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Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

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Notice of Annual General Meeting Notis Mesyuarat Agung Tahunan Corporate Information Informasi Korporat Board of Directors' Profile Profil Lembaga Pengarah Statement of Corporate Governance Penyata Pentadbiran Korporat Statement on Internal Control Penyata Kawalan Dalaman Board Committees : Audit Committee Remuneration Committee Nomination Committee Jawatankuasa-jawatankuasa Lembaga : Jawatankuasa Audit Jawatankuasa Ganjaran Jawatankuasa Pencalonan Group Financial Highlights Maklumat Kewangan Kumpulan

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Statutory Declaration Akuan Berkanun Report of the Auditors to the Members Laporan Juruaudit kepada Ahli-ahli Balance Sheets Kunci Kira-kira Income Statements Penyata Pendapatan Statement of Changes in Equity Penyata Penukaran Ekuiti Cash Flow Statements Penyata Aliran Tunai Notes to the Financial Statements Nota-nota kepada Penyata Kewangan Other Information Lain-lain Informasi Particulars of Group's Properties Butir-butir Hartanah Kumpulan Analysis of Shareholding Analisa Pemegangan Saham Directors' Shareholding Pemegangan Saham Para Pengarah Share Buy-Back Summary Ringkasan Pembelian Balik Saham Proxy Form Borang Proksi

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155 62 Chairman's Statement Penyata Pengerusi 157 76 Directors' Report Laporan Pengarah 158 82 Statement by Directors Penyata oleh Para Pengarah 159

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Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Forty-First Annual General Meeting of Malaysian Mosaics Berhad will be held at Kristal Ballroom, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor Darul Ehsan on Thursday, 28 July 2005 at 10.00 a.m. to transact the following:AS ORDINARY BUSINESS: To consider and if thought fit, to pass the following Ordinary Resolutions:1. To adopt the Audited Financial Statements for the financial year ended 31 January 2005 together with the Reports of Directors and Auditors thereon. To declare a final dividend of 3.0 sen per ordinary share of RM1.00 each less 28% income tax for the financial year ended 31 January 2005 as recommended by the Directors. To re-elect Datuk Simon Shim Kong Yip, JP who retires as Director of the Company pursuant to Article 87 of the Company's Articles of Association. To re-elect Mr. Tan Ghee Kiat who retires as Director of the Company pursuant to Article 87 of the Company's Articles of Association. To re-elect Mr. Lee Wee Yong who retires as Director of the Company pursuant to Article 87 of the Company's Articles of Association. To re-elect Mr. Edward Lee Ming Foo, JP who retires as Director of the Company pursuant to Article 91 of the Company's Articles of Association. To re-appoint Messrs KPMG as Auditors of the Company to hold office until the conclusion of the next Annual General Meeting at a remuneration to be determined by the Directors of the Company.

Resolution 1

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Resolution 2

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Resolution 3

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Resolution 4

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Resolution 5

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Resolution 6

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Resolution 7

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

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Notice of Annual General Meeting

AS SPECIAL BUSINESS: To consider and if thought fit, to pass the following Ordinary Resolution:8. Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965 "THAT subject always to the approvals of the relevant authorities, the Directors of the Company be and are hereby empowered pursuant to Section 132D of the Companies Act, 1965 to issue shares in the Company at any time upon such terms and conditions, and for such purposes as the Directors of the Company may in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued capital of the Company as at the date of this Annual General Meeting and that the Directors of the Company be and are hereby empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company." 9. To transact any other business for which due notice shall have been given in accordance with the Articles of Association of the Company and the Companies Act, 1965.

Resolution 8

By Order of the Board

Lee Wee Yong (MIA 7492) Cheah Yee Leng (LS 7848) Company Secretaries Petaling Jaya 6 July 2005

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Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notice of Annual General Meeting

Notes: 1. A member entitled to attend and vote at this Meeting is entitled to appoint a proxy or proxies (but not more than two) to attend and vote in his/her stead. Where a member appoints more than one proxy, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy. A proxy does not need to be a member and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. The instrument appointing a proxy shall be in writing under the hands of the appointor or his attorney, duly authorised in writing, or if the appointor is a corporation, either under the seal or under the hand of an officer or attorney, duly authorised. The instrument appointing a proxy must be deposited at the Registered Office of the Company, 1A, Jalan 205, Off Jalan Tandang, 46050 Petaling Jaya, Selangor Darul Ehsan, not less than forty eight (48) hours before the time appointed for holding the Meeting or any adjournment thereof. EXPLANATORY NOTES FOR ORDINARY RESOLUTION 8 Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965 The proposed Ordinary Resolution 8, if passed, will give the Directors of the Company, from the date of this Annual General Meeting, authority to issue and allot ordinary shares from the unissued share capital of the Company for such purposes as the Directors of the Company may consider to be in the interest of the Company. This authority will, unless revoked or varied by the Company in general meeting, expire at the next Annual General Meeting of the Company.

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NOTICE OF FINAL DIVIDEND PAYMENT AND ENTITLEMENT DATE

NOTICE IS HEREBY GIVEN that a final dividend of 3.0 sen per ordinary share of RM1.00 each less 28% income tax in respect of the financial year ended 31 January 2005, if approved by the shareholders at the Forty-First Annual General Meeting, will be payable on 10 August 2005 to the shareholders whose names appear on the Company's Register of Members and/or Record of Depositors at the close of business on 3 August 2005. A depositor shall qualify for entitlement to the dividend only in respect of:a. shares deposited into the depositor's securities account before 12.30 p.m. on 1 August 2005 (in respect of shares which are exempted from mandatory deposit); b. shares transferred into the depositor's securities account before 4.00 p.m. on 3 August 2005 in respect of transfers; and c. shares bought on the Bursa Malaysia Securities Berhad ["Bursa Securities"] on a cum entitlement basis according to the Rules of the Bursa Securities.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

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Notice of Annual General Meeting

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING PURSUANT TO PARAGRAPH 8.28(2) OF BURSA SECURITIES LISTING REQUIREMENTS

The Forty-First Annual General Meeting of Malaysian Mosaics Berhad will be held at Kristal Ballroom, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor Darul Ehsan on Thursday, 28 July 2005 at 10.00 a.m. Directors who are standing for re-election at the Forty-First Annual General Meeting of the Company are:Datuk Simon Shim Kong Yip, JP Mr. Tan Ghee Kiat Mr. Lee Wee Yong Mr. Edward Lee Ming Foo, JP A total of four (4) Board of Directors' Meetings were held during the financial year ended 31 January 2005. The details of Directors' attendance at Board Meetings held during the financial year ended 31 January 2005 are set out in the Statement of Corporate Governance on page 23 of the Annual Report. The Directors' Profile and their respective shareholdings in the Company and its subsidiaries for those who are standing for re-election are set out in the Annual Report on pages as follows:-

Directors standing for re-election

Director's Profile Page 20 Page 18 Page 15 Page 14

Details of shareholdings in the Company and its subsidiaries No shareholdings No shareholdings No shareholdings No shareholdings

Datuk Simon Shim Kong Yip, JP Mr. Tan Ghee Kiat Mr. Lee Wee Yong Mr. Edward Lee Ming Foo, JP

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Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notis Mesyuarat Agung Tahunan

DENGAN INI NOTIS DIBERIKAN BAHAWA Mesyuarat Agung Tahunan ke-Empat Puluh Satu Malaysian Mosaics Berhad yang akan diadakan di Kristal Ballroom, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor Darul Ehsan pada hari Khamis, 28 Julai 2005 pada jam 10.00 pagi untuk menguruskan perkara-perkara seperti berikut:SEBAGAI URUSAN BIASA: Menimbang dan jika difikirkan wajar, meluluskan Resolusi Biasa yang berikut:1. Meluluskan Penyata Kewangan Teraudit untuk tahun kewangan berakhir 31 Januari 2005 bersama Laporan-laporan Pengarah dan Juruaudit mengenainya. Mengisytiharkan dividen akhir sebanyak 3.0 sen untuk setiap saham biasa RM1.00 ditolak cukai pendapatan pada kadar 28% untuk tahun kewangan berakhir 31 Januari 2005 seperti yang disyorkan oleh Para Pengarah. Memilih semula Datuk Simon Shim Kong Yip, JP yang bersara sebagai Pengarah Syarikat mengikut Artikel 87 Tataurusan Syarikat. Memilih semula Encik Tan Ghee Kiat yang bersara sebagai Pengarah Syarikat mengikut Artikel 87 Tataurusan Syarikat. Memilih semula Encik Lee Wee Yong yang bersara sebagai Pengarah Syarikat mengikut Artikel 87 Tataurusan Syarikat. Memilih semula Encik Edward Lee Ming Foo, JP yang bersara sebagai Pengarah Syarikat mengikut Artikel 91 Tataurusan Syarikat. Melantik semula Messrs KPMG sebagai Juruaudit Syarikat sehingga tamatnya Mesyuarat Agung Tahunan yang berikut pada ganjaran yang akan ditetapkan oleh Para Pengarah.

Resolusi 1

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Resolusi 2

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Resolusi 3

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Resolusi 4

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Resolusi 5

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Resolusi 6

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Resolusi 7

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

7

Notis Mesyuarat Agung Tahunan

SEBAGAI URUSAN KHAS: Menimbang dan jika difikirkan wajar, meluluskan Resolusi Biasa yang berikut:8. Kuasa untuk memperuntuk dan menerbit saham mengikut Seksyen 132D Akta Syarikat, 1965 "BAHAWA sentiasa tertakluk kepada kelulusan pihak berkuasa yang berkenaan, Para Pengarah Syarikat dengan ini diberi kuasa mengikut Seksyen 132D Akta Syarikat, 1965 untuk menerbit saham-saham Syarikat pada bila-bila masa dan menurut terma-terma serta syarat-syarat, dan untuk tujuan-tujuan yang difikirkan wajar oleh Para Pengarah mengikut budibicara mutlak mereka, asalkan jumlah saham yang diterbitkan mengikut resolusi ini secara agregatnya tidak melebihi 10% daripada modal diterbit Syarikat pada tarikh Mesyuarat Agung Tahunan ini dan bahawa dengan ini Para Pengarah Syarikat diberi kuasa untuk mendapat kelulusan bagi penyenaraian dan sebutan harga sahamsaham tambahan yang diterbitkan itu di Bursa Malaysia Securities Berhad dan bahawa kuasa ini akan terus berkuatkuasa sehingga tamatnya Mesyuarat Agung Tahunan Syarikat yang berikut." 9. Menguruskan sebarang hal-hal lain yang mana notis yang sewajarnya telah diberikan mengikut Tataurusan Syarikat dan Akta Syarikat,1965.

Resolusi 8

Dengan Perintah Lembaga

Lee Wee Yong (MIA 7492) Cheah Yee Leng (LS 7848) Setiausaha-setiausaha Syarikat Petaling Jaya 6 Julai 2005

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Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notis Mesyuarat Agung Tahunan

Nota-nota: 1. Seorang ahli yang berhak menghadiri dan mengundi di Mesyuarat ini adalah berhak untuk melantik seorang proksi atau proksi-proksi (tetapi tidak melebihi dua orang) untuk menghadiri dan mengundi bagi pihaknya. Jika seorang ahli melantik lebih daripada seorang proksi, perlantikan tersebut adalah tidak sah kecuali beliau menyatakan bahagian pegangan beliau yang diwakili oleh setiap proksi. Seseorang proksi itu tidak semestinya ahli dan peruntukan Seksyen 149(1)(b) Akta Syarikat, 1965 tidak berkuatkuasa di sini. Sekiranya ahli Syarikat adalah seorang nominee yang diberi kuasa seperti yang didefinasikan di bawah Akta Industri Sekuriti (Depositori Pusat), 1991, ia boleh melantik sekurang-kurangnya seorang proksi untuk setiap akaun sekuriti yang ia pegang dengan adanya saham-saham biasa Syarikat dalam kredit di akaun sekuriti tersebut. Suratcara perlantikan seseorang proksi itu mestilah secara bertulis di bawah tangan pelantik atau peguamnya yang diberi kuasa secara bertulis, atau sekiranya pelantik adalah sebuah perbadanan, maka suratcara tersebut hendaklah dimeterai atau ditandatangani oleh pegawai atau peguam yang diberi kuasa sewajarnya. Suratcara melantik proksi mestilah didepositkan di Pejabat Berdaftar Syarikat di 1A, Jalan 205, Off Jalan Tandang, 46050 Petaling Jaya, Selangor Darul Ehsan, tidak lewat daripada empat puluh lapan (48) jam sebelum masa yang ditetapkan untuk Mesyuarat ini atau sebarang penangguhannya. NOTA PENJELASAN UNTUK RESOLUSI BIASA 8 Kuasa untuk memperuntuk dan menerbit saham mengikut Seksyen 132D Akta Syarikat, 1965 Cadangan Resolusi Biasa 8, sekiranya diluluskan, akan memberi kuasa kepada Para Pengarah Syarikat, mulai tarikh Mesyuarat Agung Tahunan ini, untuk menerbit dan memperuntukkan saham biasa daripada modal saham Syarikat yang belum diterbit untuk tujuan-tujuan sebagaimana yang Para Pengarah Syarikat fikirkan adalah untuk kepentingan Syarikat. Kuasa ini akan tamat pada Mesyuarat Agung yang berikut, kecuali dibatalkan atau diubahsuai oleh Syarikat dalam Mesyuarat Agung.

2.

NOTIS PEMBAYARAN DIVIDEN AKHIR DAN TARIKH PENGESAHAN KELAYAKAN HAK

DENGAN INI NOTIS DIBERIKAN BAHAWA dividen akhir sebanyak 3.0 sen untuk setiap saham biasa RM1.00 ditolak cukai pendapatan pada kadar 28% untuk tahun kewangan berakhir 31 Januari 2005, sekiranya diluluskan oleh para pemegang saham di Mesyuarat Agung Tahunan ke-Empat Puluh Satu, akan dibayar pada 10 Ogos 2005 kepada para pemegang saham yang namanya tersenarai dalam Daftar Ahli Syarikat dan/atau Rekod Pendeposit pada tarikh penutupan urusan pada 3 Ogos 2005. Seorang pendeposit hanya layak menerima bayaran dividen untuk: a. saham-saham yang didepositkan dalam akaun sekuriti pendeposit sebelum pukul 12.30 petang pada 1 Ogos 2005 (bagi saham yang dikecualikan daripada deposit mandatori); b. saham-saham yang dipindah kepada akaun sekuriti pendeposit sebelum pukul 4.00 petang pada 3 Ogos 2005 bagi pindahan-pindahan; dan c. saham-saham yang dibeli dari Bursa Malaysia Securities Berhad ("Bursa Securities") menurut asas kelayakan berdasarkan peraturan-peraturan Bursa Securities.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

9

Notis Mesyuarat Agung Tahunan

PENYATA DILAMPIRKAN BERSAMA NOTIS MESYUARAT AGUNG TAHUNAN MENURUT PERENGGAN 8.28(2) SYARAT-SYARAT PENYENARAIAN BURSA SECURITIES

Mesyuarat Agung Tahunan ke-Empat Puluh Satu Malaysian Mosaics Berhad yang akan diadakan di Kristal Ballroom, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor Darul Ehsan pada hari Khamis, 28 Julai 2005 pada jam 10.00 pagi. Para Pengarah yang akan dipilih semula pada Mesyuarat Agung Tahunan Syarikat ke-Empat Puluh Satu adalah seperti berikut:Datuk Simon Shim Kong Yip, JP Encik Tan Ghee Kiat Encik Lee Wee Yong Encik Edward Lee Ming Foo, JP Sejumlah empat (4) Mesyuarat Lembaga Pengarah telah diadakan dalam tahun kewangan berakhir 31 Januari 2005. Butir-butir kehadiran Para Pengarah di Mesyuarat Lembaga Pengarah yang diadakan dalam tahun kewangan berakhir 31 Januari 2005 adalah tertera dalam Penyata Pentadbiran Korporat di mukasurat 42 Laporan Tahunan ini. Profil Para Pengarah dan pemegangan saham dalam Syarikat dan syarikat-syarikat subsidiarinya bagi mereka yang sedia dipilih semula adalah tertera di dalam Laporan Tahunan ini pada mukasurat yang berikut:

Pengarah yang sedia diplih semula Datuk Simon Shim Kong Yip, JP Encik Tan Ghee Kiat Encik Lee Wee Yong Encik Edward Lee Ming Foo, JP

Profil Para Pengarah Mukasurat 20 Mukasurat 18 Mukasurat 15 Mukasurat 14

Butir-butir pemegangan saham di Syarikat dan syarikat-syarikat subsidiarinya Tiada sebarang pemegangan saham Tiada sebarang pemegangan saham Tiada sebarang pemegangan saham Tiada sebarang pemegangan saham

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Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Corporate Information

Informasi Korporat

Board of Directors / Lembaga Pengarah DAVID PARK,

AMN

Company Secretaries / Setiausaha-setiausaha Syarikat LEE WEE YONG ( MIA 7492 ) CHEAH YEE LENG ( LS 7848 )

( Executive Chairman / Pengerusi Eksekutif )

DATUK HENRY CHIN POY-WU

( Deputy Chairman / Timbalan Pengerusi ) ( Independent Non-Executive Director / Pengarah Bebas Bukan Eksekutif )

Registered Office / Pejabat Berdaftar 1A, Jalan 205, Off Jalan Tandang, 46050 Petaling Jaya, Selangor Darul Ehsan. Tel : 03-7782 7333 Fax : 03-7782 5375 Websites : www.mmosaics.com, www.myMML.com

EDWARD LEE MING FOO,

JP

( Managing Director / Pengarah Urusan )

LEE WEE YONG

( Deputy Managing Director / Timbalan Pengarah Urusan )

Place of Incorporation / Tempat Diperbadankan Malaysia

TUAN HAJI NIK ARIFF BIN NIK HASSAN

( Independent Non-Executive Director / Pengarah Bebas Bukan Eksekutif )

Share Registrar / Pendaftar Saham DATO' RICHARD ONG GUAN SENG

( Independent Non-Executive Director / Pengarah Bebas Bukan Eksekutif )

TAN GHEE KIAT

( Independent Non-Executive Director / Pengarah Bebas Bukan Eksekutif )

Lawco Corporate Services Sdn Bhd ( 127784-H ) Suite 16.10, Level 16, Wisma UOA II, No. 21, Jalan Pinang, 50450 Kuala Lumpur. Tel : 03-2170 2622 Fax : 03-2163 0763

LIEW CHOR BENG @ LAU CHO BENG

( Non-Executive Director / Pengarah Bukan Eksekutif )

Auditors / Juruaudit KPMG Wisma KPMG, Jalan Dungun, Damansara Heights, 50490 Kuala Lumpur.

