SCIENTEX INCORPORATED BERHAD - I3investor

2001

SCIENTEX INCORPORATED BERHAD(COMPANY NO.: 7867-P)

A n n u a l R e p o r t 2 0 0 1

2001

SCIENTEX INCORPORATED BERHAD(COMPANY NO.: 7867-P)

A n n u a l R e p o r t 2 0 0 1

As one of the nation’s aspiring corporate entity, our commitment towards our people and shareholders stem

from our strong principles. This commitment is embodied in the cover design of the Annual Report. The design

showcases the Group’s core activities as the principal source of growth and stability, and its pursuit of higher

standards, unwavering confidence and uncompromised professionalism. These are some of the core values that

has enabled Scientex to set distinctive standards.

Set in the background of the design is a globe and world chart. This signifies our efforts for greater market reach

internationally, while fully understanding and facing the challenges of global competition.

CONTENTS

cover rationale

2 Corporate Information

3 Board of Directors’ Profile

4 5 Years Group Financial Highlights

5 Group Structure

6 Chairman’s Statement

9 Penyata Pengerusi

11 Chairman’s Statement (Chinese)

13 Audit Committee Report

14 Corporate Governance Statement

16 Other Corporate Information

17 Financial Statements

86 List of Properties held by the Group

88 Analysis of Shareholdings/Warrantholdings

92 Notice of Annual General Meeting

94 Statement Accompanying Notice of Annual General Meeting

Form of Proxy

I N F O R M A T I O N

Scientex Incorporated Berhad

CORPORATE

PAGE 02

Board of Directors

Lim Teck Meng(Executive Chairman)

Lim Peng Jin(Managing Director)

Lim Peng Cheong(Executive Director)

Wong Mook Weng (Independent Non-Executive Director)

Juriah Bte Azman(Non-Executive Director)

Cham Chean Fong @ Sian Chean Fong(Independent Non-Executive Director)

Yasushi Hoshika(Independent Non-Executive Director)

SecretaryGary Tan Beng Chai

Audit CommitteeWong Mook Weng

Chairman and Independent Non-Executive Director

Cham Chean Fong @ Sian Chean FongMember and Independent Non-Executive Director

Lim Peng JinMember and Managing Director

Registered Office Jalan Utas 15/7, 40000 Shah Alam

Selangor Darul Ehsan.Tel: 03 - 5519 1325Fax: 03 - 5519 1884

Website: http://www.scientex.com.my

RegistrarsMalaysian Share Registration Services Sdn Bhd

7th Floor, Exchange Square, Bukit Kewangan50200 Kuala Lumpur

Tel: 03 - 206 8099Fax: 03 - 206 3736

Website: http://www.msrs.com.my

AuditorsT. C. Liew & Co.1st Floor, City House166-1A, Jalan Loke Yew55200 Kuala Lumpur

SolicitorsLim Kian Leong & Co.Koh Kim Leng & CompanyYeo & Yeo

Principal Bankers Malayan Banking BerhadUnited Overseas Bank (Malaysia) BerhadOverseas Union Bank (M) BerhadAffin Merchant Bank BerhadHSBC Bank Malaysia BerhadAffin Bank Berhad

Stock Exchange ListingMain Board of theKuala Lumpur Stock Exchange

P R O F I L EBOARD OF DIRECTORS’

PAGE 03


Lim Teck MengLim Teck Meng, aged 64, a Malaysian, is presently an ExecutiveChairman of the Company. He was appointed to the Board as ManagingDirector in September 1969 and he held this position until 6 November2001 when he was appointed as an Executive Chairman of theCompany. He received his education in Melaka and is a businessmanwith extensive knowledge and experience in the polymer and plasticindustry for over 35 years and also in trading and propertydevelopment. Through his many years of experience in the industryand entrepreneurial skills, Lim Teck Meng has been responsible and isinstrumental to the growth of the Group. He is the father of Lim Peng Cheong and Lim Peng Jin, who are alsoExecutive Directors of Scientex Incorporated Berhad. He has noconflict of interest with the Company. He has not been convicted of anyoffences in the past ten years. Mr Lim is subject to retirement by rotation at the forthcoming 33rdAnnual General Meeting and has offered himself for re-election. Heattended all the three Board Meetings held during the financial yearended 31 July 2001.

Lim Peng CheongLim Peng Cheong, aged 39, a Malaysian, is an Executive Director of theCompany. He was appointed to the Board as an Executive Director on 9September 1988. He graduated with a Bachelor of Science (Hons) inBusiness Studies from the City University, London, United Kingdom inJune 1984. He has considerable experience in the plastic and propertydevelopment industries. He is also the Chairman of WoventexCorporation Berhad.He is the eldest son of Lim Teck Meng and the brother of Lim Peng Jin,who are also the Executive Directors of Scientex Incorporated Berhad.He has no conflict of interest with the Company. He has not beenconvicted of any offences in the past ten years. He attended all the three Board Meetings held during the financialyear ended 31 July 2001.

Lim Peng JinLim Peng Jin, aged 34, a Malaysian, is currently the Managing Directorof the Company. He was appointed to the Board on 20 January 1995 asthe Group Executive Director and he is also a Member of the AuditCommittee of the Company. He graduated with a Bachelor of Science(Hons) in Chemical Engineering from the University of Tokyo, Japan in1990. He was attached to Yamato Chemical Industry Co Ltd and Shin-Etsu Chemical Co Ltd in Japan for a year before joining the company in1991. He had also completed a course in Programme ManagementDevelopment in Harvard University, USA in 1990. He is also theManaging Director of Woventex Corporation Berhad. He is the youngest son of Lim Teck Meng and the brother of Lim PengCheong, who are also Executive Directors of Scientex IncorporatedBerhad. He has no conflict of interest with the Company. He has notbeen convicted of any offences in the past ten years. He attended all the three Board Meetings held during the financialyear ended 31 July 2001.

Wong Mook WengWong Mook Weng, aged 69, a Malaysian, is an Independent Non-Executive Director of the Company. He was appointed to the Board on29 November 1969 and he is also the Chairman of the Audit Committeeof the Company. He received his early education in Kuala Lumpur andis a businessman with over 30 years of experience owning andmanaging businesses dealing in property development, manufacturingand trading. He does not have any family relationship with any Director and/ormajor shareholder of the Company and has no conflict of interest with

the Company. He has not been convicted of any offences in the pastten years.Mr Wong is subject to retirement by rotation at the forthcoming 33rdAnnual General Meeting and has offered himself for re-election. Heattended all the three Board Meetings held during the financial yearended 31 July 2001.

Juriah Bte AzmanJuriah Binti Azman, aged 41, a Malaysian, is a Non-Independent andNon-Executive Director of the Company. She was appointed to theBoard on 24 November 2000. She graduated with a Bachelor ofEconomic and Administration from University Malaya in 1983.Currently, she holds a position as the Portfolio Manager of PengurusanPelaburan ASN Berhad. She does not have any family relationship with any Director and/ormajor shareholder of the Company, except by virtue of being a nomineedirector of Permodalan Nasional Berhad, a substantial shareholder ofthe Company. She has no conflict of interest with the Company. Shehas not been convicted of any offences in the past ten years.She attended the two Board Meetings held during the financial yearended 31 July 2001 since her appointment on 24 November 2000.

Cham Chean Fong @ Sian Chean FongCham Chean Fong, aged 33, a Malaysian, is an Independent Non-Executive Director of the Company. He was appointed to the Board on24 May 2001 and he is also a Member of the Audit Committee of theCompany. He graduated with a LLB (Hons) from Bristol Polytechnic,United Kingdom in 1991 and obtained a Certificate of Legal Practice in1993. He was called to Bar in September 1995 and since then, he hasbeen in private practice. Currently, he is a partner of a law firm inKuala Lumpur. He is also a Non-Executive Director of WoventexCorporation Berhad.He does not have any family relationship with any Director and/ormajor shareholder of the Company and has no conflict of interest withthe Company. He has not been convicted of any offences in the pastten years. Mr Cham is subject to retirement by rotation at the forthcoming 33rdAnnual General Meeting and has offered himself for re-election. Heattended one Board Meeting since his appointment on 24 May 2001.

Yasushi HoshikaYasushi Hoshika, aged 53, a Japanese, an Independent Non-ExecutiveDirector. He was appointed to the Board on 3 September 2001. Hegraduated with a Bachelor Degree in Law from Seikei University, Japanin 1972. Upon completing his studies in 1972, he joined NichimenCorporation, Tokyo Head Office and since then he has served thecompany in various capacities. He also served as the Representative ofNichimen Office in various countries namely, Jeddah Liaison Officefrom November 1980 to March 1983, Kuala Lumpur Branch from July1984 to December 1985, Bangkok Branch from January 1986 to March1991 and from June 1997 to March 2000, and Beijing Office from April2000 to March 2001. Currently, he holds the position as the ChiefExecutive Officer of Nichimen Asia Oceania Pte Ltd in Singapore.He does not have any family relationship with any Director and/ormajor shareholder of the Company and has no conflict of interest withthe Company. He has not been convicted of any offences in the pastten years.Mr Hoshika is subject to retirement by rotation at the forthcoming 33rdAnnual General Meeting and has offered himself for re-election. He didnot attend any of the three Board Meetings held during the financialyear ended 31 July 2001 as he was appointed after the financial year-end.

118,

689

F I N A N C I A L H I G H L I G H T S


5 YEARS GROUP

PAGE 04

Year Ended 31 July 2001 2000 1999 1998 1997RM’000 RM’000 RM’000 RM’000 RM’000

Income StatementTurnover 168,142 178,310 184,163 162,494 212,651Profit Before Taxation 8,017 23,743 25,155 5,751 36,440Profit After Taxation 6,814 19,669 24,742 3,290 26,399Profit Attributable To Shareholders 5,426 16,262 17,101 1,386 18,125

Balance SheetNon-Current Assets 316,457 203,183 160,395 174,031 183,564Current Assets 172,395 157,594 174,617 162,254 152,340

Total Assets Employed 488,852 360,777 335,012 336,285 335,904

Shareholders’ Funds 266,530 182,841 161,231 150,009 152,157Minority Interests 72,709 58,166 57,483 51,380 50,229Current Liabilities 80,703 69,400 67,453 82,585 80,739Non-Current and Deferred Liabilities 68,910 50,370 48,845 52,311 52,779

Total Funds Employed 488,852 360,777 335,012 336,285 335,904

Per RM1.00 Ordinary ShareEarnings Per Share (sen) 8.8 27.1 28.3 2.3 29.8Gross Dividend Per Share (sen) 6.0 6.0 6.0 8.0 8.5Net Tangible Assets Per Share (RM) 4.27 2.92 2.63 2.38 2.39

Financial CalendarFinancial Year End : 31 July 2001Announcement of 4th Quarter

Financial Results : 21 September 2001Issue of 2001 Annual Report : 5 December 20012001 Annual General Meeting : 28 December 2001Last Entitlement Date for 2001

First and Final Dividend : 8 January 2002Payment of 2001 First and Final Dividend : 6 February 2002

Turnover(RM’000)

97 98 99 00 01

212,

651

162,

494

184,

163

178,

310

168,

142

Profit Before Taxation(RM’000)

97 98 99 00 01

36,4

40

5,75

1

25,1

55

23,7

43

8,01

7

Shareholders’ Funds (RM’000)

97 98 99 00 01

152,

157

150,

009

161,

231

182,

841

266,

530

Total Assets Employed (RM’000)

97 98 99 00 01

335,

904

336,

285

335,

012

360,

777 48

8,85

2

Earnings Per Share (Sen)

97 98 99 00 01

29.8

2.3

28.3

27.1

8.8

Net Tangible Assets Per Share (RM)

97 98 99 00 01

2.39

2.38

2.63

2.92

4.27


S T R U C T U R EGROUP

PAGE 05

• Scientex Polymer Sdn Bhd• Scientex Marketing Sdn Bhd• Scientex Wonpoong (M) Sdn Bhd• Scientex Auto Industries Sdn Bhd • Yamatex (Malaysia) Sdn Bhd

• Scientex Quatari Sdn Bhd• Scientex Park (M) Sdn Bhd• Scientex Development (Pasir Gudang) Sdn Bhd• Texland Sdn Berhad• Scientex Aidiros Sdn Bhd• KC Contract Sdn Bhd

Polymer Division

• Bestex Corporation Sdn Bhd• Scientex Packaging Film Sdn Bhd• Bestex Packaging Sdn Bhd• Scientex Containers Sdn Bhd• Scientex Resources Sdn Bhd • Woventex Sdn Bhd • Woventex FIBC Sdn Bhd • Pan Pacific Straptex Sdn Bhd • Rigidtex Sdn Bhd

Industrial PackagingDivision

Property Division

PAGE 06

S T A T E M E N T


CHAIRMAN’S

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present

the annual report and accounts of Scientex Incorporated

Berhad ("Scientex") and the Group for the financial year ended

31 July 2001.

Financial Performance

For the financial year ended 31 July 2001, the revenue

achieved for the Group was RM168.1 million, a decline of 5.7%

from RM178.3 million registered in the previous financial year.

This was mainly attributed to decreased sales from the

property division due to weak property market. Group profit

after tax and minority interests of RM5.4 million was RM10.9

million or 66.9% lower than the RM16.3 million registered in

the previous year. This was mainly due to lower contributions

from the property and manufacturing sectors as a result of

lower sales and price competition respectively.

The Group’s fundamental strength as reflected in the quality of

its balance sheet continues to grow. The total assets of the

Group rose to RM488.8 million after incorporating the

revaluation surplus arising from the revaluation of Group’s

property assets as at 31 July 2001, as compared to RM360.8

million in the previous year. The shareholders’ funds also grew

from RM182.8 million to RM266.5 million and this resulted in

the Group’s net tangible assets backing per share to improve

by 46.2 % to RM4.27.

Dividend

The Board of Directors has recommended a first and final

dividend of 6% less tax (2000: 3% tax exempt and 3% less tax)

for the financial year ended 31 July 2001. The dividend, if

approved by the shareholders at the forthcoming Annual

General Meeting, will be paid on 6 February 2002.

Review of Operations

Polymer Division

Revenue contribution from the polymer division to the Group

in the financial year amounted to RM61.4 million against

RM61.0 million in 2000 and this accounted for 36.5% of the

Group turnover.

The improved performance was due to increased sales of

automotive products in the domestic and export markets.

The newly developed product, TPO material supplied to Proton

for its WAJA model had contributed significantly to the

polymer division’s earnings. In the coming year, the division

will continue to take steps to strengthen its technical

competence and to produce high-end automotive products and

also to increase the export sales for the other PVC leather

products so as to reduce the division’s dependence on

domestic market.

Industrial Packaging Division

The industrial packaging division continues to improve and has

remained the biggest contributor to the Group’s revenue and

earnings. Turnover improved by 14.7% to RM90.6 million

predominantly attributable to growth in its export sales by

28.5% to RM52.7 million. This was mainly due to increased

contribution from the industrial stretch film operations under

Scientex Packaging Film Sdn Bhd. The performance will further

improve in the coming years with the positive contribution

from the newly commissioned third and fourth stretch film line

at its new plant located in Pulau Indah and also the wider

regional and global market network established over the years.

The company will continue to expand its export sales to new

markets and to press ahead to establish itself as a market

leader in the Asia Pacific region.

The other industrial packaging products such as carton boxes,

woven bulk bags and PP strapping bands also recorded an

improvement in performance in both the domestic and export

business.

TPO materials for moulded automotive instrumentpanels and door trims for Proton Waja model

C O N T I N U E D

PAGE 07


Property Division

For the year under review, revenue generated by the property

division declined from RM26.6 million to RM14.6 million

yielding profit before tax of RM3.1 million compared to

RM10.1 million in 2000 due to weak property market. The

property division is dependent on the income stream of a

combination of investment properties as well as the profit

from the sale of property development projects undertaken by

Scientex Park (M) Sdn Bhd, Texland Sdn Berhad and Scientex

Aidiros Sdn Bhd. The Group’s investment properties continued

to generate recurring income to the property division during

the year under review while the development properties

experienced good demand for selected residential properties

in the affordable medium cost range.

Sales of the Phase 3A 99 units of single storey terrace houses

with mezzanine floor at Taman Scientex in Pasir Gudang, Johor

had been very encouraging. A total of 79 units or 79.8% had

been sold. Scientex Park (M) Sdn Bhd launched a new

commercial project under Phase 4 comprising 77 units of low

cost shop house. As of to-date, a total of 12 units or 15.6%

had been sold. The company also plans to launch a new

residential project under Phase 5 comprising 390 units of

terrace houses.

In Melaka, Scientex Aidiros Sdn Bhd launched its Phase 1-3

residential project comprising 33 units of 2 1/2 storey terrace

house to tap into the niche market for this type of property in

Melaka. On the other hand, sales of the remaining 32 units of

3 and 4 storey shop office under Phase 1 and 2 at Plaza

Pandan Malim Business Park in Melaka had slowed down.

Texland Sdn Berhad will continue to identify buyers for the

units. The other project currently being developed by the

company is the 98 units of low cost flats and 41 units of strata

shop offices.

In line with the sluggish KLSE and the declining US economy,

the demand for property is expected to remain soft. However,

the long-term view of the Malaysian property market is

encouraging with many investors holding onto their

properties. The current low interest rates, the allocation for

EPF withdrawals for a second house, recent relaxation in FIC

guidelines for foreigners to own properties in excess of

RM250,000 and stamp duty exemption on property

transactions are all stimulating factors that are expected to

resuscitate demand for properties, particularly competitively

priced development projects in strategic locations. This will

augur well for the Group’s property division.

Corporate Developments

On 4 July 2001, the Company announced its decision not to

proceed with the proposed bonus issue of 1 for 1, as the

revaluation reserve, without taking into consideration the

surplus from the revaluation of Scientex Quatari Sdn Bhd’s

property asset, is insufficient for the proposed bonus issue.

On 31 July 2001, the Company announced the restructuring of

its subsidiaries by way of a disposal by Bestex Corporation Sdn

Quality PVC leather for industrial applications

Rigid PVC sheets used forpharmaceutical productspackaging

Stretch film in roll formNew stretch film plant at Pulau Indah(Westport)Corrugated carton boxes for industrial packages

C O N T I N U E D


PAGE 08

Bhd, a wholly-owned subsidiary of the Company, of 80% of the

equity of Scientex Auto Industries Sdn Bhd to Scientex

Polymer Sdn Bhd ("SPSB"), a 84.2% owned subsidiary of the

Company. The restructuring will enable the SPSB group to

streamline and consolidate its core PVC/PU leather and

sheeting, PVC/PU foam sheet and TPO manufacturing

operations. This will enable the SPSB group to achieve greater

management focus and operational efficiency, and thereby be

placed in a stronger position for continuing growth and

expansion.

Subsequent to year end, the Company had on 24 August 2001

announced that the Company had undertaken a valuation on

the property assets of SIB and its subsidiaries on 28 July 2001

with an intention of incorporating the surplus from the

revaluation of the Group’s properties into the consolidated

audited accounts for the financial year ended 31 July 2001.

The revaluation surplus of RM99,993,015 which had

incorporated in the Revaluation Reserve Account of SIB Group,

has improved the net tangible assets backing per share from

RM2.92 to RM4.27 as at 31 July 2001.

Outlook and Prospects

The economic slowdown in the US economy, the horrendous

terrorist attack in USA in September and impending global

recession will have a direct impact on the economic

performance of the country in year 2001/2002. However, the

measures contained in Budget 2002 coupled with the recent

Government proposed pump-priming measures to promote

expansion in domestic demand, develop new sources of growth

and strengthen competitiveness may mitigate the negative

effect of the difficult external environment.

Overall, the Group will continue to take steps to reduce costs,

while improving operational efficiencies and productivity to

cushion negative price movements. Property earnings are

expected to improve with ongoing development activities

at Taman Scientex. Sustained growth in the nation’s

manufacturing sector will benefit the polymer and industrial

packaging divisions. Thus, the Board, barring any unforeseen

circumstances is cautiously optimistic that the Group’s financial

performance will remain profitable for the coming

financial year.

Appreciation

On behalf of the Board, I would like to thank Mr Lim Kang San,

YBhg Tan Sri Dato’ Mohd Sheriff Bin Mohd Kassim, Mr Tan Siew

Hin and Mr Koay Teik Soon who resigned from the Board on 24

November 2000, 31 December 2000, 24 May 2001 and 3

September 2001 respectively, for their invaluable services

rendered to the Group and welcome Puan Juriah Binti Azman,

Mr Cham Chean Fong @ Sian Chean Fong and Mr Yasushi

Hoshika who were appointed to the Board on 24 November

2000, 24 May 2001 and 3 September 2001 respectively.

I would also like to record our thanks and appreciation to the

management and staff at all levels for their continual efforts,

dedication and commitment during the year, and also to the

Board members for their support and commitment.

I also wish to extend my deep appreciation to our

shareholders, various Government authorities, customers,

suppliers, bankers and business associates for their support,

co-operation, assistance and confidence.

LIM TECK MENG

Executive Chairman

Shah Alam

6 November 2001

Single storey terracehouses with MezzanineFloor at Taman Scientex

2 1/2 storey terrace housesat Taman Muzaffar Heights

4-storey shop-office at Taman Scientex3-storey strata shop-office at PlazaPandan Malim Business Park

Pemegang-pemegang Saham yang dihormati,

Bagi pihak Lembaga Pengarah, saya dengan sukacitanyamengemukakan laporan tahunan dan akaun ScientexIncorporated Berhad ("Scientex") dan Kumpulan bagi tahunkewangan berakhir 31 Julai 2001.

PRESTASI KEWANGANBagi tahun kewangan berakhir 31 Julai 2001, hasil yangdiperolehi bagi Kumpulan adalah RM168.1 juta, merosotsebanyak 5.7% berbanding RM178.3 juta yang dicatatkan padatahun kewangan sebelumnya. Ini terutamanya disebabkanjualan berkurangan dari bahagian harta akibat daripadakelembapan pasaran harta. Keuntungan selepas cukai dankepentingan minoriti Kumpulan sebanyak RM5.4 juta adalahRM10.9 juta atau 66.9% lebih rendah daripada RM16.3 jutayang dicatatkan pada tahun sebelumnya. Ini terutamanyadisebabkan sumbangan yang lebih rendah daripada sektorharta dan sektor pembuatan masing-masing hasil daripadajualan yang lebih rendah dan harga bersaingan.

Asas kekuatan Kumpulan sebagaimana digambarkan dalamkualiti kunci kira-kiranya terus berkembang. Jumlah asetKumpulan meningkat kepada RM488.8 juta selepasmenggabungkan lebihan penilaian semula timbul daripadapenilaian semula aset harta Kumpulan pada 31 Julai 2001,berbanding RM360.8 juta pada tahun sebelumnya. Danapemegang saham juga meningkat daripada RM182.8 jutakepada RM266.5 juta dan ini menghasilkan sokongan asetketara bersih setiap saham Kumpulan meningkat sebanyak46.2% kepada RM4.27.

DIVIDENLembaga Pengarah telah mengsyorkan dividen pertama danakhir sebanyak 6% ditolak cukai (2000: 3% dikecuali cukai dan3% ditolak cukai) bagi tahun kewangan berakhir 31 Julai 2001.Dividen, sekiranya diluluskan oleh pemegang-pemegangsaham pada Mesyuarat Agung Tahunan akan datang, akandibayar pada 6 Februari 2002.

TINJAUAN OPERASI

Bahagian PolimerSumbangan hasil daripada bahagian polimer kepada Kumpulanbagi tahun kewangan berjumlah RM61.4 juta berbandingRM61.0 juta pada tahun 2000 dan membentuk 36.5% daripadajumlah dagangan Kumpulan. Prestasi yang bertambah baikadalah akibat daripada peningkatan jualan produk automotifdalam pasaran dalam negeri dan pasaran eksport.

Produk yang baru dibangunkan, bahan TPO dibekalkan kepadaProton untuk model WAJAnya telah menyumbang denganbanyaknya kepada perolehan bahagian polimer. Pada tahun akandatang, bahagian ini akan terus mengambil langkah-langkahuntuk mengukuhkan ketrampilan teknikalnya dan mengeluarkan

produk automotif berkualiti tinggi dan juga meningkatkan jualaneksport untuk produk kulit PVC lain untuk mengurangkankebergantungan bahagian pada pasaran dalam negeri.

Bahagian Pembungkusan PerusahaanBahagian pembungkusan perusahaan terus bertambah baik danmasih merupakan penyumbang terbesar kepada hasil danperolehan Kumpulan. Jumlah dagangan meningkat sebanyak14.7% kepada RM90.6 juta kebanyakannya boleh dikait kepadapertumbuhan jualan eksportnya sebanyak 28.5% kepadaRM52.7 juta. Ini adalah disebabkan sumbangan yangbertambah daripada operasi saput regang perusahaan di bawahScientex Packaging Film Sdn. Bhd. Prestasi akan seterusnyameningkat pada tahun-tahun akan datang dengan sumbanganpositif daripada saluran saput regang ketiga dan keempatnyayang baru dijalankan di loji baru terletak di Pulau Indah danjuga rangkaian pasaran kawasan dan global yang lebih luasterbina selama ini. Syarikat akan terus mengembangkan jualaneksportnya ke pasaran-pasaran baru dan memajukan syarikatsebagai peneraju pasaran di kawasan Asia Pasifik.

