MAH SING GROUP BERHAD · MAH SING GROUP BERHAD (230149-P) annual report 2004 Mah Sing Group Berhad...

annual report 2004

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Mah Sing Group BerhadPenthouse Suite 1, No. 163, Jalan Sungai Besi, 57100 Kuala LumpurTel : 603-9221 8888 Fax : 603-9222 2833E-mail : [email protected]

www.mahsing.com.my

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Mah Sing Group Berhad ANNUAL REPORT 2004

004 Mah Sing Group Berhad Annual Report 2004

NoticeOfAnnualGeneralMeeting

AGENDA

As Ordinary Businesses:-

1. To receive and adopt the Audited Financial Statements for the financial year ended 31 December2004 together with the Directors’ and Auditors’ Reports thereon.

2. To approve the declaration of a first and final dividend of 6 sen per ordinary share of RM1.00 eachless Malaysian Income Tax at 28% in respect of the financial year ended 31 December 2004.

3. To approve the Directors’ fees for the financial year ended 31 December 2004.

4. To re-elect Jen. (R) Tan Sri Yaacob bin Mat Zain, the Director retiring pursuant to Article 102 ofthe Company’s Articles of Association.

5. To re-elect Ms Leong Yuet Mei, the Director retiring pursuant to Article 102 of the Company’sArticles of Association.

6. To re-appoint Messrs Deloitte KassimChan as Auditors and to authorise the Directors to fix theirremuneration.

As Special Businesses:-

To consider and if thought fit, to pass the following resolutions, with or without any modification, asOrdinary Resolutions of the Company:-

7. Authority To Issue Shares

“THAT subject always to the Companies Act, 1965, and the approval of the regulatory authorities,the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act,1965, to issue shares in the Company from time to time at such price, upon such terms andconditions, for such purposes and to such person or persons whomsoever as the Directors maydeem fit provided that the aggregate number of shares issued pursuant to this resolution doesnot exceed 10% of the issued share capital of the Company for the time being AND THAT theDirectors be and are also empowered to obtain the approval from the Bursa Malaysia SecuritiesBerhad for listing of and quotation for the additional shares so issued AND FURTHER THAT suchauthority shall continue to be in force until the conclusion of the next Annual General Meeting ofthe Company.”

NOTICE IS HEREBY GIVEN THAT the Thirteenth Annual General Meeting of the Company will be held atPenthouse Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur on Monday, 27 June 2005 at 10.00 a.m.for the following purposes:-

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

005Mah Sing Group Berhad ANNUAL REPORT 2004

NoticeOfAnnualGeneralMeeting(cont’d)

8. Proposed Renewal of Shareholders' Mandate for Existing Recurrent Related Party Transactionsof a Revenue or Trading Nature

“THAT approval be and is hereby given for the renewal of shareholders’ mandate for the Companyand/or its subsidiaries (“Group”) to enter into recurrent related party transactions of a revenue ortrading nature with related parties mentioned under section 2.2 of the Circular to Shareholdersdated 3 June 2005 which are necessary for the Group’s day-to-day operations subject to thefollowing:-

(a) the transactions are in the ordinary course of business and are on normal commercial termswhich are not more favourable to the related parties than those generally available to thepublic and are not detrimental to the minority shareholders of the Company; and

(b) disclosure is made in the Annual Report on the type of transactions made and the names ofthe related parties involved in each type of the transactions made and their relationship withthe Company and the breakdown of aggregate value of the transactions conducted pursuantto the shareholders’ mandate during the financial year.

AND THAT such authority shall continue to be in force until the conclusion of the next AnnualGeneral Meeting of the Company.

AND FURTHER THAT the Directors of the Company be and are hereby authorised to completeand do all such acts and things as they may consider expedient or necessary in the best interestof the Company (including executing all such documents as may be required) to give effect to theProposed Renewal of Shareholders' Mandate.”

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

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT DATE

NOTICE IS HEREBY GIVEN THAT the first and final dividend of 6 sen per ordinary share of RM1.00 each less MalaysianIncome Tax at 28%, in respect of the financial year ended 31 December 2004, if approved at the Thirteenth Annual GeneralMeeting, will be paid on 26 July 2005 to Depositors of ordinary shares registered in the Record of Depositors on 15 July 2005.

A Depositor shall qualify for entitlement to the dividend only in respect of:

a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 15 July 2005 in respect of transfers; and

b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the BursaMalaysia Securities Berhad.

BY ORDER OF THE BOARD

Phan Gaik Cher (MIA 4775)Kuan Hui Fang (MIA 16876)Company Secretaries

Kuala Lumpur3 June 2005

(Resolution 8)


NOTES:

1. A member entitled to attend and vote at the Thirteenth Annual General Meeting is entitled to appoint a proxy or attorney orin the case of a corporation, to appoint a duly authorised representative to attend and vote in his place. A proxy or attorneyor duly authorised representative may but need not be a member of the Company.

2. The power of attorney or a notarially certified copy thereof or the Form of Proxy shall be in writing under the hand of theappointor or of his attorney duly authorised in writing. If the appointor is a corporation, it must be executed under its sealor under the hand of its officer or its attorney duly authorised on its behalf.

3. Where a member appoints more than one (1) proxy (subject always to a maximum of two (2) proxies at each meeting), theappointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

4. The Form of Proxy together with the power of attorney (if any) under which it is signed or a duly notarially certified copythereof must be deposited at the registered office of the Company at Penthouse Suite 1, Wisma Mah Sing, No. 163, JalanSungai Besi, 57100 Kuala Lumpur not less than forty eight (48) hours before the time for holding the Meeting or anyadjournment thereof.

EXPLANATORY NOTE ON SPECIAL BUSINESSES

5. Resolution 7:

The proposed resolution is in relation to authority to allot shares pursuant to Section 132D of the Companies Act, 1965, andif passed, will give the Directors of the Company, from the date of the above Annual General Meeting, authority to issue andallot shares from the unissued capital of the Company for such purposes as the Directors may deem fit and in the interestof the Company. This authority will, unless revoked or varied by the Company in general meeting, expire at the conclusionof the next Annual General Meeting of the Company.

6. Resolution 8:

The proposed resolution, if passed, will enable the Group to continue to enter into recurrent related party transactions of arevenue or trading nature which are necessary for the Group’s day-to-day operations, subject to the transactions beingcarried out in the ordinary course of business and on terms not to the detriment of the minority shareholders of theCompany. The details of the proposal are set out in the Circular to Shareholders dated 3 June 2005 accompanying theCompany’s Annual Report for the financial year ended 31 December 2004.

NoticeOfAnnualGeneralMeeting(cont’d)


StatementAccompanyingNoticeOfAnnualGeneralMeeting

1. Number, date and venue of Board Meetings:

Five Board Meetings were held during the year:

DATE OF MEETING TIME VENUE

27 February 2004 10.40 a.m. Penthouse Suite 1

Wisma Mah Sing

No. 163, Jalan Sungai Besi

57100 Kuala Lumpur

25 March 2004 3.15 p.m. As above

25 May 2004 10.30 a.m. As above

10 August 2004 3.00 p.m. As above

2 November 2004 10.45 a.m. As above

2. Details of Directors' attendance at Board Meetings are as follows:

NAME OF DIRECTORS ATTENDANCE

Jen. (R) Tan Sri Yaacob bin Mat Zain 5/5

Dato' Leong Hoy Kum 4/5

Lim Ching Choy 5/5

Leong Yuet Mei 5/5

Captain (Rtd) Izaham bin Abd. Rani 5/5

Loh Kok Leong 5/5

3. Details of Directors who are retiring and seeking re-election at the forthcoming Thirteenth

Annual General Meeting pursuant to Article 102 of the Company's Articles of Association:

Jen. (R) Tan Sri Yaacob bin Mat Zain for details of the directors please refer to Profile of Directors

Leong Yuet Mei on Pages 012 and 013 of the Annual Report}


00 01 02 03 04

100,000

50,000

200,000

150,000

300,000

250,000

350,000

400,000

Revenue(in RM'000)

00 01 02 03 04

10,000

5,000

20,000

15,000

30,000

25,000

Net Profit Attributableto Shareholders(in RM'000)

13

2,5

29 18

0,4

13

17

0,6

03

64

1 5,0

98

5,3

07

14

,70

2

25

,06

2

21

2,0

27

35

6,4

55

00 01 02 03 04

50,000

150,000

100,000

200,000

250,000

Shareholders' Funds(in RM'000)

73

,26

8

86

,34

0

91

,01

4

10

5,4

00

21

4,1

23

GroupFive-YearFinancialHighlights

2004 2003 2002 2001 2000RM'000 RM'000 RM'000 RM'000 RM'000

RevenueProperties 260,870 136,220 98,589 115,084 64,874Plastics 95,291 75,807 72,014 62,967 62,715Others 294 0 0 2,362 4,940

356,455 212,027 170,603 180,413 132,529

Profit before taxationProperties 34,808 21,193 10,883 7,154 3,220Plastics 5,528 2,914 173 (689) (3,079)Others (1,495) (2,937) (2,586) (565) (2,023)

38,841 21,170 8,470 5,900 (1,882)

Net Profit Attributable to Shareholders 25,062 14,702 5,307 5,098 641

Paid-Up Share Capital 145,127 43,978 43,978 43,978 43,978

Shareholders’ Funds 214,123 105,400 91,014 86,340 73,268

Total Assets Employed 552,236 350,111 248,834 289,843 276,357

Basic Earnings per Share (sen) 19.2 16.6 12.1 11.6 1.5

Fully Diluted Earnings per Share (sen) 18.2 NA NA NA NA

Gross Dividend per Share (sen) 6.0 4.0 1.0 2.0 0

Net Tangible Assets per Share (RM) 1.48 2.40 2.07 1.96 1.65

Returns on Equity 12% 14% 6% 6% 1%


CorporateInformation

BOARD OF DIRECTORSJEN.(R) TAN SRI YAACOB BIN MAT ZAINChairman/Independent Non-Executive Director

DATO' LEONG HOY KUMManaging Director / Group Chief Executive

LIM CHING CHOYExecutive Director / Chief Executive Officer

LEONG YUET MEINon-Independent Non-Executive Director

CAPTAIN (RTD) IZAHAM BIN ABD. RANIIndependent Non-Executive Director

LOH KOK LEONGIndependent Non-Executive Director

AUDIT COMMITTEEJEN.(R) TAN SRI YAACOB BIN MAT ZAINChairman

CAPTAIN (RTD) IZAHAM BIN ABD. RANI

LOH KOK LEONG

NOMINATION COMMITTEEJEN.(R) TAN SRI YAACOB BIN MAT ZAINChairman

LEONG YUET MEI


REMUNERATION COMMITTEEJEN.(R) TAN SRI YAACOB BIN MAT ZAINChairman

DATO' LEONG HOY KUM

LEONG YUET MEI

SECRETARIESPHAN GAIK CHERKUAN HUI FANG

REGISTRARPFA Registration Services Sdn Bhd(Company No. 19234-W)Level 13, Uptown 1Jalan SS21/58, Damansara Uptown47400 Petaling Jaya, Selangor Darul EhsanTel : 603-7725 4888Fax : 603-7722 2311

REGISTERED OFFICEPenthouse Suite 1Wisma Mah SingNo. 163, Jalan Sungai Besi57100 Kuala LumpurTel : 603-9221 8888Fax : 603-9222 2833

AUDITORSDeloitte KassimChanChartered AccountantsLevel 19, Uptown 11 Jalan SS 21/58, Damansara Uptown47400 Petaling Jaya, Selangor Darul EhsanTel : 603-2693 1077Fax : 603-2693 0997

BANKERSAlliance Bank Malaysia BerhadBumiputra-Commerce Bank BerhadMalayan Banking BerhadSouthern Bank BerhadUnited Overseas Bank (Malaysia) Berhad

STOCK EXCHANGE LISTINGMain Board of Bursa Malaysia Securities Berhad

a sensory

living experience


ProfileOfDirectors

JEN (R) TAN SRI YAACOB BIN MAT ZAIN (Chairman), a Malaysian aged 70, was appointed to theBoard in June 1994. He is also the Chairman of the Audit, Nomination and Remuneration Committees. He hashad a distinguished career spanning nearly 40 years in Angkatan Tentera Malaysia before retiring in 1993 as aPanglima Angkatan Tentera Malaysia. He had attended courses at the Australian Army General Command andStaff College, the Naval Post Graduate School in Monterey, United States of America, the Royal College ofDefence Studies in the United Kingdom, including the Advance Management Programme at Harvard BusinessSchool. Apart from his directorship in the Company, he is the Chairman of Affin Merchant Bank Berhad, SyarikatPermodalan Kebangsaan Berhad, SPK Sentosa Corporation Berhad, NV Multi Corporation Berhad, FTECResources Berhad as well as a Board Member of Rating Agency Malaysia Berhad. He has attended all the 5Board and Audit Committee Meetings convened during the financial year. There does not exist any conflict ofinterest between him and the Company nor is there any family relationship between him and any director ormajor shareholder of the Company. He has not been convicted for any offences within the past 10 years.

DATO' LEONG HOY KUM, D.P.M.S., J.P., PHD. (Managing Director), a Malaysian aged 48, is alsothe Group Chief Executive of the Company. He was appointed to the Board since the Company’s inception andis also a member of the Company’s Remuneration Committee. His initial training was in plastic technology andhe began heading the plastics division in 1979. He was appointed to the Central Committee of the 900-memberMalaysian Plastics Manufacturers Association since 1986. He has been the Honorary President of the YoungMalaysian Movement Association (YMM) since 1999 and of The Dramatic Art Society, Malaysia since 1996.Besides that, he has been the Vice-President of the Table Tennis Association of Malaysia since 1999. He alsosits on the Board of Directors of various other private companies. In recognition of his achievements, he wasconferred an honorary degree of Doctor of Philosophy (PhD.) in Business Administration by the HonoluluUniversity, Hawaii in 2000. He was conferred the Darjah Paduka Mahkota Selangor (D.P.M.S) which carries thetitle of “Dato’ ” and the Jaksa Pengaman (J.P) awards by his Highness, Sultan of Selangor in 1996 and 2001respectively. He has attended 4 out of the 5 Board Meetings convened during the financial year. There does notexist any conflict of interest between him and the Company nor has he been convicted for any offences withinthe past 10 years. He is the brother to Director, Ms Leong Yuet Mei.

MR LIM CHING CHOY (Executive Director), a Malaysian aged 44, joined the Company as an ExecutiveDirector and Chief Executive Officer in July 2002. He has extensive experience of more than 22 years in bankingand financial services of which 12 years was with the Arab-Malaysian Banking Group. He subsequently joinedBolton Finance Bhd as Chief Executive Officer in 1996, a post which he held for 5 years until 2001. In that yearhe was appointed as Chief Executive Director of Alliance Finance Berhad (previously Bolton Finance Bhd). Hehas attended the 5 Board Meetings convened during the financial year. There does not exist any conflict ofinterest between him and the Company nor is there any family relationship between him and any director ormajor shareholder of the Company. He has not been convicted for any offences within the past 10 years.

013Mah Sing Group Berhad Annual Report 2004

ProfileOfDirectors (cont’d)

MS LEONG YUET MEI (Non-independent Non-Executive Director), a Malaysian aged 51, is the eldersister to Dato’ Leong Hoy Kum, the Managing Director. She was appointed as director in November 1997 andalso serves as a member of the Nomination and Remuneration Committees. She is attached to RHB SecuritiesSdn Bhd as a Dealers Representative since 1991. Prior to that she was attached with KAF Discount Berhad asa Senior Accountant. She has attended all the 5 Board Meetings convened during the financial year. There doesnot exist any conflict of interest between her and the Company nor has she been convicted for any offenceswithin the past 10 years.

CAPTAIN (RTD) IZAHAM BIN ABD. RANI (Independent Non-Executive Director), a Malaysian aged43, joined the Company as a Director in April 2001. He also serves as a member of the Audit and NominationCommittees. He is a holder of Diploma in Public Administration (DPA) from UiTM and Diploma in TurfManagement Science from Ngee Ann Polytechnic in Singapore. He had served in the Malaysian Armed Forcesfor nearly 14 years before his early retirement in 1992. He had attended various career courses conductedinternally as well as in Australia and Singapore respectively. Previously acting as Business DevelopmentManager at Kukup Golf Resort in Pontian, Johor, he is now serving at Port Dickson Golf & Country Club as theGeneral Manager. He is also a Director in a leading multi national petroleum company in Sultanate of Oman, MBPetroleum Services Sdn Bhd. He has attended all the 5 Board Meetings and Audit Committee Meetingsconvened during the financial year. There does not exist any conflict of interest between him and the Companynor is there any family relationship between him and any director or major shareholder of the Company. He hasnot been convicted for any offences within the past 10 years.

MR LOH KOK LEONG (Independent Non-Executive Director), a Malaysian aged 41, was appointed as adirector and member of the Audit Committee in September 2002. An accountant by profession, he is a memberof both the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants. He hasserved a total of more than 15 years with international accounting firms, 3 years of which was as a partner ofDeloitte Touche Tohmatsu. He is currently a partner of a professional services firm, Lean Chin & Co. Prior to thathe was a Director of PKF (formerly known as Pannell Kerr Foster), a professional services firm. Apart from hisdirectorship in the Company, he is also a director of The Ayer Hitam Planting Syndicate Berhad. He has attendedthe 5 Board and Audit Committee Meetings convened during the financial year. There does not exist any conflictof interest between him and the Company nor is there any family relationship between him and any director ormajor shareholder of the Company. He has not been convicted for any offences within the past 10 years.


CorporateStructureof Mah Sing Group Berhad(Active operating subsidiaries)

PROPERTIES DIVISION

PROPERTY DEVELOPMENT100% Mah Sing Properties Sdn Bhd

100% Mestika Bistari Sdn Bhd

100% Intramewah Development Sdn Bhd

PROPERTY INVESTMENT100% Multi Synergy Group Sdn Bhd

PROPERTY MANAGEMENT100% Acacia Springs Management Sdn Bhd

100% Mestika Kenangan Sdn Bhd

100% Prima Peninsular Development Sdn Bhd

PLASTICS DIVISION

PLASTICS TRADING100% Mah Sing Enterprise Sdn Bhd

PLASTICS MANUFACTURING100% Mah Sing Plastics Industries Sdn Bhd

100% Kenwira Sdn Bhd

INVESTMENT HOLDING

100% Vital Routes Sdn Bhd

65% PT Mah Sing Indonesia


CorporateGovernanceStatement

The Board of Directors is committed to ensuring that thehighest standards of corporate governance are practisedthroughout the Group as a fundamental part of dischargingits responsibilities to protect and enhance shareholdersvalue and the financial performance of Mah Sing GroupBerhad. To this end, the Board fully supports therecommendations of the Malaysian Code on CorporateGovernance (“the Code”) and has taken appropriate stepsto ensure compliance.

Set out below is a statement of how the Group has appliedthe principles of the Code. The Board of Directors confirmsthat the Group has sought to comply with the best practicesin the Code throughout the financial year ended 31December 2004.

The attendance of each Director at the Board meetings is as tabulated below:

NAME OF DIRECTOR ATTENDANCE ATBOARD MEETINGS

JEN. (R) TAN SRI YAACOB BIN MAT ZAINChairman 5/5(Independent Non-Executive)

DATO' LEONG HOY KUM Managing Director 4/5(Non-Independent Executive)

LIM CHING CHOYExecutive Director 5/5(Non-Independent Executive)

LEONG YUET MEIDirector 5/5(Non-Independent Non-Executive)

CAPTAIN (RTD) IZAHAM BIN ABD. RANIDirector 5/5(Independent Non-Executive)

LOH KOK LEONG Director 5/5(Independent Non-Executive)

THE BOARD OF DIRECTORS

THE BOARDThe Board takes full responsibility for the performance ofthe Group and guides the Company on its short and longterm goals, providing advice and devising strategies onmanagement and business development issues.

The Board has delegated specific responsibilities to 3 sub-committees (Audit, Nomination and RemunerationCommittees). These Committees have the authority toexamine particular issues within its terms of reference andreport back to the Board with their recommendations. Theultimate responsibility for the final decision on all matters,however, lies with the entire Board.

The Board met 5 times during the year to monitor andcontrol the development of the Group. Besides Boardmeetings, the Board also exercises control on matters thatrequire its approval by way of circular resolutions andinformal meetings.


BOARD COMPOSITIONThe Board currently has 6 members of whom 3 areindependent non-executive Directors (including theChairman). A brief profile of each Director is presented onpages 012 and 013 of this Annual Report.

