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LAPORAN TAHUNAN 2000

2000 ANNUAL REPORT

ENG TEKNOLOGIHOLDINGS BHD (234669M)

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Notice of Annual General Meeting.............................

Corporate Information..............................................

Board of Directors....................................................

Corporate Event.......................................................

Eng At-A-Glance......................................................

Financial Highlights.................................................

Group Structure.......................................................

Chairman’s Statement..............................................

Penyata Pengerusi. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Audit Committee.....................................................

Financial Statements...............................................

Directors’ Report......................................................

Statement by Directors............................................

Statutory Declaration...............................................

Auditors’ Report......................................................

Consolidated Balance Sheet.....................................

Consolidated Income Statement................................

Consolidated Statement of Changes In Equity............

Consolidated Cash Flow Statement............................

Balance Sheet.........................................................

Income Statement...................................................

Statement of Changes In Equity................................

Cash Flow Statement...............................................

Notes To The Financial Statements............................

List of Properties Owned By The Group......................

Analysis of Shareholdings..........................................

Proxy Form..............................................................

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ENG TEKNOLOGI HOLDINGS BHD • 2000 ANNUALREPORT02

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Ninth Annual General Meeting of Eng Teknologi HoldingsBhd will be held at Kuang Room, Hotel Equatorial, No. 1 Jalan Bukit Jambul, 11900 Penangon 31 May 2001 at 3.00 p.m. for the following purposes:-

AS ORDINARY BUSINESS:-

1. To receive and adopt the Audited Statement of Accounts for the year ended 31 December 2000 together with the Reports of the Directors and Auditors thereon;

(Resolution 1)

2. To re-elect the following Directors who retire in accordance with Article 97 of the Company’s Articles of Association and being eligible, offer themselves for re-election:-

(a) Dato’ Teh Ah Ba (Resolution 2)(b) Teh Eong Liang (Resolution 3)(c) Teh Yong Khoon (Resolution 4)

3. To approve a first and final tax exempt dividend of 12% for the year ended 31 December 2000;

(Resolution 5)

4. To approve the payment of Director’s fees and remuneration for the year ended31 December 2000;

(Resolution 6)

5. To re-appoint Messrs Arthur Andersen & Co. as Auditors of the Company for the ensuing year and to authorize the Directors to fix their remuneration;

(Resolution 7)

AS SPECIAL BUSINESS:

6. To consider and, if thought fit, to pass with or without modifications the following ordinary resolution:

“THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the relevant government/regulatory authorities, the Directors be and are hereby authorized, pursuant to Section 132D of the Companies Act, 1965 to allot and issue share in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed 10 percentum of the issued share capital of the Company for the time being and that the Directors are also empowered to obtain the approval from the Kuala Lumpur Stock Exchange for the listing and quotation for the additional shares to be issued.”

(Resolution 8)

03ENG TEKNOLOGI HOLDINGS BHD • 2000 ANNUALREPORT

NOTICE OF CLOSURE OF BOOKS

NOTICE IS ALSO HEREBY GIVEN that the Register of Members will be closed from 4 July 2001to 6 July 2001 (both days inclusive), to determine shareholders’ entitlement to payment of aFirst and Final Tax-Exempt Dividend of 12% per ordinary share.

The dividends, if approved, will be paid on 23 July 2001 to depositors registered in the Recordsof Depositors on 3 July 2001.

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

(a) Shares deposited into the Depositor’s Securities Account before 12.30 p.m. on 29 June 2001 (in respect of shares which are exempted from mandatory deposit);

(b) Shares transferred to the Depositor’s Securities Account before 12.30 p.m. on 3 July 2001 in respect of ordinary transfers;

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

By Order of the Board

THUM SOOK FUN (MAICSA 7025619)KHAW MEI CHING (MAICSA 7035984) Secretaries

Date: 30 April 2001Penang

Notes:1. A proxy need not be a member of the Company. Where a member appoints more than one

proxy, the appointments shall be invalid unless he specifies the proportion of his holding to be represented by each proxy.

2. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing. In the case where a member is a corporation, the proxy form must be executed under its common seal or under the hand of an officer orattorney duly authorised.

3. All proxy forms must be duly executed and deposited at the Registered Office of the Company at Suite 18.05, MWE Plaza, No. 8 Lebuh Farquhar, 10200 Penang not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

Notice of Annual General Meeting C o n t ’ d

Corporate Inform a t i o n

Company SecretariesThum Sook Fun (MAICSA 7025619)Khaw Mei Ching (MAICSA 7035984)

Registered OfficeSuite 18.05, MWE Plaza, No.8 Lebuh Farquhar,10200 PenangTel: 604 263 1966Fax: 604 262 8544

Corporate OfficePlot 69-70, Pesara Kampung Jawa,Bayan Lepas Industrial Zone,11900 Bayan Lepas, Penang

AuditorsArthur Andersen & Co. Public Accountants21st Floor, MWE Plaza, No. 8 Lebuh Farquhar,10200 Penang

Principle BankersMalayan Banking Berhad552-556, Jelutong Road,11600 Penang

HSBC Bank Malaysia Berhad1 Downing Street,10300 Penang

Standard Chartered Bank Malaysia Berhad2 Lebuh Pantai,10300 Penang

SolicitorsChew, Tan & Lim, Advocates & Solicitors51-20A, Menara BHL Bank,Jalan Sultan Ahmad Shah,10050 Penang

Share RegistrarsPlantation Agencies Sdn. BerhadStandard Chartered Bank Chambers,2 Lebuh Pantai,10300 Penang

Stock ExchangeKuala Lumpur Stock Exchange Main Board


05

B o a rd of Dire c t o r s

ENG TEKNOLOGI HOLDINGS BHD • 2000 ANNUALREPORT

Dato’ Teh Ah BaExecutive Chairman

Mr. Alfred Teh Eong LiangChief Executive Officer

Mr. Teh Yong KhoonChief Operating Officer

Ms. Teh Yeong KeatExecutive Director

Mr. Tan Tiong EngExecutive Director

Tan Sri Dato’ Hj. Wan SidekHj. Wan Abd. RahmanDirector

En Zainuddin bin Che SohDirector

En Shaharom bin Md. ShariffDirector

Dato’ Mohd Suhaimi bin AbdullahDirector

Seated: Dato’ Teh Ah Ba Standing (L-R) 1st Row: Mr. Alfred Teh Eong Liang, Tan Sri Dato’ Hj. Wan Sidek Hj. Wan Abd. Rahman, Mr. Teh Yong Khoon, Ms. Teh Yeong Keat, Mr. Tan Tiong Eng Standing (L-R) 2nd Row: En Zainuddin bin Che Soh Standing (L-R) 3rdRow: Dato’ Mohd Suhaimi bin Abdullah, En Shaharom bin Md. Shariff

ENG TEKNOLOGI HOLDINGS BHD • 2000 ANNUALREPORT06 CORP

Factory visit by TYT Yang Di Pertua Negeri Pulau Pinang.

SISB Ground Breaking Ceremony

SISB to expand and relocate its facilities toBukit Minyak situated on the mainland of theProvince of Penang.

Donation to Asia Community Services.

As part of our responsibility to the Community,Eng donated RM20,000 to Asia CommunityServices, a non-profit organization based in Penang.

The HSBC 100: Asia’sBest Corporate.

Eng was selected as one of the millennium “HSBC 100” list ofthe best corporates in Asia.

Hit the RM200 Million Annual Sales mark.

Eng achieved another milestone.

August

C O R P O R A T E E V E N T

October

October

2 0 0 0

April

CORPORATE EVENT07

November

Received Maxtor Outstanding Supplier Award

ETIL was awarded the OutstandingSupplier Award by Maxtor

Received Intel Supplier Recognition Award

EHESB was awarded the Intel SupplierRecognition 2000 Award for co-developing thenew FCPGA Metal Carrier and improving the production yield from 75% to 98%.

Received DistinguishedPartner Award by Fujitsufrom the President of Fujitsu Limited

This award was presentedto ETPI by Fujitsu inappreciation of being anoutstanding partner indevelopmentand manufacturing.

New subsidiary – EPI Products (M) Sdn Bhd.

EPI Products (M) Sdn Bhd, a 60% owned subsidiary, is a one-stop supplier involved intrading of advanced packaging materials,cleanroom and electronic products.

ENG TEKNOLOGI HOLDINGS BHD • 2000 ANNUALREPORT

November

January

February

2 0 0 1


E N G A T - A - G L A N C E

ENG HARDWAREENGINEERING

SDN BHD

Core Business

Development andmanufactureof precision machining

components on amedium volume

scale for its customers.

Location

Plot 69-70Pesara

Kampung Jawa Bayan Lepas

Industrial Zone,11900 Penang,

Malaysia

Products/Services

Jigs, fixtures, precision standard

components, tool and die

components, precision metal

s t a m p i n g , trim &form dieset,gauges etc.

MICRO TOOLINGSDN BHD

Core Business

Engaged in highprecision

machining and isinvolved in the

production ofprecision toolingcomponents on a

batch and mediumvolume basis.

Location

Plot 69-70Pesara

Kampung Jawa Bayan Lepas


Malaysia

Products/Services

Manufacture andassembly of jigs

and fixtures, precision standard

c o m p o n e n t s .

SELEKTAINOVATIF (M)

SDN BHD

Core Business

Specializes inprecision

progressivestamping and

f i n e b l a n k i n gtogether withdownstream

plating support

Location

Plot 69-70Pesara

Kampung Jawa, Bayan Lepas


Malaysia

Products/Services

HDD Voice CoilMagnet yokeplates, total

integratedprocess from

concept design totoolmaking

inspections andassemblies.

ENGTEKPHILIPPINES INC

Core Business

Principally involvein manufacturing

and assemblingof hard disk drive components and

computerperipherals.

Location

L10,Phase II-A,

Special ExportProcessing Zone II,

CarmelrayIndustrial Park 1,

Canlubang,Calamba, Laguna,

Philippines

Products/Services

HDD actuator and base,

assembling ofHDD components

and computer peripherals.

ENG TEKNOLOGISDN BHD

Core Business

Design,manufacture andassembly of HDD

actuator and peripheral

components.Fabrication and

assembly ofmechanical

components forcontract OEM.

Location

Plot 69-70Pesara



Malaysia

Products/Services

Tape drive components,assembly ofmechanical

components in contract OEM

and system.

ENG TEKNOLOGI HOLDINGS BHD (Head Office)

Core BusinessInvestment, holding and provision of management services.

LocationPlot 69-70 Pesara Kampung Jawa, Bayan Lepas Industrial Zone, 11900 Penang, Malaysia.

ENGTEKPRECISION

PHILIPPINES INC

Core Business

Manufacturing ofelectronics and

mechanicalmachineryproducts,

components andaccessories.

Location

L10,Phase II-A,

Special ExportProcessing Zone II,

CarmelrayIndustrial Park 1,

Canlubang,Calamba,Laguna,

Philippines

Products/Services

HGA & HSA jigsand fixtures forHDD industry,punches and

dumbar, spindlemotor hub and

bracket.

ENGTEKPRECISION

(THAILAND)CO. LTD

Core Business

Manufacture ofHDD actuators,bases and other

mechanicalcomponents for

the Data Storageindustry.

Location

105 M001, Hi-Tech Industrial

Estate A s i aN a k o r n s a w a n

R o a d ,T. Banlane,

A. Bangpa-In,Ayuthaya, 13160

Thailand

Products/Services

Actuators, HDDbase, coil

and bearinga s s e m b l y.

EPI PRODUCTS(M) SDN BHD

Core Business

One-Stop Supplierinvolved with

trading ofadvancedpackagingmaterials,

cleanroom andelectronicproducts.

Location

01-03-07,Persiaran Bukit

Jambul 1, Sri Relau

Complex 11950Bayan Lepas,

Penang,Malaysia

Products/Services

Industrial,cleanroom

consumables andadvancedpackagingmaterials.

ENGTEKVENTURE (M)

SDN BHD

Core Business

Trading in marketable equityand investment in

unit trust.

Location

Plot 69-70,Pesara



Malaysia

Products/Services

N/A

ENG TEKNOLOGI HOLDINGS BHD • 2000 ANNUALREPORT 09

ENGTEKINTERNATIONAL

LIMITED

Core Business

Manufacture ofHDD actuators,

backup tape drivecomponents and

production ofprecision

mechanicalcomponents.

Location

Zhong ShenBuilding,

Industrial BaimaHuangchun

Dongguan CityGuangdong,

China

Products/Services

Actuators,tape drive

components and precision

mechanicalcomponents.


Financial Highlights


Financial Highlights C o n t ’ d


G roup Structure


C h a i rman’s Statement

Dato’ Teh Ah BaExecutive ChairmanPengerusi Eksekutif

On behalf of the Board of Directors, it is my pleasure to present the AnnualReport and Financial Statements of Eng Teknologi Holdings Bhd (ETHB) andits subsidiaries (the Group) for the financial year ended 31 December, 2000.The Group has achieved another year of record performance for the reportingfinancial year 2000. There were substantial growth in terms of sales revenue andp r o f i t s , and the Group has also consistently been able to achieve a high rate o freturns on equity. In addition, the ongoing business allocations and endorsementsby the Group's various key customers in the form of distinctive awards hasproven that our commitments to be the best in class achiever in the industryremains solid and hence a key differentiating factor among the competitions.