DATUK SIMON SHIM KONG YIP,

JP

( Non-Executive Director / Pengarah Bukan Eksekutif )

SIM SIEW MENG

( Alternate to Edward Lee Ming Foo, JP / Pengarah Gantian kepada Edward Lee Ming Foo, JP )

Principal Bankers / Jurubank Utama HSBC Bank Malaysia Berhad Malayan Banking Berhad RHB Bank Berhad

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

11

Board of Directors' Profile

Profil Lembaga Pengarah

David Park, AMN

David Park, AMN, is British, aged 66, was appointed the Executive Chairman upon the resignation of Tan Sri Datuk Seri Panglima Lau Gek Poh on 4 August 2004. He was first appointed Managing Director of Malaysian Mosaics Berhad on 24 January 1994. He relinquished this position on 28 February 1999 but remained an ordinary member of the Board until 21 July 2000. On 6 January 2002, he was re-appointed a Director of Malaysian Mosaics Berhad and was the Managing Director from 10 January 2002 to 31 March 2005. He is also a member of the Audit and Remuneration Committee, all of which are sub-committees of the Board. Mr. Park is also Executive Chairman of Hap Seng Consolidated Berhad, a subsidiary of Malaysian Mosaics Berhad and a Director of Paos Holdings Berhad, both which are listed on the Main Board of Bursa Securities. He is a Fellow of the Chartered Association of Certified Accountants, United Kingdom and is a member of the Malaysian Institute of Accountants. He held various senior management positions with the Sime Darby Group between 1962 and 1993 including Chairman of Sime Darby Plantations from 1978 to 1982 and was Managing Director of Tractors Malaysia Holdings Berhad from 1982 to June 1993. He does not have any family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company save for the related party transactions disclosed in Note 34 to the Financial Statements. He has had no conviction for any offence in the past ten (10) years. He attended all four (4) of the Board Meetings held during the financial year.

David Park, AMN, seorang warga British, berusia 66 tahun telah dilantik sebagai Pengerusi Eksekutif di atas persaraan Tan Sri Datuk Seri Panglima Lau Gek Poh pada 4 Ogos 2004. Beliau mula dilantik sebagai Pengarah Urusan Malaysian Mosaics Berhad pada 24 Januari 1994. Beliau menyerahkan jawatan ini pada 28 Februari 1999 tetapi berterus sebagai ahli biasa Lembaga sehingga 21 Julai 2000. Pada 6 Januari 2002, beliau dilantik semula sebagai Pengarah Malaysian Mosaics Berhad dan mulai memegang jawatan Pengarah Urusan dari 10 Januari 2002 sehingga 31 Mac 2005. Beliau juga ialah ahli Jawatankuasa Audit dan Ganjaran, di mana kesemuanya adalah jawatankuasa kecil Lembaga. Encik Park juga adalah Pengerusi Eksekutif Hap Seng Consolidated Berhad, sebuah syarikat subsidiari Malaysian Mosaics Berhad dan Pengarah Paos Holdings Berhad, kedua-duanya tersenarai di Papan Utama Bursa Securities. Beliau adalah Felow Persatuan Berkanun Akauntan Bertauliah, United Kingdom dan ahli Institut Akauntan Malaysia. Beliau pernah memegang pelbagai jawatan pengurusan kanan di Kumpulan Sime Darby antara tahun 1962 dan 1993, termasuk Pengerusi Sime Darby Plantations dari tahun 1978 hingga 1982 dan adalah Pengarah Urusan Tractors Malaysia Holdings Berhad dari tahun 1982 hingga Jun 1993. Beliau tidak mempunyai sebarang perhubungan kekeluargaan dengan mana-mana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat kecuali urusniaga parti berkaitan yang dinyatakan dalam Nota 34 kepada Penyata Kewangan. Beliau tidak pernah disabit sebarang kesalahan undang-undang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri kesemua empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

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Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Board of Directors' Profile

Profil Lembaga Pengarah

Datuk Henry Chin Poy-Wu

Datuk Henry Chin Poy-Wu, a Malaysian, aged 68 was appointed as an Independent Non-Executive Director of Malaysian Mosaics Berhad on 30 September 1993 and assumed the position of Deputy Chairman on 10 January 2002. He is also a member of the Audit, Nomination and Remuneration Committee, all of which are subcommittees of the Board. Datuk Henry Chin is also the Deputy Chairman of Hap Seng Consolidated Berhad, a subsidiary of Malaysian Mosaics Berhad which is listed on the Main Board of Bursa Securities. He is presently a Director of JT International Ber had, Nanyang Press Holdings Ber had, Glenealy Plantations (Malaya) Berhad, Eastern & Oriental Berhad, Kilang Papan Seribu Daya Berhad and Magnum Corporation Berhad. He also sits on the Board of University Malaysia Sabah, and is a member of the Sabah Pardon Board and a Vice President of the National Crime Prevention Foundation. He served in the Royal Malaysian Police Force for more than 38 years, holding various key positions. His last post was Commissioner of Police in the Federal Territory of Kuala Lumpur until his retirement in August 1993. Datuk Henry Chin does not have any family relationship with any Director and /or major shareholder nor does he have any conflict of interest with the Company. He has had no conviction for any offence in the past ten (10) years. He attended all four (4) of the Board Meetings held during the financial year.

Datuk Henry Chin Poy-Wu, seorang warga Malaysia, berusia 68 tahun telah dilantik sebagai Pengarah Bebas Bukan Eksekutif Malaysian Mosaics Berhad pada 30 September 1993 dan mulai memegang jawatan Timbalan Pengerusi pada 10 Januari 2002. Beliau juga ialah ahli Jawatankuasa Audit, Pencalonan dan Ganjaran, di mana kesemuanya merupakan jawatankuasa kecil Lembaga. Datuk Henry Chin juga adalah Timbalan Pengerusi Hap Seng Consolidated Berhad, sebuah syarikat subsidiari Malaysian Mosaics Berhad yang tersenarai di Papan Utama Bursa Securities. Kini, beliau juga adalah seorang Pengarah di JT International Berhad, Nanyang Press Holdings Berhad, Glenealy Plantations (Malaya) Berhad, Eastern & Oriental Berhad, Kilang Papan Seribu Daya Berhad dan Magnum Corporation Berhad. Beliau juga menyandang dalam Lembaga Universiti Malaysia Sabah, dan merupakan ahli Lembaga Pengampunan Sabah serta Naib Pengerusi Yayasan Pencegahan Jenayah Nasional. Beliau telah berkhidmat dalam Pasukan Polis Diraja Malaysia lebih daripada 38 tahun, memegang pelbagai jawatan penting. Jawatan beliau yang terakhir ialah Pesuruhjaya Polis di Wilayah Persekutuan Kuala Lumpur sehingga persaraan beliau pada Ogos 1993. Datuk Henry Chin tidak mempunyai sebarang perhubungan kekeluargaan dengan manamana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit sebarang kesalahan undangundang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri kesemua empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

13

Board of Directors' Profile

Profil Lembaga Pengarah

Edward Lee Ming Foo, JP

Edward Lee Ming Foo, JP, a Malaysian, aged 50 assumed the Managing Director position of Malayaian Mosaics Berhad on 31 March 2005. He was first appointed as an Alternate Director from 18 October 1995 to 25 February 1999 and subsequently became an Executive Director of the Company from 1 March 1999 to 31 December 2002. He was re-appointed on 6 January 2003 as the Alternate Director to Mr. David Park until 4 August 2004, when he was appointed as an Executive Director. Mr. Edward Lee graduated with a Bachelor of Arts degree from the McMaster University in Canada in 1977. He joined the Malaysian Mosaics Berhad Group in 1980 and has held various senior management positions with the Group. He was promoted to General Manager - Trading Division in 1986. He was the Group Chief Operating Officer of Malaysian Mosaics Berhad, a position he assumed since 1995 until his appointment as Managing Director on 31 March 2005. Mr. Edward Lee is also the Managing Director of Hap Seng Consolidated Berhad, a subsidiary of Malaysian Mosaics Berhad listed on the Main Board of Bursa Securities and a Director of Aviva Insurance Berhad. He does not have any family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company save for the related party transactions as disclosed in Note 34 to the Financial Statements. He has had no conviction for any offence in the past ten (10) years. He attended all four (4) of the Board Meetings held during the financial year.

Edward Lee Ming Foo, JP, seorang warga Malaysia, berusia 50 tahun menyandang jawatan Pengarah Urusan Malaysian Mosaics Berhad pada 31 Mac 2005. Beliau mula menyandang jawatan Pengarah Gantian dari 18 Oktober 1995 sehingga 25 Februari 1999 dan kemudiannya dilantik Pengarah Eksekutif Syarikat dari 1 Mac 1999 sehingga 31 Disember 2002. Beliau dilantik semula pada 6 Januari 2003 sebagai Pengarah Gantian kepada Encik David Park sehingga 4 Ogos 2004, apabila beliau dilantik sebagai Pengarah Eksekutif. Encik Edward Lee berijazah Sarjana Muda Kesusateraan dari Universiti McMaster di Kanada pada tahun 1977. Beliau menyertai Kumpulan Malaysian Mosaics Berhad pada tahun 1980 dan pernah memegang pelbagai jawatan pengurusan kanan di dalam Kumpulan. Beliau telak dinaik pangkat menjadi Pengurus Besar Bahagian Perdagangan pada tahun 1986. Beliau ialah Ketua Pegawai Operasi Kumpulan di Malaysian Mosaics Berhad, jawatan yang dipegangi sejak 1995 sehingga beliau dilantik sebagai Pengarah Urusan pada 31 Mac 2005. Encik Edward Lee juga adalah Pengarah Urusan Hap Seng Consolidated Berhad, sebuah syarikat subsidiari Malaysian Mosaics Berhad yang tersenarai di Papan Utama Bursa Securities dan Pengarah Aviva Insurance Berhad. Beliau tidak mempunyai sebarang perhubungan kekeluargaan dengan mana-mana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat kecuali urusniaga parti berkaitan yang dinyatakan dalam Nota 34 kepada Penyata Kewangan. Beliau tidak pernah disabit sebarang kesalahan undang-undang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri kesemua empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

14

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Board of Directors' Profile

Profil Lembaga Pengarah

Lee Wee Yong

Lee Wee Yong, a Malaysian, aged 57, an Executive Director was appointed as Deputy Managing Director of Malaysian Mosaics Berhad on 31 March 2005. He was first appointed to the Board as an Alternate Director to the Managing Director from 14 April 1997 to 25 February 1999 and was made a full member of the Board of Directors on 1 March 1999. He holds a Bachelor of Commerce and Administration degree from Victoria University in New Zealand and is a member of the Malaysian Institute of Accountants and New Zealand Society of Accountants. Prior to joining Malaysian Mosaics Berhad, he worked in Mobil Oil (N.Z.) Ltd, Zip Holdings (N.Z.) Ltd, Associated Tractors Sdn Bhd and Asia Commercial Finance (M) Bhd. He joined Malaysian Mosaics Berhad in 1992 and has held various senior positions in the Group. He was appointed as Deputy General Manager - Finance on 14 April 1997 and Company Secretary on 28 April 1997. On 14 July 1997, he was promoted to General Manager - Finance and was made the Finance Director on 1 June 1999. He is presently also the Group Chief Financial Officer. Mr. Lee is also the Deputy Managing Director of Hap Seng Consolidated Berhad, a subsidiary of Malaysian Mosaics Berhad which is listed on the Main Board of Bursa Securities. He does not have any family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company. He has had no conviction for any offence in the past ten (10) years. He attended all four (4) of the Board Meetings held during the financial year.

Lee Wee Yong, seorang warga Malaysia, berusia 57 tahun, seorang Pengarah Eksekutif, dilantik sebagai Timbalan Pengarah Urusan Malaysian Mosaics Berhad pada 31 Mac 2005. Beliau mula menyandang di Lembaga sebagai Pengarah Gantian kepada Pengarah Urusan dari 14 April 1997 sehingga 25 Februari 1999 dan dilantik sebagai ahli penuh Lembaga pada 1 Mac 1999. Beliau berijazah Sarjana Muda Perdagangan dan Pentadbiran dari Universiti Victoria di New Zealand dan merupakan ahli Institut Akauntan Malaysia serta Persatuan Akauntan New Zealand. Sebelum menyertai Malaysian Mosaics Berhad, beliau bertugas di Mobil Oil (N.Z.) Ltd, Zip Holdings (N.Z.) Ltd, Associated Tractors Sdn Bhd dan Asia Commercial Finance (M) Bhd. Beliau menyertai Malaysian Mosaics Berhad pada tahun 1992 dan pernah memegang pelbagai jawatan pengurusan kanan di dalam Kumpulan. Beliau dilantik sebagai Timbalan Pengurus Besar Kewangan pada 14 April 1997 dan Setiausaha Syarikat pada 28 April 1997. Pada 14 Julai 1997, beliau telah dinaikkan pangkat menjadi Pengurus Besar-Kewangan dan kemudiannya, dilantik sebagai Pengarah Kewangan pada 1 Jun 1999. Kini, beliau juga ialah Ketua Pegawai Kewangan Kumpulan. Encik Lee juga adalah Timbalan Pengarah Urusan Hap Seng Consolidated Berhad, sebuah syarikat subsidiari Malaysian Mosaics Berhad yang tersenarai di Papan Utama Bursa Securities. Beliau tidak mempunyai sebarang perhubungan kekeluargaan dengan mana-mana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit sebarang kesalahan undang-undang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri kesemua empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

15

Board of Directors' Profile

Profil Lembaga Pengarah

Tuan Haji Nik Ariff Bin Nik Hassan

Tuan Haji Nik Ariff Bin Nik Hassan, a Malaysian, aged 59, is an Independent Non-Executive Director of the Company. He was appointed to the Malaysian Mosaics Berhad's Board on 3 February 1982 and is the Chairman of the Audit Committee. He is also a member of the Nomination and Remuneration Committee, all of which are sub-committees of the Board. Tuan Haji Nik Ariff Bin Nik Hassan holds a Diploma in Marketing from Institute of Marketing, London, United Kingdom. He is the Executive Director of Arab Bumiputra Equities Sdn Bhd, an investment holding company. Prior to this, he was the Business Development Manager of Arab Malaysian Merchant Bank Berhad from 1 January 1982 to 30 June 1982 and a Director of Juara Perkasa Corporation Berhad (now known as JT International Berhad) and Southern Bank Berhad from 1985 to 1989 and 1982 to 1993 respectively. He was appointed as Independent NonExecutive Director of Hap Seng Consolidated Berhad, a subsidiary of Malaysian Mosaics Berhad which is listed on the Main Board of Bursa Securities on 25 March 2002. He is also a Director of Koperasi Sri Nilam Berhad. He does not have any family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company save for the related party transactions as disclosed in Note 34 to the Financial Statements. He has had no conviction for any offence in the past ten (10) years. He attended all four (4) of the Board Meetings held during the financial year.

Tuan Haji Nik Ariff Bin Nik Hassan, seorang warga Malaysia, berusia 59 tahun, adalah Pengarah Bebas Bukan Eksekutif Syarikat. Beliau dilantik ke Lembaga Pengarah Malaysian Mosaics Berhad pada 3 Februari 1982 dan ialah Pengerusi Jawatankuasa Audit. Beliau juga ialah ahli Jawatankuasa Pencalonan dan Ganjaran, di mana kesemuanya adalah jawatankuasa kecil Lembaga. Tuan Haji Nik Ariff Bin Nik Hassan memiliki Diploma dalam Pemasaran dari Institut Pemasaran, London, United Kingdom. Beliau ialah Pengarah Eksekutif Arab Bumiputra Equities Sdn Bhd, sebuah syarikat pemegang pelaburan. Sebelum ini, beliau adalah Pengurus Pembangunan Perniagaan Arab Malaysian Merchant Bank Berhad dari 1 Januari 1982 sehingga 30 Jun 1982 dan Pengarah Juara Perkasa Corporation Berhad (kini dikenali sebagai JT International Berhad) dan Southern Bank Berhad, masing-masing dari tahun 1985 sehingga 1989 dan 1982 sehingga 1993. Beliau dilantik sebagai Pengarah Bebas Bukan Eksekutif Hap Seng Consolidated Berhad, sebuah syarikat subsidiari Malaysian Mosaics Berhad yang tersenarai di Papan Utama Bursa Securities pada 25 Mac 2002. Beliau juga adalah Pengarah Koperasi Sri Nilam Berhad. Beliau tidak mempunyai sebarang perhubungan kekeluargaan dengan mana-mana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat kecuali urusniaga parti berkaitan yang dinyatakan dalam Nota 34 kepada Penyata Kewangan. Beliau tidak pernah disabit sebarang kesalahan undang-undang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri kesemua empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

16

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Board of Directors' Profile

Profil Lembaga Pengarah

Dato' Richard Ong Guan Seng

Dato' Richard Ong Guan Seng, a Malaysian, aged 66, is an Independent Non-Executive Director of the Company. He was appointed to the Malaysian Mosaics Berhad's Board on 5 October 1993 and is a member of the Audit, Nomination and Remuneration Committee, all of which are sub-committees of the Board. He is a member of the Malaysian Institute of Accountants, the Malaysian Institute of Certified Public Accountants, the Institute of Chartered Accountants in Australia and the Institute of Chartered Secretaries and Administrators. He joined KPMG Peat Marwick (now known as KPMG)/KPMG Desa Megat & Co in February 1967 where he was a partner until 30 September 1993 when he retired from practice, after having had more than 30 years experience in the accounting profession. He is also a Director of Rock Chemical Industries (Malaysia) Berhad, Hexza Corporation Berhad and Ladang Perbadanan Fima Berhad. Dato' Richard Ong does not have any family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company. He has had no conviction for any offence in the past ten (10) years. He attended all four (4) of the Board Meetings held during the financial year.

