yoko-annualreport2009 (2.7mb)

8/7/2019 YOKO-AnnualReport2009 (2.7MB)

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ANNUAL REPORT

Tai Kwong Yokohama Berhad(292788-U)Lot 1238, Batu 23, Jalan Kachau, Semenyih-Sg. Lalang, 43500 Semenyih, Selangor Darul Ehsan, Malaysia

tel : +603 8723 3327 fax : +603 8723 3341 / 8723 3342

http://www.tkyoko.com

TAI KWONG YOKOHAMA BERHAD(292788-U)

TA

IKWONGYOKOHAMABERHADI ANNUALREPORT2009


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Corporate Inormation ... 02

Corporate Structure . . . 03

Statement o Corporate Governance ... 05

Statement on Internal Control ... 10

Audit Committee Report . . . 13

Chairmans Statement ... 17

Profle o the Board o Directors ... 19

Financial Statements ... 23

List o Properties . . . 85

Analysis o Shareholdings ... 87

Notice o Annual General Meeting ... 90

Proxy Form .. . Enclosed

contents


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CorporateInormation

BOARD OF DIRECTORS

Chow Siew Hon

Chairman

Yong Mian Thong

Chie Executive Ofcer

Goh Swee Heng

Non- Independent &

Non-Executive Director

AbduR-Rani Bin OmarNon-Independent &


Khoo Khay Chye

Independent &


DatoIR. Nik Mohammed Bin

Nik Abdullah

Independent &


Battchoo Ratilal

Independent &


PRINCIPAL PLACE

OF BUSINESS

Lot 1238, Batu 23

Jalan Kachau

Semenyih-Sg.lalang

43500 Semenyih

Selangor Darul Ehsan

Tel : 03-8723 3327

Fax : 03-8723 3341

REGISTERED OFFICE

Suite 13.03,

13th Floor, Menara Tan & Tan

207 Jalan Tun Razak

50400 Kuala Lumpur

Tel : 03-2164 0118

Fax : 03-2164 0207

REGISTRAR

Bina Management (M) Sdn. Bhd.

(Co. No. : 50164-V)

Lot 10, The Highway Centre

Jalan 51/205

46050 Petaling Jaya

Selangor, Malaysia

Tel : 03-7784 3922

Fax : 03-7784 1988

COMPANY SECRETARIES

Tan Leh Kiah

Chan Yoke Peng

INvESTORS RELATION

OFFICER

Tammy Tan

Tel : 03-8723 3327

PRINCIPAL BANKERS

Maybank Banking Berhad

(Co. No. 3813-K)

1st & 2nd Floor

Maybank Building28-30 Jalan Tukang

43000 Kajang, Selangor

OCBC Bank (M) Berhad

(Co. No. 295400-W)

Menara OCBC

18, Jalan Tun Perak

50050 Kuala Lumpur

AUDITORS

Ernst & YoungLevel 23A Menara Milenium

Jalan Damanlela

Pusat Bandar Damansara

50490 Kuala Lumpur

P.O. Box 11040

50734 Kuala Lumpur

STOCK EXCHANGE LISTING

Main Market o

Bursa Malaysia Securities Berhad

HOMEPAGE

www.tkyoko.com


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TAI KWONG YOKOHAMA BERHAD Annual Report2009

Corporate Structure

100%

Tai Kwong - Yokohama

Battery Industries Sdn. Bhd

(155552-M)Manufacturing & Marketing

of Batteries

100%

Orient Batteries Sdn. Bhd

(158934-A)

Dormant

100%


Holding (M) Sdn. Bhd

(69769-M)Investment Holding

100%

Tai Kwong Battery (KL)

Sdn. Bhd (292598-A)Dormant

100%

TK Yokohama

Reclamation Sdn. Bhd(Formerly known as Evergreen

Reclamation Sdn. Bhd)

(406274-D)Material Recovery

100%


Management Sdn. Bhd

(404320-P)Dormant

100%

Tai Kwong Battery (Ipoh)

Sdn. Bhd (103807-M)Dormant

100%

Tai Kwong Battery (Penang)

Sdn. Bhd (166142-V)Dormant

100%

Tai Kwong Battery (JB)

Sdn. Bhd (25032-T)Dormant

100%

TK - Yokohama Technology

Sdn. Bhd (349235-D)

Dormant

100%

Jendela Wira Sdn. Bhd

(239431-V)Transportation Services

100%


Battery (Kuantan) Sdn. Bhd

(277042-X)Dormant

100%


Battery (Tawau) Sdn. Bhd

(327966-M)Dormant

100%


Marketing Sdn. BhdFormerly known as Tai Kwong Yokohama

Battery (Sarawak) Sdn. Bhd)

(346065-H)Retailing of Bateries & Related

Products

100%


Battery Co. Sdn. Bhd

(182913-P)Dormant

100%

Syarikat ZHK Sdn. Bhd

(102811-W)Transportation Services

100%


Battery (Sabah) Sdn. Bhd

(172022-U)Dormant

100%


Battery (Seremban) Sdn. Bhd

(277084-M)Dormant

100%

Tai Kwong Yokohama

Battery (Melaka) Sdn. Bhd(362739-K)Dormant

100%Tai Kwong Yokohama

Ventures Sdn. Bhd

(383461-W)Dormant

Tai Kwong Battery (Penang)

Sdn. Bhd (166142-V)

Dormant

Tai Kwong Battery (JB)

Sdn. Bhd (25032-T)

Dormant50%

20%

80%

50%

TAI KWONG YOKOHAMA BERHAD

(292788-U)


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Recycled Lead Ingot


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Statemento Corporate Governance

The Board o Directors o Tai Kwong Yokohama Berhad is committed to ensure that the principles o corporate governance

and best practices as set out in Part 1 and Part 2 respectively o the Malaysian Code on Corporate Governance (Code)

are observed and practiced throughout the Group.

A. DIRECTORS

BoardCompositionandBalance

The current Board has seven (7) members, comprising one (1) Executive Directors and six (6) Non-Executive

Directors. O the six (6) Non-Executive Directors, three (3) are independent, hence the Company is in

compliance with the prescribed requirements or at least two directors or one-third o the total number o

Directors, whichever is higher, are to be Independent Directors.

The Group has complied throughout the nancial year with all the best practices o Corporate Governance set

out in Part 2 o the Code, except or Best Practise AAVII (Nomination o a Senior Independent Non-Executive

Director). Given the current composition o the Board which refects a strong independent element and

the separation o the roles o Chairman and Group Chie Executive Ocer, the Board does not consider it

necessary at this juncture to nominate a Senior Independent Non-Executive Director.

The composition o the Board refects a mix o members with international experience, and knowledge

in the areas o nance, business, general management and strategy that has been vital to the successul

direction o the Group. This balance has also enabled the Board to provide clear and eective leadershipto the Group and to bring inormed and independent judgements to many aspects o the Groups strategy

and perormance so as to ensure that the Group is under the guidance o an accountable and competent

Board. None o the Non-Executive Directors participate in the day-to-day management o the Group.

The Independent Non-Executive Directors play a pivotal role in corporate accountability. They provide

unbiased and independent views, advice and judgements as well as saeguarding the interests, not only

o the Group, but also shareholders, employees and other communities in which the Group conducts its

business.

A brie description o the prole o each Director is contained on pages 19 to 22 o this Annual Report.

Supplyoinormation

The Board is provided with sucient and timely inormation to enable it to discharge its duties eectively.

Senior Management is invited to attend the Board and Audit Committee meetings, as and when required

to provide urther explanation and representation to the members o the Board and Audit Committee.

BoardMeetings

The Board had scheduled meetings at least our (4) times a year and additional Board meetings are convened

where necessary. During the nancial year 2009, the Board has convened ve (5) meetings. The details o

attendance o the Directors o the Company at Board meetings are as below: -


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Name of Directors No. of Meetings Attended

Chow Siew Hon 5/5Yong Mian Thong 5/5Goh Swee Heng 5/5AbduR-Rani Bin Omar 4/5Khoo Khay Chye 5/5Dato IR. Nik Mohammed Bin Nik Abdullah 4/5Battchoo Ratilal (appointed w.e.. 28/7/09) 2/2

Yeo Wee Thow (resigned w.e..11/8/09) 4/4Bong Boon Fah (resigned w.e.. 31/12/09) 5/5

The agenda and Board papers or deliberation by the Board are dispatched to the Directors in advanceto acilitate inormed discussion and decision-making. As at to date, all Directors have complied with therequirements in respect o Board Meeting attendance in accordance with the provision o the CompanysArticles o Association.