JEN. (R) TAN SRI YAACOB BIN MAT ZAINChairman (Independent Non-Executive)

DATO' LEONG HOY KUMManaging Director (Non-Independent Executive)

LIM CHING CHOYExecutive Director (Non-Independent Executive)

LEONG YUET MEIDirector (Non-Independent Non-Executive)

CAPTAIN (RTD) IZAHAM BIN ABD. RANIDirector (Independent Non-Executive)

LOH KOK LEONGDirector (Independent Non-Executive)

All Board members bring a wide range of businessexperience, expertise and professional judgement to bearon issues of strategy, performance, resources andstandards of conduct. Although all the Directors have equalresponsibility for the Group’s operations the role of theindependent non-executive Directors is particularlyimportant in ensuring that the strategies proposed by theexecutive management are fully discussed and examinedand take into account the long term interests, not only ofthe shareholders, but also of employees, customers andbusiness associates.

Any concerns relating to the Group may be conveyed to anyof the independent non-executive Directors.

There is a clear division of responsibilities between theCompany’s Chairman and Managing Director to ensure abalance of power and authority. The Management of theGroup’s businesses and implementation of policies andday-to-day running of the businesses are handled by theManaging Director and Executive Director. The non-executive members provide independent views tosafeguard the interests of shareholders.

SUPPLY OF INFORMATIONSufficient notice of Board meetings are given and specificmatters requiring Board decision are listed down in theAgenda.

During Board meetings the non-executive Directors arebriefed on changes in management and control structure ofthe Group, business outlook, major acquisition anddisposal of assets including investments and changes inrequirements of regulatory bodies.

All Directors have access to the advice and services of theCompany Secretaries.

The Directors, whether as a full Board or in their individualcapacity, may take independent professional advice, wherenecessary, in the furtherance of their duties and at theGroup’s expense.

APPOINTMENTS TO THE BOARD

NOMINATION COMMITTEEThe Nomination Committee which is empowered by theBoard comprises non-executive Directors, majority ofwhom are independent:



CAPTAIN (RTD) IZAHAM BIN ABD. RANIDirector (Independent Non-Executive)

This sub-committee did not hold any meetings during thefinancial year as there were no appointments to the Board.

CorporateGovernanceStatement (cont’d)


Terms of Reference of Nomination Committee:

• to identify and evaluate new appointees to the Board;• to make recommendations to the Board on all new Board

members and Board Committee appointments andresignations;

• to assist the Board in reviewing on an annual basis therequired mix of skills and experience of the Directors ofthe Board;

• to recommend the appropriate Board balance and size ofnon-executive participation; and

• to establish procedures and processes towards anannual assessment of the effectiveness of the Board as awhole and contribution of each individual Director andBoard Committee member.

All appointments are properly made and all relevantinformation that the Company requires from the newDirectors to meet statutory and regulatory obligations areobtained.

Directors' TrainingThe Group acknowledge the fact that continuous educationis vital for the Board to gain insight into the state of theeconomy, changing commercial risks, technologicaladvances in our core businesses, latest regulatoryrequirements and management strategies. Directors attendseminars and conferences to equip themselves with theknowledge to discharge their responsibilities and dutiesmore effectively.

Re-election of DirectorsIn accordance with the Company’s Articles of Association,at least one third of the Directors shall retire from officeevery year provided always that all Directors shall retirefrom office at least once in every 3 years but shall be eligiblefor re-election.

REMUNERATION COMMITTEECompositionThe majority of the Remuneration Committee consists ofnon-executive Directors. Executive Directors may attendthe meetings at the invitation of the RemunerationCommittee.

MembersThe members of the Remuneration Committee during theyear were:


DATO' LEONG HOY KUMManaging Director (Non-Independent Executive)


The 1 meeting during the financial year was attended by allmembers.

Terms of Reference of Remuneration Committee:

• to study and periodically review and implement policiesgoverning the remuneration of all executive Directors;and

• to make recommendations to the Board on all elementsof remuneration and terms of employment for executiveDirectors.

In the case of non-executive Directors, the determination oftheir remuneration is a matter for the Board as a whole andthe level of remuneration reflects the experience and levelof responsibilities undertaken by the particular non-executive Director concerned.

Individual Directors abstain from decisions in respect oftheir individual remuneration.

The Level and Make-up of RemunerationThe remuneration of executive Directors are so determinedto ensure that the Company attracts and retains theDirectors needed to run the Group successfully. In the caseof executive Directors, the remuneration are structured soas to link rewards to corporate and individual performance.Survey data on the remuneration practices of comparablecompanies are taken into consideration in determining theremuneration package.




Disclosure on Directors’ RemunerationThe number of Directors whose total remuneration falls into the following bands for the financial year ended 31December 2004:

Remuneration Number of Chairman/Number ofband (RM) Executive Directors Non-Executive Directors

Up to 50,000 350,001 to 100,000 1500,001 to 550,000 1550,001 to 600,000 1

Total 2 4

EPF Benefits- Total 2004 Total 2003Fees Salaries Bonus Contributions In-kind Remuneration Remuneration

(RM) (RM) (RM) (RM) (RM) (RM) (RM)

Executive Directors - 690,000 245,000 82,800 50,926 1,068,726 884,411

Chairman/Non-ExecutiveDirectors 138,600 - - - 10,100 148,700 114,500

Total 138,600 690,000 245,000 82,800 61,026 1,217,426 998,911

SHAREHOLDERS

Investor RelationsThe Group recognizes the importance of communicationand proper dissemination of information to its shareholders.In this respect, the executive Directors hold briefings withinstitutional investors, investment research analysts, fundmanagers, financiers and the media as and whenappropriate to explain the Group’s strategies, performanceand major developments. The annual reports,announcements through Bursa Malaysia Securities Berhad(“Bursa Securities”) and the company quarterly newslettersprovide valuable insight on the latest developments of theGroup.

For the latest information on the Group, shareholders andmembers of the public can access the Group’s website atwww.mahsing.com.my and the Bursa Securities websiteat www.bursamalaysia.com.my.

Annual General MeetingThe Annual General Meeting is the principal forum fordialogue with shareholders. Shareholders are encouragedto participate through questions on the progress andperformance of the Group. Where it is not appropriate toprovide immediate answers, the Chairman will undertake tofurnish the shareholder with a written answer after theAnnual General Meeting.

ACCOUNTABILITY AND AUDIT

Financial ReportingIn presenting the annual financial statements and quarterlyannouncements of unaudited consolidated results toshareholders, the Directors have taken reasonable steps toensure a balanced and understandable assessment of theGroup’s financial position and prospects. The Board isassisted by the Audit Committee in overseeing the Group’sfinancial reporting processes and the quality of its financialreporting.

Internal ControlThe Directors’ Statement on the Group’s Internal Control isset out on pages 026 and 027 of the Annual Report.

Relationship with AuditorsThe Company maintains a transparent relationship with theexternal auditors in seeking the professional advice andtowards ensuring compliance with accounting standards.The Head of Internal Audit Department was present at theAudit Committee meetings while the external auditors wereinvited to brief the Audit Committee and the Board onspecific issues at certain meetings.

The report by the Audit Committee for the financial yearunder review is set out on pages 022 to 025 of the AnnualReport.


StatementOfDirectors’Responsibility

The Group and Company’s financial statements have beendrawn up in accordance with the applicable approvedaccounting standards in Malaysia and the Companies Act,1965. The Board of Directors is responsible to ensure thatthe financial statements of the Group and Company give atrue and fair view of the state of affairs of the Group andCompany at the end of the financial year and of the resultsand cash flows of the Group and Company for the financialyear.

In preparing the financial statements, the Directors have:

• adopted appropriate accounting policies and appliedthem consistently;

• made judgements and estimates that are reasonable andprudent;

• ensured that all applicable accounting standards havebeen followed; and

• prepared financial statements on the going concernbasis as the Directors have reasonable expectation,having made enquiries, that the Group and Companyhave adequate resources to continue in operationalexistence for the foreseeable future.

The Directors have responsibility of ensuring that theCompany keeps accounting records which disclose withreasonable accuracy the financial position of the Group andCompany and which enable them to ensure that thefinancial statements comply with the Companies Act, 1965.

The Directors have overall responsibilities for taking suchsteps as are reasonably opened to them to safeguard theassets of the Group to prevent and detect fraud and otherirregularities.

ADDITIONAL COMPLIANCEINFORMATION

To comply with Bursa Securities Listing Requirements, thefollowing information is provided:

Share BuybacksDuring the financial year, there were no share buybacks bythe Company.

Options, Warrants or Convertible SecuritiesPursuant to a renounceable rights issue with warrants,48,375,800 free detachable warrants issued on the basis of3 free detachable warrants for every 5 rights sharessubscribed, were listed and quoted on 11 June 2004. Theexercise period of the warrants expires on 6 June 2009.Each warrant carries the entitlement to subscribe for 1 newshare at the exercise price of RM1.00 per share. Nowarrants were converted during the financial year ended 31December 2004.

No options or convertible securities were issued by theCompany during the financial year ended 31 December2004.

Imposition of Sanctions/PenaltiesThere were no sanctions and/or penalties imposed on theCompany and its subsidiaries, Directors or management bythe relevant government authorities.

Non-audit Fees paid/payable to External AuditorsFor the financial year ended 31 December 2004, non-auditfees payable to the external auditors amounted to RM5,000for the review of the Internal Control Statement.

Profit Estimates, Forecast or ProjectionThere is no significant variance between the results for thefinancial year and the unaudited results previouslyannounced. The Company did not make any releases onthe profit estimates, forecasts or projections for thefinancial year.

Profit GuaranteeNo profit guarantee was given by the Company in respectof the financial year.

Material ContractsThere were no material contracts by the Company and itssubsidiaries involving Directors’ and major shareholders’interests.

The existing Shareholders’ Mandate for the Companyand/or its subsidiaries to enter into recurrent related partytransactions of a revenue or trading nature which isnecessary for its day-to-day operations shall expire at theconclusion of the forthcoming Annual General Meeting andis subject to renewal by the shareholders at the said AnnualGeneral Meeting.

Revaluation of Landed PropertiesCertain leasehold land and buildings were revalued by theDirectors based on valuations carried out by independentprofessional valuers in 1992. The Directors have applied thetransitional provisions of Malaysian Accounting StandardsBoard Standard No. 15 – Property, plant and equipment,which allows those assets to be stated at their 1992valuation. Accordingly, these valuations have not beenupdated.

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MEMBERSHIP

The Audit Committee comprises 3 Directors, all of whomare independent non-executive Directors:

JEN (R) TAN SRI YAACOB BIN MAT ZAIN(Chairman, Independent Non-Executive Director)

CAPTAIN (RTD) IZAHAM BIN ABD. RANI (Independent Non-Executive Director)

LOH KOK LEONG(Independent Non-Executive Director)

The 5 meetings during the year were attended by allmembers.

TERMS OF REFERENCEOF THE AUDIT COMMITTEE

MEMBERSHIP

The Audit Committee shall by appointed by the Board fromamongst the Directors and shall consist of not less than 3members, majority of whom shall be independent Directors.At least 1 member of the Audit Committee must be amember of the Malaysian Institute of Accountants orpossesses such other qualifications and/or experience asapproved by Bursa Securities.

QUORUM

A quorum shall consist of 2 members and the majority ofthe members present must be Independent Directors.

RETIREMENT AND RESIGNATION

If a member of the Audit Committee resigns, retires or forany other reason ceases to be a member with the result thatthe number of members is reduced to below 3, the Board ofDirectors shall, within 3 months of that event, appoint suchnumber of new members as may be required to make upthe minimum number of 3 members.

REVIEW OF THE AUDIT COMMITTEE

The term of office and performance of the Audit Committeeand each of its members shall be reviewed by the Board ofDirectors at least once every 3 years to determine whetherthe Audit Committee and members have carried out theirduties in accordance with their terms of reference.

CHAIRMAN

The Chairman of the Audit Committee shall be anIndependent Director appointed by the Board. He shallreport on each meeting of the Committee to the Board.

SECRETARY

The Company Secretary shall be the Secretary of the AuditCommittee and shall be responsible, in conjunction with theChairman, for drawing up the agenda and circulating it,supported by explanatory documentation to the Committeemembers prior to each meeting.

AuditCommitteeReport


The Secretary shall also be responsible for keeping theminutes of meetings of the Committee and circulating themto the Committee members and to the other members ofthe Board.

FREQUENCY OF MEETINGS

Meetings shall be held preferably not less than 4 times ayear and will normally be attended by the Department Headcharged with the responsibility of the Group’s financialreporting and Head of Internal Audit. The presence ofexternal auditors will be requested if required and theexternal auditors may also request a meeting if theyconsider it necessary.

ATTENDANCE OF OTHER DIRECTORSAND EMPLOYEES

Attendance of other Directors and employees at anyparticular Audit Committee meeting will be at the invitationof the Audit Committee.

AUTHORITY

The Committee is authorized by the Board to investigateany activity within its terms of reference and shall haveunrestricted access to both the internal and externalauditors and to all employees of the Group. The Committeeis also authorized by the Board to obtain external legal orother independent professional advice as necessary.

The Committee is also authorized to convene meetings withthe external auditors without the presence of the executivemembers of the Committee, whenever deemed necessary.

DUTIES

The duties of the Audit Committee shall be:

Oversee all matters relating to external audit:

• discuss with the external auditors where necessary, thenature and scope of the audit and ensure co-ordinationof audit where more than 1 audit firm is involved;

• discuss problems and reservations arising from theinterim and final audits and any matter the auditors maywish to discuss (in the absence of management wherenecessary);

• review with the external auditors, their evaluation of thesystem of internal controls, their management letter andmanagement’s response; and

• consider the nomination & appointment of the externalauditors, the audit fee and any questions of resignationand dismissal.

Review the half yearly reports by the Chairman of theRisk Management Team in relation to the adequacy andintegrity of the Group’s internal control systems.

AuditCommitteeReport (cont’d)


Oversee all matters relating to Internal Audit:

• to review the adequacy, scope, functions and resourcesof the internal audit function and that it has thenecessary authority to carry out its work;

• to review the internal audit programme;• to ensure co-ordination of external audit with internal

audit;• to consider the major findings of internal audit

investigations and management’s response and ensurethat appropriate actions are taken on therecommendations of the internal audit function;

• to review any assessment of the performance of thestaff of the internal audit function;

• to approve any appointment or termination of seniorstaff members of the internal audit function; and

• keep itself informed of resignations of internal audit staffmembers and provide resigning staff member anopportunity to submit his reasons for resigning.

Review of financial statements

To review the quarterly and year-end financial statements ofthe Group before submission to the Board, focusingparticularly on:• any changes in accounting policies and practices;• significant issues arising from the audit;• going concern assumption;• compliance with approved accounting standards and

regulatory requirements; and• compliance with Bursa Securities listing and other legal

requirements.

Additional duties and responsibilities:

• to consider any related party transactions and conflictof interest situation that may arise within the companyor Group including any transaction, procedure or courseof conduct that raises questions of managementintegrity. They are also required to ensure that theDirectors report such transactions annually toshareholders via the annual report;

• where the Audit Committee is of the view that a matterreported by it to the Board has not been satisfactorilyresolved resulting in a breach of Bursa Securities ListingRequirements, the Committee must promptly reportsuch matter to Bursa Securities; and

• to carry out such other responsibilities, functions orassignments as may be defined jointly by the AuditCommittee and the Board from time to time.

SUMMARY OF ACTIVITIES OF THE AUDITCOMMITTEE FOR THE FINANCIAL YEAR

The Committee convened 5 meetings during the financialyear which were attended by all members. The Head ofFinance and Accounts and the Group Internal Auditorsattended all meetings. The Group’s external auditors werepresent at 2 meetings.

During the period, the Audit Committee carried out itsduties as set out in the terms of reference and discussedthe following issues:

• reviewed the extent of the Group’s compliance with theprovisions set out under the Malaysian Code onCorporate Governance for the purpose of preparing theCorporate Governance Statement and Statement onInternal Control pursuant to Bursa Securities ListingRequirements;




• reviewed the Risk Management Team report on the riskprofile of the Group and the adequacy and integrity ofinternal control systems to manage these risks;

• reviewed with the external auditors the audit plan and toensure co-ordination of audit of the various companieswithin the Group with different external auditors;

• reviewed with the external auditors the results of theaudit, the audit report and the management letter,including management’s response;

• considered and recommended to the Board forapproval of the audit fees payable to the externalauditors as disclosed in Note 8 to the financialstatements;

• reviewed the internal audit plan and internal auditreports and considered the major findings of internalaudit investigations and management’s response;

• reviewed and discussed the internal audit function, itsauthorities, resources and scope of works;

• reviewed related party transactions entered into by theGroup and the draft proposal to seek shareholders’mandate pursuant to Paragraph 10.09 of BursaSecurities Listing Requirements to authorize the Groupto enter into recurrent related party transaction of arevenue or trading nature; and

• reviewed the Quarterly Reports on the Company’sunaudited consolidated results and year end financialstatements before recommending them to the Board fortheir approval for announcement to Bursa Securities.

SUMMARY OF ACTIVITIESOF INTERNAL AUDIT DEPARTMENTFOR THE FINANCIAL YEAR

The Internal Audit department which reports to the AuditCommittee also assists the Board of Directors in monitoringand managing risks and internal controls. Their role is toundertake independent regular and systematic reviews ofthe systems of internal control so as to provide reasonableassurance that such systems continue to operatesatisfactorily and effectively. Internal audit plans areapproved by the Audit Committee and the scope of internalaudit covers the audits of all units and operations, includingsubsidiaries and associate companies. The internal auditsare on a risk-based approach processes by whichsignificant risks are identified, assessed and managed.Such audits also ensure instituted controls are appropriateand are effectively applied to achieve acceptable riskexposures.

During the financial year the Internal Audit Departmentconducted independent reviews and evaluated riskexposures relating the Group’s operations and informationsystems as follows:

• reliability of financial and operational information;• effectiveness and efficiency of operations;• safeguarding of assets; and • compliance with policies, procedures, laws and

regulations and contracts.

At the conclusion of the various audits carried out, theweaknesses together with the recommended correctiveaction to be taken were highlighted to the management.There were no material losses incurred during the currentfinancial year as a result of weaknesses in internal controland management continues to take measures to strengthenthe control environment. Subsequently, follow-up reviewswere conducted to ensure that corrective actions wereaccordingly implemented.


StatementOfInternalControl

INTRODUCTIONThe Malaysian Code on Corporate Governance requireslisted companies to maintain a sound system of internalcontrol to safeguard shareholders’ investments and theGroup’s assets. Bursa Securities Listing Requirementsrequire Directors of listed companies to include a statementin annual reports on the state of their internal controls. TheBursa Securities Statement on Internal Control: Guidancefor Directors of Public Listed Companies (“Bursa SecuritiesGuidance”) provides guidance for compliance with theserequirements. Set out below is the Board’s Internal ControlStatement, which has been prepared in accordance withthe Guidance.

BOARD RESPONSIBILITYThe Board of Directors recognizes the importance of soundinternal controls and risk management practices to goodcorporate governance. The Board affirms its overallresponsibility for the Group’s systems of internal controlsand risk management and for reviewing the adequacy andintegrity of those systems. It should be noted, however, thatsuch systems are designed to manage rather than eliminatethe risk of failure to achieve business objectives. Inaddition, it should be noted that any system could provideonly reasonable and not absolute assurance againstmaterial misstatement or loss. The system of internalcontrol covers, inter alia, financial, organizational,operational and compliance controls.

The Board confirms that the Group has in place an on-goingprocess for identifying, evaluating, monitoring andmanaging the significant risks affecting the achievement ofits business objectives for the financial year under reviewand up to the date of approval of the annual report andfinancial statements. This process is regularly reviewed bythe Board and is in accordance with Bursa SecuritiesGuidance.

ENTERPRISE RISK MANAGEMENTFRAMEWORKThe Board is aware that a sound system of internal controlshould be embedded in the operations of the Group andforms part of its culture. In order to bring greater awarenessof employees towards risk identification, evaluation, controland monitoring, it has since 2002, set up an Enterprise RiskManagement Framework for the Group which covers thefollowing:

• risk management awareness and training courses wereconducted for senior and line management of the Groupto inculcate understanding of potential and current risksfaced by the various operating companies within theGroup;

• risk management workshops were conducted toidentify, assess and prioritize the risks faced by theGroup based on likelihood of occurrence andmagnitude of impact and also to assist management inidentifying procedures or steps taken to manage orcontrol these risks;

• a Continuous Risk Monitoring System was implementedto ensure the continuous management and monitoringof risks of the Group;

• the Risk Management Team (“RMT”) for each businessunit is charged with the responsibilities of continuouslyreviewing and maintaining risk profiles identified.Chaired by the Chief Executive Officer, the RMTcomprises management staff of plastics and propertydivisions and Corporate Office; and

• the RMT will meet every half yearly to review riskmanagement and control processes. Its review coversmatters such as responses to significant risks identified,output from monitoring process and changes made tothe internal control systems.

