ho wah genting berhad -...

Ho Wah Genting Berhad 272923-H

Wisma Ho Wah GentingNo 35, Jalan Maharajalela50150 Kuala LumpurT 603 2143 8811 F 603 2141 7477

HO

WA

H G

EN

TIN

G B

ER

HA

D272923-H

AN

NU

AL

RE

PO

RT

2009annual report

O9

02 Notice of Annual General Meeting 04 Corporate Information 05 Corporate Calendar 2009/2010

07 Group Corporate Structure 08 Group President and Board of Directors

09 Profile of The Board of Directors 12 Group Executive Chairman’s Statement

15 Products of PT. Ho Wah Genting 15 Manufacturing Plant in Batam

16 Magnesium Smelting Plant in Kamunting 17 Corporate Governance Statement

24 Audit Committee Report 29 Statement on Internal Control

31 Financial Statements 86 Analysis of Shareholdings 88 Analysis of Warrantholdings

90 Statement of Directors’ Interests 91 List of Properties Proxy Form

CONTENTS

Ho Wah Genting Berhad (272923-H)

AGENDA

ORDINARY BUSINESS

1. To receive and adopt the Audited Financial Statements for the year ended 31 December 2009 and the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ Fees of RM90,000 for the financial year ended 31 December 2009.

3. To re-elect the following Directors who retire pursuant to Article 99 of the Company’sArticles of Association:-

(a) Mr. Tee Lay Peng(b) Mr. Wong Tuck Jeong

4. To consider and if thought fit, to pass the following resolution in accordance with Section 129(6) of the Companies Act, 1965:-

“THAT pursuant to Section 129(6) of the Companies Act, 1965, Dato’ Mohd Shahar BinAbdul Hamid be re-appointed as Director of the Company to hold office until theconclusion of the next Annual General Meeting of the Company”.

5. To re-appoint Messrs Russell Bedford LC & Company as Auditors of the Company and to authorise the Directors to fix their remuneration.

SPECIAL BUSINESS

To consider and if thought fit, to pass the following Ordinary Resolution:-

6. Authority to allot shares pursuant to Section 132D of the Companies Act, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and arehereby authorised to allot and issue shares in the Company from time to time upon suchterms and conditions and for such purposes as the Directors may, in their absolutediscretion deem fit, provided that the aggregate number of shares to be issued doesnot exceed ten percent (10%) of the issued share capital of the Company for the timebeing, subject always to the approvals of all the relevant regulatory bodies beingobtained for such allotment and issue and that such authority shall continue in forceuntil the conclusion of the next Annual General Meeting of the Company”.

7. To transact any other ordinary business of the Company for which due notice has been given.

By Order of the Board

SAW GAIK SIM(MAICSA 7007802)Company Secretary

Kuala LumpurDate: 5 May 2010

2

Notice Of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Seventeenth Annual General Meeting of the Company will be held at the DewanBerjaya, Bukit Kiara Equestrian and Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur,Malaysia on Thursday, 27 May 2010 at 10.30 a.m. to transact the following businesses:-

Ordinary Resolution 1


Ordinary Resolution 3 (a)Ordinary Resolution 3 (b)




Annual Report 2009

Notice Of Annual General Meeting (cont’d)

NOTES:

1. Every member is entitled to appoint a proxy or in the case of a corporation, to appoint a representative to attend andvote in his place. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) ofthe Companies Act, 1965 shall not apply to the Company.

2. The Form of Proxy must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, be executed under its common seal or under the hand of its attorney.

3. If the Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit.

4. Where a member appoints more than one proxy (but not more than two), the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

5. The Form of Proxy or other instrument of appointment must be deposited at the Registered Office of the Companyat Wisma Ho Wah Genting, No. 35, Jalan Maharajalela, 50150 Kuala Lumpur not less than 48 hours before the timefixed for holding the meeting or at any adjournment thereof, or in the case of a poll, not less than 24 hours before thetime appointed for the taking of the poll.

Explanatory Notes to Special Business

The Ordinary Resolution 6 is a renewal of mandate obtained at the last Annual General Meeting (“AGM”) which wasnot utilized during the financial year.

The Ordinary Resolution, if passed, will renew the authority given to the Directors to issue and allot shares in theCompany up to and not exceeding in total ten percent (10%) of the issued share capital of the Company for the timebeing for such purposes as the Directors consider would be in the interest of the Company and to avoid any costsincurred and delay in convening a general meeting. This authority, unless revoked or varied by the Company in general meeting will expire at the conclusion of the next AGM.

3


Corporate Information

Board of Directors

Mr Goh Sin HuatGroup Executive Chairman

Mr Teo TiewChief Executive Officer/Managing Director

Mr Chien, Chao-ChuanExecutive Director

Dato’ Mohd Shahar Bin Abdul HamidIndependent Non-Executive Director

Mr Tee Lay PengIndependent Non-Executive Director

Mr Wong Tuck JeongIndependent Non-Executive Director

Audit Committee

Mr Tee Lay PengChairman, MIA

Mr Wong Tuck JeongMember

Dato’ Mohd Shahar Bin Abdul HamidMember

Nomination & Remuneration Committee

Mr Tee Lay PengChairman

Mr Wong Tuck JeongMember

En Adanan Bin BaharumAdviser

Company Secretary

Ms Saw Gaik Sim(MAICSA 7007802)

4

Stock Exchange Listing

Bursa Malaysia Securities Berhad (Main Market)

Sector

Industrial Products

Stock Name

HWGB

Bursa Securities Stock Code

9601

Registered Office

Wisma Ho Wah GentingNo. 35, Jalan Maharajalela50150 Kuala LumpurTel No : (603) 2143 8811Fax No : (603) 2141 7477E-mail : [email protected] : www.hwgenting.com.my

Subsidiary/Associate Companies’ Website

www.hw-genting.comwww.hwgwirecable.com.mywww.cvmminerals.comwww.hwgholidays.comwww.hwgenting-mm2h.com

Auditors

Messrs Russell Bedford LC & Company Chartered Accountants10th Floor, Bangunan Yee Seng15, Jalan Raja Chulan50200 Kuala LumpurTel No : (603) 2031 8223Fax No : (603) 2031 4223

Registrar

Symphony Share Registrars Sdn BhdLevel 6, Symphony House, Pusat Dagangan Dana 1,Jalan PJU 1A/46,47301 Petaling Jaya, SelangorTel No : (603) 7841 8000Fax No : (603) 7841 8151/52

Principal Bankers

Export-Import Bank of Malaysia Berhad

RHB Bank Berhad

EON Bank Berhad

HSBC Bank Malaysia Berhad

PT. Bank Negara Indonesia (Persero) Tbk.

The Hong Kong and Shanghai BankingCorporation Ltd. (Batam branch,Indonesia)

Annual Report 2009

Corporate Calendar 2009/2010

28 May 2009

2 June 2009

17 June 2009

15 July 2009

24 September 2009

14 October 2009

18 November 2009

23 November 2009

16 December 2009

23 December 2009

30 December 2009

13 January 2010

28 January 2010

5

Date Events

HWGB held its Sixteenth Annual General Meeting at the Bukit Kiara Equestrian andCountry Resort.

Mr Tong Gee Pun resigned from the Board of HWGB.

1. The Company subscribed for and was allotted 9,500 new ordinary shares ofUSD1.00 each representing 95% of the total issued and paid-up share capitalof Super Champion Group Limited (“SCGL”), for cash at par. With thesubscription, SCGL has become a subsidiary of the Company.

2. Subsequently, SCGL, a subsidiary of the Company had on even date acquiredone (1) ordinary share of HK$1.00 each in the capital of China Good HoldingsLimited (“CGHL”), for cash at par and subscribed for and was allotted 9,999new ordinary shares of HK$1.00 each, for cash at par. With the subscription andacquisition, CGHL has become a wholly-owned subsidiary of SCGL.

Foreign Investment Committee waived the condition to comply with the 30%Bumiputera equity condition.

Rescission of the Conditional Sale and Purchase Agreement dated 8 October 2008entered into between Ho Wah Genting Kintron Sdn Bhd (“HWGK”), a wholly-ownedsubsidiary of the Company, and Ivan Property Holding Sdn Bhd for the disposal of 2 pieces of leasehold lands together with buildings erected thereon, known asH.S.(M) 7887, P.T. No. 5 and PM238, Lot 1281, Seksyen 38, both located at BandarKulim, Daerah Kulim, Kedah.

The Company to undertake the corporate proposals involving Proposed CapitalReduction, Proposed Amendments to its Memorandum and Articles of Association,Proposed Rights Issue with free warrant and Proposed Employee Share OptionScheme (“collectively referred to as “the Proposals”).

Bank Negara Malaysia had vide its letter dated 17 November 2009, approvedHWGB’s issuance of warrants to the entitled non-resident shareholders of HWGBpursuant to the Proposed Rights Issue.

Despatch of circulars to shareholders in relation to the Proposals.

HWGB obtained its shareholders’ approval on the Proposals at the ExtraordinaryGeneral Meeting held at Boulevard Hotel, Mid Valley City.

HWGK entered into a Conditional Sale and Purchase Agreement with Hoe HuatHang Trading Sdn Bhd for the disposal of a property known as PM238, Lot 1281,Seksyen 38, Bandar Kulim, Daerah Kulim, Kedah for a cash consideration of RM5.2 million. The disposal is still pending for completion.

The Company disposed off 9,500 ordinary shares of USD1.00 each, representing95% equity interest in SCGL to Mr Chan, Kuong Ian for a total cash consideration of USD1.00. As a result of the disposal, SCGL and its wholly-owned subsidiary, CGHLwere no longer subsidiaries of the Company.

The High Court of Malaya in Kuala Lumpur had granted an Order confirming theCapital Reduction pursuant to Section 64 of the Companies Act, 1965.

The sealed order of the High Court of Malaya in Kuala Lumpur confirming theCapital Reduction had been lodged with the Registrar of Companies, which markedthe completion of HWGB’s Capital Reduction.


Corporate Calendar 2009/2010 (cont’d)

6

3 February 2010

8 February 2010

22 February 2010

2 March 2010

16 March 2010

5 April 2010

13 April 2010

HWGB together with other vendors entered into a Placing and SubscriptionAgreement with CVM Minerals Limited (“CVM”), Cinda International Capital Limitedand Athens Capital Limited (collectively the “Placing Agents”) whereby:-

a) the Placing Agents have agreed to act on behalf of HWGB and other vendors, on a best effort basis, to procure the placees to purchase up to 280,000,000existing ordinary shares of HKD0.025 each in the share capital of CVM(“Shares”) (of which up to 78,000,000 existing Shares is to be placed by HWGBwhilst the remaining Shares are to be placed by the other vendors) at a priceof HKD0.36 per existing Share (“the Placing”); and

b) HWGB and other vendors have agreed to subscribe in proportion to therespective number of Shares placed under the Placing for up to 280,000,000new Shares at a subscription price of HKD0.36 per new Share.

The completion of the Placing and Subscription Agreement.

• Change of the Company’s Registrar address.• Fixing the exercise price of the free warrants to be issued pursuant to the Rights

Issue at RM0.20.

Announcement on the important relevant dates and the entitlement date for the Rights Issue.

Despatch of Abridged Prospectus together with Notice of Provisional Allotment andRights Subscription Form to the shareholders of the Company in relation to the Rights Issue.

As at the close of the acceptance, excess application and payment for the RightsIssue at 5.00 p.m. on 31 March 2010, the total valid acceptances and excessapplications received were 189,116,554 Rights Shares representing an oversubscription of 37.15% of the 137,888,954 Rights Shares available for subscriptionunder the Rights Issue.

137,888,954 new Rights Shares together with 137,888,954 new free detachableWarrants were listed on the Main Market of Bursa Securities, which marked thecompletion of HWGB’s Rights Issue exercise.

29 May 2009

27 August 2009

23 November 2009

24 February 2010

Unaudited consolidated results for the 1st quarter ended 31 March 2009

Unaudited consolidated results for the 2nd quarter ended 30 June 2009

Unaudited consolidated results for the 3rd quarter ended 30 September 2009

Unaudited consolidated results for the 4th quarter ended 31 December 2009

Date Events

Financial Calendar For Financial Year 2009

Annual Report 2009

Group Corporate Structure

7


Group President and Board of Directors

8

from left to right

1. Dato’ Mohd Shahar Bin Abdul Hamid (Independent Non-Executive Director)

2. Mr Teo Tiew (Chief Executive Officer / Managing Director)

3. Dato’ Lim Hui Boon (Group President)

4. Mr Goh Sin Huat (Group Executive Chairman)

5. Mr Chien, Chao-Chuan (Executive Director)

6. Mr Tee Lay Peng (Independent Non-Executive Director)

7. Mr Wong Tuck Jeong (Independent Non-Executive Director)

Annual Report 2009

Profile of The Board of Directors

9

Mr Goh Sin HuatGroup Executive Chairman – Malaysian

Aged 62, was appointed as the Chief Executive Officer/Managing Director of HWGB on 2 October 2000 and subsequently promoted to Group Executive Chairman on 26 August 2003.Mr Goh graduated from the University of Malaya in 1972. He joined Ho Wah Genting KintronSdn Bhd (“HWG Kintron”), a wholly-owned subsidiary of HWGB as a Director in 1996.

Mr Goh has extensive experience in the hotel, leisure, entertainment and gaming industry, themanufacturing of moulded power supply cord sets and cable assemblies and propertydevelopment.

Mr Goh has a direct shareholding in HWGB and is deemed interested in HWGB via KintronHolding Sdn Bhd (“KHSB”), a substantial shareholder of HWGB, by virtue of his direct and indirect substantial interest in KHSB. He also a director of KHSB.

He has attended all the four (4) Board meetings of HWGB held in the financial year. Mr Gohhas no directorship in other public companies and has no family relationship with any directorand/or substantial shareholder of HWGB. He has no conflict of interest with the Company and has never been convicted for any offences within the past 10 years.

Mr Teo TiewChief Executive Officer/Managing Director - Malaysian

Aged 50, was appointed as a Director of HWGB since 31 December 1993 and is currently theChief Executive Officer/Managing Director of the Company, a position he held since 26 August 2003. He is a fellow of the Chartered Association of Certified Accountants since1984 and a registered member of the Malaysian Institute of Accountants since 9 April 1987.He joined Ho Wah Genting Group Sdn Bhd (“HWGG”) in 1990 as a Group Accountant and Corporate Planner overseeing HWGG’s overall management, financial affairs, investmentand corporate planning.

Prior to joining HWGG, he was attached with Robert Teo, Kuan & Co, a public accounting firmas an Audit Manager managing a portfolio of clients ranging from manufacturing, trading,investment holding, property development, engineering and transportation. Mr Teo is a member of HWGB’s Management and Investment Committee which was established since 4 September 2006.

Mr Teo has attended all the four (4) Board meetings of HWGB held in the financial year. He has direct shareholding in HWGB. He has no directorship in other public companies andhas no family relationship with any director and/or substantial shareholder of HWGB. He hasno conflict of interest with the Company and has never been convicted for any offences withinthe past 10 years.


Profile of The Board of Directors (cont’d)

10

Mr Chien, Chao-ChuanExecutive Director - Taiwanese

Aged 51, was appointed to the Board of HWGB on 2 October 2000. Mr Chien graduated fromthe University of Chinese Culture, Taiwan in 1981 where he majored in Financial Law. Between1984 and 1986, he served as a Purchasing Manager with Woods Wire Products Inc. (U.S.A.) in Taiwan. In 1986, he joined KAB Enterprise Ltd as a Sales Manager, a Taiwanese tradingcompany dealing in electrical materials and products.

He was one of the founders of HWG Kintron and was its first director since its inception on 30 September 1989. He has more than 24 years of experience in international marketing andthe manufacturing of moulded power supply cord sets and cable assemblies. He is activelyinvolved in research and development and engineering matters with regard to PT. Ho WahGenting’s (“PT. HWG”) products. He is also in charged of PT. HWG international sales and marketing.

Mr Chien has a direct shareholding in HWGB. He is also a director and substantial shareholderof Kintron Holding Sdn Bhd, a substantial shareholder of HWGB.

He has attended all the four (4) Board meetings of HWGB held in the financial year. He has nodirectorship in other public companies and has no family relationship with any director and/orsubstantial shareholder of HWGB.

He has no conflict of interest with the Company and has never been charged for any offenceswithin the past 10 years.

Dato’ Mohd Shahar Bin Abdul HamidIndependent Non-Executive Director - Malaysian

Aged 74, was appointed as an Independent Non-Executive Director of HWGB since 3 March 2008 and is a member of the Company’s Audit Committee. He obtained Grade 1 forhis Senior Cambridge Examinations in 1954. Dato’ Mohd Shahar took up General EngineeringCourses under the Training Within Industry programme in the United Kingdom, funded byShell Malaysia scholarship.

From October 1960, Dato’ Mohd Shahar served Shell Malaysia Trading Sdn Bhd in varioussenior positions until 1971.

In September 1971, Dato’ Mohd Shahar was invited to serve as Managing Director of PernasTrading Sdn Bhd. In the years 1971 to 1974, he was appointed the Deputy Leader of the FirstMalaysian Trade Delegations (Direct Trade) to China (The Canton Trade Fair) held twice a yearin April and October. Thereafter he was appointed the Leader for the Delegation for fourconsecutive trips. In 1974, he was appointed as the Managing Director of Pernas Edar Sdn Bhd.

In 1977, he was invited to serve as Managing Director of Gula Negeri Sembilan Sdn Bhd tocarry out Project Reappraisal following which he ventured into housing development andfertilizer processing businesses.

Dato’ Mohd Shahar previously held positions as Independent Director of Antah Sdn Bhd whichwas subsequently listed on the Bursa Malaysia Securities Berhad in 1984 under the name AntahHoldings Berhad of which he also acts as Audit Committee Chairman in 1994 until Sino Hua-An International Berhad (“Hua-An”) took over the listing status of Antah Holdings Berhad inMarch 2007. He was appointed an Independent Non-Executive Director and Audit CommitteeChairman of Hua-An.

He is one of the founding members of Lembaga Pemegang Amanah Yayasan Negeri Sembilanuntil December 2006 and a Trustee of Tuanku Ja’afar Educational Trust.

Dato’ Mohd Shahar has been conferred the honourable titles of DPTJ (DYMM Tuanku JaafarIbni Almarhom Tuanku Abdul Rahman) which carries the title Dato’, KMN (Kastria MangkuNegara), DSN and PJK (Pingat Jasa Kebaktian) from Negeri Sembilan State Government andthe Federal Authorities.

Dato’ Mohd Shahar has attended four (4) Board meetings of HWGB held in the financial year.

He sits on the Board of Hua-An. He has no shareholdings whether direct or indirect in HWGBand its subsidiaries. He has no family relationship with any director and/or substantialshareholder of HWGB. He has no conflict of interest with the Company and has never beenconvicted for any offences within the past 10 years.

