Kuala Lumpur


1 1 UTAMA Lot F302, First Floor, I Utama Shopping Centre, 03-7725 8227 03-7727 9227 No 1, Lebuh Bandar Utama, Bandar Utama Damansara, 47800 Petaling Jaya, Selangor

2 AEON BANDAR MELAKA G18, Ground Floor, Aeon Bandar Melaka Shopping Centre 06-286 8232 06-286 8231 No. 2, Jalan Lagenda, Taman I-Lagenda, 75400 Melaka

3 AEON CHERAS SELATAN Lot G22, Ground Floor, Aeon Cheras Selatan Shopping Center, 03-9076 5227 03-9076 0227 Lebuh Tun Hussien Onn, 43200 Balakong, Selangor

4 DATARAN PAHLAWAN BE-023, Ground Floor, Dataran Pahlawan Melaka Megamall, 06-281 7226 06-281 0226 Jalan Merdeka, 75000 Bandar Hilir, Melaka

5 IOI MALL Lot EG2, Ground Floor, IOI Mall, Batu 9 Jalan Puchong, 03-8075 8365 03-8075 8374 Bandar Puchong Jaya, 47100 Puchong, Selangor

6 JUSCO KINTA CITY Lot F11, First Floor, Jusco Kinta City Shopping Centre, 05-546 0227 05-546 1227 No. 2, Jalan Teh Lean Swee, Off Jalan Sultan Azlan Shah Utara, 31400 Ipoh, Perak

7 JUSCO METRO PRIMA Lot G28, Ground Floor, Jusco Metro Prima Shopping Centre, 03-6252 0226 03-6252 0227 No. 1, Jalan Metro Prima, 51200 Kepong, Kuala Lumpur

8 JUSCO PERMAS JAYA Lot G18, Ground Floor, Jusco Permas Jaya Shopping Centre, 07-388 9753 07-388 9754 No. 1, Jalan Permas Jaya Utara, Bandar Baru Permas Jaya, 81750 Johor Bahru, Johor

9 MID VALLEY Lot F-048, First Floor, Mid Valley Megamall, Mid Valley City, 03-2282 0960 03-2282 0569 Lingkaran Syed Putra, 59200 Kuala Lumpur

10 PAVILION KUALA LUMPUR Lot 4.28, Level 4, Pavilion Kuala Lumpur, 03-2148 0667 03-2142 0667 168 Jalan Bukit Bintang, 55100 Kuala Lumpur

11 SUNWAY PYRAMID LG2.71, Lower Ground Two, Sunway Pyramid Shopping Mall, 03-5635 3226 03-5635 8227 No. 3, Jalan PJS 11/15, Bandar Sunway, 46150 Petaling Jaya, Selangor

12 THE CURVE Lot G19A, Ground Floor, The Curve, No. 6, Jalan PJU 7/3, 03-7725 1815 03-7722 2946 Mutiara Damansara, 47800 Petaling Jaya, Selangor

13 THE SPRING Lot G44, Ground Floor, The Spring, Jalan Simpang Tiga, 082-248 443 082-248 557 93300 Kuching, Sarawak

12


INTERNATIONAL BRANDS AND

AWARDS

Superbrands2003/2004

Golden BullAward 2003

SMI Digi-ICT AdoptionAward 2003

Tomei:Eternal Binding Wedding Collection

Le Lumiere:Signature Creations

Le Lumiere:Diamond Wallets

Over the years, Tomei has established its name in the jewellery industry with a promise of excellent quality and services. Now growing strong with aggressive expansion locally, Tomei is proudly moving forward, striving to preserve it’s edge over competitors and to sustain all relevant market requirements where it will continue to shine above the rest.

13

ANNUAL REPORT 2009

INTERNATIONAL BRANDS AND AWARDS(CON’T)

Hall of FameAward 2008

BUSINESS SUMMITAward 2007

Fair Price Shop AwardsYear 2008-2009

Fair Price Shop EXCELLENCE Awards

Year 2005-2006

Le Lumiere 2008-2011:Advertising Campaign: “Who Adorns Who”

Le Lumiere:Diamond Time

Le Lumiere:Diamond Pen Collection

Prima Gold:24K Gold Collection

14


PROFILE OF THE BOARD OF

DIRECTORS

Malaysian, 64 years of age, was appointed as Independent Non-Executive Director on 21 April 2006. He is a member of the Malaysian Institute of Accountants (“MIA”), a Certifi ed Public Accountant and Fellow of the Institute of Chartered Accountant England and Wales. He is also a Fellow of the Institute of Bankers Malaysia. He held various positions in Maybank Group from 1974 to 1985 prior to joining Affi n Bank Berhad in 1985 as an Executive Director. He left Affi n Bank Berhad in 1992 to join Perbadanan

Usahawan Nasional Berhad as the Chief Executive Offi cer (“CEO”) for one year. He became CEO of Affi n Bank Berhad in 1995 and retired in 2003.

Raja Dato’ Seri Aman also sits on the board of Ahmad Zaki Resources Berhad, Affi n Holdings Berhad and Affi n Investment Bank Berhad and sit on the government consultative committee, “Pemudah”. He does not have any family relationship with any director of the Company.

RAJA DATO’ SERI AMAN BIN RAJA HAJI AHMAD

Malaysian, 72 years of age, was appointed as Executive Chairman on 21 April 2006. He graduated with a Bachelor of Science degree in Chemistry from the Taiwan National Cheng Kung University, Taiwan and was conferred the Honorary Professor title by the Yunnan University of Finance and Economics in 2008.

As the founder and Executive Chairman, he has been instrumental in the growth and development of the Group and is responsible for its overall strategic business direction. He brings with him more than 40 years of experience in the jewellery industry including precious metals and gemstones and is a respected authority in gold, silver, platinum and their alloys as well as other precious stones.

In his dedication to assure products of the highest quality, Tan Sri Datuk Ng assisted the establishment of the Fedmas Assay Offi ce Sdn. Bhd. in Penang for the sole purpose of testing the precious metal content of jewellery and ensuring compliance with national and international standards. He has been the President of the Federation of Goldsmiths and Jewellers Association for six years since 1996 and is currently serving several other associations in various capacities.

Tan Sri Datuk Ng also sits on the board of Masmei Berhad. His sons, Mr Ng Yih Pyng and Mr Ng Yih Chen, daughters, Ms Ng Sheau Chyn and Ms Ng Sheau Yuen and daughter-in-law, Ms Choong Chow Mooi are also members of the Board.

TAN SRI DATUK NG TECK FONG

Malaysian, 52 years of age, was appointed as Independent Non-Executive Director on 21 April 2006. She graduated with a Bachelor of Business (Administration) from the Royal Melbourne Institute of Technology in Australia in 1981 and thereafter obtained a Diploma in Montessori Method of Education, St. Nicholas, London, United Kingdom. She began her career in 1980 with the Public Works Department, Melbourne, Australia as an Accounts

Executive. She has also served Bumiputra-Commerce Bank Berhad from 1982 to 1989 and her last position was Manager in Corporate Banking Division. In 1991, she became a licensed Dealer’s Representative and was attached to a stockbroking fi rm until 1997.

Datin Nonadiah does not have directorships in other public companies. She also does not have any family relationship with any director of the Company.

DATIN NONADIAH BINTI ABDULLAH

as ed m

In his dedication to assure prodquality, Tan Sri Datuk Nthe Fedmas Asssole pu

15

ANNUAL REPORT 2009

PROFILE OF THE BOARD OF DIRECTORS(CON’T)

Malaysian, 38 years of age, was appointed as Managing Director on 21 April 2006. He holds a Bachelor of Business Administration degree in Finance in 1990 from Iowa State University in the United States of America (“USA”) and received a Master in Business Administration in Corporate Finance in 1991 from Iowa State University in the USA. Upon graduation, he joined the Group as a Director and is responsible for the overall management and business development of the Group. In addition to his role as Director, he is also appointed as the President of Goldsmiths & Jewellers

Association of Wilayah Persekutuan, Selangor, Negeri Sembilan and Pahang and Deputy President of Federation of Goldsmiths and Jewellers Association of Malaysia.

Mr Ng does not have any directorships in other public companies. He is the son to Tan Sri Datuk Ng Teck Fong. His siblings, Mr Ng Yih Chen, Ms Ng Sheau Chyn and Ms Ng Sheau Yuen and spouse Ms Choong Chow Mooi are also members of the Board.

NG YIH PYNG

Malaysian, 71 years of age, was appointed as Independent Non-Executive Director on 21 April 2006. Mr Tang obtained his Bachelor of Law degree from King’s College, University of London and is a Barrister-at-law of the Inner Temple London. He has been in the legal practice since 1968, fi rst as a Legal Assistant in Messrs Shearn & Delamore and later as

a Partner at Messrs Chye, Chow Chung & Tang until 1976. At present, he manages his own legal practice, Messrs C.S. Tang & Co.

Mr Tang also sits on the board of Amsteel Corporation Berhad and Lion Corporation Berhad. He does not have any family relationship with any director of the Company.

M CHAREON SAE TANG @ TAN WHYE AUN

Malaysian, 57 years of age, was appointed as Independent Non-Executive Director on 21 April 2006. Mr Lau is a member of the Malaysian Institute of Certifi ed Public Accountants (“MICPA”), MIA and Malaysian Institute of Taxation. He articled with Peat Marwick, Mitchell & Co and later served as an Audit Manager with Arthur Young & Co. Thereafter, Mr Lau joined a major newspaper company as its Accountant and was subsequently promoted to the position of General Manager for Finance and Administration. In

the year 1985, he established his own accounting practice, JB Lau & Associates, which has since merged with Grant Thornton, an international accounting fi rm.

Mr Lau also sits on the board as an independent director of Malaysia Building Society Berhad, Pan Global Berhad, Scanwolf Corporation Berhad, Land & General Berhad and Ewein Berhad. Mr Lau does not have any family relationship with any other director of the Company.

LAU TIANG HUA

Malaysian, 43 years of age, was appointed as Executive Director on 21 April 2006. He obtained a Bachelor of Business Administration degree in Marketing from Iowa State University in the USA in 1988 and further pursued with Gemology at the Gemological Institute of America in 1990 before receiving a Master of Business Administration (Finance) from the University of Hull, United Kingdom in 1996. Upon graduation in

1988, he joined the Group as Director and is currently responsible for specialized sales of the Group.

Mr Ng also sits on the board of Masmei Berhad. He is the son to Tan Sri Datuk Ng Teck Fong. His siblings, Mr Ng Yih Pyng, Ms Ng Sheau Chyn and Ms Ng Sheau Yuen and sister-in-law Ms Choong Chow Mooi are also members of the Board.

NG YIH CHEN


16

Malaysian, 41 years of age, was appointed as Executive Director on 21 April 2006. She graduated with a Bachelor of Business Administration degree from Iowa State University in the USA in 1989 and received a degree in Gemology from the Gemological Institute of America, Santa Monica California in 1991. Since her return to Malaysia, she joined the Group in 1995 as General Manager. She is responsible for the overall quality control of raw materials specifi cally gemstones and fi nished jewellery.

Ms Choong does not have any directorships in other public companies. She is the spouse to Mr Ng Yih Pyng. Her father-in-law, Tan Sri Datuk Ng Teck Fong, brother-in-law, Mr Ng Yih Chen, and sisters-in-law Ms Ng Sheau Chyn and Ms Ng Sheau Yuen are also members of the Board.

CHOONG CHOW MOOI

Malaysian, 39 years of age, was appointed as Executive Director on 21 April 2006. She obtained a Bachelor of Science degree in Computer Engineering as well as a Master degree in Computer Engineering from Iowa State University USA in 1990 and 1991 respectively.

She also served as a Research Assistant in the Department of Electrical and Computer Engineering at the same university from 1990 to 1991. Since her return to Malaysia in 1992, she joined the Group as

Director and has been responsible for the wholesale and manufacturing operations of the Group.

She is the daughter to Tan Sri Datuk Ng Teck Fong. Her siblings, Mr Ng Yih Pyng, Mr Ng Yih Chen and Ms Ng Sheau Yuen and sister-in-law Ms Choong Chow Mooi are also members of the Board. Mr Ong Kee Liang, the spouse of Ms Ng is a shareholder of Ong Tiong Yee & Sons Sdn. Bhd. (“OTY”). OTY is involved in retailing of gold and jewelleries.

NG SHEAU CHYN

Malaysian, 36 years of age, was appointed as Executive Director on 21 April 2006. In 1991, she obtained her Bachelor of Business Administration degree from Iowa State University in the USA and subsequently obtained her Master of Business Administration from the same university in 1993. In 2005, she has also obtained a Diploma in Diamond Grading from the Gemological Institute of America. Upon graduation in 1993, she started her career as a lecturer in Sunway College. In 1996, she left to join PT Safi lindo Permata in Bandung, Indonesia which is involved in textile operation as

Assistant Manager. In 2003, she left the company to join the Group as Director in the gold division and her responsibilities include overseeing and improving the business processes of the Group.

Ms Ng does not have any directorships in other public companies. She is the daughter to Tan Sri Datuk Ng Teck Fong. Her siblings, Mr Ng Yih Pyng, Mr Ng Yih Chen and Ms Ng Sheau Chyn and sister-in-law Ms Choong Chow Mooi are also members of the Board.

NG SHEAU YUEN

Notes:1. Save as disclosed above, none of the Directors have:-

(a) any confl ict of interest with the Company(b) any conviction of offences (other than traffi c offences) within the past ten (10) years.

2. The respective Director’s interests in the Company are detailed in page 125 of the Annual Report.

PROFILE OF THE BOARD OF

DIRECTORS(CON’T)

TOMEI CONSOLIDATED BERHAD

HARMONIOUSLY,

WE GROW


18


CHAIRMAN’S STATEMENT

On behalf of the Board of Directors of Tomei Consolidated

Berhad, it is my pleasure to present you the Annual Report and

Audited Financial Statements of our Group and our Company

for the financial year ended 31 December 2009.

Tomei which was founded in 1968 has evolved from a small

enterprise into an integrated manufacturer and retailer of

jewellery. Today, Tomei has a total of 59 retail outlets in

Malaysia and 10 retail kiosks in the Socialist Republic of

Vietnam and People’s Republic of China. Its products are also

exported to other regional countries and Europe.

19

ANNUAL REPORT 2009

CHAIRMAN’S STATEMENT(CON’T)

YEAR UNDER REVIEW

The year 2009 was a challenging one for the Group. The start of the financial crisis in 2008 has somehow affected economic growth in many countries including Malaysia. To counter this crisis, our Government has introduced and implemented several measures to stimulate the economy which has resulted in some positive growth since the 4th quarter of 2009. The financial year 2009 also witnessed the continued increase of gold price to its record high. Your Board was vigilant on these developments and had taken a cautious approach in opening new retail outlets.

During the financial year ended 31 December 2009, the Group reported turnover of RM 300.9 million from RM 289.4 million reported in the financial year 2008. Our net profit after tax and minority interest has improved by 20.2% to RM 18.2 million during the current financial year. The improved performance was attributable to the streamlining of retail outlets and better gold prices as compared to the previous financial year.

In our effort and commitment to tap into the China market, the Group has during the financial year acquired the remaining interest in its subsidiary company, Wealthy Concept Limited which in turn fully owns Wealthy Concept Jewellery (Shenzhen) Company Limited in China. The Group has since set up 3 retail kiosks in Shanghai, retailing gold and jewellery under the brand name TOMEI.

In The Socialist Republic of Vietnam, the Group continues to explore opportunities from the rapid economic growth in the country. During the financial year, the Group set up another 2 retail kiosks in major cities like Ho Chi Minh and Hanoi in addition to its existing 5 retail locations, reaching out to more consumers in the country.

Since January 2009, the Group has set up an additional 7 retail outlets in Malaysia and relocated some of its existing retail outlets in various shopping malls to more strategic locations so as to have a wider exposure to shoppers and existing customers. Today we have a total of 59 retail outlets in Malaysia operating under the brand names of TOMEI, MY DIAMOND, T.H. JEWELRY and LE LUMIERE.

The Group also takes effort to continue in its creative product development to ensure our customers are always pampered with the latest product designs of timeless masterpiece. The Group introduced its Le Lumiere Diamond Time collection offering perfect cut diamond straps for both men and women. Following this successful collection is the launching of Le Lumiere Allure Diamond Wallet in February 2010. Our Le Lumiere collections also come in different elegant design complete with their own theme such as Je T’aime, Le Lumiere du Soleil and many more.


20


AWARDS

In recognition of our excellent achievements and contribution to the industry, Tomei Group has received numerous awards and recognition. In 2008, the Group has been co-opted into the prestigious Hall of Fame for The Golden Bull Award.

