Contentsjayatiasa.listedcompany.com/misc/AR2003.pdf · 2007. 11. 27. · Export Market Corporate...

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Corporate Information

5-Year Financial Highlights

Notice of Annual General Meeting

Notice of Dividend Entitlement

Statement Accompanying Notice of Annual General Meeting

Key Information

Board of Directors

Directors' Profiles

Chairman's Statement

Export Market

Corporate Structure

Statement on Corporate Governance

Audit Committee Report

Statement on Internal Control

Directors' Responsibility Statement

Financial Statements

Additional Compliance Information

Analysis of Shareholdings

List of Properties

Proxy Form

Contents

2 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003

Corporate Information

Company Secretaries

Ngu Ung Huong

Lim Phooi Kee

Ng Yim Kong

Auditors

Ernst & Young

Chartered Accountants

Share Registrar

Signet Share Registration Services Sdn Bhd

11th Floor, Tower Block

Kompleks Antarabangsa

Jalan Sultan Ismail

50250 Kuala Lumpur

Tel : 03-21454337

Fax : 03-21421353

Stock Exchange Listing

The Kuala Lumpur Stock Exchange - Main Board

Principal Bankers

HSBC Bank Malaysia Berhad

Citibank Berhad

RHB Bank Berhad

Registered Office

No. 1-9, Pusat Suria Permata

Jalan Upper Lanang

96000 Sibu, Sarawak

Tel : 084-213255

Fax : 084-213855

E-mail : [email protected]

Website Address

www.jayatiasa.com

Board of Directors

Gen (Rtd) Tan Sri Abdul Rahman bin Abdul HamidIndependent Non-Executive Chairman

Mr Tiong Chiong HooManaging Director

Dr. Tiong Ik KingNon-Independent Non-Executive Director

Tuan Haji Wan Alshagaf bin Tuanku EsimIndependent Non-Executive Director

Tuan Haji Ashaari @ Asahari bin ShebliIndependent Non-Executive Director

Mr John Leong Chung LoongIndependent Non-Executive Director

Mdm Tiong ChoonNon-Independent Non-Executive Director

Mr Tiong Chiong HeeNon-Independent Non-Executive Director

Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 3

5-Year Financial Highlightsfor financial year ended 30 April 2003


NOTICE IS HEREBY GIVEN that the Forty-Third Annual General Meeting of the

Company will be held at the Auditorium Room, Ground Floor, No.62, Lorong

Upper Lanang 10A, 96000 Sibu, Sarawak on Monday, 29 September 2003 at

11.45 a.m. for the following purposes:-

Notice of Annual General Meeting

Agenda

1. To receive the Audited Financial Statements of the Company for the year ended

30 April 2003 together with the Directors’ and Auditors’ Reports thereon.

2. To approve payment of Directors’ Fees for the year ended 30 April 2003.

3. To declare a First and Final Dividend of 3% less tax for the year ended 30 April 2003.

4. To re-elect the following directors: -

i. Gen (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid

ii. Mr Tiong Chiong Hoo

iii. Tuan Haji Wan Alshagaf Bin Tuanku Esim

5. To re-appoint Auditors and to authorise the Directors to fix their remuneration.

6. As Special Business

To consider and, if thought fit, to pass the following Ordinary Resolution: -

Authority for Directors to Allot and Issue Shares

“THAT subject always to the approvals of the relevant authorities, the Directors

be and are hereby authorised pursuant to Section 132D of the Companies Act,

1965, to allot and issue shares in the Company at any time and upon such

terms and conditions and for such purposes as the Directors may deem fit,

provided that the aggregate number of shares to be issued pursuant to this

resolution does not exceed ten per centum (10%) of the total issued capital of

the Company at the time of issue and that such authority shall continue in force

until the conclusion of the next Annual General Meeting of the Company.”

7. To transact any other business of which due notice shall have been given in

accordance with the Company’s Articles of Association and the Companies Act, 1965.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8


Notice of Dividend Entitlement

NOTICE IS HEREBY GIVEN THAT the First and Final Dividend of 3% less tax for

the financial year ended 30 April 2003, if approved at the Forty-Third Annual

General Meeting, will be paid on 20 November 2003 to Depositors registered in

the Record of Depositors at the close of business on 23 October 2003.

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

a) Shares deposited into the depositor’s securities account before 12.30 p.m. on 21 October 2003 in respect of shares

which are exempted from mandatory deposit;

b) Shares transferred into the depositor’s securities account before 4.00 p.m. on 23 October 2003 in respect of

ordinary transfers; and

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

Kuala Lumpur Stock Exchange.

By Order of the Board

JAYA TIASA HOLDINGS BERHAD

NGU UNG HUONG

LIM PHOOI KEE

NG YIM KONG

Company Secretaries

Sibu, Sarawak

5 September 2003

Notes On Appointment Of Proxy

1. A member of the Company entitled

to attend and vote at the meeting is

entitled to appoint one or more proxies

in his/her stead. Where a member

appoints two (2) or more proxies, he/she

shall specify the proportion of his/her

shareholdings to be represented by

each proxy.

2. A proxy may but need not be a member

of the Company and the provision of

Section 149(1)(b) of the Companies

Act, 1965 shall not apply to the Company.

3. The instrument appointing a proxy

must be deposited at the Company’s

Registered Office at No.1-9, Pusat

Suria Permata, Jalan Upper Lanang,

96000 Sibu, Sarawak not less than

forty-eight (48) hours before the time

for holding the meeting or at any

adjournment thereof.

4. If the appointer is a corporation, the

proxy form must be executed under

its common seal or under the hand

of its attorney.

Notes On Special Business

The Proposed Ordinary Resolution, if

passed, will empower the Directors of the

Company, from the date of the above

Annual General Meeting, authority to allot

and issue shares in the Company up to an

amount not exceeding in total 10% of the

issued capital of the Company for such

purposes as the Directors consider would

be in the interest of the Company. This

authority, unless revoked or varied at a

General Meeting will expire at the next

Annual General Meeting.


1. Forty-Third Annual General Meeting

Date : 29 September 2003 (Monday)

Time : 11.45 a.m.

Venue : Auditorium Room, Ground Floor,

No.62, Lorong Upper Lanang 10A

96000 Sibu, Sarawak

2. Name of Directors standing for re-election

Directors who are standing for re-election at the Forty-Third Annual General Meeting of the Company are: -

• Gen (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid Resolution 4

• Mr Tiong Chiong Hoo Resolution 5

• Tuan Haji Wan Alshagaf Bin Tuanku Esim Resolution 6

3. Details of Directors standing for re-election

Details of directors who are standing for re-election are set out in the Directors’ Profiles on page 9 of the Annual

Report.

4. Details of attendance of Directors at Board Meetings

A total of four (4) Board of Directors Meetings were held during the financial year ended 30 April 2003. Details of

attendance are as follows: -

Name of Directors Number of Meetings Attended

Gen (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid 4/4

Mr Tiong Chiong Hoo 4/4

Dr Tiong Ik King 4/4

Tuan Haji Wan Alshagaf Bin Tuanku Esim 3/4

Tuan Haji Ashaari @ Asahari Bin Shebli 4/4

Mr John Leong Chung Loong 4/4

Mdm Tiong Choon 4/4

Mr Tiong Chiong Hee 4/4

Statement Accompanying Notice of Annual General Meeting


Key Information

Forest Concessions

Area 1,760,535 acres

Location Sarawak, Malaysia

Main Species Meranti, Kapor, Keruing, Selangan Batu, Jelutong, Melapi, Mersawa, Nyatoh and Arau

Annual Production Capacity

Malaysia

Jaya Tiasa Rimbunan Hijau Jaya Tiasa Total

Plywood Plywood Timber Products

Sdn Bhd Sdn Bhd Sdn Bhd

Plywood cubic metre 180,000 120,000 60,000 360,000

Veneer cubic metre 324,000 – – 324,000

Sawntimber cubic metre 70,000 – – 70,000

Blockboard cubic metre – 12,000 – 12,000

Film-Overlay Plywood cubic metre – 6,000 – 6,000

Sliced-Veneer square metre – – 6,000,000 6,000,000

Brazil

Maginco Verde Ltda Selvaplac Verde Ltda Total

Plywood cubic metre 67,200 48,000 115,200

Sawntimber cubic metre 19,200 – 19,200


Board of Directors

Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid

Mr Tiong Chiong Hoo

Tuan Haji Wan Alshagaf bin Tuanku Esim

Mdm Tiong Choon

Tuan Haji Ashaari @ Asahari Bin Shebli

Mr John Leong Chung Loong

Dr Tiong Ik King

Mr Tiong Chiong Hee


Directors’ Profiles

Gen (Rtd) Tan Sri Abdul Rahman binAbdul HamidIndependent Non-Executive Chairman

Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid, aged

65, was appointed to the Board on 27 March 1995. He

serves as chairman of the Board and the Audit Committee.

He is a graduate of the Royal Military College, Malaysia

and Army Staff College, Camberlay, United Kingdom. From

1958 to 1994, he served in various capacities and

appointments in the Malaysian Armed Forces. He was the

Chief of the Malaysian Army and Defence Force between

1992 and 1994 and was the Acting Governor of Penang in 1994.

Presently, he is the Chairman of Perbadanan Perwira

Harta Malaysia, a subsidiary of Lembaga Tabung

Angkatan Tentera (“LTAT”), a provident fund in Malaysia

involving mainly in property development and construction.

He sits on the Board of Composite Technologies

Research Malaysia (“CTRM”), an aerospace company

produces Eagle 150 aircrafts, Lancair and other

aircraft products made from composite materials. He is

also the chairman and director of a few other multinational

and private companies established in Malaysia.

He has no family relationship with any Director and/or

major shareholder of the Company, nor any conflict of

interest with the Company.

Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid

attended all the 4 Board Meetings held in the financial

year ended 30 April 2003.

Mr Tiong Chiong HooGroup Managing Director

Mr Tiong Chiong Hoo, aged 43, was appointed Executive

Director on 27 March 1995 and subsequently

re-designated as Managing Director on 26 April 1995.

He is a member of the Audit Committee.

He holds a Bachelor of Law and a Bachelor of

Economics degree from Monash University, Australia

and is a registered barrister. He has more than twenty

years of experience in timber industry.

He is the son of Tan Sri Datuk Tiong Hiew King, a major

shareholder of the Company. His uncle Dr Tiong Ik King,

sister Mdm Tiong Choon and cousin brother Mr Tiong

Chiong Hee are also members of the Board.

He is deemed interested in the related party transactions

entered into in the ordinary course of business disclosed

in Note 30(b) to the Financial Statements on pages 58

to 59. Saved as disclosed therein, he has no conflict of

interest with the Company.

Mr Tiong Chiong Hoo attended all the 4 Board Meetings

held in the financial year ended 30 April 2003.

Dr Tiong Ik KingNon-Independent Non-Executive Director

Dr Tiong Ik King, aged 53, joined the Board on

27 March 1995. He is a member of the Remuneration

Committee and the Nomination Committee.

He graduated with M.B.B.S from the National University

of Singapore in 1975 and obtained M.R.C.P. from Royal

College of Physicians, United Kingdom in 1977. He

joined Rimbunan Hijau Group in 1982. Currently, he

sits on the board of EON Capital Berhad.

He is the brother of Tan Sri Datuk Tiong Hiew King, a

major shareholder of the Company. His nephews,

Mr Tiong Chiong Hoo and Mr Tiong Chiong Hee and

his niece Mdm Tiong Choon are also members of the

Board. He is deemed interested in the related party

transactions entered into in the ordinary course of

business disclosed in Note 30(b) to the Financial

Statements on pages 58 to 59. Saved as disclosed

therein, he has no conflict of interest with the Company.

Dr Tiong Ik King attended all the 4 Board Meetings


Tuan Haji Wan Alshagaf bin Tuanku EsimIndependent Non-Executive Director

Tuan Haji Wan Alshagaf bin Tuanku Esim, aged 58,

joined the Board on 10 March 1999. He serves as

Chairman of the Nomination Committee and is a member

of the Audit Committee and Remuneration Committee.

He holds a Master in Business Administration, United

Kingdom. He had held various senior positions in

Sarawak Economic Development Corporation from

1972 till 1992 and was a member of Public Service

Commission from 1992 to 1998. He was the first President

of Persatuan Alumni Universiti Teknologi Mara Sarawak

(“MITSA”).

Currently, he is the Vice-President of Persatuan Pesara

Kerajaan Negeri Sarawak and Patron of Executive

Committee of Arr-Rahmah Mosque at RPR Batu Kawa,

Kuching. He is also active in social activities.

He has no family relationship with any Director and/or

major shareholder of the Company, nor any

conflict of interest with the Company.

Tuan Haji Wan Alshagaf bin Tuanku Esim attended 3

out of 4 Board Meetings held in the financial year ended

30 April 2003.


Directors’ Profiles (cont’d)

Tuan Haji Ashaari @ Asahari Bin ShebliIndependent Non-Executive Director

Tuan Haji Ashaari @ Asahari Bin Shebli, aged 65, joined

the Board on 2 October 2000. He is the Chairman of

the Remuneration Committee and a member of the

Nomination Committee.

He had been in the government and public services

for more than twenty years before venturing into his

own business in 1992.

He has no family relationship with any Director and or

major shareholder of the Company, nor any conflict

of interest with the Company.

Tuan Haji Ashaari @ Asahari Bin Shebli attended all

the 4 Board Meetings held in the financial year ended

30 April 2003.

Mr John Leong Chung LoongIndependent Non-Executive Director

Mr John Leong Chung Loong, aged 56, was appointed

to the Board on 28 March 2002. He is a member of

the Audit Committee.

He holds a Bachelor of Economics degree majoring in

Accounting from Sydney University, NSW, Australia.

He is an Approved Company Auditor and a member of

several professional bodies, including the Australian

Society of Certified Practising Accountants, Australian

Institute of Taxation (Fellow), Malaysian Institute of

Accountants, Malaysian Institute of Certified Public

Accountants and Malaysian Institute of Taxation

(Associate). He started his career as an Accountant in

Tractors Malaysia Berhad, Sandakan Branch in 1972

and left in 1973 to join John Liaw & Co as an audit

manager. He was a partner of Liaw, Leong, Wong &

Co from 1986 to 1997 and a partner of Ernst & Young

from 1997 to 2001.

He has no family relationship with any Director and/

or major shareholder of the Company, nor any

conflict of interest with the Company.

Mr John Leong Chung Loong attended all the 4 Board

Meetings held in the financial year ended 30 April 2003.

Mdm Tiong ChoonNon-Independent Non-Executive Director

Mdm Tiong Choon, aged 34, was appointed to the

Board on 3 May 1999.

She graduated with a Bachelor of Economics Degree

from Monash University, Australia in 1990 and has

more than twelve years of managerial experience in

various capacities.

She is the daughter of Tan Sri Datuk Tiong Hiew King,

a major shareholder of the Company. Her uncle

Dr Tiong Ik King, brother Mr Tiong Chiong Hoo and

cousin brother Mr Tiong Chiong Hee are also members

of the Board. She is deemed interested in the related

party transactions entered into in the ordinary course

of business disclosed in Note 30(b) to the Financial


therein, she has no conflict of interest with the Company.

Mdm Tiong Choon attended all the 4 Board Meetings


Mr Tiong Chiong HeeNon-Independent Non-Executive Director

Mr Tiong Chiong Hee, aged 30, was appointed to the

Board on 14 May 1999.

He obtained a Bachelor of Commerce Degree from

University of Melbourne, Australia in 1995 and has

more than seven years of managerial experience in

logging and oil palm operations in Sarawak and overseas.

He is the nephew of Tan Sri Datuk Tiong Hiew King, a

major shareholder of the Company. His uncle Dr Tiong

Ik King, cousin brother Mr Tiong Chiong Hoo and cousin

sister Mdm Tiong Choon are also members of the

Board. He is deemed interested in the related party

transactions entered into in the ordinary course of

business disclosed in Note 30(b) to the Financial


therein, he has no conflict of interest with the Company.

Mr Tiong Chiong Hee attended all the 4 Board Meetings


Notes:

1. None of the Directors has any conviction for

offences within the past 10 years.