Annual Report 2009

Profile of The Board of Directors (cont’d)

11

Mr Tee Lay PengIndependent Non-Executive Director – Malaysian

Aged 49, was appointed to the Board of HWGB on 11 December 2007. Mr Tee is a member of The Malaysian Association Institute of Certified Public Accountants since 1987 and a registered member of the Malaysian Institute of Accountants since 1988. He is also a CertifiedFinancial Planner registered with the Financial Planning Association of Malaysia since 2003. Mr Tee holds a Master of Business Administration from the University of Hull, London, United Kingdom.

Prior to joining HWGB, he was an Independent and Non-Executive Director of DPS ResourcesBerhad and also the Chairman of its Audit Committee and Risk Management Committee. He has more than 16 years of experience in the financial services industry and well versed inaccounting, auditing, financial and management accounting, management system design andEnterprise Resources Planning and set-up his own consulting firm providing financial andmanagement advisory services since 1995. He also holds position as financialcontroller/corporate advisor in various non-listed companies.

Mr Tee is the Chairman of HWGB’s Audit Committee and the Nomination and Remuneration Committee.

He has attended all the four (4) Board meetings of HWGB held in the financial year. He has nodirectorship in other public companies and does not hold any shares in HWGB and itssubsidiaries. He has no family relationship with any director and/or substantial shareholder ofHWGB and has no conflict of interest with the Company. He has never been charged for anyoffences within the past 10 years.

Mr Wong Tuck JeongIndependent Non-Executive Director - Malaysian

Aged 50, was appointed to the Board of HWGB on 21 June 2001. Mr Wong graduated with a Second Class Honours L.L.B. Degree from the University of Southampton, England in 1984. He was a Barrister-at-Law in England and was called to the English Bar at Inner Temple, London in 1985.

He has chambered with Messrs. Chua Brothers, Azzat and Xavier and was called to theMalaysian Bar in November 1986. He was a legal assistant with Messrs. A.K. Lee & Co. from1986 to 1988 before setting-up his own practice, Messrs. Tuck Jeong & Lee in 1988. He hasmore than 22 years of extensive experience in conveyance and litigation.

Mr Wong is a member of the Nomination and Remuneration Committee and the Audit Committee of HWGB. He has attended all the four (4) Board meetings of HWGB held inthe financial year. He has no directorship in other public companies and does not hold anyshares in HWGB and its subsidiaries.

He has no family relationship with any director and/or substantial shareholder of HWGB andhas no conflict of interest with the Company. He has never been charged for any offences withinthe past 10 years.


Group Executive Chairman’s Statement

12

“ On behalf of the Board of Directors, I am pleased topresent to you the Annual Report and the Audited

Financial Statements of the Company and the Group for thefinancial year ended 31 December 2009.”

Introduction

The year 2009 had continued to be difficult and challenging for the Group following theglobal slump in business and economic activities in the last quarter of 2008. The businessenvironment remained competitive and demanding amid a highly volatile commoditiesmarket fueled with speculative demand from hedge and index funds. The resilience ofthe Group was once again severely tested. Nevertheless, the severe contraction in thefirst half of 2009 and mounting challenges throughout the year had never deterred theBoard of Directors’ commitment and resolve to direct, strategize and lead the Group toovercome the ongoing difficulties and future challenges.

by Mr Goh Sin HuatGroup Executive Chairman

Annual Report 2009

Group Executive Chairman’s Statement (cont’d)

Financial Performance

The Group recorded revenue of RM144.04 million for the financial year ended 31 December 2009 as compared torevenue of RM220.79 million in the preceding year. The Group’s revenue had decreased by 35% in 2009 in comparisonto its performance achieved in 2008. Due to the sharp decline in the Group’s revenue, the Group under performedfor the financial year ended 31 December 2009 with a loss before taxation of RM25.48 million compared to a lossbefore taxation of RM19.72 million for the year 2008.

The Group’s manufacturing division recorded revenue of RM121.64 million and loss before taxation of RM18.58 millionfor the financial year ended 31 December 2009 compared to its 2008 revenue of RM190.92 million and loss beforetaxation of RM9.93 million. The decline in revenue was a consequence of weak consumer spending in US. The priceof copper (our major raw material) had surged more than 100% during the current financial year and we were notable to pass on the increase in cost to our customers in a weak US market. These two major factors had eroded ourgross profit margin and resulted in higher losses incurred for the Group’s manufacturing division.

The Group’s trading division posted an operating revenue of RM21.88 million and profit before taxation of RM427,000for the financial year ended 31 December 2009 compared to its 2008 revenue of RM29.40 million and profit beforetaxation of RM17,000. Our domestic economy continued to feel the adverse impact of the weak global economy, asa result of which, our trading division reported a lower revenue.

The Group’s tin mining division recorded a loss before taxation of RM360,000 for the financial year ended 31 December 2009 compared to its 2008 loss before taxation of RM306,000. The tin mining division is presentlyconducting additional drilling and exploratory works to complete its ongoing feasibility studies.

The Group’s share of loss in its quoted associate, CVM Minerals Limited was RM2.65 million for the financial yearended 31 December 2009. Its magnesium mining division is presently commissioning its production plant and isexpected to commence production by mid of 2010.

Prospect and Outlook

The Board is of the opinion that business operations will continue to be difficult and challenging for the year 2010 inview of the still weak economic situation or slow economic recovery in US as it accounts for the majority of the Group’srevenue.

However, the Board remains optimistic that the US economy would turn for the better by second half of the year asthere are indicative signs such as stabilization of housing markets and increase in consumer spending, a lessening offinancial turmoil, smaller declines in auto sales and slower pace of job losses point to the sign that the economicrecession may have already gone past its bottom and should recover soon.

Barring any unforeseen circumstances, the Board is hopeful and cautiously optimistic that the commencement of itsmining operations would be able to contribute positively to its bottom line in the second half of 2010.

Meanwhile, the Company will continue to explore other viable, synergistic and profitable business ventures to improvethe Group’s performance.

13


Group Executive Chairman’s Statement (cont’d)

Appreciation

I would like to take this opportunity to express sincere thanks to my fellow Board members for their wise counsel andvaluable support to the Group.

Dividend

The Board of Directors, having made due consideration, is not recommending any dividend payment for the financialyear ended 31 December 2009

Acknowledgement

On behalf of the Board, I wish to express my sincere appreciation to the Management and staff for their strongcommitment, loyalty, dedication and their most encouraging contribution towards the group in such challengingtime. I also extend my gratitude to our loyal shareholders, valued customers, business associates, suppliers, bankersand regulatory authorities for their invaluable and continuous support and confidence in the Group.

For and on behalf of the Board

Goh Sin HuatGroup Executive Chairman

Kuala LumpurDate: 20 April 2010

14

Products of PT. Ho Wah Genting

Manufacturing Plant in Batam

15

Magnesium Smelting Plant in KamuntingOur Associate Company, Commerce Venture Magnesium Sdn Bhd

16

Annual Report 2009

Corporate Governance Statement

The Board of Directors of Ho Wah Genting Berhad (“HWGB”) holds the view that the presence of good corporategovernance is fundamental to the continued growth of the Group and the achievement of its objective of protectingand enhancing long-term shareholders’ value whilst taking into account the interest of other stakeholders.

To this end, the Board fully supports the disclosure requirements of the Malaysian code on Corporate Governance (“the Code”) and strives to achieve the best practices embodied in the revised code, which took effect from 1 October 2007.

The following statement describes the manner in which the Group has applied the principles and extent of itscompliance with the best practices as set out in the Code during the financial year ended 31 December 2009.

THE BOARD OF DIRECTORS

A) The Board

The Company is managed and led by an experienced and effective Board which consists of professionals whospecialize in the fields of manufacturing, finance, legal, regulatory and operations, accounting, internationalmarketing and business development. Together with the management, they collectively bring a diverse rangeof skills and expertise to effectively discharge their responsibilities towards achieving the Group’s businessstrategies and corporate goals.

B) Board Balance

The Board consists of six (6) members with the Group Executive Chairman, the Chief Executive Officer/ManagingDirector (“CEO/MD”), an Executive Director, and three (3) Independent and Non-Executive Directors. With thisBoard composition, the Company fully complies with the Listing Requirements of Bursa Malaysia SecuritiesBerhad (“LR Bursa Securities”) for independent non-executive to make up at least one-third of the BoardMembership and for a director to be qualified under paragraph 15.09(1)(c) of the LR Bursa Securities to sit onthe Audit Committee.

The Board considers its current composition with the mix of skills and expertise adequate to discharge its dutiesand responsibilities effectively.

The role of the Group Executive Chairman and CEO/MD of the Company are separate with clear division ofresponsibilities between them to ensure balance of power and authority. The Chairman is mainly responsiblefor ensuring the effectiveness of Board policies and the Group’s strategic business direction whereas theCEO/MD is responsible for implementing the policies and decisions of the Board, overseeing the operations,coordinating the development and implementation of business and corporate strategies, internal controls aswell as monitoring performance.

The Executive Directors take a primary responsibility for managing the Group’s business and resources. Theyhave overall responsibility for the operational activities of the Group and implementation of the Board’sstrategies, policies and decisions.

The independent Non-Executive Directors are independent of management and free from any businessrelationship which could materially interfere with the exercise of their independent judgment. Together, theyplay an independent role in ensuring that the strategies proposed by the management are fully deliberated andexamined, taking into account the long term interest of all parties affected by the Group’s business activities.

A brief description on the profile of each Director is presented on pages 9 to 11 of this Annual Report.

Board Meeting and its Attendance

The Board meets on a quarterly basis, with additional meetings convened as and when required. The agenda of the meetings, cover amongst others, to review and approve the Group’s unaudited results and financialstatements, deliberate corporate proposals, investment plans, review the progress of operations of all businessunits, compliance matters and matters reserved specific for its decision in accordance with the principles of good corporate governance.

17


Corporate Governance Statement (cont’d)

Board Meeting and its Attendance (cont’d)

During the financial year under review, four (4) Board Meetings were held and the details of attendance of eachdirector are as follows:

Directors 26 Feb 29 May 25 Aug 23 Nov Attendance

Goh Sin Huat √ √ √ √ 4/4Group Executive Chairman

Teo Tiew √ √ √ √ 4/4Chief Executive Officer/Managing Director

Chien, Chao-Chuan √ √ √ √ 4/4 Executive Director

Dato’ Mohd Shahar Bin Abdul Hamid √ √ √ √ 4/4Independent Non-Executive Director

Tee Lay Peng √ √ √ √ 4/4 Independent Non-Executive Director

Wong Tuck Jeong √ √ √ √ 4/4 Independent Non-Executive Director

C) Supply of Information

In order for the Board to discharge its stewardship responsibilities efficiently, all quantitative and qualitativeinformation on the Group’s performance is provided for the Board’s review on a regular basis. Updates onoperational, financial, corporate issues and strategic matters as well as current development of the Group whichrequire the Board members’ attention are disseminated without delay.

Prior to the Board meeting, agenda and comprehensive board papers containing relevant documents andmaterial information will be distributed to Board members for their perusal. The Board members will seek furtherexplanation or clarification on issues during the proceedings of the meeting.

All the Directors are vested with rights and unlimited access to information with regard to the Group’s activities. The Company Secretary will advise and update the Directors on new statutory enactments as well as applicablerules, regulations and compliance matters. The Directors may obtain independent professional advices, wherenecessary, at the Group’s expenses in furtherance of their duties.

D) Board Committees

The following committees were set up to assist the Board in executing its responsibilities:-

- Audit Committee- Nomination and Remuneration Committee- Management and Investment Committee

Each Board committee has its own functions and terms of reference clearly defined by the Board. The Boardcommittees are delegated with specific authorities and powers to perform its duties and report to the Board onall issues within its scope of responsibilities.

The Management and Investment Committee meets as and when necessary. Its main tasks are as follows:-

(1) to discuss and update the progress of the respective subsidiary’s project; and

(2) to identify, explore and evaluate all potential investment opportunities available with the objective ofenhancing the Group’s performance and profitability.

Audit Committee

The Audit Committee reviews issues of accounting policy and presentation for external financial reporting,monitors the work of the internal audit function and ensures an objective and professional relationship ismaintained with the external auditors. The Audit Committee has full access to both the internal and externalauditors who, in turn, have access at all times to the Chairman of the Audit Committee.

The composition, terms of reference and a summary of its activities carried out during the financial year ended31 December 2009 are set out separately in the Audit Committee Report on pages 24 to 28 of this Annual Report.

18

Annual Report 2009


Nomination and Remuneration Committee

The Nomination and Remuneration Committee is made up mainly of independent non-executive directors and an adviser as follows:-

- Mr Tee Lay Peng (Chairman)- Mr Wong Tuck Jeong (Member)- Encik Adanan Bin Baharum (Adviser)

The Nomination and Remuneration Committee is responsible for recommending new nominees for appointment to the Board and Board Committees as well as to assess and evaluate the performance of the executive directors. The Committee also assumes the task of recommending to the Board the executive directors’ remunerationpackage based on the principles set by the Company.

E) Appointment to the Board

The Nomination and Remuneration Committee is responsible for recommending the right candidate withnecessary mix of skills, experience and competencies to be appointed as a Board through a formal andtransparent process. New board members will be subject to an orientation programme. The Board of Directorsis satisfied with its current size of six members.

F) Directors’ Training

All Directors of the Company have completed the Mandatory Accreditation Programme pursuant to the LR BursaSecurities. In the spirit of continuous education for Directors, the Company will on a continuous basis,appropriate training and education programmes are identified and arranged for Directors’ participation fromtime to time to further enhance their skills and knowledge to fully equip themselves in order to effectivelydischarge their duties.

Directors are aware and encouraged to attend various seminars and conferences to keep themselves abreast of the current developments and business environment affecting their roles and responsibilities of the Group.

During the year 2009, all Directors of the Company had individually participated in one or more of the followingforum/conferences/training programmes:-

- Financial Reporting during Financial Turbulence organized by The Malaysian Institute of Accountants;- Accounting Challenges in Turbulent Times organized by the Malaysian Accounting Standards Board;- Profit Maximization as the Future Way to Do Business organized by The Malaysian Institute of Accountants;- The Challenges of Implementing FRS 139 Financial Instrument: Recognition and Measurement organized

by Bursa Securities;- Due Diligence and Sale and Purchase Agreement in M&A practice in Taipei organized by KPMG;- Corporate Governance (“CG”) week 2009, covering amongst others, the following topics:-

- CG Best Practices.- The Role of Market Players in Influencing Good CG Practices amongst PLCs.- Towards Enhancing Corporate Integrity.- Strengthening the Financial Reporting Chain in Enhancing CG.- Internal Auditing – Assurance and Value Creation.- Turning Point for CG.

The Directors were also briefed by the Company Secretary from time to time during Board Meetings on changes in statutory requirements, where relevant.

G) Re-election of Directors

The Company’s Article of Association provides that at least one-third of the directors excluding the ManagingDirector shall subject to retirement by rotation and be eligible for re-election at each Annual General Meeting(“AGM”) and all directors including the Managing Director shall retire from office once at least in each three years.

In addition, Directors over seventy (70) years of age are required to submit themselves for reappointmentannually pursuant to Section 129(6) of the Companies Act, 1965.

19



DIRECTORS’ REMUNERATION

The remuneration framework for executive directors is structured to attract and retain directors of the right caliberto manage the Group effectively. Its primary purposes are to ensure that directors and employees of the Group arefairly rewarded for their contributions towards overall performance of the Group.

For the non-executive director’s fee reflects the experience and degree of responsibilities undertaken by theparticular non-executive director concerned. The Directors fees will be payable to the Non-Executive Directors uponobtaining the shareholders’ approval at the Company’s forthcoming Annual General Meeting. Meeting allowancesare also paid to the non-executive directors for each Board, Audit and General Meeting attended by them.

The Board as a whole determines the remuneration of the executive and non-executive directors. Individual directorsdo not participate in decisions concerning their own remuneration packages.

Below are the details of directors’ remuneration paid and directors’ fees payable by the Company and its subsidiaryfor the year ended 31 December 2009 which is categorized into appropriate components is as follows:-

Executive Non-Executive Category of Remuneration Directors Directors Total

(RM) (RM) (RM)

Fees 0 90,000 90,000Salaries 758,769 0 758,769Bonus 0 0 0EPF (Employers’ portion) 76,334 0 76,334Benefits-in-kind and other allowances 28,918 9,000 37,918

TOTAL 864,021 99,000 963,021

There were no commissions, percentages or compensation for loss of office paid to any of the Directors.

The number of directors of the Company whose total remunerations during the financial year under review that fallwithin the following bands are as follows:-

Range of Remuneration (RM) Number of Directors TotalExecutives Non-Executives

1 – 50,000 0 3 350,001 – 100,000 1 0 1

100,001 – 150,000 0 0 0150,001 – 200,000 0 0 0200,001 – 250,000 1 0 1250,001 – 300,000 2 0 2

TOTAL 4 3 7

INVESTORS’ RELATION AND SHAREHOLDERS’ COMMUNICATION

The Board recognizes the importance of transparency and accountability to its shareholders and the need for clear,effective communications with the Company’s institutional investors and other shareholders. The shareholders andinvestors are kept informed of the Group’s performance, business activities, financial performance, materialinformation and corporate events through the issuance of Annual Report, formal announcements, quarterly reports,circulars and press release.

The Annual General Meeting (“AGM”) is the principal forum for dialogue between the Company and its shareholdersand investors. At the AGM, the Board briefs the shareholders on the status of the Group’s businesses and operations. The shareholders are given the opportunity to raise questions on the Group’s activities and prospects as well as to communicate their expectations and concerns to the Company. Extraordinary General Meeting (“EGM”) is heldas and when shareholders’ approvals are required on specific matters. Notices of AGM and EGM are sent out to theshareholders in accordance with the Company’s Articles of Association. A press conference may be held after eachAGM or EGM of the Company, if necessary.

20

Annual Report 2009


INVESTORS’ RELATION AND SHAREHOLDER’S COMMUNICATION (CONT’D)

The Group maintains various websites at: www.hwgenting.com.my, www.hw-genting.com, www.hwgwirecable.com.my,www.hwgholidays.com, www.hwgenting-mm2h.com, www.cvmminerals.com and to provide information on HWGB, the Group’s core business of manufacturing wires and cables, moulded power supply cord sets and cable assembliesfor electrical and electronic devices and equipment, industry overview on magnesium, information on ongoingactivities of its new and competitive tour packages of the tour and travel division and information for foreigners whowish to set up their second home in Malaysia to the shareholders, investors and the general public.

In addition, the shareholders may also address their concerns, if any, to Dato’ Mohd Shahar Bin Abdul Hamid, the Senior Independent Non-Executive Director, via fax no.: 603-2141 7477 or email ([email protected]).

ACCOUNTABILITY AND AUDIT

A) Financial Reporting

The Board is assisted by the Audit Committee to oversee the Group’s financial reporting processes and thequality of its financial reporting.

In presenting the annual financial statements and the quarterly announcements to shareholders, the Board hastaken reasonable steps to ensure that the financial statements are true and fair reflection of the Group’s positionand prospects. This also applies to circulars to shareholders and other documents that are submitted to theauthorities and regulators.

B) Internal Control

The Board is responsible for maintaining a sound system of Internal Controls that cover not only financial controlsbut also the operational, compliance and risk management. The Audit Committee has been established, whichis assisted by an independent internal audit function in the discharge of its duties and responsibilities.

