7296/MinHo Final AR04 P17-32 DT 28/5/04 5:11 PM Page 26
Di r ectors’ Report
The Directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2003.
PRINCIPAL ACTIVITIES
The principal activity of the Company is investment holding.
The principal activities of the subsidiary companies consist of the following :- (i) Kiln drying and chemical preservative treatment; (iv) Manufacturing and distribution of industrial paper bags; (ii) Manufacturing, exporting and dealing in moulded (v) Trading in log supply and its related products; timber and its related products; (vi) Exploitation of timber concessions; and (iii) Export of processed timber products; (vii) The operation of a fully integrated timber complex. There have been no significant changes in the nature of these activities during the year.
FINANCIAL RESULTS
GROUP COMPANY RM’000 RM’000
Loss after taxation (31,809) (33,048) Minority interest (1,860) -
Net loss for the year (33,669) (33,048)
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the statements of changes in equity.
In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction, or event of a material and unusual nature.
DIVIDEND
No dividend has been paid or declared by the Company since the end of the previous financial year and the Directors do not propose any dividend in respect of the current financial year.
DIRECTORS
The names of the Directors of the Company in office since the date of the last report and at the date of this report are:- Y.A.M. Tunku Tan Sri Imran Ibni Tuanku Ja'afar Loo Say Leng Dato' Loo Keng An @ Lee Kim An Ng Hoe Chang Dato' Ismail bin Yusof Khibir Bin Razali Dato' Dr. Salleh bin Mohd Nor Mohd. Faizal bin Abd Majid (Appointed w.e.f 28.08.03) Yap Leong Seng (Alternate Director to Khibir bin Razali) Christoper Wan Tiong Seah Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company is a party, whereby Directors might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate other than those pursuant to the Minho's warrants.
The following Directors who held office at the end of the financial year had, according to the register required to be kept under Section 134 of the Companies Act 1965, an interest in shares and warrants of the Company as stated below :-
Ordinary Shares of RM1 each As at Bought Sold As at 1.1.2003 During the year 31.12.2003
Interest in shares of the Company
Direct interest: Y.A.M. Tunku Tan Sri Imran Ibni Tuanku Ja'afar 610,000 -- 610,000 Ng Hoe Chang 10,000 -- 10,000 Mohd Faizal bin Abd Majid 1,000 -- 1,000
Indirect interest: Dato’ Loo Keng Ang @ Lee Kim An 380,000 -- 380,000 Ng Hoe Chang 168,600 -- 168,600 Loo Say Leng 1,100,002 -- 1,100,002 Yap Leong Seng 245,865 -- 245,865
26 MINHO (M) BE R H A D 7296/MinHo Final AR04 P17-32 DT 28/5/04 5:11 PM Page 27
Di r ectors’ Report
Interest in warrants of the Company
Number of units As at Bought Sold As at 1.1.2003 During the year 31.12.2003
Y.A.M. Tunku Tan Sri Imran Ibni Tuanku Ja'afar 535,000 -- 535,000 Ng Hoe Chang 10,000 -- 10,000
None of the other directors of the Company at the end of the year held any interest in shares and warrants of the Company or its related corporations.
Since the end of the previous financial year, no Director has received or become entitled to receive any benefits (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the Group financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with any Director or with a firm of which the Director is a member or with a company in which the Director has a substantial financial interest other than the following transactions, as disclosed in Note 9 to the financial statements, between the Group and companies in which the Directors are deemed interested :-
Name of Directors Nature of Benefits
Dato' Loo Keng An @ Lee Kim An ) Sale and purchase of timbers, logging Loo Say Leng ) contracts, kiln drying and preservative Ng Hoe Chang ) treatments
OTHER STATUTORY INFORMATION
(a) Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps :-
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
(b) At the date of this report, the Directors are not aware of any circumstances which would render :-
(i) 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; and
(ii) the values attributed to current assets in the financial statements of the Group and of the Company misleading.
(c) At the date of this report, the Directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
(d) At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements and consolidated financial statements misleading.
(e) As at the date of this report, there does not exist :-
(i) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or
(ii) any contingent liabilities in respect of the Group and of the Company which have arisen since the end of the financial year other than those disclosed in the financial statements.
Annual Report 2003 27 7296/MinHo Final AR04 P17-32 DT 28/5/04 5:11 PM Page 28
Di r ectors’ Report
OTHER STATUTORY INFORMATION (cont’d)
(f) In the opinion of the Directors :-
(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due; and
(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.
AUDITORS
The auditors, A. Razak & Co., have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors
DATO’ ISMAIL BIN YUSOF
LOO SAY LENG
Klang, Malaysia
28 MINHO (M) BE R H A D 7296/MinHo Final AR04 P17-32 DT 28/5/04 5:11 PM Page 29
Income Statements for the year ended 31 December 2003
Group Company 2003 2002 2003 2002 Note RM’000 RM’000 RM’000 RM’000
Revenue 3 301,978 281,567 7,819 25,697
Cost of sales (255,799) (259,092) - -
Gross profit 46,179 22,475 7,819 25,697 Other operating income 4,038 4,151 758 547 Selling and marketing expenses (15,434) (2,020) - - Administrative expenses (17,933) (23,706) (2,548) (7,752) Other operating expenses (32,258) (154) (32,258) (16,130)
(Loss)/profit from operations 4 (15,408) 746 (26,229) 2,362
Finance costs 5 (8,756) (8,458) (6,695) (7,294)
Loss before taxation (24,164) (7,712) (32,924) (4,932)
Taxation 6 (7,645) (6,146) (124) (3,933)
Loss after taxation (31,809) (13,858) (33,048) (8,865)
Minority interests (1,860) (2,230) - -
Net loss for the year (33,669) (16,088) (33,048) (8,865)
Loss per share (sen) - Basic 7 (30.6) (14.6)
- Diluted 7 (30.6) (14.6)
The accompanying notes form an integral part of the financial statements.
Annual Report 2003 29 7296/MinHo Final AR04 P17-32 DT 28/5/04 5:11 PM Page 30
Balance Sheets as at 31 December 2003
Group Company 2003 2002 2003 2002 Note RM’000 RM’000 RM’000 RM’000
NON-CURRENT ASSETS
Property, plant and equipment 8 180,914 186,328 1,682 1,686 Investments in subsidiaries 9 - - 242,171 274,429 Other investments 10 750 500 500 500 Goodwill on consolidation 11 9 32,266 - -
CURRENT ASSETS
Inventories 12 77,159 58,989 - - Trade receivables 13 39,678 48,328 - - Other receivables 14 20,434 21,871 11 34 Tax recoverable 1,424 1,204 1,221 1,078 Amount due from affiliated company 15 323 323 - - Amount due from subsidiary companies 9 - - 15,269 18,350 Deposits with licensed banks 16 6,063 6,698 2,232 1,167 Cash and bank balances 9,302 9,872 3,664 2,130
154,383 147,285 22,397 22,759
CURRENT LIABILITIES
Trade payables 17 8,310 11,077 - - Other payables 18 19,434 22,292 1,027 1,240 Amount due to a subsidiary company 9 - - 13,853 13,216 Hire purchase obligations 19 591 483 - - Borrowings 20 33,283 26,939 - - Bank overdrafts 2,679 3,276 - - Tax payable 26,197 26,681 - -
90,494 90,748 14,880 14,456
NET CURRENT ASSETS 63,889 56,537 7,517 8,303
245,562 275,631 251,870 284,918
FINANCED BY :
Share capital 21 109,851 109,851 109,851 109,851 Reserves 22 10,217 43,886 59,830 92,878
Shareholders’ equity 120,068 153,737 169,681 202,729 Minority interests 11,779 10,414 - -
131,847 164,151 169,681 202,729
Deferred taxation 23 30,961 29,103 - - Hire purchase obligations 19 565 188 - - Borrowings 20 82,189 82,189 82,189 82,189
Non-current liabilities 113,715 111,480 82,189 82,189
245,562 275,631 251,870 284,918
The accompanying notes form an integral part of the financial statements.