Dato' Richard Ong Guan Seng, seorang warga Malaysia, berusia 66 tahun, adalah Pengarah Bebas Bukan Eksekutif Syarikat. Beliau dilantik ke Lembaga Pengarah Malaysian Mosaics Berhad pada 5 Oktober 1993 dan ialah ahli Jawatankuasa Audit, Pencalonan dan Ganjaran, di mana kesemuanya adalah jawatankuasa kecil Lembaga. Beliau adalah ahli Institut Akauntan Malaysia, Institut Akauntan Awam Bertauliah Malaysia, Institut Akauntan Bertauliah Australia dan Institut Setiausaha dan Pentadbir Bertauliah. Beliau menyertai KPMG Peat Marwick (kini dikenali sebagai KPMG)/KPMG Desa Megat & Co pada Februari 1967 di mana beliau merupakan rakan kongsi sehingga 30 September 1993 apabila beliau bersara dari kerjayanya, selepas mempunyai pengetahuan lebih dari 30 tahun dalam profesion perakaunan. Beliau juga adalah Pengarah Rock Chemical Industries (Malaysia) Berhad, Hexza Corporation Berhad dan Ladang Perbadanan Fima Berhad. Dato' Richard Ong tidak mempunyai sebarang perhubungan kekeluargaan dengan manamana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit sebarang kesalahan undangundang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri kesemua empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

17

Board of Directors' Profile

Profil Lembaga Pengarah

Tan Ghee Kiat

Tan Ghee Kiat, a Malaysian, aged 56, was appointed as a Non-Independent Non-Executive Director of Malaysian Mosaics Berhad on 31 December 2002. On 31 March 2005, he became an Independent NonExecutive Director. He is also an Independent Non-Executive Director of Hap Seng Consolidated Berhad, a subsidiary of Malaysian Mosaics Berhad which is listed on the Main Board of Bursa Securities. Mr. Tan qualified as a Chartered Accountant from the Institute of Chartered Accountants in England & Wales in United Kingdom in 1974 and upon his return to Malaysia in 1975, he became a partner of Law & Co. In 1988, he was the Managing Partner of Touche Ross & Co/Mustapha Law in Malaysia. He resigned from the merged practice of Deloitte Touche Tohmatsu/Kassim Chan & Co in 1993 and co-founded Sekhar & Tan. He is currently the Managing Partner of Sekhar & Tan. Mr. Tan has extensive experience in audit and corporate advisory services, having been in practice throughout his career. The principal industries that he has been involved in are manufacturing, public transportation, plantations, property development and timber. He is also involved in providing corporate finance services such as mergers and acquisitions and restructuring of both quoted and unquoted companies. In addition, Mr. Tan has also undertaken numerous receivership and liquidation assignments. He was elected to the MICPA council in 1989 and is currently a member of the Executive Committee, Examination Committee and the Chairman of the Membership Affairs Committee. He does not have any family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company save for the related party transactions as disclosed in Note 34 to the Financial Statements. He has had no conviction of any offence in the past ten (10) years. He attended three (3) out of the four (4) Board Meetings held during the financial year.

Tan Ghee Kiat, seorang warga Malaysia, berusia 56 tahun, dilantik sebagai Pengarah Bukan Bebas Bukan Eksekutif Malaysian Mosaics Berhad pada 31 Disember 2002. Pada 31 Mac 2005, beliau memegang jawatan sebagai Pengarah Bebas Bukan Eksekutif. Beliau juga ialah Pengarah Bebas Bukan Eksekutif Hap Seng Consolidated Berhad, sebuah syarikat subsidiari Malaysian Mosaics Berhad yang tersenarai di Papan Utama Bursa Securities. Encik Tan memperolehi kelulusan Akauntan Bertauliah dari Institut Akauntan Bertauliah di England & Wales di United Kingdom pada tahun 1974 dan menjadi rakan firma Law & Co apabila beliau pulang ke Malaysia pada tahun 1975. Pada tahun 1988, beliau telah dilantik Rakan Pengurus firma Touche Ross & Co/Mustapha Law di Malaysia. Beliau meletak jawatan dari gabungan firma Deloitte Touche Tohmatsu/Kassim Chan & Co pada tahun 1993 dan bersama-sama menubuhkan Sekhar & Tan. Kini, beliau ialah Rakan Pengurus Sekhar & Tan. Encik Tan mempunyai pengalaman yang luas dari segi perauditan dan perkhidmatan penasihatan korporat setelah menceburi praktis sepanjang kerjayanya. Industri-industri utama yang telah diceburi oleh beliau ialah pengilangan, pengangkutan awam, perladangan, pembangunan hartanah dan pembalakan. Beliau juga menceburi dalam perkhidmatan kewangan korporat seperti penggabungan dan pemerolehan serta penyusunan semula syarikat untuk kedua-dua syarikat tersenarai dan tidak senarai. Di samping ini, Encik Tan juga pernah melaksanakan berbilangan tugas penanggungan dan pembubaran syarikat. Beliau dilantik ke Kounsel MICPA pada tahun 1989 dan kini ialah ahli Jawatankuasa Eksekutif dan juga ahli Jawatankuasa Peperiksaan dan Pengerusi Jawatankuasa Hal Ehwal Ahli-ahli. Beliau tidak mempunyai sebarang perhubungan kekeluargaan dengan mana-mana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat kecuali urusniaga parti berkaitan yang dinyatakan dalam Nota 34 kepada Penyata Kewangan. Beliau tidak pernah disabit sebarang kesalahan undang-undang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri tiga (3) daripada empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

18

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Board of Directors' Profile

Profil Lembaga Pengarah

Liew Chor Beng @ Lau Cho Beng

Liew Chor Beng @ Lau Cho Beng, a Malaysian, aged 37 was appointed as a Non-Independent Non-Executive Director of the Company on 1 June 1998. He graduated with a Bachelor of Business and Administration in Management Information System and Economics degree from Simon Fraser University, Canada in 1988. He obtained his Masters in Business Administration (MBA) in Finance and Marketing from New York University, USA in 1996 and an Executive Master in Business Administration (EMBA) with University of Chicago in 2003. Prior to joining Malaysian Mosaics Ber had, he had worked in large organisations in United Kingdom and Taiwan. He is the son of Tan Sri Datuk Seri Panglima Lau Gek Poh, the founder of Gek Poh (Holdings) Sdn. Bhd., the major shareholder of Malaysian Mosaics Berhad. He does not have any family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company save for the related party transactions as disclosed in Note 34 to the Financial Statements. He has had no conviction for any offence in the past ten (10) years. He attended three (3) out of the four (4) Board Meetings held during the financial year.

Liew Chor Beng @ Lau Cho Beng, seorang warga Malaysia, berusia 37 tahun dilantik sebagai Pengarah Bukan Bebas Bukan Eksekutif Syarikat pada 1 Jun 1998. Beliau berijazah Sarjana Muda Perniagaan dan Pentadbiran dalam Pengurusan Sistem Informasi dan Ekonomi dari Universiti Simon Fraser, Kanada pada tahun 1988. Beliau memperolehi Sarjana Perniagaan dan Pentadbiran (MBA) dalam Kewangan dan Pemasaran dari Universiti New York, Amerika Syarikat pada tahun 1996 dan Sarjana Eksekutif Perniagaan dan Pentadbiran (EMBA) dengan Universiti Chicago pada tahun 2003. Sebelum menyertai Malaysian Mosaics Berhad, beliau pernah bertugas di organisasi-organisasi besar di United Kingdom dan Taiwan. Beliau ialah anak kepada Tan Sri Datuk Seri Panglima Lau Gek Poh, pengasas Gek Poh (Holdings) Sdn. Bhd., pemegang saham utama Malaysian Mosaics Berhad. Beliau tidak mempunyai sebarang perhubungan kekeluargaan dengan mana-mana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat kecuali urusniaga parti berkaitan yang dinyatakan dalam Nota 34 kepada Penyata Kewangan. Beliau tidak pernah disabit sebarang kesalahan undang-undang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri tiga (3) daripada empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

19

Board of Directors' Profile

Profil Lembaga Pengarah

Datuk Simon Shim Kong Yip, JP

Datuk Simon Shim Kong Yip, JP, a Malaysian, aged 49, was appointed as a Non-Independent NonExecutive Director of Malaysian Mosaics Berhad on 31 December 2002. Datuk Simon Shim holds a Master Degree in law from University College London, London University and is a Barrister-at-law, of the Lincoln's Inn, London, an Advocate and Solicitor of the High Court in Sabah and Sarawak, a Notary Public and a Justice of the Peace. He is a member of the British Chartered Institute of Arbitrators and a member of the Malaysian Institute of Corporate Governance. He is currently the Managing Partner of Messrs Shim, Pang & Co. Datuk Simon Shim is also a Non-Independent NonExecutive Director of Hap Seng Consolidated Berhad, a subsidiary of Malaysian Mosaics Berhad which is listed on the Main Board of Bursa Securities. He does not have any family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company save for the related party transactions disclosed in Note 34 to the Financial Statements. He has had no conviction for any offence in the past ten (10) years. He attended three (3) out of the four (4) Board Meetings held during the financial year.

Datuk Simon Shim Kong Yip, JP, seorang warga Malaysia berusia 49 tahun, dilantik sebagai Pengarah Bukan Bebas Bukan Eksekutif Malaysian Mosaics Berhad pada 31 Disember 2002. Datuk Simon Shim berijazah Sarjana Undangundang dari University College London, Universiti London dan ialah seorang peguam dari Lincoln's Inn di London, seorang Peguambela dan Peguamcara Mahkamah Tinggi Sabah dan Sarawak, seorang Notari Awam dan Jaksa Pendamai. Beliau ialah ahli Institut Bertauliah Timbang Tara British dan ahli Institut Pentadbiran Korporat Malaysia. Kini, beliau ialah Rakan Pengurus dalam firma guaman Messrs Shim, Pang & Co. Datuk Simon Shim juga adalah Pengarah Bukan Bebas Bukan Eksekutif Hap Seng Consolidated Berhad, sebuah syarikat subsidiari Malaysian Mosaics Berhad yang tersenarai di Papan Utama Bursa Securities. Beliau tidak mempunyai sebarang perhubungan kekeluargaan dengan mana-mana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat kecuali urusniaga parti berkaitan yang dinyatakan dalam Nota 34 kepada Penyata Kewangan. Beliau tidak pernah disabit sebarang kesalahan undang-undang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri tiga (3) daripada empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

20

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Board of Directors' Profile

Profil Lembaga Pengarah

Sim Siew Meng

Sim Siew Meng, a Malaysian, aged 49 was first appointed as the Alternate Director to Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak on 1 November 2000. On 4 August 2004, she was reappointed as an Alternate Director to Mr. Edward Lee Ming Foo. Madam Sim graduated from the Institute of Chartered Accountants in England and Wales in 1980 and is a member of the Malaysian Institute of Accountants. She joined Malaysian Mosaics Berhad Group in 1982 and has held various senior positions within the Group. Prior to joining Malaysian Mosaics Berhad, she worked in a public accounting firm in London. Presently she is the Financial Controller and Director of Gek Poh (Holdings) Sdn. Bhd., the holding company of Malaysian Mosaics Berhad. Madam Sim also sits on the Board of Hap Seng Consolidated Berhad, a subsidiary of Malaysian Mosaics Berhad which is listed on the Main Board of Bursa Securities, as an Alternate Director to Mr. Lee Wee Yong. Madam Sim does not have any family relationship with any Director and/or major shareholder nor does she have any conflict of interest with the Company save for the related party transactions as disclosed in Note 34 to the Financial Statements. She has had no conviction for any offence in the past ten (10) years. She attended all four (4) of the Board Meetings held during the financial year.

Sim Siew Meng, seorang warga Malaysia, berusia 49 tahun mula dilantik sebagai Pengarah Gantian kepada Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak pada 1 November 2000. Pada 4 Ogos 2004, beliau dilantik semula sebagai Pengarah Gantian kepada Encik Edward Lee Ming Foo. Puan Sim adalah siswazah Institut Akauntan Berkanun di England dan Wales pada tahun 1980 dan merupakan ahli Institut Akauntan Malaysia. Beliau menyertai Kumpulan Malaysian Mosaics Berhad pada tahun 1982 dan pernah memegang pelbagai jawatan pengurusan kanan di dalam Kumpulan. Sebelum menyertai Malaysian Mosaics Berhad, beliau berkhidmat di sebuah firma akauntan awam di London. Kini, beliau adalah Pengawal Kewangan dan Pengarah Gek Poh (Holdings) Sdn. Bhd., syarikat induk Malaysian Mosaics Berhad. Puan Sim juga menyandang di Lembaga Hap Seng Consolidated Berhad, sebuah syarikat subsidiari Malaysian Mosaics Berhad yang tersenarai di Papan Utama Bursa Securities, sebagai Pengarah Gantian kepada Encik Lee Wee Yong. Puan Sim tidak mempunyai sebarang perhubungan kekeluargaan dengan manamana Pengarah dan/atau pemegang saham utama serta tidak mempunyai sebarang konflik kepentingan dengan Syarikat kecuali urusniaga parti berkaitan yang dinyatakan dalam Nota 34 kepada Penyata Kewangan. Beliau tidak pernah disabit sebarang kesalahan undang-undang semenjak sepuluh (10) tahun yang lalu. Beliau telah menghadiri kesemua empat (4) Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

21

Statement of Corporate Governance

The Board of Directors of Malaysian Mosaics Berhad is pleased to report on the manner in which the Principles and Best Practices of Corporate Governance are applied and the extent of compliance thereon as set out in Part 1 and Part 2 of the Malaysian Code on Corporate Governance (the "Code") pursuant to paragraph 15.26 of Bursa Malaysia Securities Berhad ("Bursa Securities") Listing Requirements. It is the policy of the Company to manage the affairs of the Group in accordance with the appropriate standards for good corporate governance. The Board of Directors is committed to ensuring the appropriate standards of corporate governance are practised throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholder value and the financial performance of the Group and Company. The provisions of the Code applicable to the Group are divided into four parts. Part A Part B Part C Part D : : : : Directors Directors' Remuneration Shareholders Accountability and Audit

Set out below is a description of how the Group has applied the principles set out in the Code.

DIRECTORS The Board

The Company is headed by a Board of Directors which leads and controls the Company. The Board meets regularly and is responsible for the proper management of the Company. All Board members bring sound judgment to bear on issues of strategy, performance, resources and standards of conduct. The Board of Directors meet at least four (4) times a year and additional Board meetings are convened as necessary with due notice of issues to be discussed. During the financial year, four (4) meetings were held. Minutes of meetings are recorded by the Company Secretary. All the Directors have attended at least 50% of the total Board meetings held during the financial year. On 4 August 2004, Mr. David Park who was the Managing Director, was appointed as Executive Chairman by the Board taking over from Tan Sri Datuk Seri Panglima Lau Gek Poh who had resigned on the same date. Mr. Edward Lee Ming Foo who was previously the Alternate Director to Mr. David Park, was appointed as an Executive Director and Madam Sim Siew Meng was appointed as his Alternate on 4 August 2004 based on recommendations of the Nomination Committee. Madam Sim Siew Meng was previously the Alternate Director to Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak who had resigned on 4 August 2004. On 31 March 2005, Mr. Edward Lee Ming Foo and Mr. Lee Wee Yong who are both Executive Directors, were appointed by the Board as Managing Director and Deputy Managing Director respectively.

22

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Statement of Corporate Governance

The Board (continued)

The attendance of the Directors at Board Meetings held during the financial year are as follows: Directors Mr. David Park, AMN Datuk Henry Chin Poy-Wu Mr. Edward Lee Ming Foo, JP (ceased to be Alternate Director to Mr. David Park on

4 August 2004 and on even date was re-appointed as Executive Director)

No. of Meetings Attended 4/4 4/4 4/4 4/4 4/4 4/4 3/4 3/4 3/4 4/4

Mr. Lee Wee Yong Tuan Haji Nik Ariff Bin Nik Hassan Dato' Richard Ong Guan Seng Mr. Tan Ghee Kiat Mr. Liew Chor Beng @ Lau Cho Beng Datuk Simon Shim Kong Yip, JP Madam Sim Siew Meng (ceased to be Alternate Director to Datuk Seri Panglima

Lau Cho Kun @ Lau Yu Chak on 4 August 2004 and on even date was re-appointed as Alternate Director to Mr. Edward Lee Ming Foo)

Tan Sri Datuk Seri Panglima Lau Gek Poh (resigned on 4 August 2004) Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak (resigned on 4 August 2004)

* Attended meetings up to the date of their respective resignation as Directors.

0/2* 2/2*

The Board explicitly assumes the following six (6) specific responsibilities, which facilitate the discharge of the Board's stewardship responsibilities: · · Reviewing and adopting strategic plans for the Company; Overseeing the conduct of the Company's business to evaluate whether the business is being properly managed; Identifying principal risks and ensure the implementation of appropriate systems to manage these risks; Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing senior management; Developing and implementing an appropriate investor relations programme or shareholder communications policy for the Company; and Reviewing the adequacy and the integrity of the Company's internal control systems for compliance with applicable laws, regulations, rules, directives and guidelines.