2. All the directors of the Company are Malaysian.


I am pleased to report that the Group has managed

to turn around after a temporary setback suffered in

the previous financial year. The timber market started

to recover during the first half of the financial year

following a severe downtrend as a result of the global

economic slowdown and the aftermath of September 11

terrorist attack in USA. Recovery of both plywood and

log prices had been encouraging due to concerted

efforts taken in regulating log supply. However, the

sustainability of timber prices was shortlived mainly

as a result of the geopolitical uncertainties in West

Asia which subsequently led to the eruption of Iraq

war in March 2003. The outbreak of the SARS

epidemic during the fourth quarter of the financial year

also adversely affected our East Asian timber markets.

Financial Performance

The Group recorded a profit before tax of RM 65.0

million for the financial year ended 30 April 2003 as

compared to a loss before tax of RM 107.2 million in

the previous financial year. Net profit after tax surged

to RM 58.6 million against a net loss after tax of

RM 107.7 million in the preceding year. Revenue increased

by 31% to RM 578.4 million as compared to RM 440.3

million achieved in the previous financial year. Net

earnings per share recovered to 22.22 sen per share

as compared to a loss per share of 39.38 sen in

the previous year. The net tangible asset backing per

share also increased from RM 2.54 to RM 2.68. In

addition, the Group’s shareholders’ funds increased

to RM 792.24 million as at 30 April 2003 while

gearing continued to remain low. The significant

improvement in the results was principally attributed to

the recovery of global timber prices during the first

half of the financial year.

Operations Review

For the financial year under review, the selling prices

for most of our timber products improved as compared

to the previous financial year. The enforcement

action taken by Indonesia in regulating log supply and

its introduction of new forestry policies to better manage

its forest resources in a sustainable manner have

brought some positive impact to the timber industry.

The imposition of a permanent log export ban by the

Indonesian government from April 2002 and the

concerted efforts taken to combat illegal logging

activities by large timber producing and importing

nations have resulted in curtailed log supply thereby

resulting in a price recovery for most timber products,

in particular log and plywood during the first half of

the financial year.

However, the price uptrend of our products lost its

momentum and softened during the third financial quarter.

With the global economy being plagued by

economic and political uncertainties mainly as a result

of geopolitical tension in West Asia and the pessimism

over the recovery of the US economy coupled with

the spate of terrorist activities happening worldwide,

business confidence was weakened. The outbreak of

the US-led war against Iraq in March 2003 further

aggravated market sentiment with the corresponding

Chairman’s Statement

On behalf of the Board of Directors,

it is my great pleasure to present the

Annual Report and Financial Statements

of Jaya Tiasa Holdings Berhad for the

year ended 30 April 2003.


increase in oil prices adding uncertainty to the timber

market. In addition, the onset of the SARS epidemic

in March 2003 also exacerbated the already sluggish

timber market affecting particularly the East Asian

timber markets.

As a result of the softening of timber market during

the second half of the financial year, prices eased

during the last two quarters as demand, especially

from the East Asian markets contracted. However, the

Group in its earlier endeavor in diversifying and

developing its European and US markets on high-end

plywood products has alleviated these negative

impact. Our diversification into these niche products,

including film faced plywood fetched higher margins

and helped in mitigating the adverse effect experienced

from the depressed East Asian markets. With our

customer-focused approach in timely delivery and

reliable supply, the Group managed to adapt and

weather through the difficult and challenging

environment during the second half of the financial year.

In terms of revenue contribution, both the logging

and the plywood divisions each contributed about 45%

of the Group’s total revenue. Taiwan and Japan were

our key markets for round logs representing 37% and

33% respectively of the total log export during the

year. Export of logs to China dropped during the year

mainly attributed to stiff competition from Russian

softwood and the availability of cheaper logs from

Indonesia. As for plywood, USA remained our major

market taking up 55% of our total plywood export

during the year followed by Korea, who took up 32%.

With China becoming a net exporter of plywood

competing with those from Malaysia and Indonesia,

our export to China dropped during the year due to

the availability of internally produced plywood.

To meet the ever changing and increasing competitive

operating environment, the Group has upgraded its

wood processing technology for the processing of

smaller diameter logs to minimize costs, maximize

product recovery and hence improve manufacturing

efficiencies. The investment in these modern technology

is also in tandem with the Group’s embarkation into

reforestation whereby smaller diameter logs will be

processed with minimal wastage.

Other Developments

While prospects for the timber market remain

challenging, the Group took the opportunity to

review and increase its resource base. This involved a

two-pronged strategy with the Group refocusing on

its growth strategy and consolidation of its existing

strength and capability in the timber industry on the

one hand and actively embarking into oil palm

cultivation and reforestation on the other. These steps

taken will ensure that the Group maximise its ability

to capitalize on opportunities in existing and new

markets.

Reforestation

As a major player in the timber industry, we have

always placed the protection of our environment on

our top agenda. As biodiversity conservation and other

environmental issues are setting new demands for

forest management practices around the world, we

have set a new standard in our forest management

practices which will ensure biodiversity conservation

and protection of our environment.

Amid this very competitive business environment and

to accelerate our pace in ensuring future growth, the

Group has decided to venture into reforestation. We

have entered into agreements with RH Forest

Corporation Sdn Bhd to develop 235,000 hectares of

tree plantation in Kapit, Sarawak and to harvest and

purchase the timber grown naturally in the area and

the subsequent generations of plantation timber for

a period of 60 years. This huge land bank ensures

sustainable wood supply with close proximity to the

mills at a very competitive cost. The estimated

annual supply of mixed tropical hard wood during the

initial years is around 420,000 M3. Construction of

nursery and plantation village is progressing well.

Planting is scheduled to start in the last quarter of

2003. Various indigenous and fast growing exotic

species will be planted. The plantation will produce an

estimated 1.6 million M3 of wood annually when

harvesting starts in the 10th to the 15th year,

depending on the species planted.

Whilst our sustainable forest management practices

ensure ongoing replenishment of the wood resources

and the continuous supply of wood to the mills, the

homogeneity of plantation wood also offers better

opportunity to raise wood product quality and

uniformity, thus improving mill productivity and better

product pricing.

Fast growing plantation wood cultivated in the tropics

are in a favorable position to match the standards of

environmentally sound low cost wood. Sustainable

wood source gives the wood product a “green image”

Chairman’s Statement (cont’d)


Chairman’s Statement (cont’d)

enabling it to compete favorably in the international

market. The environmental friendly status of

plantat ion wood is an added advantage to

manufacturers like us who depend heavily on the

export market. It gives us a better opportunity to

penetrate the more sophisticated markets and fetches

premium prices.

Natural forest regeneration cannot economically and

adequately meet the wood demand as they require a

longer rotation period. Fast growing forest plantation

can produce much faster than natural forest. The yield

from the plantation will lessen the pressure on the

natural forest and help to avert the damage done to

the natural forest. Legume tree species, like Acacia

hybrid, Acacia crassicarpa and Albizzia, which are to

be planted will not only generate an active carbon

sink but also enrich the forest soil through nitrogen

fixation.

Oil Palm Plantation

To enhance strategic growth, the Group has embarked

into oil palm cultivation during the financial year under

review. Infrastructure development is being carried

out in the oil palm estate in Suai, Miri and is

progressing accordingly to schedule. Planting of oil

palm commenced in June 2002. On 28 February 2003,

the Company entered into a conditional Sale and

Purchase Agreement with the shareholders of

Hariyama Sdn Bhd to acquire the entire issued and

paid-up share capital in Hariyama Sdn Bhd. The

acquisition would increase the oil palm land bank of

the Group to 15,600 hectares.

Dividends

The Board of Directors has recommended a final

dividend of 3 sen less 28% income tax for the financial

year ended 30 April 2003. Although the Group has

posted a significant improved set of financial results,

the Board of Directors decided not to declare a higher

dividend rate, but instead to retain the profit for the

development and maintenance of the reforestation and

oil palm cultivation projects.

Outlook

The Group anticipates another challenging year ahead.

Despite the end of the Iraq war which has reduced

uncertainty in the Middle East region, the contagion

effect of the SARS epidemic subsequent to the financial

year end and the lingering concern of a weak global

economy especially in the USA and Japan will

continue to affect business confidence. The recent

imposition of JAS certification under the revision of

Building Standard Act in Japan on certain plywood

products is expected to cause short term uncertainty

in the timber market.

However, the Group envisages that the longer term

prospect of the timber industry remains intact. The

continuous enforcement in Indonesia in regulating log

supply coupled with the introduction of new forestry

policies including its recent plan to control smuggling

of logs and to reduce log production by 50% augur well

for the industry. The dynamic economic developments

with heavy infrastructure construction activities in

China and India, the region’s economic powerhouse

are expected to generate demand and add stability to

the industry.

Going forward, shareholders can rest assured that

the Directors will continue to seek new business

opportunities and manage its resources prudently, fully

cognizant of its responsibilities to them for long-term

growth in shareholders value.

Appreciation

On behalf of the Board of Directors, I wish to express

our sincere appreciation to the management and staff

of the Group for their contribution and commitment. I

would also like to thank our customers, bankers,

business associates and shareholders of the Group

for their continuous and strong support. The Board

would also like to record its gratitude to the relevant

authorities and members of the community for their

invaluable assistance and advice.

Gen. (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid

Chairman


Percentage of export Sales

Year ended Logs Plywood Veneer Others

30 April 2003 45.8% 44.7% 6.2% 3.3% 100%

30 April 2002 48.5% 33.1% 12.1% 6.3% 100%

30 April 2001 51.8% 33.2% 12.2% 2.8% 100%

Carribean Islands

China

Europe

Hong Kong

India

Japan

Korea

Middle East

Pakistan

Philippines

Singapore

Taiwan

Thailand

USA

Vietnam


Export Market


Sales Value 2003 (%) Sales Volume 2003 (%)




Export Market (cont’d)


Jaya Tiasa Plywood Sdn Bhd

Jaya Tiasa Timber Products Sdn Bhd

Rimbunan Hijau Plywood Sdn Bhd

Guanaco Sdn Bhd

Maujaya Sdn Bhd

Maxiwealth Holdings Sdn Bhd

Mantan Sdn Bhd

Jaras Sdn Bhd

Sericahaya Sdn Bhd

Curiah Sdn Bhd

Jaya Tiasa Forest Plantation Sdn Bhd

(Formerly known as Jaya Tiasa Plantations Sdn Bhd)

Multi Greenview Sdn Bhd

Simalau Plantation Sdn Bhd

Bonhin Sdn Bhd

Mafrica Trading Sdn Bhd

Hak Jaya Sdn Bhd

Kunari Timber Sdn Bhd

Jaya Tiasa R&D Sdn Bhd

(Formerly known as Jubiland Development Sdn Bhd)

Jaya Tiasa Aquaculture Sdn Bhd

Eastern Timber Limited

Eastern Green Company Inc.

Pacific Timber Holdings Limited

Selvaplac Verde Ltda

Atlantic Evergreen Holdings

Western Timber Resources Limited

Atlantic Timber Holdings Limited

Maginco Verde Ltda

Corporate Structure

Jaya Tiasa Holdings Berhad

Manufacturing of timber products

Extraction of logs

Reforestation

Oil Palm plantation

Helicopter Chartering Services

Heli-logging

Marketing

Research and Development

Dormant


Statement on Corporate Governance

Board Of Directors

The Board retains effective control of the Group and is

responsible for the Group’s overall strategic plans,

business performance, succession planning, risk

management, investor relations, internal control and

management information systems.

Board Balance

Jaya Tiasa Group is led and managed by an

experienced Board comprising members with a wide

range of experience in relevant fields required to

successfully direct and supervise the company’s business

activities, which are vital to the success of the Group.

The Board has eight (8) members comprising an

Independent Non-Executive Chairman, a Group

Managing Director, three (3) Independent Non-Executive

Directors and three (3) Non-Independent Non-Executive

Directors. The profiles of the members of the Board are

as shown on pages 9 and 10. The Board is of the

opinion that its current composition and size constitutes

an effective Board to the Company.

The Group practices a clear demarcation of responsibilities

while maintaining balance of power and authority. The

positions of the Chairman and the Managing Director

are individually held by two persons. The Chairman is

primarily responsible for the orderly conduct and working

of the Board. The day-to-day responsibilities of

overseeing the overall Group’s financial and operational

matters lies with the Executive Management under the

direction of the Group Managing Director to ensure that

the Group is managed in an efficient manner. The Managing

Director is also responsible for the implementation of

Board policies and the making of operational decisions.

The roles and responsibilities of the Executive Director

and senior management are clearly outlined. Adequate

support is in place to ensure continuity in the absence

of key executives.

The Board recognises the importance and contribution

of its Independent Non-Executive Directors. This ensures

the balance of power in the exercise of objective and

independent judgement at Board level, to safeguard

the interests of the major stakeholders and minority

shareholders respectively.

The Board has identified Gen (Rtd) Tan Sri Abdul

Rahman bin Abdul Hamid as the Senior Independent

Non-Executive Director to whom concerns of shareholders,

management and others may be conveyed.

Board Meetings

The Board holds at least four (4) regularly scheduled

meetings annually, with additional meetings to be convened

as and when necessary. There were four (4) Board

meetings held during this financial year. All conclusions

of the Board are duly recorded in Board minutes.

The attendance of the Board of Directors at Board Meetings

held during the financial year can be found in the Statement

Accompanying Notice of Annual General Meeting

(“AGM”) on page 6.

Supply Of Information

The Directors have unrestricted access to information

pertaining to the Group’s business and affairs to enable

them in discharging their duties and responsibilities.

All the Board members are provided with timely agenda

and relevant board papers which include annual budgets,

quarterly and annual financial statements, operational

reports, business and corporate proposals, minutes of

meetings as well as reports from independent advisers/

consultants to facilitate informed decision making.

All Directors have access to the advice of the Company

Secretaries, independent professional advisers, and

internal or external auditors at the Company's expense.

Committees

The following committees have been established to assist

the Board in the execution of its duties and responsibilities.

The Board of Directors of the Company is committed to ensure that the

highest standards of corporate governance are practiced throughout the

Company and its group of companies as a fundamental part of discharging its

responsibilities to protect and enhance shareholders value and financial performance.

Set out below is a statement by the Board of Directors of the Company on the

application by the Group of the principles contained in the Malaysian Code

on Corporate Governance (“Code”), and the extent of compliance with the

best practices of the Code.


Committees (cont’d)

The functions and terms of reference of the committees

as well as authority delegated by the Board to these

Committees are clearly defined.

a. Audit Committee

The Audit Committee Report is set out separately on

pages 20 to 22.

b. Nomination Committee

The following Directors are members of the Nomination

Committee:-

Chairman - Tuan Haji Wan Alshagaf bin Tuanku Esim

(Independent Non-Executive Director)

Members - Tuan Haji Ashaari @ Asahari bin Shebli


- Dr. Tiong Ik King

(Non-Independent Non-Executive Director)

The Nomination Committee is tasked with the following

responsibilities:-

• To review regularly the Board structure, size and

composition and make recommendations to the

Board with regards to any adjustments that are

deemed necessary;

• To propose, identify and recommend new nominees

for appointment to the Board of Directors and

Board Committees. This includes candidates for

directorships proposed by the Managing Director

and, within the bounds of practicability, by any

other senior executive or any Director or shareholder;

• To review the Board’s mix of skills and experience

and other qualities including core competencies,

which non-executive Directors should bring to the

Board and to determine whether or not, a Director

is Executive, Non-Executive or Independent on an

annual basis;

• To recommend to the Board for continuation (or not)

in service of Executive Director(s) and Directors

who are due for retirement by rotation; and

• To orientate and educate new Directors on the nature

of the business, current issues within the Company

and the corporate strategy, the expectations of

the company concerning input from the Directors and

the general responsibilities of Directors.

c. Remuneration Committee

The following Directors are members of the Remuneration

Committee:-

Chairman - Tuan Haji Ashaari @ Asahari bin Shebli


Members - Tuan Haji Wan Alshagaf bin Tuanku Esim


- Dr. Tiong Ik King

(Non-Independent Non-Executive Director)

Statement on Corporate Governance (cont’d)

The Remuneration Committee is tasked with the following

functions:-

• to recommend to the Board the framework of

Executive Directors’ remuneration and the

remuneration package for each Executive Director,

drawing from outside advice as necessary;

• to recommend to the Board any performance

related pay schemes for Executive Directors;

• to review Executive Directors’ scope of service

contracts; and

• to consider the appointment of the service of

such advisers or consultants as it deems

necessary to fulfill its functions.

