Contents. Notice of Annual General Meeting 2-3. Corporate Information 4. Audit Committee 5. Chairman s Statement 6-7. Group Corporate Structure 8

Transcription

1 Contents Notice of Annual General Meeting 2-3 Corporate Information 4 Audit Committee 5 Chairman s Statement 6-7 Group Corporate Structure 8 Directors Report 9-12 Statement by Directors 13 Report of the Auditors to the Members 14 Consolidated Balance Sheet 15 Balance Sheet 16 Consolidated Income Statement 17 Income Statement 17 Consolidated Statement of Changes In Equity 18 Statement of Changes In Equity 18 Consolidated Cash Flow Statement 19 Cash Flow Statement Notes to the Financial Statements Analysis of Shareholdings List of Properties 49 Proxy Form 51

2 Notice Of Annual General Meeting NOTICE IS HEREBY GIVEN THAT the Twelfth Annual General Meeting of Altan Holdings Bhd. will be held at the Conference Room of Wisma Atlan, 8 Persiaran Kampung Jawa, Bayan Lepas, Penang on Friday, June 15, 2001 at a.m. for the following purposes: A G E N D A 1. To receive and adopt the Audited Accounts for the year ended February 28, 2001 together with the reports of the Directors and Auditors thereon. (Resolution 1) 2. To approve the payment of Directors' Fees in respect of the financial year ended February 28, (Resolution 2) 3 To re-elect Mr. Wong Kam Fuat, a Director retiring under the provision of Article 78 of the Articles of Association of the Company. (Resolution 3) 4. To re-elect Tuan Haji Abdul Aziz Bin Abdul Manan, a Director retiring under the provision of Article 78 of the Articles of Association of the Company. (Resolution 4) 5. To re-elect YAM Tengku Abdul Rahman Ibni Sultan Hj. Ahmad Shah Al-Mustain Billah, DK II., SSAP, a Director retiring under the provision of Article 85 of the Articles of Association of the Company. (Resolution 5) 6. To re-elect Dato' Ong Kim Hoay, a Director retiring under the provision of Article 85 of the Articles of Association of the Company. (Resolution 6) 7. To re-elect En. Roshan Bin Jaffar, a Director retiring under the provision of Article 85 of the Articles of Association of the Company. (Resolution 7) 8. To re-elect En. Abdullah Bin Che Mat, a Director retiring under the provision of Article 85 of the Articles of Association of the Company. (Resolution 8) 9. To re-appoint Messrs. Wong Liu & Partners as Auditors of the Company and to authorise the Board of Directors to fix their remuneration. (Resolution 9) 10. As Special Business: To consider and if thought fit, to pass the following as Ordinary Resolution:- Power to issue shares pursuant to Section 132D of the Companies Act, "That subject always to the approval of all the relevant regulatory bodies being obtained, the Directors be and are hereby authorised, pursuant to Section 132D of the Companies Act, 1965, to allot and issue shares in the Company at any time until the conclusion of the next Annual General Meeting upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued does not exceed 10% of the issued share capital of the Company for the time being." (Resolution 10) 2

3 Notice Of Annual General Meeting 11. To transact any other business of which due notice shall have been given in accordance with the Companies Act, By Order of the Board, TOH CHEE SEONG LIM SAW IM Joint Secretaries Penang Dated: 30th May, 2001 NOTES: 1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead, of him/her. A proxy may but need not be a member of the Company and provisions of Section 149 (1)(b) of the Companies, Act, 1965 shall not apply to the Company. 2. In the case of a corporate body, the proxy appointed must be in accordance with the Memorandum and Articles of Association, and the instrument appointing a proxy shall be given under the Company's Common Seal or under the hand of its attorney. 3. The Form of Proxy must be deposited at the Company's Registered Office at Level 4, Wisma Atlan, 8, Persiaran Kampung Jawa, Bayan Lepas, Penang not less than 48 hours before the time set for the meeting or any adjournment thereof. EXPLANATORY NOTES ON SPECIAL BUSINESS The Ordinary Resolution proposed under item 10 if passed, will give the Directors of the Company authority to issue shares in the Company up to an amount not exceeding 10% of the total issued capital of the Company for the time being for such purposes as the Directors consider would be in the best interest of the Company. This authority, unless revoked or varied by the shareholders of the Company in general meeting, will expire at the conclusion of the next Annual General Meeting. 3

4 Corporate Information BOARD OF DIRECTORS Dato Seri Maung Ng Lim Yong Tong, SSAP Chairman Wong Kam Fuat Managing Director and Chief Executive Officer Lee Sze Siang Executive Director YAM Tengku Abdul Rahman Ibni Sultan Hj Ahamd Shah Al-Mustain Billah, DK II., SSAP Director Dato Ong Kim Hoay Director Tuan Haji Abdul Aziz Bin Abdul Manan Director Foong Kai Choong Director Yeoh Choon San Director Dato Khalid Bin Mohamad Jiwa Director Roshan Bin Jaffar Director Abdullah Bin Che Mat Director COMPANY SECRETARIES Toh Chee Seong (LS005656) Lim Saw Im (MACS 00363) REGISTRAR AUDITORS REGISTERED OFFICE PRINCIPAL BANKERS Malaysian Share Registration Services Sdn. Bhd. ( D) 7th Floor, Exchange Square, Bukit Kewangan, Kuala Lumpur, Malaysia. Tel : + 60 (0) Wong Liu & Partners Public Accountants 62-A, Sri Bahari Road, Penang, Malaysia. Level 4, Wisma Atlan 8, Persiaran Kampung Jawa, Bayan Lepas, Penang, Malaysia. Tel : +60 (0) Web : sec@atlan.com.my Southern Bank Berhad Bumiputra-Commerce Bank Berhad RHB Bank Berhad 4