In addition, the Group has been consistently awarded with the Fair Price Shop Award by the Ministry of Domestic Trade and Consumer Affairs, Malaysia since 2003.

In line with our Group’s emphasis and commitment on quality, our Group is certified with the ISO accreditations in quality management system for our retailing in gold and jewellery products from the Lloyd’s Register Quality Assurance, Kuala Lumpur.

CORPORATE SOCIAL RESPONSIBILITY

Tomei is always committed to play its role as a caring corporate citizen. We believe charity goes beyond the line of colours, creeds and beliefs. In line with this, Tomei has on 7 February 2010 organized the TOMEI 1Malaysia Charity Tea Party with participations from various schools, religious associations and education foundations. The Group hopes its contribution will assist those in need to build a better Malaysia.

DIVIDEND

Your Board is pleased to recommend a first and final single tier tax exempt dividend of 3.0 sen per ordinary share for the financial year ended 31 December 2009.

OUTLOOK

The gradual recovery of the global and Malaysian economy has improved consumer’s sentiments. Barring any unforeseen circumstances, your Board is of the opinion that the Group will be able to sustain its profitability.

APPRECIATION

On behalf of the Board of Directors, I would like to express our sincere appreciation and thanks to all our invaluable customers, bankers, suppliers, government authorities, business associates and shareholders for your continuous support.

My thanks also go to the management and staff of the Group for your utmost commitment, dedication and hard work in ensuring our success.

Last but not least, to my fellow Directors, I thank you for your invaluable advice and support.

CHAIRMAN’S STATEMENT

(CON’T)

TAN SRI DATUK NG TECK FONGGROUP EXECUTIVE CHAIRMAN

ANNUAL REPORT 2009ANNUAL REPORT 2009

21主席报告


22


23

ANNUAL REPORT 2009

PENYATAPENGERUSI

ULASAN TAHUN KEWANGAN

Tahun 2009 merupakan tahun yang mencabar bagi Kumpulan. Kemunculan kemelut kewangan dalam tahun 2008 telah mempengaruhi pertumbuhan ekonomi di banyak negara termasuk Malaysia. Dalam mengatasi kemelut ini, kerajaan telah mengumum dan melaksanakan beberapa langkah untuk merangsang ekonomi negara di mana pertumbuhan positif mula dirasai sejak suku keempat tahun 2009. Tahun kewangan 2009 turut menyaksikan peningkatan harga emas secara berterusan hingga rekod tertinggi. Lembaga Pengarah sentiasa mengawasi perkembangan ini dan mengambil langkah yang berwaspada untuk membuka kedai runcit jualan baru.

Dalam tahun kewangan berakhir pada 31 Disember 2009, Kumpulan mencatatkan perolehan sebanyak RM 300.9 juta berbanding RM 289.4 juta yang dilaporkan dalam tahun kewangan 2008. Untung bersih selepas cukai dan kepentingan minoriti meningkat sebanyak 20.2% kepada RM 18.2 juta dalam tahun kewangan semasa. Prestasi yang meningkat ini adalah hasil perlangsingan rangkaian kedai runcit jualan dan harga emas yang lebih baik berbanding dengan tahun kewangan sebelumnya.

Dalam usaha dan komitmen kami untuk menembusi pasaran China, dalam tahun kewangan yang ditinjau, Kumpulan telah mengambil alih baki kepentingan Wealthy Concept Limited, sebuah anak syarikat subsidiari yang juga memiliki semua kepentingan saham dalam Wealthy Concept Jewellery (Shenzhen) Company Limited di China. Kumpulan juga mendirikan 3 kiosk runcit jualan di Shanghai di bawah jenama TOMEI.

Di Republik Sosialis Vietnam, Kumpulan terus menerokai peluang-peluang baru dari suasana pertumbuhan ekonominya yang pesat. Dalam tahun kewangan, Kumpulan telah membuka 2 buah kiosk runcit jualan di bandar-bandar utama seperti Ho Chi Minh dan Hanoi, tambahan kepada 5 lokasi yang sedia ada bagi mencapai lebih pengguna di negara tersebut.

Sejak Januari 2009, Kumpulan juga telah membuka 7 kedai runcit jualan di Malaysia dan menempatkan semula sesetengah kedai runcit jualan yang sedia ada di gedung membeli-belah ke lokasi-lokasi yang lebih strategik untuk memperluaskan pendedahan kepada para pembeli-belah dan pelanggan kami. Kini, kami mempunyai 59 buah kedai runcit jualan di Malaysia yang beroperasi di bawah jenama TOMEI, MY DIAMOND, T.H. JEWELRY dan LE LUMIERE.

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 2009.

Tomei, sejak penubuhannya pada tahun

1968, telah berkembang daripada

sebuah syarikat kecil kepada pengilang

dan peruncit barang kemas yang

bersepadu. Kini, Tomei memiliki 59

kedai runcit jualan di Malaysia dan 10

kiosk runcit jualan di Republik Sosialis

Vietnam dan Republik Rakyat China.

Produk-produknya juga di eksport ke

negara-negara serantau dan Eropah.


24


Kumpulan juga meneruskan usahanya dalam pembangunan produk kreatif bagi memastikan pelanggan-pelanggan kami sentiasa ditawarkan aneka rekaan terkini yang anggun dan abadi. Kumpulan memperkenalkan koleksi Le Lumiere Diamond Time yang menawarkan gelang tangan kulit berlian “perfect cut” untuk lelaki dan wanita. Seiring dengan kejayaan ini ialah pelancaran dompet berlian Le Lumiere Allure pada Februari 2010. Koleksi-koleksi Le Lumiere menyerlah dengan rekaan-rekaan yang anggun dan bertema unik seperti Je T’aime, Le Lumiere du Soleil dan seumpamanya.

ANUGERAH-ANUGERAH

Sebagai pengiktirafan kepada pencapaian cemerlang dan sumbangan kami kepada industri, Kumpulan Tomei telah menerima pelbagai anugerah dan pengiktirafan. Dalam tahun 2008, Kumpulan telah diberi keanggotaan dalam Hall of Fame oleh Anugerah The Golden Bull.

Sejak tahun 2003, Kumpulan secara konsisten telah diberi anugerah Kedai Harga Patut daripada Kementerian Perdagangan Dalam Negeri dan Hal Ehwal Pengguna Malaysia.

Sejajar dengan penekanan dan komitmen Kumpulan terhadap keunggulan kualiti, Kumpulan telah ditauliahkan dengan kreditasi ISO dalam sistem pengurusan kualiti untuk penjualan runcit produk-produk emas dan barang kemas daripada Lloyd’s Regsiter Quality Assurance, Kuala Lumpur.

TANGGUNGJAWAB SOSIAL KORPORAT

Tomei sentiasa komited terhadap peranannya sebagai warga korporat yang bertanggungjawab. Kami percaya bahawa tanggungjawab amal melangkaui batasan warna kulit, perbezaan agama dan kepercayaan. Justeru itu, pada 7 Februari 2010, Tomei telah menganjurkan TOMEI 1Malaysia Charity Tea Party dengan penyertaan dari sekolah-sekolah,

persatuan-persatuan agama dan yayasan-yayasan pendidikan. Kumpulan berharap sumbangannya dapat membantu mereka yang memerlukannya demi membina Malaysia yang lebih cemerlang.

DIVIDEN

Lembaga Pengarah dengan sukacitanya mencadangkan dividen pertama dan akhir ”single tier” yang dikecualikan cukai sebanyak 3.0 sen sesaham bagi tahun kewangan berakhir pada 31 Disember 2009.

PROSPEK MASA DEPAN

Ekonomi global dan Malaysia yang beransur pulih telah memperbaiki sentimen pengguna. Melainkan timbulnya peristiwa yang tidak dijangka, Lembaga Pengarah berpendapat bahawa Kumpulan berupaya mengekalkan keuntungannya.

PENGHARGAAN

Bagi pihak Lembaga Pengarah, saya ingin merakamkan penghargaan ikhlas dan rasa terima kasih kami kepada semua pelanggan, jurubank, pembekal, badan kerajaan, rakan niaga dan pemegang saham yang telah memberikan sokongan berterusan mereka kepada kami.

Saya juga berterima kasih kepada pihak pengurusan dan kakitangan Kumpulan atas komitmen, dedikasi dan ketekunan mereka untuk 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

PENYATAPENGERUS

(SAMBUNGAN)

25

ANNUAL REPORT 2009

CALENDAROF EVENTS

Le Lumiere Wallets Premiere Launch 2010

Le Lumiere Diamond Time Premiere Launch 2009

Tomei Charity Tea Party 2010


MOVING

FORWARD

TO A FUTURE

BLAZING

WITH HOPE

27

ANNUAL REPORT 2009

Your Board of Directors recognise 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”) has 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 decision making process.

The profi les 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 takes 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 of business plan and annual budget, performing quarterly review of business and fi nancial 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 specifi c 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; and g) Developing and implementing an investor relation program or shareholders communications

policy for the Company.

STATEMENT ON CORPORATE GOVERNANCE

ANNUAL REPORT 2009

28


STATEMENT ON

CORPORATE GOVERNANCE

(CON’T)

2. 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 fi nancial year ended 31 December 2009, there were only fi ve (5) Board Meetings held and the details of attendance are as follows:-

Executive Directors Attendance Tan Sri Datuk Ng Teck Fong 5/5 Ng Yih Pyng 5/5 Ng Yih Chen 5/5 Ng Sheau Chyn 4/5 Ng Sheau Yuen 5/5 Choong Chow Mooi 5/5

Independent Non-Executive Directors Datin Nonadiah Binti Abdullah 5/5 Raja Dato’ Seri Aman Bin Raja Haji Ahmad 4/5 M Chareon Sae Tang@ Tan Whye Aun 5/5 Lau 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 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 defi ned 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 two (2) Board Committees with their respective term of reference as provided below:-

29

ANNUAL REPORT 2009

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 fi duciary responsibilities in relation to corporate governance, ensure timely and accurate fi nancial 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 Designation M Chareon Sae Tang @ Tan Whye Aun Chairman Lau Tiang Hua Member Ng 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 suffi cient 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 benefi ts-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.

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 take proactive steps to visit both manufacturing and retailing operation to gain indepth understanding of the business.

In view of the proposed implementation of the Goods & Services Tax by the Royal Custom of Malaysia, your Board together with the senior management team of the Group has attended a seminar on Goods & Services Tax conducted by BDO Tax Services Sdn. Bhd. on 8 April 2010.

STATEMENT ON CORPORATE GOVERNANCE(CON’T)

30


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 specifi cally 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 offi ce 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 offi ce 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 Offi cers 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 fi nancial year ended 31 December 2009 are set out as follows:-

Remuneration Non - Executive Director Executive Director RM RM Salaries - 2,361,560 Fees 179,000 85,000 Benefi t-in-Kind - 95,500 Remuneration Non - Executive Director Executive Director Below RM 50,000 3 - RM 50,001 - RM 100,000 1 - RM 100,001 - RM 150,000 - - RM 150,001 - RM 200,000 - - RM 200,001 - RM 250,000 - - RM 250,001 - RM 300,000 - 1 RM 300,001 - RM 350,000 - 2 RM 350,001 - RM 400,000 - 1 RM 401,001 - RM 450,000 - - RM 451,001 - RM 500,000 - 1 RM 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.

STATEMENT ON


(CON’T)

31

ANNUAL REPORT 2009

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 fi nancial statements present a true and fair view of the state of affairs and are prepared in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965.

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

The Group publishes full fi nancial statements annually and condensed fi nancial 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 fi nancial, 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 fi nancial 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 fi nancial statements for the fi nancial year which have been made out in accordance with the applicable approved Financial Reporting Standards in Malaysia and give a true and fair view of the state of affairs of the Group and the Company as at 31 December 2009 and of the results of the operations of the Group and of the Company and of the cash fl ows of the Group and the Company for the fi nancial year then ended.

In preparing the fi nancial statements, your Board has used appropriate and relevant accounting policies that are consistently applied 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 fi nancial position of the Group and the Company and which enable them to ensure that the fi nancial statements comply with the Companies Act, 1965.

STATEMENT ON CORPORATE GOVERNANCE(CON’T)

32

Your Board also have 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 2009 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 fi nancial results, press releases, annual reports and circulars to shareholders. Your Board also takes effort to meet up with investor 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 fi nancial announcement, major and signifi cant 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 clarifi cation 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 2010.

STATEMENT ON


(CON’T)


33MAJORRETAIL BRANDS

ANNUAL REPORT 2009


MAJORRETAIL

BRANDS

ANNUAL REPORT 2009

MAJORRETAIL BRANDS


MAJORRETAIL

BRANDS

33

ANNUAL REPORT 2009

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 specifi ed 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 specifi ed in Part II of the

1st Schedule of the Accountant’s Act 1967; or(iii) Fulfi ls 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 fi lled 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 auditors and the Management on matters in connection with accounting, reporting and controls.

b) The Audit Committee is to assist your Board in fulfi lling its fi duciary 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.

AUDIT COMMITTEE REPORT

34


AUDIT COMMITTEE

REPORT(CON’T)

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 fi nancial reports and year end fi nancial statements prior to the approval of

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

viii) Any related party transactions and confl ict 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 signifi cant fi nancial 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.

35

ANNUAL REPORT 2009

5. PROCEDURES

The Audit Committee shall regulate its procedures as follows:-

a) The Audit Committee shall hold at least 4 meetings in each fi nancial 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 fi ve (5) meetings during the fi nancial year ended 31 December 2009 and the attendance of each member is as follows:-

Name AttendanceLau Tiang Hua 5/5M Chareon Sae Tang @ Tan Whye Aun 5/5Raja 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 fi nancial year ended 31 December 2009:-

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 fi nancial

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 fi nancial 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 fi nal audits, and any other relevant matters;

AUDIT COMMITTEE REPORT(CON’T)

36


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 confl ict 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, profi ciency and due professional care. Internal audit adopts a risk based auditing approach by focusing on reviewing identifi ed 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 verifi cation of inventory and cash maintained at the branches (located in Malaysia) and Head Offi ce, and at a subsidiary namely Gemas Precious Metals Industries Sdn Bhd; and reviewing the compliance of laid down inventory and cash handling procedures, check for strict compliance to business processes, statutory requirements and corporate governance by the Management. 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 fi ndings 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 2010.

AUDIT COMMITTEE

REPORT(CON’T)

37

ANNUAL REPORT 2009

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 15.27(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 effi ciency of business operations, reliability of fi nancial 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

38


STATEMENT ON INTERNAL

CONTROL(CON’T)

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 verifi cation of inventory and cash maintained at the branches

(located in Malaysia), Head Offi ce and at a subsidiary namely Gemas Precious Metals Industries Sdn Bhd and reviewing the compliance of laid down inventory and cash handling procedures, and to check for strict compliance to business processes and statutory requirements. Through periodical review, audit fi ndings 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 fi nancial year stood at RM 518,000.

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 fi nal audits, and any other relevant matters.

The internal audit reports are tabled at the Audit Committee meetings, at which the fi ndings 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 confi dence on which your Board of Directors relies for assurance.

39

ANNUAL REPORT 2009

STATEMENT ON INTERNAL CONTROL(CON’T)

2.3 Other Key Areas of Internal Control

The Group has a clearly defi ned organization structure with clear defi ned 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 signifi cant 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 fi nancial reports. In their review of quarterly interim fi nancial reports, the Audit Committee will deliberate on all key fi nancial and operating performance.

The Audit Committee will deliberate on the Internal Auditor’s report every quarter and focus on those major fi ndings 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 2009 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 24 February 2010.

40


UTILIZATION OF PROCEEDS

There was no fund raising exercise implemented during the fi nancial year.

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 fi nancial year ended 31 December 2009.

AMERICAN DEPOSITORY RECEIPT OR GLOBAL DEPOSITORY RECEIPT

The Company did not sponsor any depository receipt programme for the fi nancial year ended 31 December 2009.

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 fi nancial year ended 31 December 2009.

NON–AUDIT FEE

During the fi nancial year ended 31 December 2009, RM 14,400 was paid to the external auditors, Messrs BDO, for non-audit services.

PROFIT GUARANTEE

The Company is not subject to any profi t guarantee.

VARIATION OF RESULTS

During the fi nancial year, there were no variation of results that differ by more than 10% from any profi t estimate, forecast or unaudited results that were announced.

MATERIAL CONTRACTS

There were no material contract entered into by the Company and/or its subsidiaries during the fi nancial year ended 31 December 2009, which involves the interest of Directors and major shareholders.

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. Any revaluation surplus or defi cit 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 amortization.

ADDITIONAL COMPLIANCE

INFORMATION

41

ANNUAL REPORT 2009

ADDITIONAL COMPLIANCE INFORMATION(CON’T)

RECURRENT RELATED PARTY TRANSACTIONS

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

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

Ong Tiong Yee & Yi Xing Goldsmith Sales of jewellery Note 1 179,581

Sons Sdn. Bhd. Sdn. Bhd.