Remuneration package of Executive Directors will be a

matter to be decided by the Board as a whole with the

Director concerned abstaining from deliberations and voting

on decisions in respect of his individual remuneration.

Presently, the fees of all Directors are recommended

by the Board for approval by the shareholders of the

company at the AGM.

d. Risk Management Committee

The Managing Director, Mr Tiong Chiong Hoo is the chairman

of the Risk Management Committee. He is authorized

by the Board to appoint members to support him in his

role in leading the management in the risk management

activities. Currently, his team members are from the

senior management.

The Risk Management Committee is tasked with the

following functions:-

• to establish a risk management framework and

execute an annual risk assessment. The frame

work should provide a consistent approach to risk

and facilitate an accurate perception of acceptable

risk by all employees. The annual risk assessment

will characterize the full range of corporate risk

exposures, including risk impacts such as harm to

employees and the public, environmental harm,

and damage to corporate reputation;

• as part of the annual business planning process,

to review the defined risk/return parameters, risk

appetite and risk management standards;

• to report annually to the Board of Directors on

risk assessment results and report at least half-

yearly to the Board on the risk management

activities and the effectiveness of the risk

management framework; and

• to formulate the annual risk assessment plan for

Board’s approval.

The ultimate responsibility for ensuring an effective

risk management framework/program is in place and

is aligned with the business objectives of the Group,

however, lies with the Board.


Statement on Corporate Governance (cont’d)

Directors’ Remuneration

During the financial year ended 30 April 2003, the

remuneration of the Executive Directors and Non-Executive

Directors are as follows:-

Directors’ Executive Non-Executive

Remuneration Director(s) Director(s)

RM RM

Fee(s) 30,000 210,000

Salary391,500 -

(including EPF)

Bonus 126,500 -

Allowance - 48,000

Total 548,000 258,000

Directors’ Executive Non-Executive

Remuneration Director Directors

Below RM50,000 - 6

RM50,001 to

RM100,000- 1

RM450,001 to

RM500,0001 -

Directors’ Training

All members of the Board have attended the Mandatory

Accreditation Training Programme prescribed by the Kuala

Lumpur Stock Exchange (“KLSE”). In addition, all

directors are required to participate in the KLSE-

accredited Continuing Education Programme and

activities. Further, all directors are given necessary

materials, information and updates pertaining to the

Company on a regular basis.

Re-election of Directors

In accordance with the Company’s Articles of

Association, at least one third (1/3) of the Directors

shall retire and be eligible for re-election by rotation at

each Annual General Meeting. All directors are to retire

from office at least once in three years.

Shareholders

Information pertaining to the activities and performance

of the Jaya Tiasa Group is communicated to shareholders

and other stakeholders through the following:-

• the Annual Report;

• disclosures and announcements made to the

Kuala Lumpur Stock Exchange including the

quarterly and annual financial statements;

• the Company website at

http://www.jayatiasa.com; and

• periodic dialogues with shareholders, research

analysts, fund managers and institutional

investors on the financial results and statements,

Group’s strategies as well as other significant

corporate events as and when required.

The Company's AGM serves as a principal forum for

dialogue with shareholders. Extraordinary General

Meetings are also held as and when required.

The Company endeavours to provide as much information

as possible to its shareholders and stakeholders whilst

ensuring adherence to prevailing regulatory and

statutory requirements.

Financial Reporting

In presenting the annual financial statements and

quarterly announcements to shareholders, the

Directors aim to present a balanced and understandable

assessment of the Group’s position and prospects. These

financial statements are drawn-up in accordance with

the provisions of the Companies Act, 1965 and the

applicable approved accounting standards of the

Malaysian Accounting Standards Board (MASB).

The Audit Committee assists the Board in ensuring

accuracy and adequacy of information by reviewing and

recommending certain information for public disclosure.

Internal Control

The Statement on the State of Internal Control within

the Group is provided on page 23.

Relationship With The Auditors

A transparent and appropriate relationship is maintained

with the Company’s auditors through the Audit

Committee. The Audit Committee has been explicitly

accorded the power to communicate directly with both

external auditors and internal auditors.

The auditors may from time to time throughout the

financial year, highlight to the Audit Committee and the

Board on matters that require the Board’s attention.

The Audit Committee has met once with the external

auditors without the presence of the Executive Director

during the financial year.

This statement is made in accordance with a resolution

of directors dated 19 August 2003.


Members

Gen (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid

Chairman - Independent Non-Executive Director

Mr Tiong Chiong Hoo

Member - Managing Director

Terms Of Reference

1. Size And Composition

1.1 The Audit Committee shall be appointed by

the Board of Directors from among their

number and shall be composed of not less

than three members, a majority of whom

must be independent directors. At least one

member of the Audit Committee must be a

member of the Malaysian Institute of

Accountants or person who meets the

requirements set out in Paragraph 15.10(c)(ii)

of the Kuala Lumpur Stock Exchange Listing

Requirements. No alternate director shall be

appointed as member of the Audit Committee.

1.2 The members of the Audit Committee shall

elect a chairman from among their number

who shall be an independent director.

1.3 The term of office of each member shall be

subject to review every three years.

1.4 If a member of the Audit Committee resigns,

dies or for any other reason ceases to be a

member with the result that the number of

members is reduced to below three, the

Board of Directors shall, within three months

of that event, appoint such number of new

members as may be required to make up

the minimum number of three members.

2. Authority And Rights

2.1 The Committee wherever necessary and

reasonable for the performance of its

duties, shall in accordance with the procedure

determined by the Board and at the cost of

the Company:-

(a) have authority to investigate any

matter within its Terms of Reference;

(b) have the resources which are required

to perform its duties;

(c) have full and unrestricted access to any

information relevant to its activities;

(d) have direct communication channels

with the external auditors and

person(s) carrying out the internal

audit function or activity;

(e) be able to obtain external legal or other

independent professional advice if it

considers this necessary; and

(f) be able to convene meetings with the

external auditors, excluding the

attendance of the executive members

of the committee, whenever deemed

necessary.

3. Functions And Duties

The Committee shall, amongst others, discharge

the following functions:

3.1 to assess the adequacy and effectiveness

of the systems of internal control and the

efficiency of the Group’s operations.

3.2 to review the following and report the same

to the Board of Directors of the Company:-

(a) with the external auditors:-

(i) the audit plan;

(ii) his evaluation of the system of

internal controls;

(iii) his audit report;

(iv) the assistance given by the

employees of the Company to the

auditors;

(b) the adequacy of the scope, functions

and resources of the internal audit

functions and that it has the necessary

authority to carry out its work;

(c) the internal audit programme,

processes, the results of the audit

Audit Committee Report

Tuan Haji Wan Alshagaf Bin Tuanku Esim

Member - Independent Non-Executive Director

Mr John Leong Chung Loong

Member - Independent Non-Executive Director


3. Functions And Duties (cont’d)

programme, processes or investigation

undertaken and whether or not

appropriate action is taken on the

recommendations of the internal audit

function;

(d) the quarterly results and year end

financial statements, prior to the

approval by the board of directors,

focusing particularly on:-

(i) changes in or implementation of

major accounting policies and

practices;

(ii) significant and unusual events;

(iii) the going concern assumption;

and

(iv) compliance with accounting

s tandards and o ther l ega l

requirements;

(e) any related party transaction and

conflict of interest situation that may

arise within the Company or Group;

and

(f) any letter of resignation from the

external auditors of the Company;

3.3 to consider the appointment of external

auditors, the audit fee and any questions of

resignation or dismissal.

3.4 to promptly report to Kuala Lumpur Stock

Exchange on matters which result in a

breach of Listing Requirements.

3.5 to submit to the Board on a periodic basis a

Report on the summary of activities of the

Audit Committee in the discharge of its

functions and duties in respect of each

financial quarter and the financial year.

4. Procedure Of Audit Committee

4.1 The Audit Committee shall meet not less

than four times in a year. Additional meetings

may be called at any time if so requested

by any Committee member, management

or the internal or external auditors.

4.2 A quorum shall consist of a majority of

independent directors.

Members Attendance

Gen (Rtd) Tan Sri Abdul Rahman5/5

bin Abdul Hamid

Mr Tiong Chiong Hoo 4/4

Tuan Haji Wan Alshagaf4/5

bin Tuanku Esim

Mr John Leong Chung Loong 5/5

Summary Of Audit Committee

Activities

The Audit Committee, in discharging its functions and

duties in accordance with its Terms of Reference, had

carried out the following activities during the financial

year ended 30 April 2003:-

a) Reviewed the unaudited quarterly financial

results of the Company and the Group

before recommending them for approval by

the Board;

b) Reviewed the annual audited financial

statements of the Company and the Group

with the external auditors prior to submission

to the Board for its approval;

c) Reviewed and approved the scope of internal

audit and the annual audit plan;

4.3 Other Directors and employees may attend

any particular Audit Committee meeting only

at the Audit Committee’s invitation, specific

to the relevant meeting.

4.4 Procedures in relation to giving of notice,

voting and proceedings of meeting of the

Committee shall be governed by the relevant

provisions contained in the Articles of

Association of the Company.

4.5 The Company Secretary shall act as secretary

of the Audit Committee.

Meetings And Attendance

The Audit Committee met five times during the

financial year ended 30 April 2003. One of the

meetings was held without the presence of the

Executive Director. Details of the attendance of the

members are as follows:

Audit Committee Report (cont’d)


Audit Committee Report (cont’d)

Summary Of Audit Committee Activities

(cont’d)

d) Reviewed the internal audit reports, audit

recommendations made and management

response to these recommendations. Where

necessary, the Committee has directed action

to be taken by the management to rectify

and improve the system of internal controls;

e) Reviewed the recurrent related party

transactions ("RRPT") entered into by the

Company and Group to ensure that the

established procedures for monitoring RRPT

are adhered to; and

f) Met with the external auditors in the

absence of the Executive Director.

Summary Of Internal Audit

Activities

The internal audit function of the Group provides the

Audit Committee with independent and objective

reports on the state of internal controls, risk management,

the extent of compliance with applicable policies and

procedures and its recommendation thereof.

The Internal Audit Department dedicates its efforts

towards assisting the Group in creating an atmosphere

of accountability, transparency and improved performance

in the activities being reviewed. During the financial

year, the main audit activities included the following: -

a) Reviewing and appraising the soundness,

adequacy and application of accounting,

financial, operational and other controls,

recommending and promoting control

awareness in the Company and the Group

at reasonable cost;

b) Ascertaining the extent of compliance

with the established Group policies,

procedures and statutory requirements;

c) Ascertaining the extent to which the

Company's and Group's resources are

accounted for and safeguarded from

losses;

d) Determining the reliability and integrity

of information generated for management

reporting purposes;

e) Attending the half-yearly and year-end

physical inventories of finished goods,

raw materials and spare parts;

f) Reviewing the related party transactions

within the Company and the Group;

g) Performing follow up on the

implementation and satisfactory

dispositions of audit findings and

recommendations on the previous

assignments; and

h) Attending the bimonthly Risk

Management Committee Meeting and

assisting in the review of the key risks

reported by various functional areas

within the Group.


Statement on Internal Control

Responsibility of the BoardThe Board is responsible for ensuring that a sound system

of internal control to safeguard shareholders’ interests

and the Group’s assets is maintained. The system of

internal controls within the Group encompasses financial,

operational, compliance and risk management. However,

it should be noted that the system of internal controls

is designed to manage rather than eliminate the risk of

failure to achieve business objectives and can only

provide reasonable but not absolute assurance against

material misstatement or loss.

Risk ManagementThe Board regards risk management as an integral part

of the business operations. Following the adoption of

the Risk Management Policy and Terms of Reference of

Risk Management Committee (“RMC”) in September

2002, the Board has assigned the RMC to review and

report on its Annual Risk Assessment Plan and to

ensure that there is an effective Risk Management

(“RM”) framework/program in place which is aligned to

the Group’s business objectives.

The following risk management activities were

undertaken throughout the financial year and up to the

date of this report, unless otherwise mentioned: -

1. The formalization of a RM Framework; putting in

place a structured approach in identifying, assessing

and managing the key risks faced by the Group.

2. The identification of risk champions as coordinators

to enhance risk monitoring and reporting.

3. Review of the status of key risks and control

action plans submitted by the functional areas

through the risk champions in the bi-monthly

risk management meetings.

4. Continuous professional development on risk

management capabilities of the RMC and the risk

owners through planned training and educational

programs.

5. Conducting the annual risk assessment to cover

the full spectrum of the Group’s operations. The

exercise involves identifying the key risk exposures

of the Group and providing an assessment on

the risks identified, the strength of internal controls

and/or action plans to mit igate and manage

the risks and the residual risks that affect the

achievement of the Group's business objectives.

This risk assessment is subjected to periodic

review and updates.

Control Environment and ActivitiesThere is a comprehensive system of financial reporting

to the Board, based on quarterly results and annual

budgets. In particular, monthly management reports

and risk management reports are prepared and

discussed at the monthly management meetings. In

addition, there are also continuous improvement meetings

held to discuss, among others, the matters in relation

to the improvements in business processes and

enhancement on the functionalities of the SAP system.

The Company has in place a system to ensure there

are adequate financial and operational policies,

procedures and rules relating to delegation of authority.

Assurance FunctionInternal Audit provides the Audit Committee with

independent and objective reports on the adequacy and

integrity of the internal control system in managing

the key risks within the Group. In the event

significant control weaknesses are identified from the

reviews, improvement measures are recommended to

strengthen controls; with follow-up audits conducted by

Internal Audit to determine the status of corrective

action thereof by Management.

In carrying out the audit work, Internal Audit focuses

on areas of priority as determined by risk analysis and

in accordance with the annual audit plan approved by

the Audit Committee.

Board ReviewThe Board is taking continuous steps to assess and

enhance the effectiveness of the system of internal

controls. The Audit Committee reviews the reports from

the Internal Audit function and reports to the Board on

key findings, recommendations and status of

corrective actions.

The Board is of the opinion that the system of internal

controls is in place throughout the Group and the risk

management program is appropriate to safeguard the

Group’s assets. The Board is pleased to advise that no

significant internal control weaknesses were noted

during the period under review and to the date of

approval of the annual report. However, the process to

identify, evaluate and manage the significant risks faced

by the Group will be on-going in order to meet the

changing needs of the Group’s operations.

This Statement is made in accordance with a resolution

of the Board of Directors dated 19 August 2003.

Paragraph 15.27 (b) of the Kuala Lumpur Stock Exchange Listing Requirements

requires the directors of listed companies to make a statement in annual

reports on the state of their internal controls. The Board believes that the

practice of good corporate governance is an important continuous process in

enhancing shareholders’ value in addition to regulatory compliance.


Directors’ Responsibility Statementon Annual Audited Financial Statements

In preparing the annual financial statements of the

Company and the Group, the Directors are collectively

responsible for ensuring that these financial statements

have been prepared to give a true and fair view of the

financial position of the Company and the Group at the

end of the financial year and the results and cash flows of

the Company and the Group are in accordance with the

requirements of the applicable approved accounting standards

in Malaysia, the provisions of the Companies Act, 1965 and

the Listing Requirements of the Kuala Lumpur Stock Exchange.

In preparing the financial statements for the year ended 30 April 2003, the Directors have:

a) applied appropriate accounting policies on a consistent basis;

b) made judgments and estimates that are reasonable and prudent;

c) prepared the financial statements on a going concern basis; and

d) ensured that proper accounting records are kept which disclose with reasonable

accuracy, the financial position of the Company and the Group and which enable

them to ensure that the financial statements comply with the Companies Act, 1965.

The Directors have overall responsibilities for taking such steps as are reasonably

open to them to safeguard the assets of the Group and to prevent and detect fraud

and other irregularities.


Directors’ Report

The directors have pleasure in presenting their report together with the audited financial statements of the Group

and of the Company for the year ended 30 April 2003.

Principal activities

The principal activities of the Company are investment holding, provision of management services, extraction and

sale of logs. There have been no significant changes in the nature of these activities during the year. The principal

activities of the subsidiary companies are set out in Note 9 to the financial statements.

Results

Group Company

RM’000 RM’000

Profit/(loss) after taxation 58,594 (675)

Minority interests (22) -

Net profit/(loss) for the year 58,572 (675)

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed

in the Statements of Changes in Equity.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial

year have not been substantially affected by any item, transaction or event of a material and unusual nature, other

than those disclosed in the financial statements.

