warisan cvr & ifc pdf - warisantc.com.my · pelaksanaan pendaftaran barangan kosmetik oleh Kerajaan yang berkuatkuasa ... series of attractive travel packages to its ... agen-agen

W A R I S A N T C H O L D I N G S B E R H A D

( 4 2 4 8 3 4 - W )

A N N U A L R E P O R T 2 0 0 3

Corporate Information1

Business Divisions1

Chairman’s Report / Laporan Pengerusi2

Financial Charts8

Other Information9

Financial Statements23

Notice of Annual General Meeting64

Statement Accompanying Noticeof Annual General Meeting

66

Form of Proxy

C O N T E N T S

1

W A R I S A N T C H O L D I N G S B E R H A D ( 4 2 4 8 3 4 - W )

Business DivisionsC O N S U M E R P R O D U C T S

• Cosmetics

• Hair care products

• Lingerie

T R AV E L & C A R R E N TA L

• In-bound tours

• Corporate travel

• Airline ticketing

• Car rental

M A C H I N E RY

• Material handling equipment

• Construction equipment

• Agricultural tractors

• Engine & Generator sets

1

Corporate Information

D i r e c t o r s

Dato’ Tan Heng Chew JP, DJMK,

Chairman

Ngu Ew LookExecutive Director

Yeoh Keong LianExecutive Director

Dato’ Lee Eng Guan @ Lee Eng Yuan DPTJ, ANS

Dato’ Haji Nadzam bin Haji Mohd Din JP, DJMK, KMN, AMP

Ismail bin Rautin Ibrahim

Seow Thiam Fatt

Foo Kai Yuen

A u d i t C o m m i t t e e

Seow Thiam FattChairman

Ismail bin Rautin Ibrahim

Ngu Ew Look

C o m p a n y S e c r e t a r y

Chan Yoke-Lin

R e g i s t e r e d O f f i c e

62-68 Jalan Ipoh51200 Kuala LumpurTelephone : 03-40478888Facsimile : 03-40478636E-mail : [email protected]

R e g i s t r a r s

Tenaga Koperat Sdn. Bhd.20th Floor, Plaza PermataJalan Kampar, Off Jalan Tun Razak50400 Kuala Lumpur.Telephone: 03-40412188Facsimile: 03-40439233

A u d i t o r s

KPMGWisma KPMGJalan Dungun, Damansara Heights50490 Kuala Lumpur

S t o c k E x c h a n g e L i s t i n g

Malaysia Securities Exchange Berhad(Listed on the Main Board on 15 December 1999)

C h a i rma n ’ s R e p o r tL A P O R A N P E N G E R U S I


On behalf of the Board, I am pleased to present the Annual Report andAudited Financial Statements of Warisan TC Holdings Berhad for thefinancial year ended 31 December 2003.

H i g h l i g h t sThe financial year ended 31 December 2003 has been a difficult yearfor all of us. In late 2002, the world witnessed the terror of the Balibombings, following which, the first half of 2003 saw the war in Iraqand the outbreak of Severe Acute Respiratory Syndrome (“SARS”).

For the financial year ended 31 December 2003, the Group recorded adecline of 4% in revenue from RM235.5 million to RM226.9 millionwhilst Group profit before taxation decreased by 31% to RM18.9 millionfrom RM27.4 million achieved in 2002. The decrease was attributed toa smaller contribution from the Consumer Products Division and theTravel and Car Rental Division.

During the year, a wholly-owned subsidiary of the Company enteredinto an agreement with Shiseido Asia Pacific Co. Ltd. to renew theterms of the Exclusive Distributorship Agreement (“EDA”) in relation tothe distributorship of Shiseido products for another one (1) year.Subsequent renewal of the EDA would be for indefinite number of one(1) year terms unless either party gives written notice to the otherparty that it would not renew the EDA.

In respect of the Joint Venture between the Company and Wacoal Corp.of Japan, approval was obtained from the shareholders at the SixthAnnual General Meeting held on 20 May 2003 for the Company tocontinue its involvement in the “Wacoal” business.

Bagi pihak Lembaga Pengarah, saya dengan sukacitanya membentangkanLaporan Tahunan dan Penyata Kewangan Warisan TC Holdings Berhadbagi tahun kewangan berakhir 31 Disember 2003.

M a k l u m a t P e n t i n gTahun kewangan berakhir 31 Disember 2003 merupakan tahun yang sukarbagi kami. Pada akhir 2002, dunia telah menyaksikan kegerunan pengebomandi Bali, yang diikuti oleh penularan wabak “Severe Acute RespiratorySyndrome” (“SARS”) pada awal tahun 2003.

Kumpulan telah mencatatkan kemerosotan pendapatan sebanyak 4%daripada RM235.5 juta kepada RM226.9 juta dalam tahun kewanganberakhir 31 Disember 2003, sementara keuntungan sebelum cukaiKumpulan merosot sebanyak 31% kepada RM18.9 juta daripada RM27.4juta yang dicapai pada 2002. Kemerosotan ini berpunca daripadasumbangan yang lebih kecil daripada Bahagian Barangan Pengguna danBahagian Pelancongan dan Penyewaan Kereta.

Dalam tahun semasa, sebuah anak syarikat yang dimiliki penuh Syarikattelah mengikatkan perjanjian dengan Shiseido Asia Pacific Co. Ltd. bagimemperbaharui terma-terma Perjanjian Pengedaran Eksklusif (PPE) yangberkaitan dengan hak pengedaran barangan Shiseido dengan lanjutanselama satu (1) tahun. Pembaharuan PPE yang seterusnya akanberdasarkan lanjutan satu tahun yang tiada batasan melainkan denganpemberian notis bertulis oleh salah satu pihak dengan menyatakanhasrat untuk tidak memperbaharui PPE.

Berkenaan dengan kerjasama di antara Syarikat dengan Wacoal Corp.dari Jepun pula, Syarikat telah mendapat kelulusan para pemegangsaham di Mesyuarat Agung Tahunan yang Ke-enam pada 20 Mei 2003untuk meneruskan penglibatan dalam perniagaan “Wacoal”.

2


Consumer ProductsBa rangan Pe ngguna

R e v i e w o f O p e r a t i o n sFor the financial year ended 31 December 2003,the Group continues to operate with its 3 coredivisions, namely Consumer Products, Travel & CarRental and Machinery.

Consumer ProductsDuring the year, the Consumer Products Divisionembarked on a program to upgrade Shiseidocounter image with the renovation of the Shiseidocounters in a number of key stores. Additionally,Shiseido’s positioning as “The Total SkincareHouse” is reinforced with the launching of anumber of revolutionary skincare products duringthe year.

The Zotos haircare products was rebrandedShiseido Professional to enjoy the recognition ofthe prestigious Shiseido brand image. Itcontributed significant growth over 2002 with thelaunch of a wide range of hair treatment productsand the Fuente New Haircare line.

T i n j a u a n O p e r a s iBagi tahun kewangan berakhir 31 Disember 2003,kumpulan meneruskan operasinya dengan 3 perniagaanutamanya iaitu, Barangan Pengguna, Pelancongandan Penyewaan Kereta serta Kejenteraan.

Barangan PenggunaBahagian Barangan Pengguna mengambil langkahuntuk meningkatkan imej kaunter Shiseido denganmengubahsuai kaunter Shiseido di beberapa gedungutama dalam tahun semasa. Tambahan pula,penempatan Shiseido sebagai “The Total SkincareHouse” diperkukuhkan lagi dengan pelancaranbeberapa barangan penjagaan kulit yang berlainandalam tahun semasa.

Barangan penjagaan rambut Zotos haircare ditukarkanjenamanya kepada Shiseido Professional demi untukmenikmati pengiktirafan imej jenama Shiseido yangberprestij. Ia telah memberi sumbangan terhadappertumbuhan yang ketara dalam tahun 2002dengan pelancaran rangkaian barangan rawatanrambut yang luas serta rangkaian penjagaanrambut baru Fuente.

The overall results of the division was unfavourably impacted by theSARS outbreak, and the disposal of inventories which werediscontinued ahead of the Government’s implementation of cosmeticproducts registration with effect from 1 January 2004.

The Wacoal undergarments and lingerie line continues to be a premiumbrand and Wacoal Malaysia Sdn Bhd (“Wacoal Malaysia”), the jointventure company has embarked on aggressive advertising andpromotional activities during the year. It has also increased the numberof Wacoal counters at selected stores and expanded its current range ofproducts to target young customers with the launch of the “Pop-Teens”range. With all these, Wacoal Malaysia is expected to remaincompetitive in the local market.

Penularan SARS serta pelupusan inventori yang ditamatkan sebelumpelaksanaan pendaftaran barangan kosmetik oleh Kerajaan yang berkuatkuasamulia 1 Januari 2003 telah membawa kesan buruk terhadap keputusankeseluruhan bahagian ini.

Pakaian dalam wanita, Wacoal, terus kekal sebagai jenama premiumsementara Wacoal Malaysia Sdn Bhd (“Wacoal Malaysia”), syarikatkerjasamanya telah menjalankan aktiviti-aktiviti pengiklanan sertapromosi yang aggresif dalam tahun semasa. Jumlah kaunter-kaunterWacoal juga telah ditambah di beberapa gedung yang terpilih disampingmemperluaskan rangkaian barangan yang sediada dengan pelancaranrangkaian “Pop-Teens” yang ditujukan kepada golongan remaja. Dengankehadiran usaha-usaha ini, Wacoal Malaysia dijangkaakan mengekalkan saingan di pasaran tempatan.


Travel & Car RentalThe outbreak of SARS and the Iraq war were thetwin issues which wreaked havoc in the worldtravel & tourism. As a result of the disastrousevents, in year 2003, Mayflower Acme Tours SdnBhd (“Mayflower”) reported a reduction in bothrevenue and profit before taxation.

The Inbound division, despite the slowdown inbusiness as a result of SARS, has continued tostrongly promote Malaysia as a safe destination.During the year, Mayflower actively participated inthe overseas trade shows organised by theMalaysia Tourism Promotion Board and presented aseries of attractive travel packages to its overseasagents.

In view of the imminent recovery of tourismsectors for leisure market and the higher demandfor fleet management solutions by the corporatesectors, the car rental business is anticipated tohave good potential for future growth.

Tourism being the second largest source ofrevenue, the Government will continue to supportthe tourism industry. The intensified tourismpromotions such as the “Malaysia Truly Asia” and“Malaysia: My Second Home” campaigns are stillon-going, with the ultimate aim of gearingMalaysia towards becoming a safe and favouritetourism destination in the world.

Pelancongan & Penyewaan KeretaPenularan wabak SARS dan peperangan di Iraqmerupakan dua isu yang mendatangkan kekecohanterhadap pelancongan sedunia. Mayflower AcmeTours Sdn Bhd (“Mayflower”) melaporkan kemerosotandalam hasil pendapatan serta keuntungan sebelumcukai dalam tahun 2003, akibat kecelakaan ini.

Meskipun kehadiran SARS telah melembabkanperniagaan, bahagian Kemasukan Pelancongantelah meneruskan usaha untuk mempromosikanMalaysia sebagai sebuah destinasi yang selamat.Mayflower melibatkan diri secara aktif dalampameran perdagangan luar negara anjuran LembagaPromosi Pelancongan Malaysia dan menawarkanbeberapa pakej pelancongan yang menarik kepadaagen-agen luar negaranya dalam tahun semasa.

Dengan pemulihan sector pelancongan bagi pasarankegiatan masa lapang serta permintaan tehadappenyelesaian pengurusan kumpulan yang tinggioleh sector korporat, perniagaan penyewaan keretadijangka mempunyai potensi pertumbuhan yangbaik di masa hadapan.

Kerajaan akan terus memberi sokongan kepadaindustri pelancongan memandangkan ia adalah sumberhasil pendapatan yang kedua besar. Promosipelancongan yang semakin hebat dengan matlamatuntuk menjadikan Malaysia sebagai destinasipelancongan yang selamat di dunia seperti kempen“Malaysia Truly Asia” dan “Malaysia: My SecondHome” masih giat dijalankan.

Travel & Car RentalPe l a n c ongan & S ewa Ke r e ta

5


MachineryThe machinery business remains vibrantamid a more challenging businessenvironment in 2003. The divisionregistered overall growth in revenue and profitbefore taxation of 16% and 9% respectively ascompared to last year. Such favourable performancewas mainly attributable to higher sales recordedfrom engine, forklift and after sales divisions.The Nissan forklift continues to enjoy a strongmarket presence, and in particular the launchingof the new Nissan Forklift LX series has put thedivision on a stronger footing to compete withour competitors.

The forklift fleet rental line of business expandedfurther by 13% and with a fleet utilisation rate ofmore than 90% despite stiff competition encounteredduring the year. The division has also managed tosecure additional multinational accounts whichare contracted on a long term basis.

In 2003, a new branch office was set up at LahadDatu, Sabah to strengthen the position of thedivision as a top agricultural tractor player in thestate. In order to enhance the existing productrange and remain competitive, two new lower costBrazilian made tractors were introduced during theyear which have proven to be well accepted bythe market.

KejenteraanPerniagaan kejenteraan mengekalkan semangat dalammenghadapi persekitaran perniagaan yang menpunyaisaingan yang lebih hebat dalam tahun 2003.Bahagian ini mencatatkan peningkatan hasil dankeuntungan sebelum cukai sebanyak 16% dan 9%masing-masing secara keseluruhannya berbandingtahun lepas. Persembahan yang memuaskan iniadalah disebabkan oleh peningkatan jualan enjin,trak angkat susun dan bahagian lepas jualan. Trakangkat susun Nissan forklift terus menikmati kehadiranpasaran yang kukuh. Pelancaran siri Nissan ForkliftLX yang baru yang telah menyediakan tapak yangkukuh bagi menghadapi saingan dengan pesaing-pesaing yang ada.

Rangkaian perniagaan penyewaan trak angkat susunsecara berkumpulan berkembang sebanyak 13%dengan kadar kegunaan berkumpulan melebihi 90%,meskipun menghadapi saingan yang hebat dalamtahun semasa. Bahagian ini juga berjaya mengikatperjanjian jangka panjang dengan beberapa buahlagi syarikat multinasional.

Dalam tahun 2003, sebuah cawangan pejabat telahdidirikan di Lahad Datu, Sabah bagi mengukuhkankedudukan bahagian sebagai pembekal traktorpertanian yang terutama di dalam negeri. Bagimembaiki rangkaian barangan yang sediada danmengekalkan daya saing, dua buah traktor buatanBrazil dengan kos yang lebih rendah yangdiperkenalkan dalam tahun semasa terbukti menerimasambutan yang baik di dalam pasaran.

MachineryJ e n t e ra


D i v i d e n d sAn interim dividend of 3% tax exempt per share amounting to RM2,016,000 was paid on 18 September 2003. The Board hasrecommended the payment of a final dividend of 3% tax exempt pershare amounting to RM2,016,000, for the financial year ended 31December 2003 for approval by the shareholders at the forthcomingAnnual General Meeting.

C u r r e n t Ye a r P r o s p e c t sThe business outlook for the coming year looks promising. The RealGross Domestic Product (GDP) growth is expected to gain momentumand register a higher rate of 5.5% to 6% in 2004.

In view of this, the Group’s operating performance is expected toremain satisfactorily barring any significant changes in the economicconditions and any other unforeseen circumstances.

A c k n o w l e d g e m e n tOn behalf of the Board, I would like to take this opportunity to expressour sincere gratitude and appreciation to our valued customers,shareholders, financiers and business associates for their continuedconfidence and support in the Group. We would also like to record ourappreciation to all our employees for their dedication and commitmentthroughout the year.

D i v i d e nDividen pertengahan bebas cukai sebanyak 3% sesaham sejumlahRM2,016,000 telah dibayar pada 18 September 2003. Lembaga Pengarahmencadangkan bayaran dividen akhir bebas cukai sebanyak 3% sesahamsejumlah RM2,016,000, bagi tahun kewangan berakhir 31 Disember 2003untuk kelulusan para pemegang saham pada Mesyuarat Agung Tahunanyang akan datang.