The Audit Committee has been assigned the duty ofreviewing and monitoring the effectiveness of the Group’ssystem of internal control. It receives reports from theinternal auditor and is updated on the risk profiles on a half-yearly basis by the Chairman of the RMT. The AuditCommittee then reports to the Board on significant changesin the business and the external environment which affectkey risks.


StatementOfInternalControl (cont’d)

CONTROL SELF-ASSESSMENTCentral to the Group’s Internal Control and RiskManagement System is its Control Self – Assessmentprocess. Risk assessment and evaluation takes place as anintegral part of the annual strategic business planningcycle. The risks identified by the RMT of each business unitare summarized in a risk profile together with the controlsand processes for managing them and the means forassuring the Audit Committee that the processes areeffective. Key management is nominated in each businessunit to prepare action plans, with implementation time-scales to address any risk and control issues. Independentcompliance reviews are carried out by the internal auditoron a continuous basis to ensure that the controls formanaging the risks are functioning effectively.

The Group’s Corporate Office also considers the risks to theGroup’s strategic objectives, which are not addressed bythe individual business units.

The Chairman of the RMT has reported to the AuditCommittee on compliance with the Group policies andprocedures as well as changes to the respective riskprofiles. These reports were reviewed, summarized andreported to the Board by the Audit Committee. The Board,as part of the annual strategic business planning review,considered and approved the Group’s risk profile.

CONTROL AND MONITORINGPROCESSESThe other key elements of the Group’s internal controlsystem are:

• an operational structure with defined lines ofresponsibility and delegation of authority is in place. Aprocess of hierarchical reporting has been establishedwhich provides for a documented and auditable trail ofaccountability;

• internal policies and procedures are in place and areregularly updated to reflect changing risks or resolveoperational deficiencies. Instances of non-compliancewith such policies and procedures are reported thereonby its internal audit function to the Board via the AuditCommittee;

• key functions such as finance, tax, treasury, insuranceand legal matters are centralized at head office;

• detailed budgeting process established requiring allbusiness units to prepare budget and business plan onan annual basis. The Board reviews and approves theannual budget;

• effective reporting systems which expose significantvariances against budget and plan are in place tomonitor performance. Key variances are followed up bythe management and management action taken, wherenecessary and reported to senior management on amonthly basis. The Group Managing Director and ChiefExecutive Officer meet on a monthly basis with alldivisional heads to consider the Group’s financialperformance, business developments, managementand corporate issues;

• regular visits to operating units by members of theBoard and senior management;

• an on-going training and educational programme forDirectors and staff relevant in assessing the adequacyand integrity of the company’s risks and controlprocess;

• the professionalism and competence of staff is beingcontinually upgraded through training and regularperformance evaluation; and

• internal audit independently reviews the risksidentification procedures and control processesimplemented by the management and reports to theAudit Committee every half yearly. Internal audit alsoreviews the adequacy and integrity of the system ofinternal control in the key activities of Group’sbusinesses. The internal audit function adopts a risk-based approach and prepares its audit strategy andplan based on the risk profiles of the major businessunits of the Group.

WEAKNESSES IN INTERNAL CONTROLSTHAT RESULT IN MATERIAL LOSSESA number of minor internal control weaknesses wereidentified during the period, all of which have been, or arebeing addressed. None of the weaknesses have resulted inany material losses, contingencies or uncertainties thatwould require disclosure in the Group’s annual report.Management continues to take measures to strengthen thecontrol environment.

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ON BEHALF OF THE BOARD OF DIRECTORS, I AM PLEASED TOPRESENT THE ANNUAL REPORT AND FINANCIAL STATEMENTS OFMAH SING GROUP BERHAD FOR THE FINANCIAL YEAR ENDED 31DECEMBER 2004.

Chairman’sStatement

OVERVIEWMalaysia’s economy grew 7.1% last year, the strongest rate since 2000, according to the latesteconomic performance report by Bank Negara Malaysia. Both the services and manufacturingsectors continued to be the main drivers of growth last year. Residential and non-residentialproperty sector remained strong, underpinned by favourable financing environment of lowinterest rates and improving consumer sentiments.

FINANCIAL RESULTSFor the financial year ended 31 December 2004, the Group reported a 68% year-on-year increasein revenue to RM356.5 million and an 83% year-on-year increase in profit before tax from RM21.2million to RM38.8 million. Net profit was up 70% from RM14.7 million for the financial year ended2003 to RM25.1 million for the current year under review on the back of higher revenue. The surgein both revenue and earnings was contributed largely by the property development division whichsaw more projects coming onstream.

PROPERTY DEVELOPMENTThe property development division contributed 73% and 90% of the Group revenue and profitbefore tax respectively for the financial year under review. With 3 ongoing projects of the high-end Damansara Legenda in Petaling Jaya and Austin Perdana and Sri Pulai Perdana in Johorcompared to only Sri Pulai Perdana the previous financial year, revenue from this division jumped92% from RM136.2 million for the financial year ended 2003 to RM260.9 million for the financialyear ended 2004. Higher revenue increased profit before tax for this division by 64% fromRM21.2 million for financial year ended 2003 to RM34.8 million for the financial year ended 2004.


Chairman’sStatement (cont’d)

For the year under review Sri Pulai Perdana in Johorcontributed 58% of the property development revenuewhile the new projects of Austin Perdana in Johor Bahruand Damansara Legenda in Petaling Jaya each contributedalmost equally to the remaining 42% of propertydevelopment revenue.

Sri Pulai Perdana’s contribution to profit before tax wasabout 55%, followed by Austin Perdana and DamansaraLegenda with 27% and 18% respectively.

PLASTICSPlastics division registered a 26% year-on-year increase inrevenue from RM75.8 million for financial year ended 2003to RM95.3 million for the current year under review with theincrease due to the 141% jump in revenue from ourIndonesian operations. Sales was boosted by increasedorders of ultra large automotive parts from Indonesia’slargest motor vehicle assembler, PT ASTRA Internasional.

This division posted a 90% increase in profit before taxfrom RM2.9 million for financial year ended 2003 to RM5.5million for financial year ended 2004 with the increasecoming from our Indonesian set up.

DIVIDENDSThe Board recommends a first and final gross dividend of6% less 28% income taxation in respect of the financialyear ended 31 December 2004.

CORPORATE DEVELOPMENTSThe corporate exercise involving a rights and bonus issuetogether with free detachable warrants completed in June2004 enlarged the Company’s paid up capital from RM48.4million to RM145.1 million. Upon full exercise of the 48.4million warrants by June 2009 and the employees shareoptions, the eventual paid up capital will be enlarged toRM208 million.

In June 2004, Intramewah Development Sdn. Bhd., a whollyowned subsidiary, acquired a parcel of freeholddevelopment land measuring approximately 314.7 acres inKapar, Klang for a total consideration of RM104.7 million.

On 7 July 2004, the Company’s listing status wastransferred from property sector of the Second Board to theMain Board of Bursa Securities upon completion of itsrights and bonus issue exercise.


PROJECT UPDATES

SRI PULAI PERDANA - SKUDAI, JOHOR1st launched in 2001, the township development of Sri Pulai Perdana inSkudai, Johor comprising some 4,300 units of mixed residentialdevelopment has reached maturity. To-date, 72% of the planned units hasbeen launched of which 90% has been sold. A total of 2,243 units havebeen completed to-date.

AUSTIN PERDANA - JOHOR BAHRUThis second township development of Austin Perdana in Johor with about2,100 mixed residential development is strategically located in MountAustin, Johor Bahru. Officially launched in mid 2004, it has since registereda take-up rate of 60% of the 1,600 units launched to-date.

DAMANSARA LEGENDA - PETALING JAYAFor the well-heeled seeking resort style living, the latest luxurydevelopment by Mah Sing in Damansara Legenda offers the ultimate in fineliving. Its exclusive development of 104 units of 3-storey semi-detachedbungalows and 12 units of 3-storey detached bungalows launched in mid2004 has enjoyed a good take-up rate.

AMAN PERDANA - KLANGWith semi-detached and detached bungalows accounting for only 3.5% ofthe properties developed in Klang, Mah Sing was quick to capitalize on thepotential demand. Since this 315-acre low density development wasunveiled in October last year, it has taken luxury lifestyle living to a whole



new level by making semi-detached anddetached bungalow ownership within the reachof many. Featuring some 3,200 mixed residentialand commercial units, 56% would comprisesemi-detached bungalows and detachedbungalows with gated and guarded security forsome precincts. It is located within the fast-developing Meru-Shah Alam growth corridorand is accessible from the North Klang ValleyExpressway or Federal Highway via the ShapaduHighway, Jalan Meru. Adjoining Bandar SetiaAlam, its accessibility will be great enhanced bythe NKVE-Jalan Meru Link whose completion isexpected in early 2006. Launched in March2005, sales to-date stands at RM149 million.

A GOOD YEAR AHEAD

PROPERTY While growth is expected to moderate from7.1% in 2004 to 5.4% in 2005 according to theMalaysian Institute of Economic Research, theeconomy is forecast to remain firm next year intandem with improving consumer sentimentsand favourable mortgage rates. Buying interestwill remain strong for the landed residentialproperty subsector as we are currently riding theuptrend in the property cycle.

With some RM1.1 billion in future grossdevelopment value and RM0.3 billion in unbilledsales from its 2 property projects in Klang Valleyand another 2 in Johor, Mah Sing is set for animpressive earnings growth path next year. MahSing’s strength lies in its quick projectturnaround time from land acquisitions tolaunches. It also prides itself in speedy projectimplementation and on-time delivery. Productdevelopment and market research sets it apartfrom its competitors. With strategically locatedland bank and innovative trend-setting productsand development concepts, contributions areexpected to surge.



Investors are still eyeing the niche housing which can commandhigher appreciation. The growing affluence and evolvinglifestyle of the people lead to the growth of a more discerningclass of buyers and the increase in their standard of livingresults in a steady growth in the upmarket property segment.Leveraging on this opportunity, Mah Sing will focus on the nichehousing development which can command higher profitmargins and yet secure marketability, especially in affluentgrowth areas such as Klang Valley and the up-and-comingKlang Valley Northern Development Corridor.

To differentiate ourselves from the other players in the industry,Mah Sing is paying special emphasis on effective brandbuilding. In building up a strong brand name Mah Sing isfocusing on brand creation, brand positioning and brandmanagement to stay ahead of competition. Mah Sing isleveraging on its brand which represents quality, prestige,innovation and service excellence to create a pricing premiumand a following of loyal supporters.

It is Mah Sing’s vision to be branded as a premier lifestyledeveloper of choice, synonymous with building quality homes.Its projects will continue to bear Mah Sing’s distinctivehallmarks of good addresses, quality finishing, functionallayouts and creative designs, complete with extensivelandscaped parks and grand boutique entrances. Mah Sing’sstrategy of targeting niche market segments, including buildingpremier homes within gated communities in well sought-afteraddresses and affordably priced homes in Klang Valley andJohor stands it in good stead to tap a broad section of the vastlanded residential property market.

Mah Sing is constantly on the look out for more strategic landin Klang Valley and Johor for future development of nicheproducts and lifestyle townships. It currently has some 500acres of undeveloped land in prime locations which is enoughto last for the next 3-4 years.

Mah Sing is unique in that it adopts an unconventional businessmodel of locking in land at the most appropriate stage of theproperty cycle for quick launches in multiple strategic locationsand turning around the projects very quickly to ensure highreturns on equity and to maintain healthy cashflows. This way,we are able to ride the property cycle and manage cyclical risksmore effectively.




PLASTICSWith the successful implementation of Phase 2 of the fully integrated

Enterprise Resource Planning System for our Malaysian operations,

production floor control from material planning to production planning and

machine utilisation is now being reported on a timely basis and being

monitored closely with the objective of enhancing productivity. Efforts are

being made to develop new line of proprietary products to complement the

existing range.

Ultra large automotive parts continue to be the mainstay of our Indonesian

operations which has been operating at optimum capacity to cope with

increasing orders from automotive assemblers.


INVESTOR RELATIONSAs part of our efforts of enhancing investor relations and keeping the investment communityupdated with details of performance and key developments of the company, briefings forinstitutional investors, fund managers, analysts and media are held on a regular basis. Sitevisits have been organized for them to showcase our latest projects. Investor road shows havebeen conducted both locally and overseas in a bid to establish proactive and timelycommunication linkages with institutional investor groups. Our Company website has alsobeen revamped to project a more corporate image featuring latest property launches and toimprove public awareness of our company.

ACKNOWLEDGEMENTSOn behalf of the Board of Directors, I wish to express our sincere gratitude and appreciationfor the support of our valued customers, business associates, bankers, governmentauthorities and shareholders and we look forward to their continued support in the future. Toall our management and staff, we thank you for your untiring efforts in helping the Companyto achieve its sterling performance for the financial year under review. My sincere thanks andappreciation also goes out to the Board members for their counsel and guidance during thepast year.

JEN. (R) TAN SRI YAACOB BIN MAT ZAINChairman


038 Directors’ Report

043 Report of the Auditors

044 Income Statements

045 Balance Sheets

046 Consolidated Statement of Changes In Equity

047 Company Statement of Changes in Equity

048 Cash Flow Statements

049 Notes to the Financial Statements

103 Statement by Directors

103 Statutory Declaration by the Officer PrimarilyResponsible for the Financial Managementof the Company

Financial StatementsContents of the

Mah Sing Group Berhad ANNUAL REPORT 2004


The Directors are pleased to submit their report and the audited financial statements of the Group and of the Company for thefinancial year ended 31 December 2004.

PRINCIPAL ACTIVITIESThe principal activities of the Company are that of investment holding and provision of management services to subsidiarycompanies in the Group. The principal activities of the subsidiary companies are set out in Note 23 to the financial statements.There have been no significant changes in the nature of these activities during the financial year.

FINANCIAL RESULTS

Group CompanyRM RM

Profit from ordinary activities before taxation 38,840,554 11,526,591 Taxation (13,118,849) (3,001,128)

Profit from ordinary activities after taxation 25,721,705 8,525,463 Minority interests (659,901) 0

Net profit attributable to shareholders 25,061,804 8,525,463

In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year were notsubstantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDSOn 26 July 2004, the Company paid a first and final gross dividend of 4 sen per share, less income tax, amounting toRM1,393,223 in respect of the financial year ended 31 December 2003 as approved by the members at the last Annual GeneralMeeting.

The directors have proposed a first and final gross dividend in respect of the financial year ended 31 December 2004 of 6 senper share, less income tax, amounting to RM6,269,659 on 145,127,400 ordinary shares as at 31 December 2004 and 3,600 newordinary shares exercised under Warrants as at the date of this report as disclosed in Note 15(b). The proposed first and finalgross dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting and has not been includedas a liability in the financial statements.

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

Directors’Reportfor the financial year ended 31 December 2004


SHARE CAPITALAs approved by the shareholders at the Extraordinary General Meeting held on 8 March, 2004, the Company increased itsauthorised ordinary share capital from RM100,000,000 to RM500,000,000 by way of creation of additional 400,000,000 ordinaryshares of RM1.00 each.

The Company also increased its issued and paid-up ordinary share capital from RM43,978,000 to RM145,127,400 by way of:

(i) issuance of 4,397,800 ordinary shares of RM1.00 each through a private placement at an issue price of RM1.38 per sharefor cash, for additional working capital purposes. The resulting share premium arising amounting to RM1,671,164 hasbeen credited to the share premium account;

(ii) issuance of renounceable rights issue of 80,626,333 new ordinary shares of RM1.00 each at par (rights shares) togetherwith 48,375,800 free detachable warrants on the basis of 5 new ordinary shares together with 3 free detachable warrantsfor every 3 existing shares held as at 13 April 2004 (Rights Issue with Warrants), which rights shares are also entitled tothe bonus issue of 16,125,267 bonus shares on the basis of 1 bonus share for every 5 rights shares subscribed for thepurposes of repayment of bank borrowings and increase of working capital as shown below; and

(iii) issuance of bonus issue of 16,125,267 new ordinary shares of RM1.00 each in conjunction with renounceable rights issueon the basis of 1 new ordinary share of RM1.00 each for every 5 rights shares subscribed by way of utilisation of sharepremium.

The new ordinary shares issued rank pari passu in all respects with the then existing ordinary shares of the Company.

In accordance with the conditions set by Securities Commission of Malaysia ("SC"), the status of the utilisation of proceedsraised from the rights issue as at the date of this report is as follows:

Approved for Utilised as at Balance yet

utilisation by SC 06.04.2005 to be utilised

RM RM RM

Working capital 39,126,333 38,842,411 283,922Repayment of bank borrowings 40,000,000 39,820,000 180,000Incidental expenses 1,500,000 1,047,671 452,329

80,626,333 79,710,082 916,251

WARRANTSThe Warrants 2004/2009 were constituted under the Deed Poll dated 2 April 2004.

The salient features of the Warrants 2004/2009 are as follows:

(i) The Warrants are exercisable into new shares at an exercise price of RM1.00 per ordinary share;

(ii) The issue date for the Warrants is on 7 June 2004 and the expiry date is on 6 June 2009;

(iii) The holder of the Warrants shall pay cash for the exercise price of RM1.00 per Warrant when subscribing for the newordinary shares pursuant to the Rights Issue with Warrants;

Directors’Report (cont’d)for the financial year ended 31 December 2004


WARRANTS (CONT’D)(iv) The Warrant holders are not entitled to participate in any distribution and/or offer of further securities in the Company until

and unless such holders exercise the rights under the Warrants for new ordinary shares;

(v) The adjustments to the exercise price and the number of Warrants in the event of alteration to the share capital of theCompany are set out in the Deed Poll; and

(vi) The new ordinary shares to be issued upon exercise of the Warrants shall, upon allotment and issue, rank pari passu in allrespects with the then existing ordinary shares, including the entitlement to dividends, rights, allotments or otherdistributions, except that they will not be entitled to the rights, allotments or other distributions, declared by the Companywhich entitlement thereof precedes the allotment date of the new ordinary shares allotted pursuant to the exercise of theWarrants.

As at the balance sheet date, no Warrants have been exercised by the Warrant holders.

SHARE OPTIONSThe Company implemented an Employees' Share Option Scheme ("ESOS") which is governed by the ESOS By-Laws and wasapproved by the shareholders at the Extraordinary General Meeting held on 8 March 2004.

The salient features of the ESOS are as follows:(i) the total number of new Company shares to be offered pursuant to the ESOS shall be subject to a maximum of 10% of

the issued and paid-up share capital at the time of the offer;

(ii) only eligible employees and Executive Directors of the Company and its subsidiary companies (provided they are notdormant) will be eligible to participate in the ESOS. An ESOS committee comprising members of the Board will determinethe share allocation criteria. A set of criteria on eligibility and allocation will be clearly specified and all eligible employeeswill be made aware of it;

(iii) The duration of the ESOS will be for five (5) years and may, at the option committee's discretion, be extended or renewed(as the case may be), subject to an aggregate duration of ten (10) years;

(iv) The Company shall be allowed to terminate the ESOS in mid-stream by fulfilling the following conditions:

(a) approval from the SC;

(b) consent from the shareholders at a general meeting; and

(c) written consent of all options holders who have yet to exercise their options, either in part or in whole; and

(v) In the event that a share buyback exercise of the Company results in the number of options that have been offered underthe Scheme exceeding 10% of the issued capital of the Company, there shall be no granting of additional options at anypoint in time after the share buyback, unless the number of options that have been granted under the Scheme falls below10% of the issued capital of the Company.

No options have been granted under ESOS by the Company to any parties during the financial year to take up unissued sharesof the Company.



DIRECTORSThe Directors who have held office during the financial year since the date of the last report are as follows:

JEN. (R) TAN SRI YAACOB BIN MAT ZAIN

DATO' LEONG HOY KUM

LIM CHING CHOY

LEONG YUET MEI


LOH KOK LEONG

In accordance with Article 102 of the Company's Articles of Association, Jen. (R) Tan Sri Yaacob bin Mat Zain and Ms LeongYuet Mei retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

DIRECTORS' INTERESTSAccording to the Register of Directors’ Shareholdings, particulars of interests of Directors who held office at the end of thefinancial year in the shares and warrants of the Company are as follows:

Number of ordinary shares of RM1.00 eachBonus &

Direct interest in the Company 1.1.2004 Rights Issues Sold 31.12.2004

Dato' Leong Hoy Kum 20,028,683 42,686,161 0 62,714,844

Number of warrantsDirect interest in the Company 1.1.2004 Acquired Sold 31.12.2004

Dato' Leong Hoy Kum 0 21,343,080 0 21,343,080

By virtue of Dato' Leong Hoy Kum having an interest of more than 15% of the shares in the Company, he is deemed interestedin the shares of all the subsidiary companies to the extent the Company has an interest.

None of the other Directors in office at the end of the financial year held any interest in the shares in the Company and its relatedcorporations during the financial year.