Eugen Schofer Gemas Precious Metals Sales and purchases Note 2 1,101,888

Gmbh & Co Industries Sdn. Bhd. of jewellery

Unique Avenue Tomei Gold & Jewellery Rental of premises Note 3 21,600

Sdn. Bhd. Manufacturing Sdn. Bhd.

Best Arcade Tomei Gold & Jewellery Rental of premises Note 4 306,000

Sdn. Bhd. (MJ) Sdn. Bhd.

Teck Fong Property Tomei Gold & Jewellery Rental of premises Note 5 290,400

Sdn.Bhd. (MJ) Sdn. Bhd.

Oasis Properties Tomei Gold & Jewellery Rental of premises Note 6 48,000

Sdn. Bhd. Manufacturing Sdn. Bhd.

Oasis College Tomei Gold & Jewellery Rental of premises Note 7 48,100

Sdn. Bhd. Manufacturing Sdn.Bhd. and staff training

B-Two Technology Tomei Marketing Rental of premises Note 8 36,000

Sdn. Bhd. Sdn. Bhd.

B-Two Technology Gemas Precious Metals Purchase of tools Note 8 2,720

Sdn. Bhd. Industries Sdn. Bhd.

Persekutuan Tomei Gold & Jewellery Rental ofPersatuan-Persatuan Manufacturing Sdn. Bhd. advertisement Note 9 11,200Hakka Malaysia space

C.S. Tang & Co Tomei Consolidated Provision of Note 10 17,134

Berhad legal services

Permata Sagu Tomei Gold & Jewellery Rental of premises Note 11 2,000

Sdn. Bhd. Corp. (K.L) Sdn. Bhd.

42


ADDITIONAL COMPLIANCE

INFORMATION(CON’T)

NOTE 1Ong Kee Liang, the spouse of Ng Sheau Chyn, a Director of the Company is a shareholder of Ong Tiong Yee & Sons Sdn. Bhd. .

NOTE 2Eugen Schofer Gmbh & Co is a shareholder of Gemas Precious Metals Industries Sdn. Bhd. .

NOTE 3Tan 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 is the major shareholder of Unique Avenue Sdn. Bhd. .

NOTE 4Tan 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 5Tan 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 6Tan Sri Datuk Ng Teck Fong and Ng Sheau Chyn are directors of Oasis Properties Sdn. Bhd. . Tan Sri Datuk Ng Teck Fong is also a substantial shareholder of Oasis Properties Sdn. Bhd. .

NOTE 7Tan Sri Datuk Ng Teck Fong, Ng Yih Chen and Ng Sheau Chyn are directors of Oasis College Sdn. Bhd. . Tan Sri Datuk Ng Teck Fong is also a substantial shareholder of Oasis College Sdn. Bhd. .

NOTE 8Tan Sri Datuk Ng Teck Fong and Ng Sheau Chyn are directors and major shareholders of B-Two Technology Sdn. Bhd. .

NOTE 9Tan Sri Datuk Ng Teck Fong was the President of Persekutuan Persatuan-Persatuan Hakka Malaysia.

NOTE 10M Chareon Sae Tang @ Tan Whye Aun is a partner of C.S. Tang & Co. .

NOTE 11Tan Sri Datuk Ng Teck Fong, Ny Yih Chen, Ng Sheau Chyn and Ng Sheau Yuen are directors and major shareholders of Permata Sagu Sdn. Bhd. .

43

ANNUAL REPORT 2009

DIRECTORS’ RESPONSIBILITY STATEMENTIN RELATIONTO THEFINANCIALSTATEMENTS

Your Board is responsible for ensuring that the fi nancial statements for the fi nancial year which have been made out in accordance with the applicable approved Financial Reporting Standards in Malaysia and give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2009 and of the results of the operations of the Group and of the Company and of the cash fl ows of the Group and of the Company for the fi nancial year then ended.

In preparing the fi nancial 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 (“FRSs”) 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 fi nancial position of the Group and the Company and which enable them to ensure that the fi nancial 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.

FINANCIAL CONTENTS

DIRECTORS’ REPORT 45

STATEMENT BY DIRECTORS 50

STATUTORY DECLARATION 50

INDEPENDENT AUDITORS’ REPORT 51

BALANCE SHEETS 53

INCOME STATEMENTS 55

STATEMENTS OF CHANGES IN EQUITY 56

CASH FLOW STATEMENTS 58

NOTES TO THE FINANCIAL STATEMENTS 61


45

ANNUAL REPORT 2009

DIRECTORS’ REPORT

The Directors have pleasure in submitting their report and the audited fi nancial statements of the Group and of the Company for the fi nancial year ended 31 December 2009.

PRINCIPAL ACTIVITIES

The Company’s principal activity is investment holding. The principal activities of the subsidiaries are set out in Note 9 to the fi nancial statements. There have been no signifi cant changes in the nature of these activities during the fi nancial year.

RESULTS

Group Company RM’000 RM’000 Profi t for the fi nancial year 18,880 256

Attributable to: -Equity holders of the Company 18,239 256Minority interest 641 -

18,880 256

DIVIDENDS

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

Company RM’000In respect of fi nancial year ended 31 December 2008:- First and fi nal dividend of 2.5 sen per ordinary share, less tax of 25%, paid on 15 June 2009 2,362

The Directors proposed a fi rst and fi nal single tier tax exempt dividend of 3.0 sen per ordinary share, amounting to RM 4,158,000 in respect of the fi nancial year ended 31 December 2009, subject to the approval of shareholders at the forthcoming Annual General Meeting.

46


DIRECTORS’REPORT

(CON’T)

RESERVES AND PROVISIONS

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

OPTIONS GRANTED OVER UNISSUED SHARES

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

ISSUE OF SHARES AND DEBENTURES

The Company did not issue any new shares or debentures during the fi nancial year.

DIRECTORS

The Directors who have held offi ce 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

47

ANNUAL REPORT 2009

DIRECTORS’ REPORT(CON’T)

DIRECTORS’ INTERESTS

The Directors holding offi ce at the end of the fi nancial year and their benefi cial interests in ordinary shares of the Company during the fi nancial year ended 31 December 2009 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 1.1.2009 Acquired Sold 31.12.2009Shares in the Company

Direct interests

Tan Sri Datuk Ng Teck Fong 7,274,458 6,591,000 - 13,865,458Datin Nonadiah Binti Abdullah 2,000,000 - - 2,000,000Ng Yih Pyng 581,239 - - 581,239Ng Yih Chen 100,000 - - 100,000Ng Sheau Chyn 548,700 - - 548,700Ng Sheau Yuen 100,000 - - 100,000Choong Chow Mooi 100,000 - - 100,000

Indirect interests

Tan Sri Datuk Ng Teck Fong 64,056,077 5,111,364 - 69,167,441Ng Yih Pyng 63,065,177 - - 63,065,177Ng 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 offi ce at the end of the fi nancial year held any interest in the ordinary shares of the Company and of its related corporations during the fi nancial year.

DIRECTORS’ BENEFITS

Since the end of the previous fi nancial year, none of the Directors have received or become entitled to receive any benefi t (other than a benefi t included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the fi nancial statements) by reason of a contract made by the Company or a related corporation with the Director or with a fi rm of which the Director is a member, or with a company in which the Director has a substantial fi nancial interest other than as disclosed in Note 34 to the fi nancial statements.

There were no arrangements during and at the end of the fi nancial year, to which the Company is a party, which had the object of enabling Directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate.

48


OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY:-

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the income statements and balance sheets 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 satisfi ed 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 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 fi nancial 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 amount written off for bad debts or the amount of provision for doubtful debts in the fi nancial statements of the Group and of the Company inadequate to any material extent; or

(ii) which would render the values attributed to the current assets in the fi nancial 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 fi nancial 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 fi nancial 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 fi nancial 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 fi nancial year.

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

DIRECTORS’REPORT

(CON’T)

49

ANNUAL REPORT 2009

SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

Signifi cant event during the fi nancial year is disclosed in Note 35 to the fi nancial statements.

SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

Signifi cant event subsequent to the balance sheet date is disclosed in Note 36 to the fi nancial statements.

HOLDING COMPANY

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

AUDITORS

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

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

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

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

Kuala Lumpur8 April 2010

DIRECTORS’ REPORT(CON’T)

50


STATEMENT BY DIRECTORS

I, Tan Sri Datuk Ng Teck Fong, being the Director primarily responsible for the fi nancial management of Tomei Consolidated Berhad, do solemnly and sincerely declare that the fi nancial statements set out on pages 53 to 123 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 )8 April 2010 )

Before me:-

SAW AH LEONG (No:W450)Commissioner for OathsKuala Lumpur

In the opinion of the Directors, the fi nancial statements set out on pages 53 to 123 have been drawn up in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2009 and of the results of the operations of the Group and of the Company and of the cash fl ows of the Group and of the Company for the fi nancial year then ended.

On behalf of the Board,

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

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

Kuala Lumpur8 April 2010

STATUTORY DECLARATION

51

ANNUAL REPORT 2009

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFTOMEI CONSOLIDATED BERHAD

Report on the Financial Statements

We have audited the fi nancial statements of Tomei Consolidated Berhad, which comprise the balance sheets as at 31 December 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash fl ow statements of the Group and of the Company for the fi nancial year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 53 to 123.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation and fair presentation of these fi nancial statements in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these fi nancial 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 whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s 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 fi nancial statements.

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

Opinion

In our opinion, the fi nancial statements have been properly drawn up in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2009 and of the results of the operations of the Group and of the Company and of the cash fl ows of the Group and of the Company for the fi nancial year then ended.

52


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, 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 fi nancial 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 fi nancial statements.

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

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

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 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 2855/07/10 (J)Chartered Accountants Chartered Accountant Kuala Lumpur8 April 2010

53

ANNUAL REPORT 2009

BALANCE SHEETSAS AT31 DECEMBER 2009

Group Company 2009 2008 2009 2008 NOTE RM’000 RM’000 RM’000 RM’000ASSETS Non-current assets Property, plant and equipment 7 15,340 18,553 - -Investment properties 8 1,792 1,498 - -Investments in subsidiaries 9 - - 28,867 26,882Deferred tax assets 10 479 612 - -

17,611 20,663 28,867 26,882 Current assets Inventories 11 216,420 195,776 - -Trade and other receivables 12 17,982 18,943 91,486 123,306Current tax assets 1,778 1,879 1,720 1,518Cash and cash equivalents 13 8,292 5,063 5,284 814 244,472 221,661 98,490 125,638

TOTAL ASSETS 262,083 242,324 127,357 152,520

54


BALANCE SHEETSAS AT

31 DECEMBER 2009

(CON’T)

The accompanying notes form an integral part of the fi nancial statements.

Group Company 2009 2008 2009 2008 NOTE RM’000 RM’000 RM’000 RM’000EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital 14 63,000 63,000 63,000 63,000Reserves 15 63,857 48,466 11,595 13,701 126,857 111,466 74,595 76,701Minority interest 1,855 1,535 - -

TOTAL EQUITY 128,712 113,001 74,595 76,701

LIABILITIES Non-current liabilities Borrowings 16 10,841 21,017 10,000 20,000Deferred income 19 9 12 - -Deferred tax liabilities 10 446 737 - -

11,296 21,766 10,000 20,000 Current liabilities Trade and other payables 20 27,658 22,339 2,762 5,819Borrowings 16 90,813 83,418 40,000 50,000Current tax liabilities 3,604 1,800 - - 122,075 107,557 42,762 55,819

TOTAL LIABILITIES 133,371 129,323 52,762 75,819

TOTAL EQUITY AND LIABILITIES 262,083 242,324 127,357 152,520

55

ANNUAL REPORT 2009

INCOME STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009


Group Company 2009 2008 2009 2008 NOTE RM’000 RM’000 RM’000 RM’000 Revenue 21 300,890 289,414 4,692 14,506 Cost of sales (196,764) (198,455) - -

Gross profi t 104,126 90,959 4,692 14,506 Other income 22 2,051 2,971 71 147 Selling and distribution expenses (52,772) (48,541) - - Administrative expenses (17,315) (15,315) (4,200) (2,963) Other expenses (3,593) (2,486) - - Finance costs (6,179) (6,428) (126) (502)

Profi t before tax 23 26,318 21,160 437 11,188 Tax expense 24 (7,438) (5,653) (181) (3,061)

Profi t for the fi nancial year 18,880 15,507 256 8,127

Attributable to:- Equity holders of the Company 18,239 15,174 Minority interest 641 333

18,880 15,507

Earnings per ordinary share attributable to equity holders of the Company (sen) - Basic 25 14.48 12.04

56


STATEMENTS OF CHANGES

IN EQUITY FOR THE

FINANCIAL YEAR ENDED

31 DECEMBER 2009 ------ Attributable to equity holders of the Company ------

Exchange

Share Share translation Retained Minority Total

capital premium reserve earnings Total interest equity

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

Balance as at 1 January 2008 63,000 4,078 (219) 34,087 100,946 764 101,710

Foreign currency translations - - 8 - 8 - 8

Income recognised directly in equity - - 8 - 8 - 8

Profi t for the fi nancial year - - - 15,174 15,174 333 15,507

Total recognised income and expense - - 8 15,174 15,182 333 15,515

Ordinary shares contributed

by minority shareholders

of subsidiaries - - - - - 1,778 1,778

Disposal of a subsidiary (Note 29) - - - - - (1,340) (1,340)

Dividends paid (Note 26) - - - (4,662) (4,662) - (4,662)

Balance as at 31 December 2008 63,000 4,078 (211) 44,599 111,466 1,535 113,001

Foreign currency translations - - (11) - (11) - (11)

Income recognised directly in equity - - (11) - (11) - (11)

Profi t for the fi nancial year - - - 18,239 18,239 641 18,880

Total recognised income and expense - - (11) 18,239 18,228 641 18,869

Changes in equity interest

in a subsidiary - - 10 (485) (475) (321) (796)

Dividends paid (Note 26) - - - (2,362) (2,362) - (2,362)

Balance as at 31 December 2009 63,000 4,078 (212) 59,991 126,857 1,855 128,712

57

ANNUAL REPORT 2009

STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009 (CON’T) -- Attributable to equity holders of the Company --

Share Share Retained Total capital premium earnings equity RM’000 RM’000 RM’000 RM’000Company Balance as at 1 January 2008 63,000 4,078 6,158 73,236 Profi t for the fi nancial year, representing total income and expense for the fi nancial year - - 8,127 8,127

Dividends paid (Note 26) - - (4,662) (4,662)

Balance as at 31 December 2008 63,000 4,078 9,623 76,701 Profi t for the fi nancial year representing total income and expense for the fi nancial year - - 256 256 Dividends paid (Note 26) - - (2,362) (2,362)

Balance as at 31 December 2009 63,000 4,078 7,517 74,595


58


CASH FLOW STATEMENTS

FOR THE FINANCIAL YEAR

ENDED 31 DECEMBER

2009 Group Company 2009 2008 2009 2008 NOTE RM’000 RM’000 RM’000 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES Profi t before tax 26,318 21,160 437 11,188 Adjustments for:- Allowance for doubtful debts 651 14 - -Allowance for doubtful debts no longer required (23) (6) - -Amortisation of government grant 19 (3) (3) - -Bad debts written off 7 51 - -Depreciation of property, plant and equipment 7 4,892 5,553 - -Dividend income - - (4,692) (14,506)Loss/(Gain) on disposal of property, plant and equipment 64 (28) - -Gain on disposal of a subsidiary 29 - (49) - (139)Inventories written off 11 - 36 - -Loss from fair value adjustments of investment properties 8 231 - - -Loss on disposal of investment properties - 80 - -Property, plant and equipment written off 7 559 1,440 - -Unrealised (gain)/loss on foreign exchange (654) 66 - -Unrealised loss on gold price fl uctuation 884 432 - -Finance costs 6,179 6,428 126 502Interest income (11) (28) (7) (8)

Operating profi t/(loss) before changes in working capital 39,094 35,146 (4,136) (2,963) Increase in inventories (20,644) (11,390) - -Decrease in trade and other receivables 145 1,531 1,338 141Increase/(Decrease) in trade and other payables 5,934 (7,271) 542 (374)

Cash from/(used in) operations 24,529 18,016 (2,256) (3,196)

59

ANNUAL REPORT 2009

CASH FLOW STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009 (CON’T)

Group Company 2009 2008 2009 2008 NOTE RM’000 RM’000 RM’000 RM’000 CASH FLOWS FROM OPERATING ACTIVITIES (continued) Cash from/(used in) operations 24,529 18,016 (2,256) (3,196) Interest paid (4,557) (2,508) - -Tax paid (6,076) (6,204) - -Tax refunded 387 312 140 -

Net cash from/(used in) operating activities 14,283 9,616 (2,116) (3,196) CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of:- - additional interest in a subsidiary (796) - (796) - - subsidiary for cash, net of cash acquired - - - (883)Dividend received - - 3,519 10,735Interest received 11 28 7 8Net repayment from/(advances to) subsidiaries - - 26,344 (7,738)Purchase of investment property 8 - (55) - -Purchase of property, plant and equipment 7 (2,115) (6,982) - -Proceeds from disposal of investment properties - 191 - -Proceeds from disposal of property, plant and equipment 20 45 - -Proceeds from disposal of a subsidiary, net of cash and cash equivalents disposed 29 - (37) - 139Placement of fi xed deposit as permitted investment (4,617) (571) (4,617) (571)Subscription of shares in existing subsidiaries - - - (1,110) Net cash (used in)/from investing activities (7,497) (7,381) 24,457 580

60


CASH FLOW STATEMENTS

FOR THE FINANCIAL YEAR

ENDED 31 DECEMBER

2009 (CON’T) Group Company 2009 2008 2009 2008 NOTE RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid 26 (2,362) (4,662) (2,362) (4,662)Interest paid (1,350) (1,259) (126) (249)Ordinary share capital contributed by minority shareholders of subsidiaries - 1,778 - -Net (repayments to)/proceeds from Islamic Commercial Papers/Islamic Medium Term Notes (20,000) 7,592 (20,000) 7,592Drawdown/(Repayments) of short term borrowings 3,951 (2,637) - -Repayments of term loans (316) (470) - -Repayments of hire-purchase liabilities (594) (945) - - Net cash (used in)/from fi nancing activities (20,671) (603) (22,488) 2,681

Net (decrease)/increase in cash and cash equivalents (13,885) 1,632 (147) 65 Effects of changes in exchange rate (14) 24 - - Cash and cash equivalents at beginning of fi nancial year 1,805 149 243 178

Cash and cash equivalents at end of fi nancial year 13(d) (12,094) 1,805 96 243


61

ANNUAL REPORT 2009

NOTES TO THE FINANCIAL STATEMENTS31 DECEMBER 2009

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 offi ce of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 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 company is Teck Fong Corporation Sdn. Bhd., a company incorporated in Malaysia.