P r o s p e k Ta h u n S e m a s aHarapan perniagaan bagi tahun yang akan datang nampak cerah.Pertumbuhan Keluaran Negara Kasar (KDNK) sebenar dijangka akanmencapai momentum dan akan mencatatkan kadar yang lebih tinggi,iaitu sebanyak 5.5% ke 6% pada tahun 2004.

Dengan ini, persembahan operasi Kumpulan dijangka akan kekalmemuaskan sekiranya tiada perubahan ketara dalam keadaan ekonomidan kejadian diluar jangkaan yang lain.

P e n g h a r g a a nBagi pihak Lembaga Pengarah, saya ingin mengambil kesempatan iniuntuk mengucapkan terima kasih dan merakamkan penghargaan kepadapelanggan yang dihargai, para pemegang saham, ahli kewangan sertasekutu perniagaan di atas kepercayaan dan sokongan mereka yangberterusan terhadap Kumpulan. Kami juga ingin merakamkan penghargaankepada semua kakitangan di atas dedikasi serta komitmen merekadisepanjang tahun.

Dato’ Tan Heng Chew JP, DJMK

Chairman/PengerusiKuala Lumpur25 March/Mac 2004

8


Financial Charts

REVENUERM Million

PROFIT AFTER TAXRM Million

TOTAL ASSETSRM Million

CAPITAL & RESERVESRM Million

NET TANGIBLE ASSETS PER SHARESen

EARNINGS PER SHARESen

2001

2002

2003

230

235

227

2001

2002

2003

29

20

15

2001

2002

2003

182

202

216

2001

2002

2003

133

147

157

2001

2002

2003

198

218

232

2001

2002

2003

44

30

22

Profile of the Board of Directors10

Corporate Governance Statement12

Statement on Internal Control16

Additional Compliance Information17

Audit Committee Report18

Shareholders’ Statistics20

Group Properties22

O T H E R I N F O R M A T I O N

10


Profile of the Board of Directors

Yeoh Keong Lian,

49, a Malaysian, is an Executive Director. She was appointed to theBoard on 20 March 2003.

Ms. Yeoh is a Fellow of the Association of Chartered Certified Accountantsand holds a Diploma in Applied International Management. She servedin various management capacities in the Tan Chong Motor HoldingsBerhad Group for about 12 years before joining PK Electronic IndustriesGroup in 1992 where she was the Senior Manager for about 3 years.Prior to this appointment, she was the Finance Director of Kimberly-Clark Corporation’s Malaysia and Singapore operations.

Ms. Yeoh does not have any family relationship with any director and/or major shareholder of the Company, nor any conflict of interest in anybusiness arrangement involving the Company.

Ms. Yeoh attended five of the six board meetings held after herappointment.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Dato’ Tan Heng Chew, JP, DJMK,

57, a Malaysian, is a Non-Executive and Non-Independent Director andthe Chairman of Warisan TC Holdings Berhad. He was the first directorof the Company when it was incorporated on 26 March 1997.

Dato’ Tan graduated from the University of New South Wales, Australiawith a Bachelor of Engineering (Honours) degree and a Masters degreein Engineering from the University of Newcastle, Australia. He joinedthe Tan Chong Motor Holdings Berhad Group of companies in 1970 andwas instrumental in the establishment of its Autoparts Division in the1970s and early 1980s.

Dato’ Tan sits on the Board of Tan Chong Motor Holdings Berhad asExecutive Deputy Chairman and also is the Chairman of APM AutomotiveHoldings Berhad.

He is a director and shareholder of Tan Chong Consolidated Sdn Bhd, amajor shareholder of the Company.

Dato’ Tan does not have any conflict of interest in any businessarrangement involving the Company. He has abstained from deliberationand voting in respect of transactions between the Group with relatedparties involving himself.

Dato’ Tan attended seven of the nine board meetings held in 2003.

Ngu Ew Look,

50, a Malaysian, is an Executive Director. He was appointed to the Boardon 26 July 2002 and is a member of the Audit Committee.

Mr. Ngu is a Fellow of the Association of Chartered Certified Accountants.He served the Tan Chong Motor Holdings Berhad Group in variousfinancial and management positions over the last 24 years. He was anAccountant for the travel business and later became the ProductManager and subsequently promoted to General Manager of theindustrial machinery business, both operations of which are now underthe Warisan Group. Since January 1999 and until his current appointment,he as General Manager, has been in charge of the heavy commercialvehicles division of the Tan Chong Group and overseeing the heavycommercial vehicle business of the Tan Chong Group in East Malaysia.

Mr. Ngu does not have any family relationship with any director and/ormajor shareholder of the Company, nor any conflict of interest in anybusiness arrangement involving the Company.

Mr. Ngu attended all the nine board meetings held in 2003.

Dato’ Haji Nadzam bin Haji Mohd Din, JP, DJMK, KMN, AMP,

61, a Malaysian, is a Non-Executive Non-Independent Director. He wasappointed to the Board on 1 November 1999.

Dato’ Haji Nadzam was in the Malaysian civil service and served as thePress Secretary for the Minister of Culture, Youth and Sport - 1972 to1975; the Minister of Trade and Industry - 1975 to 1978 and theMinister of Law and Attorney General - 1978 to 1980. He has been thehead of the Public Affairs department of the Tan Chong Motor HoldingsBerhad Group since 1981.

Dato’ Haji Nadzam does not have any family relationship with anydirector and/or major shareholder of the Company, nor any conflict ofinterest in any business arrangement involving the Company. He hasabstained from deliberation and voting in respect of transactionsbetween the Group with related parties involving himself.

Dato’ Haji Nadzam attended eight of the nine board meetings heldin 2003.

11


○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

PROF I L E O F THE BOARD O F D IR EC TORS

None of the directors had convictions for any offences within the past 10 years.

Ismail bin Rautin Ibrahim,

69, a Malaysian, is an Independent and Non-Executive Director. He wasappointed to the Board on 24 November 1999 and is a member of theAudit Committee.

Encik Ismail is a Fellow of the Institute of Commercial Management,United Kingdom and holds a Diploma in Entrepreneural Managementfrom Algonquin College, Canada. He joined the Royal Malaysia PoliceForce in 1954 and went on to join the Department of the ChiefGovernment Security Officers in the Prime Minister’s Departmentin 1967 and was appointed as its Chief in 1980. He subsequently optedfor early retirement and went into his own business.

Encik Ismail does not have any family relationship with any directorand/or major shareholder of the Company, nor any conflict of interestin any business arrangement involving the Company.

Encik Ismail attended eight of the nine board meetings held in 2003.

Foo Kai Yuen,

62, a Malaysian, is an Independent and Non-Executive Director. He wasappointed to the Board on 28 October 2002.

Mr. Foo has a LLB (Hons) degree from University of Singapore. He hasbeen practising law since he was called to the Malaysian Bar in 1966.Presently, he is the sole proprietor of the law firm, K.Y.Foo & Co whichprovides legal services to commercial banks, public companies andproperty developers.

Mr. Foo does not have any family relationship with any director and/ormajor shareholder of the Company, nor any conflict of interest in anybusiness arrangement involving the Company.

Mr. Foo attended eight of the nine board meetings held in 2003.

Seow Thiam Fatt Larry,

63, a Malaysian, is an Independent and Non-Executive Director. He wasappointed to the Board on 26 July 2002 and is the Chairman of theAudit Committee. He is also an Independent and Non-Executive Directorof Tan Chong Motor Holdings Berhad, Affin Merchant Bank Berhad andING Funds Berhad.

Mr. Seow, a Chartered Accountant, was admitted as a member of CPAAustralia in 1963, the Institute of Chartered Secretaries and Administratorsin 1964 and the Institute of Chartered Accountants in Australia in 1968.He is also a member of the Malaysian Institute of Accountants and theMalaysian Institute of Certified Public Accountants (MICPA) since 1969.He is a past President of MICPA and also served four years as a governmentappointed Independent Director of the previous Kuala Lumpur CommoditiesExchange (KLCE).

He has more than 20 years’ professional experience as a practisingaccountant in the capacity of a Senior Partner of Larry Seow & Co./Moores & Rowland and a partner of Arthur Young. He diverted fromprofesional practice in 1994 and was previously on the Board of severalprivate and public companies. His work experience includes a two-yearcontract with the Securities Commission of Malaysia as the GeneralManager of the Financial Reporting Surveillance and Compliance Department.

Mr. Seow does not have any family relationship with any director and/or major shareholder of the Company, nor any conflict of interest in anybusiness arrangement involving the Company.

Mr. Seow attended all the nine board meetings held in 2003.

Dato’ Lee Eng Guan @ Lee Eng Yuan, DPTJ, ANS,

58, a Malaysian, is a Non-Executive and Non-Independent Director. He waselected to the Board at the Annual General Meeting on 20 May 2003.

Dato’ Lee has a Bachelor of Arts degree from the University of Queensland,Australia. He was the divisional director of the heavy machinery andequipment operations of the Tan Chong Motor Holdings Berhad (“TCMH”)Group until the re-structuring of TCMH, resulting in the emergence ofthe Company. Prior to joining TCMH, he was with the Inchcape Groupand the Tractors Malaysia Group.

Dato’ Lee does not have any family relationship with any director and/or major shareholder of the Company, nor any conflict of interest in anybusiness arrangement involving the Company.

Dato’ Lee attended all the three board meetings held after hisappointment.

12


Corporate Governance Statement

The Board of Directors (the “Board”) of Warisan TC Holdings Berhad recognises that the exercise of good corporate governance in conducting thebusiness and affairs of the Company and the Group forms a fundamental part of discharging its responsibilities to protect shareholders’ value andto enhance the Group’s performance. Therefore, it is the policy of the Board to manage the business and affairs of the Group in accordance with theappropriate standards for good corporate governance.

In line with the MSEB Listing Requirements, the Board wishes to report on the manner the Group has applied the principles and the extent ofcompliance with the best practices set out in the Malaysian Code on Corporate Governance (the “Code”).

A: D i r e c t o r s

I The BoardThe Board is entrusted with the responsibility in leading and directing the Group towards realising long term shareholders’ values.The Board retains full and effective control of the Group’s strategic plans, overseeing the conduct of the Groups’ businesses, implementingan appropriate system of risk management and ensuring the adequacy and integrity of the Company’s system of internal control.

The board meets on a quarterly basis, with additional meetings convened as and when necessary. In 2003, the Board held nine (9) BoardMeetings. In every Board Meeting, there is a schedule of matters reserved for the Board’s decision and apart from the broad policy makingdecisions, these matters include the approval of annual and interim results, annual business plans and budgets, significant acquisitionsand disposals, material agreements, major capital expenditures, senior executive appointments and significant corporate matters. Othermatters are delegated to Board Committees, officers and the management.

II Board BalanceThe Board currently has eight (8) members comprising the Chairman, two (2) Executive Directors and five (5) Non-Executive Directors,three (3) of whom are Independent Directors. This Board membership meets the requirement of at least one third being Independent Non-Executive Directors.

The Board collectively has a diverse background in business and financial experience and skills vital for the continued progress and successof the Group. The profiles of the Board members are set out on pages 10 to 11.

III Supply of InformationAll Board and Committee meetings held were preceded with formal agenda issued by the Company Secretary. The agenda was accompaniedby the minutes of previous meetings, relevant documents for deliberations and reports on current trading and business issues, periodicfinancial reports and proposal papers from the management as and when required.

The Board has approved an agreed procedure for Directors to take independent professional advice at the Company’s expense.

The Directors have direct access to the advice and the services of the Company Secretary who is responsible for ensuring Board proceduresare followed.

IV Appointment to the BoardThe Board is of the view that an assessment carried out by drawing upon the wealth of experience of all the Directors on the Board wouldbe more effective and therefore a Nomination Committee is currently not required. Consequently, this role will be performed by the Boardas a whole when necessary and as appropriate.

It is an essential part of the Board policy that Directors receive training and update from time to time, particularly on relevant new lawsand regulations and changing commercial risks.

13


CORPORATE GOVERNANCE S TAT EMENT

V Re-electionThe names of the Directors at the date of this Report, together with their profiles are set out on pages 10 to 11.

The Company’s Articles of Association provide that at every Annual General Meeting of the Company, one-third of the Directors shall retirefrom office by rotation and that all Directors shall retire from office once at least in every three years, but shall be eligible for re-electionat each Annual General Meeting.

Non-Executive Directors are not appointed for a specific term and are subjected to election by shareholders at the next Annual GeneralMeeting following their appointment, and to re-election in accordance with the Company’s Articles of Association.

B: D i r e c t o r s ’ R e m u n e r a t i o n

The Board is of the view that existing remuneration guidelines formulated by drawing upon the wealth of experience of all the directors on theBoard would be more effective and therefore a Remuneration Committee is currently not required. Consequently, this role will be performed bythe Board as a whole when necessary and as appropriate. The remuneration policy of the Group essentially seeks to attract, retain and motivateall level of employees including Executive Directors to contribute positively towards the Group’s performance.

The quantum of the annual performance bonus and increment is dependent on the operating results of the Group after taking into account theprevailing business conditions and takes into consideration of the individual’s performance. The same guidelines were also applied in respect ofthe Executive Directors.

The aggregate remuneration of the Directors for the financial year ended 31 December 2003 is as follows:

Fees Salaries and Allowances Bonus Benefits-in-kind Total

RM RM RM RM RM

Executive Directors – 518,093 178,080 23,800 719,973

Non-Executive Directors 90,000 44,100 – – 134,100

The number of Directors whose remuneration fall into the following bands are as follows:

Range of Remuneration Executive Non-Executive

50,000 and below – 750,001 - 100,000 – 1300,001 - 350,000 1 –350,001 - 400,000 1 –

Fees for Non-Executive DirectorsThe remuneration of each of the Non-Executive Director is determined by the Board as a whole. Non-Executive Directors do not take part indiscussions of their own remuneration.

14



C: R e l a t i o n s w i t h S h a r e h o l d e r s

I Dialogue between Companies and InvestorsThe Board acknowledges the need to communicate with shareholders on all material business matters affecting the Group. The Companywill hold group and individual discussions with analyst, institutional shareholders and investment communities, at their request, with theview to foster greater understanding of the business of the Group. When appropriate, the Company will also conduct press conference toinform shareholders and investors of any material business developments of the Group. The Group’s quarterly result announcements areavailable from the MSEB website and serve to keep the interested shareholders informed of the Group’s progress from time to time.

II The Annual General Meeting (“AGM”)The AGM is the principal forum for dialogue with the shareholders which allows the shareholders to have direct access to the Board.The shareholders are given the opportunity to raise questions or issues regarding the Company’s performance or on any proposed resolutions.The shareholders attending the AGM are also advised of the number of proxy votes lodged and the outcome for each resolution.

The last AGM was held on Tuesday, 20 May 2003 at 10:30 am at the Grand Ballroom, Grand Seasons Hotel, Kuala Lumpur. It was attendedby registered shareholders, or their proxies or Corporate Representatives, representing 75% of the issued share capital. The Notice ofMeeting was attached to the Annual Report sent to shareholders.

D: A c c o u n t a b i l i t y a n d A u d i t

I Financial ReportingThe Board aims to present a balanced and understandable assessment of the Company’s and the Group’s position and prospects to theshareholders, investors and regulatory authorities primarily through the annual report and quarterly financial statements.

II Internal ControlThe Directors acknowledge their responsibility for the Group’s system of internal control which would cover all aspects of the businessincluding financial, operational and compliance controls. While acknowledging their responsibility for the system of internal control, theDirectors are aware that such a system cannot totally eliminate risks and thus there can never be an absolute assurance against the Groupin failing to achieve its objectives or a material loss arising thereon.

The system of internal control is embedded in the overall management processes and some of the key elements of the system may bedescribed as the control environment and this is represented by the following:

1. Review and approval of annual business plan and budget of all major business units by the Board. These plans set out the key businessobjectives of the respective business units and the major risks and opportunities in the operations and ensuing action plans.