·

·

·

·

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

23

Statement of Corporate Governance

Board Balance

The Board has nine (9) members comprising three (3) Executive Directors and six (6) Non-Executive Directors of which four (4) or more than one-third are independent of management and have no relationships which could interfere with the exercise of their independent judgment. Together, the Directors have wide ranging business and financial experience. A brief description of the background of each Director is presented on pages 12 to 21. The responsibilities of the Chairman and the Managing Director are divided to ensure a balance of power and authority. The Board from time to time examines its size with a view to determine the impact of the number on its effectiveness, provided always that the number of Directors shall not exceed fifteen (15) as provided under Article 78 of the Company's Articles of Association. Datuk Henry Chin Poy-Wu, being an Independent Non-Executive Director and occupies the position as Deputy Chairman of the Board, also assumes the role as Senior Independent Non-Executive Director. The Board is satisfied that the current Board composition fairly represents the interest of shareholders other than the significant shareholder.

Supply of Information

Board members are given appropriate information in advance of each Board and Committee meeting. For Board meetings these information include: · · · · · · a financial report report on current trading and business issues from the Managing Director proposals for capital expenditures (if any) proposals for acquisitions and disposals (if any) annual budget or business plan reports of the sub-committees of the Board (if any)

In addition, the Board also has a formal schedule of matters reserved for its decision including approval of annual and quarterly results. Specific responsibilities are delegated to Board Committees which comprise the Audit Committee, Nomination Committee and Remuneration Committee which shall report to the Board regularly. The terms of reference and authorities of these Board Committees which are determined and approved by the full Board are detailed on pages 33 to 40. The Company Secretary normally assists the Chairman and Deputy Chairman of the Board to organise the information necessary for the Board to deal with the agenda and providing the relevant information to the Directors on a timely basis. The Board also approves Directors to seek independent professional advice if necessary at the Company's expense in furtherance of their duties. Prior to incurring the professional fees, the Directors shall refer to the Managing Director on the nature and the fees of the professional advice sought. All information within the Group are accessible to the Directors in the furtherance of their duties and all Directors have access to the services of the Company Secretary.

24

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Statement of Corporate Governance

Appointments to the Board

The Code endorses as good practice, a formal procedure for appointments to the Board, with a Nomination Committee making recommendations to the full Board. The Nomination Committee, which comprises three (3) Independent Non-Executive Directors, is responsible for proposing new nominees to the Board and assessing Directors on an on-going basis. Terms of reference of the Nomination Committee are detailed on pages 39 to 40. On joining, all new Directors are given background information describing the Company and its activities. Site visits are arranged whenever necessary. All new Directors are required to attend the "Mandatory Accreditation Programme". All Directors have attended and completed the said Programme. As part of their Continuing Education Programme, the Directors will continue to attend relevant training programmes to further enhance their skills and knowledge as well as to keep abreast with new developments for the furtherance of their duties. The Board is entitled to the services of the Company Secretary who ensures that all appointments are properly made and all necessary information is obtained from Directors, both for the Company's own records and for the purposes of meeting statutory obligations, as well as obligations arising from Bursa Securities' Listing Requirements or other regulatory requirements. The Company Secretary or Joint Company Secretaries are appointed by the Board and are persons who are capable of carrying out the duties in which the post entails, providing effective support to the Chairman and Deputy Chairman of the Board to ensure the effective functioning of the Board. Their removal is a matter for the Board as a whole.

Re-election

In accordance with the Company's Articles of Association, Directors who are appointed by the Board during the year, shall hold office only until the next Annual General Meeting ("AGM") and shall be eligible for re-election by the shareholders. In addition, at the AGM in every calendar year, one-third of the Directors including the Managing Director shall retire from office at least once in every three (3) consecutive years from the date of appointment or last re-election but shall be eligible for re-election by shareholders.

DIRECTORS' REMUNERATION The Level and Make-up of Remuneration

The Board has adopted the policy as recommended by the Code. The Board ensures that the level of remuneration is appropriate to attract and retain Directors needed to manage the Company successfully. The component part of remuneration have been structured to link rewards to corporate and individual performance for Executive Directors whilst Non-Executive Directors' remuneration reflect the experience and level of responsibilities undertaken by individual Non-Executive Directors.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

25

Statement of Corporate Governance

Procedure

The Remuneration Committee which is a sub-committee of the Board comprises four (4) members of which three (3) are Independent Non-Executive Directors and one (1) Executive Director. Remuneration packages of newly appointed and existing Executive Directors are reviewed by the Remuneration Committee and recommended to the Board for approval. Directors do not participate in decisions on their own remuneration. Terms of reference and responsibilities of the Remuneration Committee are detailed on pages 37 to 38.

Disclosure

Directors' Remuneration and Remuneration Policy are as follows: Details of Directors' Remuneration (i) The aggregate remuneration paid or payable by the Company to the Directors of the Company for services in all capacities during the financial year ended 31 January 2005 is as follows: Category Fees RM'000 392 Salaries and Other Emoluments RM'000 1,963 Benefits In Kind RM'000 76 Total Remuneration RM'000 2,039 392

Executive Non-Executive

(ii) The number of Directors who received remuneration from the Company for the financial year ended 31 January 2005, and their remuneration including benefits in kind which falls within the following bands are as follows: Remuneration Range Executive Directors RM 300,000 - RM 350,000 RM 350,000 - RM 400,000 RM 400,000 - RM 450,000 RM 450,000 - RM 500,000 RM 500,000 - RM 550,000 Above RM 550,000 Non-Executive Directors Less than RM 50,000 RM 50,000 - RM 100,000 Above RM 100,000 5 1 1 1 1 1 1 No. of Directors

26

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Statement of Corporate Governance

Remuneration Policy

The policy of the Remuneration Committee is to ensure that the remuneration practices of the Company are competitive, thereby enabling the Company to attract and retain high calibre executive directors and reflecting their respective responsibilities and commitments. (i) Remuneration for Executive Directors The remuneration package for the Executive Directors comprises some or all of the following elements. · Basic Salary Salaries are reviewed annually. In setting the basic salary of each Director, the Remuneration Committee takes into account market competitiveness and the performance of each individual Director. · Annual Bonus The annual bonus plan focuses on annual objectives and is designed to reward appropriately the achievement of results against these objectives. · Contribution to EPF Contribution to EPF is based on the statutory rate. · Benefits in kind Benefits in kind include interalia car, driver, fuel and mobile phone. · Service Contracts All Executive Directors have service contracts with the Company, which are reviewed by the Remuneration Committee. (ii) Remuneration for Non-Executive Directors Remuneration of the Non-Executive Directors is determined by the Board as a whole. The NonExecutive Directors do not take part in the discussion on their own remuneration.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

27

Statement of Corporate Governance

SHAREHOLDERS

Dialogue between Company and Investors The Company recognises the importance of communications with shareholders. The Board views the AGM as an ideal opportunity to communicate with both institutional and private investors. While the Company endeavours to provide as much information as possible to its shareholders, it must also be wary of the legal and regulatory framework governing the release of material and price-sensitive information. Bursa Securities also provides for the Company to electronically publish all its announcements, including full version of its quarterly results announcements and Annual Report which can be assessed through Bursa Securities' website at www.bursamalaysia.com

The Annual General Meeting ("AGM")

Notice of AGM which is contained in the Annual Report is sent out at least twenty-one (21) days prior to the date of the meeting. There will be commentary by the Chairman and Managing Director or in their absence, the Deputy Chairman at the AGM regarding the Company's performance for each financial year and a brief review on current trading conditions. At each AGM, a platform is available to shareholders to participate in the question and answer session. Where appropriate, the Chairman and Managing Director or in their absence the Deputy Chairman will provide written answers to any significant question that cannot be readily answered. Each item of special business included in the Notice of AGM will be accompanied by a full explanation of the proposed resolution. In case of re-election of Directors, the Notice of AGM will state the Directors who are standing for election or re-election with a brief personal description to include the relevant details required under paragraph 8.28(2) of Bursa Securities' Listing Requirements. Whenever appropriate, press conference is held at the end of each AGM where the Chairman and Managing Director or in their absence, the Deputy Chairman advise the press on the resolutions passed and answer questions in respect of the Group as well as to clarify and explain any issues.

28

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Statement of Corporate Governance

ACCOUNTABILITY AND AUDIT Financial Reporting

The Company operates, and attaches importance to, clear principles and procedures designed to achieve accountability and control appropriate to the businesses of the Group. In presenting the annual financial statements and quarterly reports, the Directors aim to present a balanced and understandable assessment of the Group's position and prospects.

Statement of Directors' Responsibility for preparing the Annual Audited Financial Statements

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 the state of affairs of the Group and Company as at the end of the financial year and of the Group's and Company's Income and Cash Flow Statements for the financial year. The Directors consider that in preparing the financial statements, the Group and the Company have used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates, and that all applicable accounting standards have been followed. The Directors have responsibility for ensuring that the Group and the Company keep accounting records which disclose with reasonable accuracy the financial position of the Group and the Company and which enable them to ensure that the financial statements comply with the Companies Act, 1965. The Directors have overall responsibility for taking such steps as are reasonably available to them to safeguard the assets of the Group and Company.

Internal Control

The Group's Statement on Internal Control is set out on pages 30 to 32.

Relationship with Auditors

The Audit Committee and the Board have established formal and transparent arrangements to maintain an appropriate relationship with the Company's auditors as stated on pages 33 to 36. This Statement of Corporate Governance is made in accordance with a resolution from the Board.

DAVID PARK, AMN

Executive Chairman

EDWARD LEE MING FOO, JP

Managing Director

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

29

Statement on Internal Control

The Board of Directors is committed to maintaining a sound system of internal control in the Group and is pleased to provide the following Statement on Internal Control which outlines the nature and scope of internal control of the Group during the year pursuant to paragraph 15.27(b) of Bursa Securities' Listing Requirements.

i.

Internal Control

The Directors acknowledge their responsibility for the Group's system of internal controls covering not only financial controls but also operational and compliance controls as well as risk management. The internal control system involves each business and key management from each business, including the Board, and is designed to meet the Group's particular needs and to manage the risks to which it is exposed. This system, by its nature, can only provide reasonable but not absolute assurance against material loss or against the Group failing to achieve its objectives. For the purposes of this framework, associates are not dealt with as part of the Group, and therefore not covered by this statement. The key elements of the Group's internal control system are described below: · Clearly defined delegation of responsibilities to committees of the full Board and to operating units, including authorisation levels for all aspects of the business. Documented internal procedures set out in Operating Manuals, whenever applicable. Regular internal audit visits which monitor compliance with procedures and assess the integrity of financial information. Regular and comprehensive information provided to management, covering financial performance and key business indicators. A detailed budgeting process where operating units prepare budgets for the coming year which are approved both at operating unit level and by the full Board. A monthly monitoring of results against budget, with major variances being followed up and management action taken, where necessary. Regular visits to operating units by members of the Board and senior management whenever appropriate. Regular review of business processes to assess the effectiveness of internal controls by the Internal Audit Department and highlight significant risks impacting the Group to the Audit Committee. Annual internal audit plan is reviewed by the Audit Committee. Review and holding of discussions by the Audit Committee on significant internal control issues identified in reports prepared by the Internal Audit Department.

· ·

·

·

·

·

·

·

Following the issuance of "Statement on Internal Control : Guidance for Directors of Public Listed Companies" by Bursa Securities, the Group had, in June 2001, implemented a formal approach towards identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives. This is an ongoing process and is regularly reviewed by the Board and accord with the "Statement on Internal Control : Guidance for Directors of Public Listed Companies."

30

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Statement on Internal Control

i. Internal Control (continued)

In line with this: · A Group Risk Management Committee headed by the Managing Director, has been established with the responsibility to identify and communicate to the Board of Directors the critical risks (both present and potential) the Group faces, their changes and the management action plans to manage the risks. A Group's Risk Methodology had been issued to the heads of the Group's business units. Risk Assessment workshops and interviews have been conducted by the Head of Internal Audit Department with the head and operational managers from the major business units in the Group on the use of risk assessment methodology. A database of strategic risks identified and appropriate controls has been created and the information filtered to produce a detailed risk register/ scorecard and individual risk profiles for the major business units, which is continuously updated. Key risks to each business unit's objectives aligned with the Group's strategic objectives are identified and scored for likelihood of the risks occurring and the magnitude of the impact. The Risks profile of the relevant business units were tabled to the Group Risk Management Committee with highlights on the key business risk, their causes and management action plans thereon.

· ·

·

·

ii. Internal Audit Functions

The Group has an Internal Audit Department which is independent of the activities or operations of other operating units in the Group which provides the Audit Committee and the Board with much of the assurance it requires regarding the adequacy and integrity of the system of internal control. Its principal responsibility is to undertake regular and systematic reviews of the system of internal controls so as to provide reasonable assurance that such system operates satisfactorily and effectively in the Company and the Group and reports to the Audit Committee on a quarterly basis. Internal audit strategy and a detailed annual internal audit plan are presented to the Audit Committee for approval. The internal audit function adopts a risk-based approach and prepares its audit strategy and plan based on the risk profiles of the major business units of the Group. The activities that were carried out are as follows: · Undertook internal audit functions based on the audit plan that had been reviewed and approved by the Audit Committee which includes the review of operational compliance with established internal control procedures, management efficiency, risk assessment and reliability of financial records. · Attended business review meetings held regularly by the Group's senior management to keep abreast with the strategic and operational planning and development issues. Discussions relating to strategic business risks in particular are recorded and forwarded to the members of the Group Risk Management Committee.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

31

Statement on Internal Control

ii. Internal Audit Functions (continued)

· Conducted investigations with regard to various specific areas of concern as directed by the Audit Committee and the management. Formalised approach towards risk assessment in compliance with the guidance on the "Statement on Internal Control : Guidance for Directors of Public Listed Companies" issued by Bursa Securities. Assessment of key business risks at each major business units which were identified by risk analysis and continuous monitoring of control compliance through data extraction and analysis techniques. Facilitated strategic business risks assessment covering the Group's Tiles Manufacturing & Distribution, Plantation, Property Holding & Development, Automotive, Trading and Credit Financing Divisions. Issued a total of twenty-six (26) internal audit reports to the Audit Committee on the major business units which encompassed identification and assessment of business risks.

·

·

·

·

iii. Other Risks and Control Processes

Apart from risk assessment and internal audit, the Group also has in place an organisational structure with defined lines of responsibility, delegation of authority and a process of hierarchical reporting. The existence of formalised Limits of Authority which provides the authority limits of the employees in the approval of various transactions and an Employees Handbook which highlights policies on Group's objectives, terms and conditions of employment, remuneration, training and development, performance review, safety and misconduct are relevant across Group's operations. The Managing Director also reports to the Board on significant changes in the business and external environment which can affect significant risks. The Board is provided with financial information on a quarterly basis which includes key performance and risk indicators and amongst others, the monitoring of results against budget.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

As required by paragraph 15.24 of the Bursa Securities' Listing Requirements, the external auditors have reviewed this Statement on Internal Control. Their review was performed in accordance with Auditing Technical Release (ATR) 5 issued by the Malaysian Institute of Certified Public Accountants. Based on their review, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the process the Board has adopted in the review of the adequacy and integrity of internal control of the Group.

32

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Board Committees

AUDIT COMMITTEE

Members of the Audit Committee

Tuan Haji Nik Ariff Bin Nik Hassan (Independent Non-Executive Director) - Chairman Datuk Henry Chin Poy-Wu (Independent Non-Executive Director) Dato' Richard Ong Guan Seng (Independent Non-Executive Director) Mr. David Park, AMN (Executive Director)

Role of the Audit Committee

Assisting the Board in the discharge of its statutory duties and responsibilities in the following areas: · Reviewing of financial statements that give a true and fair view of the Group's affairs and results and recommending the same for approval by the Board. Managing of Group's affairs in compliance with laws and regulations and proper standards of conduct. Establishing and maintaining of internal controls for areas of risks to provide reasonable assurance for safeguarding of assets and reliable financial information. Minimising the number of Directors who need to become involved in detailed reviews of financial statements and the results of internal and external audits. Providing a forum for Independent Non-Executive Directors to keep abreast of the Group's operations and thus enabling them to perform a more active role. Giving additional emphasis to the audit functions performed by the internal and external auditors. Providing a formal contact between the Independent Non-Executive Directors who are members of the Audit Committee and the external auditors.

·

·

·

·

· ·

Membership

· The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of not less than three (3) members with a majority of Independent Directors. A member shall not have any family relationship with any Executive Director or any related company or relationship which would interfere with independent judgment. Independent Director shall be one who fulfills the requirement as provided in Bursa Securities' Listing Requirements. At least one member of the Audit Committee shall be a member of the Malaysian Institute of Accountants or a person approved under section 15.10(1)(c)(ii) of Bursa Securities' Listing Requirements. No Alternate Director shall be appointed as a member of the Audit Committee. The Chairman of the Committee who shall be an Independent Director shall be elected by the members of the Committee.

·

·

· ·

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

33

Board Committees

AUDIT COMMITTEE (continued)

Membership (continued)

· In the event the number of Audit Committee members are less than the required number of three (3) due to resignation or for any reason ceases to be a member, the Board shall within three (3) months appoint new members to fill up the vacancy. All the members of Audit Committee shall hold office until otherwise determined by the Board or until they cease to be a Director of the Company.

Attendance at Meetings

· · A quorum shall be three (3) members, a majority of which shall be Independent Directors. The Committee may require any employee and a representative of the external auditors to attend meeting(s). The Group Chief Financial Officer and the Head of Internal Audit Department normally attend the meeting(s). At least once a year, the Committee shall meet with the external auditors without the presence of executive members of the Board. The Company Secretary shall act as the Secretary of the Committee.

·

Frequency of Meetings

Meetings shall be held not less than four (4) times a year. During the financial year ended 31 January 2005, four (4) meetings were held. The details of Directors' attendance at these meetings are as follows: Directors Tuan Haji Nik Ariff Bin Nik Hassan Datuk Henry Chin Poy-Wu Dato' Richard Ong Guan Seng Mr. David Park, AMN No. of Meetings Attended 4/4 4/4 4/4 4/4

Proceedings of Meetings

· In the absence of the Chairman, the Committee shall appoint one of the independent members present to chair the meeting. Questions arising at any meeting shall be decided by a majority of votes of the members present, each member having one (1) vote.