30 MINHO (M) BE R H A D 7296/MinHo Final AR04 P17-32 DT 28/5/04 5:11 PM Page 31
Statement Of Changes In Equity for the year ended 31 December 2003
Accumulated losses/ Share Share Reserve on Capital Retained Note capital premium consolidation reserve profit Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
GROUP
At 1 January 2002 As previously stated 109,851 92,431 14,065 1,889 (24,706) 193,530 Prior year adjustments 24 ---- (25,203) (25,203)
At 1 January 2002 (restated) 109,851 92,431 14,065 1,889 (49,909) 168,327 Loss for the year ---- (16,088) (16,088) Arising from the replacement of existing warrants with the Replacement Warrants --- 1,498 - 1,498
At 31 December 2002 109,851 92,431 14,065 3,387 (65,997) 153,737
At 1 January 2003 As previously stated 109,851 92,431 14,065 3,387 (40,794) 178,940 Prior year adjustments 24 ---- (25,203) (25,203)
At 1 January 2003 (restated) 109,851 92,431 14,065 3,387 (65,997) 153,737 Loss for the year ---- (33,669) (33,669)
At 31 December 2003 109,851 92,431 14,065 3,387 (99,666) 120,068
COMPANY
At 1 January 2002 109,851 92,431 -- 7,814 210,096 Loss for the year ---- (8,865) (8,865) Arising from the replacement of existing warrants with the Replacement Warrants --- 1,498 - 1,498
At 31 December 2002 109,851 92,431 - 1,498 (1,051) 202,729
At 1 January 2003 109,851 92,431 - 1,498 (1,051) 202,729 Loss for the year ---- (33,048) (33,048)
At 31 December 2003 109,851 92,431 - 1,498 (34,099) 169,681
The accompanying notes form an integral part of the financial statements.
Annual Report 2003 31 7296/MinHo Final AR04 P17-32 DT 28/5/04 5:11 PM Page 32
Consolidated Cash Flow Statement for the year ended 31 December 2003
Group 2003 2002 Note RM’000 RM’000
CASH FLOWS FROM OPERATING ACTIVITIES Loss before taxation (24,164) (7,712)
Adjustments for:
Amortisation of goodwill 32,258 16,130 Bad debts written off - 417 Depreciation of property, plant and equipment 8,969 9,119 Foreign exchange loss 132 40 Foreign exchange gain (84) (209) Gain on disposal of property, plant and equipment (177) (371) Interest income (215) (469) Interest expense 8,756 8,458 Provision for doubtful debts 3,214 2,147 Write down of inventories 108 250
Operating profit before working capital changes 28,797 27,800
Inventories (18,278) (6,291) Receivables 6,873 (12,771) Payables (5,625) 10,067
Cash generated from operations 11,767 18,805
Interest received 215 469 Interest paid (8,756) (8,458) Income tax paid (6,261) (2,986)
Net cash (used in)/generated from operating activities (3,035) 7,830
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (1,487) (1,573) Proceeds from disposal of property, plant and equipment 314 433 Decrease in deposits with licensed banks 635 4,417
Net cash (used in)/generated from investing activities (538) 3,277
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid to minority shareholders by subsidiary company (1,158) (987) Repayment of hire purchase obligations (1,586) (568) Drawdown of term loans - 92,189 Repayment of term loans - (109,900) Proceeds received from replacement warrants issued - 1,498 Net cash used in financing activities (2,744) (17,768)
NET DECREASE IN CASH AND CASH EQUIVALENTS (6,317) (6,661) CASH AND CASH EQUIVALENTS AT 1 JANUARY (20,343) (13,682)
CASH AND CASH EQUIVALENTS AT 31 DECEMBER (26,660) (20,343)
Cash and cash equivalents comprise the following :-
Cash and bank balances 9,302 9,872 Bank overdraft (2,679) (3,276) Bank borrowings - Bankers’ acceptance (27,692) (20,999) - Trust receipt (5,591) (5,940)
(26,660) (20,343)
The accompanying notes form an integral part of the financial statements.
32 MINHO (M) BE R H A D 7296 / MinHo AR04 P33-37 DT 28/5/04 5:16 PM Page 33
Cash Flow Statement for the year ended 31 December 2003
Company 2003 2002 Note RM’000 RM’000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation (32,924) (4,932)
Adjustments for:
Depreciation of property, plant and equipment 48 38 Interest expense 6,695 7,294 Interest income (242) (292) Impairment loss on investment in subsidiary company 32,258 16,130
Operating profit before working capital changes 5,835 18,238
Receivables (120) 5,313 Payables (337) 213 Subsidiary companies 3,718 5,506
Cash generated from operations 9,096 29,270
Interest received 242 292 Interest paid (6,695) (7,294) Tax paid - (3,987)
Net cash generated from operating activities 2,643 18,281
CASH FLOW FROM INVESTING ACTIVITY
Purchase of property, plant and equipment (44) - Increase in fixed deposits with licensed banks (1,065) (37)
Net cash used in investing activity (1,109) (37)
CASH FLOWS FROM FINANCING ACTIVITIES
Drawdown of term loans - 92,189 Repayment of term loans - (109,900) Proceeds received from replacement warrants issued - 1,498
Net cash used in financing activities - (16,213)
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,534 2,031 CASH AND CASH EQUIVALENTS AT 1 JANUARY 2,130 99
CASH AND CASH EQUIVALENTS AT 31 DECEMBER 3,664 2,130
The accompanying notes form an integral part of the financial statements.
Annual Report 2003 33 7296 / MinHo AR04 P33-37 DT 28/5/04 5:16 PM Page 34
Notes to the Financial Statements 31 December 2003
1. CORPORATE INFORMATION
The registered office is located at 31A, Jalan Satu Kawasan 16, Berkeley Town Centre, 41300 Klang, Selangor Darul Ehsan, Malaysia.
The principal place of business is located at Lot 6476, Lorong Sg. Puluh, Batu 6, Off Jalan Kapar, 42100 Klang, Selangor Darul Ehsan, Malaysia.
The principal activity of the Company is investment holding. The principal activities of the subsidiary companies consist of the following:-
(i) Kiln drying and chemical preservative treatment; (iv) Manufacturing and distribution of industrial paper bags; (ii) Manufacturing, exporting and dealing in moulded (v) Trading in log supply and its related products; timber and its related products; (vi) Exploitation of timber concessions; and (iii) Export of processed timber products; (vii) The operation of a fully integrated timber complex.
The financial statements are expressed in Ringgit Malaysia.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
The financial statements of the Group and the Company have been prepared under the historical cost convention except as disclosed in this summary of significant accounting policies.
The financial statements comply with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia.
During the financial year ended 31 December 2003, the Group and the Company adopted the following MASB Standards for the first time:
MASB 25 Income Taxes MASB 27 Borrowing Costs
The effects of adopting MASB 25 is summarised in the Statement of Changes in Equity and further information is disclosed in Note 24 to the financial statements.
(b) Basis of Consolidation
Subsidiaries The consolidated financial statements include the financial statements of the Company and all its subsidiaries. Subsidiaries are those companies in which the Group has a long term equity interest and where it has power to exercise control over the financial and operating policies so as to obtain benefits therefrom.
Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. The assets and liabilities of a subsidiary are measured at their fair values at the date of acquisition and these values are reflected in the consolidated balance sheet. The difference between the cost of an acquisition and the fair value of the Group's share of the net assets of the acquired subsidiary at the date of acquisition is included in the consolidated balance sheet as goodwill or negative goodwill arising on consolidation.
Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered.
The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group's share of its net assets together with any unamortised balance of goodwill and exchange differences which were not previously recognised in the consolidated income statement.
Minority interest is measured at the minorities' share of the post acquisition fair values of the identifiable assets and liabilities of the acquiree.
(c) Goodwill
Goodwill represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition.
Goodwill is stated at cost less accumulated amortisation and impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(p). Goodwill arising on the acquisition of subsidiaries is presented separately in the balance sheet.
34 MINHO (M) BE R H A D 7296 / MinHo AR04 P33-37 DT 28/5/04 5:16 PM Page 35
Notes to the Financial Statements 31 December 2003
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(c) Goodwill (cont’d)
Goodwill is amortised over a period of 10 years from the date the subsidiary companies are acquired. The balance of goodwill was fully amortised in 2003.
(d) Investments in Subsidiaries
The Company's investments in subsidiaries are stated at cost less impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(p).
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is charged or credited to the income statement.
(e) Property, Plant and Equipment and Depreciation
Property, plant, and equipment are stated at cost or valuation less accumulated depreciation and impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(p).
Certain freehold, long leasehold land and buildings are stated at valuation less any identified impairment losses. Certain freehold, long leasehold land, and buildings of the Company have not been revalue since they were first revalued in 1993 and 1994 respectively. The Directors have not adopted a policy of regular revaluations of such assets. As permitted under the transitional provision of IAS 16(Revised): Property, Plant and Equipment, these assets continue to be stated at their previous valuation less accumulated depreciation.