5 Audit Committee 1. Dato Ong Kim Hoay (Chairman of the Audit Committee) 2. Mr. Wong Kam Fuat 3. Mr. Foong Kai Choong 4. Dato Khalid Bin Mohamad Jiwa of whom Dato Ong Kim Hoay, Mr. Foong Kai Choong and Dato Khalid Bin Mohamad Jiwa are the independent non-executive directors of the Board. The terms and reference of Audit Committee are as follows:- Constitution The Board of Directors has established a Committee of the Board known as the Audit Committee. Memberships The Audit Committee shall be appointed by the Board from amongst their number and shall consist of not less than 3 members of whom a majority shall not be :- a) executive directors of the Company or any related corporation; b) a spouse, parent, brother, sister, son or adopted son or daughter or adopted daughter of an executive director of the Company or any related corporation; or c) any person having a relationship which in the opinion of the Board of Directors, would interfere with the exercise of independent judgement in carrying out the functions of an audit committee. The members of the Audit Committee shall elect a Chairman from amongst their number who is not an executive director or employee of the Company or any related corporation. Meeting A quorum shall be two members, one of whom shall be the Chairman of the Audit Committee. At least one a year the Audit Committee shall meet the external auditors without any executive Board member present. The external auditor has the right to appear and be heard at any meeting of the Audit Committee and shall appear before the Committee when required to do so by the Audit Committee. The Company Secretary shall be the Secretary of Audit Committee. Meeting shall be held not less than three times a year. The external auditors may request a meeting if they consider that one is necessary and, the Chairman of the Committee shall convene a meeting of the Committee to consider any matters the external auditor believes should be brought to the attention of the Directors or Shareholders. Duties and Functions The duties of the Audit Committee shall be :- a) to consider the appointment of the external auditor, the audit fee, and any questions of resignation or dismissal; b) to discuss with the external auditor before the audit commences the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved; c) To review with the management and external auditor the half-year and annual financial statement before their submission to the Board, focusing particulary on :- - any changes in accounting policies and practices - major judgmental areas - significant adjustments resulting from the audit - the going concern assumption - compliance with accounting standards - compliance with stock exchange and legal requirements; Reporting Procedures The Secretary shall circulate the minutes of meeting of the Committee to all members of the board. 5

6 Chairman s Statement Dear Shareholders, On behalf of the Board of Directors, it is my privilege to present the annual report and audited accounts of Atlan Holdings Bhd for the financial year ended 28 February FINANCIAL REVIEW During the year under review, Atlan Group has registered a net loss after taxation and minority interest of 3.2 million. The higher losses sustained by Atlan Group for the year under review as compared to last year was due to several rationalisation programme introduced by the Board of Directors to streamline the operations and to refocus our position as a precision engineering company. PROGRAMME RATIONALISATION AND RE-ENGINEERING Since I joined the Board of Directors of Atlan Holdings Bhd on 16 June 2000, the Board has carried out some rationalisation programme with an objective to improve the overall performance of Atlan Group in the coming financial year which include, among others, divestment of non-profitable retail subsidiary, namely Spring Spirit Sendirian Berhad and planned cessation of our non-profitable education arm, Atlan Institute of Technology Sdn Bhd. The Group intends to concentrate its available resources to improve its precision engineering businesses. A new powder coating plant has been added to provide more comprehensive services to our customers. Similarly, a plasma robotic welding plant was also added to complement the existing manufacturing facilities in Atlan Group. This would provide the much needed platform to position the Group to face the challenges in coming months in view of the slowdown of the regional economy. CORPORATE RESTRUCTURING EXERCISE The Board of Directors has on 26 February 2001 announced to the Kuala Lumpur Stocks Exchange (KLSE) on the proposed corporate exercise. Upon completion of the corporate exercise, Atlan Group will be in a position to diversify into immediate income generating businesses. In addition, the Group will also be able to repay most of the borrowings from financial institutions. 6

7 Chairman s Statement DIVIDEND The Board of Directors does not recommend the payment of any dividend for this financial year. PROSPECTS The Board of Directors believes that the Group should be able to stabilise its operations in the next financial year once the corporate restructuring exercise is completed. The overall performance of the Group should also improve. APPRECIATION AND ACKOWLEDGEMENT On behalf of the Board of Directors, I would like to express our sincere appreciation to all management and staff for their continuous dedication and hard work. I would also like to express our sincere appreciation to all our customers, vendors, bankers, business associates, relevant government agencies and most importantly, our shareholders for their continuous support and confidence shown to our Group. I also wish to take this opportunity to thank Madam Yeoh Siew Ean, Mr. Teoh Eng Soon and Mr. Goy Weng Huat, Tan Sri Datuk Dr. Omar Abdul Rahman and his alternate, Dato Anuar Md. Nor for their contribution during their tenure as directors while at the same time welcoming the new directors to the Board. DATO SERI MAUNG NG WE, SSAP 7

8 Group Corporate Structure Atlan Industries Sendirian Berhad 100% Binamold Sdn Bhd 100% Cirrus Sdn Bhd 70% Binasonic Sdn Bhd 100% Atlan Institute of Technology Sdn Bhd 100% ATLAN HOLDINGS BHD Atlan Technology Sdn Bhd 100% Atlan Properties Sdn Bhd 100% Atlan Asia-Pacific Pte Ltd (Singapore) 100% 8

