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La p o ran Tahunan

Annual Report

MAH SING GROUP BERHAD(Company No.230149P)

C o n t e n t s

2 Financial Highlights of the Group

3 Notice of Annual General Meeting

4 Corporate Information

5 Audit Committee

6 Mah Sing Group Structure

8 Chairman’s Statement

16 Financial Statements

53 Statistics of Shareholdings

56 Properties Owned by the Group

Proxy Form

Cover rationaleThe cover image depicts

Mah Sing refocusing on its core

businesses and aggressivelyexpanding

its operations globally thus entering the new millennium with renewed zest and confidence.

Laporan Tahunan

Annual Report

MAH SING GROUP BERHAD( Com pan y No .2 30149P)

F i n a n c i a l S t a t e m e n t s

16 Directors’ Report

19 Profit and Loss Accounts

20 Balance Sheets

22 Consolidated Cash Flow Statement

23 Notes to the Accounts

51 Statement by Directors

51 Statutory Declaration

52 Report of the Auditors

Financial Highlights of the Group

2 MAH SING GROUP BERHAD (INCORPORATED IN MALAYSIA)

1999/RM’000 1998/RM’000

Turnover 125,028

Operating Loss (34,867)

Loss per Share (sen) ( 77.2)

Net Tangible Assets per Share (RM) 1.47

Loss Absorbed byShareholders (33,932)

Total Assets 262,194 Shareholders’ Funds 67,250 Paid Up Capital 43,978

Operating Profit 2,346

Earnings per Share (sen) 10.2

Profit Attributable to Shareholders 4,480

Total Assets 203,178 Shareholders’ Funds 71,490

Paid Up Capital 43,978

Turnover 154,648

Net Tangible Assets per Share (RM) 1.59

Notice of Annual General Meeting

N OTICE IS HEREBY GIVEN that the Eighth Annual General Meeting of the Company will be held at Wisma Mah Si n g ,

Penthouse Suite 1, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur on Tu e s d a y, 13th June, 2000 at 10.00 a.m. for the

f o l l owing purposes:-

AGENDA

1 . To re c e i ve and consider the Di re c t o r s’ Re p o rt and Audited Accounts for the year ended 31st De c e m b e r, 1999.

2. To approve the Directors’ fees for the year ended 31st December, 1999.

3. To re-elect Jen. (R) Tan Sri Yaacob Bin Mat Zain, the Director retiring under Article 102 of the Company’s Articles of

Association, and being eligible, offers himself for re-election.

4. To re-elect Ms Leong Yuet Mei, the Director retiring under Article 102 of the Company’s Articles of Association, and

being eligible, offers herself for re-election.

5. To re-appoint Messrs PricewaterhouseCoopers as auditors and to authorise the Directors to fix their remuneration.

6. To transact any other business of which due notice shall have been given.

BY ORDER OF THE BOARD

Yap Keong @ Yap Kong Nam (MIA 892)

Wong Fen Kong (MIA 1057)

Cheah Yoke Sim (LS 007219)

Company Secretaries

Kuala Lumpur

23rd May, 2000

NOTES:

1. A member entitled to attend and vote at the Eighth Annual General Meeting is entitled to appoint a proxy or

attorney or in the case of a corporation, to appoint a duly authorised re p re s e n t a t i ve to attend and vote in his

place. A proxy or attorney or duly authorised re p re s e n t a t i ve need not be a member of the Company.

2. The power of attorney or a notarially certified copy thereof or the instrument appointing the proxy shall be in writing

under the hand of the appointer or of his attorney duly authorised in writing. If the appointer is a corporation, it must

be executed under its seal or in the manner authorised in its constitution. In the case of joint holdings, the signature

of the first named holder is sufficient.

3. The instrument appointing a proxy together with the power of attorney (if any) under which is signed or a duly

notarially certified copy thereof must be deposited at the Registered Office of the Company at Wisma Mah Sing,

Penthouse Suite 1, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur not less than 48 hours before the time appointed

for holding the Meeting or any adjournment thereof.

3MAH SING GROUP BERHAD (INCORPORATED IN MALAYSIA)

Corporate Information

CHAIRMAN

Dato’ Mohd Ghazali Bin Mohd Khalid

DEPUTY CHAIRMAN

Jen. (R) Tan Sri Yaacob Bin Mat Zain

MANAGING DIRECTOR / CHIEF EXECUTIVE OFFICER

Dato’ Leong Hoy Kum

DIRECTORS

Yap Keong @ Yap Kong Nam (Executive Director)

Wahid Bin Othman (Executive Director)

Leong Yuet Mei

COMPANY SECRETARIES

Yap Keong @ Yap Kong Nam

Wong Fen Kong

Cheah Yoke Sim

AUDITORS

PricewaterhouseCoopers

REGISTRARS

PFA Registration Services Sdn Bhd (Company No. 19234-W)

Level 13, Uptown 1, No. 1, Jalan SS21/58, Damansara Uptown, 47400 Petaling Jaya

Tel: 03-77254888 Fax: 03-77222311

REGISTERED OFFICE

Wisma Mah Sing, Penthouse Suite 1, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur

Tel: 03-2218888 Fax: 03-2222833

BANKERS

Bumiputra-Commerce Bank Berhad

Malayan Banking Berhad

OCBC Bank (M) Berhad

Overseas Union Bank (M) Berhad


Audit Committee

COMPOSITION OF MEMBERS

Jen. (R) Tan Sri Yaacob Bin Mat Zain (Chairman, Independent Non-Executive Director)

Dato’ Mohd Ghazali Bin Mohd Khalid (Independent Non-Executive Director)

Yap Keong @ Yap Kong Nam (Executive Director)

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

The Audit Committee shall be granted the authority to investigate any activities of the Company and its subsidiaries and shall

be empowe red to retain persons having special competence as necessary to assist the Committee in fulfilling its re s p o n s i b i l i t i e s .

The duties of the Committee shall be to:

• Consider the appointment of the external auditors, the audit fee, and any questions of resignation or dismissal.

• Discuss with the external auditors the nature and scope of the audit before the audit commences, and ensure

co-ordination where more than one audit firm is involved.

• Review the quarterly and annual financial statements before submission to the Board, focusing particularly on:

– any changes in accounting policies and practices

– major judgmental areas

– significant adjustments resulting from the audit

– the going concern assumption

– compliance with approved Accounting Standards in Malaysia

– compliance with stock exchange, relevant laws and external regulations

• Discuss problems and reservations arising from the interim and final audits, and any matters the auditors may wish

to discuss (in the absence of management where necessary).

• Re v i ew the internal audit programme, consider the major findings of internal audit investigations and

management’s response, and ensure co-ordination between the internal and external auditors.

• Keep under review the effectiveness of internal control systems, and in particular review the external auditors’

management letter and management’s response.

• Review the adequacy of and compliance with ethical guidelines and Group policies affecting corporate governance

• Consider other topics, as defined.

The secretary shall circulate the minutes of meetings of the Committee to all members of the Board.



Mah Sing Group Structure


PLASTICS DIVISIONMalaysia• MAH SING PLASTICS INDUSTRIES SDN BHD• MAH SING ENTERPRISE SDN BHD• MAH SING - YOSHIKAWA COMPONENTS

MANUFACTURING SDN BHD• KENWIRA SDN BHD

Indonesia• P. T. MAH SING INDONESIA

PROPERTY DIVISION• MAH SING PROPERTIES SDN BHD• MESTIKA BISTARI SDN BHD• ACACIA SPRINGS MANAGEMENT SDN BHD

MOTORCYCLE DIVISION• GENTALI MOTOR CORPN. SDN BHD• PRESTIGE GREENERY SDN BHD

CONSUMER PRODUCTS DIVISION• PENINSULAR CONNECTION SDN BHD• TRUE MINERAL WATER SDN BHD• SPRING FRESH SDN BHD

Chairman’s Statement


On behalf of the Board of Directors of MahSing Group Berhad, I have pleasure inpresenting to you the Annual Report and

Audited Accounts of the Group for the financialyear ended 31st December, 1999.

OVERVIEWThe economy has rebounded. By the second half ofthe year, it gained strong momentum as to registeran average of 5% GDP growth for the ye a r,compared to a negative of 6.7% for the previousyear. All the macroeconomic indices are pointing toa positive economic trend for the current year.

Reflecting on our corporate rationalization strategyin reducing the number of core businesses from sixto four and the number of cost prudence measuresadopted throughout the ye a r, the Group hasreturned to profitability. This winning note hasgiven strength to the Group’s management andemployees to measure up to their best all the time,having faced extreme difficulties since the onset ofthe financial crisis the last two years.

REVIEW OF FINANCIAL RESULTSThe Group made a profit after tax of RM4.5million on the back of a turnover of RM154.6million for the ye a r. This is a considerableachievement relative to the previous year when itmade a loss of RM33.9 million on the back of aturnover of RM125.0 million. The 24% increase inturnover is in line with the overall growth of theeconomy and the regaining of consumersconfidence. The after tax profit however, includesan unrealized foreign exchange gain of RM2.3million arising from the retranslation of US Dollarborrowings by our plastic manufacturing subsidiaryin Indonesia, as opposed to the unrealized foreignexchange loss of RM8.7 million in 1998.

DIVIDENDWhile there will be no dividend declared this year,the Group is hopeful that the continuingi m p rovement trend will enable the Group toconsider one in the future.


REVIEW OF OPERATIONSPlastics DivisionMalaysiaTurnover of this division does not include performancefrom Mah Sing Nanshin Precision Industries Sdn Bhdsince the Group disposed off its entire interest in thiscompany during the previous year. For the year therefore,the division registered a turnover of RM42.1 million or adrop of 31% compared to the previous year. While ourOEM supplies to some of the MNCs in the electrical andelectronic sectors were affected rather marginally, demandfor our proprietary products such as industrial containersand pallets dropped significantly due to we a k e n e dpurchasing power. The plastic industry experienced a 15%growth overall, but were mainly boosted by the strongexport demands for plastic filmings and extrusion productsand exceptionally high demand for domestic automotivecomponents due to the recovery of domestic passenger carmarket. The sub-sector in injection moulding for electricaland electronics industry in which the group participateswas relatively stable and growing steadily in view of thecompetitive Ringgit.


Chairman’s Statement (Cont’d)

IndonesiaThe worst could have been over for the Indonesianeconomy, since the country began receiving financialaid for their reconstruction. Demand for our plastica u t o m o t i ve components increased impre s s i ve l yt ow a rds the last quarter of the ye a r. Tu r n ove rincreased by 3% from RM6.3 million to RM6.6million. With the strengthening of Rupiah againstUS Dollar in 1999 compared to 1998, ourIndonesia’s operation has managed to reduce its lossfrom RM11.9 million in the previous year to justRM0.2 million for the current year under review.