Freehold land and capital work-in-progress are not depreciated. Leasehold land is amortised over the lease period of 56 years. Depreciation of other property, plant and equipment is provided for on a straight line basis to write off the cost of each asset to its residual value over the estimated useful life at the following annual rates :-
Buildings 2% Plant and machinery 5%-20% Forklifts, trucks and motor vehicles 16%-25% Furniture, fittings and office equipment 10%-33 1/3% Other property, plant and equipment 8%-20%
Upon the disposal of an item of property, plant or equipment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the income statement and the attributable portion of the revaluation surplus is taken directly to retained profits.
(f) Other Investment
Other investment is stated at cost less provision for any permanent diminution in value. Such provision is made when there is a decline other than temporary in the value of investments and is recognised as an expense in the period in which the decline occurred.
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the income statement.
(g) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost of finished goods and work- in-progress includes direct materials, direct labour, other direct costs and appropriate production overheads. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling, and distribution.
(h) Trade and Other Receivables
Trade and other receivables are carried at anticipated realisable value. Bad debts are written off in the year in which they are identified. Specific provisions are made for debts which have been identified as bad or doubtful based on review of all specific outstanding amounts at the year end. In addition, general provisions are made to cover possible losses which are not specifically identified.
(i) Trade and Other Payables
Trade and other payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Group or Company.
Annual Report 2003 35 7296 / MinHo AR04 P33-37 DT 28/5/04 5:16 PM Page 36
Notes to the Financial Statements 31 December 2003
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(j) Leases
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incident to ownership.
Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Company's incremental borrowing rate is used.
Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are charged to the income statement over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.
The depreciation policy for leased assets is consistent with that for depreciable property, plant and equipment as described in Note 2(e).
(k) Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date.
Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.
Prior to the adoption of MASB 25 Income Taxes on 1 January 2003, deferred tax was provided for using the liability method in respect of significant timing differences and deferred tax assets were not recognised unless there was reasonable expectation of their realisation. This change in accounting policy has been accounted for retrospectively and the effects of this change are disclosed in Note 24.
(l) Provisions for Liabilities
Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation.
(m) Borrowings
Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received. The borrowing costs are charged to the income statement as an expense in the period in which they are incurred.
(n) Revenue Recognition
Revenue from sale of goods is recognised when the goods are delivered.
Revenue in respect of services rendered is recognised upon the performance of services.
Interest income is included in the income statement based on a time apportioned basis.
Dividend income from subsidiary companies is included in the income statement of the Company when declared or proposed.
Sales between Group companies are excluded from revenue of the Group.
36 MINHO (M) BE R H A D 7296 / MinHo AR04 P33-37 DT 28/5/04 5:16 PM Page 37
Notes to the Financial Statements 31 December 2003
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(o) Foreign Currencies
Foreign currency monetary items at balance sheet date are translated at the rate ruling at the date of the balance sheet and transactions in foreign currencies are recorded in Malaysian Ringgit at the rates of exchange ruling at the date of the transactions. Exchange differences arising there from are charged or credited to the income statement.
For consolidation purposes, the assets and liabilities of the foreign entity are translated into Ringgit Malaysia at rates of exchange ruling at balance sheet date. Income statement items are translated at average exchange rates for the financial year. Exchange differences arising from the restatement at year end rates of the opening net investment are dealt with through reserves.
The principal closing rates used in the translation of foreign currency amounts are as follows:
2003 2002 RM RM
1 United States Dollar 3.80 3.80 1 Sterling Pound 6.77 6.09
(p) Impairment of Assets
At each balance sheet date, the Group reviews the carrying amounts of its assets, other than inventories to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, impairment is measured by comparing the carrying values of the assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets or, if it is not possible, for the cash-generating unit to which the asset belongs.
An impairment loss is charged to the income statement immediately, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any available previously recognised revaluation surplus for the same asset.
Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. The reversal is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately.
(q) Financial Instruments
Financial instruments carried on the balance sheet include cash and bank balances, investments, receivables, payables, and borrowings. The particular recognition methods adopted are disclosed in the individual accounting policy statements associated with each item.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains, and losses relating to a financial instrument classified as liability are reported as expense or income. Financial instruments are offset when the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
(r) Cash and Cash Equivalents
For the purposes of the Consolidated Cash Flow Statement and Cash Flow Statement, cash and cash equivalents include cash and bank balances, export credit refinancing, bankers’ acceptance, bank overdrafts, letter of credit and trust receipt.
Cash equivalents are short term, highly liquid investments with maturity of three months or less from the date of acquisition and are readily convertible to cash with insignificant risk of changes in value.
3. REVENUE
Revenue of the Company represents dividends and management fees received and receivable.
Revenue of the Group represents kiln drying, chemical preservative treatment, manufacturing, exporting and dealing in moulded timber, processed timber products and industrial paper bags, trading in log supply and its related products, the operation of a fully integrated timber complex and operations of jetty services.
Annual Report 2003 37 7296 / MinHo AR04 P38-42 DT 28/5/04 5:18 PM Page 38
Notes to the Financial Statements 31 December 2003
3. REVENUE (cont’d)
The breakdown of revenue of the Group and the Company are as follows :-
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Sale of timber logs 63,804 60,631 - - Sale of moulded timber 11,612 21,512 - - Sale of processed timber products 184,207 162,552 - - Sale on industrial paper bags 13,489 9,098 - - Kiln dry services 26,595 18,530 - - Preservative treatment services 1,479 8,039 - - Jetty services 792 1,205 - - Dividend income from a subsidiary company - - 7,819 25,457 Management fees from subsidiary companies - - - 240
301,978 281,567 7,819 25,697
4. (LOSS)/PROFIT FROM OPERATIONS
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
(a) This is arrived at after charging:-
Auditors’ remuneration 147 178 17 25 Bad debts written off 87 417 - - Depreciation of property, plant and equipment 8,969 9,119 48 38 Executive Directors of the Company - fees 114 117 114 117 - emoluments 1,039 966 77 966 Non-executive Directors of the Company - fees 62 62 62 62 - emoluments 55 57 55 57 Executive directors of subsidiary companies - fees 143 101 - - - emoluments 1,118 1,082 - - Provision for doubtful debts 3,214 2,147 2,000 - Writedown of inventories 108 250 - - Rental of buildings - related party 1,824 1,912 - - - others 702 240 - - Hire of machinery - others 36 87 - - Amortisation of goodwill 32,258 16,130 - - Realised foreign exchange loss 132 40 - - Impairment loss on investment in subsidiary company - - 32,258 16,130
(b) And crediting :-
Interest income - subsidiary company - - 179 200 - fixed deposits 215 341 63 56 - others - 128 - 36 Income from rental of land and buildings - related party 240 60 - - - others 1,854 2,291 246 256 Gain on disposal of property, plant and equipment 177 371 - - Realised foreign exchange gain 84 209 - -
(c) Employee Information (excluding directors)
Staff cost 15,003 15,589 - -
Number of employees 618 810 - -
38 MINHO (M) BE R H A D 7296 / MinHo AR04 P38-42 DT 28/5/04 5:18 PM Page 39
Notes to the Financial Statements 31 December 2003
4. (LOSS)/PROFIT FROM OPERATIONS (cont’d)
(d) Directors' Remuneration
The number of Directors of the Company whose total remuneration for the year ended 31 December 2003 fell within the following bands is analysed as follows :-
Executive Directors Non-executive Directors
Range of remuneration :
Below RM50,000 - 3 RM50,001 to RM100,000 1 1 RM100,001 to RM150,000 - - RM150,001 to RM200,000 2 - RM200,001 to RM250,000 - - RM250,001 to RM300,000 1 - RM300,001 to RM350,000 - - RM350,001 to RM400,000 - - RM400,001 to RM450,000 1 -
5. FINANCE COSTS
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Interest on : - bank overdraft 142 116 - - - bankers’ acceptance, trust receipt and letter of credit 1,164 914 - - - term loan 6,694 7,294 6,695 7,294 - export credit refinancing 12 16 - - - lease and hire purchase 81 98 - - - others 663 20 - -
8,756 8,458 6,695 7,294
6. TAXATION
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Taxation based on results for the year :-
Current - Malaysian 5,743 7,523 124 3,987 - Overseas 31 137 - -
5,774 7,660 124 3,987 Transfer (from)/to deferred taxation (Note 23) 1,847 (331) - (54)
7,621 7,329 124 3,933 Underprovision in prior years 24 427 - - Prior year – deferred - (1,610) - -
7,645 6,146 124 3,933
The tax charge of the Group is attributable to the tax charges in respect of profits of subsidiaries and the non-availability of group relief.
The tax charge of the Company arise mainly from dividend income received.
Domestic income tax is calculated at the Malaysian statutory tax rate of 28% (2002 : 28%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the tax rates prevailing in the respective jurisdiction.