9 Directors Report The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended February 28, PRINCIPAL ACTIVITIES The principal activity of the Company are investment holding and providing management, financial, technical and other ancillary services. The principal activities of the subsidiary companies are set out in note 18 of the notes to the financial statements. There are no significant changes in the principal activities of the Group and the Company during the year under review. SIGNIFICANT EVENTS a) On January 3, 2001, the Company has entered into a share sale agreement to dispose the entire issued and paid-up of Spring Spirit Sdn. Bhd. of 450,000 ordinary shares of 1.00 each, a wholly owned subsidiary of the Company to Chuan Yang Construction Sdn. Bhd. at a total consideration of 1,573,416. b) On February 26, 2001, the Company announced the following :- (i) A conditional sale and purchase agreement between the Company and Albion Investments International Limited for the proposed acquisition of Courseville Holdings Limited. (ii) Two separate conditional sale and purchase agreements between the Company and Tangkas Utara Sdn. Bhd. and the Company and DYMM Tuanku Syed Sirajuddin Ibni Almarhum Tuanku Syed Putra Jamalullail DK for the proposed acquisition of Emas Kerajang Sdn. Bhd. (iii) Proposed rights issue. (iv) Proposed increase in authorised capital. RESULTS Loss after taxation (4,032,107) (2,018,581) (2,955,182) (255,348) Minority interests 797, , Net loss for the year (3,234,360) (1,764,816) (2,955,182) (255,348) Accumulated (losses)/profit brought forward (4,653,943) (2,889,127) 61, ,704 Accumulated (losses)/profit carried forward (7,888,303) (4,653,943) (2,893,826) 61,356 DIVIDENDS No dividend has been recommended, paid or declared by the directors since the end of the previous financial year. RESERVES AND PROVISIONS There were no material transfers to or from reserves and provisions during the year under review other than the movements shown in the Consolidated Statement of Changes in Equity of the Group and Statement of Changes in Equity of the Company. 9

10 Directors Report BAD AND DOUBTFUL DEBTS Before the income statement and balance sheet of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and, the making of provision for doubtful debts, and that all known bad debts had been written off and adequate provision been made for doubtful debts. At the date of this report, the directors of the Group and of the Company are not aware of any circumstances that would render the amount written off for bad debts, or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent. CURRENT ASSETS Before the income statement and balance sheet of the Group and of the Company were made out, the directors took reasonable steps to ascertain whether any current assets other than debts, were unlikely to realise their value as shown in the accounting records in the ordinary course of business of the Group and of the Company and to the extent so ascertained were written down to an amount that they might be expected to realise. At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading. VALUATION METHODS At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets and liabilities of the Group and of the Company misleading or inappropriate. CHANGE OF CIRCUMSTANCES At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company that would render any amount stated in the respective financial statements misleading. CONTINGENT AND OTHER LIABILITIES At the date of this report, there does not exist :- (i) (ii) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year. Other than those disclosed in note 27 of the notes to the financial statements, no contingent liability or other liability of the Group and of the Company has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year, which in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. ITEMS OF AN UNUSUAL NATURE In the opinion of the directors, the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature and there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the current financial year. SIGNIFICANT EVENTS The significant events during and after the financial year are disclosed in note 33 of the notes to the financial statements. ISSUE OF SHARES OR DEBENTURES During the year under review, the paid up capital of the Company was increased to 17,911,000 through the exercise of 714,000 employees share options of 1 each. The new shares rank pari passu in all respects with the existing shares. There were no debentures issued by the Company during the financial year under review. 10

11 Directors Report EMPLOYEES SHARE OPTION SCHEME (ESOS) The details of ESOS are disclosed in note 28 of the notes to the financial statements, the movement of the options are as follows :- Number of options of 1 each Date of Offer As at As at Offer Price Granted Exercised Lapsed ,000 - (103,000) (54,000) 754, ,000 - (611,000) (8,000) 20,000 Total 1,550,000 - (714,000) (62,000) 774,000 DIRECTORS AND THEIR SHAREHOLDINGS The directors who served since the date of the last report are :- Dato Seri Maung Ng Lim Yong Tong, SSAP (Chairman; appointed on ) Wong Kam Fuat ; Managing Director and Chief Executive Officer YAM Tengku Abdul Rahman Ibni Sultan Hj. Ahmad Shah Al-Mustain Billah, DKII., SSAP (Appointed on ) Dato Ong Kim Hoay (Appointed on ) Datuk Khalid Bin Mohamad Jiwa (Appointed on ) Lee Sze Siang (Executive Director ; Appointed on ) Foong Kai Choong Yeoh Choon San Tuan Haji Abdul Aziz Bin Abdul Manan Yeoh Siew Ean (Resigned on ) Teoh Eng Soon (Resigned on ) Goy Weng Huat (Resigned on ) Datuk Anuar Md. Nor (Alternate to Tan Sri Datuk Dr. Omar Abdul Rahman ; Resigned on ) Tan Sri Datuk Dr. Omar Abdul Rahman (Resigned on ) DIRECTORS INTERESTS The shareholdings of the directors in office at the end of the financial year according to the Register of Directors Shareholdings are :- Number of ordinary shares of 1 each Shares Held Shares Held Name of Directors At Bought Sold At Direct interest Dato Seri Maung Ng Lim Yong Tong - 2,000,000-2,000,000 Wong Kam Fuat 2,942,930 *1,274,100 *(1,698,800) 1,628, (890,000) - Yeoh Choon San - 17,000 (17,000) - Indirect Interest Wong Kam Fuat 1,274,100 *1,698,800 *(1,274,100) 1,698,800 * transfer of account 11