Dividends

During the year, the Company paid a final dividend of 3%, less taxation, amounting to RM5,676,944 in respect of

the previous financial year.

The directors now recommend the payment of a final dividend of 3%, less taxation, amounting to RM5,664,760 be

paid in respect of the year under review, which shall be subject to the approval of shareholders at the forthcoming

Annual General Meeting.

Directors

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

General (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid Chairman

Tiong Chiong Hoo Managing Director

Dr. Tiong Ik King

Tuan Haji Wan Alshagaf Bin Tuanku Esim

Tuan Haji Ashaari @ Asahari Bin Shebli

John Leong Chung Loong

Tiong Choon

Tiong Chiong Hee

Directors’ benefits

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to

which the Company is a party, whereby directors might acquire benefits by means of the acquisition of shares in,

and/or debentures of, the Company or any other body corporate.


Directors’ Report (cont’d)

Directors’ benefits (cont’d)

Since the end of the previous financial year, no director has received or become entitled to receive any benefit

(other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors

shown in the financial statements or the fixed salary of a full-time employee of the Company) by reason of a

contract made by the Company or a related corporation with the director or with a firm of which the director is a

member, or with a company in which the director has a substantial financial interest required to be disclosed by

Section 169(8) of the Companies Act, 1965, except for those benefits which may be deemed to have arisen by

virtue of those contracts, agreements and transactions (either as a supplier, agent or contractor) in respect of

trading and other services, entered into in the ordinary course of business between the Company and its subsidiaries

and companies in which certain directors are deemed to have a substantial financial interest.

Directors’ interests

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial

year in shares in the Company during the financial year were as follows:

Ordinary shares of RM1.00 each

As at 1.5.2002 and 30.4.2003

The Company

Tiong Chiong Hoo - direct 1,013,889

Dr. Tiong Ik King - direct 103,339

Tiong Chiong Hee - direct 5,000

None of the other directors who held office at the end of the financial year had any interest in shares in the

Company or its related corporations during the financial year.

Share buy-backs

Pursuant to the authority granted by the shareholders of the Company to the directors at the Extraordinary

General Meeting held on 26 September 2002, the Company purchased during the year a total of 4,374,000

(2002: 3,652,000) of its issued shares from the open market for a total cost of RM13,574,777 (2002: RM8,059,086).

The average cost paid for the shares purchased during the year was RM3.10 (2002: RM2.21) per share. Subsequent

to the balance sheet date and up to 11 August 2003, being the last practicable date prior to the printing of this

report, the Company purchased an additional 415,400 shares for a total cost of RM1,110,868. The average cost

paid for the shares purchased during the period was RM2.67 per share.

The above purchases were financed from the Company’s internal funds. The shares purchased are held as treasury

shares in accordance with Section 67A of the Companies Act, 1965. As at 11 August 2003, the issued and paid up

capital of the Company comprises 282,528,499 ordinary shares of RM1.00 each, of which 20,686,400 ordinary

shares are held as treasury shares.

Movements on share buy-backsTotal Average price

No. of cost per share

shares RM’000 RM

At 1 May 2002 15,897,000 49,574 3.12

Purchased during the year ended 30 April 2003 4,374,000 13,575 3.10

At 30 April 2003 20,271,000 63,149 3.12

Purchased subsequent to 30 April 2003 415,400 1,111 2.67

At 11 August 2003 20,686,400 64,260 3.11

The directors of the Company are committed to enhancing the value of the Company to its shareholders and

believe that the share buy-backs plan can be applied in the best interests of the Company and its shareholders.


Other statutory information

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the

directors took reasonable steps:

(i) to ascertain that proper action has been taken in relation to the writing-off of bad debts and the making

of provision for doubtful debts and satisfied themselves that all known bad debts had been written off

and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting

records in the ordinary course of business have been written-down to an amount which they might be

expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the provision for doubtful debts of the Group and

of the Company inadequate to any substantial extent; and

(ii) the values attributed to current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would

render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company

misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this

report or financial statements of the Group and of the Company which would render any amount stated in the

financial statements misleading.

(e) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial

year which secures the liabilities of any other person; or

(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the

financial year.

(f) In the opinion of the directors:

(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within

the period of twelve months after the end of the financial year which will or may affect the ability of the

Group or of the Company to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end

of the financial year and the date of this report which is likely to affect substantially the results of the

operations of the Group or of the Company for the financial year in which this report is made.

Significant event

The significant event is as disclosed in Note 33 to the financial statements.

Auditors

The auditors, Ernst & Young, have expressed their willingness to continue in office.

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

General (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid

Chairman

Tiong Chiong Hoo

Managing Director

Kuching, Malaysia

Date: 19 August 2003

Directors’ Report (cont’d)


Statement by DirectorsPursuant to Section 169(15) of the Companies Act, 1965

Statutory DeclarationPursuant to Section 169(16) of the Companies Act, 1965

We, General (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid and Tiong Chiong Hoo, being two of the

directors of Jaya Tiasa Holdings Berhad, do hereby state that in the opinion of the directors, the accompanying

financial statements set out on pages 31 to 60 are drawn up in accordance with applicable Approved Accounting

Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the

financial position of the Group and of the Company as at 30 April 2003 and of the results and the cash flows of the

Group and of the Company for the year then ended.

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

General (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid

Chairman

Tiong Chiong Hoo

Managing Director

Kuching, Malaysia


I, Tiong Chiong Hoo, being the director primarily responsible for the financial management of Jaya Tiasa

Holdings Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on

pages 31 to 60 are in my opinion correct and I make this solemn declaration conscientiously believing the same to

be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Tiong Chiong Hoo

Subscribed and solemnly declared

by the abovenamed Tiong Chiong Hoo

at Kuching in the State of Sarawak

on 19 August 2003

Before me,

Yap Yau Sin

Commissioner for Oaths (No.Q074)

Kuching, Malaysia


We have audited the accompanying financial statements set out on pages 31 to 60. These financial statements are

the responsibility of the Company’s directors. Our responsibility is to express an opinion on these financial statements

based on our audit.

We have conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those

standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles

used and significant estimates made by directors, as well as evaluating the overall presentation of the financial

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

In our opinion:

(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965

and applicable Approved Accounting Standards in Malaysia so as to give a true and fair view of:

(i) the financial position of the Group and of the Company as at 30 April 2003 and of the results and the cash

flows of the Group and of the Company for the year then ended; and

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

and

(b) the accounting and other records and the registers required by the Act to be kept by the Company and by its

subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of

the Act.

We have considered the financial statements and the Auditors’ Reports thereon of the subsidiaries of which we

have not acted as auditors, as indicated in Note 9 to the financial statements, being financial statements that have

been included in the consolidated financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial

statements of the Company are in form and content appropriate and proper for the purposes of the preparation of

the consolidated financial statements and we have received satisfactory information and explanations required by

us for those purposes.

The Auditors’ Reports on the financial statements of the subsidiaries were not subject to any qualification material

to the consolidated financial statements and did not include any comment required to be made under Section 174 (3)

of the Companies Act, 1965.

ERNST & YOUNG YONG VOON KAR

AF: 0039 1769/04/04 (J/PH)

Chartered Accountants Partner

Kuching, Malaysia


Report of the auditorsto the members of Jaya Tiasa Holdings Berhad


Income Statements for the year ended 30 April 2003

Group Company

Note 2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Revenue 3 578,396 440,295 279,379 235,019

Cost of sales (457,316) (493,419) (255,331) (269,395)

Gross profit/(loss) 121,080 (53,124) 24,048 (34,376)

Other operating income 7,624 55,218 3,907 17,694

Selling expenses (21,758) (19,611) - -

Administrative expenses (31,380) (79,656) (20,851) (27,675)

Profit/(loss) from operations 75,566 (97,173) 7,104 (44,357)

Finance costs (10,541) (10,069) (3,164) (1,416)

Profit/(loss) before taxation 4 65,025 (107,242) 3,940 (45,773)

Taxation 5 (6,431) (420) (4,615) (3,337)

Profit/(loss) after taxation 58,594 (107,662) (675) (49,110)

Minority interests (22) 1,908 - -

Net profit/(loss) for the year 58,572 (105,754) (675) (49,110)

Earnings/(loss) per share (sen) 6 22.2 (39.4)

Dividends per share (sen) 7

- Gross dividend 3.0 3.0 3.0 3.0

- Net of tax 2.2 2.2 2.2 2.2

The accompanying notes form an integral part of the financial statements.


Balance Sheets as at 30 April 2003

Group Company

Restated Restated

Note 2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Non-current assets

Property, plant and equipment 8 402,054 367,227 82,706 63,494

Investment in subsidiary companies 9 - - 381,274 379,009

Investment in associated company 10 - - - -

Other investments 11 - 2 - 2

Rights in timber licences 12 204,375 220,654 182,222 196,733

Goodwill on consolidation 13 89,710 87,445 - -

Current assets

Inventories 14 58,523 73,784 6,969 8,184

Trade receivables 15 140,595 163,867 10,929 16,694

Other receivables 16 50,854 27,461 24,654 967

Amount due from related companies 17 - - 147,502 147,215

Cash and bank balances 37,990 48,983 13,532 7,142

287,962 314,095 203,586 180,202

Current liabilities

Amount due to bankers 18 99,059 106,992 40,161 39,233

Trade payables 19 59,348 68,487 19,823 23,188

Other payables 20 6,980 18,889 2,242 10,290

Lease payables 21 12,278 7,083 6,703 3,851

Amount due to related companies 17 - - 205,041 136,427

Current tax liabilities 177 13,289 - 11,301

177,842 214,740 273,970 224,290

Net current assets/(liabilities) 110,120 99,355 (70,384) (44,088)

806,259 774,683 575,818 595,150

Financed by:

Share capital 22 282,529 282,529 282,529 282,529

Cost of treasury shares 23 (63,149) (49,574) (63,149) (49,574)

Reserves 24 572,858 532,420 351,846 358,198

Shareholders’ funds 792,238 765,375 571,226 591,153

Minority interests 3,079 3,058 - -

Long-term and deferred liabilities

Lease payables 21 7,056 6,250 782 3,997

Deferred tax liabilities 25 3,886 - 3,810 -

10,942 6,250 4,592 3,997

806,259 774,683 575,818 595,150



Statements of Changes in Equityfor the year ended 30 April 2003

Non-D

istr

ibuta

ble

Dis

trib

uta

ble

Capital

Capital

Share

Tre

asury

Share

Exchange

redem

ption

reserv

e o

nReta

ined

Note

capital

share

spre

miu

mre

serv

ere

serv

econsolidation

pro

fit

Tota

l

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

Gro

up

At

1 M

ay 2

001

- as p

revio

usly

report

ed

282,5

29

(41,5

15)

322,7

26

(11,5

81)

3,6

84

22,7

10

322,1

83

900,7

36

- prior

year

adju

stm

ent

29

--

--

--

5,6

50

5,6

50

As r

esta

ted

282,5

29

(41,5

15)

322,7

26

(11,5

81)

3,6

84

22,7

10

327,8

33

906,3

86

Changes in G

roup’s

inte

rest

26

--

-(1

0,9

23)

-(1

1,7

49)

-(2

2,6

72)

Net

loss f

or

the y

ear

--

--

--

(105,7

54)

(105,7

54)

Purc

hase o

f tr

easury

share

s23

-(8

,059)

--

--

-(8

,059)

Div

idends f

or

year

ended 2

001

--

--

--

(5,6

50)

(5,6

50)

Arisin

g f

rom

tr a

nsla

tion o

f

fo

reig

n s

ubsid

iary

com

panie

s-

--

1,1

24

--

-1,1

24

At

30 A

pril 2002

282,5

29

(49,5

74)

322,7

26

(21,3

80)

3,6

84

10,9

61

216,4

29

765,3

75

At

1 M

ay 2

002

- as p

revio

usly

report

ed

282,5

29

(49,5

74)

322,7

26

(21,3

80)

3,6

84

10,9

61

210,6

70

759,6

16

- prior

year

adju

stm

ent

29

--

--

--

5,7

59

5,7

59

As r

esta

ted

282,5

29

(49,5

74)

322,7

26

(21,3

80)

3,6

84

10,9

61

216,4

29

765,3

75

Net

pro

fit

for

the y

ear

--

--

--

58,5

72

58,5

72

Purc

hase o

f tr

easury

share

s23

-(1

3,5

75)

--

--

-(1

3,5

75)

Div

idends f

or

year

ended 2

002

7-

--

--

-(5

,677)

(5,6

77)

Arisin

g f

rom

tr a

nsla

tion o

f

fo

reig

n s

ubsid

iary

com

panie

s-

--

(1,4

96)

--

-(1

,496)

Arisin

g f

rom

busin

ess

re

org

anis

ation

--

--

-(1

0,9

61)

-(1

0,9

61)

At

30 A

pril 2003

282,5

29

(63,1

49)

322,7

26

(22,8

76)

3,6

84

-269,3

24

792,2

38

The a

ccom

panyin

g n

ote

s f

orm

an inte

gra

l part

of

the f

inancia

l sta

tem

ents

.


Statements of Changes in Equityfor the year ended 30 April 2003 (cont’d)

Non-Distributable Distributable

Capital

Share Share Treasury redemption Retained

Note capital premium shares reserve profit Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Company

At 1 May 2001

- as previously reported 282,529 322,726 (41,515) 3,684 80,898 648,322

- prior year adjustment 29 - - - - 5,650 5,650

As restated 282,529 322,726 (41,515) 3,684 86,548 653,972

Net loss for the year - - - - (49,110) (49,110)

Purchase of treasury shares 23 - - (8,059) - - (8,059)

Dividends for year ended 2001 - - - - (5,650) (5,650)

At 30 April 2002 282,529 322,726 (49,574) 3,684 31,788 591,153

At 1 May 2002

- as previously reported 282,529 322,726 (49,574) 3,684 26,029 585,394

- prior year adjustment 29 - - - - 5,759 5,759

As restated 282,529 322,726 (49,574) 3,684 31,788 591,153

Net loss for the year - - - - (675) (675)

Purchase of treasury shares 23 - - (13,575) - - (13,575)

Dividends for year ended 2002 7 - - - - (5,677) (5,677)

At 30 April 2003 282,529 322,726 (63,149) 3,684 25,436 571,226



Cash Flow Statements for the year ended 30 April 2003

Group Company

Note 2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Cash flows from operating activities

Profit/(loss) before taxation 65,025 (107,242) 3,940 (45,773)

Adjustments for:

Amortisation of timber rights 16,279 16,279 14,511 14,511

Bad debts written-off 239 38,010 25 492

Depreciation of property, plant

and equipment 43,584 47,815 9,073 6,332

Dividend income - - - (12,000)

Interest expense 7,404 6,149 2,993 1,249

Gain on disposal of a subsidiary company - (42,472) - -

Gain on disposal of property, plant

and equipment (2,294) (3,769) (32) -

Impairment losses 1,557 - - -

Loss on disposal of property, plant

and equipment 4,599 41 - 39

Property, plant and equipment written-off 71 200 - -

Provision for diminution in value of

investment - 1,965 - 4,400

Provision for doubtful debts - 2,600 - 2,600

Interest income (1,184) (1,436) (120) (480)

Operating profit/(loss) before working

capital changes 135,280 (41,860) 30,390 (28,630)

Decrease in inventories 15,261 42,486 1,215 2,683

Decrease/(increase) in receivables 1,047 64,962 (4,619) 2,355

(Decrease)/increase in payables (21,048) (37,873) (11,413) 1,491

Decrease in amount due from related

companies - - 68,327 51,945

Cash generated from operations 130,540 27,715 83,900 29,844

Interest received 1,184 1,436 120 480

Interest paid (7,404) (6,149) (2,993) (1,249)

Taxation paid (28,026) (19,325) (25,434) (5,000)

Net cash generated from operating activities 96,294 3,677 55,593 24,075

Cash flows from investing activities

Net cash inflow on disposal of a

subsidiary company 26(b) - 184 - -

Dividends received - - - 8,640

Investment in subsidiary companies - - (2,265) (47,028)

Purchase of additional shares in a

subsidiary company (2,265) (31) - -

Proceeds from disposal of other investments 2 - 2 -

Purchase of own shares (13,575) (8,059) (13,575) (8,059)

Purchase of property, plant and equipment (74,866) (45,306) (22,998) (8,727)

Proceeds from disposal of property,

plant and equipment 3,942 6,749 280 182

Net cash used in investing activities (86,762) (46,463) (38,556) (54,992)


Cash Flow Statements for the year ended 30 April 2003 (cont’d)

Group Company

Note 2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Cash flows from financing activities

Dividends paid (5,677) (5,804) (5,677) (5,804)

Net repayments of loans and lease payables (19,751) (10,451) (5,898) (2,575)

Net proceeds of bankers’ acceptances 10,792 35,478 1,500 38,400

Net cash (used in)/generated from financing

activities (14,636) 19,223 (10,075) 30,021

Net (decrease)/increase in cash and

cash equivalents (5,104) (23,563) 6,962 (896)

Effects of exchange rate changes 2,836 3,985 - -

Cash and cash equivalents at the

beginning of the year 35,697 55,275 6,309 7,205

Cash and cash equivalents at the end

of the year 27 33,429 35,697 13,271 6,309



Notes to the Financial Statements - 30 April 2003

1. Corporate information

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the

Main Board of the Kuala Lumpur Stock Exchange. The registered office is located at No. 1 - 9, Pusat Suria

Permata, Jalan Upper Lanang, 96000 Sibu, Sarawak.