FINANCIAL RESULTS SUMMARYFor the reporting financial year 2000, Group Revenue increased by 28.5% toRM239 million, with Group Profit Before Taxation increased by 25% toRM40.2 million. Net Earnings Per Share on weighted average number of ordinaryshares basis has increased by 8% to 58.4 sen per share.

The increase in Group Revenue was attributed to the Group's ability to furtherincrease its overall market share position and obtaining further customer productallocations amidst tough and competitive market environment. The correspondingincrease in Group Profit Before Taxation was primarily due to the Group's continuous efforts to improve costs and operations management while realisingthe various additional capital expenditures implemented during the year.

DIVIDENDSIn line with the Group's dividend policy and to continue rewarding the share-holders, the Board of Directors is recommending a First and Final Tax Exemptdividend of 12 % in respect of financial year 2000 for approval by shareholdersat the forthcoming Annual General Meeting.

PROPOSED BONUSISSUEIn its efforts to continuously reward and enhance shareholders' values, ETHBhas on 27th February, 2001 announced a proposal to issue Bonus Shares onthe basis of one new ordinary share for every two existing ordinary shares held.


The objectives of this proposal is to enable ETHB to comply with the mainboard listing requirements of a minimum issued and paid-up share capital ofRM60 million, and to enable ETHB to increase its issued capital to a levelwhich would be more reflective of the existing operations and assets employedby the Group, together with providing for better stock liquidity in terms of numberof shares being enlarged. The proposal, if approved, will entail issuance of upto 26,699,346 new ordinary shares to existing shareholders.

FY2000 BUSINESS AND OPERATIONS REVIEWPrincipal Business and ActivitiesThe principal business of the Group remains focussed in the manufacturingactivities of precision mechanical components and related assemblies. For thedata storage industry, the Group has been successful in widening its productmix offering to include actuator and assemblies, flex circuit assembly, back uptape drive components, various other hard disk drive components and assembliesfor other optical storage devices.

The Group has further enhanced its position in the data storage componentsmarketplace through winning key awards from its customers. Its subsidiaries,Engtek Philippines and Engtek International have respectively won the Fujitsu'sDistinguished Partnership Award and Maxtor Outstanding Supplier Aw a r d .

For the semiconductor engineering and precision industry, the Group has continuously focussed on its Medium Volume Manufacturing activities and hasexperienced substantial growth in this market sector. This has helped to further improve its contributions to the bottom line of the Group's performance.

The Group has successfully realised its regionalisation strategies in order toposition itself with leading competitive edge in the regional supply chain. Asof FY 2000, the Group has managed to spread out its Revenue generatingactivities from the various regional locations in the order of 60% from thePhilippines, 15% from Hong Kong/ China, 18% from Malaysia and the balancefrom Thailand activities.

During the year, the Group has also embarked on small scale Indirect MaterialsManufacturing and sales activities through its new subsidiary, EPI Products(M) Sdn Bhd (formerly known as Eng Precision Industries Sdn Bhd) to furtherenhance value chain creations and total customer needs and requirements. Onthe other hand, the Group's intended entry into the computer peripherals productand modem market via the acquisition of Digital Integrated System Sdn Bhddid not yield material results and ETHB has since rescinded the purchaseagreement with the vendor .

Principal Operations and ActivitiesDuring FY 2000 the Group continued to expand and upgrade its operationsregion wide to cater for the increased volume demand and mix from its customers. The Group has also enhanced its technological and process capabilities to continuously improve its costs and efficiencies to meet andexceed market challenges. Amongst the key operation activities and progressmade during the year were:

1. The completion and occupation of the new state of the art building andfacilities of Engtek Philippines with clean room assembly capabilities.

C h a i rman’s Statement C o n t ’ d


2. The successful start up and market entry into spindle motor components byEngtek Precision Philippines to address the increased new product demand.

3. The operations readiness of Engtek Precision Thailand in gearing up for high volume components production and assemblies to meet anticipated new customer demands in Thailand.

4. The positioning of the Group in new capabilities in flexible circuit hook up assembly.

5. The excellent inventory management records from the operations hasenhanced the Group's margin and cost effectiveness.

6. A total of RM 34 million was spent on various capital expenditures to furtherenhance productivity and capabilities in new products and to increase capacities to meet the demand.

The Group will continue to harness its strength in manufacturing excellence anddesign strengths to continue inching into further market shares and a l l o c a t i o n sfrom its current and new customers while meeting the objectives and goals ofbeing a key leader in its fields of involvement.

GOING FORWARD"EVERGREEN" Strategic Master Plan, 2001-2003The management of the Group has devised a Strategic Master Plan adopted a s"EVERGREEN" plan to chart forward its growth plans .The key strategies involveimplementing methods of business growth through both organic and inorganicmechanisms while focusing and excelling in its core competencies. Improvingcosts and operations management would go parallel with the above businessgrowth, while future sharing of gains and rewards with the work team andemployees of the Group is strongly promoted. The ultimate goals would be tofurther enhance the Group's performance standings while increasing share-holders values and returns would be the ultimate outcome.

FUTURE PROSPECTSIn line with the general global demand weakness anticipated for the first halfof FY 2001, the Group expects a challenging year ahead. However, the consistentresilience approach of the Group's management would be a key factor andstrength to ensure that ETHB would emerge ahead of the competition throughproper execution. Barring unforeseen circumstances, the Group is confident ofcontinuously charting long term growth in the future.

A NOTE OF APPRECIATIONI would like to take this opportunity to express my sincere appreciation tomy fellow Board Members for their continuous support and guidance andmy thanks to our customers, suppliers and associates for their support. Iwould like to pay tribute to my employees for their hardwork and effort tocontinuously contribute to the growth of the Group. Last but not least, mythanks to ETHB shareholders for their confidence and faith in ETHB.

Dato' Teh Ah BaExecutive Chairman

C h a i rman’s Statement C o n t ’ d


Bagi pihak Lembaga Pengarah, adalah menjadi kebanggaan saya untuk mem-bentangkan Laporan Tahunan dan Penyata Kewangan bagi Eng TeknologiHoldings Bhd (ETHB) dan syarikat-syarikat kumpulannya (kumpulan) untuktahun berakhir 31 Disember 2000.

Kumpulan ini telah mencapai satu rekod persembahan yang baik berdasarkanLaporan Kewangan tahun 2000. Kumpulan ini telah berjaya mencapai satu pertumbuhan yang amat tinggi dalam bentuk hasil jualan dan keuntungan sertakadar pulangan ekuiti yang tinggi. Dengan kata lain, perjalanan pengagihan perniagaan dan penguatkuasaan oleh pelbagai pelanggan utama Kumpulan inidalam bentuk penganugerahan cemerlang telah membuktikan bahawa keazamankita untuk mencapai kedudukan yang terunggul dalam industri ini masihberkekalan malahan ia merupakan kunci utama untuk menunjukkan perbezaankita dengan pesaing-pesaing lain.

RINGKASAN KEPUTUSAN KEWANGANMengikut Laporan Kewangan Tahun 2000, didapati Kadar Perolehan DaganganKumpulan telah meningkat 28.5% ke RM239 juta dengan PendapatanKumpulan Sebelum Cukai meningkat 25% ke RM40.2 juta. Pendapatan BersihSetiap Saham berasaskan angka purata berwajaran mengikut bilangan sahambiasa telah meningkat 8% ke 58.4 sen setiap saham.

Peningkatan dalam Perolehan Dagangan Kumpulan telah menunjukkan kebolehanKumpulan ini untuk meneruskan peningkatan kedudukan pasaran saham secarakeseluruhan serta berjaya memperolehi pengagihan produk pelanggan yangberterusan walaupun berada dalam satu persekitaran pasaran yang mempunyaipersaingan yang hebat. Peningkatan Pendapatan Kumpulan Sebelum Cukaiadalah disebabkan oleh usaha berterusan Kumpulan untuk memperbaiki kos danpengurusan operasi dengan tambahan pelbagai perbelanjaan modal pada tahuntersebut.

DIVIDENSelaras dengan polisi dividen Kumpulan dan untuk terus memberi insentif kepadapemegang saham, Lembaga Pengarah telah mencadangkan Dividen Pertama danTerakhir Pengecualian Cukai sebanyak 12% pada tahun 2000 yang akan diluluskan oleh pemegang saham dalam Mesyuarat Agung Tahunan yang akandatang.

CADANGAN SAHAM BONUSDalam usaha untuk terus memberi ganjaran serta mempertingkatkan nilaipemegang saham, ETHB telah membuat satu pengumuman pada 27 Februari2000 tentang cadangan untuk memberi Saham Bonus, iaitu setiap saham barubagi 2 saham yang dipegang semasa. Objektif cadangan ini ialah untuk mem-bolehkan ETHB memenuhi keperluan Papan Utama untuk meningkatkan modalberbayar ke satu tahap yang akan lebih mencerminkan operasi dan asetKumpulan ini, di samping juga untuk meningkatkan kecairan saham denganmenambahkan bilangan sahamnya. Jika cadangan ini diluluskan, ia dijangkaakan meningkatkan sahamnya sebanyak 26,699,346 unit bagi pemegang saham.

KAJIAN OPERASI DAN PERNIAGAAN BAGI TAHUN KEWANGAN 2000Perniagaan dan Aktiviti-aktiviti Utama Perniagaan utama Kumpulan ini masih memfokus kepada aktiviti pengeluarankomponen mekanikal kejituan dan pemasangan. Bagi industri penyimpanan

Penyata Pengerusi

data, Kumpulan ini berjaya memperluaskan penawaran produk campuran yangmelibatkan actuator dan pemasangannya, pemasangan litar flex, komponen“back-up tape drive”, pelbagai komponen “hard disk drive” serta komponen-komponen dan pemasangan penyimpanan optikal lain.

Kumpulan ini telah meningkatkan kedudukan pasarannya bagi komponen penyimpanan data menerusi kemenangan anugerah-anugerah utama daripadapelanggannya. Engtek Philippines dan Engtek International masing-masing jugatelah memenangi anugerah “Fujitsu’s Distinguished Partnership Award” dan“Maxtor Outstanding Supplier Award”.

Bagi industri kejuruteraan kejituan dan semikonduktor, Kumpulan ini terus memfokuskepada aktiviti Medium Volume Manufacturing-MVM dan telah mencapai per-tumbuhan yang tinggi dalam sektor pasaran ini. Pencapaian ini telah membantuuntuk meningkatkan sumbangan keputusan kewangan Kumpulan ini.

Kumpulan ini juga telah berjaya dalam strategi perantauan supaya dapat mele-takkan dirinya ke tahap persaingan yang terunggul dalam saluran pembekalanrantau. Bagi tahun 2000, Kumpulan ini juga berjaya memgagihkan perolehandari pelbagai lokasi, iaitu 60% dari Filipina, 15% dari Hong Kong/China, 18%dari Malaysia dan bakinya dari aktiviti negara Thai.

Pada tahun tersebut, Kumpulan ini juga pernah memulakan penggunaan skelkecil untuk pengeluaran bahan tidak langsung dan aktiviti jualan menerusisyarikat subsidari barunya, EPI Products (M) Sdn Bhd demi memperluaskanpembentukan nilai rangkaian dan keperluan pelanggan.

Namun demikian, cadangan untuk memasuki pasaran produk komputer sampingandan modem melalui pembelian Digital Integrated System (M) Sdn Bhd tidakmencapai keputusan yang dijangkakan. Akibatnya terpaksa membatalkan perjanjianpembelian ini.

Operasi dan Aktiviti-aktiviti UtamaSepanjang tahun 2000, Kumpulan ini terus mengembang dan meningkatkanoperasinya diperingkat serantau untuk memenuhi permintaan volum dan campuranyang meningkat daripada pelanggan. Kumpulan ini juga meningkatkan teknologidan proses keupayaan supaya dapat terus memperbaiki kos dan keberkesanannyademi memenuhi keperluan dan mengatasi cabaran pasaran. Antara aktivitioperasi yang utama ialah:

1. Penggunaan bangunan baru Engtek Philippines yang serba moden yang dilengkapi dengan kemudahan dan keupayaan “clean room assembly”

2. Permulaan yang baik untuk memasuki pasaran komponen “Spindle Motor” oleh Engtek Precision Philippines untuk memenuhi permintaan yang semakinmeningkat bagi produk baru.

3. Persediaan operasi di Engtek Precision Thailand untuk menghasilkan pengeluaranvolum tinggi serta pemasangan supaya dapat memenuhi permintaan pelangganbaru di Negara Thai.

4. Kedudukan Kumpulan dalam keupayaan baru dan pemasangan litar flexi.

Penyata Pengerusi S a m b u n g a n

5. Rekod pengurusan inventori yang cemerlang daripada operasi telah meningkatkan lagi margin dan keberkesanan kos Kumpulan.

6. Sebanyak RM 34 juta telah dibelanjakan untuk pelbagai perbelanjaanmodal demi meningkatkan produktiviti dan keupayaan dalam produk baruserta meningkatkan kapasiti supaya dapat memenuhi permintaan pelanggan.