Lain-lain produk pembungkusan perusahaan seperti kotak-kotak kartun, beg tenun pukal dan tali pengikat PP jugamencatatkan peningkatan dalam prestasi di kedua-duaperniagaan dalam negeri dan perniagaan eksport.

Bahagian HartaBagi tahun di bawah kajian, hasil yang dijanakan oleh bahagianharta menurun daripada RM26.6 juta kepada RM14.6 jutamenghasilkan keuntungan sebelum cukai sebanyak RM3.1 jugaberhanding RM10.1 juta pada tahun 2000 disebabkankelembapan pasaran harta. Bahagian harta bergantung kepadasumber pendapatan gandingan pelaburan harta dan jugakeuntungan daripada jualan projek pembangunan harta yangdilaksanakan oleh Scientex Park (M) Sdn Bhd, Texland SdnBerhad dan Scientex Aidiros Sdn. Bhd. Pelaburan harta Kumpulanterus menjanakan pendapatan akan berulang kepada bahagianharta dalam tahun di bawah kajian manakala pembangunanharta tanah mengalami permintaan yang baik untuk hartakediaman pilihan dalam julat kos sederhana yang termampu.

Jualan Fasa 3A terdiri daripada 99 unit rumah teres satutingkat dengan lantai mezzanin di Taman Scientex di PasirGudang, Johor amat menggalakkan. Sejumlah 79 unit atau79.8% telah dijual. Scientex Park (M) Sdn Bhd melancarkanprojek komersil baru di bawah Fasa 4 terdiri daripada 77 unitrumah kedai kos rendah. Sehingga kini, sejumlah 12 unit atau15.6% telah dijual. Syarikat juga bercadang untuk melancarkanprojek kediaman yang baru di bawah Fasa 5 terdiri daripada390 unit rumah teres.

Di Melaka, Scientex Aidiros Sdn Bhd melancarkan Fasa 1-3 projekkediaman terdiri daripada 33 unit rumah teres 2 1/2 tingkatuntuk mencungkil ruang pasaran jenis harta ini di Melaka.Sebaliknya, jualan 32 unit kedai pejabat 3 dan 4 tingkat di bawahFasa 1 dan 2 selebihnya di Taman Perniagaan Plaza Pandan Malimdi Melaka telah menurun. Texland Sdn Berhad akan terusmengenalpasti pembeli-pembeli untuk unit-unit tersebut. Lain-


P E N G E R U S IPENYATA

PAGE 09

lain projek pada masa ini dibangunkan oleh syarikat ialah 98 unitflat kos rendah, dan 41 unit kedai pejabat strata.

Selaras dengan kelembapan BSKL dan kemerosotan ekonomiUS, permintaan untuk harta dijangka lemah. Walaubagaimanapun, gambaran jangka panjang pasaran hartaMalaysia adalah mengalakkan dengan para pelabur masihbertahan dengan harta mereka. Kadar faedah yang rendah,peruntukan pengeluaran KWSP untuk rumah kedua,kelonggaran garis panduan FIC baru-baru ini untuk wargaasing memiliki harta melebihi RM250,000 dan pengecualianduti setem ke atas urusniaga harta adalah faktor-faktorrangsangan yang dijangka akan memulih semula permintaanuntuk harta, khususnya pembangunan projek-projek yangmempunyai harga bersaingan di lokasi-lokasi strategik. Iniadalah petanda baik untuk bahagian harta Kumpulan.

PERKEMBANGAN KORPORATPada 4 Julai 2001, Syarikat telah mengumumkan keputusannyauntuk tidak meneruskan dengan cadangan terbitan bonus 1untuk 1, memandangkan rizab penilaian semula, tanpamengambil kira lebihan daripada penilaian semula aset hartaScientex Quatari Sdn Bhd, tidak mencukupi untuk cadanganterbitan bonus tersebut.

Pada 31 Julai 2001, Syarikat telah mengumumkan penyusunansemula anak-anak syarikat dengan penjualan oleh BestexCorporation Sdn Bhd, anak syarikat milik penuh Syarikat,sebanyak 80% ekuiti Scientex Auto Industries Sdn Bhd kepadaScientex Polymer Sdn Bhd ("SPSB"), anak syarikat 84.2% milikSyarikat. Penyusunan semula akan membolehkan kumpulanSPSB mengemaskini dan menggabungkan perniagaan terasnyakulit dan kepingan PVC/PU, kepingan busa PVC/PU dan operasipengilangan TPO. Ini akan membolehkan kumpulan SPSB untuklebih mencapai tumpuan pengurusan dan kecekapan operasi,dan justeru itu menempatkannya pada kedudukan yang lebihkukuh untuk pertumbuhan dan perkembangan yangberterusan.

Selepas akhir tahun, Syarikat pada 24 Ogos 2001mengumumkan bahawa Syarikat telah melakukan penilaianaset harta SIB dan anak-anak syarikatnya pada 28 Julai 2001dengan hasrat menggabungkan lebihan daripada peniliansemula harta Kumpulan kepada akaun teraudit yang disatukanbagi tahun kewangan berakhir 31 Julai 2001. Lebihanpenilaian semula RM99,993,015 yang telah digabungkan kedalam Akaun Rizab Penilaian Semula Kumpulan SIB, telahmeningkatkan sokongan aset ketara bersih setiap sahamdaripada RM2.92 kepada RM4.27 pada 31 Julai 2001.

HARAPAN DAN PROSPEKKemelesetan ekonomi dalam ekonomi US, serangan pengganasyang dahsyat di US pada bulan September, dan kemelesetanglobal yang melanda akan mempunyai impak langsung ke atas

prestasi ekonomi negara pada tahun 2001/2002. Walaubagaimanapun, langkah-langkah yang terkandung dalamBelanjawan 2002 disertakan dengan cadangan langkah-langkah rangsangan modal kerajaan baru-baru ini untukmenggalak perkembangan permintaan dalam negeri,mewujudkan sumber-sumber pertumbuhan yang baru danmengukuhkan persaingan mungkin mengurangkan kesannegatif persekitaran luaran yang sukar.

Keseluruhannya, Kumpulan akan terus mengambil langkah-langkah untuk mengurangkan kos, sementara meningkatkankeberkesanan serta produktiviti operasi untuk menampungpergerakan harga negatif. Perolehan harta dijangkabertambah baik dengan kegiatan-kegiatan pembangunan yangmasih dilaksanakan di Taman Scientex. Pertumbuhan yangdapat dipertahankan dalam sektor pengilangan negara akanmenguntungkan bahagian polymer dan bahagianpembungkusan perusahaan. Justeru itu, Lembaga, dalamketiadaan perkara di luar jangkaan adalah optimistik bahawaprestasi kewangan Kumpulan akan terus menguntungkan padatahun kewangan akan datang.

PENGHARGAANBagi pihak Lembaga, saya mengucapkan terima kasih kepadaEncik Lim Kang San, Ybhg Tan Sri Mohd Sheriff Bin MohdKassim, Encik Tan Siew Hin dan Encik Koay Teik Soon yangmasing-masing meletakkan jawatan dari Lembaga pada 24 November 2000, 31 Disember 2000, 24 Mei 2001 dan 3 September 2001, di atas khidmat tidak ternilai mereka yangdiberikan kepada Kumpulan dan mengucapkan selamat datangkepada Puan Juriah Binti Azman, Encik Cham Chean Fong @Sian Chean Fong dan Encik Yasushi Hoshika yang telah dilantikke Lembaga masing-masing pada 24 November 2000, 24 Mei2001 dan 3 September 2001.

Saya juga ingin merakamkan ucapan terima kasih danpenghargaan kami kepada pengurusan dan kakitangan disemua peringkat atas usaha berterusan, dedikasi dankomitmen mereka dalam tahun, dan juga ahli-ahli Lembagaatas sokongan dan komitmen mereka.

Saya juga ingin merakamkan penghargaan saya kepadapmegang-pemegang saham, pelbagai pihak berkuasa Kerajaan,pelanggan, pembekal, jurubank dan rakan-rakan perniagaanatas sokongan, kerjasama, bantuan dan keyakinan mereka.

LIM TECK MENGPengerusi Eksekutif

Shah Alam6 November 2001


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B E R S A M B U N G


C O M M I T T E E R E P O R TAUDIT

PAGE 13

The composition of the Committee currently does not have a memberwho is a member of the Malaysian Institute of Accountants or theequivalent as required under Paragraph 15.10 of the ListingRequirements of Kuala Lumpur Stock Exchange and the Terms ofReference adopted by the Board. The requirements will be compliedwith by the deadline of 31 December 2001.On 20 September 2001, the Board approved the proposed amendmentsto the Terms of Reference of the Committee, in compliance with theListing Requirements of Kuala Lumpur. The following is the amendedterms of reference of the Committee:-

TERMS OF REFERENCE OF THE AUDIT COMMITTEEComposition1. The Committee shall be appointed by the Board from amongst the

Directors and shall consist of not less than three (3) memberswhereby at least one member of the Committee:(i) must be a member of the Malaysian Institute of Accountants

("MIA"); or(i) if he is not a member of the MIA, he must have at least three

(3) years working experience and:(a) he must have passed the examinations specified in Part I of

the 1st Schedule of the Accountants Act 1967; or(b) he must be a member of one of the associations of

accountants specified in Part II of the 1st Schedule of theAccountants Act 1967.

2. A majority of the Committee members must be IndependentDirectors.

3. No alternate director is to be appointed as a member of theCommittee.

4. The members of the Committee must elect a Chairman from amongtheir number who is an Independent Non-Executive Director.

5. If a member of the Committee resigns, dies or for any reasonceases to be a member resulting in the number of the Committeemembers being reduced to below three (3), the Board shall withinthree (3) months of that event, appoint such number of newmembers as may be required to make up the minimum number ofthree (3) members.

6. The term of office and performance of the Committee and each ofits members shall be reviewed by the Board at least once everythree (3) years.

AuthorityThe Committee is authorized by the Board to:(i) investigate any matter within its terms of reference.(ii) have full and unrestricted access to any information pertaining to

the Company and shall have the resources it requires to performits duties. All employees are directed to co-operate with anyrequest made by the Committee.

(iii) obtain outside legal or other independent professional advice asnecessary to assist the Committee in fulfilling its duties.

(iv) have direct communication channels with the external auditors andperson(s) carrying out the internal audit function activity, if any.

Functions and DutiesThe functions and duties of the Committee shall include the following:(a) to review the following and report the same to the Board:

(i) with the external auditor, the audit plan;(ii) with the external auditor, his evaluation of the system of

internal controls;

(iii) with the external auditor, his audit report;(iv) the assistance given by the employees of the Company to

the external auditor;(v) the adequacy of the scope, functions and resources of the

internal audit functions and that it has the necessaryauthority to carry out its work;

(vi) the internal audit programme, processes, the results of theinternal audit programme, processes or investigationundertaken and whether or not appropriate action is takenon the recommendations of the internal audit function;

(vii) the quarterly results and year-end financial statements ofthe Group and the Company, prior to the approval of theBoard, focusing particularly on:-• changes in or implementation of accounting policies and

practices• significant and unusual events arising• the going concern assumption• compliance with accounting standards, regulatory and

other legal requirements(viii) any related party transactions and conflict of interest

situation that may arise within the Company or Group;(ix) to discuss problems and reservations arising from the final

audit, and any matter the auditor may wish to discuss (inthe absence of management where necessary); and

(x) to consider any other functions or duties as may be agreedto by the Committee and the Board.

Meetings and Reporting ProceduresThe Committee shall meet at least four (4) times in a financial year. TheChairman may call for additional meetings at any time at his discretion.The quorum for a meeting shall consist not less than two (2) members,the majority of those present must be Independent Directors.The Head of Finance, representative of the external auditors, otherBoard members, employees and/or external independent professionaladvisers may attend meetings upon the invitation of the Committee.The Company Secretary shall be the secretary of the Committee and asa reporting procedure, the minutes of each meeting shall be kept andcirculated to the members of the Committee and also to all members ofthe Board for noting and action, where necessary.

Summary of Activities of the Committee During the YearThe Committee held five (5) meetings during the financial year ended31 July 2001. All the members meetings attended all meetings exceptMr Cham Chean Fong @ Sian Chean Fong, who attended one (1)meeting held since his appointment.The Committee reviewed the quarterly reports before such reports wereapproved by the Board for submission to the Kuala Lumpur Stock Exchangefor public release. The Head of Finance was invited to attend the meetingsto brief the Committee on specific issues pertaining to the quarterlyreports. The Committee also reviewed the audited financial year-endfinancial statements together with the external auditors. Special attentionwas given to significant issues raised by the external auditors on theannual financial statements of the Group and the Company.The Committee relied on discussions with the management and theexecutive directors, reviews of quarterly financial performance andinput from the external auditors to discharge its duties. To promotehigher standards of Corporate Governance, the Board has alreadytaken steps to establish an internal audit function and a proper andadequate internal control system with a view to safeguardshareholders’ investment and the Group’s assets.

Chairman - Wong Mook Weng(Independent Non-Executive Director)

Member -Cham Chean Fong @ Sian Chean Fong(Independent Non-Executive Director)

Member -Lim Peng Jin(Managing Director)

The Board of Directors ("Board") is pleased to present the Audit Committee Report for the year 2000/2001.The Audit Committee was established on 11 July 1995 to act as Committee of the Board of Scientex Incorporated Berhad and currentlycomprises the following members:

G O V E R N A N C E S T A T E M E N T


CORPORATE

PAGE 14

In March 2000, the Finance Committee on CorporateGovernance issued the Malaysian Code on CorporateGovernance ("the Code"), which sets out the basic principlesand best practices on structures and processes that companiesmay use towards achieving the optimal governance framework.The Board of Directors believes that good corporategovernance results in quantifiable long-term success andcreation of long-term shareholders value. Hence, the Board ofDirectors supports the Code and is committed to ensuring thatthe highest standards of corporate governance are practicedthroughout the Group as a fundamental part of discharging itsresponsibilities to protect and enhance shareholders value andthe financial performance of the Scientex Group.Set out below is a description of how the Group has applied theprinciples of the Code. Except for the matters specificallyidentified, the Board of Directors has complied with the bestpractices set out in the Code.

Board of Directors

Principal DutiesThe Board is primarily entrusted with the responsibility ofcharting the direction of the Scientex Group. It focuses mainlyon strategies, financial performance and critical businessissues, including the following areas:• Group’s strategic plans• Financial performance and key performance indicators• Principal risks identification and their management• Succession planning for senior management• Investor relations programme or shareholder

communication policy• Group’s internal control systems and management

information systems

Board CompositionThe Board currently comprises three Executive Directors, oneNon-Executive Director and three Independent Non-ExecutiveDirectors. The Board composition complies with the ListingRequirements of the Kuala Lumpur Stock Exchange that requirea minimum of two or 1/3 of the Board to be independentdirectors. The profile of the members of the Board on page 3demonstrate the range of experience and independentjudgement they each bring to bear on Board matters.The Executive Chairman functions both as Executive Directorand Chairman of the Board, having taken from the previousChairman who resigned on 31 December 2000. The Chairman isprimarily responsible for the working of the Board and toensure that all Directors, executive and non-executive alike,are enabled and encouraged to play their full part in itsactivities. The Managing Director’s task is to run the Group’sbusiness and resources, and implement the policies andstrategies adopted by the Board.The Board recognizes the crucial role and contribution playedby Independent Non-Executive Directors. They represent theelement of objectivity and independent judgement of theBoard. This ensures that there is sufficient check and balanceso that no one particular group dominates the Board.

The Board has a schedule of four regular meetings a year, andmeets additionally when necessary, to review and consider allmatters relating to financial results, Board appointments,dividend recommendations, acquisitions and disposals,corporate exercises, major capital projects, material contractsand Group strategy. During the financial year ended 31 July2001, three (3) meetings were held. The number of meetingsattended by each member of the Board is set out below:-

A procedure exists for the Board of Directors, in thefurtherance of their duties, to take independent professionaladvice if necessary, under the guidance of the CompanySecretary and at the Company’s expense. The Board is suppliedwith appropriate and timely information to enable it todischarge its duties. All Directors have access to the advice andservices of the Company Secretary, who is responsible to theBoard for ensuring that Board procedures are followed and thatapplicable rules and regulations are complied with.

Audit CommitteeThe Audit Committee is appointed by the Board of Directors ofthe Company and it has written terms of reference clearlysetting out its authority and duties. The Audit Committeeconsists of a majority of Independent Non-Executive Directors,with Mr Wong Mook Weng in the Chair and Mr Cham Chean Fong@ Sian Chean Fong (Independent Non-Executive Directors)and Mr Lim Peng Jin (Managing Director)) as members. Theterms of reference and Report of the Audit Committee are alsoprovided in the Annual Report. The Audit Committee assists the Board in fulfilling its oversightresponsibilities, primarily reviewing the quarterly and year-endfinancial statements of the Group prior to their submission tothe Board for approval, focusing particularly on accountingpolicies and compliance; reviewing the scope of external auditand audit process; and reviewing the Group’s system ofinternal audit, internal control and risk management.

Name of Director Designation No. of meetings attended

Mr Lim Teck Meng* Executive Chairman 3/3

Mr Lim Peng Jin** Managing Director 3/3

Mr Lim Peng Cheong Executive Director 3/3

Mr Wong Mook Weng Independent Non-Executive Director 3/3

Puan Juriah Bte Azman Non-Executive Director 2/2(appointed on 24/11/2000)

Mr Cham Chean Fong Independent Non-Executive Director 1/1(appointed on 24/5/2001)

Mr Yasushi Hoshika Independent Non-Executive Director N/A(appointed on 3/9/2001)

Mr Lim Kang San Non-Executive Director 1/1(resigned on 24/11/2000)

YBhg Tan Sri Dato’ Mohd Chairman & Non-Executive Director 1/1Sheriff Bin Mohd Kassim(resigned on 31/12/2000)

Mr Tan Siew Hin Non-Executive Director 1/2(resigned on 24/5/2001)

Mr Koay Teik Soon Non-Executive Director 1/2(appointed on 24/11/2000and resigned on 3/9/2001)

* Appointed as Executive Chairman on 6 November 2001** Appointed as Managing Director on 6 November 2001


PAGE 15

C O N T I N U E D

The Audit Committee meets at least four (4) times in a year. Theexternal auditors and the Company’s senior managementattend the Audit Committee meetings, which other Directorsalso attend when necessary. The Company Secretary acts asSecretary to the Audit Committee.

Appointment to the BoardThe establishment of a Nominating Committee has not beenundertaken as the full Board is primarily responsible formaking recommendations for any new appointment to theBoard and assessment of directors on an on-going basis. Aspart of the process of appointing new Directors, the Boardensures that new Directors are required to attend theMandatory Accreditation Programme in order to be keptabreast of new regulatory development and ListingRequirements of the Kuala Lumpur Stock Exchange.

Retirement and Re-electionAll Directors shall retire from office at least once in every three(3) years, but shall be eligible to offer themselves for re-election. The Company’s Articles of Association will beamended to reflect this practice when the proposedamendments are approved by the shareholders at theforthcoming 33rd Annual General Meeting of the Company.

Directors’ RemunerationThe establishment of a Remuneration Committee has not beenundertaken as the Board ascertains and approves remunerationpackages of Executive Directors in accordance with theCompany’s policy guidelines and remuneration scheme which islinked to performance, service seniority, experience and scopeof responsibilities. Individual Directors affected are notinvolved in the approval of their own packages.A summary of the remuneration of Directors in aggregatecomprising remuneration received/receivable from theCompany and its subsidiary companies, with categorization intoappropriate components and the number of Directors whoseremuneration falls into each successive band of RM50,000 forthe financial year ended 31 July 2001 are disclosed below:

Executive Non-ExecutiveDirectors Directors Total

RM RM RMFees 18,000 25,500 44,500Salaries 840,000 64,000 904,000Bonus & allowance 134,125 8,000 142,125

Range of Executive Non-ExecutiveRemuneration (RM) Directors Directors TotalBelow 50,000 - 6 650,001 - 100,000 - 1 1100,001 - 150,000 - - -150,001 - 200,000 - - -200,001 - 250,000 1 - 1250,001 - 300,000 - - -300,001 - 350,000 1 - 1350,001 - 400,000 - - -400,001 - 450,000 1 - 1

Employees Share Option Scheme ("ESOS")During the financial year ended 31 July 2001, none of theDirectors were granted any ESOS.

Relations with ShareholdersThe Company is committed to ongoing communication acrossits entire shareholder base, whether institutional investors,private or employee shareholders. This is achieved throughregular quarterly and annual reports, and announcements. Theshareholders can also obtain information about the Group byvisiting the Company’s website (http://www.scientex.com.my).In addition, it has always been the practice for the Chairman toprovide ample time for the Q&A sessions in the Annual GeneralMeeting, for suggestions and comments by shareholders to benoted by management for consideration. All Directors attendthe Annual General Meeting and are also available to answerquestions put forward by the shareholders.

Accountability and AuditFinancial ReportingThe Directors are aware of their responsibilities to present afair and balanced and understandable assessment of theScientex Group’s financial position by means of annualfinancial statements and quarterly reports to shareholders.The Audit Committee assists the Board in ensuring accuracyand adequacy of information by reviewing and recommendingfor adoption information for disclosure.The Responsibility Statement by Directors pursuant toParagraph 15.27 (a) of the Listing Requirements of the KualaLumpur Stock Exchange is set out on page 16 in the AnnualReport.

Internal ControlThe Directors acknowledge their responsibility for the Group’ssystem of internal controls covering not only financial controlsbut also operational and compliance controls, as well as riskmanagement. The internal control system involves eachsubsidiary business and is designed to meet the needs of eachsubsidiary, to ensure that the risks faced by the business inpursuit of its objectives are identified and managed at knownacceptable levels. The Group will be continuously reviewing theadequacy and integrity of its system of internal control.

Internal AuditThe Board also acknowledges the internal audit function as anintegral part of an effective system of corporate governance.In this regard, the Board has taken steps to establish a properinternal audit division to undertake the internal auditfunctions within the Group.

Relationship with External AuditorsThe role of the Audit Committee in relation to the externalauditors is stated on page 13 of the Annual Report.


PAGE 16

OPTIONS EXERCISED DURING THEFINANCIAL YEAR

During the financial year, the issued and paid-up share capitalof the Company was increased from 61,778,400 ordinary sharesof RM1.00 each to 61,968,400 ordinary shares of RM1.00 eachdue to the allotment of 190,000 ordinary shares via EmployeesShare Option Scheme.

TREASURY SHARES

The number of shares retained as treasury shares as at 31 July2001 is 180,000.

MATERIAL CONTRACTS

There were no material contracts entered into by the Companyand its subsidiary companies which involve Directors’ and majorshareholders’ interests either still subsisting at the end of thefinancial year ended 31 July 2001 or entered into since the endof the previous financial year.

NON-AUDIT FEES

The amount non-audit fees paid by the Group to externalauditors for the financial years ended 31 July 2001 amountedto RM17,500.

SANCTION AND REPRIMANDAPPLICABLE TO THE COMPANY

The Company and Affin Merchant Bank Berhad, as the advisingmerchant bank, had on 1 December 1998, received a letter ofcaution from the Securities Commission ("SC") for theCompany’s failure to seek the approval within the required timeframe for a proposed revision in the utilisation of proceedsarising from the Company’s issue of RM35,000,000 nominalamount of 4.5% Redeemable Bank Guaranteed Bonds1996/2001 on 3 December 1996.

REVALUATION POLICY

The Company had undertaken a revaluation on the landedproperties of the Group in respect of the financial year ended31 July 2001. It is the policy of the Company to revalue the

landed properties at regular intervals in every five (5) to six (6)years with additional valuations in the intervening years wheremarket conditions indicate that the carrying values of the re-valued landed properties materially differ from the marketvalues.

DIRECTORS’ RESPONSIBILITYSTATEMENT IN RESPECT OF THEAUDITED FINANCIAL STATEMENTS

Directors are required by Law to prepare financial statementsfor each financial year which give a true and fair view of thestate of affairs of the Group and of the Company at the end ofthe financial year and of the results of the Group and of theCompany for the financial year then ended.

In preparing the financial statements for the financial yearended 31 July 2001, the Directors have:

• Adopted suitable accounting policies and then apply themconsistently;

• Made estimates and judgements that are prudent andreasonable;

• Ensured that applicable accounting standards have beenfollowed, subject to any material departures disclosed andexplained in the financial statements; and

• Prepared the financial statements on the going concernbasis.