DIRECTORS' BENEFITSSince the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than thefees, other emoluments and benefits-in-kind as shown in Note 10 to the financial statements) by reason of a contract made bythe Company or by a related corporation with the Director or with a firm of which he is a member or with a company in whichhe has a substantial financial interest except for those benefits which may be deemed to have arisen by virtue of thosetransactions entered into in the ordinary course of business by the Company and its subsidiary companies with the companiesin which the Directors are deemed to have substantial financial interests. The transactions are disclosed in Note 39 to thefinancial statements.

Neither during nor at the end of the financial year was the Company or any of its related corporations a party to any arrangementwhose object was to enable the Directors to acquire benefits through the acquisition of shares in, or debentures of, theCompany or any other body corporate.



OTHER STATUTORY INFORMATIONBefore the income statements and balance sheets of the Group and of the Company were made out, the Directors tookreasonable steps:

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

(b) to ensure that any current assets, other than debts, which were unlikely to realise their book values in the ordinary courseof business had been written down to their estimated realisable values.

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

(a) which would render the amounts written off as bad debts or the amount of allowance for doubtful debts in the financialstatements of the Group and of the Company inadequate to any substantial material extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Companymisleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and ofthe Company misleading or inappropriate; or

(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financialstatements of the Group and of the Company misleading.

At the date of this report, there does not exist:

(a) any charge on the assets of the Group and of the Company which secures the liability of any other person; or

(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve monthsafter the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Groupand of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval betweenthe end of the financial year and the date of this report which is likely to affect substantially the results of operations of theGroup and of the Company for the succeeding financial year other than those disclosed in Note 42 to the financial statements.

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

Signed on behalf of the Board in accordance with a resolution of the Board of Directors dated 6 April 2005.

JEN. (R) TAN SRI YAACOB BIN MAT ZAIN DATO' LEONG HOY KUMChairman Managing Director

Kuala Lumpur



ReportOfTheAuditorsto the members of Mah Sing Group Berhad

We have audited the accompanying balance sheets as of 31 December 2004 and the related statements of income, cash flowsand changes in equity for the year then ended. These financial statements are the responsibility of the Company's Directors.It is our responsibility to form an independent opinion, based on our audit, on these financial statements and to report ouropinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do notassume responsibility towards any other person for the contents of this report.

We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we planand 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. Anaudit also includes assessing the accounting principles used and significant estimates made by the Directors, as well asevaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the abovementioned financial statements are 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 state of affairs of the Group and of the Company as at 31 December 2004 and of the results and cash flows ofthe Group and of the Company for the year ended on that date; 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 the subsidiarycompanies 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 auditors' reports of the subsidiary companies, of which we have not acted asauditors, as mentioned under Note 23 to the Financial Statements, being financial statements that have been included in theconsolidated financial statements.

We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company arein form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements andwe have received satisfactory information and explanations as required by us for these purposes.

The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and did notinclude any comment made under Subsection (3) of Section 174 of the Act.

DELOITTE KASSIMCHAN HIEW KIM TIAMAF:0080 No.1717/08/05(J)Chartered Accountants Partner

Kuala Lumpur6 April 2005


IncomeStatementsfor the financial year ended 31 December 2004

Group Company Note 2004 2003 2004 2003

RM RM RM RM

Revenue 5 356,455,162 212,026,794 14,866,340 7,459,252Cost of sales 6 (282,947,958) (168,577,330) 0 0

Gross profit 73,507,204 43,449,464 14,866,340 7,459,252Other operating income 7 4,232,243 5,102,541 17 0Selling and distribution costs (2,933,452) (1,783,888) 0 0Administrative expenses (30,702,947) (18,669,930) (2,760,274) (2,880,452)Other operating expenses 7 (368,733) (1,722,130) (60,096) (974,410)

Profit from operations 8 43,734,315 26,376,057 12,045,987 3,604,390 Finance costs 11 (4,891,813) (5,134,319) (519,396) (599,900)Share of results in

associated companies (1,948) (71,278) 0 0

Profit from ordinary activitiesbefore taxation 38,840,554 21,170,460 11,526,591 3,004,490

Taxation 12 (13,118,849) (6,213,929) (3,001,128) (1,430,000)

Profit from ordinary activitiesafter taxation 25,721,705 14,956,531 8,525,463 1,574,490

Minority interests (659,901) (254,036) 0 0

Net profit attributableto shareholders 25,061,804 14,702,495 8,525,463 1,574,490

Earnings per ordinary share (sen)- Basic 13 19.22 16.55- Fully diluted 13 18.24 16.55

Dividend per share (sen)- Proposed 14 6 4 6 4

The above income statements are to be read in conjunction with the notes to the financial statements on pages 049 to 102.


BalanceSheetsas at 31 December 2004


RM RM RM RM

Capital and reservesShare capital 15 145,127,400 43,978,000 145,127,400 43,978,000Reserves 16 68,995,144 61,422,053 3,962,378 12,925,628

214,122,544 105,400,053 149,089,778 56,903,628Minority interest 3,125,365 2,465,464 0 0

Long-term liabilitiesTerm loans 17 138,720,118 18,113,008 0 0Provision for liability 18 0 75,771 0 75,771Long-term and deferred payables 19 5,978,743 22,172,219 0 0Deferred tax liabilities 20 1,002,000 1,744,667 3,500,000 1,400,000

145,700,861 42,105,665 3,500,000 1,475,771

362,948,770 149,971,182 152,589,778 58,379,399

AssetsProperty, plant and equipment 21 65,274,425 67,036,878 137,022 137,621Intangible assets 22 44,898 53,303 0 0Subsidiary companies 23 0 0 55,826,459 55,468,002Associated companies 24 25,524 27,472 25,524 27,472Investments 25 1,080 1,082 0 2Deferred tax asset 20 0 809,959 0 0

65,345,927 67,928,694 55,989,005 55,633,097

Current assetsProperty development cost 26 319,015,282 193,143,023 0 0Inventories 27 12,495,510 8,191,300 0 0Trade and other receivables 28 119,350,979 69,130,590 107,478,355 17,608,087Deposits, cash and bank balances 29 36,028,447 11,717,566 2,734,226 41,851

486,890,218 282,182,479 110,212,581 17,649,938Current liabilitiesTrade and other payables 30 124,402,756 139,727,732 1,695,155 3,193,476Provision for liability 18 506,130 430,359 506,130 430,359Term loans - current portion 17 23,573,942 10,116,592 0 0Short-term borrowings 31 31,262,322 36,923,881 11,000,000 8,500,000Bank overdrafts 32 849,507 6,951,238 410,523 2,779,801Taxation 8,692,718 5,990,189 0 0

189,287,375 200,139,991 13,611,808 14,903,636

Net current assets 297,602,843 82,042,488 96,600,773 2,746,302

362,948,770 149,971,182 152,589,778 58,379,399

The above balance sheets are to be read in conjunction with the notes to the financial statements on pages 049 to 102.


ConsolidatedStatementOfChangesInEquityfor the financial year ended 31 December 2004

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CompanyStatementOfChangesInEquityfor the financial year ended 31 December 2004

Issued and fully paid ordinary Non-shares of RM1 each distributable

Number Nominal Share AccumulatedNote of shares value premium losses Total

RM RM RM RM

At 1 January 2004 43,978,000 43,978,000 47,199,112 (34,273,484) 56,903,628Private placement 4,397,800 4,397,800 1,671,164 0 6,068,964Rights issue 80,626,333 80,626,333 0 0 80,626,333Bonus issue 16,125,267 16,125,267 (16,125,267) 0 0

145,127,400 145,127,400 32,745,009 (34,273,484) 143,598,925Utilisation of rights issue 0 (1,641,387) 0 (1,641,387)Net profit for the financial year 16 0 0 8,525,463 8,525,463Dividend paid in respect

of financial year 2003 14 0 0 (1,393,223) (1,393,223)

At 31 December 2004 145,127,400 145,127,400 31,103,622 (27,141,244) 149,089,778

At 1 January 2003 43,978,000 43,978,000 47,199,112 (35,531,332) 55,645,780

Net profit for the financial year 0 0 1,574,490 1,574,490

Dividend paid in respectof financial year 2002 0 0 (316,642) (316,642)

At 31 December 2003 43,978,000 43,978,000 47,199,112 (34,273,484) 56,903,628

The above company statement of changes in equity is to be read in conjunction with the notes to the financial statements onpages 049 to 102.



RM RM RM RM

Cash (used in) / generated from operations : 33 (151,882,004) 15,475,758 (703,904) (943,975)

Interest received 667,425 127,318 354,340 0Interest paid (10,137,278) (7,067,715) (519,396) (599,900)Taxation paid (10,349,028) (4,774,502) 0 0

Net cash (used in) / from operating activities (171,700,885) 3,760,859 (868,960) (1,543,875)

Cash flows from / (used in) investing activities:

Investment in subsidiary companies 0 (2) (5) (250,000)Proceeds from disposal of subsidiary company 2 0 2 0Net advances (to) / from subsidiary companies 0 0 (80,212,843) 1,505,951 Net advances from associated companies 75 2,156 75 2,156 Interest received from deposits

with licensed banks 642,859 85,515 0 0Purchase of licence fee 0 (1,794) 0 0Purchase of property, plant and equipment 34 (9,980,004) (4,843,704) (17,303) (53,498)Proceeds from disposal

of property, plant and equipment 1,056,586 12,963,991 0 0

Net cash (used in) / from investing activities (8,280,482) 8,206,162 (80,230,074) 1,204,609

Cash flows from financing activities :

Proceeds from short-term borrowings 37,603,715 1,073,707 2,500,000 0Repayment of short-term borrowings (43,239,521) (2,589,000) 0 0Proceeds from term loans 181,122,193 8,386,655 0 0Dividend paid (1,393,223) (316,642) (1,393,223) (316,642)Repayment of term loans (46,588,927) (23,577,466) 0 0Proceeds from private placement

and rights issue 85,053,910 0 85,053,910 0 (Repayment) / addition of hire purchase

and finance lease liabilities (2,185,036) 4,499,529 0 0

Net cash from / (used in) financing activities 210,373,111 (12,523,217) 86,160,687 (316,642)

Net increase/(decrease) in cash and cash equivalents

during the financial year 30,391,744 (556,196) 5,061,653 (655,908)

Cash and cash equivalentsat beginning of the financial year 4,686,328 5,258,177 (2,737,950) (2,082,042)

Currency translation differences 35,868 (15,653) 0 0

Cash and cash equivalentsat end of the financial year 35 35,113,940 4,686,328 2,323,703 (2,737,950)

The above cash flow statements are to be read in conjunction with the notes to the financial statements on pages 049 to 102.

CashFlowStatementsfor the financial year ended 31 December 2004


1. GENERAL INFORMATION

The principal activities of the Company are that of investment holding and provision of management services to subsidiarycompanies in the Group. The principal activities of the subsidiary companies are set out in Note 23 to the financialstatements.

The number of employees in the Group and the Company at the end of the financial year was 997 (2003: 899) and 11(2003: 9) respectively.

The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Boardof the Bursa Malaysia Securities Berhad.

The address of the registered office and principal place of business of the Company is as follows:

Penthouse Suite 1Wisma Mah Sing163, Jalan Sungai Besi57100 Kuala Lumpur

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements of the Group and of the Company have been prepared under the historical cost conventionexcept as disclosed in the significant Group accounting policies.

The financial statements comply with the applicable Malaysian Accounting Standard Board ("MASB") approvedaccounting standards in Malaysia and the provisions of the Companies Act, 1965.

The preparation of financial statements in conformity with the applicable approved accounting standards in Malaysia andthe provisions of the Companies Act, 1965 requires the Directors to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the financial year. Actual results could differ fromthose estimates.

The financial statements of the Group and of the Company have been approved by the Board of Directors for issuance on6 April 2005.

3. SIGNIFICANT GROUP ACCOUNTING POLICIES

The Group accounting policies set out below have been used consistently with items which are considered material inrelation to the financial statements.

The following accounting policies adopted by the Group and the Company are consistent with those adopted in theprevious years except for the adoption of the new MASB Standard No. 32, Property Development Activities, which iseffective in the current financial year. The adoption does not have any significant impact on the financial statements forcurrent and prior years.

Basis of consolidationThe Group adopts the acquisition method for consolidation, except for certain subsidiaries acquired prior to 1 January2002 which have been consolidated using the merger method of accounting.

NotesToTheFinancialStatementsfor the financial year ended 31 December 2004


3. SIGNIFICANT GROUP ACCOUNTING POLICIES (CONT'D)

The consolidated financial statements include the financial statements of the Company and all its subsidiary companiesmade up to the end of the financial year. Subsidiary companies are those companies in which the Group has power toexercise control over the financial and operating policies so as to obtain benefits from their activities. Subsidiarycompanies are consolidated from the date on which control is transferred to the Group and are no longer consolidatedfrom the date that control ceases.

Acquisition methodUnder the acquisition method, the difference between the fair value of purchase consideration of subsidiary companiesand the Group’s share of the fair value of the separable net assets of subsidiaries acquired is included in the consolidatedfinancial statements as goodwill or capital reserve on consolidation. The results of the subsidiary companies acquired ordisposed of during the financial year are included in the consolidated income statement from the effective date ofacquisition or up to the effective date of their disposal.

All significant inter-company transactions and balances are eliminated on consolidation.

Minority interest is measured at the minorities' share of the post acquisition fair values of the identifiable assets andliabilities of the acquiree. Separate disclosure is made for minority interest.

Merger methodAcquisition of subsidiary companies which meets the criteria for merger accounting is accounted for using mergeraccounting principles. When the merger method is used, the cost of investment in the Company's books is recorded atthe nominal value of the shares issued and the difference between the carrying value of the investment and the nominalvalue of shares transferred, if any, is treated as merger reserve. The excess of cost of investment over the nominal valueof shares acquired is charged against any capital reserve of the subsidiary and against revenue reserve.

The results of these subsidiary companies are presented as if the merger had been effected throughout the current orprevious financial years.

Associated companiesAn associated company is a non-subsidiary company in which the Group holds not less than 20% of the equity votingrights as long-term investment and in which the Group is in a position to exercise significant influence in its management.

Investment in associated company is stated at cost in the Company's financial statements. The Group's investment inassociated company is accounted for under the equity method of accounting based on latest audited and/or themanagement financial statements of the associated company made up to 31 December 2004. Under this method ofaccounting, the Group's interest in the post-acquisition profit and reserves of the associated company is included in theconsolidated results while dividend received is reflected as a reduction of the investment in the consolidated balancesheet. The carrying amount of such investment is reduced to recognise any decline, other than a temporary decline, inthe value of the investment.

Unrealised profits and losses arising on transactions between the Group and its associated company are eliminated to theextent of the Group's equity interest in the associated company except where transactions provide evidence of animpairment of the asset transferred.

NotesToTheFinancialStatements (cont’d)for the financial year ended 31 December 2004



Currency translationsForeign currency monetary assets and liabilities are translated to Ringgit Malaysia at rates of exchange ruling at thebalance sheet date and foreign currency transactions during the financial year are translated at rates ruling on thetransaction dates. Exchange differences are taken to the income statement in the financial year in which they arise.

Assets and liabilities of foreign subsidiary company are translated to Ringgit Malaysia at rates of exchange ruling at thebalance sheet date and the results of foreign subsidiary and associated company are translated at average rate ofexchange for the financial year. Exchange differences arising from the translation are taken to reserves.

The principal closing rates used in translation of foreign currency amounts were as follows:

Foreign currency 2004 2003

1 United States Dollar (USD) RM3.8000 RM3.8000100 Indonesian Rupiah (IDR) RM0.0409 RM0.0449100 Japanese Yen RM3.6987 RM3.5541

Revenue recognitionSales are recognised upon delivery of products and customer acceptance, if any, or performance of services, net of salestaxes and discounts and after eliminating sales within the Group.

Revenue from development projects is accounted for under the percentage of completion method where the outcome ofthe development can be reliably estimated. The percentage/stage of completion is measured by reference to the costincurred to date compared to the estimated total cost of the development.

Other revenue earned by the Group is recognised on the following bases:

Interest income - on the accrual basis unless collectibility is in doubtDividend income - when the Group's right to receive payment is establishedMaintenance charges and management fee - upon performance of services

Income TaxIncome tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount ofincome taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have beenenacted at the balance sheet date.

Deferred tax is accounted for using the "balance sheet liability" method in respect of temporary differences arising fromdifferences between the carrying amounts of assets and liabilities in the financial statements and their corresponding taxbases used in the computation of taxable profit.

Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generallyrecognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it isprobable that future taxable profit will be available against which the deferred tax assets can be utilised.




Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liabilityis settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax isrecognised in the income statement, except when it arises from a transaction which is recognised directly in equity, inwhich case the deferred tax is also charged or credited directly in equity, or when it arises from a business combinationthat is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

Property, plant and equipmentLand and buildings are stated at cost or valuation less accumulated amortisation, depreciation and impairment. Otherproperty, plant and equipment are stated at cost less accumulated depreciation and impairment loss. The costs ofproperty, plant and equipment comprise their purchase costs and any incidental costs of acquisition.

Certain leasehold land and buildings were revalued by the Directors based on valuations carried out by independentprofessional valuers. The Directors have applied the transitional provisions of MASB Standard No. 15 - Property, plant andequipment, which allows those assets to be stated at their 1992 valuations. Accordingly, these valuations have not beenupdated.

Surpluses arising on revaluation are credited to revaluation reserve. Any deficit arising from revaluation is charged againstthe revaluation reserve to the extent of a previous surplus held in the revaluation reserve for the same asset. In all othercases, a decrease in carrying amount is charged to income statement. On disposal of revalued assets, amounts inrevaluation reserve relating to those assets are transferred to retained earnings.

Freehold land is not amortised as it has an infinite life. Short term leasehold land is amortised in equal instalments overthe periods of the respective leases that range from 26 to 30 years. Long term leasehold land is amortised over theunexpired lease tenure of 95 years.

Where an indication of impairment exists, the carrying amount of the asset is assessed and written down immediately toits recoverable amount.

Depreciation of other assets is calculated so as to write off the costs or valuations of the assets, to their estimated residualvalues, on a straight line basis over the expected useful economic lives of the assets concerned. The principal annual ratesare:

Buildings 3.33% - 10%Renovations 3.33% - 10%Plant, machinery and factory equipment 10% - 25%Motor vehicles 12.5% - 15%Furniture, fittings and office equipment 8% - 25%

Certain moulds acquired in 2004 by a foreign subsidiary for specific projects have been depreciated using units ofproduction method with expected total production output ranging from 27,000 to 156,000 units.

Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included inprofit/(loss) from operations.



3. SIGNIFICANT GROUP ACCOUNTING POLICIES (CONT’D)

Finance leasesLeases of property, plant and equipment where the Group assumes substantially all the benefits and risks of ownershipare classified as finance lease.

Property, plant and equipment under finance leases are capitalised and the capital element of the lease commitments isreflected as lease payables. The capital element of the lease instalments is applied to reduce the outstanding obligationswhereas the interest element is charged against the income statement so as to give a constant periodic rate of charge onthe remaining balance outstanding at the end of each accounting period.

Property, plant and equipment acquired under finance lease is capitalised and depreciated over the useful economic livesof equivalent owned property, plant and equipment.

Property, plant and equipment under hire-purchase arrangementsProperty, plant and equipment acquired under hire-purchase arrangements are capitalised in the financial statements andthe corresponding obligations treated as liabilities. Finance charges are allocated to the income statements to give aconstant periodic rate of interest on the remaining hire-purchase liabilities.

Operating leasesLeases of assets under which all the risks and benefits of ownership are retained by the lessor are classified as operatingleases. Payments made under operating leases are charged to the income statement over the lease period.

Intangible assets

(a) GoodwillGoodwill arising on consolidation represents the excess of the purchase price of subsidiary companies over theGroup’s share of the fair value of their identifiable net assets at the date of acquisition.

Goodwill is recognised as an asset and amortised through the consolidated income statement on a systematic basisfollowing an assessment of the economic useful life of the assets, subject to a maximum of 25 years. The carryingamount of goodwill is reviewed annually for impairment and written off when, in the opinion of the Directors, it isconsidered necessary.

(b) Licence feeAll costs incurred in acquisition of licence fee for assembly of certain plastic products are capitalised and amortisedon a straight line basis over a period of 10 years and they will be written off when, in the opinion of the Directors, thefuture economic benefits are uncertain.

Where an indication of impairment exists, the carrying amount of the intangible assets are assessed and written downimmediately to its recoverable amount.




Investments

Investments in subsidiary and associated companies are shown at cost in the Company’s financial statement. Where anindication of impairment exists, the carrying amount of the investment is assessed and written down to its recoverableamount.