Property DivisionThe division is the bedrock of the Group activities.The year saw the property sector receiving a series ofi n c e n t i ves from the government, as an anchori n d u s t ry entrusted to kick-start the economicre c ove ry process. First, the fiscal incentives ofproviding low interest rates for residential buyers,since most of the financial institutions have restored

their liquidity. Then, there were two national levelHome Ownership Campaigns held during the yearwhich were mooted by the government. These twoprime movers coupled with a 7-day week opening ofsales counter as well as aggressive advertising andpromotional efforts, resulted in the impressive surgeof our division to re c o rd sales of its pro p e rt yproducts by 124% or an increase of RM52.3 millionfrom RM42.5 million to RM95.3 million. Thedivision recorded a pretax profit of RM7.8 millionfor the year against a pretax profit of RM2.3 millionfor the previous year, a rise of 239%.

Consumer Product DivisionTowards the third quarter of the year, our mineralwater operation discontinued supplying to one of its major buyers, as the latter commenced its ownbottling facility. The 17% decline in sales resulted ina pretax loss of RM0.9 million for the year relative toRM0.2 million pretax loss in the previous year.


During the year we have installed additional facilities in thebottling assembly line to further enhance our product quality.

Motorcycle DivisionSales had increased by two-fold from RM1.7 million toRM3.5 million or by 108% with approximately 90% of thebikes being re-exported in view of sluggish demand in thelocal market. We have also promoted the bikes locally byparticipating in exhibition and sponsorship of some ridingactivities. As a result, the division managed to reduce itspretax loss from RM2.8 million in 1998 to RM0.9 millionfor the year under review.

PROSPECTSA negative 6.7% GDP growth for 1998, an average of 5%growth for 1999 and a forecast of 5.8% growth for the year2000 denotes a positive trend for the well-being of theeconomy in the immediate future. However, within thew i d e s p read international acceptance of globalisationformula for trade, opportunities and threats are equallyabundance for businesses.

Again, the economy is not totally insulated against futureturbulences in the international financial set-up, and onthat score our business strategies will have to be extremely



cautious. Our Group therefore will remain focused towhat it knows best. Our main core businesses will stillbe property and plastics, while consumer productswill be given a higher attention than motorcycle forthe time being.

PLASTICS DIVISIONMalaysia and IndonesiaThe industry is expected to continue growing fromits 15% rate for the year under review. Turnover forthe plastics industry in Malaysia for the year underreview was at RM7.2 billion. The export sector, thedomestic automotive sector, as well as the propertyconstruction sector are expected to lead the growth ofthe plastic industry again for next ye a r. St rong g rowth for the Information Technology andTelecommunication industries is also expected toboost demand for injection-moulded engineeringplastic component, in which the Group is one of theleading manufacturers for Ph i l i p s - J VC, Hi t a c h iGroup, Matsushita and others. The discussions on astrategic alliance venture with a reputable plasticproducer from Europe, is still on going and is likely

to be successful. As re p o rted in the pre v i o u sstatement, the alliance would enable both parties tohave the benefit of a Malaysian production for jointcoverage of the Asian market.

As a strategic direction our division will increase itsactivities in the manufacture of material and wastehandling products both for domestic and exportsespecially to the newer markets.

PROPERTY DIVISIONWith the impre s s i ve performance of this divisionduring the ye a r, the outlook for the current ye a rappears optimistic. De velopment in our Mah Si n gIntegrated Industrial Pa rk and Saujana AkasiaC o u n t ry & Re s o rt Homes is now limited to buildingof 42 units of 2 and 3 storeys commerc i a lshophouses which is expected to generate aboutRM13 million in sales value, 360 units of afford a b l ehomes to be priced at RM42,000 each and balanceunits of bungalow houses, terrace and semi-detachedfactories and bungalow factories.


With the land bank in Mah Sing Integrated Industrial Parkdepleting and the evacuation of squatter settlements in the68-acre Sungai Buloh trench still to be completed, theGroup recently has proposed to acquire 302 acres primedevelopment land in Pulai, Johor for a price considerationof RM87 million. Designed to take-off by October 2000,this township project is expected to have a Gro s sDevelopment Value of more than RM704 million for thenext 8 years.

The Group is confident on this investment in Johor asmore and more foreign investments are pouring into Johorwith completion of the new transhipment port in TanjungPelepas and opening of the new second link between Johorand Singapore. The opening of a new branch office inJohor Bahru is imminent not only to serve its propertybusinesses, but also to enhance businesses in plastics andconsumer products.

CONSUMER PRODUCTSTo augment our single line mineral water extraction andbottling, plans are afoot to value add production andm a rketing of specialized health drinks products. From ourgeneric “Spring Fre s h” mineral water brand which has gainedsubstantial brand recognition and awareness, the divisionanticipates its collaboration with an established Ta i w a n e s em a n u f a c t u rer for the distribution of some new product line-ups will be introduced before end of the current ye a r.


MOTORCYCLEThe Group does not anticipate to better thepresent performance for the current year, in viewof the higher Ringgit tag against US Dollar asc o m p a red to the period before the financial crisis.Against the background of a slower recovery inthe demand for high-end bikes, a deeperassessment has to be made against a volumeimports of the CBU bikes.

ACKNOWLEDGEMENTOnce again my deepest appreciation to all valuedcustomers, shareholders, bankers and associatesfor their continued support. Certainly a vote ofthanks to my President/CEO for his leadership atbeing able to steer and turnaround the Group atits most difficult times. Last but not least mythanks to fellow Board members, the Ma n a g e m e n tand staff of the Group.

Dato’ Mohd Ghazali Bin Mohd Khalid23rd May, 2000


MAH SING GROUP BERHAD (INCORPORATED IN MALAYSIA)16

The Directors submit their report and the audited accounts of the Group and of the Company for the financialyear ended 31st December, 1999.

PRINCIPAL ACTIVITIESThe principal activities of the Company are that of investment holding and provision of management serv i c e sto subsidiary companies in the Gro u p.The principal activities of the subsidiary companies are set out in note 15to the accounts. T h e re have been no significant changes in the nature of these activities during the financial ye a r.

FINANCIAL RESULTS

Group CompanyRM RM

Profit/(loss) for the financial year attributable to/(absorbed by) shareholder s 4,479,674 (2,811,741)

Accumulated loss brought forward (21,909,863) (33,441,244)

Accumulated loss car r ied forwar d (17,430,189) (36,252,985)

In the opinion of the Directors, the results of the operations of the Group and of the Company during thefinancial year were not substantially affected by any item, transaction or event of a material and unusual natureother than the exceptional items as disclosed in note 5 to the accounts.

DIVIDENDS

No dividend was paid or declared by the Company since the end of previous financial year. The Directors donot recommend the payment of any dividend for the financial year ended 31st December, 1999.

MOVEMENTS ON RESERVES AND PR OVISIONSAll material transfers to or from reserves or provisions during the financial year have been disclosed in the accounts.

DIRECTORSThe Directors in office since the date of the last report are:

Dato’ Mohd Ghazali Bin Mohd KhalidJen.(R) Tan SriYaacob Bin Mat ZainDato’ Leong Hoy KumYap Keong @ Yap Kong NamWahid Bin OthmanLeong Yuet Mei

Directors’ Report

MAH SING GROUP BERHAD (INCORPORATED IN MALAYSIA) 17

DIRECTORS’ INTERESTSAccording to the Register of Directors’ Shareholdings, particulars of interests in the shares in the Companyduring the financial year of those Directors holding office at the end of the financial year are as follows:

Number of ordinary shares of RM1.00 eachShares in the Compan y 1st Januar y Addition Disposal 31st December

Dato’ Leong Hoy Kum 20,028,683 – – 20,028,683*Dato’ Mohd Ghazali Bin Mohd Khalid 42,434 – (22,000) 20,434**

* Beneficial interest held under his own name and nominee companies.

** Beneficial interest held under his own name.

By virtue of Dato’ Leong Hoy Kum having an interest of more than 15% of the shares in the Company, Dato’Leong Hoy Kum is deemed to have an interest in the issued share capital of all the subsidiary companies duringthe financial year.

No other Directors in office at the end of the financial year held any interest in the shares in the Company andits related companies during the financial year.

DIRECTORS’ BENEFITSSince the end of the previous financial ye a r,no Director has re c e ived or become entitled to re c e ive a benefit (otherthan the fees, other emoluments and benefits in kind as shown in note 4 to the accounts) by reason of a contractmade by the Company or by a related company with the Director or with a firm of which he is a member orwith a company in which he has a substantial financial interest except for any benefit which may be deemed toh ave arisen by virtue of any transaction with companies, in which the Dire c t o rs have substantial financial intere s t s ,in the ord i n a ry course of bu s i n e s s .

Neither during nor at the end of the financial year was the Company or any of its related companies a partyto any arrangement whose object was to enable the Directors to acquire benefits through the acquisition ofshares in, or debentures of, the Company or any other body corporate.

OTHER ST ATUTORY INFORMATIONBefore the profit and loss account and balance sheet of the Group and of the Company were made out, theDirectors took reasonable steps:

(a) to ascertain the action taken in relation to the writing off of bad debts and the making of provision fordoubtful debts and had satisfied themselves that all known bad debts had been written off and that adequateprovision had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course ofbusiness had been written down to their estimated realisable values.

At the date of this report, the Directors are not aware of any circumstances:

(a) which would render the amounts written off or provided for bad and doubtful debts of the Group and ofthe Company inadequate to any material extent or the values attributed to current assets of the Group andof the Company misleading; and


(b) which have arisen which render adherence to the existing method of valuation of assets or liabilities of theGroup and of the Company misleading or inappropriate.

In the interval between the end of the financial year and the date of this report:

(a) no item, transaction or event of a material and unusual nature has arisen which, in the opinion of theDirectors, would substantially affect the results of the operations of the Group and of the Company for thecurrent financial year other than the events subsequent to balance sheet date as disclosed in note 35 to theaccounts; and

(b) no charge has arisen on the assets of any company in the Group which secures the liability of any otherperson nor has any contingent liability arisen in any company in the Group.

No contingent or other liability of any company in the Group has become enforceable or is likely to becomeenforceable within the period of twelve months after the end of the financial year which,in the opinion of theDirectors,will or may affect the ability of the Company and its subsidiary companies to meet their obligationswhen they fall due.