·

Review of the Audit Committee

The term of office and performance of the Committee and each of the members shall be reviewed by the Board at least once every three (3) years to determine whether the audit committee and its members have carried out their duties in accordance with their terms of reference.

34

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Board Committees

AUDIT COMMITTEE (continued)

Scope of Authority

· The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are required to comply with any request made by the Committee. The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. The Terms of Reference of the Audit Committee shall not limit in any way the responsibilities and authorities of the Managing Director to institute or instruct internal audits and reviews to be undertaken from time to time.

·

·

Duties

· To recommend to the Board the appointment of the external auditors, the audit fees, other terms of engagement and to consider any letter of resignation from the external auditor (if any). To review the annual audit plan with the external auditors and subsequent changes (if any). To consider and discuss with the external auditors any difficulties and/or restriction encountered in the course of their audit work. To ensure employees of the Company extend their assistance to the external auditors. To review the quarterly and year end financial statements before submission to the Board focusing particularly on : i. ii. iii. iv. any changes in accounting policies and practices significant adjustments arising from the audit and other unusual events (if any) compliance with Accounting Standards, relevant legislative framework and other legal requirements compliance with Bursa Securities' Listing Requirements and all other applicable rules and regulations

· ·

· ·

·

To review the internal audit programme, receive all internal audit reports, consider the major findings of internal audit investigations and management's response thereof. To review the adequacy of the scope, functions and resources of the internal audit functions and that it has the necessary authority to carry out its work. To approve any appointment or termination of senior executive of the Internal Audit Department. To review any appraisal or assessment of senior executive of the Internal Audit Department. To be informed of any resignation of senior executive of the Internal Audit Department and provide the resigning personnel an opportunity to submit his/her reasons of resigning. To keep under review the effectiveness of internal control systems, and in particular review the external auditor's management letter and management's response.

·

· · ·

·

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

35

Board Committees

AUDIT COMMITTEE (continued)

Duties (continued)

· To scrutinise all related party transactions and to ensure no potential conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity. To consider other related matters from time to time as defined by the Board.

·

Reporting Procedures

The Chairman of the Committee shall report on each meeting to the Board and the Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.

Summary of Audit Committee activities during the financial year ended 31 January 2005

The activities of the Audit Committee during the financial year ended 31 January 2005, are summarised as: · Reviewed internal audit plan for the financial year which includes review of operational compliance with established control procedures, management efficiency, risk assessment and reliability of financial record. Authorised Internal Audit Department to undertake specific investigation on specific areas of concern, reviewed outcome of investigation and deliberated on appropriate actions and/or recommendations arising therefrom. Received and reviewed a total of twenty-six (26) internal audit reports covering the business processes of the Group's Tiles Manufacturing & Distribution, Plantation, Property Holding & Development, Automotive, Trading and Credit Financing Divisions. Reviewed annual audit plans of the Group and Company with the external auditors and recommendation of their audit fees to the Board. Reviewed and discussed annual audited financial statements with the external auditors prior to recommending the same to the Board for approval; after noting specific points or pertinent issues raised by the external auditors. Reviewed the Group's quarterly report prepared in compliance with Malaysian Accounting Standards Board (MASB) Standard 26 "Interim Financial Reporting" and Chapter 9 of Bursa Securities' Listing Requirements and press announcements prior to submission to the Board for consideration and approval where the Chairman of the Audit Committee will brief the Board on the pertinent points and the recommendations of the Audit Committee. Reviewed and considered the disclosure of Related Party Transactions in the financial statements and the Recurrent Related Party Transactions Circular to shareholders. Reviewed the Statement of Corporate Governance and Statement on Internal Controls which are prepared in accordance with the provisions set out under the Malaysian Code on Corporate Governance, the extent of compliance with the said Code and recommended to the Board action plans to address identified gaps (if any) between the Group's existing corporate governance practices and the prescribed corporate governance principles and best practices under the Code.

Malaysian Mosaics Berhad

Company No: 5371-V

·

·

·

·

·

·

·

36

· Annual Report 2005 ·

Board Committees

REMUNERATION COMMITTEE

The Remuneration Committee was set up on 29 June 2001 and presently its members are as follows:

Datuk Henry Chin Poy-Wu (Independent Non-Executive Director) - Chairman Dato' Richard Ong Guan Seng (Independent Non-Executive Director) Tuan Haji Nik Ariff Bin Nik Hassan (Independent Non-Executive Director) Mr. David Park, AMN (Executive Director)

Terms of Reference of Remuneration Committee Membership

The Committee shall be appointed by the Board from amongst the Directors of the Company and in accordance with the Malaysian Code on Corporate Governance which required the Remuneration Committee to consist wholly or mainly of Non-Executive Directors.

Frequency of Meetings

Meetings are held at least once (1) a year and at such other time as and when necessary.

Attendance at Meetings

The quorum of the meeting shall be two (2).

Proceeding of Meetings

· In the absence of the Chairman, the Remuneration Committee shall appoint one of the NonExecutive members present to chair the meeting. Questions arising at any meeting shall be decided by a majority of votes of the members present, each member having one (1) vote. In the case of an equality of votes, the Chairman shall be entitled to a casting vote in addition to the vote which he is entitled as a member.

·

Duties

· To review the annual remuneration packages of each individual Executive Director such that the levels of remuneration are sufficient to attract and retain the Executive Directors needed to manage the Company successfully; and To recommend to the Board the remuneration packages of the Executive Directors of the Company.

·

Scope of Authority

Remuneration Committee does not have the delegated authority from the Board to implement its recommendations but is obliged to report its recommendations to the full Board for its consideration and implementation.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

37

Board Committees

REMUNERATION COMMITTEE (continued)

Interest of Remuneration Committee Members

Members of the Remuneration Committee shall not participate or be involved in the deliberations or discussions of their own remuneration.

Reporting Procedure

The Secretary shall circulate the minutes of meetings of the Remuneration Committee to all members of the Board.

Summary of Activities

The Remuneration Committee met on 31 March 2005 to review and recommend to the Board, the proposed bonus of the Executive Directors for the year ended 31 January 2005 and their respective proposed increment for the financial year commencing 1 February 2005.

38

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Board Committees

NOMINATION COMMITTEE

The Nomination Committee was set up on 29 June 2001 and presently its members are as follows:

Datuk Henry Chin Poy-Wu (Independent Non-Executive Director) - Chairman Dato' Richard Ong Guan Seng (Independent Non-Executive Director) Tuan Haji Nik Ariff Bin Nik Hassan (Independent Non-Executive Director)

Terms of Reference of Nomination Committee Membership

The Committee shall be appointed by the Board from amongst the Directors of the Company and in accordance with the Malaysian Code on Corporate Governance which requires the Nomination Committee to consist exclusively of Non-Executive Directors, a majority of whom are independent.

Frequency of Meetings

Meetings are held as and when necessary.

Attendance at Meetings

The quorum of the meeting shall be two (2).

Proceeding of Meetings

· In the absence of the Chairman, the Nomination Committee shall appoint one of the Independent Non-Executive members present to chair the meeting. Questions arising at any meeting shall be decided by a majority of votes of the members present, each member having one (1) vote. In the case of an equality of votes, the Chairman shall be entitled to a casting vote in addition to the vote which he is entitled as a member.

·

Duties

· To nominate and recommend suitable candidates for appointment to the Board such that the required mix, skills, experience and other qualities including core competencies which NonExecutive Directors should bring to the Board. To nominate and recommend qualified Directors to be Audit Committee Members and to sit on Board Committee from time to time. To consider candidates for directorships proposed by the Managing Director's office and, within bounds of practicability, by any other senior executive or any Director or shareholder. To annually assess the effectiveness of the board and contribution of individual Director. To determine the appropriate board size and number of Non-Executive participation in order to comply with Bursa Securities' Listing Requirements. To ensure all the new Directors participate in the Directors' training program as stipulated by Bursa Securities' Listing Requirements.

·

·

· ·

·

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

39

Board Committees

NOMINATION COMMITTEE

Scope of Authority

Nomination Committee does not have the delegated authority from the Board to implement its recommendations but is obliged to report its recommendations to the full Board for its consideration and implementation. The actual decision as to who shall be nominated is the responsibility of the full Board after considering the recommendations of the committee.

(continued)

Reporting Procedure

The Secretary shall circulate the minutes of meetings of the Nomination Committee to all members of the Board.

Summary of Activities

The appointments of Mr. Edward Lee Ming Foo who was previously the Alternate Director to Mr. David Park, as an Executive Director and Madam Sim Siew Meng as his Alternate on 4 August 2004 were based on recommendations of the Nomination Committee. Madam Sim Siew Meng was previously the Alternate Director to Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak who had resigned on 4 August 2004.

40

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pentadbiran Korporat

Lembaga Pengarah Malaysian Mosaics Berhad dengan sukacitanya membentangkan laporan Prinsip dan Praktis Terbaik Pentadbiran Korporat yang dipergunakan dan darjat kepatuhannya seperti yang diperuntukkan dalam Bahagian 1 dan Bahagian 2 Kod Pentadbiran Korporat Malaysia ("Kod") menurut perenggan 15.26 Syarat-syarat Penyenaraian Bursa Malaysia Securities Berhad ("Bursa Securities"). Adalah polisi Syarikat untuk mengurus hal ehwal Kumpulan selaras dengan standard yang sesuai dengan pentadbiran korporat yang baik. Lembaga Pengarah beriltizam untuk memastikan standard pentadbiran korporat yang sesuai dipraktikkan di segenap Kumpulan sebagai sebahagian asas bagi melaksanakan tanggungjawabnya dalam melindungi dan meningkatkan nilai pemegang saham dan prestasi kewangan Kumpulan dan Syarikat. Peruntukan Kod yang berkuatkuasa ke atas Kumpulan dibahagikan kepada empat bahagian. Bahagian A Bahagian B Bahagian C Bahagian D : : : : Para Pengarah Ganjaran Para Pengarah Para Pemegang Saham Kebertanggungjawaban dan Audit

Tersenarai di bawah adalah huraian bagaimana Kumpulan menggunakan prinsip yang diperuntukkan dalam Kod.

PARA PENGARAH Lembaga Pengarah

Syarikat diterajui oleh Lembaga Pengarah yang memimpin dan mengawal Syarikat. Lembaga bermesyuarat dengan nalar dan bertanggungjawab terhadap pengurusan Syarikat yang sewajarnya. Semua ahli Lembaga masing-masing memberi pertimbangan yang munasabah berkaitan dengan isu-isu strategik, prestasi, sumber-sumber dan standard tingkah laku. Lembaga Pengarah bermesyuarat sekurang-kurangnya empat (4) kali setahun dan juga berkumpul untuk mesyuarat tambahan yang perlu dengan diberikan notis yang sewajarnya mengenai isu-isu yang akan dibincangkan. Sepanjang tahun kewangan ini, empat (4) mesyuarat telah diadakan. Minit-minit mesyuarat dicatat oleh Setiausaha Syarikat. Semua Pengarah telah menghadiri sekurang-kurangnya 50% daripada jumlah mesyuarat Lembaga yang diadakan sepanjang tahun kewangan ini. Pada 4 Ogos 2004, Encik David Park yang merupakan Pengarah Urusan, telah dilantik sebagai Pengerusi Eksekutif, mengambilalih dari Tan Sri Datuk Seri Panglima Lau Gek Poh yang bersara pada hari yang sama. Encik Edward Lee Ming Foo, yand dahulunya ialah Pengarah Gantian kepada Encik David Park, telah dilantik sebagai Pengarah Eksekutif dan Puan Sim Siew Meng dilantik sebagai Pengarah Gantian beliau pada 4 Ogos 2004, berdasarkan pengesyoran Jawatankuasa Pencalonan. Puan Sim Siew Meng dahulunya adalah Pengarah Gantian kepada Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak yang telah meletak jawatan pada 4 Ogos 2004. Pada 31 Mac 2005, Encik Edward Lee Ming Foo dan Encik Lee Wee Yong, kedua-duanya Pengarah Eksekutif, telah dilantik oleh Lembaga sebagai Pengarah Urusan dan Timbalan Pengarah Urusan masingmasing.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

41

Penyata Pentadbiran Korporat

Lembaga Pengarah (sambungan)

Kehadiran Para Pengarah dalam Mesyuarat Lembaga yang diadakan sepanjang tahun kewangan ini adalah seperti berikut: Para Pengarah Encik David Park, AMN Datuk Henry Chin Poy-Wu Encik Edward Lee Ming Foo, JP (berhenti sebagai Pengarah Gantian kepada David

Park pada 4 Ogos 2004 dan pada tarikh yang sama dilantik semula sebagai Pengarah Eksekutif)

Bil. Mesyuarat Yang Dihadiri 4/4 4/4 4/4 4/4 4/4 4/4 3/4 3/4 3/4

Encik Lee Wee Yong Tuan Haji Nik Ariff Bin Nik Hassan Dato' Richard Ong Guan Seng Encik Tan Ghee Kiat Encik Liew Chor Beng @ Lau Cho Beng Datuk Simon Shim Kong Yip, JP Puan Sim Siew Meng (berhenti sebagai Pengarah Gantian kepada Datuk Seri Panglima

Lau Cho Kun @ Lau Yu Chak pada 4 Ogos 2004 dan pada tarikh yang sama dilantik semula sebagai Pengarah Gantian kepada Encik Edward Lee Ming Foo)

4/4

pada 4 Ogos 2004)

Tan Sri Datuk Seri Panglima Lau Gek Poh (meletak jawatan Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak

(meletak jawatan pada 4 Ogos 2004)

0/2* 2/2*

* Menghadiri mesyuarat yang diadakan sehingga perletakan jawatan mereka sebagai Pengarah.

Lembaga secara eksplisit menanggung enam (6) tanggungjawab khusus yang berikut, yang memudahkan Lembaga melaksanakan tanggungjawab kepimpinannya: · · Mengkaji dan meluluskan pelan-pelan strategik untuk Syarikat; Mengawasi tingkah laku pengendalian perniagaan Syarikat bagi menilai samada perniagaan diuruskan dengan sewajarnya; Mengenalpasti risiko utama dan memastikan implementasi sistem yang sesuai untuk mengurus risiko-risiko ini; Perancangan untuk calon pengganti, termasuk melantik, melatih, menentukan ganjaran dan di mana perlu, menggantikan pengurus kanan; Merangka dan melaksanakan program yang sesuai untuk menjalin perhubungan dengan pelabur atau polisi komunikasi dengan para pemegang saham untuk Syarikat; dan Mengkaji kecukupan dan ketulusan sistem kawalan dalaman Syarikat agar menurut undangundang, peraturan, syarat-syarat, arahan dan garis panduan yang berkuatkuasa.

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42

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pentadbiran Korporat

Keseimbangan Lembaga

Lembaga mempunyai sembilan (9) ahli yang terdiri daripada tiga (3) Pengarah Eksekutif dan enam (6) Pengarah Bukan Eksekutif di mana empat (4) atau lebih dari satu pertiga adalah bebas dari pengurusan dan tidak mempunyai sebarang perhubungan yang boleh mengganggu perlaksanaan pertimbangan bebas mereka. Secara kolektif, Para Pengarah mempunyai pengalaman yang luas dalam bidang perniagaan dan kewangan. Huraian ringkas latar belakang setiap Pengarah dibentangkan dalam mukasurat 12 hingga 21. Tanggungjawab Pengerusi dan Pengarah Urusan adalah diasingkan demi menjamin keseimbangan kuasa dan autoriti. Lembaga dari masa ke semasa memeriksa saiznya untuk memastikan impak bilangan Pengarah ke atas keberkesanannya, tertakluk sentiasa kepada Aktikel 78, Tataurusan Syarikat yang menetapkan bahawa bilangan Pengarah tidak boleh melebihi limabelas (15) orang. Datuk Henry Chin Poy-Wu, selaku Pengarah Bebas Bukan Eksekutif dan menyandang jawatan sebagai Timbalan Pengerusi Lembaga, juga memainkan peranan sebagai Pengarah Bebas Bukan Eksekutif Kanan. Lembaga puas hati bahawa komposisinya mewakili dengan saksama, kepentingan para pemegang saham selain dari pemegang saham penting.

