CONTENTS Report 2003...Jalan Lapangan Terbang, 93250 Kuching, Sarawak not less than 48 hours before...

Notice of fourth annual general meeting

Notice of dividend entitlement

Statement accompanying notice of annual general meeting

Corporate information

Board of directors

Corporate structure

Managing Director’s statement

Directors’ statement on corporate governance

Report of the audit committee

Statement on internal control

Statement of directors’ responsibilities

Statutory financial statements

Directors’ report

Report of the auditors

Balance sheets

Income statements

Statement of changes in equity

Cash flow statements

Notes to the financial statements

List of properties

Analysis of shareholdings

Form of proxy

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06

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73

for preparing the annual financial statements

CONTENTS○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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17867weida ARpg1-29 alvin 21/7/03, 10:59 AM1

WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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AGENDA

1. To receive and adopt the Audited Financial Statements for the financial year ended31 March 2003 together with the Reports of the Directors and Auditors thereon.

2. To declare a First and Final dividend of 3% per share less 28% income tax, in respect of thefinancial year ended 31 March 2003 as recommended by the Directors.

3. To approve the increase of Directors’ fees amounting to RM125,500 bringing the totalDirectors’ fees for the financial year ending 31 March 2004 to RM378,000.

4. To re-elect the following Directors who retire in accordance with Article 88 of theCompany’s Articles of Association and being eligible, offer themselves forre-election:-

(i) Mr. Chong Kwan Wai (ii) Encik Rozabil @ Rozamujib Bin Abdul Rahman

5. To re-elect the following Directors who retire in accordance with Article 81 of theCompany’s Articles of Association and being eligible, offer themselves forre-election:-(i) Tuan Haji Su’ut Bin Haji Suhaili(ii) YBhg. Datu Voon Chen Hian @ Voon Chen Kok(iii) Mr. Lee Choon Chin

6. To re-appoint Messrs. KPMG as the Company’s Auditors and to authorise theDirectors to fix their remuneration for the ensuing year.

7. As special businessTo consider and, if thought fit, pass the following resolution as Ordinary Resolution:-• Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

“THAT, pursuant to Section 132D of the Companies Act, 1965 and subject always tothe approval of the relevant authorities, the Directors be and are herebyempowered to issue shares in the Company from time to time and upon such termsand conditions and for such purposes as the Directors may deem fit provided thatthe aggregate number of shares issued pursuant to this resolution does not exceed10% of the issued share capital of the Company for the time being AND THAT theDirectors be and are hereby empowered to obtain approval for the listing andquotation of the additional shares so issued on Kuala Lumpur Stock Exchange ANDTHAT such authority shall continue in force until the conclusion of the next AnnualGeneral Meeting of the Company.”

8. To transact any other business which may properly be transacted at an annualgeneral meeting, due notice of which shall have been previously given inaccordance with the Companies Act, 1965 and the Company’s Articles ofAssociation.

NOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of the Company will beheld at the Company’s premises, Wisma Hock Peng, 2nd Floor, 123, Green Heights, JalanLapangan Terbang, 93250 Kuching, Sarawak on Monday, 25 August 2003 at 10:00 am for thefollowing purposes:-

Resolution 1

Resolution 2

Resolution 3

Resolution 4Resolution 5

Resolution 6Resolution 7Resolution 8

Resolution 9

Resolution 10

NOTICE OF FOURTH ANNUALGENERAL MEETING

02


WEIDA (M) BHD.

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NOTICE IS ALSO HEREBY GIVEN that the First and Final Dividend of 3% per share less 28%income tax, for the financial year ended 31 March 2003, if approved at the Fourth AnnualGeneral Meeting, will be paid on 20 November 2003 to Depositors whose names appear inthe Record of Depositors on 6 November 2003.

A Depositor shall qualify for entitlement only in respect of:-

(a) Shares transferred into the Depositors’ Securities Account before 4.00 pm on 6 November 2003 in respect of ordinary transfers;

(b) Shares bought on Kuala Lumpur Stock Exchange on a cum entitlement basis according to the Rules of Kuala Lumpur Stock Exchange.

BY ORDER OF THE BOARD

LEONG OI WAHVOON JAN MOIJoint Company Secretaries

Dated : 30 July 2003Kuching, Sarawak

Explanatory Notes on Special Business

(1) Ordinary Resolution on Authority to allot shares pursuant to Section 132D of theCompanies Act 1965

The proposed resolution no. 10 in relation to authority to issue shares pursuant to Section132D of the Companies Act, 1965, if passed, will empower the Directors to issue and allotshares up to an aggregate amount not exceeding 10% of the issued share capital ofthe Company for the time being, for such purposes as the Directors consider would be inthe interests of the Company. This authority unless revoked or varied at a generalmeeting will expire at the next Annual General Meeting.

Notes :-

1. A proxy may but need not be a member of the Company and the provisions of Section149(1)(b) of the Act shall not apply to the Company.

2. To be valid, the duly completed proxy form must be deposited at the Registered Officeof the Company at Wisma Hock Peng, Ground Floor to 2nd Floor, 123, Green Heights,Jalan Lapangan Terbang, 93250 Kuching, Sarawak not less than 48 hours before the timeset for holding the meeting or any adjournment thereof.

3. A member shall be entitled to appoint more than one (1) proxy to attend and vote atthe same meeting provided that the provisions of Section 149(1)(c) of the Act arecomplied with.

4. Where a member appoints more than one (1) proxy, the appointment shall be invalidunless he specifies the proportions of his shareholdings to be represented by each proxy.

5. If the appointor is a corporation the proxy form must be executed under its commonseal or under the hand of an officer or attorney duly authorised.

NOTICE OF DIVIDEND ENTITLEMENT

03


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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STATEMENT ACCOMPANYING NOTICE OFANNUAL GENERAL MEETING

1. Names of Directors standing for election or re-election

Directors who are standing for re-election at the Fourth Annual General Meeting ofthe Company are :-

Mr. Chong Kwan Wai Article 88 (Resolution 4)Encik Rozabil @ Rozamujib Bin Abdul Rahman Article 88 (Resolution 5)Tuan Haji Su’ut Bin Haji Suhaili Article 81 (Resolution 6)YBhg. Datu Voon Chen Hian @ Voon Chen Kok Article 81 (Resolution 7)Mr. Lee Choon Chin Article 81 (Resolution 8)

2. Details of attendance of Directors at Board Meetings

Details of attendance of Directors at Board Meetings are outlined in page 17 of theAnnual Report 2003.

3. Place, date and time of the forthcoming Annual General Meeting

The Fourth Annual General Meeting shall be held at the Company’s premises, WismaHock Peng, 2nd Floor, 123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching,Sarawak on Monday, 25 August 2003 at 10.00 am.

4. Profile of Directors who are standing for re-election

Further details pertaining to Directors standing for election and re-election are outlinedon pages 6 to 9 of the Annual Report 2003.

04


WEIDA (M) BHD.

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WEIDA (M) BHD.

05

CORPORATE INFORMATION

DIRECTORS

Tuan Haji Su’ut Bin Haji SuhailiIndependent Non-ExecutiveDeputy Chairman

Lee Choon ChinManaging Director

YBhg. Datu Voon Chen Hian @Voon Chen KokIndependent Non-Executive Director

Datuk Dr Stalin HardinIndependent Non-Executive Director

Rozabil @ Rozamujib Bin Abdul RahmanIndependent Non-Executive Director

Jee Hon ChongExecutive Director

Yong Lin LinExecutive Director

Chew Chin ChoongExecutive Director

Lai Lim HonExecutive Director

Tok Jiak YongExecutive Director

Chong Kwan WaiExecutive Director

COMPANY SECRETARIES

Leong Oi Wah(MAICSA 7023802)

Voon Jan Moi(MAICSA 7021367)

AUDITORS

KPMGLevel 6 Westmoore HouseTwin Tower CentreRock Road93200 KuchingTel : 082-422699Fax : 082-422399

BANKERS

Malayan Banking BhdRHB Bank BerhadUnited Overseas Bank (Malaysia) BhdPublic Bank BhdAlliance Bank BhdHSBC Bank Malaysia BhdOCBC Bank (Malaysia) Bhd

ADVOCATES & SOLICITORS

Alvin Chong & PartnersSio & Ting Advocates

SHARE REGISTRAR

Signet Share Registration Services Sdn BhdTingkat 11 Tower BlockKompleks Antarabangsa50250 Kuala LumpurTel : 03-21454337Fax : 03-21421353E-mail : [email protected]

REGISTERED OFFICE

Wisma Hock Peng,Ground Floor to 2nd Floor,123, Green Heights,Jalan Lapangan Terbang,93250 Kuching, Sarawak, Malaysia.Tel : 082-456456Fax : 082-459000E-mail: [email protected]

COUNTRY OF INCORPORATION AND DOMICILE

Malaysia

STOCK EXCHANGE LISTING

Second Board of Kuala Lumpur Stock ExchangeStock Name : WEIDAStock Code : 7111


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

06

BOARD OF DIRECTORS

The profiles of the members of the Board of Directors are set out below.

Their attendance at Board meetings and their shareholdings in WEIDA (M) BHD.("the Company") are shown on pages 17 and 72 respectively.

The Directors have no family relationship with each other or the substantial shareholders ofthe Company. They have no conflict of interest with the Company. In addition, there are nomaterial contracts of the Company or its subsidiaries involving Directors and substantialshareholders’ interest subsisting at the end of the financial year under review or entered intosince the end of the previous financial year. Significant related party disclosures are set outin Note 28 in the Notes to the Financial Statements on pages 61 to 63.

None of the Directors hold any directorship in any other public companies exceptfor YBhg. Datu Voon Chen Hian @ Voon Chen Kok who holds a directorship in one otherpublic company.

None of the Directors have been convicted of any offences other than traffic offences.

LEE CHOON CHIN 49 years of age, Malaysian

Lee Choon Chin, the Group Managing Director, was appointed to the Board on 25 October2000. He is also a member of the Remuneration and Compensation Committee.

He graduated with a Bachelor of Science (Hons) from University of Malaya in 1978. Hefounded the Weida Group in 1983 and led the Group to listing on the Second Board ofKuala Lumpur Stock Exchange on 28 February 2001. Through his excellent entrepreneurialskills backed by years of experience in the high-density polyethylene engineering productsindustry, he has steered the Group to become a leading player in its chosen industry.

TUAN HAJI SU'UT BIN HAJI SUHAILI 56 years of age, Malaysian

Tuan Haji Su'ut Bin Haji Suhaili, the Deputy Chairman of the Board, was appointed asan Independent Non-Executive Director of the Company on 25 October 2000. He isactively serving on all Board Committees, namely as Chairman of the Remuneration andCompensation Committee and as members of the Audit Committee and NominatingCommittee.

Tuan Haji is an MBA graduate from Henley Brunel University in the United Kingdom, and hasserved in the civil service for more than 30 years including many years in senior capacities.He has also served for many years as a director in various companies involved in a broadspectrum of industries.

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WEIDA (M) BHD.

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07

BOARD OF DIRECTORS (cont’d)

YBHG. DATU VOON CHEN HIAN @ VOON CHEN KOK 59 years of age, Malaysian

YBhg. Datu Voon Chen Hian @ Voon Chen Kok was appointed to the Board as anIndependent Non-Executive Director of the Company on 25 October 2000. He also servesas the Chairman of the Nominating Committee.

YBhg. Datu holds a Bachelor of Engineering (Civil) from the University of Tasmania. He startedhis career with the Public Works Department of Sarawak in 1969 and retired in 2001 afterserving as its Director for five years since 1997. He is presently the Chief Executive Officer ofSarawak Incorporated Sdn. Bhd..

JEE HON CHONG 44 years of age, Malaysian

Jee Hon Chong was appointed to the Board as an Executive Director on 25 October 2000.He graduated from Tunku Abdul Rahman College and subsequently obtained his degreein Mechanical Engineering from the Engineering Council, United Kingdom.

He is one of the pioneers of the Group, being the first factory engineer when Weidacommenced manufacturing operations in Kuching in 1988. Subsequently, he successfullycommissioned another two factories in Kota Kinabalu and Nilai. He heads the Group'smanufacturing operations.

YBHG. DATUK DR. STALIN HARDIN 61 years of age, Malaysian

YBhg. Datuk Dr. Stalin Hardin was appointed to the Board as an Independent Non-Executive Director of the Company on 16 December 2000. He is the Chairman of the AuditCommittee as well as a member of the Nominating Committee and the Remuneration andCompensation Committee. He is also the Senior Independent Director to whom concernsregarding the Company may be conveyed.

YBhg. Datuk obtained his Doctor of Medicine degree from the University of Toronto in 1966and a Master of Public Health post-graduate degree from Tulane University, USA in 1970. Heserved with the Health Department, Sarawak in various capacities for 29 years and retiredas its Director in 1996. He is now an advisor to the Sarawak State Government on theSarawak International Medical Centre project, a consultant and a businessman.


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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08

YONG LIN LIN 43 years of age, Malaysian

Yong Lin Lin was appointed to the Board as an Executive Director on 25 October 2000.Having graduated with a Diploma in Electrical and Electronic Engineering in 1985, he joinedWeida in 1986. As one of the pioneers of the Group, he has been a driving force assisting theManaging Director in building Weida from a small trading company into a public listedcompany.


LAI LIM HON 53 years of age, Malaysian

Lai Lim Hon was appointed to the Board as an Executive Director on 6 May 2002. Hegraduated with an Honours degree in Civil Engineering from University of Malaya in 1975.He subsequently obtained a Master of Engineering degree from University of New SouthWales.

He started his career with the Public Works Department of Sarawak ("PWD") where he servedfor 20 years, specialising in water supplies and sewage. He left PWD as its Chief HydraulicsEngineer in 1995 to be a Director of a leading firm of consulting engineers. He joined Weidain 1997 and has been heading the Group's engineering and research and developmentfunctions since then.

CHEW CHIN CHOONG 34 years of age, Malaysian

Chew Chin Choong was appointed to the Board as an Executive Director on 27 November2001. He is also a member of the Audit Committee. He is an economics graduate holding aB. Sc. (Hons) degree from the London School of Economics and Political Science and aChartered Accountant with the Institute of Chartered Accountants in England and Wales.

He has a total of more than 10 years experience in audit, consulting and finance andaccounting functions in public listed companies. He is the head of the finance andaccounting functions of the Group.


WEIDA (M) BHD.

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09


ROZABIL @ ROZAMUJIB BIN ABDUL RAHMAN 31 years of age, Malaysian

Rozabil @ Rozamujib Bin Abdul Rahman was appointed to the Board as an Independent Non-Executive Director on 4 June 2003. He holds a Diploma in Business Administration.

