1.

Accounting policies

The accounting policies and methods of computation are consistent with those adopted in the most recent annual financial statements.

2.

Exceptional items

Exceptional items comprise :-

Individual Quarter

Cumulative Quarter

Current Year Quarter

30/06/2001

RM'000

Preceding Year Corresponding Quarter

30/06/2000

RM'000

Current Year- To-Date

30/06/2001

RM'000

Preceding Year Corresponding Period

30/06/2000

RM'000

Provision for EuroConvertible Bond Put Premiums

-

(5,018)

(4,985)

(20,181)

Investment   in   associated 

     company written off

-

2,470

-

(19,163)

Provision for diminution in value

      of fixed assets

-

-

-

(58,915)

Gain on disposal of shares in

       subsidiary company

-

-

-

182,344

-

(2,548)

(4,985)

84,085

3.

Extraordinary items

There were no extraordinary items included in the accounts.

4.

Taxation

Taxation comprise :-

Individual Quarter

Cumulative Quarter

Current Year Quarter

30/06/2001

RM'000

Preceding Year Corresponding Quarter

30/06/2000

RM'000

Current Year- To-Date

30/06/2001

RM'000

Preceding Year Corresponding Period

30/06/2000

RM'000

Taxation - Current Year

  - Under/ (Over) provision in prior years

Deferred taxation

(10,530)

380

3,969

30,673

(15,193)

(10,595)

(1,801)

526

16,578

52,793

(11,054)

(1,595)

Share of associated companies’ taxation

170

68

1,168

32

(6,011)

4,953

16,471

40,176

The Group’s effective tax rate is lower than the statutory tax rate due to pioneer status and reinvestment allowances granted to certain subsidiaries.

5.

Sale of investments / properties

There were no profit or loss on any sale of unquoted investments and/or properties for the current quarter and the financial year other than as mentioned below :-

Current Year Quarter

30/06/2001

RM’000

Current Year To-date

30/06/2001

RM’000

Gain on disposal of  associated company

-

2,326

6.

Quoted securities

(a)

There were no purchases or disposals of quoted securities for the current quarter and financial year other than as mentioned below:-

Current Year Quarter

30/06/2001

RM'000

Current Year   To-date

30/06/2001

RM'000

          (i) Purchases

20,336

23,576

          (ii) Disposal

Sale proceeds

34,189

34,189

Cost of  investment

(30,518)

(30,518)

Profit on disposal

3,671

3,671

(b)

Particulars of investments in quoted shares as at 30 June 2001:-

Total Investment at cost:

RM’000

-           Associated Companies

-           Others

511,250

82,679

593,929

Total investments at book value (after provision for depreciation in value)

229,627

Total investments at market value

193,132

7.

Group structure

The Group's year to date results has not been affected by any form of changes in the composition of the Group other than as mentioned below :-

(I)

Quarter Ended 31 December 2000

(i)

The Company’s wholly-owned subsidiary company, Mai Kah Corporation Sdn Bhd ("MKC") has been put under voluntary winding-up pursuant to Section 254(1)(b) of the Companies Act 1965 on 10 July 2000.

Subsequently, the Company had, on 2 January 2001, filed an affidavit with the court to stay the winding up of MKC and on 13 April 2001, the Kuala Lumpur High Court has approved Mai Kah Corporation Sdn Bhd’s stay of winding-up.

(ii)

The Company had, on 11 November 2000, entered into an agreement  to dispose of  its entire 70% equity interest in Autonet Sdn Bhd comprising 1,260,000 ordinary shares of RM1.00 each, to Auto Concessionaries Sdn Bhd for a total cash consideration of RM126.00. ("Disposal"). The Disposal was completed on 11 November 2000.

(iii)

The Company had, on 14 November 2000, disposed of its entire equity interest in Guotrade  Holdings Sdn Bhd  comprising 2 ordinary shares of RM1.00 each to Ms Lee Oi Kuan and Ms Leong Wei Yin, for a total cash consideration of RM2.00.

(iv)

The Company had, on 14 December 2000, acquired the entire equity interest in Kasih Sayang Realty Sdn Bhd comprising 290,000 ordinary shares of RM1.00 each from Taman Terang Sdn Bhd, a wholly-owned subsidiary of the Company, for a total cash consideration of RM1.00.