2. Regular review of the performance of business units by the Board which also assesses the impact of the changes in business andcompetitive environment.

3. Active participation by certain members of the Board in the day to day running of the major businesses and regular dialogues with thesenior management of smaller business units.

4. Monthly financial reporting to the Holding Company.

15



There is an on-going process for identifying, evaluating and managing significant risks that would affect the business. Measures of internalcontrol are enhanced through the internal audit function which provides assurance that the system of internal control functions as intended.

The internal control of the Group is further supported by an established organisation structure with reporting lines and appropriate limits ofauthority clearly set out for different purposes, decisions or commitments. The conduct of Executive Management Committee (EMC) will set theplatform for the Group to lay down the authority limits that have been established to manage and control its businesses. Matters beyond thelimits of authority are referred to the main Board for approval.

The above processes are also complemented by the Systems & Internal Audit department. The Audit Committee approves plans for controlreviews and deals with significant issues raised by the Systems & Internal Audit department or the external auditors.

III Audit Committee and AuditorsThe Board has established an Audit Committee. The membership of this Committee, the terms of reference and its activities report are set outon pages 18 to 19.

S t a t e m e n t O f C o m p l i a n c e W i t h T h e B e s t P r a c t i c e s I n C o r p o r a t e G o v e r n a n c e

The Directors considered that for the financial year ended 31 December 2003, the Company had complied substantially with the Best Practices inCorporate Governance as set out under Part 2 of the Code, except for the formation of Nomination and Remuneration Committees.

S t a t e m e n t O n D i r e c t o r s ’ R e s p o n s i b i l i t y F o r P r e p a r i n g T h e A n n u a l A u d i t e d A c c o u n t s

The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which give a true and fair view of thestate of affairs of the Company and the Group and their results for the financial year.

In preparing the financial statements for the year ended 31 December 2003, the Directors have:

1. adopted the appropriate accounting policies, which are consistently applied;

2. made judgments and estimates that are reasonable and prudent; and

3. ensured that the applicable approved accounting standards in Malaysia and provisions of the Companies Act, 1965 are complied with.

The Directors have the responsibility for ensuring that the Company and the Group keep proper and adequate accounting records which disclosewith reasonable accuracy the financial position of the Company and the Group and to ensure that the financial statements comply with therequirements of the Companies Act, 1965. The Directors have the general responsibility for taking such steps as are reasonably open to them tosafeguard the assets of the Group and to prevent and detect fraud and other irregularities.

16


Statement on Internal Control

I n t r o d u c t i o nThe Malaysian Code on Corporate Governance requires the Directors of listed companies to maintain a sound system of internal control to safeguardshareholders’ investment and the Group’s assets. Pursuant to paragraph 15.27(b) of the Malaysia Securities Exchange Berhad Listing Requirements,the Board of Directors (the “Board”) is pleased to provide the following state of internal control of the Group, which has been prepared inaccordance with the “Statement on Internal Control : Guidance for Directors of Public Listed Companies” (“Guidance”) issued by the Institute ofInternal Auditors Malaysia.

B o a r d R e s p o n s i b i l i t yThe Board affirms its responsibility for the Group’s system of internal control and risk management, as well as for reviewing the adequacy andintegrity of those systems. It should be noted, however, that such systems are designed to manage rather than eliminate the risk of failure toachieve business objectives. It therefore, provides reasonable but not absolute assurance against material misstatement or loss.

The Group has in place an on-going process to identify, evaluate and manage significant risks affecting the achievement of its corporate objectivesthroughout the period. This process is regularly reviewed by the Board and accords with the Guidance.

R i s k M a n a g e m e n t F r a m e w o r kThe Board recognises that effective risk management is an integral part of good corporate governance and undertakes to review the existing riskmanagement processes in place within the Group with the assistance of the Systems & Internal Audit Department.

The key features of the risk management framework are as follows:

• Risk Management Committee, which is headed by the Executive Director and comprising key management personnel from respective businessdivisions, has been established. The Committee is entrusted with the responsibility to identify and communicate to the Board through theAudit Committee on the risk that the Group faces, their changes and management action plans to mitigate the risks.

• A Risk Management Oversight Policies and Procedures which outlines the risk management framework for the Group and offers practicalguidance on risk management issues has been formed and presented to the Audit Committee for adoption.

• Regular updates on Corporate Risk Scorecards by the heads of business divisions with focus on operational risks. The database of all risks andcontrols in a form of risk register is subjected to periodic review.

I n t e r n a l A u d i t F u n c t i o nThe Audit Committee, supported by the Systems & Internal Audit Department, is responsible to provide the Board with sufficient assurance that thecontrols are adequate in addressing the risks identified.

Internal Audit adopts risk-based approach which is developed based on key risks profile of the business processes. Regular audits are conductedbased on approved audit plan in order to review the effectiveness of controls in the respective business entities. Internal audit report whichillustrates control weaknesses and recommends corrective measures are presented to the Audit Committee for discussion on a quarterly basis.The Audit Committee reviews the highlighted audit issues and ensures that continuous effort is made by the Management to resolve areas withweaknesses.

The internal audit team is independent and has no involvement in the operation within the Group.

O t h e r K e y E l e m e n t s O f I n t e r n a l C o n t r o lThe other key elements of the Group’s System of Internal Control are described as follows:

• Clearly defined delegation of responsibilities including charters, organisation structures and appropriate authority levels;

• Clearly documented internal policies and procedures set out in a series of Standard Operating Manuals have been implemented. These manualsare subjected to regular review and improvement in order to resolve operational deficiencies;

• The Executive Management Committee (EMC) which reviews high level policies as well as monitors the performance and profitability of thebusiness divisions;

• Detailed budgeting process requiring all business units to prepare budget annually are discussed and approved by the Board; and

• Effective reporting systems which expose significant variances against budgets and plans are in place to monitor performance. Key variancesare followed up by the management and reported at the Board.

The Board is of the view that the system of internal control is satisfactory and has not resulted in any material losses, contingencies oruncertainties that would require public disclosure.

17


Additional Compliance Information

In compliance with the Malaysia Securities Exchange Berhad Listing Requirements, the following additional information is provided:-

(i) Utilisation of ProceedsThe proceeds raised from disposing the “Wacoal” business of distributing apparel products to a jointly controlled entity were utilised forworking capital purposes during the financial year.

(ii) Share BuybacksThere were no share buybacks during the financial year.

(iii) Warrant and Convertible SecuritiesThere were no warrants and convertible securities issued during the financial year.

(iv) American Depository Receipt (“ADR”)/Global Depository Receipt (“GDR”)The Company did not sponsor any ADR or GDR Programme during the financial year.

(v) Sanctions and/or PenaltiesThere were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatorybodies during the financial year.

(vi) Non-audit FeeThe amount of non-audit fees paid by the Group to the external auditors during the financial year was amounted RM80,740.

(vii) Variance in ResultsThere were no variance between the results for the financial year and the unaudited results previously announced. The Company did notmake any release on profit estimate, forecast or projection.

(viii) Profit GuaranteeThe Company did not give any profit guarantee during the financial year.

(ix) Material ContractsDuring the financial year, there were no:-

– material contracts between the Company and its subsidiaries involving directors’ or major shareholders’ interests; and

– contract of loans between the Company and its subsidiaries involving directors’ or major shareholders’ interest.

(x) Revaluation PolicyThe Company did not carry out any revaluation on landed properties during the financial year.

18


Audit Committee Report

C o m p o s i t i o n A n d M e e t i n g sThe composition of the Audit Committee and the attendance of its members at the four (4) meetings held during the year are set out below:

Name Designation Attendance

Seow Thiam Fatt Chairman, Independent Non-Executive Director 4/4

Ismail bin Rautin Ibrahim Independent Non-Executive Director 4/4

Ngu Ew Look Executive Director 4/4

Te r m s O f R e f e r e n c eMembership1. The Committee shall be appointed by the Board of Directors (the “Board”) from amongst the directors and shall be composed of no fewer than

three members, of whom a majority must be independent directors.

2. At least one member of the Audit Committee:

i. must be a member of the Malaysian Institute of Accountants; or

ii. if he is not a member of the Malaysian Institute of Accountants, he must have at least three years’ working experience and

* he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or

* he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967.

3. No alternative director shall be appointed as a member of the Committee.

4. The members of the Committee shall elect a Chairman from amongst their number who shall be an independent director.

5. The Board shall review the terms of office and performance of the Committee and each of its members at least once every three years.

6. In the event of any vacancy in the Committee which results in a breach in the Listing Requirements of Malaysia Securities Exchange Berhad,the vacancy must be filled within three months.

AuthorityThe Audit Committee is authorised by the Board to review any activity within its terms of reference. It is authorised to seek any information itrequires from the Director or member of the management and has full and unrestricted access to any information pertaining to the Group and themanagement, and all employees are directed to cooperate with any request made by the Audit Committee.

The Audit Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance ofoutsiders with relevant experience and expertise if it considers this necessary.

Duties and ResponsibilitiesThe duties of the Committee shall be, amongst others:

1. To review with the external auditors the nature and scope of their audit plan, audit reports, evaluation of internal control as well as theassistance given by the employees of the Group to the external auditors.

2. To consider any matters concerning the appointment and reappointment, audit fee and any questions of resignation or dismissal of the externalauditors.

3. To review the Risk Management Framework adopted within the Group annually and to be satisfied that the methodology employed allows theidentification, analysis, assessment, monitoring and communication of risks in a timely manner which result in minimizing losses and maximizingopportunities of the Group.

4. To discharge the duties in relation to internal audit functions:• Review the adequacy of the scope, functions and resources of the Systems & Internal Audit department and that it has the necessary

authority to carry out its work.

• Review the internal audit programme, processes, and the results of the internal audit programme, processes or investigation undertakenand whether or not appropriate actions have been taken on the recommendations of the internal audit function. To propose any broaderreviews if deemed necessary as a consequence of the issues identified.

• Ensure that internal auditors have unrestricted access to all activities, records, property and personnel necessary to perform their duties.

• Approve any appointment or termination of senior staff of Systems & Internal Audit department and review any appraisal or assessment ofthe performance of members of the internal audit function.

19


AUD I T COMMI T T E E R EPORT

5. To review the quarterly and annual financial statements of the Group, focusing particularly on:

i. any significant changes to accounting policies and practices;

ii. significant and unusual events;

iii. compliance with accounting standards and other legal requirements; and

iv. the going concern assumption.

6. To review any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedureor course of conduct that raises the questions of management integrity.

7. To act on any other matters as may be directed by the Board.

Q u o r u m A n d M e e t i n g P r o c e d u r e sThe Committee shall meet at least four times a year or more frequently as circumstances dictate. A majority of the members in attendance must beindependent directors in order to form a quorum for the meeting. The Heads of Internal Audit and Finance shall normally attend the meetings.The presence of a representative of the external auditors will be requested if required. Other Board members may attend meetings upon invitationof the Audit Committee. The Company Secretary shall be the Secretary of the Committee.

The external auditors may request a meeting if they consider that one is necessary. The Committee shall meet with the external auditors atleast once a year without executive board members present. The Committee shall report to the Board and its minutes will be tabled to and notedby the Board.

S u m m a r y O f A c t i v i t i e sDuring the year, the Audit Committee discharged its duties and responsibilities in accordance with its terms of reference. The major activitiesundertaken by the Committee are highlighted as follows:1. Reviewed the external auditors’ scope of work and audit plan for the year.

2. Discussed and reviewed with external auditors’ significant examination of the financial statements, their audit report and managementresponses on these matters.

3. Reviewed and approved the Group internal audit plan for the year which encompassed the adequacy of scope and resources of the Systems &Internal Audit department.

4. Reviewed the internal audit reports and appraised management comments of the key audit observations and recommendations. Discussed withthe management on actions to improve the internal control weaknesses based on audit findings.

5. Reviewed the quarterly results and annual financial statements of the Company and the Group prior to submission to the Board forconsideration and approval.

6. Reviewed the related party transactions of the Company and the Group to ensure that all such transactions are reflected in the annual report.

7. Reviewed the key risks and their related control strategies of the Group.

I n t e r n a l A u d i t F u n c t i o nThe Audit Committee is assisted by the Systems & Internal Audit department in maintaining a sound system of control.

The Systems & Internal Audit department reports directly to the Audit Committee in discharging its duties and is independent of the activities theyaudit. The scope of work covers all the principal operating divisions of the Group and the internal auditors conducted their audit in accordancewith the annual audit plan which was approved by the Committee.

During the year, the internal auditors carried out independent review of the adequacy and effectiveness of the internal controls at operatingdivisions, examined the extent of compliance by these divisions with the Group’s policies and procedures as well as evaluated the processes with anobjective to improve the Group’s operations.

The Systems & Internal Audit department also assists the Risk Management Committee to compile the key factors in identifying, evaluating andmitigating the risks of the Group.

20


Shareholders’ Statisticsas at 31 March 2004

S H A R E C A P I TA L

Authorised : RM100,000,000

Issued and Fully Paid-up : RM67,200,000

Class of Shares : Ordinary Shares of RM1.00 each

Voting Rights : 1 vote per ordinary share

T H I RT Y L A R G E S T S H A R E H O L D E R S

Name No. of Shares Held %

1. Parasand Limited 13,440,000 20.0000

2. Tan Chong Consolidated Sdn Bhd 11,513,333 17.1329

3. Mayban Nominees (Tempatan) Sdn Bhd Tan Chong Consolidated Sdn Bhd (N14011984860) 2,250,000 3.3482

4. Malaysian Assurance Alliance Berhad 1,884,900 2.8049

5. M & A Securities Sdn Bhd IVT (B) 1,685,400 2.5080

6. HSBC Nominees (Asing) Sdn Bhd BYN Brussels for Austral International Holdings Limited 1,396,100 2.0775

7. F.I.T Nominees (Asing) Sdn Bhd Platinum Broking Co Ltd for Modern Dynasty Limited 1,300,000 1.9345

8. Key Development Sdn Berhad 1,130,000 1.6815

9. HSBC Nominees (Asing) Sdn Bhd Coutts Bank (Schweiz) AG SG for Cyber Structure Ltd 1,100,000 1.6369

10. Cimsec Nominees (Tempatan) Sdn Bhd Allied Investments Limited for Tan Chong Consolidated Sdn Bhd 1,000,000 1.4881

11. F.I.T Nominees (Asing) Sdn Bhd Platinum Broking Co Ltd for Super Oriental Ltd 1,000,000 1.4881

12. Malaysian Assurance Alliance Berhad 899,000 1.3378

13. Tan Boon Hooi 860,000 1.2798

14. HSBC Nominees (Asing) Sdn Bhd BNY Brussels for Noble Pacific Mutual Fund Limited 774,000 1.1518

15. JB Nominees (Asing) Sdn Bhd Platinum Broking Co Ltd for Neta Holdings Incorporated 571,600 0.8506

16. M & A Nominee (Asing) Sdn Bhd Pedigree Limited 484,000 0.7202

17. AMMB Nominees (Tempatan) Sdn Bhd Meridian Asset Management Sdn Bhd for Kumpulan Wang Amanah Pencen (1/184-8) 460,000 0.6845

18. Malaysia Nominees (Tempatan) Sendirian Berhad Great Eastern Life Assurance (Malaysia) Berhad (Par 2) 455,000 0.6771

19. Mayban Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Tan Chong Consolidated Sdn Bhd (014011528927) 450,000 0.6696

20. Cimsec Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Khor Swee Wah @ Koh Bee Leng (MM1208) 449,369 0.6687

21. Southern Investment Bank Berhad Kumpulan Wang Simpanan Pekerja for Tan Boon Pun (EP0066) 405,000 0.6027

22. AMMB Nominees (Tempatan) Sdn Bhd Meridian Asset Management Sdn Bhd for Malaysian Assurance Alliance Bhd (1/154-6) 384,900 0.5728

23. ChinChoo Investment Sdn Berhad 369,000 0.5491

24. Koh Bee Hoon 340,000 0.5060

25. Rengo Malay Estate Sendirian Berhad 330,000 0.4911

26. Citicorp Nominees (Asing) Sdn Bhd MLPFS for Hang Chooi Seng 310,250 0.4617

27. Pacific & Orient Insurance Co Berhad 274,000 0.4077

28. ChinChoo Investment Sdn Berhad 263,000 0.3914

29. Employees Provident Fund Board 239,400 0.3562

30. Citicorp Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Chew Hoi Seng @ Chew Hooi Seng (473592) 239,000 0.3556

Total 46,257,252 68.8350

21


as at 31 March 2004

A N A LY S I S B Y S I Z E O F H O L D I N G S

Size of Holdings No. of Holders % No. of Shares Held %

1 - 99 3,304 26.8334 160,036 0.2381100 - 1,000 6,875 55.8353 2,446,514 3.64061,001 - 10,000 1,828 14.8461 6,456,431 9.607810,001 - 100,000 248 2.0142 7,607,234 11.3204100,001 - 3,359,999 56 0.4548 25,576,452 38.06023,360,000 and above 2 0.0162 24,953,333 37.1329

Total 12,313 100.0000 67,200,000 100.0000

S U B S TA N T I A L S H A R E H O L D E R S

Name No. of Shares Held %

1. Tan Chong Consolidated Sdn Bhd 15,213,333* 22.64

2. Parasand Limited 13,440,000* 20.00

* Dato’ Tan Heng Chew, Mr. Tan Eng Soon, Dato’ Tan Kim Hor, Dr. Tan Ban Leong, Mr. Tan Beng Keong, Mr. Tan Boon Pun, Mr. Tan Chee Keong, Mr. Tan Hoe Pin, Dr. Tan Kang Leong andMr. Tan Kheng Leong are deemed interested in the shares held by Tan Chong Consolidated Sdn Bhd and Parasand Limited by virtue of section 6A of the Companies Act, 1965, and

consequently, are substantial shareholders of Warisan TC Holdings Berhad.