He has extensive experience in the construction and property development industries. Hepresently serves as a director in a few companies involved in these industries.

CHONG KWAN WAI 41 years of age, Malaysian

Chong Kwan Wai was appointed to the Board as an Executive Director on 29 May 2003. Hegraduated from Tunku Abdul Rahman College in 1985 and subsequently obtained hisdegree in Mechanical Engineering from the Engineering Council, UK.

He joined Weida in 1996 as a Manager. He was subsequently promoted to be a Director ofone of the marketing subsidiaries of the Group. He is presently responsible for the Group’sSabah operations which he has headed since 1996.

TOK JIAK YONG 40 years of age, Malaysian

Tok Jiak Yong was appointed to the Board as an Executive Director on 6 May 2002. Havingcompleted his secondary education, he joined Weida in 1993 as a Sales and MarketingExecutive. He was subsequently promoted to be a Director of two of the marketingsubsidiaries of the Group. He has been playing an instrumental role in the sales driven growthof the Group since the 1990s. He is presently responsible for the marketing and salesfunctions of the Group.


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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10

CORPORATE STRUCTURE


WEIDA (M) BHD.

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WEIDA (M) BHD.

11

Industry Trends and Development

The Group is primarily engaged in the manufacturing, distribution and installation ofhigh-density polyethylene (“HDPE”) engineering products in Malaysia focusing mainly onwater supplies and sewage treatment systems.

The barriers of entry into this industry are high: substantial capital investment, intensiveresearch and development programmes and the availability of technological expertise.This industry is generally capital intensive for big scale manufacturers. The industry playershave generally remained the same during the financial year under review.

However, the margins within the industry are continuing to thin due to keen competitionamong the existing players, exacerbated by the challenging economic conditions duringthe financial year under review.

Over the longer term, prospects of the HDPE products industry remain bright as they aresuperior to their metal and concrete counterparts due to their qualities of being corrosionresistant, durable, leakage-proof, lightweight, hygenic and weather resistant. Currently, thetrend is that HDPE water and sewage tanks will gradually replace metal and concrete onesin the future.

Operating Environment

The Malaysian economy rebound in 2002 to register a healthy 4.2% real gross domesticproduct growth compared to only 0.4% in 2001. The Government’s pump priming activities,recovery of private investments, improved crude palm oil prices, higher tourist arrivals andconsumer spending provided the boost. The continuing low interest rate regime and thepegged exchange rate provided a conducive and stable monetary environment for growth.

Our customers are mainly from the construction, property development, plantation andGovernment sectors. The construction sector with the property development sub-sectorexperienced subdued growth at 2.3% in 2002, the same as in 2001. Activities in theconstruction sector were mainly supported by the pump priming activities of theGovernment. Activity levels were, however, affected by the shortage of labour beginningfrom the second half of 2002 following the repatriation of foreign workers. On the otherhand, the plantation sector did well on the back of good crude palm oil prices.

The global environment was tough during the financial year under review. Although severalkey US economic indicators showed early signs of recovery in the first few months of 2002,hopes soon fizzled out amidst revelations of corporate scandals involving grossmismanagement and fraudulent accounting practices. In Asia, the Japanese economyremained anemic. At that same time, tensions continued to rise in the Middle East,culminating in the Iraq War in March 2003. Closer to home, the regional economies were alsoaffected to some extent by the fear of terrorist activities, and the Bali bombing in October2002 was a tragic realisation of this fear.

On behalf of the Board of Directors of Weida (M) Bhd., I am pleased to present the

Annual Report and the Financial Statements of the Group and the Company for

the financial year ended 31 March 2003.

MANAGING DIRECTOR’S STATEMENT

Lee Choon Chin, Managing Director


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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12

MANAGING DIRECTOR’S STATEMENT (cont’d)

Operating Results

Operating in a challenging environment amidst turbulent times, our Group did well in thefinancial year just ended. Compared to the previous financial year, turnover increased 25% toRM96.9 million from RM77.8 million while profit before tax increased 62% to RM11.8 million fromRM7.3 million. These results did not come easy. We felt the pressures of the above industrytrends and operating environment. We countered with aggressive marketing campaigns drivenby hard work, sound operating strategies which emphasized process efficiency and a rightproduct mix, economies of scale, as well as investments in additional manpower resourcesand enhanced incentives for our staff.

Our efforts were aided by the Government’s proactive pump-priming measures. The RM28.4billion earmarked for development expenditure in Budget 2002 coupled with the unspentportion of the 2001 special stimulus package of RM7.3 billion fuelled the construction sectorin the financial year under review.

The financial position of our Group remained strong throughout the financial year underreview. With no long term borrowings and a net cash position as at 31 March 2003, our Groupis well placed to meet future challenges and take advantage of business opportunitiesas they arise.

Global and National Economic Outlook

The world continues to face increasing risks and uncertainties since the September 11incident, further exacerbated by the war in Iraq. While the world is still confronted with thesedifficulties, the outbreak of the Severe Acute Respiratory Syndrome (“SARS”) further worsenedthe economies of many countries, especially in this region.

All these have severely affected the global business environment and the prospects of anearlier world economic recovery. Most analysts are now forecasting the economies of theindustrialised countries, especially USA and Japan, to remain soft. Such an outlook wouldcertainly have an adverse impact on other economies, especially developing countries.

However, it is encouraging to note that the SARS outbreak seems to be abating while worldstock markets seem to be on an upward trend in recent months. If sustained, it may markthe beginning of a world economic recovery.

To mitigate the adverse impact of external factors, the Government has on 11th of March thisyear, announced 10 new measures to stimulate and strengthen the capital markets. On 20thof May, the Government has further announced pro-growth measures under the RM7.3billion Package of New Strategies to reinforce our economic fundamentals for themedium and long term.

Despite the uncertainties in the global business environment, most economists remainpositive about the 2003 growth prospects for Malaysia. With sustainable domestic demandfrom private consumption and investment activities, the economy is widely expected toexpand by at least 4.0% in 2003, with more significant growth coming in the later part of theyear. Bank Negara Malaysia is currently predicting a 4.5% growth rate, down from the6.0% - 6.5% growth projected during the 2003 Budget presentation. This economic expansion,if achieved, may lead to a new cycle of growth for the country.

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13

The Malaysian monetary policy is expected to remain stable and expansionist for the rest ofthis year and 2004, augmenting the Government’s fiscal measures. Interest rates are expectedto remain low for the rest of 2003 and at least the early part of 2004, sustained by ampleliquidity in the local banking system.

Operational Strategies

We foresee that the margins of the building and infrastructure materials industries willcontinue to thin gradually due to keen competition. Our Group will respond by intensifyingour efforts to capture a bigger market share with the aim of reaping the resulting economiesof scale in order to reduce unit costs and protect our margins.

Our Group will also continue to pursue new business opportunities including turnkeycontracts, new technologies and products, and look into ways to streamline our operationsaimed at improving operating efficiency and productivity as well as rationalising costs.

Besides an established national presence, we are looking to expand our business activitiesbeyond the shores of Malaysia.

Prospects For The Financial Year Ending 31 March 2004

To reiterate, our customers are mainly from the construction, property development,plantation and government sectors.

Conditions in the construction sector and property development sub-sector are expected toremain tough. Bank Negara Malaysia is forecasting a reduced growth rate of 1.9% in 2003for the construction sector due to slower growth in civil engineering and the residentialsub-sector.

The overhang of commercial and industrial properties continued to exist. The residentialsector may provide the only lift, supported by a good mortgage and interest rateenvironment, a one year exemption of real property gains tax starting from 1 June 2003 andan improving stock market. There may be pent-up demand stemming from propertypurchases previously held back due to the uncertain economic situation, poor performanceof the equity market and low consumer confidence.

However, in the Package of New Strategies, the Government has stated its intention tocontinue to undertake development projects, with priority given to infrastructure andconstruction related projects. These projects will give rise to demand for our productsand services.

Crude palm oil prices appear to be sustaining at levels of about RM1,500 per metric ton.This augurs well for our customers in the plantation sector.

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WEIDA (M) BHD.○ ○ ○ ○

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14


In spite of an economic environment that continues to be challenging and externaluncertainties, the Directors are reasonably optimistic, barring unforeseen circumstances,that the Group will be able to sustain or improve on the sterling performance achieved in thefinancial year just ended.

Dividend

The Board of Directors proposes a first and final dividend of 3% per share, less income tax(2002: 3% per share, less income tax), subject to shareholders’ approval at the forthcomingAnnual General Meeting of the Company.

Utilisation of Share Proceeds

All proceeds from the Allotment of Shares, Rights Issue and Public Issue in conjunctionwith the listing of the Company on the Second Board of Kuala Lumpur Stock Exchange on28 February 2001 have been now fully utilised.

Acknowledgement

On behalf of the Board of Directors, I would like to place on record our appreciation toour customers and shareholders for their support, without which our Group would nothave been strong and successful.

I would also like to thank our associates, bankers, advisors, suppliers and sub-contractorsfor their continuing understanding, confidence and support to the Group.

Last but not least, the Board and I wish to thank the management and all employees of theGroup for their commitment, contribution and hard work which have enabled the Group toachieve new heights in the financial year just ended.


5 July 2003

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WEIDA (M) BHD.

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15

DIRECTORS’ STATEMENT ON CORPORATEGOVERNANCE

The Code

In March 2000, the Finance Committee on Corporate Governance issued the Malaysian Codeon Corporate Governance (“the Code”). The Code sets out principles and best practices onstructures and processes that companies may use in their operations towards achievingthe optimal governance framework.

The Board of Weida (M) Bhd. welcomes the Code and is duly committed to implementing thehighest standards of corporate governance throughout the Group as a fundamental part ofdischarging its responsibilities to protect and enhance shareholders’ value and the financialperformance of the Group.

In accordance with the Listing Requirements, the Board is pleased to disclose the manner inwhich it has applied the principles of good governance and the extent to which it hascomplied with the best practices set out in the Code. These disclosures are contained in thisstatement, the Statement of Internal Control and the Report of the Audit Committee.

The Board of Directors

An effective Board leads and controls the Group. In discharging the Board's stewardshipresponsibilities, the Board explicitly assumes the following six specific responsibilities: -

(a) reviewing and adopting a strategic plan for the Group;

(b) overseeing the conduct of the Group's business to evaluate whether the business isproperly managed;

(c) identifying principal risks and ensure the implementation of appropriate systems tomanage the risks;

(d) succession planning, including appointing, training, fixing the compensation of andwhere appropriate, replacing Senior Management;

(e) developing and implementing an investors relations programme or shareholderscommunication policy for the Group; and

(f) reviewing the adequacy and integrity of the Group's internal control systems andmanagement information systems, including systems for compliance withapplicable laws, regulations, rules, directives and guidelines.

In addition, the Board reserves for itself the following areas of strategic importance to theGroup to ensure that the direction and control of the Group is firmly in its hands: -

(a) approval of strategic corporate plans and annual budgets;

(b) announcements of quarterly results;

(c) acquisitions and disposals of business segments and properties of significant value;

(d) major investments and financial decisions;

(e) appointments to the Board; and

(f) changes to the management and control structure within the Group.

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WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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16

Board Balance

The Board currently has eleven members, comprising seven Executive Directors and fourIndependent Directors. The Chairman position is presently vacant. The Deputy Chairman is anIndependent Director, and the ratio of Independent Directors complies with the statutoryrequirement of one-third. Together, the Directors have a wide range of entrepreneurial,management, marketing, manufacturing, technical, financial and civil administrationexperience. This mix of skills and experience is vital to the success of the Group given itsnature of business and customer base. A brief profile of each Director is presented on pages6 to 9.

There is a clear division of responsibilities between the Deputy Chairman of the one part, andthe Managing Director of the other part, to ensure that there is a balance of power andauthority. The Deputy Chairman heads the Board and leads the planning discussion at theBoard level, while the Managing Director is responsible for the implementation of policies andBoard decisions and executive decision making. The presence of Independent Directorsfulfils a crucial role in corporate accountability, providing unbiased and independent views,advice and judgement to take account of the interests, not only of the Group, but also of allshareholders, employees, customers, suppliers and the many communities in which the Groupconducts business.

Supply of Information

Management undertakes a proactive approach to provide all Directors with an agenda anda set of Board papers in advance for them to be properly briefed prior to Board meetingsso that time can be conserved for focussed discussions during the meetings. TheBoard therefore expects to receive, on a timely basis, material information about the Group,its activities and performance, particularly any significant variances from budgets and plans.The Board papers include, among others, the following: -

i. annual budgets and management plans;ii. quarterly and annual financial reports;iii. minutes of meetings of all Committees of the Board;iv. a summary of all correspondences with Kuala Lumpur Stock Exchange ("KLSE"),

Securities Commission ("SC") and other regulatory authorities as may be appropriate;v. a summary of all circular Board resolutions for ratification; andvi. a summary of all announcements to KLSE.

All Directors have the right to make further enquiries where they consider necessary priorto Board meetings.

All Directors have access to the advice and services of the Company Secretaries incarrying out their duties. In addition, all Directors may obtain independent professional advicein the furtherance of their duties, at the Company's expense.

Frequency and Attendance of Board Meetings

The Board holds at least four regularly scheduled meetings annually, with additional meetingsfor particular matters convened as and when necessary. Informal meetings andconsultations are frequently and freely held to share expertise and experiences. Five Boardmeetings were held during the financial year ended 31 March 2003. The attendance recordof each Director is as follows: -

DIRECTORS’ STATEMENT ON CORPORATEGOVERNANCE (cont’d)


WEIDA (M) BHD.

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17


Independent Non-Executive DirectorsDatin Amar Fredahanam Mahmud* (Chairlady)Tuan Haji Su'ut Bin Haji Suhaili (Deputy Chairman)Datuk Dr. Stalin HardinYBhg. Datu Voon Chen Hian @ Voon Chen KokRozabil @ Rozamujib Bin Abdul Rahman**

Executive DirectorsLee Choon Chin (Managing Director)Jee Hon ChongYong Lin LinChew Chin ChoongTok Jiak YongLai Lim HonChong Kwan Wai***

* resigned on 30 April 2003** appointed on 4 June 2003*** appointed on 29 May 2003N/A not applicable

Board Committees

The following Board Committees have been established to assist the Board in discharging itsduties. All Board Committees do not have executive powers. They report to the Board on allmatters considered and their recommendations thereon. The terms of reference of eachCommittee have been approved by the Board and, where applicable, comply with therecommendations of the Code.

