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TWO SIDES TO EVERY STORYANNUAL REPORT 2009

6507-TATHONG-AR09 CS2.indd i6507-TATHONG-AR09 CS2.indd i 7/4/09 11:48:55 AM7/4/09 11:48:55 AM

FINANCIAL HIGHLIGHTS 10CHAIRMAN’S STATEMENT 12YEAR IN REVIEW 16OUR GLOBAL REACH 19KEY MILESTONES 20BOARD OF DIRECTORS 22CORPORATE GOVERNANCE 25FINANCIAL REVIEW 33

CONTENTS

6507-TATHONG-AR09 CS2.indd ii6507-TATHONG-AR09 CS2.indd ii 7/4/09 11:48:55 AM7/4/09 11:48:55 AM

2008 WAS A YEAR OF MIXED EMOTIONS,AS THE WORLD WENT INTO A GLOBAL RECESSION

6507-TATHONG-AR09 CS2.indd 16507-TATHONG-AR09 CS2.indd 1 7/4/09 11:48:55 AM7/4/09 11:48:55 AM

SOME SEE IT AS AN OVERWHELMING CHALLENGE


BUT WE BELIEVE WITH EVERY

CHALLENGE COMES OPPORTUNITIES.


SOME ONLY SEE DOOM AND GLOOM ON THE HORIZON


THERE’S ALWAYS LIGHT AT THE END OF THE TUNNEL.


SOME WOULD ONLY SEE THE NEGATIVE SIDE OF THINGSWHEN CONFRONTED WITH ADVERSITY


WE STAY ON THE POSITIVE

SIDE OF THINGS,


FOR WE BELIEVE IN THE MOST TRYING OF TIMES,


COMESGREAT

FEATS OF ACHIEVEMENT.


10 TAT HONG ANNUAL REPORT 2009

FINANCIAL HIGHLIGHTS

632 EquipmentSales

40%

&

GeneralEquipment

Rental19%

640

482408

309

2005 2006 2007 2008 2009

2005 2006 2007 2008 2009

2005 2006 2007 2008 2009

27

58

97

132

97

4.57

9.76

17.13 17.73

13.62

28%Rental

Crane

PartsServices

9%

TowerCrane

Rental4%

40%

28%

19%

4%

9%

&

BASIC EARNINGS PER SHARE (CENTS)

PROFIT BEFORE TAX ($M)

REVENUE ($M) Revenue by Activities (FY2009)


TAT HONG ANNUAL REPORT 2009 11

48%

Gross Profi t by Activities (FY2009)

ASEAN

Australia

Others

Revenue by Geographical Segments (FY2009)

EquipmentSales

18%

GeneralEquipment

Rental17%

48%Rental

Crane

13%

TowerCrane

Rental4%

13%

4%

17%

48%

18%

PRC

58%

35%

4%

3%

58%

35%

4%

3%PartsServices

&

6507-TATHONG-AR09 CS2.indd 116507-TATHONG-AR09 CS2.indd 11 7/5/09 1:23:27 PM7/5/09 1:23:27 PM

Dear Shareholders,I am pleased to present our Annual Report for the year ended March 31, 2009 (“FY2009”).

Towards the closing months of 2008, the world witnessed the collapse of established fi nancial institutions and global giants which led to an economic downfall, the worst since the Depression of the 1920’s.The sombre mood lingered in 2009 but as at the time of this report, there are grounds to believe that the worst of the global economy is behind us.

CHAIRMAN’S STATEMENT



Sustenance Despite The Turbulence

Despite the unprecedented challenging operating climate, Tat Hong’s FY2009 topline performance held steady at S$631.8 million, a marginal 1% decline from the S$639.9 million recorded in the previous corresponding year (“FY2008”). With the exception of our Equipment Sales division, all our business divisions registered revenue growth in FY2009. Our new Tower Crane Rental segment, which was established in FY2008, saw revenue soaring 178% from S$8.9 million in FY2008 to S$24.7 million in FY2009. Our Crane Rental, General Equipment Rental and Parts and Services divisions registered healthy growth of 13%, 3% and 6% respectively. These results are testimonies to the success of our strategic focus to transform Tat Hong into a “rental” company to capitalise on long-term stable returns.

Our Equipment Sales division bore the brunt of the impact of the fi nancial crisis, with revenue sliding 17% to S$254.5 million in FY2009, as customers remained cautious of capital investments or commitments. Nonetheless, this division maintained its position as the top revenue contributor with 40.3% of our Group’s total revenue. Although we expect performance from the Equipment Sales division to weaken further in view of the continuing fi nancial meltdown, we remain positive of the long-term growth this division will generate for our Group.

In tandem with the steady top-line performance, our gross profi t also remained constant at S$241.1 million in FY2009, a slight 1% drop from S$244.2 million in FY2008. Accordingly, our gross profi t margin was maintained ata comfortable level of 38%.

Our net profi t attributable to shareholders declined 23% from S$89.8 million in FY2008 to S$68.9 million in FY2009. This was largely due to a 27% increase in our operating expenses, resulting from foreign exchange loss, valuation loss, impairment loss and an increase in staff costs. However, adjusting the non-recurring gains in FY2008 and the foreign exchange, valuation and impairment losses in FY2009, net profi t attributable to shareholders would have shown an improvement of 12% to S$94.2 million in FY2009 as compared to FY2008.

Notwithstanding the persisting fi nancial turmoil, our Group continued to enjoy a robust balance sheet, with healthy net debt over equity ratio of 0.57 and a comfortable cash position of S$46.3 million as at March 31, 2009. Shareholders’ equity was enhanced to S$389.1 million, and net asset value and net tangible asset per share improved to 77 Singapore cents and 68 Singapore cents respectively,as at March 31, 2009.


SHAREHOLDERS’ EQUITY

INCREASED TO

S$389.1MILLION


Maintaining Our Strategic Focus

Australia and China will continue to be our two primary growth pillars in view of the respective governments’ commitment to infrastructural and resource projects.

AUSTRALIA

In FY2009, our Australian subsidiary, Tutt Bryant Group Limited (“TBG”) expanded the hire operations of North Sheridan Pty Ltd (“North Sheridan”),a wholly-owned company engaged in the provision of quality hire equipment to the mining and resources industries, and other major sectors in Central and Northern Queensland. We also acquired the Townsville-based businesses of Compactor Hire (Townsville) Pty Ltd in April 2008, increasing and complementing the compaction equipment resources of North Sheridan in Townsville and providing the rest of North Sheridan’s branch network with access to over 45 rollers, excavators and loaders, thereby expanding our customer base.

In May, TBG acquired another equipment hire business, Caradel Hire, through its subsidiary, Kingston Industries Pty Ltd (“Kingston”). Based in Goulburn, New South Wales, Caradel Hire provides services that are complementary to Kingston in the hire of specialised rail maintenance equipment to Australian Rail and Track Corporation (“ARTC”).The expansion of Kingston’s presence to Goulburn also opened up accessibility to Canberra, Wagga Wagga and the Victorian border towns, where new developments with a focus on roads, residential and industrial sub-divisions are currently ongoing.

Both acquisitions have contributed to our Group’s performance since the fi rst quarter of FY2009 and we are hopeful that these two new additions will continue to be value-accretive in the long-term.


CHAIRMAN’S STATEMENT

0.57HEALTHYNET DEBT OVER EQUITYRATIO OF


CHINA

We are simultaneously workingon the strategic expansion of Tat Hong in China, to tap on the growing demand for tower crane rental, in line with the increasing number of infrastructure projects under the Chinese Government’s stimulus package. In just one year, we have expanded our tower crane fl eet from 216 units as at March 31, 2008, with total tonnage-metres of 35,462 to 262 units as at March 31, 2009, with total tonnage-metres of 49,040 - an increase of 21% in fl eet size and 38% in tonnage-metres. To further fortify our presence as the leading tower crane rental company in China, we established a joint venture company, Beijing Tat Hong Zhaomao Equipment Rental Co. Ltd, with Fushun Yongmao Construction Machinery Co., Ltd, for the purpose of engaging in the business of tower crane rental in China. As one of the largest tower crane rental companies in China, we are certainly poised to capture business opportunities arising from the Government’s vast infrastructure spending programme.

Looking ahead

With the ongoing market volatilities, we will maintain our prudent risk management strategy and continue to focus on moulding Tat Hong into a “rental” company to reap the stable returns from our rental operations. Cash conservation and inventory management will remain priorities as we strive to maintain our inventory at an optimal level.

In Appreciation

We are heartened to have received the unwavering support of our loyal shareholders throughout the years. As a gesture of our appreciation to our shareholders, Tat Hong completed a bonus issue of Warrants to our shareholders in August 2008, on the basis of one Warrant for every ten existing ordinary shares in Tat Hong.

We are also pleased to propose a fi nal dividend of 1.5 Singapore cents per ordinary share for FY2009, payable on August 18, 2009. Together with the interim dividend of 3.5 Singapore cents, which was paid out in December 2008, Tat Hong would have rewarded shareholders with a total dividend of 5.0 Singapore cents per ordinary share for FY2009.

In conclusion, I would like toextend my gratitude to our business partners and associates, our committed management and staff and my dedicated fellow directors on the Board. With the invaluable contributions and efforts from all, Tat Hong will be able to emerge from this crisis, a stronger leader.

Tan Chok KianNon-Executive Chairman


S$46.3CASH POSITION OFCOMFORTABLE

MILLION


Together with many organisations and multi-national corporations from all trades and sectors around the world, Tat Hong faced a tumultuous year marked by an ever-increasing tightening of credit by fi nancial institutions and heightened mood of caution towards investments.

Despite the challenging operating conditions brought on by the global fi nancial meltdown, Tat Hong maintained its revenue performance for the fi nancial year ended March 31, 2009 (“FY2009”). Revenue in FY2009 was S$631.8 million, a marginal 1% decline from the S$639.9 million recorded in the previous corresponding period (“FY2008”).

Apart from the Group’s Equipment Sales division, which saw revenue decreased by 17% in FY2009, all the remaining four divisions achieved stable growth. Tat Hong’s newly-formed Tower Crane Rental division, which was established in FY2008, was the star performer, registering a signifi cant 178% revenue surge in FY2009. Revenue from the Group’s Crane Rental division continued its growth momentum with a 13% jump, whereas the General Equipment Rental division and Parts and Services division both achieved stable revenue increases of 3%and 6% respectively.

Accordingly, the Group’s gross profi t decreased marginally to S$241.1 million in FY2009 compared to the previous year. However, gross profi t margin remained relatively constant at a comfortable 38%.

While the Group maintained its top-line performance, Tat Hong’s bottom-line was impacted by the fi nancial crisis, through a 27% increase in the Group’s Other Operating Expenses in FY2009. The increase was mainly due to a foreign exchange loss of approximately S$16.1 million arising from the strengthening of the Japanese Yen against the Singapore and Australian Dollars, as well as impairment losses of approximately S$6.4 million on the Group’s other fi nancial investments and goodwill in relation to the Group’s acquisitions of subsidiaries and associated companies. In addition, FY2009 also recorded a mark-to-market valuation loss of approximately S$2.8 million from the valuation of hedging contracts in foreign currencies and an increase in staff cost of approximately S$4.7 million – a result of the full-year absorption of staff costs of subsidiaries acquired by the Group in late FY2008.

The Group’s bottom-line was further impacted by a 14% decrease in Other Income to S$14.6 million in FY2009,as FY2008 included a S$2.2 million gain from the disposal of an associate and a S$2.9 million gain from dilution of a subsidiary. The one-off extraordinary gains in FY2008 were partially offset by a higher gain on disposal of property, plant and equipment in FY2009.

As such, net profi t attributable to shareholders registered a 23% decline from S$89.8 million in FY2008 to S$68.9 million in FY2009. Excluding the foreign exchange gains and losses, one-off extraordinary gains and impairment losses, net profi t attributable to shareholders would have refl ected an increase of 12% to S$94.2 million in FY2009.

The Group’s overall revenue and profi tability were further dampened by the weakening of the Australian Dollar against the Singapore Dollar, which impacted Tat Hong’s performance through the translation of the Group’s Australian subsidiaries’ results into Singapore Dollar during consolidation.


YEAR IN REVIEW

178%FROM THE TOWER CRANE RENTAL DIVISION

IN FY2008

REVENUE

SURGED


Established in FY2008, the Group expanded the tower crane rental fl eet in FY2009, boosting revenue to new heights.

Crane Rental Division Maintains Growth Momentum

The Crane Rental division’s revenue continued to grow notwithstanding the economic slowdown. Revenue from this division increased 13% to S$179.7 million in FY2009, accounting for 28.4% of the Group’s total revenue in FY2009. The Group’s continuing participation in the oil and gas activities in Australia and the power plant sector in Indonesia supported the healthy revenue growth.

General Equipment Rental Division Remains Stable

Revenue for the General Equipment Rental division improved marginally by 3% to S$117.4 million, contributing 18.6% to FY2009 total Group revenue. The stable performance was attributable to contribution from the Group’s newly acquired equipment hire business of Caradel Hire and Compactor Hire, as well as increased revenue from the rail maintenance division. This division’s strong performance earlier in the year, however, was affected by the discontinuance of the waste management division


and the heavy haulage New South Wales division in the fourth quarter of FY2009 (“4QFY2009”). In addition, the extended wet season in North Queensland, Australia, in 4QFY2009 also affected sales.

Consistent Performance From The Parts and Services Division

Notwithstanding the exclusion of six months of revenue contribution from the Group’s newly acquired subsidiary, PT Worldwide Equipment South East Asia, recorded in FY2008, this division achieved a 6% increase in revenue to S$55.4 million in FY2009. This was mainly due to an increase in sales of boom attachments and hydraulic components to Singapore customers, as well as higher revenue generated by the Group’s training centre. This division accounted for 8.8% of the Group’s total revenue in FY2009.

Financial Crisis Impacts Equipment Sales Division

While the Group’s other four divisions were relatively unaffected by the continuing fi nancial turmoil, the Equipment Sales division was unable to escape unscathed, with revenue declining 17% to S$254.5 million. Nevertheless, it remained as the top revenue contributor of Tat Hong, contributing the remaining 40.3% to total Group revenue in FY2009. The lower revenue was due to the impact of the global fi nancial crisis in the third and fourth quarters of FY2009, which depressed demand. Customers were reluctant to make capital investments or commitments in view of the uncertain outlook and tightening of credit by fi nancial institutions further dampened demand.

Geographically, Australia continued to be Tat Hong’s main revenue generator, contributing S$365.6 million, or 57.9%, to the Group’s total revenue in FY2009. ASEAN remained the second largest revenue contributor at 35.4%, recording S$223.9 million revenue in FY2009. Accounting for only 1.4% of total Group revenue in FY2008, the People’s Republic of China (“PRC”) grew its share of the pie to 3.9%, or S$24.7 million, in tandem with the commendable growth of the new Tower Crane Rental division this year. The remaining 2.8% revenue contribution came from Other Regions such as the Middle East.

Tat Hong continued to report a healthy balance sheet in FY2009, with relatively low net debt over equity ratio of 0.57 and free cash fl ow of S$46.3 million as at March 31, 2009. Shareholders’ equity attributable to equity holders improved to S$389 million from S$373 million the previous year.

New Tower Crane Rental Division Outperforms

Revenue from the Group’s newly formed Tower Crane Rental division showed signifi cant embryonic growth, surging 178% from S$8.9 million in FY2008 to S$24.7 million in FY2009. The division contributed 3.9% to Group revenue in FY2009.


The Road Ahead

Moving forward, the Group anticipates the global fi nancial crisis and slowing economy to continue to affect Tat Hong’s fi nancial performance. While performance of the Equipment Sales division is expected to weaken further as customers stay on the sidelines, exercising caution in capital investments or commitment, the Group is cautiously optimistic that its other divisions will remain relatively stable, in view of Government stimulus packages released in some of the key markets that Tat Hong currently operates.

In Singapore, although the Ministry of Trade and Industry has revised its Gross Domestic Product (“GDP”) forecast for 2009 downwards, to between -6% to -9%, the Government has pledged its support to ramp up construction spending to stimulate the economy back to recovery. For this year, an estimated S$18 billion to S$20 billion worth of contracts are expected to be injected into the economy. Another S$15 billion to S$17 billion are anticipated to be pumped in for building and infrastructure projects in 2010 and 2011 respectively.

The outlook for the Australian oil and gas industry remains stable for 2009, according to a Fitch Ratings report issued in February 2009, but the rush to develop new oil and gas projects are expected to moderate. Nevertheless, Fitch expects capital expenditure for this industry to remain strong, supported by cash balances built up by the Australian gas producers through the commodity boom of the previous two years. Research has also shown that there are several Liquefi ed Natural Gas projects in Australia with price tags of tens of billions of dollars, which are at a less advanced stage. Should they come on- stream, the country would experience a rapid expansion in capital being undertaken.

The China market displays similar signs of positivity, such as the Government’s stimulus package boasting a vast infrastructure spending program. Currently spending about 9% of its GDP on infrastructure, market research has estimated that China will spend US$200 billion on infrastructure developments over the next 10 years.


YEAR IN REVIEW

In view of the potential business opportunities in the Group’s two key markets – Australia and China, Tat Hong will continue to focus on its strategic expansion plans in these markets. In Australia, the Group will proactively explore possible merger and acquisition opportunities in the crawler cranes and general rental markets, to tap on the healthy demand from the oil and gas industry there. In November 2008, the Group established a joint venture enterprise in China with Fushun Yongmao Construction Machinery Co., Ltd, a wholly-owned subsidiary of Yongmao Holdings Ltd. Through this joint venture, the Group plans to expand its footprint in China through the acquisitions of rental companies, to further strengthen its foothold in the lucrative China market.

As the leading crane company in Asia-Pacifi c, Tat Hong is poised to capitalise on the various infrastructural developments planned by regional governments, for the Group’s future growth ahead.

TAT HONG WILL CONTINUE

IN AUSTRALIA AND CHINA

STRATEGIC

PLANS

TO FOCUS ON ITS

EXPANSION



OUR GLOBAL REACH

Mauritius

Seychelles

New Zealand

Middle East

Dubai

Maldives

Sri Lanka

India

BangladeshMyanmar

Russia

China

Beijing

Shenyang

SouthKorea

Japan

Philippines

Taiwan

Indonesia

Jakarta

BorneoPapau

New Guinea

Guam

Singapore

Malaysia

Kuala Lumpur

Bangkok

HanoiHong Kong

Shanghai

Ho Chi MinhVietnam

Perth

Karratha

Darwin

Australia

Adelaide

MelbourneSydney

Newcastle

BrisbaneGladstone

MackayTownsville

Cairns

Countries of Tat Hong Activity

Pakistan

USA

South Africa

Europe

Tat Hong Offi ces



KEY MILESTONES

Listed as Tat Hong Holdings on Singapore Stock Exchange

Tutt Bryant Equipment established a joint venture company, BT Equipment, with PSL Indstries Pty Ltd

Carried out a private placement of 50 million new shares at S$0.56 per share

Conversion of Secondary Listing to Primary Listing on Singapore Stock Exchange

Secondary listing of Tat Hong Holdings on Singapore Stock Exchange


EQR Investments Pty Ltd acquired the entire issued share capital of Kingston Industries Pty Ltd 56 per share

Establishment of new subsidiary and joint venture enterprise in the People’s Republic of China (“PRC”):- Fushun Yongmao Equipment Manufacturing Co. Ltd

Delisted Tat Hong Holdings Ltd from Australian Stock Exchange

1997

2001

FEB2004

APR2005

2000

AUG2002

DEC2004

AUG2005

NOV2005



Listed Tutt Bryant Group Ltd on Australian Stock Exchange

DEC2005

Entered tower crane rental business in the PRC in joint venture with Beijing Zhongjian Zhenghe

Construction Machinery Co., Ltd. New joint venture company to be named Shanghai Zheng He Tat Hong

Construction Equipment Rental Co., Ltd

JAN2007

Tutt Bryant Group acquired Muswellbrook Crane Services Pty. Ltd. for A$17.8 million

FEB2007


APR2007

Listing of Yongmao Holdings Limited

JAN2008

Completion of merger with Jiangsu NuclearHuaxing Machinery Construction Co., Ltd

SEPT2007

APR2008

Tutt Bryant Group acquired Paramount Hire for A$5.75 million

MAY2008

Aquisition of Caradel Hire by Kingston IndistriesPty Ltd, subsidiary of Tutt Bryant Group Limited

JUN2008

Issued 50,662,673 bonus warrants



BOARD OF DIRECTORS

MR TAN CHOK KIAN MR NG SAN TIONG ROLAND MR NG SUN HO TONY MR ONG TIEW SIAM

MR NG SANG KUEY MICHAEL MR NG SAN WEE DAVID MR LEONG HORN KEE MR LOW SEOW JUAN MR MAK LYE MUN


MR TAN CHOK KIANNon-Executive Chairman

Mr Tan Chok Kian was appointed as the Non-Executive Chairmanof Tat Hong on 29 July 1997.As Chairman of the Board, Mr Tan approves our overall policies and strategic plans. In addition, he is also Chairman of the Nominating Committee. Mr Tan has served in various senior appointments in the Singapore civil service from 1956 until his retirement in 1986 including the positions of Permanent Secretary in the Ministry of Finance and other Ministries. He also served as Chairman of the Central Provident Fund Board, Director-General, Nanyang University and Chairman of the Post Offi ce Savings Bank of Singapore.

MR NG SAN TIONG ROLANDManaging Director

Mr Roland Ng joined our Group in 1979 and has been Managing Director of our Company since 25 October 1991. He has more than 25 years experience in the heavy equipment and plant hiring business. He bears overall responsibility for developing our Group’s strategy which encompasses the review of new business development and potential acquisitions in the region. Mr Ng is also responsible for our corporate planning and policy and strategy formulation. He holds a Bachelor of Science (Honours) Degree from the University of Technology Loughborough (United Kingdom).

MR NG SAN WEE DAVIDExecutive Director

Mr David Ng has been an Executive Director of our Company since1 September 1999. He is the head of our Group’s Sales Division for our ASEAN operations and is responsible for implementing our Group’s policies and the conduct of businesses as well as co-ordinating activities within our Group for our ASEAN operations. Mr Ng has more than 13 years of experience in the heavy equipment industry. He has an honours degree in Computer Science from the University of Liverpool (United Kingdom).

MR ONG TIEW SIAMExecutive Director

Mr Ong Tiew Siam has been an Executive Director of our Company since 1999 and is also our Company Secretary. He is responsible for all of our corporate and secretarial matters. He has more than 30 years experience in fi nance and administration. Prior to joining us, Mr Ong was the Finance Manager of Acmil S.E.A. Pte Ltd, a subsidiary of the A.C.I. Group. He graduated with a Bachelor of Commerce (Accountancy) (Honours) degree in 1975 from the Nanyang University, Singapore and is a fellow member of the Singapore Institute of Certifi ed Public Accountants and CPA Australia. He is also a member of the Singapore Institute of Directors. Mr Ong also sits on the board of several listed companies.