The principal activities of the Company are investment holding, provision of management services, extraction

and sale of logs. The principal activities of the subsidiary companies are set out in Note 9 to the financial

statements. There have been no significant changes in the nature of the activities of the Group and of the

Company during the financial year.

The financial statements of the Group and of the Company are expressed in Ringgit Malaysia.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution

of the directors on 19 August 2003.

2. Significant accounting policies

(a) Basis of preparation

The financial statements of the Group and of the Company are prepared under the historical cost

convention, unless as otherwise indicated in the significant accounting policies, and comply with the

provisions of the Companies Act, 1965 and applicable Approved Accounting Standards in Malaysia.

(b) Basis of consolidation

(i) Subsidiaries

The consolidated financial statements include the financial statements of the Company and all its

subsidiary companies. Subsidiaries are those companies in which the Group has a long-term equity

interest and where it has power to exercise control over the financial and operating policies so as to

obtain benefits therefrom.

Where the subsidiaries are consolidated using the acquisition method of accounting, the results of

the subsidiaries acquired or disposed of during the year are included in the consolidated income

statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

The assets and liabilities of subsidiaries are measured at their fair values at the date of acquisition

and these values are reflected in the consolidated balance sheet. The difference between the cost

of an acquisition and the fair value of the Group’s share of the net assets of the acquired subsidiaries

at the date of acquisition is included in the consolidated balance sheet as goodwill or reserve arising

on consolidation as appropriate.

Acquisition of subsidiaries which meet the criteria for merger are accounted for using merger

accounting principles. When the merger method is used, the cost of investment in the Company’s

book is recorded at the nominal value of shares issued and the difference between the carrying

value of the investment and the nominal value of shares acquired is treated as merger reserve or

merger deficit. The results of the companies being merged are included as if the merger had been

effected throughout the current and previous financial years.

Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation

and the consolidated financial statements reflect external transactions only. Unrealised losses are

eliminated on consolidation unless costs cannot be recovered.

The gain or loss on disposal of subsidiaries is the difference between the net disposal proceeds and

the Group’s share of its net assets together with any unamortised balance of goodwill and exchange

differences, which were not previously recognised in the consolidated income statement.

Minority interest is measured at the minorities’ share of the fair values of the net assets or liabilities

of the subsidiaries, to the extent of their investment. Minority interest is separately disclosed in the

financial statements.


2. Significant accounting policies (cont’d)

(b) Basis of consolidation (cont’d)

(ii) Associates

Associates are those companies in which the Group has a long term equity interest and where it

exercises significant influence over the financial and operating policies.

Investments in associates are accounted for in the consolidated financial statements by the equity

method of accounting based on the audited or management financial statements of the associates.

Under the equity method of accounting, the Group’s share of profits less losses of associates during

the year is included in the consolidated income statement. The Group’s interest in associates is

carried in the consolidated balance sheet at cost plus the Group’s share of post-acquisition reserves.

Unrealised gains on transactions between the Group and the associates are eliminated to the extent

of the Group’s interest in the associates.

(c) Goodwill

Goodwill represents the excess of the cost of acquisition over the Group’s interest in the fair value of the

identifiable assets and liabilities of a subsidiary or associate at the date of acquisition.

Goodwill is stated at cost less impairment losses. The policy for the recognition and measurement of

impairment losses is in accordance with Note 2(g). Goodwill arising on the acquisition of subsidiaries is

presented separately in the balance sheet while goodwill arising on the acquisition of associates is

included within the carrying amount of investment in associates. No amortisation is provided on goodwill

on consolidation.

(d) Investments in subsidiaries and associates

The Company’s investments in subsidiaries and associates are stated at cost less impairment losses.

The policy for the recognition and measurement of impairment losses is in accordance with Note 2(g).

On disposal of such investments, the difference between net disposal proceeds and their carrying amounts

is recognised in the income statement.

(e) Rights in timber licences

Rights in timber licences are stated at cost and are amortised on a straight-line basis over the remaining

tenure of the licence period.

(f) Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

The policy for the recognition and measurement of impairment losses is in accordance with Note 2(g).

Freehold land is not amortised. Leasehold land is amortised over the period of the respective leases.

Plantation development expenditure, consisting of land clearing and upkeep of immature oil palms

incurred during the pre-maturity period (pre-cropping costs) is capitalised under plantation

development expenditure. Upon maturity, all subsequent maintenance expenditure is charged

to revenue and the capitalised pre-cropping costs is amortised on a straight-line basis over 25 years, the

expected useful life of oil palms. Oil palms is considered mature 36 months after the month of planting.

Depreciation of other property, plant and equipment is provided on a straight-line basis to write off

the cost of the assets over their estimated useful lives. The estimated useful lives are as follows:

Factory, buildings and quarters - 10 to 25 years

Watercraft, motor vehicles, plant and machinery - 5 to 10 years

Roads and bridges - 5 to 10 years

Office renovation, furniture, fittings and equipment - 2 to 10 years





(f) Property, plant and equipment and depreciation (cont’d)

Capital work-in-progress is not depreciated until the property, plant and equipment is fully completed

and brought into use.

Upon the disposal of an item of property, plant or equipment, the difference between the net disposal

proceeds and the carrying amount is charged or credited to the income statement.

Fully depreciated assets are retained in the financial statements until they are no longer in use and no

further charge for depreciation is made in respect of these assets.

(g) Impairment of assets

At each balance sheet date, the Group and Company reviews the carrying amounts of its assets to

determine whether there is any indication of impairment. If any such indication exists, impairment is

measured by comparing the carrying values of the assets with their recoverable amounts. Recoverable

amount is the higher of net selling price and value in use, which is measured by reference to discounted

future cash flows.

An impairment loss is recognised as an expense in the income statement immediately, unless the asset

is carried at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation

decrease to the extent of any available previously recognised revaluation surplus for the same asset.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the

impairment losses recognised for the asset no longer exist or have decreased.

(h) Inventories

Plywood, sawn timber, veneer and blockboard inventories are stated at the lower of average cost of

production and net realisable value. In arriving at net realisable value, due allowance is made for all

obsolete and slow moving items.

General stores are valued on a weighted average basis. Logs are stated at cost based on a first-in-first-out

basis.

Cost of finished goods and work-in-progress include the cost of raw materials, direct labour and an

appropriate proportion of fixed and variable factory overheads. Net realisable value represents the

estimated selling price less all estimated costs to completion and costs to be incurred on marketing,

selling and distribution.

(i) Foreign currencies

(i) Foreign currency transactions

Transactions in foreign currencies are initially recorded in Ringgit Malaysia at rates of exchange

ruling at the date of the transaction. At each balance sheet date, foreign currency monetary items

are translated into Ringgit Malaysia at exchange rates ruling at that date, unless hedged by forward

foreign exchange contracts, in which case the rates specified in such forward contracts are used.

Non-monetary items initially denominated in foreign currencies, which are carried at historical cost

are translated using the historical rate as of the date of acquisition and non monetary items which

are carried at fair value are translated using the exchange rate that existed when the values were

determined.

All exchange rate differences are taken to the income statement with the exception of differences

on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.

These exchange differences are taken directly to equity until the disposal of the net investment, at

which time they are recognised in the income statement.




(i) Foreign currencies (cont’d)

(ii) Foreign entities

Financial statements of foreign consolidated subsidiaries are translated at year-end exchange rates

with respect to the assets and liabilities, and at exchange rates at the dates of the transactions with

respect to the income statement. All resulting translation differences are included in the foreign

exchange reserve in shareholders’ funds.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as

assets and liabilities of the Company and translated at the exchange rate ruling at the date of the

transaction.

The principal exchange rates for every unit of foreign currency ruling at balance sheet date used are

as follows:

2003 2002

RM RM

United States Dollar 3.800 3.800

Reais 1.315 1.673

Euro Dollar 4.266 3.462

Japanese Yen 0.032 0.030

Swiss Franc 2.827 2.366

Singapore Dollar 2.162 2.128

(j) Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the

expected amount of income taxes payable in respect of the taxable profit for the year and is measured

using the tax rates that have been enacted at the balance sheet date.

Deferred tax is provided for using the liability method in respect of all material timing differences except

that where the timing differences give rise to deferred tax benefits, these benefits are not recognised.

(k) Cash and cash equivalents

Cash and cash equivalents in the Cash Flow Statement represent cash and bank balances and short-term,

highly liquid investments that are readily convertible to cash with an insignificant risk of changes

in value less short-term borrowings repayable on demand.

(l) Leases

A lease is recognised as a finance lease if it transfers substantially to the Group and Company all the

risks and rewards incident to ownership. All other leases are classified as operating leases.

Assets acquired by way of hire purchase of finance leases are stated at an amount equal to the lower of

their fair values and the present value of the minimum lease payments at the inception of the leases,

less accumulated depreciation and impairment losses. The corresponding liability is included in the

balance sheet as borrowings. In calculating the present value of the minimum lease payments, the

discount factor used is the interest rate implicit in the lease, when it is practicable to determine; other

wise, the Group’s incremental borrowing rate is used.

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability.

Finance costs, which represent the difference between the total leasing commitments and the fair value

of the assets acquired, are charged to the income statement over the term of the relevant lease so as to

produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting

period.

The depreciation policy for leased assets is consistent with that for depreciable property, plant

and equipment as described in Note 2 (f).




(m) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group

and the Company and the revenue can be reliably measured. The following specific recognition criteria

must also be met before revenue is recognised:

(i) Sale of goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have

passed to the buyer.

(ii) Interest and rental

Revenue is recognised as the interest and rental accrue unless collectibility is in doubt.

(iii) Dividends

Revenue is recognised when the right to receive the payment is established.

(iv) Management fees

Revenue is recognised as the management fees accrue unless collectibility is in doubt.

(v) Provision of services

Revenue from provision of services is recognised when the services are rendered.

(n) Financial instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the

contractual provisions of the instrument.

(i) Other non-current investments

Non-current investments other than investments in subsidiaries and associates are stated at cost

less provision for any permanent diminution in value of investments and is recognised as an

expense in the period which the decline occurred.

(ii) Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off when identified.

An estimate is made for doubtful debts based on a review of all outstanding amounts as at the

balance sheet date.

(iii) Payables

Payables are stated at cost, which is the fair value of the consideration to be paid in the future for

goods and services received.

(iv) Interest-bearing borrowings

Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received.

(v) Equity instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in

the period in which they are declared.

When issued shares of the Company are repurchased, the consideration paid, including any

attributable transaction costs is presented as a change in equity. Repurchased shares are either

held as treasury shares, cancelled or a combination of both at the discretion of the Board and are

accounted for by the cost method. Should such shares be cancelled, their nominal amounts are

eliminated, and the differences between their cost and nominal amounts will be taken to reserves

as appropriate. Repurchased shares that have not been cancelled are classified as treasury shares

and presented as a deduction from equity. No gain or loss is recognised in the income statement on

the sale, re-issuance or cancellation of treasury shares.



3. Revenue

Revenue of the Group comprises services supplied or provided net of discounts and commissions, invoiced

value of goods sold less discounts or claims and interest income.

Revenue of the Company comprises management fee derived from subsidiary companies and log sales.

The significant categories of revenue recognised during the year are as follows:

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Sale of timber and related products 574,097 438,716 279,379 234,899

Management fee - - - 120

Chartering services income 4,299 6 - -

Interest income - 1,573 - -

578,396 440,295 279,379 235,019

4. (a) Profit/(loss) before taxation

This is stated after charging:

Amortisation of timber rights 16,279 16,279 14,511 14,511

Auditors’ remuneration

Statutory audit

- current year 154 156 40 36

- underprovision in prior year 9 - 4 -

Other services 102 85 102 85

Bad debts written-off 239 38,010 25 492

Depreciation of property, plant and equipment 43,584 47,815 9,073 6,332

Directors’ remuneration

- fees 336 308 240 212

- other emoluments 566 503 566 503

Hiring charges - - 2,400 2,400

Impairment losses 1,557 - - -

Interest expense 7,404 6,149 2,993 1,249

Loss on disposal of property, plant

and equipment 4,599 41 - 39

Property, plant and equipment written-off 71 200 - -

Provision for diminution in value of investment - 1,965 - 4,400

Provision for doubtful debts - 2,600 - 2,600

Realised foreign exchange loss 53 30 - -

Rental expense 550 370 254 96

and after crediting:

Gain on disposal of property,

plant and equipment 2,294 3,769 32 -

Gain on disposal of a subsidiary company - 42,472 - -

Gross dividend income from

unquoted subsidiary companies - - - 12,000

Hiring income - 66 - 66

Interest income 1,184 1,436 120 480

Management fee income - 120 - 120

Realised foreign exchange gain 256 17 - -

Rental income 3,479 5,047 2,865 4,973

Software maintenance income from

subsidiary companies - - 321 319



4. (b) Employee information

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Staff costs 35,205 28,381 7,867 5,360

Number of employees at the end of the year

(including Executive director) 3,612 2,715 255 243

5. Taxation

Based on profit for the year 1,779 583 32 -

Under/(over) provision in prior years 766 (163) 773 3,337

Deferred tax liability 3,886 - 3,810 -

6,431 420 4,615 3,337

The disproportionate taxation charge of the Company for the current year is mainly due to disallowance of

certain expenses for taxation purposes.

Subject to agreement by the Inland Revenue Board, estimated tax losses and capital allowances available to

be set off against future assessable income amounted to RM13.8 million (2002: RM16.8 million) and Nil

(2002: RM13.8 million), respectively. The income tax benefit in respect thereof will only be realised if the

Company derives future assessable income of a nature and of sufficient amount to enable the benefit to be

realised, and existing legislation does not change in a manner which would adversely affect the Company’s

ability to realise the benefit.

6. Earnings/(loss) per share

The earnings/(loss) per share has been calculated based on the net profit for the year of RM58,572,000

(2002: net loss for the year of RM105,754,000) and the weighted average number of ordinary shares in issue

during the financial year of 263,628,666 (2002: 268,518,999), excluding the number of shares purchased

and held as treasury shares.

7. Dividends

Group/Company

2003 2002

sen per share RM’000 sen per share RM’000

(gross) (net) (gross) (net)

Proposed final dividend, net of tax 3.0 5,665 3.0 5,759

Adjustment for overprovision of

prior year’s final dividend arising

from the share buy-backs - - - (82)

3.0 5,665 3.0 5,677

At the forthcoming Annual General Meeting, a final dividend of 3% less taxation amounting to RM5,664,760

will be proposed for shareholder’s approval. The financial statements do not reflect this final dividend,

which will be accrued as a liability when approved by shareholders.