The Directors are responsible for keeping proper accountingrecords which disclose with reasonable accuracy at any time thefinancial position of the Group and of the Company. TheDirectors are also responsible for safeguarding the assets of theGroup and of the Company and, hence, for taking such stepsthat are reasonably open to them to prevent and detect fraudand other irregularities.

C O R P O R A T E I N F O R M A T I O NOTHER

18 Directors’ Report

25 Report of the Auditors to the Members

26 Group Balance Sheet

28 Group Income Statement

29 Balance Sheet

31 Income Statement

32 Shareholders’ Equity Statements

34 Group Cash Flow Statement

36 Cash Flow Statement

37 Notes to the Financial Statements

85 Statement by Directors

85 Statutory Declaration

FINANCIAL STATEMENTS


PAGE 18

The directors have pleasure in submitting their annual report to the Members together with the audited financial statements ofthe Group and of the Company for the financial year ended 31 July 2001.

PRINCIPAL ACTIVITIES The principal activities of the Company are investment holdings, letting of properties and provision of management services.

The principal activities of the subsidiaries are stated in Note 9.1 to the financial statements.

There have been no significant changes in the nature of the activities of the Company and its subsidiaries during the financial yearexcept for those relating to a newly acquired subsidiary and subsidiaries disposed of as disclosed in Note 9.1 to the financialstatements.

OPERATIONS Results Group Group Company

RM RM RM

The profit after taxation amounted to 6,813,843 3,300,714

Amounts attributable to minority interests (1,387,351) -

Profit attributable to shareholders of the Company 5,426,492 3,300,714

To which must be added accumulated profits brought forward from the previous financial year

- As previously reported 86,512,513 8,719,056

- Net effects of preliminary and pre-operating expenses written off on change of accounting policy (Note 5.4.3 and 41) (224,881)

- As restated 86,287,632

Resulting in an amount available for appropriation of 91,714,124 12,019,770

From which must be deducted: Dividends (Note 37.2) (2,688,351) (2,688,351)

89,025,773 9,331,419 Transfer from property revaluation reserves realised on change of

equity in subsidiary 28,001 -

Resulting in an amount of accumulated profits to be carried forward to the next financial year of 89,053,774 9,331,419

R E P O R T F O R T H E F I N A N C I A L Y E A R E N D E D - 3 1 J U L Y 2 0 0 1

DIRECTORS’

Dividends During the financial year, a final dividend of 6.0% comprising 3.0% tax exempt and 3.0% less tax amounting to RM3,197,569 inrespect of the previous financial year was paid by the Company.

The directors recommend the payment of first and final dividends of 6.0% less tax amounting to RM2,669,259 in respect of thecurrent financial year ended 31 July 2001.

Reserves and provisions There were no material transfers to or from reserves or provisions during the financial year other than those reported in Note 27to the financial statements.

Bad and doubtful debts Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonablesteps to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtfuldebts and that all known bad debts have been written off and adequate provision been made for doubtful debts.

At the date of this report, the directors of the Company are not aware of any circumstances that would render the amount writtenoff for bad debts or the amount of provision for doubtful debts in the Group and in the Company inadequate to any substantialextent.

Current assets Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonablesteps to ascertain whether any current assets, other than debts, were unlikely to realise in the ordinary course of business theirvalues as shown in the accounting records of the Group and of the Company and to the extent so ascertained were written downto an amount that they might be expected to realise.

At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the currentassets in the financial statements of the Group and of the Company misleading.

Valuation methods At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to theexisting methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

Contingent and other liabilities At the date of this report, there does not exist:

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

(b) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year otherthan those reported in Note 38 to the financial statements.

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


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C O N T I N U E D


PAGE 20

Change of circumstances At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financialstatements of the Group and of the Company, that would render any amount stated in the financial statements misleading.

Items of an unusual nature The results of the operations of the Group and of the Company for the financial year were not, in the opinion of the directors,substantially affected by any item, transaction or event of a material and unusual nature other than the change of accountingpolicy on the treatment of intangible assets and profits/(loss) from investing activities as reported in Note 5.4.3 and 32 to thefinancial statements respectively.

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

SHARE CAPITAL

Issue of shares During the financial year, the following issue of shares was made by the Company:

Class Number Term of issue Purpose of issue

Ordinary shares of RM1.00 each 190,000 Allotment for Pursuant to cash at RM2.08 Employees'

per share Share Option Scheme ("ESOS")

Executives / Employees' Share Option Scheme ("ESOS") At 31 July 2001, the details of the share options granted to all the employees excluding directors of the Company under the ESOSare as follows:

No. of options...................over ordinary shares of RM1.00 each....................As at the As at the

Option price Date of granted beginning, Exercised end,RM 1.8.2000 31.7.2001

2.08 22 September 1999 3,882,000 (190,000) 3,692,000

At 31 July 2001, the details of the share options granted to the executive directors of the Company under the ESOS are as follows:

Option As at the As at theprice beginning, Exercised end,

RM 1.8.2000 31.7.2001

Lim Teck Meng 2.08 500,000 - 500,000 Lim Peng Jin 2.08 500,000 - 500,000

C O N T I N U E D

Warrants At 31 July 2000, the details of the share options granted under the warrants are as follows:

Number of options over ordinary shares of RM1.00 each

As at the As at theSubscription beginning, (Cancelled)/ end,price Date of issue 1.8.2000 replaced Exercised 31.7.2001RM

4.26 3 December 1996 12,138,600 (10,396,776) - 1,741,824 2.49 18 August 2000 - 10,396,776 - 10,396,776

On 18 August 2000, a total of 10,396,776 SIB Warrants 1996 representing 85.65% of the total SIB Warrants 1996 in issue had beensurrendered by the warrantholders for cancellation and replaced with SIB Warrants 2000. The remaining 1,741,824 SIB Warrants1996 which have not been surrendered will remain listed on the Main Board of Kuala Lumpur Stock Exchange ("KLSE") based onexisting terms and will remain valid until expiry of the exercise period on 2 December 2006.

Share buybacks During the financial year, there was no movement on the treasury stocks.

DIRECTORATE Directors The directors who served since the date of the last report are:

Lim Teck Meng Lim Peng Cheong Lim Peng Jin Wong Mook Weng Juriah Binti Azman Cham Chean Fong @ Sian Chean Fong (Appointed w.e.f. 24.5.2001)Yasushi Hoshika (Appointed w.e.f. 3.9.2001)Tan Sri Dato' Mohd Sheriff Bin Mohd Kassim (Resigned w.e.f. 31.12.2000)Tan Siew Hin (Resigned w.e.f. 24.5.2001)Koay Teik Soon (Resigned w.e.f. 3.9.2001)

Shareholdings and interests in shares The shareholdings and interests in shares in the Company and its subsidiaries of those persons who were directors at the end ofthe financial year are as follows:

Number of ordinary shares of RM1.00 each held during the financial year

As at the As at thebeginning, end,

Shareholdings in names of directors 1.8.2000 Bought Sold 31.7.2001

Scientex Incorporated Berhad Lim Teck Meng 25,000 - - 25,000 Wong Mook Weng 14,000 - (14,000) -


PAGE 21

C O N T I N U E D


PAGE 22

Shareholdings and interests in shares (Cont’d)Number of ordinary shares of RM1.00 each

held or deemed interested during the financial year

As at the As at thebeginning, end,

Shareholdings in names of directors 1.8.2000 Bought Sold 31.7.2001

Scientex Trading Sdn. Bhd. Lim Teck Meng 300 - - 300

Scientex Packaging Film Sdn. Bhd. Lim Peng Jin 200,000 - - 200,000

Shareholding in name of nominee company in which director is beneficial owner

Scientex Incorporated Berhad Lim Peng Jin 40,000 - - 40,000 Wong Mook Weng 375,000 - - 375,000

Scientex Quatari Sdn. Bhd. Wong Mook Weng 25,000 - - 25,000

Scientex Aidiros Sdn. Bhd. Wong Mook Weng 60,000 - - 60,000

Shareholding in which each director mentioned below is deemed to have an interest

Scientex Quatari Sdn. Bhd. Lim Teck Meng 374,500 - - 374,500

Scientex Land Sdn. Bhd. Lim Teck Meng,

Lim Peng Cheong and Lim Peng Jin 250,000 500,000 - 750,000

Scientex Aidiros Sdn. Bhd. Lim Teck Meng,

Lim Peng Cheong and Lim Peng Jin - 840,000 - 840,000

Scientex Incorporated Berhad Lim Teck Meng,

Lim Peng Cheong and Lim Peng Jin 22,215,444 747,000 (1,429,000) 21,533,444

Lim Peng Cheong and Lim Peng Jin 44,000 4,000 - 48,000

Lim Teck Meng 2,505,000 991,000 (225,000) 3,271,000 Lim Peng Cheong 895,714 18,000 (370,000) 543,714 Lim Peng Jin 530,000 175,000 (370,000) 335,000

By virtue of their shareholdings and interests in shares in the Company, the directors, Lim Teck Meng, Lim Peng Cheong and LimPeng Jin are also deemed each to have interests in shares in all its subsidiaries to the extent of the interests held by the Company.

C O N T I N U E D

Number of warrants 2000 held or deemed interested during the financial year

*As at the As at theWarrantholdings beginning, Accepted/ Disposed/ end,in names of directors 1.8.2000 Acquired Exercised 31.7.2001

Lim Teck Meng 82,000 - - 82,000 Wong Mook Weng 47,600 - - 47,600

Warrantholding in which each director mentioned below is deemed to have an interestLim Teck Meng, Lim Peng Cheong

and Lim Peng Jin 5,201,200 674,000 (887,000) 4,988,200 Lim Peng Cheong and Lim Peng Jin 3,000 - - 3,000 Lim Teck Meng 1,583,800 268,000 - 1,851,800 Lim Peng Jin 400,000 - (52,000) 348,000

* These warrants, SIB Warrants 1996, have been surrendered for cancellation and replaced with SIB Warrants 2000 as disclosedabove.

Retirement In accordance with the Articles of Association of the Company, the directors mentioned below retire from the Board at theforthcoming Annual General Meeting and being eligible, offer themselves for re-election:

Directors Retiring on Under ArticleLim Teck Meng Rotation 92 Wong Mook Weng Rotation 92 Cham Chean Fong @ Sian Chean Fong Expiry 97 Yasushi Hoshika Expiry 97

Benefits Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit byreason of a contract made by the Company or a related corporation with the director or with a firm of which the director is amember, or with a company in which the director has a substantial financial interest except as follows:

(a) Directors' remuneration as disclosed in Note 17 and 31 to the financial statements; (b) Related party transactions as disclosed in Note 16 to the financial statements.

Neither during nor at the end of the financial year, was the Company a party to any arrangement whose object is to enable thedirectors to acquire benefits by means of the acquisition of shares in or debenture of the Company or any other body corporateother than the ESOS mentioned earlier.


PAGE 23

C O N T I N U E D


PAGE 24

SIGNIFICANT EVENTS These events are reported in Note 9.1 and 10 to the financial statements.

AUDITORS The retiring auditors, T. C. Liew & Co., Public Accountants, do not offer themselves for re-appointment.

Signed in accordance with a resolution of the directors on behalf of the Board:

LIM TECK MENG LIM PENG JIN Director Director

Kuala Lumpur, 6 November 2001

C O N T I N U E D

We have audited the financial statements set out on pages 26 to 84 of Scientex Incorporated Berhad for the financial year ended31 July 2001.

Respective responsibilities of directors and auditors The preparation of the financial statements is the responsibility of the Company's directors. Our responsibility is to express anopinion on the financial statements based on our audit.

Basis of opinion We conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards require that we plan andperform the audit to obtain all the information and explanations, which we considered necessary to provide us with sufficientevidence to give reasonable assurance that the financial statements are free of material misstatement. Our audit includesexamining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. Our audit includes anassessment of the accounting principles used and significant estimates made by the directors as well as evaluating the overalladequacy of the presentation of information in the financial statements.

We believe our audit provides a reasonable basis for our opinion.

Opinion In our opinion:

(a) the financial statements which have been prepared under the historical cost convention modified to include the revaluationof certain non-current assets are properly drawn up in accordance with the provisions of the Companies Act, 1965 andapplicable approved accounting standards so as to give a true and fair view of:

(i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of theGroup and of the Company; and

(ii) the state of affairs of the Group and of the Company as at 31 July 2001 and the results of their operations, changesin equity and cash flows for the financial year ended on that date;

and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and itssubsidiaries, of which we acted as auditors, have been properly kept in accordance with the provisions of the said Act.

We draw attention to the adverse financial position of the subsidiaries listed in Note 9.3 to the financial statements with the auditcomments thereon.

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

The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include anycomment made under Subsection (3) of Section 174 of the Act other than as mentioned in Note 9.3 to the financial statements.

T. C. LIEW & CO. LIEW TIP CHAN Firm No: AF 0047 Approval No: 555/3/02 (J/PH) Public Accountants Public Accountant

Kuala Lumpur, 6 November 2001


PAGE 25

O F T H E A U D I T O R S T O T H E M E M B E R S O F S C I E N T E X I N C O R P O R A T E D B E R H A D

REPORT


PAGE 26

As at end of financial year 31 July 2001 2000Note RM RM

EMPLOYMENT OF CAPITAL

NON-CURRENT ASSETS Properties, plant, equipment and fittings 6 235,661,016 109,519,349 Intangible assets 7 2,744,506 3,200,486 Capital work-in-progress 8 29,123,271 2,131,090 Investments in associated companies 10 41,021,257 30,969,162 Other investments 11 7,907,299 7,351,137

316,457,349 153,171,224 Land held for development 12 - 50,012,174

316,457,349 203,183,398

CURRENT ASSETS Inventories 13 22,999,440 35,173,708 Development properties 14 92,718,276 38,781,977 Trade receivables 15 & 16 39,147,795 48,208,690 Other receivables, utility deposits and prepayments 16 & 17 6,802,273 26,941,782 Tax recoverable 21 1,040,242 - Short-term deposits with licensed banks 18 430,000 1,178,073 Cash and bank balances 9,256,542 7,309,719

172,394,568 157,593,949

Less: CURRENT LIABILITIES

Trade payables 16 16,002,483 17,990,505 Other payables, provisions and accrued liabilities 16 16,539,081 10,705,037 Sinking fund 20 162,905 - Interest-bearing borrowings 19 45,329,804 35,732,989 Taxation 21 - 1,792,579 Proposed dividends 37 2,669,259 3,178,477

80,703,532 69,399,587

NET CURRENT ASSETS 91,691,036 88,194,362

B A L A N C E S H E E TGROUP


408,148,385 291,377,760

NON-CURRENT AND DEFERRED LIABILITIES Interest-bearings borrowings 19 22,592,135 10,514,080 Gratuity and retirement benefits 22 443,964 566,241 Redeemable bank guaranteed bonds 23 35,000,000 35,000,000 Deferred taxation 24 10,873,806 4,289,900

(68,909,905) (50,370,221)

TOTAL ASSETS less TOTAL LIABILITIES 339,238,480 241,007,539

MINORITY INTERESTS 25 (72,708,818) (58,166,089)

NET ASSETS 266,529,662 182,841,450

CAPITAL EMPLOYED

CAPITAL AND RESERVES Issued capital 26 61,968,400 61,778,400 Reserves 27 115,894,316 35,162,246 Accumulated profits 27 89,053,774 86,287,632

266,916,490 183,228,278 Treasury shares 26 (386,828) (386,828)

SHAREHOLDERS' EQUITY 266,529,662 182,841,450

NET TANGIBLE ASSETS per RM1.00 (2000: RM1.00) ordinary share 4.27 2.92

The above group balance sheet is to be read in conjunction with the notes to the financial statements on pages 37 to 84.

Auditors' Report - Page 25.


PAGE 27

C O N T I N U E D


PAGE 28

For the financial year ended 31 July 2001 2000Note RM RM

REVENUE Sales, investment income and fees 28 168,142,321 178,310,481

Cost of sales (143,760,394) (138,792,938)

Gross profit 24,381,927 39,517,543

Other operating income 30 3,080,614 2,244,078

27,462,541 41,761,621

EXPENSES Selling and distribution (10,180,197) (8,960,459)Administration (7,489,752) (7,845,381)Finance (3,825,375) (3,836,801)

PROFIT FROM OPERATIONS 31 5,967,217 21,118,980

Share of (losses)/profits from associated companies (1,189,941) 1,293,743 Profits from investing activities 32 3,239,457 1,329,826

PROFIT BEFORE TAXATION 8,016,733 23,742,549

TAXATION 21 (1,202,890) (4,073,331)

PROFIT AFTER TAXATION 6,813,843 19,669,218

Minority interests 25 (1,387,351) (3,407,634)

PROFIT FOR THE FINANCIAL YEAR 5,426,492 16,261,584

Sen Sen PER RM1.00 (2000: RM1.00) ORDINARY SHARE 37 Earnings - Basic 8.79 27.12 - Fully diluted 8.74 23.76

Dividends 4.32 5.16

The above group income statement is to be read in conjunction with the notes to the financial statements on pages 37 to 84.


I N C O M E S T A T E M E N TGROUP


EMPLOYMENT OF CAPITAL

NON-CURRENT ASSETSProperties, equipment and fittings 6 26,816,827 22,846,440 Investments in subsidiaries 9 53,499,919 44,059,919 Investments in associated companies 10 22,782,210 14,282,212 Other investments 11 345,100 345,100

103,444,056 81,533,671

CURRENT ASSETS Other receivables, utility deposits and prepayments 17 140,960 2,104,495 Tax recoverable 21 1,401,557 1,099,707 Amounts owing by subsidiaries 9 57,939,959 74,822,911 Short-term deposit with licensed bank 18 - 200,000 Cash and bank balances 323,654 192,400

59,806,130 78,419,513

Less: CURRENT LIABILITIES

Trade payables 16,096 5,685 Other payables, provisions and accrued liabilities 4,083,133 1,548,637 Amounts owing to subsidiaries 9 12,997,825 19,621,973 Interest-bearing borrowings 19 7,900,004 7,300,000 Proposed dividends 37 2,669,259 3,178,477

27,666,317 31,654,772

NET CURRENT ASSETS 32,139,813 46,764,741

TOTAL ASSETS less CURRENT LIABILITIES 135,583,869 128,298,412


PAGE 29

S H E E TBALANCE


PAGE 30


NON-CURRENT AND DEFERRED LIABILITIES Interest-bearing borrowings 19 1,455,227 - Gratuity and retirement benefits 22 142,907 252,390 Redeemable bank guaranteed bonds 23 35,000,000 35,000,000 Deferred taxation 24 1,773,759 218,900

(38,371,893) (35,471,290)

NET ASSETS 97,211,976 92,827,122

CAPITAL EMPLOYED

CAPITAL AND RESERVES Issued capital 26 61,968,400 61,778,400 Reserves 27 26,298,985 22,716,494 Accumulated profits 27 9,331,419 8,719,056

97,598,804 93,213,950 Treasury shares 26 (386,828) (386,828)

SHAREHOLDERS' EQUITY 97,211,976 92,827,122

NET TANGIBLE ASSETS Per RM1.00 (2000: RM1.00) ordinary share 1.57 1.51

The above balance sheet is to be read in conjunction with the notes to the financial statements on pages 37 to 84.


C O N T I N U E D


REVENUE 28 Sales, investment income and fees 8,675,229 4,526,268

Cost of sales (58,339) (21,541)

Gross profit 8,616,890 4,504,727

Other operating income 30 817,103 2,135,431

9,433,993 6,640,158 EXPENSES Administration (1,846,401) (2,489,059)Finance (2,768,310) (3,367,695)

PROFIT FROM OPERATIONS 31 4,819,282 783,404

Loss from investing activities 32 - (199,999)

PROFIT BEFORE TAXATION 4,819,282 583,405

TAXATION 21 (1,518,568) (397,793)

PROFIT FOR THE FINANCIAL YEAR 3,300,714 185,612

Sen SenPER RM1.00 (2000: RM1.00) ORDINARY SHARE 37

Earnings - Basic 5.35 0.31 - Fully diluted 5.35 0.31

Dividends 4.32 5.16

The above income statement is to be read in conjunction with the notes to the financial statements on pages 37 to 84.



PAGE 31

S T A T E M E N TINCOME


PAGE 32

Property Share Warrant Issued Share revaluation buybacks and other Accumulated Treasury

Group capital premium surplus reserves reserves profits shares TotalRM RM RM RM RM RM RM RM

Balance as at 1 August 1999 60,839,400 - 23,031,774 2,297,059 5,025,559 72,333,834 (2,297,059) 161,230,567

Net effects of preliminaryand pre-operating expenseswritten off on change of accounting policy (Notes 5.4.3 and 41) - - - - - (320,384) - (320,384)

Realised on struck-off of subsidiary - - (472,518) - - 472,518 - -

Issue during the financial year pursuant to ESOS 939,000 1,014,120 - - - - - 1,953,120

Bonus issue expense and listing fee - (25,879) - - - - - (25,879)

Profit for the financial year - - - - - 16,261,584 - 16,261,584 Dividends (Note 37) - - - - - (3,137,667) - (3,137,667)

61,778,400 988,241 22,559,256 2,297,059 5,025,559 85,609,885 (2,297,059) 175,961,341 Share buybacks during

the financial year - - - 2,669,378 - (2,669,378) (2,669,378) (2,669,378)Disposals of share buybacks

during the financial year - 5,685,805 516,557 (4,579,609) - 3,347,125 4,579,609 9,549,487

Balance as at 31 July 2000 61,778,400 6,674,046 23,075,813 386,828 5,025,559 86,287,632 (386,828) 182,841,450

Realised on change of equity in subsidiary - - (28,001) - - 28,001 - -

Share of revaluation surplus in associated company - - 203,472 - - - - 203,472

Realised on disposal of subsidiary in associated company - - - - (451,805) - - (451,805)

Replacement warrants issue during the financial year

- Proceeds - - - - 1,039,678 - - 1,039,678 - Expenses - - - - (970,943) - - (970,943)Revaluation surplus - - 86,404,809 - - - - 86,404,809 Deferred taxation - - (5,626,117) - - - - (5,626,117)Issue during the financial

year pursuant to ESOS 190,000 205,200 - - - - - 395,200 Bonus issue expense and

listing fee - (44,223) - - - - - (44,223)Profit for the financial year - - - - - 5,426,492 - 5,426,492 Dividends (Note 37) - - - - - (2,688,351) - (2,688,351)

Balance as at 31 July 2001 61,968,400 6,835,023 104,029,976 386,828 4,642,489 89,053,774 (386,828) 266,529,662

The above group shareholders' equity statement is to be read in conjunction with the notes the financial statements on pages 37 to 84.


E Q U I T Y S T A T E M E N T S F O R T H E F I N A N C I A L Y E A R E N D E D 3 1 J U L Y 2 0 0 1

SHAREHOLDERS’

Property Share Issued Share revaluation buybacks Warrant Accumulated Treasury

Company capital premium surplus reserves reserves profits shares TotalRM RM RM RM RM RM RM RM

Balance as at 1 August 1999 60,839,400 - 15,139,063 2,297,059 - 10,993,364 (2,297,059) 86,971,827

Issue during the financial year pursuant to ESOS 939,000 988,241 - - - - - 1,927,241

Profit for the financial year - - - - - 185,612 - 185,612 Dividends (Note 37) - - - - - (3,137,667) - (3,137,667)

61,778,400 988,241 15,139,063 2,297,059 - 8,041,309 (2,297,059) 85,947,013 Share buybacks during

the financial year - - - 2,669,378 - (2,669,378) (2,669,378) (2,669,378)Disposals of share buybacks

during the financial year - 5,685,805 516,557 (4,579,609) - 3,347,125 4,579,609 9,549,487

Balance as at 31 July 2000 61,778,400 6,674,046 15,655,620 386,828 - 8,719,056 (386,828) 92,827,122

Replacement warrants issue during the financial year

- Proceeds - - - - 1,039,678 - - 1,039,678 - Expenses - - - - (970,943) - - (970,943)Revaluation surplus - - 4,656,638 - - - - 4,656,638 Deferred taxation - - (1,303,859) - - - - (1,303,859)Issue during the financial year

pursuant to ESOS 190,000 205,200 - - - - - 395,200 Bonus issue expense and

listing fee - (44,223) - - - - - (44,223)Profit for the financial year - - - - - 3,300,714 - 3,300,714 Dividends (Note 37) - - - - - (2,688,351) - (2,688,351)

61,968,400 6,835,023 19,008,399 386,828 68,735 9,331,419 (386,828) 97,211,976

The above group shareholders' equity statement is to be read in conjunction with the notes the financial statements on pages 37 to 84.