Annual Report 2003 39 7296 / MinHo AR04 P38-42 DT 28/5/04 5:18 PM Page 40
Notes to the Financial Statements 31 December 2003
6. TAXATION (cont’d)
A reconciliation of income tax expense applicable to loss before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is follows :-
Group 2003 2002 RM’000 RM’000
Loss before taxation (24,163) (7,712)
Taxation at Malaysian statutory tax rate of 28% (2002 : 28%) (6,766) (2,159) Effect of different tax rates in other countries 11 - Income not subject to tax (11,952) (28,802) Expenses not deductible for tax purposes 13,901 30,973 Utilisation of current year’s tax losses (1,106) (1,776) Utilisation of previously unrecognised tax losses and unabsorbed capital allowances (1,733) (4,382)
Tax expense for the year (7,645) (6,146)
Company 2003 2002 RM’000 RM’000
Loss before taxation (32,925) (4,932)
Taxation at Malaysian statutory tax rate of 28% (2002 : 28%) (9,219) (1,381) Income not subject to tax (32,177) (33,501) Expenses not deductible for tax purposes 41,272 30,949
Tax expense for the year (124) (3,933)
Tax losses are analysed as follows:
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Tax savings recognised during the year arising from :
Utilisation of current year ‘s tax losses 1,106 1,776 - - Utilisation of tax losses brought forward from previous years 56 339 - - Unutilised tax losses carried forward 2,904 764 - -
7. LOSS PER SHARE
The basic loss per share is based on the Group's loss after taxation and minority interests of RM33,669,000 (2002: RM16,088,000) divided by the weighted average number of 109,851,000 ordinary shares (2002: 109,851,000 ordinary shares) of RM1.00 each in issue during the year.
The assumed conversion from the exercise of the warrants during the year would have an anti-dilutive effect on the loss per share of the Group and of the Company in the current and previous financial years.
40 MINHO (M) BE R H A D 7296 / MinHo AR04 P38-42 DT 28/5/04 5:19 PM Page 41
Notes to the Financial Statements 31 December 2003
Annual Report 2003 41 7296 / MinHo AR04 P38-42 DT 28/5/04 5:19 PM Page 42
Notes to the Financial Statements 31 December 2003
8. PROPERTY, PLANT AND EQUIPMENT (cont’d)
During the year, the Group acquired property, plant and equipment with the aggregate cost of RM3,702,000 (2002 : RM1,939,000) of which RM2,215,000 (2002 : RM366,000) was acquired by means of hire purchase and finance lease. Cash payments of RM1,487,000 (2002: RM1,573,000) were made to purchase these assets.
A subsidiary company entered into an agreement with a developer to develop its freehold land into residential units. The developer is still in the process of obtaining approvals from the relevant authorities for the proposed development.
Office Office Premises Equipment Total COMPANY RM’000 RM’000 RM’000
2003
Cost
At 1 January 2003 1,915 - 1,915 Addition - 44 44
At 31 December 2003 1,915 44 1,959
Accumulated Depreciation
At 1 January 2003 229 - 229 Depreciation charge for the year 39 9 48
At 31 December 2003 268 9 277
Net Book Value
At 31 December 2003 1,647 35 1,682
At 31 December 2002 1,686 - 1,686
Depreciation charge for 2002 38 - 38
The strata titles in respect of the above office premises has yet to be registered in the name of the Company.
The property, plant and equipment of the Group are stated at cost except for certain freehold and long leasehold land and buildings. The analysis of the freehold and long leasehold land and buildings are as follows :-
Freehold land and Long buildings, leasehold and office land and premises buildings Total GROUP RM’000 RM’000 RM’000
At valuation in
1993 134,522 - 134,522 1994 - 16,068 16,068
At cost 17,064 16,755 33,731
At 31 December 2003 151,586 32,823 184,321
At 31 December 2002 151,498 32,823 184,321
Freehold and long leasehold land and buildings of the Group were revalued by the Directors based on independent valuations carried out on an open market for existing use basis. As allowed by the accounting standard on property, plant and equipment, these properties have continued to be stated on the basis of their previous valuations.
42 MINHO (M) BE R H A D 7296 / MinHo AR04 P43-47 DT 28/5/04 5:22 PM Page 43
Notes to the Financial Statements 31 December 2003
8. PROPERTY, PLANT AND EQUIPMENT (cont’d)
The net book values of revalued properties of the Group that would have been included in the financial statements, had these properties been carried at cost less depreciation, are as follows:-
Group 2003 2002 RM’000 RM’000
Freehold land and buildings 38,161 38,802 Long leasehold land and buildings 11,253 11,521
49,414 50,323
Land and buildings of subsidiary companies with net book value of RM143,155,087 (2002: RM145,737,470) are charged to financial institutions for banking facilities granted to the Group and the Company.
9. SUBSIDIARY COMPANIES
Company 2003 2002 RM’000 RM’000
Unquoted shares:- At cost 290,559 290,559 Impairment loss (48,388) (16,130)
242,171 274,429
During the year, the Directors made an assessment to determine the recoverable amount of the Company's investment in subsidiary companies. Arising from this assessment, the Company recognised an impairment loss of RM32,258,000, representing the difference between the carrying value of its investment amount in Lionvest Corporation (Pahang) Sdn Bhd and the Directors' estimate of the recoverable amount of this investment based on a valuation carried out by independent professional valuers.
Details of the subsidiary companies are as follows :-
Equity Country of Interest Name of Company Incorporation 2003 2002 Principal Activities %%
Syarikat Minho Kilning Sdn Bhd Malaysia 100 100 Timber kiln drying and its related activities
Syarikat Vinco Timber Industries Malaysia 100 100 Timber kiln drying preserving Sdn Bhd treatment and its related activities
* Woodvation Sdn Bhd Malaysia 100 100 Dealing in sawn timber
Costraco Sdn Bhd Malaysia 51 51 Export of processed timber products
Indah Wood Products Sdn Bhd Malaysia 51 51 Export of processed timber products
Victory Enterprise Sdn Bhd Malaysia 100 100 Manufacturing, exporting and dealing in moulded timber and its related products
* Haitien Sdn Bhd Malaysia 100 100 Dormant
Indah Paper Industries Sdn Bhd Malaysia 100 100 Manufacturing and distribution of industrial paper bags
Lionvest Corporation (Pahang) Sdn Bhd Malaysia 100 100 Exploitation of timber concessions, trading in timber logs and operation of an integrated timber complex
Annual Report 2003 43 7296 / MinHo AR04 P43-47 DT 28/5/04 5:22 PM Page 44
Notes to the Financial Statements 31 December 2003
9. SUBSIDIARY COMPANIES (cont’d)
Equity Country of Interest Name of Company Incorporation 2003 2002 Principal Activities %%
* Lionvest Trading (UK) Limited United Kingdom 100 100 Dealing in wholesale supply of wood
* Lionvest Marketing Sdn Bhd Malaysia 100 100 Dealing in timber and its related products
* Lionvest Timber Industries Sdn Bhd Malaysia 51 51 Sawmilling, dealing in timber and its related products
* Abadi Canggih Sdn Bhd Malaysia 51 51 Exploitation of timber concessions and trading in timber logs
* Idaman Heights Sdn Bhd Malaysia 100 100 Dealing in logs, sawn timber and its related products
* Magnetic Potentials Sdn Bhd Malaysia 100 100 Dormant
* PPP Services Sdn Bhd Malaysia 70 70 Operations of jetty services
* Not audited by A. Razak & Co.
Amounts due to/from subsidiary companies represent interest free unsecured advances with no fixed terms of repayment except for an advance of RM2,000,000 (2002: RM2,000,000) to a subsidiary which bears interest at 10% per annum.
10. OTHER INVESTMENTS
This represents investments in unquoted debentures at cost.
11. GOODWILL ON CONSOLIDATION
Group 2003 2002 RM’000 RM’000
At January 32,266 48,396 Amortisation of goodwill for the year (32,257) (16,130)
At 31 December 9 32,266
12. INVENTORIES
2003 2002 RM’000 RM’000
At cost: Raw materials 3,426 13,445 Work- in-progress 1,226 407 Finished goods 50,546 43,721 Consumable inventories 370 301
55,568 57,874 At net relisable value: Raw materials 21,591 - Finished goods - 1,115
77,159 58,989
44 MINHO (M) BE R H A D 7296 / MinHo AR04 P43-47 DT 28/5/04 5:22 PM Page 45
Notes to the Financial Statements 31 December 2003
13. TRADE RECEIVABLES
Group 2003 2002 RM’000 RM’000
Trade receivables 43,996 52,172 Provision for doubtful debts (4,318) (3,844)
39,678 48,328
The Group's normal trade credit term ranges from 30 to 120 days. Other credit terms are assessed and approved on a case-by-case basis.