DA I LY S H A R E P R I C E S & V O L U M E T R A D E D O N M S E B

Share Price(RM)

Volume Traded(Million)

CompositeIndex

0.0

0.5

1.0

1.5

2.0

2.5

0.0

0.5

1.0

1.5

2.0

2.5

0

100

200

300

400

500

600

700

800

900

1,000

Jan

Feb

Mar

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

20042003

Volume Traded(number of shares traded for the day)

Share Price(closing price for the day)

KLSE Composite Index(closing index for the day)

as at 31 March 2004

(as per Register of Substantial Shareholders)

SHAREHOLDERS ’ S TAT I S T I C S

22


Group Properties

Location Description Land Area Built-up Tenure/ Net Book Age of

(sq feet) Area Expiry Value Building

(sq feet) Date (RM million) (years)

18 Jalan Segambut Pusat Office & vehicle 17,574 18,160 Leasehold 1.81 2751200 Kuala Lumpur storage yard 16.06.2067

9 Jalan Kemajuan (12/18) Showroom, offices, 78,801 77,870 Leasehold 9 2146200 Petaling Jaya workshop & warehouse 17.02.2059

Lot 9, Jalan Delima 1/1 Showroom, office, 98,349 53,766 Freehold 4.51 11Subang Hi Tech Industrial Park workshop &40000 Shah Alam vehicle storage yardSelangor

43 Jalan IMJ 3 Office and workshop 11,087 3,700 Leasehold 0.39 7Taman Industry Malim Jaya 18.11.209575050 Malacca

19 Jalan Bertam 8 Office and workshop 8,456 7,553 Freehold 0.69 11Taman Daya81100 Johor BahruJohor

Lot 9378, 21/2 Miles Land for development 68,999 – Leasehold 1.82 –Jalan Pending/Jalan Sg Priok 31.12.279693450 KuchingSarawak

Directors’ Report24

Statement by Directors27

Statutory Declaration27

Report of the Auditors28

Balance Sheets29

Income Statements30

Balance Sheets (In USD Equivalent)31

Income Statements (In USD Equivalent)32

Consolidated Statement of Changes in Equity33

Statement of Changes in Equity34

Cash Flow Statements35

Notes to the Financial Statements37

F I N A N C I A L S T A T E M E N T S

24


Directors’ Reportfor the year ended 31 December 2003

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 31December 2003.

P r i n c i p a l A c t i v i t i e s

The Company is principally engaged in investment holding and the provision of management services, whilst the principal activities of thesubsidiaries are as stated in Note 28 to the financial statements. There has been no significant change in the nature of these activities during thefinancial year.

R e s u l t sGroup Company

RM’000 RM’000

Net profit for the year 14,616 13,180

R e s e r v e s a n d P r o v i s i o n s

There were no material transfers to or from reserves and provisions during the year except as disclosed in the financial statements.

D i v i d e n d s

Since the end of the previous financial year, the Company paid:

(i) a final dividend of 4% tax exempt per share totalling RM2,688,000 in respect of the year ended 31 December 2002 on 18 June 2003;

(ii) an interim dividend of 3% tax exempt per share totalling RM2,016,000 in respect of the year ended 31 December 2003 on 18 September 2003.

The final dividend recommended by the Directors in respect of the year ended 31 December 2003 is 3% tax exempt per share totaling RM2,016,000.

D i r e c t o r s o f t h e C o m p a n y

Directors who served since the date of the last report are:

Dato’ Tan Heng ChewDato’ Haji Nadzam bin Haji Mohd DinIsmail bin Rautin IbrahimNgu Ew LookSeow Thiam FattFoo Kai YuenYeoh Keong LianDato’ Lee Eng Guan @ Lee Eng Yuan (elected at the Annual General Meeting held on 20.5.2003)Tan Eng Soon (resigned on 27.2.2004)Tan Boon Pun (removed at the Annual General Meeting held on 20.5.2003)

25


D IREC TORS ’ R E PORT

for the year ended 31 December 2003

The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations (other than wholly-owned subsidiaries) ofthose who were Directors at year end as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares

At At

1.1.2003 Bought Sold 31.12.2003

Shareholdings in which Directors have direct interest

Interest in the Company:

Dato’ Tan Heng Chew 1,283 149,800 – 151,083Tan Eng Soon 70,000 – – 70,000Dato’ Haji Nadzam bin Haji Mohd Din 97,000 – 2,000 95,000Dato’ Lee Eng Guan @ Lee Eng Yuan – 8,000 – 8,000

Shareholdings in which Directors have deemed interest

Interest in the Company:

Dato’ Tan Heng Chew 28,653,333 – – 28,653,333Tan Eng Soon 28,653,333 – – 28,653,333

By virtue of their interests in the shares of the Company, Dato’ Tan Heng Chew, Tan Eng Soon, Dato’ Haji Nadzam bin Haji Mohd Din and Dato’ LeeEng Guan @ Lee Eng Yuan are also deemed interested in the shares of the subsidiaries during the financial year to the extend that Warisan TCHoldings Berhad has an interest.

None of the other Directors holding office at 31 December 2003 had any interest in the ordinary shares of the Company and of its relatedcorporations during the financial year.

D i r e c t o r s ’ B e n e f i t s

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than abenefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements of theCompany and of related corporations or the fixed salaries of full time employees of the Company and of related corporations as shown in thefinancial statements of the Company and of related corporations) by reason of a contract made by the Company or a related corporation with theDirector or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other thancertain Directors who have significant financial interests in companies which traded with certain companies in the Group in the ordinary course ofbusiness and rental income receivable and rental expense payable from/to companies in which the Directors have significant financial interests.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquirebenefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

S i g n i f i c a n t E v e n t s D u r i n g t h e Ye a r

(i) Pursuant to the Joint Venture Agreement (“JVA”) with Wacoal Corp. of Japan (“WC”) on 12 December 2002, WC and the Company had eachsubscribed for 8,000,000 and 7,999,998 new ordinary shares of RM1 each in Wacoal Malaysia Sdn. Bhd. (“WM”) which, together with thetwo subscriber shares owned by the Company, had resulted in WC and the Company each owning 50% of the issued and paid up sharecapital in WM on 5 June 2003.

(ii) Further to the JVA with WC and pursuant to the Conditional Sale and Purchase Agreement between Tan Chong Apparels Sdn. Bhd. (“TCAP”)and WM, TCAP had completed the disposal of its business and assets to WM for a total cash consideration of RM11,236,854 on 1 June 2003.

26


I s s u e o f S h a r e s

There were no changes in the issued and paid-up capital of the Company during the financial year.

O p t i o n s G r a n t e d O v e r U n i s s u e d S h a r e s

No options were granted to any person to take up unissued shares of the Company during the year.

O t h e r S t a t u t o r y I n f o r m a t i o n

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

(i) all known bad debts have been written off and adequate provision made for doubtful debts, and

(ii) all current assets have been stated at the lower of cost and net realisable value.

At the date of this report, the Directors are not aware of any circumstances:

(i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the Companyinadequate to any substantial extent, or

(ii) that would render the value attributed to the current assets in the financial statements of the Group and in the Company misleading, or

(iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Companymisleading or inappropriate, or

(iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of theGroup and of the Company misleading.

At the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilitiesof any other person, or

(ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

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

In the opinion of the Directors, except for the gain on disposal of a subsidiary’s business as disclosed in Note 16 to the financial statements, theresults of the operations of the Group and of the Company for the financial year ended 31 December 2003 have not been substantially affected byany item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between theend of that financial year and the date of this report.

A u d i t o r s

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed in accordance with a resolution of the Directors:

Ngu Ew Look Yeoh Keong Lian

Kuala Lumpur,25 March 2004

D IREC TORS ’ R E PORT


27


In the opinion of the Directors, the financial statements set out on pages 29 to 63 are, except for pages 31 and 32 which are expressed in USDequivalent, drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so asto give a true and fair view of the state of affairs of the Group and of the Company at 31 December 2003 and of the results of their operations andcash flows for the year ended on that date.

Signed in accordance with a resolution of the Directors:

Ngu Ew Look Yeoh Keong Lian


I, Chua Tian Pang, the officer primarily responsible for the financial management of Warisan TC Holdings Berhad, do solemnly and sincerely declarethat the financial statements set out on pages 29 to 63 are, except for pages 31 and 32 which are expressed in USD equivalent, to the best of myknowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions ofthe Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamedChua Tian Pang (MIA 12361) in Kuala Lumpur on 25 March 2004

Before me:Mohd Radzi bin YasinNo. W327Commissioner for Oaths(Pesuruhjaya Sumpah)Kuala Lumpur

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

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


28


We have audited the financial statements set out on pages 29 to 63, except for pages 31 and 32 which are expressed in USD. The preparation ofthe financial statements is the responsibility of the Company’s Directors. Our responsibility is to express an opinion on the financial statementsbased on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards require that we plan and perform theaudit to obtain all the information and explanations which we consider necessary to provide us with evidence to give reasonable assurance that thefinancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence relevant to the amounts anddisclosures in the financial statements. An audit also includes an assessment of the accounting principles used and significant estimates made bythe Directors as well as evaluating the overall adequacy of the presentation of information in the financial statements. We believe our auditprovides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approvedaccounting standards in Malaysia so as to give a true and fair view of:

(i) the state of affairs of the Group and of the Company at 31 December 2003 and the results of their operations and cash flows for theyear ended on that date; and

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

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

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in formand content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactoryinformation and explanations required by us for those purposes.

The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment madeunder subsection (3) of Section 174 of the Act.

KPMG Jimmy Leow Min FongFirm Number: AF 0758 PartnerChartered Accountants Approval Number: 595/03/04(J/PH)


Report of the Auditorsto the members of Warisan TC Holdings Berhad

29


Group Company

2003 2002 2003 2002

Note RM’000 RM’000 RM’000 RM’000

(Restated) (Restated)

Property, plant and equipment 2 63,782 53,081 290 182

Investments in subsidiaries 3 – – 72,478 72,478

Investment in jointly controlled entities 4 6,305 1,084 8,000 –

Deferred tax assets 5 430 789 161 168

Goodwill 6 782 – – –

Other investments 7 10 96 – –

Long term lease receivables 9 2,017 2,854 – –

73,326 57,904 80,929 72,828

Current assetsInventories 8 32,649 39,713 – –Trade and other receivables 9 50,481 46,354 1,567 802Cash and cash equivalents 10 59,519 57,680 45,601 37,543

142,649 143,747 47,168 38,345Current liabilities

Trade and other payables 11 33,490 34,292 45,301 36,864Provisions for warranties 12 – 1,330 – –Borrowings 13 16,379 9,177 – –Taxation 2,499 3,014 – –

52,368 47,813 45,301 36,864

Net current assets 90,281 95,934 1,867 1,481

163,607 153,838 82,796 74,309

Financed by:

Capital and reserves

Share capital 14 67,200 67,200 67,200 67,200Reserves 15 89,865 79,953 15,324 6,848

157,065 147,153 82,524 74,048Long term and deferred liabilities

Deferred tax liabilities 5 5,305 5,247 – –Retirement benefits 1,237 1,438 272 261

6,542 6,685 272 261

163,607 153,838 82,796 74,309

The financial statements were approved and authorised for issue by the Board of Directors on 25 March 2004.The notes set out on pages 37 to 63 form an integral part of, and should be read in conjunction with, these financial statements.

Balance Sheetsat 31 December 2003

30


Income Statementsfor the year ended 31 December 2003

Group Company

2003 2002 2003 2002

Note RM’000 RM’000 RM’000 RM’000


Revenue 16 226,900 235,460 17,835 6,473

Operating profit 16 17,217 25,238 14,695 4,202

Interest expense (382) (266) (1,128) (897)Interest income 1,849 1,748 1,512 1,264Share of profit of jointly controlled entities 242 721 – –

Profit before taxation 18,926 27,441 15,079 4,569

Tax expense 18 (4,310) (7,457) (1,899) (470)

Net profit for the year 14,616 19,984 13,180 4,099

Basic earnings per ordinary share (sen) 19 21.8 29.7

Dividend per ordinary share – net (sen)– excluding proposed final dividend 20 3.0 4.0 3.0 4.0

– including proposed final dividend 20 6.0 8.0 6.0 8.0

The notes set out on pages 37 to 63 form an integral part of, and should be read in conjunction with, these financial statements.

31


Balance Sheets (In USD equivalent)

at 31 December 2003

2003 2002

USD’000 USD’000

(Restated)

Property, plant and equipment 16,785 13,969

Investments in jointly controlled entities 1,659 285Deferred tax assets 113 208Goodwill 206 –Other investments 2 25Long term lease receivables 531 751

19,296 15,238Current assets

Inventories 8,592 10,451Trade and other receivables 13,284 12,198Cash and cash equivalents 15,663 15,179

37,539 37,828

Current liabilities

Trade and other payables 8,813 9,024Provision for warranties – 350Borrowings 4,310 2,415Taxation 658 793

13,781 12,582

Net current assets 23,758 25,246

43,054 40,484

Financed by:Capital and reserves

Share capital 17,684 17,684Reserves 23,648 21,041

41,332 38,725Long term and deferred liabilities

Deferred taxation 1,396 1,381Retirement benefits 326 378

1,722 1,759

43,054 40,484

The information presented on this page does not form part of the audited financial statements of the Group.

Figures for both 2003 and 2002 are converted into USD equivalent using the same exchange rate of RM3.80 = USD1.00, which approximates that prevailing on 31.12.2003.

32


2003 2002

USD’000 USD’000

(Restated)

Revenue 59,711 61,963

Operating profit 4,531 6,642Interest expense (101) (70)Interest income 486 460Share of profit of jointly controlled entities 64 190

Profit before taxation 4,980 7,222Tax expense (1,134) (1,963)


Basic earnings per ordinary share (US cents) 5.7 7.8

Dividends per ordinary share – net (US cents)– excluding proposed final dividend 0.8 1.1

– including proposed final dividend 1.6 2.1

The information presented on this page does not form part of the audited financial statements of the Group.