At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in thisreport or the accounts which would render any amount stated in the accounts misleading.

AUDITORSThe auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.

On behalf of the Board of Directors

Dato’ Mohd Ghazali Bin Mohd KhalidChairman

Dato’ Leong Hoy KumManaging Director

Kuala Lumpur25th April,2000

Directors’ Report (Cont’d)


Group Compan yNote 1999 1998 1999 1998

RM RM RM RM

Turno ver 3 154,648,290 125,028,392 2,380,938 1,756,440

Cost of sales 134,670,280 106,782,052 – –

Operating profit/(loss) befor eexceptional items 4 398,257 (5,017,667) 1,722,352 1,075,590

Exceptional items 5 1,853,756 (29,787,073) (4,063,322) (20,829,417)

Operating profit/(loss)after exceptional items 2,252,013 (34,804,740) (2,340,970) (19,753,827)

Share of results of associatedcompanies 93,533 (62,095) – –

Profit/(loss) before taxation 2,345,546 (34,866,835) (2,340,970) (19,753,827)

Taxation 6 594,917 (1,638,074) (470,771) (346,333)

Profit/(loss) after taxation befor eminority interests 2,940,463 (36,504,909) (2,811,741) (20,100,160)

Minority interests 1,539,211 2,572,948 – –

Profit attributable to/(loss absorbedby) shareholder s 4,479,674 (33,931,961) (2,811,741) (20,100,160)

( A c c u mulated loss)/profitunappropriated brought forward (21,909,863) 12,022,098 (33,441,244) (13,341,084)

A c c u m ulated loss carried forw a r d (17,430,189) (21,909,863) (36,252,985) (33,441,244)

Earnings/(loss) per ordinary shar e(sen) 7 10.2 (77.2)

The above profit and loss accounts are to be read in conjunction withthe notes to the accounts on pages 23 to 50.Auditors’ report - page 52.

Profit and Loss Accountsfor the financial year ended 31st December, 1999


Balance Sheetsas at 31st December, 1999


RM RM RM RM

Capital and reser vesShare capital 8 43,978,000 43,978,000 43,978,000 43,978,000Reserves 9 27,512,419 23,271,755 10,946,127 13,757,868

71,490,419 67,249,755 54,924,127 57,735,868Minority interests 391,740 732,387 – –

D e f e r red and long term lia b i l i t i e sTerm loans 10 8,443,578 12,096,688 – –Deferred creditors 11 303,361 385,517 – –Deferred taxation 12 3,625,260 3,790,760 – –

12,372,199 16,272,965 – –

84,254,358 84,255,107 54,924,127 57,735,868

Represented by:Fixed assets 13 68,379,572 73,889,185 71,285 72,427Intangible assets 14 954,232 1,574,183 – –Subsidiary companies 15 – – 59,031,299 50,361,124Associated companies 16 2,300,608 1,163,147 224,750 224,750Investments 17 3,700 3,700 – –

Cur rent assetsProperty development expenditure 18 59,136,040 111,590,576 – –Contract work-in-progress 19 – 95,198 – –Stocks 20 7,285,629 12,022,551 – –Trade debtors less provision for

doubtful debts:G ro u p :R M 4 , 9 7 6 , 4 6 9(1998: RM2,898,056) 37,161,476 29,820,245 – –

Other debtors , deposits and pre p ay m e n t s 21 7,828,083 8,890,962 60,642 161,614Deposits with licensed banks 22 1,250,717 13,977,700 – 13,700,000Project accounts 23 11,030,579 5,984,031 – –Cash and bank balances 7,219,988 2,313,580 103,973 57,727

130,912,512 184,694,843 164,615 13,919,341

The above balance sheets are to be read in conjunction with the notesto the accounts on pages 23 to 50.Auditors’ report - page 52.



RM RM RM RM

Cur rent liabilitiesTrade creditors 27,010,616 40,600,433 – –Other creditors and accrued liabilities 24 25,975,750 31,457,505 50,804 62,367Term loans 10 4,644,211 4,255,154 – –Short term borrowings 25 51,354,400 82,212,435 3,845,000 5,220,000Bank overdrafts 26 5,373,109 12,838,031 622,018 1,509,407Taxation 4,565,385 6,575,849 50,000 50,000

118,923,471 177,939,407 4,567,822 6,841,774

Net cur rent assets/(liabilities) 11,989,041 6,755,436 (4,403,207) 7,077,567

Defer red expenditur e 27 627,205 869,456 – –

84,254,358 84,255,107 54,924,127 57,735,868

The above balance sheets are to be read in conjunction with the notesto the accounts on pages 23 to 50.Auditors’ report - page 52.


Consolidated Cash Flow Statementfor the financial year ended 31st December, 1999

Note 1999 1998RM RM

Cash generated from operations 28 45,267,569 36,362,107Interest received from customers for late charges 346,183 1,628,631Interest paid (9,180,395) (17,903,184)Proceeds from insurance claims 4,459,017 –Taxation paid (1,658,263) (4,219,729)

Net cash generated from operating activities 39,234,111 15,867,825

Cash flows from in vesting activities

Deferred expenditure incurred (7,325) (35,043)Disposal of subsidiary companies, net of cash disposed 29 – 3,362,493Discount on acquisition price paid for subsidiary

companies acquired in previous financial year – 350,000Purchase of shares from minority shareholders (110,000) (49)Interest received from deposit placement 332,729 248,277Investment in associated company (11,534) –Purchase of fixed assets 30 (4,011,924) (15,585,238)Proceeds from disposal of fixed assets 5,056,796 21,617,876

Net cash from investing activities 1,248,742 9,958,316

Cash flows from financing activitiesSubscription of shares in subsidiary company

by minority shareholder s 1,333,423 –Repayment of short term borrowings (30,858,635) (1,036,733)Repayment of term loans (3,522,799) (8,837,803)Repayment of hire purchase and lease creditors (2,710,414) (2,094,316)Dividend paid – (316,642)

Net cash used in financing activities (35,758,425) (12,285,494)

Net increase in cash and cash equi valentsduring the financial year 4,724,428 13,540,647

Cash and cash equi valents at be g inning of the financial year 9,310,080 (4,313,090)

Unrealised foreign exchange (loss)/gain (57,050) 82,523

Cash and cash equi valents at end of the financial year 31 13,977,458 9,310,080

The above consolidated cash flow statement is to be read inconjunction with the notes to the accounts on pages 23 to 50.Auditors’ report - page 52.


Notes to the Accountsfor the financial year ended 31st December, 1999

1 BASIS OF PREPARATION OF THE ACCOUNTS

The accounts of the Group and of the Company have been prepared in accordance with the applicableapproved Accounting Standards in Malaysia and provisions of the Companies Act, 1965.

2 SIGNIFICANT GROUP ACCOUNTING POLICIES

All significant Group accounting policies set out below are consistent with those applied in the previousfinancial year.

Accounting con ventionThe accounts are prepared under the historical cost convention, modified by the revaluation of certainfixed assets.

Basis of consolidationThe Group adopts both the acquisition and merger methods of consolidation.

The consolidated profit and loss account and balance sheet include the audited accounts of the Company andall its subsidiary companies made up to the end of the financial ye a r. Inter company transactions and re s u l t i n gu n realised profits or losses are eliminated fully on consolidation and the consolidated accounts reflect extern a ltransactions only.

Merger methodAcquisitions of subsidiary companies which meet the cri t e ria for merger accounting under the Malay s i a nAccounting Standard 2, Accounting for Acquisitions and Mergers , a re accounted for using mergeraccounting pri n c i p l e s .When the merger method is used, the cost of investment in the Company ’s books isre c o rded at the nominal value of the shares issued and the difference between the carrying value of thei nvestment and the nominal value of shares transferred is treated as merger re s e rve in accordance with mergerrelief provisions under Section 60(4) of the Companies A c t ,1 9 6 5 .The results of these subsidiary c o m p a n i e sa re presented as if the merger had been effected throughout the current or previous financial ye a rs .

Acquisition methodAcquisition of subsidiary companies that do not meet the criteria for merger accounting is consolidatedusing the acquisition method of accounting.

When the acquisition method is adopted, the difference between the fair value of purchase considerationof subsidiary companies acquired over the Group’s share of the fair value of the separable net assetsacquired is included in the consolidated accounts as goodwill or capital reserve on consolidation.Theresults of the subsidiary companies acquired or disposed of during the year are included in theconsolidated profit and loss account from the date of acquisition or up to the date of their disposal.

Associated companiesThe Group treats those companies as associated companies, in which a long term equity interest of between 20and 50 percent is held and where it is in a position to exe rcise significant influence through managementp a rticipation over the financial and operating policies.P remium or re s e rve arising on acquisition re p resents thed i f f e rence between the cost of investment and the Gro u p ’s share of the value of separable net assets of theassociated companies at the date of acquisition.


2 SIGNIFICANT GROUP ACCOUNTING POLICIES Associated companies (Cont’d)

The Group’s share of profits less losses of associated companies is included in the consolidated profit andloss account, and the G ro u p ’s share of post-acquisition retained profits and re s e rves is added to the interest inassociated companies in the consolidated balance sheet. These amounts are taken from the latest auditedaccounts of the associated companies with the same financial year end as the Gro u p, and where the financialyear end is not coterminous,the amounts are taken from the management accounts made up to the samefinancial year end of the Group.

Cur rency translationsFo reign currency monetary assets and liabilities are translated into Ringgit Malaysia at rates of exchange ru l i n gat the balance sheet date and foreign currency transactions are translated at rates ruling on the transaction dates.Exchange differences are taken to the profit and loss account in the year in which they ari s e.

Assets and liabilities of foreign subsidiary company are translated to Ringgit Malaysia at rates of exchangeruling at the balance sheet date and the results of foreign subsidiary and associated companies are translated ataverage rate of exchange for the ye a r. Exchange differences arising from the translation are taken to re s e rve s .

InvestmentsI nvestments in quoted and unquoted shares including investment in subsidiary and associated companies,h e l das long term investments are stated at cost less provision for diminution in va l u e. P rovision is made ford i m i nution in value only when, in the opinion of the Dire c t o rs ,t h e re is permanent diminution in their va l u e s .

Fixed assets and depreciationCertain leasehold land and buildings were revalued by the Directors based on valuations carried out byindependent professional valuers. The Directors have applied the transitional provision of InternationalAccounting Standards No. 16 (Revised) – Property, plant and equipment as adopted by the MalaysianAccounting Standards Board which allow those assets to be stated at their 1992 valuations. Accordingly,these valuations have not been updated. The cost of other fixed assets comprises their purchase cost andany incidental costs of acquisition.