The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups of debtors.
14. OTHER RECEIVABLES
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Deposits 4,328 5,398 11 11 Prepayments 9,676 8,892 - -
Other debtors 9,552 13,351 - 23 Provision for doubtful debts (3,122) (5,770) - -
7,651 7,581 - 23
20,434 21,871 11 34
15. AMOUNT DUE FROM AN AFFILIATED COMPANY
The amount due from an affiliated company, Minho Holdings Sdn Bhd, a company incorporated in Malaysia, is unsecured, interest free and with no fixed terms of repayment.
16. DEPOSITS WITH LICENSED BANKS
Fixed deposits held by the Group include an amount of RM831,827 (2002: RM831,827) pledged for bank guarantee facilities granted to the Group.
The weighted average interest rates during the financial year and the average maturities of deposits as at 31 December 2003 were 3.1% and 30 days respectively.
17. TRADE PAYABLES
The normal trade credit term granted to the Group ranges from 30 to 120 days.
18. OTHER PAYABLES
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Accruals 11,629 12,312 186 631 Provision for damage claims 2,497 2,497 - - Provision for transportation charges 417 1,072 - - Sundry payables 4,340 5,650 688 422 Deposits received 551 574 - - Dividend payable - 187 153 187
19,434 22,292 1,027 1,240
Annual Report 2003 45 7296 / MinHo AR04 P43-47 DT 28/5/04 5:22 PM Page 46
Notes to the Financial Statements 31 December 2003
19. HIRE PURCHASE OBLIGATIONS
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Minimum lease payments:
Not later than 1 year 702 525 - - Later than 1 year and not later than 2 years 543 181 - - Later than 2 years and not later than 5 years - 30 - -
1,245 736 - - Less : Future finance charges (89) (65) - -
Present value of finance lease liabilities 1,156 671 - -
Present value of finance lease liabilities :
Not later than 1 year 591 483 - - Later than 1 year and not later than 2 years 565 163 - - Later than 2 years and not later than 5 years - 25 - -
1,156 671 - -
Analysed as:
Due within 12 months 591 483 - - Due after 12 months 565 188 - -
1,156 671 - -
The hire purchase bore interest during the year between 3.9% to 10% (2002: 3.9% to 10%) per annum.
20. BORROWINGS - SECURED
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Short Term Borrowings
Secured: Bankers’ acceptance 27,692 20,999 - - Trust receipt 5,591 5,940 - -
33,283 26,939 - -
Long Term Borrowings
Secured: Term loans 82,189 82,189 82,189 82,189
Total Borrowings
Bankers’ acceptance 27,692 20,999 - - Trust receipt 5,591 5,940 - - Term loans 82,189 82,189 82,189 82,189
115,472 109,128 82,189 82,189
Maturity of borrowings:
Within one year 33,283 26,939 - - More than 1 year and less than 2 years 7,500 7,500 50,500 7,500 More than 2 years and less than 5 years 73,500 73,500 32,189 73,500 5 years or more 1,189 1,189 - 1,189
115,472 109,128 82,189 82,189
Borrowings other than term loan bear interest at weighted rate of 5.76% (2002: 5.76%) per annum. Term loan bear interest at 8.4% per annum.
46 MINHO (M) BE R H A D 7296 / MinHo AR04 P43-47 DT 28/5/04 5:22 PM Page 47
Notes to the Financial Statements 31 December 2003
20. BORROWINGS - SECURED (cont’d)
The borrowings are secured by the following:
(a) First legal charge over the freehold land and buildings of certain subsidiary companies;
(b) Fixed and floating charges over assets of the Company's wholly owned subsidiaries, Lionvest Corporation (Pahang) Sdn Bhd and Syarikat Minho Kilning Sdn Bhd; and
(c) Corporate guarantees by certain subsidiaries.
In connection with the term loan agreement dated 23 August 2002, the Company has agreed with the bank not to incur any indebtedness in excess of a debt equity ratio of 1 to 1.
21. SHARE CAPITAL
Group/Company 2003 2002 RM’000 RM’000
Authorised: 500,000,000 ordinary shares of RM1 each 500,000 500,000
Issued and fully paid: 109,851,000 ordinary shares of RM1 each 109,851 109,851
On 22 November 2002, the shareholders of the Company approved the issue of up to 48,000,000 Replacement Warrants on the basis of one (1) Replacement Warrant to be offered for RM0.05 each in substitution and cancellation of one (1) existing warrant held.
The exercise price of Replacement Warrants was set at RM1.00. The exercise period for the Replacement Warrants is from the date of issue to 4 September 2005.
Group/Company 2003 2002 RM’000 RM’000
Number of warrant as at 31 December Existing warrants 18,052,495 18,052,495 Replacement warrants 29,947,505 29,947,505
48,000,000 48,000,000
22. RESERVES
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Distributable :
Accumulated losses (99,666) (65,997) (34,099) (1,051)
Non-distributable :
Share premium 92,431 92,431 92,431 92,431 Reserve on consolidation 14,065 14,065 - - Capital reserves - revaluation 1,889 1,889 - - - arising from the replacement of existing warrants with the Replacement Warrants 1,498 1,498 1,498 1,498
10,217 43,886 59,830 92,878
Based on the estimated tax credits and tax exempt profits available, subject to confirmation by tax authorities, the entire retained profit of the Company is available for distribution by way of dividends without incurring additional tax liability.
Annual Report 2003 47 7296 / MinHo AR04 P48-52 DT 28/5/04 5:24 PM Page 48
Notes to the Financial Statements 31 December 2003
23. DEFERRED TAXATION
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
At 1 January 29,103 5,841 - 54 Transfer (to)/from income statement 1,847 (331) - (54)
30,950 5,510 - - Underprovision in prior year 11 23,593 - -
At 31 December 30,961 29,103 - -
Subject to the agreement of the Inland Revenue Board, the potential timing differences not recognised in the financial statements of the Group are estimated as follows :-
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Unabsorbed tax losses 678 629 - - Unutilised capital allowances 609 1,128 - - Others 1,237 1,321 - -
2,524 3,078 - -
24. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS
(a) Changes in Accounting Policies
During the financial year, the Group and the Company applied two new MASB Standards which became effective from 1 January 2003, and accordingly modified certain accounting policies. The changes in accounting policies which resulted in prior year adjustments is discussed below:
MASB 25 : Income Taxes
Under MASB 25, deferred tax liabilities are recognised for all taxable temporary differences. Previously, deferred tax liabilities were provided for on account of timing differences only to the extent that a tax liability was expected to materialise in the foreseeable future. In addition, the Group and the Company have commenced recognition of deferred tax assets for all deductible temporary differences, when it is probable that sufficient taxable profit will be available against which the deductible temporary differences can be utilised. Previously, deferred tax assets were not recognised unless there was reasonable expectation of the realisation.