Kumpulan ini akan terus menekankan kekuatannya dalam pengeluaran yangcemerlang dan rekabentuk kekuatan supaya dapat terus meningkatkan pasaransaham dan pengagihan daripada pelanggan semasa dan pelanggan baru untukmencapai objektif dan matlamat untuk mengetuai dalam bidang yang diceburi.

MENUJU KE HADAPAN

“EVERGREEN”, Plan Induk Strategik, 2001-2003Pengurusan Kumpulan telah mengemukakan satu plan induk strategik yangdinamakan “EVERGREEN” demi merancang kemajuan Kumpulan ini. Strategi-strategi utama termasuklah melaksanakan kaedah-kaedah pertumbuhan perniagaanmenerusi kedua-dua mekanisme organik dan tidak organik serta memberi fokusterhadap keupayaannya. Pembaikan kos dan pengurusan operasi akan dijalankanbersama-sama dengan pertumbuhan perniagaan yang disebutkan di atas.Manakala perkongsian hasil pendapatan dan ganjaran pada masa depanbersama-sama dengan kumpulan kerja dan pekerja-pekerja Kumpulan adalahsangat digalakkan. Matlamat yang dibentuk dijangka akan terus meningkatkanpencapaian Kumpulan malah juga meningkatkan nilai pemegang saham sertamemperolehi pulangan yang lumayan.

PROSPEK MASADEPANMemandangkan terdapat kelemahan dalam permintaan global pada separuhtahun pertama 2001, Kumpulan ini meramal akan menghadapi tahun depanyang lebih mencabar. Walau bagaimanapun, dengan adanya pendekatan“resilience” yang konsisten daripada pengurusan Kumpulan, ia akan menjadisatu faktor dan kekuatan untuk memastikan ETHB dapat menghadapi sebaranghalangan di kalangan persaingan yang hebat menerusi pelaksanaan yang bersesuaian. Melainkan terdapat sesuatu yang di luar jangka berlaku, Kumpulanini yakin akan memperolehi pertumbuhan jangka panjang yang berlanjutan padamasa depan.

PENGHARGAANSaya ingin mengambil kesempatan ini untuk menyampaikan setinggi-tinggipenghargaan kepada ahli-ahli Pengarah yang sentiasa memberi sokongan, danbimbingan. Selanjutnya saya mengucapkan ribuan terima kasih atas sokongandaripada para pelanggan, pembekal and rakan bisnes kami. Disamping menunjukkanperhormatan saya terhadap seluruh pekerja-pekerja Engtek atas kerajinan dankesungguhan menyumbangkan tenaga untuk pertumbuhan Kumpulan. Akhirsekali, saya mengucapkan terima kasih kepada pemegang saham ETHB ataskeyakinan dan kepercayaan terhadap ETHB.

Dato' Teh Ah BaPengerusi Eksekutif


Penyata Pengerusi S a m b u n g a n


Audit Committee

i) The members who have served on the Audit Committee in the year were:-

Non-Executive Independent Directors

a) En. Zainuddin Bin Che Soh - Chairman (w.e.f 28-03-96)b) Dato’ Mohd Suhaimi Bin Abdullah - Member (w.e.f 19-03-94)c) En. Shaharom Bin Md Shariff - Member (w.e.f 25-03-97)

Executive Director

d) Mr. Teh Eong Liang - Member (w.e.f 19-03-94)

ii) The Terms of Reference of the Audit Committee are as follows:-

Membership

1. The committee shall be appointed by the Board from among their numbers and shall consist ofnot less than three members of whom a majority shall not be:

• Executive Directors of the Company or any related corporation• a spouse, parent, brother, sister, son or adopted son, daughter or adopted daughter of an Executive

Director of the Company or of any related corporation, or• any person having a relationship which, in the opinion of the Board of Directors, would interf e r e

with the exercise of independent judgement in carrying out the functions of the Audit Committee.

2 . The members of the Committee shall select a Chairman from among their numbers who is not anExecutive Director or employee of the Company or any related corporation.

3. If a member of the Committee resigns, dies or for any other reason ceases to be a member with theresult that the number of members is reduced to below 3, the Board of Directors shall, within 3months of that event, appoint such number of new members as may be required to make up the minimum number of 3 members.

4. The term of office of members of the Committee should be reviewed by the Board no less than everythree years.

Authority

5. The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.

6 The Committee is authorised by the Board to obtain outside legal or independent professional adviceand to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

Audit Committee C o n t ’ d


Functions

7. The functions of the Committee shall be:a) to review -

i) with the external auditors, the audit plan;i i ) with the external auditors, their evaluation of the system of internal accounting controls;iii) with the external auditors, their audit report;iv) the assistance given by the Company’s officers to the auditors;v) the scope and results of the internal audit procedures;vi) the balance sheet and profit and loss account of the Company and the consolidated balance

sheet and profit and loss accounts, submitted to it by the Company, and thereafter to submit them to the Directors of the Company;

vii) any related party transactions that may arise within the Company or Group; and

b) to consider the nomination of a person or persons as auditors together with such other functions asmay be agreed to by the Audit Committee and the Board of Directors.

Attendance at Meetings

8. The Finance Director, the Head of Internal Audit, and a representative of the external auditors shallnormally attend meetings. Other Board members shall also have the right of attendance. However, at least once a year the Committee shall meet with the external auditors without the Executive Boardmembers present.

9. The Company Secretary shall be the Secretary of the Committee.

Frequency of Meetings

1 0 . Meeting shall be held not less than 4 times a year. The external auditors may request for a meetingif they consider it necessary.

Reporting Procedures

1 1 . The secretary shall circulate the minutes of meetings of the Committee to all members of the Board.

20002000 F INANCIAL STAT E M E N T S

ENG TEKNOLOGI HOLDINGS BHD (234669M)I n c o r p o r a t e d I n M a l a y s i a

D i rectors’ Report


The directors hereby submit their report together with the audited financial statements of the Company andthe Group for the financial year ended 31 December, 2000.

PRINCIPAL ACTIVITIESThe principal activities of the Company are investment holding and provision of management services.

The principal activities of the subsidiaries are described in Note 16 to the financial statements.

There were no significant changes in these activities during the financial year.

RESULTSGroup CompanyRM RM

Net profit for the year 31,017,339 11,761,642

DIVIDENDSThe amount of dividends paid or declared by the Company since 31 December, 1999 were as follows:

In respect of the financial year ended 31 December, 1999: RM

Special tax exempt dividend of 8% paid on 21 July, 2000 4,270,583First and final tax exempt dividend of 10% paid on 21 July, 2000 5,338,229

9,608,812

The directors now recommend a first and final tax exempt dividend of 12%, amounting to RM6,407,843 in respect of the current financial year

RESERVES AND PROVISIONSThere were no material transfers to or from reserves or provisions during the financial year, other than as disclosed in the statements of changes in equity.

BAD AND DOUBTFUL DEBTSBefore the income statements and balance sheets were made out, the directors took reasonable steps toascertain that action had been taken in relation to the writing off of bad debts and the making of provisionfor doubtful debts and satisfied themselves that no debts need to be written off as bad or provided for as doubtful in the financial statements of the Company. The directors are also satisfied that all known bad debtshad been written off and that adequate provision had been made for doubtful debts in the financial statements of the Group.

At the date of this report, the directors are not aware of any circumstances which would require any debtsto be written off as bad or provided for as doubtful in the financial statements of the Company nor arethey aware of any circumstances which would render the amounts written off as bad debts or provided for as doubtful debts in the financial statements of the Group inadequate to any substantial extent.

D i rectors’ Report C o n t ’ d


CURRENT ASSETSBefore the income statements and balance sheets were made out, the directors took reasonable steps to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Company and the Group have been writtendown to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the valuesattributed to the current assets in the financial statements of the Company and the Group misleading.

VALUATION METHODSAt the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Company and the Group misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIESAt the date of this report, there does not exist:

(a) any charge on the assets of the Company or the Group which has arisen since the end of the financial year which secures the liabilities of any other person; or

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

No contingent or other liability has become enforceable or is likely to become enforceable within the periodof twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Company or the Group to meet their obligations when they fall due.

CHANGE OF CIRCUMSTANCESAt the date of this report, the directors are not aware of any circumstances not otherwise dealt with in thisreport or the financial statements of the Company or the Group which would render any amount stated in thefinancial statements misleading.

ITEMS OF AN UNUSUAL NATUREThe results of the operations of the Company and the Group during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusualnature.

There has not arisen in the interval between the end of the financial year and the date of this report any item,transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Company or the Group for the financial year in which this report is made.

SIGNIFICANT EVENTSThe significant events are as disclosed in Note 35 to the financial statements.

SUBSEQUENT EVENTSThe subsequent events are as disclosed in Note 36 to the financial statements.



EMPLOYEES’ SHARE OPTION SCHEMEThe Company’s Employees’ Share Option Scheme (the Scheme) consisting of up to 2,745,400 share optionswith rights to subscribe for the same number of new ordinary shares of RM1 each was implemented in 1995and the main features of the Scheme are:

a) The eligible persons are employees and executive directors of the Company having at least one (1) yearof service in the Company. The eligibility for participation in the Scheme shall be at the absolute discretion of the Scheme’s Committee.

b) The option shall be for a minimum of 1,000 ordinary shares and shall not exceed the maximum allowableallotment for original options granted. However, the Scheme’s Committee shall permit the exercise of“odd” lots shares which are not in the multiple of 1,000 ordinary shares arising as a result of the corporate exercise undertaken by the Company.

c) The option period is for five (5) calendar years commencing from 11 August, 1995 (Date of the LastApproval) and expiring on 11 August, 2000.

d) The option price shall be determined based on the average of the mean market quotation of the shares of the Company as shown in the Daily Official List issued by the Kuala Lumpur Stock Exchange for thefive (5) preceding market days prior to the Date of Offer or at par, whichever is higher. The option grantedis exercisable in the ratio of 50% within the first two years and the remaining 50% after that.

e) The shares to be allotted upon any exercise of the option will upon allotment, rank pari passu in allrespects with the existing shares of the Company.

f) The number of option and the option price may be adjusted as a result of any alteration in the capitalstructure of the Company by way of capitalisation of profits or reserves, rights issues or reduction of capital, if any, made by the Company while an option remains unexercised.

As at 31 December, 2000, the details of the share options are as follows:

Year Balance Number of Balanceof Options as at Share Options as at Granted 1 January, 2000 Exercised Forgone 31 December, 2000

1995 867,800 859,800 8,000 –1996 254,800 254,800 – –1999 93,200 93,200 – –

Year Option Price Per Share Option Price Per Share of Options before revision arising from after revision arising fromGranted change in capital structure change in capital structure

RM RM

1995 5.55 3.471996 7.63 4.771999 9.68 6.05



SHARE CAPITALDuring the financial year, the Company increased its issued and paid-up share capital from RM52,190,892to RM53,398,692 by the issuance of 1,207,800 ordinary shares of RM1 each for cash by virtue of the exercise of employees’ share options.

DIRECTORSThe directors who served since the date of the last report are:

Dato’ Teh Ah BaTeh Eong LiangTeh Yong KhoonTeh Yeong KeatTan Tiong EngZainuddin bin Che SohDato’ Mohd Suhaimi bin AbdullahTan Sri Dato Hj. Wan Sidek Hj. Wan Abd. RahmanShaharom bin Md Shariff

In accordance with the Company’s Articles of Association, Dato’ Teh Ah Ba, Mr. Teh Eong Liang and Mr. Teh Yo n gKhoon retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-election.

DIRECTORS’ BENEFITSDuring and at the end of the financial year, no arrangements subsisted to which the Company or its subsidiaries is a party with the object of enabling directors of the Company to acquire benefits by means ofthe acquisition of shares in or debentures of the Company or any other body corporate, other than the optionsgranted under the Employees’ Share Option Scheme.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than as shown in the financial statements) by reason of a contract made by the Company or arelated corporation with the director or with a firm of which he is a member, or with a company in which hehas a substantial financial interest.

DIRECTORS’ INTERESTSAccording to the register of directors’ shareholdings, the interests of directors in office at the end of thefinancial year in the shares of the Company during the financial year were as follows:

Number of ordinary shares of RM1 each

1 January, 31 December,Company 2000 Bought Sold 2000

Dato’ Teh Ah Ba 15,056,722 272,000 272,000 15,056,722Teh Eong Liang 2,212,546 921,600 – 3,134,146Teh Yeong Keat 1,103,883 400,000 – 1,503,883Teh Yong Khoon 5,575,892 121,600 2,446,000 3,251,492Tan Tiong Eng 276,502 246,400 – 522,902Zainuddin bin Che Soh 1,280 – 1,000 280Dato’ Mohd Suhaimi

bin Abdullah 115,200 – – 115,200



Number of ordinary shares of Peso 1 / Baht 10 each

1 January, 31 December,Subsidiaries 2000 Bought Sold 2000

Engtek Precisions Philippines Inc.