MR NG SUN HO TONYDeputy Managing Director

Mr Tony Ng has been with our Group since 1975 and has more than 30 years experience in the heavy equipment and plant hiring business. He was appointed asan Executive Director on2 November 1991 and is our Group’s Deputy Managing Director. Mr Ng maintains key relationships with manufacturers of heavy equipment, identifi es and explores new businesses with them. His role involves identifi cation and expansion of our Group’s businesses in various markets and he is primarily responsible for our operations in Australia and Vietnam.

MR NG SANG KUEY MICHAELExecutive Director

Mr Michael Ng was appointed as an Executive Director of our Company on 1 October 1996 and is the head of our Asean operations. He is also responsible for all sales and purchasing functions of the Group. Mr Ng has spent the majority of his working years in the heavy equipment industry. He holds various key appointments in our Group and has good market network and close relationships with our major suppliers. Mr Ng also explores new businesses and is involved in identifying and expanding our Group’s operation in the various markets.



MR LEONG HORN KEENon-Executive Director

Mr Leong Horn Kee was appointed as an Independent Director of Tat Hong on 19 January 2001. He is the Chairman/CEO of CapitalCorp Partners Pte Ltd, a fi nancial services and consultancy company. Mr Leong has experience in both the public sector in economic planning, trade and investments, and in the private sector in corporate fi nance, venture capital, merchant banking, hotels, property development and management.He served as a Member of Parliament for 22 years from 1984 to 2006. Mr Leong is appointed Singapore’s Non-Resident Ambassador to Mexico in 2006 and is also a member of the Securities Industry Council in 2008. Mr Leong holds a degree (Honours) in Production Engineering from Loughborough University, UK;a degree (Honours) in Economics from the University of London, UK; and an MBA from INSEAD, France.

MR LOW SEOW JUANNon-Executive Director

Mr Low Seow Juan was appointed Non-Executive Director on 25 January 2006. He is a Consultant with the law fi rm Lee & Lee and Chairman of Pinetree Capital Partners Pte Ltd, a Singapore venture capital fund company. Previously, Mr Low headed the Corporate Finance Departments in the Singapore law fi rms Drew & Napier and Harry Elias Partnership. Mr Low started his working career with the Singapore Public Works Department, Morgan Grenfell (Asia) Limited and the Singapore Economic Development Board heading the Aerospace, Medical Optical Division. Mr Low is a director of a number of public and private companies including Ferrochina Limited, SHC Capital Ltd, Biosensors International Group, Ltd and Jurong International Holdings Pte Ltd. Mr Low holds a Masters in Business Administration from the National University of Singapore, a Bachelor of Law degree from the University of London and a Bachelor Degree in Electrical Engineering from Monash University.

MR MAK LYE MUNNon-Executive Director

Mr Mak Lye Mun was appointed as a Non-Executive Director on 1 June 2005. He is head of Investment Banking in CIMB-GK Securities Pte. Ltd. Mr Mak has worked in various senior positions in the fi nancial industry within Singapore and was responsible for building and developing the corporate fi nance business for the fi nancial institutions that he worked for.Mr Mak is a Non-Executive Director of Boardroom Limited and Stamford Land Corporation Ltd.He has a Bachelor of Civil Engineering (First Class Honours) degree from the University of Malaya in Malaysia and a Master of Business Administration degree from the University of Texas at Austin in the United States. Mr Mak is a qualifi ed Chartered Financial Analyst.


BOARD OF DIRECTORS


The Board of Directors (the “Board”) of Tat Hong Holdings Ltd (the “Company”) is committed to maintain a high standard of corporate governance, and has always recognised the importance of good governance to ensure continued growth, success and enhance investors’ confi dence. This report describes the Company’s corporate governance practices with specifi c reference to the Code of Corporate Governance 2005 (the “Code”), pursuant to Rule 710 (1) of the Listing Manual of Singapore Exchange Securities Trading Limited (“SGX-ST”).

BOARD MATTERS

Principle 1: Board’s Conduct of its Affairs

The Board’s primary role is to protect and enhance long-term shareholders’ value. The Board meets at least quarterly each year to oversee the business affairs of the Group, reviews and approves the fi nancial objectives and the strategies to be implemented by Management including signifi cant acquisitions and divestments, monitors standards of performance and issues on policies and approving the release of the quarterly and full year results.The Board has its own internal controls which set out the limits for capital expenditure, investments and divestments, funding decisions and bank borrowings.

Board meetings are scheduled by all Directors in advance. This enables the Board to meet on a regular basis while not interfering with the Company’s operation. The Board is free to request for further clarifi cation and information from Management on all matters within their purview. Ad-hoc meetings are convened as and when the circumstances require.

The Board is supported by Board committees to provide independent supervision of Management. These Board committees are Audit Committee, Nominating Committee and Remuneration Committee and Option Shares/ Performance Shares Plan Committee. The various Committees have written terms of references and they are reviewed from time to time.

Management would conduct briefi ngs and orientation programmes to familiarise newly appointed Directors with the various business, operations and processes of the Group. The Directors of the Company are also updated regularly concerning any changes in policies, relevant new laws and regulations.

The Company’s Articles of Association provides for meetings of the Board to be conducted by way of telephone conference or video conference or other methods of simultaneous communication by electronic means.

Directors’ Training

Updates on corporate governance are being circulated to all Board members by the Company Secretary on a regular basis. Relevant courses conducted by various institutions are attended by Directors when possible.

Principle 2&3: Board Composition and Balance & Chairman & Chief Executive Offi cer

The Board now comprises nine members, consisting of fi ve Executive Directors, one Non-Executive Non-Independent Director and three Non-Executive Directors who are also independent from Management.

Mr Tan Chok Kian (Non-Executive Chairman)Mr Ng San Tiong Roland (Managing Director)Mr Ng Sun Ho Tony (Deputy Managing Director)Mr Ng Sang Kuey Michael (Executive Director)Mr Ng San Wee David (Executive Director)Mr Ong Tiew Siam (Executive Director)Mr Leong Horn Kee (Non-Executive Director)Mr Low Seow Juan (Non-Executive Director)Mr Mak Lye Mun (Non-Executive Director)

CORPORATE GOVERNANCE



The Board believes that there should be a strong and independent element on the Board, which allows the Board to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision-making. The Directors consider that the Board is of the appropriate size and with the right mix of skills and experience. This composition of the Board enables Management to benefi t from their external, diverse and objective perspective on issues brought before the Board.

Our Chairman is non-executive and independent from the Management and is free to act independently in the best interests of the Company and shareholders. Our Chief Executive Offi cer (“CEO”) is responsible for the running of the Group’s business. The Chairman together with other non-executive directors ensure that the Board can engage in constructive debate with Management on various matters, including strategic issues and business plans.

The following table shows the respective roles, functions and appointments of the Board in the Board committees:

BOARD COMPOSITION

Board Members Executive IndependentAudit

CommitteeRemuneration

CommitteeNominatingCommittee

Option Shares/Performance Shares

Plan Committee

Tan Chok Kian No Chairman Yes Yes Chairman No

Ng San Tiong Roland Yes No No No Yes Yes

Ng Sun Ho Tony Yes No No No No Yes

Ng Sang Kuey Michael Yes No No No No No

Ng San Wee David Yes No No No No No

Leong Horn Kee No Yes Chairman Chairman No No

Mak Lye Mun No No No Yes No Chairman

Low Seow Juan No Yes Yes Yes Yes No

Ong Tiew Siam Yes No No No No Yes

BoardMeetings

AuditCommittee Meetings

RemunerationCommittee Meetings

NominatingCommittee Meetings

Option Shares/ Performance Shares

Plan Committee

Name of Director

No. of Meetings

Held

No. of MeetingsAttended

No. of Meetings

Held


No. of Meetings

Held


No. of Meetings

Held


No. of Meetings

Held


Tan Chok Kian 4 4 4 4 1 1 3 3 – –

Ng San Tiong Roland* 4 4 4 4 – – 3 3 1 1

Ng Sun Ho Tony* 4 4 4 4 – – – – 1 1

Ng Sang Kuey Michael* 4 4 4 4 – – – – – –

Ng San Wee David* 4 4 4 4 – – – – – –

Leong Horn Kee 4 4 4 4 1 1 – – – –

Ong Tiew Siam* 4 4 4 4 – – – – 1 1

Low Seow Juan 4 4 4 4 1 1 3 3 – –

Mak Lye Mun 4 4 – – 1 1 – – 1 1

* Mr Ng San Tiong Roland, Mr Ng Sun Ho Tony, Mr Ng Sang Kuey Michael, Mr Ng San Wee David and Mr Ong Tiew Siam attended the Audit Committee meetings by invitation.




Principle 4&5: Board Membership and Performance

The Nominating Committee (the “NC”) comprises the following three members, all of whom are Non-Executive Directors:

Mr Tan Chok Kian (Chairman)Mr Ng San Tiong RolandMr Low Seow Juan

The NC is responsible for the following:

• Assessment of the necessary and desirable competencies of Board members;

• Review of Board succession;

• Evaluation of the Board’s performance;

• Recommendations for the appointment, re-appointment and removal of Directors; and

• Review the independence of each Director annually.

The Chairman of the NC is not associated with the substantial shareholder.

In identifying and receiving candidates, the NC applies the following principles and making recommendations to the Board.

• Ensures a formal and transparent procedure for the appointment and re-appointment of Directors to the Board;

• Identifi es and reviews other Board committees and top management positions; and

• Ensures the Board should comprise Directors who, as a group, provide core competencies such as accounting or fi nance, business or management experiences, industry knowledge and strategic planning experience.

The NC has reviewed the independence of each Director for FY2009 in accordance with the Code’s defi nition of independence and is satisfi ed that one-third of the Board comprise independence Directors.

The Board is of the view that the fi nancial indicators set out in the Code for the evaluation of Directors’ performance are more a measurement of Management’s performance and hence less appropriate to the Non-Executive Directors and the Board’s performance as a whole. The Board is of the view that its performance would be better refl ected in, and evidenced by, its proper guidance, diligent oversight and able leadership of the Company and the Group in the appropriate directions.

Principle 6: Access to information

All Directors are provided with complete, adequate and timely information prior to meetings and on a regular basis to enable them to fulfi ll their duties properly. Management strives to provide adequate information and explanation on materials furnished to Directors and shall meet to discuss any issues prior to Board meetings or any other committee meetings if required.

In exercising their duties, the Directors have access to the advice of senior management and the Company Secretary (who is responsible to the Board for ensuring that Board procedures are followed and that applicable laws and regulations are complied with). If necessary, the Directors can seek professional advices and services on areas which they deem necessary, at the expenses of the Company. The Company Secretary and/or his representatives are present at all Board Meetings.




Remuneration Matters

Principle 7: Procedures for Developing Remuneration Policies

Principle 8: Level and Mix of Remuneration

Principle 9: Disclosure of Remuneration

The Remuneration Committee (the “RC”) comprises the following four members, of whom one Non-ExecutiveNon-Independent Director and the three Non-Executive Directors:

Mr Leong Horn Kee (Chairman)Mr Low Seow JuanMr Mak Kye MunMr Tan Chok Kian

The RC meets at least once a year and performs the following:

• Reviews and approves recommendations on remuneration policies and packages for the Company’s senior management;

• Approves the annual increment and bonuses of key executives as recommended by Management;

• Reviews all matters concerning the Non-Executive Director’s remuneration package to ascertain that the remuneration is commensurate with the contribution and responsibility of the Director; and

• Reviews and approves any executive’s annual package over and above $150,000 who is related to the controlling shareholders.

The RC also ensures that none of the Directors should be involved in deciding his own remuneration.Each member of the RC refrains from voting on any resolutions in respect of the assessment of his remuneration. The terms of appointment of Non-Executive Directors that are not covered with any service agreements shall follow the Articles of Association of the Company.

The RC has full authority to engage any external professional advice on matters relating to remuneration as and when the need arises.

The Option Shares/ Performance Shares Plan Committee (formerly known as Option Shares Committee) performs the following functions:

• Reviews option shares or performance shares scheme of the Company to ensure that they are effective in rewarding deserving employees;

• Reviews and recommends to the Board on issue of option shares and/or performance shares to Executive or Non-Executive Directors or employees; and

• Reviews and recommends to the Board on the exercise price of the proposed options and share awards to be granted.

The Company sets out the remuneration package of the top fi ve key executives in addition to the Company’s disclosure on Directors’ remuneration in the attached report enclosed in the Annual Report.






Details of remuneration paid to the Directors of the Company for the fi nancial year ended 31 March 2009 are set out below:

Name of DirectorRemunerationBand ($’000)

Total%

Fees%

Salaries1

%Bonus

%

Tan Chok Kian2 1 to 200 100 100 0 0

Leong Horn Kee2 1 to 200 100 100 0 0

Mak Lye Mun4 1 to 200 100 100 0 0

Low Seow Juan2 1 to 200 100 100 0 0

Ng San Tiong Roland 1,401 to 1,600 100 4 40 563

Ng Sun Ho Tony* 801 to 1,000 100 6 41 533

Ng Sang Kuey Michael* 600 to 800 100 0 43 573

Ng San Wee David* 401 to 600 100 0 49 513

Ong Tiew Siam 201 to 400 100 0 61 393

The disclosure of details in respect of remuneration of the top 5 key executives (included one excutive related to the CEO, Mr Ng San Tiong Roland) of the Group for the fi nancial year ended 31 March 2009 are set out below:

Name of ExecutiveRemunerationBand ($’000)

Total%

Fees%

Salaries1

%Bonus

%

D.J. Haynes 801 to 1,000 100 0 70 305

Ng Sun Hoe* 601 to 800 100 0 44 563

Chia Hai Kwang Roy 601 to 800 100 80 19 13

S.E. Fisher 401 to 600 100 0 74 265

Tan Peng Koon 401 to 600 100 68 30 23

Family members related to CEORemunerationBand ($’000)

Total%

Fees%

Salaries1

%Bonus

%

Ng San Guan* 401 to 600 100 0 54 463

Ng Sun Oh* 201 to 400 100 0 45 553

Ng Chen Wei# 1 to 200 100 100 0 0

* Mr Ng Sun Ho Tony, Mr Ng Sang Kuey Michael, Mr Ng San Wee David, Mr Ng Sun Hoe, Mr Ng San Guan and Mr Ng Sun Oh are the brothers of Mr Ng San Tiong Roland, the CEO. # Mr Ng Chen Wei is the son of Mr Ng San Tiong Roland, the CEO. 1 Salaries included Allowance, Central Provident Fund contribution, Transport Allowance, Super Annuation Fund, Long Service Leave and Benefi ts-in-kind. 2 These are Non-Executive and Independent Directors. 3 The bonus and fee are paid in accordance with the service agreement. 4 Non-Executive and Non-Independent Director. 5 The bonus and fee are paid in accordance with the service agreement and included Share Base Payment.




Principle 10: Accountability

In presenting the annual fi nancial statements and announcements of fi nancial results to shareholders, it is the aim of the Board to provide shareholders with a balanced and clear assessment of the Company’s and Group’s performance, position and prospects. Management currently provides the Board with appropriate detailed management accounts of the Group’s performance and position on a monthly basis.

Principle 11: Audit Committee

Principle 12: Internal Controls

Principle 13: Internal Audit

The Audit Committee (the “AC”) comprises the following three members, all of whom are Non-Executive Directors:

Mr Leong Horn Kee (Chairman)Mr Low Seow JuanMr Tan Chok Kian

The AC meets four times a year and performs the following functions:

• Assessment of performance and independence of external Auditor and recommendations for the appointment or removal of external Auditor;

• Assessment of the performance and objectivity of the internal audit function;

• Assessment of Management process supporting external reporting and appropriateness and timely release of information to shareholders including our results announcement;

• Review of material interested person transactions;

• Review of risk management and internal compliance and control systems; and

• Approves and reviews the internal audit plan on an annual basis.

Apart from the duties listed above, the AC shall commission and review the fi ndings of the internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material impact on the Group’s operating results and/or fi nancial position. Each member of the AC shall abstain from voting on any resolution in respect of matters in which he is interested.

The AC has full access to Management and also full discretion to invite any Director or key management to attend the meetings, and has been given reasonable resources to discharge its function.

The AC is also responsible to conduct an annual review of the volume of non-audit services provided by the external Auditors to ensure such services will not prejudice the independence and objectivity of the external Auditors.

The AC meets with the external and internal Auditors, without the presence of Management, at least once a year.

The Board is responsible for ensuring that Management maintains a sound system of internal controls to safeguard shareholders’ investments and the Company’s assets. The Board believes that in the absence of any evidence to the contrary and from due enquiry, the system of internal controls that has been maintained by the Company’s Management throughout the fi nancial year is adequate to meet the needs of the Company in its current business environment.


The system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives. It can only provide reasonable and not absolute assurance against material misstatement or loss. During the year, the AC, on behalf of the Board, has reviewed the effectiveness of the Group’s material internal controls, including fi nancial, operational and compliance controls, and risk management.

The Company’s internal audit function is outsourced to a professional accounting fi rm. The Internal Auditor (the “IA”) reports directly to the Chairman of the AC and administratively to the Group Financial Offi cer. The IA has appropriate standing within the Company and meets the standards of the Professional Practice of Internal Auditing set by the Institute of the Internal Auditors.

The Company has put in place a whistle-blowing framework, endorsed by the AC where employees of the Company may, in confi dence, raise concerns about possible corporate improprieties in matters of fi nancial reporting or other matters and to ensure that arrangements are in place for the independent investigations of such matters and for appropriate follow-up actions. The details of the whistle-blowing policies and arrangements will be made available to all employees when implemented.

Principle 14: Communication with Shareholders

The Company is committed to regular and proactive communications with its shareholders in line with continuous disclosure obligations of the Company according to the Listing Manual of the SGX-ST. Pertinent information will be disclosed to shareholders in a timely and equitable manner.

The announcement of results is published through the SGXNET and news releases. All information on the Company’s new initiatives is fi rst disseminated via SGXNET followed by a news release. Results and annual reports are announced or issued within the mandatory period.

All shareholders of the Company receive the annual report, circulars and notices of Annual General Meeting (the “AGM”). The notices are also advertised in newspapers. The Directors including Chairman of AC, NC and RC will be available at the AGM to answer questions relating to the Company’s affairs and the work of various committees. The external Auditors will also be present to assist the Directors in addressing any relevant queries from the shareholders.

DEALINGS IN SECURITIES

The Group has adopted an internal code on dealings in securities in its shares by Directors, Management staff and employees in possession of confi dential information. The Group’s Directors and affected employees are not allowed to deal in securities while in possession of price-sensitive information or during the embargo period.

This internal code is modeled on the Best Practices Guide and has been disseminated to Directors and affected employees. A copy of the code on dealings in securities is also issued to any new affected employees at the time of them joining the Company.






POLICY ON INTERESTED PERSONS TRANSACTIONS

The Company has adopted a policy in respect of any transactions with interested persons and has procedures established for the review and approval of the Company’s interested person transactions to ensure that they are carried out on normal commercial terms or entered into on an arm’s length basis.

The Company also adopts the materiality thresholds imposed under Chapter 9 of the Listing Manual of SGX-ST to announce such transactions, or to announce and convene separate general meetings as and when potential transactions with the Interested Persons arise, to seek shareholders’ prior approval for these transactions.

Save as disclosed below, there are no interested person transactions between the Company or its subsidiaries and any of its interested persons during the fi nancial year under review.

Name of interested person

Aggregate value of all interested person transactions during the

fi nancial year under review (excluding transactions less

than S$100,000 and transactions conducted under shareholders’ mandate pursuant to Rule 920)

Aggregate value of all interested person transactions conducted

under the shareholders’ mandate pursuant to Rule 920

(excluding transactions less than S$100,000)

Group(Year-To-Date)

12 months ended

Group(Year-To-Date)

12 months ended

31 March 2009 31 March 2008 31 March 2009 31 March 2008

S$’000 S$’000 S$’000 S$’000

(A) Sale

CS Construction & Geotechnic Pte Ltd 2,400 – – –

CS Bored Pile System Pte Ltd 745 490 – –

THL Foundation Equipment Pte Ltd 1,279 7,219 – –

L&M Foundation Specialist Pte Ltd 5,629 2,051 – –

(B) Purchase

CS Construction & Geotechnic Pte Ltd 180 – – –

L&M Foundation Specialist Pte Ltd 4,968 – – –

MATERIAL CONTRACTS

There are no material contracts of the Group or its subsidiaries involving the interests of any Directors or controlling shareholders subsisting at the end of the fi nancial year ended 31 March 2009 other than those that have been announced via SGXNET.

RISK MANAGEMENT

Management regularly reviews the Group’s business and operational activities to identify areas of signifi cant business risks as well as appropriate measures to control and mitigate these risks within the Group’s policies and strategies.



DIRECTORS’ REPORT 34

STATEMENT BY DIRECTORS 42

INDEPENDENTAUDITORS’ REPORT 43

BALANCE SHEETS 44

CONSOLIDATED INCOME STATEMENT 45

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 46

CONSOLIDATED CASH FLOW STATEMENT 48

NOTES TO THE FINANCIAL STATEMENTS 50

SHAREHOLDERS’INFORMATION 113

WARRANTHOLDERS’ INFORMATION 115

NOTICE OF ANNUAL GENERAL MEETING 116

PROXY FORM 123

FINANCIAL CONTENTS

6507-TATHONG-AR09-financial.indd 336507-TATHONG-AR09-financial.indd 33 7/3/09 3:55:20 PM7/3/09 3:55:20 PM


DIRECTORS’ REPORT

We are pleased to submit this annual report to the members of the Company together with the audited fi nancial statements for the fi nancial year ended 31 March 2009.