8. Property, plant and equipment

Office

Land, Watercraft, renovation,

factory, motor furniture,

buildings vehicles, Roads fittings Plantation Capital

and plant and and and development work-in-

quarters machinery bridges equipment expenditure progress Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

Cost

At 1 May 2002 175,966 470,652 61,358 26,242 1,364 8,285 743,867

Exchange translation (1,876) (3,172) - (33) - (532) (5,613)

Amount restated

at 1 May 2002 174,090 467,480 61,358 26,209 1,364 7,753 738,254

Reclassification (12,215) (1,096) 230 143 - 12,938 -

Additions 2,580 15,023 21,151 1,226 13,529 37,117 90,626

Disposals (26) (14,816) - (224) - - (15,066)

Written-off - (66) - (15) - - (81)

At 30 April 2003 164,429 466,525 82,739 27,339 14,893 57,808 813,733

Accumulated

depreciation

Charge for 2002 8,889 33,191 3,358 2,377 - - 47,815

At 1 May 2002 56,530 284,159 28,423 7,528 - - 376,640

Exchange translation (243) (1,027) - (11) - - (1,281)

Amount restated

at 1 May 2002 56,287 283,132 28,423 7,517 - - 375,359

Charge for the year 8,021 27,833 5,204 2,534 - - 43,592

Impairment of assets - 1,557 - - - - 1,557

Disposals - (8,665) - (154) - - (8,819)

Written-off - - - (10) - - (10)

At 30 April 2003 64,308 303,857 33,627 9,887 - - 411,679

Net book value

At 30 April 2003 100,121 162,668 49,112 17,452 14,893 57,808 402,054

At 30 April 2002 119,436 186,493 32,935 18,714 1,364 8,285 367,227

Included in the plantation development expenditure are the following expenses incurred during the year:

2003 2002

RM RM

Depreciation of property, plant and equipment 8 -

Staff costs 64 1



8. Property, plant and equipment (cont’d)

Land, Watercraft, Office

factory, motor renovation,

buildings vehicles, Roads furniture,

and plant and and fittings and

quarters machinery bridges equipment Total

RM’000 RM’000 RM’000 RM’000 RM’000

Company

Cost

At 1 May 2002 1,607 43,756 13,814 14,018 73,195

Additions 2,676 8,740 14,401 671 26,488

Disposals - (532) - (54) (586)

At 30 April 2003 4,283 51,964 28,215 14,635 99,097

Accumulated depreciation

Charge for 2002 84 3,507 1,377 1,364 6,332

At 1 May 2002 138 11,193 2,425 1,869 15,625

Charge for the year 175 4,993 2,469 1,436 9,073

Disposals - (331) - (7) (338)

At 30 April 2003 313 15,855 4,894 3,298 24,360

Net book value

At 30 April 2003 3,970 36,109 23,321 11,337 74,737

Add: Capital work-in-progress 7,969

82,706

At 30 April 2002 1,469 32,563 11,389 12,149 57,570

Add: Capital work-in-progress 5,924

63,494

Land, factory, building and quarters stated at cost, comprises:

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Freehold land 4,465 2,973 623 623

Long leasehold land 6,688 5,377 - -

Short leasehold land 1,302 2,565 - -

Factory, buildings and quarters 151,974 165,051 3,660 984

164,429 175,966 4,283 1,607

Included in plant and machinery of the Group and of the Company are assets acquired under instalment plans

with a net book value of RM21,676,171 (2002: RM21,502,892) and RM12,371,750 (2002: RM17,165,935),

respectively.



8. Property, plant and equipment (cont’d)

During the year, the Group and the Company acquired property, plant and equipment by the following means:

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Cash 74,874 45,306 22,998 8,727

Lease instalment arrangements 15,752 14,384 5,535 8,000

90,626 59,690 28,533 16,727

9. Investment in subsidiary companies

Company

2003 2002

RM’000 RM’000

Unquoted shares, at cost

At 1 May 379,028 331,999

Arising from further subscription of shares in a subsidiary company 2,265 47,029

At 30 April 381,293 379,028

Provision for diminution in value of investment (19) (19)

381,274 379,009

Details of subsidiary companies as at 30 April 2003 and their principal activities are shown below:

Group equity

Country of interest

Name of company Principal activities incorporation 2003 2002

Direct subsidiaries of the Company

Rimbunan Hijau Plywood Sdn. Bhd. Manufacturing and sale of

sawn timber, blockboard

and plywood Malaysia 100% 100%

Jaya Tiasa Plywood Sdn. Bhd.* Manufacturing and sale of

veneer, plywood and

sawn timber Malaysia 100% 100%

Guanaco Sdn. Bhd.* Extraction and sale of

timber Malaysia 100% 100%

Hak Jaya Sdn. Bhd. Extraction and sale of logs Malaysia 100% 100%

Maxiwealth Holdings Sdn. Bhd.* Extraction and sale of


Kunari Timber Sdn. Bhd.* Extraction and sale of


Jaras Sdn. Bhd. Extraction, purchase and

sale of logs Malaysia 100% 100%

Maujaya Sdn. Bhd.* Extraction and sale of


Mantan Sdn. Bhd. Extraction and sale of logs Malaysia 100% 100%

Curiah Sdn. Bhd. Extraction and sale of logs Malaysia 70% 70%

Sericahaya Sdn. Bhd. Extraction and sale of logs Malaysia 70% 70%



9. Investment in subsidiary companies (cont’d)

Group equity

Country of interest

Name of company Principal activities incorporation 2003 2002

Direct subsidiaries of the Company (cont’d)

Jaya Tiasa Forest Extraction of logs,

Plantation Sdn. Bhd. development and

(formerly known as maintenance of

Jaya Tiasa Plantations Sdn. Bhd.) planted forests Malaysia 100% 100%

Bonhin Sdn. Bhd. Provision of air

transportation services Malaysia 100% 100%

Eastern Timber Ltd. Offshore trading agent Federal Territory

of Labuan,

Malaysia 100% 100%

Eastern Green Company, Inc. Importation and sale of

wood products U.S.A. 100% 100%

Jaya Tiasa Timber Manufacturing and sale

Products Sdn. Bhd.* of veneer, sawn timber

and plywood Malaysia 100% 100%

Simalau Plantation Sdn. Bhd. Oil palm plantation Malaysia 100% 90%

Jaya Tiasa Aquaculture Sdn. Bhd. Dormant Malaysia 100% 100%

Jaya Tiasa R&D Sdn. Bhd.

(formerly known as Jubiland

Development Sdn. Bhd.) Dormant Malaysia 100% -

Atlantic Evergreen Holdings Investment holding Cayman Islands 100% 100%

Atlantic Timber Holdings Limited Investment holding Cayman Islands 100% 100%

Pacific Timber Holdings Limited Investment holding Cayman Islands 100% 100%

Subsidiary of Atlantic Evergreen Holdings

Western Timber Resources Limited Investment holding Cayman Islands 100% 100%

Subsidiary of Atlantic Timber Holdings Limited

Maginco Verde Ltda. Investment holding Brazil 100% 100%

Subsidiary of Pacific Timber Holdings Limited

Verde Para Sempre Ltda. Investment holding Brazil - 100%

Subsidiary of Verde Para Sempre Ltda.

Selvaplac Verde Ltda. Manufacturing and sale

(formerly known as of plywood and other

Selvaplac Verde S.A.) wood related products Brazil 100% 99.92%

* not audited by Ernst & Young or their associates.

On 31 March 2003, the net liabilities of Selvaplac Verde Ltda. (formerly known as Selvaplac Verde S.A.) were

merged with those of its immediate holding company, Verde Para Sempre Ltda. Following the merger,

Selvaplac Verde Ltda. became a direct subsidiary company of Pacific Timber Holdings Limited.



10. Investment in associated company

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Unquoted shares, at cost

- ordinary shares 2,000 2,000 2,000 2,000

- redeemable non-cumulative preference shares 2,400 2,400 2,400 2,400

4,400 4,400 4,400 4,400

Provision for diminution in value of investment (2,400) (2,400) (4,400) (4,400)

2,000 2,000 - -

Share of post-acquisition losses (2,000) (2,000) - -

- - - -

The Group’s interest in the associated company is as follows:

Group

2003 2002

RM’000 RM’000

Group’s share of net tangible assets (335) (335)

Premium on acquisition 335 335

- -

The associated company, which is incorporated in Malaysia, is:

Financial Percentage of

Name of company Principal activities year-end equity held

2003 2002

Mafrica Trading Sdn. Bhd.* General trading and

heli-logging services 28.2.2003 40% 40%

* Not audited by Ernst & Young or their associates.

11. Other investments

Group/Company

2003 2002

RM’000 RM’000

Unquoted shares, at cost - 2



12. Rights in timber licences

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

At cost 298,447 298,447 247,724 247,724

Provision for amortisation

At 1 May 77,793 61,514 50,991 36,480

Amortisation during the year 16,279 16,279 14,511 14,511

At 30 April 94,072 77,793 65,502 50,991

204,375 220,654 182,222 196,733

In 1998, the Company acquired nine timber licensee companies and the rights to two timber licences. Apart

from one licence expiring in the year 2011, all the other licences will expire in the year 2015.

13. Goodwill on consolidation

Group

2003 2002

RM’000 RM’000

At cost

At 1 May 87,445 87,414

Arising from incidental charges incurred on acquisition of a subsidiary company 2,265 31

At 30 April 89,710 87,445

14. Inventories

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Plywood 19,488 25,497 - -

Veneer 12,220 13,082 - -

Blockboard 558 971 - -

General stores 14,721 16,126 891 81

Logs 9,859 15,680 6,078 8,103

Sawn timber 458 2,066 - -

Work-in-progress 1,620 763 - -

58,924 74,185 6,969 8,184

Provision for inventory obsolescence (401) (401) - -

58,523 73,784 6,969 8,184

The carrying amount of inventories

is stated as follows:

At cost 58,186 53,616 6,969 8,184

At net realisable value 337 20,168 - -

58,523 73,784 6,969 8,184



15. Trade receivables

The Group and the Company’s normal trade credit term is 30 days. Other credit terms are assessed and

approved on a case-by-case basis.

The Group and the Company have no significant concentration of credit risk that may arise from exposures to

a single receivable or to groups of receivables.

16. Other receivables

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Other receivables 18,187 7,119 11,056 768

Deposits 44 56 27 39

Prepayments 540 572 243 160

Current tax assets 32,083 19,714 13,328 -

50,854 27,461 24,654 967

The Group has no significant concentration of credit risk that may arise from exposures to a single receivable

or to groups of receivables.

17. Amount due from/(to) related companies

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Amount due from subsidiary companies - - 187,742 187,750

Provision for doubtful debts - - (40,240) (40,535)

- - 147,502 147,215

Amount due from associated company 2,600 2,600 2,600 2,600

Provision for doubtful debts (2,600) (2,600) (2,600) (2,600)

- - - -

- - 147,502 147,215

Amount due to subsidiary companies - - (205,041) (136,427)

The amounts due from/(to) related companies are unsecured, interest-free and have no fixed term of repayment.

18. Amount due to bankers

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Bankers’ acceptances 94,498 83,706 39,900 38,400

Bank overdrafts 4,561 13,286 261 833

Revolving loan - 10,000 - -

99,059 106,992 40,161 39,233

The amount due to bankers is unsecured and bears interest at various rates ranging between 7.15% to

7.80% (2002: 7.00% to 8.05%) per annum.



19. Trade payables

The normal trade credit terms granted to the Group range from 30 to 180 days.

20. Other payables

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Exchange contract advances 1,139 2,174 - -

Other payables and accruals 5,841 16,715 2,242 10,290

6,980 18,889 2,242 10,290

21. Lease payables

Minimum lease payments:

Repayable within one year 13,367 7,914 7,137 4,342

Repayable after one year but within five years 7,364 6,483 673 4,159

Future finance charges on finance leases (1,397) (1,064) (325) (653)

Present value of finance lease liabilities 19,334 13,333 7,485 7,848

Present value of finance lease liabilities:

Repayable within one year

(shown under current liabilities) 12,278 7,083 6,703 3,851

Repayable after one year but within

five years (shown under long-term and

deferred liabilities) 7,056 6,250 782 3,997

19,334 13,333 7,485 7,848

The lease payables bore interest at the balance sheet date at between 3.80% to 5.00% (2002: 3.80% to

4.75%) per annum.

22. Share capital

Group/Company

2003 2002

RM’000 RM’000

Authorised:

Ordinary shares of RM1.00 each 1,000,000 1,000,000

Issued and fully paid:

Ordinary shares of RM1.00 each 282,529 282,529

Of the total 282,528,499 issued and fully paid ordinary shares, 20,271,000 (2002: 15,897,000) are held as

treasury shares by the Company. As at 30 April 2003, the number of outstanding shares in issue and

fully paid is therefore 262,257,499 (2002: 266,631,499) ordinary shares of RM1.00 each.



23. Treasury shares

Pursuant to the authority granted by the shareholders of the Company to the directors at the Extraordinary

General Meeting held on 26 September 2002, the Company purchased during the year a total of 4,374,000

(2002: 3,652,000) of its issued shares from the open market for a total cost of RM13,574,777 (2002: RM8,059,086).

The average cost paid for the shares purchased during the year was RM3.10 (2002: RM2.21) per share.

Subsequent to the balance sheet date and up to 11 August 2003, being the last practicable date prior to the

printing of this report, the Company purchased an additional 415,400 shares for a total cost of RM1,110,868.

The average cost paid for the shares purchased during the period was RM2.67 per share.

The above purchases were financed from the Company’s internal funds. The shares purchased are held as

treasury shares in accordance with Section 67A of the Companies Act, 1965. As at 11 August 2003, the

issued and paid up capital comprises 282,528,499 ordinary shares of RM1.00 each, of which 20,686,400

ordinary shares are held as treasury shares.

Movements on share buy-backs

Total Average price

No. of cost per share

shares RM’000 RM

At 1 May 2002 15,897,000 49,574 3.12

Purchased during the year ended 30 April 2003 4,374,000 13,575 3.10

At 30 April 2003 20,271,000 63,149 3.12

Purchased subsequent to 30 April 2003 415,400 1,111 2.67

At 11 August 2003 20,686,400 64,260 3.11

The directors of the Company are committed to enhancing the value of the Company to its shareholders and

believe that the share buy-backs plan can be applied in the best interests of the Company and its shareholders.

24. Reserves

Movements in reserves are shown in the Statements of Changes in Equity.

Based on the estimated tax credits available, the entire retained profit of the Company is available for

distribution by way of dividends without incurring additional tax liability. In addition, the Company has tax

exempt credit estimated at RM2 million (2002: RM2 million) which is available for distribution as tax exempt

dividends. These amounts are subject to agreement by the Inland Revenue Board.

25. Deferred tax liabilities

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

At 1 May - - - -

Transfer from income statement 3,886 - 3,810 -

At 30 April 3,886 - 3,810 -

Deferred taxation of the Group is in respect of timing differences between depreciation and capital allowances

on property, plant and equipment.



25. Deferred tax liabilities (cont’d)

The following unutilised tax losses and allowances have not been provided, the effects of which at 28% are:

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Tax losses carried forward 23,727 35,825 3,864 4,704

Capital allowance carried forward 25,150 33,360 - 3,864

Reinvestment allowance carried forward 842 842 - -

As at 30 April 2003, the deferred tax benefits are not recognised as there is no assurance beyond any

reasonable doubt that in the near future there will be sufficient taxable income to allow the assets to be realised.

26. Disposal of a subsidiary company

The effect of the disposal of a subsidiary company on the Consolidated Income Statement and Consolidated

Balance Sheet were as follows:

2002

RM’000

(a) Consolidated Income Statement

Revenue 2

Cost of sales (1,710)

Gross loss (1,708)

Other operating income 554

Selling and distribution costs (60)

Administrative expenses (1,099)

Other operating expenses -

Gain on disposal of subsidiary 42,472

Profit from operations 40,159

Finance costs (2,996)

Profit for the year 37,163

(b) Consolidated Balance Sheet

Property, plant and equipment 3,134

Current assets 19,776

Current liabilities (42,520)

Net liabilities (19,610)

Reclassification from shareholders’ equity

Foreign currency exchange reserve (10,923)

Capital reserve consolidation (11,749)

Proceeds from disposal (190)

Gain on disposal of a subsidiary company (42,472)

Proceeds from disposal 190

Less: Cash and cash equivalents of subsidiary disposed of (6)

Net cash inflow on disposal of a subsidiary company 184



27. Cash and cash equivalents

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 37,990 48,983 13,532 7,142

Bank overdrafts (4,561) (13,286) (261) (833)

33,429 35,697 13,271 6,309

28. Segmental reporting

The Group adopts business segment analysis as its primary reporting format and geographical segment as its

secondary reporting format. The Group is organised into two major business segments:

(i) Logs trading - Extraction and sale of logs

(ii) Manufacturing - Manufacturing and trading of sawn timber, plywood, veneer, blockboard and laminated wood

Other business segments include the provision of air transportation services, oil palm plantation, development

and maintenance of planted forests, offshore trading and investment holding.