Figures for both 2003 and 2002 are converted into USD equivalent using the same exchange rate of RM3.80 = USD1.00, which approximates that prevailing on 31.12.2003.

Income Statements (In USD equivalent)


33


Consolidated Statement of Changes in Equityfor the year ended 31 December 2003

Reserves

Non-distributable Distributable

Share Revaluation Merger Retained

capital reserve reserve profits Sub-total Total

Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2002Previously stated balance 67,200 615 (41,614) 107,132 66,133 133,333Effect of adopting MASB 25 – – – (788) (788) (788)

Restated balance 67,200 615 (41,614) 106,344 65,345 132,545

Previously stated net profit for the year – – – 19,725 19,725 19,725Effect of adopting MASB 25 – – – 259 259 259

Restated balance – – – 19,984 19,984 19,984Dividend – 2001 final 20 – – – (2,688) (2,688) (2,688)

– 2002 interim 20 – – – (2,688) (2,688) (2,688)

At 31 December 2002/1 January 2003 67,200 615 (41,614) 120,952 79,953 147,153Net profit for the year – – – 14,616 14,616 14,616Dividend – 2002 final 20 – – – (2,688) (2,688) (2,688)

– 2003 interim 20 – – – (2,016) (2,016) (2,016)

At 31 December 2003 67,200 615 (41,614) 130,864 89,865 157,065

Note 14 Note 15


➤

➤

➤ ➤

➤➤

34


Statement of Changes in Equityfor the year ended 31 December 2003

Distributable

Share Retained

capital profits Total

Note RM’000 RM’000 RM’000

Company

At 1 January 2002Previously stated balance 67,200 8,004 75,204Effect of adopting MASB 25 – 121 121

Restated balance 67,200 8,125 75,325

Previously stated net profit for the year – 4,052 4,052Effect of adopting MASB 25 – 47 47

Restated balance – 4,099 4,099Dividend – 2001 final 20 – (2,688) (2,688)

– 2002 interim 20 – (2,688) (2,688)

At 31 December 2002/1 January 2003 67,200 6,848 74,048Net profit for the year – 13,180 13,180Dividend – 2002 final 20 – (2,688) (2,688)

– 2003 interim 20 – (2,016) (2,016)

At 31 December 2003 67,200 15,324 82,524

Note 14 Note 15


35


Cash Flow Statementsfor the year ended 31 December 2003

Group Company

2003 2002 2003 2002

Note RM’000 RM’000 RM’000 RM’000

Cash flows from operating activitiesProfit before taxation 18,926 27,441 15,079 4,569Adjustments for:Amortisation of goodwill 88 – – –

Dividend income (11) (11) (16,994) (6,401)Depreciation 14,139 9,649 76 54Gain on disposal of subsidiary’s business (2,375) – – –(Gain)/Loss on disposal of property, plant

and equipment (1,781) (1,346) 3 24Interest expense 382 266 1,128 897Interest income (1,849) (1,748) (1,512) (1,264)Loss on foreign exchange – unrealised 136 150 – –Property, plant and equipment written off – 11 – –Provision for retirement benefits 189 – 11 4Reversal of retirement benefits (173) (1,141) – –Profit retained in jointly controlled entities (242) (721) – –

Operating profit/(loss) before working capital changes 27,429 32,550 (2,209) (2,117)Decrease/(Increase) in working capital:

Inventories 1,408 (322) – –Trade and other receivables (1,706) (7,991) (765) (451)Trade and other payables (938) 4,100 8,437 1,111Provision for warranties (1,330) 230 – –

Cash generated from/(used in) operations 24,863 28,567 5,463 (1,457)Income taxes paid (5,693) (8,720) (1,892) (517)Interest paid (382) (266) (1,128) (897)Interest received 1,849 1,748 1,512 1,264Retirement benefits paid (217) (67) – –

Net cash generated from/(used in) operating activities 20,420 21,262 3,955 (1,607)

Cash flows from investing activitiesAcquisition of subsidiary (ii) (1,211) – – –Dividends received 11 11 16,994 6,401Proceeds from disposal of property, plant and equipment 3,714 3,837 140 151Purchase of property, plant and equipment (26,830) (13,801) (327) (98)Investment in joint venture (8,000) – (8,000) –Proceeds from disposal of subsidiary’s business (iii) 11,237 – – –

Net cash (used in)/generated from investing activities (21,079) (9,953) 8,807 6,454

Cash flows from financing activitiesDividends paid to shareholders of the Company (4,704) (5,376) (4,704) (5,376)Proceeds from bills payable 46,403 26,930 – –Repayment of bills payable (39,076) (23,743) – –Repayment of term loan (125) (500) – –

Net cash generated from/(used in) financing activities 2,498 (2,689) (4,704) (5,376)

36


Group Company

2003 2002 2003 2002

Note RM’000 RM’000 RM’000 RM’000

Net increase/(decrease) in cash and cash equivalents 1,839 8,620 8,058 (529)Cash and cash equivalents at beginning of year 57,680 49,060 37,543 38,072

Cash and cash equivalents at end of year (i) 59,519 57,680 45,601 37,543

Notes to cash flow statement:

(i) Cash and cash equivalents

Cash and bank balances 7,745 14,077 261 238Deposits 51,774 43,603 45,340 37,305

59,519 57,680 45,601 37,543

(ii) Acquisition of assets and liabilities

During the year, the Group acquired Discovery Tours (Sabah) Sdn. Bhd. and had the following effect on the Group’s assets and liabilities:RM’000

Property, plant and equipment 420Current assets 595Current liabilities (416)

599Goodwill on acquisition 870

Purchase price paid 1,469Cash acquired (258)

Net cash outflow 1,211

(iii) Disposal of assets and liabilitiesDuring the year, the Group disposed of Tan Chong Apparels Sdn. Bhd.’s business to Wacoal Malaysia Sdn. Bhd., a jointly controlled entity.The disposal had the following effect on the Group’s assets and liabilities as at 1 June 2003.

RM’000

Property, plant and equipment 57Current assets 6,540Current liabilities (77)Long term liabilities (33)

Net assets acquired 6,487Gain on disposal of business 4,750

Consideration received 11,237


CASH F LOW S TAT EMENTS


37


1 . S u m m a r y o f S i g n i f i c a n t A c c o u n t i n g P o l i c i e s

The following accounting policies are adopted by the Group and by the Company and are consistent with those adopted in previous yearsexcept for the adoption of the following:

(i) MASB 25, Income Taxes;(ii) MASB 27, Borrowing Costs; and(iii) MASB 29, Employee Benefits.

In addition to the new policies and extended disclosures where required by these new standards, the effects of the changes in the aboveaccounting policies are disclosed in Note 29 to these financial statements.

(a) Basis of accounting

The financial statements of the Group and of the Company are prepared on the historical cost basis except as disclosed in the notesto the financial statements and in compliance with the provisions of the Companies Act, 1965 and applicable approved accountingstandards in Malaysia.

(b) Basis of consolidation

Subsidiaries are those enterprises controlled by the Company. Control exists when the Company has the power, directly or indirectlyto govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. The financial statements ofsubsidiaries are included in the consolidated financial statements from the date that control effectively commences until the datethat control effectively ceases. Subsidiaries acquired from TCMH Group* pursuant to an internal reorganisation are consolidated usingthe merger method of accounting. TC Beauty Services Sdn. Bhd. is consolidated using the acquisition method of accounting.

* TCMH Group refers to companies in the Tan Chong Motor Holdings Berhad Group before the reorganisation and demerger of theAutoparts and Non-Motor Divisions of TCMH Group.

A subsidiary is excluded from consolidation when either control is intended to be temporary if the subsidiary is acquired and heldexclusively with a view of its subsequent disposal in the near future and it has not previously been consolidated or it operates undersevere long term restrictions which significantly impair its ability to transfer funds to the Company. Subsidiaries excluded on thesegrounds are accounted for as investments.

Under the merger method of accounting, the results of the subsidiaries are presented as the companies had been combinedthroughout the current and previous financial years. The difference between the cost of acquisition and the nominal value of theshare capital and reserves of the merged subsidiaries is taken to merger reserve (or adjusted against any suitable reserve in the caseof debit differences).

Under the acquisition method of accounting, the results of a subsidiary acquired or disposed of during the year are included from thedate of acquisition or up to the date of disposal. At the date of acquisition, the fair value of the subsidiary’s net asset is determinedand this value is reflected in the Group financial statements. The difference between the acquisition cost and the fair value of thesubsidiary’s net asset is reflected as goodwill or reserve on consolidation as appropriate.

Intragroup transactions and balances and the resulting unrealised profits are eliminated on consolidation. Unrealised losses resultingfrom intragroup transactions are also eliminated unless cost cannot be recovered.

Notes to the Financial Statements31 December 2003

38


1 . S u m m a r y o f S i g n i f i c a n t A c c o u n t i n g P o l i c i e s ( C o n t ’d )

(c) Property, plant and equipment

Property, plant and equipment except for freehold land are stated at cost/valuation less accumulated depreciation.

It is the Group’s policy to state property, plant and equipment at cost. Revaluation of certain properties in 1984 was carried outprimarily for the purpose of issuing bonus shares then in certain subsidiaries and was not intended to effect a change in theaccounting policy to one of revaluation of properties.

In accordance with the transitional provisions issued by the MASB on the adoption of International Accounting Standard (“IAS”) No.16 (Revised) - “Property, Plant and Equipment”, the valuation of these properties have not been updated and they continue to bestated at their existing carrying amounts less accumulated depreciation.

The Directors are of the opinion that the current market values of the revalued properties are not less than their net book values asat 31 December 2003.

Depreciation

Freehold land and capital work-in-progress are not amortised. Leasehold land is amortised in equal instalments over the period of therespective leases which range from 72 to 800 years. Buildings are depreciated on a straight-line basis over the shorter of 50 years orthe lease period.

The straight-line method is used to write off the cost of the other property, plant and equipment over the term of their estimateduseful lives at the following principal annual rates:

Plant, machinery, equipment and equipment for lease 15% – 20%Furniture, fixtures, fittings and office equipment 10% – 50%Motor vehicles, coaches and motor vehicles for lease 10% – 20%

(d) Impairment

The carrying amount of the Group’s assets, other than inventories (refer Note 1(h)), deferred tax assets and financial assets (otherthan investments in subsidiaries and joint ventures), are reviewed at each balance sheet date to determine whether there is anyindication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss isrecognised whenever the carrying amount of an asset or the cash-generating unit to which it belongs exceeds its recoverableamount. Impairment losses are recognised in the income statement, unless the asset is carried at a revalued amount, in which casethe impairment loss is charged to equity.

The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing value in use, estimated futurecash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the timevalue of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, therecoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific external event of an exceptionalnature that is not expected to recur and subsequent external events have occurred that reverse the effect of that event.

In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine therecoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that wouldhave determined, net of depreciation or amortisation, if no impairment loss had been recognised. The reversal is recognised in theincome statement, unless it reverses an impairment loss on a revalued asset, in which case it is taken to equity.

NOTES TO THE F INANC IAL S TAT EMENTS

31 December 2003

39



31 December 2003


(e) Goodwill

Goodwill represents the excess of the cost of acquisition over the fair values of the net identifiable assets acquired and is stated atcost less accumulated amortisation and accumulated impairment losses (refer Note 1(d)).

Goodwill is amortised from the date of initial recognition over its estimated useful life of 10 years.

In respect of associates and jointly controlled entities, the carrying amount of goodwill is included in the carrying amount of theinvestment in the associate or jointly controlled entity.

(f) Investments

Long term investments, other than in subsidiaries and joint ventures, are stated at cost less impairment loss. An allowance is madewhen the Directors are of the view that there is a diminution in their value which is other than temporary.

Investments in subsidiaries and joint ventures in the Company are stated at cost less impairment loss, where applicable.

(g) Joint venture

A joint venture is a contractual agreement whereby the Group and other parties have joint control over an economic entity.

In respect of its interest in the jointly controlled entity, the Group uses the equity method to account for its interest.

Unrealised profits or losses arising from transactions between the Group and its joint ventures are recognised only to the extent ofthat portion of the gain or loss which is attributable to the interests of the other venturer. Unrealised losses are recognised in fullwhen the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss.

(h) Inventories

Inventories are stated at the lower of cost and net realisable value.

Raw materials, work-in-progress, manufactured inventories, trading inventories and spare parts are determined mainly on theweighted average basis, while machinery and workshop inventories are determined on a specific identification basis.

Costs of work-in-progress and manufactured inventories consist of costs of raw materials, indirect materials, direct labour and anappropriate allocation of manufacturing overheads.

Costs of raw materials, trading inventories and machinery, spare parts and workshop inventories consist of purchase cost and allexpenses incurred in bringing the inventories to their present location and condition.

(i) Trade and other receivables

Trade and other receivables are stated at cost less allowance for doubtful debts.

(j) Lease receivables and leased assets

Assets leased to customers under agreements which transfer substantially all the risks and rewards associated with ownership other thanlegal title, are classified as lease receivables. The balance sheet amount represents total minimum lease payments receivable lessunearned income and prepaid rentals. Initial direct costs including legal fees and commissions are recognised immediately as expenses.

Assets leased to customers under agreements whereby substantially all risks and rewards associated with ownership are retained withthe Group, are classified as leased assets. These leased assets are accounted for in accordance with the Group’s policy on property,plant and equipment and depreciation as disclosed in Note 1(c) above.

40



31 December 2003


(k) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have aninsignificant risk of changes in value.

(l) Retirement benefits

The Company operates an unfunded defined benefit scheme for employees who have completed a qualifying period of service. Thebenefits payable on retirement are based on a fixed percentage of the basic salaries of the employees less the statutorycontributions to the Employees Provident Fund (“EPF”). A provision is made monthly for each employee regardless of whether theemployee has completed the qualifying period of service. Should an employee leave before completing the qualifying period ofservice, the provision made for the employee is written back. No actuarial valuation has been conducted on the retirement benefitsprovision as in the opinion of the Directors the differences in amount estimated through an actuarial valuation as compared to theprovision made in the balance sheet would not be material in relation to these financial statements. The Company has no obligationfor the payment of retirement benefits beyond the amount provided.

(m) Liabilities

Borrowings and trade and other payables are stated at cost.

(n) Provisions

A provision is recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle apresent obligation (legal or constructive) as a result of a past event and a reliable estimate can be made of the amount.

Provision for warranties

A provision for warranties is recognised when the underlying products or services are sold. It is based on historical warranty date anda weighting of all possible outcomes against the associated probabilities.

(o) Derivative financial instruments

The Group uses forward foreign exchange contracts to hedge its exposure to foreign exchange risks arising from operationalactivities. Transaction costs related to the foreign exchange contracts are expensed to the income statement.

Foreign currency monetary items, which are hedged by forward exchange contracts in respect of trade transactions, are reportedusing the rates of exchange specified in those contracts. Related foreign exchange differences arising on translation are recognisedin the income statement.

(p) Income tax

Tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the income statement except tothe extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enactedat the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilitiesand their carrying amounts in the financial statements. Temporary differences are not recognised for goodwill not deductible for taxpurposes and the initial recognition of assets or liabilities that at the time of the transaction affects neither accounting nor taxableprofit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount ofassets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which theasset can be utilised.

41



31 December 2003


(q) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to Ringgit Malaysia at rates of exchange ruling at the date of thetransactions. Except for monetary items which are hedged by forward exchange contracts (Note 1(o)), monetary assets andliabilities denominated in foreign currencies at the balance sheet date are translated to Ringgit Malaysia at the foreignexchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in the incomestatement. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, aretranslated to Ringgit Malaysia at the foreign exchange rates ruling at the date of the transactions.