DIRECTORSThe directors in offi ce at the date of this report are as follows:

Tan Chok KianNg San Tiong Ng Sun Ho Ng Sang Kuey Ong Tiew Siam Ng San Wee Leong Horn Kee Mak Lye Mun Low Seow Juan

DIRECTORS’ INTERESTSAccording to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50, particulars of interests of directors who held offi ce at the end of the fi nancial year (including those held by their spouses and infant children) in shares and warrants in the Company and related corporations are as follows:

Number of Number of shares held at sharesName of director and corporation beginning held at endin which interests are held of the year of the year

Tan Chok KianThe Company - ordinary shares - interests held 570,000 690,000- warrants - interests held – 57,000

Ng San TiongThe Company - ordinary shares - interests held 8,459,345 8,959,345 - deemed interests 210,215,160 237,430,160- warrants - interests held – 845,934 - deemed interests – 21,021,516

Chwee Cheng & Sons Pte Ltd * - ordinary shares - interests held 1,583,022 1,583,022 - deemed interests 5,994,580 5,994,580



DIRECTORS’ REPORT

DIRECTORS’ INTERESTS (cont’d)


Ng Sun HoThe Company - ordinary shares - interests held 6,138,630 6,138,630 - deemed interests 210,215,160 237,430,160- warrants - interests held – 613,863 - deemed interests – 21,021,516

Chwee Cheng & Sons Pte Ltd * - ordinary shares - interests held 1,376,230 1,376,230 - deemed interests 5,994,580 5,994,580

Ng Sang KueyThe Company - ordinary shares - interests held 4,125,350 4,345,350- warrants - interests held – 412,535

Chwee Cheng & Sons Pte Ltd * - ordinary shares - interests held 911,863 911,863

Ong Tiew SiamThe Company - ordinary shares - interests held 2,417,000 2,617,000- warrants - interests held – 241,700

Ng San WeeThe Company - ordinary shares - interests held 2,911,250 2,961,250 - deemed interests 210,215,160 237,430,160- warrants - interests held – 291,125 - deemed interests – 21,021,516

Chwee Cheng & Sons Pte Ltd * - ordinary shares - interests held 463,497 463,497 - deemed interests 5,994,580 5,994,580



DIRECTORS’ REPORT

DIRECTORS’ INTERESTS (cont’d)


Leong Horn KeeThe Company - ordinary shares - interests held 500,000 650,000- warrants - interests held – 50,000

Low Seow JuanThe Company - ordinary shares - interests held – 40,000

* Immediate and ultimate holding company

Except as disclosed in this report, no director who held offi ce at the end of the fi nancial year had interests in shares or debentures of the Company or of related corporations either at the beginning or at the end of the fi nancial year.

There were no changes in any of the above mentioned interests in the Company between the end of the fi nancial year and 21 April 2009.

Except as disclosed under the “Share Options” section of this report, neither at the end of, nor at any time during the fi nancial year, was the Company a party to any arrangements whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate.

In the normal course of business, the Company and its related corporations entered into transactions with companies in which directors have substantial interests as disclosed in note 29 to the fi nancial statements. However, the directors have neither received nor become entitled to receive any benefi t arising out of these transactions other than those to which they are ordinarily entitled to as shareholders of these companies.

Except as disclosed above and in the notes to the fi nancial statements, since the end of the last fi nancial year, no director has received or become entitled to receive, a benefi t by reason of a contract made by the Company or a related corporation with the director or with a fi rm of which he is a member or with a company in which he has a substantial fi nancial interest.



DIRECTORS’ REPORT

SHARE OPTIONSTat Hong Employee Share Option Scheme 2006 and Performance Share Plan

The Tat Hong Employee Share Option Scheme 2006 (“ESOS 2006”) and Performance Share Plan (“PSP”) were approved by the Company at its Extraordinary General Meeting on 8 December 2006. The ESOS 2006 and PSP are administered by the Option Shares/Performance Shares Plan Committee, comprising four directors, Mak Lye Mun (Chairman), Ng San Tiong, Ng Sun Ho and Ong Tiew Siam.

Other information regarding the ESOS 2006 and PSP are set out as follows:

- the Board of the Company may specify the vesting conditions which must be satisfi ed or waived by the Board before options and awards allocated under the ESOS 2006 and PSP may be dealt with;

- the exercise price for each share in respect of which an option is exercisable shall be a price equal to the market price;

- the options can be exercised 1 year after the grant; and

- the options granted expire after 5 years for non-executive directors and 10 years for the employees of the Company and its subsidiaries.

No options and performance shares have been granted during the fi nancial year or since the ESOS 2006 and PSP were established.

The options granted by the Company do not entitle the holders of the options, by virtue of such holdings, to any rights to participate in any share issue of any other company.

Tutt Bryant Share Plans and Performance Rights Plan

The Share Plans and Performance Rights Plan (“PRP”) of Tutt Bryant Group Limited (“Tutt Bryant”), a subsidiary of the Company, was approved and adopted by its members by virtue of the issue of Tutt Bryant’s prospectus dated 31 October 2005 and its subsequent listing on the Australian Stock Exchange on 15 December 2005. The Plans are administered by Tutt Bryant’s Remuneration and Nomination Committee, comprising three directors, Bernard Carrasco (Chairman), Kym Godson and Ng San Tiong.

Other information regarding the Plans is set out as follows:

(a) Exempt Share Plan (“ESP”)

- The purpose of the ESP is to encourage share ownership among all staff including executives of Tutt Bryant and its subsidiaries. The ESP provides that up to A$1,000 of shares can be acquired by employees of Tutt Bryant and its subsidiaries tax-free per income year, provided that the ESP is operated in accordance with Australian Income Tax Assessment Act.

- The Board of Tutt Bryant shall determine from time to time the acquisition price of shares offered.

- All shares offered under the ESP must not be disposed of or dealt with until the earlier of the end of three years from the date of acquisition of shares by the employee and cessation of employment of the participant by Tutt Bryant or a subsidiary of Tutt Bryant.



DIRECTORS’ REPORT

SHARE OPTIONS (cont’d)Tutt Bryant Share Plans and Performance Rights Plan (cont’d)

(b) Deferred Share Plan (“DSP”)

- The purpose of the DSP is to encourage share ownership among all staff and executives of Tutt Bryant and its subsidiaries. Any shares issued under the DSP will be held by a trust established for the DSP and attract a tax deferral arrangement of 10 years subject to satisfying the requirements of the Australian Income Tax Assessment Act. Disposal of shares under the DSP will also be effected through the trust.

- The Board of Tutt Bryant may specify the vesting conditions which must be satisfi ed or waived by the Board before shares allocated under the DSP may be dealt with.

- The Board of Tutt Bryant shall determine from time to time the acquisition price, if any, of shares offered.

- All shares offered under the DSP may not be disposed of or dealt with until the period determined by the Board when making the offer.

- Shares offered under the DSP will be subject to forfeiture provisions for a period of 10 years from the acquisition of the shares under which rights or interests in the shares are forfeited if the participant commits any act of fraud, defalcation or gross misconduct or any other conduct specifi ed in the offer in relation to Tutt Bryant or subsidiaries of Tutt Bryant.

(c) Performance Share Rights Plan (“PRP”)

- The purpose of the PRP is to reward and motivate senior executives, and to align the interests of shareholders and senior executives.

- Under the PRP, the Board of Tutt Bryant may offer performance rights to a person who the Board determines to be an employee of Tutt Bryant or a subsidiary of Tutt Bryant, or such other persons as the Board determines.

- No amount will be payable on exercise of a performance right unless the Board of Tutt Bryant has determined otherwise at the time it is offered.

- The Board of Tutt Bryant has the discretion to establish performance or other conditions that must be met before the performance rights can be exercised and also impose restrictions on disposal of shares delivered upon the exercise of a performance right.

- When performance rights are granted, the Board of Tutt Bryant will specify the circumstances in which the performance rights will expire. Unless otherwise determined by the Board, any unvested performance rights will lapse on the employee’s cessation of employment. The Board may also apply a forfeiture condition such that if the employee commits any act of fraud, defalcation or gross misconduct in relation to the affairs of Tutt Bryant and its subsidiaries, the shares may be forfeited.

- In assessing whether the performance criteria has been met, the Remuneration and Nomination Committees of Tutt Bryant will obtain independent data which provides Tutt Bryant and its comparative companies’ total shareholders return performance.



DIRECTORS’ REPORT

SHARE OPTIONS (cont’d)Tutt Bryant Share Plans and Performance Rights Plan (cont’d)

At the end of the fi nancial year, details of the rights granted under the PRP on the unissued ordinary shares of Tutt Bryant are as follows:

Rights Rights Number Financial Fair value outstanding outstanding of right years Date of per at Rights at holders at in which grant of performance 1 April Rights Rights cancelled/ 31 March 31 March rights rights right 2008 granted vested expired 2009 2009 vests

Executive 15 A$0.74 300,000 – (300,000) – – – 31 MarchDirectors of December 2009a subsidiary 2005 15 A$0.74 300,000 – – – 300,000 2 31 March December 2010 2005 9 A$0.74 16,104 – (16,104) – – – 31 March August 2009 2007

9 A$0.74 16,104 – – – 16,104 2 31 March August 2010 2007

632,208 – (316,104) – 316,104

Exercise of performance rights granted as compensation

During the fi nancial year, the following number of shares were issued on the exercise of performance rights previously granted as compensation:

Fair value per Vested balance Vested Exercised Vested balanceDate of performance at during during atgrant of rights right 31 March 2008 the year the year 31 March 2009 15 December 2005 A$0.74 150,000 – (150,000) –15 December 2005 A$0.74 – 300,000 (187,500) 112,5009 August 2007 A$0.74 8,052 16,104 (18,117) 6,039

158,052 316,104 (355,617) 118,539

Except as disclosed above, there were no other unissued shares of the Company or its subsidiaries under options granted by the Company or its subsidiaries as at the end of the fi nancial year.



DIRECTORS’ REPORT

AUDIT COMMITTEEThe members of the Audit Committee during the year and at the date of this report are as follows:

• Leong Horn Kee (Chairman)• Tan Chok Kian• Low Seow Juan

The Audit Committee performs the functions specifi ed by section 201B of the Companies Act, Chapter 50, the SGX Listing Manual and the Code of Corporate Governance.

The Audit Committee held four meetings during the year. In performing its functions, the Audit Committee met with the Company’s external and internal auditors to discuss the scope of their work and the results of their examination and evaluation of the Company’s system of internal accounting controls.

The Audit Committee also reviewed the following:

• assistance provided by the Company’s offi cers to the internal and external auditors;

• quarterly fi nancial information and annual fi nancial statements of the Group and of the Company prior to their submission to the directors of the Company for adoption; and

• interested person transactions (as defi ned in Chapter 9 of the SGX Listing Manual).

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and discretion to invite any director or executive offi cer to attend its meetings.

The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.

The Audit Committee has reviewed the independence of the external auditors and determined that the external auditors were independent in carrying out the audit of the fi nancial statements.

The Audit Committee has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.



AUDITORSThe auditors, KPMG LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Tan Chok KianDirector

Ng San TiongDirector

28 May 2009

DIRECTORS’ REPORT



In our opinion:

(a) the fi nancial statements set out on pages 44 to 112 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2009 and the results, changes in equity and cash fl ows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

The Board of Directors has, on the date of this statement, authorised these fi nancial statements for issue.

On behalf of the Board of Directors

Tan Chok KianDirector

Ng San TiongDirector

28 May 2009

STATEMENT BY DIRECTORS



INDEPENDENT AUDITORS’ REPORTMEMBERS OF THE COMPANY TAT HONG HOLDINGS LTD

We have audited the accompanying fi nancial statements of Tat Hong Holdings Ltd (the “Company”) and its subsidiaries (the “Group”), which comprise the balance sheets of the Group and the Company as at 31 March 2009, the income statement, statement of changes in equity and cash fl ow statement of the Group for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 44 to 112.

Management’s responsibility for the fi nancial statements

Management is responsible for the preparation and fair presentation of these fi nancial statements in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards. This responsibility includes:

(a) devising and maintaining a system of internal accounting controls suffi cient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profi t and loss accounts and balance sheets and to maintain accountability of assets;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility

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

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

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

Opinion

In our opinion:

(a) the consolidated fi nancial statements of the Group and balance sheet of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2009 and of the results, changes in equity and cash fl ows of the Group for the year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by the subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

KPMG LLPPublic Accountants andCertifi ed Public Accountants

Singapore28 May 2009



BALANCE SHEETSAS AT 31 MARCH 2009

Group Company

Note 2009 2008 2009 2008 $’000 $’000 $’000 $’000

Non-current assets Property, plant and equipment 3 385,741 315,724 7 4Subsidiaries 4 – – 133,096 132,961Associates 5 61,165 50,080 29,894 35,849Joint ventures 6 28,110 24,040 22,454 21,521Other fi nancial assets 7 1,199 2,909 998 2,708Finance lease receivables 8 4 33 – –Deferred tax assets 9 3,862 584 – –Intangible assets 10 44,657 50,347 – –

524,738 443,717 186,449 193,043Current assets Other fi nancial assets 7 5 6 – –Inventories 11 217,686 207,545 – –Trade and other receivables 12 97,725 113,281 64,964 75,502Cash and cash equivalents 13 46,280 75,442 1,626 62

361,696 396,274 66,590 75,564

Total assets 886,434 839,991 253,039 268,607 Equity Share capital 14 189,122 189,122 189,122 189,122Reserves 15 199,916 183,967 38,701 50,943

389,038 373,089 227,823 240,065Minority interests 72,854 75,790 – –

Total equity 461,892 448,879 227,823 240,065 Non-current liabilities Trade and other payables 16 5,261 4,290 – –Financial liabilities 17 132,474 96,490 14,002 17,929Deferred tax liabilities 9 6,063 4,265 – –

143,798 105,045 14,002 17,929Current liabilities Trade and other payables 16 182,325 211,897 2,851 4,494Financial liabilities 17 85,009 51,950 6,900 4,500Current tax payable 13,410 22,220 1,463 1,619

280,744 286,067 11,214 10,613

Total liabilities 424,542 391,112 25,216 28,542

Total equity and liabilities 886,434 839,991 253,039 268,607

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



CONSOLIDATED INCOME STATEMENTYEAR ENDED 31 MARCH 2009

Note 2009 2008 $’000 $’000

Revenue 18 631,761 639,871Cost of sales (390,622) (395,681)

Gross profi t 241,139 244,190Other operating income 14,593 17,065Distribution expenses (14,495) (13,335)Administrative expenses (10,599) (11,146)Other operating expenses (135,779) (106,506)

Results from operating activities 94,859 130,268Finance expense 19 (12,352) (10,026)

82,507 120,242Share of profi ts of associates (net of tax) 12,873 9,187Share of profi ts of joint ventures (net of tax) 2,075 2,295

Profi t before income tax 20 97,455 131,724Income tax expense 21 (20,770) (30,183)

Profi t for the year 76,685 101,541

Attributable to: Equity holders of the Company 68,889 89,786Minority interests 7,796 11,755


Earnings per share Basic earnings per share (cents) 22(a) 13.62 17.73

Diluted earnings per share (cents) 22(b) 13.62 17.73




CONSOLIDATED STATEMENT OF CHANGES IN EQUITYYEAR ENDED 31 MARCH 2009

Total attributable to equity Share Fair Currency Accumu- holders Share option Capital value translation lated of the Minority Total Note capital reserve reserves reserve reserve profi ts Company interests equity

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 1 April 2007 132,037 220 11,445 489 (1,826) 112,161 254,526 48,829 303,355

Net gain on translation of net investment in foreign entities – – – – 1,168 – 1,168 453 1,621Fair value change on available-for-sale fi nancial assets – – – (610) – – (610) – (610)

Net (loss)/gain recognised directly in equity – – – (610) 1,168 – 558 453 1,011Profi t for the year – – – – – 89,786 89,786 11,755 101,541

Total expenses/income recognised for the year – – – (610) 1,168 89,786 90,344 12,208 102,552Issue of new shares (net of share issue expenses) 14 56,817 – – – – – 56,817 – 56,817Issue of new shares under Employee Option Plan (net of share issue expenses) 14 268 – – – – – 268 – 268Value of employee services received for issue of share options – 104 – – – – 104 45 149Capital injection from minority shareholders – – – – – – – 5,058 5,058Acquisition of subsidiaries/ businesses 23 – – – – – – – 13,863 13,863Disposal of a subsidiary 23 – – – – – – – (484) (484)Transfer to reserves – – 202 – – (202) – – –Dividends 24 – – – – – (28,970) (28,970) (3,729) (32,699)

At 31 March 2008 189,122 324 11,647 (121) (658) 172,775 373,089 75,790 448,879




Total attributable to equity Reserve Share Fair Currency Accumu- holders Share for own option Capital value translation lated of the Minority Total Note capital shares reserve reserves reserve reserve profi ts Company interests equity

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 1 April 2008 189,122 – 324 11,647 (121) (658) 172,775 373,089 75,790 448,879

Net gain/(loss) on translation of net investment in foreign entities – – (68) 111 – (14,389) – (14,346) (8,371) (22,717)Fair value change on available-for-sale fi nancial assets – – – – (1,710) – – (1,710) – (1,710)Net fair value change on available-for-sale fi nancial assets transferred to income statement – – – – 1,831 – – 1,831 – 1,831

Net gain/(loss) recognised directly in equity – – (68) 111 121 (14,389) – (14,225) (8,371) (22,596)Profi t for the year – – – – – – 68,889 68,889 7,796 76,685

Total expenses/income recognised for the year – – (68) 111 121 (14,389) 68,889 54,664 (575) 54,089Value of employee services received for issue of share options – – 175 – – – – 175 76 251Transfer to reserves – – – 575 – – (575) – – –Issue of new shares under Share Option Plan of a subsidiary – – (195) – – – – (195) 195 –Repurchase of shares 15 – (1,780) – – – – – (1,780) – (1,780)Capital injection by minority shareholder – – – – – – – – 2,140 2,140Dividends 24 – – – – – – (36,915) (36,915) (4,772) (41,687)

At 31 March 2009 189,122 (1,780) 236 12,333 – (15,047) 204,174 389,038 72,854 461,892

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYYEAR ENDED 31 MARCH 2009




CONSOLIDATED CASH FLOW STATEMENTYEAR ENDED 31 MARCH 2009

Note 2009 2008 $’000 $’000

Operating activities Profi t for the year 76,685 101,541Adjustments for: Impairment loss on available-for-sale quoted equity shares 1,831 –Impairment loss on property, plant and equipment 152 –Impairment loss on goodwill of associates 3,150 –Impairment loss on intangible assets 1,246 –Depreciation of property, plant and equipment 41,842 32,783Gain on disposal of property, plant and equipment (9,608) (6,795)Property, plant and equipment written off 35 17Amortisation of intangible assets 1,106 4,248Gain on dilution of a subsidiary – (2,895)Loss/(gain) on liquidation/disposal of an associate 2 (2,249)Gain on disposal of available-for-sale quoted equity shares – (859)Liability for long service and annual leave 3,968 3,611Share of profi ts of associates (12,873) (9,187)Share of profi ts of joint ventures (2,075) (2,295)Loss/(gain) on fair value adjustment on derivatives 2,802 (1,883)Provisions 535 516Value of employee services received for issue of share options 251 283Dividend income (71) (740)Interest income (1,546) (2,436)Interest expense 12,352 9,728Income tax expense 20,770 30,183

Operating profi t before working capital changes 140,554 153,571

Changes in working capital: Inventories (87,500) (74,068)Trade and other receivables 10,032 (25,065)Trade and other payables (19,911) 34,359

Cash generated from operations 43,175 88,797Income taxes paid (30,982) (20,397)Payment for long service and annual leave and others (3,416) (3,674)

Cash fl ows from operating activities 8,777 64,726




CONSOLIDATED CASH FLOW STATEMENTYEAR ENDED 31 MARCH 2009

Note 2009 2008 $’000 $’000

Investing activities Purchase of property, plant and equipment (28,835) (38,881)Purchase of other fi nancial assets – (656)Purchase of intangible assets (265) (206)Proceeds from disposal of property, plant and equipment 21,050 16,726Proceeds from disposal of other fi nancial assets – 2,514Proceeds from disposal of associates 49 4,122Investment in joint ventures – (2,080)Investments in associates (1,898) (10,480)Net cash outfl ow upon acquisition/disposal/dilution of interest in subsidiaries and businesses 23 (11,502) (20,277)Payments for share buyback (1,780) –Interest received 1,554 2,434Dividends received from associates 1,875 1,727Dividends received from quoted securities 71 740

Cash fl ows from investing activities (19,681) (44,317)

Financing activities Net proceeds from issue of shares – 57,085Proceeds from bank loans 60,240 37,694Repayment of bank loans (33,615) (41,563)Capital injection by minority shareholders 2,140 5,058Loans to associates (1,606) (1,035)Loan to joint venture (80) –Repayment of loans from associates 2,721 –Proceeds from fi nance lease obligations 41,220 23,440Repayment of fi nance lease obligations (37,978) (29,026)Interest paid (12,295) (9,892)Dividends paid to minority shareholders (4,772) (3,729)Dividends paid (36,915) (28,970)

Cash fl ows from fi nancing activities (20,940) 9,062

Net (decrease)/increase in cash and cash equivalents (31,844) 29,471Cash and cash equivalents at beginning of the year 74,859 44,826Effect of exchange rate fl uctuations on cash held (3,033) 562

Cash and cash equivalents at end of the year 13 39,982 74,859

During the fi nancial year, the Group acquired property, plant and equipment with an aggregate cost of $72,959,000 (2008: $49,488,000) of which $44,124,000 (2008: $10,607,000) was acquired by means of fi nance leases. In addition, property, plant and equipment of $65,617,000 (2008: $32,623,000) was reclassifi ed from inventories during the fi nancial year, of which $41,220,000 (2008: $23,440,000) was fi nanced by means of fi nance leases.




NOTES TO THE FINANCIAL STATEMENTSYEAR ENDED 31 MARCH 2009

These notes form an integral part of the fi nancial statements.

The fi nancial statements were authorised for issue by the Board of Directors on 28 May 2009.

1 DOMICILE AND ACTIVITIESTat Hong Holdings Ltd (the Company) is incorporated in the Republic of Singapore and has its registered offi ce at 18 Sungei Kadut Avenue, Singapore 729489.

The principal activities of the Company are those relating to investment holding. The principal activities of the subsidiaries are set out in note 4 below.

The immediate and ultimate holding company is Chwee Cheng & Sons Pte Ltd, a company incorporated in the Republic of Singapore.

The consolidated fi nancial statements relate to the Company and its subsidiaries (together referred to as the Group) and the Group’s interest in associates and joint ventures.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of preparation

The fi nancial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).

The fi nancial statements have been prepared on the historical cost basis except for certain fi nancial assets and liabilities which are measured at fair value.

The fi nancial statements are presented in Singapore dollars which is the Company’s functional currency. All fi nancial information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.

The preparation of fi nancial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

In particular, information about signifi cant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most signifi cant effect on the amount recognised in the fi nancial statements are described in the following notes:

• Note 2.7 – classifi cation of leases;• Note 3 – useful life and depreciation of property, plant and equipment;• Note 5 – impairment losses of associates;• Note 10 – assumptions of recoverable amounts relating to goodwill impairment;• Note 21 – income taxes;• Note 23 – valuation of assets, liabilities and contingent liabilities acquired in business combinations;

and• Note 25 – valuation of fi nancial instruments.

The accounting policies used by the Group have been applied consistently to all periods presented in these fi nancial statements.