(a) Audit CommitteeThe Audit Committee was established on 17 May 2001. The Report of the AuditCommittee is set out on pages 22 to 26.

(b) Nominating CommitteeChairman : YBhg. Datu Voon Chen Hian Independent Non-Executive Director

@ Voon Chen KokMembers : Tuan Haji Su'ut Bin Haji Suhaili Independent Non-Executive Director

Datuk Dr. Stalin Hardin Independent Non-Executive Director

The Nominating Committee was established on 4 February 2002. It held one meetingduring the financial year.

The functions of the Nominating Committee are to: -

• Determine the core competencies and skills required of Board members tobest serve the business and operations of the Group as a whole and the optimumsize of the Board to reflect the desired skills and competencies;

• Review the size of non-executive participation, board balance and determine ifadditional board members are required and also to ensure that at least 1/3 of theBoard is independent;

Number of MeetingsAttended

3554

N/A

544545

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Percentage

6010010080

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1008080

10080

100N/A


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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18


• Recommend to the Board, all candidates for directorships to be filled by theshareholders or the Board;

• Consider, in making its recommendations, candidates for Directorshipsproposed by the Managing Director and, within the bounds of practicality, byany other senior executive or any director or shareholder;

• Recommend to the Board, Directors to fill the seats on Board committees;

• Undertake an annual review of the required mix of skills and experience and otherqualities of Directors, including core competencies which non-executive Directorsshould bring to the Board and to disclose this in the annual report;

• Formulate and implement procedures to be carried out by the NominatingCommittee annually for assessing the effectiveness of the Board as a whole, theBoard committees and for assessing the contributions of each director; and

• Introduce such regulations, guidelines, or procedures to function effectively andfulfil the Committee’s objectives.

(c) Remuneration and Compensation CommitteeChairman : Tuan Haji Su'ut Bin Haji Suhaili Independent Non-Executive Director

Members : Datuk Dr. Stalin Hardin Independent Non-Executive Director

Lee Choon Chin Managing Director

The Remuneration and Compensation Committee (“RACC”) was established on 23 March2001. It held one meeting during the financial year.

The RACC is responsible for recommending the level and make-up of the remuneration ofthe Executive Directors of Weida (M) Bhd. so as to ensure that the Group attracts andretains Directors of the necessary calibre, experience and quality needed to run theGroup successfully. It is nevertheless the responsibility of the entire Board to approve theremuneration of these Directors.

The fees for the Non-Executive Directors are determined by the Board as a whole.

Appointments to the Board

The Nominating Committee recommends the appointment of new Directors to the Board.

Directors' and Senior Management Training

All new Board members and Senior Management are guided on a familiarisation programme,including visits to the Group’s offices and manufacturing facilities and meetings with seniormanagement as appropriate, to facilitate their understanding of the Group.

All the Directors have attended the Mandatory Accreditation Programme (“MAP”) exceptfor Chong Kwang Wai and Rozabil @ Rozamujib Bin Abdul Rahman who were appointed on29 May 2003 and 4 June 2003, respectively. They will attend similar training programmes fromtime to time to equip themselves with the knowledge to discharge their dutieseffectively.


WEIDA (M) BHD.

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19


Succession Planning

The Board recognises human resource development and succession planning as criticalfactors in achieving the Group’s business objectives.

The Group reviews its manpower requirements and updates its organisation charts regularly,and conducts periodic recruitment drives to fill vacancies as they arise. However, the Group’spolicy is to promote from within where possible.

All staff, including Directors and Senior Management, are encouraged to attend externaltraining courses and seminars to continuously upgrade their skills set. The Group contributesto the Human Resource Development Fund and sets aside an amount for training in its annualbudget.

Re-election of Directors

In accordance with the Company’s Articles of Association, all Directors who are appointedby the Board are subject to election by shareholders at the ensuing Annual General Meetingafter their appointment.

In accordance with the Company’s Articles of Association and in compliance with KLSE’sListing Requirements that came into force on 1 June 2001, one-third of the remainingDirectors, including the Managing Director, are required to submit themselves for re-electionby rotation at each Annual General Meeting.

Directors over seventy years of age are required to submit themselves for re-appointmentannually in accordance with Section 129(6) of the Companies Act, 1965.

Directors' Remuneration

Contrary to the disclosure recommendations as contained in the best practices of theCode, the Board would not be providing details of remuneration awarded to each Director.The Board is of the opinion that matters pertaining to Directors remuneration are of a personalnature. However, the Board wishes to confirm that the level and make-up of remuneration forExecutive Directors were reviewed and recommended by the RACC and approved by theBoard as a whole.

In compliance with KLSE Listing Requirements, the fees and remuneration paid to Directorsduring the financial year, in aggregate and analysed into bands of RM50,000 are as follows: -

Aggregate Non-Executive Directors Executive DirectorsRM RM

Fees 112,500 140,000Salaries Nil 967,680Bonus Nil 444,640Benefits-in-kind 3,861 78,400


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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20


Remuneration Non-Executive Directors Executive Directors RM Number NumberLess than 50,000 4 -50,001 - 100,000 - -100,001 - 150,000 - -150,001 - 200,000 - -200,001 - 250,000 - 4250,001 - 300,000 - 1300,001 - 350,000 - -350,001 - 400,000 - -400,001 - 450,000 - 1

Investors Relations and Communications to Shareholders

The Board acknowledges the need for shareholders to be informed of all materialbusiness matters affecting the Group and values dialogue with investors. In addition tovarious announcements made during the year, the timely release of financial results on aquarterly basis provides shareholders with an overview of the Group’s performance andoperations.

The Group has been using the Annual General Meeting, usually held in August or Septembereach year, as a mean of communicating with shareholders. Shareholders who are unableto attend the meeting in person are allowed to appoint proxies to attend and vote ontheir behalf. Shareholders are encouraged to participate in the question and answersession at the meeting. Members of the Board as well as the Auditors of the Company arepresent to answer questions raised at the meeting.

In addition, shareholders can obtain information on the Group by accessing its website atwww.weida.com.my .

Datuk Dr. Stalin Hardin is the Senior Independent Non-Executive Director. Any concerns orqueries concerning the Group may be conveyed to him.

Financial Reporting

In presenting the annual financial statements and quarterly announcements of results toshareholders, the Directors aim to present a balanced and understandable assessment ofthe Group’s position and prospects.

The Directors consider that in preparing the financial statements, the Group has usedappropriate accounting policies, consistently applied and supported by reasonable andprudent judgements and estimates. All the applicable accounting standards have beenfollowed, subject to material departures being disclosed and explained in the notes to thefinancial statements, if any.

Internal Control

The Directors acknowledge their responsibility for the Group’s system of internal control,which is designed to suit the particular circumstances of the Group and to manage the risksinvolved in pursuing the Group’s business objectives. The system of internal control currentlypractised by the Group spans not only financial aspects but also operational andcompliance aspects of the Group’s activities in order to safeguard the Group’s assets andhence, shareholders’ investments. This system, by its nature, can only provide reasonablebut not absolute assurance against misstatement or loss.


WEIDA (M) BHD.

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21


Some of the key elements of the Group's internal control system are set out on page 27 andpage 28 of the Statement of Internal Control.

The Board is committed to undertake regular reviews of key commercial, operational andfinancial risks facing the Group’s businesses together with more general risks such as thoserelating to compliance with laws and regulations. In executing this commitment, the Boardhas established an Internal Audit Department. The scope of the Internal Audit Departmentis set out in the Report of the Audit Committee set out on pages 22 to 26.

The objectives of periodic review of risks and internal audit are to give reasonable assurancethat the structure of controls and operations is appropriate to the Group’s situation and thatthere is an acceptable level of risk throughout the Group’s operations.

The Board has implemented a risk management framework in compliance with theguidance issued by the Task Force on Internal Control, and will continue to enhance it.

Relationship with the External Auditors

Through the Audit Committee, the Group has established a transparent and appropriaterelationship with the external auditors. The Audit Committee meets with the external auditorswithout the presence of executive members of the Board and Management at least oncea year.

The amount of non-audit fees paid to KPMG by the Company and its subsidiaries duringthe financial year ended 31 March 2003 amounted to RM9,300.

This statement is made in accordance with a resolution of the Board of Directors dated5 July 2003.

Tuan Haji Su’ut Bin Haji SuhailiDeputy Chairman



WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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22

REPORT OF THE AUDIT COMMITTEE

Composition of Audit Committee

The Committee comprised the following Directors:-

Audit Committee Member Designation Status of Directorship

Datuk Dr. Stalin Hardin Chairman Independent Non-Executive Director

Tuan Haji Su'ut Bin Haji Suhaili Member Deputy Chairman &Independent Non-Executive Director

Chew Chin Choong Member Executive Director

Chew Chin Choong is a member of one of the associations of accountants specified inPart II of the 1st Schedule of the Accountants Act 1967.

Terms of Reference

The terms of reference of the Committee are as follows: -

Constitution

The Audit Committee was established on 17 May 2001. The functions and authority of theCommittee extend to Weida (M) Bhd. and all its subsidiaries collectively referred to as“the Group”.

Primary objectives

The Audit Committee has been formed with the following objectives: -

a. enhance openness, integrity and accountability in the Group's activities so as tosafeguard the rights and interests of the shareholders;

b. provide assistance to the Board in fulfilling its fiduciary responsibilities relating tocorporate accounting and reporting practices;

c. enhance the Group's business effectiveness and efficiency, quality of the accountingand audit functions and strengthen the public's confidence in the Group'sreported results;

d. maintain, through regularly scheduled meeting, a direct line of communicationbetween the Board and the external and internal auditors; and

e. enhance the independence of the internal audit function.


WEIDA (M) BHD.

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23

Membership

The Committee shall be appointed by the Board from amongst their number and shall consistof no fewer than three members, a majority of whom shall be Independent Directors and atleast one of whom shall be a member of the Malaysian Institute of Accountants or one of theassociations of accountants specified in Part II of the 1st Schedule of the Accountants Act1967. The Chairman of the Committee shall be an Independent Non-Executive Directorappointed by the Board.

If membership of the Committee for any reason falls below three members, the Board ofDirectors shall, within three months of that event, appoint such number of new members asmay be required to fulfil the minimum requirement.

No alternate directors shall be appointed to the Audit Committee.

Meetings and Minutes

Meetings shall be held at least four times a year and the Group Financial Controller is normallyinvited to attend the meetings. Other members of the Board may attend the meetings uponthe invitation of the Committee. The Committee shall meet with the external auditors withoutthe presence of Executive Directors and the Management at least once a year.

A quorum shall be two members present and a majority of whom must be IndependentDirectors. Minutes of each meeting shall be kept and distributed to each member of theCommittee and of the Board. The Chairman of the Committee shall report on each meetingto the Board. The Secretary to the Committee shall be any of the Joint Company Secretaries.

Review of the composition of the Committee

The term of office and performance of the Committee and each of the members shallbe reviewed by the Board of Directors at least once every three years to determine whetherthe Committee and its members have carried out their duties in accordance with theirterms of reference.

Authority

The Committee is authorised by the Board to: -

i. investigate any activity within its terms of reference and shall have unrestrictedaccess to all employees of the Group;

ii. have the resources in order to perform its duties as set out in its terms of reference;

iii. have full and unrestricted access to information pertaining to the Company and theGroup;

iv. have direct communication channels with the internal and external auditors; and

v. obtain external legal or other independent professional advice as necessary.

Notwithstanding anything to the contrary hereinbefore stated, the Committee does not haveexecutive powers and shall report to the Board of Directors on matters considered and itsrecommendations thereon, pertaining to the Company and the Group.

REPORT OF THE AUDIT COMMITTEE (cont’d)


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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24


Responsibility

Where the Committee is of the view that a matter reported by it to the Board of Directors hasnot been satisfactorily resolved resulting in a breach of the Listing Requirements of KualaLumpur Stock Exchange (“KLSE”), the Committee has the responsibility to promptly reportsuch matter to KLSE.

Functions and Duties

The duties of the Committee are to: -

a. consider the appointment, resignation and dismissal of external auditors and the auditfee;

b. review the nature and scope of audit plans prepared by the internal and externalauditors;

c. review the audit reports prepared by the internal and external auditors, the majorfindings and management's responses thereto;

d. discuss problems and reservations arising from the interim and final audits, andany matter the external auditors may wish to bring up;

e. review the quarterly and annual financial statements of the Company and the Groupprimarily focusing on the matters set out below, before submission to the Board: -• changes in accounting policies and practices, where applicable;• significant audit adjustments;• the going concern assumption;• compliance with accounting standards and regulatory requirements.

f. consider the internal audit reports, major findings and management's responsesthereto on any internal investigations carried out by the internal auditors and ensurethat appropriate action is taken by management in respect of the audit observationsand the committee’s recommendations;

g. review the auditors’evaluation of the systems of internal controls;

h. review the scope, functions and resources of the internal audit department andwhether it has the necessary authority to carry out its work;

i. review any appraisal or assessment of the performance of the staff in the internal auditdepartment;

j. approve appointment or termination of senior executives in the internal auditdepartment;

k. be informed of any resignation of executives in the internal audit department andto provide the resigning executive an opportunity to submit his or her reason forresigning;

l. review the assistance given by the Company and the Group's employees to theauditors;


WEIDA (M) BHD.

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25


m. review related party transactions entered into by the Company and the Group toensure that such transactions are undertaken on the Group’s normal commercialterms and on an arm’s length basis; and

n. perform such other functions as may be agreed to by the Committee and the Board.

Frequency and Attendance of Committee Meetings

The Committee held five meetings during the financial year ended 31 March 2003. Theattendance of each member is as follows: -

Audit Committee Member Number of Meetings Attended Percentage

Datuk Dr. Stalin Hardin (Chairman) 5 100

Tuan Haji Su'ut Bin Haji Suhaili 5 100

Chew Chin Choong 5 100

Activities of the Committee For The Financial Year

In line with the terms of reference of the Committee, the following activities were carriedout by the Committee in the discharge of its functions and duties for the financial yearended 31 March 2003: -

a. review of the quarterly financial results and annual reports of the Company prior tosubmission to the Board of Directors for consideration and approval;

b. review of the annual audit strategy and plans of the external auditors;

c. review and deliberate the external auditors’ reports in relation to the statutory auditand issues arising from the audit;

d. review and approve the annual audit plan and quarterly updates thereof preparedby the Internal Audit Department;

e. review and deliberate the quarterly internal audit reports presented by the InternalAudit Department on findings, recommendations (incorporating Management’sresponse) and action plans with persons responsible and a time frame forimplementation of the recommendations;

f. review of proposed related party transactions to be entered into by the Company andthe Group prior to submission to the Board of Directors for consideration and approval;

g. review adequacy of the disclosure on related party transactions entered into by theCompany and the Group in the quarterly and annual reports of the Company;

h. meet with the external auditors without the presence of any executives except for theJoint Company Secretaries;

i. consider the nomination and appointment of external auditors, as well as their fees;

j. review the Statement on Internal Control prior to submission to the Board for itsapproval.