DirectorsTraining

All Directors have attended the Mandatory Accreditation Progamme and are also encouged to attend coursewhether in-house or external to help them in the discharge o their duties:-

NameofDirectors

Dato Ir.Nik Chow Yong Goh Khoo AbduR-Rani Mohammed Siew Mian Swee Khay Bin Bin Battchoo No.NatureofTraining Hon Thong Heng Chye Omar NikAbdullah Ratilal

1 Forum by Public Listed Companies:CG Best Practices by Securities Commission X

2 Enterprise Risk Management -An Awareness session by KPMG X X X X

3 Corporate Governance Guide -Towards Boardroom Excellenceby Malaysian Institute of Accountants X X

4 Corporate Governance Revisitedby Bursa Malaysia X

5 ACI Roundtable Discussion X

6 Mandatory Accreditation Programme(MAP) by Bursatra Sdn. Bhd. X

7 KPMG Evening Talk - EssentialUpdates for Directors by KPMG X

8 SID-SGX-PWC AC Workshop 2 onComposition Conduct of AC Meetingby Singapore Institude of Director X

9 Directors Training :Getting up to Speed withGovernance Part I & II by IIAM X

11 13th Asia Battery Conference X X

12 Corporate Governance Presentation by KPMG X X X X X X X

Statement o Corporate Governance (contd)


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BoardCommittees

The Audit committee consists o two (2) Independent and Non-Executive Directors. The Committee reviews

all published nancial statements and post audit ndings, ocusing in particular on accounting policies,

compliance, management judgments and estimates. It also monitors the Group internal control and risk

management including internal audit unction and nancial reporting. Any signicant ndings or identied

weaknesses are closely examined so that appropriate action can be taken, monitored and reported to the

Board.

Re-electionoDirectors

In accordance with Article 101 o the Companys Articles o Association, all Directors shall retire rom oce

once at least three (3) years but shall be eligible or re-election at each Annual General Meeting (AGM).

The Article also provides that one-third (1/3) o the Directors, or, i their number is not in multiple o three

(3), the number nearest to one-third (1/3) with minimum o one (1) shall retire rom oce.

Pursuant to Section 129(2) o the Companies Act, 1965, the oce o a director over the age o seventy years

becomes vacant at every AGM unless he is reappointed by a resolution passed in such an AGM o which

no shorter notice than that required or the AGM has been given and majority by which such resolution is

passed is not less then three-ourths (3/4) o all members present and voting at such AGM.

Directors who are appointed by the Board during the nancial year are subject to re-election by theshareholders at the next Annual General Meeting.

Appointment

All appointments o Directors are recommended to the Board or approval. The Board periodically reviews

the board composition in terms o the required mix o skills and experience and other qualities o the

Directors to ensure the eciency o the Board. The Board also assess issues such as international experience,

independence and skills relating o nance, legal and manuacturing issues.

PrincipalResponsibilities

The principal responsibilities o the Board also include the ollowing:-

a) Reviewing and adopting the strategic plans or the Group;

b) Overseeing the conduct o the Groups business;

c) Identiying risks and ensure implementation o plans to manage such risks;

d) Ensure human capital management include succession planning, training and compensation;

e) Ensure there is a shareholder communications policy;

) Review and ensure internal control systems are in place or compliance with applicable laws, regulations

risk, directives and guidelines.



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B. DIRECTORS REMUNERATION AND NOMINATION

The Remuneration and Nomination Committees were combined as a single committee on 14 October 2009 and

it meets as and when required and comprises the ollowing members:

Goh Swee Heng - Chairman and Director

Dato Ir. Nik Mohammed Bin Nik Abdullah - Independent Non-Executive Director

Khoo Khay Chye - Independent Non-Executive Director

The Committee is responsible to recommend to the Board a remuneration ramework or Directors and Senior

Management with the objective to ensure that the Company attracts and retains the Director needed to run

the Group successully. It is the ultimate responsibility o the entire Board to approve the remuneration o the

Executive Directors and Senior Management with individual Directors abstaining rom decision in respect o their

remuneration.

The Committee is also responsible or nominating and recommending to the Board, candidates to be appointed

as directors o the Company as well as Directors to ll seats on Board Committees, assessing, on an annual basis,

the eectiveness o the Board, Board Committees and the contribution o each director and annual review o the

required mix o skills, experience and qualities o which Non-Executive Directors should bring to the Board.

The Executive Directors play no part in deciding their own remuneration and the respective Board members shall

abstain rom all discussion pertaining to their remuneration.

Details o the Directors remuneration are set out in the Audited Financial Statements on pages 53 to 54 o the

Annual Report.

C. SHAREHOLDERS AND INVESTORS

The Board is committed in providing accurate, useul and timely inormation about the Company, its business

and its activities. Realising the importance o timely and equal dissemination o material inormation, the annual

report and nancial statements, to the shareholders, investors and the public at large, the Company maintains an

open communications policy with its shareholders, individuals or institutional members, and welcome eedback

rom them.

The key element o the Companys dialogue with its shareholders is the opportunity to gather views o and answerquestions rom, both private and institutional shareholders on all issues relevant to the Company at the AGM. The

shareholders are encouraged to ask questions about the resolutions being proposed or about the Companys

operations in general. All the Directors are available to provide responses to questions rom the shareholders during

these meetings. The Board believes that clear and consistent communication with them encourages a better

appreciation o the Companys activities, reduces share price volatility, and allows the Companys business and

prospects to be evaluated properly. This also ensures a high level o accountability, transparency and identication

with the Groups business operations, strategy and goals.

The Group also maintains a website at www.tkyoko.com whereby shareholders and the general public can have

access to obtain the latest inormation o the Group.



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D. ACCOUNTABILITY AND AUDIT

AuditCommittee

The Audit Committee assists the Board in scrutinising inormation or disclosure to ensure accuracy, adequacy and

completeness. The statement by Directors pursuant to Section 169 o Companies Act 1965 is set out on pages

28 o the Annual Report.

FinancialReporting

The Board always aims to provide a balanced and air assessment o the Groups nancial perormance and

prospects primarily through the annual report and quarterly nancial statements to shareholders. Directors also

strive to ensure that nancial reporting presents a air and understandable assessment o the Companys nancial

position and results.

InternalControl

The Board has overall responsibility or the Groups system o internal control, which comprises a process or

identiying, evaluating and managing the risks aced by the Group and or regularly reviewing its eectiveness

in accordance with the Malaysian Code o Corporate Governance. Inormation on the Groups Internal Control is

presented in the Statement o Internal Control laid out on pages 10 & 11.

RelationshipwiththeAuditors

Key eatures underlying the relationship o the Audit Committee with external auditors are stated in the Report

on Audit Committee set out on pages 13 to 15. The Company has always maintained a close and transparent

relationship with its auditors in seeking proessional advice and ensuring compliance with the accounting standards

in Malaysia

Whistle-BlowingPolicy

The Group has during the nancial year adopted a Whistle-Blowing Policy, as part o the commitment to upload

the highest standards, o ethics, integrity and accountability.

This Policy will enable employees and members o the Board to disclose internally any serious malpractice or

misconduct with ear or reprisal and also provide a Platorm or them to channel their concerns about illegal,unethical or improper business conduct aecting the Group



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10

The Malaysian Code on Corporate Governance stipulates that the Board o a listed company should maintain a sound

system o internal control to saeguard shareholders investment and the Groups assets. Paragraph 15.26(b) o the

Listing Requirements o Bursa Malaysia Securities Berhad requires Directors to include a statement about the state o

internal control o the public listed company, as a group, in their Annual Reports. The intention is that companies should

have the discretion to explain the governance policies in the light o the principles, including any special circumstances,

which have led the company to adopting a particular approach.

BOARD RESPONSIBILITY

The Board has an overall responsibil ity in reviewing the adequacy and integrity o the Groups internal control systems and

management inormation systems, including systems or compliance with applicable laws, regulations, rules, directives

and guidelines. Because o the limitations that are inherent in any system o internal control, this system is designed

to manage rather that eliminate the risks that may impede the achievement o the Groups objectives. Thereore, the

system o internal control can only provide reasonable and not absolute assurance against material misstatement or

loss to the company. As an integral part o the system o internal control, the Board conrms that there is an ongoing

process or identiying, evaluating and managing the signicant risks aced by the Group and is subject to regular

reviews by the Board.