Freehold land is not depreciated. Depreciation of other assets is calculated so as to write off the cost, orvaluation of the assets, less their estimated residual values, on a straight line basis over the expected usefuleconomic lives of the assets concerned.The principal annual rates used for this purpose are:

Long term leasehold land 2%Short term leasehold land 3.33% - 3.85%Buildings 3.33% - 10%Plant, machinery and factory equipment 10%Motor vehicles 15%Furniture, fittings and office equipment 8% - 25%

Intangible Assetsa) GoodwillGoodwill arising on consolidation represents the excess of the purchase price over the Group’s share ofthe fair value of the separable net assets of subsidiary companies at the date of acquisition and is amortisedthrough the consolidated profit and loss account on a straight line basis over a period of twenty five (25)years. The carrying amount of goodwill is reviewed annually and written down for permanent diminutionin value when, in the opinion of the Directors, it is considered necessary.


b) Brand nameAll costs incurred in creating the brand name are capitalised and amortised on a straight line basis over aperiod of ten (10) years and they will be written off when, in the opinion of the Directors, the futureeconomic benefits are uncertain.

Stocks Stocks are stated at the lower of cost and net realisable value after adequate provision has been made forall deteriorated, damaged, obsolete or slow-moving stocks. In the case of manufactured products, costincludes direct m a t e ri a l s ,d i rect labour,d i rect charges and va ri a ble production overheads and is determined ona firs t - i n ,f i rst-out basis.

Defer red taxationProvision is made using the liability method for taxation deferred in respect of all timing differences exceptwhere it is considered reasonably probable that the tax effects of such deferrals will continue in theforeseeable future. Deferred tax assets are not recognised unless there is a reasonable expectation of theirrealisation.

Debtor sK n own bad debts are written off and specific provision is made for any considered to be doubtful of collection.

Assets held under hire purchase and finance lease ag reementsAssets acquired under hire purchase and finance lease agreements are capitalised and the capital elementof the hire purchase and lease commitments is reflected as hire purchase and lease creditors. The capitalelement of the hire purchase and lease instalments is applied to reduce the outstanding obligations whereasthe interest element is charged against profit so as to produce a constant periodic rate of interest on theremaining balance of the liability for each period.

Property de velopment expenditur eProperty development expenditure is shown as current asset when significant development work has beenundertaken and is expected to be completed within its normal operating cycle. Property developmentexpenditure includes the cost of land held for development, related development cost common to thewhole development project, direct cost of construction and where applicable attributable profit onconstruction in progress less applicable progress billings. Land held for future development and wheresignificant development activities have not been undertaken is classified as non current assets.

Contract work-in-pr ogr essContract work-in-progress comprises contract costs accrued directly on uncompleted contracts. Allrelated progress billings are deferred and deducted from the corresponding accumulated cost of contractwork-in-progress.

Profit recognition on de velopment projectsProfit from sale of development projects is recognised on the percentage of completion method whereoutcome of the development projects can be reliably estimated. Any foreseeable loss on a developmentproject is provided in full.


2 SIGNIFICANT GROUP ACCOUNTING POLICIES (Cont’d)

Profit recognition on construction contractsProfit from construction contracts is recognised by reference to the stage of completion of the projectwhere the outcome can be reliably estimated. Any foreseeable loss on a development project is providedin full.

Capitalisation of bor rowing costsBorrowing costs incurred to finance the construction of assets which require a substantial period of timeto get ready for their intended use are capitalised. Capitalisation of borrowing costs is ceased when theassets are ready for their intended use or sale.

Defer red expenditur ea) Exploration expenditur e

Exploration expenditure represents all costs incurred in relation to exploration,developing and testingof a site for the purpose of extracting mineral water for commercial purpose.

b) Pre-operating expenditur eExpenditure incurred prior to achieving commercial production capacity are capitalised as pre-operating expenditure.

c) Preliminary expenditur eP re l i m i n a ry expenditure re p resents the cost of incorp o r a t i o n .

Deferred expenditure are stated at cost and are amortised over a period of not more than five (5) yearsupon commencement of operations of the subsidiary companies concerned.

Deferred expenditure will be written off when, in the opinion of the Directors, the future economicbenefits are uncertain.

Cash and cash equi valentsCash and cash equivalents comprise cash and bank balances, p roject accounts, bank ove rdraft and depositsat call which are readily conve rt i ble to cash on hand and are subject to insignificant risk of changes in va l u e.

3 TURNOVER

Turnover of the Group represents gross invoiced value of goods sold, a proportion of contracted salesrevenue determined by reference to the stage of completion of the development properties, interestincome and management fees.

Turnover of the Company represents dividend income, interest income and management fees fromsubsidiary companies.


4 OPERATING PROFIT/(LOSS) BEFORE EXCEPTIONAL ITEMS

Group Compan y1999 1998 1999 1998RM RM RM RM

Operating profit/(loss) before exceptional items is stated after charg i n g :

Amortisation of goodwill 73,987 252,649 – –Amortisation of exploration expenditure 25,153 25,153 – –Brand name written off – 40,153 – –Amortisation of preliminary and

pre-operating expenditure 221,238 485,191 – –Auditors’ remuneration 144,429 201,192 6,000 6,000Depreciation 7,504,180 8,642,134 7,730 7,204Directors’ remuneration

- Fees 48,400 48,400 48,400 48,400- Other emoluments 683,104 718,700 – –

Interest expenses 12,375,917 14,905,429 – –Realised foreign exchange loss 146,456 214,779 – –Bad debts written off – 121,947 – –Rental expenses 493,176 1,535,574 – –Provision for stocks obsolescence 413,903 – – –Stocks written off 12,025 – – –Fixed assets written off 245,610 – – –

and crediting:Gross dividend from a subsidiary company – – 2,000,000 1,400,000Gain on disposal of fixed assets 359,406 221,430 – –Interest income 678,912 1,876,908 298,938 244,440Realised foreign exchange gain 263,260 952,865 – –Management fees from subsidiary companies – – 82,000 112,000Rental income 516,137 98,130 – –

The estimated monetary value of benefits in kind received and receivable by the Directors otherwise thanin cash from the Group amount to RM40,800 (1998: RM51,784).


5 EXCEPTIONAL ITEMS

Exceptional items comprise the following:


Goodwill written off 650,902 2,456,100 – –P rovision for diminution in value of

i nvestment in subsidiary companies – – 587,142 6,578,064Provision for diminution in value of

investment in unquoted shares – 1,204,055 – –Provision for amounts due from

subsidiary companies – – 3,476,180 14,146,878Unrealised foreign exchange (gain)/loss (2,336,579) 8,729,429 – –Loss on disposal of subsidiary

companies – 735,560 – 24,556Gain on disposal of subsidiary

companies – (2,945,105) – –Provision for doubtful debts 2,124,888 1,083,439 – 76,160Provision for amount due from

associated company – 293,612 – 3,759Provision for foreseeable loss in

development project – 4,134,075 – –(Surplus)/shortfall of insurance

claim (2,292,967) 6,518,613 – –Provision for stocks obsolescence – 3,334,608 – –Fixed assets written off – 4,242,687 – –

( 1 , 8 5 3 , 7 5 6 ) 2 9 , 7 8 7 , 0 7 3 4,063,322 20,829,417

The exceptional loss/(gain) of 1998 arising from closure of information technology and direct sellingbusinesses included in the above are summarised as follows:


(i) Information Technology– Malaysia – 138,533 – 1,111,645– Overseas – (1,776,514) – 1,319,790

(ii) Direct Selling – 767,135 – 7,050,620

– (870,846) – 9,482,055


6 TAXATION


Taxation based on the results ofthe financial ye a r:- Malaysian income tax – 1,987,656 560,000 392,000- Foreign tax – 4,560 – –

Over provision in respect of prioryears (429,417) (354,142) (89,229) (45,667)

Transfer from deferred taxation (165,500) – – –

(594,917) 1,638,074 470,771 346,333

The taxation charge for the Company is in respect of dividend from subsidiary company.

For subsidiary companies with assessable income, no provision for income tax has been made for thefinancial year ended 31st December, 1999 in respect of the income earned by the subsidiary companies inaccordance with the waiver granted under the Income Tax (Amendment) Act, 1999. The amount ofincome tax waived for the financial year ended 31st December, 1999 amounted to approximatelyRM1,395,000.

7 EARNINGS/(LOSS) PER ORDINARY SHARE

The earnings/(loss) per ord i n a ry share for the financial year has been calculated based on the Gro u p ’s pro f i tfor the financial year of RM4,479,674 (1998: loss for the financial year of RM33,931,961) divided by thenumber of ord i n a ry shares in issue during the financial year of 43,978,000 shares (1998:43,978,000 share s ).

8 SHARE CAPITAL

Group and Compan yOrdinary shares of RM1.00 each: 1999 1998

RM RM

Authorised 100,000,000 100,000,000

Issued and fully paid 43,978,000 43,978,000


9 RESERVES


Non-distributableCapital reserve 1,222,931 851,927 – –Exchange fluctuation reserve (3,479,435) (2,869,421) – –Share premium 47,199,112 47,199,112 47,199,112 47,199,112

44,942,608 45,181,618 47,199,112 47,199,112

DistributableAccumulated loss (17,430,189) (21,909,863) (36,252,985) (33,441,244)

27,512,419 23,271,755 10,946,127 13,757,868

At balance sheet date, the Company has tax credit under Section 108 of the Income Tax Act, 1967 ofapproximately RM2,242,000 (1998: RM1,675,000) subject to ag reement by the Inland Revenue Board.

Movements of capital and exchange fluctuation reser ves are as follows:Group

1999 1998Capital reser ve RM RM

At 1 January 851,927 914,702Add: accretion arising from additional investment in

associated company 371,004 –Less: realisation upon disposal of subsidiary companies – (62,775)

At 31 December 1,222,931 851,927

Group1999 1998

Exchange fluctuation reser ve RM RM

At 1 January (2,869,421) (1,014,828)Add: arising from translation of net assets of subsidiary companies (610,014) 151,156Less: reversal upon disposal of subsidiary companies – (2,005,749)

At 31 December (3,479,435) (2,869,421)


10 TERM LOANS

Group1999 1998RM RM

Secured:Repayable after 12 months 7,009,764 9,957,075Repayable within 12 months (included in current liabilities) 3,959,726 3,679,330

10,969,490 13,636,405

Unsecured:Repayable after 12 months 1,433,814 2,139,613Repayable within 12 months (included in current liabilities) 684,485 575,824

2,118,299 2,715,437

TotalRepayable after 12 months 8,443,578 12,096,688Repayable within 12 months (included in current liabilities) 4,644,211 4,255,154

13,087,789 16,351,842

The secured term loans include foreign loans of USD2,147,887 (1998: USD2,668,988) or RinggitMalaysia equivalent of RM8,161,974 (1998: RM10,141,397) obtained by a subsidiary company aresecured by legal charges over the leasehold land and buildings,plant,machinery and equipment,inventoryand trade debtors of the said subsidiary company and guaranteed by the Company. These loans arerepayable over 48 monthly instalments commencing April 1998 and interest charged for the financial yearwas at rates varying between 10.00% and 19.50% (1998: 15.00% and 15.50%) per annum.