PAGE 33

C O N T I N U E D


PAGE 34


OPERATING ACTIVITIES Operations

Cash generated 33 39,300,653 48,872,305 Dividends paid to - Shareholders of the Company (3,197,569) (2,048,634)- Minority shareholders of subsidiaries (1,137,067) (216,000)Taxation paid (4,072,093) (5,919,580)Taxation refunded 108,428 1,830 Gratuity and retirement benefits paid (144,277) (77,363)Interest paid (1,651,291) (1,640,867)Interest received 391,126 463,252 Dividends (net) received 14,698 27,922

Net cash from operating activities 29,612,608 39,462,865

INVESTING ACTIVITIES Acquisitions of subsidiaries, net of cash acquired 34 - (49,568)Sinking fund - Amounts received 234,164 - - Expenses paid (71,259) - Purchase of investments (167,400) (5,300,186)Acquisition of/subscription to associated company (8,499,998) (125,000)Purchase of additional shares in associated company (62,500) (8,745,727)Purchase of additional shares in subsidiary (60,243) (2,107,320)Purchase of properties, plant, equipment and fittings (15,170,402) (16,845,826)Additions of capital work-in-progress - Interest paid (206,260) - - Other expenditure (26,785,921) (13,786,176)Land held for development - (4,412,522)Proceeds from disposal of investments 21,376 1,420,820 Proceeds from disposal of plant, equipment and fittings 704,500 1,143,584 Disposal of subsidiaries 35 - - Dividends (net) received from associated company 484,552 199,823 Dividends (net) received 45,034 45,173 Interest received 156,548 114,762

Net cash used in investing activities (49,377,809) (48,448,163)

C A S H F L O W S T A T E M E N TGROUP


FINANCING ACTIVITIES Proceeds from issuance of shares to minority

shareholders of subsidiaries 750,000 - Proceeds (net) from issuance of shares

pursuant to ESOS 395,200 1,953,120 Bonus issue and other listing expenses (44,223) (25,879)Proceeds from disposal of own shares - 9,549,487 Purchase of own shares - (2,669,378)Issue of replacement warrants - Proceeds 1,039,678 - - Expenses (970,943) - Loans from unquoted companies 5,000,000 - Proceeds from term loan 20,065,662 - Repayment to associated companies - (87,905)Repayment of term loans (7,664,608) (327,073)Interest paid (2,310,631) (556,890)

Net cash from financing activities 16,260,135 7,835,482

CASH AND CASH EQUIVALENTS 36

Net decrease in the financial year (3,505,066) (1,149,816)

As at beginning of financial year 5,695,896 6,845,712

As at end of financial year 2,190,830 5,695,896

The above group cash flow statement is to be read in conjunction with the notes to the financial statements on pages 37 to 84.



PAGE 35

C O N T I N U E D


PAGE 36


OPERATING ACTIVITIES Operations

Cash generated 33 6,666,982 9,922,015 Dividends paid to shareholders (3,197,569) (2,048,634)Taxation paid (422,099) (821,249)Gratuity and retirement benefits paid (109,483) (61,264)

Net cash from operating activities 2,937,831 6,990,868

INVESTING ACTIVITIES Acquisition of associated company (8,499,998) - Purchase of additional shares in associated company - (8,745,727)Purchase of additional shares in subsidiary (9,440,000) - Purchase of equipment and fittings (14,181) (44,047)Proceeds from disposal of associated company - 50,000 Proceeds from disposal of equipment and fittings 118,000 23,688 Dividends (net) received 4,568,801 1,051,300 Interest received 1,827 1,767,796

Net cash used in investing activities (13,265,551) (5,896,990)

FINANCING ACTIVITIES Proceeds (net) from issuance of shares pursuant to ESOS 395,200 1,953,120

Bonus issue and other listing expenses (44,223) (25,879)Proceeds from disposal of own shares - 9,549,487 Purchase of own shares - (2,669,378)Issue of replacement warrants - Proceeds 1,039,678 - - Expenses (970,943) - Repayment from/(advance to) subsidiaries 16,891,534 (2,418,217)Repayment to subsidiaries (6,624,148) (4,834,451)Repayment to associated companies - (87,905)Proceeds from term loan 2,800,000 - Repayment of term loans (844,769) - Interest paid (2,383,355) (2,245,596)

Net cash from/(used in) financing activities 10,258,974 (778,819)

CASH AND CASH EQUIVALENTS 36

Net (decrease)/increase in the financial year (68,746) 315,059

As at beginning of financial year 392,400 77,341

As at end of financial year 323,654 392,400

The above cash flow statement is to be read in conjunction with the notes to the financial statements on pages 37 to 84.


S T A T E M E N TCASH FLOW

1. GROUPThe Group comprises the Company, Scientex Incorporated Berhad and its subsidiaries disclosed in Note 9 to the financialstatements.

2. GENERALScientex Incorporated Berhad, a public company limited by shares and quoted on the Main Board of the Kuala Lumpur StockExchange, was incorporated in Malaysia. It is resident in Malaysia with its registered office and principal place of businesssituated at Jalan Utas 15/7, 40000 Shah Alam, Selangor Darul Ehsan.

3. PRINCIPAL ACTIVITIESThe principal activities of the Company are investment holdings, letting of properties and provision of management services.

The principal activities of its subsidiaries are disclosed in Note 9.1 to the financial statements.

There have been no significant changes in the nature of the activities of the Company and its subsidiaries during thefinancial year except for those relating to a newly acquired subsidiary and subsidiaries disposed of as disclosed in Note 9.1to the financial statements.

4. PREPARATION OF FINANCIAL STATEMENTSThe financial statements are prepared in accordance with the provisions of the Companies Act, 1965 and applicable approvedaccounting standards, covering a twelve-month financial year from 1 August 2000 to 31 July 2001 to provide informationabout the:

(a) financial position,(b) financial performance,(c) equity, and(d) cash flows

of the Group and of the Company.

There is no change of the financial year.

All the amounts in these statements are expressed in Ringgit Malaysia ("RM").

5. SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies adopted by the Group which are consistent with those of the previous financial year exceptas otherwise stated, are stated in paragraphs 5.1 to 5.22.

5.1 Basis of accountingThe financial statements of the Group are prepared under the historical cost convention modified to include therevaluation of certain non-current assets.

5.2 Basis of consolidationThe group financial statements consolidate the audited financial statements of the Company and all its subsidiariesmade up to the same financial year.

All subsidiaries are consolidated on the acquisition method of accounting.

The results of any subsidiary acquired or disposed of during the financial year are included in the group incomestatement from the date of acquisition or up to the date of disposal.


PAGE 37

F I N A N C I A L S T A T E M E N T S - 3 1 J U L Y 2 0 0 1

NOTES TO THE


PAGE 38

5. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

5.2 Basis of consolidation (Cont’d)All significant intragroup transactions and balances are eliminated on consolidation and the group financialstatements reflect external transactions only.

The difference between the cost of investments and the underlying value of net assets acquired at the date ofacquisition is shown as goodwill arising on consolidation in the group balance sheet.

The gain or loss on disposal of subsidiary is the difference between net disposal proceeds and the Group’s share of itsnet assets together with any unamortised balance of goodwill on acquisition.

5.3 Properties, plant, equipment and fittings and depreciation/amortisationFreehold lands are stated at cost and valuation.

All other assets are stated at cost and at valuation less accumulated depreciation/amortisation.

No depreciation/amortisation is provided for freehold lands.

Depreciation and amortisation are provided on all other assets at rates calculated to write off the book values on thereducing balance method or straight line method as applicable over their expected useful lives.

The principal annual rates used for this purpose are as follows:%

Per annumBuildings 2 -10Factory plant, machinery, tools and equipment 10 - 20Motor vehicles 20Office equipment, furniture and fittings 5 - 25

Long leasehold land is amortised over the terms of the leases which range from 52 to 99 years.

5.4 Intangible assets

5.4.1 Product development expenditureDevelopment expenditure relates to development of products which indicate definite marketability andcommercial viability. Such expenditure is amortised over a period of five (5) years, during which periodbenefits are expected to be derived, commencing in the financial year in which the related sales of theproducts are made.

5.4.2 Goodwill on consolidationGoodwill arising on consolidation is amortised evenly over a period of twenty (20) years based on estimate ofits useful economic life.

5.4.3 Preliminary and pre-operating expensesPreliminary and pre-operating expenses are expensed off in the income statement in the financial year theyare incurred.

This is a change of accounting policy adopted in the previous financial year which deferred such expenses andamortised them over five (5) years.

The change is to comply with MASB 1 on presentation of financial statements.

The effects of the change on the current expenses and profit and writing off of all such expenses incurred inprior financial years in the financial statements are disclosed in Note 41 to the financial statements.

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5.5 Capitalisation of interestInterest on term loan and borrowings specifically used to finance plant and machinery under construction andinstallation is capitalised up to the date of completion and ready for their intended use.

5.6 Investments in subsidiariesSubsidiaries are companies in which the Company holds more than half of their issued share capitals and has controlon the composition of their boards of directors with the power to govern their financial and operating policies so asto obtain benefits from their activities.

Investments in subsidiaries are stated at cost. Provision for diminution in value is made when, in the opinion of thedirectors, there is a permanent diminution in value of the investments.

5.7 Associated companiesAssociated companies are those companies in which the Company holds a long-term investment equity between 20%and 50% and in which the Company has representation on the boards and is in a position to exercise significantinfluence in their financial and operating policies.

Premium on acquisition is amortised evenly over a period of twenty (20) years based on estimate of its useful economiclife.

The Group's share of post-acquisition operating results in the associated companies under equity accounting based onthe latest audited and unaudited financial statements, for those whose financial year ends differ from that of theCompany by more than six (6) months, of the associated companies concerned is included in the consolidated financialstatements.

Investments in associated companies are stated at cost. Provision for diminution in value is made when, in the opinionof the directors, there is a permanent diminution in value of the investments.

5.8 Other investmentsInvestments which are held for long-term are stated at cost. For inventories of quoted securities re-classified to long-term investments, they are transferred at the lower of cost and market value.

Provision for any diminution in value is made when, in the opinion of the directors, there is a permanent diminutionin value of the investments.

5.9 Land held for developmentLand held for development comprise land banks which are being prepared for development and will be reclassified asdevelopment properties when significant development works such as clearing, levelling and earthwork have beenundertaken and which are expected to be completed within the normal cycle of two (2) to three (3) years.

Land held for development is stated at cost.

Cost is determined based on purchase cost of land acquired and invoiced value of preparation works done specificallycharged and other related expenses allocated to development of the land. Accumulation of costs does not cease evenwhen the estimated future revenue realisable is lower than the carrying value.

Provision for all foreseeable losses and diminution in value is made to write them down to realisable value.

5.10 InventoriesInventories and work-in-progress are valued at the lower of cost and net realisable value.


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5.10 Inventories (Cont’d)

Cost incurred in bringing the following inventories to their present location and condition is determined as follows:

Raw materials and consumables - purchase cost on first-in-first-out or weighted average basis, asappropriate.

Work-in-progress and finished products - cost of direct materials, labour and proportion of productionoverheads based on normal activity.

Quoted securities - purchase cost on a weighted average basis.

Freehold land - purchase cost of land acquired and invoiced value of preparationworks done specifically charged and other related expensesallocated to development of the land.

Provision is made for all foreseeable losses, diminution in value, deteriorated, obsolete and slow-moving inventories.

Contract work-in-progress is stated at the lower of:

(a) cost plus accrued profits/minus accrued losses based on the percentage of completion method less progressbillings; and

(b) realisable value.



5.11 Development propertiesDevelopment properties are stated at the lower of:

(a) cost plus accrued profits/minus accrued losses based on the percentage of completion method less progressbillings; and

(b) realisable value.



5.12 ReceivablesKnown bad debts are written off. Specific provision is made for any debt which is considered to be doubtful ofcollection.

In addition, a general provision is made on the remaining debts.

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5.13 Sinking fund for maintenanceThe fund represents amounts received from residents of low cost flats and shops for future cost of maintenance ofinfrastructure and other expenses for the said premises, net of the expenses incurred to-date.

5.14 Gratuity and retirement benefitsIn addition to the mandatory contributions to the Employees Providend Fund, the Group estimates provisions forunfunded gratuity and retirement benefits for union and non-union employees.

Estimated unfunded gratuity and retirement benefits are provided for in the accounts based on monetary scale andlength of service of eligible employees.

5.15 Redeemable bank guarantee bondsThe bonds are stated at their principal face value. The annual interest expense is charged to the income statementsand land held for development account to which the funds from the bonds are employed.

5.16 Minority interestsThis item represents shares in certain subsidiaries owned by minority shareholders together with proportion of capitalreserves and accumulated profits less accumulated losses, which losses are limited where applicable to the amount oftheir paid-up share capital, relating to such shares.

5.17 Revaluation of landed propertiesProperties at valuation are updated once in every five (5) to six (6) years with additional valuations in the interveningyears where market conditions indicate that the carrying values of the revalued properties materially differ from themarket values.

Revaluation surplus arising therefrom will be dealt with in the Property Revaluation Surplus Account. Any revaluationdeficit is set-off against the Property Revaluation Surplus Account up to the extent of surplus credited from theprevious and current revaluation of properties and the excess of the deficit, if any, is charged to the incomestatements.

5.18 RevenueRevenue is recognised in the financial statements as follows:

5.18.1 ManufacturingInvoiced value of net sales of polyvinyl chloride ("PVC") and polyurethane ("PU") leather, sheetings,polypropylene ("PP") foamed sheets, fibre containers and bricks to customers;

5.18.2 Property developmentProportionate sale value of development properties sold attributable to stage of development works performedas certified by external professional architects;

5.18.3 Building and civil worksProportionate sale value of civil and building works to customers based on up-to-date stage of completion ascertified by external professional architects;

5.18.4 Trading in quoted securitiesNet sale value of quoted securities in stock market to the buyers;

5.18.5 TradingInvoiced value of sales to customers;


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5.18 Revenue (Cont’d)

5.18.6 InvestmentsRental and interest income from subsidiaries on accrual basis;Dividend (gross) income from investments in subsidiaries and associated companies as at when theshareholders' right to receive payment is established;Dividend (gross) income from other investments on receipt basis;

5.18.7 OthersInterest income from short-term deposits on maturity and sundry interest on receipt basis; andManagement fees on accrual basis.

5.19 TaxationCurrentIncome tax for the financial year is provided on taxable profit at current statutory rate.

DeferredAccounting profit and taxable profit differ partly due to treatment of certain revenue/expense items in differentperiods for taxation purposes in accordance with the rules established by the taxation authorities.

Provision is made for the tax effects on these timing differences using the liability method at current statutory ratein the deferred taxation account to the extent that, on the basis of present evidence, the liability is likely to becomepayable in the future periods.

If the tax is deferred for such a long time that it is unlikely to become payable in the foreseeable future periods, suchliability is not recognised in the financial statements.

5.20 DividendsDividends on ordinary shares are accounted for in shareholders' equity as an appropriation of accumulated profits inthe financial year in which they are proposed.

5.21 Cash and cash equivalentsCash and cash equivalents comprise cash in hand, bank balances and short-term deposits which are readily convertibleto cash with no risk of changes in value below the amount stated in financial statements, net of bank overdrafts.

5.22 Foreign currency conversionForeign currency transactions are converted into Ringgit Malaysia at rates of exchange ruling at the transaction dates.Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at theapproximate exchange rates ruling at the balance sheet date. Exchange differences are taken into the incomestatements.

Non-monetary assets and liabilities denominated in foreign currencies and which are stated at historical cost aretranslated to Ringgit Malaysia at the approximate exchange rates ruling at the transaction dates.

C O N T I N U E D

6. PROPERTIES, PLANT, EQUIPMENT AND FITTINGS

Group Long leaseholdFreehold land land andand buildings buildings

Valuation/Cost Valuation Cost ValuationRM RM RM

As at beginning of financial year 3,411,523 1,493,168 35,600,000Acquisition of subsidiary - - -Additions - 35,976 -Re-classification 21,940,514 (22,178,034) 14,374,768Revaluation surplus 95,322,963 - 506,232Transfer from capital work-in-progress (Note 8) - - -Transfer from inventories - 2,180,997 -Transfer from prepayments - 18,739,854 -Assets written off - - -Disposals - (260,961) -

As at end of financial year 120,675,000 11,000 50,481,000

Accumulated depreciation/amortisationAs at beginning of financial year 34,115 101,059 3,027,299Acquisition of subsidiary - - -Charge for the financial year 4,400 47,631 570,020Re-classification 4,406 (58,995) 954,927Revaluation surplus (5,488) - (4,552,246)Assets written off - - -Disposals - (88,394) -

As at end of financial year 37,433 1,301 -

Net book valueAs at end of financial year- 31 July 2001 120,637,567 9,699 50,481,000

- 31 July 2000 3,377,408 1,392,109 32,572,701

Depreciation/amortisation charge for the financial year 2000 4,620 50,692 606,293

Factory plant,Long leasehold machinery,

land and tools and Motorbuildings equipment vehicles

Valuation/Cost Cost Cost CostRM RM RM

As at beginning of financial year 10,280,437 99,630,128 3,846,333Acquisition of subsidiary - - -Additions 7,714,502 6,640,853 538,700Re-classification (14,374,768) 69,893 -Revaluation surplus 761,797 - -Transfer from capital work-in-progress (Note 8) - - -Transfer from inventories - - -Transfer from prepayments - - -Assets written off - (79,308) -Disposals - (633,811) (594,762)

As at end of financial year 4,381,968 105,627,755 3,790,271


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6. PROPERTIES, PLANT, EQUIPMENT AND FITTINGS (Cont’d)Factory plant,

Long leasehold machinery,land and tools and Motorbuildings equipment vehicles

Valuation/Cost Cost Cost CostRM RM RM

Accumulated depreciation/amortisationAs at beginning of financial year 691,951 39,873,384 2,900,799Acquisition of subsidiary - - -Charge for the financial year 262,976 8,717,728 519,078Re-classification (729,627) 9,907 -Revaluation surplus (225,300) - -Assets written off - (52,296) -Disposals - (258,938) (498,011)

As at end of financial year - 48,289,785 2,921,866

Net book valueAs at end of financial year- 31 July 2001 4,381,968 57,337,970 868,405

- 31 July 2000 9,588,486 59,756,744 945,534

Depreciation/amortisation charge for the financial year 2000 176,464 6,292,598 536,904

Office equipment,furniture and Total

fittings 2001 2000Valuation/Cost Cost Valuation/Cost

RM RM RM

As at beginning of financial year 4,531,734 158,793,323 129,603,744Acquisition of subsidiary - - 1,168,340Additions 240,371 15,170,402 16,845,826Re-classification 237,196 69,569 -Revaluation surplus - 96,590,992 -Transfer from capital work-in-progress (Note 8) - - 12,549,734Transfer from inventories - 2,180,997 -Transfer from prepayments - 18,739,854 274,420Assets written off (22,715) (102,023) (184,627)Disposals (3,830) (1,493,364) (1,464,114)


Accumulated depreciation/amortisationAs at beginning of financial year 2,645,367 49,273,974 41,593,960Acquisition of subsidiary - - 260,476Charge for the financial year 361,210 10,483,043 8,046,975Re-classification 44,682 - -Revaluation surplus - (4,557,734) -Assets written off (11,962) (64,258) (134,376)Disposals (948) (846,291) (493,061)


C O N T I N U E D

6. PROPERTIES, PLANT, EQUIPMENT AND FITTINGS (Cont’d)Office equipment,

furniture and Totalfittings 2001 2000

Valuation/Cost Cost Valuation/CostRM RM RM

Net book valueAs at end of financial year- 31 July 2001 1,944,407 235,661,016

- 31 July 2000 1,886,367 109,519,349

Depreciation/ amortisation charge for the financial year 2000 379,404 8,046,975

The depreciation/amortisation is charged to: 2001 2000RM RM

Income statements 10,483,043 7,942,743Land held for development - 104,232

10,483,043 8,046,975

Company Office equipment,

Long leasehold land furnitureand buildings and fittings

Valuation/Cost Valuation Cost CostRM RM RM

As at beginning of financial year 21,000,000 3,542,348 605,019Additions - - 14,181Re-classification 3,542,348 (3,542,348) -Revaluation surplus 1,938,652 - -Inter-company transfer - - -Disposals - - -

As at end of financial year 26,481,000 - 619,200

Accumulated depreciation/amortisationAs at beginning of financial year 1,788,155 479,102 216,719Charge for the financial year 321,358 129,371 66,654Re-classification 608,473 (608,473) -Revaluation surplus (2,717,986) - -Inter-company transfer - - -Disposals - - -

As at end of financial year - - 283,373

Net book valueAs at end of financial year- 31 July 2001 26,481,000 - 335,827

- 31 July 2000 19,211,845 3,063,246 388,300

Depreciation/amortisation charge for the financial year 2000 357,631 129,371 71,931


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6. PROPERTIES, PLANT, EQUIPMENT AND FITTINGS (Cont’d)Motor Total

vehicles 2001 2000Valuation/Cost Cost Valuation/Cost

RM RM RM

As at beginning of financial year 925,231 26,072,598 26,050,878Additions - 14,181 44,047Re-classification - - -Revaluation surplus - 1,938,652 -Inter-company transfer - - (1,500)Disposals (105,389) (105,389) (20,827)

As at end of financial year 819,842 27,920,042 26,072,598

Accumulated depreciation/amortisationAs at beginning of financial year 742,182 3,226,158 2,495,486Charge for the financial year 178,720 696,103 747,451Re-classification - - -Revaluation surplus - (2,717,986) -Inter-company transfer - - (812)Disposals (101,060) (101,060) (15,967)

As at end of financial year 819,842 1,103,215 3,226,158

Net book valueAs at end of financial year- 31 July 2001 - 26,816,827

- 31 July 2000 183,049 22,846,440

Depreciation/ amortisation charge for thefinancial year 2000 188,518 747,451

TitlesThree (2000: Two) of the titles for long leasehold land of three (2000: two) subsidiaries have not yet been issued by therelevant authorities.

LeasesThe long leasehold for land mentioned refers to leases with unexpired periods of fifty (50) years or more.

Assets under legal charges to secure term loans, bankoverdrafts and other banking facilities (Note 19)

Group2001 2000

RM RMFreehold landLot Nos. 6470, 6471 & 6472, Mukim of Ampangan, District of Seremban, Negeri Sembilan

- Stated at valuation 225,000 145,000

C O N T I N U E D

6. PROPERTIES, PLANT, EQUIPMENT AND FITTINGS (Cont’d)

Property revaluation SurplusGroup Company

RM RMAdopted by the directors of the Company and subsidiaries based on professional revaluation of freehold and long leasehold lands and buildings on the basis of open market value conducted by independent valuers on 1 March 1995. 23,411,453 15,139,063

Amount utilised for bonus issue by subsidiaries (1,634,766) -Amount attributable from associated company 1,374,104 -Pre-acquisition property revaluation reserves (713,718) -Amounts attributable to minority interests (60,556) -

22,376,517 15,139,063and revaluation of the landed properties updated on 28 July 2001 by independent valuer, Bock Check Hai, Registered Valuer, of Raine & Horne International Zaki & Partners Sdn. Bhd. on the basis of open market value 101,148,726 4,656,638

Deferred taxation (Note 24) (6,524,356) (1,303,859)Amount attributable from associated company 203,472 -Amounts attributable to minority interests (13,845,678) -

Balance as per property revaluation surplus account (Note 27) 103,358,681 18,491,842

Notwithstanding the revaluation stated above, the Group has not changed its policy of stating its non-current assets at costto that of revaluation except for its landed properties, on a regular basis.

The freehold lands, long leasehold lands and factory buildings are stated at their 2001 revaluation less accumulatedamortisation/depreciation.