Investments in other non-current investments are shown at cost and an allowance for diminution in value is made where,in the opinion of the Directors, there is a decline other than temporary in the value of an investment, such a decline isrecognised as an expense in the year in which the decline is identified.

i) Land held for property developmentsLand held for property development consist of land on which no significant development work has been undertakenor where development activities are not expected to be completed within the normal operating cycle. Such land isclassified as non-current asset and is stated at cost less accumulated impairment losses.

Land held for property development is transferred to property development costs (under current assets) whendevelopment activities have commenced and where the development activities can be completed within the Group'snormal operating cycle of 2 to 4 years.

Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties,commissions, conversion fees and other relevant levies. Where the Group had previously recorded the land atrevalued amount it continues to retain this amount as its surrogate cost as allowed by MASB 32. Where an indicationof impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverableamount.

ii) Property development costsProperty development costs comprise costs associated with the acquisition of land and all costs directly attributableto development activities or that can be allocated on a reasonable basis to these activities.

When the outcome of the development activity can be estimated reliably, property development revenue andexpenses are recognised by using the stage of completion method. The stage of completion is measured byreference to the proportion that property development costs incurred bear to the estimated total costs for theproperty development.

When the outcome of a development activity cannot be reliably estimated, property development revenue isrecognised only to the extent of property development costs incurred that is probable will be recoverable; propertydevelopment costs on the development units sold are recognised when incurred.

Irrespective of whether the outcome of a property development activity can be estimated reliably, when it is probablethat total property development costs (including expected defect liability expenditure) will exceed total propertydevelopment revenue, the expected loss is recognised as an expense immediately.

Property development costs not recognised as an expense is recognised as an asset and is stated at the lower ofcost and net realisable value.

Where revenue recognised in the income statement exceeds billings to purchasers, the balance is shown as accruedbillings under receivables, deposits and prepayments (within current assets). Where billings to purchasers exceedrevenue recognised in the income statement, the balance is shown as progress billings under payables (within currentliabilities).




InventoriesInventories of completed properties are stated at the lower of cost and net realisable value. Cost includes the relevantcost of land and development expenditure.

Inventories of raw materials, work-in-progress and finished goods are stated at the lower of cost and net realisable value.Cost is determined using the weighted average method. The cost of raw materials comprises the original purchase priceplus cost incurred in bringing the inventories to their present location. The costs of finished goods and work-in-progresscomprise raw materials, direct labour, other direct costs and an appropriate proportion of production overheads.

Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion andselling expenses.

ReceivablesReceivables are reduced by the appropriate allowances for estimated irrecoverable amounts. Allowance for doubtful debtsis made based on estimates of possible losses which may arise from non-collection of certain receivable accounts.

BorrowingsBorrowings are initially recognised based on the proceeds received. In subsequent period, borrowings are stated withaccumulated outstanding interest and net of repayment during the period. Portions repayable after 12 months aredisclosed as non-current liabilities.

Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assetsthat necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of thecost of those assets, until such time as the assets are substantially ready for their intended use or sale.

The amount of borrowing costs eligible for capitalisation is determined based on actual interest incurred on borrowingsmade specifically for the purpose of obtaining a qualifying asset and less any investment income on the temporaryinvestment of that borrowing.

All other borrowing costs are recognised as an expense in the income statement in the period in which they are incurred.

Provision for liabilitiesProvision for liabilities are recognised when the Group has a present obligation as a result of a past event and it is probablethat an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimateof the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current bestestimate. Where the effect of the time value of money is material, the amount of a provision is the present value of theexpenditure expected to be required to settle the obligation.




Employee Benefits

i) Short term benefitsWages, salaries, bonuses and social security contributions are recognised as an expense in the year in which theassociated services are rendered by employees of the Group and the Company. Short term accumulatingcompensated absences for paid annual leave when services are rendered by employees that increase their entitlementto future compensated absences are recognised based on the past experience that the absences will occur.

ii) Defined contribution planThe Group and the Company are required by law to make monthly contributions to the Employees' Provident Fund(EPF), a statutory defined contribution plan for all their eligible employees based on certain prescribed rates of theemployees' salaries. The Group's and the Company's contribution to EPF are disclosed separately. The employees'contributions to EPF are included in salaries and wages.

iii) Termination benefitsThe Group pays termination benefits in cases of termination of employment within the framework of a restructuring.Termination benefits are recognised as a liability and an expense when the Group has a detailed formal plan for thetermination and is without realistic possibility of withdrawal.

iv) Defined benefit plansA foreign subsidiary operates a defined Retirement Benefit Scheme ("the Scheme") for its eligible employees. Theforeign subsidiary’s obligations under the Scheme are determined based on external actuarial valuation inaccordance with the labour law requirement in that country where the amount of benefit that employees have earnedin return for their service in the current and prior years is estimated. That benefit is discounted using the ProjectedUnit Credit Method in order to determine its present value. Actuarial gains and losses are recognised as income orexpense over the expected average remaining working lives of the participating employees when the cumulativeunrecognised actuarial gains or losses for the Scheme exceed 10% of the higher of the present value of the definedbenefit obligation and the fair value of plan assets. Past service cost is recognised immediately to the extent that thebenefits are already vested; otherwise, it is amortized on a straight-line basis over the average period until thebenefits become vested.

The amount recognised in the balance sheet represents, the present value of the defined benefit obligations adjustedfor unrecognised actuarial gains and losses and unrecognised past service cost, and reduced by the fair value of planassets. Plan assets resulting from this calculation are to be used only to settle the employee benefit obligations andcan be returned to the enterprise only if the remaining assets of the fund are sufficient to meet the plan's obligationto pay the related employee benefits directly.

v) Equity compensation benefitsThe Company Employee Share Options Scheme ("ESOS") allows the Group's employees to acquire shares of theCompany. No compensation cost or obligation is recognised. When the options are exercised, equity is increased bythe amount of the proceeds received.




Redeemable preference sharesPreference shares which are redeemable at any time on or before a specific date and which carry non-discretionarydividend obligation are classified as non-current liabilities. The dividends on this preference shares are recognised in theincome statement as finance cost when declared.

DividendsThe declared and proposed final dividends which will only be accounted for as a liability upon approval by shareholdersare debited directly to equity.

Share capitalOrdinary shares and non-redeemable preference shares with discretionary dividends are both classified as equity. Othershares are classified as equity and/or liabilities according to the economic substance of the particular instrument.

Cash and cash equivalentsThe Group and the Company adopt the indirect method in the preparation of the cash flow statements. Cash and cashequivalents are short term, highly liquid investments with maturities of three months or less from the date of acquisitionand are readily convertible to cash with insignificant risk of changes in value.

Fair value estimation of financial instruments for disclosure purposesIn assessing the fair value of financial instruments, the Group uses a variety of methods and makes assumptions that arebased on market conditions existing at each balance sheet date. The fair value of quoted investments is based on itsquoted market price at the balance sheet date. For current financial assets and liabilities, the carrying amounts areassumed to approximate their fair values because of the short maturity of these instruments. The fair value of financialliabilities is estimated by discounting the future contractual cash flows at the current market interest rate available to theGroup for similar financial instruments.

4. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The operation of the Group and of the Company are subject to a variety of financial risks, including foreign currency risk,interest rate risk, market risk, credit risk, liquidity and cash flow risk.

The Group and the Company have formulated a financial risk management framework whose principal objective is tominimise the Group's and the Company's exposure to risks and/or costs associated with the financing, investing andoperating activities of the Group and the Company.

The Group focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on thefinancial performance of the Group. Financial risk management is carried out through risk reviews, internal control systemsand adherence to Group financial risk management policies. The Board regularly reviews these risks and approves thetreasury policies, which cover the management of these risks.

Foreign currency riskSince almost all foreign currency transactions are in US Dollar to which the Ringgit Malaysia is currently pegged, theGroup's exposure to currency risks is very minimal.



4. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONT’D)

Interest rate riskThe Group enters into various interest rate risk management transactions, including using a combination of fixed andfloating rate loans to manage net interest rates within a predictable, desired range.

Market riskThe Group has in place policies to manage the Group's exposure to fluctuation in the prices of the key raw materials usedin the operations through close monitoring and buying ahead in anticipation of significant price increase, where necessary.

For sales to key Original Equipment Manufacturing customers the Group establishes a floating raw material pricingmechanism in determining the selling price where changes in raw material component prices beyond certain range arepassed on to customers.

For property development, the Group is actively sourcing for new development land in prime locations to increase itsdevelopment land bank. Properties developed by the Group range from affordable homes to high-end products dependingon the location of the development project and the profile of its target market.

Credit riskThe Group is exposed to credit risk mainly from its customer base, including trade receivables. The Group extends creditto its customers based upon careful evaluation of the customer's financial condition and credit history. Trade receivablesare monitored on an ongoing basis by the Group's credit control department.

Liquidity riskThe Group and the Company practise prudent liquidity risk management to minimise the mismatch of financial assets andliabilities and to maintain sufficient credit facilities for contingent funding requirement of working capital.

Cash flow riskThe Group and the Company review their cash flow position regularly to manage their exposure to fluctuations in futurecash flows associated with their monetary financial instruments.

5. REVENUE

Group Company 2004 2003 2004 2003RM RM RM RM

Sale of goods 95,291,259 75,806,756 0 0Property development revenue 259,917,230 132,168,857 0 0Sale of completed properties 953,125 3,489,094 0 0Dividend income 0 0 14,500,000 7,400,000Interest income 293,548 0 354,340 47,252Rental income 0 280,303 0 0Maintenance charges 0 281,784 0 0Management fee 0 0 12,000 12,000

356,455,162 212,026,794 14,866,340 7,459,252



6. COST OF SALES

Group2004 2003RM RM

Cost of inventories sold 81,484,996 65,992,040Property development costs 200,723,868 98,287,837Cost of completed properties sold 739,094 4,118,841Cost of rendering maintenance services 0 178,612

282,947,958 168,577,330

7. IMPAIRMENT LOSSES

Group Company2004 2003 2004 2003RM RM RM RM

Included in other operating incomeare reversal of impairment lossesin respect of property, plantand equipment (Note 21) (197,257) 0 0 0

Included in other operating expensesare impairment losses in respect of :

- Investment in subsidiaries (Note 23) 0 0 58,148 903,132- Investment in associates(Note 24) 0 0 1,948 71,278- Plant and machinery (Note 21) 360,327 1,713,729 0 0

360,327 1,713,729 60,096 974,410

The reversal of impairment loss of plant and machinery is in respect of certain moulds, factory equipment, machinery,renovation, office equipment and furniture and fittings for which the depreciation is continuing during the year.

Impairment loss for investment in subsidiaries is in respect of dormant subsidiaries where the net tangible asset value isbelow the cost of investment and for which there are no business plans to generate future income. For investment inassociates impairment is recognised on the basis of the Group's share of post-acquisition accumulated losses.

The impairment loss of plant and machinery is in respect of certain moulds, factory equipment, machinery, renovation,office equipment and furniture and fittings for which the Group has no future plans for utilisation.



8. PROFIT FROM OPERATIONS

Group Company 2004 2003 2004 2003

Note RM RM RM RM

Profit from operations is stated after charging:

Amortisation of licence fee 22 8,405 8,401 0 0Auditors' remuneration- current year 150,300 109,000 13,000 12,000- overprovision in prior years 0 (58,089) 0 (13,545)- non-audit fee 5,000 5,000 5,000 5,000

Property, plant and equipment- depreciation 21 14,645,223 8,832,460 17,902 14,832- written-off 224,190 0 0 0

Goodwill written off 22 1 0 0 0Provision for term loan in

associated company 18 0 506,130 0 506,130

Allowance for doubtful amounts due from:- subsidiary companies 0 0 1,493,132 708,774- associated companies (75) 987,858 (75) 837,858

Allowance for doubtful debts:- trade 398,407 304,246 0 0- non-trade 0 23,229 0 0

Rental of buildings 547,803 347,315 0 0Staff costs 9 20,059,353 17,297,013 700,298 491,686Inventories write-down 850,314 89,632 0 0Inventories written-off 49,764 0 0 0Realised loss on foreign exchange - net 58,686 0 0 0Interest expenses in cost of sales 4,844,473 2,169,124 0 0



8. PROFIT FROM OPERATIONS (CONT’D)

Group Company 2004 2003 2004 2003

Note RM RM RM RM

and crediting:

Gross dividend from subsidiary companies 0 0 14,500,000 7,400,000Gain on disposal of property, plant

and equipment 773,671 3,013,838 0 0

Interest income received from:- deposits and development

accounts with licensed banks 642,859 85,515 293,548 0- customers 667,425 127,318 0 0- subsidiary company 0 0 60,792 47,252

Management fees froma subsidiary company 0 0 12,000 12,000

Allowance for doubtful debtsno longer required - non trade 3,856 0 0 0

Unrealised gain on foreign exchange - net 205,006 0 0 0 Debts waived by a creditor 400,583 0 0 0 Rental of premises included in

other operating income 382,200 382,200 0 0

9. STAFF COSTS


Wages and salaries 16,231,853 14,219,884 614,728 447,421Employees’ Provident Fund

contributions and social security costs 1,652,522 1,243,131 45,644 39,868Short term accumulating

compensated absences 73,407 24,773 7,745 0Pension costs -

defined benefit plan (Note 41 ) 168,902 102,531 0 0Other staff related expenses 1,932,669 1,706,694 32,181 4,397

20,059,353 17,297,013 700,298 491,686

Included in staff costs of the Group and of the Company are directors' remuneration amounting to RM1,217,426 (2003:RM998,911) and RM138,600 (2003: RM104,400) respectively as further disclosed in Note 10.



10. DIRECTORS’ REMUNERATION

The aggregate amount of emoluments receivable by Directors of the Company during the financial year were as follows:


Non-executive Directors:- Fees 138,600 104,400 138,600 104,400- Estimated monetary value

of benefits-in-kind 10,100 10,100 0 0Executive Directors:- Other emoluments 935,000 770,459 0 0 - Employees’ Provident Fund contributions 82,800 71,577 0 0 - Estimated monetary value

of benefits-in-kind 50,926 42,375 0 0

1,217,426 998,911 138,600 104,400

11. FINANCE COSTS


Interest expenses on:- term loans 6,043,626 2,912,708 0 0- bank overdrafts 2,199,363 1,310,750 154,152 193,097- hire purchase 598,092 535,652 0 0- other borrowings 1,596,197 2,308,605 365,244 406,803 Dividend for redeemable preference

shares waived (Note 19(i)) (300,000) 300,000 0 0 Net exchange loss

on foreign currency borrowings:- unrealised 0 122,371 0 0- realised 0 103,020 0 0

10,137,278 7,593,106 519,396 599,900 Less: Interest capitalised

in development properties (Note 26) (5,245,465) (2,458,787) 0 0

4,891,813 5,134,319 519,396 599,900



12. TAXATION

Taxation based on the results of the financial year:


Current tax expense:- Malaysian 12,087,377 6,864,781 1,200,000 1,158,500- Foreign 1,009,093 0 0 0(Over) / Underprovision

in respect of prior years - Malaysian (44,913) 30,000 (298,872) 30,000Deferred taxation (Note 20):- Current year (342,066) (680,852) 2,100,000 241,500- Underprovision in prior years 409,358 0 0 0

67,292 (680,852) 2,100,000 241,500

13,118,849 6,213,929 3,001,128 1,430,000

The tax charge for the Company is in respect of dividends from a subsidiary company.

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income taxexpense at the effective income tax rate of the Group and of the Company is as follows:


Profit before taxation 38,840,554 21,170,460 11,526,591 3,004,490

Taxation at Malaysian statutorytax rate @ 28% (2003: 28%) 10,875,355 5,927,728 3,227,445 841,257

Tax effects of:- Expenses not deductible for tax purposes 2,528,773 3,601,797 914,805 1,818,679 - Tax exempted income 0 0 (560,000) (672,000)Effect of different tax rates

in other jurisdiction 74,568 14,789 0 0 Utilisation of current year's tax losses (282,250) (587,936) (282,250) (587,936)Utilisation of deferred tax assets

not previously recognised (442,042) (2,772,449) 0 0Under / (over) provision in prior years 364,445 30,000 (298,872) 30,000

Tax expense for the year 13,118,849 6,213,929 3,001,128 1,430,000

Average effective tax rate 34% 29% 26% 48%



13. EARNINGS PER ORDINARY SHARE

(a) BasicThe earnings per ordinary share for the financial year has been calculated based on the net profit for the financialyear divided by the weighted average number of ordinary shares in issue during the financial year as follows:

Group2004 2003

Net profit for the financial year (RM) 25,061,804 14,702,495Total number of ordinary shares in issue 145,127,400 43,978,000Weighted average number of ordinary shares in issue 130,409,109 88,835,560Basic earnings per share (sen) 19.22 16.55

(b) Fully dilutedThe diluted earnings per share has been calculated by dividing the net profit for the period by the weighted averagenumber of shares that would have been in issue upon full exercise of the remaining options under the Warrants,adjusted for the number of such shares that would have been issued at fair value as follows:

Group2004 2003RM RM

Weighted average number of ordinary shares in issue 130,409,109 88,835,560Warrants 6,975,649 0

Fully diluted weighted average number of shares 137,384,758 88,835,560

Fully diluted earning per share (sen) 18.24 16.55

Comparative figures for the basic and fully diluted earnings per ordinary share have been restated to reflect the rightsand bonus issues during the financial year.

14. DIVIDEND

Dividend proposed in respect of the financial year ended 31 December 2004 is as follows:

Group and Company Group and Company2004 2003

Gross Amount of Gross Amount ofdividend dividend, dividend dividend,per share net of tax per share net of tax

Sen RM Sen RM

Proposed first and final dividend 6 6,269,659 4 1,393,223

On 26 July 2004, the Company paid a first and final gross dividend of 4 sen per share, less income tax, amounting toRM1,393,223 in respect of the financial year ended 31 December 2003 as approved by the members at the last AnnualGeneral Meeting.



14. DIVIDEND (CONT’D)

The directors have proposed a first and final gross dividend in respect of the financial year ended 31 December 2004 of6 sen per share, less income tax, amounting to RM6,269,659 on 145,127,400 ordinary shares as at 31 December 2004and 3,600 new ordinary shares exercised under Warrants as at the date of this report as disclosed in Note 15(b). Theproposed first and final gross dividend is subject to approval by the shareholders at the forthcoming Annual GeneralMeeting and has not been included as a liability in the financial statements.

15. SHARE CAPITAL

Number of Ordinary Group and CompanyShares of RM1.00 each Amount2004 2003 2004 2003

RM RM

Authorised:At 1 January 100,000,000 100,000,000 100,000,000 100,000,000 Created during the year 400,000,000 0 400,000,000 0

At 31 December 500,000,000 100,000,000 500,000,000 100,000,000

Issued and fully paid: At 1 January 43,978,000 43,978,000 43,978,000 43,978,000 Private placement 4,397,800 0 4,397,800 0 Rights issue 80,626,333 0 80,626,333 0 Bonus issue 16,125,267 0 16,125,267 0 Issued and paid up during the year 101,149,400 0 101,149,400 0

At 31 December 145,127,400 43,978,000 145,127,400 43,978,000

(a) Ordinary shares

As approved by the shareholders at the Extraordinary General Meeting held on 8 March, 2004, the Company increased itsauthorised ordinary share capital from RM100,000,000 to RM500,000,000 by way of creation of additional 400,000,000ordinary shares of RM1.00 each.

The Company also increased its issued and paid-up ordinary share capital from RM43,978,000 to RM145,127,400 by way of:

(i) issuance of 4,397,800 ordinary shares of RM1.00 each through a private placement at an issue price of RM1.38 pershare for cash, for additional working capital purposes. The resulting share premium arising amounting toRM1,671,164 has been credited to the share premium account.

(ii) issuance of renounceable rights issue of 80,626,333 new ordinary shares of RM1.00 each at par (rights shares)together with 48,375,800 free detachable warrants on the basis of 5 new ordinary shares together with 3 freedetachable warrants for every 3 existing shares held as at 13 April 2004 (Rights Issue with Warrants), which rightsshares are also entitled to the bonus issue of 16,125,267 bonus shares on the basis of 1 bonus share for every 5rights shares subscribed for the purposes of repayment of bank borrowings and increase of working capital.

(iii) issuance of bonus issue of 16,125,267 new ordinary shares of RM1.00 each in conjunction with renounceable rightsissue on the basis of 1 new ordinary share of RM1.00 each for every 5 rights shares subscribed by way of utilisationof share premium.



15. SHARE CAPITAL (CONT'D)

The new ordinary shares issued rank pari passu in all respects with the then existing ordinary shares of the Company.

(b) Warrants

The Warrants 2004/2009 were constituted under the Deed Poll dated 2 April 2004.