The closing rates used in the translation of foreign currency monetary assets and liabilities are as follows:

1USD: RM3.80 (2002 – 1USD: RM3.80)1 JPY: RM0.04 (2002 – 1JPY: RM0.03)1 EUR: RM4.75 (2002 – 1EUR: RM3.36)

(ii) Financial statements of a subsidiary incorporated in Labuan

The Group’s operations in Labuan, Warisan Captive Incorporated (Note 28), are not considered an integral part of theCompany’s operations. Accordingly, the assets and liabilities of the operations in Labuan, which are denominated in USD, aretranslated to Ringgit Malaysia at exchange rates ruling at the balance sheet date. The revenues and expenses of theoperations in Labuan are translated to Ringgit Malaysia at average exchange rates applicable throughout the year. Foreignexchange differences arising on translation are recognised directly in equity. The closing rate used to translate the financialstatements of the Labuan operations is 1USD: RM3.80 (2002 - 1USD: RM3.80).

(r) Revenue

(i) Goods sold

Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised in the incomestatement when the significant risks and rewards of ownership have been transferred to the buyer.

(ii) Services rendered

Revenue from services rendered is recognised in the income statement as and when the services are performed.

(iii) Operating lease and car hire income

Operating lease and car hire income are recognised in the income statement based on the value invoiced to customers duringthe year.

(iv) Finance lease income

Finance lease income is recognised in the income statement over the terms of the lease commencing from the month thelease is executed to give a constant periodic rate of interest over the remaining period of the lease receivable amountoutstanding.

(v) Dividend income

Dividend income is recognised when the right to receive payment is established.

42



(s) Interest income

Interest income from finance lease transactions is recognised based on the sum-of-digits method. Where an account becomesnon-performing, interest income is suspended until it is realised on a cash basis. An account is classified as non-performing whererepayments are in arrears for more than six months.

Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset.

(t) Interest expense

All interest and other costs incurred in connection with borrowings are expensed as incurred.

2 . P r o p e r t y, P l a n t a n d E q u i p m e n t

Furniture,

Plant, fixtures, Motor

Long term machinery, Equipment fittings vehicles Motor Boats, Capital

Freehold leasehold and for and office and vehicles rafts and work-in-

land land Buildings equipment lease equipment coaches for lease cabin progress Total

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

Group

Cost/Valuation

Opening balance 2,421 6,957 14,798 1,587 24,477 12,956 27,598 5,468 – 188 96,450Additions – – 349 3 8,826 2,458 8,580 6,427 187 – 26,830Disposals – – – (12) (3,537) (392) (5,729) (145) – – (9,815)

Closing balance 2,421 6,957 15,147 1,578 29,766 15,022 30,449 11,750 187 188 113,465

Representing items at:

Cost 2,421 – 5,595 1,578 29,766 15,022 30,449 11,750 187 188 96,956Directors’ valuation – 6,957 9,552 – – – – – – – 16,509

Closing balance 2,421 6,957 15,147 1,578 29,766 15,022 30,449 11,750 187 188 113,465

Accumulated depreciation

Opening balance – 1,327 4,518 1,503 12,011 9,885 13,322 803 – – 43,369Charge for the year – 71 281 34 5,018 1,837 5,423 1,291 184 – 14,139Disposals – – – (12) (3,112) (317) (4,364) (20) – – (7,825)

Closing balance – 1,398 4,799 1,525 13,917 11,405 14,381 2,074 184 – 49,683

Net book value

At 31 December 2003 2,421 5,559 10,348 53 15,849 3,617 16,068 9,676 3 188 63,782

At 31 December 2002 2,421 5,630 10,280 84 12,466 3,071 14,276 4,665 – 188 53,081

Depreciation chargefor the year ended31 December 2002 – 71 280 38 3,910 1,382 3,403 565 – – 9,649

Note 27


31 December 2003

43


2 . P r o p e r t y, P l a n t a n d E q u i p m e n t ( C o n t ’ d )

Furniture,

fixtures,

fititngs and Motor

office equipment vehicles Total

RM’000 RM’000 RM’000

Company

Cost

Opening balance 68 203 271Additions 17 310 327Disposal (7) (202) (209)

Closing balance 78 311 389

Accumulated depreciation

Opening balance 23 66 89Charge for the year 14 62 76Disposal – (66) (66)

Closing balance 37 62 99

Net book value

At 31 December 2003 41 249 290

At 31 December 2002 45 137 182

Depreciation charge for the year ended31 December 2002 13 41 54

Revaluation

Certain land and buildings of the Group are stated at Directors’ valuation based on professional valuations on the existing use basisconducted in 1984.

The net book value of the revalued properties had they been stated at cost less accumulated depreciation calculated on original cost asrequired by MASB No. 15 – Property, Plant and Equipment is not shown as the records are not available since the revaluation was done in1984.


31 December 2003

44



31 December 2003

3 . I n v e s t m e n t s i n S u b s i d i a r i e s

Company

2003 2002

RM’000 RM’000

Unquoted shares, at cost 74,178 74,178Less: Impairment loss (1,700) (1,700)

72,478 72,478

Details of the subsidiaries are shown in Note 28.

4 . I n v e s t m e n t i n J o i n t l y C o n t r o l l e d E n t i t i e s

Group

The Group’s interest in the assets and liabilities, revenue and expenses of jointly controlled entities are as follows:Group

2003 2002

RM’000 RM’000

(Restated)

Assets and liabilities

Long term assets 1,244 447Current assets 11,260 5,339Long term and deferred liabilities (72) (55)Current liabilities (6,127) (4,647)

Net assets 6,305 1,084

Revenue and expenses

Income 117,038 85,067Expenses (116,796) (84,346)

Profit before taxation 242 721Tax expense (Note 18) (329) (125)

Net (loss)/profit for the year (87) 596

45



31 December 2003

4 . I n v e s t m e n t i n J o i n t l y C o n t r o l l e d E n t i t i e s ( C o n t ’ d )

Details of the jointly controlled entities are as follows:Proportion of

effective

Country of ownership

Name Principal activities incorporation interest

2003 2002

% %

Mayflower American Express Travel Operation of inbound tours and provision of Malaysia 70 70Services Sdn. Bhd. air ticketing services

Wacoal Malaysia Sdn. Bhd. Distribution and sale of undergarments Malaysia 50 –

Pursuant to the Joint Venture Agreement executed between Mayflower Acme Tours Sdn. Bhd., Belize Holdings Sdn. Bhd., Mayflower AmericanExpress Travel Services Sdn. Bhd. (“MAETS”) and American Express Travel Holdings (M) Company Sdn. Bhd. dated 24 August 2000 and inaccordance with MASB 16, Financial Reporting of Interests in Joint Ventures, MAETS has been reclassified as a jointly controlled entity.

Company

The Company investments in jointly controlled entity represents cost of shares in Wacoal Malaysia Sdn. Bhd..

5 . De fe r r ed Ta x

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

End of year recognised deferred tax assets 430 789 161 168

End of year recognised deferred tax liabilities (5,305) (5,247) – –

No deferred tax has been recognised for the following items:Group

2003 2002

RM’000 RM’000

Property, plant and equipment – (21)Provisions 63 1,896Unabsorbed capital allowances 193 303

256 2,178

Deferred tax assets not recognised at 28% 72 610

The property, plant and equipment and provisions do not expire under current tax legislation. Deferred tax assets have not been recognised inrespect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits.

46



31 December 2003

6 . Goodwi l l

Group

2003 2002

RM’000 RM’000

Goodwill at cost 870 –Amortisation (88) –

782 –

7 . O t h e r I n v e s t m e n t s

Group

2003 2002

RM’000 RM’000

Unquoted shares, at cost 10 10

Unquoted investment, at cost – 86

10 96

Unquoted investment represents membership in a recreation club.

8 . I n v e n t o r i e s

Group

2003 2002

RM’000 RM’000

Raw materials 1,214 1,234Work-in-progress 111 334Manufactured inventories 370 185Trading inventories 25,746 33,429Spare parts and workshop inventories 5,208 4,531

32,649 39,713

The following inventories are carried at net realisable value:

Trading inventories 3,429 10,122Spare parts and workshop inventories 2,935 428

6,364 10,550

During the year, there was a reversal of inventories written down of RM1,677,038 (2002 – Nil). The reversal was due to an increase in netrealisable value as a result of improving prices for trading inventories.

47



31 December 2003

9 . Tr a d e a n d O t h e r R e c e i v a b l e s

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Trade receivables 41,321 33,620 – –Less: Allowance for doubtful debts (3,407) (2,281) – –

37,914 31,339 – –Lease receivables 2,585 2,086 – –Subsidiaries – – 1,520 642Jointly controlled entities 3,993 4,318 41 26Tax recoverable 1,584 5 – –Other receivables, deposits and prepayments 4,405 8,606 6 134

50,481 46,354 1,567 802

During the year, bad debts of RM18,680 (2002 - RM432,903) were written off against the allowance for doubtful debts.

Lease receivables are receivable as follows:Group

Lease

payments Interest Principal

2003 2003 2003

RM’000 RM’000 RM’000

Less than one year 3,087 (502) 2,585Between one and three years 2,404 (387) 2,017

5,491 (889) 4,602

The amounts due from subsidiaries are non-trade in nature, unsecured, have no fixed term of repayment and are interest free.

The amount due from jointly controlled entities relates to:Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Trade 1,136 286 – –Non-trade 2,857 4,032 41 26

3,993 4,318 41 26

The non-trade amount due from the jointly controlled entities is unsecured, has no fixed term of repayment and is interest free except foran amount of RM2,857,000 (2002 - RM4,032,000) of the Group is subject to interest at rates ranging from 4% to 6.4% (2002 – 6.4% to6.8%) per annum.

Included in other receivables, deposits and prepayments of the Group are:

(i) advances made to related party for trade deposits of RM794,000 (2002 – RM2,931,000); and(ii) consideration for the purchase of a subsidiary of Nil (2002 – RM1,500,000).

48



31 December 2003

1 0 . C a s h a n d C a s h E q u i v a l e n t s

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 7,745 14,077 261 238Deposits 51,774 43,603 45,340 37,305

59,519 57,680 45,601 37,543

Deposits are placed with:

Licensed banks 9,809 12,959 3,375 6,661Licensed finance companies 4,365 5,327 4,365 5,327Other corporations 37,600 25,317 37,600 25,317

51,774 43,603 45,340 37,305

Deposits placed have an effective interest yield of 2.75% to 3.5% (2002 – 2.8% to 4.0%) per annum.

Included in the deposits in the Company’s accounts is an amount of RM35,631,187 (2002 – RM26,903,000) placed on behalf of subsidiaries(Note 11). Interest earned on these deposits are refunded to these subsidiaries.

1 1 . Tr a d e a n d O t h e r P a y a b l e s

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Trade payables 21,808 21,627 – –Other payables and accrued expenses 11,682 12,665 322 749Subsidiaries – – 44,979 36,115

33,490 34,292 45,301 36,864

The amounts due to subsidiaries are non-trade in nature, unsecured, have no fixed terms of repayment and are interest free except for amountsof RM35,631,187 (2002 – RM26,903,000) which are subject to interest of 2.75% to 3.5% (2002 – 2.8% to 4.0%) per annum (Note 10).

1 2 . P r o v i s i o n f o r Wa r r a n t i e s

Group

2003

RM’000

Balance at 1 January 2003 1,330Reversal/utilised during the year (1,330)

Balance at 31 December 2003 –

The provision for warranties relates to machinery sold. The provision is based on estimates made from historical warranty data and past claims.

49



31 December 2003

1 3 . B o r r o w i n g s

Group

2003 2002

RM’000 RM’000

CurrentBills payable – unsecured 16,379 9,052Term loan – unsecured – 125

16,379 9,177

Terms and debt repayment schedule

The bills payable of the Group is subject to interest at rates ranging from 3.0% to 3.15% (2002 – 3.05% to 3.18%) per annum. The billspayable is supported by a negative pledge over the current and future assets of a subsidiary.

The term loan of a subsidiary was granted under the Fund for Small and Medium Scale Industries, is subject to interest at 2.0% (2002 –2.0%) per annum above Bank Negara Malaysia’s approved rate and is repayable in sixteen equal quarterly instalments with the first principalrepayment commencing three months from the date of the first drawdown.

Significant covenant for the term loan granted to a subsidiary

In connection with the term loan agreement, the subsidiary has agreed not to create or permit to exist any security over all its assetswithout the prior written consent from the lender.

1 4 . S h a r e C a p i t a l

Group and Company

2003 2002

RM’000 RM’000

Ordinary shares of RM1.00 each

Authorised 100,000 100,000

Issued and fully paid 67,200 67,200

1 5 . R e s e r v e s

Company

Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit and tax exempt income to frankapproximately RM15,324,000 of its distributable reserves at 31 December 2003 if paid out as dividends.

50



31 December 2003

1 6 . O p e r a t i n g P r o f i t

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Revenue

Sale of goods 139,477 145,122 – –Services rendered including hire income 86,977 90,182 841 72Gross dividends – – 16,994 6,401Lease interest income 446 156 – –

226,900 235,460 17,835 6,473

Cost of sales

Sale of goods 89,196 83,289 – –Services rendered including hire services 57,789 70,054 – –

146,985 153,343 – –

Gross profit 79,915 82,117 17,835 6,473

Distribution costs (46,814) (44,201) – –Administration expenses (19,462) (15,637) (3,112) (2,223)Other operating expenses (2,665) (1,371) (28) (48)Other operating income 6,243 4,330 – –

Operating profit 17,217 25,238 14,695 4,202

Operating profit is arrived at after crediting:

Gross dividends/tax exempt dividends from unquoted shares of:Subsidiaries

– tax exempt dividends – – 10,238 4,554– gross dividends – – 6,756 1,847

Investments 11 11 – –Bad debts recovered 54 58 – –Gain on disposal of property, plant

and equipment 1,781 1,346 – –Gain on disposal of subsidiary’s business 2,375 – – –Gain on foreign exchange – realised 313 898 – –Management fees from subsidiaries – – 841 72Rental income on land and buildings 699 698 – –Rental of equipment 10,092 8,982 – –Write back of allowance for doubtful debts 118 240 – –Write back of inventories written down 1,677 – – –Write back of provision for retirement benefits 173 1,141 – –Write back of marketing and promotion expenses – 1,228 – –

51



31 December 2003

1 6 . O p e r a t i n g P r o f i t ( C o n t ’d )

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

and after charging:

Auditors’ remuneration– current year 120 114 28 24– (over)/under provision in prior year (1) 3 (4) –

Allowance for doubtful debts 1,229 – – –Amortisation of goodwill 88 – – –Bad debts written off 19 433 – –Company’s Directors:

Remuneration 740 462 740 462Fees 90 93 90 93

Depreciation 14,139 9,649 76 54Inventories written down 1,963 779 – –Management fees to a related party 132 131 132 131Payment discounts – 82 – –Provision for retirement benefits 189 – 11 4Provision for employee benefits 32 – – –Provision for inventories 79 – – –Property, plant and equipment written off – 11 – –Rental expense on land and buildings 1,178 1,000 – –Rental of equipment 86 83 – –Loss on disposal of property, plant and equipment – – 3 24Loss on foreign exchange – realised 91 – – –

– unrealised 136 150 – –Legal fees 533 216 533 127

The estimated monetary value of Directors’ benefits-in-kind of the Group and of the Company are RM23,800 (2002 – RM14,417) andRM23,800 (2002 – RM14,417) respectively.

1 7 . E m p l o y e e I n f o r m a t i o n

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Staff costs 33,174 32,207 1,280 878

The number of employees of the Group (including Directors) and of the Company (including Directors) at the end of the year was 1,100(2002 – 1,261) and 10 (2002 – 10) respectively.