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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26


Internal Audit Function

The Company has established an Internal Audit Department during the financial year toassist the Audit Committee to discharge its duties and responsibilities. The Internal AuditCharter which sets out the responsibility, scope and objectives, independence and authorityof the internal audit function has also been established. The principal responsibility of theInternal Audit Department is to undertake regular and systematic reviews of the systems ofcontrols based on the risks identified by the Board so as to provide reasonable assurance tothe Committee on the adequacy of internal controls and that they have been operatingsatisfactorily and effectively.

In attaining these objectives, the scopes of activities of the Department include thefollowing: -

a. review and appraise the soundness, adequacy and application of the systems ofinternal controls and recommend improvements thereon;

b. ascertain the extent of compliance with established policies, procedures andstatutory requirements;

c. appraise the reliability, integrity and usefulness of financial and managementinformation developed;

d. carry out audit work in liaison with the external auditors to maximise the use ofresources and for effective coverage of relevant risks;

e. review the controls for safeguarding assets and as appropriate, verify the existenceof assets;

f. carry out special reviews and investigations requested by the Audit Committee, Boardof Directors and Managing Director; and

g. identify ways and opportunities to improve the effectiveness and efficiency of theoperations and processes of the Group.

In the course of the financial year, the Internal Audit Department had conducted theevaluation of the system of internal controls that emcompass the Group’s governance,operations, and information systems of major areas of the Group operation.

The internal audit reports were deliberated by the Audit Committee and recommendationswere duly acted upon by management.

This report of the Audit Committee is made in accordance with a resolution of the Board ofDirectors dated 5 July 2003.


WEIDA (M) BHD.

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27

STATEMENT ON INTERNAL CONTROL

Board responsibility

The Board of Directors recognises the importance of maintaining a sound system of internalcontrol and the proper management of risks throughout its operations in order to safeguardshareholders’ investments. The Board affirms its overall responsibility for the Group’s systems ofinternal control and risk management, and for reviewing the adequacy and integrity of thosesystems. It should be noted, however, that such systems are designed to manage rather thaneliminate the risk of failure to achieve business objectives. Accordingly, these systems canprovide only reasonable, and not absolute, assurance against material misstatement or loss.

Risk management framework

The Board confirms that it has an ongoing process of identifying, documenting, evaluating,monitoring and managing significant risks affecting the achievement of its businessobjectives. As part of the risk management process, the Board has completed an extensiverisk assessment of the Group that includes:

i. identification of principal risks under appropriate risk categories, levels and sub-levels;ii. assessment of the likelihood of risks crystalising and the resulting impact;iii. the identification and review of the inventory of the internal controls framework that

exists within the Group;iv. the identification of gaps between risks and controls and the actions to be taken to

bridge the gaps; andv. a two-dimensional scoring of the Group’s risk profile by reference to the likelihood of

crystalisation and the materiality of impact.

The above assessment is documented as the Group’s Risk Profile and is subject to annualreview and updates.

In addition, the Board has established an organisational structure with clearly defined linesof accountability and authority for each Board member. The responsibility of the AuditCommittee includes monitoring of internal controls of the Group, with the assistance of theInternal Audit Department. The scope of the activities of the Internal Audit Department is setout in the Report of the Audit Committee on pages 22 to 26.

The Internal Audit Department was established in December 2002. The Internal AuditDepartment adopts a risk-based approach and prepared its annual audit plan based on thelikelihood and impact of risks identified in the Group’s Risk Profile. The annual audit plan isupdated and presented to the Audit Committee for approval on a quarterly basis. The scopeof work includes periodic review and evaluation of various aspects including operational,financial and regulatory compliance. An internal audit report is presented to the AuditCommittee quarterly on findings, recommendations (incorporating management’s response)and action plans with persons responsible and a time frame for implementation of therecommendations. The Chairman of the Audit Committee presents summaries of the internalaudit reports at Board meetings. The Internal Audit Department continuously monitors theimplementation of its recommendations by the management.

The monitoring, review and reporting process in place give reasonable assurance that thestructure of controls is appropriate to the Group’s operations and that risks are at anacceptable level throughout the Group’s business.


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28

STATEMENT ON INTERNAL CONTROL (cont’d)

Other key elements of internal control

The other key elements of the Group's internal control system include: -

• establishment of Audit Committee, Nominating Committee, Remuneration andCompensation Committee, with clearly defined responsibilities and authority;

• the Nominating Committee recommends to the Board, candidates for directorship;• the Remuneration and Compensation Committee reviews the remuneration package

of each Director by reference to performance of the Director;• appraisal and approval by the Board of major capital expenditure and asset disposals;• quarterly Audit Committee and Board meetings to review the Group’s financial

performance prior to announcements to KLSE;• comprehensive and detailed monthly financial reports for review by Senior

management;• a detailed budgeting process where operating units prepare budgets for approval

by the Board on a yearly basis;• quarterly monitoring of actual results against budgets, with major variances being

followed up and management actions being taken, where necessary;• regular visits to operating units by members of the Board and Senior Management.

Control weaknesses that result in material losses

A number of minor to moderate internal control weaknesses were identified during thefinancial year, all of which have been, or are being, addressed. None of the weaknesseshave resulted in any material losses, contingencies or uncertainties that would requiredisclosure in the Group’s annual report.



WEIDA (M) BHD.

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STATEMENT OF DIRECTORS’ RESPONSIBILITIESFOR PREPARING THE ANNUAL FINANCIAL STATEMENTS

The Directors are required by the Companies Act, 1965 (“the Act”) to prepare financialstatements for each financial year which give a true and fair view of the state of affairs of theCompany and the Group at the end of the financial year and the results and cash flows ofthe Company and the Group for the financial year.

As required by the Act, the financial statements have been prepared in accordance with theapplicable approved accounting standards in Malaysia and the provisions of the Act. Inpreparing the financial statements for the financial year ended 31 March 2003 set out onpages 35 to 68, the Directors consider that the Group has used and consistentlyapplied appropriate accounting policies as well as supported them with reasonable andprudent judgements and estimates.

The Directors have the responsibility to ensure the Company and the Group maintain properaccounting records which disclose with reasonable accuracy, the financial position andperformance of the Company and the Group, and to enable them to ensure the financialstatements comply with the Act. The Directors have the overall responsibility for takingsuch steps as are reasonably open to them to safeguard the assets of the Company and theGroup, to prevent and detect fraud and other irregularities.


29


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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DIRECTORS’ REPORTFOR THE FINANCIAL YEAR ENDED 31 MARCH 2003

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of theCompany for the financial year ended 31 March 2003.

Principal activities

The Company is principally engaged in investment holding and provision of management services to subsidiaries, whilstthe principal activities of its subsidiaries are stated in Note 3 to the financial statements. There have been no significantchanges in the nature of these activities during the financial year.

Results

Net profit for the financial year

Dividend

Since the end of the previous financial year, the Company paid a first and final dividend of 3% less tax totallingRM864,000 in respect of the financial year ended 31 March 2002 on 23 December 2002.

The Directors recommend a first and final dividend of 3% less tax totalling RM864,000 in respect of the financial yearended 31 March 2003.

Reserves and provisions

There were no material transfers to or from reserves and provisions during the financial year except as disclosed in thefinancial statements.

Directors of the Company

Directors who served since the date of the last report are:

Tuan Haji Su’ut Bin Haji SuhailiLee Choon ChinDatu Voon Chen Hian @ Voon Chen KokDatuk Dr. Stalin HardinJee Hon ChongYong Lin LinChew Chin ChoongLai Lim HonTok Jiak YongChong Kwan Wai (appointed on 29 May 2003)Rozabil @ Rozamujib Bin Abdul Rahman (appointed on 4 June 2003)Datin Amar Fredahanam Bt. Mahmud (resigned on 30 April 2003)

The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations (other thanwholly-owned subsidiaries) of those who were Directors at financial year end as recorded in the Register of Directors’Shareholdings are as follows:

GroupRM

9,459,571

CompanyRM

687,406


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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DIRECTORS’ REPORTFOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 (cont’d)

Number of ordinary shares of RM1.00 each At At1.4.2002 Bought Sold 31.3.2003

Shareholdings in Weida (M) Bhd. inwhich Directors have direct interests

Tuan Haji Su’ut Bin Haji Suhaili 10,000 - - 10,000Lee Choon Chin 2,122,273 - - 2,122,273Datu Voon Chen Hian @ Voon Chen Kok 10,000 - - 10,000Datuk Dr. Stalin Hardin 10,000 - - 10,000Jee Hon Chong 360,568 - - 360,568Yong Lin Lin 430,682 - 10,000 420,682Lai Lim Hon 126,284 - - 126,284Tok Jiak Yong 259,568 - - 259,568

Shareholdings in which a Director,Lee Choon Chin, has deemed interests

Weida (M) Bhd.* 9,333,323 - - 9,333,323Weidaya Sdn. Bhd.** 350,000 - - 350,000Saruwas Sdn. Bhd.** 102,000 - - 102,000Weida Marketing Sdn. Bhd.** 255,000 - - 255,000Weida Environmental Technology Sdn. Bhd.** 51,000 - - 51,000Sar-Alam Indah Sdn. Bhd.** - 5,100 - 5,100

* Deemed interest by virtue of his substantial interest in Weida Management Sdn. Bhd. and his spouse’s (Liew Kee Moi)direct interest in the Company.

** Deemed interest by virtue of his substantial interest in Weida (M) Bhd..

None of the other Directors holding office at 31 March 2003 had any interest in the ordinary shares of the Company and ofits related corporations during the financial year.

Directors’ benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receiveany benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable byDirectors as shown in the financial statements or the fixed salary of full time employees of subsidiaries) by reason of acontract made by the Company or a related corporation with the Director or with a firm of which the Director is a member,or with a company in which the Director has a substantial financial interest, other than certain Directors who havesignificant financial interests in companies which traded with certain companies in the Group in the ordinary courseof business.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors ofthe Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any othercorporate body.

Issue of shares

There were no changes in the issued and paid-up capital of the Company during the financial year.

Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the financial year.


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DIRECTORS’ REPORTFOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 (cont’d)

Other statutory information

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps toascertain that:

i. all known bad debts have been written off and adequate provision made for doubtful debts; and

ii. all current assets have been stated at the lower of cost and net realisable value.

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

i. that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in theGroup and in the Company inadequate to any substantial extent, or

ii. that would render the value attributed to the current assets in the Group and in the Company financial statementsmisleading, or

iii. which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Groupand of the Company misleading or inappropriate, or

iv. not otherwise dealt with in this report or in the financial statements, that would render any amount stated in thefinancial statements of the Group and of the Company misleading.

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

i. any charge on the assets of the Group and of the Company that has arisen since the end of the financial year andwhich secures the liabilities of any other person, or

ii. any contingent liability in respect of the Group and of the Company that has arisen since the end of the financialyear.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to becomeenforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, willor may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, except as disclosed in the financial statements, the results of the operations of the Group andof the Company for the financial year ended 31 March 2003 have not been substantially affected by any item, transactionor event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between theend of that financial year and the date of this report.

Auditors

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed in accordance with a resolution of the Directors:

.................................................. ..................................................Tuan Haji Su’ut Bin Haji Suhaili Lee Choon Chin

Kuching

5 July 2003


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STATEMENT BY DIRECTORSPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

In the opinion of the Directors, the financial statements set out on pages 35 to 68 are drawn up in accordance withapplicable approved accounting standards in Malaysia, so as to give a true and fair view of the state of affairs of the Groupand of the Company at 31 March 2003 and of the results of their operations and cash flows for the financial year ended onthat date.

Signed in accordance with a resolution of the Directors:

.................................................. ..................................................Tuan Haji Su’ut Bin Haji Suhaili Lee Choon Chin

Kuching

5 July 2003

I, Chew Chin Choong, the Director primarily responsible for the financial management of Weida (M) Bhd., do solemnly andsincerely declare that the financial statements set out on pages 35 to 68 are, to the best of my knowledge and belief,correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions ofthe Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed in Kuching in the State of Sarawak on 5 July 2003.

.................................................Chew Chin Choong

Before me:

Peter Sim Hoi PengCommissioner For OathsKuching, Sarawak

STATUTORY DECLARATIONPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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REPORT OF THE AUDITORSTO THE MEMBERS OF WEIDA (M) BHD. (Company No. 504747-W) (Incorporated in Malaysia)

We have audited the financial statements set out on pages 35 to 68. The preparation of the financial statements is theresponsibility of the Company’s Directors. Our responsibility is to express an opinion on the financial statements based onour audit.

We have conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards requirethat we plan and perform the audit to obtain all the information and explanations, which we consider necessary to provideus with evidence to give reasonable assurance that the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. An auditalso includes an assessment of the accounting principles used and significant estimates made by the Directors as wellas evaluating the overall adequacy of the presentation of information in the financial statements. We believe our auditprovides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 andapplicable 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 at 31 March 2003 and of the results of their operationsand cash flows for the financial 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 statementsof the Group and of the Company;

and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by theCompany and the subsidiaries have been properly kept in accordance with the provisions of the said Act.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financialstatements are in form and content appropriate and proper for the purposes of the preparation of the consolidatedfinancial statements and we have received satisfactory information and explanations required by us for those purposes.

The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not includeany comment made under subsection (3) of Section 174 of the Act.

The previous financial year’s financial statements were audited by another firm of Chartered Accountants.