RISK MANAGEMENT

The Board recognizes the importance o establishing a ormal risk management ramework in order to identiy principalrisks and implement appropriate controls to manage such risks. A structured approach to ormalize the processes by

which risks are identied, assessed and reviewed by Management, with the involvement o the Audit Committee and

the Board, was established during the year with the appointment o an independent proessional rm to provide the

requisite assistance to the Board. The Group has in place internal control procedures with clear lines o accountability

and delegated authority through a series o standard operating procedures to monitor the signicant risks aecting it.

INTERNAL AUDIT FUNCTION

The Group has an in-house internal audit unction which is independent o the activities it audits. In addition, the

Company appointed an independent proessional rm, namely KPMG Business Advisory Sdn Bhd, on a co-sourced basis,

to augment the internal audit resources o the Group in conducting internal audit, covering the key processes within

the Group. The internal audit was undertaken to assess the adequacy and integrity o the system o internal controlstherein. Internal audit reports that highlighted areas o control deciency or improvements were tabled beore the Audit

Committee or remedial measures to be taken by Management. Such matters were ollowed up by the internal audit

unction to determine the status o implementation o remedial measures by Management.

On a quarterly basis, the Internal Audit Department submits the audit report and the audit plan to the Audit Committee

or review and approval.

Statemento Internal Control


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11


OTHER KEY ELEMENTS OF INTERNAL CONTROL

Apart rom risk management and internal audit, the Group also put in place the ollowing elements as part o its internal

control system:

An Organization Structure with ormally dened lines o responsibilities, accountability and delegation o

authority;

Financial Authority Limits were dened to ensure a clear line o responsibility or each level o Management;

Regular Management Meetings involving the MD, COO and senior management were held to review perormance

and to promptly address any operational issues that arose;

BS EN MS ISO 9001:2000 Quality Management System was in place to monitor and ensure the quality requirements

o the Groups products and services to meet customers expectation;

BS EN MS ISO 14001:2004 Environment Management System was in place or continual improvement in

Environmental Management which strictly prevented pollution rom our activities, products and services and

ensure they were in compliance with environmental and legal requirements;

Established System O Operation and Financial Reporting to Management Committee, Audit Committee and

Board based on quarterly results and budgets;

Regular Training and Awareness Programmes were conducted to emphasize the importance o corporate

governance, risk management and internal control; and

Formal Employee Annual Appraisal System to evaluate and measure employees perormance and their

competency.

CONCLUSION

The Board is o the opinion that the internal control systems are in place or the year under review and up to the date

o issuance o annual report and nancial statements, based on the issues highlighted by the Management, Internal

and External Auditors.

Statement o Internal Control (contd)


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Grid Casting


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1


AuditCommitees Report

The Board o Directors is pleased to present its report on the Audit Committee and the activities carried out during the

nancial year ended 31st December 2009.

COMPOSITION OF AUDIT COMMITTEE AND MEETINGS

During the nancial year ended 31st December 2009, the Audit Committee held our (4) meetings. The members o

the committee together with their attendance are set out below:-

Member Directorship No.OMeetingsAttended

Battchoo Ratilal Independent & 2/2

(Chairman o the Committee) Non Executive Director

(Appointed w.e.. 28/7/2009)

Khoo Khay Chye Independent & 4/4


AbduR-Rani Bin Omar Non-Independent & 1/1

(Appointed w.e.. 14/10/2009) Non-Executive Director

Dato IR. Nik Mohammed Independent & 2/3

Bin Nik Abdullah Non-Executive Director(Chairman o the Committee)

(Resigned w.e.. 14/10/2009)

Yeo Wee Thow Independent & 3/3

(Resigned w.e.. 11/8/2009) Non-Executive Director

TERMS OF REFERENCE

The Terms o Reerence or the Audit Committee (the Committee) as stipulated by the Board o Directors are as

ollows:-

PRIMARY PURPOSE

The purposes o the Committee are as ollows:-

To provide assistance to the Board in ullling its duciary responsibilities relating to corporate accounting and

reporting practice or Tai Kwong Yokohama Berhad as a group (the Group);

To maintain, through regularly scheduled meetings, a direct line o communication between the Board and the

External Auditors as well as the Internal Auditors;

To act upon the Boards request to investigate and report on any issue o concern in regard to the management

o the Group;

Review existing practices and recommend to Management to ormalize a code o ethics or all executives and

sta o the Group;

To ensure compliance with any such changes/amendments/updates/insertions o the listing requirements and

any other applicable laws and regulations, arising thereo rom time to time.


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14

MEMBERSHIP

The Committee shall be appointed by the Board rom amongst their members and shall consist o not less than

two (2) members who must be non-executive directors, and are independent.

All members shall be nancial literate.

ROLESANDRESPONSIBILITY

The unctions and duties are as ollows: -

To act as an intermediary between management or other employees, and the external auditors;

To discuss problems and reservations arising rom the interim and nal audits, and any matters the External Auditors

may wish to discuss in the absence o the management where necessary;

To recommend to the Board the appointment o the External Auditors and the audit ee thereo;

To review the adequacy o the scope, unctions, competency and resources o the internal audit unctions and

that it has the necessary authority to carry out its work;

To review the internal audit programme, processes, the results o the internal audit programme, processes or

investigation undertaken and whether or not appropriate action is taken on the recommendations o the internal

audit unction;

To review the quarterly results and year-end nancial statements prior to the approval by the Board, ocusing

particularly on: -

(i) any changes in accounting policies and practice;

(ii) major judgmental areas;

(iii) signicant and unusual events arising rom the audit;

(iv) going concern assumption;

(v) compliance with the accounting standards, regulatory requirements and legal requirements;

(vi) the quality and eectiveness o the entire internal control system;

(vii) the accuracy and adequacy o the disclosure o inormation essential to a air and ull presentation o the

nancial aairs o the Company.

Carry out any other unction that may be mutually agreed upon by the Committee and the Board which would

be benecial to the Group and ensure the eective discharge o the Committees duties and responsibilities;

Reports to Bursa Securities on any matter reported by it to the Board o the Group, which has not been satisactorily,

resolved resulting in a breach o Bursa Securities Listing Requirements.

Review and consider letter o resignation rom external auditors;

Consider any related party transaction and confict o interest that may arise within the Group;

Continuously engaging in discussions with Chairman o the Board o Directors, Senior Management and FinanceDirector, External and Internal Auditors.

AUTHORITY

The Committee shall,

have authority to investigate any matters o the Group and its subsidiaries, within its terms o reerence;

have ull and unrestricted access to any inormation concerning the Group;

have direct communication channels with the External Auditors and persons carrying out the internal audit

unction;

have the resource required to perorm its duties as well as to obtain independent proessional or other advice as

necessary;

be able to convene meetings with External Auditors and Internal Auditors excluding the attendance o the Directorsand employees o the Group, whenever deemed necessary.

Audit Commitees Report (contd)


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1


MEETINGS AND QUORUM

The quorum or the Committee Meeting shall be at least two (2) members; the majority present must be Independent

Directors.

Meeting shall be held not less than 4 times a year and as when required during each nancial year.

The External Auditors has the right to appear and be heard at any meeting o the Audit Committee and request

a meeting i they deem necessary.

The Chie Executive Ocer, Director o Finance & Admin and representatives o the External and Internal

Auditors shall normally attend the meetings. Other Board members may attend meetings upon invitation o the

Committee. The Internal Auditors shall be in attendance at all meetings to present and discuss the audit ndings, the

recommendations and the ollow-up on all relevant decisions made.

The secretary shall circulate the notice o meetings to the members o Committee prior to the meeting and shall

be entrusted to record, saekeeping and production o all proceedings and minutes o the Committee.

A resolution in writing signed and approved by a majority o the Committee and who are sucient to orm a

quorum shall be as valid and eective as i it had been passed at a Meeting o the Committee duly called and

constituted.

MINUTES

The minutes o each meeting shall be kept and distributed to each member. All minutes o meetings shall be circulated

to every member o the Board. The Chairman o the Committee shall report on each meeting to the Board.

ACTIVITIES

The Committee carried out the ollowing activities during the nancial year ended 31 December 2009:-

Review the audit reports o the Group prepared by the Internal and External Auditors and major ndings by the

auditors and management responses thereon;

Review the quarterly and annual reports o the Group prior to submission to the Board or consideration and

approval;

Review the related party transactions entered into by the Group and the disclosure o such transactions in the

annual report, quarterly announcemment and circular on recurrent related party transactions to ensure compliance

with Listing Requirements;

Review and approval granted or the External and Internal Auditors annual audit plans.

Audit Commitees Report (contd)


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1

Yokohama Battery


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1


Chairmans Statement

OnbehaloTheBoard

oDirectors, it ismy

pleasure to present

the Annual Report

andAuditedFinancialStatements o Ta i

Kwong Yokohama

B e r ha d a nd i t s

subsidiary companies

or thefnancialyear

ended31December

2009.

