1.

Accounting policies 

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

2.

Exceptional items

Exceptional items comprise :-

Individual Quarter

Cumulative Quarter

Current Year Quarter 

30/09/2001

RM'000

Preceding Year Corresponding Quarter

30/09/2000

RM'000

Current Year- To-Date 

30/09/2001

RM'000

Preceding Year Corresponding Period

30/09/2000

RM'000

Provision for EuroConvertible Bond Put Premiums

1,256

5,073

1,256

5,073

 3.

Extraordinary items

There were no extraordinary items for the current quarter and financial year-to-date ended 30 September 2001.

4.

Taxation

Taxation comprise :-

Individual Quarter

Cumulative Quarter

Current Year Quarter

 30/09/2001

RM'000

Preceding Year Corresponding Quarter

30/09/2000

RM'000

Current Year- To-Date

 30/09/2001

RM'000

Preceding Year Corresponding Period

30/09/2000

RM'000

Taxation

- Current Year

4,148

4,116

4,148

4,116

- Over provision in prior years

(110)

-

(110)

-

Deferred taxation

- Current Year

4,752

4,203

4,752

4,203

- Over provision in prior years

(286)

-

(286)

-

Share of associated companies’ taxation

-

29

-

29

8,504

8,348

8,504

8,348

The Group’s effective tax rate is higher than the statutory tax rate due to the non-availability of group relief where tax losses of certain subsidiary companies can not be set-off against the taxable income of other subsidiary companies.

5.

Sale of investments / properties

There were no sales of unquoted investments and/or properties for the current quarter ended 30 September 2001.

6.

Quoted securities

(a)

There were no purchases or disposals of quoted securities for the current quarter ended 30 September 2001 other than as mentioned below:-

Current Year Quarter

 30/09/2001

RM'000

Current Year   To-date

 30/09/2001

RM'000

          (i) Purchases

7,132

7,132

          (ii) Disposal

Sale proceeds

1,530

1,530

Cost of  investment

(1,215)

(1,215)

Profit on disposal

315

315

(b)

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

At cost :

RM’000

-           Associated Companies

-           Others

511,250

87,964

599,214

At book value :

-           Associated Companies

-           Others

122,801

87,964

210,765

 At market value

 193,669

7.

Group structure

There were no changes in the composition of the Group other than as mentioned below :-

(i)

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 1,500,000 ordinary shares of RM1.00 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 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.

(ii)

The Company had, on  10 August 2001, entered into an agreement with MPI Property Sdn Bhd, a wholly-owned subsidiary, to acquire the entire equity interest in MPI Polyester Industries Sdn Bhd comprising 40,000,000 ordinary shares of RM1.00 each, for a total cash consideration of RM2.00 (“Transfer”). The Transfer was effected on 26 October 2001.   

(iii)

The Company’s wholly-owned subsidiary, Quayline Company Pte Ltd, 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.     

8.

Corporate Proposals

There were no corporate proposal announced but not completed other than as mentioned below:-

(i)

Aseambankers Malaysia Berhad, on behalf of the Company had, on 28 September 2001, announced that the Company proposed to implement a rights issue of up to RM288,038,060 nominal value of 4% five (5)-year irredeemable convertible unsecured loan stocks ("ICULS") at 100% of the nominal value on the basis of RM1.00 nominal value of ICULS for every one  (1) existing ordinary share of RM0.50 held in the Company.

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 quarter ended 30 September 2001.

(i)

The Executive Share Option Scheme (“ESOS”) of the Company was implemented with effect from 28 December 1999. During the quarter review ended 30 September 2001, there were no ordinary shares of RM0.50 each being issued and allotted pursuant to the exercise of the ESOS.

(ii)

There were no share buy back from the open market during the financial period ended 30 September 2001. The total number of shares bought back as at 30 September 2001 was 7,344,000 shares and the shares are being held as treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965.

10.

Group’s borrowings 

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

RM’000

(i)

Unsecured short term borrowings

917,704

(ii)

Unsecured long term borrowings

1,299,793

2,217,497

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

RM’000

USD borrowings

422,701

DM borrowings

18,338

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 financial  instruments with off-balance sheet risks as at the date of this report.

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 period ended 30 September 2001 is as follows:-

 Turnover

RM’000

Profit/(Loss) Before Tax

RM’000

Total Assets

Employed

RM’000

Semiconductor

178,816

(13,153)

2,060,040

Motorcycles

102,497

2,420

337,432

Building Materials

127,628

11,026

469,336

Packaging

48,803

4,183

222,977

Investment holding & others

21,330

(20,597)

1,082,318

479,074

(16,121)

4,172,103

Share of losses of associated companies

-

(13,584)

161,813

479,074

(29,705)

4,333,916

15.

Material Changes in Profit Before Taxation

For the quarter under review, the Group recorded a loss before tax of RM29.71 million as compared with a loss before tax of RM141.38 million for the preceding quarter. 

The decrease in the loss before tax is mainly due to the decrease in the share of associated companies’ losses from RM135.27 million in the preceding quarter to RM13.58 million in the current quarter.

16.

Review of Performance  

The Group recorded a turnover and loss after tax of RM479.07 million and  RM38.21 million respectively  for the current quarter under review. The poor performance in current quarter is mainly due to  the severe downturn  of the semiconductor sector.

17

Material Events Not Reflected In Financial Statements

(i)

The Company had, on 13 July 2001, served a notice on the Board of Directors of Guolene Packaging Industries Berhad (“GPIB”) to extend 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 26.50% equity interest in GPIB (“Offer Shares”) at a cash offer price of RM1.00 per Offer Share (“Offer”). The Offer Document was despatched to the shareholders of GPIB on 6 November 2001. 

The Offer closed for acceptances at 5.00 p.m. on 5 November 2001 and that the Company's shareholdings in GPIB as at the closing of the Offer is 96.36%.

(ii)

HLI-HUME Management Co Sdn Bhd (“HLI-HUME”), a wholly-owned subsidiary of the Company had, on 1 October 2001 entered into a subscription agreement with Hume Industries (Malaysia) Berhad (“HIMB”) for the subscription by HIMB of 200,000 new ordinary shares (“New Shares”) at par value of RM1.00 per share representing 49% of the enlarged issued and paid-up capital of HLI-HUME, for a total cash consideration of RM200,000 (“Subscription”). 

The shareholders of HLI had, on 26 October 2001 approved the Subscription. The New Shares  were allotted to HIMB on 27 October 2001.

18.

Seasonal / Cyclical factors 

There were no material changes to the factors affecting the sources of income and performance of the Group for the quarter under review.

19.

Prospects 

The medium and long-term visibility of the semiconductor sector is still unclear. Nevertheless, barring unforeseen circumstances, the Group's other businesses are expected to perform satisfactorily.

20.

Profit forecast / profit guaranteed 

This note is not applicable.

21.

Dividend 

The Board does not recommend any interim dividend for the financial quarter ended 30 September 2001.

22.

Adjustment Against Brought Forward Reserve

During the quarter under review, an associated company of the Group has taken into accounts its share of losses in an associated company against its brought forward retained profit (“Effects”). Consequently, the Group has taken into account its share of the Effects, amounting to RM12.09 million and adjusted against the brought forward retained profit accordingly.