Long leasehold lands, factory buildings and apartmentsThe breakdown of the long leasehold lands, factory buildings and apartments at net book value is as follows:

Group2001 2000

RM RMLong leaseholds land and factory buildings for 60 to 99 years expiring on- 25 June 2052- 1 January 2075- 10 February 2076

Stated at valuation 2,900,000 3,452,371Subsequent additions stated at cost - 358,515

Long leasehold land and factory building for 99 years expiring on- 20 September 2084

Stated at valuation 8,100,000 7,929,318Subsequent additions stated at cost - 26,137

- 27 July 2097Stated at valuation 26,000,000 19,211,845Subsequent additions stated at cost - 2,759,451


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6. PROPERTIES, PLANT, EQUIPMENT AND FITTINGS (Cont’d)

Property revaluation Group2001 2000

RM RM- 27 January 2079

Stated at valuation 5,300,000 1,979,167Subsequent additions stated at cost - 1,751,667

- Pursuant to Sale and Purchase AgreementStated at cost 481,000 303,795

- Titles of the lands not yet been issued by the relevant authorityStated at cost 12,081,968 4,388,921

54,862,968 42,161,187

If the Group and the Company have continued to show the revalued properties at cost, the net carrying amount of theseassets will be as follows:

Long leaseholdFreehold lands lands and Total

Group and buildings buildings 2001 2000RM RM RM RM

Cost 27,910,825 23,659,339 51,570,164 14,879,151Accumulated amortisation (45,119) (5,893,743) (5,938,862) (1,707,653)

Net book value 27,865,706 17,765,596 45,631,302 13,171,498

Company

Cost - 8,111,222 8,111,222 4,568,874Accumulated amortisation - (1,902,268) (1,902,268) (1,213,241)

Net book value - 6,208,954 6,208,954 3,355,633

CommitmentsGroup

2001 2000RM RM

Authorised and contracted capital expenditure notprovided for in the financial statementsLong leasehold lands 11,895,147 11,895,147Buildings 123,200 215,600Plant and machinery 2,171,700 21,576,400

14,190,047 33,687,147

C O N T I N U E D

7. INTANGIBLE ASSETS

7.1 Product development expenditure and goodwill on consolidation

Group Product Goodwilldevelopment on Totalexpenditure consolidation 2001 2000

Cost RM RM RM RM

As at beginning of financial year 1,042,821 4,495,029 5,537,850 5,790,291Acquisitions of subsidiaries - - - 32,983Negative goodwill arising from acquisitions of

additional shares in existing subsidiaries - (131,806) (131,806) (285,424)

As at end of financial year 1,042,821 4,363,223 5,406,044 5,537,850

Accumulated amortisationAs at beginning of financial year 943,907 1,393,457 2,337,364 1,895,344Charge for the financial year 98,914 225,260 324,174 442,020


Net book valueAs at end of financial year- 31 July 2001 - 2,744,506 2,744,506

- 31 July 2000 98,914 3,101,572 3,200,486

Amortisation charge for the financial year 2000 208,565 233,455 442,020

7.2 Preliminary and pre-operating expenses

Group Preliminary Pre-operating Totalexpenses expenses 2001 2000

Cost RM RM RM RM

As at end of financial year - - - 1,064,452Written off on change of accounting policy

(Note 5.4.3) - - - (1,064,452)

As at end of financial year - - - -

Accumulated amortisationAs at end of financial year - - - 771,710Written off on change of accounting policy

(Note 5.4.3) - - - (771,710)

As at end of financial year - - - -

Net book valueAs at end of financial year- 31 July - - - -


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8. CAPITAL WORK-IN-PROGRESS

Group Plant and machinery2001 2000

Cost RM RM

As at beginning of financial year 2,131,090 895,235Additions 26,992,181 13,786,176Transfer to plant and machinery (Note 6) - (12,549,734)Transfer to upkeep of plant and machinery - (587)


Capital work-in-progress included statutory disclosureitem below incurred during the financial year:

Interest on term loan 206,260 -

9. SUBSIDIARIES

9.1 General information and investments

Equity interest held

Name 2001 2000 Principal activities% %

Subsidiaries of the Company

Scientex Polymer Sdn. Bhd. 84.21 80.00 Manufacturing of polyvinyl chloride ("PVC") andpolyurethane ("PU") leather sheeting and investmentholdings

Bestex Corporation Sdn. Bhd. 100.00 100.00 Investment holdings

Scientex Trading Sdn. Bhd. 98.89 98.89 Trading in building materials and textile products

Scientex Quatari Sdn. Bhd. 85.05 85.05 Property investment and investment holdings

Texland Sdn. Berhad 75.66 75.66 Property investment and development

Scientex Maju Sdn. Bhd. 100.00 100.00 Investment holdings

Scientex Air Keroh Holdings 100.00 100.00 Investment holdingsSdn. Bhd.

Scientex Enterprise Sdn. Bhd. 100.00 100.00 Investment holding and dealing in quoted securities

Scientex Management 100.00 100.00 Rendering of management servicesSdn. Bhd.

Scientex Manufacturing Sdn. Bhd. 100.00 100.00 Dormant- Rendering of contract services

Scientex Land Sdn. Bhd. 57.14 80.00 Letting of property

C O N T I N U E D

9. SUBSIDIARIES (Cont’d)

9.1 General information and investments (Cont’d)



Subsidiaries of the Company

Scientex Quatari Holdings Sdn. Bhd. 100.00 100.00 Investment holdings

Scientex Quatari 100.00 100.00 Investment holdingsDevelopment Sdn. Bhd.

Scientex Import-Export Sdn. Bhd. 100.00 100.00 Dormant- General trading

Subsidiaries of Scientex PolymerSdn. Bhd.

Scientex Permanja Sdn. Bhd. 100.00 100.00 Trading in PVC and PU products

Scientex Marketing Sdn. Bhd. 100.00 100.00 Trading in PVC and PU products

Scientex Wonpoong (M) Sdn. Bhd. 55.00 55.00 Manufacturing and trading of PVC and PU castingleather

Scientex Auto Industries Sdn. Bhd. 80.00 - Manufacturing of PVC, thermoplastic olefins ("TPO")and polypropylene ("PP") foamed sheets forautomobiles

Subsidiaries of Bestex CorporationSdn. Bhd.

Scientex Resources Sdn. Bhd. 100.00 100.00 Sales and marketing of packaging related materials

Scientex Auto Industries Sdn. Bhd. - 80.00 Manufacturing of PVC, thermoplastic olefins ("TPO")and polypropylene ("PP") foamed sheets forautomobiles

Scientex Packaging Film Sdn. Bhd. 90.91 90.91 Manufacturing of stretch film

Uniontex Containers Sdn. Bhd. 100.00 100.00 Investment holdings

Bestex Packaging Sdn. Bhd. 100.00 100.00 Manufacturing of paper core and related products

Subsidiary of Uniontex ContainersSdn. Bhd.

Scientex Containers Sdn. Bhd. 94.85 94.85 Manufacturing of fibre containers and printing ofcorrugated carton boxes

Subsidiaries of Scientex TradingSdn. Bhd.

Scientex Fabric Industries Sdn. Bhd. - 100.00 Investment holdings

KC Contract Sdn. Bhd. 65.00 65.00 Property construction


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C O N T I N U E D





Subsidiaries of Scientex QuatariSdn. Bhd.

Scientex Development 100.00 100.00 Investment and dealing in quoted securities and (Pasir Gudang) Sdn. Bhd. property and property development

Scientex Property Sdn. Bhd. 100.00 100.00 Investment holdings

Scientex Park (M) Sdn. Bhd. 60.00 60.00 Property investment and development

Scientex Bricks Sdn. Bhd. 77.26 77.26 Dormant- Manufacturing and trading of bricks

Subsidiaries of Texland Sdn. BerhadCeria Gigih Sdn. Bhd. 100.00 100.00 Pre-operating

- Property investment

Gemilang Subur Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Kejora Anggun Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Saluran Mesra Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Saluran Adiwarna Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Sejati Hati Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Suci Salju Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Unique Entrepreneur Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Scientex Auto Parts Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Scientex Duplex Board Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Scientex Information 100.00 100.00 Pre-operatingTechnology Sdn. Bhd. - Property investment


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C O N T I N U E D





Subsidiaries of Texland Sdn. BerhadScientex Paper Mills Sdn. Bhd. 100.00 100.00 Pre-operating

- Property investment

Scientex Plastic Pallets Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Texland Development Sdn. Bhd. 100.00 100.00 Property development and general trading

Terus Kasturi Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Target Review Sdn. Bhd. 100.00 100.00 Pre-operating- Property investment

Scientex Fabric Industries Sdn. Bhd. 99.80 - Investment holdings

Subsidiaries of Scientex AidirosSdn. Bhd.

Tri- Ivory Assets Sdn. Bhd. 100.00 100.00 General trading

Duta Ganda Alliance Sdn. Bhd. 100.00 100.00 General trading

Subsidiary of Scientex MajuSdn. Bhd.

Scientex Aidiros Sdn. Bhd. 63.00 63.00 Property developer

Subsidiary of Scientex AirKeroh Holdings Sdn. Bhd.

Scientex Air Keroh Sdn. Bhd. 100.00 100.00 Property investment and development

All the subsidiaries were incorporated in Malaysia.

During the financial year, Scientex Land Sdn. Bhd. has issued 500,000 ordinary shares of RM1.00 each to an associatedcompany, Woventex Corporation Berhad, at an issue price of RM1.50 per share resulting in a reduction of the equityinterest held by the Company from 80.00% to 57.14%.

A subsidiary of the Company, Scientex Quatari Sdn. Bhd., acquired an additional 60,000 ordinary shares of RM1.00 inScientex Aidiros Sdn. Bhd. which has changed the effective equity interest held by the Company from 80.01% to 80.29%.

The Company has acquired an additional 8,000,000 ordinary shares of RM1.00 in Scientex Polymer Sdn. Bhd. ("SPSB") atan subscription price of RM1.18 per share. The equity interest held by the Company in SPSB has been increased by 4.21%to 84.21%.

During the financial year, 2 and 4,480,000 ordinary shares of RM1.00 each in Scientex Fabric Industries Sdn. Bhd. andScientex Auto Industries Sdn Bhd. have been transferred from Scientex Trading Sdn. Bhd. to Texland Sdn. Bhd. andBestex Corporation Sdn. Bhd. to Scientex Polymer Sdn. Bhd. at the price of RM1.00 and RM2.06 per share respectively.


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9.2 InvestmentsCompany

2001 2000Cost RM RMUnquoted sharesAs at beginning of financial year 44,259,918 44,256,918Additions 9,440,000 -Re-classified from other investments (Note 11) - 2,000Transfer from amounts owing by subsidiaries - 1,000


Provision for diminution in valueAs at beginning of financial year 199,999 -Charge for the financial year - 199,999

As at end of financial year 199,999 199,999

Net book value 53,499,919 44,059,919

9.3 Adverse financial positionDeficit in Deficit in

working capital shareholders' equity

As at end of financial year 31 July 2001 2000 2001 2000RM RM RM RM

Subsidiaries of the CompanyScientex Enterprise Sdn. Bhd. (11,696,809) (9,860,734) (7,179,320) (6,491,885)Scientex Trading Sdn. Bhd. (1,957,970) (2,251,025) (697,516) (690,215)Scientex Management Sdn. Bhd. (77,044) (84,153) (69,971) (75,516)Scientex Quatari Holdings Sdn. Bhd. - - (10,985) (9,015)Scientex Air Keroh Holdings Sdn. Bhd. (163,634) (163,182) (6,816) (6,364)Scientex Maju Sdn. Bhd. (11,346,119) (11,345,565) (6,119) (5,565)

Subsidiary of Air Keroh Holdings Sdn. Bhd.Scientex Air Keroh Sdn. Bhd. (5,776,069) (5,632,467) (9,489) (8,937)

Subsidiary of Scientex Polymer Sdn. Bhd.Scientex Wonpoong (M) Sdn. Bhd. (1,609,216) (570,995) (317,619) -

Subsidiaries of Texland Sdn. Bhd.Scientex Fabric Industries Sdn. Bhd. (697,866) (693,503) (15,666) (7,003)Scientex Auto Parts Sdn. Bhd. (435,308) (433,344) (14,108) (12,144)Scientex Paper Mills Sdn. Bhd. (792,553) (788,924) (11,083) (7,454)Scientex Duplex Board Sdn. Bhd. (670,370) (667,432) (9,770) (6,832)Scientex Plastic Pallets Sdn. Bhd. (722,865) (719,418) (9,165) (5,718)Sejati Hati Sdn. Bhd. (825,722) (820,969) (7,622) (2,869)Scientex Information Technology Sdn. Bhd. (814,446) (811,220) (6,246) (3,020)Gemilang Subur Sdn. Bhd. (459,713) (457,264) (5,213) (2,764)

C O N T I N U E D


9.3 Adverse financial position (Cont’d)Deficit in Deficit in

working capital shareholders' equityAs at end of financial year 31 July

2001 2000 2001 2000RM RM RM RM

Subsidiaries of Texland Sdn. Bhd. (Cont’d)Saluran Mesra Sdn. Bhd. (459,397) (457,264) (4,897) (2,764)Suci Salju Sdn. Bhd. (459,391) (457,370) (4,891) (2,870)Unique Entrepreneur Sdn. Bhd. (459,389) (457,370) (4,889) (2,870)Ceria Gigih Sdn. Bhd. (408,088) (405,964) (4,888) (2,764)Target Review Sdn. Bhd. (459,388) (457,370) (4,888) (2,870)Terus Kasturi Sdn. Bhd. (408,076) (406,069) (4,876) (2,869)Kejora Anggun Sdn. Bhd. (407,927) (405,964) (4,727) (2,764)Saluran Aidiwarna Sdn. Bhd. (407,930) (405,964) (4,730) (2,764)

The audit reports for the subsidiaries listed above drew attention to their adverse financial position for the financialyear ended 31 July 2001:

As the financial statements were prepared on the basis that these subsidiaries were going concerns, thevalidity of the basis was dependent on the continued financial support from the Company and the subsidiariesattaining/returning to profitable operations to meet their liabilities as and when they fell due.

9.4 Inter-company outstanding accounts/transactions

9.4.1 Outstanding accountsThe amounts owing by/(to) subsidiaries below are unsecured, with no fixed repayment terms and interest freeexcept as indicated below:

Company2001 2000

RM RMOwing by subsidiaries

Trade debts 18,324 9,742Loans and advances- without interest charge 56,277,232 62,682,432- with interest charge at 10.00%

(2000: 10.00%) per annum 1,644,403 12,130,737

57,939,959 74,822,911

Owing to subsidiariesLoans and advances- without interest charge (12,997,825) (12,741,216)- with interest charge - nil

(2000: 5.50% - 8.30% per annum) - (6,880,757)

(12,997,825) (19,621,973)

Net 44,942,134 55,200,938


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9.4.2 TransactionsRevenue/(expense) transactions with subsidiaries:

Company2001 2000

RM RM

Sales 71,109 25,846Management fees 288,000 288,000Rental income 2,600,000 2,760,000Interest income 406,118 1,764,250Dividends (gross) 5,245,000 1,200,000Corporate finance charges 271,952 342,298Rental for car - (5,500)Interest charge (210,736) (598,207)

Except for the dividend income as declared by the subsidiaries, the above transactions were, in the opinion ofthe directors, made in the ordinary course of business at commercial rates and terms agreed between theparties concerned.

10. ASSOCIATED COMPANIES

Equity Name interest held Principal activities

2001 2000% %

Associated companies of the CompanyWoventex Corporation Berhad + 40.38 40.38 Investment holdings

Rigidtex Sdn. Bhd. ("RSB") 24.29 - Manufacturing of rigid PVC film and sheets

Associated company ofBestex Corporation Sdn. Bhd.

Yamatex (Malaysia) Sdn. Bhd. 30.00 30.00 Manufacturing and trading in tufted carpet mats forautomobiles

Associated company ofTexland Sdn. Berhad

Harikaya Sdn. Bhd. 48.80 48.80 General construction work

Associated companies ofScientex Quatari Sdn. Bhd.

Scientex Metro Holdings Sdn. Bhd. 49.33 49.33 Investment holdings("SMHSB")

Sung Dynasty Restaurant Sdn. Bhd.("SDRSB") 28.09 25.00 Restaurant

All the associated companies were incorporated in Malaysia.

All the financial statements of the associated companies used for equity accounting are audited except for the unauditedfinancial statements of SMHSB, SDRSB and RSB, whose financial year ends differ from that of the Company by more thansix months.

C O N T I N U E D

10. ASSOCIATED COMPANIES (Cont’d)

+ The shares in this associated company are quoted on the Second Board of the Kuala Lumpur Stock Exchange.

During the financial year, 8,499,998 (2000: Nil) ordinary shares of RM1.00 each in RSB (2000: Nil) representing 24.29%(2000: Nil) equity interest were acquired by the Company at a total consideration of RM8,499,998 (2000: Nil).

During the financial year, 62,500 (2000: 125,000) ordinary shares of RM1.00 each of SDRSB representing 3.10% (2000:25.00%) equity interest were subscribed by a subsidiary of the Company at a total consideration of RM62,500 (2000:RM125,000).

Investments and interests Group Company2001 2000 2001 2000

Cost RM RM RM RMUnquoted sharesAs at beginning of financial year 2,543,000 2,468,000 - 50,000Additions 8,562,498 125,000 8,499,998 -Re-classified to subsidiary - (50,000) - -Inter-company transfer - - - (50,000)

As at end of financial year 11,105,498 2,543,000 8,499,998 -

Shares quoted in MalaysiaAs at beginning of financial year 14,883,998 5,536,485 14,282,212 5,536,485Additions - 8,745,727 - 8,745,727Re-classified from other investments (Note 11) - 601,786 - -


25,989,496 17,426,998 22,782,210 14,282,212

Share of post-acquisition capitalreserves and profits less losses 15,031,761 13,542,164

41,021,257 30,969,162

Share of- Net tangible assets 40,535,895 30,674,589- Intangible assets 114,839 242,498

40,650,734 30,917,087Premium on acquisition, less amortisation of RM16,026

(2000: RM3,444) 370,523 52,075

41,021,257 30,969,162

Market valueShares quoted in Malaysia 14,859,601 25,035,197 14,445,601 24,337,697

The share of post-acquisition profits less losses is stated after deducting dividends (net) received of RM484,552 (2000:RM199,823).

A subsidiary of an associated company, Woventex Corporation Berhad, held 1,987,000 (2000: 1,987,000) ordinary shares and337,000 (2000: 337,000) warrants in the issued share capital and warrants of the Company respectively as at 31 July 2001.

7,976,079 (2000: Nil) of the shares in Woventex Corporation Berhad costing RM7,254,995 (2000: Nil) were under pledge forterm loan (Note 19).


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11. OTHER INVESTMENTS

Shares and warrants quoted in Malaysia Group Company2001 2000 2001 2000

RM RM RM RMStated at costAs at beginning of financial year 5,079,591 1,745,204 2,372 2,372Additions 50,400 5,300,186 - -Disposals (21,041) (1,364,013) - -Re-classified to investments in

associated companies (Note 10) - (601,786) - -

As at end of financial year 5,108,950 5,079,591 2,372 2,372

Stated at market value on date of transferRe-classified from inventories

and as at end of financial year 1,581,410 - - -


Unquoted sharesStated at costAs at beginning of financial year 2,271,546 2,272,546 342,728 344,728Additions 117,000 - - -Re-classified to club memberships (229,728) - (144,728) -Transfer to minority interests (Note 25) - (1,000) - -Re-classified to investments in subsidiaries (Note 9) - - - (2,000)


Provision for diminution in valueCharge for the financial year and

as at end of financial year (1,171,607) - - -

987,211 2,271,546 198,000 342,728

Transferable club membershipsStated at costRe-classified from other unquoted investments and

as at end of financial year 229,728 - 144,728 -

7,907,299 7,351,137 345,100 345,100

Market valueShares and warrants quoted in Malaysia 3,467,500 2,704,140 1,892 3,063

C O N T I N U E D

12. LAND HELD FOR DEVELOPMENTGroup

2001 2000Cost RM RMLands- Freehold - 3,826,652- Long leasehold - 15,014,773

- 18,841,425Development expenditure - 31,170,749

- 50,012,174

MovementsAs at beginning of financial year 50,012,174 43,018,933Additions - 4,516,754Re-classified from development properties - 3,627,829Transfer to development properties (50,012,174) (1,151,342)

As at end of financial year - 50,012,174

The development expenditure included the statutorydisclosure items below incurred during the financial year:

Depreciation of equipment, furniture and fittings - 104,232Directors' emoluments- Directors of the Company - 223,048- Director of subsidiary - 104,088Project management fee - 219,996Staff costs - 748,502Rental - 21,388

Interest expense on:- Bond - 140,349- Bank overdraft - 3,350- Term loan - 236,350- Others - 330,070

13. INVENTORIESGroup

2001 2000RM RM

Held for- Manufacture and productionStated at costRaw materials 9,795,068 13,435,469Work-in-progress 1,660,000 2,244,824

11,455,068 15,680,293


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13. INVENTORIES (Cont’d)Group

2001 2000RM RM

- MaintenanceStated at costSpare parts 251,817 199,655

- ConstructionStated at costWork-in-progress 12,837 -

- SaleStated at costCompleted shop office 3,466,291 3,466,291Completed houses 955,416 1,225,469Finished products 6,830,510 9,322,285Freehold land 23,312 2,555,019

Stated at net realisable valueSecurities quoted in Malaysia - 2,685,803Finished products 4,189 38,893

11,279,718 19,293,760

Total 22,999,440 35,173,708

14. DEVELOPMENT PROPERTIESGroup

2001 2000RM RM

14.1 Properties for development

CostFreehold land 3,395,771 -Long leasehold land 15,014,773 -

18,410,544 -Development expenditure 32,894,581 -

51,305,125 -

MovementsAs at beginning of financial year - -Additions 4,532,148 -Re-classified from land held for development 50,012,174 -Transfer to properties under development (3,239,197) -

As at end of financial year 51,305,125 -

C O N T I N U E D

14. DEVELOPMENT PROPERTIES (Cont’d)Group

2001 2000RM RM

14.2 Properties under development

Cost- Freehold land 3,212,610 12,234,839- Long leasehold land 8,880,616 8,880,616- Development expenditure 89,561,821 126,783,476

101,655,047 147,898,931Proportion of estimated profit accrued using the

percentage of completion method 19,155,168 44,357,271

120,810,215 192,256,202Development revenue (79,397,064) (153,474,225)

41,413,151 38,781,977

92,718,276 38,781,977

The properties for development of a subsidiary amounting to RM16,000,000 (2000: RM16,000,000) is under legalcharges to bankers (Note 19) for bank overdraft and term loan facilities.

One of the titles for long leasehold lands which is under legal charge to a banker (Note 19) has not yet been transferredto the name of the Company's subsidiary.

15. TRADE RECEIVABLESGroup

2001 2000RM RM

Gross receivables 42,860,964 51,259,554

Accumulated doubtful debtsAs at beginning of financial year 3,050,864 3,174,358Charge for the financial year 686,000 966,956Written off from provision made previously - (1,090,450)Written back (23,695) -


Net receivables 39,147,795 48,208,690

The gross receivables is stated after (charging)/crediting of:Bad debts written off (135,088) (31,443)Bad debts recovered 8,165 -


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16. RELATED PARTY ACCOUNTS/TRANSACTIONS

16.1 General informationThe related parties and their relationships with the Company are as follows:

Name RelationshipWoventex Corporation Berhad ("WCB") Associated companyHarikaya Sdn. Bhd. Associated companySung Dynasty Restaurant Sdn. Bhd. Associated companyYamatex (Malaysia) Sdn. Bhd. Associated companyRigidtex Sdn. Bhd. Associated companyPan Pacific Straptex Sdn. Bhd. Subsidiary of an associated company, WCBUtas Pereka Sdn. Bhd. Subsidiary of an associated company, WCBWoventex FIBC Sdn. Bhd. Subsidiary of an associated company, WCBWoventex Holding Sdn. Bhd. Subsidiary of an associated company, WCBWoventex Properties Sdn. Bhd. Subsidiary of an associated company, WCBWoventex Sdn. Bhd. Subsidiary of an associated company, WCBWoventex Trading Sdn. Bhd. Subsidiary of an associated company, WCBEsteem Valley Sdn. Bhd. Subsidiary of an associated company, WCB

Malacca Securities Sdn. Bhd. Companies in which three directors of the Scientex Holdings Sdn. Bhd. Company, Lim Teck Meng, Lim Peng Cheong, Lim Peng Jin

and a connected person of these directors havesubstantial equity interests

Lim Teck Meng Sdn. Bhd. Company in which a director of the Company, Lim TeckMeng has substantial interest

K. S. Lim * Legal firm in which a former director, Lim Kang San is apartner

Tejana Trading Corporation Sdn. Bhd. Director of a subsidiary, Daisuke Sugiura is a director

These companies/firm mentioned were incorporated/registered in Malaysia.

* Lim Kang San resigned as a director of the Company on 24 November 2000.