Tan Tiong Eng 1,000,000 – – 1,000,000

Engtek Precisions (Thailand) Co., Ltd

Teh Yong Khoon 100,000 250,000 – 350,000

Number of options over ordinary shares of RM1 each

Options Optionsoutstanding outstanding

as at 1.1.2000 Exercised as at 31.12.2000

Dato’ Teh Ah Ba 272,000 272,000 –Teh Eong Liang 121,600 121,600 –Teh Yong Khoon 121,600 121,600 –Teh Yeong Keat 128,000 128,000 –Tan Tiong Eng 246,400 246,400 –

By virtue of his interest in the shares of the Company, Dato’ Teh Ah Ba is deemed interested in the sharesof all the Company’s subsidiaries to the extent the Company has an interest.

The other directors in office at the end of the financial year did not have any interest in shares or shareoptions in the Company or its related corporations during the financial year.

NUMBER OF EMPLOYEES AND PRINCIPAL PLACE OF BUSINESSThe number of employees in the Company and in the Group at the end of the year were 49 (1999: 34) and2,778 (1999: 2,073) respectively. The principal place of business of the Company is located at Plot 69-70,Pesara Kampung Jawa, Bayan Lepas Industrial Zone, 11900 Bayan Lepas, Penang, Malaysia.

AUDITORSArthur Andersen & Co. retire and have indicated their willingness to accept re-appointment.

Signed on behalf of the Board in accordance with a resolutionof the directors

—————————————————-DATO’ TEH AH BA

——————————————–––––––TEH EONG LIANG

PenangDated: 6 April 2001

Statement by Dire c t o r s


STATEMENT BY DIRECTORSWe, DATO’ TEH AH BA and TEH EONG LIANG, being two of the directors of ENG TEKNOLOGI HOLDINGSBHD., do hereby state that, in the opinion of the directors, the financial statements set out on pages 29 to60 give a true and fair view of the state of affairs of the Company and the Group as at 31 December, 2000and of the results and cash flows of the Company and the Group for the year then ended, and have beenproperly drawn up in accordance with applicable approved accounting standards in Malaysia.

Signed on behalf of the Board in accordance with a resolutionof the directors

—————————————————DATO’ TEH AH BA

—————————————————TEH EONG LIANG

PenangDated: 6 April 2001

I, TEH EONG LIANG, the director primarily responsible for the financial management of ENG TEKNOLOGIHOLDINGS BHD., do solemnly and sincerely declare that the financial statements set out on pages 29 to60 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiouslybelieving the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared )by the abovenamed TEH EONG LIANG )at Georgetown in the State of Penang )on 6 April 2001 ) TEH EONG LIANG

Before me:

Badaruddin bin Hj. Othman (A–P049)Commissioner for OathsPenang

Statutory Declaration

Auditors’ Report


To the Shareholders ofENG TEKNOLOGI HOLDINGS BHD.

We have audited the financial statements set out on pages 29 to 60. These financial statements are theresponsibility of the Company’s directors. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by the directors, as well as evaluating the overall financialstatements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion,

(a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia and give a true and fair view of:

(i) the state of affairs of the Company and the Group as at 31 December, 2000 and of the results andcash flows of the Company and the Group for the year then ended; and

(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financialstatements;

(b) the accounting and other records and the registers required by the Act to be kept by the Company andits subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

We have considered the financial statements and the auditors’ reports of all the subsidiaries of which wehave not acted as auditors, as indicated in Note 16 to the financial statements, being financial statementsthat have been included in the consolidated financial statements.

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

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

Arthur Andersen & Co. Lim Foo ChewNo. AF 0103 No. 1748/01/02(J)Public Accountants Partner of the Firm

Dated: 6 April 2001Penang

Consolidated Balance Sheet31 December, 2000


Note 2000 1999RM RM

CURRENT ASSETSCash and bank balances 3 21,331,795 21,530,157Deposits with licensed banks 4 18,977,460 6,769,891Trade debtors 5 45,822,616 37,724,790Other debtors 6 14,238,376 5,109,347Marketable securities 7 129,080 236,392Stocks 8 8,720,364 8,482,586

109,219,691 79,853,163

CURRENT LIABILITIESBank borrowings 10 19,225,162 1,237,449Trade creditors 28,203,306 27,571,674Other creditors 11 17,126,835 11,847,320Hire-purchase and lease creditors 12 2,345,447 2,032,994Taxation 3,205,878 114,980Proposed dividends 6,407,843 9,394,360

76,514,471 52,198,777

NET CURRENT ASSETS 32,705,220 27,654,386INVESTMENTS 13 2,190,434 2,402,641FIXED ASSETS 14 84,910,741 66,934,002INTEREST IN ASSOCIATED COMPANY 15 2,720,013 3,138,821GOODWILL ON CONSOLIDATION 17 26,082,598 27,176,975TERM LOANS 10 – (191,885)HIRE-PURCHASE AND LEASE CREDITORS 12 (1,754,772) (1,679,032)DEFERRED TAXATION 18 (2,798,245) (2,343,060)DEFERRED INCOME 19 (325,808 ) (379,365)MINORITY INTERESTS (6,118,270) (4,236,354)

137,611,911 118,477,129

SHAREHOLDERS’ FUNDSShare capital 20 53,398,692 52,190,892Reserves 84,213,219 66,286,237

137,611,911 118,477,129

The accompanying notes are an integral part of this balance sheet.

Consolidated Income StatementFor The Year Ended 31 December, 2000


Note 2000 1999RM RM

Revenue 21 239,126,420 185,982,836Other operating income 22 1,044,433 551,071Changes in stocks of finished goods and

work-in-progress (1,185,384 ) 675,390Marketable securities purchased (1,110,145) (522,298)Raw materials and consumables (119,767,500 ) (94,797,216)Staff costs 23 (39,357,256) (28,209,749)Depreciation (12,213,696) (9,175,121)Amortisation of goodwill on consolidation (1,094,377 ) (182,396)Sub-contract expenses (5,967,549) (5,624,516)Other operating expenses 24 (18,596,748) (16,107,871)Profit from operations 40,878,198 32,590,130Finance costs 25 (706,958 ) (528,514)Profit before taxation 40,171,240 32,061,616Taxation 26 (7,698,123) (1,726,176)

32,473,117 30,335,440Pre-acquisition profit – (3,377,054)Minority interests (1,455,778) (1,218,016)Net profit for the year 31,017,339 25,740,370

Earnings per share (sen) 27 58.4 54.1

The accompanying notes are an integral part of this statement.

Consolidated Statement of Changes In EquityFor The Year Ended 31 December, 2000


Share capital Reserves * TotalRM RM RM

At 31.12.1998 as previously stated 28,620,000 45,496,281 74,116,281Prior year adjustment (Note 28) – (696,464) (696,464)At 1.1.1999 as restated 28,620,000 44,799,817 73,419,817Bonus issue of 3 for 5 17,625,600 (17,625,600) –Arising on acquisitions 5,093,092 22,849,583 27,942,675Arising from share options exercised 852,200 3,862,294 4,714,494Corporate exercise expenses – (800,000) (800,000)Amortisation – (7,915) (7,915)Dividends (Note 29) – (9,394,360) (9,394,360)Underprovision of dividend – (100,080) (100,080)Net profit for the year – 25,740,370 25,740,370Currency translation differences – (3,037,872) (3,037,872)At 31.12.1999 as restated 52,190,892 66,286,237 118,477,129

At 31.12.1999 as previously stated 52,190,892 68,211,416 120,402,308Prior year adjustment – (1,925,179) (1,925,179)At 1.1.2000 as restated 52,190,892 66,286,237 118,477,129Arising from share options exercised 1,207,800 3,554,962 4,762,762Amortisation – (47,953) (47,953)Dividends (Note 29) – (6,407,843) (6,407,843)Underprovision of dividend – (214,452) (214,452)Net profit for the year – 31,017,339 31,017,339Dilution of interest – (24,527) (24,527)Currency translation differences – (9,950,544) (9,950,544)Transfer from retained profits – 2,630,407 2,630,407Transfer to capital reserve (Note 30) – (2,630,407) (2,630,407)At 31.12.2000 53,398,692 84,213,219 137,611,911


Consolidated Statement of Changes In Equity C o n t ’ d

For The Year Ended 31 December, 2000


RESERVES *

Non-distributable Distributable

Share Reserve on Translation Capital Retainedpremium consolidation reserve reserve profits Total

RM RM RM RM RM RMAt 31.12.1998

as previously stated 5 , 3 9 6 , 8 2 0 1 , 5 5 6 , 5 9 2 5 , 5 9 7 , 8 1 4 – 3 2 , 9 4 5 , 0 5 5 4 5 , 4 9 6 , 2 8 1Prior year adjustment

(Note 28) – – – – ( 6 9 6 , 4 6 4) ( 6 9 6 , 4 6 4)At 1.1.1999 as restated 5 , 3 9 6 , 8 2 0 1 , 5 5 6 , 5 9 2 5 , 5 9 7 , 8 1 4 – 3 2 , 2 4 8 , 5 9 1 4 4 , 7 9 9 , 8 1 7Bonus issue of 3 for 5 ( 4 , 5 9 6 , 8 2 0) – – – ( 1 3 , 0 2 8 , 7 8 0) ( 1 7 , 6 2 5 , 6 0 0)Arising on acquisitions 2 2 , 9 1 8 , 9 0 8 ( 6 9 , 3 2 5) – – – 2 2 , 8 4 9 , 5 8 3Arising from share

options exercised 3 , 8 6 2 , 2 9 4 – – – – 3 , 8 6 2 , 2 9 4Corporate exercise

e x p e n s e s ( 8 0 0 , 0 0 0) – – – – ( 8 0 0 , 0 0 0)A m o r t i s a t i o n – ( 7 , 9 1 5) – – – ( 7 , 9 1 5)Dividends (Note 29) – – – – ( 9 , 3 9 4 , 3 6 0) ( 9 , 3 9 4 , 3 6 0)Underprovision of

d i v i d e n d – – – – ( 1 0 0 , 0 8 0) ( 1 0 0 , 0 8 0)Net profit for the year – – – – 2 5 , 7 4 0 , 3 7 0 2 5 , 7 4 0 , 3 7 0Currency translation

d i f f e r e n c e s – – ( 3 , 0 3 7 , 8 7 2 ) – – ( 3 , 0 3 7 , 8 7 2)At 31.12.1999 as restated 2 6 , 7 8 1 , 2 0 2 1 , 4 7 9 , 3 5 2 2 , 5 5 9 , 9 4 2 – 3 5 , 4 6 5 , 7 4 1 6 6 , 2 8 6 , 2 3 7

At 31.12.1999 aspreviously stated 2 6 , 7 8 1 , 2 0 2 1 , 4 7 9 , 3 5 2 2 , 5 8 4 , 1 7 7 – 3 7 , 3 6 6 , 6 8 5 6 8 , 2 1 1 , 4 1 6

Prior year adjustment(Note 28) – – ( 2 4 , 2 3 5) – ( 1 , 9 0 0 , 9 4 4) ( 1 , 9 2 5 , 1 7 9)

At 1.1.2000 as restated 2 6 , 7 8 1 , 2 0 2 1 , 4 7 9 , 3 5 2 2 , 5 5 9 , 9 4 2 – 3 5 , 4 6 5 , 7 4 1 6 6 , 2 8 6 , 2 3 7Arising from share

options exercised 3 , 5 5 4 , 9 6 2 – – – – 3 , 5 5 4 , 9 6 2A m o r t i s a t i o n – ( 4 7 , 9 5 3 ) – – – ( 4 7 , 9 5 3)Dividends (Note 29) – – – – ( 6 , 4 0 7 , 8 4 3) ( 6 , 4 0 7 , 8 4 3)Underprovision of

d i v i d e n d – – – – ( 2 1 4 , 4 5 2) ( 2 1 4 , 4 5 2)Net profit for the year – – – – 3 1 , 0 1 7 , 3 3 9 3 1 , 0 1 7 , 3 3 9Dilution of interest – – – – ( 2 4 , 5 2 7 ) ( 2 4 , 5 2 7)Currency translation

d i f f e r e n c e s – – ( 9 , 9 5 0 , 5 4 4) – – ( 9 , 9 5 0 , 5 4 4)Transfer from retained

p r o f i t s – – – 2 , 6 3 0 , 4 0 7 – 2,630,407Transfer to capital

reserve (Note 30) – – – – (2,630,407) (2,630,407)At 31.12.2000 3 0 , 3 3 6 , 1 6 4 1 , 4 3 1 , 3 9 9 ( 7 , 3 9 0 , 6 0 2) 2 , 6 3 0 , 4 0 7 5 7 , 2 0 5 , 8 5 1 8 4 , 2 1 3 , 2 1 9


Consolidated Cash Flow StatementFor The Year Ended 31 December, 2000


Note 2000 1999RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 40,171,240 32,061,616Adjustments for:

Amortisation of goodwill on consolidation 1,094,377 182,396Bad debt written off 65,456 –Depreciation 12,213,696 9,175,121Fixed assets written off 197,387 –Interest expenses 942,771 776,684Provision for doubtful debts 529,523 182,875Provision for diminution in value

of investment 192,937 44,183Provision for stock obsolescence 120,540 14,364Stock write down 19,761 –Unrealised foreign exchange loss/(gain) 2,412,668 (121,697)Amortisation of deferred income (53,557) (53,557)Amortisation of reserve on consolidation (47,953) (7,915)Dividend income (8,332) (1,609)Gain on disposal of fixed assets (720,572) (12,690)Interest income (976,592) (986,582)Write back of provision for doubtful debts (67,681) (131,350)Write back of provision for stock obsolescence (20,244) (280,673)Write back of provision for diminution in value

of investment – (366,102)Operating profit before working capital changes 56,065,425 40,475,064

(Increase)/Decrease in debtors (17,657,878) 1,570,237Increase in stocks (357,835) (709,047)Decrease in creditors (2,803,691) (2,090,394)Net change in associated company balances 409,483 (53,566)

Cash generated from operations 35,655,504 39,192,294Interest paid (865,822) (776,684)Tax paid (4,145,227) (3,179,098)Net cash generated from operating activities 30,644,455 35,236,512

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of additional investment

in subsidiaries – (7,004,000)Purchase of marketable securities (1,121,235) (790,295)Sales of marketable securities 1,084,110 509,720Purchase of other investments (59,299 ) (503,420)Sales of other investments 223,006 –Purchase of fixed assets A (28,336,340 ) (17,005,074)Proceeds from disposal of fixed assets 1,199,401 136,788Increase in fixed deposits (302,536 ) (506,291)Interest received 976,592 986,582Dividend received 8,332 1,609Net cash used in investing activities (26,327,969 ) (24,174,381)

Consolidated Cash Flow Statement C o n t ’ d



Note 2000 1999RM RM

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of share capital 5,900,760 5,124,644Expenditure on corporate exercise – (800,000)Repayment of lease creditors and

hire-purchase creditors (2,556,811) (3,232,457)Drawndown of term loan 1,418,464 –Repayment of term loans (1,463,543 ) (2,947,500 )Drawndown of revolving loan 15,000,000 –Dividend paid (9,959,668) (7,122,358)Net cash generated from/(used in)

financing activities 8,339,202 (8,977,671)

Foreign exchange translation effect (3,899,990) (1,604,192)Net increase in cash and cash equivalents 12,655,688 2,084,460Cash and cash equivalents

at beginning of the year 27,266,034 26,785,766Cash and cash equivalents at end of the year B 36,021,732 27,266,034

A. PURCHASE OF FIXED ASSETSDuring the year, the Group acquired fixed assets with an aggregate cost of RM37,043,818 (1999: RM24,827,675) of which RM2,945,004 (1999: RM4,031,566) was acquired by means of hire-purchaseand leasing. Cash payment of RM28,336,340 (1999: RM17,005,074) were paid to purchase fixedassets. The remaining balance of RM5,762,474 (1999: RM3,791,035) has not been paid as at year end.

B. CASH AND CASH EQUIVALENTSCash and cash equivalents included in the consolidated cash flow statement comprise the following balance sheet amounts:

2000 1999RM RM

Cash and bank balances 21,331,795 21,530,157Deposits with licensed banks 17,897,316 5,992,283Bank borrowings (2,840,907) –Effect of exchange rate on bank balances (366,472 ) (256,406)

36,021,732 27,266,034


Balance Sheet31 December, 2000


Note 2000 1999RM RM

CURRENT ASSETSCash and bank balances 824,681 1,461,447Deposits with licensed banks 4 9,832,690 3,900,000Other debtors 6 16,523,620 13,698,908Due from subsidiaries 9 21,089,522 8,674,152

48,270,513 27,734,507

CURRENT LIABILITIESBank borrowings 10 15,000,000 –Other creditors 11 1,944,038 801,578Hire-purchase creditors 12 93,215 44,315Proposed dividends 6,407,843 9,394,360

23,445,096 10,240,253

NET CURRENT ASSETS 24,825,417 17,494,254INVESTMENTS 13 1,875,000 1,875,000FIXED ASSETS 14 1,390,812 585,979INVESTMENT IN SUBSIDIARIES 16 64,673,899 62,818,962HIRE-PURCHASE CREDITORS 12 (133,639 ) (15,815)DEFERRED TAXATION 18 – (29,000)

92,631,489 82,729,380

SHAREHOLDERS’ FUNDSShare capital 20 53,398,692 52,190,892Reserves 39,232,797 30,538,488

92,631,489 82,729,380

The accompanying notes are an integral part of this balance sheet.

Income StatementFor The Year Ended 31 December, 2000


Note 2000 1999RM RM

Revenue 21 19,787,120 14,278,149Other operating income 22 20,118 372,550Staff costs 23 (3,003,417) (2,214,262)Depreciation (241,466 ) (198,215)Other operating expenses 24 (2,583,881) (1,384,904)Profit from operations 13,978,474 10,853,318Finance costs 25 (327,617 ) (14,959)Profit before taxation 13,650,857 10,838,359Taxation 26 (1,889,215 ) (988,913)Net profit for the year 11,761,642 9,849,446


Statement of Changes In EquityFor The Year Ended 31 December, 2000



Non-distributable DistributableShare capital Share premium Retained profits Total

RM RM RM RM

At 1.1.1999 28,620,000 5,396,820 16,431,060 50,447,880Bonus issue of 3 for 5 17,625,600 (4,596,820) (13,028,780) –Arising on acquisitions 5,093,092 22,918,908 – 28,012,000Arising from share

options exercised 852,200 3,862,294 – 4,714,494Corporate exercise expenses – (800,000) – (800,000)Dividends (Note 29) – – (9,394,360) (9,394,360)Underprovision of dividend – – (100,080) (100,080)Net profit for the year – – 9,849,446 9,849,446At 31.12.1999 52,190,892 26,781,202 3,757,286 82,729,380

At 1.1.2000 52,190,892 26,781,202 3,757,286 82,729,380Arising from share

options exercised 1,207,800 3,554,962 – 4,762,762Dividends (Note 29) – – (6,407,843) (6,407,843)Underprovision of dividend – – (214,452) (214,452)Net profit for the year – – 11,761,642 11,761,642At 31.12.2000 53,398,692 30,336,164 8,896,633 92,631,489

Cash Flow StatementFor The Year Ended 31 December, 2000


Note 2000 1999RM RM

CASH FLOWS FROM OPERATING ACTIVITIESProfit before taxation 13,650,857 10,838,359Adjustments for:

Depreciation 241,466 198,215Interest expenses 322,055 12,303Dividend income from subsidiaries (16,527,088 ) (12,311,561)Gain on disposal of fixed assets (19,938 ) –Interest income (210,131 ) (264,205)Write back of provision for

diminution in investment – (366,102)Operating loss before working capital changes (2,542,779) (1,892,991)(Increase)/Decrease in debtors (8,652,446 ) 700,481Increase/(Decrease) in creditors 1,021,881 (465,805)Net change in related companies balances (14,281,945 ) (6,629,668)Cash used in operations (24,455,289 ) (8,287,983)Interest paid (245,106 ) (12,303)Tax paid (1,918,215) (1,408,913)Net cash used in operating activities (26,618,610 ) (9,709,199)

CASH FLOWS FROM INVESTING ACTIVITIESInvestment in subsidiaries (119,998 ) (8,744,598)Purchase of fixed assets A (644,534 ) (252,613)Proceeds from disposal of fixed assets 38,500 –Dividend received from subsidiaries 22,354,762 19,473,259Interest received 210,131 264,205Net cash generated from investing activities 21,838,861 10,740,253

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of share capital 4,762,762 4,714,494Expenditure on corporate exercise – (800,000)Repayment of hire-purchase creditors (78,277 ) (65,686)Drawndown of revolving loan 15,000,000 –Dividend paid (9,608,812) (5,251,680)Net cash generated from/

(used in) financing activities 10,075,673 (1,402,872)

Net increase/(decrease) in cash and cash equivalents 5,295,924 (371,818)

Cash and cash equivalents at beginning of the year 5,361,447 5,733,265

Cash and cash equivalents at end of the year B 10,657,371 5,361,447

Cash Flow Statement C o n t ’ d



A. PURCHASE OF FIXED ASSETSDuring the year, the Company acquired fixed assets with an aggregate cost of RM1,065,963 (1999:RM339,780) of which RM245,000 (1999: RM87,167) and RM132,739 (1999: Nil) were acquired bymeans of hire-purchase and transferred from its subsidiary company respectively. Cash payment ofRM644,534 (1999: RM252,613) were paid to purchase fixed assets. The remaining balances ofRM43,690 (1999 : Nil) have not been paid as at year end.

B. CASH AND CASH EQUIVALENTSCash and cash equivalents included in the cash flow statement comprise the following balance sheetamounts:

2000 1999RM RM

Cash and bank balances 824,681 1,461,447Deposits with licensed banks 9,832,690 3,900,000

10,657,371 5,361,447


Notes To The Financial Statements31 December, 2000


1. PRINCIPAL ACTIVITIESThe principal activities of the Company are investment holding and provision of management services.

The principal activities of the subsidiaries are described in Note 16.

There were no significant changes in these activities during the financial year.

2. SIGNIFICANT ACCOUNTING POLICIES(a) Basis of Accounting

The financial statements are prepared under the historical cost convention modified by the revaluation of certain leasehold land and building and comply with applicable approved accounting standards in Malaysia.

(b) Revenue Recognition(i) Sales are recognised net of discounts when transfer of risks and rewards has been completed.

(ii) Income from investments and rental income are included in the income statement when theright to receive has been established.

(c) Basis of ConsolidationThe consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the end of the financial year. Companies acquired or disposed during theyear are included in the consolidated financial statements from the date of acquisition or to the dateof disposal. Intragroup transactions are eliminated on consolidation and the consolidated financial statements reflect external transactions only.

The excess or deficiency of the purchase price over the fair value of the net assets of subsidiaries at the date of acquisition is included in the consolidated balance sheet as goodwill or reserve arising on consolidation. Goodwill or reserve on consolidation are amortised over 25 years.

(d) Associated CompaniesThe Group treats as associated company those companies in which the Group has a long term equity interest and where it exercises significant influence through management participation.

The Group’s share of post acquisition profits less losses of associated companies is included in theconsolidated income statement and the Group’s interest in associated company is stated at cost plusthe Group’s share of post-acquisition retained profits and reserves less accumulated losses.

(e) Investmentsi) Investments in subsidiaries, unquoted shares and mutual fund held as long term investments

are stated at cost less any provision for permanent diminution in value.

ii) Investment in quoted shares are stated at the lower of cost and market value, determined on a portfolio basis by comparing aggregate cost against market value.

Notes To The Financial Statements C o n t ’ d

31 December, 2000


(f) Currency Conversion and TranslationTransactions in foreign currencies during the year are converted into Ringgit Malaysia at the rates of exchange approximating those ruling at the transaction dates. Foreign currency monetary assets and liabilities at the balance sheet date are translated into Ringgit Malaysia at the rates of exchange approximating those ruling at that date. All exchange gains or losses are dealt with in the incomestatement.

The financial statements of foreign subsidiaries are translated as follows:

• Assets and liabilities, both monetary and non-monetary, are translated into Ringgit Malaysia at the rate of exchange ruling at the balance sheet date

• Income statement items are translated at average exchange rates that correspond with the datesof the underlying transactions

• All exchange gains or losses are transferred to the exchange fluctuation reserve until the disposal of the net investment

The principal exchange rates ruling at balance sheet date used are as follows:

2000 1999

Hong Kong Dollar 0.4868 0.4885Thailand Baht 0.0874 0.1007Philippines Peso 0.0757 0.0943United States Dollar 3.7700 3.7700Japanese Yen 0.0348 0.0363Singapore Dollar 2.1709 2.2508

(g) Fixed Assets and DepreciationFixed assets are stated at cost or valuation less accumulated depreciation.

Freehold land and construction work-in-progress are not depreciated. Depreciation of other fixedassets is provided on a straight line basis calculated to write off the cost or valuation of each asset over its estimated useful life or lease term.

The principal annual rates of depreciation are:

Leasehold land 1.67%Plant, machinery and sundry tools 12% - 33.33%Building improvements 2% - 12%Buildings 1.25% - 2%Office equipment, electrical installation,

computer, furniture, fixtures and fittings 2% - 33.33%Motor vehicles 16%

Short leasehold land and a building of the Group have not been revalued since they were first revaluedin 1992. The directors have not adopted a policy of regular revaluation of such assets. As permittedunder the transitional provisions of International Accounting Standards (IAS) No. 16 (Revised): Property, Plant and Equipment adopted by the Malaysian Accounting Standards Board, these assetscontinued to be stated at their 1992 valuation less accumulated depreciation.


31 December, 2000


(h) StocksStocks are stated at the lower of cost and net realisable value. Cost is determined on the weightedaverage basis except for two of the foreign subsidiaries whereby the first-in, first-out basis is used.Work-in-progress and finished goods include material, labour and production overheads, where appropriate.

(i) DebtorsKnown bad debts are written off and specific provision is made for any debts considered to be doubtfulin collection.