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.2 Consolidation

Business combinations

Business combinations are accounted for under the purchase method. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

The excess of the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of acquisition is credited to the income statement in the period of the acquisition.

Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group.

Associates and joint ventures

Associates are those entities in which the Group has signifi cant infl uence, but not control, over their fi nancial and operating policies. Signifi cant infl uence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic fi nancial and operating decisions. Associates and joint ventures (collectively referred to as “equity accounted investees”) are accounted for using the equity method. The consolidated fi nancial statements include the Group’s share of the income, expenses and equity movements of associates and joint ventures, after adjustments to align the accounting policies with those of the Group, from the date that signifi cant infl uence or joint control commences until the date that signifi cant infl uence or joint control ceases. When the Group’s share of losses exceeds its interest in an associate or a joint venture, the carrying amount of that interest (including any long-term investments) is reduced to zero and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

Transactions eliminated on consolidation

Intra-group balances, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated fi nancial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries, associates and joint ventures by the Company

Investments in subsidiaries, associates and joint ventures are stated in the Company’s balance sheet at cost less accumulated impairment losses.



2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.3 Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated at the respective functional currencies of the Group’s entities at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined.

Foreign currency differences arising on retranslation are recognised in the income statement, except for differences arising on the retranslation of monetary items that in substance form part of the Group’s net investment in a foreign operation (see below) and available-for-sale equity instruments (see note 2.6).

Foreign operations

The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates prevailing at the balance sheet date. The income and expenses of foreign operations are translated to Singapore dollars at exchange rates prevailing at the dates of the transactions. Goodwill and fair value adjustment arising on the acquisition of a foreign operations are treated as assets and liabilities of the foreign operations and translated at the closing rate.

Foreign currency differences are recognised in the foreign currency translation reserve. When a foreign operation is disposed of, in part or in full, the relevant amount in the foreign exchange translation reserve is transferred to the income statement.

Net investment in a foreign operation

Exchange differences arising from monetary items that in substance form part of the Company’s net investment in a foreign operation are recognised in the Company’s income statement. Such exchange differences are reclassifi ed to equity in the consolidated fi nancial statements. When the foreign operation is disposed of, the cumulative amount in equity is transferred to the income statement as an adjustment to the profi t or loss arising on disposal.

2.4 Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the cost of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefi ts embodied within the part will fl ow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.4 Property, plant and equipment (cont’d)

Gains or losses arising from the retirement or disposal of property, plant and equipment are determined as the difference between the estimated net sale proceeds and the carrying amount of the asset and are recognised in the income statement on the date of retirement or disposal.

No depreciation is provided on freehold land. Depreciation on other property, plant and equipment is recognised in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.

The estimated useful lives are as follows:

Leasehold properties Over the terms of the leases between 25 to 43 yearsBuildings on freehold land 50 yearsPlant and machinery 10 to 20 yearsFurniture, fi ttings, offi ce and workshop equipments 3 to 5 yearsMotor vehicles 5 yearsVessels 12 years

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each balance sheet date.

2.5 Intangible assetsGoodwill

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities of the acquiree.

Goodwill arising on the acquisition of subsidiaries is presented in intangible assets. Goodwill arising on the acquisition of associates and joint ventures is presented together with investments in associates and joint ventures.

Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment as described in note 2.8. Negative goodwill is recognised immediately in the income statement.

Acquisition of minority interest

Goodwill arising on the acquisition of a minority interest in a subsidiary represents the excess of the cost of the additional investment over the carrying amount of the net assets acquired at the date of exchange.

Other intangible assets

Other intangible assets that are acquired by the Group, which have fi nite useful lives, are stated at cost less accumulated amortisation.

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefi nite. Other intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:

Customer relationships 1 to 7 yearsComputer software 3 years




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.6 Financial instruments

Non-derivative fi nancial instruments

Non-derivative fi nancial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents, fi nancial liabilities and trade and other payables.

Non-derivative fi nancial instruments are recognised initially at fair value plus, for instruments not at fair value through profi t or loss, any directly attributable transaction costs. Subsequent to initial recognition, non-derivative fi nancial instruments are measured as described below.

A fi nancial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash fl ows from the fi nancial assets expire or if the Group transfers the fi nancial asset to another party without retaining control or transfers substantially all the risks and rewards of the asset. Regular way purchases and sales of fi nancial assets are accounted for at trade date, i.e, the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specifi ed in the contract expire or are discharged or cancelled.

Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on demand and that form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the cash fl ow statement.

Financial assets at fair value through profi t or loss

An instrument is classifi ed as at fair value through profi t or loss if it is acquired principally for the purpose of selling in the short term or is designated as such upon initial recognition. Financial instruments are designated as fair value through profi t or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk management and investment strategies. Upon initial recognition, attributable transaction costs are recognised in the income statement when incurred. Financial instruments at fair value through profi t or loss are measured at fair value, and changes therein are recognised in the income statement.

Held-to-maturity investments

If the Group has the positive intent and ability to hold debt securities to maturity, they are classifi ed as held-to-maturity. Held-to-maturity investments are measured at amortised cost using the effective interest rate method, less any impairment losses.

Available-for-sale fi nancial assets

The Group’s investments in equity securities and certain debt securities are classifi ed as available-for-sale fi nancial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than for impairment losses, and foreign exchange gains and losses on available-for-sale monetary items (see note 2.3), are recognised directly in equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to the income statement. Any fair value changes relating to equity securities which are considered signifi cant or prolonged are accounted for as impairment losses in the income statement.




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.6 Financial instruments (cont’d)

Other

Other non-derivative fi nancial instruments are measured at amortised cost using the effective interest rate method, less any impairment losses.

Derivative fi nancial instruments and hedging activities

The Group holds derivative fi nancial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the defi nition of a derivative, and the combined instrument is not measured at fair value through profi t or loss.

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the income statement when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

Cash fl ow hedges

Changes in the fair value of the derivative hedging instrument designated as a cash fl ow hedge are recognised directly in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in the income statement.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in equity remains there until the forecast transaction occurs. When the hedged item is a non-fi nancial asset, the amount recognised in equity is transferred to the carrying amount of the asset when it is recognised. In other cases the amount recognised in equity is transferred to the income statement in the same period that the hedged item affects profi t or loss.

Fair value hedges

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognised in the income statement. The hedged item is also stated at fair value in respect of the risk being hedged; the gain or loss attributable to the hedged risk is recognised in the income statement and the carrying amount of the hedged item is adjusted.

Economic hedges

Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities denominated in foreign currencies. Changes in the fair value of such derivatives are recognised in the income statement as part of gain or loss on fair value adjustment on derivatives.

Separable embedded derivatives

Changes in the fair value of separable embedded derivatives are recognised immediately in the income statement.




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.6 Financial instruments (cont’d)

Impairment of fi nancial assets

A fi nancial asset is assessed at each balance sheet date to determine whether there is any objective evidence that it is impaired. A fi nancial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash fl ows of that asset.

An impairment loss in respect of a fi nancial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash fl ows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale fi nancial asset is calculated by reference to its current fair value.

Individually signifi cant fi nancial assets are tested for impairment on an individual basis. The remaining fi nancial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in the income statement. Any cumulative loss in respect of an available-for-sale fi nancial asset recognised previously in equity is transferred to the income statement.Impairment losses in respect of fi nancial assets measured at amortised cost and available-for-sale debt securities are reversed if the subsequent increase in fair value can be related objectively to an event occurring after the impairment loss was recognised.

Impairment losses once recognised in the income statement in respect of available-for-sale equity securities are not reversed through the income statement. Any subsequent increase in fair value of such assets is recognised directly in equity.

Intra-group fi nancial guarantees

Financial guarantees are fi nancial instruments issued by the Group that requires the issuer to make specifi ed payments to reimburse the holder for the loss it incurs because a specifi ed debtor fails to meet payment when due in accordance with the original or modifi ed terms of a debt instrument.

Financial guarantees are recognised initially at fair value. Subsequent to initial measurement, the fi nancial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. When fi nancial guarantees are terminated before their original expiry date, the carrying amount of the fi nancial guarantees is transferred to the income statement.

Share capital

Ordinary shares are classifi ed as equity.

Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

Where share capital recognised as equity is repurchased (treasury shares), the amount of the consideration paid, including directly attributable costs, net of any tax effects, is presented as a deduction from equity. Where such shares are subsequently reissued, sold or cancelled, the consideration received is recognised as a change in equity. No gain or loss is recognised in the income statement.




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.7 Leases

When entities within the Group are lessees of a fi nance lease

Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classifi ed as fi nance leases. Upon initial recognition, property, plant and equipment acquired through fi nance leases are capitalised at the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between fi nance expense and reduction of the lease liability. The fi nance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confi rmed.

At inception, an arrangement that contains a lease is accounted for as such based on the terms and conditions even though the arrangement is not in the legal form of a lease.

When entities within the Group are lessees of an operating lease

Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease payments made. Contingent rentals are charged to the income statement in the accounting period in which they are incurred.

When entities within the Group are lessors of an operating lease

Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.

2.8 Impairment – non-fi nancial assetsThe carrying amounts of the Group’s non-fi nancial assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifi able asset group that generates cash fl ows that largely are independent from other assets and groups. Impairment losses are recognised in the income statement unless it reverses a previous revaluation, credited to equity, in which case it is charged to equity. Impairment losses recognised in respect of cash-generating units are allocated fi rst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset or cash-generating unit.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each balance sheet date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are recognised in the income statement.




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.9 Inventories

Heavy machinery, equipment and spare parts

Inventories held for resale are stated at the lower of cost (principally specifi c identifi cation and weighted average cost method) and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses.

Cost of machinery and equipment is determined on specifi c identifi cation cost basis. Cost of spare parts is calculated using weighted average cost basis.

Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

2.10 Employee benefi tsDefi ned contribution plans

Obligations for contributions to defi ned contribution plans are recognised as an expense in the income statement as incurred.

Short-term employee benefi ts

Short-term employee benefi t obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profi t-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Long service leave

The liability for employee benefi ts for long service leave represents the present value of the estimated future cash outfl ows to be made by the employer resulting from employee’s services provided up to the balance sheet date.

In determining the provision for long service leave, consideration has been given to future increases in wage and salary rates, expired settlement dates and experience with staff departures. Related on-costs, as described above, have also been included in the liability.

Provision for employee entitlements which are not expected to be settled within twelve months are discounted using the rates attached to certain government securities at balance sheet date, which most closely match the terms of maturity of the related liabilities.

Share-based payments

The Performance Rights Plan allows certain subsidiaries’ employees to receive shares of a subsidiary. The fair value of performance rights granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the performance rights. The fair value of the performance rights granted is measured using a Monte Carlo simulation model, taking into account the terms and conditions upon which the performance rights were granted. The amount recognised as an expense is adjusted to refl ect the actual number of performance rights that vest except where forfeiture is only due to share prices not achieving the threshold for vesting.




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.11 Provisions

A provision is recognised in the balance sheet when the Group has a legal or constructive obligation as a result of a past event, and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash fl ows at a pre-tax rate that refl ects current market assessments of the time value of money and, where appropriate, the risks specifi c to the liability.

Warranties

A provision for warranties is recognised when the underlying products are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

Reinstatement costs for leased property

A provision for reinstatement costs for leased property is recognised when an underlying make good obligation clause exists in property lease contracts.

2.12 Revenue recognitionRental income

Rental income receivable under operating leases is recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income to be received. Contingent rentals are recognised as income in the accounting period in which they are earned.

Sale of equipment, machinery and spare parts

Revenue from sale of equipment, machinery and spare parts are recognised upon the delivery to the customer which is taken to be the point in time when the signifi cant risks and rewards of ownership have been transferred to the customer. Revenue excludes goods and services taxes and is arrived at after deduction of trade discounts. No revenue is recognised if there are signifi cant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

Dividend

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




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.13 Finance income and expense

Finance income comprises interest income on funds invested and gains on hedging instruments that are recognised in the income statement. Interest income is recognised as it accrues, using the effective interest rate method. Dividend income is recognised on the date that the Group’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions and losses on hedging instruments that are recognised in the income statement. All borrowing costs are recognised in the income statement using the effective interest rate method, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale.

2.14 Income tax expenseIncome tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profi t, and differences relating to investments in subsidiaries and joint ventures to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profi ts will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each balance sheet date and are reduced to the extent that it is no longer probable that the related tax benefi t will be realised.




2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)2.15 Segment

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

Segment information is presented in respect of the Group’s business and geographical segments. The primary format, business segments, is based on the Group’s management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise income-earning assets and revenue, interest-bearing loans and expenses, and corporate assets and expenses.

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

Business segments

The main business segments of the Group are:

Crane rental: relates to rental of cranes, heavy machinery, construction industrial equipment and its related services;

Tower crane rental: relates to rental of tower cranes;

General equipment rental: relates to rental of maintenance equipment and plant hire services and contracting for heavy haulage, compaction services, civil engineering, rail maintenance and excavation;

Equipment sales: relates to sale of cranes, heavy machinery and construction industrial equipment; and

Spare parts: relates to sale of spare parts and provision of training and maintenance services.

Geographical segments

The above business segments are managed on a worldwide basis, but operate in three principal geographical areas, namely ASEAN, Australia, People’s Republic of China and other regions.

In representing information on the basis of geographical segments, segment revenue is based on the geographical location where the services are rendered and the products are sold. Segment assets are based on the geographical location of the assets.




3 PROPERTY, PLANT AND EQUIPMENT

Furniture, fi ttings, offi ce and Freehold Freehold Leasehold Plant and Motor workshop Note land properties properties machinery vehicles equipment Vessels Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Cost At 1 April 2007 8,758 11,998 28,682 250,964 22,783 8,696 – 331,881Additions – – 2,432 44,661 1,733 662 – 49,488Reclassifi cation to intangible assets – – – – – (26) – (26)Reclassifi cation from inventories – – – 32,623 – – – 32,623Disposals/ Write-offs – – – (17,008) (1,512) (353) – (18,873)Transfer/ Reclassifi cation – – – 679 (34) (645) – –Acquisition of a subsidiary 23 – – 933 24,485 705 170 6,150 32,443Disposal of a subsidiary 23 – – – – – (4) – (4)Translation difference on consolidation 286 460 (46) 5,440 717 107 (33) 6,931

At 31 March 2008 9,044 12,458 32,001 341,844 24,392 8,607 6,117 434,463Additions – 130 555 58,738 11,691 1,461 384 72,959Disposals/ Write-offs – – (127) (20,531) (908) (493) (2,783) (24,842)Reclassifi cation from inventories – – – 61,065 – – 4,552 65,617Acquisition of subsidiaries/ businesses 23 – – – 8,459 505 8 – 8,972Translation difference on consolidation (1,320) (2,135) (9) (30,960) (4,580) (843) 335 (39,512)

At 31 March 2009 7,724 10,453 32,420 418,615 31,100 8,740 8,605 517,657




3 PROPERTY, PLANT AND EQUIPMENT (cont’d)

Furniture, fi ttings, offi ce and Freehold Freehold Leasehold Plant and Motor workshop land properties properties machinery vehicles equipment Vessels Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Accumulated depreciation and impairment losses At 1 April 2007 629 3,121 7,474 66,821 9,807 5,063 – 92,915Depreciation charge for the year – 437 1,016 27,807 1,980 1,405 138 32,783Disposals/Write-offs – – – (7,486) (1,090) (347) – (8,923)Transfer/Reclassifi cation – – – 670 (25) (645) – –Translation difference on consolidation – 116 (13) 1,514 285 66 (4) 1,964

At 31 March 2008 629 3,674 8,477 89,326 10,957 5,542 134 118,739Depreciation charge for the year – 396 1,196 33,002 3,349 1,531 2,368 41,842Impairment losses 152 – – – – – – 152Disposals/Write-offs – – – (10,925) (1,594) (645) (201) (13,365)Translation difference on consolidation – (656) (28) (12,614) (1,683) (575) 104 (15,452)

At 31 March 2009 781 3,414 9,645 98,789 11,029 5,853 2,405 131,916 Carrying amount

At 31 March 2007 8,129 8,877 21,208 184,143 12,976 3,633 – 238,966

At 31 March 2008 8,415 8,784 23,524 252,518 13,435 3,065 5,983 315,724

At 31 March 2009 6,943 7,039 22,775 319,826 20,071 2,887 6,200 385,741

Property, plant and equipment with carrying amount of $187,237,000 (2008: $134,502,000) were acquired under fi nance lease arrangements.

Impairment losses

The recoverable amount of freehold land is based on an independent valuation carried out in March 2009. The recoverable amount of the freehold land was determined to be lower than its carrying amount, accordingly an impairment loss of $152,000 (2008: $Nil) was recognised in other operating expenses during the fi nancial year ended 31 March 2009.




3 PROPERTY, PLANT AND EQUIPMENT (cont’d)Impairment losses (cont’d)

The relevant information on the Group’s properties is set out below:

Location Tenure Gross Area Nature

(Sq m)

8 Sungei Kadut AvenueSingapore 729645

28 years(Effective from 1 August 2007)

9,138 Offi ce and factory building

18 Sungei Kadut Avenue Singapore 729489

30 years(Effective from 1 November 1993)

3,604 Offi ce and factory building

19 Sungei Kadut Avenue Singapore 729654

40 years(Effective from 1 January 1980)

5,907 Offi ce andfactory building

21 Sungei Kadut AvenueSingapore 729656

40 years(Effective from 1 February 1980)


11 Gul Crescent Singapore 629524

60 years(Effective from 1 January 1981)


Tuas South Avenue 2/5 (Plot 1 at Land Parcel 593)

60 years(Effective from 8 April 2000)

6,222 Vacant land

PTD41666 and PTD41667Mukim Senai-Kulai Johor BahruMalaysia

Freehold 8,729 Vacant land

6 Ferngrove PlaceSouth Granville, NSW Australia

Freehold 11,500 Offi ce andfactory building

80 – 100 Frankston Dandenong RoadDandenong, VictoriaAustralia


50 Great Eastern HighwaySouth GuilfordAustralia


14 Ashover RoadRocklea, QueenslandAustralia

Freehold 19,579 Offi ce and factory building

163, 165, 167Paradise Street MackayQueenslandAustralia

Freehold 6,500 Offi ce and factory building

74 Mitchell RoadCandiff NSW Australia





3 PROPERTY, PLANT AND EQUIPMENT (cont’d)Impairment losses (cont’d)

Furniture, fi ttings, offi ce and work-shop equipment

$’000

Company

Cost At 1 April 2007 11Additions 3Disposals (2)

At 31 March 2008 12Additions 6

At 31 March 2009 18 Accumulated depreciation At 1 April 2007 7Depreciation charge for the year 2Disposals (1)

At 31 March 2008 8Depreciation charge for the year 3

At 31 March 2009 11 Carrying amount At 31 March 2007 4

At 31 March 2008 4

At 31 March 2009 7

The carrying amount of the property, plant and equipment is depreciated on a straight-line basis over the remaining useful life of each property, plant and equipment. Management reviews and revises the estimates of the remaining useful life and residual values of the property, plant and equipment at the end of each fi nancial year based on their age and condition at that time. Changes in the way the property, plant and equipment are used and other factors (such as market or technological factors) could impact the useful life and residual values of the property, plant and equipment, therefore future depreciation charges could be revised. Any changes in the useful life and residual values of the property, plant and equipment would impact the depreciation charges and consequently affect the Group’s and the Company’s results.




4 SUBSIDIARIES – COMPANY

2009 2008 $’000 $’000

Unquoted shares in subsidiaries, at cost 36,289 34,913Loans to subsidiaries 96,807 98,048

133,096 132,961

Loans to subsidiaries which form part of the Company’s net investments in subsidiaries, are interest-free, unsecured and settlement is neither planned nor likely to occur in the foreseeable future. As the amounts are, in substance, a part of the Company’s net investment in subsidiaries, they are stated at cost.

Details of the subsidiaries are as follows: Equity interest Place of held byName of subsidiaries Principal activities incorporation the Group

2009 2008 % %

Tat Hong HeavyEquipment Repair, reconditioning, Singapore 100 100(Pte.) Ltd. and its subsidiaries: repairing and supply of heavy machinery and equipment Tat Hong Machinery Pte Ltd Supply of spare parts Singapore 100 100 Tat Hong Flo-Line Pte Ltd Remanufacturing, Singapore 60 – repair and testing services of hydraulic pumps and motors Load Controls Systems Pte Ltd Supply of scientifi c and Singapore 70 70 precision equipment Tat Hong Plant Leasing Pte Ltd Rental of heavy machinery Singapore 100 100and its subsidiaries: and equipment and holding of investments Tat Hong United Logistics Pte Ltd Provision of transportation Singapore 100 100 and logistics services TH Heavylift Pte Ltd Crane rental, heavy lifting, Singapore 95 95 haulage and provision of erection service




4 SUBSIDIARIES – COMPANY (cont’d)

Equity interest Place of held byName of subsidiaries Principal activities incorporation the Group

2009 2008 % %

Peng Koon Heavy Supply of heavy machinery Singapore 70 70Machinery Pte Ltd and equipment, motor trucks and motor lorries

Tat Hong Offshore and Provision of offshore and Singapore 50* 50*Marine Services Pte Ltd marine services PT Tat Hong Batam Rental of heavy equipment, Indonesia 100 100 lifting services, repair and maintenance services PT World Wide Equipment Repair and maintenance Indonesia 50* 50*South East Asia services of machinery and heavy equipment Tat Hong Training Services Provision of training Singapore 100 100Pte Ltd courses and management consultancy work Leadpoint Pte Ltd Investment holding Singapore 70 70and its subsidiary: Dyno Engineering Pte Ltd Manufacturer and trading Singapore 70 70 of construction equipment Tat Hong International Pte Ltd Investment holding Singapore 100 100and its subsidiaries: Tat Hong Plant Hire Sdn Bhd Rental of heavy machinery, Malaysia 100 100 industrial equipment and cranes KP Equipment Services Inc. In the process of Philippines 100 100 voluntary liquidation PT Tatindo HeavyEquipment Distribution of heavy Indonesia 95 95 equipment and spare parts Tat Hong HeavyEquipment Trading of heavy equipment United Arab 100 100Middle East FZE and provision of related Emirates services Tat Hong Heavy Equipment Trading and rental of United Arab 49* 49*Middle East LLC construction equipment, Emirates machinery and spare parts






2009 2008 % %

Tat Hong HeavyEquipment Rental of construction Hong Kong 100 100(Hong Kong) Limited equipment andand its subsidiary: related services Tat Hong HeavyEquipment Rental and trading of Macau 100 100(Macau) Limited heavy equipment and construction machinery and repair and maintenance of equipment Tat Hong (V.N.) Pte Ltd Investment holding Singapore 70 70and its subsidiary: Tat Hong Vietnam Co., Ltd Rental of heavy equipment Vietnam 70 70 and machineries and provision of related services Tat Hong Equipment (China) Investment holding Singapore 100 100Pte. Ltd. and its subsidiaries: Shanghai Tat Hong Equipment Rental of tower cranes People’s 93 90Rental Co., Ltd. and other construction Republic of machineries China China Nuclear Huaxing Rental of construction People’s 76 76TatHong Machinery machinery & heavy lifting Republic ofConstruction Co. Ltd equipment, installation & China related engineering services & supplies Jiangsu Zheng He TatHong Rental, maintenance and People’s 55 55Equipment Rental Co., Ltd repair of construction Republic of machines and equipment; China sale of construction equipment; technology consultancy and related technical services Tutt Bryant Group Limited Supply of construction Australia 70 70and its subsidiaries: equipment and related services Tat Hong Equipment In the process of Australia 70 70Finance Pty Ltd voluntary liquidation






2009 2008 % %

Pacifi c Tutts Heavy Lift Deregistered Papua – 54(PNG) Ltd New Guinea BT Equipment Pty Ltd Supply of heavy machinery, Australia 70 70 equipment and related services EQR Investments Pty Ltd Investment holding Australia 70 70and its subsidiaries: Offi ce Cleaning Services Rental of equipment Australia 70 70Pty Ltd (EQ Hire Vic) North Sheridan Pty Ltd General hire operations Australia 70 70and its subsidiary:

Muswellbrook Crane Services Provision of crane rental Australia 70 70Pty Ltd and related services Kingston Industries Pty Ltd Plant hire services and Australia 70 70and its subsidiaries: contracting for heavy haulage, compaction services, civil engineering, rail maintenance and excavation Kingston Industries (WA) Pty Ltd Heavy haulage Australia 70 70 Relsok Pty Ltd Property holding Australia 70 70 Falconer Administration Provision of trustTrust administration services Australia 70 70 KPMG Singapore is the auditor of all Singapore-incorporated subsidiaries. Other member fi rms of KPMG International are auditors of signifi cant foreign-incorporated subsidiaries. For this purpose, a subsidiary is considered signifi cant as defi ned under the Singapore Exchange Limited Listing Manual if its net tangible assets represent 20% or more of the Group’s consolidated net tangible assets, or if its pre-tax profi ts account for 20% or more of the Group’s consolidated pre-tax profi ts.