The statement on Internal Control of the Group is set out on pages 29 to 30 of this Annual Report.

C) Relationship with Auditors

The Board via the Audit Committee maintains a formal and transparent professional relationship with the Group’sauditors, both internal and external. The role of the Audit Committee in relation to the auditors is described inthe Audit Committee Report as set out on pages 24 to 28 of this Annual Report.

OTHER COMPLIANCE INFORMATION

A) Utilisation of Proceeds

The RM27,577,790 proceeds raised from the Rights Issue of 137,888,954 HWGB Rights Shares of RM0.20 each atan issue price of RM0.20, which was completed on 13 April 2010, has been proposed to be utilised as follows:-

Proposed Actual Utilisation Estimated timeframe forDescription Utilisation as at 20 April 2010 Balance the utilisation of proceeds

RM RM RM

Repayment of bank 10,000,000 5,000,000 5,000,000 Within one (1) year from theborrowings listing of the Rights Shares

Working capital 17,057,790 3,557,790 13,500,000 Within one (1) year from the listing of the Rights Shares

Estimated listing 520,000 520,000 - Within one (1) month from the expenses listing of the Rights Shares

TOTAL 27,577,790 9,077,790 18,500,000

21



B) Share Buybacks

During the financial period, there were no share buybacks by the Company.

C) Options, Warrants or Convertible Securities

- The Company had on 10 February 2010 implemented the Employees’ Share Option Scheme (“ESOS”) for a period of 10 years expiring on 9 February 2020. The ESOS is governed by the ByLaws which were approvedby its shareholders on 16 December 2009. However, until the date of this report, the Company had notgranted any ESOS to the eligible employees.

- The Company had on 9 April 2010 issued 137,888,954 warrants in conjunction with the renounceable rightsissue of 137,888,954 right shares on the basis of one (1) rights share and one (1) free warrant for every two(2) existing ordinary shares of RM0.20 each constituted by a Deed Poll dated 2 March 2010. The exerciseperiod for the warrant is 5 years from 9 April 2010 up to and including 8 April 2015.

Each warrant entitles its registered holder the right to subscribe for one (1) new ordinary share of RM0.20each in the Company at an exercise price of RM0.20 per share until the expiry of the exercise period.However, until the date of this report, none of the warrants has been exercised and converted.

- The Company did not issue any convertible securities for the financial year.

D) Depository Receipt Programme

The Company did not sponsor any depository receipt programme during the financial year.

E) Imposition of Sanctions/Penalties

There were no sanctions and/or penalties imposed on the Group and the Company, Directors or Managementby the relevant regulatory bodies.

F) Non-Audit Fees

There was a non-audit fee of RM20,000 (excluding out-of-pocket expenses and service tax) paid to Messrs RussellBedford LC & Company for the financial year ended 31 December 2009 in relation to the Company’s rights issue exercise.

G) Variation in Results

The Group and the Company did not release any profit estimate, forecast or projection for the financial yearended 31 December 2009.

There was no material variance of 10% or more between the audited financial results and the unaudited resultsof the Group for the financial year ended 31 December 2009.

H) Profit Guarantee

During the financial period, there was no profit guarantee given by the Group and the Company.

I) Material Contracts

There were no material contracts entered into by the Company and its subsidiaries involving directors and majorshareholders’ interests since the previous financial year ended 31 December 2008.

There were no material contracts relating to loans between the Company and its subsidiaries involving directorsand major shareholders’ interests.

J) Revaluation Policy

The Group’s revaluation policy is disclosed in Note 3 to the financial statements.

22

Annual Report 2009


DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors are required under the Companies Act, 1965 (“Act”) to prepare financial statements for each financialyear which give a true and fair view of the state of affairs of the Group and of the Company for the financial yearthen ended.

The Directors consider that, in preparing these financial statements, the Group and the Company have usedappropriate accounting policies and applies them consistently and made judgments and estimates that arereasonable and prudent. The Directors also consider that all applicable approved accounting standards have beenfollowed and confirm that the financial statements have been prepared on a going concern basis.

The Directors are responsible and have ensured that proper accounting records are kept under the Act, that disclosewith reasonable accuracy, the financial positions and results of the Group and the Company. The Directors are alsoresponsible for taking necessary and reasonable steps to safeguard the assets of the Company and the Group andto prevent and detect fraud and other irregularities.

CORPORATE SOCIAL RESPONSIBILITY STATEMENT (“CSR”)

The Group, whilst pursuing it’s commitment to the stakeholders, is also consciously emphasizing the importance ofits social responsibility. Throughout the year, the Group continued to carry out its CSR activities focusing on thefollowing aspects:-

A) Environment

The Group is committed to safeguard and achieve high standards of environmental protection in carrying outits business through the following Environmental Policy:-

- Concerned to environmental issue, in using resources efficiently, reducing and preventing environmentalpollution.

- Comply with legal and applicable requirements.- Conduct continual improvement and monitoring the environmental management program result

periodically.- A proper set-up of Quality Assurance and Quality Control Department as to manage overall quality system.

Further upgrading the Group’s quality system in enhancing better quality and highly reliable products inachieving customers’ satisfaction and needs.

B) Human Resources Development

The Group’s manufacturing division has formed a Quality Control Circle (“QCC”) comprising representativesfrom various departments, with the aim to inculcate a continuous improvement culture amongst the workforcein the Group.

The objectives of the QCC are to improve productivity, minimize wastage, problem solving and enhancingemployees’ personal development and motivation by providing on-the-job training.

C) Employees Health

Encourage employees’ participation in various games and sports competitions amongst the departments aswell as amongst the factories in Kawasan Bintang Industri for the purpose of motivating them to live a healthylifestyle through games and activities.

D) Training Programme

As part of our human capital developments, the Group provided quality training programmes to the employees on a timely and regularly basis with the aim to further build up our employees’ quality awareness and competency in producing better quality and highly reliable products to meet customers’ and societies’ needs.

23


Audit Committee Report

COMPOSITION OF THE AUDIT COMMITTEE

The Audit Committee was established since 4 October 1994 and currently comprises the following members:-

Mr Tee Lay Peng Chairman, Independent Non-Executive Director

Dato’ Mohd Shahar Bin Abdul Hamid Member, Independent Non-Executive Director

Mr Wong Tuck JeongMember, Independent Non-Executive Director

RECORD OF ATTENDANCE IN AUDIT COMMITTEE MEETINGS

The Committee held four (4) meetings with due notice of issues to be discussed were circulated to the CommitteeMembers during the financial year ended 31 December 2009.

The attendance records of the Committee Members at the meetings are as follows:-

Audit Members 26 Feb 29 May 25 Aug 23 Nov Attendance

Tee Lay Peng √ √ √ √ 4/4 Dato’ Mohd Shahar Bin Abdul Hamid √ √ √ √ 4/4 Wong Tuck Jeong √ √ √ √ 4/4

The Chief Executive Officer/Managing Director, the Group Accountant and representatives of the external andinternal auditors were present at all the meetings during the 2009 financial year.

The Committee also invites its management for the meetings for briefing on the activities involving their areas of responsibilities as and when necessary.

During the 2009 financial year, the Audit Committee met with the external auditors twice on 26 February 2009 and23 November 2009 without the presence of the Executive Directors and key management.

The proceedings and conclusions of each audit committee meeting were documented and distributed to eachmember of the Audit Committee.

TERMS OF REFERENCE

The Audit Committee was established on 4 October 1994 and subsequently its terms of reference were amended on 31 March 2008 to be in line with the revised Malaysian Code on Corporate Governance on 1 October 2007 and the amendments made to the LR Bursa Securities in relation to corporate governance.

1. Composition

The Board shall appoint an Audit Committee from amongst its Directors and shall consist of not less than 3members who must be non-executive directors, with a majority of them being Independent Directors. At leastone member of the Committee must be a member of the Malaysian Institute of Accountants and if not, he/shemust fulfill the criteria set out in the LR Bursa Securities.

The Chairman of the Audit Committee shall be appointed by the members of the Committee and he shall be anIndependent Non-Executive Director. No alternate director of the Board shall be appointed as a member of theCommittee.

In the event of any vacancy arises in the Audit Committee resulting in the number of members becomes lessthan three, the Board shall fill the vacancy within three months of such event.

The Board shall review the term of office and performance of the Committee and each of its members at leastonce in every three years to determine whether such Committee and members have carried out their duties in accordance with their terms of reference.

24

Annual Report 2009

Audit Committee Report (cont’d)

2. Objectives

- Provide assistance to the Board of Directors in fulfilling its legal responsibilities pertaining to the financial,accounting records, internal control systems and the reporting practices of the Group.

- Oversee and appraise the quality of the audits conducted both by the internal and external auditors andevaluate the adequacy and effectiveness of the Group’s administrative, operating and accounting controlsand the integrity of its financial information.

3. Authority

The Audit Committee is authorized by the Board to investigate any activities within its terms of reference. It isauthorized to seek any information it requires from any employee and it has unlimited access to all the Companyand its subsidiaries’ records and information.

The Audit Committee is authorized by the Board to seek external legal or other independent professional advice and to secure the attendance of outsiders with the relevant experience and expertise.

4. Functions of the Audit Committee

- To consider the appointment of the internal and external auditors, their audit fee and any questions of theirresignation or dismissal.

- To discuss with the external auditors their audit plan, scope and nature of audit, prior to commencementof audit.

- To review with the external auditors their evaluation of the system of internal controls, audit report, theirmanagement letter and the management’s response.

- To review the quarterly and year-end financial statements of the Company and the Group before submission to the Board whilst ensuring that they are prepared in a timely and accurate manner focusing particularly on:-

- Changes in or implementing of major accounting policies and practices.- Major judgmental areas.- Significant adjustments resulting from the audit.- Significant or unusual events.- The going concern assumption.- Compliance with accounting standards and other statutory and regulatory requirements.

- To discuss problems and reservations arising from the interim and final audits and any matter that theexternal auditors may wish to discuss (in the absence of management, if necessary).

- To review the adequacy of the scope, functions, competency and resources of the internal audit functionand that it has the necessary authority to carry out its work.

- To review the Internal Audit Charter, staffing and any appraisal or assessment of the performance of themembers of the internal audit functions.

- To review the effectiveness of internal control systems and in particular, review the internal auditors’ findings and management’s response to those findings.

- To review any related party transactions and conflict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises question on managementintegrity and to ascertain that the procedures established to monitor Recurrent Related Party Transactionshave been complied with.

- The Audit Committee shall have direct communication channels with the internal and external auditors andthe senior management of the Group and shall be able to convene meetings with the auditors wheneverdeemed necessary.

- Report any breaches of the LR Bursa Securities, which have not been satisfactorily resolved, to the BursaSecurities.

25



4. Functions of the Audit Committee (cont’d)

- Direct and where appropriate supervise any special projects or investigation considered necessary andreview investigation reports on any major defalcations, frauds or thefts.

- The Audit Committee shall also be responsible for any other functions as may be determined by the Board and reflected in its terms of reference.

5. Quorum and Meeting

The quorum for a meeting shall be two members of which the majority present must be independent directors.

The Committee shall meet as frequently as the Chairman shall decide and it shall be able to convene meetingswith the external auditors, the internal auditors or both, excluding the attendance of other directors andemployees of the Company, whenever deemed necessary. The Committee shall meet at least twice during thefinancial year with the internal and external auditors without the presence of executive boardmembers/management.

The Audit Committee Meeting shall be attended by its members and the secretary. Members of themanagement, employees, other directors and representatives of the internal and external auditors shall attendthe meetings only by the invitation of the Audit Committee.

A resolution put to vote shall be decided by a majority of votes of the members present and each member shallhave one vote. In the case of an equality of votes, the Chairman shall have a second or casting vote.

6. Reporting Procedures

The secretary of the Audit Committee is responsible for sending out notices of the meetings, preparing andkeeping minutes of meetings and shall also provide the necessary administrative and secretarial services for theeffective functioning of the Committee.

SUMMARY OF AUDIT COMMITTEE ACTIVITIES

The activities undertaken by the Audit Committee during the year under review were as follows:-

- Met regularly with the Group’s senior management and external auditors to review the Group’s unauditedquarterly financial statements and made suitable recommendations thereon to the Board for adoption prior to their release to the Bursa Securities.

- Reviewed the Group’s budget for the year 2009 and discussed with Executive Board members on businessoperations, opportunities and risk.

- To monitor and ensure that the internal auditors carried out its functions in accordance with the Group’s auditplan and ensure that there is an adequate scope and comprehensive coverage of the Group’s manufacturing activities.

- Deliberated over the internal audit reports which highlighted audit issues, recommendation and management’sresponse and reviewed the effectiveness of the Group’s system of internal controls.

- Reviewed the internal audit reports which covered various areas, amongst others:-

- Production on Moulding & Assembly and Wire & Cable, focusing on the following areas:-- Production Schedule Execution;- Issuance and Return of Raw Material;- Raw Material Usage Recording;- Preparation and Updating of Post Production Report; and- Control of Rejections and Scraps.

- Personal and General Administration- Cost Accounting - Audit Implementation for 2001 to 2009- Bill of Materials

and considered the findings and recommendations of the internal auditors on the Group’s operation andensuring shortcomings, if any, were adequately highlighted to the management.

26

Annual Report 2009


SUMMARY OF AUDIT COMMITTEE ACTIVITIES (CONT’D)

- Assessed the outsourced internal auditors’ performance.

- Reviewed the Audit Summary Memorandum prepared by the external auditors which comprised the significantaudit matters for attention for the financial year ended 31 December 2008.

- Reviewed the Audit Planning Memorandum 2009 prepared by the external auditors which set out the auditors’responsibilities, audit approach, audit programme and scope of their audit for the financial year, results of annualaudit, audit report and management letter together with management’s response to the findings of the external auditors.

- Reviewed significant issues and matters that had a material impact on the results of the Group.

- Considered and recommended to the Board for approval the audit fees payable to the internal and externalauditors.

- Reviewed existing accounting standards for additional disclosure requirement approved by the MalaysianAccounting Standards Board and new Financial Reporting Standards applicable in the preparation of the Group’sfinancial statements.

- Reviewed any related party transactions and conflict of interest situation that may arise within the Company andthe Group.

- Reviewed the Company’s compliance with the LR Bursa Securities, Malaysian Accounting Standards Board andother relevant legal and regulatory requirements.

INTERNAL AUDIT FUNCTION

The Group’s internal audit function is outsourced to CEOPE Consulting Sdn Bhd since 1 July 2001.

The main role of the internal audit is to provide an independent and objective review on the organisation’smanagement, records, policies and controls and reports them to the Audit Committee. The internal audits includeevaluation of the processes by which significant risks are identified, assessed and managed and ensure that institutedcontrols are appropriate and effectively applied.

The total fees incurred for the internal audit function of the Group for 2009 amounted to RM60,000.00 (excluding out-of-pocket expenses and service tax).

SUMMARY OF INTERNAL AUDIT ACTIVITIES

During the financial year, the internal auditors carried out the following activities:-

- Continuously review the effectiveness of the Group’s system of internal control.

- Reviewed, agreed and apprised the Audit Committee on the audit strategy, approach plan, scope of work,resources requirements and programmes and apprise them of the audit activities on a quarterly basis.

- Recommended new internal audit approach focusing on the Group’s strategic management to the AuditCommittee.

- Reviewed the risk identification processes and system of internal controls in all the key operating processes and activities using a cyclical audit approach, reported findings, made recommendations and followed up toensure satisfactory controls are maintained.

- Monitored and ensured that management implemented the corrective action plan in particular the rectificationand improvement of the system of internal controls and procedures promptly and effectively to ensure that all key risks and controls have been addressed and reported to the Audit Committee.

27



SUMMARY OF INTERNAL AUDIT ACTIVITIES (CONT’D)

- Acted on suggestions made by the Audit Committee and/or senior management on concerns over operations or controls.

- Monitored compliance with policies and standards and assessed the effectiveness of the internal controlstructures within the Group.

- Continued to assist the Board and the management on the compliance with the Malaysian Code on CorporateGovernance for the purpose of preparing the Statement on Internal Control pursuant to the LR Bursa Securities.

- Key managements nominated in each business unit have prepared action plans, with implementation time-scalesto address any risk and control issues.

- Other ongoing assurance and advisory work to the Board and management.

- Conducting special reviews requested by Audit Committee and/or management on ad-hoc basis.

28

Annual Report 2009

Statement On Internal Control

INTRODUCTION

The Statement, prepared in accordance with Paragraph 15.26(b) of the Listing Requirements of Bursa MalaysiaSecurities Berhad has been approved by the Board. The Board is committed to maintaining a sound system of internalcontrol in the Group and is please to provide the following statement which outlines the nature and scope of internalcontrols of the Group during the financial year.

BOARD OF DIRECTORS’ RESPONSIBILITIES

The Board affirms its overall responsibility for overseeing the Group’s system of internal control and reviewing its effectiveness whilst the role of management is to implement the Board’s policies on risk and control recognizing the importance of effective and sound system of internal control to enhance good corporate governance.

The system of internal control, designed to safeguard shareholders’ investments and Group’s assets, covers not onlyfinancial controls but also organisational, operational, and compliance controls. These controls are designed tomanage the risks to achieve the Group’s business objectives. As with any such system, controls can only providereasonable but not absolute assurance against material misstatement, fraud or loss. The Group is continuously lookinginto the adequacy and integrity of its system of internal controls.

In pursuing this objective, the role of management is to implement the Board’s policies, procedures and guidelineson risk and control by identifying and evaluating the risks faced and design, operate and monitor a suitable systemof internal control to manage these risks. The Board has extended the responsibilities of the Audit Committee to include the role of monitoring all internal controls on behalf of the Board, including the identifying risk areas andcommunicates to the Board critical risk areas faced by the Group. The Audit Committee is supported by an internalaudit function which is independent of the activities they audit.

The internal audit function which report directly to the Audit Committee, undertakes an objective, independent and systematic review of the systems of internal control so as to provide reasonable assurance that such systemscontinue to operate satisfactorily and effectively. The internal auditors have performed their duties with impartiality,proficiency and due professional care. To the effect, the Board also ensures that the external auditors review thestatement on internal control and report the results thereof to the Board.

The Board has considered the system of internal control in operation during the financial year and the key elementsof the system are as follows:-

Risk Assessment

The Board defines risk parameters and standards guided by the corporate objective to maximise long termshareholder value whilst meeting the needs of customers, employees and all related stakeholders. In that, the Boardmaintains an on-going process of identification, evaluation and management of significant risks. The process isregularly reviewed by the Board and has been in place during the year under review. Risk assessment exercise wascarried out by the Board and management to identify and evaluate significant risks faced by the Group. Key risk areasmade known to the Board and management are reviewed by the internal auditors based on audit plan devised.

An annual plan was adopted the risk assessment exercise to continuously review the effectiveness of the Group’ssystem of internal control. The internal audit function adopts a risk-based approach and prepares its plan and strategybased on the risk profile of the Group’s operations as assessed by the management. The internal auditors report itsfindings and recommendations on risk control procedures to the Audit Committee on a quarterly basis. The AuditCommittee and management shall be required to review the audit plan as and when required to take into accountany changes in the risks that the Group may be exposed to its objectives and environment in which its operationsare continuously evolving.