The remaining secured term loan obtained by a subsidiary company is secured by assignment of sale andpurchase agreements over 31 units office premises owned by the subsidiary company.This loan is repayableover 8 years commencing January 1996 and interest charged for the financial year was at rates varyingbetween 8.25% and 9.79% (1998: 9.10% to 13.30%) per annum.

The unsecured term loan obtained by a subsidiary company is granted on a negative pledge over thepresent and future assets of the subsidiary company and guaranteed by the Company.This loan is repayableover 54 monthly instalments commencing April 1998 and interest charged for the financial year was atrates varying between 9.45% and 11.25% (1998: 12.30% to 14.50%) per annum.


11 DEFERRED CREDITORS

This re p resents the principal amount in respect of lease and hire purchase of fixed assets and are re p aya bl eas follow s :

Group1999 1998RM RM

After 12 months 303,361 385,517Within 12 months (included in other creditors and accrued liabilities) 701,600 2,151,347

1,004,961 2,536,864

12 DEFERRED TAXATION

Group1999 1998RM RM

At 1 January 3,790,760 4,484,760Transfer to profit and loss account (165,500) –Reversal upon disposal of subsidiary company – (694,000)

At 31 December 3,625,260 3,790,760

The deferred taxation provided in the accounts is in respect of:

Capital allowances in excess of depreciation 3,625,260 3,790,760

The tax effect in connection with the surplus arising from the revaluation of certain properties of asubsidiary company is not disclosed as there is no intention to dispose of these properties.


13 FIXED ASSETS

The details of fixed assets are as follows:

Group At ValuationLong Shor t At Cost At Valuationter m ter m Short ter m Short ter m At Cost

leasehold leasehold Freehold leasehold Total leasehold Freehold Leasehold Totalland land land land land buildings buildings buildings buildingsRM RM RM RM RM RM RM RM RM

1999

Cost/valuationAt 1 Januar y 1,900,036 3,682,639 90,000 1,656,280 7,328,955 11,368,999 10,486,327 2,601,841 24,457,167Reclassification - - - - - - (73,375) (137,101) (210,476)Foreign exchange fluctuation - - - 215,924 215,924 - - 266,742 266,742Additions - - - - - 1,850,815 - 54,785 1,905,600Disposals (1,900,036) - - - (1,900,036) - - (35,440) (35,440)

At 31 December - 3,682,639 90,000 1,872,204 5,644,843 13,219,814 10,412,952 2,750,827 26,383,593

Accumulated depreciationAt 1 Januar y 193,363 844,426 - 159,260 1,197,049 1,933,618 1,130,643 366,047 3,430,308Reclassification - - - - - - 66,589 (66,589) -Foreign exchange fluctuation - - - 20,762 20,762 - - 25,952 25,952Charge for the financial year 10,720 140,735 - 72,008 223,463 482,765 382,598 148,977 1,014,340Disposals (204,083) - - - (204,083) - - (4,397) (4,397 )

At 31 December - 985,161 - 252,030 1,237,191 2,416,383 1,579,830 469,990 4,466,203

Net book value - 2,697,478 90,000 1,620,174 4,407,652 10,803,431 8,833,122 2,280,837 21,917,390

1998

Cost/valuationAt 1 Januar y 1,900,036 3,682,639 90,000 2,395,934 8,068,609 12,072,736 10,446,697 4,188,297 26,707,730Reclassification - - - - - - - (10,718) (10,718)Foreign exchange fluctuation - - - (739,654) (739,654) - - (891,036) (891,036)Additions - - - - - 1,187,324 59,118 282,182 1,528,624Disposal of subsidiary companies - - - - - - - (702,556) (702,556)Disposals - - - - - - - (186,361) (186,361)Written off - - - - - (1,891,061) (19,488) (77,967) (1,988,516)

At 31 December 1,900,036 3,682,639 90,000 1,656,280 7,328,955 11,368,999 10,486,327 2,601,841 24,457,167

Accumulated depreciationAt 1 Januar y 171,928 691,328 - - 863,256 1,976,818 734,188 406,590 3,117,596Reclassification - - - - - - - (1,516) (1,516)Foreign exchange fluctuation - - - - - - - (44,335) (44,335)Charge for the financial year 21,435 153,098 - 159,260 333,793 500,473 399,705 199,314 1,099,492Disposal of subsidiary companies - - - - - - - (174,749) (174,749)Disposals - - - - - - - (3,865) (3,865)Written off - - - - - (543,673) (3,250) (15,392) (562,315)

At 31 December 193,363 844,426 - 159,260 1,197,049 1,933,618 1,130,643 366,047 3,430,308

Net book value 1,706,673 2,838,213 90,000 1,497,020 6,131,906 9,435,381 9,355,684 2,235,794 21,026,859


13 FIXED ASSETS (Cont’d)

At Cost/Valuation At CostGroup Plant, Furnitur e,

machiner y fittings and Capitaland factor y Motor office work-in-

Land Buildings equipment vehicles equipment progr ess TotalRM RM RM RM RM RM RM

1999

Cost/valuationAt 1 January 7,328,955 24,457,167 58,332,522 5,529,182 3,096,849 - 98,744,675Reclassification - (210,476) - - - - (210,476)Foreign exchange fluctuation 215,924 266,742 1,677,760 49,352 12,641 - 2,222,419Additions - 1,905,600 2,084,619 739,918 447,737 - 5,177,874Disposals (1,900,036) (35,440) (3,127,389) (766,596) (27,052) - (5,856,513)Written off - - (255,905) (278,355) (92,412) - (626,672)

At 31 December 5,644,843 26,383,593 58,711,607 5,273,501 3,437,763 - 99,451,307

Accumulated depreciationAt 1 Januar y 1,197,049 3,430,308 16,594,818 2,701,809 931,506 - 24,855,490Foreign exchange fluctuation 20,762 25,952 236,820 10,647 3,716 - 297,897Charge for the financial year 223,463 1,014,340 5,283,221 695,252 287,904 - 7,504,180Disposals (204,083) (4,397) (533,201) (453,010) (10,079) - (1,204,770)Written off - - (70,374) (278,355) (32,333) - (381,062)

At 31 December 1,237,191 4,466,203 21,511,284 2,676,343 1,180,714 - 31,071,735

Net book value 4,407,652 21,917,390 37,200,323 2,597,158 2,257,049 - 68,379,572

1998

Cost/valuationAt 1 Januar y 8,068,609 26,707,730 79,155,334 7,489,952 4,745,769 37,181,977 163,349,371Reclassification - (10,718) 2,945 - 7,773 (44,866,162) (44,866,162)Foreign exchange fluctuation (739,654) (891,036) (5,075,213) (160,058) (51,568) - (6,917,529)Additions - 1,528,624 10,652,096 295,447 423,532 7,684,185 20,583,884Disposal of subsidiary companies - (702,556) (6,690,463) (576,858) (924,688) - (8,894,565)Disposals - (186,361) (5,380,266) (1,292,708) (54,303) - (6,913,638)Written off - (1,988,516) (14,331,911) (226,593) (1,049,666) - (17,596,686)

At 31 December 7,328,955 24,457,167 58,332,522 5,529,182 3,096,849 - 98,744,675

Accumulated depreciationAt 1 Januar y 863,256 3,117,596 22,020,617 3,215,068 1,354,123 - 30,570,660Reclassification - (1,516) 337 - 1,179 - -Foreign exchange fluctuation - (44,335) (297,463) (17,524) (8,508) - (367,830)Charge for the financial year 333,793 1,099,492 5,877,185 901,125 430,539 - 8,642,134Disposal of subsidiary companies - (174,749) (1,923,557) (230,691) (293,491) - (2,622,488)Disposals - (3,865) (804,270) (962,364) (13,747) - (1,784,246)Written off - (562,315) (8,278,031) (203,805) (538,589) - (9,582,740)

At 31 December 1,197,049 3,430,308 16,594,818 2,701,809 931,506 - 24,855,490

Net book value 6,131,906 21,026,859 41,737,704 2,827,373 2,165,343 - 73,889,185


Compan yOffice equipment 1999 1998

RM RMCostAt 1 January 90,046 90,372Additions 6,588 6,169Disposals – (6,495)

At 31 December 96,634 90,046

Accumulated depreciationAt 1 January 17,619 11,374Disposals – (959)Charge for the financial year 7,730 7,204

At 31 December 25,349 17,619

Net book value 71,285 72,427

ValuationThe leasehold land and buildings of the Group were valued by the Directors in 1992 based onvaluations carried out by independent professional valuers on the open market value basis.

The net book values of revalued fixed assets of the Group that would have been included in theaccounts, had these assets been carried at cost less depreciation, are as follows:

Group1999 1998RM RM

Leasehold land and buildings 8,767,668 7,316,746

Assets with restricted titleAt the balance sheet date, the cost and net book value of fixed assets of the Group pledged to financialinstitutions to secure long term and short term borrowings as shown in notes 10,25 and 26 are as follows:

Group1999 1998RM RM

CostFreehold building 8,147,302 8,147,302Short term leasehold land and buildings 4,174,944 3,702,372Plant, machinery and equipment 15,580,643 12,869,538

Total cost 27,902,889 24,719,212


13 FIXED ASSETS (Cont’d)Group

1999 1998RM RM

Net book valueFreehold building 6,888,572 7,166,780Short term leasehold land and buildings 3,588,448 3,344,043Plant, machinery and equipment 12,099,065 11,052,971

Total net book value 22,576,085 21,563,794

Assets held under hire purchase and finance lease ag reementsAt the balance sheet date, the cost and net book value of fixed assets of the Group held under hirep u rchase and finance leases amounting to RM2,210,912 and RM1,637,369 (1998: RM1,060,082 andRM835,419) re s p e c t ive l y.