(b) Prior Year Adjustments
The changes in accounting policies have been applied retrospectively and comparatives have been restated. The effects of changes in accounting policies are as follows :-
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Effects on retained profits:
At 1 January, as previously stated (40,794) (24,706) (1,051) 7,814 Effects of adopting MASB 25 (25,203) (25,203) - -
At 1 January, as stated (65,997) (49,909) (1,051) 7,814
Comparatives amounts as at 31 December 2002 have been restated as follows :-
Previously Adjustments Restated GROUP RM’000 RM’000 RM’000
Deferred taxation 3,900 25,203 29,103
48 MINHO (M) BE R H A D 7296 / MinHo AR04 P48-52 DT 28/5/04 5:24 PM Page 49
Notes to the Financial Statements 31 December 2003
25. CAPITAL COMMITMENTS
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Authorised and contracted for 2,799 2,389 - -
26. CONTINGENT LIABILITIES - UNSECURED
Group Company 2003 2002 2003 2002 RM’000 RM’000 RM’000 RM’000
Outstanding bank guarantees given in respect of: - subsidiary companies’ banking facilities - - 33,126 28,028
Tax contingencies in relation to disputes on reinvestmentallowances and double deduction of freight charges claimed 2,786 2,786 - -
27. SIGNIFICANT RELATED PARTY TRANSACTIONS
Group Amount Amount oustanding oustanding as at as at 2003 31.12.2003 2002 31.12.2002 RM’000 RM’000 RM’000 RM’000
Purchase of sawn timber and its related product - D.M. Timber Sdn. Bhd. -- 2,339 (135) - Wangsamakmur Holdings Sdn. Bhd. - (106) 387 (76) Purchase of logs - Sri Temerloh Timber Industries Sdn Bhd. -- 1,927 250 - D.M. Timber Sdn. Bhd. 5,385 (135) -- - Mahawangsa Timber Industries Sdn Bhd. 2,189 - -- Logging, infrastructure works and contract maintenance charged by related party - D.M. Timber Sdn. Bhd. 1,515 - 2,233 1,402 - Great Basic Sdn. Bhd. 274 (132) 1,360 (168) - Mestimakmur Industries Sdn. Bhd. - (10) 499 - Sales of timber and kiln drying services to related parties - D.M. Timber Sdn. Bhd. (3,538) - (4,823) (4,823) - Excell Corporation Sdn. Bhd. (243) (330) (829) (243) Sales of sawn timber and its related product to related parties - Excell Corporation Sdn Bhd (1,993) (348) (1,633) (67) - Mahawangsa Timber Industries Sdn. Bhd. (172) - -- - Euro-CGA Sdn. Bhd. (2,371) (921) -- Rental and utilities charges to related parties - LNK Computer Consultant Sdn Bhd - (5) (44) (38) - MH Lumber Sdn Bhd - (15) Rental charged by related party - LK Timber Sdn Bhd 108 115 108 187 Rental of storage charged by related party - Minho Kilning (Klang) Sdn Bhd 1,716 576 1,804 71 Insurance brokerage fee charged by related party - QR Printing Sdn Bhd 13 65 33 171 Purchase of stationery and printing charges from related party - LKN Computer Forms (M) Sdn. Bhd 7 3 -- Repair and maintenance services provided by related party - Bright Pace Sdn Bhd. 220 80 --
Annual Report 2003 49 7296 / MinHo AR04 P48-52 DT 28/5/04 5:24 PM Page 50
Notes to the Financial Statements 31 December 2003
27. SIGNIFICANT RELATED PARTY TRANSACTIONS (cont’d)
The related parties relationships are as follow:-
Related Parties: Relationship:
D.M. Timber Sdn Bhd Dato' Loo Keng Ann, is the Managing Director of Minho (M) Berhad and chairman of D.M. Timber Sdn Bhd.
Ng Chee Min and Eng Kim Hong are Directors of Lionvest Timber Industries Sdn Bhd and D.M. Timber Sdn Bhd.
Wangsamakmur Holding Sdn Bhd Liew Leong Tat is a Director of Abadi Canggih Sdn Bhd and Wangsamakmur Holding Sdn Bhd.
Mestimakmur Industries Sdn Bhd Liew Leong Tat is a Director of Abadi Canggih Sdn Bhd and Mestimakmur Industries Sdn Bhd.
Alunan Pesona Sdn Bhd Ng Ho Liat is a Director of Lionvest Timber Industries Sdn Bhd and Alunan Pesona Sdn Bhd.
Excell Corporation Sdn Bhd Eng Kin Hong is a Director of Lionvest Timber Industries Sdn Bhd and Excell Corporation Sdn Bhd.
Sri Temerloh Timber Industries Sdn Bhd Loo Say Kian and Ng Ho Liat are Directors of Lionvest Timber Industries Sdn Bhd and Sri Temerloh Timber Industries Sdn Bhd.
LNK Computer Consultant Sdn Bhd Loo Say Leng is a Director of Minho (M) Berhad and LNK Computer Consultant Sdn Bhd.
MH Lumber Sdn Bhd MH Lumber Sdn Bhd is a wholly owned subsidiary of Minho Holdings Sdn Bhd, a major shareholder of Minho (M) Berhad.
LK Timber Sdn Bhd LK Timber Sdn Bhd is a wholly owned subsidiary of Minho Holdings Sdn Bhd, a major shareholder of Minho (M) Berhad.
Minho Kilning (KIang) Sdn Bhd Minho Kilning (Klang) Sdn Bhd is a wholly owned subsidiary of Minho Holdings Sdn Bhd, a major shareholder of Minho (M) Berhad.
QR Printing Sdn Bhd Loo Say Leng and Ng Hoe Chang are Directors of Minho (M) Berhad and QR Printing Sdn Bhd.
Bright Pace Sdn Bhd Bright Pace Sdn Bhd is a wholly owned subsidiary of Minho Holdings Sdn Bhd, a major shareholder of Minho (M) Bhd.
Mahawangsa Timber Industries Sdn Bhd Ng Chee Min and Eng Kim Hong is the director of Lionvest Timber Industries Sdn Bhd and D.M. Timber Sdn Bhd.
Company 2003 2002 RM’000 RM’000
Management fees receivable from subsidiary company 240 240 Interest receivable from subsidiary company 179 200 Dividend received from subsidiary companies 7,819 25,457
The Directors of the Group and the Company are of the opinion that the above transactions were made in the normal course of business and had been established under terms mutually agreed between the parties.
28. COMPARATIVES
The presentation and classification of items in the current year financial statements have been consistent with the previous financial year except that certain comparative amounts have been adjusted as a result of changes in accounting policies as disclosed in Note 2(a) and Note 24.
50 MINHO (M) BE R H A D 7296 / MinHo AR04 P48-52 DT 28/5/04 5:24 PM Page 51
Notes to the Financial Statements 31 December 2003
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group's business whilst managing its risks. The main areas of financial risks face by the Group are set out as follows-
(a) Foreign Exchange Risk:
The Group is exposed to foreign currency risks as a result of its subsidiaries' normal operating activities with foreign companies being denominated mainly in Pound Sterling and United States Dollar. Despite the fact that the Malaysian Ringgit is currently pegged against the United States Dollar, foreign exchange contracts will continue to be used to hedge against any material exposure to foreign exchange risks.
(b) Interest Rate Risk:
The Group's exposure to interest rate fluctuations is mainly due to interest on borrowings being charged at the lending financial institutions' base lending rates plus a margin and is therefore dependent on the periodical resetting of the lending financial institutions' base lending rates particularly for its term loan, overdrafts and trade financing facilities.
(c) Credit Risk
The Group has a credit assessment in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.
(d) Liquidity and Cash Flow Risk
The Group exercises prudent liquidity risk management to maintain adequate cash and short term investments and the availability of funding by way of bank credit facilities sufficient for its business needs.
(e) Fair Values
It is not practicable to determine the fair values of:
(i) balances due from and to subsidiary companies principally due to a lack of fixed repayment terms; and
(ii) contingent assets and liabilities due to the uncertainties of timing, costs and eventual outcome.
The fair values of all other financial assets and liabilities of the Group and Company as at 31 December 2003 are not materially different from their carrying values.
30. SEGMENT INFORMATION
The Group operates principally in the timber industry and within the country. The manufacturing of industrial paper bags and its related products and operations of jetty services contributed only 4.7% in Group Revenue and 3.6% in Group Operation Profit.
No analysis by geographical location is provided as the Group operates substantially in Malaysia, and the subsidiary company in the United Kingdom accounts for less than 10% of the Group's activities.
Annual Report 2003 51 7296 / MinHo AR04 P48-52 DT 28/5/04 5:25 PM Page 52
Notes to the Financial Statements 31 December 2003
52 MINHO (M) BE R H A D 7296 / MinHo AR04 P53-57 DT 28/5/04 5:27 PM Page 53
Notes to the Financial Statements 31 December 2003
Annual Report 2003 53 7296 / MinHo AR04 P53-57 DT 28/5/04 5:27 PM Page 54
Statement By Direc t o r s Pursuant To Section 169(15) Of The Companies Act 1965
We, DATO’ ISMAIL BIN YUSOF and LOO SAY LENG, being two of the Directors of MINHO (M) BERHAD, state that in the opinion of the Directors, the accompanying financial statements set out on pages 26 to 55 are drawn up in accordance with applicable Approved Accounting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2003 and of the results and the cash flows of the Group and of the Company for the year then ended.
Signed on behalf of the Board in accordance with a resolution of the Directors
DATO’ ISMAIL BIN YUSOF Director
LOO SAY LENG Director
Klang, Malaysia. Date:
Statutory Declaration Pursuant To Section 169(16) Of The Companies Act 1965
I, KHIBIR BIN RAZALI, being the Director primarily responsible for the financial management of MINHO (M) BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 26 to 55 are in my opinion 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, 1960.
