Proposed Bonus Issue

The Board of Directors (the "Directors") of HG Metal Manufacturing Limited (the "Company") is pleased to announce that the Company is proposing a bonus issue of 22,832,500 new ordinary shares of S$0.20 each on the basis of one new ordinary share of S$0.20 each credited as fully paid ("Bonus Shares") for every four existing ordinary shares of S$0.20 each held in the capital of the Company (the "Proposed Bonus Issue"). Fractional entitlements will not be allotted but will be disposed of in such manner as the Directors in their absolute discretion deem fit for the benefit of the Company.

The Bonus Shares will be issued pursuant to a general mandate obtained at the Annual General Meeting of the Company held on 28 March 2003 which allows the Directors to issue shares in the Company aggregating up to fifty per cent (50%) of the Company's issued share for the time being. The Bonus Issue will be made by capitalising S$566,500 from the share premium account and S$4,000,000 from retained earnings and applying the same towards payment in full at par for the Bonus Shares to be issued. As of 31 October 2003, the balance in the Company's share premium account was S$657,465 and the Company had accumulated profits of S$5,373,346.

The Bonus Shares, when allotted and issued, will rank pari passu in all respects with the existing ordinary shares of S$0.20 each in the capital of the Company.

The Proposed Bonus Issue is subject to the approval of the Singapore Exchange Securities Trading Limited (the "SGX-ST") for the listing and quotation of the Bonus Shares on the official list of the Singapore Exchange Securities Trading Limited Dealing and Automated Quotation System.

The Bonus Shares will be issued to Shareholders whose names appear in the Registry of Members or who have shares entered against their names in the Depository Register as at the date of the closure of the Share Transfer Books. Notice will be given at a later date on the closure of the Share Transfer Books and the Register of Members of the Company in order to determine Shareholders' entitlements to the Proposed Bonus Issue, if approved by the SGX-ST.

By Order of the Board
HG Metal Manufacturing Limited