KPMGFirm Number: AF 0758Chartered Accountants

Chin Chee KongPartnerApproval Number: 1481/1/05 (J)

Kuching

5 July 2003


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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BALANCE SHEETSAT 31 MARCH 2003

Group CompanyNote 2003 2002 2003 2002

(Restated) (Restated)RM RM RM RM

Property, plant and equipment 2 44,488,647 41,308,381 2,447,930 622,656Investment in subsidiaries 3 - - 24,251,047 24,151,047Investment in associate 4 44,137 41,466 - -Other investments 5 68,558 - 68,558 -Intangible assets 6 431,355 533,883 - -Long term receivable 7 - - 29,770,990 23,938,484Deferred taxation 8 944,000 336,000 98,000 25,000

Current assets

Inventories 9 18,165,105 14,940,751 - -Properties held for resale 10 267,347 267,347 - -Trade and other receivables 11 28,704,372 19,830,417 3,473,865 2,370,842Tax recoverable 1,264,174 - 1,147,985 222,312Cash and cash equivalents 12 13,013,049 29,600,080 1,578,706 8,842,244

61,414,047 64,638,595 6,200,556 11,435,398

Current liabilities

Trade and other payables 13 17,106,897 24,727,744 15,236,167 12,227,979Borrowings 14 9,148,552 10,131,227 - 33,610Taxation 337,248 501,765 - -Provision for warranties 15 147,284 446,434 - -

26,739,981 35,807,170 15,236,167 12,261,589

Net current assets/(liabilities) 34,674,066 28,831,425 (9,035,611) (826,191)

80,650,763 71,051,155 47,600,914 47,910,996


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BALANCE SHEETSAT 31 MARCH 2003 (cont’d)



Financed by:

Capital and reservesShare capital 16 40,000,000 40,000,000 40,000,000 40,000,000Reserves 17 33,206,408 24,610,837 7,600,914 7,777,508

73,206,408 64,610,837 47,600,914 47,777,508

Reserve on consolidation 18 1,162,455 1,213,929 - -

Minority shareholders’ interests 19 2,296,900 1,397,530 - -

Long term and deferred liabilitiesBorrowings 14 - 316,859 - 133,488Deferred taxation 8 3,985,000 3,512,000 - -

3,985,000 3,828,859 - 133,488

80,650,763 71,051,155 47,600,914 47,910,996

The financial statements were approved and authorised for issue by the Board of Directors on 5 July 2003.

The notes set out on pages 42 to 68 form an integral part of, and should be read in conjunction with, these financialstatements.


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INCOME STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2003



Revenue 20 96,921,469 77,847,862 2,683,649 3,013,687Other operating income 152,097 806,570 438,056 30,219Changes in inventories 650,504 228,509 - -Raw materials and consumables used (32,963,204) (26,677,771) - -Purchase of finished goods and contractors fees payable (13,678,764) (13,603,469) - -Staff costs (10,511,941) (12,668,399) (851,460) (1,021,689)Depreciation and amortisation expenses (4,052,351) (3,646,751) (360,626) (142,032)Transportation charges (4,678,632) (4,447,930) - -Other operating expenses (19,587,006) (9,775,146) (1,604,228) (404,518)

Operating profit 22 12,252,172 8,063,475 305,391 1,475,667Interest expense (472,137) (724,106) (13,322) (12,297)Share of profit of associate 2,679 2,886 - -

Profit before tax 11,782,714 7,342,255 292,069 1,463,370Tax expense 23 (1,043,473) (2,112,146) 395,337 (506,388)

Profit after tax 10,739,241 5,230,109 687,406 956,982Minority interests (1,279,670) (439,408) - -

Net profit for the financial year 9,459,571 4,790,701 687,406 956,982

Basic earnings per ordinary share (sen) 24 23.6 12.0

Dividend per ordinary share - net (sen) 25 2.2 2.2 2.2 2.2



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STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 MARCH 2003

Non-Distributable DistributableShare Share Revaluation Merger Retained

Group capital premium reserve deficit profits TotalRM RM RM RM RM RM

At 1 April 2001As previously stated 40,000,000 5,671,557 7,140,098 (16,983,045) 28,393,736 64,222,346Prior year adjustment (Note 32) - - (1,999,000) - (963,210) (2,962,210)

As restated 40,000,000 5,671,557 5,141,098 ( 16,983,045) 27,430,526 61,260,136

Net profit for the financial yearAs previously stated - - - - 5,062,251 5,062,251Prior year adjustment (Note 32) - - - - (271,550) (271,550)

As restated - - - - 4,790,701 4,790,701

Dividend (Note 25) - - - - (1,440,000) (1,440,000)

Restated balance at31 March 2002 40,000,000 5,671,557 5,141,098 ( 16,983,045) 30,781,227 64,610,837

Net profit for the financial year - - - - 9,459,571 9,459,571

Dividend (Note 25) - - - - (864,000) (864,000)

At 31 March 2003 40,000,000 5,671,557 5,141,098 (16,983,045) 39,376,798 73,206,408

Note 16 Note 17 Note 17

Non-Distributable DistributableShare capital Share premium Retained profits Total

Company RM RM RM RM

At 1 April 2001 40,000,000 5,521,557 2,738,969 48,260,526

Net profit for the financial yearAs previously stated - - 931,982 931,982Prior year adjustment (Note 32) - - 25,000 25,000

As restated - - 956,982 956,982

Dividend (Note 25) - - (1,440,000) (1,440,000)

At 31 March 2002 40,000,000 5,521,557 2,255,951 47,777,508

Net profit for the financial year - - 687,406 687,406

Dividend (Note 25) - - (864,000) (864,000)

At 31 March 2003 40,000,000 5,521,557 2,079,357 47,600,914

Note 16 Note 17



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CASH FLOW STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2003

Group Company2003 2002 2003 2002


Cash flows from operating activities

Net profit for the financial year 9,459,571 4,790,701 687,406 956,982Adjustments for:

Amortisation of product development costs 96,310 96,310 - -Amortisation of goodwill on consolidation 6,218 4,225 - -Reserve on consolidation recognised (51,474) (51,474) - -Depreciation 3,949,823 3,546,216 360,626 142,032Dividend income (500) - (2,065,500) (2,477,500)Gain on disposal of quoted investments (96) - (96) -Loss on disposal of property, plant and equipment 3,497 73,155 1,470 -Interest expense 472,137 724,106 13,322 12,297Interest income (374,152) (505,186) (138,149) (330,649)Minority interests 1,279,670 439,408 - -Property, plant and equipment written off 165,236 - - -Share of profit of associate (2,679) (2,886) - -Tax expense 1,043,473 2,112,146 (395,337) 506,388

Operating profit/(loss) before working capital changes 16,047,034 11,226,721 ( 1,536,258) ( 1,190,450)

(Increase)/Decrease inworking capital:Inventories (3,224,354) (853,000) - -Trade and other receivables (8,873,955) (3,515,349) (1,430,623) 3,547,484Trade and other payables (7,829,647) 16,396,502 3,008,188 18,515,002Provision for warranties (299,150) (178,565) - -

Cash (used in)/generated fromoperations (4,180,072) 23,076,309 41,307 20,872,036

Interest paid (457,471) (692,086) - -Interest received 374,152 505,186 138,149 330,649Tax paid (2,607,156) ( 3,437,604) (25,000) (68,200)

Net cash (used in)/generatedfrom operating activities (6,870,547) 19,451,805 154,456 21,134,485


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CASH FLOW STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 (cont’d)

Group Company2003 2002 2003 2002


Cash flows from investing activities

Acquisition of subsidiaries, net of cashacquired (Note 30) 4,900 - - (10)

Additional investment in subsidiaries - - (100,000) (399,992)Decrease/(Increase) in pledged deposits

placed with licensed banks 81,498 (724,940) - -Product development costs paid - (481,550) - -Purchase of property, plant and

equipment [Note (ii)] (7,438,967) (4,984,655) (2,188,670) (131,742)Purchase of other investments (73,233) - (73,233) -Proceeds from disposal of other investments 4,771 - 4,771 -Proceeds from disposal of property, plant

and equipment 140,145 390,611 1,300 -Dividend received 500 - 1,814,764 2,955,000Advances to subsidiaries - - (5,832,506) (25,844,603)

Net cash used in investing activities (7,280,386) (5,800,534) (6,373,574) (23,421,347)

Cash flows from financing activities

(Repayment)/Proceeds of bankers’acceptances (886,000) 247,000 - -

Payment of hire purchase principal (414,903) (100,312) (167,098) (35,199)Hire purchase interest paid (14,666) - (13,322) -Dividend paid to:

- shareholders of the Company (864,000) (1,440,000) (864,000) (1,440,000)- minority shareholders of subsidiaries (176,400) (147,000) - -

Net cash used in financing activities (2,355,969) (1,440,312) (1,044,420) (1,475,199)

Net (decrease)/increase in cash and cashequivalents (16,506,902) 12,210,959 (7,263,538) (3,762,061)

Cash and cash equivalents at beginningof financial year 27,631,470 15,420,511 8,842,244 12,604,305

Cash and cash equivalents at end offinancial year [Note (i)] 11,124,568 27,631,470 1,578,706 8,842,244


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Notes

(i) Cash and cash equivalents

Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:

Fixed deposits (excluding deposits pledged) 2,087,666 20,086,058 1,000,000 8,831,091Cash and bank balances 9,038,454 7,545,595 578,706 11,153Bank overdrafts (1,552) (183) - -

11,124,568 27,631,470 1,578,706 8,842,244

(ii) Purchase of property, plant and equipment

Property, plant and equipment acquired during the financial year were paid as follows:

By cash 7,438,967 4,984,655 2,188,670 131,742Using hire purchase loans - 380,000 - 190,000On credit terms - 742,949 - 442,946

7,438,967 6,107,604 2,188,670 764,688


CASH FLOW STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 (cont’d)


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NOTES TO THE FINANCIAL STATEMENTS

1. Summary of significant accounting policies

The following accounting policies are adopted by the Group and the Company and are consistent with thoseadopted in previous financial years except for the adoption of the following:

(i) MASB 21, Business Combination which the Group opted to apply prospectively. The restatement ofcomparative figures and prior year adjustment are therefore not presented;

(ii) MASB 23, Impairment of Assets which is applied prospectively. The restatement of comparative figures andprior year adjustment are therefore not presented;

(iii) MASB 24, Financial Instruments: Disclosure and Presentation which has been adopted prospectively; and

(iv) MASB 25, Income Taxes which the Group and the Company have elected to adopt earlier than themandatory date and which is applied retrospectively. Comparative figures have been restated to reflectthe change in accounting policy.

(a) Basis of accounting

The financial statements of the Group and of the Company are prepared under the historical costconvention modified by the revaluation of certain land and buildings and in compliance withapplicable approved accounting standards in Malaysia.

(b) Basis of consolidation

Subsidiaries are those enterprises controlled by the Company. Control exists when the Company has thepower, directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtainbenefits from its activities. The financial statements of subsidiaries are included in the consolidated financialstatements from the date that control effectively commences until the date that control effectively ceases.Subsidiaries are consolidated using the acquisition method of accounting except for three subsidiaries whichare consolidated using the merger method of accounting. These three subsidiaries were acquired prior to 1April 2002 and the merger method of accounting adopted accords with the Malaysian AccountingStandard No. 2, Accounting for Acquisitions and Mergers, the generally accepted accounting principlesprevailing at the dates of acquisition.

A subsidiary is excluded from consolidation when either control is intended to be temporary if the subsidiaryis acquired and held exclusively with a view of its subsequent disposal in the near future and it has notpreviously been consolidated or it operates under severe long term restrictions which significantly impair itsability to transfer funds to the Company. Subsidiaries excluded on these grounds are accounted for asinvestments.

Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of during thefinancial year are included from the date of acquisition or up to the date of disposal. At the date ofacquisition, the fair values of the subsidiaries’ net assets are determined and these values are reflected in theGroup financial statements. The difference between the acquisition cost and the fair values of thesubsidiaries’ net assets is reflected as goodwill or reserve on consolidation as appropriate.

Under the merger method of accounting, the results of the subsidiaries are presented as if the companieshad been combined throughout the current and previous financial years. The difference between the costof acquisition and the nominal value of the share capital and reserves of the merged subsidiaries is taken tomerger reserve or deficit, as the case may be.

Intra-group transactions and balances and the resulting unrealised profits are eliminated on consolidation.Unrealised losses resulting from intra-group transactions are also eliminated unless cost cannot berecovered.


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NOTES TO THE FINANCIAL STATEMENTS (cont’d)

1. Summary of significant accounting policies (continued)

(c) AssociateAssociate is the enterprise in which the Group has significant influence, but not control, over the financial andoperating policies.

The consolidated financial statements include the total recognised gains and losses of associate on an equityaccounted basis from the date that significant influence effectively commences until the date that significantinfluence effectively ceases.

Unrealised profits arising on transactions between the Group and its associate which are included in the carryingamount of the related assets and liabilities are eliminated partially to the extent of the Group’s interests in theassociate. Unrealised losses on such transactions are also eliminated partially unless cost cannot be recovered.

Goodwill on acquisition is calculated based on the fair value of net assets acquired.

(d) Property, plant and equipment

Property, plant and equipment except for certain land and buildings are stated at cost less accumulateddepreciation. Certain land and buildings are stated at valuation less accumulated depreciation.

The Group engages external independent valuers to revalue its property comprising land and buildings every 5years and at shorter intervals whenever the fair value of the revalued assets is expected to differ materially from theircarrying value.

Surpluses arising from revaluation are dealt with in the property revaluation reserve account. Any deficit arising isoffset against the revaluation reserve to the extent of a previous increase for the same property. In all other cases, adecrease in carrying amount is charged to the income statement.

Property, plant and equipment retired from active use and held for disposal are stated at the lower of net bookvalue and net realisable value.

Cost incurred on the construction and installation of plant and machinery is capitalised as capital work-in-progressuntil the plant and machinery are fully commissioned and operational.

Depreciation

Freehold land is not amortised. Leasehold land is amortised in equal instalments over the period of the respectiveleases ranging from 41 to 60 years while buildings are depreciated on a straight line basis over the shorter of 50 yearsor the lease period. The straight line method is used to write off the cost of the other assets over the term of theirestimated useful lives at the following principal annual rates:

Plant, machinery and moulds 10%- 33 1/3%Office equipment, furniture and fittings 10% - 33 1/3%Equipment and tools 12% - 33%Motor vehicles 20%Electrical installation and renovation 10% - 20%Infrastructure 5%

Depreciation on capital work-in-progress commences when the property, plant and equipment are ready for theirintended use.


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(e) Investments

Long term investments other than in subsidiaries and associate are stated at cost. An allowance is madewhen the Directors are of the view that there is diminution in their value which is other than temporary.

Investment in subsidiaries and associate are stated at cost in the Company, less impairment losses whereapplicable.

(f) Intangible assets

(i) Goodwill

Goodwill represents the excess of the cost of acquisition over the fair values of the net identifiableassets acquired and is stated at cost less accumulated amortisation and accumulatedimpairment losses.

Reserve on consolidation represents the excess of the fair values of the net identifiable assetsacquired over the cost of acquisition.

Goodwill/Reserve on consolidation is amortised or credited on a straight line basis to the incomestatement over the period of 25 years.