Pembekalan Informasi

Ahli-ahli Lembaga diberi terdahulu, informasi yang sesuai sebelum setiap mesyuarat Lembaga dan Jawatankuasa. Untuk mesyuarat Lembaga, informasi-informasi ini termasuk: · · · · · · laporan kewangan laporan mengenai perdagangan dan perniagaan semasa daripada Pengarah Urusan cadangan untuk perbelanjaan modal (jika ada) cadangan untuk pengambilalihan dan pelupusan (jika ada) belanjawan tahunan atau rancangan perniagaan laporan jawatankuasa kecil Lembaga (jika ada)

Tambahan pula, Lembaga juga mempunyai jadual rasmi tentang hal ehwal yang disediakan khas untuk keputusannya termasuk kelulusan keputusan tahunan dan suku tahun. Tanggungjawab khusus diwajibkan kepada Jawatankuasa Lembaga yang terdiri daripada Jawatankuasa Audit, Jawatankuasa Pencalonan dan Jawatankuasa Ganjaran yang akan melapor kepada Lembaga dengan nalar. Termaterma rujukan dan autoriti Jawatankuasa Lembaga yang diputuskan dan diluluskan oleh seluruh Lembaga dihuraikan dalam mukasurat 52 hingga 59. Setiausaha Syarikat biasanya membantu Pengerusi dan Timbalan Pengerusi Lembaga mengatur informasi yang diperlu oleh Lembaga untuk bertindak menurut agenda serta menyediakan informasi yang relevan kepada Pengarah-pengarah pada waktu yang tepat. Lembaga juga meluluskan Para Pengarah untuk mendapatkan nasihat profesional bebas jika perlu atas tanggungan perbelanjaan Syarikat demi melaksanakan kewajipan mereka. Sebelum yuran profesional dikenakan, Para Pengarah harus merujuk kepada Pengarah Urusan berkenaan dengan sifat dan yuran nasihat profesional tersebut. Semua informasi dalam Syarikat boleh diperolehi oleh Para Pengarah dalam melaksanakan kewajipan mereka dan semua Pengarah boleh memperolehi perkhidmatan Setiausaha Syarikat.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

43

Penyata Pentadbiran Korporat

Perlantikan Lembaga

Kod menyokong prosedur formal untuk perlantikan Lembaga sebagai praktis baik, dengan sebuah Jawatankuasa Pencalonan yang membuat cadangan kepada seluruh Lembaga. Jawatankuasa Pencalonan yang terdiri daripada tiga (3) Pengarah Bebas Bukan Eksekutif bertanggungjawab untuk mencadangkan calon-calon baru ke dalam Lembaga dan menilai Para Pengarah secara berterusan. Terma-terma rujukan untuk Jawatankuasa Pencalonan dihuraikan dalam mukasurat 58 hingga 59. Tatkala menyertai Lembaga, semua Pengarah baru diberi informasi latar belakang Syarikat serta aktivitiaktivitinya. Lawatan ke tapak perniagaan diatur sekiranya perlu. Semua Pengarah baru dikehendaki menghadiri "Program Pentauliahan Mandatori". Semua Pengarah telah menghadiri dan menyelesaikan Program ini. Sebagai sebahagian daripada Program Perlanjutan Pendidikan, Para Pengarah akan sentiasa menghadiri program yang sesuai untuk memperbaiki kemahiran dan pengetahuan serta mengetahui perkembangan baru dalam melaksanakan kewajipan mereka. Lembaga layak mendapatkan perkhidmatan Setiausaha Syarikat yang memastikan semua perlantikan dibuat dengan sewajarnya dan semua informasi yang perlu dapat diperolehi daripada Para Pengarah untuk rekod Syarikat dan juga untuk memenuhi kewajipan berkanun, di samping kewajipan yang timbul daripada Syarat-syarat Penyenaraian Bursa Securities atau keperluan peraturan lain. Setiausaha Syarikat atau Setiausaha Syarikat Gabungan dilantik olen Lembaga dan merupakan orang yang berupaya melaksanakan kewajipan-kewajipan yang diperlukan oleh jawatan tersebut demi memberi sokongan efektif kepada Pengerusi dan Timbalan Pengerusi untuk memastikan Lembaga berfungsi dengan efektif. Penamatan perkhidmatan mereka adalah urusan seluruh Lembaga.

Pemilihan Semula

Selaras dengan Tataurusan Syarikat, Pengarah yang dilantik oleh Lembaga dalam tahun semasa akan memegang jawatan sehingga Mesyuarat Agung Tahunan yang berikutnya dan layak untuk dipilih semula oleh para pemegang saham. Tambahan pula, dalam Mesyuarat Agung Tahunan bagi setiap tahun kalendar, satu pertiga daripada Para Pengarah termasuk Pengarah Urusan perlu bersara dari jawatan sekurang-kurangnya sekali dalam setiap tiga (3) tahun berturut-turut mulai dari hari perlantikan atau pemilihan semula yang lepas tetapi layak dipilih semula oleh para pemegang saham.

GANJARAN PARA PENGARAH Tahap dan Penentuan Ganjaran

Lembaga telah mengamalkan polisi seperti yang dicadangkan oleh Kod. Lembaga memastikan bahawa tahap ganjaran adalah wajar untuk menarik dan mengekalkan Para Pengarah yang diperlukan untuk mengurus Syarikat dengan berjaya. Komponen ganjaran distruktur untuk mengaitkan ganjaran dengan prestasi korporat dan prestasi individu Para Pengarah Eksekutif sementara ganjaran Pengarah Bukan Eksekutif mencerminkan pengalaman dan tahap tanggungjawab yang dipikul oleh seseorang Pengarah Bukan Eksekutif.

44

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pentadbiran Korporat

Prosedur

Jawatankuasa Ganjaran yang merupakan jawatankuasa kecil Lembaga terdiri daripada empat (4) ahli di mana tiga (3) adalah Pengarah Bebas Bukan Eksekutif dan satu (1) Pengarah Eksekutif. Pakej ganjaran Pengarah Eksekutif yang baru dilantik dan Pengarah Eksekutif sedia ada dikaji semula oleh Jawatankuasa Ganjaran dan dicadang kepada Lembaga untuk kelulusan. Para Pengarah tidak menyertai dalam membuat keputusan berkenaan ganjaran mereka sendiri. Terma-terma rujukan dan tanggungjawab Jawatankuasa Ganjaran dihuraikan dalam mukasurat 57.

Pemakluman

Ganjaran Pengarah dan Polisi Ganjaran adalah seperti berikut:

Butir-Butir Ganjaran Pengarah

(i) Ganjaran agregat yang dibayar atau perlu dibayar oleh Syarikat kepada Para Pengarah Syarikat untuk semua kewajipan rasmi sepanjang tahun kewangan berakhir 31 Januari 2005 adalah seperti berikut: Kategori Yuran RM'000 392 Gaji dan lain-lain Emolumen Faedah Bukan Kewangan RM'000 RM'000 1,963 76 Jumlah Ganjaran RM'000 2,039 392

Eksekutif Bukan Eksekutif

(ii) Bilangan Pengarah yang menerima ganjaran daripada Syarikat untuk tahun kewangan berakhir 31 Januari 2005, dan ganjaran mereka termasuk faedah bukan kewangan yang termasuk dalam kumpulan berikut adalah: Kumpulan Ganjaran Pengarah Eksekutif RM 300,000 - RM 350,000 RM 350,000 - RM 400,000 RM 400,000 - RM 450,000 RM 450,000 - RM 500,000 RM 500,000 - RM 550,000 Lebih daripada RM 550,000 Pengarah Bukan Eksekutif Kurang daripada RM 50,000 RM 50,000 - RM 100,000 Lebih daripada RM 100,000 5 1 1 1 1 1 1 Bil. Pangarah

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

45

Penyata Pentadbiran Korporat

Polisi Ganjaran

Polisi Jawatankuasa Ganjaran ialah untuk memastikan praktis ganjaran Syarikat adalah kompetitif demi membolehkan Syarikat menarik dan mengekalkan pengarah eksekutif yang berkaliber tinggi dan mencerminkan ketanggungjawaban dan komitmen mereka. (i) Ganjaran Para Pengarah Eksekutif Pakej ganjaran Para Pengarah Eksekutif terdiri daripada beberapa atau semua elemen yang berikut: · Gaji Asas Gaji dikaji semula setiap tahun. Dalam menentukan gaji asas setiap Pengarah, Jawatankuasa Ganjaran mengambil kira dayasaingan pasaran dan prestasi setiap individu Pengarah. Bonus Tahunan Pelan bonus tahunan berfokuskan kepada objektif tahunan dan direka bentuk untuk mengganjar pencapaian keputusan dengan sewajarnya berdasarkan objektif-objektif ini. Sumbangan Kepada KWSP Sumbangan kepada KWSP berdasarkan kadar berkanun. Faedah Bukan Kewangan Faedah bukan kewangan antara lain, meliputi kereta, pemandu, petrol dan telefon bimbit. Kontrak-kontrak Perkhidmatan Semua Pengarah Eksekutif mempunyai kontrak-kontrak perkhidmatan dengan Syarikat yang dikaji semula oleh Jawatankuasa Ganjaran.

·

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(ii) Ganjaran Para Pengarah Bukan Eksekutif Ganjaran Para Pengarah Bukan Eksekutif ditentukan oleh Lembaga secara kolektif. Para Pengarah Bukan Eksekutif tidak mengambil bahagian dalam perbincangan berkenaan ganjaran mereka sendiri.

46

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pentadbiran Korporat

PARA PEMEGANG SAHAM Dialog antara Syarikat dengan Para Pelabur

Syarikat mengiktiraf kepentingan komunikasi dengan para pemegang saham. Lembaga menganggap Mesyuarat Agung Tahunan sebagai peluang yang ideal untuk berkomunikasi dengan kedua-dua pelabur institut dan persendirian. Sementara Syarikat berikhtiar menyediakan informasi sebanyak mungkin kepada para pemegang sahamnya, ia juga perlu berwaspada tentang rangka perundangan dan peraturan yang mengawal pengedaran informasi yang penting dan bersifat sensitif harga. Bursa Securities juga menyediakan kemudahan kepada Syarikat untuk menyiarkan secara elektronik, pengumumannya termasuk versi penuh pengumuman keputusan suku tahun dan Laporan Tahunan yang boleh diperolehi melalui laman jaring Bursa Securities di www.bursamalaysia.com

Mesyuarat Agung Tahunan

Notis Mesyuarat Agung Tahunan yang terkandung dalam Laporan Tahunan dikirimkan sekurangkurangnya dua puluh satu (21) hari sebelum tarikh mesyuarat. Dalam Mesyuarat Agung Tahunan, Pengerusi dan Pengarah Urusan, atau jika mereka tidak hadir, Timbalan Pengerusi akan memberikan penyataan-penyataan mengenai prestasi Syarikat bagi setiap tahun kewangan serta kajian ringkas mengenai keadaan perdagangan semasa. Dalam setiap Mesyuarat Agung Tahunan, suatu platform disediakan untuk para pemegang saham untuk mengambil bahagian dalam sesi soal dan jawab. Apabila perlu, Pengerusi dan Pengarah Urusan, atau jika mereka tidak hadir, Timbalan Pengerusi akan menyediakan jawapan bertulis kepada sebarang pertanyaan penting yang tidak dapat sedia dijawab. Setiap perkara urusan khas yang termasuk dalam Notis Mesyuarat Agung Tahunan akan disertakan satu penerangan penuh mengenai cadangan resolusi. Dalam kes pemilihan semula Para Pengarah, Notis Mesyuarat Agung Tahunan akan menyatakan Pengarah yang layak dipilih semula dengan satu deskripsi persendirian ringkas termasuk butir-butir relevan yang diperlukan di bawah perenggan 8.28(2) Syarat-syarat Penyenaraian Bursa Securities. Apabila perlu, sidang akhbar diadakan pada penghujung setiap Mesyuarat Agung Tahunan di mana Pengerusi dan Pengarah Urusan, atau jika mereka tidak hadir, Timbalan Pengerusi memberitahu sidang akhbar tentang resolusi yang diluluskan dan menjawab pertanyaan berkenaan Kumpulan di samping memberi penjelasan dan penerangan terhadap sebarang isu.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

47

Penyata Pentadbiran Korporat

KEBERTANGGUNGJAWABAN DAN AUDIT Laporan Kewangan

Syarikat mengendali dan memberi kepentingan kepada pembentukan prinsip-prinsip dan prosedurprosedur yang jelas demi mencapai kebertanggungjawaban serta pengawalan yang sesuai dengan urusan perniagaan Kumpulan. Semasa membentangkan penyata kewangan tahunan dan laporan suku tahun, Para Pengarah berhasrat untuk membentangkan satu penilaian yang seimbang dan mudah difahami mengenai kedudukan dan prospek Kumpulan.

Penyata Tanggungjawab Para Pengarah untuk menyediakan Penyata Kewangan Tahunan yang Diaudit

Para Pengarah diwajibkan oleh Akta Syarikat, 1965, untuk menyediakan Penyata Kewangan bagi setiap tahun kewangan yang memberi gambaran yang benar dan saksama terhadap kedudukan hal ehwal Kumpulan dan Syarikat pada akhir tahun kewangan tersebut serta Penyata Pendapatan dan Penyata Aliran Tunai Kumpulan dan Syarikat untuk tahun kewangan tersebut. Para Pengarah menganggap bahawa dalam menyediakan penyata kewangan, Kumpulan dan Syarikat telah menggunakan polisi perakaunan yang sesuai, yang diamal secara konsisten dan disokong oleh pertimbangan dan anggaran yang munasabah dan cermat, dan menurut semua standard perakaunan yang relevan. Para Pengarah bertanggungjawab untuk memastikan Kumpulan dan Syarikat menyimpan rekod perakaunan yang melaporkan kedudukan kewangan Kumpulan dan Syarikat dengan ketepatan yang munasabah bagi membolehkan mereka memastikan penyatapenyata kewangan mematuhi Akta Syarikat, 1965. Para Pengarah mempunyai tanggungjawab menyeluruh untuk mengambil langkah-langkah munasabah untuk melindungi harta Kumpulan dan Syarikat.

Kawalan Dalaman

Penyata Kawalan Dalaman Kumpulan tertera di mukasurat 49 hingga 51.

Perhubungan dengan Juruaudit

Jawatankuasa Audit dan Lembaga telah menjalin pengaturan yang formal dan transparen untuk memelihara perhubungan yang sesuai dengan juruaudit Syarikat seperti yang tercatat dalam mukasurat 52 hingga 56. Penyata Pentadbiran Korporat ini dibentangkan menurut resolusi Lembaga.

DAVID PARK, AMN

Pengerusi Eksekutif

EDWARD LEE MING FOO, JP

Pengarah Urusan

48

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Kawalan Dalaman

PENYATA KAWALAN DALAMAN

Lembaga Pengarah beriltizam untuk mengekalkan sistem kawalan dalaman yang baik dalam Kumpulan dan dengan sukacitanya membentangkan Penyata Kawalan Dalaman berikut yang memberi garis kasar tentang sifat dan skop kawalan dalaman Kumpulan sepanjang tahun menurut perenggan 15.27(b) Syarat-syarat Penyenaraian Bursa Securities.

i.

Kawalan Dalaman

Para Pengarah mengakui tanggungjawab mereka terhadap sistem kawalan dalaman Kumpulan yang bukan sahaja meliputi kawalan-kawalan kewangan malahan juga kawalan-kawalan operasional dan kawalan pematuhan di samping pengurusan risiko. Sistem kawalan dalaman melibatkan setiap perniagaan dan pihak pengurusan penting setiap perniagaan, termasuk Lembaga Pengarah, dan ia dibentuk untuk memenuhi keperluan-keperluan tertentu Kumpulan dan untuk mengurus risiko yang dihadapinya. Sistem ini, disebabkan sifat semulajadinya, hanya dapat memberi jaminan yang munasabah, tetapi bukan jaminan yang mutlak terhadap kerugian besar atau kegagalan Kumpulan mencapai objektifnya. Demi matlamat rangka ini, syarikat-syarikat bersekutu tidak diuruskan sebagai sebahagian daripada Kumpulan, sejurusnya tidak dirangkumi oleh Penyata ini. Elemen penting sistem kawalan dalaman Kumpulan dihuraikan seperti berikut: · Delegasi tanggungjawab kepada jawatankuasa-jawatankuasa Lembaga dan unit operasi ditentukan secara jelas, meliputi tahap autoriti untuk setiap aspek urusan perniagaan. Prosedur dalaman tertulis yang dinyatakan dalam Manual Operasi, sekiranya berpatutan. Lawatan audit dalaman yang kerap untuk memonitor pematuhan prosedur dan menilai ketulusan informasi kewangan. Informasi yang kerap dan komprehensif disediakan kepada pihak pengurusan, meliputi prestasi kewangan dan petunjuk urusniaga penting. Suatu proses penentuan belanjawan yang terperinci di mana unit-unit operasi menyediakan belanjawan-belanjawan untuk tahun akan datang yang diluluskan pada tahap kedua-dua unit operasi dan seluruh Lembaga. Memonitor keputusan-keputusan bulanan dan bandingkan dengan belanjawan, di mana perbezaan-perbezaan utama disusuli dan tindakan pihak pengurusan diambil, jika perlu. Lawatan yang kerap ke unit-unit operasi oleh ahli-ahli Lembaga dan pihak pengurusan kanan apabila perlu. Mengkaji proses perniagaan dengan kerap oleh Jabatan Audit Dalaman demi menilai keberkesanan kawalan dalaman dan mengemukakan risiko penting yang menjejaskan Mengkaji dan mengadakan perbincangan oleh Jawatankuasa Audit mengenai isu-isu kawalan dalaman penting yang dikenalpasti dalam laporan yang disediakan oleh Jabatan Audit Dalaman.

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Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

49

Penyata Kawalan Dalaman

i. Kawalan Dalaman (sambungan)

Susulan penerbitan "Penyata Kawalan Dalaman : Panduan untuk Pengarah Syarikat Awam Tersenarai" oleh Bursa Securities, Kumpulan dalam bulan Jun 2001 telah melaksanakan pendekatan yang formal untuk mengenalpasti, menilai, memonitor dan mengurus risiko penting yang mempengaruhi pencapaian objektif perniagaannya. Proses ini dilaksanakan secara berterusan dan kerap dikaji semula oleh Lembaga dan menurut "Penyata Kawalan Dalaman : Panduan untuk Pengarah Syarikat Awam Tersenarai". Selaras dengan perkembangan ini: · Sebuah Jawatankuasa Pengurusan Risiko Kumpulan yang diketuai oleh Pengarah Urusan telah ditubuhkan dengan tanggungjawab untuk mengenalpasti dan mengkomunikasi dengan Lembaga Pengarah mengenai risiko kritikal (semasa dan berpotensi) yang dihadapi Kumpulan, perubahan-perubahan yang timbul dan pelan tindakan pihak pengurusan untuk menguruskan risiko ini. Suatu Metodologi Risiko Kumpulan telah diedarkan kepada ketua-ketua unit perniagaan Kumpulan. Bengkel-bengkel Penilaian Risiko dan temuduga-temuduga dianjurkan oleh Ketua Jabatan Audit Dalaman dengan ketua dan para pengurus operasi unit-unit perniagaan utama Kumpulan ke atas kegunaan metodologi penilaian risiko. Satu pangkalan data risiko strategik dan kawalan sesuai yang dikenalpasti telah dibentuk dan informasi ditapis bagi menghasilkan satu pendaftar/kad skor risiko yang terperinci dan profil risiko individu untuk unit-unit perniagaan utama yang sentiasa dikemaskini. Risiko penting yang mengancam objektif setiap unit perniagaan, selaras dengan objektif strategi Kumpulan, telah dikenalpasti dan kemungkinan besar risiko ini akan berlaku serta magnitud kesannya diberikan skor. Profil Risiko unit-unit perniagaan yang relevan dibentangkan kepada Jawatankuasa Pengurusan Risiko Kumpulan dengan penekanan atas risiko perniagaan penting, punca-puncanya dan pelan tindakan pihak pengurusan yang seterusnya.