* Note: Although the Group owns less than half of the voting power of these companies, it is able to govern the fi nancial and operating policies of the companies by virtue of agreement with the other investors. Consequently, the Group consolidates its investments in the companies as subsidiaries of the Group.




5 ASSOCIATES

Group

2009 2008 $’000 $’000

Investments in associates 59,434 47,210Loans to associates – interest free 1,731 2,870

61,165 50,080

Company

2009 2008 $’000 $’000

Quoted equity shares 28,975 31,381Unquoted equity shares 1,973 2,042

30,948 33,423Loans to associates – interest free 746 2,426

31,694 35,849Less: Impairment loss (1,800) –

29,894 35,849

Market value of quoted equity shares 20,078 45,181

During the fi nancial year, the Group acquired an associate and recognised goodwill amounting to $346,000 (2008:$5,755,000). The Group wrote off goodwill amounting to $3,150,000, which included goodwill of $346,000 that was written off by a subsidiary. Investments in associates as at 31 March 2009, after impairment losses, include goodwill of $5,755,000 (2008: $8,559,000).

An impairment loss of $4,604,000 (2008: $Nil) was recognised by the Company during the year. Of this amount, $2,804,000 (2008: $Nil) was written off by the Company.

The impairment assessments of the associates which are impaired was determined by applying a pre-tax discount rate of 11% to the cash fl ows.

Loans to associates which form part of the Group’s net investments in associates are interest-free, unsecured and settlement is neither planned nor likely to occur in the foreseeable future. As the amounts are, in substance, a part of the Group’s net investment in the associates, they are stated at cost.




5 ASSOCIATES (cont’d)Movements in allowance for impairment losses are as follows:

Company

2009 2008 $’000 $’000

At 1 April – 549Impairment losses recognised during the year 4,604 –Amount written off during the year (2,804) (549)

At 31 March 1,800 –

The summarised information is as follows: Group

2009 2008 $’000 $’000

Revenue 278,894 242,502Expenses (252,271) (212,696)

Profi t before income tax 26,623 29,806Income tax expense (5,048) (2,925)


Non-current assets 77,741 37,966

Current assets 236,641 223,054Current liabilities (94,055) (89,449)

142,586 133,605Non-current liabilities (31,837) (20,733)

Net assets 188,490 150,838

The summarised fi nancial information relating to the associates is not adjusted for the percentage of ownership held by the Group.

The Group’s share of the capital commitments of the associates is $Nil (2008: $Nil).




5 ASSOCIATES (cont’d)During the year, the Group has not recognised losses relating to an associate where the Group’s share of losses exceeds the carrying amount of its investment in the associate. The Group’s share of cumulative unrecognised losses is $2,709,000 (2008:$Nil). The Group has no obligation in respect of these losses.

Details of associates are as follows: Equity interest Place of held byName of associates Principal activities incorporation the Group

2009 2008 % %

Kian Ho Bearings Ltd Stockists, distributors and Singapore 31 30 retailers in bearings and seal products KT Lion Oilfi eld Services Limited Provision of rig and oilfi eld British Virgin 30 30 related services Islands KTH Mining Engineering Pte Ltd Investment holding and Singapore 45 45 mining engineering services EMC Cranes (KL) Sdn. Bhd. Dormant Malaysia 22 22 Tat Hong (Thailand) Co., Ltd Rental of construction Thailand 49 49 equipment and provision of parts and related services

THL Foundation Equipment Trading and rental of Singapore 45 45Pte Ltd construction equipment and related parts Tat Hong Properties Sdn Bhd Property investment Malaysia 30 30 Tat Hong Heavy Equipment Dormant Malaysia – 29(M) Sdn Bhd Plants & Machinery Parts Pty Ltd In the process of Australia 48 48 voluntary liquidation Pacifi c Tutts Heavy Lift (Aust) Rental of construction Australia 34 34Pty Ltd equipment and provision of related services Yongmao Holdings Limited Investment holding Singapore 20 20 Fushun Yongmao Construction To develop, manufacture People’s 20 20Machinery Co., Ltd. and sell tower cranes and Republic of other construction machinery China Beijing Yongmao Jiangong Manufacture of towercranes People’s 13 –Machinery Manufacturing and tower cranes accessories Republic ofCo., Ltd China




5 ASSOCIATES (cont’d)

Equity interest Place of held byName of associates Principal activities incorporation the Group

2009 2008 % %

Yongmao Machinery Pte Ltd Sales and distribution of Singapore 20 – tower cranes, construction machinery and related components ALCII – Tat Hong Joint Venture Import, export, trade and Vietnam 49 49Co., Ltd lease industrial and construction machinery and equipment; repair and maintain industrial machine and equipment of construction and lease warehouses R&D Holdings Pte Ltd Investment holding company Singapore 21 –and its subsidiary: R&D Technology (Suzhou) Business of precision People’s 21 –Co., Ltd engineering and Republic of mould making China

KPMG Singapore is the auditor of all Singapore-incorporated associates except for Yongmao Holdings Limited, Kian Ho Bearings Ltd, KTH Mining Engineering Pte Ltd and R&D Holdings Pte Ltd which are audited by Foo Kon Tan Grant Thorton, Ernst & Young and local audit fi rm respectively.

An associate is considered signifi cant as defi ned under the SGX Listing Manual if the Group’s share of its net tangible assets represent 20% or more of the Group’s consolidated net tangible assets, or if the Group’s share of its pre-tax profi ts account for 20% or more of the Group’s consolidated pre-tax profi ts.

6 JOINT VENTURES

Group Company

2009 2008 2009 2008 $’000 $’000 $’000 $’000

Investments in unquoted equity shares 13,595 10,437 7,939 7,918Loans to joint ventures 14,515 13,603 14,515 13,603

28,110 24,040 22,454 21,521




6 JOINT VENTURES (cont’d)Loans to joint ventures which form part of the Group’s net investments in joint ventures are interest-free, unsecured and settlement is neither planned nor likely to occur in the foreseeable future. As the amounts are, in substance, a part of the Group’s net investment in the joint ventures, they are stated at cost.Particulars of joint ventures are as follows: Equity interest Place of held byName of company Principal activities incorporation the Group

2009 2008 % %

Girdnal Oilfi eld Services Inc. Ownership and charter United States 50 50 of land rigs of America Global Oilfi eld Services Pte Ltd Provision of procurement Singapore 50 50 and project management services Tat Hong Energy Pte Ltd Supply of heavy machinery Singapore 50 50and its subsidiary: and investment holding PT Tat Hong Energy Indonesia Hiring of equipment Indonesia 50 50 and machinery

KPMG Singapore is the auditor of all Singapore-incorporated joint ventures.

A joint venture is considered signifi cant as defi ned under the Singapore Exchange Limited Listing Manual if the Group’s share of its net tangible assets represent 20% or more of the Group’s consolidated net tangible assets, or if the Group’s share of its pre-tax profi ts account for 20% or more of the Group’s consolidated pre-tax profi ts.

The Group’s share of the joint ventures’ results, assets and liabilities is as follows:

2009 2008 $’000 $’000

Revenue 10,570 13,212Expenses (7,426) (9,798)

Profi t before income tax 3,144 3,414Income tax expense (1,069) (1,119)


Non-current assets 27,779 35,108

Current assets 13,786 12,129Current liabilities (9,953) (12,205)

3,833 (76)Non-current liabilities (18,017) (24,595)

Net assets 13,595 10,437

The Group’s share of the capital commitments of the joint ventures is $Nil (2008: $ Nil).




7 OTHER FINANCIAL ASSETS

Group Company

2009 2008 2009 2008 $’000 $’000 $’000 $’000

Available-for-sale Unquoted equity shares 201 201 – –Quoted equity shares 998 2,708 998 2,708

1,199 2,909 998 2,708Held for trading Quoted equity shares 5 6 – –

8 FINANCE LEASE RECEIVABLES – GROUPAt 31 March 2009, the Group had obligations under fi nance leases that are receivable as follows:

Receipts Interest Principal Receipts Interest Principal

2009 2009 2009 2008 2008 2008 Note $’000 $’000 $’000 $’000 $’000 $’000

Receivable: Within 1 year 12 30 (3) 27 53 (4) 49 After 1 year but within 5 years 5 (1) 4 36 (3) 33

35 (4) 31 89 (7) 82

The following table indicates the effective interest rates at balance sheet date and the period in which they reprice:

Fixed interest rates maturing

Effective within within interest rate Total 1 year 1 to 5 years

% $’000 $’000 $’000

2009Finance lease receivables 7.8 31 27 4 2008 Finance lease receivables 7.8 82 49 33

Under the terms of the fi nance lease arrangements, no contingent rents are receivable.




9 DEFERRED TAX ASSETS AND LIABILITIES – GROUPMovements in deferred tax assets and liabilities (prior to offsetting of balances) during the year are as follows:

Acquisition Recognised Recognised At of in income Translation At in income Translation At 1 April subsidiaries statement difference on 31 March statement difference on 31 March 2007 (note 23) (note 21) consolidation 2008 (note 21) consolidation 2009

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Deferred tax assets Property, plant and equipment – – 18 (1) 17 83 3 103Unabsorbed wear and tear allowances and unutilised tax losses 147 – (139) (8) – – – –Allowances 2,347 – 176 83 2,606 2,437 (618) 4,425Other items 1,799 – (743) 53 1,109 (159) (56) 894

4,293 – (688) 127 3,732 2,361 (671) 5,422 Deferred tax liabilities Property, plant and equipment (6,804) (216) (155) (130) (7,305) (691) 373 (7,623)Intangible assets – (688) 690 (2) – – – –Other items (300) – 192 – (108) 115 (7) –

(7,104) (904) 727 (132) (7,413) (576) 366 (7,623) Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxation authority. The following amounts, determined after appropriate offsetting, are included in the balance sheet as follows:

2009 2008 $’000 $’000

Deferred tax liabilities (6,063) (4,265)Deferred tax assets 3,862 584

(2,201) (3,681)

Deferred tax assets of $87,000 (2008: $61,000) have not been recognised in respect of the following temporary differences:

2009 2008 $’000 $’000

Unutilised tax losses and capital allowances 514 348

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profi t will be available against which the Group can utilise these benefi ts.




10 INTANGIBLE ASSETS – GROUP

2009 2008 Note $’000 $’000

Goodwill arising on consolidation At 1 April 48,821 44,504Goodwill arising on acquisition of subsidiaries/businesses 23 5,529 2,609Translation difference on consolidation (9,034) 1,708

At 31 March 45,316 48,821

Less: Accumulated amortisation and impairment loss At 1 April 933 889Impairment loss 1,246 –Translation difference on consolidation (260) 44

At 31 March 1,919 933

Carrying amount 43,397 47,888

Customer relationships At 1 April 6,606 3,338Acquisition of a subsidiary 23 – 3,140Translation difference on consolidation (591) 128

At 31 March 6,015 6,606

Accumulated amortisation At 1 April 4,454 500Amortisation charge for the year 882 4,038Translation difference on consolidation (289) (84)

At 31 March 5,047 4,454

Carrying amount 968 2,152

Computer software At 1 April 1,172 907Additions 265 206Reclassifi cation from property, plant and equipment 3 – 26Translation difference on consolidation (219) 33

At 31 March 1,218 1,172

Less: Accumulated amortisation At 1 April 865 632Amortisation charge for the year 224 210Translation difference on consolidation (163) 23

At 31 March 926 865

Carrying amount 292 307

Total carrying amount 44,657 50,347

The amortisation and impairment loss is recognised in other operating expenses in the income statement.




10 INTANGIBLE ASSETS – GROUP (cont’d)Impairment testing for cash-generating units containing goodwill

Impairment tests for all cash generating units are based on value in use calculations. Those calculations use cash fl ow projections based on management’s forecast results for the year ending 31 March 2010. Cash fl ows for a further fi ve years are extrapolated using growth rates of 3% to 6% across all cash generating units, based on management’s knowledge and past experience of the businesses. A pre-tax discount rate of 11% to 15% (2008: 6% to 15%) has been used in discounting the projected cash fl ows.

Based on sensitivity analysis performed by the management, an increase of one percentage point in the discount rate or a 10% decrease in future planned revenues will have no impact on the impairment assessments.

The recoverable amount of an Australian rental cash-generating unit was estimated based on its value in use. The carrying amount of the unit was determined to be higher than its recoverable amount and an impairment loss of $1,246,000 was recognised. The impairment loss was allocated fully to goodwill, and is included in other operating expenses.

11 INVENTORIES – GROUP

2009 2008 $’000 $’000

Inventories for resale 210,943 187,664Inventories in transit 8,882 22,802Work-in-progress 3,155 2,706

222,980 213,172Allowance for inventory: At 1 April 5,627 4,253 Allowance made during the year 1,988 3,118 Inventory written off against allowance (2,073) (1,756) Translation difference on consolidation (248) 12

At 31 March 5,294 5,627

217,686 207,545




12 TRADE AND OTHER RECEIVABLES

Group Company

Note 2009 2008 2009 2008 $’000 $’000 $’000 $’000

Trade receivables 75,245 81,683 – –Allowance for receivables (3,850) (4,589) – –

71,395 77,094 – –Finance lease receivables 8 27 49 – –Non-trade receivables 568 105 – –Deposits: - for purchase of inventories 2,761 1,306 – –- for purchase of property, plant and equipment 3,263 127 – –- others 1,298 1,377 4 2Advance payments 536 258 – –Prepayments 3,120 2,665 140 175Staff loans and advances 104 225 3 3Expenses recoverable 866 200 17 61Tax recoverable 1,669 1,061 – –Interest receivables 2 10 – –Fair-value derivatives receivable – 1,603 – –Amounts due from: - related corporations 120 244 – –- related parties 338 1,341 – –- subsidiaries – – 58,300 55,939- associates 5,134 6,372 – 622- a substantial shareholder of a subsidiary 24 544 – –- a substantial shareholder of an associate 6,500 18,700 6,500 18,700

97,725 113,281 64,964 75,502

Amounts due from related corporations, related parties, subsidiaries, associates, substantial shareholders of a subsidiary and an associate are unsecured and interest-free.

The Group’s primary exposure to credit risk arises through its trade receivables. Concentration of credit risk relating to trade receivables is limited due to the Group’s many varied customers. These customers are internationally dispersed, engage in a wide spectrum of manufacturing and distribution activities, and sell in a variety of end markets. The Group’s historical experience in the collection of accounts receivable falls within the recorded allowances. Due to these factors, management believes that no additional credit risk beyond the amounts provided for collection losses is inherent in the Group’s trade receivables.




12 TRADE AND OTHER RECEIVABLES (cont’d)Impairment losses

The ageing of trade receivables and related parties balances at the balance sheet date is:

Impairment Impairment Gross losses Gross losses

2009 2009 2008 2008 $’000 $’000 $’000 $’000

Group

Not past due 63,146 (350) 58,266 (85)Past due 0 – 90 days 17,980 (658) 41,775 (862)Past due 91 – 180 days 3,510 (639) 2,687 (1,268)Past due 181 – 365 days 1,407 (885) 1,222 (819)Past due more than one year 1,318 (1,318) 4,934 (1,555)

87,361 (3,850) 108,884 (4,589)

The amounts outstanding of the Company at the balance sheet dates are not past due.

The change in impairment loss in respect of trade receivables and related parties balances during the year is as follows: Group

2009 2008 $’000 $’000

At 1 April 4,589 3,786Impairment loss recognised 2,727 2,449Amount reversed (1,646) (1,020)Amount utilised (1,574) (670)Acquisition of subsidiaries – 6Translation difference (246) 38

At 31 March 3,850 4,589

Based on historical default rates, the Group believes that no impairment allowance is necessary in respect of trade receivables not past due or past due up to 90 days, unless specifi cally provided for due to uncertainties in the collection of debts. These receivables are mainly arising by customers that have a good record with the Group.




13 CASH AND CASH EQUIVALENTS

Group Company

Note 2009 2008 2009 2008 $’000 $’000 $’000 $’000

Cash at banks and in hand 38,268 62,331 1,626 62Fixed deposits with banks 8,012 13,111 – –

46,280 75,442 1,626 62Bank overdrafts (unsecured) 17 (6,298) (583)

Cash and cash equivalents in the consolidated cash fl ow statement 39,982 74,859

The effective interest rates per annum relating to cash and cash equivalents, excluding bank overdrafts, at the balance sheet for the Group are between 0.15% and 0.43% per annum (2008: between 1.19% and 4.70% per annum). Interest rates reprice within one year.

The bank overdrafts are guaranteed by the Company. The effective interest rates per annum at the balance sheet date for the Group is between 4.88% and 6.25% (2008: between 5.25% and 5.50%). Interest rates reprice within one year.




14 SHARE CAPITAL – COMPANY

2009 2008

No. of shares No. of shares ’000 $’000 ’000 $’000

Issued and fully-paid with no par value: At 1 April 506,627 189,122 465,853 132,037Share placement – – 40,000 56,817Issue of new shares under share option plan – – 774 268

At 31 March 506,627 189,122 506,627 189,122

During the year ended 31 March 2009, the Company completed the buy-back of 1,961,000 (2008: Nil) ordinary shares, representing 0.4% (2008: Nil) of the issued share capital on that date. Under the terms of the Share Buy-back Mandate dated 21 August 2008, approved by shareholders on 8 September 2008, the total consideration from the shares bought back from the market was $1,780,000 (2008: Nil), being an average market price, including incidental costs of $0.91 (2008: $Nil) per share. This amount is classifi ed as a deduction from equity under “reserve for own shares”. As at 31 March 2009, the Company held 1,961,000 (2008: Nil) of its own shares.

On 8 August 2008, the Company issued 50,662,672 (2008: Nil) warrants to be traded separately on the Singapore Exchange Securities Trading Limited for no consideration. Each warrant can be converted into 1 new ordinary shares in the share capital of the Company at $2.50 each for cash, to be exercised at any time during the 6 months, upon the listing of the warrants, i.e. commencing on 8 February 2009.

The holders of ordinary shares (excluding treasury shares) are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares (excluding treasury shares) rank equally with regard to the Company’s residual assets.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confi dence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Group defi nes as net operating income divided by total shareholders’ equity, excluding minority interests. The Board also monitors the level of dividends to ordinary shareholders.

From time to time, the Group purchases its own shares on the market; the timing of these purchases depends on market prices. Primarily, the shares purchased are intended to be used for issuing shares under the Group’s share option programme. Buy and sell decisions are made on a specifi c transaction basis by the Board; the Group does not have a defi ned share buy-back plan.

There were no changes in the Group’s approach to capital management during the year.




15 RESERVES

Group Company

2009 2008 2009 2008 $’000 $’000 $’000 $’000

Reserve for own shares (1,780) – (1,780) –Share option reserve 236 324 – –Currency translation reserve (15,047) (658) – –Capital reserves 12,333 11,647 – –Fair value reserve – (121) – (121)Accumulated profi ts 204,174 172,775 40,481 51,064

199,916 183,967 38,701 50,943

Reserve for own shares comprises the cost of the Company’s shares held by the Group.

The share option reserve comprises the cumulative value of employee services rendered for the issue of share options.

The currency translation reserve comprises all foreign exchange differences arising from the translation of the fi nancial statements of foreign entities as well as the translation of loans which form part of the Company’s net investment in subsidiaries and joint ventures.

Capital reserves represent the amount capitalised from accumulated profi ts upon bonus issue by subsidiaries and profi t arising from dilution of interest in a subsidiary. Capital reserves include statutory reserve funds of $887,000 (2008: $202,000) as at 31 March 2009.

Subsidiaries in the People’s Republic of China (“PRC”) follow the accounting principles and relevant fi nancial regulations of the People’s Republic of China (“PRC GAAP”) relating to the appropriation of profi t to a statutory reserve fund, which is not distributable.

Fair value reserve includes cumulative net change in the fair value of available-for-sale investments until the investment is derecognised or impaired.

As at 31 March 2009, the Group and the Company’s available-for-sale equity securities were individually determined to be impaired on the basis of a prolonged and signifi cant decline in fair value below cost. In accordance with the accounting policy set out in note 2.6, the cumulative losses on these securities that were previously recognised in the available-for-sale reserve of $1,831,000 (2008: $Nil) were transferred to the income statement.