(j) Intangible AssetsDuring the year, the Company changed its accounting policy for preoperating expenses so as to bein accordance with the requirements of Malaysian Accounting Standards Board’s MASB 1: Presentation of Financial Statements. In prior year, preoperating expenses were capitalised andamortised over five years upon commencement of operations. In the current year, preoperating expenses are charged to the income statement as and when incurred. The prior year adjustmentrepresents the effects of this change in accounting policy.

(k) Deferred TaxationDeferred taxation is computed under the liability method for all material timing differences exceptwhere there is reasonable evidence that these timing differences will not reverse in the foreseeable future.

(l) Government Agency GrantGovernment agency grant related to the purchase of assets namely certain plant and machinery bya subsidiary, are presented in the balance sheet as deferred income. It is recognised as income ona systematic and rational basis over the useful life of the assets at 12% per annum to match the annual depreciation charge of these assets.

(m) Finance Lease and Hire-Purchase ArrangementsFixed assets acquired under finance lease and hire-purchase are capitalised in the financialstatements and are depreciated in accordance with the policy set out in (g) above. The correspondingoutstanding obligations due under the finance lease and hire-purchase after deducting financeexpenses are included as liabilities in the financial statements. Finance expenses are charged tothe income statement over the period of the respective agreements using the sum-of-digit method.

(n) Cash and Cash EquivalentsCash and cash equivalents include cash on hand and in banks and deposits in bank, net of bank overdraft.

(o) Interest CapitalisationInterest on borrowings relating to the construction of fixed assets is capitalised until the assets are ready for their intended use.

3. CASH AND BANK BALANCESIncluded in the cash and bank balances of the Group is an amount of RM114,150 (1999: Nil) being bank account balances held in trust by a Filipino agent appointed for the newly set up sales representativeoffice in Philippines.


31 December, 2000


4. DEPOSITS WITH LICENSED BANKSGroup Company

2000 1999 2000 1999RM RM RM RM

Short term deposit 1,206,400 – – –Fixed deposits 17,771,060 6,769,891 9,832,690 3,900,000

18,977,460 6,769,891 9,832,690 3,900,000

Certain fixed deposits of the Group amounting to RM1,080,144 (1999: RM777,608) have been pledgedto the banks as collaterals for banking facilities granted.

5. TRADE DEBTORS2000 1999RM RM

GroupTrade debtors 46,638,443 38,078,775Provision for doubtful debts (815,827) (353,985 )

45,822,616 37,724,790

6. OTHER DEBTORSGroup Company

2000 1999 2000 1999RM RM RM RM

Sundry debtors 10,662,460 1,661,752 8,894,576 281,289Deposits and prepayment 2,413,502 2,052,513 76,614 37,455Tax recoverable 1,162,414 1,395,082 792,192 792,192Dividend receivable – – 6,760,238 12,587,972

14,238,376 5,109,347 16,523,620 13,698,908

Included in sundry debtors of the Company and the Group are the following:

(i) Loan to directors of certain foreign subsidiaries amounting to RM582,100 (1999: Nil).

(ii) Amount due from a third party of RM8,041,680 (1999: Nil) as a result of the rescission of the Share Sale Agreement mentioned in Note 35. No provision is made as the directors are of the view that the amount is recoverable.

(iii) Amount due from Digital Integrated System Sdn. Bhd. amounting to RM750,833 (1999: Nil).No provision is made as the directors of the Group are of the view that the amount is recoverable.


31 December, 2000


7. MARKETABLE SECURITIES2000 1999RM RM

GroupQuoted shares in Malaysia, at cost 317,700 280,575Less: Provision for diminution in value of

investments (188,620) (44,183 )Quoted shares, at market value 129,080 236,392

8. STOCKS2000 1999RM RM

GroupRaw materials 5,169,692 3,736,471Work-in-progress 2,707,573 2,696,731Finished goods 843,099 2,049,384

8,720,364 8,482,586

Included in the above carrying amounts of the Group are stocks amounting to RM86,693 (1999: Nil)which are stated at their net realisable value.

9. DUE FROM SUBSIDIARIESCompanyThe amount due from subsidiaries are unsecured, interest free and have no fixed term of repayment.

10. BANK BORROWINGS (UNSECURED)Group Company

2000 1999 2000 1999RM RM RM RM

6.4% per annum revolvingloan 15,000,000 – 15,000,000 –

9.25% - 10.25% per annumbank overdrafts 2,840,907 – – –

7% - 9% per annum termloans repayable by 20 equal quarterlyinstalments commencingJune, 1996* 191,885 922,457 – –

12.2% per annum termloan repayable by 36 equal monthly instalmentscommencing February,1997** – 81,237 – –


31 December, 2000


Group Company2000 1999 2000 1999RM RM RM RM

9% per annum term loan repayable by 36 equalmonthly instalmentscommencing August,1997** – 425,640 – –

9.5% per annum term loanrepayable by 12 equalmonthly instalments commencing October,2000* 1,192,370 – – –

19,225,162 1,429,334 15,000,000 –

Less: Repayments duewithin 12 months(included in currentliabilities) (19,225,162) (1,237,449) (15,000,000) –

– 191,885 – –

* The term loans are secured by way of corporate guarantee by the holding company.**The term loans are secured by way of personal guarantee by a subsidiary’s director.

11. OTHER CREDITORSGroup Company

2000 1999 2000 1999RM RM RM RM

Provision for payroll related expenses 4,497,993 3,510,364 1,273,165 437,115

Tax and other statutory payables 1,873,667 1,160,639 262,019 147,016

Accruals of expenses 2,147,723 1,797,650 287,505 217,447Fixed assets vendors 5,762,474 3,791,035 43,690 –Others 2,844,978 1,587,632 77,659 –

17,126,835 11,847,320 1,944,038 801,578


31 December, 2000


12. HIRE-PURCHASE AND LEASE CREDITORSGroup Company

2000 1999 2000 1999RM RM RM RM

Hire-purchase and lease creditors 4,538,072 4,192,600 254,390 64,560

Less: Interest in suspense (437,853) (480,574) (27,536) (4,430)4,100,219 3,712,026 226,854 60,130

Less: Repayments due within 12 months (included in current liabilities) (2,345,447) (2,032,994) (93,215) (44,315)

1,754,772 1,679,032 133,639 15,815

The hire-purchase and lease payments are analysed as follows:

Group Company2000 1999 2000 1999

RM RM RM RM

Years ending 31 December,2000 – 2,331,938 – 48,4202001 2,669,117 1,576,038 110,592 16,1402002 1,333,286 284,624 94,452 –2003 535,669 – 49,346 –

Total future hire-purchase and lease payments 4,538,072 4,192,600 254,390 64,560

Less: Amount representing interest (437,853) (480,574) (27,536) (4,430)

Principal of future hire-purchaseand lease payments 4,100,219 3,712,026 226,854 60,130

13. INVESTMENTSGroup Company

2000 1999 2000 1999RM RM RM RM

Unquoted shares, at cost 1,986,192 1,934,635 1,875,000 1,875,000Less: Provision for diminution

in value of investments (5,000) (5,000) – –1,981,192 1,929,635 1,875,000 1,875,000

Unit trust, at cost 257,742 473,006 – –Less: Provision for diminution

in value of investment (48,500) – – –209,242 473,006 – –

Total 2,190,434 2,402,641 1,875,000 1,875,000

Unit trust, at market value 209,242 449,060 – –


31 December, 2000


14. FIXED ASSETSPlant,

* Land Construction machineryand Building work-in- and sundry Other

Group buildings improvements progress tools assets # TotalRM RM RM RM RM RM

Valuation/CostAt 1.1.2000 1 6 , 0 6 1 , 0 7 5 5 , 6 8 5 , 5 0 2 4 , 3 3 4 , 6 3 4 6 8 , 7 3 7 , 3 7 0 8 , 5 0 5 , 0 8 6 1 0 3 , 3 2 3 , 6 6 7Additions 5,281,687 1,410,874 1,846,901 25,157,131 3,347,225 37,043,818Disposals – – – (1,349,200) (1,068,968) (2,418,168)R e c l a s s i f i c a t i o n 3,896,222 – (3,896,222) – – –Written off – – – (555,621) (240,461) (796,082)Translation

difference (1,237,913) (666,812) (305,673) (5,199,599) (353,198) (7,763,195)At 31.12.2000 24,001,071 6,429,564 1,979,640 86,790,081 10,189,684 129,390,040

Representing:At valuation 4,487,147 – – – – 4,487,147At cost 19,513,924 6,429,564 1,979,640 86,790,081 10,189,684 124,902,893

24,001,071 6,429,564 1,979,640 86,790,081 10,189,684 129,390,040

AccumulatedDepreciation

At 1.1.2000 1,537,413 2,071,847 – 28,308,085 4,472,320 36,389,665Additions 588,925 619,984 – 9,576,090 1,428,697 12,213,696Disposals – – – (1,008,789) (930,550) (1,939,339)Written off – – – (465,330) (133,365) (598,695)Translation

difference (39,011) (418,736) – (1,170,083) 41,802 (1,586,028)At 31.12.2000 2,087,327 2,273,095 – 35,239,973 4,878,904 44,479,299

Representing:At valuation 661,448 – – – – 661,448At cost 1,425,879 2,273,095 – 35,239,973 4,878,904 43,817,851

2,087,327 2,273,095 – 35,239,973 4,878,904 44,479,299

Net Book ValueAt 31.12.2000At valuation 3,825,699 – – – – 3,825,699At cost 18,088,045 4,156,469 1,979,640 51,550,108 5,310,780 81,085,042

21,913,744 4,156,469 1,979,640 51,550,108 5,310,780 84,910,741

At 31.12.1999At valuation 3,908,574 – – – – 3,908,574At cost 10,615,088 3,613,655 4,334,634 40,429,285 4,032,766 63,025,428

14,523,662 3,613,655 4,334,634 40,429,285 4,032,766 66,934,002

Depreciationcharge for 1 9 9 9 299,641 1,186,418 – 6,597,340 1,091,722 9,175,121

# Other assets consist of electrical installation, computers, office equipment, furniture, fixtures, fittings andmotor vehicles.


31 December, 2000


* LAND AND BUILDINGS

Long ShortFreehold leasehold leasehold Freehold Leasehold

Group land land land building building TotalRM RM RM RM RM RM

Valuation/CostAt 1.1.2000 144,990 3,797,165 2,081,588 750,119 9,287,213 16,061,075Additions – – – – 5,281,687 5,281,687Reclassification – – – – 3,896,222 3,896,222Translation

difference – – – – (1,237,913) (1,237,913)At 31.12.2000 144,990 3,797,165 2,081,588 750,119 17,227,209 24,001,071

Representing:At valuation – – 2,081,588 – 2,405,559 4,487,147At cost 144,990 3,797,165 – 750,119 14,821,650 19,513,924

144,990 3,797,165 2,081,588 750,119 17,227,209 24,001,071

AccumulatedDepreciation

At 1.1.2000 – 265,401 243,555 81,756 946,701 1,537,413Additions – 61,901 34,763 15,003 477,258 588,925Translation

difference – – – – (39,011) (39,011)At 31.12.2000 – 327,302 278,318 96,759 1,384,948 2,087,327

Representing:At valuation – – 278,318 – 383,130 661,448At cost – 327,302 – 96,759 1,001,818 1,425,879

– 327,302 278,318 96,759 1,384,948 2,087,327

Net Book ValueAt 31.12.2000At valuation – – 1,803,270 – 2,022,429 3,825,699At cost 144,990 3,469,863 – 653,360 13,819,832 18,088,045

144,990 3,469,863 1,803,270 653,360 15,842,261 21,913,744

At 31.12.1999At valuation – – 1,838,033 – 2,070,541 3,908,574At cost 144,990 3,531,764 – 668,363 6,269,971 10,615,088

144,990 3,531,764 1,838,033 668,363 8,340,512 14,523,662

Depreciationcharge for 1999 – 65,228 34,763 15,002 184,648 299,641


31 December, 2000


Computers,office equipment,

furniture,Capital work- Building fixtures and Motor

Company in-progress improvement fittings vehicles TotalRM RM RM RM RM

CostAt 1.1.2000 – 52,320 633,417 370,835 1,056,572Additions 516,415 – 103,702 313,107 933,224Transfer in 132,739 – – – 132,739Disposals – – (9,300 ) (51,415 ) (60,715 )Transfer out – – (9,570 ) – (9,570 )At 31.12.2000 649,154 52,320 718,249 632,527 2,052,250

AccumulatedDepreciationAt 1.1.2000 – 730 253,969 215,894 470,593Additions – 1,046 161,622 78,798 241,466Transfer in – – – – –Disposals – – (3,078 ) (39,075 ) (42,153 )Transfer out – – (8,468 ) – (8,468 )At 31.12.2000 – 1,776 404,045 255,617 661,438

Net Book ValueAt 31.12.2000 649,154 50,544 314,204 376,910 1,390,812At 31.12.1999 – 51,590 379,448 154,941 585,979

Depreciationcharge for 1999 – 730 138,152 59,333 198,215

The carrying amount of temporarily idle machinery of the Group amounted to RM632,092 (1999: Nil).

A short leasehold land and a building were revalued in 1992 on open market basis by an independent professional valuer.