MARKET OVERVIEW

In general, the recovery rom the global economic slowdown has given rise to

a higher demand in the automotive battery replacement market or the year

under review. To get a better balance in domestic and export ratio, the Group

will be exploring new markets overseas, especially when tari barriers are being

lowered in certain countries.

PERFORMANCE REVIEW

The Group achieved a record prot beore tax o RM18.4 million, a substantial

increase over the preceding years RM2.2million. Revenue showed a reduced

level to RM183.3million (6% decrease against RM195.1million in the previous

year) due to a downtrend in lead prices, pushing down selling prices.

Despite a lower revenue, the Group recorded higher prot margins, as a result

o higher production volume and more ecient utilization o banking acilities.

The receipt o a judgment sum and interest o RM1.9million in respect o a legal

suit also contributed to the better results or 2009.

The Groups net tangible assets stood at RM1.64 per share as compared to

RM1.30 per share in 2008.

OPERATIONS REVIEW

Learning rom experience and growing based on knowledge, is the basic

philosophy o the TKY Group. The single largest non-controllable risk in our

business is the sudden drop in the price o lead. This is the largest cost

component o our batteries, and will impact us in drop o inventory value and

downward adjustment o sale prices. We plan to mitigate this by expanding the

capacity o our lead reclamation plant and also to introduce new equipment

and methods o reclamation to urther lower the cost o internally consumed

secondary lead.

Our newly established Electro-Chemistry Research Centre is also introducingnew alloys and paste ormulae that may bring about lower cost o batteries

with higher quality. The introduction o our new Beta Series o MF batteries

with the new paste and alloy technology will spearhead our penetration into

local and export markets.

The usage o solar-powered battery plate curing ovens and introduction o deep

cycle batteries, conrms our determination towards having a share in the eco-

riendly and environmentally pie in this seemingly dirty industry.

The uture looks bright, taking all into consideration and we look orward to

meeting the surge in demand or batteries in the hot zero emission mobility

market.


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1

PROSPECTS

The Group has continuously been taking proactive actions towards cost optimization and achieving economies o scale

and this has shown positive results in 2009 whereby the Group recorded a prot beore tax o RM18.4million.

The latest changes in the shareholding in the Company by our major shareholder, HSG Investment Pte. Ltd., a subsidiary

o Hup Soon Global Corporation Limited (HSGC), a company listed in the Singapore Stock Exchange, has resulted in

the Company becoming a subsidiary o HSGC on 24 March 2010.

The Group is maintaining an optimistic outlook perormance or the current year and will take the necessary measuresto meet any expected economic challenges.

APPRECIATION

On behal o the Board o Directors, I would like to express my sincere appreciation to the management and sta or

their commitment and dedication. I also wish to extend my heartelt thanks to our directors, Mr. Bong Boon Fah and

Mr Yeo Wee Thow who had resigned during the year or their past contributions to the Group.

CHOW SIEW HON

Chairman

26 April 2010

Chairmans Statement (contd)


20/97

1


Profle o the Board o Directors

Mr Chow Siew HonChairman & Director

Mr Chow Siew Hon, a Malaysian, aged 63, was appointed as Managing Director o Tai

Kwong Yokohama Berhad on 29 March 1995 and as the Chairman on 1 January 2010.

Mr Chow has over 40 years o working experience in the battery industry. His involvement in

the battery business started when he joined his ather in setting up the battery reconditioning

operation in Kuala Lumpur in 1967. Over the last 40 years he has been intensively involved

in the development o the Group to become a leading battery manuacturer and distributor

in Malaysia. Mr Chow is the Chairman o the Battery Industries Association o Malaysia. He

also holds directorship in several other private limited companies in Malaysia.

Mr Chow has no amily relationship with any Director and / or major shareholder o the Company. He has indirect

shareholding o 22,000 ordinary shares in the Company. He does not have any confict o interest with the Company

and has not been convicted o any oences within the past 10 years. He has attended all ve (5) board meetings heldin the nancial year.

Standing From Let to Right

DatoIr.NikMohammedbinNikAbdullah

En.AbdulR-RanibinOmar

MrBattchooRatilal

MrKhooKhayChye

Seated From Let to Right

MrChowSiewHon

MrGohSweeHeng

Dr.PatrickYongMianThong


21/97

0

Prole o the Board o Directors (contd)

Dr. Patrick Yong Mian Thong,Chie Executive Ofcer

Dr. Yong Mian Thong, a Malaysian, aged 57, was appointed as the Chie Executive Ocer

o Tai Kwong Yokohama Berhad on 1 January 2010. Prior to that, and since 1 July 2008

was the Chie Operating Ocer.

Prior to joining the Group, he was the ounder and Managing Director o SularidTechnologies since 2004 which was renamed Borid Technologies ater it was sold to the

Hup Soon Global Corporate Group. Dr. Yong started his career as an engineer with the

National Electricity Board o Malaysia (LLN) upon graduating rom the Polytech o Brighton

in the United Kingdom with a BSc(Hons) in Electronics and Electrical Engineering under

an LLN Scholarship. He let civil service in 1989 to join the corporate world and subsequently entered the eld o

Consultancy in Electrical Engineering.

Throughout his line o work, he established his prociency in electrical distributions systems and pursued research in

eld o eciency in energy conversion leading to a PhD in Electrical Engineering.

He has no amily relationship with any Director and / or major shareholder o the Company. He does not have any

confict o interest with the Company and has not been convicted o any oences within the past 10 years. He has

attended all ve (5) board meetings held in the nancial year.

Mr Goh Swee HengNon-independent & Non-Executive Director

Mr Goh Swee Heng, a Malaysian, aged 60, was appointed as a Non-Independent

and Non-Executive Director o Tai Kwong Yokohama Berhad on 5 March

2008.

Mr Goh is currently the Controlling Director or Automotive / Industrial Supplies

Business o Hup Soon Global Corporation and also Country Manager in Malaysia.

Mr Goh rst joined the Borneo Company in 1967 and worked his way up to

various senior positions. Prior to assuming his position as Managing Director in

1990 o Borneo Technical Co. (M) Sdn. Bhd., Mr Goh held the positions o Divisional Manager, Deputy General Manager

and Executive Director. As part o his overall responsibilities, he also held positions o Managing Director, Borneo Technical

(Thailand) Ltd and Inchcape Technical Singapore Ptd. Ltd. Mr Goh has been involved in the automotive / industrial

supplies business or over 30 years and is instrumental in the start-up o Kwikpart Sdn. Bhd. He has also completed

various General Management Programmes at Sunridge Park-UK, Insead and Ashridge.



attended all ve (5) board meetings held in the nancial year.


22/97

1



Encik Abdul R-Rani bin OmarNon-Independent & Non-Executive Director

Encik AbduR-Rani Bin Omar, a Malaysian, aged 52, was appointed as an Non-Independent

and Non-Executive Director o Tai Kwong Yokohama Berhad on 17 November 2000 and as

a member o Audit Committee on 14 October 2009.

Encik Abdu R-Rani graduated with a Bachelor o Business Administration with Honours romUniversity o Malaya in 1981. He is the Executive Chairman or the Teguh Group o Companies.

The Group is principally involved in the supply, delivery, installation and commissioning o

electrical substations and other peripherals to the oil and gas industry. He is also a Director

o several other private limited companies in Malaysia.



attended our (4) out o the ve (5) board meetings held in the nancial year.

Mr Khoo Khay ChyeIndependent & Non-Executive Director

Mr. Khoo Khay Chye, a Malaysian, aged 64, was appointed as an Independent and Non-

Executive Director o Tai Kwong Yokohama Berhad on 5 March 2008. He is a member o

the Audit Committee and Nomination & Remuneration Committee.

Mr Khoo graduated rom Institute o Motor Industry, UK and a Commissioned Ocer in

the Electrical and Mechanical Engineering Corps o the Malaysian Armed Forces.

He has no amily relationship with any Director and / or major shareholder o the Company.

He does not have any confict o interest with the Company and has not been convicted o any oences within the past

10 years. He has attended all ve (5) board meetings held in the nancial year.


23/97

Dato Ir. Nik Mohammed bin Nik AbdullahDPMJ, JMK, PIS, PJMIndependent & Non-Executive

Dato Ir. Nik Mohammed bin Nik Abdullah, a Malaysian, aged 68, was appointed as the

Independent and Non-Executive Director o Tai Kwong Yokohama Berhad on 29 September

2008.