16.2 Transactions/accounts outstanding

16.2.1 Transactions

Revenue/(expense) transactions with these companies and firm:Group

2001 2000RM RM

Sales- Woventex Sdn. Bhd. 54,960 30,722- Pan Pacific Straptex Sdn. Bhd. 802,349 207,787- Woventex FIBC Sdn. Bhd. 2,931 1,617- Yamatex (M) Sdn. Bhd. 178,930 344,585

Sales commission- Woventex Sdn. Bhd. 10,003 8,328- Pan Pacific Straptex Sdn. Bhd. 186,301 78,096- Woventex FIBC Sdn. Bhd. 25,649 9,596- Rigidtex Sdn. Bhd. - 1,246,134

C O N T I N U E D

16. RELATED PARTY ACCOUNTS/TRANSACTIONS (Cont’d)

16.2.1 Transactions (Cont’d)Group

2001 2000RM RM

Rental income- Sung Dynasty Restaurant Sdn. Bhd. 60,000 40,000- Woventex FIBC Sdn. Bhd. 374,400 305,280

Management fee- Harikaya Sdn. Bhd. 22,000 -

Progress billings- Malacca Securities Sdn. Bhd. 123,800 1,114,200- Harikaya Sdn. Bhd. 63,540 571,860- Scientex Holdings Sdn. Bhd. - 1,017,000

Cancellation of Sale and Purchase Agreement for property- Scientex Holdings Sdn. Bhd. (1,130,000) -

Interest income- Woventex Sdn. Bhd. 1,575 -

Directors' emoluments (included under Note 31)- Lim Teck Meng Sdn. Bhd. (252,000) (216,000)

Development expenditure- Utas Pereka Sdn. Bhd. (215,700) (4,060,600)

Purchase of raw materials- Pan Pacific Straptex Sdn. Bhd. (10,755) (3,704)- Tejana Trading Corporation Sdn. Bhd. - (83,080)- Woventex Trading Sdn. Bhd. - (28,905)

Brokerage commission- Malacca Securities Sdn. Bhd. (216) (223,701)

Legal fee (Note 31)- K. S. Lim - (6,192)

Company2001 2000

RM RMDividend (gross) income- Woventex Corporation Berhad 484,552 232,532

Directors' emoluments (included under Note 31)- Lim Teck Meng Sdn. Bhd. (252,000) (216,000)

Except for the dividend income which was approved by the associated company, the above transactions were,in the opinion of the directors, made in the ordinary course of business at commercial rates and termsagreed between the parties concerned.


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16. RELATED PARTY ACCOUNTS/TRANSACTIONS (Cont’d)

16.2.2 Outstanding accountsGroup

2001 2000RM RM

Included under:

Trade receivables- Malacca Securities Sdn. Bhd. - 990,400- Scientex Holdings Sdn. Bhd. - 904,000- Pan Pacific Straptex Sdn. Bhd. 267,892 199,532- Woventex Sdn. Bhd. 16,170 23,228- Woventex FIBC Sdn. Bhd. 10,880 -- Rigidtex Sdn. Bhd. 39,446 6,128- Yamatex (M) Sdn. Bhd. - 40,145

Other receivables- Harikaya Sdn. Bhd. 19,088 -- Woventex Trading Sdn. Bhd. - 7,909- Pan Pacific Straptex Sdn. Bhd. - 39- Esteem Valley Sdn. Bhd. - 93- Woventex Holdings Sdn. Bhd. - 4,916- Woventex FIBC Sdn. Bhd. - 79

Trade payables- Utas Pereka Sdn. Bhd. (2,954,329) (3,772,063)- Woventex Sdn. Bhd. (4,867) -- Woventex Properties Sdn. Bhd. - (4,890)- Woventex Trading Sdn. Bhd. (3,723) -- Pan Pacific Straptex Sdn. Bhd. (620) -- Woventex FIBC Sdn. Bhd. (6) -- Rigidtex Sdn. Bhd. (3,097,930) (2,407,404)- Tejana Trading Corporation Sdn. Bhd. (224,981) (83,080)

Other payables- Scientex Holdings Sdn. Bhd. (65,000) -- Malacca Securities Sdn. Bhd. - (26,680)- Utas Pereka Sdn. Bhd. - (11,704)

The amounts owing are unsecured, interest free and with no fixed repayment terms.

17. OTHER RECEIVABLES, UTILITY DEPOSITS AND PREPAYMENTSGroup Company

2001 2000 2001 2000RM RM RM RM

Gross receivables 6,825,968 26,941,782 140,960 2,104,495

Accumulated doubtful debtsCharge for the financial year and as at end of financial year (23,695) - - -

Net receivables 6,802,273 26,941,782 140,960 2,104,495

C O N T I N U E D

17. OTHER RECEIVABLES, UTILITY DEPOSITS AND PREPAYMENTS (Cont’d)

Group Company2001 2000 2001 2000

RM RM RM RM

Included under the other receivables and prepayments are:

- Loans to staff earning interest incomeat 4% (2000: 4%) per annum 58,888 115,645 - -

- Statutory disclosure expense itemsincurred during the financial year

Bond interest - 621,070 - -Directors' emoluments- Directors of the Company 148,250 71,665 - -- Director of a subsidiary - 4,044 - -Staff costs 334,515 96,622 - -Hire of equipment and fittings - 4,090 - -Rental - 1,157 - -

18. SHORT-TERM DEPOSITS WITH LICENSED BANKSInterest income

2001 2000 2001 2000Group RM RM RM RMPlaced on short-term basis with licensed banks as and

when surplus funds are availableBalance as at beginning of financial year 13,465 11,676 1,178,073 4,867,177Cumulative amounts placed 143,083 103,086 222,645,665 142,704,719Cumulative amounts withdrawn (223,393,738) (146,393,823)

Balance as at end of financial year 430,000 1,178,073

156,548 114,762

% %

Rate of interest income per annum 2.00 - 6.10 2.00 - 5.10

The short-term deposits as at end of financial year 2001 included an amount of RM130,000 (2000: Nil) representing theamounts received from low cost flat residents and shops for sinking fund. The corresponding segregated liabilities are statedas sinking fund in Note 20 to the financial statements.

Interest income2001 2000 2001 2000

Company RM RM RM RMPlaced on short-term basis with licensed banks as and

when surplus funds are availableBalance as at beginning of financial year 22 - 200,000 -Cumulative amounts placed 1,805 3,546 5,900,000 19,450,000Cumulative amounts withdrawn (6,100,000) (19,250,000)

Balance as at end of financial year - 200,000

1,827 3,546

% %

Rate of interest income per annum 2.00 - 2.40 2.00 - 5.10


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19. INTEREST-BEARING BORROWINGS

Group Company2001 2000 2001 2000

RM RM RM RM19.1 Amounts owing to bankers

SecuredBank overdrafts 1,569,787 677,311 - -Trust receipts - 1,000,000 - -Bankers' acceptances 200,000 6,998,000 - -Term loans

Due and repayable- within next twelve months 500,004 1,052,005 500,004 -- after next twelve months but

not later than five years 1,455,227 5,574,250 1,455,227 -

3,725,018 15,301,566 1,955,231 -

UnsecuredBank overdrafts 5,925,925 2,114,585 - -Bankers' acceptances 21,557,000 15,289,000 - -Revolving credits 8,400,000 7,300,000 7,400,000 7,300,000Term loans

Due and repayable- within next twelve months 2,177,088 1,302,088 - -- after next twelve months but

not later than five years 21,136,908 4,939,830 - -

59,196,921 30,945,503 7,400,000 7,300,000

62,921,939 46,247,069 9,355,231 7,300,000

Rates of interest charge per annum % % % %

Term loans 8.10 - 9.75 6.90 - 11.80 - -Bank overdrafts 6.80 - 9.45 7.20 - 9.50 - -Other banking facilities 3.10 - 7.95 3.05 - 9.50 5.30 - 7.95 5.05 - 5.75

The term loans, bank overdrafts and other banking facilities are:

- Secured:By debenture for RM8,300,000 (2000: RM8,700,000) creating fixed and floating charges over all the other assetsof the Company and a (2000: two) subsidiary;

By fixed charges over the properties for development of a subsidiary (Note 14)*;

By fixed charges over the freehold land of a subsidiary held under H.S. (D) 33741, 33742 and 33743, Lot 474, 475and 476 Mukim of Seremban, Negeri Sembilan (Note 6);

Pledge by way of Memorandum of Deposit over 7,976,079 (2000: Nil) shares in Woventex Corporation Berhad (Note 10);

- Under:Negative pledges on all the other assets issued by five (2000: four) subsidiaries and the Company;

Corporate guarantees of the Company for ten (2000: nine) subsidiaries.

* Discharged after the financial year end.

C O N T I N U E D

19. INTEREST-BEARING BORROWINGS (Cont’d)

19.1 Amounts owing to bankers (Cont’d)

Repayments for the term loans are made by way of:

- Eighteen (18) quarterly instalments of RM650,000 (2000: RM650,000) each commencing on 1 April 2000 or 15%redemption sum on every development property unit sold;

- Forty seven (47) monthly instalments of RM41,667 (2000: Nil) each and a final instalment of RM41,651commencing on twelve (12) months after the first drawdown;

- Quarterly instalment of RM125,000 (2000: RM125,000) each commencing on 7 June 2000 till full settlement of loan;

- Quarterly repayment of RM250,000 (2000: Nil) which will commence on 13 February 2001 till full settlement ofloan;

- Twenty (20) quarterly repayments of RM1,000,000 (2000: Nil) each commencing twelve (12) months from the dateof full drawdown or upon expiry of the availability period whichever is earlier; and

- Monthly instalment of RM25,174 (2000: RM25,174) each within the next ten (10) years.

19.2 Loans from unquoted companiesGroup Company

2001 2000 2001 2000RM RM RM RM

UnsecuredLoan bearing interest of 4.5% (2000: Nil) 1,000,000 - - -Loan bearing interest of 5.0% (2000: Nil) 4,000,000 - - -

5,000,000 - - -

There is no fixed repayment term for these loans.

19.3 SummaryCurrent portionAmounts owing to bankers 40,329,804 35,732,989 7,900,004 7,300,000Loans from unquoted companies 5,000,000 - - -

45,329,804 35,732,989 7,900,004 7,300,000Non-current portionAmounts owing to bankers 22,592,135 10,514,080 1,455,227 -

67,921,939 46,247,069 9,355,231 7,300,000

20. SINKING FUNDGroup

2001 2000RM RM

Amounts collected from the low cost residents and shops 234,164 -Expenses incurred for the related residential buildings and compound (71,259) -

Balance as at end of financial year 162,905 -


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20. SINKING FUND (Cont’d)

The corresponding segregated assets are stated as follows:Group

2001 2000RM RM

Short-term deposits with licensed bank (Note 18) 130,000 -Cash and bank balances (Note 36) 32,905 -

162,905 -

21 TAXATION

21.1 GroupCharge for the financial year

2001 2000 2001 2000RM RM RM RM

CurrentIncome tax

As at beginning of financial year 1,792,579 4,382,309Payments (4,072,093) (5,919,580)Refunds 108,428 1,830Tax deducted at source (5,555) (18,111)

(2,176,641) (1,553,552)Charge for the financial year 1,136,399 3,346,131 1,136,399 3,346,131

As at end of financial year (1,040,242) 1,792,579

DeferredTransfer to deferred taxation (Note 24) 59,550 547,121

On share of profits in associated companies 6,941 180,079

Total 1,202,890 4,073,331

21.2 CompanyCharge for the financial year

2001 2000 2001 2000RM RM RM RM

CurrentIncome tax

As at beginning of financial year (1,099,707) (278,229)Payments (422,099) (821,249)Tax deducted at source (1,147,319) (401,122)

(2,669,125) (1,500,600)Charge for the financial year 1,267,568 400,893 1,267,568 400,893

As at end of financial year (1,401,557) (1,099,707)

DeferredTransfer to/(from) deferred taxation (Note 24) 251,000 (3,100)

1,518,568 397,793

C O N T I N U E D

21 TAXATION (Cont’d)

21.3 Income tax charge for the financial year is detailed below:

Group Company2001 2000 2001 2000

RM RM RM RM

Accounting profit before taxation 8,016,733 23,742,549 4,819,282 583,405(Profits)/loss from investing activities (3,239,457) (1,329,826) - 199,999Share of losses/(profits) in associated companies 1,189,941 (1,293,743) - -Unrealised losses/(profits) from

net intragroup transactions 438,252 (221,574) - -Non-deductible expenses 3,492,252 1,646,300 117,812 504,700(Origination)/reversal of timing differences

arising on:- Capital allowance claims against

financial depreciation (2,161,508) (6,962,168) (18,616) 13,753- Other timing differences (185,254) 121,478 (860,771) (18,140)Reinvestment allowances utilised (1,206,097) (4,024,824) - -Tax exempt dividend (gross) income (45,169) (26,524) - (19,845)Amortisation of goodwill 225,260 233,455 - -Amortisation of premium on acquisition of

associated companies 16,026 3,444 - -Unabsorbed capital allowances

and tax losses utilised (1,993,255) (587,142) - -Unabsorbed capital allowances and tax

losses carried forward 1,329,955 1,269,684 - 98,084

Taxable profit 5,877,679 12,571,109 4,057,707 1,361,956

Income tax at current statutory rate 1,646,480 3,521,628 1,136,000 381,300

(Over)/under-provided in theprevious financial year (510,081) (175,497) 131,568 19,593

Income tax charge 1,136,399 3,346,131 1,267,568 400,893

21.4 Unabsorbed tax losses and capital allowances

Group Company2001 2000 2001 2000

RM RM RM RMUnutilised capital allowances not taken into

accounts which subject to agreement by the Director-General of Inland Revenue Board and compliance with certain provisions of the Income Tax Act, 1967 are available for off-set against future taxable profit of approximately 21,338,800 20,340,100 3,355,000 3,376,000


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22. GRATUITY AND RETIREMENT BENEFITSGroup Company

2001 2000 2001 2000RM RM RM RM

As at beginning of financial year 566,241 615,321 252,390 313,654Payments during the financial year (144,277) (77,363) (109,483) (61,264)Provision for the financial year 22,000 28,283 - -

As at end of financial year 443,964 566,241 142,907 252,390

23. REDEEMABLE BANK GUARANTEED BONDSThe Company issued RM35,000,000 nominal amount of 4.5% Redeemable Bank Guaranteed Bonds 1996/2001 ("Bonds")constituted by a Trust Deed dated 25 November 1996. The Bonds carry a coupon interest rate of 4.5% per annum payableannually in arrears on 3 December. Unless previously redeemed, repurchased or cancelled, the Company shall redeem theBonds in cash at their nominal amount on maturity on 3 December 2001.

Together with the Bonds issue of RM35,000,000 was an issue of 12,139,000 detachable warrants conferring subscriptionrights to 12,139,000 ordinary shares of RM1.00 each in the Company. The warrants are transferable and are quoted on theKuala Lumpur Stock Exchange. Holders of the warrants have the rights to subscribe for the new shares at any time before 3December 2001 in cash at the exercise price of RM4.26 per warrant. The exercise price may be adjusted in accordance withthe provisions contained in the Deed Poll dated 25 November 1996.

The RM35,000,000 (2000: RM35,000,000) Bonds and the interest of up to RM1,050,004 (2000: RM1,050,004) are under abank guarantee.

At the financial year ended 31 July 2001, 12,138,600 (2000: 12,138,600) warrants remain unexercised.

24. DEFERRED TAXATIONGroup Company

2001 2000 2001 2000RM RM RM RM

As at beginning of financial year 4,289,900 3,742,779 218,900 222,000Transfer from/(to) income statements (Note 21) 59,550 547,121 251,000 (3,100)Revaluation surplus (Note 6) 6,524,356 - 1,303,859 -

As at end of financial year 10,873,806 4,289,900 1,773,759 218,900

The deferred taxation adjustments arose out of the tax effects from the following:

Origination/(reversal) of timing differences arising on:- Capital allowance claims against financial depreciation 138,322 808,635 6,000 (3,800)- Other timing differences (616,426) (1,375,965) 241,000 -Under-provided in the previous financial year 537,654 1,114,451 4,000 700

59,550 547,121 251,000 (3,100)

C O N T I N U E D

25. MINORITY INTERESTSGroup

2001 2000RM RM

Shares in subsidiariesAs at beginning of financial year 33,619,001 35,650,003Additions

Arising from purchase of additional shares 500,000 -Transfer from other investments (Note 11) - (1,000)

DisposalsDecrease in equity in a subsidiary (60,000) (2,000,000)Re-classified to share of reserves and profits/(losses) * - (30,002)


Share of reserves and profits/(losses)As at beginning of financial year 24,547,088 21,718,196Additions

Arising from purchase of additional shares 67,250 -Current profits net of losses 1,387,351 3,407,634

DisposalsDecrease in equity in a subsidiary (60,483) (392,744)

Re-classified from share capital * - 30,002Dividend paid (1,137,067) (216,000)Revaluation surplus 13,845,678 -


Total 72,708,818 58,166,089

26. SHARE CAPITAL2001 2000 2001 2000

No. No. RM RMOrdinary shares of RM1.00 (2000: RM1.00) each

- AuthorisedAs at beginning and end of financial year 200,000,000 200,000,000 200,000,000 200,000,000Issued (61,968,400) (61,778,400) (61,968,400) (61,778,400)

Unissued 138,031,600 138,221,600 138,031,600 138,221,600

- Issued and fully paidAs at beginning of financial year 61,778,400 60,839,400 61,778,400 60,839,400Issue pursuant to ESOS 190,000 939,000 190,000 939,000

61,968,400 61,778,400 61,968,400 61,778,400Share buybacks- held as treasury shares (180,000) (180,000) - -


There is only one class of authorised and issued shares. All these shares rank parri passu in respect of distribution ofdividends, repayment of capital, voting and other rights, privileges, conditions and restrictions in accordance with theArticles of Association of the Company.


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26. SHARE CAPITAL (Cont’d)

Treasury sharesDuring the financial year, there was no disposal or purchase of treasury shares.

The following reserves of the Company which have been applied to provide for the consideration for the purchase of thetreasury shares are restricted for any distribution as at end of financial year are as below:

2001 2000RM RM

Accumulated profits 386,828 386,828

WarrantsOn 18 August 2000, a total of 10,396,776 SIB Warrants 1996 representing 85.65% of the total SIB Warrants 1996 in issuehad been surrendered by the warrantholders for cancellation and replaced with SIB Warrants 2000. The remaining 1,741,824SIB Warrants 1996 which have not been surrendered will remain listed on the Main Board of Kuala Lumpur Stock Exchange("KLSE") based on existing terms (subject to adjustments as provided under the existing deed poll constituting the SIBWarrant 1996) and will remain valid until expiry of the exercise period on 2 December 2006.

27. RESERVESGroup Company

2001 2000 2001 2000RM RM RM RM

DistributableAccumulated profits 89,053,774 86,287,632 9,331,419 8,719,056

Capital reservesProperty revaluation surplus realised

As at beginning of financial year 671,295 154,738 516,557 -Transfer from share buybacks reserves - 516,557 - 516,557


Total distributable 89,725,069 86,958,927 9,847,976 9,235,613

Non-distributableCapital reserves

Share premiumAs at beginning of financial year 6,674,046 - 6,674,046 -Bonus issue expenses (43,842) (25,879) (43,842) (25,879)ESOS listing expenses (381) - (381) -Transfer from share buybacks reserves - 715,927 - 715,927Net surplus on disposals of share buybacks - 4,969,878 - 4,969,878Addition from issues pursuant to ESOS, net of expenses 205,200 1,014,120 205,200 1,014,120


C O N T I N U E D

27. RESERVES (Cont’d)Group Company

2001 2000 2001 2000RM RM RM RM

Property revaluation surplusAs at beginning of financial year 22,404,518 22,877,036 15,139,063 15,139,063Revaluation of landed properties

during the financial year 86,404,809 - 4,656,638 -Deferred taxation (5,626,117) - (1,303,859) -Share of revaluation surplus in an associated company 203,472 - - -Realised on change of equity (28,001)Realised on struck-off of subsidiary - (472,518) - -


Share buybacks reserves (Note 26)As at beginning of financial year 386,828 2,297,059 386,828 2,297,059Transfer to accumulated profits - (677,747) - (677,747)Transfer to property revaluation surplus realised - (516,557) - (516,557)Transfer to share premium - (715,927) - (715,927)


Warrant reservesAs at beginning of financial year - - - -Proceeds from issuance of replacement warrants 1,039,678 - 1,039,678 -Expenses incurred (970,943) - (970,943) -

As at end of financial year 68,735 - 68,735 -

Other reservesCapitalisation for bonus issue

As at beginning of financial year 5,025,559 5,025,559 - -Realised on disposal of subsidiary in

associated company (451,805) - - -

As at end of financial year 4,573,754 5,025,559 - -

Total non-distributable 115,223,021 34,490,951 25,782,428 22,199,937

204,948,090 121,449,878 35,630,404 31,435,550

Expenses incurred under warrant reserves included the statutory disclosure item below:

Auditors' remuneration other than audit fee 18,000 - 18,000 -

Distributable reserves are those available for distribution by way of cash dividends subject to availability of Section 108 taxcredits and tax exempt income mentioned below.


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27. RESERVES (Cont’d)Company

2001 2000Dividend franking credits RM RMTax credits available under Section 108 of the Income TaxAct, 1967 are sufficient to frank payment of dividends outof distributable reserves of approximately 2,559,000 2,307,000

Tax exempt incomeTax exempt income available for distribution astax exempt dividends of approximately 1,089,000 1,089,000

28. REVENUEGroup Company

2001 2000 2001 2000Activities RM RM RM RM

Manufacturing 152,559,560 140,134,516 - -Property development 14,596,742 26,556,821 - -Contractor 47,170 1,064,476 - -General trading 338,102 1,938,123 71,109 25,846Trading in quoted securities - 8,237,454 - -Investment holdings- Dividends (gross) from

- Unquoted subsidiaries - - 5,245,000 1,200,000- Quoted associated company in Malaysia - - 471,052 232,532- Shares quoted in Malaysia 1,925 10,757 68 90- Unquoted shares - 19,800 - 19,800

Property investments- Rental income 559,300 348,534 2,600,000 2,760,000- Lease rental income 38,700 - - -Management service fees 822 - 288,000 288,000

168,142,321 178,310,481 8,675,229 4,526,268

29. SEGMENT INFORMATIONGroup Profit/(loss) Assets

Turnover before taxation employedActivities all carried out in Malaysia RM RM RM

2001Manufacturing 152,559,560 5,111,803 166,052,286Property development 14,596,742 3,045,729 109,304,115Contractor 47,992 3,214 2,007,090Trading 338,102 (953,537) 598,244Investment holdings 599,925 (1,435,925) 168,828,683

168,142,321 5,771,284 446,790,418

C O N T I N U E D

29. SEGMENT INFORMATION (Cont’d)Group Profit/(loss) Assets

Turnover before taxation employedActivities all carried out in Malaysia RM RM RM

Share of (losses)/profits of associated companies:Manufacturing - (1,198,182) 37,844,783Investment holdings - 3,433,813 1,475,323Contractor - 5,009 1,543,676Restaurant - 4,809 157,475

- 2,245,449 41,021,257

168,142,321 8,016,733 487,811,675

2000Manufacturing 140,134,516 14,734,641 137,402,877Property development 26,556,821 10,146,888 120,189,712Contractor 1,064,476 216,748 3,370,624Trading 10,175,577 29,897 14,121,957Investment holdings 379,091 (3,077,229) 54,723,015

178,310,481 22,050,945 329,808,185

Share of (losses)/profits of associated companies:Manufacturing - 1,336,257 28,311,611Investment holdings - 397,357 1,477,545Contractor - (7,462) 1,089,554Restaurant - (34,548) 90,452

- 1,691,604 30,969,162

178,310,481 23,742,549 360,777,347

30. OTHER OPERATING INCOMEGroup Company

2001 2000 2001 2000RM RM RM RM

Included the statutory disclosure items below:

Dividends (gross) from- Unquoted shares 45,034 46,835 - -- Shares quoted in Malaysia 18,328 13,814 - -Director's fee from an unquoted trade investee company - 3,000 - 3,000Bad debts recovered- Trade debts 8,165 - 535 -- Non-trade debts 23,695 - - -Lease rental income - 43,860 - -Management fee 28,000 - - -Rental income 204,573 206,300 - -Interest from- Short-term deposits 156,548 114,762 1,827 3,546- Subsidiaries - - 406,118 1,764,250- Stakeholders' fund 19,170 43,465 - -- House purchasers 260,856 36,457 - -- Housing Development Accounts 8,814 34,440 - -- Foreign currency accounts 90,431 16,878 - -- Loan to unquoted company - 253,758 - -- Others 11,855 78,254 - 238Profit on disposal of plant, equipment and fittings 57,427 172,531 113,671 18,140


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31. PROFIT FROM OPERATIONSGroup Company

2001 2000 2001 2000RM RM RM RM

The profit from operations of 5,967,217 21,118,980 4,819,282 783,404

has been arrived at after charging- Cost of sales and expenses which included the statutory

disclosure expense/(credit) items below:

Directors' remunerationDirectors of the Company

- Fees 38,500 48,000 38,500 48,000- Emoluments (see also Note 16) 897,875 472,287 485,375 414,000

Directors of subsidiaries- Emoluments 132,800 69,668 - -

Staff and labour costs 13,772,703 10,238,708 113,009 370,690Provision for gratuity and retirement benefits 22,000 28,283 - -Auditors' remuneration- Audit fees

Company 9,000 9,000 9,000 9,000Subsidiaries 190,100 179,550 - -

- Other than audit feesCompany 10,500 9,500 10,500 9,500Subsidiaries 7,000 - - -

Amortisation of intangible assets 324,174 442,020 - -Amortisation of premium on acquisition

of associated companies 16,026 3,444 - -Utility deposits written off 6,360 9,861 - -Depreciation and amortisation of properties,

equipment and fittings 10,483,043 7,942,743 696,103 747,451Hire of office equipment - (4,090) - -Legal fee (Note 16) - 6,192 - -Office equipment, furniture and fittings written off 37,765 50,251 - -Interest on