The salient features of the Warrants 2004/2009 are as follows:

(i) the Warrants are exercisable into new shares at an exercise price of RM1.00 per ordinary share;

(ii) the issue date for the Warrants is on 7 June 2004 and the expiry date is on 6 June 2009;

(iii) the holder of the Warrants shall pay cash for the exercise price of RM1.00 per Warrant when subscribing for thenew ordinary shares pursuant to the Rights Issue with Warrants;

(iv) the Warrant holders are not entitled to participate in any distribution and/or offer of further securities in theCompany until and unless such holders exercise the rights under the Warrants for new ordinary shares;

(v) the adjustments to the exercise price and the number of Warrants in the event of alteration to the share capitalof the Company are set out in the Deed Poll; and

(vi) the new ordinary shares to be issued upon exercise of the Warrants shall, upon allotment and issue, rank paripassu in all respects with the then existing ordinary shares, including the entitlement to dividends, rights,allotments or other distributions, except that they will not be entitled to the rights, allotments or otherdistributions, declared by the Company which entitlement thereof precedes the allotment date of the newordinary shares allotted pursuant to the exercise of the Warrants.

As at the balance sheet date, no Warrants have been exercised by the Warrant holders.

The movements in the Company's unissued number of shares under Warrants as at the date of this report are as follows:

Number of ordinary shares of RM1.00 eachBalance at Balance at31.12.2004 Issued Exercised 06.04.2005

Number of unissued shares under warrants 48,375,800 0 (3,600) 48,372,200

(c) Share options

The Company implemented an Employees' Share Option Scheme ("ESOS") which is governed by the ESOS By-Lawsand was approved by the shareholders at the Extraordinary General Meeting held on 8 March 2004.

The salient features of the ESOS are as follows:

(i) the total number of new Company shares to be offered pursuant to the ESOS shall be subject to a maximumof 10% of the issued and paid-up share capital at the time of the offer;



15. SHARE CAPITAL (CONT'D)

(ii) only eligible employees and Executive Directors of the Company and its subsidiary companies (provided theyare not dormant) will be eligible to participate in the ESOS. An ESOS committee comprising members of theBoard will determine the share allocation criteria. A set of criteria on eligibility and allocation will be clearlyspecified and all eligible employees will be made aware of it;

(iii) the duration of the ESOS will be for five (5) years and may, at the option committee's discretion, be extendedor renewed (as the case may be), subject to an aggregate duration of ten (10) years;

(iv) the Company shall be allowed to terminate the ESOS in mid-stream by fulfilling the following conditions:

(a) approval from the SC;

(b) consent from the shareholders at a general meeting; and

(c) written consent of all options holders who have yet to exercise their options, either in part or in whole; and

(v) in the event that a share buyback exercise of the Company results in the number of options that have beenoffered under the Scheme exceeding 10% of the issued capital of the Company, there shall be no granting ofadditional options at any point in time after the share buyback, unless the number of options that have beengranted under the Scheme falls below 10% of the issued capital of the Company.

No options have been granted under ESOS by the Company to any parties during the financial year to take up unissuedshares of the Company.

16. RESERVES


Non- distributable reserves:Share premium 31,103,622 47,199,112 31,103,622 47,199,112 Capital reserve 350,927 350,927 0 0 Reserve on consolidation 501,000 501,000 0 0 Exchange fluctuation reserve 6,003,186 6,003,186 0 0

37,958,735 54,054,225 31,103,622 47,199,112 Retained profit / (accumulated losses) 31,036,409 7,367,828 (27,141,244) (34,273,484)

68,995,144 61,422,053 3,962,378 12,925,628



16. RESERVES (CONT’D)

Group

Capital reserveCapital reserve arose from the difference between the purchase price and the fair values of the net assets of the foreignsubsidiary company at the date of acquisition of additional investment.

Reserve on consolidationReserve on consolidation represents the excess of the net assets of the subsidiary company acquired at the date ofacquisition over the purchase consideration paid.

Company

Dividends are available for distribution out of its net profit for the financial year or distributable reserves.

Net profit for the financial yearAs at 31 December 2004, the Company has tax exempt profits available for distribution of approximately RM5,284,160(2003: RM2,884,000), subject to the agreement of the Inland Revenue Board.

The Company has, subject to confirmation by the Director General of Inland Revenue Board, sufficient tax credit underSection 108 of the Income Tax Act 1967 and tax exempt account to frank the payment of net dividends out of all its netprofit for the financial year.

Accumulated lossesThe accumulated losses include the net profit for the financial year which is subject to the distribution of dividends asdisclosed in Note 14.



17. TERM LOANS

Group2004 2003RM RM

Secured :Term loan 1 0 975,334Term loan 2 0 1,660,387Term loan 3 0 1,554,113Term loan 4 737,626 2,591,935Term loan 5 130,522 17,735,022Term loan 6 527,779 760,000Term loan 7 1,132,212 1,434,154Term loan 8 4,784,212 0Term loan 9 75,000,000 0Term loan 10 5,340,000 0Term loan 11 2,455,615 0Term loan 12 30,000,000 0Term loan 13 2,800,000 0Term loan 14 2,615,858 0Term loan 15 404,703 0Term loan 16 26,952,730 0Term loan 17 8,490,277 0

161,371,534 26,710,945

Unsecured:Term loan 18 922,526 1,518,655

922,526 1,518,655

Total 162,294,060 28,229,600

Group2004 2003RM RM

Repayable not later than 1 year (included under current liabilities) 23,573,942 10,116,592 Repayable later than 1 year and not later than 2 years 42,791,528 10,157,579 Repayable later than 2 years and not later than 5 years 91,241,090 7,955,429 Repayable later than 5 years 4,687,500 0 Non-current portion 138,720,118 18,113,008

Total 162,294,060 28,229,600



17. TERM LOANS (CONT’D)

Term loans Terms of repayment Security

Secured:

Term loan 1 36 monthly instalments commencing Secured by legal charges over the leasehold landFebruary 2001. and buildings, plant, machinery and equipment,

inventories and trade receivables of a subsidiarycompany and a guarantee from the Company.

Term loan 2 36 monthly instalments commencing Secured by a fixed charge over the leasehold landDecember 2001. and buildings, plant, machinery and equipment,

inventories and trade receivables of a subsidiary company and a guarantee from the Company.

Term loan 3 20 quarterly instalments commencing Secured by a first fixed charge over a piece of mixedDecember 2001 or by way of redemption development land and a debenture over the sameof the property sold on the project, development land of a subsidiary companywhichever is earlier. and a guarantee from the Company.

Term loan 4 16 quarterly instalments commencing Secured by a second fixed charge over a piece of mixedSeptember 2003 or by way of redemption development land and a debenture over the sameof the property sold on the project, development land of a subsidiary companywhichever is earlier. and a guarantee from the Company.

Term loan 5 20 quarterly instalments commencing Secured by a first fixed charge over a piece of mixedJuly 2001 or by way of redemption development land and a debenture over the sameof the property sold on the project, development land of a subsidiary companywhichever is earlier. and a guarantee from the Company.

Term loan 6 42 monthly instalments commencing Secured by a fixed charge over the leasehold land and January 2007. buildings, plant, machinery and equipment of a

subsidiary company and a guarantee from theCompany.

Term loan 7 60 monthly instalments commencing Secured by a first fixed charge over a building of a October 2004. subsidiary company and a guarantee from the

Company.

Term loan 8 24 monthly instalments commencing Secured by Fiduciary Transfer Ownership ofApril 2006. Moulds of a subsidiary company.

Term loan 9 16 quarterly instalments commencing Secured by a second fixed charge over a piece of mixedJune 2006 or by way of redemption development land of a subsidiary companyof the property sold on the project, and a guarantee from the Company.whichever is earlier.




Term loans Terms of repayment Security

Term loan 10 24 monthly instalments commencing Secured by a Special Assignment of RightsJanuary 2006 or by way of redemption over certain completed properties of a subsidiaryof the property sold on the project, company and a guarantee from the Company.whichever is earlier.

Term loan 11 16 quarterly instalments commencing Secured by a first fixed charge over a piece of mixedApril 2005 or by way of redemption development land of a subsidiary company andof the property sold on the project, a guarantee from the Company.whichever is earlier.

Term loan 12 16 quarterly instalments commencing Secured by a first fixed charge over a piece of mixedJuly 2005 or by way of redemption development land of a subsidiary company andof the property sold on the project, a guarantee from the Company.whichever is earlier.


Term loan 14 8 quarterly instalments commencing Secured by a first fixed charge over a piece of mixedAugust 2005 or by way of redemption development land of a subsidiary company andof the property sold on the project, a guarantee from the Company.whichever is earlier.

Term loan 15 8 quarterly instalments commencing Secured by a first fixed charge over a piece of mixedSeptember 2005 or by way of redemption development land of a subsidiary company andof the property sold on the project, a guarantee from the Company.whichever is earlier.


Term loan 17 16 quarterly instalments commencing Secured by a second fixed charge over a piece of mixedAugust 2006 or by way of redemption development land of a subsidiary company andof the property sold on the project, a guarantee from the Company.whichever is earlier.

Unsecured:

Term loan 18 24 monthly instalments commencing Granted on negative pledge over the presentApril 2006 and future assets of a subsidiary company and

a guarantee from the Company.




The currency exposure profile of the term loans are:

Group2004 2003RM RM

United States Dollar 5,311,991 3,395,721 Indonesian Rupiah 922,526 1,518,655 Ringgit Malaysia 156,059,543 23,315,224

162,294,060 28,229,600

All term loans bear interest at floating rates and their fair values approximate their carrying values at the balance sheet date.

As at 31 December 2004, the weighted average effective interest rate of the term loans denominated in United StatesDollar, Indonesia Rupiah and Ringgit Malaysia were 6.00% (2003: 7.50%), 7.62% (2003: 13.50%), 7.63% (2003: 8.21%)per annum respectively.

During the year the interest rates were in the following range :

Group2004 2003

% %

Foreign currency facilities (United States Dollar) 6.00 - 7.50 7.50 - 8.00Local currency facilities 7.50 - 8.25 7.50 - 8.65Indonesian Rupiah (IDR) 7.62 13.50

18. PROVISION FOR LIABILITY


Provision in respectof loan granted by a financial

institution to an associated company 506,130 506,130 506,130 506,130

At 31 December:Current 506,130 430,359 506,130 430,359 Non-current 0 75,771 0 75,771

506,130 506,130 506,130 506,130



18. PROVISION FOR LIABILITY (CONT'D)

The provision is in respect of a loan granted to an associated company for which the Company has given a corporateguarantee. The associated company had ceased operation during the year and is not in a position to settle the outstandingamount pending disposal of its assets.

19. LONG-TERM AND DEFERRED PAYABLES

Group2004 2003RM RM

Redeemable preference shares of a subsidiary company (Note 19(i)) 0 14,000,000 Finance lease and hire purchase liabilities (Note19(ii)) 5,707,310 6,918,193 Payable for acquisition of property, plant and equipment 0 1,151,495 Retirement benefit obligation (Note 41) 271,433 102,531

5,978,743 22,172,219

(i) Redeemable preference shares

Group2004 2003RM RM

Preference shares of RM1.00 each, issued by a subsidiary company 0 5,000,000 Share premium on preference shares 0 9,000,000

0 14,000,000

In 2003, a wholly owned subsidiary company issued 5,000,000 redeemable, non-participating, non-convertiblepreference shares of RM1.00 each at an issue price of RM2.80 per share to a creditor in consideration for RM14million owing by the subsidiary company.

The redeemable preference shares bear a 6% non-cumulative preferential dividend per annum, payable from year2003 onwards out of the profits of the subsidiary company and are redeemable any time from the date of issue upto 31 December 2009 at its issue price of RM2.80 per share.

The redeemable preference shares were fully redeemed during the financial year with the waiver of the previouslyaccrued preference shares dividends as shown in Note 11.



19. LONG-TERM AND DEFERRED PAYABLES (CONT'D)

(ii) Finance lease and hire purchase liabilities

Group2004 2003RM RM

Minimum finance lease and hire purchase payments:- not later than 1 year 2,775,498 2,315,034 - later than 1 year and not later than 5 years 6,813,935 7,862,910 - later than 5 years 0 567,682

9,589,433 10,745,626 Future finance charges on finance lease and hire purchase liabilities (1,659,499) (1,885,844)

Principal of finance lease and hire purchase liabilities 7,929,934 8,859,782

Principal of finance lease and hire purchase liabilities:- not later than 1 year (Note 30) 2,222,624 1,941,589 - later than 1 year and not later than 5 years 5,707,310 6,459,479 - later than 5 years 0 458,714

7,929,934 8,859,782

It is the Group's policy to acquire certain property, plant and equipment under finance lease and hire-purchasearrangements. The average term for finance lease and hire-purchase is between 3 to 5 years. For the financial year ended31 December 2004, the average effective borrowing rate was 4.32% (2003: 4.48%) per annum. Interest rates are fixed atthe inception on the hire-purchase arrangements.

The Group's finance lease and hire-purchase payables are secured by assets acquired under finance lease and hire-purchase agreements as disclosed under Note 21.

20. DEFERRED TAX


At 1 January 934,708 1,615,560 1,400,000 1,158,500 Transfer from / (to) income statement (Note 12) 67,292 (680,852) 2,100,000 241,500

At 31 December 1,002,000 934,708 3,500,000 1,400,000

Presentation after appropriate offsetting as follows:

Deferred tax assets 0 (809,959) 0 0 Deferred tax liabilities 1,002,000 1,744,667 3,500,000 1,400,000

1,002,000 934,708 3,500,000 1,400,000



20. DEFERRED TAX (CONT'D)

The amount of the deferred tax assets and liabilities recognised in the balance sheet are as follows:


Tax effects of:Temporary differences in respect of:- Property, plant and equipment 812,200 360,672 0 0- Property development expenditure 889,800 1,607,995 0 0- Payables (700,000) (224,000) 0 0- Recognition of dividends proposed

by wholly owned subsidiary companies 0 0 3,500,000 1,400,000Unutilised tax losses from a foreign subsidiary 0 (809,959) 0 0

1,002,000 934,708 3,500,000 1,400,000

Details of net deferred tax assets pertaining to certain subsidiary companies which have not been recognised in thefinancial statements are as follows:

Group2004 2003RM RM

Tax effects of:Temporary differences in respect of:- Property, plant and equipment (218,804) (974,040)- Others 1,059,865 960,861 Unutilised tax losses 5,482,200 5,450,762 Unabsorbed capital allowances 5,893,880 7,221,600

Deferred tax assets - net 12,217,141 12,659,183

The unutilised tax losses and unabsorbed capital allowances in Malaysia are available indefinitely for offset against futuretaxable profits of the subsidiaries. Net deferred tax assets have not been recognised in the financial statements as theymay not be used to offset taxable profits of other subsidiaries in the Group and they have arisen in subsidiaries that havea recent history of losses.

The unutilised tax losses and unutilised capital allowances are subject to agreement by the tax authorities.




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21. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

2004Company RM

Office EquipmentCostAt 1 January 211,059Addition 17,303

At 31 December 228,362

Accumulated depreciationAt 1 January 73,438Charge for the financial year 17,902

At 31 December 91,340

Net book valueAt 31 December 2004 137,022

At 31 December 2003 137,621

ValuationThe short term leasehold land and buildings of a subsidiary company were valued by the Directors in 1992 based onvaluation carried out by independent professional valuers on the open market value basis. The surplus arising from therevaluation amounting to RM4,224,379 has been credited to revaluation reserve account and eliminated uponconsolidation.

The net book values of revalued short term leasehold land and buildings of the subsidiary company that would have beenincluded in the financial statements had these assets been carried at cost less accumulated amortisation/depreciation, areas follows:

Group2004 2003RM RM

Net book valueShort term leasehold land and buildings 7,211,688 8,018,535



21. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Assets with restricted titleAt the balance sheet date, the net book value of property, plant and equipment of the Group pledged to financialinstitutions to secure term loans, borrowings and bank overdrafts as shown in Notes 17, 31 and 32 are as follows:

Group2004 2003RM RM

Net book valueFreehold building 6,240,229 6,216,683 Short term leasehold land and buildings 8,015,194 8,287,126 Long term leasehold land and buildings 3,543,725 3,641,046 Plant, machinery and equipment 14,300,026 12,043,712

32,099,174 30,188,567

Assets held under hire purchase and finance lease agreementsAt the balance sheet date, the net book value of property, plant and equipment of the Group held under hire purchase andfinance leases are as follows:

Group2004 2003RM RM

Net book valuePlant, machinery and factory equipment 7,123,038 9,528,675 Motor vehicles 2,473,730 2,437,578 Furniture, fittings and office equipment 665,345 319,070

10,262,113 12,285,323

22. INTANGIBLE ASSETS

Group Goodwill Licence fee2004 2003 2004 2003RM RM RM RM

CostAt 1 January 0 0 81,794 80,000 Addition (Note 23) 1 0 0 1,794

At 31 December 1 0 81,794 81,794

Accumulated amortisationAt 1 January 0 0 28,491 20,090 Amortisation for the financial year 1 0 8,405 8,401

At 31 December 1 0 36,896 28,491

Net book value 0 0 44,898 53,303



23. SUBSIDIARY COMPANIES

Interest in subsidiary companies:

Company2004 2003RM RM

Unquoted shares, at cost 59,225,255 57,225,250 Less: accumulated impairment losses (10,842,163) (10,784,015)

48,383,092 46,441,235 Amounts due from subsidiary companies 110,813,678 56,696,747 Less : amounts receivable within 12 months (Note 28) (103,279,665) (15,639,417)

7,534,013 41,057,330 Less: allowance for doubtful debts (90,646) (32,030,563)

7,443,367 9,026,767

55,826,459 55,468,002

Amounts due from subsidiary companies arose mainly from inter-company advances and payments on behalf and arereceivable after 12 months, unsecured and interest free except for an amount of RM4,047,000 (2003: RM4,047,000) whichbears interest at rates ranging between 1.03% and 2.34% (2003: 1.07% and 1.71%) per annum.

It is impracticable to determine the fair value of amount due from subsidiary companies as these are interest free and haveno fixed terms of repayment. However, the carrying amounts recorded are not anticipated to significantly differ from its fairvalue at balance sheet date.

The subsidiary companies are:

Effective equity interestCountry of By By subsidiary Principal

Name of company incorporation Company company activities2004 2003 2004 2003

% % % %

Subsidiary companiesof Mah Sing Group Berhad

Mah Sing Properties Sdn Bhd Malaysia 100 100 0 0 Propertyinvestment and

development

Mah Sing Plastics Industries Malaysia 100 100 0 0 ManufactureSdn Bhd+ of plastic

moulded productsand propertydevelopment



23. SUBSIDIARY COMPANIES (CONT’D)



% % % %

Mah Sing Enterprise Sdn Bhd+ Malaysia 100 100 0 0 Tradingof plastic andother related

products

Mah Sing ComponentsManufacturing Sdn Bhd@ Malaysia 100 51 0 0 Inactive

Jastamax Sdn Bhd Malaysia 100 100 0 0 Inactive

Multi Synergy Group Sdn Bhd Malaysia 100 100 0 0 Propertyinvestment

Vital Routes Sdn Bhd Malaysia 100 100 0 0 Investmentholding

Champion Computers Sdn Bhd Malaysia 100 100 0 0 Investmentholding

Peninsular Connection Sdn Bhd Malaysia 100 100 0 0 Investmentholding

Pleasant Network Sdn Bhd Malaysia 100 100 0 0 Investmentholding

Insan Johan Sdn Bhd Malaysia 100 100 0 0 Inactive

Vital Roles Sdn Bhd Malaysia 90 90 0 0 Inactive

Mah Sing Precision EngineeringSdn Bhd Malaysia 100 100 0 0 Inactive

Konsortium LingkaranLembah Kinta Sdn Bhd Malaysia 51 51 0 0 Dormant

Gentali Motor Corpn. Sdn Bhd Malaysia 60.5 60.5 0 0 Inactive

Superior Focus Sdn Bhd Malaysia 80 80 0 0 Inactive






% % % %

Loyalview Development Sdn Bhd^ Malaysia 0 100 0 0 Dormant

Intramewah Development Sdn Bhd* Malaysia 100 0 0 0 Property development

Prima Peninsular Development Malaysia 100 0 0 0 DormantSdn Bhd

Legend Grand Development Sdn Bhd Malaysia 100 0 0 0 Dormant

Subsidiary company ofMah Sing Plastics IndustriesSdn Bhd

Kenwira Sdn Bhd Malaysia 0 0 100 100 Assemblyof helmets

Subsidiary companies ofMah Sing Properties Sdn Bhd

Acacia Springs Management Sdn Bhd Malaysia 0 0 100 100 Propertymanagement

Mestika Kenangan Sdn Bhd Malaysia 0 0 100 100 Property management

Mestika Bistari Sdn Bhd Malaysia 0 0 100 100 Property development

Subsidiary company ofPleasant Network Sdn Bhd

Vican Technology Sdn Bhd** Malaysia 0 0 68 68 Inactive,under court

winding up order

Subsidiary company ofVican Technology Sdn Bhd

Vican Electronics Sdn Bhd # Malaysia 0 0 100 100 Inactive






% % % %

Subsidiary company ofVital Routes Sdn Bhd

P.T.Mah Sing Indonesia* Indonesia 0 0 65 65 Manufacture of plastic moulded

products

*Audited by other firms of auditors.