DatoIr. Nik Mohammed graduated rom Brighton College o Technology in Electrical

Engineering in 1966 and is a Chartered Engineer and a corporate member o Institute o

Engineers Malaysia. He also holds a competent Electrical Engineer Certicate.

DatoIr. Nik Mohammed retired rom the post o Deputy General Manager (Customer Services) department in TNB or

4 years, he was responsible or the continuous development and improvement o customer services in TNB apart rom

handling the commercial and other matters. During his period, he was also exposed to the media and requently

appear on live TV talk shows on behal o TNB.

During his 30 years service with LLN/Tenaga Nasional, he had served in various capacities in Butterworth, Muar, Kuala

Lumpur and Johor Bahru. Most o his tenure within LLN was in distribution department, the longest being or 13 years

in Johor Bahru where he served as Senior District Manager, Deputy Area Manager (South) and Area Manager (South)

till early January 1993.



attended our (4) out o the ve (5) board meetings held in the nancial year.

Mr Battchoo RatilalC.A.(M), FTII, B.COM, CPA (Aust), CFPIndependent & Non-Executive Director

Mr Battchoo Ratilal, a Malaysian, aged 65, was appointed as an Independent Non-

Executive Director o Tai Kwong Yokohama Berhad on 28 July 2009 and as theChairman o the Audit Committee on 14 October 2009.

Mr Battchoo is a graduate o the University o Newcastle, Australia. A member o the

Malaysia Institute o Accountants, he is a Certied Practicing Accountant and a member

o the Malaysian Institute o Taxation. Upon graduation, he embarked on a career in

accounting as an internal auditor with the electronics giant, Philips in Australia. On

his return to Malaysia, he joined the Systems Division o Olivetti, Malaysia.

Ater a stint in marketing at Olivetti, he was appointed Finance Manager at United Manuacturing, a signicant distributor

o construction and earth moving equipment. Thereater, he was a manager with a notable public accounting rm.

In 1979, he ounded SWA Management Consultants and in 1989, ounded Battchoo & Co.

Battchoo Ratilal has over 36 years o experience in the eld o proessional accounting.



attended all two (2) board meetings held in the nancial year.



24/97

Directors Report ... 24

Statement by Directors ... 28

Statutory Declaration . . . 28

Report of the Auditors . . . 29

Income Statements . . . 31

Balance Sheets . . . 32

Statements of Changes in Equity ... 34

Cash Flow Statements ... 35

Notes to the Financial Statements ... 37

fnancialstatements


25/97

24

The directors have pleasure in presenting their report together with the audited nancial statements o the Group and

o the Company or the year ended 31 December 2009.

Principal activities

The principal activity o the Company is investment holding. The principal activities o the subsidiaries are shown in Note

15 to the nancial statements.

There have been no signicant changes in the nature o the principal activities during the year except that certain

subsidiaries have turned dormant as disclosed in Note 15 to the nancial statement.

Results

Group Company

RM RM

Prot/(loss) or the year 14,817,864 4,768,546

Attributable to:

Equity holders o the Company 14,819,581 4,768,546Minority interest (1,717)

14,817,864 4,768,546

There were no material transers to or rom reserves or provisions during the year, other than as disclosed in the nancial

statements.

In the opinion o the directors, the results o the operations o the Group and the Company during the year were not

substantially aected by any item, transaction or event o a material and unusual nature.

Dividend

No dividend has been paid or declared by the Company since the end o the previous year.

At the orthcoming Annual General Meeting (AGM), a nal dividend in respect o year ended 31 December 2009, o

5% less 25% taxation on 43,560,000 ordinary shares, amounting to a dividend payable o RM1,633,500 (5 sen per

ordinary share) will be proposed or shareholders approval. The nancial statements or the current year do not refect

this proposed dividend. Such dividend, i approved by shareholders, will be accounted or in equity as an appropriation

o retained earnings in the year ending 31 December 2010.

Directors report


26/97

25


Directors

The names o the directors o the Company in oce since the date o the last report and at the date o this report are:

Chow Siew Hon

Yong Mian Thong

Goh Swee Heng

AbduR-Rani bin Omar

Khoo Khay Chye

DatoIr Nik Mohammed Bin Nik AbdullahBattchoo Ratilal (appointed on 28 July 2009)

Yeo Wee Thow (resigned on 11 August 2009)

Bong Boon Fah (resigned on 31 December 2009)

Directors benets

Neither at the end o the year, nor at any time during that year, did there subsist any arrangement to which the Company

was a party, whereby the directors might acquire benets by means o the acquisition o shares in or debentures o the

Company or any other body corporate.

Since the end o the previous year, no director has received or become entitled to receive a benet (other than benets

included in the aggregate amount o emoluments received or due and receivable by directors or the xed salary o a

ull-time employee o the Company as shown in Note 9 to the nancial statements) by reason o a contract made by

the Company or a related corporation with any director or with a rm o which he is a member, or with a company in

which he has a substantial nancial interest.

Directors interests

According to the register o directors shareholdings, the interests o directors in oce at the end o the year in shares

in the Company and its related corporations during the year were as ollows:

Number o ordinary shares o RM1 each

1.1.2009 Acquired Sold 31.12.2009

The Company

Direct interest:

Chow Siew Hon 3,921,802 3,921,802

AbduR-Rani bin Omar 2,200,000 2,200,000

Indirect interest:

Chow Siew Hon 652,519 652,519

Goh Swee Heng 31,800 31,800

The indirect interest was pursuant to Section 134(12)(c) o the Companies (Amendment) Act, 2007 in relation to shares

held by the spouse and/or children o the director.

The other directors in oce at the end o the year had no interest in shares in the Company or its related corporations

during the year.

Directors report (Contd)


27/97

26

Other statutory inormation

(a) Beore the income statements and balance sheets o the Group and o the Company were made out, the directors

took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing o o bad debts and the making

o provision or doubtul debts and satised themselves that all known bad debts had been written o and

that adequate provision had been made or doubtul debts;

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting

records in the ordinary course o business had been written down to an amount which they might be

expected so to realise.

(b) At the date o this report, the directors are not aware o any circumstances which would render:

(i) the amount written o or bad debts or the amount o the provision or doubtul debts in the nancial

statements o the Group and the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the nancial statements o the Group and o the Company

misleading.

(c) At the date o this report, the directors are not aware o any circumstances which have arisen which would render

adherence to the existing method o valuation o assets or liabilities o the Group and o the Company misleadingor inappropriate.

(d) At the date o this report, the directors are not aware o any circumstances not otherwise dealt with in this report

or nancial statements o the Group and o the Company which would render any amount stated in the nancial

statements misleading.

(e) As at the date o this report, there does not exist:

(i) any charge on the assets o the Group or o the Company which has arisen since the end o the year which

secures the liabilities o any other person; or

(ii) any contingent liability o the Group or o the Company which has arisen since the end o the year.

() In the opinion o the directors:

(i) no contingent or other liability has become enorceable or is likely to become enorceable within the

period o twelve months ater the end o the year which will or may aect the ability o the Group or o

the Company to meet their obligations when they all due; and

(ii) no item, transaction or event o a material and unusual nature has arisen in the interval between the end

o the year and the date o this report which is likely to aect substantially the results o the operations o

the Group or o the Company or the year in which this report is made.



28/97

27


Signicant events

In addition to the signicant events disclosed elsewhere in this report, other signicant events are as ollows:

(a) Distribution agreement with Borneo Technical Co (M) Sdn Bhd

During the year the Group entered into a Distribution Agreement with Borneo Technical Co (M) Sdn Bhd (BTCM),

a wholly owned subsidiary o HSGC or distribution o the Groups brand, YOKOHAMA on the exclusive basis.

BTCM has a well established retail network across the Peninsular and the East o Malaysia in the battery replacement

market. The agreement is strategised towards substantial reduction in expenses associated with distribution,

improve eective and ecient distribution to the battery replacement market and to allow resouces and time to

be channelled towards attaining corporate objectives in the long term. The agreement also entitles the Group to

a share o distribution prots o BTCM, took eect rom June 2009 and is renewable on the yearly basis.

(b) Change in principal activities o subsidiaries

Following the distribution strategy adopted by the Group, the existing retail subsidiaries o the Group have ceased

operations during the year and have turned dormant. Details o the subsidiaries are disclosed in Note 15 to the

nancial statements.

Subsequent events

Details o subsequent events are disclosed in Note 34 to the nancial statements.

Auditors

The auditors, Ernst & Young, have expressed their willingness to accept reappointment.

Signed in accordance with a resolution o the directors dated 31 March 2010.