16 TRADE AND OTHER PAYABLES

Group Company

2009 2008 2009 2008 $’000 $’000 $’000 $’000

Trade payables 138,371 150,604 488 –Non-trade payables 3,262 5,888 31 20Interest payable 340 283 40 58Advance payment received – 2,480 – –Deposits received 3,647 5,509 – –Liability for long service and annual leave 7,783 8,288 144 145Provisions 1,788 1,708 – –Unclaimed dividends 7 2 7 2Advance billings 564 1,096 – –Fair value derivatives payables 1,282 83 – 83Accrued operating expenses 15,581 15,576 2,141 2,183Amounts due to:- related corporations 161 2,100 – 2,003- related parties 730 – – –- associates 2,190 3,543 – –- shareholders of subsidiaries 4,696 505 – –- substantial shareholder of an associate 7,184 18,522 – –

187,586 216,187 2,851 4,494 Payable: Within 12 months 182,325 211,897 2,851 4,494 After 12 months 5,261 4,290 – –

187,586 216,187 2,851 4,494

The amounts due to related corporations, related parties, associates, shareholders of subsidiaries and substantial shareholder of an associate are unsecured, interest-free and repayable on demand.

Trade payables of the Group included trust receipts amounting to $49,339,000 (2008: $38,196,000) which are guaranteed by the Company. The following table indicates the effective interest rates at balance sheet date and the period in which they reprice:

Effective Floating Fixed interest interest interest rates maturing rate Total rate within 1 year

% $’000 $’000 $’000

Group

2009 Trust receipts 1.55 – 7.00 49,339 – 49,339 2008 Trust receipts 1.39 – 4.00 38,196 – 38,196




16 TRADE AND OTHER PAYABLES (cont’d)Movements in provisions are as follows: Provision for Provision leased property for reinstatement warranty costs Others Total

$’000 $’000 $’000 $’000 Group

At 1 April 2007 1,667 281 92 2,040Provision made during the year 613 – – 613Payments made during the year (930) – – (930)Provisions reversed during the year – – (97) (97)Translation difference on consolidation 66 11 5 82

At 31 March 2008 1,416 292 – 1,708Provision made during the year 548 – – 548Payments made during the year (124) (10) – (134)Provision reversed during the year – (13) – (13)Translation difference on consolidation (273) (48) – (321)

At 31 March 2009 1,567 221 – 1,788

Provision for warranty claims are made by a subsidiary for claims received and claims expected to be received in relation to sales made prior to the balance sheet date, based on historical claims rates, adjusted for specifi c information arising from internal quality assurance processes.

The Group provides an amount to reinstate the premises upon termination of leases when this is a requirement specifi ed in the terms of the leases. The amount provided is based on an estimate of likely costs to be incurred.

Movements in liability for long service and annual leave are as follows:

Group Company

2009 2008 2009 2008 $’000 $’000 $’000 $’000

At 1 April 8,288 6,988 145 146Provision made during the year 3,986 3,611 – –Provision reversed during the year (18) – – –Payments made during the year (3,282) (2,744) (1) (1)Acquisition of subsidiaries/businesses 205 223 – –Translation difference on consolidation (1,396) 210 – –

At 31 March 7,783 8,288 144 145




16 TRADE AND OTHER PAYABLES (cont’d)Equity compensation benefi tsTat Hong Employee Share Option Scheme 2006 and Performance Share Plan

The Tat Hong Employee Share Option Scheme 2006 (“ESOS 2006”) and Performance Share Plan (“PSP”) were approved by the Company at its Extraordinary General Meeting on 8 December 2006. The ESOS 2006 and PSP are administered by the Option Shares/Performance Shares Plan Committee, comprising four directors, Mak Lye Mun (Chairman), Ng San Tiong, Ng Sun Ho and Ong Tiew Siam.

Other information regarding the ESOS 2006 and PSP are set out as follows:

- the Board of Tat Hong Holdings Ltd may specify the vesting conditions which must be satisfi ed or waived by the Board before options and awards allocated under the ESOS 2006 and PSP may be dealt with;

- the Board of the Company may specify the vesting conditions which must be satisfi ed or waived by the Board before options and awards allocated under the ESOS 2006 and PSP may be dealt with;

- the exercise price for each share in respect of which an option is exercisable shall be a price equal to the market price;

- the options can be exercised 1 year after the grant; and

- the options granted expire after 5 years for non-executive directors and 10 years for the employees of the Company and its subsidiaries.

No options and performance shares have been granted during the fi nancial year or since the ESOS 2006 and PSP were established.




17 FINANCIAL LIABILITIES

Group Company

2009 2008 2009 2008 $’000 $’000 $’000 $’000

Non-current liabilities Secured bank loans 2,548 1,210 – –Unsecured bank loans 27,381 22,058 12,000 16,500Finance lease liabilities 102,545 73,222 – –Intra-group fi nancial guarantees – – 2,002 1,429

132,474 96,490 14,002 17,929 Current liabilities Secured bank loans 2,792 361 – –Unsecured bank overdrafts 6,298 583 – –Unsecured bank loans 40,257 22,344 6,900 4,500Finance lease liabilities 35,662 28,662 – –

85,009 51,950 6,900 4,500

217,483 148,440 20,902 22,429 Total loans and borrowings 217,483 148,440 18,900 21,000Intra-group fi nancial guarantees – – 2,002 1,429

Total fi nancial liabilities 217,483 148,440 20,902 22,429

The secured bank loans are secured on property, plant and equipment with a carrying amount of $8,281,000 (2008: $2,804,000).

At 31 March 2009, the Group had obligations under fi nance leases that are repayable as follows:

Payments Interest Principal Payments Interest Principal

2009 2009 2009 2008 2008 2008 $’000 $’000 $’000 $’000 $’000 $’000

Repayable: Within 1 year 43,096 (7,434) 35,662 34,756 (6,094) 28,662 After 1 year but within 5 years 111,909 (9,364) 102,545 78,878 (5,772) 73,106 After 5 years – – – 117 (1) 116

After 1 year 111,909 (9,364) 102,545 78,995 (5,773) 73,222

Total 155,005 (16,798) 138,207 113,751 (11,867) 101,884

Under the terms of the fi nance lease arrangements, no contingent rents are payable.




17 FINANCIAL LIABILITIES (cont’d)Terms and debt repayment schedule

Terms and conditions of outstanding loans and borrowings are as follows:

2009 2008

Nominal interest Year of Face Carrying Face Carrying rate maturity value amount value amount

$’000 $’000 $’000 $’000

Group

S$ fi xed rate loans 5.00% 2013 5,000 5,000 – –S$ fl oating rate loans SIBOR + 1.0% to 2.3% 2009 – 2010 37,186 37,186 36,900 36,900A$ fi xed rate loans 5.16% - 7.05% 2009 – 2012 10,272 10,272 2,126 2,126RMB fl oating rate loans * PBOCx 1.02 – 1.10 2011 – 2012 20,520 20,520 6,947 6,947Bank overdrafts 4.25% - 6.25% 2010 6,298 6,298 583 583

79,276 79,276 46,556 46,556

Company

S$ fl oating rate loans SIBOR + 1.5% to 2.3% 2010 18,900 18,900 21,000 21,000 * PBOC denotes People’s Bank of China interest rates




17 FINANCIAL LIABILITIES (cont’d)Terms and debt repayment schedule (cont’d)

The following indicates the effective interest rates at balance sheet date and the period in which they reprice:

Fixed interest rates maturing

Effective Floating Within 1 to 5 After interest rate Total interest rate 1 year years 5 years

% $’000 $’000 $’000 $’000 $’000

Group

2009 Secured loans - A$ fi xed rate 5.16 – 7.05 2,353 – 1,350 1,003 –- S$ fl oating rate 1.94 2,986 2,986 – – –Unsecured loans - RMB fl oating rate 5.51 – 5.94 20,520 20,520 – – –- A$ fi xed rate 5.63 – 6.98 7,919 – 7,919 – –- S$ fi xed rate 5.00 5,000 – – 5,000 –- S$ fl oating rate 1.60 – 2.77 34,200 34,200 – – –Finance lease liabilities 2.80 – 9.85 138,207 – 16,214 121,993 –

211,185 57,706 25,483 127,996 – 2008 Secured loans - A$ fi xed rate 6.87 1,571 – 361 1,210 –Unsecured loans - RMB fl oating rate 7.71 6,947 6,947 – – –- A$ fi xed rate 5.51 555 555 – – –- S$ fl oating rate 2.25-2.71 36,900 36,900 – – – - effect of interest rate swaps 0.90 – (21,000) 21,000 – –Finance lease liabilites 2.80 – 9.76 101,884 – 20,542 79,704 1,638

147,857 23,402 41,903 80,914 1,638 Company

2009 Financial liabilities Unsecured loans - S$ fl oating rate 1.60 - 2.77 18,900 18,900 – – –





Effective Floating Fixed interest interest interest maturing rate Total rate within 1 year

% $’000 $’000 $’000

Company

2008 Financial liabilities Unsecured loans - SS$ fl oating rate 2.45 21,000 21,000 – - effect of interest rate swaps 0.90 – (21,000) 21,000

21,000 – 21,000 The following are the expected contractual undiscounted cash outfl ows of fi nancial liabilities, including interest payments and excluding the impact of netting agreements:

Carrying amount Cash fl ows

Contractual Within Within More than cash fl ows 1 year 1 to 5 years 5 years $’000 $’000 $’000 $’000 $’000

Group

2009 Non-derivative fi nancial liabilities Variable interest rate loans 57,706 (59,915) (33,720) (26,195) –Fixed interest rate loans 15,272 (16,502) (11,750) (4,752) –Finance lease liabilities 138,207 (155,005) (43,096) (111,909) –Bank overdrafts 6,298 (6,644) (6,644) – –Trade and other payables* 156,594 (156,594) (156,594) – –

374,077 (394,660) (251,804) (142,856) –

2008 Non-derivative fi nancial liabilities Variable interest rate loans 43,847 (46,039) (22,901) (23,138) –Fixed interest rate loans 2,126 (2,350) (1,019) (1,331) –Finance lease liabilities 101,884 (113,751) (34,756) (78,878) (117)Bank overdrafts 583 (613) (613) – –Trade and other payables* 181,162 (181,162) (181,162) – –

329,602 (343,915) (240,451) (103,347) (117)

Derivative fi nancial liabilities Interest rate swaps 83 (189) (189) – –





Carrying amount Cash fl ows

Contractual Within Within More than cash fl ows 1 year 1 to 5 years 5 years $’000 $’000 $’000 $’000 $’000

Company

2009 Non-derivative fi nancial liabilities Variable interest rate loans 18,900 (19,428) (7,299) (12,129) –Trade and other payables* 519 (519) (519) – –

19,419 (19,947) (7,818) (12,129) –

2008 Non-derivative fi nancial liabilities Variable interest rate loans 21,000 (22,177) (5,050) (17,127) –Trade and other payables* 2,023 (2,023) (2,023) – –

23,023 (24,200) (7,073) (17,127) –

Derivative fi nancial liabilities Interest rate swap 83 (189) (189) – –

* Includes trade payables, non-trade payables and amounts due to related parties.

Intra-group guarantees

Intra-group fi nancial guarantees comprise guarantees granted by the Company to banks in respect of banking facilities amounting to $30,573,000 (2008: $24,974,000). The periods in which the fi nancial guarantees expire are as follows:

Company

2009 2008 $’000 $’000

Less than 1 year 26,141 18,206Between 1 and 5 years 4,432 6,768

30,573 24,974




18 REVENUE – GROUPRevenue comprises income from rental of equipment and machinery, material and related labour charges to customers, invoiced trading sales and other operating income (refer to Note 26).

All inter-company transactions have been eliminated in arriving at the Group’s revenue.

19 FINANCE EXPENSE – GROUP

2009 2008 $’000 $’000

Interest paid and payable to: - banks 3,931 2,424- fi nance lease payable 8,292 7,178- others 3 48Cost of borrowing 126 78Loss on fair value adjustment on derivatives – 298

Finance expense 12,352 10,026

20 PROFIT BEFORE INCOME TAX – GROUPThe following items have been included in arriving at profi t before income tax:

2009 2008 $’000 $’000

Other operating income Interest income 1,546 2,436Gain on disposal of property, plant and equipment 9,608 6,795Gain on dilution of a subsidiary – 2,895Gain on disposal of an associate – 2,249Gain on disposal of other fi nancial assets – 859Dividend income 71 740Trade receivable recovered 22 44Rental income 796 505Others 2,550 542

14,593 17,065

Staff costs Wages and salaries 79,843 70,876Contributions to defi ned contribution plans 1,604 1,602Increase in liability for unconsumed annual and long service leave 3,968 3,611Value of employee services received for issue of share options 251 283Others 62 326

85,728 76,698




20 PROFIT BEFORE INCOME TAX – GROUP (cont’d)

2009 2008 $’000 $’000

Key management personnel compensation: Compensation payable to key management personnel comprises:

Short-term employee benefi ts 7,015 7,564Post employment benefi ts 160 230Value of employee services received for issue of share options 251 283

7,426 8,077

Other expenses Allowance for inventories 11 1,988 3,118Allowance made for receivables 12 1,081 1,429Amortisation of intangible assets 10 1,106 4,248Trade receivables written off 3 –Depreciation of property, plant and equipment 3 41,842 32,783Directors’ fees:- directors of the Company: - payable by the Company 260 286 - payable by subsidiary 105 106- directors of the subsidiaries 911 818Exchange loss 16,110 1,426Inventory written off 127 982Loss/(gain) on fair value adjustment on derivatives, net 2,802 (2,181)

Non-audit fees paid to:- auditors of the Company 72 28- auditors of subsidiaries 110 150Operating lease expenses 8,616 7,951Property, plant and equipment written off 35 17Provisions 16 535 516Impairment loss on intangible assets 10 1,246 –Impairment loss on goodwill of associates 3,150 –Loss on disposal of an associate 2 –Impairment loss on available-for-sale asset 1,831 –Impairment loss on property, plant and equipment 3 152 –

2009 2008 No of No of directors directors

Directors’ remuneration bandsCompany’s directors receiving remuneration from the Group: Number of directors in remuneration band: - $500,000 and above 4 4- $250,000 to $499,999 1 1- below $250,000 4 5

9 10




21 INCOME TAX EXPENSE – GROUP

2009 2008 $’000 $’000

Recognised in income statement

Current tax expense Current year 20,809 28,260Under provision in respect of prior years 227 679Foreign taxes suffered 1,519 1,283

22,555 30,222Deferred tax expense Movement in temporary differences (1,598) 392Reduction in tax rate (236) –Under/(over) provision in respect of prior years 49 (431)

(1,785) (39)

Income tax expense 20,770 30,183

Reconciliation of effective tax rate Profi t before income tax 97,455 131,724

Tax calculated using Singapore tax rate of 17% (2008: 18%) 16,567 23,710Effect of reduction in tax rate (236) –Effect of tax rates in foreign jurisdictions 4,164 7,137Effect of utilisation of capital allowances and tax losses previously not recognised (5) (97)Foreign taxes suffered 1,519 1,283Net non-chargeable income (1,970) (2,870)Under provision in respect of prior years 276 248Unrecognised deferred tax assets during the year 33 4Other items, net 422 768

20,770 30,183

Signifi cant judgement is required in determining the capital allowances, the types and rates of taxes payable, deductibility of certain expenses, and taxability of certain income during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the fi nal tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the provision for income tax and deferred income tax provisions in the period in which such determination is made. The carrying amounts of the Group’s and the Company’s current income tax liabilities and deferred tax assets and liabilities are as follows:

Group Company

2009 2008 2009 2008 $’000 $’000 $’000 $’000

Current tax payable 13,410 22,220 1,463 1,619Deferred tax assets 3,862 584 – –Deferred tax liabilities 6,063 4,265 – –




22 EARNINGS PER SHARE – GROUP (a) Basic earnings per share

The calculation of earnings per share is based on: 2009 2008 $’000 $’000

Profi t attributable to ordinary shareholders 68,889 89,786

Number of shares

2009 2008 ’000 ’000

The weighted average number of ordinary shares is arrived at as follows: Issued ordinary shares at beginning of the year 506,627 465,853Weighted average of new shares issued during the year – 40,000Weighted average number of shares issued under share option plan – 486Weighted average number of own shares repurchased (965) –

505,662 506,339

(b) Diluted earnings per share The calculation of diluted earnings per share is based on: 2009 2008 $’000 $’000

Profi t attributable to ordinary shareholders 68,889 89,786

Number of shares

2009 2008 ’000 ’000

The weighted average number of ordinary shares is arrived at as follows: Weighted average number of shares (used in the calculation of basic earnings per share) 505,662 506,339

As at 31 March 2009, the Group has a contractual obligation to convert 50,662,672 (2008: Nil) warrants into 50,662,672 (2008: Nil) new ordinary shares in the share capital of the Company at $2.50 each for cash commencing on 8 February 2009. The warrants were not included in the computation of diluted earnings per share because the warrants were anti-dilutive.




23 ACQUISITION/DILUTION OF INTEREST IN SUBSIDIARIES/BUSINESSES (i) Acquisition of subsidiaries/businesses (a) PT. World Wide Equipment South East Asia

During the year ended 31 March 2008, the Group purchased 50% equity interest in PT. World Wide Equipment South East Asia (“PT World Wide”) for a total consideration of $6,216,000. PT. World Wide is engaged in the repair and maintenance services of machinery and heavy equipment. The effect of the acquisition is summarised as follows:

2008 2008 2008 Note $’000 $’000 $’000

Carrying Fair value Recognised amounts adjustments value

Property, plant and equipment 3 6,270 2,714 8,984Intangibles – 1,392 1,392Trade and other receivables 5,114 – 5,114Cash and cash equivalents 731 – 731Trade and other payables (2,981) – (2,981)Current tax payable (341) – (341)Deferred tax assets/(liabilities) 9 22 (489) (467)

Net assets acquired 8,815 3,617 12,432Minority interest (6,216)

Cash consideration paid 6,216Less: Cash and cash equivalents acquired (731)

Net cash outfl ow 5,485

The fair value of identifi able assets acquired was determined by an independent valuation.




23 ACQUISITION/DILUTION OF INTEREST IN SUBSIDIARIES/BUSINESSES (cont’d) (i) Acquisition of subsidiaries/businesses (cont’d) (b) China Nuclear Huaxing TatHong Machinery Construction Co. Ltd

During the year ended 31 March 2008, the Group purchased 76.36% equity interest in China Nuclear Huaxing TatHong Machinery Construction Co. Ltd (“Huaxing”) for a total consideration of $2,682,000. Huaxing is engaged in the rental of construction machinery and heavy lifting equipment, installation and related engineering services and supplies.

The acquisition is summarised as follows:

2008 2008 2008 Note $’000 $’000 $’000


Property, plant and equipment 3 4,279 – 4,279Intangibles – 1,748 1,748Inventories 237 – 237Trade and other receivables 2,750 – 2,750Cash and cash equivalents 153 – 153Trade and other payables (6,400) – (6,400)Current tax payable (14) – (14)Deferred tax liabilities 9 – (437) (437)

Net assets acquired 1,005 1,311 2,316Goodwill on consolidation 917Minority interest (551)



The fair value of identifi able assets acquired was determined by the management. The goodwill recognised on the acquisition is attributable mainly to the long standing presence of the subsidiary in its industry, the knowledge and technical ability of the acquired subsidiary’s workforce and the synergies expected to be achieved from integrating the subsidiary into the Group’s existing operations.

Subsequently, the Group and the minority interest injected an additional RMB45,816,000 (S$9,328,000) and RMB14,184,000 (S$2,815,000) respectively into the share capital of Huaxing.




23 ACQUISITION/DILUTION OF INTEREST IN SUBSIDIARIES/BUSINESSES (cont’d) (c) Jiangsu Zheng He TatHong Equipment Rental Co., Ltd (formerly known as “Shanghai Zheng He Tat Hong Construction Equipment Rental Co. Ltd.)

During the year ended 31 March 2008, the Group incorporated Jiangsu Zheng He TatHong Equipment Rental Co., Ltd (“Jiangsu Zheng He”), and equity accounted for it as a joint venture. Subsequently, the Group purchased additional equity interest in Jiangsu Zheng He for a total consideration of $8,505,000, resulting in a reclassifi cation from joint venture to subsidiary. Jiangsu Zheng He is engaged in the rental, maintenance and repair of construction equipment and machineries.

The effect of the acquisition is summarised as follows:

2008 2008 2008 Note $’000 $’000 $’000


Property, plant and equipment 3 15,244 – 15,244Inventories 242 – 242Trade and other receivables 2,200 – 2,200Cash and cash equivalents 138 – 138Trade and other payables (2,056) – (2,056)

Net assets acquired 15,768 – 15,768

Goodwill on consolidation 10 180Previously accounted for as joint venture (347)Minority interest (7,096)



(d) Bradshaw Ultra Heavy Haulage Pty LtdIn December 2007, the Group acquired the rental business of Bradshaw Ultra Heavy Haulage Pty Ltd at a purchase consideration of $3,896,000.

The effect of the acquisition is summarised as follows:

2008 2008 2008 Note $’000 $’000 $’000


Property, plant and equipment 3 1,127 2,809 3,936Trade and other receivables 354 – 354Trade and other payables (99) – (99)Financial liabilities (1,708) – (1,708)Employee benefi ts (99) – (99)

Net assets acquired (425) 2,809 2,384Goodwill on consolidation 10 1,512


The fair value of identifi able assets and liabilities acquired was determined by an independent valuation.




23 ACQUISITION/DILUTION OF INTEREST IN SUBSIDIARIES/BUSINESSES (cont’d) (e) Compactor Hire Pty Limited (“Compactor Hire”)

In April 2008, the Group acquired Compactor Hire for a purchase consideration of $6,203,000. The effect of the acquisition is summarised as follows:

2009 2009 2009 Note $’000 $’000 $’000


Property, plant and equipment 3 4,608 – 4,608Trade and other payables (156) – (156)Financial liabilities (1,346) – (1,346)

Net assets acquired 3,106 – 3,106Goodwill on consolidation 10 3,097



The goodwill recognised on the acquisition is attributable mainly to the long standing presence of the business in the industry, the knowledge and technical ability of the acquired business workforce and the synergies expected to be achieved from integrating the business into the consolidated entities existing operations.

(f) Caradel Pty Limited (“Caradel”)In May 2008, the Group acquired Caradel for a purchase consideration of $5,299,000. The effect of the acquisition is summarised as follows:

2009 2009 2009 Note $’000 $’000 $’000


Property, plant and equipment 3 4,364 – 4,364Trade and other receivables 817 – 817Trade and other payables (183) – (183)Financial liabilities (2,131) – (2,131)

Net assets acquired 2,867 – 2,867Goodwill on consolidation 10 2,432



The goodwill recognised on the acquisition is attributable mainly to the long standing presence of the business in the industry, the knowledge and technical ability of the acquired business workforce and the synergies expected to be achieved from integrating the business into the consolidated entities existing operations.