Control Environment

The key elements of the Group’s internal control systems include:

a) Regular management reports are made available to the Board on a quarterly basis, covering financialperformance and key business indicators, which allows for effective monitoring of significant variances betweenactual performance against budgets and plans.

29


Statement On Internal Control (cont’d)

Control Environment (cont’d)

b) A well defined organisational structure that is aligned to business and operation requirements. Limits and levelof authority, accountability and responsibility are set out.

c) Documentation on internal policies, processes and procedures are reviewed and revised when necessary.Instances of non-compliance with such policies and procedures are reported thereon by its internal auditors to the Board via the Audit Committee.

d) Provision of regular and comprehensive information to management.

e) Regular internal audit visits that provide assurance on the effectiveness of the Group’s system of internal controland advising management on areas for further improvement to resolve operational deficiencies.

f) Regular visits to operating units by senior management.

Internal Audit Function

The Board, the Audit Committee and management monitor the effectiveness of the Group’s internal control system. The Group has outsourced its internal audit function to an external party, CEOPE Consulting Group, which isindependent of the activities it audits. The outsourced internal auditors review the audit areas based on the approvedinternal audit plan which will cover major operating subsidiaries. The internal audit focuses on regular and systematicreviews of the systems of financial and operational control in anticipating potential risk exposures over key businessprocesses and proper conduct of the business of the Group. This is to ensure that the business processes and internalcontrols of the Group are continually assessed and monitored, to ensure statutory compliance and maintain data integrity.

Results of the audit including comments from management are reported directly to the Audit Committee periodically, who reports to the Board. The effectiveness of the system of internal control is also monitored on an ongoing basisby the Audit Committee, who receives reports from the internal auditors. Improvements are made to the internalcontrol system, where necessary, in response to recommendations. The corrective actions were followed up and reports were updated to reflect the latest position.

Information & Communication

The Board receives periodic reports on operations and financial performance of various divisions of the Group whichprovide them with information needed for decision-making.

CONCLUSION

The Board has appraised the effectiveness, adequacy and integrity of the system of internal control in operationduring the financial year through the monitoring process set out above. However, it must be made clear that anysystem of internal control, no matter how well designed, implemented and monitored, does not eliminate thepossibility of human error, collusion or the deliberate circumvention of control procedures. The Board remainscommitted towards operating a sound system of internal control and therefore acknowledge that the system mustcontinuously evolve to support the Group.

30

32 Directors’ Report 35 Statement by Directors 35 Statutory Declaration

36 Report of the Independent Auditors 38 Income Statements 39 Balance Sheets

41 Statements of Changes in Equity 42 Cash Flow Statements 45 Notes to the Financial Statements

FINANCIAL STATEMENTS


Directors’ Report

The directors hereby submit their report and the audited financial statements of the Group and the Company for thefinancial year ended 31 December 2009.

PRINCIPAL ACTIVITIES

The principal activities of the Company are that of an investment holding company and the provision of managementservices. The principal activities of the subsidiaries are disclosed in Note 13 to the financial statements.

There have been no significant changes in the nature of these activities during the financial year.

FINANCIAL RESULTS

Group CompanyRM’000 RM’000

Net loss for the year 23,983 5,348

Attributable to:Equity holders of the Company 23,807 5,348Minority interests 176 -

23,983 5,348

In the opinion of the directors, the results of the operations of the Group and the Company during the financial yearhave not been substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

No dividend has been paid or declared by the Company since the end of the previous financial year. The directorsalso do not recommend any dividend payment in respect of the current financial year.

RESERVES AND PROVISIONS

There were no material transfers to and from reserves or provisions during the financial year other than as disclosedin the financial statements.

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any shares and debentures during the financial year.

SHARE OPTIONS

No options have been granted by the Company to any parties during the financial year to take up unissued sharesof the Company.

No shares have been issued during the financial year by virtue of the exercise of any option to take up unissuedshares of the Company. As at the end of the financial year, there were no unissued shares of the Company under options.

32

Annual Report 2009

Directors’ Report (cont’d)

DIRECTORS

The directors of the Company in office since the date of the last report are:

Goh Sin HuatTeo TiewChien, Chao-ChuanDato’ Mohd Shahar Bin Abdul HamidTee Lay PengWong Tuck JeongTong Gee Pun - Resigned on 2 June 2009

DIRECTORS’ INTERESTS IN SHARES

The shareholdings in the Company and its related companies of those who were directors at the end of the financialyear, as recorded in the Register of Directors’ Shareholdings kept under Section 134 of the Companies Act, 1965, areas follows:

Number of ordinary shares of RM1.00 eachBalance as at Balance as at01.01.2009 Bought Sold 31.12.2009

In the CompanyShareholdings registered in the name of directors:Goh Sin Huat 58,000 - - 58,000Teo Tiew 40,000 - - 40,000Chien, Chao-Chuan 100,000 - - 100,000

Other shareholdings in which directors are deemed to have an interest:

Goh Sin Huat 39,083,000@ - - 39,083,000@Chien, Chao-Chuan 39,083,000^ - - 39,083,000^

@ Deemed interest by virtue of his substantial shareholdings in Kintron Holding Sdn Bhd (“KHSB”), and thesubstantial interest of his associate, Expand Quest Sdn Bhd in KHSB of which KHSB is the beneficial owner.

^ Deemed interest by virtue of his substantial shareholdings in Kintron Holding Sdn Bhd (“KHSB”), of which KHSBis the beneficial owner.

By virtue of their indirect substantial interest in the shares of the Company, Goh Sin Huat and Chien, Chao-Chuanare also deemed to have interests in the shares of its subsidiaries to the extent the Company has an interest duringthe financial year.

None of the other directors in office at the end of the financial year had any interest in the shares of the Companyand its related companies during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (otherthan a benefit included in the aggregate amount of emoluments received or due and receivable by the directors asshown in the financial statements) by reason of a contract made by the Company or a related corporation with thedirector or with a firm of which the director is a member, or with a company in which the director has a substantialfinancial interest.

There were no arrangements during or at the end of the financial year, which had the object of enabling directors toacquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

33


Directors’ Report (cont’d)

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and the Company were made out, the directors took reasonable steps:

(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of provisionfor doubtful debts and had satisfied themselves that all known bad debts had been written off and that adequateprovision had been made for doubtful debts; and

(b) 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 expected realisable values.

At the date of this report, the directors are not aware of any circumstances:

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

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

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Groupand the Company misleading or inappropriate.

In the interval between the end of the financial year and the date of this report:

(a) no item, transaction or event of a material and unusual nature has arisen which, in the opinion of the directors,would substantially affect the results of the operations of the Group and the Company for the financial year inwhich this report is made other than the event subsequent to the balance sheet date as disclosed in Note 14 tothe financial statements; and

(b) no charge has arisen on the assets of the Group and the Company which secures the liability of any other personnor have any contingent liabilities arisen in the Group and the Company.

No contingent or other liability of the Group and the Company has become enforceable or is likely to becomeenforceable within the period of twelve months after the end of the financial year which, in the opinion of thedirectors, will or may affect the ability of the Group and the Company to meet its obligations as and when they fall due.

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report orthe financial statements, which would render any amount stated in the financial statements of the Group and theCompany misleading.

AUDITORS

The auditors, Messrs Russell Bedford LC & Company, have indicated their willingness to continue in office.

Signed on behalf of the Boardin accordance with a resolution of the directors,

GOH SIN HUAT

TEO TIEW

Kuala LumpurDated: 20 April 2010

34

Annual Report 2009

Statement by Directors

Statutory Declaration

The directors of HO WAH GENTING BERHAD state that, in the opinion of the directors, the accompanying financialstatements are drawn up in accordance with the provisions of the Companies Act, 1965 and the Approved AccountingStandards for Entities Other Than Private Entities in Malaysia so as to give a true and fair view of the financial positionof the Group and of the Company as at 31 December 2009, and of their financial performance and their cash flowsfor the year ended on that date.

Signed on behalf of the Boardin accordance with a resolution of the directors,

GOH SIN HUAT

TEO TIEW


I, TEO TIEW, being the director primarily responsible for the financial management of HO WAH GENTING BERHAD,do solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financialstatements are correct, and I make this solemn declaration conscientiously believing the same to be true and byvirtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the )above named TEO TIEW at Kuala Lumpur in )Wilayah Persekutuan on 20 April 2010 )

TEO TIEW

Before me,

Mohan A.S. ManiamNo. W 521COMMISSIONER FOR OATHS

35


Report of the Independent Auditorsto the members of Ho Wah Genting Berhad

1. REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements which comprise the balance sheet of the Group and ofthe Company as at 31 December 2009, and the related statements of income, changes in equity and cash flowsfor the year then ended, and a summary of significant accounting policies and other explanatory notes.

1.1 Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation and fair presentation of these financialstatements in accordance with the Companies Act 1965 (“Act”) and the Approved Accounting Standardsfor Entities Other Than Private Entities in Malaysia. This responsibility includes: designing, implementingand maintaining internal control relevant to the preparation and fair presentation of financial statementsthat are free from material misstatement, whether due to fraud or error; selecting and applying appropriateaccounting policies; and making accounting estimates that are reasonable in the circumstances.

1.2 Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conductedour audit in accordance with the Approved Standards on Auditing in Malaysia. Those standards require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonable assurancewhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessmentof the risks of material misstatement of the financial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal control relevant to the entity’s preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

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

1.3 Opinion

In our opinion, the financial statements have been properly drawn up in accordance with the Act and theApproved Accounting Standards for Entities Other Than Private Entities in Malaysia so as to give a true andfair view of the financial position of the Group and of the Company as at 31 December 2009, and of theirfinancial performance and their cash flows for the year ended on that date.

36

Annual Report 2009

Report of the Independent Auditorsto the members of Ho Wah Genting Berhad (cont’d)

2. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Act, we also report on the following:

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

(b) We have considered the financial statements and the auditors’ reports thereon of the subsidiaries of whichwe have not acted as auditors, as indicated in Note 13 to the financial statements, being financial statementsthat have been included in the Group’s financial statements.

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

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualificationmaterial in relation to the Group’s financial statements and did not include any comment made underSection 174(3) of the Act.

3. OTHER MATTERS

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

RUSSELL BEDFORD LC & COMPANY CHIN KIM CHUNGAF 1237 2006/09/10 (J/PH)CHARTERED ACCOUNTANTS PARTNER


37


Income Statementsfor the year ended 31 December 2009

Group CompanyNote 2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Revenue 4 144,043 220,788 645 698Cost of sales 5 (148,570) (217,984) - -

Gross (loss)/profit (4,527) 2,804 645 698Other operating income 3,355 19,352 5 389Distribution costs (2,269) (2,615) - -Administrative expenses (7,612) (13,627) (4,805) (4,851)Other operating expenses (2,863) (5,895) (1,075) (2,237)

(Loss)/Profit from operations (13,916) 19 (5,230) (6,001)Finance costs (8,888) (7,580) (118) (158)Share in losses of associates (2,676) (216) - -

Loss before tax 7 (25,480) (7,777) (5,348) (6,159)Income tax expense 8 1,497 1,643 - 7

Net loss for the year (23,983) (6,134) (5,348) (6,152)

Attributable to:Equity holders of the Company (23,807) (3,979) (5,348) (6,152)Minority interests (176) (2,155) - -

(23,983) (6,134) (5,348) (6,152)

Loss per share (sen)Basic 9 (8.63) (1.44)

38

Annual Report 2009

Balance Sheetsas at 31 December 2009


RM’000 RM’000 RM’000 RM’000

Non current assetsProperty, plant and equipment 10 60,374 60,542 15,126 11,717Exploration and evaluation assets 11 3,017 423 - -Prepaid lease payments 12 6,371 6,675 2,365 2,437Investment in subsidiaries 13 - - 64,221 64,221Investment in associates 14 23,063 25,763 18,068 19,143Other long term investments 15 184 187 - -Casino licence 16 - - - -Goodwill on consolidation 17 - - - -

93,009 93,590 99,780 97,518

Current assetsInventories 18 35,961 45,463 - -Non current assets held for sale 19 7,000 7,000 - -Trade receivables 20 12,910 15,621 - -Amount due from subsidiaries 21 - - 1,545 241Amount due from an associate 22 2,982 - 2,982 -Other receivables, deposits and prepayments 23 969 7,674 251 3,527Prepaid lease payments 12 254 256 72 72Tax recoverable 2,625 2,732 - 235Fixed deposits with a licensed bank 24 674 - - -Cash and bank balances 25 11,186 28,285 585 2,866

74,561 107,031 5,435 6,941

Current liabilitiesTrade payables 26 10,169 15,605 - -Amount due to subsidiaries 27 - - 47,504 43,271Amount due to an associate 22 2,578 2,586 2,578 2,491Other payables and accruals 28 9,718 16,143 2,353 3,930Hire purchase and finance lease liabilities 29 29 27 29 27Short term borrowings 30 66,002 81,779 600 600Tax payable 372 1,611 - -

88,868 117,751 53,064 50,319

Net current liabilities (14,307) (10,720) (47,629) (43,378)

Non current liabilitiesHire purchase and finance lease liabilities 29 187 213 187 213Long term loans 31 30,813 19,560 1,500 2,100Deferred tax liabilities 32 - 316 - -

(31,000) (20,089) (1,687) (2,313)

47,702 62,781 50,464 51,827

39


Balance Sheetsas at 31 December 2009 (cont’d)


RM’000 RM’000 RM’000 RM’000

Represented by:Share capital 33 275,778 275,778 275,778 275,778Reserves 34 (228,684) (213,781) (225,314) (223,951)

Equity attributable to equity holders of the Company 47,094 61,997 50,464 51,827Minority interests 608 784 - -

Total equity 47,702 62,781 50,464 51,827

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

40

Annual Report 2009

Statements of Changes in Equityfor the year ended 31 December 2009

41

Equity

Foreign

attributable

exc

han

ge

to equity

Share

Share

Reva

luation

fluctuation

Accumulated

holders of

Minority

Total

Group

capital

premium

rese

rve

rese

rve

losses

the Compan

yinterests

equity

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

At 1 January 2008

275,778

41,218

-(63)

(252,447)

64,486

13,833

78,319

Deemed disposal of a subsidiary

--

--

--

(10,894)

(10,894)

Translation differences

--

-1,490

-1,490

-1,490

Net loss for the year

--

--

(3,979)

(3,979)

(2,155)

(6,134)

At 31 December 2008

275,778

41,218

-1,427

(256,426)

61,997

784

62,781

Translation differences

--

-(67)

-(67)

-(67)

Surplus on revaluation of properties

--

8,971

--

8,971

-8,971


--

--

(23,807)

(23,807)

(176)

(23,983)

At 31 December 2009

275,778

41,218

8,971

1,360

(280,233)

47,094

608

47,702

Share

Reva

luation

Share

Accumulated

Total

Compan

yca

pital

surp

lus

premium

losses

equity

RM’000

RM’000

RM’000

RM’000

RM’000

At 1 January 2008

275,778

-41,218

(259,017)

57,979


--

-(6,152)

(6,152)

At 31 December 2008

275,778

-41,218

(265,169)

51,827

Surplus on revaluation of property

-3,985

--

3,985


--

-(5,348)

(5,348)

At 31 December 2009

275,778

3,985

41,218

(270,517)

50,464



Cash Flow Statementsfor the year ended 31 December 2009

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Cash flows from/(used in) operating activitiesLoss before tax (25,480) (7,777) (5,348) (6,159)Adjustments for:Amortisation of prepaid lease payments 259 335 72 72Bad debts written off 8 - - -Depreciation 9,090 8,119 583 364Equipment written off 10 - - -Fair value adjustment on long term leasehold land buildings classified to non current assets held for sale - 1,224 - -Gross dividend income from quoted investment in Malaysia (5) (5) - -Gain on disposal of a subsidiary - (511) - -Gain on deemed disposal of a subsidiary - (11,345) - -Impairment losses on investment in a subsidiary - - - 2,036Impairment loss on investment in an associate - - 1,075 -Interest expense 8,888 7,580 118 158Interest income from fixed deposits (17) (160) - (93)Write down of inventories - 9,322 - -Loss on disposal of property, plant and equipment 20 20 20 -Loss on disposal of a subsidiary 35 - 35 -Provision for doubtful debts - 975 - 515Provision for doubtful debts no longer required (5) (296) - (296)Share in losses of associates 2,676 216 - -Unrealised gain on foreign exchange (161) (70) - -Unrealised loss on foreign exchange 272 1,015 - 14

Operating (loss)/profit before working capital changes (4,410) 8,642 (3,445) (3,389)Decrease/(Increase) in inventories 9,502 (9,790) - -Decrease/(Increase) in trade and other receivables 6,283 8,790 (1,010) 5,748(Decrease)/Increase in trade and other payables (11,826) 229 2,743 (3,200)

Cash generated from/(used in) operations (451) 7,871 (1,712) (841)Income tax refunded 84 967 235 859Income tax paid (301) - - -Interest paid (8,888) (7,580) (118) (158)Interest received 17 160 - 93

Net cash (used in)/from operating activities (9,539) 1,418 (1,595) (47)

42

Annual Report 2009

Cash Flow Statementsfor the year ended 31 December 2009 (cont’d)

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Cash flows from/(used in) investing activitiesIncrease in sinking fund account (3,206) (2,962) - -(Increase)/Decrease in fixed deposits pledged (674) 69 - 49Dividends received 4 5 - -Deemed disposal of a subsidiary (Note 13) - (853) - -Disposal of a subsidiary - (11) - -Proceeds from disposal of property, plant and equipment 2 32 - 1Proceeds from disposal of other investment 3 - - -Purchase of property, plant and equipment (335) (21,140) (27) (14)Payment of exploration and evaluation assets (2,594) (423) - -Subscription of shares in a subsidiary - - (35) -

Net cash (used in)/from investing activities (6,800) (25,283) (62) 36

Cash flows from/(used in) financing activitiesProceeds from trade finance 85,721 132,126 - -Repayment of trade finance (84,414) (132,857) - -Proceeds from term loans - 41,699 - 2,700Repayment of term loans (4,889) (4,678) (600) (417)Repayment of hire purchase and finance lease liabilities (24) (57) (24) (23)

Net cash (used in)/from financing activities (3,606) 36,233 (624) 2,260Exchange differences (281) 537 - -

Net (decrease)/increase in cash and cash equivalents (20,226) 12,905 (2,281) 2,249Cash and cash equivalents at beginning of year 23,977 11,072 2,866 617

Cash and cash equivalents at end of year 3,751 23,977 585 2,866

43


Cash Flow Statementsfor the year ended 31 December 2009 (cont’d)

Cash and cash equivalents comprise:

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 11,186 28,285 585 2,866Fixed deposits with licensed banks 674 - - -Bank overdrafts (1,267) (1,346) - -

10,593 26,939 585 2,866

Less: Fixed deposits pledged (674) - - -Sinking fund account (6,168) (2,962) - -

3,751 23,977 585 2,866

Analysis of disposal of subsidiaries:

Group2009 2008

RM’000 RM’000

Plant and equipment - 1Cash and cash equivalents - 11Trade and other payables - (523)

Net assets/(liabilities) disposed of - (511)(Loss)/Gain on disposal of a subsidiary - 511

Net proceeds received - -Less: Cash and cash equivalents disposed of - (11)

Net cash inflow/(outflow) on disposal - (11)


44

Annual Report 2009

Notes to the Financial Statements31 December 2009

1. GENERAL INFORMATION

The principal activities of the Company are that of an investment holding company and the provision ofmanagement services. The principal activities of the subsidiaries are disclosed in Note 13.