**This subsidiary company is under court winding up order and was deconsolidated from the Group results in 2000. Thecost of investment in this subsidiary company had been fully provided for.

#This sub-subsidiary company has not been included in the Group consolidation as its immediate holding wasdeconsolidated from the Group.

+Consolidated by merger method.

^This subsidiary was acquired with the intention to dispose of in the short term and has not been included in the Groupconsolidation for the financial year ended 31 December 2003. The disposal was completed on 29 January 2004 (Note 25).

@Mah Sing Components Manufacturing Sdn Bhd (formerly known as Mah Sing-Yoshikawa Components ManufacturingSdn Bhd), has become a 100% subsidiary after the acquisition of the remaining 49% shareholding from its MinorityShareholder on 21 September 2004.

RMPurchase consideration 1Minority interest:490,000 shares ordinary share @ RM1 each 490,000 Losses absorbed up to the date of acquisition (490,000)Net assets acquired 0

Goodwill on acquisition Note 22 1



24. ASSOCIATED COMPANIES


Interest in associated companies:

Unquoted shares, at cost 936,248 936,248 224,750 224,750 Less: accumulated impairment losses 0 0 (199,226) (197,278)Group's share of post-acquisitionaccumulated losses (910,724) (908,776) 0 0

25,524 27,472 25,524 27,472 Amount due from an associated company 0 3,775,977 0 2,137,858 Less: repayable within 12 months (Note 28) 0 (3,775,977) 0 (2,137,858)

0 0 0 0

25,524 27,472 25,524 27,472

Amount due from an associated company is unsecured, interest free and full allowance for doubtful debts has been made.

The Group's share of the accumulated losses of associated companies as shown below has not been recognised in theGroup's income statement as equity accounting ceased when the Group's share of losses of associated companiesexceeded the carrying amount of its investment in the associates.

Group2004 2003RM RM

Accumulated lossesAs at 1 January (3,326,932) (2,359,649)Loss from ordinary activities after taxation (421,549) (967,283)

As at 31 December (3,748,481) (3,326,932)



24. ASSOCIATED COMPANIES (CONT'D)

Details relating to the associated companies are as follows:

Country of Effective PrincipalName of company incorporation equity interest activities

2004 2003% %

Associated companies ofMah Sing Group Berhad

Perstorp-Mah Sing Sdn Bhd* Malaysia 42 42 Inactive

Prestige Greenery Sdn Bhd * Malaysia 39.5 39.5 Dormant

Associated company ofPeninsular Connection Sdn Bhd

True Mineral Water Sdn Bhd Malaysia 50 50 Inactive

* Audited by other firms of auditors

25. INVESTMENTS

Group2004 2003RM RM

Quoted shares in Malaysia, at cost 3,700 3,700 Less: allowance for diminution in value (2,620) (2,620)

1,080 1,080 Unquoted shares outside Malaysia, at cost 0 1,204,055 Less: allowance for diminution in value 0 (1,204,055)

0 0Unquoted shares in Malaysia, at cost 2 2 Disposal (2) 0

0 2

1,080 1,082

Market value of quoted shares in Malaysia 1,080 1,120



26. PROPERTY DEVELOPMENT ACTIVITIES

(i) Land held for property development

Group2004 2003

Note RM RM

At 1 January 0 0 Addition during the year 111,291,084 98,113,044Transfer to property development costs 26(ii) (111,291,084) (98,113,044)

At 31 December 0 0

(ii) Property development cost

Group2004 2003

Note RM RM

At 1 JanuaryLand cost 197,655,249 99,542,205 Development costs 462,657,893 373,498,520 Accumulated cost charged to income statement (467,170,119) (369,068,584)

193,143,023 103,972,141

Cost incurred during the year:Transfer from land under property development 26(i) 111,291,084 98,113,044 Development costs 216,225,884 89,159,374

327,516,968 187,272,418

Cost charged to income statement (201,644,709) (98,101,536)

At 31 DecemberLand cost 308,946,333 197,655,249 Development costs 678,883,777 462,657,894 Accumulated cost charged to income statement (668,814,828) (467,170,120)

319,015,282 193,143,023

Included in development expenditure is interest on borrowings capitalised during the financial year amounting toRM5,245,465 (2003: RM2,458,787).

Included under land cost are freehold land costing RM300,933,954 (2003:RM95,689,201) which have been chargedto financial institutions as security for the term loans and bank overdrafts as shown in Notes 17 and 32. A piece ofleasehold land costing RM1,741,858 (2003: RM1,741,858) has been pledged as security for short term borrowingsgranted to the Company as shown in Note 31.



27. INVENTORIES

Group2004 2003RM RM

At cost:Completed properties 898,140 1,510,264 Raw materials 6,041,856 2,302,653 Work-in-progress 2,657,962 1,075,437 Finished goods 2,897,552 2,967,869

12,495,510 7,856,223

At net realisable value:Raw materials 0 199,967 Finished goods 0 135,110

0 335,077

12,495,510 8,191,300

Inventories of a subsidiary company amounting to RM4,407,080 (2003: RM1,827,659) are pledged to financial institutionsto secure foreign term loans, short term borrowing and bank overdraft as shown in Notes 17, 31 and 32.

28. TRADE AND OTHER RECEIVABLES


Trade receivables 76,158,490 53,497,462 0 0 Less : allowance for doubtful debts (1,759,016) (1,360,609) 0 0

74,399,474 52,136,853 0 0

Other receivables 3,134,727 3,630,449 37,520 113,288 Less: allowance for doubtful debts 0 (111,947) 0 (76,160)

3,134,727 3,518,502 37,520 37,128

77,534,201 55,655,355 37,520 37,128Accrued billings in respect of property development 36,965,578 7,823,733 0 0Amounts due from subsidiary companies (Note 23) 0 0 103,279,665 15,639,417Amount due from an associated company (Note 24) 0 3,775,977 0 2,137,858 Less : allowance for doubtful debts 0 (3,775,977) 0 (2,137,858)

0 0 0 0Tax recoverable 780,274 657,377 4,152,872 1,554,000 Deposits 3,333,366 3,725,448 1,900 2,250 Prepayments 737,560 1,268,677 6,398 375,292

119,350,979 69,130,590 107,478,355 17,608,087



28. TRADE AND OTHER RECEIVABLES (CONT’D)

The currency exposure profile of trade receivable is as follows:

Group2004 2003RM RM

- Ringgit Malaysia 65,817,752 50,502,965 - United States Dollar 8,581,722 1,633,894

74,399,474 52,136,859

Trade receivables of the Group amounting to RM8,581,722 (2003: RM1,633,894) are pledged to financial institutions tosecure foreign term loans, short term borrowings and bank overdrafts as shown in Notes 17, 31 and 32.

Trade receivables comprise amounts receivable for the sales of goods of RM19,254,311 (2003:RM16,123,011) andamounts receivable from customers for property development projects of RM55,145,163 (2003:RM36,013,848). Otherreceivables comprise mainly balance of property management fee and rental receivable.

The terms for sale of goods range from payment in advance to 90 days (2003: 90 days) credit whilst credit terms forreceivable under property development is 21 days (2003: 21 days).

Concentration of credit risk with respect to trade receivables are limited due to the Group's large number of customers,which are widely distributed and covers a broad range of end markets in which they sell. The Group's historical experiencein collection of accounts receivable falls within the recorded allowances. Due to these factors management believes thereare no additional credit risk beyond amounts provided for collection losses for the Group's trade receivables.

Amounts due from subsidiary companies which are receivable within 12 months are unsecured, interest free, arose mainlyfrom inter-company advances and payments on behalf.

29. DEPOSITS, CASH AND BANK BALANCES


Cash and bank balances 21,931,723 4,374,429 37,226 41,851Project accounts 11,334,724 7,263,137 0 0Deposits with licensed banks 2,762,000 80,000 2,697,000 0

36,028,447 11,717,566 2,734,226 41,851



29. DEPOSITS, CASH AND BANK BALANCES (CONT’D)

The interest rates per annum for deposits and project accounts during the financial year are:

Group2004 2003

% %

Project accounts 2.0 2.0 Deposits with licensed banks 3.0 3.0

Deposits have an average maturity of 30 days (2003: 30 days). Bank balances are deposits held on call with licensed banks.

Deposits with licensed banks of the Group amounting to RM65,000 (2003:RM80,000) have been pledged as collateral forguarantees issued on behalf of subsidiary companies.

Project accounts are bank accounts maintained in accordance with Section 7A of the Housing Developers Act, 1966.These accounts, which consist of monies received from purchasers, are for the payment of property developmentexpenditure incurred. The surplus monies, if any, will be released to the subsidiary company upon the completion of theproperty development projects and after all property development expenditure have been fully settled.

The currency exposure profile of cash and bank balances is as follows:


- Ringgit Malaysia 34,791,441 11,592,523 2,734,226 41,851 - United States Dollar 1,237,006 125,043 0 0

36,028,447 11,717,566 2,734,226 41,851



30. TRADE AND OTHER PAYABLES


Trade payables 73,940,630 111,681,709 0 0Retention sum 15,051,756 11,104,600 0 0Other payables 6,520,473 3,480,127 0 0

95,512,859 126,266,436 0 0Progress billings in respect

of property development 11,204,387 0 0 0Finance lease and hire purchase liabilities

(Note 19(ii)) 2,222,624 1,941,589 0 0Amounts due to subsidiary companies 0 0 1,480,694 3,143,557 Amounts due to associated companies 109,985 109,985 0 0Amount due to minority shareholder

of a subsidiary company 1,995,000 2,230,000 0 0Payable for acquisition

of property, plant and equipment 3,469,248 0 0 0Deposits received from customers 2,832,437 4,141,378 0 0Accrued operating expenses 7,056,216 5,038,344 214,461 49,919

124,402,756 139,727,732 1,695,155 3,193,476

Amounts payable for acquisition of property, plant and equipment are denominated in Japanese Yen, guaranteed by theCompany, interest-free during the financial year and are due on February 2005.

The terms of payment for trade payables and other payables granted to the Group range from cash basis to 90 days (2003:90 days) credit.

Included in trade payables is an amount of RM 21,030,000 (2003:RM84,487,540) representing balance of purchaseconsideration for development land acquired.

The currency exposure profile of trade payables including retention sum and other payables are as follows:

Group2004 2003RM RM

- Ringgit Malaysia 86,118,738 122,881,702 - United States Dollar 9,394,121 3,384,734

95,512,859 126,266,436

Amounts due to subsidiary companies are unsecured, interest free, arose mainly from inter-company advances andpayments on behalf and have no fixed term of repayment.

Amounts due to associated companies are unsecured, interest free and have no fixed term of repayment.

Amount due to minority shareholder of a subsidiary company is unsecured, bears interest at rates varying between 1.03%and 2.34% (2003: 1.07% and 1.71%) per annum and has no fixed term of repayment.



31. SHORT-TERM BORROWINGS


Secured:

Short-term foreign credit facilities 4,312,322 4,535,881 0 0 Revolving credit 6,000,000 8,500,000 6,000,000 3,500,000

10,312,322 13,035,881 6,000,000 3,500,000

Unsecured:

Revolving credit 16,000,000 16,000,000 5,000,000 5,000,000 Bankers acceptances 4,950,000 7,888,000 0 0

20,950,000 23,888,000 5,000,000 5,000,000

31,262,322 36,923,881 11,000,000 8,500,000

Group The secured short-term foreign credit facilities obtained by a subsidiary company are secured by legal charges over theleasehold land and buildings, plant, machinery and equipment, inventories and trade receivables of the said subsidiarycompany and is guaranteed by the Company.

Secured revolving credit of RM6,000,000 (2003: RM3,500,000) is secured by first and second fixed legal charge over apiece of vacant commercial site owned by a wholly owned subsidiary company.

In 2003, a secured revolving credit of RM5,000,000 is secured by deed of assignment over certain property, plant andequipment of subsidiary company and a first fixed charge over a piece of commercial development land and is guaranteedby the Company.

Both unsecured revolving credit and bankers acceptances are granted on negative pledges over the present and futureassets of the respective subsidiary companies and are guaranteed by the Company.

The currency exposure profile of the borrowings is as follows:


United States Dollar 3,230,000 3,173,000 0 0 Indonesian Rupiah 1,082,322 1,362,881 0 0 Ringgit Malaysia 26,950,000 32,388,000 11,000,000 8,500,000

31,262,322 36,923,881 11,000,000 8,500,000



31. SHORT-TERM BORROWINGS (CONT'D)

GroupAs at 31 December 2004, the weighted average effective interest rates of the borrowings denominated in United StatesDollar, Indonesian Rupiah and Ringgit Malaysia were 6.00% (2003: 7.50%), 7.62% (2003: 8.25%) and 4.75% (2003:4.91%) per annum respectively.

The borrowings bear interest at floating rates and their fair values approximate their carrying values at balance sheet date.

CompanyAs at 31 December 2004, the weighted average effective interest rates of the borrowings was 5.10% (2003: 5.10%) perannum respectively.

During the year, the rates were in the following range :

Group Company 2004 2003 2004 2003

% % % %

Foreign facilities :- United States Dollar 6.00 - 7.50 7.50 - 8.25 - -- Indonesian Rupiah 7.62 - 16.50 8.25 - 18.25 - -Local facilities 3.39 - 5.40 3.41 - 6.65 5.10 5.10

32. BANK OVERDRAFTS


Secured 409,862 2,094,612 0 0 Unsecured 439,645 4,856,626 410,523 2,779,801

849,507 6,951,238 410,523 2,779,801

GroupThe secured bank overdrafts of the Group are secured by legal charges over the leasehold land and buildings, plant,machinery and equipment, inventories and trade receivables, by a first fixed charge over a building and by a second fixedcharge over a piece of mixed development land, a specific debenture over the same development land of respectivesubsidiaries company and are guaranteed by the Company.

The unsecured bank overdraft facilities are granted on negative pledges over the present and future assets of theCompany and respective subsidiary companies.



32. BANK OVERDRAFTS (CONT'D)

CompanyThe unsecured bank overdraft facility is granted on negative pledges over the present and future assets of the Company.

The currency exposure profile of the bank overdrafts is as follows:


- Indonesian Rupiah 0 564,596 0 0 - Ringgit Malaysia 849,507 6,386,642 410,523 2,779,801

849,507 6,951,238 410,523 2,779,801

As at 31 December 2004, the weighted average effective interest rate of the bank overdrafts denominated in IndonesianRupiah was 13.75% (2003: 15.75%) per annum and local overdraft was 7.76% (2003: 7.61%) per annum.

The above overdrafts bear interest at floating rates. During the financial year the rates were in the following range :

Group Company 2004 2003 2004 2003

% % % %

Foreign facilities - Indonesian Rupiah 13.75 15.75 - -

Local facilities 7.00 - 8.25 7.00 - 8.65 7.75 7.75 - 8.15



33. CASH GENERATED FROM OPERATIONS


Profit before taxation 38,840,554 21,170,460 11,526,591 3,004,490 Adjustments for:Depreciation 14,645,223 8,832,460 17,902 14,832 Amortisation of licence fee 8,405 8,401 0 0 Goodwill written off 1 0 0 0 Gain on disposal of property,

plant and equipment (773,671) (3,013,838) 0 0 Net impairment loss of property,

plant and equipment 163,070 1,713,729 0 0 Property, plant and equipment written off 224,190 0 0 0 Allowance for amounts due

from subsidiary companies 0 0 1,493,132 708,774 Allowance for diminution in value

of investment in subsidiary companies 0 0 58,148 903,132 Allowance for diminution in value

of investment in associated company 0 0 1,948 71,278 (Recover) / allowance for

amount due from associated companies (75) 987,858 (75) 837,858

Provision for term loan in associated company 0 506,130 0 506,130 Interest expenses 9,736,286 6,778,052 519,396 599,900 Interest income (1,310,284) (212,833) (354,340) (47,252)Dividend for redeemable preference shares (300,000) 300,000 0 0 Gross dividend income

from subsidiary companies 0 0 (14,500,000) (7,400,000)Share of results in associates 1,948 71,278 0 0 Net unrealised foreign exchange (gain) / loss (205,006) 122,371 0 0

61,030,641 37,264,068 (1,237,298) (800,858)

(Increase) / decrease in working capital

Development properties (114,266,886) (108,489,893) 0 0 Real property assets 0 22,996,996 0 0 Inventories (4,304,210) 3,882,515 0 0 Receivables (50,201,888) (32,174,064) 368,852 (115,187)Payables (44,139,661) 91,996,136 164,542 (27,930)

Net change in working capital (212,912,645) (21,788,310) 533,394 (143,117)

Cash (used in) / generatedfrom operations (151,882,004) 15,475,758 (703,904) (943,975)



34. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

Net cash outlay for the acquisition of property, plant and equipment during the financial year is as follows:


Total acquisition (Note 21) 13,552,945 8,386,778 17,303 53,498 Less: amount payable for acquisition

of property, plant and equipment (2,317,753) (1,151,495) 0 0 Less: amount financed

by hire purchase and lease (1,255,188) (2,391,579) 0 0

Net cash outlay for the financial year 9,980,004 4,843,704 17,303 53,498

35. CASH AND CASH EQUIVALENTS

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


Cash and bank balances 21,931,723 4,374,429 37,226 41,851 Project accounts 11,334,724 7,263,137 0 0 Deposits with licensed banks 2,762,000 80,000 2,697,000 0 Bank overdrafts (Note 32) (849,507) (6,951,238) (410,523) (2,779,801)

35,178,940 4,766,328 2,323,703 (2,737,950)Less: deposits pledged

as collateral (Note 29) (65,000) (80,000) 0 0

35,113,940 4,686,328 2,323,703 (2,737,950)



36. CONTINGENT LIABILITIES (UNSECURED)

Company2004 2003RM RM

Corporate guarantees issued to financial institutions in respectof credit facilities granted to :- subsidiary companies 182,995,000 60,825,000

Corporate guarantees issued to third parties in respectof the acquisition of :

- development land 0 39,487,540 - property, plant and equipment 3,469,000 1,151,000

186,464,000 101,463,540

In the ordinary course of business, certain companies in the Group are defendants in various legal actions for breach ofcontracts and claims for service rendered which have no material impact. In the opinion of the Directors, after takingappropriate legal advice, the outcome of such actions are remote, therefore there is no provisions made in the financialstatements.

37. SEGMENTAL INFORMATION

The Group is organised into two main business segments:

i) Properties - investment, construction, management and development of residential, commercial and industrial properties

ii) Plastics - manufacture, assembly and sale of a range of plastic moulded products

Other operations of the Group include investment holding, dormant and inactive operations which are not of a sufficientsize to be reported separately.

Inter-segment sales comprise dividend income, interest charges and management fee on an arms length basis.



37. SEGMENTAL INFORMATION (CONT’D)

(a) Primary reporting format - business segments

2004 Properties Plastics Others GroupRM RM RM RM

RevenueTotal revenue 260,870,355 95,291,259 14,866,340 371,027,954 Inter-segment revenue 0 0 (14,572,792) (14,572,792)

External revenue 260,870,355 95,291,259 293,548 356,455,162

ResultsSegment results 36,973,433 7,365,155 13,216,480 57,555,068 Inter-segment results (1,200) 1,200 (13,820,753) (13,820,753)

Profit from operations 36,972,233 7,366,355 (604,273) 43,734,315

Finance cost (4,891,813)Share of results of associates (1,948)

Profit from ordinary activities before taxation 38,840,554 Taxation (13,118,849)

Profit from ordinary activities after taxation 25,721,705Minority interest (659,901)

Net profit for the financial year 25,061,804

Other informationCapital expenditure 2,102,977 11,432,665 17,303 13,552,945 Depreciation and amortisation 1,114,913 13,520,813 17,902 14,653,628 Impairment loss -Property, plant and equipment 0 360,327 0 360,327 Reversal of impairment loss -Property, plant and equipment 0 (197,257) 0 (197,257)

At 31 December 2004

Consolidated Balance SheetSegment assets 444,538,432 103,530,692 3,361,223 551,430,347 Investment in associates 0 0 25,524 25,524 Unallocated assets 780,274

Total assets 444,538,432 103,530,692 3,386,747 552,236,145

Segment liabilities 250,694,991 26,384,692 1,937,556 279,017,239 Unallocated liabilities 55,970,997

Total liabilities 250,694,991 26,384,692 1,937,556 334,988,236




(a) Primary reporting format - business segments (cont’d)

2003 Properties Plastics Others GroupRM RM RM RM

RevenueTotal revenue 136,220,038 75,806,756 7,459,252 219,486,046 Inter-segment revenue 0 0 (7,459,252) (7,459,252)

External revenue 136,220,038 75,806,756 0 212,026,794

ResultsSegment results 23,434,239 5,253,962 3,451,948 32,140,149 Inter-segment results (74,570) 74,570 (5,764,092) (5,764,092)

Profit from operations 23,359,669 5,328,532 (2,312,144) 26,376,057

Finance cost (5,134,319)Share of results of associates (71,278)

Profit from ordinary activities before taxation 21,170,460 Taxation (6,213,929)

Profit from ordinary activities after taxation 14,956,531 Minority interest (254,036)

Net profit for the financial year 14,702,495

Other informationCapital expenditure 1,891,633 6,441,647 53,498 8,386,778 Depreciation and amortisation 1,116,598 7,709,431 14,832 8,840,861 Impairment loss - Property, plant and equipment 0 1,713,729 0 1,713,729

At 31 December 2003

Consolidated Balance SheetSegment assets 251,194,784 96,360,355 1,061,226 348,616,365Investment in associates 0 0 27,472 27,472Unallocated assets 1,467,336

Total assets 251,194,784 96,360,355 1,088,698 350,111,173

Segment liabilities 140,891,000 20,428,017 1,542,506 162,861,523 Unallocated liabilities 79,384,133

Total liabilities 140,891,000 20,428,017 1,542,506 242,245,656




(b) Secondary reporting format - geographical segments

Segment assets include real property assets, investments, current assets that are used in the operating activities ofthe segment, property, plant and equipment and intangible assets. Segment liabilities include trade payables, otherpayables and accrued liabilities. Capital expenditure comprise additions to property, plant and equipment.