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

The fi nancial statements were authorised for issue in accordance with a resolution by the Board of Directors on 8 April 2010.

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 fi nancial statements. There have been no signifi cant changes in the nature of these activities during the fi nancial year.

3. BASIS OF PREPARATION

The fi nancial statements of the Group and of the Company have been prepared in accordance with applicable approved Financial Reporting Standards (“FRSS”) in Malaysia and the provisions of the Companies Act, 1965.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of accounting

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

The preparation of fi nancial 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 fi nancial statements. Although these estimates and assumptions are based on Directors’ best knowledge of events and actions, actual results could differ from those estimates.

62


NOTES TO THE FINANCIAL

STATEMENTS31 DECEMBER

2009(CON’T)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.2 Basis of consolidation

The consolidated fi nancial statements incorporate the fi nancial statements of the Company and all its subsidiaries made up to the end of the fi nancial 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 identifi able 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 identifi able assets, liabilities and contingent liabilities is recognised as goodwill (see Note 4.7(a) to the fi nancial statements on goodwill). If the cost of business combination is less than the interest in the net fair value of the identifi able assets, liabilities and contingent liabilities, the Group will:-

(a) reassess the identifi cation and measurement of the acquiree’s identifi able assets, liabilities and contingent liabilities and the measurement of the cost of the combination; and

(b) recognise immediately in the profi t 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 identifi able 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 fi nancial and operating policies of an entity so as to obtain benefi ts 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 fi nancial statements. If subsidiaries use accounting policies other than those adopted in the consolidated fi nancial statements for like transactions and events in similar circumstances, appropriate adjustments are made to its fi nancial statements in preparing the consolidated fi nancial 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 income statement.

Minority interest is that portion of the profi t 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’ identifi able assets and liabilities at the acquisition date and the minority’s share of changes in the subsidiaries’ equity since that date.

63

ANNUAL REPORT 2009

NOTES TO THE FINANCIAL STATEMENTS31 DECEMBER 2009(CON’T)


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 profi ts, such profi ts 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 balance sheet within equity and is presented in the consolidated statement of changes in equity separately from equity attributable to equity holders of the Company.

Minority interest in the results of the Group is presented in the consolidated income statement as an allocation of the total profi t or loss for the fi nancial year between minority interest and equity holders 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 assets.

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 benefi ts associated with the asset will fl ow 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 profi t 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 signifi cant 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.

64




2009(CON’T)


4.3 Property, plant and equipment and depreciation (continued)

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% Plant and machineries 10% - 20% Motor vehicles 20% Furniture and fi ttings 20% Offi ce equipment 20% Renovation and electrical installations 20% Tools, equipment and moulds 20%

Freehold land has unlimited useful life and is not depreciated. Construction-in-progress represents properties under construction and is stated at cost. Construction-in-progress is not depreciated until such time when the asset is available for use.

At each balance sheet date, 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 fi nancial statements on impairment of assets).

The residual values, useful lives and depreciation method are reviewed at each fi nancial 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 benefi ts 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 benefi ts are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in profi t or loss.

4.4 Leases and hire-purchase

(a) Finance leases and hire-purchase

Assets acquired under fi nance 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.

65

ANNUAL REPORT 2009



4.4 Leases and hire-purchase (continued)

(a) Finance leases and hire-purchase (continued)

The minimum lease payments are apportioned between the fi nance charges and the reduction of the outstanding liability. The fi nance charges are recognised in profi t 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.

(b) Operating leases

A lease is classifi ed 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 refl ect market conditions at the balance sheet date, 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 qualifi cation 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 profi t 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 benefi t 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 profi t 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 has the power to exercise control over the fi nancial and operating policies so as to obtain benefi ts 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 fi nancial 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 profi t or loss.

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2009(CON’T)


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 identifi able 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 identifi ablility, control and future economic benefi t 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 fi nite or indefi nite. Intangible assets with fi nite 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 fi nite useful life are reviewed at least at each fi nancial year end. The amortisation expense on intangible assets with fi nite lives is recognised in profi t or loss and is included within the other operating expenses line item.

An intangible asset has an indefi nite 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 infl ows to the Group. Intangible assets with indefi nite 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 indefi nite useful life assessment for the asset. If they do not, the change in the useful life assessment from indefi nite to fi nite 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 benefi ts 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 profi t or loss when the assets is derecognised.

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4.8 Impairment of assets

The carrying amounts of assets, except for fi nancial assets (excluding investments in subsidiaries), inventories, deferred tax assets and investment properties measured at fair value, are reviewed at each balance sheet date 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 indefi nite 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 benefi t 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.

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 the value in use, the estimated future cash infl ows and outfl ows 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 refl ects current market assessments of the time value of money and the risks specifi c to the asset for which the future cash fl ow estimates have not been adjusted. An impairment loss is recognised in profi t 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, fi rst, 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 profi t 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 profi t 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.

Such reversals are recognised as income immediately in profi t 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 profi t or loss, a reversal of that impairment loss is also recognised in profi t or loss.

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2009(CON’T)


4.9 Inventories

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

Cost is determined on a weighted average basis or specifi c identifi cation 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 fi nancial instrument is any contract that gives rise to a fi nancial asset of one enterprise and a fi nancial liability or equity instrument of another enterprise.

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

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

4.10.1 Financial instruments recognised on the balance sheets

Financial instruments are recognised on the balance sheet when the Group has become a party to the contractual provisions of the instrument.

Financial instruments are classifi ed as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and losses and gains relating to a fi nancial instrument or a component that is a fi nancial liability shall be recognised as income or expense in profi t or loss. Distributions to holders of an equity instrument are debited directly to equity, net of any related tax effect. Financial instruments are offsetted when the Group has a legally enforceable right to offset and intends to settle on a net basis or to realise the asset and settle the liability simultaneously.

(a) Receivables

Trade receivables and other receivables including amounts owing by related parties, are classifi ed as loans and receivables under FRS 132 Financial Instruments: Disclosures and Presentation.

Receivables are carried at anticipated realised value. Known bad debts are written off and specifi c allowance is made for debts considered to be doubtful of collection.

Receivables are not held for trading purposes.

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4.10 Financial instruments (continued)

4.10.1 Financial instruments recognised on the balance sheets (continued)

(b) Cash and cash equivalents

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

(c) Payables

Liabilities for trade and other amounts payables, including amounts owing to related parties, are stated at the fair value of the consideration to be paid in the future for goods and services received.

(d) Interest-bearing loans and borrowings

All loans and borrowings are recognised at the fair value of the consideration received less directly attributable transaction costs.

(e) 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 classifi ed as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related tax benefi ts. Otherwise, they are charged to profi t 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 profi t 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.

4.10.2 Financial instruments not recognised on the balance sheets

Gold contracts

The Group is a party to fi nancial instruments that comprise gold contracts. Gold contracts are commitments to either purchase or sell gold at a future date for a specifi ed price and are generally settled in cash but may be settled through delivery of gold. These instruments are not recognised in the fi nancial statements on inception. All gains and losses on such contracts are included in profi t or loss upon settlement.

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2009(CON’T)


4.11 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 profi t 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 profi t or loss in the period in which they are incurred.

4.12 Income taxes

Income taxes include all domestic and foreign taxes on taxable profi t. 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 income statement comprise current tax and deferred tax.

4.12.1 Current tax

Current tax is the amount of income taxes payable or receivable in respect of the taxable profi t 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 at the balance sheet date.

4.12.2 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 balance sheet 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 profi t nor taxable profi t.

A deferred tax asset is recognised only to the extent that it is probable that taxable profi t 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 each balance sheet date. If it is no longer probable that suffi cient taxable profi t will be available to allow the benefi t of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that suffi cient taxable profi t will be available, such reductions will be reversed to the extent of the taxable profi t.

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.

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ANNUAL REPORT 2009



4.12 Income taxes (continued)

4.12.2 Deferred tax (continued)

Deferred tax will be recognised as income or expense and included in profi t 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 balance sheet date.

4.13 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 outfl ow of resources embodying economic benefi ts 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 refl ects current market assessments of the time value of money and the risks specifi c to the liability.

Provisions are reviewed at each balance sheet date and adjusted to refl ect the current best estimate. If it is no longer probable that an outfl ow of resources embodying economic benefi ts 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.

4.14 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence will be confi rmed 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 outfl ow 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 fi nancial statements.

A contingent asset is a possible asset that arises from past events whose existence will be confi rmed 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 infl ows of economic benefi ts 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.

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2009(CON’T)


4.15 Employee benefi ts

4.15.1 Short term employee benefi ts

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefi ts are recognised as an expense in the fi nancial 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.

4.15.2 Defi ned 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.

4.16 Foreign currencies

4.16.1 Functional and presentation currency

Items included in the fi nancial 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 fi nancial statements are presented in Ringgit Malaysia, which is also the Company’s functional and presentation currency.

4.16.2 Foreign currency transactions and balances

Transactions in foreign currencies are converted into Ringgit Malaysia at rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the balance sheet date are translated into Ringgit Malaysia at rates of exchange ruling at that date unless hedged by forward foreign exchange contracts, in which case the rates specifi ed 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 profi t 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.

4.16.3 Foreign operations

Financial statements of foreign operations are translated at fi nancial 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 income statement. All resulting translation differences are recognised as a separate component of equity.

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ANNUAL REPORT 2009



4.16 Foreign currencies (continued)

4.16.3 Foreign operations (continued)

In the consolidated fi nancial statements, exchange differences arising from the translation of net investment in foreign operations are taken to equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in profi t 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 profi t or loss in the separate fi nancial statements of the Company or the foreign operation, as appropriate. In the consolidated fi nancial statements, such exchange differences shall be recognised initially as a separate component of equity and recognised in profi t 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 balance sheet date.

4.17 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 benefi ts associated with the transaction will fl ow 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 specifi c recognition criteria have been met for each of the activities as follows:-

(a) Sales of goods

Revenue from sale of goods is recognised when signifi cant 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.

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2009(CON’T)


4.18 Government grants

Government grants are recognised in the fi nancial 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 profi t or loss on a straight line basis over the remaining estimated useful life of the assets.

4.19 Research costs

Research costs are written off to profi t or loss in the fi nancial year in which it is incurred.

4.20 Segment reporting

Segment reporting is presented for enhanced assessment of the Group’s risks and returns. 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.

Segment revenue, expense, assets and liabilities are those amounts resulting from the operating activities of a segment that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment. Segment revenue, expense, assets and liabilities are determined before intragroup balances and intragroup transactions are eliminated as part of the consolidation process, except to the extent that such intragroup balances and transactions are between Group enterprises within a single segment.

5. ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs

5.1 Early adoption of new FRSs During the fi nancial year, the Group early adopted FRS 4 Insurance Contracts in accordance with

the transitional provisions in paragraphs 41 to 45 of FRS 4. These transitional provisions require the following:-

(a) Simultaneous adoption of Financial Guarantee Contracts (Amendments to IAS 39 and IFRS 4) issued by the International Accounting Standards Board (‘IASB’) in August 2005. This pronouncement permits the accounting policy choice of scoping fi nancial guarantee contracts in accordance with FRS 139 Financial Instruments: Recognition and Measurement, or as insurance contracts in accordance with FRS 4; and

(b) The disclosure requirements in FRS 4 need not apply to comparative information that relates to annual periods beginning before 1 January 2010.

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ANNUAL REPORT 2009


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

5.1 Early adoption of new FRSs (continued) Consequentially, the Group designates corporate guarantees given to banks for credit facilities

granted to subsidiaries as insurance contracts as defi ned in FRS 4. 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 outfl ow of resources embodying economic benefi ts 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 fl ows under its insurance contracts. If this assessment shows that the carrying amount of the insurance liabilities is inadequate, the entire defi ciency shall be recognised in profi t or loss.

Recognised insurance liabilities shall only be removed from the balance sheet when, and only when, it is extinguished via a discharge, cancellation or expiration.

The early adoption of FRS 4 does not result in any adjustment to recognised items of assets, liabilities, income and expenses of the Group in both, the current year and prior years.

5.2 New FRSs not adopted

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

FRS 8 sets out the requirements for disclosure of information on an entity’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 entity that management uses to make decisions about operating matters. This Standard requires identifi cation of operating segments on the basis of internal reports that are regularly reviewed by the entity’s chief operating decision maker in order to allocate resources to the segment and assess its performance.

This Standard also requires the amount reported for each operating segment item to be

the measure reported to the chief operating decision maker for the purposes of allocating resources to the segment and assessing its performance. Segment information for prior years that is reported as comparative information for the initial year of application would be restated to conform to the requirements of this Standard.

The Group does not expect any impact on the fi nancial statement arising from the adoption

of this Standard.

(b) FRS 7 Financial Instruments: Disclosures and the consequential amendments resulting from FRS 7 are mandatory for annual fi nancial 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 fi nancial instruments and

requires the disclosure of the signifi cance of fi nancial instruments for an entity’s fi nancial position and performance. By virtue of the exemption provided under paragraph 44AB of FRS 7, the impact of applying FRS 7 on the fi nancial statements upon fi rst adoption of the FRS as required by paragraph 30(b) of FRS 108 is not disclosed.

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2009(CON’T)


5.2 New FRSs not adopted (continued)

(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.

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

of this Standard. (d) FRS 139 Financial Instruments: Recognition and Measurement and the consequential

amendments resulting from FRS 139 are mandatory for annual fi nancial periods beginning on or after 1 January 2010.

This Standard establishes the principles for the recognition and measurement of fi nancial

assets and fi nancial liabilities including circumstances under which hedge accounting is permitted. By virtue of the exemption provided under paragraph 103AB of FRS 139, the impact of applying FRS 139 on the fi nancial statements upon fi rst adoption of the FRS as required by paragraph 30(b) of FRS 108 is not disclosed.

(e) Amendments to FRS 2 Share-based Payment: Vesting Conditions and Cancellations are

mandatory for annual fi nancial 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.

Amendments to FRS 2 are not relevant to the Group’s operations. (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 fi rst-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 fi nancial statements. The cost method of accounting for an investment has also been removed pursuant to these amendments.


of these amendments.

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ANNUAL REPORT 2009




(g) IC Interpretation 9 Reassessment of Embedded Derivatives is mandatory for annual fi nancial 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 signifi cantly modifi es the cash fl ows that would otherwise be required by the host contract.

The Group does not expect any impact on the fi nancial statements arising from the adoption of this Interpretation.

(h) IC Interpretation 10 Interim Financial Reporting and Impairment is mandatory for annual fi nancial 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 fi nancial asset carried at cost.


of this Interpretation in the future.