In respect of associate, the carrying amount of goodwill is included in the carrying amount of theinvestment in the associate.

(ii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific ortechnical knowledge and understanding, is recognised in the income statement as an expense asincurred.

Expenditure on development activities, whereby research findings are applied to a plan or design forthe production of new or substantially improved products and processes, is capitalised if the productor process is technically and commercially feasible and the Group has sufficient resources tocomplete development. The expenditure capitalised includes the cost of materials, direct labourand an appropriate proportion of overheads. Other development expenditure is recognised in theincome statement as an expense as incurred.

Capitalised development expenditure is amortised and recognised as an expense on a systematicbasis so as to reflect the pattern in which the related economic benefits are recognised, but notexceeding 5 years.

(g) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost of raw materials is determined usingthe first in, first out method. Cost of finished goods is determined on the weighted average basis. For finishedgoods, cost consists of materials, direct labour and an appropriate proportion of fixed and variableproduction overheads.


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(h) Trade and other receivables

Trade and other receivables are stated at cost less allowance for doubtful debts.

(i) Amounts due from contract customers

Amounts due from contract customers are stated at cost plus attributable profits less foreseeable losses andless progress billings. Cost includes all direct costs and other related costs. Where progress billings exceed theaggregate amounts due from contract customers plus attributable profits less foreseeable losses, the netcredit balance on all such contracts is shown in trade and other payables as amounts due to contractcustomers.

(j) Properties held for resale

Properties held for resale are stated at the lower of cost and net realisable value.

(k) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquidinvestments which have an insignificant risk of changes in value. For the purpose of the cash flow statement,cash and cash equivalents are presented net of bank overdrafts and pledged deposits.

(l) Impairment

The carrying amount of the Group’s assets, other than inventories [refer Note 1(g)], assets arising fromconstruction contracts, deferred tax assets [refer Note 1(p)] and financial assets (other than investments insubsidiaries and associate), are reviewed a each balance sheet date to determine whether there is anyindication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Animpairment loss is recognised whenever the carrying amount of an asset or the cash-generating unit towhich it belongs exceeds its recoverable amount. An impairment loss is charged to the income statement,unless the asset is carried at a revalued amount, in which case the impairment loss is charged to equity.

The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing valuein use, estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risks specific to the asset.For an asset that does not generate largely independent cash inflows, the recoverable amount isdetermined for the cash-generating unit to which the asset belongs.

An impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific externalevent of an exceptional nature that is not expected to recur and subsequent external events haveoccurred that reverse the effect of that event.

In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used todetermine the recoverable amount and is reversed only to the extent that the asset’s carrying amount doesnot exceed the carrying amount that would have determined, net of depreciation or amortisation, if noimpairment loss has been recognised. The reversal is recognised in the income statement.

(m) Liabilities

Borrowings and trade and other payables are stated at cost.


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(n) ProvisionsA provision is recognised when it is probable that an outflow of resources embodying economic benefitswill be required to settle a present obligation (legal or constructive) as a result of a past event and areliable estimate can be made of the amount.

Provision for warranties

A provision for warranties is recognised when the underlying contract is handed over to the customer.

(o) Hire purchase loans

Property, plant and equipment acquired using hire purchase loans are capitalised and depreciated inaccordance with Note 1(d). Outstanding hire purchase instalments after deducting interest yet to falldue are disclosed as borrowings in the balance sheet. Hire purchase interest is charged to the incomestatement over the loan tenure using the ‘sum-of-digit’ method.

(p) Taxation

Income tax on the profit or loss for the financial year comprises current and deferred tax. Income tax isrecognised in the income statement except to the extent that it relates to items recognised directly toequity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the financial year, using tax ratesenacted or substantially enacted at the balance sheet date, and any adjustment to tax payable inrespect of previous financial years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differencesbetween the carrying amounts of assets and liabilities for financial reporting purposes and the amounts usedfor taxation purposes. The following temporary differences are not provided for: goodwill not deductible fortax purposes and the initial recognition of assets or liabilities that affect neither accounting nor taxableprofit. The amount of deferred tax provided is based on the expected manner of realisation or settlementof the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at thebalance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will beavailable against which the asset can be utilised. A deferred tax asset is reduced to the extent that it is nolonger probable that the related tax benefits will be realised.

In the previous financial years, deferred tax liabilities were recognised for all timing differences, exceptwhere no liability was expected to arise in the foreseeable future and there were no indication the timingdifferences would reverse thereafter. Deferred tax assets were only recognised when there was areasonable expectation of realisation in the near future.

(q) Foreign currency transactions

Transactions in foreign currencies are translated to Ringgit Malaysia at rates of exchange ruling at thetransaction dates. Monetary assets and liabilities denominated in foreign currencies at the balancesheet date are translated to Ringgit Malaysia at the foreign exchange rates ruling at that date.Foreign exchange differences arising on translation are recognised in the income statement.

The closing rates used in the translation of foreign currency monetary assets and liabilities are as follows:

1USD RM3.80 (2002: 1USD RM3.80)1EURO RM4.10 (2002: 1EURO RM3.33)


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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(r) Revenue

(i) Goods sold and services rendered

Revenue from sale of goods is measured at the fair value of the consideration receivable and isrecognised in the income statement when the significant risks and rewards of ownership have beentransferred to the buyer.

Revenue from sale of sewage systems is recognised in the income statement in proportion to thestage of completion of the transaction at the balance sheet date. The stage of completion isassessed by reference to services performed to date as a percentage of total services to beperformed. When the outcome of the transaction cannot be estimated reliably, revenue isrecognised only to the extent of the expenses recognised that are recoverable.

Revenue from treatment and disposal of sludge services rendered is recognised in the incomestatement as it accrues, based on rates agreed with customer.

Revenue from fixed price construction contracts is recognised on the percentage of completionmethod, measured by reference to the proportion that contract costs incurred for contract workperformed to date that reflect work performed bear to the total estimated contract costs. When theoutcome of a construction contract cannot be estimated reliably, revenue is recognised only to theextent of contract costs incurred that is probable of recovery and contract costs are recognised asan expense in the period in which they are incurred. An expected loss on a contract is recognisedimmediately in the income statement.

(ii) Dividend income

Dividend income is recognised when the right to receive payment is established.

(iii) Interest income

Interest income is recognised in the income statement as it accrues, taking into account theeffective yield on the assets.

(iv) Rental income

Rental income is recognised as it accrues at contracted rates.

(v) Management fees

Management fees are recognised as it accrues at contracted rates.

(s) Interest expense

All interest incurred in connection with borrowings are expensed as incurred.


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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2. Property, plant and equipment (continued)

Officeequipment,

Company furnitureand fittings Motor vehicles Renovation Total

RM RM RM RM

CostOpening balance 71,611 684,581 8,496 764,688Additions 451,592 926,155 810,923 2,188,670Disposals (4,154) - - (4,154)

Closing balance 519,049 1,610,736 819,419 2,949,204

DepreciationOpening balance 18,784 120,424 2,824 142,032Charge for the financial year 61,660 216,284 82,682 360,626Disposals (1,384) - - (1,384)

Closing balance 79,060 336,708 85,506 501,274

Net book valueAt 31 March 2003 439,989 1,274,028 733,913 2,447,930

At 31 March 2002 52,827 564,157 5,672 622,656

Depreciation charge for the financial year ended 31 March 2002 18,784 120,424 2,824 142,032

There were a parcel of leasehold land and a parcel of freehold land pledged as collaterals for term loans.These loans were fully settled in the previous financial year. The charge on the land concerned is in the process ofbeing discharged.

RevaluationCertain freehold and short term leasehold land and buildings are stated at Directors’ valuation based onprofessional valuations made by independent professional valuers on the open market basis conducted on 31January 2001.

Had the land and buildings been carried at historical cost less accumulated depreciation, the carrying amount ofthe revalued assets that would have been included in the financial statements at the end of the financial yearwould be as follows:

Group2003 2002

(Restated)RM RM

Freehold land 2,332,692 2,332,692Short term leasehold land 4,310,576 4,395,763Buildings 9,234,827 9,502,545

15,878,095 16,231,000


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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3. Investment in subsidiaries

Company2003 2002

RM RM

Unquoted shares, at cost 24,251,047 24,151,047

All the subsidiaries are incorporated in Malaysia. The principal activities of the subsidiaries and the interest of Weida(M) Bhd. therein are as follows:

Effective ownershipName of Company Principal activities interest

2003 2002% %

Weida Integrated Industries Sdn. Bhd.# Manufacturing of high density 100 100polyethylene (“HDPE”)engineering products

Weida Resources Sdn. Bhd.# Trading of HDPE engineering 100 100products, fittings and otherengineering products

Weida Works Sdn. Bhd.# Construction of water supply 100 100and other specialised systemsinvolving the use of HDPEengineering products

Weida Water Sdn. Bhd. Trading of water storage tanks, 100 100chemical tanks, fittings, otherspecialised technical and engineeringproducts, and the provision ofspecialised installation services

Weidaline Sdn. Bhd. Trading of HDPE pipes, other 100 100specialised technical and engineeringproducts, and the provision ofspecialised installation services

Weida Agrotech Sdn. Bhd. Trading of HDPE agriculture 100 100products, other specialised technicalengineering products and the provisionof specialised installation services

Weida Dagangan Sdn. Bhd. Trading of HDPE engineering 100 100products, other specialised technicaland engineering products, and theprovision of specialised installationservices

Weida Engineering Sdn. Bhd. Dormant 100 100


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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3. Investment in subsidiaries (continued)

Effective ownershipName of Company Principal activities interest

2003 2002% %

Weidaya Sdn. Bhd. Trading of HDPE products and the 70 70provision of specialised installationservices

Saruwas Sdn. Bhd. Project management services 51 51

Weida Marketing Sdn. Bhd. Trading of HDPE engineering 51 51products and the provision ofspecialised installation services

Weida Environmental Providing sewage treatment services 51 51 Technology Sdn. Bhd. comprising the design, supply and

installation, commissioning andmaintenance of sewage systems

Sar-Alam Indah Sdn. Bhd. Treatment and disposal of sludge 51 -services

# Consolidated using merger method of accounting

4. Investment in associate

Group2003 2002

RM RM

Unquoted shares, at cost 40,000 40,000Share of post-acquisition reserves 4,137 1,466

44,137 41,466

Represented by:Group’s share of net assets other than goodwill 44,137 41,466

The associate is incorporated in Malaysia. The principal activities of the associate and the interest of Weida (M)Bhd. therein are as follows:

Principal Effective ownershipName of Company activities interest

2003 2002% %

Weidasar Sdn. Bhd. General trading and project 40 40management


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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5. Other investments

Group and Company2003 2002

RM RM

Long termQuoted shares, at cost 68,558 -

The market value of the quoted shares is shown in Note 31.

6. Intangible assets

Productdevelopment

Goodwill costs TotalGroup RM RM RM

CostOpening and closing balances 155,459 481,550 637,009

AmortisationOpening balance 6,816 96,310 103,126Amortisation charge for the financial year 6,218 96,310 102,528

Closing balance 13,034 192,620 205,654

Net book valueAt 31 March 2003 142,425 288,930 431,355

At 31 March 2002 148,643 385,240 533,883

Amortisation charge for the financial year ended 31 March 2002 4,225 96,310 100,535

7. Long term receivable

Long term receivable represents an amount due from a subsidiary. This amount is non-trade in nature, unsecured,interest free and is not repayable during the next twelve months in so far as such repayment will not adversely affectthe ability of the subsidiary to meet its liabilities when due.


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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8. Deferred taxation

Movements in deferred tax assets/(liabilities) during the financial year are as follows:

Property, Allowanceplant for Unabsorbedand doubtful capital Tax

Group equipment debts allowances losses TotalRM RM RM RM RM

Deferred tax assets

Restated balance at 1 April 2001 (46,000) 134,000 - - 88,000

Credited to income statement (restated) 4,000 192,000 33,000 19,000 248,000

Restated balance at 31 March 2002 (42,000) 326,000 33,000 19,000 336,000

(Charged)/Credited to income statement (37,000) 554,000 110,000 (19,000) 608,000

Balance at 31 March 2003 (79,000) 880,000 143,000 - 944,000

Property,plant Productand development

Group equipment costs TotalRM RM RM

Deferred tax liabilities

Restated balance at 1 April 2001 (3,037,000) - (3,037,000)

Charged to income statement (restated) (367,000) (108,000) (475,000)

Restated balance at 31 March 2002 (3,404,000) (108,000) (3,512,000)

(Charged)/Credited to income statement (500,000) 27,000 (473,000)

Balance at 31 March 2003 (3,904,000) (81,000) (3,985,000)


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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8. Deferred taxation (continued)

Group

Unrecognised deferred tax assets

The tax effects of the following temporary differences have not been recognised in the financial statements:

2003 2002(Restated)

RM RM

Property, plant and equipment (123,000) (142,000)Allowance for doubtful debts 598,000 623,000Provision for warranties 147,000 446,000Unabsorbed capital allowances 156,000 100,000Tax losses 879,000 617,000

1,657,000 1,644,000

The deferred tax assets of RM454,000 (2002: RM460,000) arising from the above temporary differences have notbeen recognised in the financial statements because it is not probable that future taxable profit will be availableagainst which the affected subsidiaries can utilise the benefits.

Company

Movements in deferred tax assets/(liabilities) during the financial year are as follows:

Property, Unabsorbedplant and capital

equipment allowances TotalRM RM RM

Deferred tax assets

Balance at 1 April 2001 - - -

(Charged)/Credited to income statement (restated) (3,000) 28,000 25,000

Restated balance at 31 March 2002 (3,000) 28,000 25,000

(Charged)/Credited to income statement (42,000) 115,000 73,000

Balance at 31 March 2003 (45,000) 143,000 98,000


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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9. Inventories

Group2003 2002

RM RM

Raw materials 7,361,699 4,837,170Finished goods 10,803,406 10,103,581

18,165,105 14,940,751

Except for the finished goods of RM110,643 (2002: Nil) which are carried at net realisable value, the other inventoriesare stated at cost.

10. Properties held for resale - Group

Properties held for resale represent properties received in exchange for settlement of trade receivables, and areheld with a view to realisation in cash.