14 INTANGIBLE ASSETS

Intangible assets include the following:

Group1999 1998RM RM

Goodwill 954,232 1,574,183Brand name – –

954,232 1,574,183

GroupGoodwill 1999 1998

RM RMCostAt 1 January 1,780,458 7,480,315Add: arising from acquisition of subsidiary company

during the financial year 104,938 –Less: adjustment arising from variation of purchase consideration – (350,000)Less: written off (774,883) (2,779,462)Less: reversal upon disposal of subsidiary companies – (2,570,395)

At 31 December 1,110,513 1,780,458

Accumulated amortisationAt 1 January 206,275 534,028Add: amortisation for the financial year 73,987 252,649Less: written off (123,981) (323,362)Less: reversal upon disposal of subsidiary companies – (257,040)

At 31 December 156,281 206,275

954,232 1,574,183


GroupBrand name 1999 1998

RM RMCostAt 1 January – 45,445 Less: written off during the financial year – (45,445)

At 31 December – –Accumulated amortisationAt 1 January – 5,292Less: written off during the financial year – (5,292)

At 31 December – –

– –

15 SUBSIDIARY COMPANIES

The subsidiary companies are:

E f f e c t i ve Equity Inter e s tB y

C o u n t r y of B y S u b s i d i a r yName of Compan y I n c o rp o r a t i o n C o m p a n y C o m p a n y Principal Activities

1 9 9 9 1 9 9 8 1 9 9 9 1 9 9 8% % % %

Subsidiary companies ofMah Sing Group Berhad

Mah Sing Plastics Industries Malaysia 100 100 – – Manufacture of plasticSdn Bhd moulded products and

property development

Mah Sing Precision Engineering Malaysia 100 100 – – Fabrication, repairs and Sdn Bhd maintenance of tools,

moulds and dies

Mah Sing Enterprise Sdn Bhd Malaysia 100 100 – – Trading of plastic and other related products

Mah Sing Properties Sdn Bhd Malaysia 100 100 – – Property investment and development

Mestika Bistari Sdn Bhd Malaysia 100 100 – – Construction and property development


15 SUBSIDIARY COMPANIES (Cont’d)



1 9 9 9 1 9 9 8 1 9 9 9 1 9 9 8% % % %

Mah Sing -Yoshikawa Malaysia 51 51 – – M a nu fa c t u re of Components Manu fa c t u ring semi-finished and Sdn Bhd finished plastic parts

Insan Johan Sdn Bhd Malaysia 100 100 – – Inactive

Vital Roles Sdn Bhd Malaysia 90 90 – – Inactive

Vital Routes Sdn Bhd Malaysia 100 100 – – Investment holding

Multi Synergy Group Sdn Bhd Malaysia 100 100 – – Dormant

Pleasant Network Sdn Bhd Malaysia 100 100 – – Investment holding

Champion Computers Sdn Bhd Malaysia 100 100 – – Investment holding

Peninsular Connection Sdn Bhd Malaysia 100 100 – – Investment holding

Jastamax Sdn Bhd Malaysia 100 100 – – Dormant

Konsortium Lingkaran Lembah Malaysia 51 51 – – DormantKinta Sdn Bhd

Gentali Motor Corpn. Sdn Bhd Malaysia 60.5 60.5 – – Marketing and distribution of Aprilia motorcycles

Superior Focus Sdn Bhd Malaysia 80 80 – – Inactive

S u b s i d i a r y company of Mah SingPlastics Industries Sdn Bhd

Kenwira Sdn Bhd Malaysia – – 100 100 Dormant

S u b s i d i a r y company of Mah SingP ro p e r ties Sdn Bhd

Acacia Springs Management Malaysia – – 100 100 Property managementSdn Bhd

S u b s i d i a r y company ofChampion Computers Sdn Bhd

Mestika Kenangan Sdn Bhd Malaysia – – 100 1 0 0 Dormant




1 9 9 9 1 9 9 8 1 9 9 9 1 9 9 8% % % %

S u b s i d i a r y company ofPleasant Network Sdn Bhd

Vican Technology Sdn Bhd* Malaysia – – 68 68 Inactive

S u b s i d i a r y company of V i c a nTe c h n o l o gy Sdn Bhd

Vican Electronics Sdn Bhd Malaysia – – 100 100 Inactive

S u b s i d i a r y company of V i t a lRoutes Sdn Bhd

P.T. Mah Sing Indonesia** Indonesia – – 65 65 M a nu fa c t u re of plastic moulded products

S u b s i d i a r y company of Peninsular Connection Sdn Bhd

True Mineral Water Sdn Bhd Malaysia – – 100 90 Extracting and packaging of mineral water

S u b s i d i a r y companies of True Mineral Water Sdn Bhd

Spring Fresh Sdn Bhd Malaysia – – 100 100 Distribution of mineralwater

FLS Manufacturing Sdn Bhd Malaysia – – 100 100 Inactive

True Marketing Sdn Bhd Malaysia – – 100 100 Inactive

* A winding up order was made by Johor Bahru High Court against this subsidiary company as disclosed in note 35 to the

accounts. The cost of investment in this subsidiary company has been fully provided.

** Audited by other firms of auditors.


15 SUBSIDIARY COMPANIES ( Cont’d)

Interest in subsidiary companies:Compan y

1999 1998RM RM

Unquoted shares, at cost 57,975,252 57,975,252Less: provision for diminution in value (8,765,210) (8,178,068)

49,210,042 49,797,184

Amount due from subsidiary companies 40,591,242 33,576,007Less: provision for doubtful debts (29,960,959) (26,484,779)

10,630,283 7,091,228

59,840,325 56,888,412

Amount due to subsidiary companies (809,026) (6,527,288)

59,031,299 50,361,124

The amounts due from/(to) subsidiary companies are unsecure d , i n t e rest free and have no fixed term ofre p ay m e n t .

16 ASSOCIATED COMPANIES

Interest in associated companies:Group Compan y

1999 1998 1999 1998RM RM RM RM

Unquoted shares, at cost 2,006,216 1,994,682 224,750 224,750Exchange differences (395,922) (547,721) – –Accretion arising from additional

investment in associated company 570,776 – – –Group’s share of post-acquisition

retained losses (90,281) (183,814) – –

2,090,789 1,263,147 224,750 224,750

Amount due from associated company(trade) 489,611 293,612 3,759 3,759

Less: provision for doubtful debts (169,807) (293,612) (3,759) (3,759)

319,804 – – –

2,410,593 1,263,147 224,750 224,750

Amount due to associated company (109,985) (100,000) – –

2,300,608 1,163,147 224,750 224,750


The Group’s interest in the associated companies is analysed as follows:Group

1999 1998RM RM

Share of net assets 2,090,789 1,263,147

Amount due from associated company is unsecure d ,i n t e rest free and has no fixed term of re p ay m e n t .

Amount due to associated company is unsecured, bears interest at 10% (1998: 10%) per annum and hasno fixed term of repayment.

Details relating to the associated companies are as follows:

E f f e c t i veC o u n t r y of E q u i t y

Name of compan y I n c o rp o r a t i o n Interest Principal Activities1 9 9 9 1 9 9 8% %

Associated companies ofMah Sing Group Berhad

* Perstorp-Mah Sing Sdn Bhd Malaysia 42 42 Distribution,marketing and sale ofwaste handling systems

Prestige Greenery Sdn Bhd Malaysia 39.5 39.5 Dormant

Associated company ofP.T. Mah Sing Indonesia

* P.T. Multi Pratama Interbuana Indonesia 17.88 22.75 Manufacturing of plastic productsIndonesia via injection moulding for

technical and industrial equipmentand home furniture and fixtures

* Audited by other firms of auditors.

17 INVESTMENTSGroup

1999 1998RM RM

Quoted shares in Malaysia, at cost 3,700 3,700

Unquoted shares outside Malaysia, at cost 1,204,055 1,204,055Less: provision for diminution in value (1,204,055) (1,204,055)

– –

3,700 3,700

Market value for quoted shares in Malaysia 1,900 1,700


18 PROPERTY DEVELOPMENT EXPENDITURE

Group1999 1998RM RM

Land, at cost 83,006,277 79,208,277Development expenditure, at cost 263,352,664 237,731,229

Total land and development expenditure 346,358,941 316,939,506Attributable profits net of foreseeable loss 114,412,296 94,940,864

460,771,237 411,880,370Less: progress billings received and receivable (401,635,197) (300,289,794)

59,136,040 111,590,576

Included in development expenditure is interest on borrowings capitalised during the financial year amounting to RM2,879,626 (1998: RM6,828,246).

19 CONTRACT WORK-IN-PROGRESS

Group1999 1998RM RM

Contract work-in-progress, at cost 772,166 772,166Attributable profits 184,270 231,646

956,436 1,003,812Less: progress billings received (956,436) (908,614)

– 95,198

20 STOCKS

Group1999 1998RM RM

Raw materials 3,585,323 4,219,117Work-in-progress 861,359 1,023,503Finished goods 5,026,098 11,385,685

9,472,780 16,628,305Less: provision for stocks obsolescence (2,187,151) (4,605,754)

7,285,629 12,022,551


21 OTHER DEBTORS , DEPOSITS AND PREP AYMENTS


Other debtors 1,406,532 1,727,545 111,242 111,242Less: provision for doubtful debts (152,385) (105,910) (76,160) (76,160)

1,254,147 1,621,635 35,082 35,082Deposits and prepayments 6,573,936 7,269,327 25,560 126,532

7,828,083 8,890,962 60,642 161,614

22 DEPOSITS WITH LICENSED BANKS

Deposits with licensed banks of the Group amounting to RM150,717 (1998: RM127,200) have beenpledged as collateral for guarantees issued on behalf of the subsidiary companies.

23 PROJECT ACCOUNTS

This is in respect of bank accounts opened and maintained in accordance with Section 7A of the HousingDevelopers Act, 1966.

24 OTHER CREDITORS & ACCRUED LIABILITIES

Included in other creditors and accrued liabilities of the Group are the following:Group

1999 1998RM RM

Hire purchase and lease creditors - current portion 701,600 2,151,347Amount payable for purchase of machinery 6,605,937 6,505,005

25 SHORT TERM BORROWINGS


Secured 7,961,004 7,960,405 – –Unsecured 43,393,396 74,252,030 3,845,000 5,220,000

51,354,400 82,212,435 3,845,000 5,220,000


25 SHORT TERM BORR OWINGS ( Cont’d)

GroupThe secured short term borrowings comprise short term foreign loans of USD2,095,000 (1998:USD2,095,000) or Ringgit Malaysia equivalent of RM7,961,004 (1998:RM7,960,405) obtained by as u b s i d i a ry company are secured by legal charges over the leasehold land and bu i l d i n g s ,p l a n t ,m a c h i n e ry ande q u i p m e n t , i nve n t o ry and trade debtors of the said subsidiary company and guaranteed by the Company.