23 ACQUISITION/DILUTION OF INTEREST IN SUBSIDIARIES/BUSINESSES (cont’d) (f) Caradel Pty Limited (“Caradel”) (cont’d)

The Group considers it is impractical to quantify the impact of not including the 2009 fi nancial results of the rental business arising from the acquisition from Compactor Hire and Caradel for the full fi nancial year and to disclose the fi nancial results of the rental business as though the acquisition effected during the year had been the beginning of the fi nancial year, as the said entities were privately owned, had a different balance sheet date and accounting policies were not consistent to those adopted by the Group.

(ii) Dilution of interests in a subsidiaryA former subsidiary, Yongmao Holdings Limited was listed on the Singapore Exchange Ltd in 2008 and new shares were issued to third parties. As a result, the interest in Yongmao Holdings Limited was diluted from 73.09% to 15.77%.

The effect of dilution of interests in Yongmao Holdings Limited is as follows: 2008 $’000

Property plant and equipment 4Interest in associates 7,281Trade and other receivables 535Trade and other payables (3,173)Cash and cash equivalents 856Minority interest (484)

Net assets disposed of 5,019Equity interest retained post issuance of new shares to third parties (2,124)

Gain on dilution 2,895

24 DIVIDENDS

Group and Company

2009 2008 $’000 $’000

Final dividend paid of 3.8 cents per share (one-tier) (2008: 3 cents per share less tax at 18%) 19,252 12,454Interim dividend paid of 3.5 cents per share (one-tier) (2008: 0.8 cents per share, one-tier) 17,663 4,053Interim dividend of Nil% (2008: 3 cents per share less tax at 18%) – 12,463

36,915 28,970

After the balance sheet date, the directors proposed the following dividends. The dividends have not been provided for. Group and Company

2009 2008 $’000 $’000

Proposed dividend of 1.5 cents per share (one-tier) [2008: 3.8 cents per share (one-tier)] 7,570 19,252




25 FINANCIAL INSTRUMENTSFinancial risk management objectives and policies

Exposure to credit, liquidity and market risks arises in the normal course of the Group’s business. The Group’s risk management approach seeks to minimise the potential material adverse effects from these exposures. As a whole, the Group has implemented credit risk management policies and guidelines. The Group does not have written risk policies and guidelines on liquidity and market risks.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

Credit risk

Credit evaluation and exposure to credit risk is monitored on an ongoing basis by the Group. In addition, collections and credit limits of customers are monitored by the Group.

The Group establishes an allowance for impairment that represents its estimates of incurred losses in respect of trade and other receivables. The main components of this allowance are a specifi c loss component that relates to individually signifi cant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identifi ed. The collective loss allowance is determined based on historical data of payment statistics for similar fi nancial assets.

The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfi ed that no recovery of the amount owing is possible. At that point, the fi nancial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired fi nancial asset.

Investments and bank transactions are allowed with counter-parties that meet the appropriate credit criteria and are of high credit standing. As such, management does not expect any counter-party to fail to meet its obligations.

At the balance sheet date, there were no signifi cant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each fi nancial asset in the balance sheets.

Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to fi nance the Group’s operations and to mitigate the effects of fl uctuations in cash fl ows. Typically the Group ensures that it has suffi cient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of fi nancial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will affect the Group’s income or the value of its holdings of fi nancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.




25 FINANCIAL INSTRUMENTS (cont’d)Interest rate risk

The Group’s exposure to changes in interest rates relates primarily to interest-bearing fi nancial liabilities. Interest rate risk is managed by the Group on an on-going basis with the primary objective of limiting the extent to which net interest expense could be affected by an adverse movement in interest rates.

The Group adopts a policy of constantly monitoring movements in interest rate. Presently it does not use derivative fi nancial instruments to hedge its interest rate risk.

Sensitivity analysis

The Company has not entered into any new interest rate swap during the year. In 2008, the Company had an interest rate swap was accounted for as an economic hedge; an increase of 100 bp in interest rate at the balance sheet date would decrease profi t or loss by $210,000. A decrease in 100 bp in interest rate would have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

For other variable rate fi nancial assets and liabilities, a change of 100 bp in interest rate at the balance sheet date would increase (decrease) profi t or loss before tax (and accumulated profi ts) by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

Profi t or loss

100 bp 100 bp increase decrease

$’000 $’000

Group

2009Fixed deposit 80 (80)Variable rate instruments (577) 577

(497) 4972008Fixed deposits 131 (131)Variable rate instrument (438) 438

(307) 307

Company

2009Variable rate instrument (189) 189

2008Variable rate instrument (210) 210




25 FINANCIAL INSTRUMENTS (cont’d)Foreign currency risk

The Group is exposed to foreign currency risks on sales and purchases that are denominated in a currency other than Singapore dollars. The currencies giving rise to this risk are primarily Japanese Yen, United States dollars, Euro, Thai Baht, Malaysian ringgit, Philippines Peso, British pounds, Australian dollars and United Arab Emirates Dirham. Exposure to foreign currency risk is monitored on an ongoing basis by the Group to ensure that the net exposure is at an acceptable level.

The Group’s and the Company’s exposure to foreign currencies and the sensitivity to a 10% strengthening of the Singapore dollars against the foreign currencies, are as follows:

United Arab Singapore US Malaysian Japanese Thai British Emirates Philippines dollars dollars ringgit Yen Baht Euro pounds Dirham Peso Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

2009 Trade and other receivables 4,510 12,454 830 4,676 1,109 26 – – – 23,605Cash and cash equivalents 3,421 1,982 1 2,003 – 341 – – – 7,748Trade and other payables (4,831) (11,316) (60) (105,225) (197) (1,271) (178) (7) (353) (123,438)Forward exchange contracts held – 1,079 – 9,647 – 2,898 – – – 13,624Loan from holding company (3,390) (17,417) – – – – – – – (20,807)Loans to subsidiaries 112 17,949 – – – – – 79 – 18,140Loans to associates – 46 – – 206 – – – – 252Loans to joint ventures – 9,220 – – – – – – – 9,220

(178) 13,997 771 (88,899) 1,118 1,994 (178) 72 (353) (71,656) Sensitivity analysis – income statement (321) (420) (77) 8,890 (91) (199) 18 1 35 7,836 Sensitivity analysis – equity 339 (980) – – (21) – – (8) – (670)

Hong Singapore US Malaysian Japanese Kong Australian Thai British Philippines dollars dollars ringgit Yen dollars dollars Baht Euro pounds Peso Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

2008 Trade and other receivables 1,905 13,303 229 10,164 101 199 2,103 162 28 – 28,194Cash and cash equivalents 325 1,288 – 915 – 116 – 1,098 – – 3,742Trade and other payables (5,914) (7,896) (150) (109,567) – (53) (378) (5,036) (172) (370) (129,536)Forward exchange contracts held – 1,727 – 24,660 – – – 5,007 – – 31,394Loan from holding company – (9,563) – – – – – – – – (9,563)Loans to subsidiaries – 10,046 – – – – – – – – 10,046Loans to associates – 41 444 – – – – – – – 485Loans to joint ventures – 8,389 – – – – – – – – 8,389

(3,684) 17,335 523 (73,828) 101 262 1,725 1,231 (144) (370) (56,849) Sensitivity analysis – income statement 368 (842) (8) 7,383 (10) (26) (173) (123) 14 37 6,620 Sensitivity analysis – equity – (891) (44) – – – – – – – (935)




25 FINANCIAL INSTRUMENTS (cont’d)Foreign currency risk (cont’d)

2009 2008

US Australian US Australian dollars dollars Total dollars dollars Total $’000 $’000 $’000 $’000 $’000 $’000

Company

Loans to associates 46 – 46 41 – 41Loans to joint ventures 9,220 – 9,220 8,389 – 8,389Cash and cash equivalents – 6 6 – 1 1

9,266 6 9,272 8,430 1 8,431

Sensitivity analysis (927) (1) (928) (843) – (843)

A 10% weakening of Singapore dollars against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Recognised assets and liabilities

The fair value of forward exchange contracts used as economic hedges of monetary assets and liabilities in foreign currencies as at 31 March 2009 is $Nil (31 March 2008: $1,603,000) which has been recognised as a fair value derivative asset.

The fair value of interest rate swaps used as economic hedges as at 31 March 2009 is $Nil (31 March 2008: $83,000) which has been recognised as a fair value derivative liability.

Sensitivity analysis-equity price risk

The Group’s equity investments are listed. A 10% increase/decrease in the underlying equity prices at the balance sheet date would increase/decrease equity of the Company and the Group by $100,000 (2008: $271,000).

This analysis assumes that all other variables remain constant.




25 FINANCIAL INSTRUMENTS (cont’d)Foreign currency risk (cont’d)

Estimation of fair values

The following summarises the signifi cant methods and assumptions used in estimating the fair values of fi nancial instruments of the Group and the Company.

Investments in equity securities

The fair value of fi nancial assets at fair value through profi t or loss, held-to-maturity investments and available-for-sale fi nancial assets is determined by reference to their quoted bid prices at the balance sheet date. The fair value of held-to-maturity investments is determined for disclosure purposes only.

Derivatives

The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual period to maturity of the contract using a risk-free interest rate (based on government bonds).

The fair value of interest rate swaps is based on broker’s quotes. These quotes are tested for reasonableness by discounting estimated future cashfl ows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date.

Non-derivative fi nancial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash fl ows, discounted at the market rate of interest at the balance sheet date. For fi nance leases, the market rate of interest is determined by reference to similar lease agreements.

Intra-group fi nancial guarantees

The value of fi nancial guarantees provided by the Company to its subsidiaries is determined by reference to the difference in the interest rates, by comparing the actual rates charged by the banks with these guarantees made available, with the estimated rates that the banks would have charged had these guarantees not been available.

Other fi nancial assets and liabilities

The carrying amounts of fi nancial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, and trade and other payables) are assumed to approximate their fair values because of the short period to maturity. All other fi nancial assets and liabilities are discounted to determine their fair values.

Fair values

As at the balance sheet dates, the carrying amounts of fi nancial assets and liabilities approximated their fair values.




26 SEGMENT INFORMATION – GROUP (a) Business segments

Tower General Crane crane equipment Equipment Spare rental rental rental sales parts Elimination Consolidated

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue and expenses2009

Total revenue from external customers 179,662 24,697 117,423 254,544 55,435 – 631,761Inter-segment revenue 20,277 1,719 – 90,907 13,828 (126,731) –

Total revenue 199,939 26,416 117,423 345,451 69,263 (126,731) 631,761 Segment results 52,035 8,685 10,020 22,272 15,909 (2,504) 106,417 Unallocated expenses (11,558)Finance costs (12,352)Share of profi ts of associates 4,505 – – 5,246 3,122 – 12,873Share of profi ts of joint ventures 2,075 – – – – – 2,075

Profi t before income tax 97,455Income tax expense (20,770)Minority interests (7,796)

Profi t attributable to equity holders of the Company 68,889

Revenue and expenses 2008

Total revenue from external customers 158,543 8,877 113,727 306,194 52,530 – 639,871Inter-segment revenue 26,357 397 – 52,963 11,096 (90,813) –

Total revenue 184,900 9,274 113,727 359,157 63,626 (90,813) 639,871 Segment results 66,467 691 16,008 34,325 16,764 (3,225) 131,030 Unallocated expenses (762)Finance costs (10,026)Share of profi ts of associates 1,550 – – 5,470 2,167 – 9,187Share of profi ts of joint ventures 2,295 – – – – – 2,295

Profi t before income tax 131,724Income tax expense (30,183)Minority interests (11,755)

Profi t attributable to equity holders of the Company 89,786




26 SEGMENT INFORMATION – GROUP (cont’d) (a) Business segments (cont’d)

Tower General Crane crane equipment Equipment Spare rental rental rental sales parts Elimination Consolidated

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Assets and liabilities2009

Segment assets 341,591 86,184 82,876 318,778 47,002 – 876,431Unallocated assets 10,003

886,434 Segment liabilities 17,620 14,279 7,797 137,473 8,113 – 185,282Unallocated liabilities 239,260

424,542 Capital expenditure 25,003 24,561 18,023 4,520 844 – 72,951Unallocated capital expenditure 8

72,959 Depreciation 21,442 3,812 14,112 1,535 936 – 41,837Unallocated depreciation 5

41,842 Assets and liabilities2008

Segment assets 305,914 71,417 88,395 300,673 51,598 – 817,997Unallocated assets 21,994

839,991 Segment liabilities 17,145 24,068 12,731 148,126 9,600 – 211,670Unallocated liabilities 179,442

391,112 Capital expenditure 2,758 26,323 13,142 3,260 4,000 – 49,483Unallocated capital expenditure 5

49,488 Depreciation 15,757 1,246 12,451 2,372 953 – 32,779Unallocated depreciation 4

32,783




26 SEGMENT INFORMATION – GROUP (cont’d) (b) Geographical segments

People’s Republic of ASEAN Australia China Other regions Elimination Consolidated

$’000 $’000 $’000 $’000 $’000 $’000

2009 Total revenue from external customers 223,869 365,563 24,697 17,632 – 631,761

Segment assets 452,340 298,273 114,195 11,623 – 876,431

Capital expenditure 4,321 43,964 24,561 105 – 72,951

2008 Total revenue from external customers 234,423 387,363 8,877 9,208 – 639,871

Segment assets 370,247 349,830 90,184 7,736 – 817,997

Capital expenditure 7,354 15,593 26,323 213 – 49,483

27 COMMITMENTS – GROUP Operating lease commitments

As at 31 March 2009, the commitments of the Group for minimum lease payments under non-cancellable operating leases are as follows:

2009 2008 $’000 $’000

Within 1 year 6,125 5,936Between 1 and 5 years 13,412 10,511More than 5 years 10,613 11,835

30,150 28,282

The Group leases motor vehicles and a number of premises for production, warehouse and offi ce purposes under operating leases. The leases typically run for an initial period of two to forty-three years, with options to renew the leases after that date. Lease payments are subject to increases annually to refl ect market rentals. None of the leases includes contingent rentals.

The Group leases out its plant and machinery (refer to Note 3). Non-cancellable operating lease rentals are receivable as follows:

2009 2008 $’000 $’000

Within 1 year 34,048 10,834Between 1 and 5 years 5 71

34,053 10,905

Capital commitmentsContracted for but not provided for 6,397 15,856




28 CONTINGENT LIABILITIES (UNSECURED) – GROUP

2009 2008 $’000 $’000

Performance guarantees given as security for third party on behalf of a subsidiary 6,048 –

29 SIGNIFICANT RELATED PARTY TRANSACTIONS – GROUPFor the purposes of these fi nancial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise signifi cant infl uence over the party in making fi nancial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common signifi cant infl uence. Related parties may be individuals or other entities.

In addition to the related party information disclosed elsewhere in the fi nancial statements, there were signifi cant related party transactions which were carried out in the normal course of business on terms agreed between the parties during the fi nancial year as follows:

2009 2008 $’000 $’000

Transactions with companies in which certain directors of the Company have substantial fi nancial interestsRental income receivable 1,835 4,702Sales 8,418 1,990Purchases 5,016 123Hiring charges payable 137 169

Transactions with associates of the GroupRental income receivable 1,713 1,506Sales 2,743 8,193Purchases 18,680 17,940Yard rental payable 151 158

Transactions with related partiesRental income receivable 4,834 –Sales 637 563Purhcases 25 330Hiring charges payable 288 148Yard rental payable 30 –




30 SUBSEQUENT EVENTS(i) On 9 April 2009, the Group incorporated a new company, Beijing Tat Hong Zhaomao Equipment

Rental Co. Ltd (“BJTH”), for the purpose of engaging in the business of rental of tower cranes in the People’s Republic of China. BJTH is 55% owned by the Group and 45% owned by Yongmao Holdings Limited. BJTH will have a share capital of RMB20 milllion, of which RMB11 million relates to the capital contribution provided by the Group, which was paid up on 2 April 2009.

(ii) On 14 April 2009, the Group completed the de-registration of an associate, Tat Hong Heavy Equipment (M) Sdn Bhd.

31 COMPARATIVE INFORMATIONCertain comparatives in the fi nancial statements have been changed from the previous year to be consistent with current year’s presentation. The changes are as follows:

As previously As reported Reclassifi cation restated

$’000 $’000 $’000

Cost of sales 390,171 5,510 395,681Other operating expenses 112,016 (5,510) 106,506

32 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTEDThe Group has not applied the following accounting standards (including their consequential amendments) and interpretations that have been issued as of the balance sheet date but are not yet effective:

• FRS 1 (revised 2008) Presentation of Financial Statements

• FRS 23 (revised 2007) Borrowing Costs

• Amendments to FRS 32 Financial Instruments: Presentation and FRS 1 Presentation of Financial Statements – Puttable Financial Instruments and Obligations Arising on Liquidation

• Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items

• Amendments to FRS 101 First-time Adoption of Financial Reporting Standards and FRS 27 Consolidated and Separate Financial Statements – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

• Amendments to FRS 102 Share-based Payment – Vesting Conditions and Cancellations

• FRS 108 Operating Segments

• Improvements to FRSs 2008

• INT FRS 113 Customer Loyalty Programmes

• INT FRS 116 Hedges of a Net Investment in a Foreign Operation

• INT FRS 117 Distributions of Non-Cash Assets to Owners


6507-TATHONG-AR09-financial.indd 1106507-TATHONG-AR09-financial.indd 110 7/5/09 11:58:21 AM7/5/09 11:58:21 AM


32 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED (cont’d)FRS 1 (revised 2008) will become effective for the Group’s fi nancial statements for the year ending 31 March 2010. The revised standard requires an entity to present, in a statement of changes in equity, all owner changes in equity. All non-owner changes in equity (i.e. comprehensive income) are required to be presented in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). Components of comprehensive income are not permitted to be presented in the statement of changes in equity. In addition, a statement of fi nancial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the reclassifi cation of items in the fi nancial statements. FRS 1 (revised 2008) does not have any impact on the Group’s fi nancial position or results.

FRS 23 (revised 2007) will become effective for the Group’s fi nancial statements for the year ending 31 March 2010. FRS 23 (revised 2007) removes the option to expense borrowing costs and requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The Group’s current policy to capitalise borrowing costs is consistent with the requirement in the revised FRS 23.

The amendments to FRS 32 and FRS 1 on puttable fi nancial instruments will become effective for the Group’s fi nancial statements for the year ending 31 March 2010. The amendments allow certain instruments that would normally be classifi ed as liabilities to be classifi ed as equity if and only if they meet certain conditions. The Group does not issue such puttable fi nancial instruments and thus the application of these amendments is not expected to have any signifi cant impact on the Group’s fi nancial statements.

The amendments to FRS 39 on eligible hedged items will become effective for the Group’s fi nancial statements for the year ending 31 March 2011. The amendments clarify how the principles that determine whether a hedged risk or portion of cash fl ows is eligible for designation should be applied in two particular situations: (i) the designation of a one-sided risk in a hedged item; and (ii) the designation of infl ation in particular situations. The application of these amendments is not expected to have any signifi cant impact on the Group’s fi nancial statements.

The amendments to FRS 101 and FRS 27 on the cost of an investment in a subsidiary, jointly controlled entity or associate will become effective for the Company’s fi nancial statements for the year ending 31 March 2010. The amendments remove the defi nition of “cost method” currently set out in FRS 27, and instead require an entity to recognise all dividend from a subsidiary, jointly controlled entity or associate as income in its separate fi nancial statements when its right to receive the dividend is established. The application of these amendments is not expected to have any signifi cant impact on the Company’s fi nancial statements.

The amendments to FRS 102 on vesting conditions and cancellations will become effective for the Group’s fi nancial statements for the year ending 31 March 2010. The amendments clarify the defi nition of vesting conditions and provide the accounting treatment for non-vesting conditions and cancellations. The application of these amendments is not expected to have any signifi cant impact on the Group’s fi nancial statements.




32 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED (cont’d)FRS 108 will become effective for the Group’s fi nancial statements for the year ending 31 March 2010. FRS 108, which replaces FRS 14 Segment Reporting, requires identifi cation and reporting of operating segments based on internal reports that are regularly reviewed by the entity’s chief operating decision maker in order to allocate resources to the segment and to assess its performance. Currently, the Group presents segment information in respect of its business and geographical segments (see note 26). Under FRS 108, the Group will present segment information in respect of its operating segments.

Improvements to FRSs 2008 will become effective for the Group’s fi nancial statements for the year ending 31 March 2010, except for the amendment to FRS 105 Non-current Assets Held for Sale and Discontinued Operations which will become effective for the year ending 31 March 2011. Improvements to FRSs 2008 contain amendments to numerous accounting standards that result in accounting changes for presentation, recognition or measurement purposes and terminology or editorial amendments. The Group is in the process of assessing the impact of these amendments.

INT FRS 113 will become effective for the Group’s fi nancial statements for the year ending 31 March 2010. INT FRS 113 concludes that where entities grant award credits as incentives to customers to buy their goods or services (e.g. loyalty points or free products), such customer loyalty programmes should be accounted for by taking a multiple sales approach, i.e. by deferring some of the revenue received from the initial sales transaction, to be recognised as revenue as and when the entity provides the goods or services promised under the customer loyalty programmes. The Group is in the process of assessing the impact of these amendments.

INT FRS 116 will become effective for the Group’s fi nancial statements for the year ending 31 March 2010. INT FRS 116 provides guidance on identifying foreign currency risks and hedging instruments that qualify for hedge accounting in the hedge of a net investment in a foreign operation. It also explains how an entity should determine the amounts to be reclassifi ed from equity to profi t or loss for both the hedging instrument and the hedged item. The application of this Interpretation is not expected to have any signifi cant impact on the Group’s fi nancial statements.

INT FRS 117 will become effective for the Group’s fi nancial statements for the year ending 31 March 2011. INT FRS 117 prescribes the accounting treatment of distributions of non-cash assets by an entity to owners. It clarifi es that such distributions should be measured at the fair value of the non-cash assets and the difference between the carrying amount and the fair value of non-cash assets to be distributed should be recognised in the profi t or loss. INT FRS 117 will be applied prospectively.

Other than the changes in disclosures relating to FRS 1, the initial application of these standards (including their consequential amendments) and interpretation is not expected to have any material impact on the Company’s fi nancial statements. The Group has not considered the impact of accounting standards issued after the balance sheet date.




SHAREHOLDERS’ INFORMATIONAS AT 16 JUNE 2009

SHAREHOLDING STATISTICSNumber of shares (excluding treasury shares) : 504,665,723 Ordinary sharesTreasury Shares : 1,961,000Class of shares : Ordinary shares Voting Rights : One vote per share

The percentage of Treasury Shares against the total number of issued shares excluding treasury shares is 0.39%.