(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.

The Group doest not expect any impact on the fi nancial statement arising from the adoption

of this Interpretation in the future.

(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 identifi able

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.

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2009(CON’T)



(j) IC Interpretation 13 Customer Loyalty Programmes is mandatory for annual periods beginning on or after 1 January 2010. (continued)

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.

IC Interpretation 13 is not relevant to the Group’s operations. (k) IC Interpretation 14 FRS 119 – The Limit on a Defi ned Benefi t 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 defi ned benefi ts and other long-term

employee defi ned benefi ts. This Interpretation clarifi es that an economic benefi t 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.

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

available shall be measured as the amount of the surplus at the balance sheet date less any associated costs. If there are no minimum funding requirements, the economic benefi t 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 benefi ts, the economic benefi t 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 fi nancial year.

IC Interpretation 14 is not relevant to the Group’s operations.

(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 fi nancial statements,

guidelines for their structure and minimum requirements for their content. This Standard introduces the titles ‘statement of fi nancial position’ and ‘statement of cash

fl ows’ to replace the current titles ‘balance sheet’ and ‘cash fl ow 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.

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ANNUAL REPORT 2009




(l) FRS 101 Presentation of Financial Statements is mandatory for annual periods beginning on or after 1 January 2010. (continued)

This Standard also introduces a new requirement to present a statement of fi nancial position as at the beginning of the earliest comparative period if there are applications of retrospective restatements that are defi ned in FRS 108, or when there are reclassifi cations of items in the fi nancial statements.

Additionally, FRS 101 requires the disclosure of reclassifi cation 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 fi nancial 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 defi ned in FRS 124 Related Party Disclosures. Additional disclosures are also required for puttable fi nancial instruments classifi ed as equity instruments.

Apart from the new presentation and disclosure requirements described, the Group does not expect any other impact on the fi nancial statements arising from the adoption of this Standard.

(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 reclassifi cations of non-derivative fi nancial assets (other than those

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

These amendments also clarifi es 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.

By virtue of the exemptions provided under paragraphs 103AB of FRS 139 and 44AB

of FRS 7, the impact of applying these amendments on the fi nancial statements upon fi rst adoption of the FRS 139 and FRS 7 respectively as required by paragraph 30(b) of FRS 108 are not disclosed. However, the Group does not expect any impact on the fi nancial statements arising from the adoption of the amendment to IC Interpretation 9.

(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 fi nancial instruments, and fi nancial 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 classifi ed as equity.

80




2009(CON’T)



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

Puttable fi nancial instruments are defi ned as fi nancial instruments that give the holder the right to put the instrument back to the issuer for cash, or another fi nancial 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.

The Group doest not expect any impact on the fi nancial statements arising from the adoption of these amendments.

(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 clarifi es that the disclosure requirements of this Standard specifi cally apply to non-current assets (or disposal groups) classifi ed as held for sale or discontinued operations. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 8 clarifi es the consistency of disclosure requirement for information about profi t or loss, assets and liabilities. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 107 Statement of Cash Flows clarifi es the classifi cation of cash fl ows 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 classifi ed as cash fl ows from operating activities. Expenditures that result in a recognised asset in the statement of fi nancial position are eligible for classifi cation as cash fl ows from investing activities. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 108 clarifi es that only Implementation Guidance issued by the MASB that are integral parts of FRSs is mandatory. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 110 Events after the Reporting Period clarifi es the rationale for not recognising dividends declared after the reporting date but before the fi nancial statements are authorised for issue. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 116 Property, Plant and Equipment removes the defi nition 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 defi nition 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 clarifi es 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. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

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ANNUAL REPORT 2009




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

Amendment to FRS 117 Leases removes the classifi cation of leases of land and of buildings, and instead, requires assessment of classifi cation 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. The Group does not expect any impact on the fi nancial statments arising from the adoption of this amendment.

Amendment to FRS 118 clarifi es reference made on the term ‘transaction costs’ to the

defi nition in FRS 139. The Group does not expect any impact on the consolidated fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 119 Employee Benefi ts clarifi es the defi nitions in this Standard by

consistently applying settlement dates within twelve (12) months in the distinction between short-term employee benefi ts and other long-term employee benefi ts. This amendment also provides additional explanations on negative past service cost and curtailments. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

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. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 123 clarifi es that interest expense calculated using the effective interest rate method described in FRS 139 qualifi es for recognition as borrowing costs. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 127 Consolidated and Separate Financial Statements clarifi es 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. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 128 Investments in Associates clarifi es 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 signifi cant 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 clarifi es 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. Amendment to FRS 128 is not relevant to the Group’s operations.

Amendment to FRS 129 Financial Reporting in Hyperinfl ationary Economies streamlines

the terms used in this Standard in accordance with the new terms used in FRS 101. This amendment also clarifi es that assets and liabilities that are measured at fair value are exempted from the requirement to apply historical cost basis of accounting. Amendment to FRS 129 is not relevant to the Group’s operations.

82




2009(CON’T)



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

Amendment to FRS 131 Interests in Joint Ventures clarifi es 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 clarifi es that a listing and description of interests in signifi cant joint ventures and the proportion of ownership interest held in jointly controlled entities shall be made. Amendment to FRS 131 is not relevant to the Group’s operations.

Amendment to FRS 134 Interim Financial Reporting clarifi es the need to present basic and

diluted earnings per share for an interim period when the entity is within the scope of FRS 133 Earnings Per Share. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 136 clarifi es the determination of allocation of goodwill to each cash-

generating unit whereby each unit shall not be larger than an operating segment as defi ned in FRS 8 before aggregation. This amendment also requires additional disclosures if the fair value less costs to sell is determined using discounted cash fl ow projections. The Group does not expect any impact on the fi nancial statments arising from the adoption of this amendment.

Amendment to FRS 138 Intangible Assets clarifi es 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. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

Amendment to FRS 140 clarifi es that properties that are being constructed or developed for future use as investment property are within the defi nition of ‘investment property’. This amendment further clarifi es 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. The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

(p) 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 fi rst time via the explicit and unreserved statement of compliance with FRSs. An opening FRS statement of fi nancial 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 reclassifi ed in accordance

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

83

ANNUAL REPORT 2009




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

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 fi nancial statements arising from the adoption of this Standard.

(q) 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 identifi able assets.

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

crystallisation of deferred tax benefi ts 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 outfl ow 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 profi t or loss.


of this Standard.

(r) 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 defi ned 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 defi cit 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 profi t or loss and any investment retained in the former subsidiary shall be measured at its fair value at the date when control is lost.


of this Standard.

84




2009(CON’T)



(s) The following amendments to FRSs are mandatory for annual periods beginning on or after 1 July 2010, except for Amendments to FRS 139 which is mandatory for annual periods beginning on or after 1 January 2010.

Amendments to FRS 2 Share-based Payments clarifi es 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. Amendments to FRS 2 are not relevant to the Group’s operations.

Amendments to FRS 5 clarifi es that non-current asset classifi ed as held for distribution to owners

acting in their capacity as owners are within the scope of this Standard. The amendment also clarifi es 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 classifi ed 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 classifi ed 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 fi nancial statements arising from the adoption of these amendments.

Amendments to FRS 138 clarifi es that the intention of separating an intangible asset is

irrelevant in determining the identifi ability of the intangible asset. In a separate acquisition and acquisition as part of a business combination, the price paid by the Group refl ects the expectations of the Group of an infl ow of economic benefi ts, even if there is uncertainty about the timing or the amount of the infl ow. Accordingly, the probability criterion is always considered to be satisfi ed 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 fi nancial statements arising from the adoption of these amendments.

Amendments to FRS 139 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. The Group does not expect any impact on the fi nancial statements arising from the adoption of these amendments.

Amendments to IC Interpretation 9 clarifi es 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 fi nancial statements arising from the adoption of these amendments.

( t ) 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.

85

ANNUAL REPORT 2009




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

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 fi nancial asset from the grantor, it shall be classifi ed as a fi nancial asset. Conversely, if the consideration consists of a right to charge users of the public service, it shall be classifi ed as an intangible asset.


(u) IC Interpretation 15 Agreements for the Construction of Real Estate is mandatory for annual periods beginning on or after 1 July 2010.

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 identifi able 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 infl uence 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 signifi cant risks and rewards, no continuing managerial involvement nor effective control, reliable measurement, etc.).


(v) 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 fi nancial statements.


86




2009(CON’T)



(w) 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 amounts of the dividend payable shall be recognised in profi t or loss.


(x) 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 fi nancial instruments and classifi cation of rights issues respectively.

These amendments remove the transitional provisions in respect of accounting for compound fi nancial instruments issued before 1 January 2003 pursuant to FRS 132

2004 Financial

Instruments: Disclosure and Presentation. Such compound fi nancial instruments shall be classifi ed into its liability and equity components when FRS 139 fi rst applies.

The amendments also clarifi es that rights, options or warrants to acquire a fi xed number of the Group’s own equity instruments for a fi xed amount of any currency shall be classifi ed as equity instruments rather than fi nancial 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 fi nancial statements arising from the adoption of these amendments.

(y) Amendments 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 fi rst-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(z)).

The Group does not expect any impact on the fi nancial statements arising from the adoption of this amendment.

87

ANNUAL REPORT 2009




(z) Amendments to FRS 7 Improving Disclosures about Financial Instruments is mandatory for annual periods beginning on or after 1 January 2011.

These amendments require enhanced disclosures of fair value of fi nancial instruments based on the fair value hierarchy, including the disclosure of signifi cant 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 fi nancial statements upon fi rst adoption of FRS 7 as required by paragraph 30(b) of FRS 108 are not disclosed.

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 signifi cant effect on the amounts recognised in the fi nancial statements.

(a) Classifi cation between investment properties and property, plant and equipment

The Group has developed certain criteria based on FRS 140 in making judgement whether a property qualifi es 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 fi nance 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 insignifi cant 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 signifi cant 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.

88




2009(CON’T)

6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

6.2 Key sources of estimation uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial 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 fi ve (5) years to fi fty (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, 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 profi t will be available against which the tax losses and capital allowances can be utilised. Signifi cant 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 profi ts together with future tax planning strategies.

(c) Allowance for doubtful debts

The Group makes allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifi cally 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 allowance for doubtful debts. Where expectations differ from the original estimates, the differences will impact the carrying value of receivables.

(d) Valuation of investment properties

Fair value for investment property is arrived at by reference to market evidence of transaction prices for similar properties in the same location and based on a valuation carried out by an independent professional valuer on an open market value basis.

(e) Fair values of borrowings

The fair values of borrowings are estimated by discounting future contractual cash fl ows at the current market interest rates available to the Group for similar fi nancial 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.

(f) Write down for obsolete or slow moving inventories

The Group writes down its obsolete or slow moving inventories based on assessment of their estimated net selling price. Inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifi cally analyses sales trend and current economic trends when making a judgement to evaluate the adequacy of the write down for obsolete or slow moving inventories. Where expectations differ from the original estimates, the differences will impact the carrying amount of inventories.

89

ANNUAL REPORT 2009


7. PROPERTY, PLANT AND EQUIPMENT

Depreciation charge Transfer to Group Balance for the investment Balance2009 as at 1 Written fi nancial Translation properties Reclassi- as at 31 January Additions Disposal off year adjustments (Note 8) fi cation 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 fi ttings 7,044 1,152 (79) (475) (2,190) (4) - - 5,448

Offi ce 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 fi ttings 10,939 (5,491) 5,448

Offi ce equipment 3,173 (1,837) 1,336

Renovation and

electrical installations 5,363 (2,754) 2,609


moulds 746 (532) 214

33,373 (18,033) 15,340

90




2009(CON’T)

7. PROPERTY, PLANT AND EQUIPMENT (continued)

Depreciation Disposal charge Group Balance of a for the Balance2008 as at 1 subsidiary Written fi nancial Translation Reclassi- as at 31 January Additions Disposal (Note 29) off year adjustments fi cation 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 1,012 - - - - (60) - 525 1,477

Computer equipment

and software 418 332 - (27) (120) (157) - 6 452

Plant and machineries 1,478 3,091 - (2,358) - (893) - (30) 1,288

Motor vehicles 1,258 958 (17) (18) - (629) - - 1,552

Furniture and fi ttings 8,111 2,081 - (24) (702) (2,124) 1 (299) 7,044

Offi ce equipment 2,291 410 - (16) (347) (663) (8) 158 1,825

Renovation and

electrical installations 2,759 1,281 - (127) (234) (863) - 121 2,937


moulds 275 268 - (124) (37) (164) - 44 262

Construction-in-progress 480 45 - - - - - (525) -

19,798 8,466 (17) (2,694) (1,440) (5,553) (7) - 18,553

------ At 31 December 2008-------

Accumulated Carrying Cost depreciation amount

RM’000 RM’000 RM’000

Freehold land 1,716 - 1,716

Buildings 1,843 (366) 1,477

Computer equipment

and software 1,290 (838) 452

Plant and machineries 4,696 (3,408) 1,288

Motor vehicles 3,695 (2,143) 1,552

Furniture and fi ttings 11,024 (3,980) 7,044

Offi ce equipment 3,415 (1,590) 1,825

Renovation and

electrical installations 4,747 (1,810) 2,937


moulds 727 (465) 262

33,153 (14,600) 18,553

91

ANNUAL REPORT 2009


7. PROPERTY, PLANT AND EQUIPMENT (continued)

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

Group 2009 2008 RM’000 RM’000 Purchase of property, plant and equipment 2,852 8,466 Financed by hire-purchase arrangements (737) (1,484)

Cash payments on purchase of property, plant and equipment 2,115 6,982

As at 31 December 2009, the net carrying amount of Group’s property, plant and equipment held under hire-purchase arrangements are as follows:-

Group 2009 2008 RM’000 RM’000 Computer equipment and software - 65 Motor vehicles 487 410 Furniture and fi ttings 504 624 Offi ce equipment 19 176 Renovation and electrical installations 312 389

1,322 1,664

(b) The net book value of the property, plant and equipment which have been charged to licensed fi nancial institutions for credit facilities granted to the Group (Note 16 and Note 18 to the fi nancial statements) are as follows:-

Group 2009 2008 RM’000 RM’000 Freehold land 880 880 Buildings 687 1,230

1,567 2,110

92




2009(CON’T)

8. INVESTMENT PROPERTIES

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

Group Balance Balance 2008 as at as at 1 January Addition Disposals 31 December RM’000 RM’000 RM’000 RM’000 Carrying amount Freehold land and factory buildings 1,973 55 (530) 1,498 Freehold shoplot 1,080 - (1,080) - Leasehold shoplot 380 - (380) -

3,433 55 (1,990) 1,498

Investment properties with an aggregate carrying amount of RM 1,081,238 (2008: RM 757,238) are charged to licensed fi nancial institutions for banking facilities granted to the Group (Note 16 and Note 18 to the fi nancial statements).

In the previous year, investment properties amounted to RM 1,990,000 were disposed of to a related party for a total consideration of RM 1,910,000.

The fair value of the investment properties of the Group as at 31 December 2009 were estimated by the Directors based on recent prices of similar properties in the same location and recommended by the Directors based on a valuation carried out on 19 January 2010 by an independent professional valuer on an open market value basis. The fair value for the investment properties as at 31 December 2008 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 fi nancial year are as follows:-

Group 2009 2008 RM’000 RM’000 Quit rent and assessment 8 7

93

ANNUAL REPORT 2009


9. INVESTMENTS IN SUBSIDIARIES Company 2009 2008 RM’000 RM’000 Unquoted shares - at cost 28,867 26,882

Acquisition of additional interest in an existing subsidiary

On 15 July 2009, the Company entered into a Sale and Purchase Agreement for the acquisition of the remaining 49% equity interest in Wealthy Concept Limited (“WC”) representing 3,430,000 ordinary shares of HKD 1 each, of which 848,610 ordinary shares of HKD 1 each has been fully paid and 2,581,390 ordinary shares of HKD 1 each has been issued but not paid, for a cash consideration of

RM 795,596 (HKD 1,726,729). As at 31 December 2009, the said 2,581,390 ordinary shares have been fully paid up by the Group.