(II)

Quarter Ended 31 March 2001

(i)

The Company’s  subsidiary company, Guolene Packaging Industries Berhad ("GPIB") had, on 16 April 2001, entered into an agreement with its wholly-owned subsidiary, Joint Steel Works Sdn Bhd ("JSW") for the transfer of 100% equity stake comprising 20,000,000 ordinary shares of RM1.00 each, in Guolene Plastic Products Sdn Bhd from JSW to GPIB for a total consideration of RM5,000,000 (“Transfer of GPLP Shares”). The transfer of GPLP shares has been approved by the Ministry of International Trade and Industry Malaysia on 25 June 2001 and accordingly, the transfer of GPLP shares  was completed.

(ii)

The Company’s wholly-owned subsidiary, Quayline Company Pte Ltd (“Quayline”), has been put under voluntary winding-up pursuant to Section 290(1)(b) of the Singapore’s  Companies Act (Chapter 50) and is currently pending for tax clearance from the Inland Revenue Board.                                                                                                                                                                                                                                                                                                                                                                               

(III)

Quarter Ended 30 June 2001

None

8.

Corporate Proposals

Issuance of RM361,125,000/- Islamic Private Debt Securities

The Company issued RM361,125,000/- Islamic Private Debt Securities comprising 7-Year Primary Notes having face amount of RM250,000,000/- and a series of Secondary Notes having face amount of RM111,125,000/- pursuant to the Syariah Financing Principles of Al Bai’ Bithaman Ajil (“BAIDS”). The Securities Commission had, on 10 July 2001 approved the BAIDS.

9.

Debt / Equity securities and Share buy-back

There were no issuance or repayment of debts or equity securities, share buy back, share cancellation, shares held as treasury shares and resale of treasury shares for the financial year ended 30 June 2001 other than as mentioned below:-

(i)     The  Executive  Share  Option Scheme (“ESOS”) of  the  Company  was  implemented with effect from 28 December 1999. During the financial year ended 30 June 2001, 4,600 ordinary shares of RM0.50 each were issued and allotted pursuant to the exercise of the ESOS.

No. of shares

RM

         As at 1 July 2000

225,123,900

112,561,950

         Ordinary shares issued pursuant to ESOS

4,600

2,300

         As at 30 June 2001

225,128,500

112,564,250

(ii)  During the financial year ended 30 June 2001, the Company bought back a  total of 7,344,000 of its issued share capital from the open market. Total number of shares bought back as at 30 June 2001 was 7,344,000. The shares bought back are being held as treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965.

        The details of the shares bought back during the financial year are as follows:-

No. of shares bought back

Highest price paid (RM)

Lowest price paid (RM)

Average

price paid

(RM)

Total Consideration (RM)

August 2000

287,000

12.50

12.30

12.52

3,592,975.75

September 2000

1,735,000

12.30

8.70

9.69

16,794,603.77

October 2000

571,000

9.20

8.30

7.74

5,071,989.67

November 2000

1,157,000

8.95

7.00

8.23

9,099,141.81

December 2000

3,594,000

7.05

6.50

6.99

25,276,882.56

10.

Group’s borrowings

Particulars of  the Group’s borrowings as at 30 June 2001 are as follows :-

RM’000

(i)

Unsecured short term borrowings

626,683

(ii)

Unsecured long term borrowings

1,338,531

1,965,214

The above include borrowing denominated in foreign currency as follows :-

RM’000

USD borrowings

386,160

DM borrowings

27,593

11.

Contingent  liabilities

There are no contingent liabilities to be disclosed as at the date of this report.

12.

Off-balance sheet risks

There are no off-balance sheet risks envisaged as at the date of this report that might materially affect the position or business of the Group.

13.

Material Litigation

There is no pending material litigation against the Group as at the date of this report.

14.

Segmental Reporting

The Group’s segmental report for the financial year to-date are as follows:-

Turnover

RM’000

Profit Before Tax

RM’000

Total Assets

Employed

RM’000

Semiconductor

1,330,853

326,030

2,133,436

Motorcycles

350,191

(6,929)

339,695

Building Materials

476,901

28,929

471,813

Packaging

186,409

16,535

216,727

Investment holding & others

166,300

(73,859)

1,032,494

2,510,654

290,706

4,194,165

Share of losses of associated companies

-

(164,119)

2,510,654

126,587

4,194,165

15.

Quarterly Analysis

For the quarter under review, the Group recorded a loss before tax of RM141.38 million as compared to profit before tax of RM42.3 million for the preceding quarter.