The directors are of the opinion that all inter-segment transactions have been entered into in the normal

course of business and have been established on terms and conditions that are not materially different from

those obtainable in transactions with unrelated parties.

(a) Primary reporting format - business segments

Logs trading Manufacturing Others Eliminations Total

RM’000 RM’000 RM’000 RM’000 RM’000

2003

Revenue

External revenue 369,932 206,599 1,865 - 578,396

Intersegment revenue 212,192 96,252 4,007 (312,451) -

Total revenue 582,124 302,851 5,872 (312,451) 578,396

Results

Profit from operations 14,413 61,976 1,421 (2,244) 75,566

Finance costs (3,373) (4,422) (4,046) 1,300 (10,541)

Profit/(loss) before taxation 11,040 57,554 (2,625) (944) 65,025

Taxation (6,431) - - - (6,431)

Profit/(loss) after taxation 4,609 57,554 (2,625) (944) 58,594

Minority interests - - - - (22)

Net profit/(loss) for the year 4,609 57,554 (2,625) (944) 58,572

Other information

Segment assets 173,648 433,521 57,784 (7,020) 657,933

Rights in timber licenses 182,222 - - 22,153 204,375

Goodwill on consolidation - - - - 89,710

Current tax assets 23,428 5,945 2,710 - 32,083

Total assets 379,298 439,466 60,494 15,133 984,101



28. Segmental reporting (cont’d)

(a) Primary reporting format - business segments (cont’d)


RM’000 RM’000 RM’000 RM’000 RM’000

2003 (cont’d)

Segment liabilities 33,469 32,715 4,030 - 70,214

Bank borrowings 48,363 69,808 222 - 118,393

Tax liabilities 66 - 111 - 177

Total liabilities 81,898 102,523 4,363 - 188,784

Capital expenditure 36,409 40,561 13,656 - 90,626

Depreciation of property,

plant and equipment 12,263 28,007 3,322 - 43,592

Amortisation of timber

rights 16,279 - - - 16,279

Impairment losses - 1,557 - - 1,557

2002

Revenue

External revenue 317,950 119,762 2,583 - 440,295

Intersegment revenue 171,314 95,351 3,840 (270,505) -

Total revenue 489,264 215,113 6,423 (270,505) 440,295

Results

(Loss)/profit from

operations (86,671) (38,375) 178 27,695 (97,173)

Finance costs (1,562) (7,175) (5,475) 4,143 (10,069)

Loss before taxation (88,233) (45,550) (5,297) 31,838 (107,242)

Taxation (3,813) 33 - 3,360 (420)

Loss after taxation (92,046) (45,517) (5,297) 35,198 (107,662)

Minority interests - - - - 1,908

Net loss for the year (92,046) (45,517) (5,297) 35,198 (105,754)

Other information

Segment assets 148,832 461,956 56,956 (6,134) 661,610

Rights in timber licenses 196,733 - - 23,921 220,654

Goodwill on consolidation - - - - 87,445

Current tax assets 10,629 5,945 3,140 - 19,714

Total assets 356,194 467,901 60,096 17,787 989,423

Segment liabilities 49,974 32,809 4,593 - 87,376

Bank borrowings 47,926 72,224 175 - 120,325

Tax liabilities 13,044 - 245 - 13,289

Total liabilities 110,944 105,033 5,013 - 220,990




(a) Primary reporting format - business segments (cont’d)


RM’000 RM’000 RM’000 RM’000 RM’000

2002 (cont’d)

Capital expenditure 33,528 24,685 1,477 - 59,690


plant and equipment 8,528 35,598 3,689 - 47,815

Amortisation of timber

rights 16,279 - - - 16,279

(b) Secondary reporting format - geographical segments

Although the Group’s two major business segments are managed on a worldwide basis, they operate in

two principal geographical areas of the world. In Malaysia, its home country, the Group’s areas of

operation are principally logs trading and investment holding. Additionally, the Group’s manufacturing

activities are also conducted principally in Malaysia. Other operations in Malaysia include the provision of

air transportation services, oil palm plantation, development and maintenance of planted forests, offshore

trading and investment holding.

The Group also operates in other countries:

(i) U.S.A. - importation and sale of wood products.

(ii) Cayman Islands - investment holding.

Other

Malaysia Brazil countries Eliminations Total

RM’000 RM’000 RM’000 RM’000 RM’000

2003

Revenue

External revenue 576,823 - 1,573 - 578,396

Intersegment revenue 312,451 - - (312,451) -

Total revenue 889,274 - 1,573 (312,451) 578,396

Other information

Segment assets 847,177 31,628 453 15,133 894,391

Capital expenditure 90,626 - - - 90,626


plant and equipment 41,953 1,632 7 - 43,592

Amortisation of timber rights 16,279 - - - 16,279

Impairment losses 1,557 - - - 1,557

2002

Revenue

External revenue 438,345 377 1,573 - 440,295

Intersegment revenue 270,505 - - (270,505) -

Total revenue 708,850 377 1,573 (270,505) 440,295




(b) Secondary reporting format - geographical segments (cont’d)

Other

Malaysia Brazil countries Eliminations Total

RM’000 RM’000 RM’000 RM’000 RM’000

2002 (cont’d)

Other information

Segment assets 854,700 29,032 459 17,787 901,978

Capital expenditure 59,597 93 - - 59,690


plant and equipment 44,931 2,876 8 - 47,815

Amortisation of timber rights 16,279 - - - 16,279

29. Change in accounting policy and prior year adjustment

During the year, the Group and the Company changed its accounting policy in respect of the treatment of

dividends proposed or declared after the balance sheet date in accordance with MASB Standard No.19 ‘Events

After the Balance Sheet Date’.

In previous years, dividends were accrued as a liability when proposed by the Board of directors. The Group

and the Company have now changed the accounting policy to recognise dividends in shareholders’ funds in

the year in which the obligation to pay is established in accordance with MASB Standard No.19. Therefore,

final dividends are now accrued as a liability after approval by shareholders at the Annual General Meeting.

This change in accounting policy has been accounted for retrospectively and the comparatives have been restated.

The change in policy has the effect of increasing the Group and the Company’s retained profit and decreasing

the current liabilities for the year ended 30 April 2003 by RM5,759,240 (2002: RM5,650,096) respectively.

The effect of the changes in the Group and the Company’s financial statements are reflected in the Statements

of Changes in Equity.

30. Significant related party transactions

Significant related party transactions entered into by the Group and Company are as follows:

(a) Transactions with subsidiary companies

Company

2003 2002

RM’000 RM’000

Hiring charges paid to a subsidiary company 2,400 2,400

Software maintenance income from subsidiary companies 321 319

Dividend received from a subsidiary company - 12,000

Interest received from a subsidiary company 120 480

Management fee received from subsidiary comspanies - 120

Purchase from subsidiary companies 11,198 6,590

Sales to subsidiary companies 211,271 190,939



30. Significant related party transactions (cont’d)

(b) Transactions with companies in which certain directors of the Company and their close family

members have a substantial financial interest and/or are directors:

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Income

(i) Sale of logs

Perpuluhan Jaya Sdn. Bhd. 1,775 309 1,464 305

Subur Tiasa Group* 443 8,528 443 7,107

(ii) Sale of power

Subur Tiasa Group* 844 816 33 -

(iii) Rental of equipment

Hose Mountains Logging Sdn. Bhd. - 33 - 33

Taman Logging Sdn. Bhd. 2,723 4,710 2,723 4,710

Tiong Toh Siong & Sons Sdn. Bhd. 92 228 92 162

Expenditure

(i) Purchase of logs

Binamewah Sdn. Bhd. 21,989 11,599 12,331 4,537

Lukutan Enterprises Sdn. Bhd. 10,600 3,079 4,886 1,201

Rejang Logging Co. Sdn. Bhd. - 156 - -

Subur Abadi Sdn. Bhd. - 152 - -

Subur Tiasa Group* 81 718 - 18

(ii) Purchase of raw material

Petanak Enterprises Sdn. Bhd. 13,672 8,376 - -

(iii) Contract fee for log harvesting

Hose Mountains Logging Sdn. Bhd. 16,500 26,608 - -

Meli-Mujong Logging Sdn. Bhd. 14,358 19,465 - -

Rimbunan Hijau Sdn. Bhd. 14,182 11,153 - -

Taman Logging Sdn. Bhd. 35,403 36,795 35,403 36,795

Tiong Toh Siong & Sons Sdn. Bhd. 77,522 116,579 77,522 115,188

(iv) Purchase of spare parts, fuel and lubricants

Rimbunan Hijau General Trading Sdn. Bhd. 943 647 195 94

(v) Towage and freight charges

Globular Sdn. Bhd. - 1,993 - 1,324

Onward Shipping Sdn. Bhd. 1,548 1,013 - -

Rimbunan Hijau Sdn. Bhd. - 2,441 - 2,329

Transport Resources Sdn. Bhd. 150 1,886 53 1,146

(vi) Insurance charges

Evershine Agency Sdn. Bhd. 80 422 36 119

Harmony Agencies Sdn. Bhd. 51 510 - 15

(vii) Purchase of air tickets

RH Tours and Travel Agency Sdn. Bhd. 95 108 22 62

(viii) Purchase of computer hardware and

related products

Comserv (Sarawak) Sdn. Bhd. 90 125 83 123



30. Significant related party transactions (cont’d)

(b) Transactions with companies in which certain directors of the Company and their close

family members have a substantial financial interest and/or are directors: (cont’d)

* Subur Tiasa Group includes Subur Tiasa Holdings Bhd. and its wholly owned subsidiaries, namely,

Subur Tiasa Plywood Sdn. Bhd., Homet Raya Sdn. Bhd. and RH Timber Processing Industries Sdn. Bhd.

The directors are of the opinion that the above transactions were entered into in the normal course of

business have been established on terms and conditions that are not materially different from those

obtainable in transactions with unrelated parties.

(c) Directors remuneration

The aggregate remuneration of the directors of the Group and of the Company categorised into

appropriate components are as follows:

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Executive Directors

- fees 30 30 30 30

- salaries and other emoluments 518 455 518 455

548 485 548 485

Non-Executive Directors

- fees 306 278 210 182

- other emoluments 48 48 48 48

354 326 258 230

The remuneration paid to the directors of the Company, analysed into bands of RM100,000 are as follows:

Number of directors

Range of remuneration Executive Non-Executive

Below 100,000 - 7

RM100,001 - RM200,000 - -

RM200,001 - RM300,000 - -

RM300,001 - RM400,000 - -

RM400,001 - RM500,000 - -

RM500,001 - RM600,000 1 -

31. Contingent liabilities, unsecured

Company

2003 2002

RM’000 RM’000

Bankers’ guarantees issued to third parties

on behalf of subsidiary companies 2,228 2,700

Corporate guarantees issued to bankers

on behalf of subsidiary companies 156,049 150,236

158,277 152,936



32. Capital commitments

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Authorised capital expenditure not provided

for in the financial statements:

- approved and contracted for 1,528 6,931 1,132 -

33. Significant event

On 28 February 2003, the Company entered into a Sale and Purchase Agreement to acquire 10,000 ordinary

shares of RM1.00 each, representing the entire issued and paid-up share capital of Hariyama Sdn. Bhd., a

company incorporated in Malaysia, for a total cash consideration of RM23,573,340. The acquisition has been

approved by the relevant authorities and is now pending completion.

34. Financial instruments

(a) Financial risk management objectives and policies

The Group’s financial risk management policy seeks to ensure that adequate financial resources are

available for the development of the Group’s businesses whilst managing its interest rate, liquidity,

credit and foreign exchange risks. The Group operates within clearly defined guidelines that are

approved by the Board and the Group’s policy is not to engage in speculative transactions.

(b) Interest rate risk

The Group’s primary interest rate risk relates to interest-bearing debt, as the Group had no substantial

long-term interest-bearing assets as at 30 April 2003. The investments in financial assets are short term

in nature and are not held for speculative purposes.

(c) Liquidity risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding

so as to ensure that all repayment and funding needs are met. As part of its overall prudent liquidity

management, the Group maintains sufficient levels of cash and cash equivalents to meet its working

capital requirements. In addition, the Group strives to maintain available banking facilities of a reasonable

level to its overall debt position.

(d) Credit risk

Credit risk is managed by credit approvals and monitoring procedures.

The Group does not have any significant exposure to any individual customer or counter party nor does

it have any major concentration of credit risk related to any financial instruments.

(e) Foreign exchange risk

The Group is exposed to currency risk in respect of its foreign investments in subsidiaries. These are,

however, not significant.

(f) Fair value

The carrying amounts of short-term financial assets and liabilities approximate their fair value due to the

relative short maturity term of these financial instruments.

35. Comparative figures

The presentation and classification of items in the current year’s financial statements are consistent with the

previous financial year except that certain comparative amounts have been adjusted as a result of the change

in accounting policy as disclosed in Note 29.


Additional Compliance Information

1. American Depository Receipt (ADR) or Global Depository Receipt (GDR)

There were no American Depository Receipt (ADR) or Global Depository Receipt (GDR) programmes

sponsored by the Company during the financial year.

2. Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company or its subsidiaries, directors or management

by any relevant authority during the financial year.

3. Variation in Results

There were no profit estimates, forecasts or projections or unaudited results announced which differed by

10% or more during the financial year.

4. Profit Guarantees

There were no profit guarantees given by the Company and its subsidiaries during the financial year.

5. Material Contracts

There were no material contracts (not being contracts entered into in the ordinary course of business)

entered into by the Company or its subsidiaries which involve directors and major shareholders, either still subsisting

at the end of the financial year ended 30 April 2003 or entered into since the end of the previous financial year.

6. Revaluation Policy

There were no revaluation policies adopted on landed properties during the financial year.

7. Utilisation of Proceeds Raised from Corporate Proposals

There were no utilisations of proceeds raised from any proposal during the financial year.

8. Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities exercised during the financial year.

9. Non-audit fee

The non-audit fees paid by the Group to the external auditors for the financial year ended 30 April 2003

amounted to RM102,000.

10. Share Buy-backs

At the Extraordinary General Meeting held on 26 September 2002, the shareholders renewed the authority

for the Company to purchase and/or hold up to a maximum of 28,252,000 ordinary shares of RM1.00 each

representing 10% of the issued and paid up share capital of the Company.

During the financial year ended 30 April 2003, a total of 4,374,000 of the Company’s own shares were

purchased pursuant to the share buybacks mandate. All the shares purchased are retained as treasury

shares. None of the shares purchased has been resold or cancelled as at 30 April 2003. A monthly breakdown

of the shares bought back is set out below:

Month No. of Shares Price Average Total Cost

Highest Lowest Cost

RM RM RM RM

May 2002 72,000 2.50 2.19 2.45 176,061

June 2002 476,000 2.60 2.04 2.44 1,159,526

July 2002 1,366,000 3.50 2.69 3.23 4,415,675

August 2002 503,000 3.42 3.10 3.33 1,676,853

September 2002 626,000 3.40 3.04 3.24 2,027,636

October 2002 260,000 3.46 3.16 3.35 870,368

November 2002 678,000 3.20 3.08 3.16 2,139,587

December 2002 - - - - -

January 2003 22,000 3.38 2.98 3.13 68,755

February 2003 59,000 3.12 3.08 3.13 184,681

March 2003 274,000 3.00 2.49 2.75 753,359

April 2003 38,000 2.70 2.62 2.69 102,276

4,374,000 13,574,777


Additional Compliance Information (cont’d)

11. Recurrent Related Party Transactions of A Revenue or Trading Nature

The Company obtained the approval of its shareholders at the Extraordinary General Meeting held on 26

September 2002 for the Group to enter into recurrent related party transactions of a revenue or trading

nature which are in the ordinary course of business of the Group.