The details of the subsidiaries are as follows:-

Effective equity

Country of interest

Name of company incorporation 2009 2008 Principal activities

Direct subsidiaries

Gemas Precious Metals Malaysia 61% 61% Design and manufacturing of

Industries Sdn. Bhd. jewellery, including gold

and silver chains and refi ning

of gold and jewellery

Tomei Marketing Sdn. Bhd. Malaysia 100% 100% Distribution of jewellery

Tomei Gold & Jewellery Malaysia 100% 100% Design and manufacturing of

Manufacturing Sdn. Bhd. (“TGJM”) jewellery

Tomei International Limited@ Hong Kong 100% 100% Inactive

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% 51% Investment holding

Subsidiary of TGJM

Lumiere 2006 Limited@ Hong Kong 100% 100% Distribution of diamond

94




2009(CON’T)

9. INVESTMENTS IN SUBSIDIARIES (continued)

Effective equity

Country of interest


Subsidiary of WC

Wealthy Concept Jewellery People’s Republic 100% 51% Distribution and retailing of

(Shenzhen) Company of China jewellery

Limited@

Subsidiaries of TR

Cindai Permata Sdn. Bhd. Malaysia 100% 100% Retailing of jewellery

J & G Collections Sdn. Bhd. Malaysia 100% 100% Distribution of jewellery

My Diamond Sdn. Bhd. Malaysia 100% 100% Retailing of jewellery

Sinar Raya Trading Sdn. Bhd. Malaysia 100% 100% Retailing of jewellery

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

Tomei Gold & Jewellery (B) Brunei 99.99% 99.99% Inactive

Sdn. Bhd.* Darussalam

Tomei Gold & Jewellery (JB) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery (MJ) Malaysia 100% 100% Investment holding and retailing of

Sdn. Bhd. (“TGJ (MJ)”) jewellery

Tomei Gold & Jewellery (P.T.) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery (RW) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery (SK) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery (WM) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery Corp. Malaysia 100% 100% Retailing of jewellery

(K.L) Sdn. Bhd.

Tomei Gold & Jewellery Holdings Malaysia 100% 100% Investment holding and distribution

(M) Sdn. Bhd. (“TGJH”) of jewellery

Tomei Worldwide Franchise Malaysia 100% 100% Inactive

Sdn. Bhd.

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

95

ANNUAL REPORT 2009


9. INVESTMENTS IN SUBSIDIARIES (continued)

Effective equity

Country of interest


Subsidiaries of TGJH

Tomei Gold & Jewellery (B.U.) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery (K.P.) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery (Klang) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

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

Sdn. Bhd.

Tomei Gold & Jewellery (MK) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery (TS) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.


(KLCC) Sdn. Bhd.


(Sunway) Sdn. Bhd.

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

Limited@ of Vietnam jewellery

Subsidiaries of TGJ (MJ)

Tomei Gold & Jewellery (IOI) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery (S.A.) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

Tomei Gold & Jewellery (Subang) Malaysia 100% 100% Retailing of jewellery

Sdn. Bhd.

@ Subsidiaries audited by BDO Member Firms.

* Subsidiary is consolidated based on unaudited management fi nancial statements for the fi nancial year ended 31 December 2009. The fi nancial statements of this subsidiary is not required to be audited in its country of incorporation for current year as it has been placed under members’ voluntary liquidation on 30 June 2009 and is not material to the Group.

The acquisition of the remaining equity interest in Wealthy Concept Limited during the fi nancial year is disclosed in Note 35 to the fi nancial statements.

96




2009(CON’T)

10. DEFERRED TAX

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

Group 2009 2008 RM’000 RM’000 Balance as at 1 January 125 493 Recognised in the income statements (Note 24) - current year 138 (369) - prior years (296) 1

Balance as at 31 December (33) 125

Presented after appropriate offsetting:- Deferred tax assets, net (479) (612) Deferred tax liabilities, net 446 737

(33) 125

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

Group 2009 2008 RM’000 RM’000 Deferred tax assets Balance as at 1 January 919 1,344 Recognised in the income statements Unabsorbed capital allowances (64) (138) Unused tax losses (132) (92) Other deductible temporary differences 115 (195) (81) (425)

Deferred tax assets as at 31 December, prior to offsetting 838 919 Set-off of tax (359) (307)

Deferred tax assets as at 31 December, net 479 612

97

ANNUAL REPORT 2009


10. DEFERRED TAX (continued)

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

Group 2009 2008 RM’000 RM’000 Deferred tax liabilities Balance as at 1 January 1,044 1,837 Recognised in the income statements Property, plant and equipment (450) (335) Other taxable temporary differences 211 (458) (239) (793)

Deferred tax liabilities as at 31 December, prior to offsetting 805 1,044 Set-off of tax (359) (307)

Deferred tax liabilities as at 31 December, net 446 737

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

Group 2009 2008 RM’000 RM’000 Deferred tax assets Unabsorbed capital allowances - 64 Unused tax losses 668 738 Other deductible temporary differences 170 117

838 919

Deferred tax liabilities Property, plant and equipment 598 1,044 Other taxable temporary differences 207 -

805 1,044

98




2009(CON’T)

10. DEFERRED TAX (continued)

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

Group 2009 2008 RM’000 RM’000 Unused tax losses 1,746 220 Unabsorbed capital allowances 404 2

2,150 222

Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that taxable profi ts 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 2009 2008 RM’000 RM’000 Gold ornaments 98,599 80,676 Jewellery 115,063 111,581 Silver 1,406 1,572 Consumables 1,352 1,947

216,420 195,776

Cost of inventories of the Group recognised as an expense during the fi nancial year amounted to RM 160,692,068 (2008: RM 185,973,889). In the previous fi nancial year, inventories of the Group

amounting to RM 36,216 were written off.

12. TRADE AND OTHER RECEIVABLES

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000 Trade receivables Trade receivables 8,671 8,177 - - Less: Allowance for doubtful debts (665) (37) - - 8,006 8,140 - - Other receivables Amounts owing by subsidiaries - - 91,476 121,958 Other receivables 1,779 3,840 - 1,249 Deposits 6,749 5,241 2 2 Prepayments 1,448 1,722 8 97 9,976 10,803 91,486 123,306

17,982 18,943 91,486 123,306

99

ANNUAL REPORT 2009


12. TRADE AND OTHER RECEIVABLES (continued)

(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.

(b) In the fi nancial year 2008, the Group’s allowance for doubtful debts is net of bad debts written off of RM 6,719.

(c) Amounts owing by subsidiaries represent advances which are unsecured and repayable upon demand in cash and cash equivalents.

During the fi nancial year, the Company had reduced its issuance of Islamic Commercial Paper/ Islamic Medium Term Note (“ICP/IMTN”) from RM 70 million to RM 50 million. Most of the proceeds are raised on behalf of its subsidiaries. Such share of profi ts by the fi nancial institution on ICP/IMTN ranged from 5.80% to 7.50% (2008: 4.05% to 7.50%) per annum are therefore passed down to the respective subsidiaries.

(d) Included in Group’s other receivables as at 31 December 2008 were amounts of RM 1,719,000 and RM 1,249,851 owing from related parties in respect of sales proceeds from the disposal of investment properties and a subsidiary respectively.

The Company’s other receivables as at 31 December 2008 represented amount owing from related parties in respect of sales proceeds from the disposal of a subsidiary.

(e) The currency exposure profi le of receivables are as follows:-

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000 Ringgit Malaysia 14,592 16,326 91,115 122,894 Chinese Renminbi 1,178 98 - - Euro 371 375 - - Hong Kong Dollar 843 745 371 412 Singapore Dollar 33 17 - - UAE Dirham 177 618 - - US Dollar 387 476 - - Vietnamese Dong 401 288 - -

17,982 18,943 91,486 123,306

13. CASH AND CASH EQUIVALENTS

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Fixed deposits with licensed banks 5,431 571 5,188 571 Cash and bank balances 2,861 4,492 96 243

8,292 5,063 5,284 814

100




2009(CON’T)

13. CASH AND CASH EQUIVALENTS (continued)

(a) The fi xed deposits as at 31 December 2009 have maturity range from 1 to 6 months (2008: 1 ½ months). Included in the fi xed deposits of the Group and the Company as at 31 December 2009 is an amount of RM 5,187,500 (2008: RM 571,125) representing 50% of the redemption amount of IMTN which is due on 22 June 2010, and semi-annual profi t payment of IMTN. The fi xed deposits are held in the designated accounts and operated by the Security Agent.

(b) Information on fi nancial risks of cash and cash equivalents are disclosed in Note 33 to the fi nancial statements.

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

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000 Ringgit Malaysia 7,657 4,930 5,284 814 Chinese Renmimbi 199 2 - - US Dollar 179 109 - - Other foreign currencies 257 22 - -

8,292 5,063 5,284 814

(d) For the purpose of the cash fl ow statements, cash and cash equivalents comprise the following as at balance sheet date:-

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000 Fixed deposits with licensed banks 5,431 571 5,188 571 Cash and bank balances 2,861 4,492 96 243

8,292 5,063 5,284 814 Less: Bank overdrafts included in borrowings (Note 16) (15,198) (2,687) - - Placement of fi xed deposit as permitted investment (5,188) (571) (5,188) (571)

(12,094) 1,805 96 243

101

ANNUAL REPORT 2009


14. SHARE CAPITAL

Group and Company 2009 2008 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 126,000 63,000 126,000 63,000

The holders of ordinary shares 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.

15. RESERVES


Non-distributable:- Share premium 4,078 4,078 4,078 4,078 Exchange translation reserve (212) (211) - - Distributable:- Retained earnings 59,991 44,599 7,517 9,623

63,857 48,466 11,595 13,701

(a) Exchange translation reserve

The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the fi nancial 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 balance sheet date.

102




2009(CON’T)

16. BORROWINGS


Current liabilities Secured Bank overdrafts 586 52 - - Bankers’ acceptances 1,000 1,987 - - Hire-purchase creditors (Note 17) 462 429 - - Term loans (Note 18) 307 337 - -

2,355 2,805 - -

Unsecured Bank overdrafts 14,612 2,635 - - Bankers’ acceptances 29,090 22,872 - - Factoring 190 477 - - Gold loans 4,566 3,636 - - Revolving credit - 993 - - Islamic commercial paper (“ICP”) 30,000 50,000 30,000 50,000 Islamic medium term note (“IMTN”) 10,000 - 10,000 -

88,458 80,613 40,000 50,000

90,813 83,418 40,000 50,000

Non-current liabilities Secured Hire-purchase creditors (Note 17) 517 407 - - Term loans (Note 18) 324 610 - -

841 1,017 - - Unsecured IMTN 10,000 20,000 10,000 20,000

10,841 21,017 10,000 20,000

Total borrowings Bank overdrafts 15,198 2,687 - - Bankers’ acceptances 30,090 24,859 - - Factoring 190 477 - - Gold loans 4,566 3,636 - - Revolving credit - 993 - - Hire-purchase creditors (Note 17) 979 836 - - Term loans (Note 18) 631 947 - - ICP 30,000 50,000 30,000 50,000 IMTN 20,000 20,000 20,000 20,000

101,654 104,435 50,000 70,000

103

ANNUAL REPORT 2009


16. BORROWINGS (continued)

Group

The bank overdrafts and bankers’ acceptances are secured by a fi rst legal charge over certain land and buildings and investment properties of the Group (Note 7 and Note 8 to the fi nancial statements).

The bank overdrafts, bankers’ acceptances, factoring, gold loans and revolving credit are guaranteed by the Company and a subsidiary.

Group and Company

Signifi cant covenants

The ICP/IMTN borrowings are subject to the following signifi cant 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 fi ve percent (5%) of the Group’s net tangible assets;

(iii) not to dispose of any assets in excess of fi ve 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.

Information of fi nancial risk of borrowings is disclosed in Note 33 to the fi nancial statements.

17. HIRE-PURCHASE CREDITORS

Group 2009 2008 RM’000 RM’000

Minimum hire-purchase payments:- - not later than one year 515 469 - later than one year and not later than fi ve years 547 432

Total minimum hire-purchase payments 1,062 901 Less: Future interest charges (83) (65)

Present value of hire-purchase liabilities 979 836

104




2009(CON’T)

17. HIRE-PURCHASE CREDITORS (continued) Group 2009 2008 RM’000 RM’000 Repayable as follows:- Current liabilities:- - not later than one year 462 429 Non-current liabilities:- - later than one year and not later than fi ve years 517 407

979 836

18. TERM LOANS Group 2009 2008 RM’000 RM’000 Term loan I repayable by 120 equal monthly instalments of RM 2,509 each commencing September 2001 52 78 Term loan II repayable by 84 equal monthly instalments of RM 5,334 each commencing 1 April 2003 16 77 Term loan III repayable by 120 equal monthly instalments of RM 2,846 each commencing September 2001 39 69 Term loan IV repayable by 84 equal monthly instalments of RM 7,337 each commencing 12 May 2004 119 189 Term loan V repayable by 84 equal monthly instalments of RM 9,486 each commencing 12 May 2004 156 245 Term loan VI repayable by 120 equal monthly instalments of RM 4,909 each commencing 25 November 2004 249 289

631 947

Repayable as follows:- Current liabilities:- - within one year 307 337 Non-current liabilities:- - later than one year and not later than fi ve years 324 537 - later than fi ve years - 73 324 610

631 947

The term loans are secured by certain land and buildings and investment properties of the Group (Note 7 and Note 8 to the fi nancial statements). The term loans are also guaranteed by the Company.

105

ANNUAL REPORT 2009


19. DEFERRED INCOME

Group 2009 2008 RM’000 RM’000

Balance as at 1 January 12 15 Recognised as income during the fi nancial year (3) (3)

Balance as at 31 December 9 12

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.

20. TRADE AND OTHER PAYABLES Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000 Trade payables Trade payables 18,967 15,925 - - Other payables Amounts owing to subsidiaries - - 1,420 5,019 Other payables 1,563 1,191 - - Deposits received 360 678 - - Accruals 6,768 4,545 1,342 800 8,691 6,414 2,762 5,819

27,658 22,339 2,762 5,819

(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 repayable upon demand in cash and cash equivalents.

(c) Information on fi nancial risks of trade payables is disclosed in Note 33 to the fi nancial statements.

106




2009(CON’T)

20. TRADE AND OTHER PAYABLES (continued)

(d) The currency exposure profi le of payables are as follows:-

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000 Ringgit Malaysia 10,992 11,342 2,762 4,618 Chinese Renminbi 576 12 - - Euro 148 - - - Hong Kong Dollar 3,181 2,300 - 1,201 Singapore Dollar 70 18 - - US Dollar 12,638 8,631 - - Vietnamese Dong 53 32 - - Others - 4 - -

27,658 22,339 2,762 5,819

21. REVENUE Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000 Sales of goods:- Gold ornaments and jewellery 292,218 267,125 - - Gold bar 6,776 16,705 - - Silver 1,896 2,611 - - Manufacturing of precision tools and mould - 2,919 - - Rental income from investment properties - 54 - - Dividend income from subsidiaries - - 4,692 14,506

300,890 289,414 4,692 14,506

22. OTHER INCOME Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000 Deposits forfeited 93 36 - - Discount received 4 18 - - Gain on gold contracts 83 364 - - Gain on disposal of a subsidiary - 49 - 139 Gain on disposal of property, plant and equipment 15 28 - - Gain on foreign exchange 1,436 1,657 64 - Gain on gold price fl uctuation 10 7 - - Interest income 11 28 7 8 Proceeds from insurance claimed 156 404 - - Rental income from investment properties 190 232 - - Others 53 148 - -

2,051 2,971 71 147

107

ANNUAL REPORT 2009


23. PROFIT BEFORE TAX

Group Company 2009 2008 2009 2008 Note RM’000 RM’000 RM’000 RM’000

Profi t before tax is arrived at after charging:- Allowance for doubtful debts 651 14 - - Auditors’ remuneration - statutory audit - current year 239 253 28 28 - under provision in prior years - 5 - 5 - non-statutory audit - current year 14 8 7 7 - under provision in prior years - 2 - 2 Bad debts written off 7 51 - - Depreciation of property, plant and equipment 7 4,892 5,553 - - Directors’ remuneration - fee 264 240 264 240 - other emoluments 2,362 1,374 2,040 1,204 Interest expense:- - bankers’ acceptances 1,184 1,441 - - - bank overdrafts 1,029 586 - - - gold loan 202 290 - - - hire-purchase 81 72 - - - term loans 57 96 - - - others 109 191 - - Finance costs: share of profi ts by fi nancial institution on ICP and IMTN 3,517 3,752 126 502 Inventories written off 11 - 36 - - Loss on disposal of investment property - 80 - - Loss on disposal of property, plant and equipment 79 - - - Property, plant and equipment written off 7 559 1,440 - - Rental expense:- - exhibition booths 759 641 - - - plant and machinery 206 24 - - - premises 13,753 12,054 - - Research cost 30 354 - - Loss from fair value adjustments of investment properties 8 231 - - - Loss on foreign exchange 351 130 - - Loss on gold price fl uctuation 1,675 574 - -

108




2009(CON’T)

23. PROFIT BEFORE TAX (continued) Group Company 2009 2008 2009 2008 Note RM’000 RM’000 RM’000 RM’000

And crediting:- Allowance for doubtful debts no longer required 23 6 - - Amortisation of government grant 19 3 3 - - Gross dividends received from unquoted subsidiaries - - 4,692 14,506 Gain on gold contracts 83 364 - - Gain on disposal of a subsidiary 29 - 49 - 139 Gain on disposal of property, plant and equipment 15 28 - - Gain on foreign exchange 1,436 1,657 64 - Gain on gold price fl uctuation 10 7 - - Interest income 11 28 7 8 Rental income from investment properties 190 232 - -

The estimated monetary value of benefi t-in-kind received by the Directors of the Group amounted to RM 95,500 (2008: RM 95,500).