12 Directors Report The remaining directors in office do not hold any shares in the Company and in the related companies during the financial year. Mr. Wong Kam Fuat is deemed to have interest in the subsidiary companies by virtue of his interest in shares of the Company. The directors share options in the Company pursuant to the Employees Share Option Scheme (ESOS) are as follows :- Number of options of 1 each Options Held Options Held Name of Directors At Granted Exercised At Wong Kam Fuat 120, ,000 Yeoh Choon San 17,000 - (17,000) - The remaining directors in office do not hold any share options in the Company during the financial year. DIRECTORATE In accordance with the Articles of Association, Mr. Wong Kam Fuat, YAM Tengku Abdul Rahman Ibni Sultan Hj. Ahmad Shah Al-Mustain Billah, DKII., SSAP, Dato Ong Kim Hoay and Tuan Haji Abdul Aziz Bin Abdul Manan shall retire at the coming Annual General Meeting and, being eligible, offer themselves for re-election. DIRECTORS' BENEFITS Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than those included in the amount of emoluments received or receivable by the directors as shown in note 16 of the notes to the financial statements and any benefits arising from transactions disclosed in note 21 of the notes to the financial statements) by reason of a contract made by the Company or a related corporation with the directors or with a firm of which the director is a member, or with a company in which the director has a substantial interest. Neither during nor at the end of the financial year was the Company a party to any arrangement whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate except for share options granted to eligible executive directors of the Company under the Employees Share Option Scheme. AUDITORS The auditors, Messrs. Wong Liu & Partners have indicated their willingness to continue in office. Signed in accordance with a resolution of the directors, WONG KAM FUAT Penang Dated : May 14, 2001 LEE SZE SIANG 12

13 Statement by Directors We, the undersigned, being two of the directors of Atlan Holdings Bhd., state that, in the opinion of the directors, the financial statements set out on pages 15 to 46 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at February 28, 2001 and of the results of the business of the Group and of the Company and the cash flows of the Group and the Company for the year ended on that date. On Behalf of the Board of Directors, WONG KAM FUAT Penang Dated : May 14, LEE SZE SIANG STATUTORY DECLARATION I, Wong Kam Fuat, I/C No , the director responsible for the financial management of Atlan Holdings Bhd. do solemnly declare that to the best of my knowledge and belief the financial statements set out on pages 15 to 46 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, Subscribed and solemnly declared by the ) abovenamed Wong Kam Fuat ) at Georgetown in the State of Penang ) this 14 day of May, 2001 ) WONG KAM FUAT Before me, (Commissioner for Oaths) 13

14 Report of the Auditors to the Member We have audited the financial statements set out on pages 15 to 46. These financial statements are the responsibility of the directors of the Company. Our responsibility is to express an opinion on the financial statements based on our audit conducted in accordance with approved auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the financial statements and disclosures in the financial statements. An audit also includes an assessment of the accounting principles used and significant estimates made by the directors as well as evaluating the overall presentation in the financial statements. We believe our audit provides a reasonable basis for our opinion. In our opinion, the financial statements are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards so as to give a true and fair view of : (a) (b) the matters required under Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Company ; state of affairs of the Group and the Company as at February 28, 2001 and of the results of the business of the Group and of the Company and the cash flows of the Group and the Company for the year ended on that date ; and the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and its subsidiary companies have been properly kept in accordance with the provisions of the Act. We have considered the financial statements of the subsidiary companies and are satisfied that the financial statements that have been consolidated with the Company's financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. The audit reports on the financial statements of the subsidiary companies were not subject to any qualification or any adverse comment made under sub-section (3) of Section 174 of the Act. WONG LIU & PARTNERS AF 0182 Public Accountants Penang Dated : May 14, 2001 DEAN LIU 933/7/02 (J) Partner Public Accountant 14

15 Consolidated Balance Sheet CONSOLIDATED BALANCE SHEET AS AT FEBRUARY 28, Note ASSETS PROPERTY, PLANT AND EQUIPMENT 5 27,930,937 32,712,412 OTHER INVESTMENT 6 189, ,683 DEFERRED EXPENDITURE 7 53,256 CURRENT ASSETS Inventories 8 4,284,950 10,280,972 Trade debtors 9 10,197,805 7,627,001 Other debtors, deposits and prepayments 2,630,403 1,154,151 Deposits with a licenced bank , ,421 Cash and bank balances 1,141, ,675 18,472,970 19,649,220 TOTAL ASSETS 46,593,590 52,604,571 EQUITY AND LIABILITIES SHARE CAPITAL 11 17,911,000 17,197,000 SHARE PREMIUM 11,055,270 9,969,050 ACCUMULATED LOSSES CARRIED FORWARD 12 (7,888,303) (4,653,943) CURRENCY TRANSLATION RESERVE (24,805) (24,817) 21,053,162 22,487,290 MINORITY INTEREST 496,201 1,293,948 DEFERRED LIABILITIES ,354 CURRENT LIABILITIES Trade creditors 14 15,001,749 17,033,233 Other creditors and accruals ,822 1,430,243 Amount due to a director 16 25,842 31,359 Bank borrowings 17 8,971,072 9,684,474 Provision for discontinued operations expenses 150,000 Provision for taxation 13,742 31,670 25,044,227 28,210,979 TOTAL EQUITY AND LIABILITIES 46,593,590 52,604,571 The notes on pages 22 to 46 form part of the financial statements. Auditors' Report - page 14 15