Chow Siew Hon Yong Mian Thong



29/97

28

We, Chow Siew Hon and Yong Mian Thong, being two o the directors o Tai Kwong Yokohama Berhad, do hereby state

that, in the opinion o the directors, the accompanying nancial statements set out on pages 24 to 84 are drawn up in

accordance with the provisions o the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia

so as to give a true and air view o the nancial position o the Group and o the Company as at 31 December 2009

and o the results and the cash fows o the Group and o the Company or the year then ended.

Signed in accordance with a resolution o the directors dated 31 March 2010.

Chow Siew Hon Yong Mian Thong

Statementby Directors

Pursuant to Section 169(15) o the Companies Act, 1965

I, Tan Ah Moi, being the ocer primarily responsible or the nancial management o Tai Kwong Yokohama Berhad, do

solemnly and sincerely declare that the accompanying nancial statements set out on pages 24 to 84 are in my opinion

correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue o the provisions

o the Statutory Declarations Act, 1960.

Subscribed and solemnly declared )

by the abovenamed Tan Ah Moi ) Tan Ah Moi

at Kuala Lumpur in the Federal Territory )

on 31 March 2010 )

Beore me,

Pesuruhjaya Sumpah, Malaysia

R. Vasugi Ammal, PJK

No : (W480)

StatutorydeclarationPursuant to Section 169(16) o the Companies Act, 1965


30/97

29


Report on the nancial statements

We have audited the nancial statements o Tai Kwong Yokohama Berhad, which comprise the balance sheets as at

31 December 2009 o the Group and o the Company, and the income statements, statements o changes in equity

and cash fow statements o the Group and o the Company or the year then ended, and a summary o signicant

accounting policies and other explanatory notes, as set out on pages 24 to 84.

Directors responsibility or the fnancial statements

The directors o the Company are responsible or the preparation and air presentation o these nancial statements in

accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes:

designing, implementing and maintaining internal control relevant to the preparation and air presentation o nancial

statements that are ree rom material misstatement, whether due to raud or error; selecting and applying appropriate

accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors responsibility

Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit

in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical

requirements and plan and perorm the audit to obtain reasonable assurance whether the nancial statements are ree

rom material misstatement.

An audit involves perorming procedures to obtain audit evidence about the amounts and disclosures in the nancial

statements. The procedures selected depend on our judgement, including the assessment o risks o material misstatement

o the nancial statements, whether due to raud or error. In making those risk assessments, we consider internal control

relevant to the Companys preparation and air presentation o the nancial statements in order to design audit procedures

that are appropriate in the circumstances, but not or the purpose o expressing an opinion on the eectiveness o the

Companys internal control. An audit also includes evaluating the appropriateness o the accounting policies used and

the reasonableness o accounting estimates made by the directors, as well as evaluating the overall presentation o the

nancial statements.

We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis or our audit

opinion.

Opinion

In our opinion, the nancial statements have been properly drawn up in accordance with Financial Reporting Standards

and the Companies Act 1965 in Malaysia so as to give a true and air view o the nancial position o the Group and o

the Company as at 31 December 2009 and o their nancial perormance and cash fows or the year then ended.

IndependentAuditors Report

to the members o Tai Kwong Yokohama Berhad (Incorporated in Malaysia)


31/97

30

Report on other legal and regulatory requirements

In accordance with the requirements o the Companies Act 1965 in Malaysia, we also report the ollowing:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company

and its subsidiaries o which we have acted as auditors have been properly kept in accordance with the provisions

o the Act.

(b) We have considered the accounts and the auditors report o the subsidiary o which we have not acted as

auditors, which is indicated in Note 15 to the nancial statements.

(c) We are satised that the accounts o the subsidiaries that have been consolidated with the nancial statements

o the Company are in orm and content appropriate and proper or the purposes o the preparation o the

consolidated nancial statements and we have received satisactory inormation and explanations required by us

or those purposes.

(d) The auditors reports on the accounts o the subsidiaries were not subject to any qualication and did not include

any comment required to be made under Section 174(3) o the Act.

Other matters

This report is made solely to the members o the Company, as a body, in accordance with Section 174 o the Companies

Act 1965 in Malaysia and or no other purpose. We do not assume responsibility to any other person or the content

o this report.

Ernst & Young Yap Seng Chong

AF: 0039 No. 2190/12/11(J)

Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia

31 March 2010

Independent Auditors Report

to the members o Tai Kwong Yokohama Berhad (Contd)


32/97

31


Group Company

2009 2008 2009 2008

Note RM RM RM RM

Revenue 3 183,333,378 195,126,243 7,876,400 2,942,340

Cost o sales 4 (147,043,327) (166,281,274) (18,253) (25,809)

Gross prot 36,290,051 28,844,969 7,858,147 2,916,531

Other income 5 5,770,546 4,652,235 654,197 400,750

Distribution expenses (6,764,234) (9,207,496)

Administrative expenses (13,288,683) (12,717,739) (2,120,048) (1,326,610)

Other expenses (597,883) (4,720,897) (72,809) (13,520)

Operating prot 21,409,797 6,851,072 6,319,487 1,977,151

Finance costs 6 (2,975,783) (4,609,341)

Prot beore tax 7 18,434,014 2,241,731 6,319,487 1,977,151

Income tax expense 10 (3,616,150) (1,735,686) (1,550,941) (718,750)

Prot or the year 14,817,864 506,045 4,768,546 1,258,401

Attributable to:

Equity holders o the Company 14,819,581 507,670 4,768,546 1,258,401

Minority interest (1,717) (1,625)

14,817,864 506,045 4,768,546 1,258,401

Earnings per share attributable

to equity holders o

the Company (sen) 11 34.02 1.17

Income statements

or the year ended 31 December 2009

The accompanying notes orm an integral part o the nancial statements.


33/97

32

Group Company

2009 2008 2009 2008

Note RM RM RM RM

Assets

Non-current assets

Property, plant and equipment 12 50,880,420 46,890,611 8,167 3,795

Investment properties 13 658,714 673,068 581,886 595,111

Prepaid land lease payments 14 15,658,139 15,920,828 177,553 181,588

Investments in subsidiaries 15 39,986,265 11,501,745

Investment in an associate 16

Amounts due rom subsidiaries 17 7,077,232 33,219,194

Deerred tax assets 18 1,037,223 2,636,741

68,234,496 66,121,248 47,831,103 45,501,433

Current assets

Inventories 19 59,337,708 36,295,632

Trade and other receivables 17 29,447,895 27,294,621 6,851,945 2,169,236

Government grant receivable 20 83,518 33,276

Tax recoverable 1,883,916 3,175,856 1,550,664 2,354,353

Cash and bank balances 21 1,856,848 7,267,422 29,679 40,385

92,609,885 74,066,807 8,432,288 4,563,974

Non-current asset classied

as held or sale 22 292,499 292,499

92,609,885 74,359,306 8,432,288 4,856,473

Total assets 160,844,381 140,480,554 56,263,391 50,357,906

Equity and liabilities

Equity attributable to equity

holders o the CompanyShare capital 23 43,560,000 43,560,000 43,560,000 43,560,000

Share premium 2,167,580 2,167,580 2,167,580 2,167,580

Retained earnings 24 25,666,374 10,846,793 8,238,272 3,469,726

71,393,954 56,574,373 53,965,852 49,197,306

Minority interest 328 2,045

Total equity 71,394,282 56,576,418 53,965,852 49,197,306

Balance Sheets

as at 31 December 2009


34/97

33


Group Company

2009 2008 2009 2008

Note RM RM RM RM

Non-current liabilities

Borrowings 25 11,224,720 12,657,808

Deerred tax liabilities 18 2,656,686 2,578,145 1,550,664 718,750

13,881,406 15,235,953 1,550,664 718,750

Current liabilities

Borrowings 25 62,354,197 56,857,626

Trade and other payables 27 12,968,780 11,059,906 746,875 441,850

Income tax payable 245,716 750,651

75,568,693 68,668,183 746,875 441,850

Total liabilities 89,450,099 83,904,136 2,297,539 1,160,600

Total equity and liabilities 160,844,381 140,480,554 56,263,391 50,357,906


Balance Sheets

as at 31 December 2009 (Contd)


35/97

34

Attributable to equity holders o the Company

Non-

distributable Distributable

Share Share Retained

capital premium earnings Minority Total

(Note 23) (Note 24) Total interest equity

RM RM RM RM RM RM

Group

At 1 January 2008 43,560,000 2,167,580 12,917,875 58,645,455 3,670 58,649,125

Proft/(loss) or the year 507,670 507,670 (1,625) 506,045

Dividend (Note 28) (2,578,752) (2,578,752) (2,578,752)