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ii. Fungsi-fungsi Audit Dalaman

Kumpulan mempunyai sebuah Jabatan Audit Dalaman yang bebas daripada aktiviti-aktiviti atau operasi unit-unit operasi Kumpulan yang lain, yang memberikan jaminan yang diperlukan oleh Jawatankuasa Audit dan Lembaga berkenaan dengan kecukupan dan ketulusan sistem kawalan dalaman. Tanggungjawab utamanya ialah mengadakan penyemakan yang kerap dan sistematik terhadap sistem kawalan dalaman demi memberi pengesahan yang munasabah bahawa sistem tersebut beroperasi dengan memuaskan dan efektif dalam Syarikat dan Kumpulan di samping melapor kepada Jawatankuasa Audit setiap suku tahun. Strategi audit dalaman dan pelan audit dalaman tahunan yang terperinci dibentangkan kepada Jawatankuasa Audit untuk mendapatkan kelulusan. Fungsi audit dalaman mengamalkan pendekatan berdasarkan risiko dan menyediakan strategi dan pelan audit berdasarkan profil risiko unit-unit perniagaan utama Kumpulan.

50

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Kawalan Dalaman

ii. Fungsi-fungsi Audit Dalaman (sambungan)

Aktiviti-aktiviti yang telah dijalankan adalah seperti berikut: · Melaksanakan fungsi audit dalaman berdasarkan pelan audit yang telah dikaji dan diluluskan oleh Jawatankuasa Audit yang meliputi penilaian kepatuhan operasional dengan prosedur kawalan dalaman yang telah ditetapkan, kecekapan pengurusan, penilaian risiko dan kebolehpercayaan rekod-rekod kewangan. Menghadiri mesyuarat pengkajian perniagaan yang diadakan dengan nalar oleh pihak pengurusan kanan Kumpulan untuk mengikuti perancangan strategik dan operasional serta perkembangan isu. Perbincangan-perbincangan berkenaan dengan risiko strategik perniagaan khasnya direkodkan dan ditujukan kepada Jawatankuasa Pengurusan Risiko Kumpulan. Menjalankan siasatan-siasatan berkenaan dengan pelbagai bidang tertentu yang memerlukan perhatian, sebagaimana yang diarahkan oleh Jawatankuasa Audit dan pihak pengurusan. Memformalkan pendekatan ke arah penilaian risiko menurut panduan "Penyata Kawalan Dalaman : Panduan untuk Pengarah Syarikat Awam Tersenarai" Bursa Securities. Penilaian risiko perniagaan penting di setiap unit-unit perniagaan utama yang telah dikenalpasti oleh analisis risiko dan memonitor secara berterusan pematuhan kawalan melalui pengekstrakan data dan teknik analisis. Memudahkan penilaian risiko strategik perniagaan yang meliputi Bahagian-bahagian Pembuatan & Pengedaran Jubin, Perladangan, Pemegangan & Pembangunan Hartanah, Automotif, Perdagangan dan Pembiayaan Kredit dalam Kumpulan. Mengedarkan sejumlah dua puluh enam (26) laporan audit tahunan kepada Jawatankuasa Audit atas unit-unit perniagaan utama yang merangkumi pengenalpastian dan penilaian risiko perniagaan.

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iii. Risiko-risiko dan Proses Kawalan lain

Selain daripada penilaian risiko dan audit dalaman, Kumpulan juga mempunyai sebuah struktur organisasi yang mendefinasikan tanggungjawab, delegasi autoriti dan proses laporan berhierarki. Kewujudan Had Autoriti yang formal menggariskan had kuasa kakitangan dalam meluluskan pelbagai urusniaga dan sebuah Buku Panduan Kakitangan yang menyatakan polisi-polisi objektif Kumpulan, terma-terma dan syarat pekerjaan, ganjaran, latihan dan pembangunan, penilaian prestasi, keselamatan dan salah laku adalah relevan di seluruh operasi Kumpulan. Pengarah Urusan juga melapor kepada Lembaga tentang perubahan penting dalam perniagaan dan persekitaran luar yang mempengaruhi risiko penting. Lembaga diberi informasi kewangan setiap suku tahun yang meliputi petunjuk penting prestasi dan risiko serta pemonitoran keputusan berbanding dengan belanjawan.

PENGKAJIAN PENYATA OLEH JURUAUDIT LUAR

Seperti yang diperlukan oleh perenggan 15.24 Syarat-syarat Penyenaraian Bursa Securities, juruaudit luar telah mengkaji Penyata Kawalan Dalam ini. Pengkajian mereka adalah selaras dengan `Keluaran Audit Teknikal (ATR) 5' diterbitkan oleh Institut Akauntan Awam Bertauliah Malaysia. Berdasar pada pengkajian mereka, juruaudit luar telah melapor kepada Lembaga bahawa tiada perkara timbul dalam perhatian mereka yang menyebabkan mereka percaya bahawa Penyata ini tidak konsisten dengan pemahaman mereka tentang proses yang telah diterima pakai oleh Lembaga untuk mengkaji lengkapan serta integriti kawalan dalaman Kumpulan.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

51

Jawatankuasa-Jawatankuasa Lembaga

JAWATANKUASA AUDIT

Ahli-ahli Jawatankuasa Audit

Tuan Haji Nik Ariff Bin Nik Hassan (Pengarah Bebas Bukan Eksekutif) - Pengerusi Datuk Henry Chin Poy-Wu (Pengarah Bebas Bukan Eksekutif ) Dato' Richard Ong Guan Seng (Pengarah Bebas Bukan Eksekutif) Encik David Park, AMN (Pengarah Eksekutif)

Peranan Jawatankuasa Audit

Membantu Lembaga dalam melaksanakan kewajipan-kewajipan dan tanggungjawab berkanun mereka dalam bidang-bidang seperti berikut: · Menyemak penyata-penyata kewangan yang memberi gambaran yang benar dan saksama mengenai kedudukan dan keputusan Kumpulan dan mengesyorkannya untuk kelulusan Lembaga Pengarah. Pengurusan hal ehwal Kumpulan menurut undang-undang dan peraturan-peraturan serta standard tingkah laku yang wajar. Penubuhan dan penyelenggaraan kawalan dalaman untuk bidang-bidang berisiko supaya memberi jaminan yang munasabah untuk melindungi harta dan informasi kewangan yang boleh dipercayai. Mengurangkan bilangan Pengarah yang perlu terlibat dalam penyemakan terperinci penyatapenyata kewangan dan keputusan-keputusan audit dalaman dan luar. Menyediakan satu forum kepada Para Pengarah Bebas Bukan Eksekutif supaya dapat mengemaskinikan pemahaman mereka terhadap operasi Kumpulan dan dengan itu membolehkan mereka melaksanakan peranan yang lebih aktif. Memberi penekanan tambahan kepada fungsi audit yang dijalankan oleh juruaudit-juruaudit dalaman dan luaran. Menyediakan perhubungan formal antara Para Pengarah Bebas Bukan Eksekutif yang merupakan ahli-ahli kepada Jawatankuasa Audit dengan juruaudit luar.

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Keahlian

· Jawatankuasa mesti dilantik oleh Lembaga daripada kalangan Para Pengarah Syarikat dan mesti mengandungi tidak kurang daripada tiga (3) orang ahli dengan majoritinya ialah Para Pengarah Bebas. Seseorang ahli mesti tidak mempunyai sebarang hubungan kekeluargaan dengan manamana Pengarah Eksekutif atau mana-mana syarikat berkaitan atau hubungan yang boleh mengganggu pertimbangan bebas. Pengarah Bebas mesti merupakan orang yang memenuhi syarat yang diperuntukkan dalam Syaratsyarat Penyenaraian Bursa Securities.

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52

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Jawatankuasa-Jawatankuasa Lembaga

JAWATANKUASA AUDIT

Keahlian (sambungan)

· Sekurang-kurangnya seorang ahli Jawatankuasa Audit mestilah ahli Institut Akauntan Malaysia atau seorang yang diluluskan di bawah seksyen 15.10(1)(c)(ii) Syarat-syarat Penyenaraian Bursa Securities. Pengarah Gantian tidak boleh dilantik sebagai ahli Jawatankuasa Audit. Pengerusi Jawatankuasa mesti merupakan seorang Pengarah Bebas dan mesti dipilih oleh ahli-ahli Jawatankuasa. Sekiranya bilangan ahli Jawatankuasa Audit adalah kurang daripada bilangan yang diperlukan, iaitu seramai tiga (3) orang disebabkan oleh perletakan jawatan atau sebarang sebab yang menghentikannya sebagai seorang ahli, Lembaga mesti melantik ahli-ahli baru dalam tempoh tiga (3) bulan bagi memenuhi jawatan kosong tersebut. Kesemua ahli Jawatankuasa Audit mesti memegang jawatan berterusan melainkan diputuskan oleh Lembaga atau sehingga mereka berhenti sebagai Pengarah Syarikat.

(sambungan)

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Kehadiran Mesyuarat

· · Kuorum mesti mempunyai tiga (3) ahli, yang majoritinya adalah Pengarah-pengarah Bebas. Jawatankuasa boleh mengkehendaki mana-mana kakitangan dan wakil daripada juruaudit luar menghadiri mesyuarat. Ketua Pegawai Kewangan Kumpulan dan Ketua Jabatan Audit Dalaman biasanya menghadiri mesyuarat. Sekurang-kurangnya setahun sekali, Jawatankuasa berjumpa dengan juruaudit luar tanpa kehadiran ahli-ahli eksekutif daripada Lembaga. Setiausaha Syarikat bertindak sebagai Setiausaha Jawatankuasa.

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Kekerapan Mesyuarat

Mesyuarat diadakan tidak kurang daripada empat (4) kali setahun. Pada tahun kewangan berakhir 31 Januari 2005, sejumlah empat (4) mesyuarat telah diadakan. Butirbutir kehadiran Pengarah dalam mesyuarat-mesyuarat ini adalah seperti berikut: Para Pengarah Tuan Haji Nik Ariff Bin Nik Hassan Datuk Henry Chin Poy-Wu Dato' Richard Ong Guan Seng Encik David Park, AMN Bil. Mesyuarat Yang Dihadiri 4/4 4/4 4/4 4/4

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

53

Jawatankuasa-Jawatankuasa Lembaga

JAWATANKUASA AUDIT

Prosiding Mesyuarat

· Semasa ketidakhadiran Pengerusi, Jawatankuasa mesti memilih seorang daripada ahli Bebas yang hadir untuk mempengerusikan mesyuarat berkenaan. Persoalan yang timbul dalam mana-mana mesyuarat mesti diputuskan oleh undi majoriti ahli-ahli yang hadir, di mana setiap ahli memiliki satu (1) undi.

(sambungan)

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Penilaian Jawatankuasa Audit

Tempoh jawatan serta prestasi Jawatankuasa dan setiap ahli mesti dikaji semula oleh Lembaga sekurang-kurangnya sekali setiap tiga (3) tahun untuk memutuskan samada Jawatankuasa Audit dan ahli-ahlinya telah melaksanakan kewajipan-kewajipan mengikut terma-terma rujukan masing-masing.

Skop Autoriti

· Jawatankuasa diberi autoriti oleh Lembaga untuk menyiasat sebarang aktiviti dalam terma-terma rujukannya. Ia diberi kuasa untuk mendapatkan sebarang informasi yang diperlukannya daripada mana-mana kakitangan dan kesemua kakitangan dikehendaki mematuhi sebarang permintaan daripada Jawatankuasa. Jawatankuasa diberi kuasa oleh Lembaga untuk memperolehi nasihat perundangan luar atau profesional bebas lain dan memastikan kehadiran pihak luar yang mempunyai pengalaman dan kemahiran yang relevan, jika difikirkan perlu. Terma dan Rujukan Jawatankuasa Audit tidak menghadkan tanggungjawab dan autoriti Pengarah Urusan untuk menegakkan atau mengarahkan audit dalaman serta penyemakan diadakan dari masa ke semasa.

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Kewajipan-Kewajipan

· Untuk mengesyorkan kepada Lembaga perlantikan juruaudit luar, yuran audit, syarat-syarat perlantikan lain serta mempertimbangkan sebarang surat perletakan jawatan daripada juruaudit luar (jika ada). Untuk mengkaji pelan audit tahunan bersama juruaudit luar dan perubahan yang seterusnya (jika ada). Untuk mempertimbangkan dan berbincang dengan juruaudit luar tentang kesukaran dan/atau sekatan yang mereka menghadapi sewaktu kerja mengaudit mereka. Untuk memastikan bahawa para kakitangan Syarikat memberi bantuan kepada juruaudit luar.

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54

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Jawatankuasa-Jawatankuasa Lembaga

JAWATANKUASA AUDIT

Kewajipan-Kewajipan (sambungan)

· Untuk mengkaji penyata kewangan suku tahunan dan tahunan sebelum penyerahan kepada Lembaga, dengan berfokus khusus kepada:i. ii. sebarang perubahan dalam polisi dan praktis perakaunan penyesuaian penting yang timbul daripada pengauditan dan peristiwa-peristiwa luar biasa yang lain (jika ada) iii. kepatuhan mengikut Standard Perakaunan, rangka kerja perundangan yang relevan dan lainlain keperluan undang-undang iv. kepatuhan Syarat-syarat Penyenaraian Bursa Securities dan semua peraturan-peraturan lain yang perlu · Untuk mengkaji program audit dalaman, menerima kesemua laporan audit dalaman, mempertimbangkan hasil penting siasatan audit dalaman dan respons pengurusan ke atasnya. Untuk mengkaji kecukupan skop, fungsi dan sumber-sumber fungsi audit dalaman, dan yang ia mempunyai autoriti yang perlu untuk melaksanakan kewajipan-kewajipannya. Untuk meluluskan sebarang perlantikan atau penghentian eksekutif kanan Jabatan Audit Dalaman. Untuk mengkaji sebarang penilaian terhadap eksekutif kanan Jabatan Audit Dalaman. Untuk dimaklumkan ke atas sebarang perletakan jawatan eksekutif kanan Jabatan Audit Dalaman serta menyediakan peluang kepada kakitangan yang meletakkan jawatan tersebut mengajukan sebab-sebab perletakan jawatannya. Untuk sentiasa mengkaji kecekapan sistem kawalan dalaman, dan khasnya mengkaji surat pengurusan daripada pihak juruaudit luar dan respons pihak pengurusan. Untuk meneliti kesemua sebarang urusniaga parti berkaitan dan untuk memastikan tiada sebarang konflik kepentingan yang mungkin wujud di dalam Syarikat atau Kumpulan termasuk sebarang urusniaga, prosedur atau tingkah laku yang menimbulkan persoalan mengenai ketulusan pengurusan. Untuk mempertimbangkan perkara-perkara berkaitan lain dari masa ke semasa seperti yang didefinisikan oleh Lembaga.

(sambungan)

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Prosedur Melapor

Pengerusi Jawatankuasa mesti melaporkan setiap mesyuarat kepada Lembaga dan Setiausaha mesti mengedarkan minit-minit mesyuarat Jawatankuasa kepada semua ahli Lembaga.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

55

Jawatankuasa-Jawatankuasa Lembaga

JAWATANKUASA AUDIT

(sambungan)

Ringkasan aktiviti-aktiviti Jawatankuasa Audit sepanjang tahun kewangan berakhir 31 Januari 2005

Pada tahun kewangan berakhir 31 Januari 2005, aktiviti-aktiviti Jawatankuasa Audit adalah diringkaskan seperti berikut: · Mengkaji pelan audit dalaman bagi setiap tahun kewangan yang merangkumi penilaian atas kepatuhan operasi mengikut prosedur-prosedur kawalan yang ditetapkan, kecekapan pengurusan, penilaian risiko dan kebolehpercayaan rekod-rekod kewangan. Memberi autoriti kepada Jabatan Audit Dalaman untuk menjalankan siasatan khusus ke atas pelbagai bidang khusus yang memerlukan perhatian, mengkaji hasil siasatan dan mempertimbangkan tindakan-tindakan yang sesuai serta/atau cadangan-cadangan yang berbangkit darinya. Menerima dan mengkaji sejumlah dua puluh enam (26) laporan audit dalaman yang meliputi proses Bahagian Pembuatan & Pengedaran Jubin, Perladangan, Pemegangan & Pembangunan Hartanah, Automotif, Perdagangan dan Pembiayaan Kredit dalam Kumpulan. Mengkaji pelan audit tahunan untuk Kumpulan dan Syarikat dengan juruaudit luar dan mengesyorkan yuran audit mereka kepada Lembaga. Mengkaji dan membincangkan penyata kewangan tahunan yang diaudit dengan juruaudit luar sebelum mengesyorkannya kepada Lembaga untuk kelulusan; selepas meneliti butir-butir khusus atau isu-isu yang dikemukakan oleh juruaudit luar. Mengkaji laporan suku tahunan Kumpulan yang disediakan menurut Piawaian 26 Lembaga Piawaian Perakaunan Malaysia "Laporan Kewangan Interim" dan Bab 9 Syarat-syarat Penyenaraian Bursa Securities dan pengumuman akhbar, sebelum dihantar kepada Lembaga untuk pertimbangan dan kelulusan di mana Pengerusi Jawatankuasa Audit akan menerangkan kepada Lembaga tentang butir-butir yang jitu dan pengesyoran daripada Jawatankuasa Audit. Mengkaji dan mempertimbangkan pendedahan Urusniaga Parti Berkaitan dalam penyata kewangan dan Surat Pekeliling kepada para pemegang saham mengenai Urusniaga Parti Berkaitan yang Berulang. Mengkaji Penyata Pentadbiran Korporat dan Penyata Kawalan Dalaman yang telah disediakan mengikut peruntukan-peruntukan yang ditetapkan di bawah Kod Pentadbiran Korporat Malaysia, tahap pematuhan mengikut Kod tersebut serta mengesyorkan kepada Lembaga pelan tindakan untuk menangani jurang-jurang yang telah dikenalpasti (jika ada) di antara praktis Pentadbiran Korporat Kumpulan yang sedia ada dengan prinsip dan praktis terbaik Pentadbiran Korporat yang ditetapkan di bawah Kod.