16 BALANCE SHEET AS AT FEBRUARY 28, Note ASSETS PROPERTY, PLANT AND EQUIPMENT 5 696, ,288 INVESTMENT IN SUBSIDIARIES 18 13,890,266 15,427,302 OTHER INVESTMENT 6 189, ,683 AMOUNT OWING BY SUBSIDIARY COMPANIES 19 9,897,457 11,290,709 CURRENT ASSETS Other debtors, deposits and prepayments 1,486,418 16,367 Cash and bank balances 41,047 37,560 1,527,465 53,927 TOTAL ASSETS 26,201,487 27,473,909 EQUITY AND LIABILITIES SHARE CAPITAL 11 17,911,000 17,197,000 SHARE PREMIUM 11,055,270 9,969,050 ACCUMULATED (LOSSES)/PROFIT CARRIED FORWARD (2,893,826) 61,356 26,072,444 27,227,406 AMOUNT OWING TO SUBSIDIARY COMPANY 19 17,371 21,249 DEFERRED LIABILITIES 13 10,915 CURRENT LIABILITIES Other creditors and accruals , , , ,339 TOTAL EQUITY AND LIABILITIES 26,201,487 27,473,909 The notes on pages 22 to 46 form part of the financial statements. Auditors' Report - page 14 16

17 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED FEBRUARY 28, 2001 < > Note Continuing Subsidiary Total Continuing Subsidiary Total Operations Disposed Operations Disposed Revenue Cost of goods sold 20 55,052, ,382 (47,344,599) (522,302) 55,723,424 (47,866,901) 41,541,726 (35,301,723) 1,218,684 (1,249,939) 42,760,410 (36,551,662) Gross profit/(loss) 7,707, ,080 7,856,523 6,240,003 (31,255) 6,208,748 Other operating income 1,042-1,042 79,970-79,970 Administrative expenses Selling and distribution expenses Provision for discontinued 7,708,485 (9,017,593) (531,587) 149,080 7,857,565 6,319,973 (31,255) 6,288,718 (596,827) (9,614,420) (5,754,363) (350,294) (6,104,657) (594,577) (1,126,164) (383,456) (301,066) (684,522) operations expenses (150,000) - (150,000) (Loss)/profit from operations (1,990,695) (1,042,324) (3,033,019) 182,154 (682,615) (500, 461) Finance expenses Other income (1,218,292) (1,456,416) 281, ,783 Loss before taxation Taxation (3,969,833) (62,274) (1,844,094) (174,487) Loss after taxation Minority interest (4,032,107) 797,747 (2,018,581) 253,765 Net loss for the year (3,234,360) (1,764,816) Basic loss per share (sen) 23 (18.15) (10.34) Diluted loss per share (sen) 23 (18.15) (10.34) INCOME STATEMENT FOR THE YEAR ENDED FEBRUARY 28, Note Revenue , ,763 Administrative expenses (4,652,388) (769,689) Loss from operations (4,063,276) (220,926) Finance expenses (15,322) (12,800) Other income 1,123,416 - Loss before taxation 21 (2,955,182) (233,726) Taxation 22 - (21,622) Loss after taxation (2,955,182) (255,348) The notes on pages 22 to 46 form part of the financial statements. Auditors' Report - page 14 17

18 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED FEBRUARY 28, 2001 Currency Share Share Accumulated Translation 2001 Capital Premium Losses Reserve Total Balance as at March 1, ,197,000 9,969,050 (4,653,943) (24,817) 22,487,290 ESOS exercised 714,000 1,086, ,800,220 Translation of a foreign subsidiary Net gain not recognised in the income statement Net loss for the year - - (3,234,360) - (3,234,360) Total recognised (loss) / gain - - (3,234,360) 12 (3,234,348) Balance as at February 28, ,911,000 11,055,270 (7,888,303) (24,805) 21,053, Balance as at March 1, ,050,000 9,873,500 (2,889,127) (24,932) 24,009,441 ESOS exercised 147,000 95, ,550 Translation of a foreign subsidiary Net gain not recognised in the income statement Net loss for the year - - (1,764,816) - (1,764,816) Total recognised (loss) / gain - - (1,764,816) 115 (1,764,701) Balance as at February 29, ,197,000 9,969,050 (4,653,943) (24,817) 22,487,290 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED FEBRUARY 28, 2001 Share Accumulated 2001 Share Capital Premium Loss Total Balance as at March 1, ,197,000 9,969,050 61,356 27,227,406 ESOS exercised 714,000 1,086,220-1,800,220 Loss after taxation - - (2,955,182) (2,955,182) Balance as at February 28, ,911,000 11,055,270 (2,893,826) 26,072, Balance as at March 1, ,050,000 9,873, ,704 27,240,204 ESOS exercised 147,000 95, ,550 Loss after taxation - - (255,348) (255,348) Balance as at February 29, ,197,000 9,969,050 61,356 27,227,406 The notes on pages 22 to 46 form part of the financial statements. Auditors' Report - page 14 18

19 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED FEBRUARY 28, 2001 CASH FLOWS FROM OPERATING ACTIVITIES 2000 Note Loss before taxation (3,969,833) (1,844,094) Adjustments for - : Bad debts written off 41,537 - Deferred expenditure written off 53,256 - Depreciation 4,110,833 4,075,971 Gain on disposal of subsidiary (274,073) - Interest income (6,405) (16,783) Interest on bank overdrafts 498, ,585 Interest on bills payable 296, ,320 Interest on hire purchase 35,068 76,297 Interest on revolving credit 179, ,702 Interest on term loan 71, ,829 Loss/(Gain) on disposal of property, plant and equipment 874,185 (20,245) Property, plant and equipment written off 145,591 - Provision for discontinued operations 150,000 - Provision for doubtful debts 50,727 - Provision for impairment losses of property, plant and equipment 1,079,068 - Rental income (1,000) - Operating profit before working capital changes 3,334,801 3,557,582 Decrease/(Increase) in stocks 4,612,052 (1,124,566) Increase in debtors (2,597,115) (2,853,692) (Decrease)/Increase in creditors (1,683,676) 4,925,829 Increase in deferred expenditure - (599) Cash generated from operations 3,667,062 4,504,554 Interest paid (1,080,915) (1,362,733) Tax paid (40,251) (65,439) Net cash from operating activities 2,545,896 3,076,382 CASH FLOWS FROM INVESTING ACTIVITIES Rental received 1,000 - Acquisition of property, plant and equipment 24 (2,413,769) (1,233,098) Proceeds from disposal of property, plant and equipment 25 45,304 26,500 Disposal of subsidiary ,334 - Interest received 655 8,581 Net cash used in investing activities (2,106,476) (1,198,017) The notes on pages 22 to 46 form part of the financial statements. Auditors' Report - page 14 19