At 31 December 2008 43,560,000 2,167,580 10,846,793 56,574,373 2,045 56,576,418

At 1 January 2009 43,560,000 2,167,580 10,846,793 56,574,373 2,045 56,576,418

Proft/(loss) or the year 14,819,581 14,819,581 (1,717) 14,817,864

At 31 December 2009 43,560,000 2,167,580 25,666,374 71,393,954 328 71,394,282

Non-

distributable Distributable

Share Share Retained Total

capital premium earnings equity

(Note 23) (Note 24)

RM RM RM RM

Company

At 1 January 2008 43,560,000 2,167,580 4,790,077 50,517,657

Prot or the year 1,258,401 1,258,401

Dividend (Note 28) (2,578,752) (2,578,752)

At 31 December 2008 43,560,000 2,167,580 3,469,726 49,197,306

At 1 January 2009 43,560,000 2,167,580 3,469,726 49,197,306

Prot or the year 4,768,546 4,768,546

At 31 December 2009 43,560,000 2,167,580 8,238,272 53,965,852

Statemento Changes in Equity




36/97

35


Group Company

2009 2008 2009 2008

RM RM RM RM

Cash fows rom operating activities

Prot beore tax 18,434,014 2,241,731 6,319,487 1,977,151

Adjustments or:

Interest income (876,353) (12,242)

Dividend income (7,848,000) (2,875,000)

Gain on disposals o property, plant

and equipment (424,126) (50,782)

Gain on disposal o non-current

asset classied as held or sale (87,501) (87,501)

Gain on disposal o an

investment property (400,750) (400,750)

Unrealised oreign exchange gain (175,549) (116,126)

Interest expenses 2,975,783 4,609,341

Depreciation o property, plant

and equipment 4,494,893 4,030,445 2,716 2,901

Property, plant and equipment

written o 388,581 807,962

Depreciation o investment properties 14,354 20,354 13,225 20,997Amortisation o prepaid land

lease payments 262,689 267,417 4,035 8,763

Write-down o inventories 225,664 1,626,462

Allowance or doubtul debts 70,303 186,451 13,500

Reversal o allowance

or doubtul debts (391,783) (3,756,890) (566,696)

Bad debts written o 70,279 3,624,521 70,279

Operating prot/(loss) beore

working capital changes 24,981,248 13,077,894 (2,092,455) (1,252,438)

(Increase)/decrease in inventories (23,267,740) 17,187,980

(Increase)/decrease in trade and

other receivables (1,703,843) 1,617,614 (837,100) 2,846,502Increase in government grant receivable (50,242) (33,276)

Increase/(decrease) in trade and

other payables 1,883,624 (7,239,434) 305,025 179,903

Cash generated rom/

(used in) operations 1,843,047 24,610,778 (2,624,530) 1,773,967

Taxes (paid)/reunded (1,151,086) (3,402,847) 84,662

Government grant received 25,250 15,000

Net cash generated rom/(used in)

operating activities 717,211 21,222,931 (2,539,868) 1,773,967

Cash FlowStatements



37/97

36

Group Company

2009 2008 2009 2008

RM RM RM RM

Cash fows rom investing activities

Purchase o property,

plant and equipment (7,405,995) (436,795) (7,088) (1,399)

Proceeds rom disposals o

property, plant and equipment 764,647 285,333 Proceed rom disposal o

non-current asset classied as

held or sale 380,000 380,000

Proceed rom disposal o an

investment property 780,000 780,000

Interest received 876,353 12,242

Dividend received 2,156,250

Net cash (used in)/generated rom

investing activities (5,384,995) 640,780 2,529,162 778,601

Cash fows rom nancing activities

Repayment o hire purchase and

nance lease liabilities (2,827,000) (5,765,394)

Proceeds rom term loans 2,767,303

Repayment o term loans (2,776,489) (2,732,971)

Proceeds rom/(repayment o) other

short term borrowings 14,489,059 (1,248,146)

Interest paid (2,975,783) (4,609,341)

Dividend paid (2,578,752) (2,578,752)

Net cash generated rom/

(used in) nancing activities 8,677,090 (16,934,604) (2,578,752)

Net increase/(decrease) in cash

and cash equivalents 4,009,306 4,929,107 (10,706) (26,184)

Eect o oreign exchange

rate changes (22,681) 89,914

Cash and cash equivalents

at beginning o year (8,981,427) (14,000,448) 40,385 66,569

Cash and cash equivalents

at end o year (Note 21) (4,994,802) (8,981,427) 29,679 40,385

Cash FlowStatements

or the year ended 31 December 2009 (Contd)



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1. Corporate inormation

The Company is a public limited company, incorporated and domiciled in Malaysia, and is listed on the Main

Market o Bursa Malaysia Securities Berhad. The registered oce o the Company is located at Suite 13.02, 13th

Floor, Menara Tan & Tan, 207 Jalan Tun Razak, 50400 Kuala Lumpur. The principal place o business o the

Company is located at Lot 1238, Batu 23, Jalan Kachau, Semenyih - Sungai Lalang, 43500 Semenyih, Selangor

Darul Ehsan.

The principal activity o the Company is investment holding. The principal activities o the subsidiaries are shown

in Note 15. There have been no signicant changes in the nature o the principal activities during the year exceptthat certain subsidiaries have turned dormant as disclosed in Note 15.

Related companies are companies within the Tai Kwong Yokohama Berhad group and the companies ultimately

controlled by Hup Soon Global Corporation Limited (HSGC).

HSG Investments Pte Ltd (HSGI), a wholly-owned subsidiary o HSGC, was a substantial corporate shareholder o

the Company. Both HSGI and HSGC are companies incorporated in the Republic o Singapore. HSGI is a private

limited company whilst HSGC is a public limited company listed on the Singapore Exchange Securities Trading

Limited. On 24 March 2010, based on a take-over oer, HSGI received unconditional and valid acceptances to

acquire the shares o the Company resulting in HSGI holding more than 50% interest in the Company. Accordingly,

HSGI and HSGC became the immediate and ultimate holding companies o the Company. Further details o the

take-over oer are disclosed in Note 34(b).

Mr Chow Siew Hon was a substantial shareholder o the Company up to 26 March 2010. Accordingly, individualsconnected and/or related to Mr Chow Siew Hon are reerred to as related parties.

The nancial statements were authorised or issue by the Board o Directors in accordance with a resolution o

the directors on 31 March 2010.

2. Signicant accounting policies

2.1 Basis o preparation

The nancial statements comply with the provisions o the Companies Act, 1965 and applicable Financial

Reporting Standards (FRSs) in Malaysia.

The nancial statements o the Company have also been prepared on the historical cost basis unless otherwiseindicated. The nancial statements are presented in Ringgit Malaysia (RM).

2.2 Summary o signifcant accounting policies

(a) Subsidiaries and basis o consolidation

(i) Subsidiaries

Subsidiaries are entities over which the Group has the ability to control the nancial and

operating policies so as to obtain benets rom their activities. The existence and eect o

potential voting rights that are currently exercisable or convertible are considered when

assessing whether the Group has such power over another entity.

In the Companys separate nancial statements, investments in subsidiaries are stated at costless impairment losses. On disposal o such investments, the dierence between net disposal

proceeds and their carrying amounts is included in prot or loss.

Notes to the Financial Statements

31 December 2009


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31 December 2009 (Contd)

2. Signicant accounting policies (contd.)

2.2 Summary o signifcant accounting policies (contd.)

(a) Subsidiaries and basis o consolidation (contd.)

(ii) Basis o consolidation

The consolidated nancial statements comprise the nancial statements o the Company and

its subsidiaries as at the balance sheet date. The nancial statements o the subsidiaries areprepared or the same reporting date as the Company.

Subsidiaries are consolidated rom the date o acquisition, being the date on which the Group

obtains control, and continue to be consolidated until the date that such control ceases.

In preparing the consolidated nancial statements, intragroup balances, transactions and

unrealised gains or losses are eliminated in ull. Uniorm accounting policies are adopted in the

consolidated nancial statements or like transactions and events in similar circumstances.

Acquisitions o subsidiaries are accounted or using the purchase method. The purchase method

o accounting involves allocating the cost o the acquisition to the air value o the assets

acquired and liabilities and contingent liabilities assumed at the date o acquisition. The cost

o an acquisition is measured as the aggregate o the air values, at the date o exchange, o

the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs

directly attributable to the acquisition.