The aggregate value of the recurrent related party transactions entered into by the Company and/or its

subsidiaries with related parties during the financing year ended 30 April 2003 are as follows: -

Nature of Transactions Related Parties Relationship with Amount

entered into by the the Company Transacted

Company and/or its RM’000

subsidiary(ies)

Contract fee for the Tiong Toh Siong & Sons Sdn Bhd 1 (a) 77,522

harvesting of logs from Taman Logging Sdn Bhd 1 (c) 35,403

timber concessions Hose Mountains Logging Sdn Bhd 1 (c) 16,500

paid to Related Parties Meli-Mujong Logging Sdn Bhd 1 (c) 14,358

Rimbunan Hijau Sdn Bhd 1 (b) 14,182

Purchase of logs from Binamewah Sdn Bhd 1 (c) 21,989

Related Parties Lukutan Enterprises Sdn Bhd 1 (b) 10,600

Subur Group2 1 (c) 81

Purchase of raw material Petanak Enterprises Sdn Bhd 1 (d) 13,672

(glue) from Related Party

Sales of logs to Related Subur Group2 1 (c) 443

Parties

Towage and freight Transport Resources Sdn Bhd 1 (c) 150

charges paid to Related Onward Shipping Sdn Bhd 1 (f) 1,548

Parties

Equipment Rental Income Taman Logging Sdn Bhd 1 (c) 2,723

received from Related Tiong Toh Siong & Sons Sdn Bhd 1 (a) 92

Parties

Purchase of spare parts, Rimbunan Hijau General Trading 1 (c) 943

fuel and lubricants from Sdn Bhd

Related Party

Purchase of computer Comserv (Sarawak) Sdn Bhd 1 (b) 90

hardware and related

products from Related

Party

Supply of power to Subur Group2 1 (c) 844

Related Parties

Purchase of air ticket R.H. Tours & Travel Agency Sdn Bhd 1 (c) 95

through the Related Party

Total 211,235

Notes:

1. Relationship of the Related Party with the Company.

(a) A wholly-owned subsidiary of a major shareholder

(b) A subsidiary of a major shareholder

(c) A company in which major shareholder(s) and/or person(s) connected have substantial interests

(d) A company in which major shareholder(s) are deemed to have substantial interests

(e) A company in which director and person(s) connected have substantial interests

(f) A company in which a person connected with a director has a substantial interest

2. Subur Group include Subur Tiasa Holdings Berhad and its wholly owned subsidiaries, namely, Subur Tiasa Plywood Sdn Bhd,

Homet Raya Sdn Bhd and R.H. Timber Processing Industries Sdn Bhd.


Analysis of Shareholdings as at 5 August 2003

Authorised share capital : RM1,000,000,000-00

Issued and fully paid-up share capital : RM282,528,499-00

Class of share : Ordinary share of RM1-00 each

Voting Rights : 1 vote per ordinary share

Distribution of shareholdings No. of Holders % No. of Holdings %

1 - 99 48 1.89 1,599 0.00

100 - 1000 1,064 41.86 984,622 0.38

1001 - 10000 1,117 43.94 4,400,628 1.68

10001 - 100000 206 8.10 6,778,820 2.59

100001 - 13092203 (less than 5% of issued shares) 103 4.05 140,324,352 53.59

13092204 (5%) and above of issued shares 4 0.16 109,354,078 41.76

TOTAL 2,542 100.00 261,844,099* 100.00

* the number of 261,844,099 ordinary shares was arrived at after deducting 20,684,400 treasury shares

retained by the Company from the issued and paid-up share capital of 282,528,499 ordinary shares.

Top 30 Shareholders

No. Name Shareholdings %

1 Tiong Toh Siong Holdings Sdn Bhd 40,428,867 15.44

2 HSBC Nominees (Asing) Sdn Bhd 31,762,711 12.13

HSBC Sg Ltd for Genine Chain Limited

3 Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 19,162,500 7.32

Pledged Securities Account for Amanas Sdn Bhd

4 Public Nominees (Tempatan) Sdn Bhd 18,000,000 6.87

Pledged Securities Account for Asanas Sdn Bhd

5 RHB Capital Nominees (Tempatan) Sdn Bhd 13,000,000 4.96

Pledged Securities Account for Tiong Toh Siong Holdings Sdn Bhd

6 Employees Provident Fund Board 10,955,000 4.18

7 Asanas Sdn Bhd 9,250,000 3.53


Pledged Securities Account for Asanas Sdn Bhd


Pledged Securities Account for Nustinas Sdn Bhd


Pledged Securities Account for Insan Anggun Sdn Bhd

11 Malaysia Nominees (Tempatan) Sendirian Berhad 7,736,880 2.95

Great Eastern Life Assurance (Malaysia) Berhad

12 Mayban Nominees (Tempatan) Sdn Bhd 7,250,000 2.77

Pledged Securities Account for Tiong Toh Siong Holdings Sdn Bhd

13 Cartaban Nominees (Asing) Sdn Bhd 6,169,342 2.36

Credit Suisse Singapore for Double Universal Limited

14 Mayban Nominees (Asing) Sdn Bhd 5,076,419 1.94

DBS Bank for Bloomswick Ltd

15 Insan Anggun Sdn Bhd 4,500,000 1.72

16 Kenanga Nominees (Tempatan) Sdn Bhd 3,758,759 1.44

Pledged Securities Account for Tiong Thai King

17 DB (Malaysia) Nominee (Asing) Sdn Bhd 3,347,304 1.28

UBS Ag Singapore for Pacific Investment Fund

18 Lembaga Tabung Haji 2,877,000 1.10


Analysis of Shareholdings as at 5 August 2003 (cont’d)

Top 30 Shareholders (cont’d)

No. Name Shareholdings %


DBS Bank for Tiong Hiew King

20 Cartaban Nominees (Asing) Sdn Bhd 2,599,026 0.99

Credit Suisse Singapore for Gold Palace Profits Limited


JPMorgan Chase Bank for Roxton Investments Limited

22 Marabong Lumber Sendirian Berhad 1,850,435 0.71

23 Ke-Zan Nominees (Tempatan) Sdn Bhd 1,480,000 0.57

Kim Eng Ong Asia Securities Pte Ltd for Wong Thiam Meng

24 Am Nominees (Tempatan) Sdn Bhd 1,296,000 0.49

Employees Provident Fund Board

25 Tiong Chiong Ong 1,200,889 0.46

26 Azerina Mohd Arip @ Gertie Chong Soke Hoon 1,000,000 0.38


HSBCIT (S) Ltd for Numbley Assets Limited

28 Lembaga Amanah Kebajikan Darul Falah 1,000,000 0.38


DBS Bank for Tiong Chiong Hoo

30 BBMB Securities Nominees (Tempatan) Sdn Bhd 945,000 0.36

Petroliam Nasional Berhad

Substantial Shareholders

Name Direct No. % Indirect No. %

of Shares of Shares

Tiong Toh Siong Holdings Sdn Bhd 60,678,867 23.17 2,135,711(a) 0.82

Asanas Sdn Bhd 35,662,500 13.62

Genine Chain Limited 31,762,711 12.13

Amanas Sdn Bhd 19,162,500 7.32

Employees Provident Fund Board 13,523,000 5.16

Tan Sri Datuk Tiong Hiew King 2,682,212 1.02 62,814,578(b) 23.99

Teck Sing Lik Enterprise Sdn Bhd 62,814,578(c) 23.99

Dato’ Zulkifli Bin Ali 35,662,500(d) 13.62

Cheung Pak Keung 31,762,711(e) 12.13

Chang Meng 31,762,711(e) 12.13

Datuk Kenneth Kanyan Temenggong Koh 19,162,500(f) 7.32

Notes:

a. Deemed interested by virtue of its substantial shareholding in Marabong Lumber Sdn Bhd and Tiong Toh Siong & Sons Sdn Bhd.

b. Deemed interested by virtue of his substantial shareholding in Teck Sing Lik Enterprise Sdn Bhd.

c. Deemed interested by virtue of its substantial shareholding in Tiong Toh Siong Holdings Sdn Bhd.

d. Deemed interested by virtue of his substantial shareholding in Asanas Sdn Bhd.

e. Deemed interested by virtue of their substantial shareholdings in Genine Chain Limited.

f. Deemed interested by virtue of his substantial shareholding in Amanas Sdn Bhd.

Directors' Shareholdings

Name Direct No. % Indirect No. %

of Shares of Shares

Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid - - - -

Mr Tiong Chiong Hoo 1,013,899 0.39 - -

Dr. Tiong Ik King 103,339 0.04 - -

Tuan Haji Wan Alshagaf bin Tuanku Esim - - - -

Tuan Haji Ashaari @ Asahari bin Shebli - - - -

Mr John Leong Chung Loong - - - -

Mdm Tiong Choon - - - -

Mr Tiong Chiong Hee 5,000 0.002 - -


List of Properties as at 30 April 2003

Malaysia

Description Tenure Existing use Land Area Approximate Net Book Date of

age of Value as at Acquisition

building 30 April

2003

(RM’000)

Tanjung Ensurai, Sibu

Engkilo L.D. Blk 8 Leasehold land 19 June 1996

Lot 804 expiring on

05.09.2062 Factory, warehouse 141,298 16 years 5,887

and staff quarter sq metres

Sibu O.T. 838 Leasehold land 1 January 1997

expiring on

31.12.2024

Sibu Grant No. 2383, 2458 Leasehold land 31 March 1993

expiring on

31.12.2018

Engkilo L.D. Blk 8 Leasehold land Factory, warehouse 136,326 11 years 8,945 31 March 1993

Lot 803 expiring on and staff quarter sq metres

05.09.2062

Sibu O.T. 655 and 837 Leasehold land 31 March 1993

expiring on

31.12.2024

Sibu O.T. 12262 Leasehold land Vacant 16,183 - 229 26 July 2000

expiring on Agriculture land sq metres

13.06.2027

Putai, Kapit Factory, warehouse 11 years 21,619 -

Concession land and staff quarter

Upper Lanang Rd, Sibu

Sibu Town District Leasehold land Detached 832 13 years 34 31 December 1990

Blk 10 Lot 169 expiring on residential house sq metres

01.03.2050

Salim, Sibu

Seduan L.D. Blk 16 Leasehold land Warehouse 19,981 5 years 4,252 14 November 1995

Lot 1393 expiring on sq metres

31.12.2915

Ulu Oya Road, Sibu

Seduan L.D. Blk 10 Leasehold land Semi-detached 430.2 6 years 227 19 October 1999

Lot 1161 expiring on residential house sq metres

07.08.2054

Tanjung Manis, Sarikei

Sare L.D. Blk 3, Lot 25 Rented land Factory, warehouse 250,717 5 years 41,805 -

expiring on and staff quarter sq metres

22.09.2052

Sare L.D. Blk 3, Lot 71, Freehold land Vacant 40,961 - 307 19 January 1998

86 and 87 Agriculture land sq metres

Sare L.D. Blk 3, Leasehold land Vacant 15,699.50 - 1,854 1 September 2002

Lot 138 expiring on Industrial land sq metres

19.06.2062

Sare L.D. Blk 3, Lot 53, Freehold land Vacant 230,747 - 623 14 November 1996

54, 56, 57, 58, 59, 60 Agriculture land sq metres

and 61

Sungei Terus, Niah, Miri Provisional Vacant 23,629,286 - 1,782 30 April 2001

Lot 161, Suai Land leasehold Agriculture land sq metres

District expiring on

06.12.2060

Lot 934, Niah Land Provisional Vacant 26,369,203 - 1,989 30 April 2001

District leasehold Agriculture land sq metres

expiring on

06.12.2060


List of Properties as at 30 April 2003

Brazil

Municipality/State Description Tenure Existing Land Area Approx. Net Book Date of

Freehold Land Use Age Of Value Acquisition

Building As At

30 April

2003

(RM’000)

Maginco Verde Ltda

Sao Felix do Xingu, Para Lote n. 44-D Freehold Forest Land 2,275.745 hectares – 3 1 July 1997

Sao Felix do Xingu, Para Lote n. 35-E Freehold Forest Land 2,393.587 hectares – 2 1 July 1997

Sao Felix do Xingu, Para Lote n. 36-E, M-12060 Freehold Forest Land 2,440.310 hectares – 1 1 July 1997


Sao Felix do Xingu, Para Reg. 4496 Pg 234 Freehold Forest Land 4,356.000 hectares – 2 1 July 1997

Sao Felix do Xingu, Para Reg. 4496 Pg 232 Freehold Forest Land 4,356.000 hectares – 63 1 July 1997





Sao Felix do Xingu, Para Lote n. 42-D Freehold Forest Land 2,464.510 hectares – 50 1 July 1997

Ananindeus, Para Enroll no. 289 Freehold Factory Building 138,084 sq. metres 19 5,773 1 July 1997

Ananindeus, Para Enroll no. 1722 Freehold Urban Land 20,000 sq. metres – 47 1 July 1997

Ananindeus, Para Lote nbr. 322 Freehold Urban Land 2,301 sq. metres – 5 1 July 1997

Ananindeus, Para Lote nbr. 344-C Freehold Urban Land 1,926 sq. metres – 2 1 July 1997


Ananindeus, Para Lote nbr. 342-A Freehold Urban Land 5,184 sq. metres – 5 1 July 1997

Ananindeus, Para Lote nbr. 344-B Freehold Urban Land 5,184 sq. metres – 5 1 July 1997




Ananindeus, Para Lote nbr. 342-B Freehold Urban Land 600 sq. metres – 1 1 July 1997



REFORESTATION

Carauari, Amazonas Seringal Nazare Freehold Forest Land 8,679.924 hectares – 9 1 July 1997

Carauari, Amazonas Seringal Pupunha I Freehold Forest Land 3,441.455 hectares – 4 1 July 1997

Carauari, Amazonas Seringal Pupunha II Freehold Forest Land 830.345 hectares – 1 1 July 1997

Carauari, Amazonas Seringal Pupunha III Freehold Forest Land 2,300.037 hectares – 3 1 July 1997

Selvaplac Verde Ltda

Moju, Para M. 4199, F.99, L.2-AV Freehold Rural Land 1,160.000 hectares – 36 1 July 1997

Portel, Para M. 951, F.99, L.2 Freehold Forest Land 7,090.000 hectares – 1,905 1 July 1997

Icoaraci, Para Ind. Plant (M.473, Freehold Factory Building 47,076 sq. metres 20 4,747 1 July 1997

L2-AM)

Icoaraci, Para M.236, F.236, L.2-GV Freehold Urban Land 106,323 sq. metres – 575 1 July 1997

M.47, F.47, L.2-GX

Number of shares held

I / We NRIC No.

(Full name in capital letters)

of

(Address)

being a member / members of JAYA TIASA HOLDINGS BERHAD hereby appoint

NRIC No.


of

(Address)

or failing him NRIC No.


of

(Address)

as my / our proxy to vote for me / us and on my / our behalf at the Forty-Third Annual General Meeting of the

Company to be held at the Auditorium Room, Ground Floor, No.62, Lorong Upper Lanang 10A, 96000 Sibu,

Sarawak on Monday, 29 September 2003 at 11:45 a.m. and at any adjournment thereof.

Resolution For Against

No. 1 Adoption of the Audited Financial Statements for the year ended 30 April 2003

together with the Directors' and Auditors' Reports thereon.

No. 2 Approval of Directors' Fees for the year ended 30 April 2003.

No. 3 Declaration of a First and Final Dividend of 3% less tax for the year ended

30 April 2003.

No. 4 Re-election of Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid.

No. 5 Re-election of Mr Tiong Chiong Hoo.

No. 6 Re-election of Tuan Haji Wan Alshagaf bin Tuanku Esim.

No. 7 Re-appointment of Auditors.

No. 8 Authority for the directors to allot and issue shares pursuant to Section 132D

of the Companies Act, 1965.

(Please indicate with (x) how you wish your vote to be casted. If no specific direction as to voting is given, the proxy will vote or abstain at his / her discretion)

Dated this day of 2003

Signature / Common Seal of Shareholder(s)

Notes:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies in his/her stead. Where a member

appoints two (2) or more proxies, he/she shall specify the proportion of his/her shareholdings to be represented by each proxy.

2. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the

Company.

3. The instrument appointing a proxy must be deposited at the Company's Registered Office at No. 1-9, Pusat Suria Permata, Jalan Upper Lanang,

96000 Sibu, Sarawak not less than forty-eight (48) hours before the time set for holding the meeting or at any adjournment thereof.

4. If the appointer is a corporation, the proxy form must be executed under its common seal or under the hand of its attorney.

Jaya Tiasa Holdings Berhad(Incorporated in Malaysia)

Proxy Form

The Secretary

Jaya Tiasa Holdings Berhad

No. 1-9, Pusat Suria Permata

Jalan Upper Lanang

96000 Sibu, Sarawak

Malaysia

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