Subscribed and solemnly declared by the abovenamed KHIBIR BIN RAZALI at Klang in the State of Selangor Darul Ehsan on…………………………………
KHIBIR BIN RAZALI
Before me,
54 MINHO (M) BE R H A D 7296 / MinHo AR04 P53-57 DT 28/5/04 5:27 PM Page 55
Report Of The Auditors To The Members Of Minho (M) Be r h a d
We have audited the accompanying financial statements set out on pages 26 to 55. These financial statements are the responsibility of the Company's Directors. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:-
(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Approved Accounting Standards in Malaysia so as to give a true and fair view of:-
(i) the financial position of the Group and of the Company as at 31 December 2003 and of the results and the cash flows of the Group and of the Company for the year then ended; and
(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and
(b) the accounting and other records and the registers required by the Act to be kept by the Company and by its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
We have considered the financial statements and the auditors’ reports thereon of the subsidiaries of which we have not acted as auditors, as indicated in Note 9 to the financial statements, being financial statements that have been included in the consolidated financial statements.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company 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 auditors’ report on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated financial statements and did not include any comment required to be made under Section 174 (3) of the Act.
A. RAZAK & CO. Firm Number : AF 0842 Chartered Accountants
ABD. RAZAK BIN HJ. NAZAH DIN 1522/03/06(J/PH)
Date:
Annual Report 2003 55 7296 / MinHo AR04 P53-57 DT 28/5/04 5:27 PM Page 56
List Of Properties Held
The Group’s landed properties are as follows:-
Location Description Land Area Tenure Age Net Book Year of Value Acquisition / Revaluation
Lot No. 6466 Kiln drying factory with 9.95 acres Freehold 15 2,208,505 1993 Mukim of Kapar parking and storage shed, District of Klang workshop and office cum store, Selangor Darul Ehsan building and worker’ quarters
Lot No. 6537 Kiln drying factory with 10.013 acres Freehold 16 4,313,052 1993 Mukim of Kapar parking and storage shed District of Klang office cum workshop building Selangor Darul Ehsan
Lot No.6475 and 6476 Kiln drying factory 9.89 acres Freehold 14 4,487,178 1993 Mukim of Kapar with storage shed District of Klang Selangor Darul Ehsan
Lot No. 6469 Kiln drying factory 9.85 acres Freehold 16 4,280,413 1993 Mukim of Kapar District of Klang Selangor Darul Ehsan
Lot No. 921 Terrace shop cum office Built up area Freehold 22 472,321 1993 Section 24 of 302.8 sq Municipality of Klang metres Selangor Darul Ehsan
Lot No. 6477 Storage shed, office blocks 9.94 acres Freehold 15 4,498,211 1993 Mukim of Kapar and store District of Klang Selangor Darul Ehsan
Lot No. 6474 Kiln drying factory with 10.43 acres Freehold 14 4,479,490 1993 Mukim of Kapar storage shed District of Klang Selangor Darul Ehsan
56 MINHO (M) BE R H A D 7296 / MinHo AR04 P53-57 DT 28/5/04 5:27 PM Page 57
List Of Properties Held
Location Description Land Area Tenure Age Net Book Year of Value Acquisition / Revaluation
Lot No. 6471 Kiln drying factory with 10.18 acres Freehold 19 1993 Mukim of Kapar storage shed, office block District of Klang and workshop Selangor Darul Ehsan }9,071,135 Lot No. 6470 Kiln drying factory with 10.18 acres Freehold 16 1993 Mukim of Kapar storage shed and office District of Klang block Selangor Darul Ehsan
Lot No. 6457 and 6458 Storage shed 10.144 acres Freehold 16 4,392,131 1993 Mukim of Kapar District of Klang Selangor Darul Ehsan
Lot No. 1532 Vacant 24,610 sq Freehold 13 2,292,203 1990 Mukim of Kapar metres District of Klang Selangor Darul Ehsan
Lot No. PT 2863 Factory with storage shed, 145.41 acres Leasehold 52 27,754,465 1994 Mukim of Chenor office and workshop expiring on District of Maran 10-10-2045 Pahang Darul Makmur
Lot No. 879 Vacant 3.4677 acres Freehold 4 2,500,000 1999 Mukim of Klang District of Klang Selangor Darul Ehsan
Annual Report 2003 57 7296 / MinHo AR04 P58-63 DT 28/5/04 5:29 PM Page 58
Statistics of Shareholdings As at 7 May 2004
SHARE CAPITAL
Authorised Share Capital : RM 500,000,000 Issued and Fully Paid Share Capital : 109,851,000 Class of Shares : Ordinary shares of RM1 each Voting Rights : 1 vote per ordinary share
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings No. of Holders % No. of Holdings %
1-999 274 2.83 63,093 0.06 1,000 – 10,000 8,598 88.92 23,9978,990 21.83 10,001 – 100,000 736 7.61 18,955,725 17.26 100,001- less than 5% of the issued shares 59 0.61 28,882,182 26.29 5% of the issued shares and above 2 0.02 37,971,010 34.57
Total 9,669 100.00 109,851,000 100.00
LIST OF TOP 30 HOLDERS AS AT 06/05/2004
Name of Shareholders Holdings %
1. Minho Holdings Sdn. Bhd. 32,282,010 29.39
2. Lembaga Tabung Haji 5,689,000 5.18
3. Cerah Bestari Sdn. Bhd. 4,294,000 3.91
4. Emas Adil Sdn. Bhd. 3,846,000 3.50
5. MDB Manufacturing Sdn. Bhd. 3,594,125 3.27
6. DB (Malaysia) Nominee (Asing) Sdn. Bhd. 1,891,875 1.72 BNP Paribas Nominees Singapore Pte. Ltd. for Kenswick Investment Limited
7. Kuala Lumpur City Nominees (Tempatan) Sdn. Bhd. 1,714,000 1.56 Pledged Securities Account for Eng Kin Hong (D18)
8. Bank Pembangunan Dan Infrastrutur Malaysia Berhad 730,000 0.66
9. Mayban Nominees (Tempatan) Sdn. Bhd. 665,500 0.61 Pledged Securities Account for Cheah Keng Meng
10. Tan Chui Hua 656,400 0.60
11. Euginny Yap Chiew Yei 648,300 0.59
12. Eng Kin Hong 560,000 0.51
13. HDM Nominees (Tempatan) Sdn. Bhd. 450,000 0.41 DYMM Tuanku Ja’afar Ibni Almarhum Tuanku Abdul Rahman
14. Ng Chee Min 446,000 0.41
15. Lau Siew Choo 421,000 0.38
58 MINHO (M) BE R H A D 7296 / MinHo AR04 P58-63 DT 28/5/04 5:29 PM Page 59
Statistics of Shareholdings As at 7 May 2004
LIST OF TOP 30 HOLDERS AS AT 06/05/2004 (cont’d)
Name of Shareholders Holdings %
16. HSBC Nominees (Tempatan) Sdn. Bhd. 400,000 0.36 Pledged Securities Account for DYMM Tunku Naquiyuddin Ibni Tuanku Jaafar
17. Cheong Sim Lam 398,750 0.36
18. HSBC Nominees (Tempatan) Sdn. Bhd. 362,500 0.33 HPBN for Hartlane Enterprises Inc
19. Khoo Saw Choo 349,500 0.32
20. HSBC Nominees (Tempatan) Sdn. Bhd. 310,000 0.28 Pledged Securities Account for Tunku Tan Sri Imran Ibni Tuanku Jaafar
21. SJ Sec Nominees (Tempatan) Sdn. Bhd. 300,000 0.27
22. Citicorp Nominees (Asing) Sdn. Bhd. 292,500 0.27 Citigroup GM Inc for Maria Sriati
23. Tan Ah Tin 273,250 0.25
24. Tan Chui Hua 269,100 0.24
25. Jeanne Lukimto 257,500 0.23
26. Cheok Wai Lin 250,000 0.23
27. Amsec Nominees (Asing) Sdn. Bhd. 249,200 0.23 Pledged Securities Account for Lim Han Leng
28. Wong Kian Teck 247,000 0.22
29. Lim Siew Chu 246,000 0.22
30. Tan Kim Wah 236,000 0.21
HOLDERS WITH HOLDINGS OF 5% AND ABOVE AS AT 06/05/2004