52



31 December 2003

1 8 . Ta x E x p e n s e

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000


Current tax expenseMalaysian – current 3,408 5,992 1,892 517

– prior 156 (57) – –Deferred tax expense

– current year 440 1,465 7 (47)– prior year – (45) – –– revaluation reserve (23) (23) – –

Tax expense on share of profit of jointly controlled entities 329 125 – –

4,310 7,457 1,899 470

Reconciliation of effective tax rate2003 2002

% RM’000 % RM’000

(Restated)

Group

Profit before taxation 18,926 27,441

Income tax using Malaysian tax rates 28 5,299 28 7,683Non-deductible expenses 4.4 840 1.4 387Tax exempt income (10.3) (1,947) (5.1) (1,391)Crystallisation of revaluation reserve (0.1) (23) (0.1) (23)Other items 1.0 192 3.0 820Utilisation of unrecognised deferred tax assets (2.8) (536) (0.2) (42)Jointly controlled entities 1.7 329 0.5 125

21.9 4,154 27.5 7,559Over/(under) provision in prior years 0.8 156 (0.4) (102)

Tax expense 22.7 4,310 27.1 7,457

Company

Profit before taxation 15,079 4,569

Income tax using Malaysian tax rates 28 4,222 28 1,279Non-deductible expenses 4.3 641 6.0 273Tax exempt income (21.1) (3,182) (27.9) (1,275)Other items 1.4 218 4.2 193

Tax expense 12.6 1,899 10.3 470

53



31 December 2003

1 9 . E a r n i n g s P e r O r d i n a r y S h a r e

Group

The calculation of basic earnings per share is based on the net profit attributable to shareholders of RM14,616,000 (2002 – RM19,984,000)and the number of ordinary shares in issue during the year of 67,200,000 (2002 – 67,200,000).

2 0 . D i v i d e n d s

Group amd Company

2003 2002

RM’000 RM’000

Ordinary

Final:2002 final dividend of 4% tax exempt per share paid

on 18 June 2003 (2001 final dividend – 4% tax exempt per share paid on 26 June 2002) 2,688 2,688Interim:2003 interim dividend of 3% tax exempt per share

paid on 18 September 2003 (2002 interim dividend – 4% tax exempt per share paid

on 10 October 2002) 2,016 2,688

4,704 5,376

Proposed final dividend for the financial year ended 31 December 2003

The proposed final dividend for the year ended 31 December 2003 of 3% tax exempt per share totalling RM2,016,000 has not beenaccounted for in the financial statements of the Group and of the Company as at 31 December 2003.

Dividend per share

The calculation of dividend per share is based on the net dividend declared, or net dividend declared and proposed for the financial year andthe number of ordinary shares in issue during the year of 67,200,000 (2002 – 67,200,000).

2003 2002 2003 2002

RM’000 RM’000 sen per share

Ordinary dividend including proposed final dividend 4,032 5,376 6.0 8.0Proposed final dividend (2,016) (2,688) (3.0) (4.0)

Ordinary dividend excluding proposed final dividend 2,016 2,688 3.0 4.0

54



31 December 2003

2 1 . S e g m e n t a l I n f o r m a t i o n

Segment information is presented in respect of the Group’s business segments. Segment information by geographical location is notprovided as the activities of the Group are located principally in Malaysia.

Inter-segment pricing is determined based on negotiated terms.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on areasonable basis. Unallocated items mainly comprise corporate assets and expenses.

Business segments

The Group comprises the following main business segments:

Consumer products The manufacture and distribution of under-garments and distribution of cosmetics.

Travel and car rental Operation of inbound and outbound tours, the hiring of cars and coaches and the sale of air tickets.

Machinery The distribution and rental of industrial machinery and equipment.

Consumer Travel and

products car rental Machinery Other operations Eliminations Consolidated

2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002

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

(Restated)

Business SegmentsRevenue from external

customers 69,807 76,412 67,839 81,116 88,463 76,658 791 1,274 – – 226,900 235,460Inter-segment revenue – – 133 103 – – – – (133) (103) – –

Total revenue 69,807 76,412 67,972 81,219 88,463 76,658 791 1,274 (133) (103) 226,900 235,460

Segment result 5,538 12,087 2,157 6,546 9,363 8,332 172 473 – – 17,230 27,438

Unallocated expenses (2,388) (2,200)

Operating profit 14,842 25,238Interest expense (382) (266)Interest income 1,849 1,748Share of profit of

jointly controlledentities 242 721

Exceptional item– gain on disposal

of a subsidiary’sbusiness 2,375 –

Profit before taxation 18,926 27,441Tax expense (4,310) (7,457)


55



31 December 2003

2 1 . S e g m e n t a l I n f o r m a t i o n ( C o n t ’d )

Consumer Travel and

products car rental Machinery Other operations Eliminations Consolidated

2003 2002 2003 2002 2003 2002 2003 2002 2003 2002 2003 2002

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

(Restated)

Segment assets 42,323 53,613 42,085 41,310 71,548 61,069 378 160 – – 156,334 156,152

Share of net assets injointly controlledentities 6,305 1,084

Unallocated assets 53,336 44,415

Total assets 215,975 201,651

Segment liabilities (11,475) (11,424) (8,651) (9,351) (13,922) (16,666) (65) (47) – – (34,113) (37,488)Unallocated liabilities (24,797) (17,010)

Total liabilities (58,910) (54,498)

Capital expenditure 1,864 376 15,055 6,610 9,584 6,717 – – – – 26,503 13,703Unallocated capital

expenditure 327 98

Total capital expenditure 26,830 13,801

Depreciation andamortisation (889) (1,000) (7,304) (3,903) (5,870) (4,692) – – – – (14,063) (9,595)

Unallocated depreciationand amortisation (76) (54)

Total depreciationand amortisation (14,139) (9,649)

Non-cash expenses otherthan depreciation andamortisation (2,126) (1,066) (130) (433) (152) (33) – – – – (2,408) (1,532)

Unallocated non-cashexpenses (10) (4)

Total non-cash expenses (2,418) (1,536)

56



31 December 2003

2 2 . C o m m i t m e n t s

Group

2003 2002

RM’000 RM’000

Capital commitments:

Property, plant and equipmentContracted but not provided for in the financial statements 6,506 1,733

2 3 . F i n a n c i a l I n s t r u m e n t s

Financial risk management objectives and policies

Exposure to credit, interest rate and foreign currency risk arises in the normal course of the Group and the Company’s business. Credit andforeign currency risk in relation to the Group’s core business activities are managed by the respective operating units. The Group monitorsthe interest rate trend on an on going basis. Arising from the analysis of the market situation and taking into consideration the advice ofthe Group’s key bankers, the Group determines and varies the risk management objectives and tolerance limits from time to time.

Forward exchange rate contracts are used to reduce exposure to fluctuations in foreign exchange rates. While these are subject to the risk ofmarket rates changing subsequent to acquisition, such changes are generally offset by opposite effects on the items being hedged. TheGroup does not use any derivatives for speculative purposes.

The Group and the Company’s accounting policies in relation to derivative financial instruments are set out in Note 1(o).

Credit risk

In respect of the operating units, credit policies that are specific to their respective industries are in place. Exposure to credit risk ismonitored on an on going basis.

The Group and the Company also places a significant portion of its excess funds with licensed financial institutions. The management is ofthe view that credit risk exposure to licensed financial institutions is minimal.

At balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit risk for the Group and for theCompany are represented by the carrying amount of the receivables presented in the balance sheet.

Interest rate risk

The Group and the Company’s exposure to interest rate risk mainly arises through its fixed deposits.

Foreign currency risk

The Group incurs foreign currency risk mainly on purchases that are denominated in Japanese Yen. The Group monitors its exchangeexposure regularly and undertake selective hedging whenever deemed necessary.

A subsidiary’s financial statements are denominated in US Dollar. The Group is not exposed to foreign exchange risk arising from translationof the subsidiary’s financial statements from US Dollar to Ringgit Malaysia given the current government’s peg.

Transactions involving derivative financial instruments are entered into with licensed banks only.

57



31 December 2003

2 3 . F i n a n c i a l I n s t r u m e n t s ( C o n t ’d )

Effective interest rates and repricing analysis

In respect of interest-earning financial assets and interest-bearing liabilities, the following table indicates their effective interest rates atthe balance sheet date and the period they reprice or mature, whichever is earlier.

2003 2002

Effective Effective

interest Within interest Within

rate Total 1 year rate Total 1 year

% RM’000 RM’000 % RM’000 RM’000

Group

Financial assets

Fixed deposits 3.1 51,774 51,774 3.2 43,603 43,603Amount due from jointly

controlled entities 6.4 2,857 2,857 6.6 4,032 4,032

Financial liabilitiesBills payable 3.1 16,379 16,379 3.1 9,052 9,052Term loan – – – 6.0 125 125

Company

Financial asset

Fixed deposits 3.1 45,340 45,340 3.2 37,305 37,305

Financial liability

Amount due to subsidiaries 3.1 35,631 35,631 3.2 26,903 26,903

Fair values

As at balance sheet date, the carrying amounts of trade and other receivables and trade and other payables approximate fair value due tothe relatively short term nature of these financial instruments.

2 4 . R e l a t e d P a r t i e s

Identity of related parties

The Group and the Company have a controlling related party relationship with its subsidiaries and substantial shareholder of the Company,Tan Chong Consolidated Sdn. Bhd.

58



31 December 2003

2 4 . R e l a t e d P a r t i e s ( C o n t ’d )

Transactions and balances with related parties

(i) Significant transactions and balances with Tan Chong Motor Holdings Berhad (“TCMH”) Group, APM Automotive Holdings Berhad(“APM”) Group and Auto Dunia Sdn. Bhd., companies in which certain Directors of the holding company, namely Dato’ Tan Heng Chewand Tan Eng Soon, are deemed to have substantial financial interests are as follows:

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Transactions:

With TCMH GroupDisposal of property, plant and equipment – (151) – (151)Insurance expense 1,041 1,569 – –Interest expense 2 – – –Interest income (2) (32) – –Management fees 132 131 132 131Purchase of property, plant and equipment 1,897 369 185 74Purchases 1,471 2,918 – –Rental expense 303 325 – –Rental income (669) (660) – –Sales (5,629) (4,460) – –

Transactions:

With APM Group

Purchases 74 98 – –Rental income of equipment (31) – – –Sales (1,010) (1,268) – –

These transactions have been entered into in the normal course of business and have been established under negotiated terms.

Group

2003 2002

RM’000 RM’000

Balance:

With Auto Dunia Sdn. Bhd.

Amount due from in respect of:

Trade deposits 794 2,931

59



31 December 2003

2 4 . R e l a t e d P a r t i e s ( C o n t ’d )

(ii) Significant transactions with jointly controlled entities other than those disclosed elsewhere in the financial statements are as follows:

Group

2003 2002

RM’000 RM’000

Sales (3,945) (828)Interest income (151) (230)Sale of business operation (2,375) –Sale of investment (49) –Sale of property, plant and equipment (86) –Sale of inventories (5,491) –


(iii) Significant transactions with related corporations other than those disclosed elsewhere in the financial statements are as follows:

Company

2003 2002

RM’000 RM’000

Subsidiaries

Gross dividend income (16,994) (6,401)Management fee income (841) (72)Interest expenses 1,128 897


2 5 . S i g n i f i c a n t E v e n t s D u r i n g t h e Ye a r

(i) Pursuant to the Joint Venture Agreement (“JVA”) with Wacoal Corp. of Japan (“WC”) on 12 December 2002, WC and the Company hadeach subscribed for 8,000,000 and 7,999,998 new ordinary shares of RM1 each in Wacoal Malaysia Sdn. Bhd. (“WM”) which, togetherwith the two subscriber shares owned by the Company, had resulted in WC and the Company each owning 50% of the issued and paidup share capital in WM on 5 June 2003.

(ii) Further to the JVA with WC and pursuant to the Conditional Sale and Purchase Agreement between Tan Chong Apparels Sdn. Bhd.(“TCAP”) and WM, TCAP had completed the disposal of its business and assets to WM for a total cash consideration of RM11,236,854on 1 June 2003.

60



31 December 2003

2 6 . C o n t i n g e n t L i a b i l i t y

In previous year, a former director of the Company together with a former director who served on the Board of certain subsidiaries haveclaimed against the Company and the respective subsidiaries in relation to their non re-election as Directors of the subsidiaries. The formerdirectors’ application for interim injunctions was dismissed with costs. The High Court has struck out the former directors’ Writ andStatement of Claim on 19 July 2003. The former directors have appealed to the Court of Appeal and at this stage, no hearing date has beenfixed. Based on legal advice, the Directors of the Company are of the opinion that the claim is unlikely to succeed and will ultimately bedismissed with costs. No provision for damages needs to be made in the financial statements due to the unlikely success of the claim.

2 7 . O p e r a t i n g L e a s e s

The Group leases out its equipment and motor vehicle for lease under operating lease arrangement. These assets are included underproperty, plant and equipment (Note 2). Non-cancellable operating lease rentals are receivable as follows:

Group

2003 2002

RM’000 RM’000

Less than one year 2,439 916Between one and five years 1,358 812

3,797 1,728

2 8 . C o m p a n i e s i n t h e G r o u p

The principal activities of the subsidiaries in the Group, their places of incorporation and the interest of Warisan TC Holdings Berhad areshown below:

Effective

ownership

Country of interest

Name Principal activities incorporation 2003 2002

% %

Tung Pao Sdn. Bhd. Distribution and sale of cosmetics and consumer Malaysia 100 100products

Tan Chong Apparels Sdn. Bhd. Distribution and sale of under-garments Malaysia 100 100

Tan Chong Apparels Manufacturer Manufacture of under-garments Malaysia 100 100Sdn. Bhd.

TCIM Sdn. Bhd. Distribution and sale of material handling equipment, Malaysia 100 100agriculture tractors, engines and constructionequipment and parts

61



31 December 2003

2 8 . C o m p a n i e s i n t h e G r o u p ( C o n t ’ d )

Effective

ownership

Country of interest

Name Principal activities incorporation 2003 2002

% %

Jentrakel Sdn. Bhd. Rental of industrial machinery and equipment Malaysia 100 100

Mayflower Acme Tours Sdn. Bhd. Operation of inbound and outbound tours,of hiring Malaysia 100 100of cars and coaches and the sale of air tickets

Discovery Tours (Sabah) Sdn. Bhd. Operation of inbound tours Malaysia 100 –(100% of equity is held byMayflower Acme Tours Sdn. Bhd.)

Warisan Captive Incorporated Underwriting of captive insurance business Labuan, 100 100Malaysia

TC Beauty Services Sdn. Bhd. Rental of salon equipment Malaysia 100 100(100% of equity is held byTung Pao Sdn. Bhd.)

Belize Holdings Sdn. Bhd. Investment holding Malaysia 100 100

Comit Communications Technologies Dormant Malaysia 100 100(M) Sdn. Bhd.

Comit Phone (Malaysia) Sdn. Bhd. Dormant Malaysia 100 100

Telechoice Communication Sdn. Bhd. Dormant Malaysia 100 100

Angka-Tan Machinery Sdn. Bhd. Dormant Malaysia 100 100

62



31 December 2003

2 9 . C h a n g e s i n A c c o u n t i n g P o l i c i e s

In the current financial year, the Company adopted three new MASB Standards. The adoption of these new standards resulted in changes inaccounting policies are as follows:

(a) MASB 25, Income Taxes which has been adopted retrospectively. Comparative figures have been adjusted to reflect the change in theaccounting policy;

(b) MASB 27, Borrowing Costs which is applied retrospectively. Comparative figures have not been restated as the previous accountingpolicy was in line with the accounting standard; and

(c) MASB 29, Employees Benefits which has been adopted retrospectively. The adoption of this standard has no material impact on thefinancial statements.

The adoption of MASB 25 has resulted in the recognition in full of all taxable temporary differences. Previously, deferred tax liabilities werenot provided if no liability was expected to arise in the foreseeable future and there were no indications the timing differences wouldreverse thereafter. Deferred tax assets are now recognised when it is probable that taxable profits will be available against which thedeferred tax assets can be utilised (previously only recognised where there was a reasonable expectation of realisation in the near future).

This change in accounting policies, applied retrospectively, has the following impact on results are as follows:

Group Company

2003 2002 2003 2002

RM’000 RM’000 RM’000 RM’000

Net profit before change in accounting policy 14,952 19,725 13,187 4,052Effect of adopting MASB 25 (336) 259 (7) 47

Net profit for the year 14,616 19,984 13,180 4,099

Prior year adjustment

The change in accounting policy due to the adoption of MASB 25 has been accounted for by restating comparatives and adjusting theopening balance of retained profits at 1 January 2002 as disclosed in Note 30 and the statement of changes in equity respectively.