11. Trade and other receivables

Group Company2003 2002 2003 2002

(Restated)RM RM RM RM

Trade receivables 26,564,727 18,388,158 - -Amounts due from contract customers 395,029 607,254 - -Subsidiaries - - 3,457,959 2,344,406Associate 2,146 130,398 - -Other receivables, deposits and prepayments 1,742,470 704,607 15,906 26,436

28,704,372 19,830,417 3,473,865 2,370,842

Amounts due from contract customers

Group2003 2002

(Restated)RM RM

Value of work performed to-date 13,216,650 4,258,883Less: Progress billings (13,918,430) (3,669,489)

(701,780) 589,394

Amounts due to contract customers reclassified (Note 13) 1,096,809 17,860

395,029 607,254


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The amounts due from subsidiaries are non-trade in nature, unsecured and interest free.

The amount due from associate is unsecured and interest free. The amount has been fully settled subsequent tothe balance sheet date.

Included in other receivables of the Group at 31 March 2002 was an amount of RM10,089 due from companies inwhich certain Directors of the Company had financial interests. This amount had been fully settled in the currentfinancial year.

12. Cash and cash equivalents

Group Company2003 2002 2003 2002

RM RM RM RM

Fixed deposits placed with licensed banks 3,974,595 22,054,485 1,000,000 8,831,091Cash and bank balances 9,038,454 7,545,595 578,706 11,153

13,013,049 29,600,080 1,578,706 8,842,244

The fixed deposits of the Group amounting to RM1,886,929 (2002: RM1,968,427) are pledged to licensed banks tosecure bank guarantee facilities granted to the Group.

13. Trade and other payables

Group Company2003 2002 2003 2002

(Restated)RM RM RM RM

Trade payables 8,823,373 9,435,026 - -Amounts due to contract customers (Note 11) 1,096,809 17,860 - -Subsidiaries - - 14,582,719 11,859,980Dividend payable to minority shareholders of subsidiaries 208,800 - - -Amounts due to Directors - 50,677 - 50,677Accrued expenses 3,800,296 5,518,145 450,903 291,342Other payables 3,177,619 9,706,036 202,545 25,980

17,106,897 24,727,744 15,236,167 12,227,979

The amounts due to subsidiaries and Directors are non-trade in nature, unsecured and interest free.


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14. Borrowings

Group Company2003 2002 2003 2002

RM RM RM RM

Current: Overdrafts - unsecured 1,552 183 - - Bankers’ acceptances - unsecured 9,147,000 10,033,000 - - Hire purchase liabilities - secured - 98,044 - 33,610

9,148,552 10,131,227 - 33,610

Non-current: Hire purchase liabilities - secured - 316,859 - 133,488

9,148,552 10,448,086 - 167,098

The overdrafts and bankers’ acceptances of the Group are covered by way of a negative pledge over asubsidiary’s present and future assets and a corporate guarantee from the Company. The overdrafts bear interestat rates ranging from 1.00% to 2.00% per annum above the lenders’ base lending rates. The bankers’ acceptancesbear interest at rates ranging from 0.50% to 1.75% per annum above the lenders’ cost of funds.

15. Provision for warranties

Group2003 2002

RM RM

Opening balance 446,434 624,999Additions during the financial year - 198,930Utilisation/Reversal during the financial year (299,150) (377,495)

Closing balance 147,284 446,434

The provision for warranties relates to contract services rendered. The Group expects to incur the liability in the nextfinancial year.

16. Share capital


RM RMOrdinary shares of RM1.00 each

Authorised: Opening and closing balances 100,000,000 100,000,000

Issued and fully paid: Opening and closing balances 40,000,000 40,000,000


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17. Reserves

Group Company2003 2002 2003 2002


Share premium 5,671,557 5,671,557 5,521,557 5,521,557Revaluation reserve 5,141,098 5,141,098 - -Merger deficit (16,983,045) (16,983,045) - -Retained profits 39,376,798 30,781,227 2,079,357 2,255,951

33,206,408 24,610,837 7,600,914 7,777,508

Revaluation reserve

The revaluation reserve was the surplus of revalued amounts over the net book value of revalued assets. The relateddeferred tax liability of RM1,999,000 has been recognised against the revaluation reserve via a prior year adjustment(Note 32).

Retained profits

Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit to distributeapproximately RM503,000 out of its retained profits at 31 March 2003 as dividends.

The estimated shortfall in tax credit should all the retained profits of the Company at 31 March 2003 be distributed isapproximately RM613,000.

18. Reserve on consolidation

Group2003 2002

RM RM

Opening balance 1,213,929 1,265,403Amount recognised in the income statement (51,474) (51,474)

Closing balance 1,162,455 1,213,929

19. Minority shareholders’ interests

This consists of the minority shareholders’ proportion of share capital and reserves of subsidiaries.


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20. Revenue

Group Company2003 2002 2003 2002

RM RM RM RM

Sale of goods 78,406,987 60,122,717 - -Sale of sewage systems 14,385,833 12,289,097 - -Services 3,990,000 - - -Contract revenue - 5,105,399 - -Interest income 138,149 330,649 138,149 330,649Dividend income from subsidiaries - - 2,065,000 2,477,500Dividend income from other investments 500 - 500 -Management fees - - 480,000 205,538

96,921,469 77,847,862 2,683,649 3,013,687

21. Employee information

The number of employees of the Group and Company (including Directors) at the end of the financial year is 468(2002: 466) and 10 (2002: 4) respectively.

22. Operating profit

Group Company2003 2002 2003 2002

RM RM RM RMOperating profit is arrived at after crediting:

Gain on disposal of quoted investments 96 - 96 -Interest income 374,152 505,186 138,149 330,649Realised gains on foreign exchange - 11,187 - -Rental income 11,040 25,216 420,000 21,054Reversal of allowance for doubtful debts 38,415 302,936 - -Reserve on consolidation recognised(Note 18) 51,474 51,474 - -

and after charging:

Allowance for doubtful debts 2,250,329 1,262,004 - -Amortisation of product development costs 96,310 96,310 - -Amortisation of goodwill on consolidation 6,218 4,225 - -Auditors’ remuneration 95,000 70,000 20,000 20,000Bad debts written off - 332,813 - -Depreciation (Note 2) 3,949,823 3,546,216 360,626 142,032Directors’ remuneration - fees 252,500 116,000 160,500 112,500 - other emoluments 1,412,320 840,000 582,400 739,200Inventories written down - 431,793 - -


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22. Operating profit (continued)

Group Company2003 2002 2003 2002

RM RM RM RMLoss on disposal of property, plant and equipment 3,497 73,155 1,470 -Property, plant and equipment written off 165,236 - - -Rental of premises 454,469 159,824 290,000 -

The estimated monetary value of Directors’ benefits-in-kind by way of usage of the Group and Company’s motorvehicles is RM82,261 (2002: RM36,292) and RM25,261 (2002: RM24,951) respectively.

23. Tax expenseGroup Company

2003 2002 2003 2002(Restated) (Restated)

RM RM RM RM

Current tax expense Malaysian - current 2,484,200 1,789,631 370,000 531,646 - prior financial years (1,305,735) 95,330 (692,337) (258)

1,178,465 1,884,961 (322,337) 531,388

Deferred tax (income)/ expense (135,000) 227,000 (73,000) (25,000)Tax expense on share of profit of associate 8 185 - -

1,043,473 2,112,146 (395,337) 506,388

Reconciliation of effective tax rateGroup Company

2003 2002 2003 2002(Restated) (Restated)

RM RM RM RM

Profit before tax 11,782,714 7,342,255 292,069 1,463,370

Income tax using Malaysian tax rates 3,299,160 2,062,165 82,000 410,000Double deduction for certain expenditure - (138,000) - -Non-deductible expenses 682,378 822,591 215,000 96,646Utilisation of reinvestment allowance (1,613,000) (842,000) - -Other items (19,338) 111,875 - -

2,349,200 2,016,631 297,000 506,646(Over)/Under provision in prior financial years (1,305,735) 95,330 (692,337) (258)Tax expense on share of profit of associate 8 185 - -

Tax expense 1,043,473 2,112,146 (395,337) 506,388


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24. Basic earnings per ordinary share - Group

The calculation of basic earnings per ordinary share is based on the net profit attributable to ordinaryshareholders of RM9,459,571 (2002: RM4,790,701) and the number of ordinary shares outstanding during thefinancial year of 40,000,000 (2002: 40,000,000).

25. Dividend


Ordinary RM RMFirst and final paid: 2002 - 3% (2001: 5%) less tax 864,000 1,440,000

The proposed final dividend of 3% less tax totalling RM864,000 has not been accounted for in the financialstatements.

26. Commitments

Group2003 2002

RM RM

Capital commitments: Property, plant and equipment Authorised but not contracted for 300,000 600,000 Contracted but not provided for in the financial statements 1,096,000 -

1,396,000 600,000

27. Contingent liabilities - unsecured

Company2003 2002

RM RM

Guarantees relating to banking facilities of subsidiaries 70,419,000 79,600,000

28. Related parties

Controlling related party relationships are as follows:

(i) Its subsidiaries as disclosed in Note 3;(ii) Associate of a subsidiary as disclosed in Note 4;(iii) The companies in which certain Directors have substantial interests; and(iv) The Directors of the Company.


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28. Related parties (continued)

Transactions with subsidiariesCompany

2003 2002Nature of transactions RM RM

Dividend income (2,065,000) (2,477,500)Management fees receivable (480,000) (205,537)Rental income on motor vehicles receivable (7,280) (7,410)Rental income for furnished office, inclusive of maintenance (420,000) (21,055)Purchase of property, plant and equipment - 442,946Share of common administrative expenses - 5,934

Other significant related party transactions

Significant related party transactions other than those disclosed elsewhere in the financial statements are as follows:

Transactions with Weidasar Sdn. Bhd., an associate of a subsidiaryGroup

2003 2002Nature of transactions RM RM

Sale of finished goods - (1,402,970)Commission fees payable 66,000 120,000

Transactions with companies in which certain Directors have substantial interests

Group2003 2002

Nature of transactions RM RM

Rental payable Premium Fortune Sdn. Bhd.* 36,000 36,000 Weian Resources Sdn. Bhd.# 16,200 32,400

*This Company is owned by Lee Choon Chin and Jee Hon Chong, two of the Directors of the Company.

#This Company is owned by Lee Choon Chin, a Director of the Company.


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28. Related parties (continued)

Transactions with Directors

Group2003 2002

Nature of transactions RM RM

Lee Choon Chin Sales proceeds from disposal of motor vehicles - (22,082) Interest payable - 126,412

These transactions have been entered into in the normal course of business and have been established undernegotiated terms.

29. Segmental information

No segmental information is presented as the Group is principally involved in the homogeneous activity ofmanufacturing, trading, marketing of HDPE engineering products and the provision of turnkey and projectmanagement services that involve the use of or related to the sale of HDPE engineering products in Malaysia.

30. Acquisition of subsidiaries

On 30 August 2002, one of the subsidiaries, Weida Environmental Technology Sdn. Bhd. acquired a 51% equity interestin Sar-Alam Indah Sdn. Bhd. for a consideration of RM5,100, satisfied by cash. The acquisition was accounted forusing the acquisition method of accounting. For the seven (7) months ended 31 March 2003, the subsidiarycontributed RM77,000 to the consolidated net profit for the financial year.

In the previous financial year, the Company acquired the entire equity interest in Weida Water Sdn. Bhd., WeidalineSdn. Bhd., Weida Agrotech Sdn. Bhd., Weida Dagangan Sdn. Bhd. and Weida Engineering Sdn. Bhd. for a totalconsideration of RM10, satisfied by cash.

Details of the assets, liabilities and cash flow arising from the acquisition of subsidiaries are as follows:

Group2003 2002

RM RM

Current assets acquired 10,000 10Minority interests (4,900) -

Net assets acquired 5,100 10

Consideration paid, satisfied in cash (5,100) (10)Cash acquired 10,000 10

Net cash inflow 4,900 -


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30. Acquisition of subsidiaries (continued)

The effects of acquisition of subsidiaries on the Group’s financial position at the end of the financial year are asfollows:

2003 2002RM RM

Property, plant and equipment 70,618 587,492Current assets 1,339,631 19,603,347Current liabilities (1,097,453) (18,877,215)Long term and deferred liabilities (7,000) (139,134)Minority interests (149,840) -

Group’s share of net assets 155,956 1,174,490

31. Financial instruments

Financial risk management objectives and policies

The Group’s activities expose it to a variety of financial risks, namely credit risk, interest rate risk and foreigncurrency risk. The objective of the Group’s financial risk management is to ensure the Group creates value for itsshareholders by taking steps to manage the risks and minimise their potential adverse effects on the financialperformance of the Group. Financial risk management is carried out through review of risk exposures, internalcontrol systems and adherence to the Group financial risk management policies.

Credit risk

Credit risk arises from sales made on credit terms. The Group seeks to control its credit risk by setting credit limits andensuring that sales of products and services are made to customers with an appropriate credit history. Creditevaluations of customers are carried out on an ongoing basis.

The Group has no significant concentration of credit risk as at the balance sheet date. The maximum exposure tocredit risk for the Group and for the Company is represented by the carrying amount of each financial asset.

Interest rate risk

The Group’s primary interest rate risk exposure relates to short term financing facilities. These facilities are negotiatedand monitored according to changes in the interest rate regime to ensure that the Group benefits from lowestpossible financing cost.

Foreign currency risk

The Group is exposed to foreign currency risk arising mainly from purchases of raw materials denominated in USDollar. The Group does not hedge its foreign currency transactions as the exchange rate for US Dollar has beenpegged to Ringgit Malaysia at 3.80.


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31. Financial instruments (continued)

Effective interest rates and repricing analysis

Effectiveinterest Within 1 - 5 After

Group rate Total 1 year years 5 years% RM RM RM RM

2003

Financial assetsFixed deposits 3.20 - 3.26 3,974,595 3,974,595 - -

Financial liabilitiesOverdrafts - unsecured 7.90 1,552 1,552 - -Bankers’ acceptances - unsecured 3.40 - 4.65 9,147,000 9,147,000 - -

2002

Financial assetsFixed deposits 3.20 - 3.45 22,054,485 22,054,485 - -

Financial liabilitiesOverdrafts - unsecured 8.30 183 183 - -Bankers’ acceptances - unsecured 3.62 - 4.75 10,033,000 10,033,000 - -

Effectiveinterest Within 1 - 5 After

Company rate Total 1 year years 5 years% RM RM RM RM

2003

Financial assetsFixed deposits 3.20 1,000,000 1,000,000 - -

2002

Financial assetsFixed deposits 3.20 8,831,091 8,831,091 - -

Fair values

Recognised financial instruments

In respect of cash and cash equivalents, trade and other receivables, trade and other payables and short termborrowings, the carrying amounts approximate fair value due to the relatively short term nature of these financialinstruments.