20 Consolidated Cash Flow Statement 2000 CASH FLOWS FROM FINANCING ACTIVITIES Repayment of term loans (542,138) (868,648) Repayment of hire purchase (151,328) (347,651) Repayment to director (5,517) - Proceeds from shares issued 1,800, ,550 Net cash from/(used in) financing activities 1,101,237 (973,749) Effect on foreign exchange translation Net increase in cash and cash equivalents 1,539, ,616 Cash and cash equivalents brought forward (6,301,474) (7,206,205) Cash and cash equivalents carried forward (4,761,805) (6,301,474) REPRESENTED BY : Cash and bank balances 1,141, ,675 Bank overdrafts (5,903,446) (6,676,149) (4,761,805) (6,301,474) The notes on pages 22 to 46 form part of the financial statements. Auditors' Report - page 14 20

21 Cash Flow Statement CASH FLOW STATEMENT FOR THE YEAR ENDED FEBRUARY 28, 2001 CASH FLOWS FROM OPERATING ACTIVITIES 2000 Note Profit before taxation (2,955,182) (233,726) Adjustments for : Bad debt written off 1,331,231 - Depreciation 132, ,067 Gain on disposal of subsidiary (1,123,416) - Interest on hire purchase 14,982 12,592 Loss on disposal of property, plant and equipment 6,049 - Property, plant and equipment written off 6,962 - Provision for diminution in value of investment 1,087,036 - Provision for doubtful debts 1,063,166 - Operating loss before working capital changes (436,945) (98,067) Increase in debtors (195,946) (1,452) (Decrease)/Increase in creditors (58,860) 100,612 Cash (used in)/from operations (691,751) 1,093 Interest paid (14,982) (12,592) Tax paid - (10,479) Net cash used in operating activities (706,733) (21,978) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment 24 (40,001) (17,257) Proceeds from disposal of property, plant and equipment Advances to subsidiary companies (1,292,233) (119,681) Disposal of subsidiary 300,000 - Net cash used in investing activities (1,031,400) (136,938) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from shares issued 1,800, ,550 Repayment to subsidiary company (3,878) (5,186) Repayment to hire purchase (54,722) (43,808) Net cash from financing activities 1,741, ,556 Net (decrease)/increase in cash and cash equivalents 3,487 34,640 Cash and cash equivalents brought forward 37,560 2,920 Cash and cash equivalents carried forward 41,047 37,560 REPRESENTED BY : Cash and bank balances 41,047 37,560 The notes on pages 22 to 46 form part of the financial statements. Auditors' Report - page 14 21

22 Notes to the Financial Statements 1. CORPORATE INFOATION The Company is incorporated in Malaysia with limited liability and quoted on the Second Board of the Kuala Lumpur Stock Exchange. The registered office and principal place of business is Level 4, Wisma Atlan, 8 Persiaran Kampung Jawa, Bayan Lepas, Penang. The total number of employees in the Group and the Company as at financial year end is 455 (2000: 478) and 13 (2000: 10) respectively. 2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements have been prepared in accordance with applicable approved accounting standards in Malaysia and comply with the Companies Act, SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiary companies made up to the end of the financial year. The results of the subsidiary companies acquired or disposed during the financial year are included in the consolidated income statement from the date of acquisition or up to the date of disposal. Inter-company transactions and balances are eliminated on consolidation. (b) Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost and at valuation. Depreciation of property, plant and equipment is calculated to write off the cost/valuation of the property, plant and equipment on a straight line basis over the estimated useful lives of the property, plant and equipment concerned. Depreciation is provided in the year following the year of acquisition of the respective property, plant and equipment. Full depreciation is provided in the year of disposal. The directors have applied the transitional provisions of International Accounting Standard No. 16 (Revised) Property, Plant and Equipment as adopted by Malaysian Accounting Standards Board which allow the short-term leasehold land and buildings to be stated at their 1992 valuation less depreciation. Accordingly, these valuations have not been updated. The principal annual rates used are :- Air conditioner Computer Canteen equipment Electrical installation Factory equipment fire protection systems Forklift Furniture and fittings Generator Motor vehicles Office equipment Plant and machinery 10% 10% - 25% 10% - 20% 10% 10% 10% 20% 5% - 10% 10% 20% 10% 10% Leasehold land and buildings are amortised over the unexpired term of the leases. 22

