9. Internal Control

The Audit Committee and Independent Directors meet quarterly and hold
special meetings and conferences with the Company’s appointed external
auditor to ensure the Company’s compliance with generally accepted
accounting principles and regulations. The Audit Committee is also
concerned with connected transactions with related companies and parties
to ensure that procedures are in accordance with generally accepted
accounting principles and regulatory requirements.

In year 2009, the Audit Committee held five formal meetings to
effectively and responsibly carry out its duties. Each of these formal
meetings was preceded by a working group meeting to discuss and thresh
out relevant matters affecting financial disclosures in the interim and
annual financial reports, risk management and internal control. By
invitation of the Chairman of the Audit Committee, the Chief Executive
and his immediate executive officers, the Accounting and Treasury
Finance Officers, the in-house legal department and the internal auditor
also attended both the working group and formal Audit Committee
meetings. The External Auditors also attended all five formal meetings
and some of the working group meetings.

The financial statements for the year ended 31 December 2009 were
prepared by the management and audited externally by the appointed
auditing firm of A.M.T. & Associates. Upon review of these financial
statements and other activities of the company for the year 2009, the
Audit Committee concurred with the findings.

In addition, the financial statements of the Company and its
subsidiaries for 2009 audited by the independent and external auditor
have not identified any significant weakness in internal controls which
may have an impact or cause disruption in business operations except for
two major areas affecting the company’s operations, namely:

1.  In 2008, the Audit Committee cited advances made as potential
    investment in foreign mining ventures as not in compliance with good
    internal control. Adequate disclosure of this transaction has been
    made in the financial statements. In 2009, the Audit Committee and
    External Auditor mutually agreed with the decision that loss from
    impairment of these advances should be recognized in the financial
    statements.

2.  In 2009, the Audit Committee and the External Auditor mutually
    recognized that the increased negative working capital and rising
    net losses of the Tongkah Group of Companies have been caused to a
    large extent by external factors, which if not resolved, would
    threaten the companies’ continued operations. Foremost of these
    external factors are: delay in government approval for export of
    copper concentrates that bear a substantial amount of the projected
    gold production, substantial delay in obtaining government approval
    of new mining licenses, and substantial government fees and
    royalties that have exceeded those prevailing at the commencement of
    the concession agreement.

The planned additional activity of the Audit Committee for 2010 will be
to enhance the Internal Audit activities by monitoring the development a
formal internal audit program that will effectively review internal
controls, safeguard assets and enhance risk management in key areas of
the companies’ operations. As necessary, outside independent consultants
may be hired for this purpose.