Interest charged for the financial year was at rates varying between 10.00% and 19.50% (1998:15.00% and15.50%) per annum.

The unsecured short term borrowings comprise revolving credits and bankers acceptances which aregranted on negative pledges over the present and future assets of the respective subsidiary companies andguaranteed by the Company.

Interest charged for the financial year was at rates varying between 3.75% and 12.05% (1998: 6.80% and22.15%) per annum.

Compan yThe unsecured short term borrowings comprise revolving credit granted on negative pledge over thepresent and future assets of the Company.


26 BANK OVERDRAFTS


Secured 536,245 500,290 – –Unsecured 4,836,864 12,337,741 622,018 1,509,407

5,373,109 12,838,031 622,018 1,509,407

GroupThe bank overdraft facilities granted to a subsidiary company are secured by legal charges over theleasehold land and buildings, plant, machinery and equipment, trade debtors and inventory of the saidsubsidiary company and guaranteed by the Company.

Interest charged for the financial year was at rates varying between 25.00% and 55.00% (1998:37.50% and55.00%) per annum.

The unsecured bank overdraft facilities are granted on negative pledges over the present and future assetsof the respective subsidiary companies and guaranteed by the Company.


Compan yThe unsecured bank overdraft facility was granted on negative pledge over the present and future assets ofthe Company.



27 DEFERRED EXPENDITURE

Deferred expenditure comprise the following:

Group1999 1998RM RM

Exploration expenditure, at cost 125,765 125,765Less: accumulated amortisation (56,594) (31,441)

69,171 94,324

Preliminary expenditure, at cost 36,334 41,534Pre-operating expenditure, at cost 1,535,123 1,767,305

1,571,457 1,808,839Less:accumulated amortisation (1,013,423) (1,033,707)

558,034 775,132

Total deferred expenditure 627,205 869,456

Movements of preliminary and pre-operating expenditure are as follows:

Group1999 1998RM RM

CostAt 1 January 1,808,839 2,108,311Exchange differences 690 (4,376)Add: addition during the financial year 7,325 35,043Less: reclassification (3,875) –Less: reversal upon disposal of subsidiary companies – (330,139)Less: written off (241,522) -

At 31 December 1,571,457 1,808,839

Accumulated amortisationAt 1 January 1,033,707 844,533Add: amortisation for the financial year 221,238 485,191Less: reversal upon disposal of subsidiary companies – (296,017)Less:written off (241,522) –

At 31 December 1,013,423 1,033,707

558,034 775,132

Included in pre-operating expenditure during the financial year is auditors’ remuneration of RM4,000(1998: RM5,600).


28 CASH GENERATED FROM OPERATIONS

Group1999 1998RM RM

Profit/(loss) before taxation 2,345,546 (34,866,835)

Adjustments for non-cash items:Share of results of associated companies (93,533) 62,095Depreciation 7,504,180 8,642,134Amortisation of goodwill 73,987 252,649Goodwill written off 650,902 2,456,100Brand name written off – 40,153Amortisation of preliminary and pre-operating expenditure 221,238 485,191Amortisation of exploration expenditure 25,153 25,153Gain on disposal of fixed assets (359,406) (221,430)Gain on disposal of investment in subsidiary companies – (2,945,105)(Surplus)/shortfall of insurance claim (2,292,967) 6,518,613Loss on disposal of investment in subsidiary companies – 735,560Fixed assets written off 245,610 4,242,687Provision for stocks obsolescence 413,903 3,334,608Provision for doubtful debts 2,124,888 1,083,439Provision for amount due from associated company – 293,612Provision for diminution in value of investment in unquoted shares – 1,204,055Provision for foreseeable loss in development project – 4,134,075Stocks written off 12,025 –Bad debts written off – 121,947Interest expenses 12,375,917 14,905,429Interest income (678,912) (1,876,908)Unrealised foreign exchange (gain)/loss (2,336,579) 8,729,429

Operating profit before working capital changes 20,231,952 17,356,651

(Increase)/Decrease in working capital

Stocks and contract work-in-progress 53,775,141 (17,592,615)Debtors (10,684,064) 37,940,181Creditors (18,055,460) (1,342,110)

Net change in working capital 25,035,617 19,005,456

Cash generated from operations 45,267,569 36,362,107


29 A NA L YSIS OF NET DISPOSAL OF SUBSIDIARY COMP A N I E S

The summary effect of subsidiary companies disposed of in prior year was as follows:

Group1999 1998RM RM

Cash and cash equivalents – (1,356,967)Debtors – 6,522,969Intangible assets – 34,123Goodwill on consolidation – 2,313,355Stocks – 4,348,271Fixed assets – 6,272,077Lease creditor – (495,510)Creditors – (10,088,385)Deferred taxation – (694,000)Minority interests – (3,787,373)

Total assets disposed by the Group – 3,068,560Add: realisation of capital reserves – (62,775)Add: realisation of exchange fluctuation reserves – (2,005,749)

Net assets disposed by the Group – 1,000,036

Less:amount retained as simple investment – (1,204,055)

– (204,019)Gain on disposal of subsidiary companies – 2,209,545

Net cash proceeds received – 2,005,526Cash and cash equivalents disposed net of bank overdrafts 1,356,967

Net cash disposed – 3,362,493

30 PURCHASE OF FIXED A S S E T S

Net cash outlay for the acquisition of fixed assets during the financial year is as follows:

Group

1999 1998RM RM

Total acquisition 5,177,874 12,899,699

Add: amount paid for assets acquired in previous financial year – 2,779,539

Less:amount financed by hire purchase (1,165,950) (94,000)

Net cash outlay for the financial year 4,011,924 15,585,238


31 CASH AND CASH EQUIVALENTS

Cash and cash equivalents at end of the financial year comprise the following balance sheet items:

Group1999 1998RM RM

Cash and bank balances 7,219,988 2,313,580Project accounts 11,030,579 5,984,031Deposits with licensed banks 1,100,000 13,850,500Bank overdrafts (5,373,109) (12,838,031)

13,977,458 9,310,080

32 SIGNIFICANT RELATED PARTY TRANSACTIONS

In the course of business,the Company undertakes on agreed terms and prices,transactions with its inter-company and other related parties.

The significant related party transactions undertaken by the Company with its related parties during thefinancial year are as follows:


Gross dividend from a subsidiary company – – 2,000,000 1,400,000Management fees from subsidiary companies – – 82,000 112,000Purchase of second hand machinery and

equipment from a company in which c e rt a i n Directors have financial interests – 6,954,222 – –

33 CONTINGENT LIABILITIES


Secured:

Corporate guarantees issued to financialinstitutions in respect of credit facilities granted to subsidiary companies – – 19,466,000 22,035,000

Unsecured:

Bankers guarantees 2,245,960 2,519,400 – –Corporate guarantees issued to financial

institutions in respect of credit facilitiesgranted to subsidiary companies – – 48,128,000 87,345,000

2,245,960 2,519,400 48,128,000 87,345,000

2,245,960 2,519,400 67,594,000 109,380,000


There is a legal suit against the Company and certain of its subsidiary companies for alleged breach ofcopyright and confidential information, which is still pending hearing at the High Court of Malaya inKuala Lumpur. Based on legal opinion obtained, the Group provided for an amount of RM0.8 millionfor the potential legal and other costs to be incurred.

34 SEGMENTAL INFORMATION

Analysis by activity and geo graphical location - Group1999:

Profit/(loss) Total assetsActivities Country Turnover before tax employed

RM RM RM

Plastics Malaysia 42,094,490 (1,161,503) 56,169,928Indonesia 6,577,094 (170,729) 21,371,690

48,671,584 (1,332,232) 77,541,618Mineral Water Malaysia 6,894,078 (872,050) 8,027,662Motorcycle Malaysia 3,487,598 (924,570) 661,383Property Malaysia 95,232,877 7,854,012 115,096,353Investment Holding Malaysia 298,938 (1,119,216) 1,743,383Other s Malaysia 63,215 (1,260,398) 107,430

Total 154,648,290 2,345,546 203,177,829

1998:

Plastics Malaysia 60,834,391 (15,842,201) 62,310,853Indonesia 6,323,898 (11,972,028) 18,591,110Japan 225,544 (9,382) –

67,383,833 (27,823,611) 80,901,963

Information Malaysia 854,292 (629,950) 87,829Technology Taiwan 1,592,121 (451,840) –

USA 1,320,029 (530,410) –

3,766,442 (1,612,200) 87,829

Mineral Water Malaysia 8,267,258 (175,643) 10,042,522Direct Selling Malaysia 1,218,160 (2,487,102) 864,039Motorcycle Malaysia 1,675,844 (2,834,563) 5,562,328Property Malaysia 42,472,415 2,317,682 149,247,776

Investment Holding Malaysia 244,440 (2,177,823) 15,488,057Taiwan – (60,412) –USA – (13,163) –

244,440 (2,251,398) 15,488,057

Total 125,028,392 (34,866,835) 262,194,514


35 EVENTS SUBSEQUENT TO BALANCE SHEET D ATE

a) On 18 January 2000, a winding up order was made by the Johor Bahru High Court against Vican Technology Sdn Bhd, a 68% owned subsidiary company of the Company.

b) On 23 February 2000, Mah Sing Properties Sdn Bhd, a wholly-owned subsidiary company of MahSing Group Berhad, entered into a conditional Sale and Purchase Agreement with SouthernIntegrated City Sdn Bhd for the acquisition of a parcel of freehold land held under Geran 25081,Lot 241, Mukim Pulai, Daerah Johor Bahru, Johor Darul Takzim measuring approximately 302.74acres of land for a cash consideration of RM87,000,000. The proposed acquisition is subject to thea p p roval of the Fo reign Investment Committee and share h o l d e rs of the Company at anExtraordinary General Meeting to be convened.


Statement by Directorspursuant to Section 169(15) of the Companies Act, 1965

We, Dato’ Mohd Ghazali Bin Mohd Khalid and Dato’ Leong Hoy Kum, being two of the Directors of MahSing Group Berhad state that,in the opinion of the Directors,the accounts set out on pages 19 to 50 are drawnup so as to exhibit a true and fair view of the state of affairs of the Group and the Company as at 31stDecember, 1999 and of the results of the Group and the Company and the cash flows of the Group for thefinancial year ended on that date in accordance with the applicable approved Accounting Standards in Malaysia.

