Company History & Business Hwa Tai Industries Berhad (HTIB) is one of the premier and longest established

biscuit manufacturers in Malaysia. Established in 1962 and listed on the Stock Exchange Malaysia in 1992. Since then, this fast expanding company has grown to be one of the largest players in the biscuits industry in the country and produce a fine, wide range of superior quality biscuits. It has been successfully marketed domestically and internationally through HTIBs own vast and comprehensive distribution network. Our biscuits are marketed under the brand name or trademark of HWA TAI and LUXURY. We take pride in our excellent innovation and high quality products which have firmly entrenched us not only in Malaysia but also in over 50 countries around the world. We are keenly involved in the integrated supply chain of our products, from manufacture to sales to distribution throughout the entire trade channels. Due to our extensive and comprehensive distribution network, we are also carrying products / brands by other principals for the Malaysian market. Our Vision We aim to be a leading biscuits and confectionery manufacturer in the region known for its product quality and variety. Our Commitment HTIB is committed in producing the best quality biscuit products for our customers all over the world and creating business opportunities for our partners. We have more than 49 years of manufacturing experience and the ability to manage our entire value chain, from procurement of raw materials to distribution of finished products. From the company's very first beginning, we have recognized that the skilled and dedicated people who work for us are critical to our success. We expect high standards from our staff a team totally committed to the provision of the highest quality service in the business.

Quality Assurance HTIB's dedication to quality is further reinforced by using the most advanced state-of-the art machinery and processing techniques to produce premium biscuits with distinct flavors and tastes. HTIB has developed an internationally recognized Quality Management System based upon MS ISO 9001:2000 to ensure that our products conform to international standards. Awards & Achievements As an active and enterprising company, we participated in the Monde Selection in Belgium with 4 of our products, i.e. Duchess Cookies, Sesamio, Siang-Siang cream crackers & Choose, and we were awarded with 2 gold & 2 silver medals respectively. In the year 2000, Hwa Tai Industries Berhad won two gold medals from the Monde Selection again for Luxury Original Calcium Crackers and Luxury Vegetable Crackers.

HTIB Today HTIB has successfully established a strong presence in Malaysia and has built up a wide international market. Today, our products can be found locally from small sundry shops to big hypermarkets, fast-food chains, airlines and other mass consumption industries. A total of 40% of our company's production is exported internationally to countries such as China, Taiwan, Hong Kong, Singapore, Brunei, USA, Mauritius, Middle East, Papua New Guinea, Maldives, Nigeria and 28 other countries. And we are still growing - support facilities are constantly being upgraded, with our continuous goal of producing the finest product ranges possible.

1. Horizontal Analysis (Balance Sheet)

Definition:

also called trend analysis, is a technique for evaluating a series of financial statement data over a period of time.

120% 100% 80% 60% 40% 20% Total Non Current Assets 0% 2009 -20%
Total Non Current Assets 2009 2008 2007 3% 21% 3% Property, plant and equipment 3% 8% -1% Leasehold land Investment in an associate company Investment properties Prepaid land lease payments

Property, plant and equipment Leasehold land Investment in an associate company Investment properties Prepaid land lease payments

2008

2007

3% 0% 0%

2% -2% -1%

0% 100% 17%

0% 100% 3%

1.1 Horizontal Analysis for Non Current Assets Based on the graph above, the non-current asset basically is the investment of property, plant and equipments, leasehold land, investment in an associate company, investment properties and prepaid land lease payments. The non-current asset growth was the biggest in year 2008, that is 21% as compared to the year 2009 and 2007 which only have 3%. Meaning that compared to this three years, in 2008, Hwa Tai got higher of asset which is not easily convertible to cash or not expected to become cash within the next year.

200% 100% 0% 2009 -100% -200% -300% -400% -500% -600% -700% Cash and bank balance Total Current Assets 2008 2007 Prepayments Fixed deposit place with licensed bank Tax recoverable Inventories Trade and other receivables