- Bank overdrafts 239,118 113,318 5,337 10,897- Term loans 735,631 556,890 171,452 -- Late payment 8,740 6,031 - -- Other banking facilities 1,191,343 1,002,422 393,294 61,492- Loans and advances from subsidiaries - - 210,736 598,207- Bonds 1,575,000 813,581 1,575,000 1,575,000- Other loans 212,090 (294,485) 27,536 -

Project management fee 343,458 358,962 - -Provision for doubtful debts- Trade debts 686,000 966,956 - -- Non-trade debts 23,695 - - -Bad debts written off 135,088 31,443 - 66,156Rental for office 42,567 10,907 - -Rental for house 44,390 41,837 - -Rental for motor vehicles 134,942 24,800 - 5,500

C O N T I N U E D

32. PROFITS/(LOSS) FROM INVESTING ACTIVITIESGroup Company

2001 2000 2001 2000RM RM RM RM

Profit on sales of quoted investments 335 56,807 - -Realisation of profit on disposal of land 864,155 860,973 - -Profit on changes in equity interest in subsidiaries 111,184 - - -Profit on disposal of shares in subsidiary and

associated company 456,040 397,861 - -Profit on disposal of subsidiaries - 14,185 - -Profit on disposal of subsidiary in an associated company 2,979,350 - - -Provision for diminution in value of investments (1,171,607) - - (199,999)

3,239,457 1,329,826 - (199,999)

33. CASH GENERATED FROM OPERATIONSGroup Company

2001 2000 2001 2000RM RM RM RM

Profit before taxation 8,016,733 23,742,549 4,819,282 583,405Adjustments for:

Depreciation of properties, plant, equipmentand fittings 10,483,043 7,942,743 696,103 747,451

Amortisation of intangible assets 324,174 442,020 - -Profit on disposal of property, plant, equipment

and fittings (57,427) (172,531) (113,671) (18,140)(Profits)/loss from investing activities (3,239,457) (1,329,826) - 199,999Amortisation of premium on acquisition of

associated companies 16,026 3,444 - -Provision for gratuity and retirement benefits 22,000 28,283 - -Provision for doubtful debts 709,695 966,956 - -Share of results in associated companies 1,189,941 (1,293,743) - -Office equipment, furniture and fittings written off 37,765 50,251 - -Interest expense on:- Bank overdrafts 239,118 113,318 5,337 10,897- Term loans 735,631 556,890 171,452 -- Late payment 8,740 6,031 - -- Other banking facilities 1,191,343 1,002,422 393,294 61,492- Bonds 1,575,000 813,581 1,575,000 1,575,000- Other loans 212,090 (294,485) 238,272 598,207Unrealised loss on transfer of inventories of quoted

securities to long-term investments 1,104,393 - - -Capital work-in-progress transfer to income statements - 587 - -Dividend (gross) income (65,287) (91,206) (5,716,120) (1,452,422)Bad debts recovered (31,860) - (535) -Bad debts written off 135,088 31,443 - 66,156Interest income from:- Short-term deposits (156,548) (114,762) (1,827) (3,546)- Others (391,126) (463,252) - (1,764,250)

Operating profit before working capital changes 22,059,075 31,940,713 2,066,587 604,249


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33. CASH GENERATED FROM OPERATIONS (Cont’d)Group Company

2001 2000 2001 2000RM RM RM RM

Changes in working capital:Inventories 7,307,468 (1,014,328) - -Development properties (3,059,970) 7,976,715 - -Trade and other receivables 9,578,058 5,261,239 1,964,070 1,966,923Trade and other payables 3,846,022 (2,899,311) 2,544,907 60,585Amount owing by subsidiary - - (8,582) (9,742)Interest-bearing borrowings (430,000) 7,607,277 100,000 7,300,000

Cash generated 39,300,653 48,872,305 6,666,982 9,922,015

34. ANALYSIS OF ACQUISITION OF SUBSIDIARIESGroup

2001 2000Net assets acquired: RM RM

Properties, plant, equipment and fittings - 907,864Current assets - 465,565Current liabilities - (1,333,943)

- 39,486Transfer from associated company - (22,469)Negative goodwill on acquisition - 32,983

Total purchase price - 50,000Less:

Cash acquired - (432)

- 49,568

Consideration discharged:

Cash paid - (50,000)Cash acquired - 432

- (49,568)

35. ANALYSES OF DISPOSALS OF SUBSIDIARIESGroup

2001 2000RM RM

Net assets disposed:

Current assets - (10)Current liabilities - 14,185

- 14,175

C O N T I N U E D

35. ANALYSES OF DISPOSALS OF SUBSIDIARIES (Cont’d)Group

2001 2000RM RM

Profit on disposal of subsidiaries - (14,185)

Total disposal price - (10)Bank overdraft and cash balances disposed of - 10

- -

Consideration:

Cash received - 10Bank overdraft and cash balances disposed of - (10)

- -

36. CASH AND CASH EQUIVALENTSBalance as at end Net increase/ (decrease)of financial year in the financial year

2001 2000 2001 2000Group RM RM RM RM

Short-term deposits with Malaysian licensed banks 430,000 1,178,073 (748,073) (3,689,104)Cash and bank balances with Malaysian licensed banks 9,256,542 7,309,719 1,946,823 1,312,409Bank overdrafts (7,495,712) (2,791,896) (4,703,816) 1,226,879

2,190,830 5,695,896 (3,505,066) (1,149,816)

CompanyShort-term deposits with Malaysian licensed banks - 200,000 (200,000) 200,000Cash and bank balances with Malaysian licensed banks 323,654 192,400 131,254 115,059

323,654 392,400 (68,746) 315,059

Group2001 2000

RM RMBank balances held under Housing Development Account pursuant to Section 7A

of the Housing Development (Control and Licensing) Act 1991 784,915 969,438

Cash and bank balances segregated and held for sinking fund (Note 20) 32,905 -


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37. EARNINGS AND DIVIDENDS PER ORDINARY SHARE37.1 Earnings

Group Company2001 2000 2001 2000

RM RM RM RMBasicProfit for the financial year (a) 5,426,492 16,261,584 3,300,714 185,612

No. No. No. No.Weighted average number/number of ordinary shares in issue (b) 61,741,900 59,954,441 61,741,900 59,954,441

Sen Sen Sen SenEarnings per RM1.00 (2000: RM1.00)ordinary share (a)/(b) 8.79 27.12 5.35 0.31

Fully dilutedProfit for the financial year 5,426,492 16,261,584 - -

Notional interest savings at an average rate of: 4.5% (2000: 4.5%) on net proceeds from issuance of shares of RM38,224,430 (2000: RM36,887,772) 1,720,099 1,659,950 - -

Income tax at 28% thereon (481,268) (464,786) - -

Adjusted profit for the financial year (c) 6,665,323 17,456,748 - -

No. No. - -Weighted average number/number of ordinary shares in issue 61,741,900 59,954,441 - -

Number of ordinary shares issuable- Under ESOS 2,363,600 1,389,400 - -

- On conversion of warrants 12,138,600 12,138,600 - -

(d) 76,244,100 73,482,441 - -

Sen Sen Sen SenFully diluted earnings per RM1.00

(2000: RM1.00) ordinary share (c)/(d) 8.74 23.76 - -

Assume that the number of ordinary shares issuable under the ESOS and on conversion of warrants was taken up atbeginning of the financial year.

The fully diluted earnings per share and its calculations of the Company for the financial year ended 31 July 2001 and31 July 2000 are not presented as they are anti-dilutive, that is, increased earnings per share figures rather thandiluted earnings.

Accordingly, the basis and fully diluted earnings per share for the financial years concerned are considered to be thesame.

C O N T I N U E D

37. EARNINGS AND DIVIDENDS PER ORDINARY SHARE (Cont’d)37.2 Dividends

2001 2000RM RM

Final dividends proposed:- Tax exempt: Nil (2000: 3%) - 1,847,952- Less tax: 6% (2000: 3%) 2,669,259 1,330,525

2,669,259 3,178,477

Under/(Over)-provided in the previous financial year 19,092 (40,810)

2,688,351 3,137,667

Per RM1.00 (2000: RM1.00) ordinary share for the financial year: % %

Percentage- Final dividends 6.0 6.0

Sen SenAmount (net)- Final dividends

Tax exempt - 3.00Less tax 4.32 2.16

4.32 5.16

38. CONTINGENT LIABILITIESGroup Company

2001 2000 2001 2000RM RM RM RM

Bankers' guarantees- secured 254,569 103,000 - -- unsecured 1,256,516 1,906,521 620,600 1,039,021

Letters of credit- secured 123,500 474,999 - -- unsecured 981,848 908,860 - -

Corporate guarantees for- subsidiaries - - 148,790,000 119,140,000- suppliers - 3,100,000 - 3,100,000

2,616,433 6,493,380 149,410,600 123,279,021

No loss is anticipated.

For securities furnished on the secured banking facilities, refer Note 19 to the financial statements.


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39. DISPOSAL OF SUBSIDIARIESDuring the previous financial year ended 31 July 2000, five sub-subsidiaries of the Company as listed below had beendisposed of:

Ardour Performance Sdn. Bhd.Charming Field Sdn. Bhd.Gallant Splendid Sdn. Bhd.Regal Grace Sdn. Bhd.Scientex International Sdn. Bhd.

for a consideration of RM2.00 each.

40. NEW SUBSIDIARYThe new subsidiary acquired by a Company's subsidiary during the previous financial year ended 31 July 2000 was set outbelow:

No. of% of ordinary shares

Name Equity interest of RM1.00 each ConsiderationRM

Bestex Packaging Sdn. Bhd. 100 100 50,000

The company was incorporated in Malaysia.

41. CHANGE OF ACCOUNTING POLICYThe change in the accounting policy stated in Note 5.4.3 to the financial statements has been accounted for retrospectively.

The effects from the change of the accounting policy for the financial year ended 31 July 2000 are as follows:

Written off onchange of

As previously accounting AsGroup reported policy restated

RM RM RMBalance sheetProperties, equipment and fittings 109,519,349 109,519,349Intangible assets 3,457,352 (256,866) 3,200,486Investments in associated companies 31,002,269 (33,107) 30,969,162Capital work-in-progress 2,131,090 2,131,090Other investments 7,351,137 7,351,137Land held for development 50,012,174 50,012,174Net current assets 88,194,362 88,194,362Non-current and deferred liabilities (50,370,221) (50,370,221)Minority interests (58,231,181) 65,092 (58,166,089)

Net assets 183,066,331 182,841,450

Net effects of this change on group financial position (a) (224,881)

C O N T I N U E D

41. CHANGE OF ACCOUNTING POLICY (Cont’d)



RM RM RMIncome statementOperating profit 21,005,222 113,758 21,118,980Share of profits in associated companies 1,276,172 17,571 1,293,743

Profit from operations 22,281,394 131,329 22,412,723Profits from investing activities 1,316,108 13,718 1,329,826

Profit before taxation 23,597,502 145,047 23,742,549Taxation (4,073,331) - (4,073,331)

Profit after taxation 19,524,171 145,047 19,669,218Minority interests (3,358,090) (49,544) (3,407,634)

Profit for the financial year 16,166,081 16,261,584

Net effects of this change on group financial performance (b) 95,503

Net effects of this change on groupaccumulated profits as at 31.7.1999 (a) - (b) (320,384)

Earnings per ordinary share of RM1.00 each- Basic 26.96 27.12- Fully diluted 23.63 23.76

42. COMPARATIVE FIGURESFollowing the change of accounting policy stated in Note 5.4.3 to the financial statements, comparative figures in the previousfinancial year ended 31 July 2000 have been re-classified to facilitate comparison with the current financial year presentation:



RM RM RMBalance sheet- Intangible assets 3,457,352 (256,866) 3,200,486- Investments in associated companies 31,002,269 (33,107) 30,969,162- Minority interests (58,231,181) 65,092 (58,166,089)- Accumulated profits 86,512,513 (224,881) 86,287,632


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42. COMPARATIVE FIGURES (Cont’d)



RM RM RMIncome statement- Administration expenses (7,959,139) 113,758 (7,845,381)- Amortisation of goodwill (232,873) (582) (233,455)- Share of profits in associated companies 1,276,172 17,571 1,293,743- Profit from operations 22,281,394 131,329 22,412,723- Profits from investing activities 1,316,108 13,718 1,329,826- Profit before taxation 23,597,502 145,047 23,742,549- Share of minority interests (3,358,090) (49,544) (3,407,634)- Profit for the financial year 16,166,081 95,503 16,261,584

43. EMPLOYEESThe number of employees at the end of the financial year is as follows:

Group Company2001 2000 2001 2000

No. No. No. No.

Employees 540 535 4 4

44. DATE OF AUTHORISATION FOR ISSUEThe financial statements were authorised by the Board of Directors for issue on 6 November 2001 with no power to amendthe financial statements after this date.

C O N T I N U E D

We, Lim Teck Meng and Lim Peng Jin, being two of the directors of Scientex Incorporated Berhad, do hereby state on behalf of thedirectors that in our opinion, the financial statements set out on pages 26 to 84 are drawn up in accordance with applicableapproved accounting standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31July 2001 and the results of their operations, changes in equity and cash flows for the financial year ended on that date.

LIM TECK MENG LIM PENG JINDirector Director

Kuala LumpurDate: 6 November 2001

I, Lim Peng Jin, being the director primarily responsible for the accounting records and financial management of ScientexIncorporated Berhad, do solemnly and sincerely declare that the financial statements set out on pages 26 to 84 are to the best ofmy knowledge and belief, correct and I made this solemn declaration conscientiously believing the same to be true and by virtueof the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed Lim Peng Jin at Kuala Lumpur in Wilayah Persekutuan this day of 6 November 2001

LIM PENG JINDirector

Before me,

ONG KAH CHONGCommissioner for OathsKuala Lumpur


PAGE 85

B Y D I R E C T O R SSTATEMENT

D E C L A R A T I O NSTATUTORY


PAGE 86

Net BookBuilt-up Value as at Age of Year of

Description/ Site Area Area 31 July 2001 Building Acquisition/Location Existing Use Tenure (sq. ft) (sq. ft) RM’000 (Years) Revaluation*

P. T. No. 164 Land, factory Leasehold 312,245 217,534 26,000 31 2001*Jalan Utas 15/7 buildings, warehouse for 99 yearsShah Alam and office for expiring onSelangor Darul Ehsan industrial use 27.07.2097

Flat Nos. 301, 302, 401 Flats used as Leasehold for - 3,715 341 7 2001*402 & 408 workers’ hostel 99 yearsSection 24, Shah Alam expiring onSelangor Darul Ehsan 05.01.2095

Flat Nos. 501 & 503 Flats used as Leasehold for - 1,505 140 7 2001*Section 24, Shah Alam workers’ hostel 99 yearsSelangor Darul Ehsan expiring on

06.06.2096

7, Hala Pinji 1 Double-storey Freehold - 1,400 192 9 1992Ipoh, Perak terrace shophouse

for commercial use

Lot No. 88, P. T. Nos. 168 Land, factory Leasehold for 65,340 58,242 2,900 21 2001*1267 & 12999 buildings, 99 and 60 Senawang warehouse and years expiring Industrial Estate office for on 01.01.2075,Seremban industrial use 10.02.2076 andNegeri Sembilan 25.06.2052

respectively

Lot No. 38-40, P. T. Land, factory Leasehold 130,680 124,361 8,100 11 2001*No. 6045, Senawang buildings, for 99 yearsIndustrial Estate warehouse and expiring onSeremban office for industrial 20.09.2084Negeri Sembilan use

Lot Nos. 6470, 6471 Vacant Freehold 5,175 - 255 - 2001*& 6472, Mukim and commercialDistrict of Seremban land for futureNegeri Sembilan development

Lot No. 3685, Mukim Land, factory Leasehold 279,425 52,072 5,300 7 2001*of Bukit Rambai buildings and for 99 yearsDistrict of Melaka office for expiring onTengah, Melaka rental 27.01.2079

Taman Scientex - Mukim Vacant land for Freehold 20,643,955 - 120,000 - 2001*of Plentong, District of future mixJohor Bahru, Johor development(various sub-divided lots)

H E L D B Y T H E G R O U P A S A T 3 1 J U L Y 2 0 0 1

LIST OF PROPERTIES


PAGE 87

C O N T I N U E D

Net BookBuilt-up Value as at Age of Year of

Description/ Site Area Area 31 July 2001 Building Acquisition/Location Existing Use Tenure (sq. ft) (sq. ft) RM’000 (Years) Revaluation*

Parcel No. AVO11-2 Townhouse Freehold - 1,356 200 1 2001*First Floor, Block APalm Spring Golf andMarina ResortPort DicksonNegeri Sembilan

Taman Scientex - On-going mix Freehold 10,475,572 - 63,747 - 1993various sub-divided development lots in Mukim of projectPlentong, District of Johor Bahru, Johor

Taman Scientex - On-going Freehold 238,680 - 11,787 - 1996various sub-divided commerciallots in Mukim of development Plentong, District of projectJohor Bahru, Johor

Plaza Pandan Malim On-going Leasehold 588,019 - 20,139 - 1994Business Park - various commercial for 99 yearssub-divided lots in development expiring onMukim of Balai Panjang project 09.06.2095District of Melaka Tengah, Melaka

Plaza Pandan Malim Vacant land for Leasehold 43,852 - 262 - 1994Business Park - future for 99 yearsH.S. (M) 235 development expiring onP.T. 2538, Mukim of 02.06.2095Balai Panjang, District of Melaka TengahMelaka

Taman Muzaffar Heights - On-going mix Leasehold 7,345,394 - 33,136 - 1995PN. 2984, H.S. (D) Nos. development for 99 years6103, 6104, 6105 & 43164 project expiring onMukim of Bukit Katil 01.08.2078District of Melaka Tengah, Melaka


PAGE 88

O F S H A R E H O L D I N G S / W A R R A N T H O L D I N G S A S A T 6 N O V E M B E R 2 0 0 1

ANALYSIS

Authorised Share Capital - RM200,000,000Issued & Fully Paid-Up Capital - RM61,968,400Type of Shares - Ordinary Shares of RM1.00 eachVoting Rights - One vote per shareholder on a show of hands

One vote per ordinary share on a pollNo. of Shareholders - 4,601

DISTRIBUTION OF SHAREHOLDINGS

Size of Holdings No. of Holders % Total Holdings %

Less than - 1,000 33 0.72 11,245 0.021,000 - 10,000 4,188 91.02 10,524,737 16.98

10,001 - 100,000 333 7.24 9,405,228 15.18100,001 to less than 5% 47 1.02 42,027,190 67.82

of issued shares5% and above of issued shares - - - -

TOTAL 4,601 100.00 61,968,400 100.00

SUBSTANTIAL SHAREHOLDERS (as per Register of Substantial Shareholders)

No. of Shares HeldName Direct % Indirect %

1 Lim Teck Meng 25,000 0.04 24,206,444 * 39.062. Sim Swee Tin 5,000 0.01 22,481,476 ** 36.283. Lim Peng Cheong - - 22,125,158 # 35.704. Lim Peng Jin 40,000 0.06 21,916,444 + 35.375. Scientex Holdings Sdn Berhad 10,073,874 16.26 8,000,000 ++ 12.916. Permodalan Nasional Berhad 6,484,000 10.46 - -7. OUB Nominees (Tempatan) Sdn Bhd 5,000,000 8.07

– Account for Scientex Holdings Sdn Berhad

Notes:* Deemed interest through Scientex Holdings Sdn Berhad, TM Lim Sdn Bhd, Bestex Holding Sdn Bhd, Teck Management Sdn Bhd, Woventex Trading Sdn Bhd, Harikaya Sdn

Bhd and Lim Teck Meng Sdn Bhd.** Deemed interest through Scientex Holdings Sdn Berhad, TM Lim Sdn Bhd, Bestex Holding Sdn Bhd, Teck Management Sdn Bhd, Woventex Trading Sdn Bhd, Harikaya Sdn

Bhd, Catra Management Sdn Bhd and Sim Swee Tin Sdn Bhd.# Deemed interest through Scientex Holdings Sdn Berhad, TM Lim Sdn Bhd, Bestex Holding Sdn Bhd, Teck Management Sdn Bhd, Woventex Trading Sdn Bhd, Harikaya Sdn

Bhd, Catra Management Sdn Bhd and Paradox Corporation Sdn Bhd.+ Deemed interest through Scientex Holdings Sdn Berhad, TM Lim Sdn Bhd, Bestex Holding Sdn Bhd, Teck Management Sdn Bhd, Woventex Trading Sdn Bhd, Harikaya Sdn

Bhd, Catra Management Sdn Bhd and Progress Innovations Sdn Bhd.++ Held through OUB Nominees (Tempatan) Sdn Bhd and Mayban Nominees (Tempatan) Sdn Bhd.

DIRECTORS’ SHAREHOLDINGS IN THE COMPANYNo. of Shares Held

Name Direct % Indirect %

1. Lim Teck Meng 25,000 0.04 24,206,444 a 39.062. Lim Peng Cheong - - 22,125,158 b 35.703. Lim Peng Jin 40,000 f 0.06 21,916,444 c 35.374. Wong Mook Weng 375,000 f 0.61 - -


PAGE 89

C O N T I N U E D

DIRECTORS’ SHAREHOLDINGS IN RELATED COMPANIESNo. of Shares Held

Name Direct % Indirect %

Scientex Trading Sdn BhdLim Teck Meng 300 0.03 - -

Scientex Packaging Film Sdn BhdLim Peng Jin 200,000 9.09 - -

Scientex Quatari Sdn BhdWong Mook Weng 25,000 f 0.13 - -

Scientex Aidiros Sdn BhdLim Teck Meng - - 840,000 d 4.67Lim Peng Cheong - - 840,000 d 4.67Lim Peng Jin - - 840,000 d 4.67Wong Mook Weng 60,000 f - - -

Scientex Land Sdn BhdLim Teck Meng - - 750,000 e 42.86Lim Peng Cheong - - 750,000 e 42.86Lim Peng Jin - - 750,000 e 42.86

Notes:a Deemed interest through Scientex Holdings Sdn Berhad, TM Lim Sdn Bhd, Bestex Holding Sdn Bhd, Teck Management Sdn Bhd, Woventex Trading Sdn Bhd, Harikaya Sdn

Bhd and Lim Teck Meng Sdn Bhd.b Deemed interest through Scientex Holdings Sdn Berhad, TM Lim Sdn Bhd, Bestex Holding Sdn Bhd, Teck Management Sdn Bhd, Woventex Trading Sdn Bhd, Harikaya Sdn

Bhd, Catra Management Sdn Bhd and Paradox Corporation Sdn Bhd.c Deemed interest through Scientex Holdings Sdn Berhad, TM Lim Sdn Bhd, Bestex Holding Sdn Bhd, Teck Management Sdn Bhd, Woventex Trading Sdn Bhd, Harikaya Sdn

Bhd, Catra Management Sdn Bhd and Progress Innovations Sdn Bhd.d Held through Esteem Valley Sdn Bhd, a subsidiary of an associated company.e Held through Woventex Sdn Bhd, a subsidiary of an associated company.f Held through nominee company.