There have been no significant changes in the nature of these activities during the financial year.

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

The Company’s registered office and principal place of business are located at Wisma Ho Wah Genting, No. 35,Jalan Maharajalela, 50150 Kuala Lumpur.

The financial statements of the Group and the Company were approved and authorised for issue by the boardof directors on 20 April 2010.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements of the Group and the Company have been prepared and presented in accordance withthe provisions of the Companies Act, 1965 and the Approved Accounting Standards for Entities Other ThanPrivate Entities issued by the Malaysian Accounting Standards Board (“MASB”).

In the preparation of the financial statements the directors are required to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of financial statements and the reported amounts of revenues and expenses during the financial year. Actualresults could differ from those estimates.

Estimates and judgments are continually evaluated by the directors and are based on historical experience andother factors, including expectations of future events that are believed to be reasonable under the circumstances.

In the process of applying the Group’s accounting policies, which are described below, management is of theopinion that there are no instances of application of judgment which are expected to have a significant effecton the amounts recognised in the financial statements.

Management believes that there are no key assumptions made concerning the future, and other key sources ofestimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year.

The Group had adopted new and revised Financial Reporting Standards (“FRSs”) and their related interpretationsthat become mandatory for the current financial year. The adoption of these new and revised FRSs and theirrelated interpretations does not result in significant changes in accounting policies of the Group.

The new standards, amendments to published standards and interpretations that may result in changes in theaccounting policies of the Group and are mandatory for financial period beginning after 1 January 2009, butwhich the Group has not early adopted would not result in significant changes in accounting policies of theGroup other than the following:

(i) FRS 8 Operating Segments (effective for annual period beginning on 1 July 2009). FRS 8 replaces FRS1142004 Segment Reporting. The new standard requires a ‘management approach’, under which segmentinformation is presented on the same basis as that used for internal reporting purposes. The Group willapply this standard from financial period beginning on 1 January 2010.

(ii) FRS 7 Financial Instruments: Disclosure and FRS 139 Financial Instruments: Recognition and Measurement(both effective for the financial period beginning on 1 January 2010) which the Group will apply wheneffective. FRS 7 requires disclosures in financial statements that enable users to evaluate the significanceof financial instruments of the entity to which is exposed and how these risks are managed. FRS 139establishes principles for recognising and measuring financial assets, financial liabilities and some contractsto buy and sell non-financial items. Hedge accounting is permitted only under strict circumstances. Theimpact of applying FRS 7 and FRS 139 on the financial statements upon its initial application is not disclosedby virtue of the exemption given in the standards.

45


Notes to the Financial Statements31 December 2009 (cont’d)

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D)

(iii) FRS 101 Presentation of Financial Statements (revised) (effective for annual period beginning on 1 January2010). FRS 101 will prohibit the presentation of items of income and expenses (that is, non owner changesin equity) in the statement of changes in equity, requiring ‘non-owner changes in equity’ to be presented,separately from owner changes in equity. All non-owner changes in equity will be required to be shown ina performance statement, but entities can choose whether to present one performance statement (thestatement of comprehensive income) or two statements (the income statement and statement ofcomprehensive income). Where entities restate or reclassify comparative information, they will be requiredto present a restated balance sheet as at the beginning comparative period in addition to the currentrequirement to present balance sheets at the end of the current period and comparative period. Theadoption of this standard introduces a new disclosure requirement to the objectives, policies and processesfor managing capital.

3. SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting

The financial statements of the Group and the Company have been prepared under the historical cost conventionand any other bases described in the significant accounting policies are summarised below.

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiarieslisted under Note 13 made up to the end of the year. The financial statements of subsidiaries are included inthe consolidated financial statements from the date that control effectively commences until the date that controleffectively ceases. Subsidiaries are consolidated using the acquisition method of accounting.

All significant inter company transactions, balances and unrealised gains on transactions between groupcompanies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Wherenecessary, accounting policies for subsidiaries have been changed to ensure consistency with the policiesadopted by the Group.

Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets,liabilities and contingent liabilities represents goodwill.

Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingentliabilities over the cost of acquisition is recognised immediately in income statement.

Minority interests in the consolidated balance sheet consist of the minorities’ share of the fair value of theidentifiable assets and liabilities and contingent liabilities of the acquiree as at acquisition date and theminorities’ share of movements in the acquiree’s equity since then.

Revenue and income recognition

Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised upondelivery of goods and customer’s acceptance.

Revenue from services rendered is recognised when the services are rendered.

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

Interest income is recognised as it accrues (taking into account the effective yield on the asset) unlesscollectibility is in doubt.

Rental income is recognised as it accrues unless collectibility is in doubt.

46

Annual Report 2009


3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)Foreign currencies

(i) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of theprimary economic environment in which the entity operates (“functional currency”). The consolidatedfinancial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functionalcurrency and all values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailingat the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of suchtransactions and from the translation at year end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognised in the income statement.

(iii) Group companies

Assets and liabilities of a foreign operation are translated into Ringgit Malaysia at rates of exchange rulingat the balance sheet date and the results of foreign operation are translated at the average rate of exchangefor the financial year. Exchange differences arising from the translation are recognised as a separatecomponent of equity.

When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equityare recognised in the income statement as part of the gain or loss on sale.

The principal exchange rates for every unit of foreign currency ruling at balance sheet date used are as follows:

2009 2008RM RM

100 Indonesian Rupiah 0.04 0.03100 New Taiwan Dollar 10.71 10.57100 Hong Kong Dollar 44.18 44.741 Euro Dollar 4.94 4.891 United States Dollar 3.43 3.471 Singapore Dollar 2.45 2.411 Chinese Renminbi 0.50 0.51

Employee benefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the period inwhich the associated services are rendered by employees of the Company. Short term accumulatingcompensated absences such as paid annual leave are recognised when services are rendered by employeesthat increase their entitlement to future compensated absences. Short term non accumulating compensatedabsences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans and retirement benefits

Obligations for contributions to defined contribution plans such as Employees Provident Fund arerecognised as an expense in the income statement as incurred.

47



3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expectedamount of income taxes payable in respect of the taxable profit for the year and is measured using the tax ratesthat have been enacted at the balance sheet date.

Deferred tax is provided for, using the ‘liability’ method, on temporary differences at the balance sheet datebetween the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle,deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognisedfor all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probablethat taxable profit will be available against which the deductible temporary differences, unused tax losses andunused tax credits can be utilised.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised orthe liability settled, based on tax rates that have been enacted or substantively enacted at the balance sheetdate. Deferred tax is recognised in the income statement, except when it arises from a transaction which isrecognised directly in equity, in which case the deferred tax is also charged or credited directly in equity.

Impairment of assets

The carrying amount of assets subject to accounting for impairment are reviewed at each balance sheet date todetermine whether there is any indication of impairment. If any such indication exists, the asset’s recoverableamount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or the cash-generating unit to which it belongs exceeds its recoverable amount. Impairment losses are recognised in theincome statement in the period in which it arises, unless, the asset is carried at a revalued amount, in which casethe impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss does notexceed the amount held in asset revaluation reserve for the same asset.

The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing value inuse, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflectscurrent market assessments of the time value of money and the risks specific to the asset. For an asset that doesnot generate largely independent cash inflows, the recoverable amount is determined for the cash-generatingunit to which the asset belongs.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss isreversed if there has been a change in the estimates used to determine the recoverable amount. An impairmentloss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount thatwould have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.The reversal is recognised in the income statement, unless the asset is carried at revalued amount, in whichcase, such reversal is treated as a revaluation increase.

Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost or valuation less accumulated depreciation and impairmentlosses, if any.

Gain and loss arising from the disposal of an asset is determined as the difference between the net disposalproceeds and the carrying amount of the asset and is recognised in the income statement.

During the financial year, the Group adopted the revaluation method to measure its entire class of buildings.Buildings are stated at revalued amount, which is the fair value at the date of the revaluation less anyaccumulated depreciation and impairment losses, if any. Fair value is determined from market-based evidenceby appraisal that is undertaken by professionally qualified valuers. Buildings are revalued at a regular interval ofevery five (5) years with additional valuations in the interval years where market conditions indicate that thecarrying values of the revalued buildings materially differ from the market value.

An increase arising from revaluation is credited to equity as revaluation surplus. Any decrease arising is firstoffset against the revaluation surplus on an earlier valuation in respect of the same property and thereaftercharged to the income statement.

48

Annual Report 2009



Property, plant and equipment and depreciation (cont’d)

A revaluation increase is recognised as income to the extent that it reverses a revaluation decrease of the sameproperty previously charged as an expense. Upon the disposal of revalued assets, the amounts in revaluationreserve relating to those assets are transferred directly to retained profits.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of theasset and the net amount is restated to the revalued amount of the asset.

No depreciation is provided on asset under construction. Depreciation on other property, plant and equipmentis calculated to write off the cost of the assets to its residual values on a straight line basis at the following annualrates based on their estimated useful lives:

Buildings 2% - 3%Plant and machinery 10% - 20%Furniture, fittings and equipment 10% - 25%Motor vehicles 10% - 20%Renovations 3.33% - 10%

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure thatthe amount, method and period of depreciation are consistent with previous estimates and the expected patternof consumption of the future economic benefits embodied in the items of property, plant and equipment.

Exploration and evaluation assets

Exploration and evaluation assets are stated at cost less impairment losses, if any.

Exploration and evaluation expenditure comprises costs which are directly attributable to researching andanalysing existing data, conducting geological studies, exploratory drilling and sampling, examining and testingextraction and treatment methods, and compiling pre-feasibility and feasibility studies. Exploration andevaluation expenditure also includes the costs incurred in the entry premiums paid to gain access to areas ofinterest and amount payable to third parties to acquire interests in the existing projects.

Exploration and evaluation expenditure are capitalised. If a project does not prove viable, all irrecoverable costsassociated with the project are expensed in the income statement.

Amortisation is recognised in the income statement on the commencement of commercial mining activities.

Investment in subsidiaries

Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power,directly or indirectly, to govern the financial and operating policies of a company so as to derive benefits fromits activities.

The Company’s investment in subsidiaries is stated at cost less impairment losses, if any.

Investment in associates

An associate is a company in which the Group or the Company, directly or indirectly, has significant influenceand which is neither a subsidiary nor a joint venture of the Group or the Company.

The Company’s investment in associates is stated at cost less impairment losses, if any.

The Group’s investment in associates is accounted for under the equity method of accounting based on theaudited or management financial statements of the associates made up to the balance sheet date. Under thismethod of accounting, the Group’s interest in the post acquisition profit of the associates is included in theconsolidated results while dividend received is reflected as a reduction of the investment in the consolidatedbalance sheet.

49




Investment in associates (cont’d)

Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Anyexcess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingentliabilities over the cost of the investment is excluded from the carrying amount of the investment and is insteadincluded as income in the determination of the Group’s share of the associates’ profit or loss in the period inwhich the investment is acquired.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of theGroup’s interest in the associates; unrealised losses are also eliminated unless the transaction provides evidenceon impairment of the asset transferred. Where necessary, in applying the equity method, adjustments have beenmade to the financial statements of the associates to ensure consistency of accounting policies with the Group.

Other long term investments

Other long term investments in quoted and unquoted corporations are stated at cost less impairment losses, if any.

Casino licence

The premium paid for the licence to operate the casino in Cambodia is stated at cost less accumulatedamortisation and accumulated impairment losses, if any. The licence is amortised on a straight line basis fromthe date of commencement of the casino operations over a period of 20 years.

Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of thebusiness combination over the Group’s interest in the net fair value of the identifiable assets, liabilities andcontingent liabilities. Goodwill is measured at cost less any accumulated impairment losses and is tested forimpairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired.

Inventories

Raw materials and consumable stores, work in progress and manufactured inventories are stated at the lower ofcost and net realisable value with weighted average cost being the main basis for cost. For work in progressand manufactured inventories, cost consists of materials, direct labour and an appropriate proportion of fixedand variable production overheads.

Non current assets held for sale

Non current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. The asset must be available for immediate sale in itspresent condition subject only to terms that are usual and customary for sale of such asset and its sale must be highly probable.

Non current assets classified as held for sale are measured at the lower of carrying amount and fair value lesscosts to sell.

Leases

Assets acquired under leases which transfer substantially all the risks and rewards incident to ownership of theassets are capitalised under property, plant and equipment. The assets and the corresponding lease obligationsare recorded at their fair values or, if lower, at the present value of the minimum lease payments of the leasedassets at the inception of the respective leases.

Finance costs, which represent the difference between the total lease commitments and the fair values of theassets acquired, are charged to the income statement over the term of the relevant lease periods so as to givea constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

Leases of asset where a significant portion of the risks and rewards of ownership are retained by the lessor areclassified as operating leases. Payments made under operating leases (net of any incentives received from thelessor) are amortised over the lease term in accordance with the pattern of benefits provided.

50

Annual Report 2009



Leases (cont’d)

Long term leasehold land that normally has an indefinite economic life and title is not expected to pass to thelessee by the end of the lease term is treated as operating lease. The prepaid land lease payments is amortisedon the straight line basis over the lease period ranging from 30 to 89 years.

Plant and equipment acquired under hire purchase

Plant and equipment acquired under hire purchase arrangements are capitalised in the financial statements andthe corresponding obligations treated as liabilities. Finance charges are allocated to the income statement togive a constant periodic rate of interest on the remaining hire purchase liabilities.

Segment information

Segment information is presented in respect of the Group’s business and geographical segments. The primaryreporting segment information is in respect of business segments as the Group’s risks and returns are affectedpredominantly by differences in the products it produces and in the services it renders, while the secondaryinformation is reported geographically.

A segment with a majority of operating income earned from providing product or services to external clientsand whose operating income, results or assets are 10 percent or more of all the segments is reported separately.

Segment results, assets and liabilities include items that are directly attributable to a segment as well as thosethat can be allocated on a reasonable basis.

Segment capital expenditure is the total cost incurred during the year to acquire segment assets that areexpected to be used for more than one period.

Financial instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractualprovisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractualarrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, arereported as expense or income.

Distributions to holders of financial instruments classified as equity are charged directly to equity. Financialinstruments are offset when the Group has legal enforceable right to offset and intends to settle either on a netbasis or realise the asset and settle the liability simultaneously.

(i) Receivables

Receivables are carried at anticipated realisable value. All known bad debts are written off and specificprovisions are made for debts that are considered to be doubtful with regards to collection. In addition,general provisions are made to cover possible debts which are not specifically identified.

(ii) Payables

Payables are carried at cost which is the fair value of the consideration to be paid in the future for goodsand services received.

(iii) Interest bearing borrowings

Interest bearing borrowings are recorded at the amount of proceeds received, net of transaction costs.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are capitalised as part of the cost of those assets, until such time as the assets are substantially readyfor their intended use or sale. Capitalisation of borrowing costs is suspended during extended period inwhich active construction or production of these assets is interrupted.

All other borrowing costs are recognised as an expense in the income statement in the period in which theyare incurred.

51




Financial instruments (cont’d)

(iv) Equity instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the periodin which they are approved for payment.

Cash flow statements

Cash flow statements are prepared using the indirect method.

Cash equivalents are short term, highly liquid investments that are readily convertible to known amount of cashand which are subject to insignificant risk of changes in value. For the purpose of the cash flow statements, cashand cash equivalents are presented net of bank overdrafts and fixed deposits pledged.

4. REVENUE

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Sale of goods 143,526 220,320 - -Rendering of services - - 128 146Rental income 517 468 517 552

144,043 220,788 645 698

5. COST OF SALES

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Sale of goods 148,570 217,984 - -

6. STAFF COSTS

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Salaries, wages, bonus and allowances 8,304 11,051 1,799 2,006Defined contribution plan 370 563 90 105Other employee related expenses 633 659 106 131

9,307 12,273 1,995 2,242

52

Annual Report 2009


6. STAFF COSTS

The number of directors of the Company where total remuneration during the financial year falls within thefollowing band is analysed as follows:

2009 2008Executive directors:RM50,001 – RM100,000 1 -RM150,001 – RM200,000 - 1RM200,001 – RM250,000 1 1RM250,001 – RM300,000 2 1RM300,001 – RM350,000 - 1

Non executive directors:Below RM50,000 3 3

The key management personnel of the Company whose remuneration is analysed as follows:

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Executive directors:Salaries, wages, bonus and allowances 761 894 540 676Defined contribution plan 77 93 65 81Benefits-in-kind and others 26 25 26 25

864 1,012 631 782

Non executive directors:Fees 90 85 90 85Others 9 10 9 10

99 95 99 95

Total 963 1,107 730 877

53



7. LOSS BEFORE TAXGroup Company

2009 2008 2009 2008RM’000 RM’000 RM’000 RM’000

Loss before tax is arrived at after charging:Amortisation of prepaid lease payments 259 335 72 72Auditors’ remuneration- auditors’ of the Company- audit services- current year 70 55 25 23- under provision in prior years 12 28 2 3

- other services 22 - 22 -- other auditors- audit services- current year 10 366 - -

Bad debts written off 8 - - -Depreciation 9,090 8,119 583 364Directors’ remuneration- directors of the Company- fees 90 85 90 85- others 847 997 614 767

- directors of subsidiaries- others 179 1,320 - -

Equipment written off 10 - - -Fair value adjustment on long term leasehold land and buildings classified to non current assets held for sale - 1,224 - -Impairment loss on investment in a subsidiary - - - 2,036Impairment loss on investment in an associate - - 1,075 -Interest expenses- bank overdraft 109 115 - -- hire purchase 13 29 13 14- term loans 1,331 1,811 105 144- trade finance 7,435 5,625 - -Loss on disposal of plant and equipment 20 20 20 -Loss on disposal of a subsidiary 35 - 35 -Loss on foreign exchange- realised 264 225 - 188- unrealised 272 1,015 - 14Provision for doubtful debts - 975 - 515Rental of- motor vehicles 9 9 - -- office equipment 67 90 66 66- premises 115 24 24 24Write down of inventories - 9,322 - -

And crediting:Deposit forfeited 700 - - -Gross dividend income from quoted investmentsin Malaysia 5 5 - -Gain on disposal of a subsidiary - 511 - -Gain on deemed disposal of a subsidiary - 11,345 - -Gain on foreign exchange- realised 78 594 1 -- unrealised 161 70 - -Interest income from fixed deposits 17 160 - 93Provision for doubtful debts no longer required 5 296 - 296Rental income of buildings 517 783 517 552

54

Annual Report 2009


8. INCOME TAX EXPENSE

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Estimated income tax payable Malaysia- over/(under) provision in prior years 1,173 (565) - 7Deferred tax (Note 32)- current year 324 2,505 - -- under provision in prior years - (297) - -

1,497 1,643 - 7

A reconciliation of income tax expense applicable to loss before tax at the statutory income tax rate to incometax expense at the effective income tax rate is as follows:

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Loss before tax (25,480) (7,777) (5,348) (6,159)

Taxation at statutory tax rate of 25% (2008: 26%) 6,370 2,022 1,337 1,602Expenses not deductible for tax purposes (1,625) (2,718) (1,337) (1,602)Tax effect of different tax rate in other countries - 211 - -Deferred tax assets not recognised during the year (4,642) (99) - -Income not subject to tax - 2,951 - -Utilisation of prior years unrecognised deferred tax assets 221 138 - -Over/(Under) provision of income tax in prior years 1,173 (565) - 7Under provision of deferred tax in prior years - (297) - -

Income tax expense 1,497 1,643 - 7

9. LOSS PER SHARE Basic loss per ordinary share is based on net loss attributable to ordinary shareholders and weighted averagenumber of ordinary shares in issued as follows:

Group2009 2008

RM’000 RM’000

Net loss attributable to ordinary shareholders (23,807) (3,979)

Issued ordinary shares at beginning and end of the year (‘000) 275,778 275,778

Loss per share (sen) (8.63) (1.44)

Diluted loss per share is not presented in the financial statements since there are no dilutive potential ordinaryshares as at 31 December 2008 and 2009.