31 December, 2000


Had the fixed assets been carried at historical cost less depreciation, the carrying value of eachclass of fixed assets that would have been included in the financial statements would be as follows:

2000 1999Group RM RM

Short leasehold land 555,237 590,000Building 1,225,767 1,273,879

1,781,004 1,863,879

Assets Held Under Hire-Purchase And Lease AgreementsIncluded in the above fixed assets of the Group and the Company are assets held under hire-purchaseand finance lease as follows:

Accumulated Net book DepreciationGroup Cost depreciation value charge2000 RM RM RM RM

Plant and machinery 8,036,205 1,644,583 6,391,622 940,572Motor vehicles 1,805,917 276,551 1,529,366 235,640Computers 37,085 19,571 17,514 12,361

9,879,207 1,940,705 7,938,502 1,188,573

1999

Plant and machinery 10,306,326 2,005,100 8,301,226 1,079,037Motor vehicles 703,700 289,136 414,564 112,592Computers 37,085 7,210 29,875 7,210

11,047,111 2,301,446 8,745,665 1,198,839

Company2000

Motor vehicles 308,247 25,377 282,870 25,377Computers 37,085 19,571 17,514 12,361

345,332 44,948 300,384 37,738

1999

Computers 37,085 7,210 29,875 7,210


31 December, 2000


15. INTEREST IN ASSOCIATED COMPANY2000 1999

Group RM RM

a) Unquoted shares, at cost 37,825 47,150Due from associated company 2,682,188 3,091,671

2,720,013 3,138,821

The associated company, AYT Dev Inc, a company incorporated in Philippines is owned by a foreign subsidiary in Philippines. The Company has 40% (1999: 40%) effective interest in the associated company.

The principal activities of the associated company are to own, lease and develop any and all real andpersonal properties,among others.

The amount due carries interest at 12% per annum and repayable by 25 equal annual instalments commencing 2000.

b ) The results of AYT Dev Inc was not equity accounted for as the directors are of the opinion that the amounts are not significant to the Group.

16. INVESTMENT IN SUBSIDIARIES2000 1999

Company RM RM

Unquoted shares, at cost 64,673,899 62,818,962

The following are the subsidiary companies:

Effectiveinterest Principal Country of

2000 1999 activities incorporation% %

Eng Hardware 100 100 MalaysiaEngineering Sdn. Bhd.

Eng Teknologi Sdn. Bhd. 100 100 Malaysia

Manufacture, design andsale of high precisionmould, die, jigs and fixture,automation system andstamped components f o rthe electronics industries.

Manufacture and sale ofhard disk drive peripheralscomponents, automationsystem for computerperipherals andsemiconductor industries.


31 December, 2000


Effectiveinterest Principal Country of

2000 1999 activities incorporation

Micro Tooling Sdn. Bhd. 100 100 Malaysia

Selekta Inovatif (M) Sdn. Bhd. 100 100 Malaysia

EPI Products (M) Sdn. Bhd. 60 100 Malaysia(formerly known as Eng Precision Industries Sdn. Bhd.)

Engtek Venture (M) Sdn. Bhd. 100 100 Malaysia

Engtek R & D Sdn. Bhd. * 100 100 Malaysia

Engtek International Limited*** 57.6 60 Hong Kong

Engtek Philippines Inc.** 100 100 Philippines

Engtek Precision Philippines, 80 80 PhilippinesInc. **

Engtek Precision (Thailand) Co., 80 80 ThailandLtd. ***

* The shares are held in trust by the Company’s directors on behalf of Eng Teknologi Holdings Bhd.

** Audited by firms affiliated with Arthur Andersen & Co.

*** Audited by other firms of auditors.

Manufacture industrialm a c h i n e r y, equipment andparts including tools, diesand engineering parts andprovision of service charges.

Specialised plating servicesand production stamping.

Trading of advanced packaging materials,clean rooms and electronicproducts (Dormant in current year)

Trading in marketableequity and investment inunit trust.

Provision of research anddevelopment services andmarketing of newly developed technology anddesign for the electronicindustry. (Dormant in current year)

Manufacture of precisionmachine components

Manufacture of actuatorsassemblies and peripheralassemblies

Manufacture of assemblyparts, precision tools, fixtures, jigs, moulds anddies.

Manufacture and sale ofelectronic and computerparts and equipment.(commenced operation incurrent year).


31 December, 2000


17. GOODWILL ON CONSOLIDATION2000 1999

Group RM RM

Goodwill arising on consolidation 27,359,371 27,359,371Less: Accumulated amortisation (1,276,773) (182,396)

26,082,598 27,176,975

18. DEFERRED TAXATIONGroup Company

2000 1999 2000 1999RM RM RM RM

At 1 January 2,343,060 940,000 29,000 29,000Transfer to/(from) income

statement 462,000 1,402,832 (29,000) –Translation reserve (6,815) 228 – –At 31 December 2,798,245 2,343,060 – 29,000

Deferred taxation for the Group is principally in respect of timing differences between depreciation and capital allowance of RM15,688,154 (1999: RM11,395,268).

19. DEFERRED INCOME

2000 1999Group RM RM

Grant received 379,365 432,922Less: Amortisation for the year (53,557) (53,557)

325,808 379,365

This refers to grant received from a government agency on fulfillment of certain criterias relating to the environment for the purchase of certain plant and machinery by a subsidiary.

20. SHARE CAPITAL2000 1999RM RM

Ordinary shares at RM1 each:Authorised:

As at 1 January 100,000,000 50,000,000Created during the year – 50,000,000As at 31 December 100,000,000 100,000,000

Issued and fully paid:As at 1 January 52,190,892 28,620,000Bonus issue of 3 for 5 – 17,625,600Arising on acquisitions – 5,093,092Arising from share options exercised 1,207,800 852,200As at 31 December 53,398,692 52,190,892


31 December, 2000


21. REVENUE2000 1999

Group RM RM

Manufacturing of hard disk drive peripherals components, industrial machinery, equipment and tools 237,756,414 185,134,957

Trading of marketable equity, investment in unit trustand dividend income 1,159,875 583,674

Interest income 210,131 264,205239,126,420 185,982,836

Company

Management fee 3,049,901 1,702,383Dividend income 16,527,088 12,311,561Interest income 210,131 264,205

19,787,120 14,278,149

22. OTHER OPERATING INCOMEGroup Company

2000 1999 2000 1999RM RM RM RM

Included in otheroperating income are:

Amortisation of deferred income 53,557 53,557 – –

Dividend income 8,332 1,609 – –Gain on disposal

of fixed assets 720,572 12,690 19,938 –

23. STAFF COSTSGroup Company

2000 1999 2000 1999RM RM RM RM

Included in staffcosts are:

Directors’ remuneration - fees 108,000 144,000 40,000 40,000- other emoluments* 4,814,745 3,846,471 957,162 921,956

* The estimated monetary value of other benefits received by the directors of the Group and Company notincluded in the above are RM82,177 (1999: RM58,675) and RM17,400 (1999: RM17,400) respectively.


31 December, 2000


24. OTHER OPERATING EXPENSESGroup Company

2000 1999 2000 1999RM RM RM RM

Included in other operating expenses are the following:

Auditors’ remuneration- current year 108,266 99,019 13,000 10,000- underprovision in

prior year 8,320 300 4,000 –Bad debt written off 65,456 – – –Directors’ remuneration

- fees 358,840 337,056 50,000 50,000- other emoluments * 1,358,190 1,395,834 21,000 35,390

Fixed assets written off 197,387 – – –Management fee 215,496 199,810 – –Provision for

doubtful debts 529,523 182,875 – –Provision for diminution

in value of investments 192,937 44,183 – –Provision for stock

obsolescence 120,540 14,364 – –Stock write down 19,761 – – –Rental paid to a director

for housing workers 12,000 12,000 – –Rental expense 1,318,530 935,702 – –Rental of machine paid

to a minority shareholder of a subsidiary – 25,929 – –

Rental of building paid to a company with common director 58,261 56,356 – –

Unrealised foreignexchange loss/(gain) 2,412,668 (121,697) – –

Amortisation of reserve on consolidation (47,953) (7,915) – –

Bad debt recovered (52,639) (22,072) – –Realised foreign exchange

(gain)/loss (4,334,054) 12,234 292,587 231,180Write back of provision

for diminution in valueof investment – (366,102) – (366,102 )

Write back of provision for doubtful debts (67,681) (131,350) – –

Write back of provision forstock obsolescence (20,244) (280,673) – –

* The estimated monetary value of other benefits received by the directors of the Group not included in the above are RM6,500 (1999: RM6,500).


31 December, 2000


25. FINANCE COSTSGroup Company

2000 1999 2000 1999RM RM RM RM

Included in finance costs are:Interest expenses (942,771) (776,684) (322,055) (12,303)Interest income 766,461 722,377 – –

26. TAXATIONGroup Company

2000 1999 2000 1999RM RM RM RM

Current year provision 1,657,394 185 – –Under/(Over) provision of

taxation in respect of prior years 3,660,514 (245,754) – –

Foreign tax 1,918,215 988,913 1,918,215 988,913Deferred taxation 462,000 996,511 (29,000) –Deferred taxation

under providedin respect of prior years – 406,321 – –

Tax recoverable – (420,000) – –7,698,123 1,726,176 1,889,215 988,913

Included in the underprovision of taxation is an amount of RM3,600,000 which arose as a result of anunderstanding reached between two subsidiaries and the Director General of Inland Revenue pursuantto Section 96(A) of the Income Tax Act, 1967. As at year end, the finalisation of the understanding intoan agreement is still pending. The directors are of the view that the above settlement represents the conclusion of the tax review and no further provision is required.

As at 31 December, 2000, the Company has unutilised capital allowance of approximately RM693,000(1999: RM419,000) and unabsorbed losses of approximately RM6,818,000 (1999: RM3,120,000) which can be used to offset against future taxable profits. This is subject to the agreement with theInland Revenue Board.

As at 31 December, 2000, the Company has a potential deferred tax benefit of approximatelyRM2,054,000 (1999: Nil) arising principally from unabsorbed losses carried forward and unutilised capital allowance, the effects of which are not included in the financial statements as there is no assurance beyond any reasonable doubt that future taxable income will be sufficient to allow the benefit to be realised.

As at 31 December, 2000, the Company has sufficient tax exempt income under the Income Tax(Exemption) (No. 48) Order, 1997 and Section 108 tax credit under the Income Tax Act, 1967 to frankout the payment of dividend out of its retained profit as at 31 December, 2000 without incurring additional tax liability. This is subject to the agreement with the Inland Revenue Board.


31 December, 2000


27. EARNINGS PER SHAREWeighted Average

Income Number of shares Earnings per share2000 1999 2000 1999 2000 1999RM RM Unit Unit Sen Sen

(Restated) (Restated)Net profit

for theyear 31,017,339 25,740,370 53,144,918 47,573,246 58.4 54.1

The earnings per share for the previous year has been recomputed to take into account the prior yearadjustment as a result of the effect of the change in accounting policy for preoperating expenses asreferred to in Note 2(j) and Note 28. It has the effect of decreasing net profit for the year byRM1,204,480 in 1999.

28. PRIOR YEAR ADJUSTMENTThe prior year adjustment represents the effect of the change in accounting policy for preoperatingexpenses as referred to in Note 2(j). This change in accounting policy has been accounted for retrospectively. The comparative statements for 1999 has been restated to conform to the changedpolicy. It has the effect of decreasing net profit for the year by RM78,375 in 2000 and RM1,204,480in 1999. The effect relating to periods prior to 1999 of RM696,464 have been adjusted against theopening retained profits for the year ended 31 December, 1999.

29. DIVIDENDSAmount Dividend per share

2000 1999 2000 1999RM RM Sen Sen

Special tax exempt dividendof 8% – 4,175,271 – 8.0

First and final tax exemptdividend of 10% – 5,219,089 – 10.0

Under provision of dividend – 214,452Proposed first and final tax

exempt dividend of 12% 6,407,843 – 12.0 –6,407,843 9,608,812

30. CAPITAL RESERVEThe capital reserve arose as a result of bonus issue by a subsidiary through capitalisation of its retainedprofits.


31 December, 2000


31. SIGNIFICANT RELATED PARTY TRANSACTIONS2000 1999

Group RM RM

Housing rental paid to Mdm Teh Yeong Keat, a director of the Company 12,000 12,000

Rental of machine paid to Scarbo Holdings Limited(formerly known as Scarborough Limited), theminority shareholder of one of the subsidiaries – 25,929

Rental of building paid to Fair Concept TechnologyLimited, a company connected with Mr Wong Chi Keung, a director of one of the subsidiaries 58,261 –

Rental of building paid to Fair Concept Technology Limited, a company connected with Mr Hung Kim Wai, a director of one of the subsidiaries – 56,356

Interest paid to Mr Teh Yong Khoon, a director ofthe Company – 3,629

Interest paid to Scarbo Holdings Limited (formerlyknown as Scarborough Limited), the minorityshareholder of one of the subsidiaries – 14,921

The directors are of the opinion that the above transactions have been entered into in the normal courseof business and have been established under terms that are no less favourable than those arranged withthird parties.