LIST OF 30 LARGEST SHAREHOLDERS (Without Aggregating Securities from Different Securities Accounts Belonging to the Same Person)

Name No. of Shares Held %

1. Scientex Holdings Sdn Berhad 10,073,874 16.262. Permodalan Nasional Berhad 6,484,000 10.463. OUB Nominees (Tempatan) Sdn Bhd - A/C Scientex Holdings Sdn Berhad 5,000,000 8.074. Mayban Nominees (Tempatan) Sdn Bhd - A/C Scientex Holdings Sdn Berhad 3,000,000 4.845. Lim Teck Meng Sdn Bhd 2,673,000 4.316. Woventex Trading Sdn Bhd 1,987,000 3.217. Chan Shu Mee 1,383,000 2.238. Nichimen Asia Oceania Pte Ltd 1,300,000 2.109. Ang Teow Cheng & Sons Sdn Bhd 1,000,000 1.6110. Sim Swee Tin Sdn Bhd 900,032 1.4511. Teck Realty Sdn Bhd 888,570 1.4312. Panglobal Insurance Berhad 675,000 1.0913. Teow Her Kok @ Chang Choo Chau 463,000 0.7514. Yatee & Sons Sdn Bhd 400,000 0.6515. Ratus Hikmat Sdn Bhd 392,000 0.6316. Harikaya Sdn Bhd 371,000 0.6017. Mayban Nominees (Tempatan) Sdn Bhd - A/C Wong Mook Weng @ Wong Tsap Loy 370,000 0.6018. AllianceGroup Nominees (Tempatan) Sdn Bhd - A/C Beh Boon Seong 300,000 0.4819. OSK Nominees (Tempatan) Sdn Bhd - A/C Abdul Hamed Bin Sepawi 299,000 0.4820. Ang Seng Chin 250,000 0.4021. OUB Nominees (Tempatan) Sdn Bhd - A/C Paradox Corporation Sdn Bhd 250,000 0.4022. Paradox Corporation Sdn Bhd 243,714 0.3923. Chan Kiah Seom 235,000 0.3824. Progress Innovations Sdn Bhd 235,000 0.3825. Lee Chi On 216,000 0.3526. Hong Leong Finance Berhad - A/C Andrew Lim Tiong Yong 201,000 0.3227. KAF Nominees (Tempatan) Sdn Bhd - A/C Chan Shu Mee 200,000 0.3228. Chuah Eng Yong 187,000 0.3029. Citicorp Nominees (Tempatan) Sdn Bhd - A/C Ooi Eng Su 180,000 0.2930. Scientex Incorporated Berhad - Share Buy Back Account 180,000 0.29

Total 40,337,190 65.07


PAGE 90

C O N T I N U E D

Type of Securities - Warrants (1996/2006)Voting Rights - One vote per warrantholder on a show of hands

in the meeting of warrantholdersOne vote per warrant on a poll

No.of Warrants (1996/2006) - 1,741,824No.of Warrantholders - 767

DISTRIBUTION OF WARRANTHOLDINGS


Less than - 1,000 293 38.20 93,610 5.381,000 - 10,000 456 59.45 1,080,286 62.02

10,001 - 100,000 16 2.09 371,928 21.35100,001 to less than 5% - - - -

of issued warrants5% and above of issued warrants 2 0.26 196,000 11.25

TOTAL 767 100.00 1,741,824 100.00

LIST OF 30 LARGEST WARRANTHOLDERS (Without Aggregating Securities from Different Securities Accounts Belonging to the Same Person)

Name No. of Warrants Held %

1. Cartaban Nominees (Asing) Sdn Bhd - A/C Proclaim Assets Limited 100,000 5.742. Mayban Nominees (Tempatan) Sdn Bhd - A/C Subhas A/L NK Kannan 96,000 5.513. RHB Nominees (Asing) Sdn Bhd - A/C Tan Tow Hung 50,000 2.874. Ismail Bin Mohd Dom 30,000 1.725. OSK Nominees (Tempatan) Sdn Bhd - A/C Leong Ah Kow @ Leang Lean Yow 30,000 1.726. Ratus Hikmat Sdn Bhd 30,000 1.727. TCL Nominees (Tempatan) Sdn Bhd - A/C Timber Forest Products (M) Sdn Bhd 30,000 1.728. HDM Nominees (Tempatan) Sdn Bhd - A/C Song Ah Bah 26,000 1.509. Wong Chiap You 25,000 1.4410. Wong Kan Moi @ Wong Soo Chun 22,000 1.2611. Menteri Kewangan Malaysia 21,928 1.2612. Tan Soo Im 20,000 1.1513. Lee Chew Beng @ Lee Sew Ben 19,000 1.1014. Hoo Cheek Yook @ Ho Check Yoke 18,000 1.0315. Ting Hook Kwok 18,000 1.0316. Lee Kar Wuei 16,000 0.9317. Koh Kok Cheng 15,000 0.8618. OSK Nominees (Tempatan) Sdn Bhd - A/C Amin Shah Bin Omar Shah 15,000 0.8619. Botly Nominees (Tempatan) Sdn Bhd - A/C Low Eng Huat 14,000 0.8020. Gnoh Chong Hock 12,000 0.7021. Syed Mohamed Annuar Bin Syed Osman 12,000 0.7022. Chua Chin Tong 10,000 0.5723. Hong Leong Finance Berhad - A/C Choon Yaw Kim 10,000 0.5724. Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd - A/C Gan Kien Poh 10,000 0.5725. JP Apex Nominees (Tempatan) Sdn Bhd - A/C Tan Zee Chow 10,000 0.5726. Koperasi Angkatan Tentera Malaysia Berhad 10,000 0.5727. Maimoon Binti Meor Hamzah 10,000 0.5728. Optimum Privilege Sdn Bhd 10,000 0.5729. RHB Capital Nominees (Tempatan) Sdn Bhd - A/C Chong Mook Ching 10,000 0.5730. TA Nominees (Tempatan) Sdn Bhd - A/C Cheang Vui Lik 10,000 0.57

Total 709,928 40.75

]


PAGE 91

C O N T I N U E D

Type of Securities - Warrants B (2000/2006)Voting Rights - One vote per warrantholder on a show of hands

in the meeting of warrantholdersOne vote per warrant on a poll

No.of Warrants (2000/2006) - 10,396,776No.of Warrantholders - 368

DISTRIBUTION OF WARRANTHOLDINGS


Less than - 1,000 181 49.18 64,892 0.621,000 - 10,000 154 41.85 386,484 3.72

10,001 - 100,000 23 6.25 952,400 9.16100,001 to less than 5% 7 1.90 1,832,000 17.62

of issued shares5% and above of issued shares 3 0.82 7,161,000 68.88

TOTAL 368 100.00 10,396,776 100.00

LIST OF 30 LARGEST WARRANTHOLDERS (Without Aggregating Securities from Different Securities Accounts Belonging to the Same Person)

Name No. of Warrants Held %

1 Scientex Holdings Sdn Berhad 3,905,200 37.562 Lim Teck Meng Sdn Bhd 1,851,800 17.813 Permodalan Nasional Berhad 1,404,000 13.504 Woventex Trading Sdn Bhd 377,000 3.635 Glamour Assets Sdn Bhd 323,000 3.116 Progress Innovations Sdn Bhd 348,000 3.357 Ratus Hikmat Sdn Bhd 309,000 2.978 Scientex Leasing Sdn Bhd 300,000 2.899 Koay Teik Chuan 175,000 1.6810 Beh Boon Seong 100,000 0.9611 Teo Hock Kar 100,000 0.9612 Bestex Holding Sdn Bhd 83,000 0.8013 Lim Teck Meng Sdn Bhd 82,000 0.7914 Sim Swee Tin Sdn Bhd 75,000 0.7215 Chua Lay Peng 73,000 0.7016 Mohamed Tamrin Bin Munir 55,000 0.5317 Sim Swee Peck 50,000 0.4818 Wong Mook Weng@ Wong Tsap Loy 47,600 0.4619 Yong Sook Lan 46,000 0.4420 Eng Wing Kuang 33,000 0.3221 Mayban Nominees (Tempatan) Sdn Bhd - A/C Wong Mook Weng @ Wong Tsap Loy 26,800 0.2622 Mayban Nominees (Tempatan) Sdn Bhd - A/C Ong Ai Peng 26,000 0.2523 Sin Yew Seng 25,000 0.2424 CIMB Securities Sdn Bhd - A/C IVT for Company 6 20,000 0.1925 Ku Gaik Lee 17,000 0.1626 Tengku Zainudin Bin Tengku Jaafar 16,000 0.1527 Foo Kim Fong @ Foo Ah Fook 15,000 0.1428 Liew Poo 15,000 0.1429 Benjamin Tan Wee Teck 13,000 0.1330 Chong Sai Hwa 12,000 0.12

Total 9,923,400 95.44

]


PAGE 92

AS ORDINARY BUSINESS

1. To receive the Audited Accounts for the year ended 31 July2001 together with the Reports of the Directors andAuditors thereon. (Resolution 1)

2. To declare a first and final dividend of 6% less 28% tax inrespect of the year ended 31 July 2001. (Resolution 2)

3. To approve Directors’ fees. (Resolution 3)

4. To re-elect the following Directors retiring under the followingprovisions of the Company’s Articles of Association and who,being eligible, offer themselves for re-election:

(a) Article 92Mr. Lim Teck Meng (Resolution 4)Mr. Wong Mook Weng (Resolution 5)

(b) Article 97Mr. Cham Chean Fong @

Sian Chean Fong (Resolution 6)Mr. Yasushi Hoshika (Resolution 7)

5. To appoint Messrs. Arthur Andersen & Co. as Auditors ofthe Company in place of the retiring Auditors, Messrs. T.C.Liew & Co. and to authorise the Directors to fix theirremuneration. (Resolution 8)

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass the following OrdinaryResolutions:-

6. ORDINARY RESOLUTION -Authority to Directors to Allot and Issue Shares

"THAT pursuant to Section 132D of the Companies Act,1965, the Directors be and are hereby empowered to issueshares in the Company, at any time and at such price, uponsuch terms and conditions and for such purposes and tosuch person or persons whomsoever as the Directors may,in their absolute discretion, deem fit, provided that theaggregate number of shares to be issued pursuant to thisresolution does not exceed 10% of the issued share capitalof the Company for the time being AND THAT the Directors

be also empowered to obtain the approval for the listingand quotation of the additional shares so issued on theKuala Lumpur Stock Exchange AND THAT such authorityshall continue in force until the conclusion of the nextAnnual General Meeting of the Company." (Resolution 9)

7. SPECIAL RESOLUTION -Proposed Amendments to the Articles of Association

"THAT the proposed amendments, modifications, additionsor deletions to the Articles of Association of the Companyas set out in the Appendix 1 attached to the Circular toShareholders dated 5 December 2001 be and are herebyapproved AND THAT the Directors and Secretary be and arehereby authorised to take all steps as they may considernecessary or expedient in order to implement, finalise andgive full effect to the proposed amendments to the Articlesof Association." (Resolution 10)

8. ORDINARY RESOLUTION -Proposed Shareholders’ Mandate for Recurrent RelatedParty Transactions of a Revenue or Trading Nature

"THAT, subject always to the Listing Requirements of theKuala Lumpur Stock Exchange ("KLSE"), the Company andits subsidiaries shall be mandated to enter into thecategory of recurrent transactions of a revenue or tradingnature and with those related parties as set out in theCircular to Shareholders dated 5 December 2001 providedthat such transactions are carried out in the normal courseof business, at arm’s length, on normal commercial termsand on terms not more favourable to the related partiesthan those generally available to the public and are not tothe detriment of the minority shareholders and inaccordance with the guidelines of the Company for recurrentRelated Party Transactions as set out in the Circular and anysuch past transactions entered into by the Company and/orits subsidiaries with the related parties prior to the date ofthis resolution be and are hereby approved and ratified;

AND THAT the authority conferred by this resolution willcommence immediately and will, subject to renewalthereat, expire at the conclusion of the next AnnualGeneral Meeting of the Company following the passing of

A N N U A L G E N E R A L M E E T I N GNOTICE OF

NOTICE IS HEREBY GIVEN THAT the Thirty-Third Annual General Meeting of the Company will be held atBilik Klang, Kelab Shah Alam Selangor, Jalan Aerobik 13/43, Persiaran Kayangan, 40704 Shah Alam,Selangor Darul Ehsan on Friday, 28 December 2001 at 11.00 a.m. for the following purposes:-


PAGE 93

this Ordinary Resolution or at the expiration of the periodwithin which next Annual General Meeting of the Companyis required to be held under the Companies Act, 1965(excluding any extension of such period as may be allowedunder the Companies Act, 1965) or unless earlier revokedor varied by Ordinary Resolution of the shareholders of theCompany in general meeting, but shall not prejudice thecompletion of the transaction(s) by the Company or anyperson before that aforesaid expiry date and in any event,in accordance with the provisions of the guidelines issuedby KLSE and any other relevant authorities;

AND THAT the Directors of the Company be authorized tocomplete and do all such acts and things (includingexecuting such documents as may be required) as they mayconsider expedient or necessary to give effect to theshareholders’ mandate." (Resolution 11)

9. To transact any other ordinary business of which due noticeshall have been given.

NOTICE OF CLOSURE OF BOOKS

NOTICE IS ALSO HEREBY GIVEN that the Register of Members ofthe Company will be closed from 9 January 2002 to 11 January2002 (both dates inclusive) for the purpose of determiningshareholders’ entitlements to the dividend. The first and finaldividend of 6% less tax, if approved, will be paid on 6 February2002 to shareholders whose names appear in the Record ofDepositors at the close of business at 5.00 p.m. on 8 January 2002.

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

(a) shares deposited into the Depositor’s Securities Accountbefore 12.30 p.m. on 4 January 2002 (in respect of shareswhich are exempted from the mandatory deposit);

(b) shares transferred into the Depositor’s Securities Accountbefore 12.30 p.m. on 8 January 2002 in respect of ordinarytransfers; and

(c) shares bought on the Kuala Lumpur Stock Exchange on acum entitlement basis according to the Rules of the KualaLumpur Stock Exchange.

By Order Of The Board

GARY TAN BENG CHAISecretary

Shah Alam5 December 2001

NOTES:

1. A member entitled to attend and vote at the meeting is entitled to appoint aproxy to attend and vote in his stead. A proxy need not be a member of theCompany and a member may appoint any person to be his proxy withoutlimitation and the provision of Section 149(1)(b) of the Companies Act, 1965shall not apply to the Company.

2. The instrument appointing a proxy shall be in writing under the hand of theappointer or his attorney duly authorised in writing or if such appointer is acorporation, under its common seal or the hand of its attorney.

3. The form of proxy must be deposited at the Company’s Registered Office at JalanUtas 15/7, 40000 Shah Alam, Selangor Darul Ehsan, not less than forty-eight(48) hours before the time appointed for the holding of the meeting or anyadjournment thereof.

4. Change of Auditors

Resolution No. 8 is in respect of the retirement of Messrs T.C. Liew & Co. (TCL)at the forthcoming Annual General Meeting. TCL is not seeking re-appointment.The Notice of Nomination pursuant to Section 172(11) of the Companies Act,1965, a copy of which is annexed hereto and marked "Annexure", has beenreceived by the Company for the nomination of Messrs Arthur Andersen & Co.,who have given their consent to act as Auditors of the Company in place of theretiring Auditors, TCL.

5. Resolution on Authority to Directors to Allot and Issue Shares

The Ordinary Resolution No. 9 proposed under item 6, if passed, will give powersto the Directors to allot and issue shares up to a maximum of 10% of the issuedshare capital of the Company for the time being for such purposes as theDirectors consider would be in the interest of the Company. This authority, unlessrevoked or varied at a general meeting, will expire at the next Annual Generalmeeting of the Company.

6. Resolution on Proposed Amendments to the Articles of Association

The Special Resolution No. 10 proposed under item 7 is to render the Articles ofAssociation consistent with the provisions of the revamped Listing Requirementsof the Kuala Lumpur Stock Exchange, Companies Act, 1965, Rules of theMalaysian Central Depository Sdn Bhd, Securities Industry (Central Depositories)Act, 1991 and other regulatory requirements. Shareholders’ attention is herebydrawn where a member of the Company who is an authorised nominee asdefined under the Securities Industry (Central Depositories) Act, 1991 and otherregulatory requirements.

7. Resolution on Proposed Shareholders’ Mandate for Recurrent Related PartyTransactions of a Revenue or Trading Nature

The Ordinary Resolution No. 11 proposed under item 8, if passed, will authorise theGroup to enter into recurrent related party transactions as specified in the Circularto Shareholders dated 5 December 2001 provided such transactions are of arevenue or trading nature which are necessary for the Group’s day-to-dayoperations in the ordinary course of business made on arm’s length basis and onnormal commercial terms which are no more favourable to the related parties thanthose generally available to the public and are not detrimental to the minorityshareholders of the Company. This authority will, unless previously revoked orvaried at a general meeting, expire at the next Annual General Meeting.

8. The statement accompanying this Notice of Annual General Meeting is containedon pages 94 to 96 of the Annual Report.

C O N T I N U E D


PAGE 94

1. Names of Directors who are standing for re-election.

(i) Lim Teck Meng (retiring pursuant to Article 92 of the Articles of Association)

(ii) Wong Mook Weng (retiring pursuant to Article 92 of the Articles of Association)

(iii)Cham Chean Fong @ Sian Chean Fong (retiring pursuant to Article 97 of the Articles of Association)

(iv) Yasushi Hoshika (retiring pursuant to Article 97 of the Articles of Association)

2. Details of attendance of Directors at Board Meetings.Three (3) Board Meetings were held during the financial year from 1 August 2000 till 31 July 2001. Details of attendance ofDirectors at the Board Meetings are as follows:

Name AttendanceLim Teck Meng 3 meetingsLim Peng Jin 3 meetingsLim Peng Cheong 3 meetingsWong Mook Weng 3 meetingsJuriah Binti Azman (appointed on 24.11.2000) 2 meetingsCham Chean Fong @ Sian Chean Fong (appointed on 24.5.2001) 1 meetingYasushi Hoshika (appointed on 3 September 2001) NATan Sri Dato’ Mohd Sheriff Bin Mohd Kassim (resigned on 31.12.2000) 1 meetingTan Siew Hin (resigned on 24 May 2001) 1 meetingKoay Teik Soon (resigned on 3 September 2001) 1 meeting

3. Date, time and venue of the Board Meetings.

Date Time Venue

28.09.2000 10.30 a.m. Board RoomJalan Utas 15/740000 Shah AlamSelangor Darul Ehsan

01.03.2001 11.30 a.m. Board RoomJalan Utas 15/740000 Shah AlamSelangor Darul Ehsan

27.06.2001 11.00 a.m. Board RoomJalan Utas 15/740000 Shah Alam Selangor Darul Ehsan

4. Further details of Directors who are standing for re-election.

(i) Name Lim Teck MengAge 64

Nationality Malaysian

Qualification Received his early education in Melaka.

Position in the Company Executive Chairman

Working experience and Lim Teck Meng is presently the Executive Chairman of the Company. He was appointed to the occupation Board in September 1969 as the Managing Director of the Company and he held this position until

6 November 2001 when he was appointed as the Executive Chairman. He is a businessman withextensive knowledge and experience in the polymer and plastic industry for over 35 years and alsoin trading and property development. He has been instrumental to the growth of the Group.

Other directorships of Nonepublic companies

N O T I C E O F A N N U A L G E N E R A L M E E T I N GSTATEMENT ACCOMPANYING


PAGE 95

C O N T I N U E D

Securities holdings in the Securities holdings No. of securities %

Company and its subsidiaries Shares(as at 31.07.2001) Scientex Incorporated Berhad 25,000 (Direct) 0.04

24,804,444 (Indirect) 40.03

Scientex Trading Sdn Bhd 300 (Direct) 0.03

Scientex Quatari Sdn Bhd 374,500 (Indirect) 1.98

Scientex Land Sdn Bhd 750,000 (Indirect) 42.86

Scientex Aidiros Sdn Bhd 840,000 (Indirect) 4.67

Warrants B (2000/2006)Scientex Incorporated Berhad 82,000 (Direct) 0.79

6,840,000 (Indirect) 65.79

Family relationship with any Father of Lim Peng Cheong and Lim Peng Jindirector and/or majorshareholder of the Company

Any conflict of interest Nonewith the Company

List of convictions for offences Nonewithin the past 10 years other than traffic offences, if any

(ii) Name Wong Mook WengAge 69


Qualification Received his early education in Kuala Lumpur.

Position in the Company Independent Non-Executive Director

Working experience and Wong Mook Weng was appointed to the Board on 29 November 1969 and he is presently the Chairmanoccupation of the Audit Committee. He is a businessman with considerable experience owning and managing

businesses dealing in property development, manufacturing and trading.


Securities holdings in the Securities holdings No. of securities %Company and its subsidiaries Shares(as at 31.07.2001) Scientex Incorporated Berhad 375,000 (Indirect) 0.61

Scientex Quatari Sdn Bhd 25,000 (Indirect) 0.13Scientex Aidiros Sdn Bhd 60,000 (Indirect) 0.33

Warrants B (2000/2006)Scientex Incorporated Berhad 47,600 (Direct) 0.46

Family relationship with any Nonedirector and/or majorshareholder of the Company




PAGE 96

(iii) Name Cham Chean Fong @ Sian Chean Fong

Age 33


Qualification LLB (Honours) from Bristol Polytechnic, U.K.


Working experience and Cham Chean Fong was appointed to the Board on 24 May 2001. He is also a Member of occupation the Audit Committee. He obtained his Certificate of Legal Practice in 1993 and was called to Bar in

September 1995. Since then, he has been in private practice and he is currently a partner of a lawfirm in Kuala Lumpur.

Other directorships of Woventex Corporation Berhadpublic companies

Securities holdings in the NoneCompany and its subsidiaries




(iv) Name Yasushi Hoshika

Age 53

Nationality Japanese

Qualification Bachelor Degree in Law from Seikei University, Japan


Working experience and Yasushi Hoshika was appointed to the Board on 3 September 2001. He joined Nichimen Corporation, occupation Tokyo Head Office in 1972 and has since served the company in various capacities. He had served

as the Representative of Nichimen Office in various countries namely, Jeddah Liaison Office, KualaLumpur Branch, Bangkok Branch and Beijing Office. Currently, he holds the position as the ChiefExecutive Officer of Nichimen Asia Oceania Pte Ltd in Singapore.


Securities holdings in the NoneCompany and its subsidiaries




C O N T I N U E D


PAGE 97

ANNEXURE

Permodalan Nasional Berhad(38218-X)

November 12, 2001

The Board of DirectorsScientex Incorporated BerhadJalan Utas 15/740000 Shah AlamSelangor

Dear Sirs

NOTICE OF NOMINATION OF AUDITORS

With regard to the above matter and pursuant to Section 172(11) of the Companies Act, 1965, Permodalan Nasional Berhad, beinga registered shareholder of Scientex Incorporated Berhad, hereby give notice of our intention to nominate Messrs Arthur Andersen& Co. for appointment as Auditors of Scientex Incorporated Berhad, to replace the retiring Auditors, Messrs T. C. Liew & Co., andto propose the following as an ordinary resolution to be tabled at the forthcoming Annual General Meeting of ScientexIncorporated Berhad.

“That Messrs Arthur Andersen & Co. be and are hereby appointed Auditors of Scientex Incorporated Berhad in place of the retiringAuditors, T. C. Liew & Co. to hold office until the conclusion of the next annual general meeting at a remuneration to be determinedby the Directors.”

Yours faithfullyPERMODALAN NASIONAL BERHAD

DATUK HAMAD KAMA PIAH CHE OTHMANGroup Chief Executive

201-A, Jalan Tun Razak, P. O. Box 10745 Kuala LumpurTel: 03-213 5100 Fax: 03-213 5268

PNB

O F P R O X YFORM

I/We

of

being a member/members of SCIENTEX INCORPORATED BERHAD, hereby appoint *the Chairman of the

Meeting or

of

or failing him/her

of

as my/our proxy to attend and vote for me/us and on my/our behalf at the Thirty-Third Annual General Meeting of the Company to be heldat Bilik Klang, Kelab Shah Alam Selangor, Jalan Aerobik 13/43, Persiaran Kayangan, 40704 Shah Alam, Selangor Darul Ehsan, on Friday, 28 December 2001 at 11.00 a.m. and at any adjournment thereof and to vote as indicated below:-

No. RESOLUTION FOR AGAINST

(Please indicate with an "X" in the spaces provided above how you wish your votes to be cast on the resolutions specified in the Notice ofAnnual General Meeting. If no specific instruction as to voting is given, the proxy will vote or abstain from voting at his/her discretion.)

Dated this day of 2001

Number of Shares heldSignature of Member (s)

* Delete the words "the Chairman of the meeting or" if you wish to appoint some other person(s) to be your proxy.

Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company and a member may appointany person to be his proxy without limitation and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation, under its common sealor the hand of its attorney.

3. The form of proxy must be deposited at the Company’s Registered Office at Jalan Utas 15/7, 40000 Shah Alam, Selangor Darul Ehsan, not less than forty-eight (48) hours before the timeappointed for the holding of the meeting or any adjournment thereof.

SCIENTEX INCORPORATED BERHAD(Company No. 7867-P)

(Incorporated in Malays ia)

1. To receive the Accounts and Reports

2. To approve the declaration of a first and final dividend

3. To approve Directors’ fees

To re-elect the following Directors retiring in accordance with Article 92 of theCompany’s Articles of Association:

4. a) Mr. Lim Teck Meng5. b) Mr. Wong Mook Weng

To re-elect the following Directors retiring in accordance with Article 97 of theCompany’s Articles of Association:

6. a) Cham Chean Fong @ Sian Chean Fong7. b) Mr. Yasushi Hoshika

8. To appoint Messrs. Arthur Andersen & Co. as the Auditors of the Company andauthorise the Directors to fix their remuneration

9. To authorise Directors to issue shares not exceeding 10% of the issued share capitalof the Company

10. Special ResolutionProposed Amendments to the Articles of Association

11. Ordinary ResolutionProposed Shareholders’ Mandate for Recurrent Related Party Transactions of aRevenue or Trading Nature.

REGISTERED OFFICE

SCIENTEX INCORPORATED BERHAD (7867-P)

Jalan Utas 15/7

40000 Shah Alam

Selangor Darul Ehsan

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SCIENTEX INCORPORATED BERHAD - I3investor

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