55



56

10. PROPERTY, PLA

NT A

ND EQUIPMENT

Furniture,

fittings

2009

Plant an

dan

d

Moto

rGroup

Build

ings

mac

hinery

equipment

vehicles

Renova

tions

Total

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

Cost or va

luation

At beginning of year - at cost

26,422

137,460

5,456

1,959

1,034

172,331

Additions

-18

221

-96

335

Disposals/Write offs

--

(399)

--

(399)

Revaluation

4,061

--

--

4,061

Exchange differences

(150)

(777)

(69)

(7)

(11)

(1,014)

At end of year

30,333

136,701

5,209

1,952

1,119

175,314

Represe

nting:

At cost

-136,701

5,209

1,952

1,119

144,981

At valuation

30,333

--

--

30,333

30,333

136,701

5,209

1,952

1,119

175,314

Accumulated D

epreciation

At beginning of year

4,492

102,931

3,004

1,078

284

111,789

Charge for the year

1,360

6,900

604

169

579,090

Disposals/Write offs

--

(367)

--

(367)

Revaluation

(4,910)

--

--

(4,910)


(35)

(579)

(40)

(6)

(2)

(662)

At end of year

907

109,252

3,201

1,241

339

114,940

Net book va

lue

At cost

-27,449

2,008

711

780

30,948

At valuation

29,426

--

--

29,426

At 31 December 2009

29,426

27,449

2,008

711

780

60,374

Annual Report 2009


57

10. PROPERTY, PLA

NT A

ND EQUIPMENT (CONT’D

)

Furniture,

fittings

Asset

2008

Plant an

dan

d

Moto

runder

Group

Build

ings

mac

hinery

equipment

vehicles

Renova

tions

construction

Total

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

Cost


33,630

133,211

5,235

2,223

1,024

50,100

225,423

Additions

-1,143

174

135

148,157

49,610

Disposals

--

(4)

(55)

--

(59)


--

(80)

(395)

(23)

(98,257)

(98,755)

Reclassification to non current assets held for sale (Note 19)

(7,785)

--

--

-(7,785)


577

3,106

131

5132

-3,897

At end of year

26,422

137,460

5,456

1,959

1,034

-172,331

Accumulated D

epreciation


5,468

94,693

2,672

911

231

-103,975

Charge for the year

836

6,725

299

201

58-

8,119

Disposals

--

(2)

(5)

--

(7)


--

(21)

(56)

(9)

-(86)

Reclassification to non current assets held for sale (Note 19)

(1,899)

--

--

-(1,899)


871,513

5627

4-

1,687

At end of year

4,492

102,931

3,004

1,078

284

-111,789

Net book va

lue

At 31 December 2008

21,930

34,529

2,452

881

750

-60,542



10. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Furniture,fittings and

2009 office MotorCompany Buildings equipment vehicles Renovations Total

RM’000 RM’000 RM’000 RM’000 RM’000

Cost or valuationAt beginning of year – at cost 13,747 815 321 321 15,204Additions - 27 - - 27Revaluation 1,311 - - - 1,311Disposals - (370) - - (370)

At end of year 15,058 472 321 321 16,172

Representing:At cost - 472 321 321 1,114At valuation 15,058 - - - 15,058

15,058 472 321 321 16,172

Accumulated depreciationAt beginning of year 2,537 704 47 199 3,487Charge for the year 494 26 31 32 583Revaluation (2,674) - - - (2,674)Disposals - (350) - - (350)

At end of year 357 380 78 231 1,046

Net book valueAt cost - 92 243 90 425At valuation 14,701 - - - 14,701

At 31 December 2009 14,701 92 243 90 15,126

2008Company

Cost At beginning of year 13,747 804 321 321 15,193Additions - 14 - - 14Disposals - (3) - - (3)

At end of year 13,747 815 321 321 15,204

Accumulated depreciationAt beginning of year 2,262 682 14 167 3,125Charge for the year 275 24 33 32 364Disposals - (2) - - (2)

At end of year 2,537 704 47 199 3,487

Net book valueAt 31 December 2008 11,210 111 274 122 11,717

58

Annual Report 2009


10. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

At the balance sheet date:

(i) Property, plant and equipment of the Group and the Company with carrying amount of RM59,021,000 (2008:RM59,181,000) and RM14,701,000 (2008: RM11,210,000) respectively, have been charged as collaterals tosecure the banking facilities referred to in Note 30;

(ii) Equipment and motor vehicles of the Group and the Company with net book value of RM243,000 (2008:RM272,000) and RM243,000 (2008: RM272,000) respectively are acquired under finance lease and hirepurchase arrangements.

During the financial year, cash payments made to purchase property, plant and equipment are as follows:

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Total additions 335 49,610 27 14Amount payable for purchase of plant and equipment of a subsidiary deemed disposed of - (28,470) - -

Cash payments 335 21,140 27 14

Revaluation

The buildings of the Group and the Company were revalued on 24 March 2009 and 11 May 2009 respectively bythe directors based upon valuations carried out by independent professional valuers using the fair value methodwhich is determined by reference to open market values on an existing use basis.

Had the buildings been carried at historical cost, the net book value of the buildings that would have beenincluded in the financial statements of the Group and the Company as at 31 December 2009 would have beenRM21,131,000 and RM10,936,000 respectively.

11. EXPLORATION AND EVALUATION ASSETS

Group2009 2008

RM’000 RM’000

CostAt beginning of year 423 1,627Additions 2,594 423Deemed disposal of a subsidiary - (1,627)

At end of year 3,017 423

The amount represents the cost of feasibility studies to determine the technical feasibility and commercialviability of mining resources.

59



12. PREPAID LEASE PAYMENTS

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Leasehold land:

CostAt beginning of year 7,963 16,022 2,581 2,581Additions - 263 - -Deemed disposal of a subsidiary - (5,879) - -Reclassification to non current assets held for sale (Note 19) - (2,684) - -Exchange differences (63) 241 - -

At end of year 7,900 7,963 2,581 2,581

Accumulated amortisationAt beginning of year 1,032 1,166 72 -Amortisation for the year 259 335 72 72Deemed disposal of a subsidiary - (166) - -Reclassification to non current assets held for sale (Note 19) - (346) - -Exchange differences (16) 43 - -

At end of year 1,275 1,032 144 72

Carrying amount 6,625 6,931 2,437 2,509Less: Portion due within one year (254) (256) (72) (72)

Non current portion 6,371 6,675 2,365 2,437

Analysed as: Short term leasehold land * 6,625 6,931 2,437 2,509

* Short term leases refer to leasehold land that has an unexpired period of 50 (2008: 50) years or less.

Included under prepaid lease payments are parcels of leasehold land of the Group and the Company withcarrying amount of RM6,625,000 (2008: RM6,931,000) and RM2,437,000 (2008: RM2,509,000) respectively whichhave been charged as collaterals to secure the banking facilities referred to in Note 30.

60

Annual Report 2009


13. INVESTMENT IN SUBSIDIARIES

Company2009 2008

RM’000 RM’000

Unquoted shares at costAt beginning of year 110,280 124,324Acquisition of a subsidiary 35 1,020Subscription of shares in a subsidiary - 2,000Disposal of a subsidiary (35) (14)Reclassified to investment in associates arising from the deemed disposal of a subsidiary - (17,050)

At end of year 110,280 110,280

Accumulated impairment lossesAt beginning of year 46,059 44,023Impairment loss for the year - 2,036

At end of year 46,059 46,059

Carrying amount 64,221 64,221

The details of the subsidiaries are as follows:

Country Group’s effective of interest

incorporation 2009 2008 Principal activities% %

Subsidiaries of the CompanyHo Wah Genting Trading Sdn Bhd Malaysia 100 100 Trading of wires and cables

Ho Wah Genting Kintron Sdn Bhd Malaysia 100 100 Trading of moulded power supply cord sets and cable assemblies for electrical and electronic devices andequipment

PT. Ho Wah Genting # Indonesia 100 100 Manufacturing of wires and cables,moulded power supply cord setsand cable assemblies for electricaland electronic devices and equipment

Ho Wah Genting Poipet Cambodia 60 60 Ceased operationCasino Resorts Co., Ltd #

HWG Management Services Sdn Bhd Malaysia 100 100 Provision of management andoperational services and hastemporary ceased operationsduring the last financial year

Ho Wah Genting (Labuan) Ltd # Malaysia 100 100 Dormant

Commerce Venture Malaysia - - * Mining of dolomite and Magnesium Sdn Bhd # manufacturing of magnesium

ingots

61



13. INVESTMENT IN SUBSIDIARIES (CONT’D)



HWG Venture Sdn Bhd Malaysia - - ** Dormant

HWG Minerals Sdn Bhd Malaysia 100 100 Investment holding company

CVM Minerals Limited # Hong Kong - - * Investment holding company

HWG Tin Mining Sdn Bhd # Malaysia 51 51 Dormant, intended activity is mining of tin

Subsidiary of HWG Minerals Sdn Bhd

HWG Copper Mining Sdn Bhd Malaysia 100 100 Dormant

* Investment in the previously held subsidiaries had been reclassified to investment in associates

** Disposed of in the previous year

# The financial statements of the subsidiaries indicated by # are not audited by Russell Bedford LC &Company.

Acquisition and disposal of subsidiaries:

(a) During the financial year:

(i) On 18 May 2009, the Company subscribed for 9,500 new ordinary shares of USD1 each representing95% of total issued and paid up share capital of Super Champion Group Limited (“SCGL”), a companyincorporated in British Virgin Islands, for a cash consideration of USD9,500.

With the subscription, SCGL has become a subsidiary of HWGB.

(ii) Subsequent to the above acquisition, SCGL had on even date acquired one ordinary share of HKD1each and subscribed for 9,999 new ordinary shares of HKD1 each in China Good Holdings Limited(“CGHL”), a company incorporated in Hong Kong, for a cash consideration of HKD10,000.

With the subscription, CGHL become a wholly owned subsidiary of SCGL.

(iii) The Company had on 30 December 2009 disposed of its entire equity interest in SCGL to a third partyfor a total cash consideration of USD1. As a result of the disposals, SCGL and CGHL were no longersubsidiaries of the Company.

(b) In the previous financial year:

(i) On 15 January 2008, the Company further subscribed for 1,019,998 new ordinary shares of RM1 eachin HWG Minerals Sdn Bhd (“HWGM”) by way of capitalisation of amount due to the Company for atotal consideration of RM1,019,998. HWGM also issued 980,000 new ordinary shares of RM1 each toits minority shareholders for a total consideration of RM980,000 resulting in the equity interest of theCompany in HWGM reducing from 100% to 51%.

Subsequently, the Company had on 18 August 2008, acquired 980,000 ordinary shares of RM1.00 eachrepresenting 49% of the total issued and paid-up capital of HWGM for a total consideration ofRM980,000 from the minority shareholders of HWGM.

Thus, HWGM became a wholly owned subsidiary of the Company.

62

Annual Report 2009



(b) In the previous financial year: (cont’d)

(ii) On 3 April 2008, the Company acquired 1,020,000 ordinary shares of RM1 each representing 51% ofthe total issued and paid up share capital of HWG Tin Mining Sdn Bhd (“HWG Tin Mining”) for a totalcash consideration of RM1,020,000 from its wholly owned subsidiary, HWG Minerals Sdn Bhd, resultingin HWG Tin Mining becoming a directly owned subsidiary of the Company.

(iii) In connection with the listing of CVM Minerals Limited (“CVM Minerals”) on the Main Board of theStock Exchange of Hong Kong Limited (“SEHK”), on 14 October 2008, CVM Minerals acquired theentire equity interest of Commerce Venture Magnesium Sdn Bhd (“CVM”) comprising 31,000,000ordinary shares of RM1.00 each from all its existing shareholders for a total purchase consideration ofHK$67,750,000 (or equivalent to approximately RM28,794,254 based on the exchange rate of RM1.00:HK$2.3529 as at 31 December 2007) based on the audited net asset value of CVM of RM28,715,431 asat 31 December 2007, satisfied via the issuance and allotment of 338,250,000 new CVM Minerals Sharesat par value of HK$0.10 each.

Subsequent to the above acquisition, CVM became a wholly owned subsidiary of CVM Minerals.

On 22 December 2008, CVM Minerals issued and allotted 112,750,000 shares to the public in HongKong by way of placing and public offer at the offer price of HK$1.05 per share and listed on SEHK onthe same day.

Upon completion of the above transactions, the Company’s shareholding in CVM Minerals has beendiluted from 55% to 41.25% resulting in CVM Minerals becoming an associate of the Company.

(iv) On 15 December 2008, the Company disposed of its entire 55% equity interest in HWG Venture SdnBhd comprising 13,750 ordinary shares of RM1 each for a cash consideration of RM13,750.

The effects of the disposal of a subsidiary on the Group’s financial results and financial position are as follows:

GroupUp to date of disposal

2009 2008RM’000 RM’000

Revenue - -Cost of sales - -

Gross profit - -Other operating income - -Administrative expenses - (461)Other operating expenses - (28)

Loss before tax - (489)Income tax expense - -

Net loss for the year - (489)

GroupAt date of disposal2009 2008

RM’000 RM’000

Plant and equipment - 1Cash and cash equivalents - 11Other payables and accruals - (523)

Net assets/(liabilities) disposed of - (511)

63




The effects of the deemed disposal of a subsidiary on the Group’s financial results are as follows:

GroupUp to date of

deemed disposal2009 2008

RM’000 RM’000

Revenue - -Cost of sales - -

Gross profit - -Other operating income - -Administrative expenses - (3,738)Other operating expenses - (189)

Loss from operations - (3,927)Finance costs - (414)

Loss before tax - (4,341)Income tax expense - -

Net loss for the year - (4,341)

The effects of the deemed disposal of a subsidiary on the financial position of the Group are as follows:

GroupAt date of

deemed disposal2009 2008

RM’000 RM’000

Property, plant and equipment - 98,669Exploration and evaluation assets - 1,627Prepaid lease payments - 5,713Goodwill - 285Other receivables, deposits and prepayments - 7,486Cash and bank balances - 853Other payables and accruals - (27,319)Short term borrowings - (32,973)Long term borrowings - (29,951)

Net assets deemed disposed of - 24,390Gain on deemed disposal of a subsidiary - 11,345Less: Minority interests - (10,894)

Transfer to investment in an associate - (24,841)

Net proceeds received - -Less : Cash and cash equivalents disposed of - (853)

Net cash inflow/(outflow) on deemed disposal - (853)

64

Annual Report 2009



The summarised financial information included in the consolidated cash flow statements in 2008 of the subsidiarydeemed disposed of is as follows:

Cash flows statement

GroupUp to date of

deemed disposal2008

RM’000

Operating cash flows 288Investing cash flows (19,674)Financing cash flows 19,016

Total cash outflows (370)

14. INVESTMENT IN ASSOCIATES

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Unquoted shares at cost 2,056 2,056 2,400 2,400Quoted shares at cost 24,841 24,841 17,050 17,050

26,897 26,897 19,450 19,450

Accumulated impairment losses

At beginning - - 307 307Impairment loss for the year - - 1,075 -

At end of year - - 1,382 307

Share in post acquisition losses of associates (3,810) (1,134) - -Exchange difference (24) - - -

(3,834) (1,134) - -

Carrying amount 23,063 25,763 18,068 19,143

Market value of a quoted associate 133,947 70,748 133,947 70,748

65



14. INVESTMENT IN ASSOCIATES (CONT’D)

The details of the associates are as follows:



Associates of the Company

Ho Wah Genting Poipet Resorts Malaysia 40 40 Travel agent and tour coachesSdn Bhd (“HWG Poipet”) charterer

CVM Minerals Limited # Hong Kong 41.25 41.25* Investment holding company(“CVM Minerals”)

# The financial statements of the associate indicated by # is not audited by Russell Bedford LC & Company.

* Investment in the previously held subsidiary had been reclassified as investment in an associate as disclosedin Note 13 (b) (iii).

The investment in CVM Minerals comprises “moratorium” ordinary shares which are not available to be sold,transferred and assigned before the expiry of the moratorium period of one year from the date of its lisitng onSEHK of 22 December 2008.

At the balance sheet date, the investment in CVM Minerals for up to sale proceeds of RM5 million (2008: RMNil) has been pledged as collaterals for the banking facilities referred to in Note 30.

On 1 February 2010, the Company together with other major shareholders of CVM Minerals entered into aPlacing and Subscription Agreement (“PSA”) with CMV Minerals. The PSA have been fulfilled and the placingwas completed on 10 February 2010. Subsequent to the completion of PSA, CVM Minerals had obtained theapproval from the SEHK for the issuance of an additional new 80 million ordinary shares to the public.Immediately after the completion of the above PSA and allotment of new 80 million ordinary shares, the effectivegroup interest in CVM Minerals was reduced to 34.39%. The dilutions give rise to a gain on deemed disposal tothe Group of approximately RM12 million.