23 Notes to the Financial Statements (c) Investments Investments in subsidiary companies are stated at cost and at valuation. Investments in subsidiaries were revalued in 1994 by the directors. Provision for diminution in value will be made when the directors are of the opinion that there is a permanent diminution in the value of the investment. Where market conditions indicate that the carrying value of the revalued investments is permanently and materially different from the underlying net asset values of the subsidiary companies, the director will consider revaluation in that year. Investments in unquoted shares are stated at cost. Any temporary fluctuation in value of these investments will not be adjusted as the investments are intended to be held on a long term basis. Provision for any diminution in value will be made only if the diminution is permanent in nature. (d) Deferred Expenditure Deferred expenditure is written off to the income statement during the year. Previously, such expenses incurred up to the date of commencement of operations are carried forward in the balance sheet at cost and to be written off as and when the subsidiary companies commence operations. The change in accounting policies is to accord a more appropriate treatment of such expenses. The change has no material effect on the results for the year. (e) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in first-out basis. Cost of work-in-progress and finished goods includes cost of raw materials, direct labour and a proportion of production overheads. (f) Bad and Doubtful Debts Known bad debts are written off and specific provisions are made for any debts considered to be doubtful. (g) Hire Purchase Transactions Property, plant and equipment acquired by way of hire purchase are stated at cost at the commencement of hire purchase and depreciation is provided accordingly. The corresponding obligations under hire purchase are included under liabilities. The finance charges payable are charged to income statement over the period of the hire purchase using the sum of the digits method. (h) Income Recognition Revenue from sales is recognised when the risks and rewards of ownership have been passed to the customers. Interest on deposits with licensed banks are recognised on a time proportion basis. Gain on disposal of investment of the Company is the excess of sales proceeds over carrying book value of investment. Gain on disposal of subsidiary companies of the Group is the excess of sales proceeds over carrying book value of the subsidiaries in the Group accounts. (i) Taxation Taxation is provided based on the current year's income as adjusted for tax purposes. Provision is made by the liability method for tax deferred in respect of all material timing differences except where it is reasonably probable that the tax effects of such deferrals will continue for the foreseeable future. Deferred tax benefit is not recognised in the financial statements. 23

24 Notes to the Financial Statements (j) Currency Conversion Transactions in foreign currencies during the financial year are converted into Ringgit Malaysia at rates of exchange approximating those ruling at the transaction dates. Foreign currency monetary assets and liabilities at the balance sheet date are translated into Ringgit Malaysia at rates ruling at the balance sheet date. All exchange gains or losses are dealt with in the income statement. Foreign subsidiary companies are accounted for as foreign entities In the Group financial statements, assets and liabilities of the foreign subsidiary companies are translated into Ringgit Malaysia at exchange rates ruling at the balance sheet date. Income and expenditure are translated at the approximate average exchange rates ruling on transaction dates. All exchange differences are dealt with in the foreign currency translation reserve. The closing rates of exchange applicable in the preparation of the financial statements are as follows : US Dollar Singapore French Franc (k) Cash and Cash Equivalents The components of cash and cash equivalents are cash in hand and at bank and bank overdrafts. 4. PRINCIPAL ACTIVITIES The principal activities of the Company are investment holding and providing management, financial, technical and other ancillary services. The principal activities of the subsidiary companies are set out in note 18 of the notes to the financial statements. There have been no significant changes in these principal activities during the year under review. 5. PROPERTY, PLANT AND EQUIPMENT Particulars of the property, plant and equipment are as follows :- (i) (a) Group VALUATION/COST 2001 At Valuation As at Written As at Additions Disposals off Short-term leasehold land and buildings 3,590,000 3,590,000 24

25 Notes to the Financial Statements 25

26 Notes to the Financial Statements (b) ACCUMULATED DEPRECIATION As at Current Written As at Depreciation Disposals At Valuation Short-term leasehold land and buildings 332,847 71, ,095 At Cost Long-term leasehold land and buildings 108, , ,274 Short-term leasehold land and buildings 540, ,064 (4,373) (125) 661,115 Air conditioner 187,831 69,147 (1,224) - 255,754 Computer 314, ,949 (92,238) (2,916) 337,003 Canteen equipment 24,959 6,326 - (1,977) 29,308 Electrical installation 450,323 95,061 (83) (5,115) 540,186 Factory equipment 385, ,032 (141,893) (16,417) 353,883 Fire protection systems 177,860 44,837 - (300) 222,397 Forklift 56, ,354 Furniture and fittings 160,947 50,795 (25,728) (18,729) 167,285 Generator 83,269 16,670 (819) - 99,120 Motor vehicles 1,018, ,296 (97,001) - 1,092,065 Office equipment 882, ,224 (224,354) (28,535) 885,098 Plant and machinery 18,242,009 2,852,477 (1,120,577) (27,000) 19,946,909 Sub-total Total 2000 At valuation As at Reclassi- As at Short-term leasehold land and buildings 261,600 71, ,847 At Cost Long-term leasehold land and buildings - 108, ,637 Short-term leasehold land and buildings 416, , ,549 Air conditioner 120,726 67,850 (745) - 187,831 Computer 220,124 94, ,208 Canteen equipment 19,748 5, ,959 Electrical installation 350,758 99, ,323 Factory equipment 265, , ,161 Fire protection systems 128,314 49, ,860 Forklift 56, ,284 Furniture and fittings 110,811 50, ,947 Generator 66,589 16, ,269 Motor vehicles 881, ,704 (50,900) - 1,018,770 Office equipment 644, , ,763 Plant and machinery 15,426,800 2,843,959 (28,750) - 18,242,009 Sub-total 18,709,241 4,004,724 (80,395) - 22,633,570 Total 18,970,841 4,075,971 (80,395) - 22,966,417 26