ANALYSIS OF SHAREHOLDINGS AS AT 16 JUNE 2009 No. of Range of Shareholdings Shareholders % No. of Shares % 1 - 999 30 0.71 7,690 0.001,000 - 10,000 2,955 69.88 15,714,155 3.1010,001 - 1,000,000 1,216 28.76 64,491,308 12.791,000,001 and above 27 0.64 424,452,570 84.11

4,228 100.00 504,665,723 100.00

SUBSTANTIAL SHAREHOLDERS (As recorded in the Register of Substantial Shareholders)

Direct Interest % Deemed Interest %

Ng San Tiong Roland 8,115,095 1.61 238,274,410 (1)(2) 47.21Ng Sun Ho Tony 6,006,130 1.19 237,562,660 (1)(3) 47.07Ng San Wee David 2,611,750 0.52 237,779,660 (1)(4) 47.12Ng Sun Giam Roger 792,500 0.16 237,430,160 (1) 47.04Chwee Cheng & Sons Pte Ltd 213,238,160 42.25 24,192,000 (5) 4.79Ng Chwee Cheng 28,323,000 5.61 23,662,646 (6) 4.67

The percentage of shareholding above is computed based on the total issued shares of 504,665,723 excluding treasury shares of 1,961,000.

Notes:1. Pursuant to the terms of a trust deed dated 29 July 1997 (as supplemented by a deed dated 12 October

1998) (the “Trust Deed”), Messrs Ng San Tiong Roland, Ng Sun Ho Tony and Ng San Wee David, Directors of the Company and their brother, Mr Ng Sun Giam Roger are joint trustees of the Chwee Cheng Trust constituted under the Trust Deed and which owns approximately 42.03% of the issued share capital of Chwee Cheng & Sons Pte Ltd. Under the terms of the Trust Deed, the benefi ciaries of the Chwee Cheng Trust are the sons of Mr Ng Chwee Cheng, namely, Messrs Ng San Tiong Roland, Ng Sun Ho Tony, Ng Sun Hoe Patrick, Ng Sang Kuey Michael, Ng San Guan William, Ng Sun Giam Roger, Ng San Wee David, Ng Sun Eng Sunny, Ng Sun Oh Lewis and their descendants. Being joint trustees, Messrs Ng San Tiong Roland, Ng Sun Ho Tony, Ng Sun Giam Roger, and Ng San Wee David, are deemed to be interested in the 237,430,160 shares held by Chwee Cheng & Sons Pte Ltd as at the Latest Practicable Date.

2. Ng San Tiong Roland is deemed interested in 300,000 shares held through nominees and 544,250 shares held by his spouse.

3. Ng San Ho Tony is deemed interested in 132,500 shares held by his spouse.

4. Ng San Wee David is deemed interested in 349,500 shares held by his spouse.

5. Chwee Cheng & Sons Pte Ltd is deemed interested in 24,192,000 shares held through nominees.

6. Ng Chwee Cheng is deemed interested in 23,662,646 shares held through nominees.



SHAREHOLDERS’ INFORMATIONAS AT 16 JUNE 2009

SHAREHOLDINGS HELD IN HANDS OF THE PUBLICBased on information available to the company as at 16 June 2009 approximately 38.36% of the Company’s shares listed on the Singapore Exchange Securities Trading Limited were held by the public. Therefore, the Company has complied with Rule 723 of the Listing Manual.

TOP 20 SHAREHOLDERS AS AT 16 JUNE 2009

No Name of Shareholders No. of Shares %

1 CHWEE CHENG & SONS PTE LTD 213,238,160 42.092 HSBC (SINGAPORE) NOMINEES PTE LTD 45,581,000 9.003 NG CHWEE CHENG 28,323,000 5.594 CITIBANK NOMINEES SINGAPORE PTE LTD 24,122,750 4.765 CIMB-GK SECURITIES PTE. LTD. 19,507,368 3.856 DBS NOMINEES PTE LTD 17,267,315 3.417 PHILLIP SECURITIES PTE LTD 10,262,198 2.038 RAFFLES NOMINEES (PTE) LTD 8,157,000 1.619 NG SAN TIONG 8,115,095 1.6010 DBSN SERVICES PTE LTD 6,883,000 1.3611 NG SUN HO 6,006,130 1.1912 NG SANG KUEY 3,565,350 0.7013 NG SUN HOE 3,133,065 0.6214 OCBC SECURITIES PTE LTD 2,838,029 0.5615 UNITED OVERSEAS BANK NOMINEES PTE LTD 2,801,000 0.5516 NG SUN ENG 2,619,328 0.5217 NG SAN WEE 2,611,750 0.5218 ONG TIEW SIAM 2,599,500 0.5119 STARICH INVESTMENTS PTE LTD 2,466,000 0.4920 MORGAN STANLEY ASIA (S) SECURITIES PTE LTD 2,286,000 0.45

TOTAL 412,383,038 81.41



WARRANTHOLDERS’ INFORMATIONAS AT 16 JUNE 2009

ANALYSIS OF WARRANTHOLDINGS AS AT 16 JUNE 2009

No. of Range of Warrantholdings Warrantholders % No. of Warrants % 1 - 999 1,990 62.52 724,883 1.431,000 - 10,000 1,022 32.11 2,216,948 4.3710,001 - 1,000,000 164 5.15 16,590,080 32.751,000,001 and above 7 0.22 31,130,745 61.45

3,183 100.00 50,662,656 100.00

TOP 20 WARRANTHOLDERS AS AT 16 JUNE 2009

No Name of Warrantholders No. of Warrants %

1 CHWEE CHENG & SONS PTE LTD 21,021,516 41.492 NG CHWEE CHENG 3,237,000 6.393 HSBC (SINGAPORE) NOMINEES PTE LTD 1,821,200 3.594 MAK WAI NAM 1,611,000 3.185 DBS NOMINEES PTE LTD 1,216,431 2.406 TAN LEE LIN 1,189,000 2.357 RAFFLES NOMINEES (PTE) LTD 1,034,598 2.048 PHILLIP SECURITIES PTE LTD 984,437 1.949 OCBC SECURITIES PTE LTD 931,700 1.8410 NG SAN TIONG 791,509 1.5611 LOH KAH WAI 705,000 1.3912 CITIBANK NOMINEES SINGAPORE PTE LTD 666,343 1.3213 DBS VICKERS SECURITIES (S) PTE LTD 654,700 1.2914 KIM ENG SECURITIES PTE. LTD. 652,400 1.2915 NG TOONG SENG 631,000 1.2516 NG SUN HO 600,613 1.1917 MORGAN STANLEY ASIA (S) SECURITIES PTE LTD 564,000 1.1118 TAN HAN KOK 436,000 0.8619 UNITED OVERSEAS BANK NOMINEES PTE LTD 394,700 0.7820 NG SANG KUEY 356,535 0.70

TOTAL 39,499,682 77.96



NOTICE OF ANNUAL GENERAL MEETING TAT HONG HOLDINGS LTD(INCORPORATED IN THE REPUBLIC OF SINGAPORE) Company Registration No. 199105392H

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Tat Hong Holdings Ltd (the “Company”) will be held at 18 Sungei Kadut Avenue Singapore 729489 on Friday, 31 July 2009 at 10.00 a.m. for the following purposes:

AS ORDINARY BUSINESS1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company and the Group

for the year ended 31 March 2009 together with the Auditors’ Report thereon. (Resolution 1)

2. To declare a fi nal one-tier tax exempt dividend of S$0.015 for the year ended 31 March 2009 (previous year: S$0.038 per share). (Resolution 2)

3. To re-elect the following Directors of the Company retiring pursuant to Article 113 of the Articles of Association of the Company:

Mr Ng Sun Ho Tony (Resolution 3) Mr Ong Tiew Siam (Resolution 4) Mr Low Seow Juan (Resolution 5) [See Explanatory Note (i)]

4. To re-appoint Mr Tan Chok Kian, a director of the Company retiring under Section 153(6) of the Companies Act, Cap. 50, to hold offi ce from the date of this Annual General Meeting until the next Annual General Meeting of the Company.

[See Explanatory Note (ii)] (Resolution 6)

5. To approve the payment of Directors’ fees of S$260,000 for the year ended 31 March 2009. [See Explanatory Note (iii)] (Resolution 7)

6. To re-appoint Messrs KPMG LLP as the Auditors of the Company and to authorise the Directors of the Company to fi x their remuneration. (Resolution 8)

7. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.




AS SPECIAL BUSINESSTo consider and if thought fi t, to pass the following resolutions as Ordinary Resolutions, with or without any modifi cations:

8. Authority to issue shares in the capital of the Company (excluding treasury shares) pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (the “SGX-ST”)

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the SGX-ST, the Directors of the Company be authorised and empowered to:

(a) (i) issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Company may in their absolute discretion deem fi t; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors of the Company while this Resolution was in force,

(the “Share Issue Mandate”)

provided that:

(1) Save for sub-paragraph (2) below, the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not exceed fi fty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (3) below), of which the aggregate number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (3) below);

(2) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) and Instruments to be issued to existing shareholders via a pro-rata renounceable rights issue pursuant to this Resolution shall not exceed one hundred per centum (100%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (3) below);




(3) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares and Instruments that may be issued under sub-paragraphs (1) and (2) above, the percentage of issued shares and Instruments shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

(a) new shares arising from the conversion or exercise of the Instruments or any convertible securities;

(b) new shares arising from exercising share options or vesting of share awards outstanding and subsisting at the time of the passing of this Resolution; and

(c) any subsequent consolidation or subdivision of shares;

(4) in exercising the Share Issue Mandate conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association of the Company; and

(5) unless revoked or varied by the Company in a general meeting, the Share Issue Mandate shall continue in force (i) until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the Instruments.

[See Explanatory Note (iv)] (Resolution 9)

9. Authority to issue shares and Instruments other than on a pro rata basis at a discount not exceeding 20 per centum (20%)

That subject to and pursuant to the Share Issue Mandate being obtained in Resolution 9 above, approval be and is hereby given to the Directors of the Company to issue shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to the Share Issue Mandate) other than on a pro rata basis at an issue price per share as the Directors of the Company may in their absolute discretion deem fi t provided that such price shall not represent a discount of more than 20 per centum (20%) to the weighted average price per share determined in accordance with the requirements of the SGX-ST.

[See Explanatory Note (v)] (Resolution 10)

10. Authority to issue shares under the Tat Hong Share Option Scheme 2006

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and empowered to offer and grant options under the Tat Hong Share Option Scheme (the “Scheme 2006”) and to issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the exercise of options granted by the Company under the Scheme 2006, whether granted during the subsistence of this authority or otherwise, provided always that the total aggregate number of additional ordinary shares to be issued pursuant to the Scheme 2006 and the Share Plan shall not exceed fi fteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (vi)] (Resolution 11)




11. Authority to issue shares under the Tat Hong Performance Share Plan

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and empowered to offer and grant awards under the Tat Hong Performance Share Plan (the “Share Plan”) and to issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the vesting of awards under the Share Plan, whether granted during the subsistence of this authority or otherwise, provided always that the total aggregate number of additional ordinary shares to be issued pursuant to the Scheme 2006 and the Share Plan shall not exceed fi fteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (vii)] (Resolution 12)

12. Proposed Renewal of Shareholders’ Mandate for Interested Person Transactions

That:-

(1) approval be and is hereby given for the Company, its subsidiaries and associated companies or any of them to enter into any of the transactions falling within the categories of Interested Person Transactions set out in section 2.4 of the Company’s Circular to Shareholders dated 13 July 2009 (the “Circular”), with any party who is of the class or classes of Interested Persons described in section 2.3 of the Circular, provided that such transactions are made on normal commercial terms in accordance with the guidelines and procedures for review and administration of Interested Person Transactions as described in the Circular (the “Shareholders’ Mandate”);

(2) the Shareholders’ Mandate shall, unless revoked or varied by the Company in general meeting, continue to be in force until the conclusion of the next Annual General Meeting of the Company;

(3) the Audit Committee of the Company be and is hereby authorised to take such action as it deems proper in respect of procedures and/or to modify or implement such procedures as may be necessary to take into consideration any amendment to Chapter 9 of the SGX-ST Listing Manual which may be prescribed by SGX-ST from time to time; and

(4) the Directors of the Company be and are hereby authorised and empowered to complete and to do all such acts and things, and to approve, modify, ratify and execute such documents, acts and things as they may consider necessary, desirable or expedient to give effect to the Shareholders’ Mandate and this Resolution.[See Explanatory Note (viii)]

(Resolution 13)




13. Proposed Renewal of the Share Buyback Mandate

That:-

(1) the exercise by the Directors of all the powers of the Company to purchase or otherwise acquire Shares not exceeding in aggregate the Prescribed Limit (as hereafter defi ned), at such price(s) as may be determined by the Directors of the Company from time to time up to the Maximum Price (as hereafter defi ned), whether by way of:-

(a) market purchase(s) (“Market Purchase”) on the SGX-ST; and/or

(b) off-market purchase(s) (“Off-Market Purchase”) effected otherwise than on the SGX-ST in accordance with any equal access schemes as may be determined or formulated by the Directors as they consider fi t, which schemes shall satisfy all the conditions prescribed by the Companies Act;

and otherwise in accordance with all other laws and regulations and rules of the SGX-ST as may for the time being be applicable, be and is hereby authorised and approved generally and unconditionally (the “Share Buyback Mandate”);

(2) unless varied or revoked by the Company in general meeting, the authority conferred on the Directors pursuant to the Share Buyback Mandate may be exercised by the Directors at any time and from time to time during the period commencing from the date of the passing of this Resolution and expiring on the earlier of:-

(a) the date on which the next annual general meeting of the Company is held; and

(b) the date by which the next annual general meeting of the Company is required by law to be held; and

(3) The Directors be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) as they may consider expedient or necessary to give effect to the transactions contemplated by this Resolution.

In this Resolution:

“Prescribed Limit” means 10% of the issued ordinary share capital of the Company as at the date of passing of this Resolution; and “Maximum Price”, in relation to a Share to be purchased or acquired, means the purchase price (excluding brokerage, commission, applicable goods and services tax and other related expenses) which shall not exceed:-

(a) in the case of a Market Purchase, 105% of the Average Closing Price (as defi ned below) of the Shares; and

(b) in the case of an Off-Market Purchase, 110% of the Average Closing Price (as defi ned below) of the Shares; and




where:-

“Average Closing Price” means (1) the average of the closing market prices of a Share over the last fi ve market days, on which transactions in the Shares were recorded, preceding the date of the Market Purchase or, as the case may be, the day of the making of the offer pursuant to the Off-Market Purchase; and (2) deemed to be adjusted for any corporate action that occurs after the relevant fi ve-day period; and

“day of the making of the offer” means the day on which the Company announces its intention to make an offer for the purchase of Shares from Shareholders, stating the purchase price (which shall not be more than the Maximum Price calculated on the foregoing basis) for each Share and the relevant terms of the equal access scheme for effecting the Off-Market Purchase.

[See Explanatory Note (ix)] (Resolution 14)

By Order of the Board

Ong Tiew SiamCompany SecretarySingapore,13 July 2009

Explanatory Notes:(i) Mr Low Seow Juan will, upon re-election as a Director of the Company, remain as members of the

Audit Committee, Nominating Committee and Remuneration Committee and will be considered independent.

(ii) The effect of the Ordinary Resolution 6 above; is to re-appoint a Director of the Company who is over 70 years of age. Mr Tan Chok Kian will, upon re-appointment as a Director of the Company, remain as Chairman of the Board, Chairman of the Nominating Committee and members of the Audit Committee and Remuneration Committee, and will be considered independent.

(iii) The Company will disregard any votes cast on this resolution by Non-Executive Directors who are eligible to be paid fees. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or it is cast by the person who is entitled to vote, in accordance with the discretions on the proxy form to vote as the proxy decides.

(iv) The Ordinary Resolution 9 above, if passed, will empower the Directors of the Company from the date of this Meeting until the date of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to existing shareholders of the Company save that such number shall be up to 100% of the total number of issued shares (excluding treasury shares) in the capital of the Company in relation to a pro-rata renounceable rights issue to existing shareholders.




For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of the Company will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new shares arising from the conversion or exercise of the Instruments or any convertible securities, the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent consolidation or subdivision of shares.

(v) The Ordinary Resolution 10 above, if passed, will empower the Directors of Company to issue shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to the Share Issue Mandate) other than on a pro-rata basis at a discount of not more than 20% to the weighted average price per share determined in accordance with the requirements of the SGX-ST.

(vi) The Ordinary Resolution 11 above, if passed, will empower the Directors of the Company, from the date of this Meeting until the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the exercise of options granted or to be granted under the Scheme 2006 and the Share Plan up to a number not exceeding in total (for the entire duration of the Scheme 2006) fi fteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.

(vii) The Ordinary Resolution 12 above, if passed, will empower the Directors of the Company, from the date of this Meeting until the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the vesting of awards under the Scheme 2006 and the Share Plan up to a number not exceeding in total (for the entire duration of the Share Plan) fi fteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.

(viii) The Information relating to the proposed Ordinary Resolution 13 above is set out in the Circular to Shareholders dated 13 July 2009.

(ix) The Information relating to the proposed Ordinary Resolution 14 above is set out in the Circular to Shareholders dated 13 July 2009.

Notes:1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint

not more than two proxies to attend and vote in his/her stead.

2. The instrument appointing a proxy must be deposited at the Registered Offi ce of the Company at 18 Sungei Kadut Avenue Singapore 729489 not less than forty-eight (48) hours before the time appointed for holding the Meeting.

NOTICE OF BOOK CLOSURENOTICE IS ALSO HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed on 7 August 2009, for the purpose of determining the Members’ entitlements to the dividend to be proposed at the Annual General Meeting of the Company to be held on 31 July 2009 at 18 Sungei Kadut Avenue Singapore 729489. Duly completed registrable transfers in respect of shares in the Company’s Share Registrar, M & C Services Private Limited at 138 Robinson Road #17-00 The Corporate Offi ce Singapore 068906, will be registered to determine Members’ entitlements to such dividend. Members whose Securities Accounts with The Central Depository (Pte) Ltd are credited with shares in the Company as at 5:00pm on 6 August 2009 will be entitled to such proposed dividend.

The proposed dividend, if approved at the Annual General Meeting, will be paid on 18 August 2009.



No. Resolutions relating to: For Against

1 Directors’ Report and Audited Accounts for the year ended 31 March 2009

2 Payment of proposed fi nal dividend

3 Re-election of Mr Ng Sun Ho Tony as a Director

4 Re-election of Mr Ong Tiew Siam as a Director

5 Re-election of Mr Low Seow Juan as a Director

6 Re-appointment of Mr Tan Chok Kian as a Director

7 Approval of Directors’ fees amounting to S$260,000.00

8 Re-appointment of Messrs KPMG LLP as Auditors

9 Authority to issue new shares

10 Authority to issue new shares other than pro-rata at a discount not more than 20%

11 Authority to issue shares under the Tat Hong Share Option Scheme 2006

12 Authority to issue shares under the Tat Hong Performance Share Plan

13. Renewal Of Shareholders’ Mandate For Interested Person Transactions

14. Renewal of the Share Buyback Mandate

PROXY FORM

TAT HONG HOLDINGS LTD(INCORPORATED IN THE REPUBLIC OF SINGAPORE WITH LIMITED LIABILITY)COMPANY REGISTRATION NO. 199105392H

I/We,

of

being a member/members of TAT HOLDINGS LTD (the “Company”), hereby appoint:

or failing the person, or either or both of the persons, referred to above, the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held at 18 Sungei Kadut Avenue Singapore 729489 on 31 July 2009 at 10.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specifi c direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please see notes overleaf before completing this Form)

IMPORTANT:1. For investors who have used their CPF monies to buy Tat Hong Holdings Ltd’s shares, this

Report is forwarded to them at the request of the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

3. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specifi ed. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specifi ed to enable them to vote on their behalf.

(Please indicate your vote “For” or “Against” with a tick [ ] within the box provided.)

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

Signature of Shareholder(s)or, Common Seal of Corporate Shareholder

Dated this day of 2009

Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members

*Delete where inapplicable



PROXY FORM

TAT HONG HOLDINGS LTD(INCORPORATED IN THE REPUBLIC OF SINGAPORE WITH LIMITED LIABILITY)COMPANY REGISTRATION NO. 199105392H

Notes:

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defi ned in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, he shall specify the proportion of his shareholding to be represented by each proxy. If no such proportion or number is specifi ed the fi rst proxy shall be treated as representing 100% of the shareholding and any second named proxy as an alternate to the fi rst named.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the registered offi ce of the Company at 18 Sungei Kadut Avenue Singapore 729489 not less than 48 hours before the time appointed for the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an offi cer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certifi ed copy thereof must be lodged with the instrument.

7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fi t to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible, or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.


BOARD OF DIRECTORS

Mr Tan Chok Kian(Chairman)

Mr Ng San Tiong Roland (Managing Director)

Mr Ng Sun Ho Tony (Deputy Managing Director)

Mr Ng Sang Kuey Michael

Mr Ng San Wee David

Mr Ong Tiew Siam

Mr Leong Horn Kee

Mr Low Seow Juan

Mr Mak Lye Mun

AUDIT COMMITTEE

Mr Leong Horn Kee (Chairman)

Mr Low Seow Juan

Mr Tan Chok Kian

REMUNERATION COMMITTEE

Mr Leong Horn Kee (Chairman)

Mr Low Seow Juan

Mr Mak Lye Mun

Mr Tan Chok Kian

NOMINATING COMMITTEE

Mr Tan Chok Kian (Chairman)

Mr Ng San Tiong Roland

Mr Low Seow Juan

OPTION SHARES / PERFORMANCESHARES PLAN COMMITTEE

Mr Mak Lye Mun (Chairman)

Mr Ng San Tiong Roland

Mr Ng Sun Ho Tony

Mr Ong Tiew Siam

COMPANY SECRETARY

Mr Ong Tiew SiamFCPA (Singapore / Australia)

SINGAPORE REGISTERED OFFICE

18 Sungei Kadut AvenueSingapore 729489Tel: (65) 6269 0022

SINGAPORE SHARE REGISTRAR& SHARE TRANSFER OFFICE

M & C Services Private Limited138 Robinson RoadThe Corporate Offi ce #17-00Singapore 068906Tel: (65) 6227 6660

AUDITOR

KPMGCertifi ed Public Accountants16 Raffl es Quay #22-00Hong Leong BuildingSingapore 048581

Partner-In-Charge:Mr Jeremy Hoon (Appointed in 2004)

CORPORATE INFORMATION


18 Sungei Kadut Avenue Singapore 729489Tel: (65) 6269 0022 • Fax: (65) 6269 6888

Website: www.tathong.com.sg


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