Any excess o the cost o the acquisition over the Groups interest in the net air value o the

identiable assets, liabilities and contingent liabilities represents goodwill. Any excess o the

Groups interest in the net air value o the identiable assets, liabilities and contingent liabilities

over the cost o acquisition is recognised immediately in prot or loss.

Minority interests represent the portion o prot or loss and net assets in subsidiaries not

held by the Group. It is measured at the minorities share o the air value o the subsidiaries

identiable assets and liabilities at the acquisition date and the minorities share o changes in

the subsidiaries equity since then.

(b) Associates

Associates are entities in which the Group has signicant infuence and that is neither a subsidiary

nor an interest in a joint venture. Signicant infuence is the power to participate in the nancial and

operating policy decisions o the investee but not in control or joint control over those policies.

Investments in associates are accounted or in the consolidated nancial statements using the

equity method o accounting. Under the equity method, the investment in associate is carried in

the consolidated balance sheet at cost adjusted or post-acquisition changes in the Groups share

o net assets o the associate. The Groups share o the prot or loss o the associate is recognised

in the consolidated prot or loss. Where there has been a change recognised directly in the equity

o the associate, the Group recognises its share o such changes. In applying the equity method,

unrealised gains and losses on transactions between the Group and the associate are eliminated to

the extent o the Groups interest in the associate. Ater application o the equity method, the Group

determines whether it is necessary to recognise any additional impairment loss with respect to the

Groups net investment in the associate. The associate is equity accounted or rom the date the Groupobtains signicant infuence until the date the Group ceases to have signicant infuence over the

associate.


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(b) Associates (contd.)

When the Groups share o losses in an associate equals or exceeds its interest in the associate,

including any long-term interests that, in substance, orm part o the Groups net investment in the

associates, the Group does not recognise urther losses, unless it has incurred obligations or made

payments on behal o the associate.

The most recent available audited nancial statements o the associates are used by the Group

in applying the equity method. Where the dates o the audited nancial statements used are not

coterminous with those o the Group, the share o results is arrived at rom the last audited nancial

statements available and management nancial statements to the end o the accounting period.

Uniorm accounting polices are adopted or like transactions and events in similar circumstances.

On disposal o such investments, the dierence between net disposal proceeds and their carrying

amounts is included in prot or loss.

(c) Property, plant and equipment, and depreciation

All items o property, plant and equipment are initially recorded at cost. Subsequent costs are included

in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is

probable that uture economic benets associated with the item will fow to the Group and the cost

o the item can be measured reliably. The carrying amount o the replaced part is derecognised. All

other repairs and maintenance are charged to the income statement during the nancial period in

which they are incurred.

Subsequent to recognition, property, plant and equipment except or reehold land are stated at cost

less accumulated depreciation and any accumulated impairment losses.

Freehold land has an unlimited useul lie and thereore is not depreciated. Capital expenditure in

progress is stated at cost and is not depreciated as these assets are not available or use. Depreciation

o other property, plant and equipment is provided or on a straight line basis to write o the cost o

each asset to its residual value over the estimated useul lie, at the ollowing annual rates:

Buildings 2%

Building improvements 10% - 15%

Plant and machinery 10%

Moulds, tools and equipment 10% - 15%

Furniture, ttings and oce equipment 10% - 20%

Motor vehicles 20%

The residual values, useul lie and depreciation method are reviewed at each year end to ensure

that the amount, method and period o depreciation are consistent with previous estimates and the

expected pattern o consumption o the uture economic benets embodied in the items o property,

plant and equipment.

An item o property, plant and equipment is derecognised upon disposal or when no uture economicbenets are expected rom its use or disposal. The dierence between the net disposal proceeds, i

any and the net carrying amount is recognised in prot or loss.


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d) Investment properties

Investment properties are properties which are held either to earn rental income or or capital

appreciation or or both. Such properties are measured initially at cost, including transaction costs.

Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation

and any accumulated impairment losses. The depreciation policy or investment properties is inaccordance with that or depreciable property, plant and equipment as described in Note 2.2(c) and

the ollowing annual rate apply:

Buildings 2%

Investment properties are derecognised when either they have been disposed o or when the

investment property is permanently withdrawn rom use and no uture economic benet is expected

rom its disposal. Any gains or losses on the retirement or disposal o an investment property are

recognised in prot or loss in the year in which they arise.

(e) Impairment o non-fnancial assets

The carrying amounts o assets, other than inventories, deerred tax assets and non-current asset

classied as held or sale, are reviewed at each balance sheet date to determine whether there is any

indication o impairment. I any such indication exists, the assets recoverable amount is estimated to

determine the amount o impairment loss.

For the purpose o impairment testing o these assets, recoverable amount is determined on an

individual asset basis unless the asset does not generate cash fows that are largely independent o

those rom other assets. I this is the case, recoverable amount is determined or the cash-generating

unit (CGU) to which the asset belongs to.

An assets recoverable amount is the higher o an assets or CGUs air value less costs to sell and its

value in use. In assessing value in use, the estimated uture cash fows are discounted to their present

value using a pre-tax discount rate that refects current market assessments o the time value o money

and the risks specic to the asset.

An impairment loss is recognised in prot or loss in the period in which it arises.

() Inventories

Inventories are stated at lower o cost and net realisable value.

Cost is determined using the weighted average method. The costs o raw materials, machinery parts

and tools comprise costs o purchase. The costs o nished goods and work-in-progress comprise

costs o raw materials, direct labour, other direct costs and appropriate proportions o production

overheads based on normal operating capacity.

Net realisable value represents the estimated selling price in the ordinary course o business less the

estimated costs o completion and the estimated costs necessary to make the sale. The dierence

between the cost o inventory and its net realisable value is recognised in the prot or loss as write-down o inventories.


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(g) Financial instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to

the contractual provisions o the instrument.

Financial instruments are classied as liabilities or equity in accordance with the substance o thecontractual arrangement. Interest, dividends and gains and losses relating to a nancial instrument

classied as a liability, are reported as expense or income. Distributions to holders o nancial

instruments classied as equity are recognised directly to equity. Financial instruments are oset when

the Group has a legally enorceable right to oset and intends to settle either on a net basis or to

realise the asset and settle the liability simultaneously.

(i) Cash and cash equivalents

For the purposes o the cash fow statement, cash and cash equivalents include cash on hand

and at bank and deposits at call which have an insignicant risk o changes in value, net o

outstanding bank overdrats.

(ii) Receivables

Receivables are carried at anticipated realisable values. Bad debts are written o when identied.

An estimate is made or doubtul debts based on a review o all outstanding amounts as at

the balance sheet date.

(iii) Payables

Payables are stated at the air value o the consideration to be paid in the uture or goods

and services received.

(iv) Interest bearing loans and borrowings

All loans and borrowings are initially recognised at the air value o the consideration received

less directly attributable transaction costs. Ater initial recognition, interest bearing loansand borrowings are subsequently measured at amortised cost using the eective interest

method.

All borrowing costs are recognised as an expense in the income statement in the period in

which they are incurred.

(v) Equity instruments

Ordinary shares are classied as equity. Dividend on ordinary shares are recognised in equity

in the period in which they are declared.

(vi) Derivative fnancial instruments

Derivative nancial instruments are not recognised in the nancial statements.


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(h) Leases

(i) Classifcation

A lease is recognised as a nance lease i it transers substantially to the Group all the risks and

rewards incidental to ownership. Leases o land and buildings are classied as operating ornance leases in the same way as leases o other assets and the land and buildings elements

o a lease o land and buildings are considered separately or the purpose o lease classication.

All leases that do not transer substantially all the risks and rewards are classied as operating

leases.

(ii) Finance leases - the Group as lessee

Assets acquired by way o hire purchase are stated at an amount equal to the lower o their

air values and the present value o the minimum lease payments at the inception o the leases,

less accumulated depreciation and impairment losses. The corresponding liability is included

in the balance sheet as borrowings. In calculating the present value o the minimum lease

payments, the discount actor used is the interest rate implicit in the lease, when it is practicable

to determine, otherwise, the Companys incremental borrowing rate is used. Any initial direct

cost are also added to carrying amount o such assets.

Lease payments are apportioned between the nance costs and the reduction o the

outstanding liability. Finance cost, which represent the dierence between the total leasing

commitments and the air value o the assets acquired, are recognised in the prot or loss

over the term o the relevant lease so as to produce a constant periodic rate o charge on the

remaining balance o the obligations or each accounting period.

The depreciation policy or leased assets is in accordance with that or depreciable property,

plant and equipment as described in Note 2.2(c).

(iii) Opera

yoko-annualreport2009 (2.7mb)

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