27 Notes to the Financial Statements (c) ACCUMULATED IMPAIENT 2001 As at Current Written As at At Valuation Provision Disposals off Short-term leasehold land and buildings land and buildings Short-term leasehold land and buildings Air conditioner - 133, ,620 Computer - 361, ,115 Canteen equipment Electrical installation Factory equipment - 17, ,705 Fire protection systems Forklift Furniture and fittings - 60, ,333 Generator Motor vehicles Office equipment - 17, ,483 Plant and machinery - 488, ,812 Sub-total - 1,079, ,079,068 Total - 1,079, ,079, NIL 27

28 Notes to the Financial Statements (d) NET BOOK VALUE As at As at At Valuation Short-term leasehold land and buildings 3,185,905 3,257,153 At Cost Long-term leasehold land and buildings 5,894,259 5,983,397 Short-term leasehold land and buildings 5,699,121 5,667,540 Air conditioner 335, ,145 Computer 310, ,169 Canteen equipment 21,758 27,184 Electrical installation 534, ,309 Factory equipment 593, ,855 Fire protection systems 273, ,624 Forklift 26, Furniture and fittings 501, ,099 Generator Motor vehicles 150, ,881 Office equipment 1,373,482 1,709,813 Plant and machinery 8,963,704 11,843,600 Sub-total Total 24,745,032 27,930,937 29,455,259 32,712,412 Cost of property, plant and equipment of the Group acquired under hire purchase plans as at balance sheet date amounts to NIL (2000: 655,464 ). The leasehold land and buildings were revalued in 1992 by the directors based on independent professional valuations using the open market value basis. The leasehold land and buildings of the Group were charged to financial institutions for banking facilities granted to certain subsidiary companies as disclosed in note 14 of the notes to the financial statements. The deferred tax effect in connection with the surplus arising from the revaluation of short-term leasehold land and buildings is not disclosed as there is no intention to dispose the properties in the near future. The carrying amount of the revalued short-term leasehold land and buildings had the properties been carried at cost less accumulated depreciation is as follow :- Group ,678,085 1,678,085 Less: Accumulated depreciation 316, ,469 1,361,113 1,392,616 28

29 Notes to the Financial Statements (ii) (a) Company COST 2001 As at Additions Written off Disposal As at Computer 11, ,093 (1,466) - 111,895 Office equipment 458,590 23,020 (3,004) (15,570) 463,036 Furniture and fittings 6, ,716 (3,285) - 106,436 Canteen equipment 2,443 78,557 (1,155) - 79,845 Motor vehicles 384,852 23, , , ,089 (8,910) (15,570) 1,169, As at Additions Disposal As at Computer - 11,268-11,268 Office equipment 456,591 1, ,590 Furniture and fittings 2,015 3,990-6,005 Canteen equipment 2, ,443 Motor vehicles 384, ,852 Total 845,901 17, ,158 (b) ACCUMULATED DEPRECIATION 2001 As at Current Depreciation Written off Disposal As at Computer - 3,042 (83) - 2,959 Office equipment 100,852 46,112 (1,104) (7,998) 137,862 Furniture and fittings 281 2,085 (534) - 1,832 Canteen equipment 488 1,384 (227) - 1,645 Motor vehicles 249,249 79, , , ,227 (1,948) (7,998) 473,151 29

30 Notes to the Financial Statements 2000 As at Current Depreciation Disposals As at Computer Office equipment Furniture and fittings Canteen equipment Motor vehicles 55, ,278 45, , , ,249 Total 227, , ,870 (c) NET BOOK VALUE As at As at Computer 108,936 11,268 Office equipment 325, ,738 Furniture and fittings 104,604 5,724 Canteen equipment 78,200 1,955 Motor vehicles 79, ,603 Total 696, ,288 Cost of property, plant and equipment of the Company acquired under hire purchase plans as at balance sheet date amounts to NIL (2000: 293,164) 30

31 Notes to the Financial Statements 6. OTHER INVESTMENT Group/Company 2000 Foreign unquoted shares, at cost 189, , DEFERRED EXPENDITURE The above comprises :- Group 2000 Preliminary expenses 4,944 4,944 Pre-operating expenses 48,312 48,312 Less: Charged to income statement (53,256) ,256 Included in pre-operating expenses of the financial year ended February 29, 2000 is audit fee INVENTORIES Group Raw materials 1,943,344 5,509,661 Work in progress 601,233 1,493,305 Finished goods 1,209,798 1,954, TRADE DEBTORS Group Trade debtors 10,248,532 7,627,001 Less: Provision for doubtful debts (50,727) FIXED DEPOSITS WITH A LICENSED BANK The fixed deposits placed in a local licensed bank is held as security for banking facilities granted. 31

32 Notes to the Financial Statements 11. SHARE CAPITAL Group/Company Authorised: 25,000,000 ordinary shares of 1 each 25,000,000 25,000,000 Issued and fully paid up: As at March 1 17,197,000 17,050,000 Issued during the year through exercise of ESOS (note 28) 714, ,000 As at February 28/29 17,911,000 17,197,000 During the year under review, the paid up capital of the Company was increased to 17,911,000 through the exercise of 714,000 employees share options of 1 each. The new shares rank pari passu in all respects with the existing shares. 12. ACCUMULATED LOSSES CARRIED FORWARD Group Retained by : The Company (2,893,826) 61,356 Subsidiary companies (4,994,477) (4,715,299) (7,888,303) (4,653,943) 13. DEFERRED LIABILITIES Secured term loans - due after 12 months - 601, Hire purchase creditors - due after 12 months - 10,915-10, ,354-10,915 The term loans obtained from local financial institutions bear interest at 7% and 9% per annum and 1.75% above the base lending rates on a yearly basis. The loans are repayable by 24 quarterly installments and 60 monthly installments respectively. The term loans are secured against the leasehold land and factory buildings of the subsidiary companies and corporate guarantees by the Company. 32