Signed at Kuala Lumpur on 25th April 2000.

On behalf of the Board of Directors

Dato’ Mohd Ghazali Bin Mohd KhalidChairman

Dato’ Leong Hoy KumManaging Director

Statutory Declaration

I,Yap Keong @ Yap Kong Nam, being the Director responsible for the financial management of Mah SingGroup Berhad,do solemnly and sincerely declare that the accounts set out on pages 19 to 50 are in my opinioncorrect and I make this solemn declaration conscientiously believing the same to be true and by virtue of theprovisions of the Statutory Declaration Act, 1960.

Yap Keong @ Yap Kong NamDirector

Subscribed and solemnly declared at Kuala Lumpur this 25th April, 2000.

Before me:

T. Tharumarajah PPNCommissioner for Oaths


Report of the Auditorsto the members of Mah Sing Group Berhad

We have audited the accounts set out on pages 19 to 50. These accounts are the responsibility of the Company’sDirectors. Our responsibility is to express an opinion on these accounts based on our audit.

We conducted our audit in accordance with approved Auditing Standards in Malaysia. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the accounts are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the accounts. An audit also includes assessing the accounting principles used and significantestimates made by Directors, as well as evaluating the overall accounts presentation. We believe that our auditprovides a reasonable basis for our opinion.

In our opinion:

(a) the accounts give a true and fair view of the state of affairs of the Group and the Company as at 31stDecember, 1999 and of the results of the Group and the Company and the cash flows of the Group for thefinancial year ended on that date in accordance with the applicable approved Accounting Standards inMalaysia, and comply with the Companies Act, 1965; and

(b) the accounting and other records and the registers required by the Act to be kept by the Company and itssubsidiary companies have been properly kept in accordance with the provisions of the Act.

The names of the subsidiary companies of which we have not acted as auditors are indicated in note 15 to theaccounts.We have considered the accounts of these subsidiary companies and the auditors’ reports thereon.

We are satisfied that the accounts of the subsidiary companies that have been consolidated with the Company’saccounts are in form and content appropriate and proper for the purposes of the preparation of the consolidatedaccounts and we have received satisfactory information and explanations required by us for those purposes.

The auditors’ reports of the subsidiary companies were not subject to any qualification and did not include anyadverse comment made under subsection (3) of Section 174 of the Act.

Price waterhouseCooper s[AF:1146]Public Accountants

Yap Kim Swee[1654/10/00(J)]Partner

Kuala Lumpur25th April, 2000


Statistics of Shareholdings

As at 25th April, 2000

Authorised Share Capital : RM100,000,000.00Issued and Fully Paid Share Capital : RM43,978,000.00Class of Shares : Ordinary Shares of RM1.00 eachVoting Rights : One Vote Per Ordinary Share (On a Poll)

DISTRIBUTION OF SHAREHOLDINGS AND NUMBER OF SHAREHOLDERSAS AT 25TH APRIL, 2000

No. of % of Issued No. of % ofSize of Shareholding Shares Held Share Capital Shareholder s Total Shareholder s

1 – 1,000 2,870,661 6.53 2,911 46.711,001 – 5,000 7,444,022 16.92 2,627 42.155,001 – 10,000 3,720,000 8.46 456 7.3210,001 & above 29,943,317 68.09 238 3.82

Total 43,978,000 100.00 6,232 100.00


TWENTY LARGEST SHAREHOLDERSAS AT 25TH APRIL, 2000

% of IssuedName No. of Shares Held Share Capital

1. OUB Nominees (Tempatan) Sdn BhdPledged Securities Account for Dato’ Leong Hoy Kum (T88-6310468939) 9,600,000 21.83

2. Amsec Nominees (Tempatan) Sdn BhdArab-Malaysian Bank Berhadfor Dato’ Leong Hoy Kum 4,813,378 10.94

3. Malaysia Nominees (Tempatan) Sendirian BerhadPledged Securities Account for Dato’ Leong Hoy Kum (01-00124-000) 3,800,000 8.64

4. Dato’ Leong Hoy Kum 1,815,305 4.135. TA Nominees (Tempatan) Sdn Bhd

Pledged Securities Accountfor Chua Chong Kee 1,702,000 3.87

6. Mayban Nominees (Tempatan) Sdn BhdSociete Generale, Singapore Branch for Kwong Seng Choy (N14011985220) 795,200 1.81

7. Wong Kem Chen 724,000 1.658. HLG Nominee (Asing) Sdn Bhd

Commerzbank (Sea) Ltd for Hacienda Limited 343,000 0.789. Wang Tai Hsiang 241,000 0.5510. Poon Yen Yen Angeline 200,000 0.4611. Lee Lee Kong 191,000 0.4312. HDM Nominees (Asing) Sdn Bhd

Phillip Securities Pte Ltd for Lin Yunzhi 180,000 0.4113. Mohamed Tamrin Bin Munir 172,000 0.3914. Ng Tiong Seng Corporation Sdn Bhd 160,000 0.3615. Cartaban Nominees (Asing) Sdn Bhd

SSBT Fund ZV3M for IFC Emerging Markets Fund-Malaysia 150,000 0.34

16. Mayban Nominees (Tempatan) Sdn BhdSociete Generale, Singapore Branch for Tan Seow Than (990259) 120,000 0.27

17. Mohd Fahmi Bin Said 113,000 0.2618. Amanah Saham Mara Berhad 100,000 0.2319. Ooi Say Hup 82,000 0.1920. M.I.T Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Allied Champion Inc (ZZ178-009) 72,000 0.16

25,373,883 57.70

Statistics of Shareholdings (Cont’d)


SUBSTANTIAL SHAREHOLDERSAS AT 25TH APRIL, 2000


1. Dato’Leong Hoy Kum 20,028,683* 45.542. Chua Chong Kee 1,702,000** 3.87

* Beneficial interest held under his own name and Malaysia Nominees (Tempatan) Sendirian Berhad, OUB Nominees (Tempatan) Sdn

Bhd and Amsec Nominees (Tempatan) Sdn Bhd.

** Beneficial interest held under TA Nominees (Tempatan) Sdn Bhd.

DIRECTORS’ SHAREHOLDINGSAS AT 21ST JANUAR Y, 2000


1. Dato’Leong Hoy Kum 20,028,683* 45.542. Dato’Mohd Ghazali Bin Mohd Khalid 20,434 0.053. Jen.(R) Tan SriYaacob Bin Mat Zain _ _4. Wahid Bin Othman _ _5. Yap Keong @ Yap Kong Nam _ _6. Leong Yuet Mei _ _

* Beneficial interest held under his own name and Malaysia Nominees (Tempatan) Sendirian Berhad, OUB Nominees (Tempatan) Sdn

Bhd and Amsec Nominees (Tempatan) Sdn Bhd.


Properties Owned by the Groupas at 31st December, 1999

Estimated Age of Net Book

Description Location Existing Use Tenur e Land Area Buildings Value(years) RM

1. Leasehold land and single Lot 9,Lingkaran 1, Factory Lease expiring 304,920 sq. f t . 8 1 3 , 5 0 0 , 9 0 9s t o rey detached industrial Taiwanese Industrial Park on 02.03.2019building with a two-storey North Klang Straitoffice section (see note *) Selangor Darul Ehsan

2. 31 units office premises in GM No. 930 Lot No 1796 Office Freehold 17,280 sq.ft. 5 6,888,572Wisma Mah Sing Section 93, Jalan Sungai

Besi, Kuala Lumpur

3. F reehold land and single Lot 919,EMR No 2529 Factory Freehold 122,404 sq.ft. 3 2,357,505s t o rey detached industrial Mukim Batang Kalibuilding with an Selangor Darul Ehsanoffice section

4. Leasehold land and Kawasan Industri Factory Lease expiring 224,947 sq.ft. 4 3,588,448detached industrial bu i l d i n g Jababeka Jl. Jababeka on 29.06.2022with an office section Blok Raya W17-20

Cikarang Industrial EstateBekasi,Indonesia 26,335,434

Note: * The property was valued by an independent professional valuer on 12th March 1999 at RM19,930,000.

P R O X Y F O R M

I/We

of

being Member/Members of the abovenamed Company, hereby appoint

of

or failing him

ofor the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Eighth A n nual General Meetingof the Company to be held at Wisma Mah Sing, Penthouse Suite 1, N o. 1 6 3 , Jalan Sungai Besi, 57100 Kuala Lumpur onTu e s d ay, 13th Ju n e, 2000 at 10.00 a.m. and at any adjournment there o f, on the following resolutions re f e rred to in the noticeof the Eighth A n nual General Meeting:-

No. Resolution For Against

1. Adoption of Directors’Report and Audited Accounts for theyear ended 31st December, 1999

2. Approval of Directors’fees

3. Re-election of Jen.(R) Tan SriYaacob Bin Mat Zain

4. Re-election of Ms Leong Yuet Mei

5. Re-appointment of Messrs PricewaterhouseCoopers as Auditors

(Please indicate with a cross “X” in the spaces provided whether you wish your votes to be cast for or against theResolutions.In the absence of specific direction, your proxy will vote or abstain as he thinks fit).

Dated this day of 2000.

Signature:First or Sole Shareholder orCommon Seal of Appointor

NOTES:1. A member entitled to attend and vote at the Eighth A n nual General Meeting is entitled to appoint a proxy or attorn ey

or in the case of a corp o r a t i o n , to appoint a duly authorised re p re s e n t a t ive to attend and vote in his place. A proxy ora t t o rn ey or duly authorised re p re s e n t a t ive need not be a member of the Company.

2. The power of attorney or a notarially certified copy thereof or the instrument appointing the proxy shall be in writingunder the hand of the appointer or of his attorney duly authorised in writing.If the appointer is a corporation,it mustbe executed under its seal or in the manner authorised in its constitution.In the case of joint holdings, the signatureof the first named holder is sufficient.

3. The instrument appointing a proxy together with the power of attorney (if any) under which is signed or a dulynotarially certified copy thereof must be deposited at the Registered Office of the Company at Wisma Mah Sing,Penthouse Suite 1,No. 163, Jalan Sungai Besi,57100 Kuala Lumpur not less than 48 hours before the time appointedfor holding the Meeting or any adjournment thereof.

MAH SING GROUP BERHAD

No. of Shares Held

(Company No.230149P)

The Company SecretaryMah Sing Group BerhadWisma Mah SingPenthouse Suite 1No. 163, Jalan Sungai Besi57100 Kuala Lumpur

Stamp

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