66

Annual Report 2009


67


The summarised financial information of the associates is as follows:

(i) Balance sheet2009 2008

RM’000 RM’000

Non current assetsProperty, plant and equipment 203,949 98,726Exploration and evaluation assets 1,717 1,627Prepaid lease payments 5,655 5,713

211,321 106,066

Current assetsInventories 104 -Trade receivables 54 17Other receivables, deposits and prepayments 5,565 10,130Cash and bank balances 3,379 14,501Fixed deposit with a licensed bank 142 138

9,244 24,786

Current liabilitiesTrade payables 128 17Other payables and accruals 6,802 27,604Hire purchase and finance lease liabilities 38 36Short term borrowings 158,074 11,404

165,042 39,061

Net current liabilities (155,798) (14,275)Non current liabilitiesHire purchase and finance lease liabilities 228 266Long term loans - 29,685

(228) (29,951)

Net assets 55,295 61,840


(ii) Income statement

2008Accounted

Consolidated for underin Group’s the equity

income method of2009 statement accounting Total

RM’000 RM’000 RM’000 RM’000

Revenue 5,645 - 5,905 5,905Cost of sales (5,336) - (5,659) (5,659)

Gross profit 309 - 246 246Other operating income 1,865 - 19 19Administrative expenses (8,614) (3,738) (626) (4,364)Other operating expenses (12) (189) (6) (195)

Loss from operations (6,452) (3,927) (367) (4,294)Finance costs (36) (414) - (414)

Loss before tax (6,488) (4,341) (367) (4,708)Income tax expense (5) - - -

Net loss for the year (6,493) (4,341) (367) (4,708)

15. OTHER LONG TERM INVESTMENTS

Group2009 2008

RM’000 RM’000

Equity shares quoted in Malaysia at cost 1,332 1,376Club membership 39 39

1,371 1,415

Accumulated impairment lossesAt beginning/end of year 1,187 1,228

Carrying amount 184 187

Market value of quoted equity shares 170 137



68

Annual Report 2009


69

16. CASINO LICENCE

Group2009 2008

RM’000 RM’000

At costAt beginning/end of year 1,765 1,765

Accumulated amortisationAt beginning/end of year 309 309


Carrying amount - -

17. GOODWILL ON CONSOLIDATION

Group 2009 2008

RM’000 RM’000

At beginning of year 14,429 14,714Deemed disposal of a subsidiary - (285)

At end of year 14,429 14,429


Carrying amount - -

18. INVENTORIES

Group2009 2008

RM’000 RM’000

At cost:Raw materials and consumables stores 13,522 7,287Work in progress 16,763 -Manufactured inventories 5,676 -

35,961 7,287

At net realisable value:Work in progress - 26,480Manufactured inventories - 11,696

- 38,176

Carrying amount 35,961 45,463

Inventories with a carrying amount of RM34,673,000 (2008: RM Nil) are pledged as collaterals for the bankingfacilities referred to in Note 30.



19. NON CURRENT ASSETS HELD FOR SALE

Group2009 2008

RM’000 RM’000

Long term leasehold buildings (Note 10) 5,886 5,886Long term leasehold land (Note 12) 2,338 2,338

At carrying amount 8,224 8,224Less: Fair value adjustment (1,224) (1,224)

At fair value less costs to sell 7,000 7,000

On 8 October 2008, the Group entered into a sale and purchase agreement to dispose of the long term leaseholdland and buildings of the Group for a total consideration of RM7 million. The disposal is expected to completewithin next twelve months upon the fulfillment of all conditions precedent of the sale and purchase agreement.Accordingly, the fair value less costs to sell the long term leasehold land and buildings is classified as assetsheld for sale.

On 24 September 2009, the Company and the purchaser agreed to rescind the sale and purchase agreement asthe purchaser was unable to obtain the financing to pay the balance purchase price. The 10% deposit amountingto RM700,000 was forfeited.

On 21 December 2009, the Company entered into a new sale and purchase agreement to dispose of one of thelong term leasehold land and building for a consideration of RM5.2 million. The disposal is expected to completewithin the next twelve months.

As at the balance sheet date, the long term leasehold land and buildings have been charged as collaterals tosecure the banking facilities referred to in Note 30.

20. TRADE RECEIVABLES

Group2009 2008

RM’000 RM’000

Trade receivables 16,957 19,668Less: Provision for doubtful debts (4,047) (4,047)

12,910 15,621

The Group’s normal trade credit terms range from 30 days to 120 days (2008: 30 days to 120 days). Other creditterms are assessed and approved on a case by case basis.

Trade receivables with a carrying amount of RM8,749,000 (2008: RM Nil) are pledged as collaterals for the bankingfacilities as disclosed in Note 30.

70

Annual Report 2009


21. AMOUNT DUE FROM SUBSIDIARIES

Company2009 2008

RM’000 RM’000

Amount due from subsidiaries 60,436 59,132Less: Provision for doubtful debts (58,891) (58,891)

1,545 241

The amount due from subsidiaries represents unsecured interest free advances receivable on demand (2008:with no fixed terms of repayment).

22. AMOUNT DUE FROM/(TO) AN ASSOCIATE

The amount due from/(to) an associate represents unsecured interest free advances receivable/repayable ondemand (2008: with no fixed terms of repayment).

23. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Unsecured interest free advances with no fixed terms of repayment due from a former subsidiary 515 515 515 515Deposits for purchase of raw materials 87 - - -Other receivables, deposits and prepayments 882 7,674 251 3,527

1,484 8,189 766 4,042Less: Provision for doubtful debts (515) (515) (515) (515)

969 7,674 251 3,527

24. FIXED DEPOSITS WITH A LICENSED BANK

Group2009 2008

Weighted average effective interest rate (%) 1.70 3.00Weighted average maturity (days) 182 -

The fixed deposits of the Group amounting of RM674,000 (2008: RM Nil) have been pledged to bank for facilitiesgranted as disclosed in Note 30.

25. CASH AND BANK BALANCES

Included under cash and bank balances of the Group is RM6,168,000 (2008: RM2,962,000) that represents asinking fund account with a bank for facilities granted as disclosed in Note 30.

26. TRADE PAYABLES

The normal trade credits granted to the Group range from 30 days to 90 days (2008: 30 to 90 days).

71



27. AMOUNT DUE TO SUBSIDIARIES

The amount due to subsidiaries represents unsecured interest free advances repayable on demand (2008: withno fixed terms of repayment).

28. OTHER PAYABLES AND ACCRUALS

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Included under other payables and accruals are:Unsecured interest free advances repayable on demand due to third parties - 8,167 - 1,301Assumption of liabilities of a subsidiary 940 1,434 940 1,434

29. HIRE PURCHASE AND FINANCE LEASE LIABILITIES

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Outstanding obligations 244 281 244 281Less: Future finance charges (28) (41) (28) (41)

Present value of liabilities 216 240 216 240Less: Portion due within one year (29) (27) (29) (27)

Non current portion 187 213 187 213

The non current portion of the present value of liabilities is payable as follows:Later than 1 year and not later than 2 years 31 30 31 30Later than 2 years and not later than 5 years 97 91 97 91Later than 5 years 59 92 59 92

187 213 187 213

These liabilities are subject to effective interest rate of 4.5% (2008: 4.5%) per annum.

30. SHORT TERM BORROWINGS

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Secured:Bank overdrafts 1,267 1,346 - -Trade finance 54,590 74,765 - -Short term loans - 3,467 - -Long term loans – current portion (Note 31) 10,145 2,201 600 600

66,002 81,779 600 600

66,002 81,779 600 600

72

Annual Report 2009


30. SHORT TERM BORROWINGS

The effective interest rates are as follows:

Group Company2009 2008 2009 2008

% % % %

Bank overdrafts 6.55 7.75 - -Trade finance 9.7 8.20 - -Term loans 8.0 6.30 6.48 6.50

The above banking facilities are secured by way of:

Group CompanyCarrying Carrying Carrying Carryingamount amount amount amount

2009 2008 2009 2008RM’000 RM’000 RM’000 RM’000

Property, plant and equipment (Note 10) 59,021 59,181 14,701 11,210Prepaid lease payments (Note 12) 6,625 6,931 2,437 2,509Investment in associates (Note 14) 5,000 - 5,000 -Inventories (Note 18) 34,673 - - -Non current assets held for sale (Note 19) 7,000 7,000 - -Trade receivables (Note 20) 8,749 - - -Fixed deposits with a licensed bank (Note 24) 674 - - -Cash and bank balances- sinking fund (Note 25) 6,168 2,962 - -

The above banking facilities are also secured by way of:

(i) corporate guarantees by the Company for facilities of the subsidiaries; and(ii) first fixed and floating charge on all the present and future assets of the Group by way of debenture.

31. LONG TERM LOANS

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Amount outstanding 40,958 21,761 2,100 2,700Less: Portion due within one year (Note 30) (10,145) (2,201) (600) (600)

Non current portion 30,813 19,560 1,500 2,100

The non current portion of long term loans ispayable as follows:

Later than 1 year and not later than 2 years 8,280 2,206 600 581Later than 2 years and not later than 5 years 19,125 7,010 900 1,519Later than 5 years 3,408 10,344 - -

30,813 19,560 1,500 2,100

The long term loans are secured as disclosed in Note 30.

73



32. DEFERRED TAX ASSETS/(LIABILITIES)

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

At beginning of year (316) (2,500) - -Recognised in income statement (Note 8)- current year 324 2,505 - -- under provision in prior years - (297) - -Exchange differences (8) (24) - -

At end of year - (316) - -

Presented after appropriate offsetting as follows:Deferred tax assets 3,172 3,297 - -Deferred tax liabilities (3,172) (3,613) - -

- (316) - -

Deferred tax liabilities of the Group are in respect of the following:

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Tax effects of excess of tax capital allowances over related depreciation of plant and equipment 3,172 3,613 - -

Deferred tax assets of the Group and the Company in respect of the following temporary difference:

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Tax effects of:Deductible temporary differences 773 1,067 168 436Unutilised tax losses- no expiry date 10,563 18,628 7,284 7,867- tax losses allowed to be utilised up to the financial year ending 31 December- 2013 3,112 3,112 - -- 2014 3,966 - - -

Unutilised reinvestment allowances 985 - - -

19,399 22,807 7,452 8,303Less: Deferred tax assets recognised (3,172) (3,297) - -

Deferred tax assets has not been recognised 16,227 19,510 7,452 8,303

These unabsorbed capital allowances and unutilised tax losses have not been recognised as it is not probablethat taxable profit will be available in the foreseeable future to utilise these tax benefits.

74

Annual Report 2009


33. SHARE CAPITAL

Group and Company2009 2008

RM’000 RM’000

Authorised: 500,000,000 ordinary shares of RM1 each 500,000 500,000

Issued and fully paid:275,777,907 ordinary shares of RM1 each 275,778 275,778

34. RESERVES

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Accumulated losses (280,233) (256,426) (270,517) (265,169)

Non distributable:Share premium 41,218 41,218 41,218 41,218Revaluation reserve 8,971 - 3,985 -Foreign exchange fluctuation reserve 1,360 1,427 - -

51,549 42,645 45,203 41,218

(228,684) (213,781) (225,314) (223,951)

The revaluation reserve represents revaluation surplus arising from buildings. The revaluation reserve is usedto record increases in the fair value of buildings and decreases to the extent that such decrease relates to anincrease on the same asset previously recognised in equity.

35. COMMITMENTS

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Rental commitmentsThe future minimum lease payments under non cancellable operating leases are as follows:

Not later than 1 year 156 165 66 66Later than 1 year and not later than 2 years 184 221 94 133Later than 2 years and not later than 5 years - 331 - 28

340 717 160 227

75



36. SIGNIFICANT RELATED PARTY DISCLOSURES

(a) Related party transactions

Group CompanyType of 2009 2008 2009 2008

transactions RM’000 RM’000 RM’000 RM’000

Name of companySignificant transactions with related parties are as follows:With subsidiaries:Ho Wah Genting Trading Sdn Bhd Management

fees - - 128 128With associates:Ho Wah Genting Poipet Purchases - 176 - 104Resorts Sdn Bhd Rental income 24 24 24 24

Commerce Venture Magnesium ManagementSdn Bhd fees - 18 - 18

Rental income 84 84 84 84

The directors are of the opinion that the terms and conditions and prices of the above transactions are notmaterially different from that obtainable in transactions with unrelated parties.

(b) Related party balances



Name of company

Individually significant outstandingbalances arising from transactions (other than normal trade transactions) are as follows:

Financial assets

With subsidiaries:

HWG Management Services Sdn Bhd Advances - - 95 -HWG Tin Mining Sdn Bhd Advances - - 1,209 -HWG Copper Mining Sdn Bhd Advances - - 193 193PT Ho Wah Genting Advances - - 48 48

With an associate

Commerce Venture ManufacturingSdn Bhd Advances 2,982 - 2,982 -

76

Annual Report 2009


36. SIGNIFICANT RELATED PARTY DISCLOSURES (CONT’D)

(b) Related party balances (cont’d)



Name of companyIndividually significant outstandingbalances arising from transactions (other than normal trade transactions) are as follows:

Financial liabilities

With subsidiaries:

Ho Wah Genting Kintron Sdn Bhd Advances - - 27,291 28,991Ho Wah Genting Labuan Ltd Advances - - 430 441Ho Wah Genting Trading Sdn Bhd Advances - - 17,838 10,867HWG Minerals Sdn Bhd Advances - - 1,945 1,945HWG Tin Mining Sdn Bhd Advances - - - 1,027

With an associate

Ho Wah Genting Poipet Resorts Sdn Bhd Advances 2,578 2,586 2,578 2,491

(c) Compensation of key management personnel

The key management personnel comprises mainly executive directors of the Company whose remunerationis disclosed in Note 6.

37. SUBSEQUENT EVENTS

Subsequent to the balance sheet date, the following corporate transactions of the Company were completed:

(i) Proposed reduction of the share premium account of the Company and capital reduction by the cancellationof RM0.80 of the par value of every existing ordinary share of RM1 each in the Company to be off-set againstthe accumulated losses of the Company. This has been completed on 28 January 2010.

(ii) Proposed amendments to the Memorandum and Articles of Association of the Company to facilitate thechange in the par value of the ordinary shares of RM1 each in the Company resulting from the proposedcapital reduction. This has been completed on 28 January 2010.

(iii) Proposed establishment of an employee share option scheme (“ESOS”) of up to 10% of the issued andpaid up share capital of the Company after the proposed capital reduction. This has been established on10 February 2010.

(iv) Proposed renounceable rights issue of 137,888,954 new ordinary shares of RM0.20 each in the Company(“Rights Shares”) together with 137,888,954 free detachable Warrants on the basis of one (1) Right Sharewith one (1) free Warrant for every two (2) ordinary shares of RM0.20 each held in the Company after theproposed capital reduction. This has been completed on 13 April 2010.

77



38. SEGMENT INFORMATION OF THE GROUP

Segment information is presented in respect of the Group’s business and geographical segments. The primaryreporting segment information is in respect of business segments while the secondary information is reportedas geographical segments.

Business segments

The Group’s operations comprise the following segments:

Investment - Investment in properties and investment by the holding companyMoulded power supply cord sets - Manufacturing and trading of wires and cables, moulded power

supply cord sets and cable assemblies for electrical and electronicdevices and equipment

Wires and cables - Trading of wires and cablesMining - Mining of dolomite and manufacturing of magnesium ingots

The inter segment transactions were entered in the normal course of business and have been established onterms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

78

Annual Report 2009


79

38.SEGMENT INFORMATIO

N O

F THE G

ROUP (CONT’D

)

Business segments (co

nt’d)

Moulded

power

Wires

supply

and

2009

Mining

Inve

stment

cord

sets

cables

Total

Elim

ination

Group

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

Reve

nue

External revenue

-518

121,640

21,885

144,043

-144,043

Inter-segment revenue

-128

35,459

-35,587

(35,587)

-

Total revenue

-646

157,099

21,885

179,630

(35,587)

144,043

Resu

lts

Segment results

(360)

(4,193)

(9,807)

427

(13,933)

-(13,933)

Share in losses of associates

(2,647)

(29)

(2,676)

Interest income

17

Loss from operations

(16,592)

Finance costs

(8,888)

Loss before tax

(25,480)

Income tax expense

1,497

Loss after tax

(23,983)



80


N O

F THE G

ROUP (CONT’D

)


nt’d)

Moulded

power

Wires

supply

and

2009

Mining

Inve

stment

cord

sets

cables

Total

Elim

ination

Group

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

Assets and liabilities

Segment assets

3,256

84,655

161,025

22,494

271,430

(126,923)

144,507


22,044

1,019

--

23,063

-23,063

Unallocated corporate assets

--

--

--

-

Conso

lidated total asse

ts25,300

85,674

161,025

22,494

294,493

(126,923)

167,570

Segment liabilities

2,016

131,967

121,126

10,907

266,106

(146,238)

119,868

Unallocated corporate liabilities

--

--

--

-

Conso

lidated total lia

bilities

2,016

131,967

121,126

10,907

266,106

(146,238)

119,868

Other inform

ation

Capital expenditure

627

302

-335

-335

Amortisation of prepaid lease payments

872

179

-259

-259

Depreciation

1586

8,503

-9,090

-9,090

Non cash expense other than depreciation and amortisation

-1,085

--

1,085

(1,075)

10

Annual Report 2009


81


N O

F THE G

ROUP (CONT’D

)


nt’d)

Moulded

power

Wires

supply

and

2008

Mining

Inve

stment

cord

sets

cables

Total

Elim

ination

Group

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

Reve

nue

External revenue

-468

190,924

29,396

220,788

-220,788

Inter-segment revenue

-230

122,142

-122,372

(122,372)

-

Total revenue

-698

313,066

29,396

343,160

(122,372)

220,788

Resu

lts

Segment results

(3,927)

(5,108)

(2,979)

17(11,997)

-(11,997)

Gain on disposal of a subsidiary

511

Gain on deemed disposal of a subsidiary

as disclosed in Note 13(b)(iii)

11,345

11,345

Share in losses of associates

(125)

(91)

(216)

Interest income

160

Loss from operations

(197)

Finance costs

(7,580)

Loss before tax

(7,777)

Income tax expense

1,643

Loss after tax

(6,134)



82


N O

F THE G

ROUP (CONT’D

)


nt’d)

Moulded

power

Wires

supply

and

2008

Mining

Inve

stment

cord

sets

cables

Total

Elim

ination

Group

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

Assets and liabilities

Segment assets

-92,014

193,409

18,843

304,266

(129,408)

174,858


24,715

1,048

--

25,763

-25,763

Unallocated corporate assets

--

--

--

-

Conso

lidated total asse

ts24,715

93,062

193,409

18,843

330,029

(129,408)

200,621

Segment liabilities

-130,429

136,727

8,865

276,021

(138,181)

137,840

Unallocated corporate liabilities

--

--

--

-

Conso

lidated total lia

bilities

-130,429

136,727

8,865

276,021

(138,181)

137,840

Other inform

ation

Capital expenditure

48,207

191,384

-49,610

-49,610

Amortisation of prepaid lease payments

6472

199

-335

-335

Depreciation

49370

7,700

-8,119

-8,119

Non cash expense other than depreciation and amortisation

-4,235

9,322

-13,557

(2,036)

11,521

Annual Report 2009


38. SEGMENT INFORMATION OF THE GROUP (CONT’D)

Geographical segments

Revenue Assets employed Capital expenditure2009 2008 2009 2008 2009 2008

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

Asia 24,104 45,996 144,507 174,858 335 49,610North America 119,939 174,792 - - - -

144,043 220,788 144,507 174,858 335 49,610

39. CONTINGENT LIABILITIES

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Guarantees and contingencies relating to borrowings of subsidiaries - - 41,878 98,639

It is anticipated that no material liabilities will arise as a result of these guarantees.

40. FINANCIAL INSTRUMENTS

Financial risk management objectives and policies

The Group’s financial risk management policy seeks to ensure that adequate financial resources are availablefor the development of the Group’s businesses whilst managing its interest rate, liquidity, foreign exchange,market and credit risks. The Group operates within guidelines that are approved by the Board and the Group’spolicy is not to engage in speculative transactions.