Total Current Assets

Inventories

Trade and Other receivables 9% 7% 2%

Prepayments

Fixed Deposit Place 0% 100% 0%

Cash and Bank Balance

Tax Recoverable

2009 2008 2007

4% -3% 4%

-24% 18% -15%

110% 0% 0%

7% -624% 65%

-53% 56% 80%

1.2 Horizontal Analysis for Current Assets Based on the graph, current assets include inventories, trade and other receivables, prepayments, fixed deposit place, cash and bank balance and tax recoverable. All this assets are readily to be converted into cash within one year in the normal course of business. Based on the result above, in 2009 and 2007, the current assets are higher compare to 2008. As we can see, total for non current 2008 is higher and the total current asset is lower. Trade receivable was at the highest in year 2009 when comparing year-to-year (9%). The lowest trade receivable trend is in 2007 (2%). Trade receivable trend dropped drastically in year 2007 from 2008 (7% dropped to 2%). This is in tandem with the economic trend. During good years, the trade receivable is good, and during bad times, the trade receivable is bad. Since experiencing an economic downturn in 2008, Hwa Tai decrease. Their cash reserves are remain positive in 2009 and 2007. During the economic downturn, the cash in 2008 moved to negative (-624%). By reason of this matter, Hwa Tai experienced losses in 2008.

2007 Total Assets 2008

2009

0%

2%

4%

6%
Total Assets 4% 8% 4%

8%

10%

2009 2008 2007

1.3 Horizontal Analysis for Total Assets The total assets registered the highest in years, 2008 (8%) respectively. The increased in the year 2008 are due to: i. ii. iii. iv. v. vi. increased in investment on property, plant and equipments (8%) increased in inventories (18%) increase in investment properties (100%) increased in prepaid land and lease payment (100%) increased in fixed deposit place (100%) increased in noncurrent assets (21%)

200% 100% 0% 2009 -100% -200% -300% -400% -500% -600% 2008 2007 Loans and borrowings Deferred tax liabilities Hire purchase liabilities Total Non Current Liabilities

2009 2008 2007

Total Non Current Liabilities 21% -58% -482%

Loans and Borrowings 21% 0% 0%

Deferred Tax Liabilities 0% 20% 100%

Hire Purchase Liabilities 0% 0% -470%

1.4 Horizontal Analysis for Non Current Liabilities

Noncurrent liabilities are the obligations of the firm that generally are due more than one year after the balance sheet date. The portion of noncurrent liabilities consists of loans and borrowings and hire purchase liabilities. In addition, deferred tax liabilities are an important component of liabilities for many companies. Based on the graph, in 2009, Hwa Tai posses the highest noncurrent liabilities (21%) compared to 2008 and 2007. These liabilities represent money Hwa Tai owes one year or more in the future. In 2009, Hwa Tai bought more assets in terms of transportation in order to expand their businesses after downturn in 2008.

150% 100% 50% 0% 2009 -50% -100% -150% -200% 2008 2007

Trade and other payables Hire purchase liabilities Short term borrowings Loans and borrowings Term loans Bank overdraft Provisions Tax Payable Total Current Liabilities

Total Current Liabilities 2009 2008 2007 5% 17% 9%

Trade and Other Payables 21% 0% 0%

Hire Purchase Liabilities 0% 20% 100%

Loans and Borrowings

Term Loans

Provisions

Tax Payable

Bank Overdraft

Short Term Borrowings

-3% 0% 0%

0% 0% 100%

95% -93% -16%

11% -14% 0%

0% 100% 9%

0% 0% -470%

1.5 Horizontal Analysis for Current Liabilities Current liabilities are understood as all liabilities of the business that are to be settle in cash within the fiscal year or the operating cycle. Based on the data above, total current liabilities increase in 2008 (17%). Managing current liabilities is very important to Hwa Tai and other companys cash flow process and extended viability. The increase of current liabilities in 2008 is because of increase of other payable. In 2009, the current liabilities is lower because there are no hire purchase liabilities compare to another two years (2008, 2007).

16% 14% 12% 10% 8% 6% 4% 2% 0% 2009 2008 2007 Total Liabilities

2009 2008 2007

Total Liabilities 6% 14% 6%

1.6 Horizontal Analysis for Total Liabilities The trend for total liabilities peaked in the year 2008, which is at 14%. This peaked is due to the increase in total current liabilities. This increase is due to the bank overdraft at 100%.

0% 2009 -2% -4% -6% -8% -10% -12% -14% -16% Total equity 2008 2007

2009 2008 2007

Total Equity -2% -14% -3%

1.7 Horizontal Analysis for Total Equity Total equity is the net worth of business and includes such elements as the value of common and preferred shares. According to the data, the highest total equity is in year 2009 (-2%). In Hwa Tai situation, this company experience higher accumulated losses in three years. However, in 2009, the equity is increased from 2008.