63



31 December 2003

3 0 . C o m p a r a t i v e F i g u r e s

The following comparatives have been restated to reflect the change in accounting policy as explained in Note 29.

Group Company

As As previously As As previously

Restated stated restaetd stated

RM’000 RM’000 RM’000 RM’000

Balance sheet

Deferred tax asset 789 – 168 –Deferred tax liability 5,247 3,809 – –

Income statement

Tax expense 7,457 7,716 470 517

Statement of changes in equity

Retained profits at 1 January 2002 65,345 66,133 8,125 8,004Retained profits at 31 December 2002 79,953 80,482 6,848 6,680

64


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Seventh Annual General Meeting ofWarisan TC Holdings Berhad will be held at the Grand Ballroom, GrandSeasons Hotel, No. 72 Jalan Pahang, 53000 Kuala Lumpur, Malaysia onThursday, 20 May 2004 at 2:30 p.m. to transact the following businesses:

O r d i n a r y B u s i n e s s :

1. To receive and consider the Financial Statements for the financialyear ended 31 December 2003 together with the Reports of theDirectors and Auditors thereto. Resolution 1

2. To declare a final dividend of 3% tax exempt for the financial yearended 31 December 2003. Resolution 2

3. To re-elect the following Directors, who are eligible and haveoffered themselves for re-election, in accordance with Article 100of the Company’s Articles of Association.i Ngu Ew Look Resolution 3ii Seow Thiam Fatt Resolution 4

4. To re-appoint the Auditors and to authorise the Directors to fixtheir remuneration. Resolution 5

S p e c i a l B u s i n e s s :

5. To consider and if thought fit, to pass the following resolution asan ordinary resolution:PROPOSED GRANT OF AUTHORITY PURSUANT TO SECTION 132DOF THE COMPANIES ACT, 1965“THAT, subject always to the Companies Act, 1965, the Articles ofAssociation of the Company and approvals and requirements of therelevant governmental/regulatory authorities (where applicable), theDirectors be and are hereby empowered pursuant to Section 132Dof the Companies Act, 1965 to allot and issue new ordinary sharesof RM1.00 each in the Company, from time to time and upon suchterms and conditions and for such purposes and to such personswhomsoever the Directors may, in their absolute discretion deemfit and expedient in the interest of the Company, provided that theaggregate number of shares issued pursuant to the resolution doesnot exceed 10% of the issued and paid-up share capital for thetime being of the Company AND THAT such authority shallcontinue to be in force until the conclusion of the next AnnualGeneral Meeting of the Company.” Resolution 6

6. To consider and if thought fit, to pass the following resolution asan ordinary resolution:

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENTRELATED PARTY TRANSACTIONS WITH TAN CHONG MOTOR HOLDINGSBERHAD GROUP“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandumand Articles of Association of the Company and the Listing Requirementsof Malaysia Securities Exchange Berhad, approval be and is herebygiven to the Company and its subsidiaries (“WTCH Group”) to enterinto all arrangements and/or transactions with Tan Chong Motor

Holdings Berhad Group involving the interest of Directors, majorshareholders or persons connected with Directors and/or majorshareholders of the WTCH Group as set out under section 5.3.1.1 ofthe Circular to shareholders dated 27 April 2004 (“Related Parties”)provided that such arrangements and/or transactions are recurrenttransactions of a revenue or trading nature which are necessary forthe day-to-day operations and are carried out in the ordinarycourse of business on normal commercial terms and on terms whichare not more favourable to the Related Parties than those generallyavailable to the public and not to the detriment of the minorityshareholders (the “Shareholders’ Mandate”).

AND THAT such approval shall continue to be in force until theconclusion of the next Annual General Meeting (“AGM”) of the Companyat which time it will lapse, unless by a resolution passed at ageneral meeting, the authority of the Shareholders’ Mandate isrenewed or the expiration of the period within which the next AGMof the Company is required to be heldpursuant to Section 143(1) ofthe Act (but shall not extend to such extension as may be allowedpursuant to Section 143(2) of the Act) or revoked or varied by aresolution passed by the shareholders in a general meeting,whichever is earlier.

AND THAT the Directors of the Company be authorised to completeand do all such acts and things (including executing all suchdocuments as may be required) as they may consider expedient ornecessary to give effect to the Shareholders’ Mandate.”

Resolution 77. To consider and if thought fit, to pass the following resolution as

an ordinary resolution:

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENTRELATED PARTY TRANSACTIONS WITH APM AUTOMOTIVE HOLDINGSBERHAD GROUP“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandumand Articles of Association of the Company and the ListingRequirements of Malaysia Securities Exchange Berhad, approval beand is hereby given to the Company and its subsidiaries (“WTCHGroup”) to enter into all arrangements and/or transactions withAPM Automotive Holdings Berhad Group involving the interest ofDirectors, major shareholders or persons connected with Directorsand/or major shareholders of the WTCH Group as set out undersection 5.3.1.2 of the Circular to shareholders dated 27 April 2004(“Related Parties”) provided that such arrangements and/or transactionsare recurrent transactions of a revenue or trading nature which arenecessary for the day-to-day operations and are carried out in theordinary course of business on normal commercial terms and onterms which are not more favourable to the Related Parties thanthose generally available to the public and not to the detriment ofthe minority shareholders (the “Shareholders’ Mandate”).

AND THAT such approval shall continue to be in force until theconclusion of the next Annual General Meeting (“AGM”) of theCompany at which time it will lapse, unless by a resolution passedat a general meeting, the authority of the Shareholders’ Mandate is

65


NOT I C E O F ANNUAL G ENERAL MEE T ING

renewed or the expiration of the period within which the next AGMof the Company is required to be held pursuant to Section 143(1)of the Act (but shall not extend to such extension as may beallowed pursuant to Section 143(2) of the Act) or revoked or variedby a resolution passed by the shareholders in a general meeting,whichever is earlier.

AND THAT the Directors of the Company be authorised to completeand do all such acts and things (including executing all suchdocuments as may be required) as they may consider expedient ornecessary to give effect to the Shareholders’ Mandate.”

Resolution 8

8. To consider and if thought fit, to pass the following resolution asan ordinary resolution:

PROPOSED DISPOSAL BY TUNG PAO SDN BHD, A WHOLLY-OWNEDSUBSIDIARY OF WARISAN TC HOLDINGS BERHAD, OF ALL THATPARCEL OF LAND SITUATED AT 2 1/2 MILE, JALAN PENDINGCONSISTING OF 6,410 SQUARE METRES, MORE OR LESS, ANDDESCRIBED AS LOT 9378 SECTION 64, KUCHING TOWN LANDDISTRICT TO TAN CHONG & SONS MOTOR COMPANY SDN BHD, AWHOLLY-OWNED SUBSIDIARY OF TAN CHONG MOTOR HOLDINGSBERHAD FOR A CASH CONSIDERATION OF RM2,690,000

“THAT pursuant to Section 132E of the Companies Act, 1965, authoritybe and is hereby given to Tung Pao Sdn Bhd (“TP”), a wholly-owned subsidiary of the Company, to dispose of all that parcel ofland situated at 2 1/2 Mile, Jalan Pending consisting of 6,410square metres, more or less, and described as Lot 9378 Section 64,Kuching Town Land District (“the Land”) to Tan Chong & SonsMotor Company Sdn Bhd, (“Purchaser”), a wholly-owned subsidiaryof Tan Chong Motor Holdings Berhad which is deemed to beconnected with Dato’ Tan Heng Chew, a director of the Companyand Tan Eng Soon, a former director of the Company, by virtue ofthe provisions of Section 122A of the Companies Act, 1965, for acash consideration of Ringgit Malaysia : Two Million Six Hundredand Ninety Thousand (RM2,690,000), and upon such arm’s lengthand commercially acceptable terms and conditions as the Board ofDirectors of TP shall determine and agree upon with the Purchaser.”

Resolution 9

9. To transact any other business of the Company of which due noticeshall have been received.

By order of the BoardCHAN YOKE-LINCompany Secretary

Kuala Lumpur27 April 2004

N o t e s :

1. A member entitled to vote is entitled to appoint a proxy or proxies (but not more than

two) to attend and vote for him. A proxy need not be a member of the Company, and,

where there are two proxies, the number of shares to be represented by each proxy must

be stated.

2. In the case of a corporation, the form of proxy appointing a corporate representative must

be executed under seal or under the hand of an officer or attorney duly authorised.

3. An authorised nominee may appoint one proxy in respect of each securities account the

authorised nominee holds in the Company standing to the credit of such securities

account. Each appointment of proxy shall be by a separate instrument of proxy which shall

specify the securities account number and the name of the beneficial owner for whom the

authorised nominee is acting.

4. The form of proxy must be deposited at the Registered Office of the Company, 62 - 68

Jalan Ipoh, 51200 Kuala Lumpur, Malaysia, not less than forty-eight hours before the time

appointed for the meeting.

5. Explanatory Statement in relation to Resolution 6

The Company continues to consider opportunities to broaden the operating base and

earnings potential of the Company. If any of the expansion or diversification proposals

involve the issue of new shares, the Directors of the Company, under present circumstances,

would have to convene a general meeting to approve the issue of new shares even though

the number involved may be less than 10% of the issued share capital of the Company.

In order to avoid any delay and costs involved in convening a general meeting to approve

such issue of shares, it is thus considered appropriate that the Directors of the Company

be empowered to issue shares in the Company up to an amount not exceeding in total

10% of the issued share capital of the Company for the time being, for such purpose. This

authority, unless revoked or varied at a general meeting, shall continue to be in force

until the conclusion of the next annual general meeting of the Company.

6. Explanatory Statement in relation to Resolution 7 and Resolution 8

The proposed resolutions 7 and 8, if passed, will enable the Company and/or its

subsidiaries to enter into recurrent transactions involving the interest of related parties,

which are of a revenue or trading nature and necessary for the Group’s day to day

operations, subject to the transactions being carried out in the ordinary course of

business and on terms not to the detriment of the minority shareholders of the Company.

Further information on resolutions 7 and 8 are set out in the Circular to shareholders

dated 27 April 2004, despatched together with the Annual Report.

7. Explanatory Statement in relation to Resolution 9

The Company proposes to dispose of all that parcel of land situated at 2 1/2 Mile, Jalan

Pending consisting of 6,410 square metres, more or less, and described as Lot 9378

Section 64, Kuching Town Land District held by Tung Pao Sdn Bhd to Tan Chong & Sons

Motor Company Sdn. Bhd. at a cash consideration of RM2,690,000. The land was acquired

in 1980 at a cost RM1,600,000. The Group has no intended use for the land. By realising

the land’s capital appreciation on disposal, there will be an additional source of funds for

the Group’s working capital.

As the proposed disposal falls under the provisions of Section 132E of the Companies Act,

1965, the prior approval of the shareholders at a general meeting is required.

Details on the proposed disposal are set out in the Circular to shareholders dated 27 April

2004, despatched together with the Annual Report.

66


Statement Accompanying Notice of Annual General Meeting

D i r e c t o r s S t a n d i n g F o r R e - e l e c t i o n A t T h e S e v e n t h A n n u a l G e n e r a l M e e t i n g

Directors standing for re-election pursuant to Article 100 are Ngu Ew Look and Seow Thiam Fatt. The profiles of these Directors are set out in thesection entitled “Profiles of the Board of Directors” on pages 10 to 11 of the Annual Report. None of the directors hold shares in the Company.

D e t a i l s O f A t t e n d a n c e O f T h e D i r e c t o r s A t B o a r d M e e t i n g s

There were a total of nine (9) board meetings held during the financial year ended 31 December 2003 and the details of the attendance of theDirectors who are standing for re- election are set out in the section entitled “Profiles of the Board of Directors” on pages 10 to 11 of the AnnualReport.

D a t e, T i m e A n d P l a c e O f T h e S e v e n t h A n n u a l G e n e r a l M e e t i n g

Date : Thursday, 20 May 2004Time : 2:30 p.m.Place : Grand Ballroom

Grand Seasons HotelNo. 72, Jalan Pahang,53000 Kuala Lumpur, Malaysia

W A R I S A N T C H O L D I N G S B E R H A D ( 4 2 4 8 3 4 - W ) ( I n c o r p o r a t e d i n M a l a y s i a )

I/We (1) (Name and NRIC No/Company No)

of (address)

being a member of WARISAN TC HOLDINGS BERHAD, hereby appoint (Name and NRIC No of Proxy/Proxies (2)/Corporate Representative (3))

or failing him (Name and NRIC No)

or failing the abovenamed proxy/proxies/corporate representative, the Chairman of the meeting, as my/our proxy to vote for me/us on my/ourbehalf at the Seventh Annual General Meeting of the Company to be held at the Grand Ballroom, Grand Seasons Hotel, No. 72, Jalan Pahang, 53000Kuala Lumpur, Malaysia on Thursday, 20 May 2004 at 2:30 p.m., and at any adjournment thereof, as indicated below:

For Against

Resolution 1 Financial Statements and Report of the Directors and Auditors

Resolution 2 Final Dividend

Resolution 3 Re-elect Ngu Ew Look

Resolution 4 Re-elect Seow Thiam Fatt

Resolution 5 Re-appoint Auditors

Resolution 6 Proposed Grant of Authority pursuant to Section 132D of the Companies Act, 1965

Resolution 7 Proposed Renewal of Shareholders’ Mandate For Recurrent Related PartyTransactions with Tan Chong Motor Holdings Berhad Group

Resolution 8 Proposed Renewal of Shareholders’ Mandate For Recurrent Related PartyTransactions with APM Automotive Holdings Berhad Group

Resolution 9 Proposed disposal by Tung Pao Sdn Bhd, a wholly-owned subsidiary of WarisanTC Holdings Berhad, of all that parcel of land situated at 21/2 Mile, JalanPending consisting of 6,410 square metres, more or less, and described asLot 9378 Section 64, Kuching Town Land District to Tan Chong & Sons MotorCompany Sdn Bhd, a wholly-owned subsidiary of Tan Chong Motor HoldingsBerhad for a cash consideration of RM2,690,000

(If you wish to instruct your proxy how to vote, insert a “√“ or “X” in the appropriate box. Subject to any voting instructions so given, the proxy will vote, or may abstain from voting, on any resolution

as the proxy may think fit.)

If the member is an individual CDS Account No

No. of shares held :

Date :

Signature

If the member is an corporation CDS Account No

The Common Seal of

was hereunto affixed in accordance with its Articles of Association common seal

in the presence of

No. of shares held :

Director Director/Secretary Date :

Form of proxy

fold here

fold here

affixstamphere

Notes:

(1) An authorised nominee may appoint one proxy in respect of each securities account the authorised nominee holds in the Company standing to the credit of such securities account. Eachappointment of proxy shall be by a separate instrument of proxy which shall specify the securities account number and the name of the beneficial owner for whom the authorised nominee isacting.

(2) A member entitled to vote is entitled to appoint a proxy or proxies (but not more than two) to attend and vote for him. A proxy need not be a member of the Company, and, where there are twoproxies, the number of shares to be represented by each proxy must be stated.

(3) In the case of a corporation, the form of proxy appointing a corporate representative must be executed under seal or under the hand of an officer or attorney duly authorised.

The Form of Proxy must be deposited at the Registered Office of the Company, 62 - 68 Jalan Ipoh, 51200 Kuala Lumpur, Malaysia, not less than forty-eight hours before the timeappointed for the meeting.

The Company Secretary

WARISAN TC HOLDINGS BERHAD62-68 Jalan Ipoh

51200 Kuala Lumpur

Malaysia

Documents

warisan cvr & ifc pdf - warisantc.com.my · pelaksanaan pendaftaran barangan kosmetik oleh Kerajaan yang berkuatkuasa ... series of attractive travel packages to its ... agen-agen