Interest rate risk

The Group’s primary interest rate risk relates to interest bearing debts. The Group manages its interest rateexposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group actively reviews itsdebt portfolio, taking into account the investment holding period and nature of its assets. The information onmaturity dates and effective interest rates of financial liabilities are disclosed in their respective notes.

Liquidity risk

The Company practices prudent liquidity risk management to minimize the mismatch of financial assets andliabilities and to maintain sufficient credit facilities for contingent funding requirement of working capital.

Market risk

The Group’s principal exposure to market risk arises mainly from the changes in equity prices for quoted sharesincluded in investment in an associate and other investments.

Credit risk

The Group is exposed to credit risk mainly from its customer base, including trade receivables. The Groupextends credit to its customers based upon careful evaluation of the customer’s financial condition and credithistory. Trade receivables are monitored on an ongoing basis by the Group’s credit control department. Atbalance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit riskis represented by the carrying amount of each financial asset.

83



40. FINANCIAL INSTRUMENTS (CONT’D)

Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk. Foreign currency denominatedassets and liabilities together with expected cash flows from highly probable purchases and sales give rise toforeign exchange exposures.

Foreign exchange exposures in transactional currencies other than functional currencies of the operation entitiesare kept to an acceptable level.

The net unhedged financial assets and financial liabilities of the Group companies that are not denominated intheir functional currencies are as follows:

Net Financial Assets/(Liabilities) Held in Non-Functional CurrenciesUnited

Indonesian States Singapore RinggitFunctional currency Rupiah Dollar Dollar Malaysia Total of the Group RM’000 RM’000 RM’000 RM’000 RM’000

At 31 December 2009

Ringgit Malaysia - 3,454 9 - 3,463United States Dollar (634) - (1,043) (26) (1,703)

(634) 3,454 (1,034) (26) 1,760

At 31 December 2008

Ringgit Malaysia - 700 10 - 710United States Dollar 351 - (1,909) - (1,558)

351 700 (1,899) - (848)

84

Annual Report 2009


85

40.FIN

ANCIA

L IN

STRUMENTS (CONT’D

)

Fair va

lues

The fair values of all financial assets and liabilities as at balance sheet date are not materially different from their carrying values except for the following:

Group

Compan

y2009

2008

2009

2008

Carrying

Fair

Carrying

Fair

Carrying

Fair

Carrying

Fair

amount

value

amount

value

amount

value

amount

value

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

Finan

cial assets

Amount due from subsidiaries

--

--

--

241

*Other long term investments

184

170

187

137

--

--

Finan

cial liabilities

Amount due to subsidiaries

--

--

--

43,271

*Amount due to an associate

--

2,586

*-

-2,491

*

*It is not practicable to estimate the fair values of the amounts due from/to related companies without incurring excessive costs due principally to a lack

of repayment terms entered into by the parties.

Authorised Share Capital : RM500,000,000 divided into 2,500,000,000 ordinary shares of RM0.20 each

Issued & Fully Paid-up Share Capital : RM82,733,372 divided into 413,666,861 ordinary shares of RM0.20 each

Voting Rights : One vote per share

LIST OF SUBSTANTIAL SHAREHOLDERS AS AT 13 APRIL 2010

NO. NAME OF SUBSTANTIAL SHAREHOLDER NO. OF ORDINARY SHARES OF RM1.00 EACHDirect Deemed

Interest % Interest %

1. KINTRON HOLDING SDN BHD 58,624,500* 14.17 - -

Note:-* 24,583,000 shares registered in the name of OSK Nominees (Tempatan) Sdn Berhad

14,500,000 shares registered in the name of RHB Nominees (Tempatan) Sdn Bhd19,541,500 shares registered in the name of Kintron Holding Sdn Bhd

DISTRIBUTION SCHEDULE OF SHAREHOLDINGS AS AT 13 APRIL 2010

HOLDINGS NO. OF TOTALHOLDERS HOLDINGS %

Less than 100 101 3,945 0.00100-1,000 2,402 1,946,676 0.471,001-10,000 5,535 26,132,167 6.3210,001-100,000 2,744 95,258,681 23.03100,001 to less than 5% of issued shares 560 265,742,392 64.245% and above of issued shares 1 24,583,000 5.94

TOTAL 11,343 413,666,861 100.00

LIST OF THIRTY (30) LARGEST SHAREHOLDERS AS AT 13 APRIL 2010

NO. NAME OF SHAREHOLDERS NO. OF SHARES HELD %

1. OSK NOMINEES (TEMPATAN) SDN BERHAD 24,583,000 5.94Pledged Securities Account for Kintron Holding Sdn Bhd

2. KINTRON HOLDING SDN BHD 19,541,500 4.72

3. RHB NOMINEES (TEMPATAN) SDN BHD 14,500,000 3.51EON Bank Berhad for Kintron Holding Sdn Bhd

4. MKW CONSOLIDATED SDN. BHD. 6,864,900 1.66

5. HDM NOMINEES (ASING) SDN BHD 6,119,700 1.48UOB Kay Hian Pte Ltd for Sim Sem Peng

6. TAN HENG TA 4,226,100 1.02

7. CIMSEC NOMINEES (ASING) SDN BHD 3,985,546 0.96Exempt an for CIMB-GK Securities Pte Ltd

8. OSK NOMINEES (ASING) SDN BERHAD 3,886,300 0.94DMG & Partners Securities Pte Ltd for Sim Sem Peng


Analysis of Shareholdingsas at 13 April 2010

86

Annual Report 2009

Analysis of Shareholdingsas at 13 April 2010 (cont’d)

87

LIST OF THIRTY (30) LARGEST SHAREHOLDERS AS AT 13 APRIL 2010 (cont’d)

NO. NAME OF SHAREHOLDERS NO. OF SHARES HELD %

9. TEO AH SENG 3,713,300 0.90

10. LOW PAK SENG 3,352,900 0.81

11. DAN YOKE PYNG 3,159,700 0.76

12. CITIGROUP NOMINEES (ASING) SDN BHD 3,100,000 0.75CBHK PBGHK for Golden Millennium Worldwide Limited

13. MD NAZIR BIN MD ALI 3,000,075 0.73

14. TOH EAN HAI 2,730,000 0.66

15. DIONG MEE 2,675,800 0.65

16. MAYBAN NOMIMEES (TEMPATAN) SDN BHD 2,500,000 0.60Pledged Securities Account for Tan Sun Ping

17. LEE YEOW TENG 2,089,900 0.51

18. TAN YU WEI 1,913,300 0.46

19. TAN LEI LING 1,676,550 0.41

20. LEKOK PLANTATION SDN. BHD. 1,641,600 0.40

21. KOON WOH 1,575,000 0.38

22. LOW YANG KAI @ LOW YEONG KEE 1,434,000 0.35

23. WONG KOK SIN 1,410,200 0.34

24. MAH HUNG HWA 1,400,000 0.34

25. TAN SOO SING 1,285,000 0.31

26. TAN SUI LAN 1,212,200 0.29

27. CHAP KAR KAR 1,200,375 0.29

28. MAYBAN SECURITIES NOMIMEES (TEMPATAN) SDN BHD 1,200,000 0.29Pledged Securities Account for Pang Tet Kong

29. YONG SIEW NGEE 1,179,500 0.29

30. CIMSEC NOMINEES (TEMPATAN) SDN BHD 1,174,000 0.28CIMB for Lim Beng Leong

DISTRIBUTION OF WARRANTHOLDINGS

HOLDINGS NO. OF HOLDERS NO. OF SHARES %

Less than 100 - - -100-1,000 230 182,577 0.131,001-10,000 798 3,851,710 2.7910,001-100,000 580 21,974,902 15.94100,001 to less than 5% of issued shares 189 92,338,265 66.975% and above of issued shares 1 19,541,500 14.17

TOTAL 1,798 137,888,954 100.00

LIST OF THIRTY (30) LARGEST WARRANTHOLDERS AS AT 13 APRIL 2010

NO. NAME OF HOLDERS NO. OF WARRANTS %

1. KINTRON HOLDING SDN BHD 19,541,500 14.17

2. MKW CONSOLIDATED SDN. BHD. 6,854,900 4.97

3. TEO AH SENG 3,713,300 2.69

4. TOH EAN HAI 3,390,000 2.46

5. DAN YOKE PYNG 3,159,700 2.29

6. DIONG MEE 2,675,800 1.94

7. MAYBAN NOMIMEES (TEMPATAN) SDN BHD 2,500,000 1.81Pledged Securities Account for Tan Sun Ping

8. LOW PAK SENG 2,181,400 1.58

9. TAN YU WEI 1,913,300 1.39

10. LEKOK PLANTATION SDN. BHD. 1,641,600 1.19

11. WONG KOK SIN 1,410,200 1.02

12. TAN HENG TA 1,408,700 1.02

13. TAN SOO SING 1,285,000 0.93

14. TAN SUI LAN 1,212,200 0.88

15. LIM CHIEW HEONG 1,200,450 0.87

16. CHAP KAR KAR 1,200,375 0.87


Analysis of Warrantholdings as at 13 April 2010

88

Annual Report 2009

Analysis of Warrantholdings as at 13 April 2010 (cont’d)

89

LIST OF THIRTY (30) LARGEST WARRANTHOLDERS AS AT 13 APRIL 2010 (cont’d)

NO. NAME OF HOLDERS NO. OF WARRANTS %

17. YONG SIEW NGEE 1,179,500 0.86

18. KOK CHEE YUN @ KOK CHEE YAN 1,154,100 0.84

19. SENG HEONG HOW 1,142,600 0.83

20. NG HO FATT 1,141,700 0.83

21. MD NAZIR BIN MD ALI 1,000,025 0.73

22. LIM BEE SAN 1,000,000 0.73

23. MAYBAN NOMINEES (TEMPATAN) SDN BHD 993,300 0.72LEE AH FONG

24. TEO YONG FONG 913,400 0.66

25. TAN BOON CHIN 874,000 0.63

26. CHUA KAI HEE @ CHUAH KAI ENG 868,500 0.63

27. ONG WAN CHIN 841,300 0.61

28. LEE YEOW TENG 805,600 0.58

29. TAN CHIN CHING 779,000 0.56

30. TAN MING CHUAN 765,000 0.55

STATEMENT OF DIRECTORS’ INTERESTS AS AT 13 APRIL 2010

A) SHARES

NO. NAME OF DIRECTORS NO. OF ORDINARY SHARES OF RM0.20 EACHDirect % Deemed %

Interest Interest

1. MR GOH SIN HUAT 87,000 0.02 58,624,500* 14.17

2. MR TEO TIEW 78,300 0.02 - -

3. MR CHIEN, CHAO-CHUAN 100,000 0.02 58,624,500# 14.17

4. DATO’ MOHD SHAHAR BIN ABDUL HAMID - - - -

5. MR TEE LAY PENG - - - -

6. MR WONG TUCK JEONG - - - -

* Deemed Interest by virtue of his substantial shareholdings in Kintron Holding Sdn Bhd (“KHSB”) and thesubstantial interest of his associate, Expand Quest Sdn Bhd in KHSB, of which KHSB is the beneficial owner.

# Deemed Interest by virtue of his substantial shareholdings in KHSB, of which KHSB is the beneficial owner.

B) WARRANTS

NO. NAME OF DIRECTORS NO. OF WARRANTS OF RM0.20 EACHDirect % Deemed %

Interest Interest

1. MR GOH SIN HUAT 29,000 0.02 - -

2. MR TEO TIEW 38,300 0.03 - -

3. MR CHIEN, CHAO-CHUAN - - - -

4. DATO’ MOHD SHAHAR BIN ABDUL HAMID - - - -

5. MR TEE LAY PENG - - - -

6. MR WONG TUCK JEONG - - - -


Statement of Directors’ Interestsas at 13 April 2010

90

Annual Report 2009

List of Properties as at 31 December 2009

91

Location/Description Existing use Approximate Land Tenure Date of Net age of building area Acquisition Book Value

(year) (sq. ft.) (RM)

HO WAH GENTING BERHAD

Lot 1066, Seksyen 69 Commercial 25 1,324 Freehold 23.03.1994 1,935,569Bandar Kuala Lumpur, premises Negeri Wilayah Persekutuan[No. 35, Jalan Maharajalela50150 Kuala Lumpur]

4 ½ storey shop cum office

Lot 1067 and 1068, Seksyen 69 Commercial 25 3,045 Freehold 02.08.2002 4,951,808Bandar Kuala Lumpur premisesNegeri Wilayah Persekutuan[No. 37 & 39, Jalan Maharajalela50150 Kuala Lumpur]

2 adjoining 4 ½ storey intermediate and corner shop cum office

Lot 2.72, 2nd Floor Commercial 27 140 Freehold 23.03.1994 30,621Wisma Punca Emas premisesJalan Yam Tuan, SerembanNegeri Sembilan Darul Khusus

a shoplot in a shopping complex

Lot 1341, Seksyen 38, Industrial cum 13 231,173 Leasehold 22.07.1996 7,890,467Bandar Kulim, Daerah Kulim, office expiring in Kedah Darul Aman premises 2043[Plot No. 4, Jalan Perusahaan, Kawasan Perusahaan Kulim, 09000 Kulim, Kedah Darul Aman]

comprising a single storey factory and a double storey office with annexed single storey factory cum warehouse

HO WAH GENTING KINTRON SDN BHD

H.S. (M) 7887, P.T. No. 5, Industrial cum 28 110,976 Leasehold 16.11.1989 2,000,000Bandar Kulim, Daerah Kulim, office expiring in Kedah Darul Aman premises 2040[Lot No. 5, Phase 1, Kawasan Perusahaan Kulim, 09000 Kulim, Kedah Darul Aman]

comprising a single storey factory cum office

Location/Description Existing use Approximate Land Tenure Date of Net age of building area Acquisition Book Value

(year) (sq. ft.) (RM)

HO WAH GENTING KINTRON SDN BHD (cont’d)

PM 238, Lot 1281 Seksyen 38 Industrial 216,900 Leasehold *04.01.1999 5,000,000Bandar Kulim, Daerah Kulim, premises expiring inKedah Darul Aman 2048[Lot No. 21, Phase 1, Kawasan Perusahaan Kulim, 09000 Kulim, Kedah Darul Aman]

comprising 3 units of buildings as follows :-- a single storey factory 20- a single storey factory 9- a warehouse 7

PT. HO WAH GENTING, INDONESIA

Kawasan Bintang Industri II, Industrial cum 11 159,564 Leasehold 13.05.2004 4,094,411No. 29, 29A & 30, office expiring inJalan Brigadir Jenderal Katamso, premises 2034Tanjung Uncang/Sagulung, Sekupang, Batam, Riau, Indonesia

comprising Plant I with annexed double storey office

Kawasan Bintang Industri II, Industrial cum 273,715 Leasehold 30.08.2002 4,965,488Lot No. 27 & 28, residential expiring inJalan Brigadir Jenderal Katamso, premises 2031Tanjung Uncang/Sagulung, Sekupang, Batam, Riau, Indonesia

comprising the following buildings:-- Plant II 8- Plant III 6- Staff quarters and a canteen -

Kawasan Bintang Industri II, Industrial 6 157,326 Leasehold 29.12.2004 9,726,904Lot C No. 27 & 28, premises expiring inJalan Brigadir Jenderal Katamso, 2035Tanjung Uncang/Sagulung, Sekupang, Batam, Riau, Indonesia

comprising a Plant IV and a warehouse

Blok A2, No. 11, Residential 6 775 Leasehold 29.12.2004 12,279Komplek Perumahan Pluto, premises expiring inTanjung Uncang, Sekupang, 2031Batam, Riau, Indonesia

* The proposed disposal of the said property is pending completion.


List of Properties as at 31 December 2009 (cont’d)

92

I/We* …………………………………………………………………………NRIC No/Company No.* ……………….....................(full name in block letters)

of………………………………………………………………………………………………..............................................................(full address)

……………………………………………………………………………………….………………Tel No…………………..................

being a member/members* of HO WAH GENTING BERHAD, do hereby appoint :-

Name/NRIC No. No. of Shares Percentage (%)

Proxy 1 and/or* failing him/her*

Proxy 2 and/or* failing him/her*

TOTAL

the Chairman of the Meeting as my/our* proxy/proxies* to vote for me/us* on my/our* behalf, at the Seventeenth Annual General Meeting of the Company to be held at the Dewan Berjaya, Bukit Kiara Equestrian andCountry Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur, Malaysia on Thursday, 27 May 2010 at10.30 a.m. and at any adjournment thereof.

My/our* proxy/proxies* is/are* to vote as indicated below:-

Ordinary Ordinary Business Proxy 1 Proxy 2

Resolution For Against For Against

1. To receive and adopt the Audited Financial Statements for the year ended 31 December 2009

2. Payment of Directors’ Fees of RM90,000

3(a). Re-election of Mr. Tee Lay Peng pursuant to Article 99

3(b). Re-election of Mr. Wong Tuck Jeong pursuant to Article 99

4. Re-appointment of Dato’ Mohd Shahar Bin Abdul Hamid pursuant to Section 129(6) of the Companies Act, 1965

5. Re-appointment of Messrs Russell Bedford LC & Company as Auditors

No. Special Business For Against For Against

6. Authority to allot shares pursuant to Section 132D of the Companies Act, 1965

(Please indicate with an “X” in the spaces provided as to how you wish your vote to be cast for or against the Resolutions.In the absence of specific instructions, the proxy/proxies may vote or abstain from voting as he/her/they* may think fit.)

Dated this________ day of __________________, 2010* Delete if not applicable Signature (s)/Common Seal*

NOTES1. Every member is entitled to appoint a proxy or in the case of a corporation, to appoint a representative to attend and vote in his place. A proxy may

but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.2. The Form of Proxy must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, be executed under its

common seal or under the hand of its attorney.3. If the Form of Proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain as he thinks fit.4. Where a member appoints more than one proxy (but not more than two), the appointment shall be invalid unless he specifies the proportion of his

holdings to be represented by each proxy.5. The Form of Proxy or other instrument of appointment must be deposited at the Registered Office of the Company at Wisma Ho Wah Genting, No.

35, Jalan Maharajalela, 50150 Kuala Lumpur not less than 48 hours before the time fixed for holding the meeting or at any adjournment thereof, orin the case of a poll, not less than 24 hours before the time appointed for the taking of the poll.

HO WAH GENTING BERHAD(Company No. 272923-H) Incorporated in Malaysia

PROXY FORM

No. of shares held

Fold this flap for sealing

Then fold here

1st fold here

HO WAH GENTING BERHAD (272923-H)Wisma Ho Wah GentingNo 35, Jalan Maharajalela50150 Kuala Lumpur

Tel : (603) 2143 8811Fax : (603) 2141 7477

STAMP

Ho Wah Genting Berhad 272923-H

Wisma Ho Wah GentingNo 35, Jalan Maharajalela50150 Kuala LumpurT 603 2143 8811 F 603 2141 7477

HO

WA

H G

EN

TIN

G B

ER

HA

D272923-H

AN

NU

AL

RE

PO

RT

2009

annual report

O9

ho wah genting berhad -...

Documents