24. TAX EXPENSE Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Current year tax expense based on profi t for the fi nancial year 7,705 6,274 188 3,044 Deferred tax (Note 10) 138 (369) - -

7,843 5,905 188 3,044 (Over)/Under provision in prior years:- - Tax expense (109) (253) (7) 17 - Deferred tax (Note 10) (296) 1 - -

7,438 5,653 181 3,061

The Malaysian income tax is calculated at the statutory tax rate of 25% (2008: 26%) of the estimated taxable profi t for the fi scal year. The Malaysian statutory tax rate has been reduced to 25% from the previous year’s rate of 26% for the fi scal year of assessment 2009. The computation of deferred tax as at 31 December 2009 has refl ected these changes.

Tax expenses for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions.

109

ANNUAL REPORT 2009


24. 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 2009 2008 2009 2008 % % % % Applicable tax rate 25.0 26.0 25.0 26.0 Tax effects in respect of:- Non-allowable expenses 4.2 5.8 18.0 1.5 Non-taxable income - (0.2) - (0.3) Utilisation of previously unrecognised tax losses and unabsorbed capital allowance of subsidiaries - (0.3) - - Tax allowance (1.2) (0.7) - - Reduction in tax rate on fi rst RM 500,000 chargeable income of certain subsidiaries - (2.8) - - Movement in deferred tax assets not recognised 1.8 - - - Effect of changes in tax rate on deferred tax - 0.1 - -

29.8 27.9 43.0 27.2 (Over)/Under provision in prior years (1.5) (1.2) (1.6) 0.2

Average effective tax rate 28.3 26.7 41.4 27.4

25. EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share

The basic earnings per ordinary share for the fi nancial year is calculated by dividing the profi t for the fi nancial year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the fi nancial year.

Group 2009 2008 RM’000 RM’000 Consolidated profi t for the fi nancial year attributable to ordinary equity holders of the Company 18,239 15,174

Weighted average number of ordinary shares outstanding (‘000) 126,000 126,000

Basic earnings per ordinary share (sen) 14.48 12.04

Diluted earnings per ordinary share

There is no diluted earnings per ordinary share as the Company does not have any convertible fi nancial instruments as at balance sheet date.

110




2009(CON’T)

26. DIVIDENDS Group and Company 2009 2008 Gross Amount of Gross Amount of dividend dividend dividend dividend per share net of tax per share net of tax sen RM’000 sen RM’000 First and fi nal dividend paid:- In respect of fi nancial year ended 31 December 2008 2.5 2,362 - - In respect of fi nancial year ended 31 December 2007 - - 5.0 4,662

A fi rst and fi nal single tier tax exempt dividend of 3.0 sen per ordinary share, in respect of the fi nancial year ended 31 December 2009, amounting to RM 4,158,000 has been proposed by the Directors after the balance sheet date for shareholders’ approval at the forthcoming Annual General Meeting. The fi nancial statements for the current fi nancial year do not refl ect 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 fi nancial year ending 31 December 2010.

27. EMPLOYEE BENEFITS

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000 Directors’ emoluments 2,362 1,374 2,040 1,204 Salaries, wages, overtime and allowances 22,049 20,469 1,135 902 Defi ned contribution plan 2,875 2,681 163 131 Staff commissions 3,705 3,519 - - Other employee benefi ts 3,204 3,081 242 195

34,195 31,124 3,580 2,432

28. ACQUISITION OF A SUBSIDIARY

During the previous fi nancial year, the Group acquired the following subsidiary:-

(a) Acquisition of B-Two Technology Sdn. Bhd. (“B-Two”)

On 25 February 2008, the Company acquired 882,601 ordinary shares of RM 1 each representing majority equity interest (50% plus 1 share) in B-Two for a total consideration of RM 882,601. B-Two was dormant as at the date of acquisition and the principal activities of the B-Two were manufacturing of precision tooling and mould.

111

ANNUAL REPORT 2009


28. ACQUISITION OF A SUBSIDIARY (continued)

(a) Acquisition of B-Two Technology Sdn. Bhd. (“B-Two”) (continued)

The details of net assets acquired and goodwill were as follows:- RM’000 Purchase consideration by way of cash 883 Fair value of net assets acquired 883

Goodwill determined -

The acquisition of B-Two did not have any material fi nancial effect on the Group.

On 28 October 2008, the Company further subscribed for its entitlement of 367,400 ordinary shares of RM 1 each in B-Two.

The subsidiary was subsequently disposed of to a related party on 30 December 2008 (Note 29 to the fi nancial statements).

29. DISPOSAL OF A SUBSIDIARY

During the previous fi nancial year, the Group disposed of the following subsidiary:-

Disposal of B-Two Technology Sdn. Bhd. (“B-Two”)

On 30 December 2008, the Company disposed of its 1,250,001 ordinary shares of RM 1 each in B-Two, to a related party, representing the entire shareholding by the Company, for a cash consideration of RM 1,388,724.

Details of fair value of the net assets and cash infl ow on disposal of the subsidiary were as follows:-

Group 2008 RM’000 Property, plant and equipment 2,694 Trade and other receivables 1,221 Cash and bank balances 176 Trade and other payables (1,411)

Net assets disposed 2,680 Less: Minority interest (1,340)

1,340 Net proceeds from disposal (1,389)

Gain on disposal (49)

Cash consideration for the disposal 1,389 Less: Cash and cash equivalent of subsidiary disposed (176) Less: Amount receivable from the purchaser (1,250)

Proceeds from disposal of a subsidiary, net of cash and cash equivalent disposed (37)

112




2009(CON’T)

29. DISPOSAL OF A SUBSIDIARY (continued)

Disposal of B-Two Technology Sdn. Bhd. (“B-Two”) (continued)

Company 2008 RM’000 Cost of investment 1,250 Net proceeds from disposal (1,389)

Gain on disposal (139)

30. SEGMENT INFORMATION

(a) Reporting format

The primary segment reporting format is determined to be business segments as the Group’s risks and returns are affected predominantly by methods it deliver its products and sales services.

Secondary information is reported geographically.

(b) Business segments

The Group comprises the following main business segments:-

(i) Manufacturing

Manufacturing of gold ornaments and jewellery

(ii) Retail and distribution

Retailing and distribution of jewellery (iii) Others

Investment holding

(c) Geographical segments

No geographical segment information is presented as the Group’s overseas operations are still insignifi cant.

113

ANNUAL REPORT 2009


30. SEGMENT INFORMATION (continued)

The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by business segment:-

Manufac- Retail and Consoli- turing distribution Others Elimination dation 2009 RM’000 RM’000 RM’000 RM’000 RM’000 Revenue External sales 63,899 236,991 - - 300,890 Inter-segment sales 115,128 4,554 4,692 (124,374) - Revenue 179,027 241,545 4,692 (124,374) 300,890 Results Profi t before tax 9,786 20,905 319 (4,692) 26,318 Tax expense - - - - (7,438) Profi t for the fi nancial year - - - - 18,880 Assets Segment assets 147,902 105,810 6,114 - 259,826 Unallocated assets - - - - 2,257 Total assets - - - - 262,083 Liabilities Segment liabilities 49,337 28,626 51,358 - 129,321 Unallocated liabilities - - - - 4,050 Total liabilities - - - - 133,371 Other segment information Capital expenditure 811 2,041 - - 2,852 Depreciation 1,302 3,590 - - 4,892 Non-cash expenses other than depreciation 719 1,865 - - 2,584

114




2009(CON’T)

30. SEGMENT INFORMATION (continued)

Manufac- Retail and Consoli- turing distribution Others Elimination dation 2008 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue External sales 75,404 214,010 - - 289,414 Inter-segment sales 91,264 3,587 14,506 (109,357) - Revenue 166,668 217,597 14,506 (109,357) 289,414 Results Profi t before tax 7,008 17,527 11,131 (14,506) 21,160 Tax expense - - - - (5,653) Profi t for the fi nancial year - - - - 15,507 Assets Segment assets 136,212 100,274 3,347 - 239,833 Unallocated assets - - - - 2,491 Total assets - - - - 242,324 Liabilities Segment liabilities 31,948 24,021 70,817 - 126,786 Unallocated liabilities - - - - 2,537 Total liabilities - - - - 129,323 Other segment information Capital expenditure 4,349 4,117 - - 8,466 Depreciation 2,110 3,443 - - 5,553 Non-cash expenses other than depreciation 515 1,524 - - 2,039

115

ANNUAL REPORT 2009


31. COMMITMENTS

(i) Rental commitments

The Group had entered into several tenancy agreements for the rental of retail space, offi ce 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 balance sheet date as follows:-

Group 2009 2008 RM’000 RM’000 Not later than one year 10,802 10,697 Later than one year and not later than fi ve years 5,215 7,829

16,017 18,526

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 2009 2008 RM’000 RM’000 Contracted but not provided for 559 379

32. CONTINGENT LIABILITIES - UNSECURED


Corporate guarantees given to fi nancial institutions for credit facilities granted to:- - subsidiaries - - 50,495 33,864 - third party 752 1,094 752 1,094

752 1,094 51,247 34,958

33. FINANCIAL INSTRUMENTS

(a) Financial risk management objectives and policies

The Group’s fi nancial risk management objectives are to optimise value creation for its shareholders whilst minimising the potential adverse impact arising from fl uctuations in foreign currency exchange, gold prices and interest rates and the unpredictability of the fi nancial markets.

116




2009(CON’T)

33. FINANCIAL INSTRUMENTS (continued)

(a) Financial risk management objectives and policies (continued)

The fi nancial risk management is carried out through risk review programmes, internal control systems, insurance programmes and adherence to the Group’s fi nancial risk management policies. The Group’s exposure to fi nancial risks and the management of the related exposures are as follows:-

(i) Interest rate risk The Group’s exposure to interest rates related primarily to the Group’s bank borrowings. The

Group does not use derivative fi nancial instruments to hedge its risk.

The Company’s ICP and IMTN of RM 50 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 fi xed interest rate for a specifi c tenure were used by the Group to minimise the risk of change in interest rate.

The following table sets out the carrying amounts, the weighted average effective interest rates (“WAEIR”) as at the balance sheet date and the remaining maturities of the Group’s and the Company’s fi nancial instruments that are exposed to interest rate risk:-

Within 1 More than

WAEIR year 1 - 2 years 2 - 3 years 3 - 4 years 4 - 5 years 5 years Total

Group % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

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)

As at

31 December 2008

Fixed rate

Hire-purchase

creditors 7.76% (429) (265) (140) (2) - - (836)

ICP 5.16% (50,000) - - - - - (50,000)

IMTN 7.33% - (10,000) (10,000) - - - (20,000)

Fixed deposit with

licensed bank 3.20% 571 - - - - - 571

Floating rate

Bank overdrafts 6.80% (2,687) - - - - - (2,687)

Bankers’ acceptances 5.13% (24,859) - - - - - (24,859)

Factoring 8.20% (477) - - - - - (477)

Gold loans 7.25% (3,636) - - - - - (3,636)

Revolving credit 7.55% (993) - - - - - (993)

Term loans 6.86% (337) (315) (134) (49) (39) (73) (947)

117

ANNUAL REPORT 2009




(i) Interest rate risk (continued)

Within 1 More than

WAEIR year 1 - 2 years 2 - 3 years 3 - 4 years 4 - 5 years 5 years Total

Company % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’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

As at

31 December 2008

Fixed rate

ICP 5.16% (50,000) - - - - - (50,000)

IMTN 7.33% - (10,000) (10,000) - - - (20,000)

Fixed deposit with

licensed bank 3.20% 571 - - - - - 571

(ii) Foreign currency risk

Transactional currency exposures mainly arise from transactions that are denominated in currencies other than functional currencies of the operating entities.

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 fi nancial 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 are minimal.

(iii) Credit risk

Trade and other 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 fi nancial standing of these counter party 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 2009. 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 doubtful debts is inherent to the Group’s trade receivables.

In respect of the deposits, cash and bank balances placed with major fi nancial institutions in Malaysia, the Directors believe that the possibility of non-performance by these fi nancial institutions is remote on the basis of their fi nancial strength.

The maximum exposures to credit risk are represented by the carrying amounts of the fi nancial assets in the balance sheets.

118




2009(CON’T)



(iv) Liquidity and cash fl ow risk The Group is actively managing its operating cash fl ow to ensure that all operating and fi nancing

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 fl exibility in funding by keeping committed credit lines available.

(v) Price fl uctuation risk

The Group is exposed to the fl uctuation of gold price risk arising from purchase of gold from 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.

There was no purchase contract outstanding as at 31 December 2008 and 2009.

(b) Fair values

The carrying amount of the fi nancial assets and fi nancial liabilities of the Group and of the Company as at the balance sheet date approximate their fair values due to the relatively short term maturity of these fi nancial instruments except for the followings:-

Group and Company 2009 2008 Carrying Fair Carrying Fair amount value amount value RM’000 RM’000 RM’000 RM’000 (i) IMTN 10,000 10,021 20,000 19,909

Fair value of IMTN is determined using discounted cash fl ow method using the present interest rate that is applicable to similar IMTN issued as at balance sheet date.

(ii) Hire-purchase creditors

Group 2009 Carrying Fair amount value RM’000 RM’000 Hire-purchase creditors 517 499

2008

The carrying amounts of the non-current hire-purchase creditors approximate their fair values as the current rates offered to the Group approximate the market rate for the similar borrowings of the same remaining maturities.

119

ANNUAL REPORT 2009



(b) Fair values (continued)

(iii) Term loans

2009

The carrying amounts of the non-current term loans approximate their fair values as the current rates offered to the Group approximate the market rate for the similar borrowings of the same remaining maturities.

Group 2008 Carrying Fair amount value RM’000 RM’000 Term loans 610 624

34. 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 signifi cant infl uence over the party in making fi nancial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common signifi cant infl uence. 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.

The Group also has related party relationships with the following parties:-

Related parties

Ong Tiong Yee & Sons Sdn. Bhd. (“OTY”)

Eugen Schofer Gmbh & Co (“Eugen Schofer”)

Unique Avenue Sdn. Bhd. (“UASB”)

Best Arcade Sdn. Bhd. (“BASB”)

Teck Fong Property Sdn. Bhd. (“TFP”)

Relationships

Related by connected person – Ong Kee Liang, the spouse of

Ng Sheau Chyn.

A shareholder of a subsidiary, Gemas Precious Metals Industries

Sdn. Bhd..

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 is also a substantial shareholder

of UASB.

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.

Related by common Directors, Tan Sri Datuk Ng Teck Fong,

Ng Yih Pyng, Ng Yih Chen, Ng Sheau Chyn and Ng Sheau

Yuen.

120




2009(CON’T)

34. RELATED PARTY DISCLOSURES (continued)

(a) Identities of related parties (continued)

Related parties

Oasis College Sdn. Bhd. (“Oasis College”)

Oasis Properties Sdn. Bhd. (“Oasis”)

Persekutuan Persatuan-Persatuan

Hakka Malaysia (“Persatuan Hakka”)

Ng Teck Fong Holdings Sdn. Bhd. (“NTFH”)

DMT Seiko Sdn. Bhd. (“DMT”)

U Two Technology Sdn. Bhd. (“U2”)

C. S. Tang & Co. (“CS Tang”)

Permata Sagu Sdn. Bhd. (“Permata Sagu”)

B-Two Technology Sdn. Bhd. (“B-Two”)

Relationships

Related by common Directors, Tan Sri Datuk Ng Teck Fong, Ng

Yih Chen and Ng Sheau Chyn. Tan Sri Datuk Ng Teck Fong is

also a substantial shareholder of Oasis College.

Related by common Directors, Tan Sri Datuk Ng Teck Fong

and Ng Sheau Chyn. Tan Sri Datuk Ng Teck Fong is also a

substantial shareholder of Oasis.

Related by the Director, Tan Sri Datuk Ng Teck Fong who is the

President of Persatuan Hakka. (Resigned on 3 August 2009)

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.

Related by common Directors of former subsidiary, Chang Kok

Veng and Liew Siau Moy. Chang Kok Veng is also a major

shareholder of DMT.

Related by common Directors of former subsidiary, Chang Kok

Veng and Liew Siau Moy. Chang Kok Veng is also a major

shareholder of U2.