Name of Shareholders Holdings %
1. Minho Holdings Sdn. Bhd. 32,282,010 29.39
2. Lembaga Tabung Haji 5,689,000 5.18
Annual Report 2003 59 7296 / MinHo AR04 P58-63 DT 28/5/04 5:29 PM Page 60
Warrant Statistics
Issued : RM48,000,000 Outstanding : RM48,000,000
DISTRIBUTION OF WARRANTHOLDINGS
Size of Shareholdings No. of Holders % No. of Holdings %
1-999 122 4.88 60,280 0.33 10,000 2,143 85.75 6,538,400 36.22 10,001 – 100,000 215 8.60 5,127,500 28.40 100,001- less than 5% of the issued warrants 18 0.72 3,826,315 21.20 5% of the issued warrants and above 1 0.04 2,500,000 13.85
Total 2,499 100.00 18,052,495 100.00
THIRTY LARGEST WARRANTHOLDERS AS PER THE RECORD OF DEPOSITORS
Name of Warrantholders No. of Warrants % of Warrants
1. Lembaga Tabung Haji 2,500,000 13.85
2. HSBC Nominees (Tempatan) Sdn. Bhd. 535,000 2.96 Pledged Securities Acccount for Tunku Tan Sri Imran Ibni Tuanku Jaafar
3. Chun Yooi Luon 518,000 2.87
4. Lau Saw Kuen 295,500 1.64
5. HSBC Nominees (Tempatan) Sdn. Bhd. 248,500 1.38 Pledged Securities Account for DYMM Tunku Naquiyuddin Ibni Tuanku Jaafar
6. Choeng Sim Lam 244,000 1.35
7. HDM Nominees (Tempatan) Sdn. Bhd. 240,000 1.33 DYMM Tuanku Ja’afar Ibni Almarhum Tuanku Abdul Rahman
8. Ong Keng Hoe 229,500 1.27
9. Tang Boon Ping 196,000 1.09
10. TCL Nominees (Tempatan) Sdn. Bhd. 195,000 1.08 Pledged Securities Account for Chew Kim Hwa
11. Liong Vui Hyen @ James Liong 149,900 0.83
12. Gan Ah Huat 146,000 0.81
13. Menteri Kewangan Malaysia 141,415 0.78 Section 29 (SICDA)
60 MINHO (M) BE R H A D 7296 / MinHo AR04 P58-63 DT 28/5/04 5:29 PM Page 61
Warrant Statistics
THIRTY LARGEST WARRANTHOLDERS AS PER THE RECORD OF DEPOSITORS
Name of Warrantholders No. of Warrants % of Warrants
14. Public Nominees (Tempatan) Sdn. Bhd. 123,000 0.68 Pledged Securities Account for Toh Chiong Jin (CST)
15. Chew Kim Hwa 120,000 0.66
16. Cheah Keng Toh 114,500 0.63
17. Yew Kam @ Yeow Hong Chiang 113,000 0.63
18. Public Nominees (Tempatan) Sdn. Bhd. 110,000 0.61 Pledged Securities Account for Teoh Kim Seng (E-TWU)
19. Beh Hong Ang 107,000 0.59
20. YAM Tunku Nadzaruddin Ibni Tuanku Ja’afar 100,000 0.55
21. Kueh Ooi Voon 85,000 0.47
22. Mayban Securities Nominees (Tempatan) Sdn. Bhd. 80,000 0.44 Pledged Securities Account for Lau Yin Pin @ Lau Yen Beng
23. Tan Boon Pi @ Tan Hoy 79,000 0.44
24. Koh Cheng Kiat 78,100 0.43
25. Lau Siew Choo 78,000 0.43
26. Ling Sui Hiong 60,000 0.33
27. Phun Sick Keong 58,500 0.32
28. Yap Fah Choy 58,100 0.32
29. Chin Choon Foo 58,000 0.32
30. Lim Yew Chai 56,000 0.31
THIRTY LARGEST WARRANT B HOLDERS AS PER THE RECORD OF DEPOSITORS
Size of Shareholdings No. of Holders % No. of Holdings %
1-999 19 2.82 9,700 0.03 1,000 – 10,000 551 81.75 1,881,700 6.28 10,001 – 100,000 95 14.09 2,471,100 8.25 100,001- less than 5% of the issued warrant B 7 1.04 3,059,500 10.22 5% of the issued warrant B and above 2 0.30 22,525,505 75.22
Total 674 100.00 29,947,505 100.00
Annual Report 2003 61 7296 / MinHo AR04 P58-63 DT 28/5/04 5:29 PM Page 62
Warrant Statistics
Name of Warrant B Holders Warrants Holdings %
1 Minho Holdings Sdn. Bhd. 17,812,505 59.48
2 MDB Manufacturing Sdn. Bhd. 4,713,000 15.74
3 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 1,340,500 4.48 BNP Paribas Nominees Singapore Pte. Ltd. for Kenswick Investments Limited
4 Wong Kian Teck 604,000 2.02
5 Emas Adil Sdn. Bhd. 388,000 1.30
6 Wong Kian Hock 218,000 0.73
7 Soh Shuh Yih 200,000 0.67
8 Mayban Nominees (Tempatan) Sdn. Bhd. 174,000 0.58 Pledged Securities Account for Choo Soo Lim
9 Wong Kien Beng 135,000 0.45
10 Teo Geok Ting 85,900 0.29
11 Abdul Shukor bin Abu Bakar 80,000 0.27
12 Lee Teng Seng 80,000 0.27
13 Heng Siok Moi 77,000 0.26
14 Citicorp Nominees (Asing) Sdn. Bhd. 75,000 0.25 CBHK PBGSGP for Cheong Sim Eng
15 TA Nominees (Tempatan) Sdn. Bhd. 62,000 0.21 Pledged Securities Account for Mohd Jamel bin Abdul Munin
16 Wong Ah Yong 50,000 0.17
17 Leong Oi Ling 50,000 0.17
18 Lee Kong Yew 47,000 0.16
19 Tan Teng Boon @ Tan Thean Boon 46,000 0.15
20 Tan Tung Hun 45,000 0.15
21 Halim Securities Sdn. Bhd. (In Creditors’ Voluntary Liquidation) 42,500 0.14
22 Koo Lai Choo 40,000 0.13
23 Looi Futt Foo 40,000 0.13
24 Chew Kiau Sin 38,000 0.13
25 Pan Chin Ee 35,000 0.12
26 Eng Nominees (Tempatan) Sdn. Bhd. 35,000 0.12 Pledged Securities Account for Lui Whye Kean
27 Cha Guan Hong 33,000 0.11
28 Mayban Nominees (Tempatan) Sdn. Bhd. 32,500 0.11 Pledged Securities Account for the Teo Kok Wah
29 Khoo Yee @ Chiu Yee Siah 31,000 0.10
30 AllianceGroup Nominees (Tempatan) Sdn. Bhd. 31,000 0.10 Pledged Securities Account for Angela Chua Lai Hee
62 MINHO (M) BE R H A D 7296 / MinHo AR04 P58-63 DT 28/5/04 5:29 PM Page 63
MINHO (M) BERHAD (Company No. 200903-H) Proxy Form
I/We ______
of ______
a Member / Members of the above named Company, do hereby appoint ______
______
of ______as my / our proxy to vote for me / us and on my / our behalf at the Thirteen Annual General Meeting of the Company to be held on 28 June 2004 and at every adjournment thereof in the manner indicated below:-
No. Resolution For Against
1 Adoption of Accounts and Report Resolution 1
2 To re-elect the following Directors: i) Y.A.M Tunku Tan Sri Imran ibni Tuanku Ja’afar Resolution 2 ii) Dato’ Ismail Bin Yusof Resolution 3 iii) Loo Say Leng Resolution 4
3 To approve the payment of Directors’ fees. Resolution 5
4 To re-appoint Messrs Razak & Co as auditors of the Company and to authorise the Directors to determine their remuneration Resolution 6
5 Pursuant of the Section 132D Companies Act, 1965 Resolution 7
6 Pursuant to Para 10.09 of the new Listing Requirements of the BMSB Resolution 8
(Please indicate with an "X" in the space provided whether you wish your votes to be cast for or against the Resolution. In the absence of specific directions, your proxy will vote or abstain as he thinks fit.)
Dated this…………………..day of ……………………, 2004
Number of Shares held
...... …………………………………………… Signature of Shareholder or Common Seal
Notes:
1. Proposed Shareholders’ Mandate For Recurrent Related Party Transactions of A Revenue or Trading Nature 2. To be valid this form duly completed must be deposited at the registered office, 31A, Jalan Satu Kaw 16, Berkeley Town Centre, Off Federal Highway, 41300 Klang, Selangor Darul Ehsan of the Company not less than 48 hours before the time for holding the meeting. 3. A member shall be entitled to appoint more than one proxy to attend and vote at the same meetings, provided that the provisions of Section 149(1)(c) of the Act are complied with. 4. Where a member appoints more than one proxy the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. 5. If the appointer is a corporation this form must be executed under its common seal or under the hand of its attorney. 7296 / MinHo AR04 P58-63 DT 28/5/04 5:29 PM Page 64
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