32. SEGMENTAL INFORMATIONAnalysis by geographical locations:

Profit/(Loss) Total assets2000 Turnover before taxation employed

RM RM RM

Malaysia 70,603,383 19,773,404 173,938,841Hong Kong 35,087,541 5,047,662 32,206,477Philippines 152,649,421 35,240,938 77,961,851Thailand 7,709,053 (2,830,420) 11,617,801

266,049,398 57,231,584 295,724,970Consolidation adjustments (26,922,978 ) (17,060,344) (70,601,493)

239,126,420 40,171,240 225,123,477

1999

Malaysia 56,144,813 19,001,905 142,301,104Hong Kong 24,124,733 4,964,261 26,279,755Philippines 136,815,110 22,288,115 67,469,443Thailand – (1,573,467) 4,368,481

217,084,656 44,680,814 240,418,783Consolidation adjustments (31,101,820 ) (12,619,198) (60,913,181)

185,982,836 32,061,616 179,505,602

The activities of the Group are primarily in manufacturing and as such segmental reporting by activities are not presented.


31 December, 2000


33. CONTINGENT LIABILITY (UNSECURED)2000 1999

Company RM RM

Guarantee for banking facilities given to subsidiaries 13,188,000 5,453,000

The directors are of the view that the likelihood that the above guarantees will be called upon is remote and as such no provision has been set aside.

34. COMMITMENTS2000 1999

Company RM RM

Commitment in respect of expenditurecontracted for but not provided for in the financial statements- Information system 180,000 330,000

Group

Commitment in respect of expenditure contractedfor but not provided for in the financial statements- Plant and machinery – 208,000- Information system 180,000 330,000- Construction of building 3,406,050 3,549,897

Leasing commitments:within one year 944,016 1,125,852two to five years inclusive 1,621,185 2,814,044more than five years 7,412,187 9,701,490

13,563,438 17,729,283

35. SIGNIFICANT EVENTS(i) Digital Integrated System Sdn. Bhd. (DIS)

On 2 August, 2000, the Company (ETHB) entered into a Shares Sale Agreement to acquire 265,000ordinary shares of RM1.00 each of DIS from Mr. Cheah Yew Keat for a cash consideration ofRM5,041,680. On execution of this Agreement, ETHB also subscribed to 500,000 new ordinaryshares of RM1.00 each of DIS for a cash consideration of RM3,000,000.

Subsequent to year end, both parties involved have rescinded the Shares Sale Agreement.

(ii) Kobe Precision (Malaysia) Sdn. Bhd. (KPM) On 25 October, 2000, ETHB entered into a Memorandum of Understanding (MOU) with Kobe Steel Limited (KSL) for the purchase of 70% equity in KPM. The principal activities of KPM are themanufacturing of actuators and other precision machining products for the computer data storageand electronics industries. The MOU was to enable both ETHB and KSL to evaluate the feasibilityof working together and also to enable ETHB to carry out a due diligence on the business and affairsof KPM before finalising a Shares Sale Agreement.

Subsequent to year end, both parties have agreed not to proceed with the acquisition and to terminatethe MOU. The termination was signed on 4 April, 2001 releasing both parties from any obligationsunconditionally and amicably.


31 December, 2000


(iii) EPI Products (M) Sdn. Bhd.EPI Products (M) Sdn. Bhd., a 60% owned subsidiary:

(a) changed its name from Eng Precision Industries Sdn. Bhd. to EPI Products (M) Sdn. Bhd.

(b) increased its issued and fully paid up share capital from RM2 to RM200,000 for cash, by the issuance of 199,998 units of new ordinary shares of RM1 each, of which 119,998 units havebeen subscribed by the Company.

(iv) Engtek Precision (Thailand) Co. Ltd. (ETTH)ETTH, a 80% owned subsidiary:

(a) commenced operations during the year.

(b) increased its authorised share capital from Baht 10m to Baht 35m by the creation of2,500,000 units of new ordinary shares of Baht 10 each.

(c) increased its issued and fully paid up share capital from Baht 10m to Baht 35m, by the issuance of 2,500,000 units of new ordinary shares of Baht 10 each, of which 2,000,000 unitshave been subscribed by the Company.

(v) Engtek International Limited (ETIL)ETIL, a 57.6% owned subsidiary:

(a) increased its authorised share capital from HK$18,000,000 to HK$25,000,000 by the creation of 7,000,000 units of new ordinary shares of HK$1 each.

(b) increased its fully paid up share capital from HK$18,000,000 to HK$25,000,000 by:

(1) bonus issue of 6,000,000 new ordinary shares of HK$1 each on the basis of 1 bonusshare for every 3 shares from the capitalisation of retained profits of HK$6,000,000.

(2) the subscription of 1,000,000 new ordinary shares by the employees at the price of HK$1.3585.

( v i ) AYT Dev Inc.AYT Dev Inc, an associated company incorporated in Philippines, commenced operations during theyear. The principal activities of the company are to own, lease and develop any and all real and personal properties, among others.

36. SUBSEQUENT EVENTSSubsequent to year end, the Company announced the following proposals:

(a) A new Employee Share Option Scheme for eligible employees and Executive Directors of theCompany and its subsidiaries; and

(b) Bonus issue of up to 26,699,346 new ordinary shares of RM1.00 each to be credited as fully paid up on the basis of one (1) new ordinary share for every two (2) existing ordinary shares held.

37. COMPARATIVE FIGURESThe presentation of the financial statements for the current year has been changed to adopt the formatas prescribed by Malaysian Accounting Standards Board Standard 1: Presentation of Financial Statements. Comparative figures have been reclassified to conform with this presentation, where necessary.

38. CURRENCYAll amounts are stated in Ringgit Malaysia (RM), unless otherwise stated.

List of Properties Owned By The Gro u p


APPROXIMATEAGE OF LAND AREA/ NBV

LOCATION DESCRIPTION BUILDING BUILT UP AREA TENURE RM

133,250 sq ft /MK 12 Factory and 14 years (Bldg 1) 39,000 sq ft Leasehold* 9,817,690Daerah Barat Daya Office Building 11 years (Bldg 2) 24,000 sq ft Expiring 2047Lot No.P.T. 733 & 734 4 years( Bldg 3) 40,000 sq ft & 2048Plot 69 & 70 Bayan Lepas Ind. Estate, Pulau Pinang

Plot 65 Taman Industri Factory and 7 years 4,758 sq ft / Freehold 349,149Cherok To'kun, Alma, Office Building 3,600 sq ftBukit Mertajam

Plot 66 Taman Industri Factory and 7 years 4,908 sq ft / Freehold 362,055Cherok To'kun, Alma, Office Building 3,600 sq ftBukit Mertajam

Lot 6782, Tingkat 12 Flat 9 years 843 sq ft Freehold 87,145Bangunan No. M2 MK 13 (for employees'Daerah Timur Laut accommodation)Pulau PinangMK 12, Plot 120 Land – 39,479 sq ft Leasehold 418,447Bayan Lepas (for car park) Expiring 2057Industrial Estate, Pulau Pinang

H.S. (D) 552 Single-storey 26 years 1529 sq ft Leasehold 153,141P.T. PTBP/PM/6/74 link house Expiring 2074MK 12, SWD (for employees'4, Lebuhraya accommodation)Mayang Pasir, BandarBayan Baru, 11950 Penang

H.S.(D) 551 Single-storey 26 years 1529 sq ft Leasehold 244,954P.T.PTBP/PM/74 link house Expiring 2074MK 12, SWD (for employees'6 Lebuhraya accommodation)Mayang Pasir, BandarBayan Baru, 11950 Penang

MK 13, Central Province Land _ 193,032 sq ft Leasehold 1,857,624Wellesley, Plot 34 (a) Expiring 2058Bukit MinyakIndustrial Park

MK 13, Central Province Land _ 109,744 sq ft Leasehold 1,109,708Wellesley, Plot 34 (b) Expiring 2056Bukit MinyakIndustrial Park

* The property had been revalued in 1992.

Analysis of Shareholdings


ANALYSIS OF SHAREHOLDINGS AS AT 27 MARCH 2001

Authorized Share Capital = RM100,000,000Issued and Paid-up Capital = RM53,398,692Class of Shares = Ordinary Shares of RM1.00 eachVoting Right = One vote per share

DISTRIBUTION OF SHAREHOLDERS

Size Of Holdings No. Of Holders % No. Of Shares %1 - 499 41 3.59 8,640 0.02

500 - 5000 847 74.23 1,617,760 3.035001 - 10000 90 7.89 692,080 1.30

10001 - 100000 122 10.69 3,766,924 7.05100001 - 1000000 34 2.98 10,166,008 19.04

Over - 1000000 7 0.61 37,147,280 69.57Total 1,141 100.00 53,398,692 100.00

LIST OF TOP 20 SHAREHOLDERS

No. Name Shareholdings %1 Dato’ Teh Ah Ba 13,056,722 24.452 Permodalan Nasional Berhad 12,198,920 22.843 Cartaban Nominees (Asing) Sdn Bhd State Street Australia 4,230,000 7.92

Fund Q5RU For AIG Asian Opportunity Fund L.P.4 Teh Yong Khoon 2,851,492 5.345 Teh Eong Liang 2,734,146 5.126 Amanah Raya Nominees (Tempatan) Sdn Bhd 2,262,000 4.24

Amanah Saham Malaysia7 Employees Provident Fund Board 920,000 1.728 Citicorp Nominees (Asing) Sdn Bhd American International 820,000 1.54

Assurance Company Limited9 Lembaga Tabung Haji 792,200 1.4810 Teng Woei En 759,691 1.4211 Teh Yeong Keat 743,883 1.3912 Low Yeow Siang 699,411 1.3113 Teh Yeong Choo 647,230 1.2114 Tan Tiong Eng 522,902 0.9815 Teh Bee Loon 306,000 0.5716 Cartaban Nominees (Asing) Sdn Bhd SS Australia 300,000 0.56

Fund Q5V4 For AIG Asian Opportunity Parallel Fund C.V.17 Universal Trustee (Malaysia) Berhad 288,000 0.54

BHLB Pacific Emerging Companies Growth Fund18 Cimsec Nominees (Tempatan) Sdn Bhd 281,000 0.53

Commerce Asset Fund Managers Sdn Bhd For Commerce Asset-Holding Berhad

19 Mayban Nominees (Tempatan) Sdn Bhd Mayban Trustees 277,000 0.52Berhad For Amanah Saham Bank Islam Tabung

20 HSBC Nominees (Asing) Sdn Bhd 250,000 0.47HSBC IT HK for JF Malaysia Trust

SUBSTANTIAL SHAREHOLDERS

No. Name No of Shares held %1 Dato’ Teh Ah Ba 13,056,722 24.452 Permodalan Nasional Berhad 12,198,920 22.843 Cartaban Nominees (Asing) Sdn Bhd - 4,230,000 7.92

State Street Australia Fund Q5RU For AIG Asian Opportunity Fund L.P.

4 Teh Yoong Khoon 2,851,492 5.345 Teh Eong Liang 2,734,146 5.126 Amanah Raya Nominees 2,262,000 4.24

(Tempatan) Sdn Bhd - Amanah Saham Malaysia

PROXY FORMENG TEKNOLOGI HOLDINGS BHD (234669 M)(Incorporated in Malaysia)

I / We _____________________________________of_____________________________ (BLOCK LETTERS)

being a member of ENG TEKNOLOGI HOLDINGS BHD (234669 M) hereby appoint

___________________________________________of _____________________________________________

or failing him, _________________________________of __________________________________________

or failing him, the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the Ninth Annual General Meeting of the Company to be held at Kuang Room, Hotel Equatorial, No. 1 JalanBukit Jambul, 11900 Penang on 31 May 2001 at 3.00 p.m. and at any adjournment thereof.

My / Our Proxy is to vote as indicated below:

Resolution For Against

1. Adoption of Audited Accounts together with the Reports of theDirectors and Auditors for the year ended 31 December 2000

2. Re-election of Dato’ Teh Ah Ba as a Director

3. Re-election of Teh Eong Liang as a Director

4. Re-election of Teh Yong Khoon as a Director

5. Approval of 12% First and Final Tax-Exempt Dividend

6. Payment of Directors’ Fees and Remuneration

7. Re-appointment of Messrs Arthur Andersen & Co. as Auditors

8. Authority to allot shares under Section 132D of the CompaniesAct, 1965

(Please indicate with an ‘X’ in the space provided how you wish your vote to be cast. In the absence ofspecific directions, your proxy will vote or abstain as he thinks fit)

Signed this __________ day of ______________ 2001

__________________________________Signature of shareholder/Common Seal

Notes:1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote in his stead.

A proxy need not be a member of the Company.

2. The instrument appointing a proxy, in the case of an individual, shall be signed by the appointer or hisattorney, and in the case of a corporation, either under seal or under the hand of an officer or attorney duly authorised.

3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at the Suite 18.05 MWE Plaza, No. 8 Lebuh Farquhar, 10200 Penang, not less than 48 hours before the time for holding the meeting or at any adjournments thereof.

No. of shares held

The Company Secretaries

ENG TEKNOLOGI HOLDINGS BHD., (234669M)

Suite 18.05, MWE PlazaNo. 8 Lebuh Farquhar

10200 Penang, Malaysia

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A f f i xP o s t a g e

H e r e

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