With the exception of a manufacturing set up for plastic moulded products in Indonesia the Group's operations arelocated in Malaysia.

The following is an analysis of the Group's external sales by location of customers, irrespective of the origin of thegoods/services:

Sales revenue by geographical market

2004 2003RM RM

Malaysia 309,804,121 188,432,869 Indonesia 38,715,947 16,083,375 Other countries 7,935,094 7,510,550

356,455,162 212,026,794

The following is an analysis of the carrying amount of segment assets and capital expenditure by the geographicalarea in which the assets are located:

Carrying amount of segment assets Capital expenditure

2004 2003 2004 2003RM RM RM RM

Malaysia 511,804,311 323,526,340 2,707,741 4,078,958 Indonesia 39,626,036 25,090,025 10,845,204 4,307,820

551,430,347 348,616,365 13,552,945 8,386,778

38. COMMITMENTS

(a) Capital commitments

Capital commitments in respect of property, plant and equipment are as follows:

Group2004 2003RM RM

Approved and contracted for 0 1,231,071



38. COMMITMENTS (CONT’D)

(b) Non-cancellable operating lease commitments for rental of premises are as follows:

2004 2003Future Future Future Future

minimum minimum minimum minimumlease sub-lease lease sub-lease

payments receipts payments receiptsRM RM RM RM

Group- not later than 1 year 58,960 33,000 64,960 0 - later than 1 year and not

later than 5 years 0 0 0 0

58,960 33,000 64,960 0

39. RELATED PARTY DISCLOSURES

(a) Related party and relationship

Name of related party Relationship

(i) Principal View Sdn Bhd Company in which Dato' Leong Hoy Kumhas substantial financial interest

(ii) Mah Sing Realty Sdn Bhd Company in which Dato' Leong Hoy Kumhas substantial financial interest

(iii) Leong Yuet Mei Director of the Company

(iv) Harian Madu Sdn Bhd Company in which two directors are brothers-in-law to Dato' Leong Hoy Kum

(v) Lim Kim Hooi Brother-in-law to Dato' Leong Hoy Kum



39. RELATED PARTY DISCLOSURES (CONT’D)

(b) Related party disclosures

In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are otherrelated party transactions and balances. The related party transactions described below were carried out on termsand conditions obtainable in transactions with unrelated parties:

Group2004 2003RM RM

(i) Rental expenses paid and payable to Principal View Sdn Bhd 212,416 206,508

(ii) Rental expenses paid to Mah Sing Realty Sdn Bhd 0 36,000

(iii) Rental expenses paid to Leong Yuet Mei 6,000 6,000

(iv) Maintenance charges paid and payable to Harian Madu Sdn Bhd 155,520 155,520

(v) Transportation services paid and payable to Lim Kim Hooi 56,127 60,345 Outstanding balance 5,784 5,000

40. FINANCIAL INSTRUMENTS

Estimated fair values

The carrying amounts of financial assets and liabilities of the Group and Company at the balance sheet date approximatetheir fair values except as set out below:

Group Company Carrying Fair Carrying Fair

Note amount value amount valueRM RM RM RM

Financial liabilities

At 31 December 2004:Finance lease liabilities 19 7,929,934 8,661,772 0 0

At 31 December 2003:Redeemable preference

shares issued bya subsidiary company # 19 14,000,000 12,161,000 0 0

Finance lease liabilities 19 8,859,782 7,715,337 0 0

There is no disclosure of fair value for investment in subsidiary and associated companies as these are excluded fromMASB Standard No. 24 Financial Instruments: Disclosure and Presentation.

# In 2003, the fair value is estimated by discounting the future cash flows of redeemable preference shares on theassumption that the preference dividend will be declared every year and the redeemable preference shares will be fullyredeemed at the issue price of RM2.80 per share by 31 December 2009, based on the current market rate available tothe Group for borrowing with similar maturity profile.



41. RETIREMENT BENEFIT OBLIGATIONS

A foreign subsidiary operates an unfunded defined Retirement Benefit Scheme ("the Scheme") for its eligible employees.

The amounts recognised in the balance sheet are determined as follows:

Group2004 2003RM RM

Present value of benefit obligations 770,854 329,852Fair value of plan assets 0 0

770,854 329,852Unrecognised past service cost - non vested (499,421) (227,321)

271,433 102,531

The amounts recognised in the income statement are as follows:

Group2004 2003RM RM

Current service cost 110,386 53,842 Interest on obligation 30,056 25,091 Amortisation of past service cost -vested 17,399 14,526 Amortisation of past service cost -non vested 11,061 9,072

Total, included in staff cost (Note 9 ) 168,902 102,531

The Group charge for the year of RM168,902 (2003: RM102,531) has been included in the administrative expenses.

Movements in the net liability in the current year are as follows:

Group2004 2003RM RM

At 1 January 102,531 0 Amounts recognised in the income statement 168,902 102,531

At 31 December 271,433 102,531

Principal actuarial assumptions used:

Group2004 2003

Discount rate 10.00% 10.00%Expected rate of salary increase 8.00% 8.00%

42. SIGNIFICANT POST BALANCE SHEET EVENT

On 19 January 2005, an additional 3,600 new ordinary shares of RM1.00 each, issued pursuant to the Warrants 2004/2009exercise was listed and quoted on the Main Board of Bursa Malaysia Securities Berhad.

43. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform with current year's presentation.



StatementByDirectorspursuant to Section 169(15) of the Companies Act, 1965

StatutoryDeclarationby the officer primarily responsible for the financial management of the Company

We, Jen. (R) Tan Sri Yaacob bin Mat Zain and Dato' Leong Hoy Kum, being two of the Directors of Mah Sing Group Berhad,state that, in the opinion of the Directors, the financial statements set out on pages 44 to 102 are drawn up so as to give a trueand fair view of the state of affairs of the Group and the Company as at 31 December 2004 and of the results and cash flowsof the Group and the Company for the financial year ended on that date in accordance with the applicable approved accountingstandards in Malaysia and the provisions of the Companies Act, 1965.

Signed on behalf of the Board in accordance with a resolution of the Board of Directors dated 6 April 2005.

JEN. (R) TAN SRI YAACOB BIN MAT ZAIN DATO' LEONG HOY KUMChairman Managing Director

I, Phan Gaik Cher, being the officer primarily responsible for the financial management of Mah Sing Group Berhad, do solemnlyand sincerely declare that the financial statements set out on pages 44 to 102 are in my opinion, correct and I make this solemndeclaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declaration Act, 1960.

PHAN GAIK CHER

Subscribed and solemnly declared at Kuala Lumpur this 6 April 2005.

Before me:

P. SAROJA PPNCommissioner for Oaths


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StatisticsOfShareholdingsas at 9 May 2005

SUBSTANTIAL SHAREHOLDERS

NAME NO. OF SHARES %

Dato’ Leong Hoy Kum 62,714,484 43.21

DIRECTORS’ SHAREHOLDINGS



LIST OF TOP 30 SHAREHOLDERS


01. Dato’ Leong Hoy Kum 18,117,484 12.49

02. EB Nominees (Tempatan) Sendirian Berhad 14,400,000 9.92Pledged securities account for Dato’ Leong Hoy Kum

03. Southern Nominees (Tempatan) Sdn Bhd 11,113,200 7.66Pledged securities account for Dato’ Leong Hoy Kum

04. HSBC Nominees (Asing) Sdn Bhd 7,230,200 4.98Silver Glass Continental S.A.

05. Amsec Nominees (Tempatan) Sdn Bhd 7,000,200 4.82AmBank Berhad for Dato’ Leong Hoy Kum

06. Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 7,000,200 4.82Pledged securities account for Dato’ Leong Hoy Kum(20856 JTRK)

07. HSBC Nominees (Asing) Sdn Bhd 5,619,200 3.87CALIM Finance Ltd

08. Mayban Nominees (Tempatan) Sdn Bhd 4,740,000 3.27Malaysian Trustees Berhad for Mayban SmallcapTrust Fund (240165)

09. HSBC Nominees (Asing) Sdn Bhd 4,431,800 3.05Dobson Agents Ltd

Authorised Share Capital : RM500,000,000Issued and Fully Paid Share Capital : RM145,131,000Class of Shares : Ordinary shares of RM1.00 eachVoting Rights : One vote per ordinary share on a poll

ANALYSIS OF SHAREHOLDINGS

Size of Holdings No. of Holders No. of Shares %

1 – 99 138 2,196 0.00100 – 1,000 1,218 1,100,760 0.761,001 – 10,000 2,499 10,648,940 7.3410,001 – 100,000 488 12,214,260 8.42100,001 – 7,256,549* 63 77,534,160 53.427,256,550 and above** 3 43,630,684 30.06

Total 4,409 145,131,000 100.00

Remarks : *Less than 5% of issued shares**5% and above of issued shares



10. HSBC Nominees (Asing) Sdn Bhd 4,000,000 2.76BNY Brussels for Strong Asia Pacific Fund Inc

11. HSBC Nominees (Asing) Sdn Bhd 3,900,000 2.69Mscoil for Pyrenees Global Value Master Fund Ltd

12. HSBC Nominees (Asing) Sdn Bhd 3,060,600 2.11HPBS SG for Tenacious Hold Limited

13. HSBC Nominees (Asing) Sdn Bhd 3,000,000 2.07DZ Bank Intl for Uni Em FernostTreuhandkonto, Luxembourg

14. HSBC Nominees (Asing) Sdn Bhd 3,000,000 2.07BBH (LUX) SCA for Fidelity Funds Malaysia

15. Malaysia Nominees (Tempatan) Sendirian Berhad 2,543,760 1.75Pledged securities account for Dato’ Leong Hoy Kum(01-00124-000)

16. Citicorp Nominees (Tempatan) Sdn Bhd 2,540,000 1.75 Pledged securities account for Dato’ Leong Hoy Kum (473907)

17. DB (Malaysia) Nominee (Asing) Sdn Bhd 2,190,000 1.51Deutsche Bank AG London for GLG Market Neutral Fund

18. ECM Libra Securities Nominees (Tempatan) Sdn Bhd 1,485,520 1.02Pledged securities account for Bonnie Yong @ Yong Yoon Kong

19. HSBC Nominees (Asing) Sdn Bhd 1,429,500 0.98Monarto South Invest Corp.

20. Lee Hiok Kui @ Jimmy Lingam 1,135,500 0.78

21. HSBC Nominees (Tempatan) Sdn Bhd 853,600 0.59HSBC (M) Trustee Bhd for Amcumulative Growth (3639)

22. DB (Malaysia) Nominee (Asing) Sdn Bhd 782,280 0.54BNP Paribas Nominees Singapore Pte Ltd for Cablestar Limited

23. TA Nominees (Tempatan) Sdn Bhd 705,000 0.49Pledged securities account for You Swee Lang @

Yeo Swee Lan

24. Wong Swee Yee 666,400 0.46

25. HLB Nominees (Tempatan) Sdn BhdPledged securities account for Wong Kok Hou 666,100 0.46

26. Lim Yoke Hiap 585,500 0.40

27. Citicorp Nominees (Asing) Sdn Bhd 507,200 0.35GSCO for Pantera Asia Master Fund Ltd

28. Citicorp Nominees (Asing) Sdn Bhd 500,000 0.34GSI for Alcor Capital Asia Fund Ltd

29. RHB Capital Nominees (Tempatan) Sdn Bhd 498,300 0.34Pledged securities account for Looi Boon Han (CEB)

30. Sze See Chuen 437,300 0.30

114,138,844 78.64

StatisticsOfShareholdings (cont’d)as at 9 May 2005


DIRECTORS’ WARRANT HOLDINGS

NAME NO. OF WARRANTS %


LIST OF TOP 30 WARRANT HOLDERS


01. EB Nominees (Tempatan) Sendirian Berhad 7,200,000 14.88Pledged securities account for Dato’ Leong Hoy Kum

02. Southern Nominees (Tempatan) Sdn Bhd 5,556,600 11.48Pledged securities account for Dato’ Leong Hoy Kum

03. HSBC Nominees (Asing) Sdn Bhd 3,505,700 7.25Dobson Agents Ltd

04. Amsec Nominees (Tempatan) Sdn Bhd 3,500,100 7.24AmBank Berhad for Dato’ Leong Hoy Kum

05. Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 3,500,100 7.24Pledged securities account for Dato’ Leong Hoy Kum(20856 JTRK)

06. HSBC Nominees (Asing) Sdn Bhd 2,550,300 5.27Crownpro Investment Limited

07. Dato’ Leong Hoy Kum 1,586,280 3.28

08. HSBC Nominees (Asing) Sdn Bhd 1,530,300 3.16HPBS SG for Tenacious Hold Limited

09. HSBC Nominees (Asing) Sdn Bhd 1,331,300 2.75Calim Finance Ltd

10. Wong Swee Yee 1,033,500 2.14

StatisticsOfWarrantHoldingsas at 9 May 2005

No. of Outstanding Warrants : 48,372,200Exercise Price of Warrants : RM1.00Exercise Period of Warrants : 7 June 2004 to 6 June 2009Exercise Rights : Each warrant entitles the holder to subscribe for one new ordinary share of

RM1.00 each in the CompanyVoting Rights at Meetings of Warrant Holders : One vote per warrant on a poll

ANALYSIS OF WARRANT HOLDINGS

Size of Holdings No. of Holders No. of Warrants %

1 – 99 199 5,021 0.01100 – 1,000 508 430,100 0.891,001 – 10,000 1,107 3,634,199 7.5110,001 – 100,000 166 5,122,800 10.59100,001 – 2,418,609* 32 13,367,280 27.642,418,610 and above** 6 25,812,800 53.36

Total 2,018 48,372,200 100.00

Remarks : *Less than 5% of warrants outstanding**5% and above of warrants outstanding



11. RHB Capital Nominees (Tempatan) Sdn Bhd 908,200 1.88Pledged securities account for Looi Boon Han (CEB)

12. Lim Yoke Hiap 901,400 1.86

13. ECM Libra Securities Nominees (Tempatan) Sdn Bhd 690,760 1.43Pledged securities account for Bonnie Yong @ Yong Yoon Kong

14. Hoh Sin Lien 500,000 1.03

15. Kee Siok Ai 458,400 0.95

16. TA Nominees (Tempatan) Sdn Bhd 431,000 0.89Pledged securities account for You Swee Lang@Yeo Swee Lan

17. RHB Capital Nominees (Tempatan) Sdn Bhd 395,700 0.82Pleadged securities account for Susy Ding (CEB)

18. DB (Malaysia) Nominee (Asing) Sdn Bhd 391,140 0.81BNP Paribas Nominees Singapore Pte Ltdfor Cablestar Limited

19. Cimsec Nominees (Tempatan) Sdn Bhd 327,000 0.68CIMB for Yong Ah Ku @Yeoh Kok Wah(Margin MM1152)

20. RHB Capital Nominees (Tempatan) Sdn Bhd 250,000 0.52Pledged securities account for Fong Jong Han (CEB)

21. RHB Capital Nominees (Tempatan) Sdn Bhd 215,000 0.44Pledged securities account for Fong Siling(CEB)

22. Mayban Nominees (Tempatan) Sdn Bhd 204,200 0.42Pledged securities account for Lee Choon Fok(338AB2817)

23. HSBC Nominees (Asing) Sdn Bhd 200,000 0.41Idealist Finance Limited

24. Lee Hiok Kui @ Jimmy Lingam 187,000 0.39

25. UOBM Nominees (Tempatan) Sdn Bhd 175,000 0.36Fortress Capital Asset Management (M) Sdn Bhdfor Tan Beng Im

26. Wong Kok Hou 171,000 0.35

27. Duar Tuan Kiat 161,000 0.33

28. Loi Pui Khim 140,500 0.29

29. Mayban Nominees (Tempatan) Sdn Bhd 120,500 0.25Pledged securities account for Tee See Kim(188AJ0042)

30. Loh Tsu Ern 120,000 0.25

38,241,980 79.05

StatisticsOfWarrantHoldings (cont’d)as at 9 May 2005

FORM OF PROXY

(Before completing the form please refer to notes below)

I / We

(FULL NAME IN CAPITAL LETTERS)

of

(FULL ADDRESS)

being a Member / Members of MAH SING GROUP BERHAD, hereby appoint *the Chairman of the Meeting or failing

him


of

(FULL ADDRESS)

or failing him,


of

(FULL ADDRESS)

as my / our proxy to vote for me / us on my / our behalf at the Thirteenth Annual General Meeting of the Company, to be held at

Penthouse Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur on Monday, 27 June 2005 at 10.00 a.m. and at

any adjournment thereof, on the following resolutions referred to in the notice of the Thirteenth Annual General Meeting:-

My / Our proxy is to vote as indicated below:

No. Resolutions FOR AGAINST

1. Adoption of Audited Financial Statements and Reports

2. Approval of First and Final Dividend

3. Approval of Directors’ fees

4. Re-election of Jen. (R) Tan Sri Yaacob bin Mat Zain as Director

5. Re-election of Ms Leong Yuet Mei as Director

6. Re-appointment of Auditors

7. Empower Directors to issue and allot shares pursuant to Section 132D of the Companies Act, 1965

8. Approval of Proposed Renewal of Shareholders’ Mandate

(Please indicate with an “X” in the spaces provided whether you wish your votes to be cast for or against the Resolutions. In the

absence of specific direction, your proxy will vote or abstain as he/she thinks fit.)

Total Number of shares held

If more than one proxy is appointed, please specify in the table below

the no. of shares represented by each proxy.

Name of Proxy 1:

Name of Proxy 2:

………………………………………..

Signature: Shareholder or

Common Seal of Appointor

Dated this ……………. day of ………………………. 2005.

* Delete the words “the Chairman of the Meeting or” if you wish to appoint some other person to be your proxy.

NOTES:1. A member entitled to attend and vote at the Thirteenth Annual General Meeting is entitled to appoint a proxy or attorney or in the case of a corporation, to appoint

a duly authorised representative to attend and vote in his place. A proxy or attorney or duly authorised representative may but need not be a member of theCompany.

2. The power of attorney or a notarially certified copy thereof or the Form of Proxy shall be in writing under the hand of the appointor or of his attorney duly authorisedin writing. If the appointor is a corporation, it must be executed under its seal or under the hand of its officer or its attorney duly authorised on its behalf.

3. Where a member appoints more than one (1) proxy (subject always to a maximum of two (2) proxies at each meeting), the appointment shall be invalid unless hespecifies the proportions of his holdings to be represented by each proxy.

4. The Form of Proxy together with the power of attorney (if any) under which it is signed or a duly notarially certified copy thereof must be deposited at the registeredoffice of the Company at Penthouse Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur not less than forty eight (48) hours before the timefor holding the Meeting or any adjournment thereof.

Fold this flap for sealing

1st fold here

THE COMPANY SECRETARYMAH SING GROUP BERHAD

Penthouse Suite 1Wisma Mah Sing

No. 163, Jalan Sungai Besi57100 Kuala Lumpur

Then fold here

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MAH SING GROUP BERHAD · MAH SING GROUP BERHAD (230149-P) annual report 2004 Mah Sing Group Berhad...

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Transcript of MAH SING GROUP BERHAD · MAH SING GROUP BERHAD (230149-P) annual report 2004 Mah Sing Group Berhad...