Related by the Director, M Chareon Sae Tang @ Tan Whye Aun

who is the partner of CS Tang.

Related by the common Directors and substantial shareholders,

Tan Sri Datuk Ng Teck Fong, Ng Sheau Yuen, Ng Yih Chen

and Ng Sheau Chyn.

Related by common Directors, Tan Sri Datuk Ng Teck Fong and

Ng Sheau Chyn.

121

ANNUAL REPORT 2009



(b) Signifi cant related party transactions

In addition to the transactions detailed elsewhere in the fi nancial statements, the Group had the following transactions with related parties during the fi nancial year.

Group 2009 2008 RM’000 RM’000

Sales of goods to:- - OTY 180 36 - Eugen Schofer 919 1,672 Purchase of goods from:- - DMT - 54 - Eugen Schofer 183 230 - B-Two 3 - Offi ce rental paid to:- - UASB 22 39 - BASB 306 264 - TFP 290 257 - Oasis 48 36 - Persatuan Hakka 11 20 - Permata Sagu 2 - Offi ce rental received from:- - Oasis College 34 60 - B-Two 36 - Fees paid to:- - CS Tang 17 11 Staff training paid to:- - Oasis College 14 - Purchase of property, plant and equipment from:- - DMT - 727 - U2 - 1,219 Disposal of investment properties to UASB - 1,910 Disposal of a subsidiary, B-Two to NTFH - 1,389

The related party transactions described above were carried out on negotiated commercial terms.

122




2009(CON’T)


(c) Compensation of key management personnel

The remuneration of Directors during the fi nancial year are as follows:-


Short term employee benefi ts 2,183 1,272 1,896 1,121 Contribution to defi ned contribution plans 179 102 144 83

2,362 1,374 2,040 1,204

The estimated monetary value of benefi t-in-kind received by the Directors from the Group amounted to RM 95,500 (2008: RM 95,500).

(d) Inter-company transactions Company 2009 2008 RM’000 RM’000 Dividend income received from subsidiaries 4,692 14,506

35. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

Acquisition of additional interest in an existing subsidiary

On 15 July 2009, the Company entered into a Sale and Purchase Agreement for the acquisition of the remaining 49% equity interest in Wealthy Concept Limited (“WC”) representing 3,430,000 ordinary shares of HKD 1 each, of which 848,610 ordinary shares of HKD 1 each has been fully paid and 2,581,390 ordinary shares of HKD 1 each has been issued but not paid, for a cash consideration of RM 795,596 (HKD 1,726,729). As at 31 December 2009, the said 2,581,390 ordinary shares have been fully paid up by the Group.

36. SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

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 fi t 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.

123

ANNUAL REPORT 2009


36. SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE (continued)

On 10 February 2010, the Board fi xed 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.

37. COMPARATIVE FIGURES

The following comparative fi gures have been reclassifi ed to be consistent with current year’s presentation:-

Group Company As previously As As previously As reported restated reported restated RM’000 RM’000 RM’000 RM’000 Balance sheets Trade receivables 8,140 - - - Other receivables, deposits and prepayments 10,803 - 1,348 - Amounts owing by subsidiaries - - 121,958 - Trade and other receivables - 18,943 - 123,306 Trade payables 15,925 - - - Other payables, deposits and accruals 6,414 - 800 - Amounts owing to subsidiaries - - 5,019 - Trade and other payables - 22,339 - 5,819

Cash fl ow statements Cash fl ows from operating activities Decrease in trade receivables 841 - - - Decrease in other receivables, deposits and prepayments 690 - 141 - Decrease in trade and other receivables - 1,531 - 141 Decrease in trade payables (6,400) - - - Decrease in other payables, deposits and accruals (871) - (374) - Decrease in trade and other payables - (7,271) - (374) Cash fl ows from investing activities Interest received - 28 - 8 Net advances to subsidiaries - - - (7,738) Cash fl ows from fi nancing activities Interest received 28 - 8 - Net advances to subsidiaries - - (7,738) -

124


Net Book/

Existing Market Built Up/ Purchase

Property Address Property Description Use Value Land Area Status Age Date

No. 4, Jalan 2/131A, Lot. No. 30515, Geran 18847,

Project Jaya Industrial Estate, Mukim of Petaling, Industrial 757,238 174 sq mt Freehold 27 years 17-Mar-04

Batu 6, Jalan Kelang Lama, District of Kuala Lumpur, Building

58200 Kuala Lumpur. State of Wilayah Persekutuan.

No. 14, Jalan 2/131A, Lot No. 30520, Geran 18852,

Project Jaya Industrial Estate, Mukim of Petaling, Industrial 395,984 174 sq mt Freehold 27 years 22-May-95




Project Jaya Industrial Estate, Mukim of Petaling, Industrial 553,225 174 sq mt Freehold 27 years 16-Dec-03




Project Jaya Industrial Estate, Mukim of Petaling, Industrial 711,000 153 sq mt Freehold 27 years 11-Jun-90




Projcet Jaya Industrial Estate, Mukim of Petaling, Industrial 490,400 153 sq mt Freehold 27 years 26-Sep-02




Project Jaya Industrial Estate, Mukim of Petaling, Industrial 682,117 153 sq mt Freehold 27 years 28-Feb-07



RK1.20,RK1.21,RK1.22,RK1.23 3 Blocks of 33 storey

Rhythm Avenue Axis, condotel/serviced apartments Commercial 324,000 248 sq ft Freehold 1 year 25-Jun-01

Persiaran Kewajipan,USJ 19, 3 1/2 levels of basement Complex

47620 Subang Jaya, Car Park Area

Selangor Darul Ehsan. 3 Levels of Retail Units

Parcel No.G23, Ground Floor, Lot No. 14193, Geran 55365,

Subang Parade, Mukim of Subang Jaya, A Stratifi ed 523,111 529 sq ft Freehold 21 years 14-May-01

No. 5, Jalan SS 16/1, District of Petaling, Retail Lot

47500 Subang Jaya, Selangor.

Selangor Darul Ehsan.

LIST OFPROPERTIES

AS AT 31 DECEMBER

2009

125

ANNUAL REPORT 2009

ANALYSIS OF SHAREHOLDINGS

Authorised Share Capital : RM100,000,000

Issued & Fully Paid up Capital : RM 69,300,000

Class of Shares : Ordinary shares of RM 0.50

Voting Rights : One (1) vote per ordinary share

No. ofSize of Shareholdings Shareholders % No. of Shares %

Less than 100 20 1.07 677 0.00

100 to 1,000 227 12.10 191,297 0.14

1,001 to 10,000 1,148 61.19 5,998,600 4.33

10,001 to 100,000 425 22.65 14,168,059 10.22

100,001 to 1,000,000 47 2.51 13,789,866 9.95

1,000,000 and above issued shares 9 0.48 104,451,501 75.36

1,876 100.00 138,600,000 100.00

SUBSTANTIAL SHAREHOLDERS

Name No. of Shares %

Teck Fong Corporation Sdn. Bhd. 63,032,177 45.48

Kenanga Nominees (Tempatan) Sdn. Bhd.

Benefi ciary: Pledged Securities Account for Ng Teck Fong 13,832,658 9.98

Lembaga Tabung Amanah Warisan Negeri Terengganu 10,000,000 7.22

DIRECTORS’ SHAREHOLDINGS

Name Direct % Indirect %

Tan Sri Datuk Ng Teck Fong 13,865,458 10.00 69,167,441* 49.90

Datin Nonadiah Binti Abdullah 2,000,000 1.44 - -

Ng Yih Pyng 581,239 0.42 63,065,177** 45.50

Ng Yih Chen 100,000 0.07 63,065,177** 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.

SHAREHOLDINGSANALYSISAS AT 31MARCH 2010

126


THIRTY (30) LARGEST SHAREHOLDERS

Name No. of Shares %

1. Teck Fong Corporation Sdn. Bhd. 63,032,177 45.48

2. Kenanga Nominees (Tempatan) Sdn. Bhd. Benefi ciary: Pledged Securities Account for Ng Teck Fong 13,832,658 9.98

3. Lembaga Tabung Amanah Warisan Negeri Terengganu 10,000,000 7.22

4. Wong Wai Peng 6,300,000 4.55

5. Tropical Bliss Sdn. Bhd. 3,585,964 2.59

6. Koperasi Permodalan Felda 3,000,000 2.16

7. Nonadiah Binti Abdullah 2,000,000 1.44

8. Tropical Bliss Sdn. Bhd. 1,525,400 1.10

9. Choong Yee Kong 1,175,302 0.85

10. Gan Sao Wah @ Gan Sao Eng 990,900 0.71

11. Teo Chiang Hong 989,000 0.71

12. Chin Lai Ying 856,600 0.62

13. Dato’ Teo Soo Cheng 775,000 0.56

14. Goh Phaik Lynn 643,700 0.46

15. HLG Nominee (Tempatan) Sdn. Bhd. Benefi ciary: Pledged Securities Account for Seh Choi Hoo 590,000 0.43

16. Chen Yen Ling 531,200 0.38

17. Kenanga Nominees (Tempatan) Sdn. Bhd.

Benefi ciary: Pledged Securities Account for Ng Yih Pyng 521,239 0.38

18. Ng Sheau Chyn 448,700 0.32

19. Choong Siew Mooi 412,007 0.30

20. Yan Cheok Wing 361,000 0.26

21. Ambank (M) Berhad Benefi ciary: Pledged Securities Account for Mohd Karim Bin Abdullah Omar 321,000 0.23

22. Choong Kwei Mooi 312,007 0.23

23. Mayban Securities Nominees (Tempatan) Sdn. Bhd. Benefi ciary: UOB Kay Hian Pte Ltd for Choong Yock Mooi 312,007 0.23

24. Choong Yee Vooi 312,006 0.23

25. Gerald John Richards 274,000 0.20

26. Mercsec Nominees (Tempatan) Sdn. Bhd. Benefi ciary: Pledged Securities Account for Chu Law Jin @ Chew Hwa Song 270,000 0.19

27. Public Nominees (Tempatan) Sdn. Bhd. Benefi ciary: Pledged Securities Account for Chew Pat Chai 244,300 0.18

28. Cimsec Nominees (Tempatan) Sdn. Bhd. Benefi ciary: Pledge Securities Account for Tan See Huat 223,000 0.16

29. HLB Nominees (Tempatan) Sdn. Bhd. Benefi ciary: Pledge Securities Account for Wong Nga Siu 222,000 0.16

30. AMSEC Nominees (Tempatan) Sdn. Bhd. Benefi ciary: Pledge Securities Account for Tham Ah Ngan 220,000 0.16

114,281,167 82.47

SHAREHOLDINGSANALYSISAS AT 31

MARCH 2010(CON’T)

127

ANNUAL REPORT 2009

NOTICE IS HEREBY GIVEN THAT the Fifth 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 Tuesday, 18 May 2010 at 10.30 a.m. for the following purposes:-

1 To receive and adopt the Directors’ Report and the Audited Financial Statements for the

fi nancial year ended 31 December 2009 together with the Auditors’ Report thereon.

2 To declare a First and Final Single Tier Tax Exempt Dividend of 3.0 sen per ordinary

share for the fi nancial year ended 31 December 2009.

3 To approve the payment of Directors’ Fees amounting to RM 264,000 in respect of the

fi nancial year ended 31 December 2009.

4 To re-elect the following Directors retiring in accordance with Article 84 of the Articles

of Association of the Company:-

(i) Mr Ng Yih Pyng

(ii) Mr Ng Yih Chen

(iii) Mr Lau Tiang Hua

5 To re-appoint 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 fi x their remuneration.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

NOTICE OFANNUALGENERALMEETING

128


BY ORDER OF THE BOARD

TAN ENK PURN (MAICSA 7045521)

TEOH KOK JONG (LS 04719)

Company Secretaries

Kuala Lumpur

Date: 23 April 2010

NOTICE OF DIVIDEND PAYMENT

NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the Fifth Annual General Meeting, the First and Final Single Tier Tax Exempt Dividend of 3.0 sen per ordinary share in respect of the fi nancial year ended 31 December 2009 shall be paid on 4 June 2010 to the shareholders registered in the Record of Depositors at the close of business on 21 May 2010.

A Depositor shall qualify for the entitlement to the dividend only in respect of:-

a) Shares transferred into the Depositor’s Securities Account before 5.00 p.m. on 21 May 2010 in respect of ordinary transfers; and

b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis accordingly to the Rules of Bursa Malaysia Securities Berhad.

NOTICE OF ANNUAL GENERAL MEETING

(CON’T)

7 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 fi t, provided that the aggregate number of shares issued in any one fi nancial 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.”

8 To transact any other ordinary business of which due notice shall have been received.

Resolution 10

AS SPECIAL BUSINESS

To consider and if thought fi t, to pass the following resolution:-

Ordinary Resolution

129

ANNUAL REPORT 2009

Notes:

1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(a), (b), (c) and (d) of the Act shall not apply to the Company.

2. To be valid this form duly completed must be deposited at the Registered Offi ce of the Company at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 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 specifi es 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 defi ned 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 NOTE ON ORDINARY BUSINESS

Resolution 3

It is proposed that the fee for each of the Non-executive Directors of the Company be increased fromRM 30,000 per annum to RM 36,000 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 NOTE ON SPECIAL BUSINESS

Resolution 10

The proposed Resolution 10, 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 was utilized as follows:-

On 23 February 2010, the Company allotted 12,600,000 ordinary shares of RM 0.50 each via a private placement. The proceeds raised from the private placement which amounts to RM 6,300,000.00 were utilized fully for working capital purposes.

The renewal of this mandate would empower the Company to raise funds for working capital purposes in the near future.

NOTICE OF ANNUAL GENERAL MEETING(CON’T)

130


Pursuant to Paragraph 8.28(2) of the Listing Requirements of Bursa Malaysia Securities Berhad

1. DIRECTORS WHO ARE STANDING FOR RE-ELECTION AT THE FIFTH ANNUAL GENERAL MEETING

Pursuant to Article 84 of the Articles of Association of the Company:-

i) MR NG YIH PYNG ii) MR NG YIH CHEN iii) MR LAU TIANG HUA

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 profi les 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 fi nancial year ended 31 December 2009 (a total of 5 were held for the fi nancial 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 4/5 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 4/5 ix) MS NG SHEAU YUEN 5/5 x) MS CHOONG CHOW MOOI 5/5

The profi les of the above Directors are set out in the section entitled “Profi le 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 125.

STATEMENT ACCOMPANYING

NOTICEOF ANNUAL

GENERAL MEETING

131

ANNUAL REPORT 2009

STATEMENT ACCOMPANYING NOTICEOF 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 26th February 2009 2.30 p.m. Menara Uni.Asia 9th April 2009 10.30 a.m. Menara Uni.Asia 27th May 2009 12.00 p.m. Sime Darby Convention Centre 20th August 2009 11.30 a.m. Menara Uni.Asia 18th November 2009 2.00 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 FIFTH ANNUAL GENERAL MEETING

VENUE: Dillenia & Eugenia, Ground Floor, Sime Darby Convention Centre, No. 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur.

DATE: 18th May 2010

TIME: 10.30 a.m.

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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 and on my/our behalf at the Fifth Annual General Meeting of the Company to be held at the Dillenia & Eugenia, Ground Floor, Sime Darby Convention Centre, No. 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Tuesday, 18 May 2010 at 10.30 a.m. and at every adjournment thereof, as indicated below:-

No. Ordinary Resolutions For Against

1. Adoption of Audited Financial Statements and Reports

2. Declaration of First and Final Single Tier Tax Exempt Dividend

3. Approval for the payment of Directors’ fees

4. Re-election of Mr Ng Yih Pyng as Director

5. Re-election of Mr Ng Yih Chen as Director

6. Re-election of Mr Lau Tiang Hua as Director

7. Re-appointment of Tan Sri Datuk Ng Teck Fong as Director

8. Re-appointment of Mr M Chareon Sae Tang @ Tan Whye Aun as Director

9. Re-appointment of Auditors, BDO

Special Business

10. Ordinary Resolution 1 Authority to Allot and Issue Shares

Please indicate with a ( ) in the appropriate box against the resolution how you wish your vote to be cast. If no specifi c 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)(a), (b), (c) and (d) of the Act shall not apply to the Company.

2. To be valid this form duly completed must be deposited at the Registered Offi ce of the Company at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 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 specifi es 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 defi ned 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.

No. of Shares CDS Account No.

Signature/Seal of the Shareholder

Date

Fold this fl ap for sealing

fold here

fold here

AFFIX STAMP

THE COMPANY SECRETARY


LEVEL 18, THE GARDENS NORTH TOWERMID VALLEY CITY, LINGKARAN SYED PUTRA59200 KUALA LUMPUR

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