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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31. Financial instruments (continued)

The aggregate fair values of the other financial assets carried on the balance sheet as at 31 March are shownbelow:

2003 2002Carrying Fair Carrying Fairamount value amount value

Group and Company RM RM RM RM

Financial assetsQuoted shares - long term 68,558 62,070 - -

The fair value of quoted shares is their quoted bid price at the balance sheet date. The quoted shares have notbeen written down to their fair value because the Directors are of the view that the apparent diminution in value istemporary and immaterial.

Unrecognised financial instruments

There are no unrecognised financial instruments as at 31 March 2003 and 31 March 2002

32. Prior year adjustment

The prior year adjustment relates to the change in accounting policy on deferred tax from the income statementliability method to the balance sheet liability method, in compliance with the requirements of MASB 25, IncomeTaxes. This change in accounting policy has been accounted for retrospectively. The comparative figures havebeen restated to conform with the changed policy. The change has resulted in a decrease in the Group’s retainedprofits brought forward of RM963,210 and RM1,234,760 at 1 April 2001 and 1 April 2002 respectively. There is alsoa decrease in the Group’s revaluation reserve brought forward of RM1,999,000 at 1 April 2001 and 1 April 2002.

There is an increase in the Company’s retained profits brought forward of RM25,000 at 1 April 2002 as a result ofthe change.

33. Events subsequent to the balance sheet date

On 17 April 2003, one of the subsidiaries, Weida Works Sdn. Bhd. (“WWSB”) entered into a Joint Venture (“JV”)Agreement with Jasamu Development Sdn. Bhd. (“JASAMU”) for the formation of a new company, Duta Tiasa Sdn.Bhd. (“DUTA”). JASAMU acquired the entire 70,000 Class A ordinary shares whilst WWSB acquired the entire 30,000Class B ordinary shares of DUTA.

On 9 May 2003, WWSB entered into another JV Agreement with Pembinaan Masrafan Sdn. Bhd. (“PMSB”) for theformation of a new company, Masrada Water Sdn. Bhd. (“MASRADA”). PMSB acquired the entire 70,000 Class Aordinary shares whilst WWSB acquired the entire 30,000 Class B ordinary shares of MASRADA.

On 23 June 2003, the Company acquired the entire equity interest in Weida Prima Sdn. Bhd. comprising two ordinaryshares of RM1 each for a consideration of RM2.


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34. Comparative figures

(i) The following comparatives have been restated to reflect the change in accounting policy as explained in Note 32.

Group CompanyAs As previously As As previously

restated stated restated statedRM RM RM RM

Balance sheetsDeferred tax assets 336,000 - 25,000 -Reserves 24,610,837 27,844,597 7,777,508 7,752,508Minority shareholders’ interests 1,397,530 1,307,770 - -Deferred tax liabilities 3,512,000 32,000 - -

Income statementsTax expense (2,112,146) (1,885,146) ( 506,388) ( 531,388)Minority interests ( 439,408) ( 394,858) - -Net profit for the financial year 4,790,701 5,062,251 956,982 931,982

Cash flow statementsNet profit for the financial year 4,790,701 5,062,251 956,982 931,982Minority interests 439,408 394,858 - -Tax expense 2,112,146 1,885,146 506,388 531,388

Certain comparatives in the statements of changes in equity have similarly been restated consequent on thechange in accounting policy. The restatement is reflected in the said statements.

(ii) The following comparatives have been reclassified to conform with the current financial year’s presentation.

GroupAs As previously

restated statedRM RM

Balance sheetsTrade and other receivables 19,830,417 19,812,557Trade and other payables 24,727,744 24,709,884

Income statementsOther operating income 806,570 755,096Reserve on consolidation recognised - 51,474Purchases of finished goods and sub-contractors fees payable ( 13,603,469) ( 10,425,811)Staff costs ( 12,668,399) ( 13,650,161)Transportation charges ( 4,447,930) ( 3,731,063)Other operating expenses ( 9,775,146) ( 8,793,384)Contractor fees payable - ( 3,894,525)


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34. Comparative figures (continued)

GroupAs As previously

restated statedRM RM

Cash flow statementsTrade and other receivables (3,515,349) (3,497,489)Trade and other payables 16,396,502 16,378,642

Note 11 - Trade and other receivablesAmounts due from contract customers 607,254 589,394

Note 13 - Trade and other payablesAmounts due to contract customers

17,860 -


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LIST OF PROPERTIES AS AT 31 MARCH 2003

Location Usage Tenure Date of Land Approximate Net Book Date ofExpiry Area Age of Value (RM) Last

(Sq Metre) Building as at Revaluation(Year) 31/3/2003

, Lot 472, Block 8, Office and Leasehold 7/7/2058 70,380.0 5 17,602,533 31/1/2001Muara Tebas Land manufacturingDistrict, Jalan Bako, buildings and93050 Kuching, storage yardSarawak

Lot 56, Sedco-Lok Storage yard Leasehold 31/12/2042 3,747.8 NA 612,375 31/1/2001Kawi Industrial Estate,88801 Kota Kinabalu,Sabah

Lot 58, Sec Sedco-Lok Manufacturing Leasehold 31/12/2042 4,185.3 NA 1,403,463 31/1/2001Kawi Industrial Estate, building and88801 Kota Kinabalu, storage yardSabah

Lot 57, Sec Sedco-Lok Office and Leasehold 31/12/2042 8,704.4 7 2,915,662 31/1/2001Kawi Industrial Estate, manufacturing88801 Kota Kinabalu, buildingSabah

Lot 48, Lok Kawi Storage yard Leasehold 31/12/2042 35,506 NA 561,810 NAIndustrial Estate,Papar, Sabah

Lot 109, Jalan AM2, Office and Freehold NA 12,311.5 6 4,141,334 31/1/2001Arab-Malaysian manufacturingIndustrial Park, building71800 Nilai, & storageSeremban yard

Unit No C T 7.14, Rented Freehold NA 38.83 2 165,000 NA7th Floor CorporateTower,Subang Square

NA - Not applicable

Note: The revaluation policy on landed property is disclosed under notes 1(d) and 2 of the Notes to the Financial Statements as outlined on pages 43, 48 and 49 of this Annual Report.


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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ANALYSIS OF SHAREHOLDINGS AS AT 20 JUNE 2003

Authorised Share Capital : RM100,000,000Issued and Paid-up Capital : RM40,000,000Class of Shares : Ordinary Shares of RM1.00 eachVoting Rights : One vote per ordinary share

Size of Holdings No. of Holders Total Holdings %

less than 100 shares 0 0 0.00100 to 1,000 shares 667 666,000 1.671,001 to 10,000 shares 438 1,848,000 4.6210,001 to 100,000 shares 34 928,000 2.32100,001 to less than 5% of issued shares 16 10,081,270 25,205% and above of issued shares 6 26,476,730 66.19

TOTAL 1,161 40,000,000 100.00

No. Name No. of shares held %1. Assar Industri Sdn. Bhd. 4,785,197 11.962. Weida Management Sdn. Bhd. 4,737,357 11.843. Fablepoint Sdn. Bhd. 4,606,402 11.524. Zainal Abidin Bin Ahmad 4,481,550 11.205. AMMB Nominees (Tempatan) Sdn. Bhd. 4,000,000 10.00

- Pledged Securities Account for Weida Management Sdn. Bhd.6. Tiara Senja Sdn. Bhd. 3,866,224 9.677. Zainal Abidin Bin Ahmad 1,772,154 4.438. Chai Mui Huon 1,500,079 3.759. Malaysia Nominees (Tempatan) Sdn. Bhd. 1,500,000 3.75

- Pledged Securities Account for Lee Choon Chin10. Lim Wei Wui 821,000 2.0511. Sim Hong Swee 715,737 1.7912. Lee Choon Chin 622,273 1.5613. Liew Kee Moi 595,966 1.4914. Alliancegroup Nominees (Tempatan) Sdn. Bhd. 555,000 1.39

- Pheim Asset Management Sdn. Bhd. for Employees Provident Fund15. Yong Lin Lin 420,682 1.0516. Jee Hon Chong 360,568 0.9017. Yayasan Sarawak 273,959 0.6818. Tok Jiak Yong 259,568 0.6519. Kenanga Nominees (Tempatan) Sdn. Bhd. 200,000 0.50

- Pledged Securities Account for Zainal Abidin Bin Ahmad20. HSBC Nominees (Tempatan) Sdn. Bhd. 180,000 0.45

HSBC (M) Trustee Bhd. for Pheim Emerging Companies Balanced Fund (4033)21. Lai Siew Mu 178,000 0.4522. Lai Lim Hon 126,284 0.3223. Sia Seng Ming 80,000 0.2024. Kenanga Nominees (Tempatan) Sdn. Bhd. 71,000 0.18

- Pledged Securities Account for Hamni Bin Juni25. Liew Lian Khin 48,000 0.1226. Alliancegroup Nominees (Tempatan) Sdn. Bhd. 47,000 0.12

- Pheim Asset Management Sdn. Bhd. for Employees Provident Fund27. Ting Hie Na 47,000 0.1228. Lee Swee Hang 41,000 0.1029. Golden Tile (M) Sdn. Bhd. 40,000 0.1030. TA Nominees (Tempatan) Sdn. Bhd.

- Pledged Securities Account for Lee Mon Man 39,000 0.10

LIST OF THIRTY LARGEST SHAREHOLDERS


WEIDA (M) BHD.○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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ANALYSIS OF SHAREHOLDINGS (cont’d)

AS AT 20 JUNE 2003

LIST OF SUBSTANTIAL SHAREHOLDERS

Name Direct Direct Deemed Total Interest Interest Interest Shareholdings

(registered (held (%) in own Through name) Nominees)

1. Lee Choon Chin 622,273 1,500,000 9,333,323*1 28.64 (1.56%) (3.75%) (23.33%)

2. Liew Kee Moi 595,966 - 10,859,630*2 28.64 (1.49%) (27.15%)

3. Weida Management Sdn. Bhd. 4,737,357 4,000,000 - 21.84(11.84%) (10.00%)

4. Zainal Abidin Bin Ahmad 6,253,704 200,000 - 16.13 (15.63%) (0.50%)

5. Assar Industri Sdn. Bhd. 4,785,197 - - 11.96

6. Fablepoint Sdn. Bhd. 4,606,402 - - 11.52

7. Tiara Senja Sdn. Bhd. 3,866,224 - - 9.67

*1 Deemed interested by virtue of his substantial interest in Weida Management Sdn. Bhd.and his spouse's (Liew Kee Moi) direct shareholding in Weida (M) Bhd.

*2 Deemed interested by virtue of her spouse's (Lee Choon Chin) substantial interest inWeida Management Sdn. Bhd. and direct interest in Weida (M) Bhd.

No. of shares held


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ANALYSIS OF SHAREHOLDINGS (cont’d)

AS AT 20 JUNE 2003

DIRECTORS' INTEREST

No. of shares held Total

No. Name of Director Direct % Indirect % Shareholding %

1. Tuan Haji Su'ut Bin 10,000 0.03 - - 10,000 0.03Haji Suhaili

2. Lee Choon Chin 2,122,273* 5.31 9,333,323** 23.33 11,455,596 28.64

3. YBhg. Datu Voon Chen Hian 10,000 0.03 - - 10,000 0.03@ Voon Chen Kok

4. Datuk Dr. Stalin Hardin 10,000 0.03 - - 10,000 0.03

5. Yong Lin Lin 420,682 1.05 - - 420,682 1.05

6. Jee Hon Chong 360,568 0.90 - - 360,568 0.90

7. Lai Lim Hon 126,284 0.32 - - 126,284 0.32

8. Tok Jiak Yong 259,568 0.65 - - 259,568 0.65

9. Chew Chin Choong - - - - - -

10. Chong Kwan Wai 10,000 0.03 - - 10,000 0.03

11. Rozabil @ Rozamujib - - - - - -Bin Abdul Rahman

* 1,500,000 shares held through Malaysia Nominees (Tempatan) Sdn. Bhd.** Deemed interested by virtue of his substantial interest in Weida Management Sdn. Bhd. and his

spouse's (Liew Kee Moi) direct shareholding in Weida (M) Bhd.


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FORM OF PROXY

I/We ............................................................................................ (Name in full) ........................................................................ (IC No.)of .......................................................................................................................................................................................... (Address)being a member/members of the abovenamed Company hereby appoint............................................................................(Name in full) of ............................................................................................................................................................... (Address) orfailing him/her, the Chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the FourthAnnual General Meeting of the Company to be held at the Company’s premises, Wisma Hock Peng, 2nd Floor,123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching, Sarawak on Monday, 25 August 2003 at 10:00 am andany adjournment thereof.

Please indicate with an "X" in the appropriate box against each resolution how you wish your vote to be cast. If you do notindicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstainfrom voting.

My/our proxy is to vote as indicated below:-

1. To adopt the Audited Financial Statements.2. To declare a First and Final dividend of 3% per share less 28% income tax.3. To approve the increase of directors’ fees for the financial year ending

31 March 2004.4. To re-elect Mr. Chong Kwan Wai.5. To re-elect Encik Rozabil @ Rozamujib Bin Abdul Rahman.6. To re-elect Tuan Haji Su’ut Bin Haji Suhaili.7. To re-elect YBhg. Datu Voon Chen Hian @ Voon Chen Kok.8. To re-elect Mr. Lee Choon Chin.9. To re-appoint Messrs. KPMG as auditors.10. Special business - On Authority to issue shares pursuant to Section 132D of the

Companies Act 1965.

Shareholding Represented by Proxy

Dated this .........day of .................... 2003 ............................................................................... Signature of shareholder(s)/common seal

Notes :-1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his

stead. A proxy need not be a member of the Company.2. Where a member appoints more than one proxy to attend the said meeting, the member shall specify the proportion

of his shareholdings to be represented by each proxy.3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in

writing, or if the appointer is a corporation, either under its Common Seal or under the hand of an officer or attorneyduly authorised.

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Wisma Hock Peng,Ground Floor to 2nd Floor, 123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching, Sarawak not less than 48hours before the time appointed for holding the meeting or any adjournment thereof.

NO. RESOLUTIONS FOR AGAINST


Please fold here

Please fold here

The Company SecretaryWEIDA (M) BHD.(Company No. 504747-W)

Wisma Hock Peng,Ground Floor to 2nd Floor,123, Green Heights,Jalan Lapangan Terbang,P.O.Box 2424,93748 Kuching, Sarawak.

Stamp


CONTENTS Report 2003...Jalan Lapangan Terbang, 93250 Kuching, Sarawak not less than 48 hours before...

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