The current quarter losses is mainly attributable  to  the share of  exceptional losses of an associated company amounting to RM131.4 million in respect of the write down of its investment  to market value.

16.

Review of Results

During the financial year ended 30 June 2001, the Group recorded a turnover and profit before tax  of RM2,510.7 million and  RM126.6 million respectively  as compared to the last financial year's turnover and profit before taxation of  RM2,635.2 million and RM513.0 million which is attributable mainly to share of  exceptional losses of a associated company amounting to RM131.4 million in respect of  the write down of its investment  to market value coupled with the severe downturn of the  semiconductor sector during the financial year.

17

Subsequent Events

(i)

Issuance of RM361,125,0000/- Islamic Private Debt Securities

The Company issued RM361,125,000/- Islamic Private Debt Securities comprising 7-Year Primary Notes having face amount of RM250,000,000/- and a series of Secondary Notes having face amount of RM111,125,000/- pursuant to the Syariah Financing Principles of Al Bai’ Bithaman Ajil (“BAIDS”). The Securities Commission had, on 10 July 2001 approved the BAIDS.

(ii)

Extension of Subscription Period of Warrants 1996/2001

The Company extended the subscription period of its outstanding warrants 1996/2001 (“Warrants”) for a  further period of five (5) years from the existing expiry date of 13 November 2001 to 13 November 2006 as the Warrants were deemed not “in-the-money” for each of the 30 market days, the last of which occurred on 13 August 2001.      

(iii)

Disposal of 75% Equity Interest in Hong Leong Equipment Sdn Bhd

The Company had, on 5 July 2001, entered into an agreement with  Kobelco International (S) Pte Ltd (“Kobelco”) and Ricon Private Ltd , to dispose of 75% of its equity interest in Hong Leong Equipment Sdn Bhd(“HLE”) comprising of 1,500,000 ordinary shares of RM1 each,  for a total consideration of RM1.5 million (“Proposed Disposal”). The Company has a put option and Kobelco has a call option in respect of the remaining 25% of the equity shares comprising of  500,000 ordinary shares of RM1.00 each (“option shares”) at a purchase price based on the higher of the par value of the option shares or  the NTA value of HLE based on the latest management account of HLE on the option exercise date. The Proposed Disposal is currently pending for the approvals of the Foreign Investment Committee and Ministry of Domestic Trade and Consumer Affairs.

(iv)

Voluntary General Offer to acquire 38,424,105 ordinary shares in GPIB

The Company had on 13 July 2001, served a notice on the Board of Directors of GPIB of its intention to undertake a voluntary offer to acquire all the remaining 38,424,105 ordinary shares of RM1.00 each in GPIB  not already owned directly by the Company, representing approximately 26.5% equity interest in GPIB (“Offer Shares”) at a cash offer price of RM1.00 per Offer Share. The Offer is currently pending for approval from the relevant authorities.

18.

Seasonal / Cyclical factors

There were no material changes to the factors affecting the sources of income and performance of the Group during the financial year ended 30 June 2001.

19.

Prospects

Save for the semiconductor business, all other businesses of the Group are expected to perform satisfactorily. The performance of the Group is dependent  on the recovery of the semiconductor sector. Although the semiconductor sector is expected to show a moderate growth in the second quarter because of the festive season, the Board is unable to determine whether this growth is sustainable due to uncertainties in the global economy.

20.

Profit forecast / profit guaranteed

There was neither profit forecast prepared  nor  profit guaranteed by the Group.

21.

Dividend

The directors have declared a first and second interim dividend totaling 20% tax exempt and 30% special less tax. The Board do not recommend any final dividend for the financial year ended 30 June 2001.  (1999/2000 : 25% less tax and 10% tax exempt )

In respect of the financial year ended 30 June 2000, the proportion of final dividend attributable to shares bought back by the Company and Malaysian Pacific Industries Berhad, a subsidiary of the Company, from 1 July 2000 to the dividend entitlement date on 1 November 2000 and 25 October 2000 respectively, which amounted to RM351,000 and RM837,000 respectively, have been reversed and adjusted against retained earnings during the current financial year.

22.

Adjustment Against Brought Forward Reserve

During the financial year, an associated company (“associate”) of the Group reclassified a long term investment as an investment in associated company in which the effects of the equity accounting (“effects”) has been adjusted against the reserve brought forward of the associate. Consequently, the Group has taken into account its share of the effects, amounting to RM192.3 million and adjusted against the brought forward reserve accordingly.