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56

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Jawatankuasa-Jawatankuasa Lembaga

JAWATANKUASA GANJARAN

Jawatankuasa Ganjaran ditubuhkan pada 29 Jun 2001 dan kini ahli-ahlinya adalah seperti berikut:

Datuk Henry Chin Poy-Wu (Pengarah Bebas Bukan Eksekutif) - Pengerusi Dato' Richard Ong Guan Seng (Pengarah Bebas Bukan Eksekutif) Tuan Haji Nik Ariff Bin Nik Hassan (Pengarah Bebas Bukan Eksekutif) Encik David Park, AMN (Pengarah Eksekutif)

Terma-terma Rujukan bagi Jawatankuasa Ganjaran Keahlian

Jawatankuasa mesti dilantik oleh Lembaga Pengarah daripada Para Pengarah Syarikat menurut Kod Pentadbiran Korporat Malaysia yang menghendaki semua atau majoriti ahli-ahli Jawatankuasa Ganjaran terdiri daripada Pengarah-pengarah Bukan Eksekutif.

Kekerapan Mesyuarat

Mesyuarat diadakan sekurang-kurangnya sekali (1) setahun dan pada bila-bila masa yang perlu.

Kehadiran Mesyuarat

Kuorum mesyuarat mesti mempunyai dua (2) orang.

Prosiding Mesyuarat

· · Semasa ketidakhadiran Pengerusi, Jawatankuasa Ganjaran mesti memilih seorang daripada ahli Bukan Eksekutif untuk mempengerusikan mesyuarat berkenaan. Persoalan yang timbul dalam mana-mana mesyuarat mesti diputuskan oleh undi majoriti ahli-ahli yang hadir, di mana setiap ahli memiliki satu (1) undi. Sekiranya berlaku kesamaan bilangan undi, Pengerusi mempunyai hak undi pemutus sebagai undi tambahan ke atas undinya sebagai seorang ahli. Untuk mengkaji pakej-pakej ganjaran tahunan setiap individu Pengarah Eksekutif agar taraf ganjaran adalah memadai untuk menarik dan mengekalkan Pengarah-pengarah Eksekutif yang diperlukan untuk menguruskan Syarikat dengan berjaya, dan Untuk mengesyorkan kepada Lembaga mengenai pakej-pakej ganjaran Para Pengarah Eksekutif Syarikat.

Kewajipan-kewajipan

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Skop Autoriti

Jawatankuasa Ganjaran tidak diberi autoriti oleh Lembaga untuk melaksanakan pengesyorannya, tetapi diwajibkan untuk melapor pengesyorannya kepada seluruh Lembaga bagi pertimbangan dan implementasi oleh Lembaga.

Kepentingan Ahli-ahli Jawatankuasa Ganjaran

Tidak boleh menyertai atau terlibat dalam pertimbangan atau perbincangan mengenai ganjaran mereka sendiri.

Prosedur Melapor

Setiausaha mesti mengedarkan minit-minit mesyuarat Jawatankuasa Ganjaran kepada semua ahli Lembaga.

Ringkasan Aktiviti-aktiviti

Jawatankuasa Ganjaran bersidang pada 31 Mac 2005 untuk mengkaji dan mengesyorkan kepada Lembaga, cadangan bonus Para Pengarah Eksekutif untuk tahun berakhir 31 Januari 2005 serta cadangan kenaikan gaji mereka untuk tahun kewangan yang bermula pada 1 Februari 2005.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

57

Jawatankuasa-Jawatankuasa Lembaga

JAWATANKUASA PENCALONAN

Jawatankuasa Pencalonan ditubuhkan pada 29 Jun 2001 dan kini ahli-ahlinya adalah seperti berikut:

Datuk Henry Chin Poy-Wu (Pengarah Bebas Bukan Eksekutif) - Pengerusi Dato' Richard Ong Guan Seng (Pengarah Bebas Bukan Eksekutif ) Tuan Haji Nik Ariff Bin Nik Hassan (Pengarah Bebas Bukan Eksekutif)

Terma-terma Rujukan bagi Jawatankuasa Pencalonan Keahlian

Jawatankuasa mesti dilantik oleh Lembaga daripada Para Pengarah Syarikat menurut Kod Pentadbiran Korporat Malaysia yang menghendaki Jawatankuasa Pencalonan secara eksklusif terdiri daripada Pengarah Bukan Eksekutif di mana majoriti adalah Pengarah Bebas Bukan Eksekutif.

Kekerapan Mesyuarat

Mesyuarat diadakan pada bila-bila masa yang perlu.

Kehadiran Mesyuarat

Kuorum mesyuarat mesti mempunyai dua (2) orang.

Prosiding Mesyuarat

· Semasa ketidakhadiran Pengerusi, Jawatankuasa Pencalonan mesti memilih seorang daripada ahli Bukan Eksekutif untuk mempengerusikan mesyuarat berkenaan. Persoalan yang timbul dalam mana-mana mesyuarat mesti diputuskan oleh undi majoriti ahli-ahli yang hadir, di mana setiap ahli memiliki satu (1) undi. Sekiranya berlaku kesamaan bilangan undi, Pengerusi mempunyai hak undi pemutus sebagai undi tambahan ke atas undinya sebagai seorang ahli.

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58

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Jawatankuasa-Jawatankuasa Lembaga

JAWATANKUASA PENCALONAN

Kewajipan-kewajipan

· Untuk mencalonkan dan mengesyorkan calon-calon yang sesuai untuk dilantik kepada Lembaga supaya kemahiran padu, pengalaman dan kualiti-kualiti lain termasuk kecekapan teras yang diperlukan dapat dibawa oleh Pengarah Bukan Eksekutif kepada Lembaga. Untuk mencalonkan dan mengesyorkan Para Pengarah yang layak sebagai Ahli Jawatankuasa Audit dan menganggotai Jawatankuasa Lembaga dari masa ke semasa. Untuk mempertimbangkan calon-calon sebagai Pengarah seperti yang dicadangkan oleh Pengarah Urusan dan cadangan daripada mana-mana eksekutif kanan atau mana-mana Pengarah atau pemegang saham, tertakluk kepada batasan praktikal. Untuk menilai secara tahunan keberkesanan Lembaga serta sumbangan individu Pengarah. Untuk memutuskan saiz Lembaga yang sesuai dan bilangan penyertaan Bukan Eksekutif agar mematuhi Syarat-syarat Penyenaraian Bursa Securities. Untuk memastikan bahawa kesemua Pengarah baru mengambil bahagian dalam program latihan Pengarah seperti yang ditetapkan dalam Syarat-syarat Penyenaraian Bursa Securities.

(sambungan)

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Skop Autoriti

Jawatankuasa Pencalonan tidak diberi autoriti oleh Lembaga untuk melaksanakan pengesyorannya, tetapi diwajibkan untuk melapor pengesyorannya kepada seluruh Lembaga bagi pertimbangan dan implementasi oleh Lembaga. Keputusan sebenar samada seseorang akan dicalonkan adalah tanggungjawab seluruh Lembaga selepas mempertimbangkan pengesyoran jawatankuasa.

Prosedur Melapor

Setiausaha mesti mengedarkan minit-minit mesyuarat Jawatankuasa Pencalonan kepada semua ahli Lembaga.

Ringkasan-ringkasan Aktiviti-aktiviti

Perlantikan Encik Edward Lee Ming Foo yang dahulunya ialah Pengarah Gantian kepada Encik David Park, sebagai Pengarah Eksekutif dan Puan Sim Siew Meng sebagai Pengarah Gantian beliau pada 4 Ogos 2004 adalah berdasarkan pengesyoran Jawatankuasa Pencalonan. Puan Sim Siew Meng dahulunya adalah Pengarah Gantian kepada Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak yang telah meletak jawatan pada 4 Ogos 2004.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

59

Group Financial Highlights

Maklumat Kewangan Kumpulan

Year Ended 31 January / Tahun Berakhir 31 Januari 2001 2002 2003 As restated 2004 2005 INCOME (RM'000) PENDAPATAN (RM'000) (i) (ii) (iii) (iv) Revenue / Perolehan Operating profit / Keuntungan Operasi Profit before taxation# / Keuntungan sebelum cukai# Profit after taxation and minority interests attributable to shareholders of the Company## / Keuntungan selepas cukai dan kepentingan minoriti yang boleh diagihkan kepada pemegangpemegang saham Syarikat##

Includes Other Non Operating Items / Termasuk Lain-lain Butir Bukan Operasi

##

667,360 93,831 250,487

754,733 67,278 138,059

911,983 150,232 173,763

1,123,847 1,416,228 201,675 247,729 200,335 248,392

17,571

42,565

59,652

75,507

102,551

#

149,458

64,085

27,520

-

16,458

Includes Other Non Operating Items after taxation and minority interests / Termasuk Lain-lain Butir Bukan Operasi selepas cukai dan kepentingan minoriti (12,597) 25,129 13,788 8,246

BALANCE SHEET (RM'000) KUNCI KIRA-KIRA (RM'000) Assets/ Harta (i) Total tangible assets / Jumlah harta ketara (ii) Net tangible assets / Harta ketara bersih (iii) Current assets / Harta semasa Liabilities and Shareholders' Funds/ Tanggungan dan Dana Pemegang-pemegang Saham (i) Current liabilities / Tanggungan semasa (ii) Paid-up capital / Modal berbayar (iii) Shareholders' funds / Dana pemegang-pemegang saham PER SHARE/ SESAHAM (i) Net earnings (sen) / Pendapatan bersih (sen) (ii) Net tangible assets (RM) / Harta ketara bersih (RM) (iii) Gross dividend (%) / Dividen kasar (%)

* Adjusted for bonus issue and conversion of warrants / Diselaraskan untuk terbitan bonus dan penukaran waran.

2,108,416 1,992,108 700,650 715,641 775,188 561,931

2,002,919 691,870 562,209

2,162,965 2,805,937 732,986 820,131 612,445 936,644

548,600 292,000 711,662

377,045 438,003 725,681

344,993 438,003 711,012

434,917 438,003 738,711

679,833 438,003 824,542

4.01* 1.60* 8.00

9.72 1.63 8.00

13.62 1.58 14.50

17.24 1.67 14.50

23.42 1.88 5.50

FINANCIAL RATIOS/ KADAR KEWANGAN (i) Return on total tangible assets (%) / Kepulangan atas jumlah harta ketara (%) (ii) Return on shareholders' funds (%) / Kepulangan atas dana pemegang-pemegang saham (%) (iii) Current ratio / Kadar semasa

0.83

2.14

2.98

3.49

3.65

2.47 1.41

5.87 1.49

8.39 1.63

10.22 1.41

12.44 1.38

60

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Group Financial Highlights

Maklumat Kewangan Kumpulan

Revenue / Operating Profit Perolehan / Keuntungan Operasi RM Million 1,600 1,400 1,200 250 1,000 200 800 150 600 400 200 0 2001 2002 2003 2004 2005 100 50 0 2001 2002 2003 2004 2005 RM Million 350 300 Profit Before Tax / Profit After Tax and Minority Interests Keuntungan Bersih Sebelum Cukai / Keuntungan Bersih Selepas Cukai dan Kepentingan Minoriti

Revenue

Operating Profit

Profit before Tax

Profit after Tax and Minority Interests

Shareholders' Funds / Total Tangible Assets Dana Pemegang-pemegang Saham / Jumlah Harta Ketara RM Million 3,500 3,000 2,500 2,000 1,500 1,000 5.00 500 0 2001 2002 2003 2004 2005 0 20.00 25.00

Net Earnings per share (EPS) / Net Tangible Assets per Share (NTA) Pendapatan Bersih Sesaham (EPS) / Harta Ketara Bersih Sesaham (NTA) 4.00 3.50 3.00

EPS (SEN)

15.00

2.50 2.00

10.00

1.50 1.00 0.50 0.00 2001 2002 2003

NTA (RM)

2004

2005

Total Tangible Assets

Shareholders' Funds

EPS (sen)

NTA (RM)

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

61

Chairman's Statement

On behalf of the Board, I have pleasure in presenting the Forty-First Annual Report and Financial Statements of the Company and the Group for the year ended 31 January 2005.

Review of Results

Group Consolidated results include the consolidation of the results of Hap Seng Consolidated Berhad Group of Companies. Consolidated Net Revenue increased over the previous financial year by 26% to RM1,416.2 million (2004 : RM1,123.8 million). Operating Profit increased by 23% to RM247.7 million (2004: RM201.7 million). Other Non Operating Items of RM16.5 million was in respect of gains arising from disposal of the Group's entire equity interests of 12.099% in Lam Soon (Hong Kong) Limited and 5.49% in Aviva Insurance Berhad. Profit Before Tax including Other Non Operating Items was RM248.4 million (2004 : RM200.3 million). Net Profit attributable to shareholders after taxation and minority interests which included Other Non Operating Items was RM102.6 million (2004 : RM75.5 million). Excluding Other Non Operating Items, Net Profit attributable to shareholders after taxation and minority interests for the year under review was RM94.3 million (2004 : RM75.5 million). Basic Earnings Per Share for the year attributable to shareholders which included Other Non Operating Items at 23.42 sen was 36% higher than the preceding year of 17.24 sen. Excluding the Other Non Operating Items, Earnings Per Share for the year attributable to shareholders was 21.54 sen and 25% higher than the preceding year of 17.24 sen. The Group's asset base has grown in line with the expansion of operations and was funded from internal sources and appropriate unsecured bank facilities. The major changes in Fixed Asset allocation during the year was the acquisition of MUI Plaza and the adjoining land in the Kuala Lumpur City Centre, additions to the development land bank in Sabah and Kuala Lumpur and divestment of the Group's equity holdings in Lam Soon (Hong Kong) Limited and Aviva Insurance Berhad. Inventories increased by RM156 million during the year mainly in support of Sasco sales growth and the Automotive Division start up of business in Kuala Lumpur. Trade Receivables increased to RM631.4 million largely due to the growth in Hap Seng Credit Sdn Bhd's portfolio of RM161 million and trade debts related to improved sales performances of the other divisions. Bank borrowings increased by RM469 million to RM735 million which included Term Loans of RM236 million for partial financing of MUI Plaza and the Hap Seng Credit Sdn Bhd's term loan portfolio. The Overall Gearing Ratio at 31 January 2005 was 0.89 (2004 : 0.36) with Net Tangible Assets increasing by 12% to RM820 million (2004 : RM733 million).

62

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pengerusi

Bagi pihak Lembaga Pengarah, dengan sukacitanya saya membentangkan Laporan Tahunan dan Penyata Kewangan Syarikat dan Kumpulan yang Keempat Puluh Satu bagi tahun berakhir 31 Januari 2005.

Tinjauan Keputusan

Keputusan Kumpulan Yang Disatukan merangkumi penyatuan keputusan dari Kumpulan Hap Seng Consolidated Berhad. Perolehan Bersih Kumpulan Yang Disatukan meningkat sebanyak 26% ke RM1,416.2 juta (2004 : RM1,123.8 juta) berbanding dengan tahun kewangan yang lepas. Keuntungan Operasi meningkat sebanyak 23% ke RM247.7 juta (2004 : RM201.7 juta). ` Lain-lain Butir Bukan Operasi berjumlah RM16.5 juta merupakan keuntungan daripada pelupusan seluruh kepentingan ekuiti Kumpulan sebanyak 12.099% dalam Lam Soon (Hong Kong) Limited dan 5.49% dalam Aviva Insurance Berhad. Keuntungan Sebelum Cukai termasuk Lain-lain Butir Bukan Operasi adalah RM248.4 juta (2004 : RM200.3 juta). Keuntungan Bersih yang boleh diagihkan kepada para pemegang saham selepas ditolak cukai dan kepentingan minoriti termasuk Lain-lain Butir Bukan Operasi adalah RM102.6 juta (2004 : RM75.5 juta). Selepas dikecualikan Lain-lain Butir Bukan Operasi, Keuntungan Bersih yang boleh diagihkan kepada para pemegang saham selepas ditolak cukai dan kepentingan minoriti dalam tahun yang ditinjau ialah RM94.3 juta (2004 : RM75.5 juta). Perolehan Asas Sesaham yang boleh diagihkan kepada para pemegang saham termasuk Lain-lain Butir Bukan Operasi ialah 23.42 sen, iaitu 36% lebih tinggi daripada 17.24 sen pada tahun lepas. Selepas dikecualikan Lainlain Butir Bukan Operasi, Perolehan Sesaham yang boleh diagihkan kepada para pemegang saham untuk tahun kewangan ini ialah 21.54 sen, iaitu 25% lebih tinggi daripada 17.24 sen pada tahun lepas. Aset Kumpulan berkembang sejajar dengan pengembangan operasi dan dibiayai dari sumber dalaman dan kemudahan bank tidak bercagar yang sesuai. Perubahan-perubahan utama dalam peruntukan Aset Tetap pada tahun ini ialah pengambilalihan MUI Plaza dan tanah bersebelahannya di Pusat Bandar Kuala Lumpur, pengembangan bank tanah di Sabah dan Kuala Lumpur serta pelupusan ekuiti Kumpulan dalam Lam Soon (Hong Kong) Limited dan Aviva Insurance Berhad. Inventori meningkat sebanyak RM156 juta dalam tahun kewangan untuk memapah pertumbuhan jualan Sasco dan permulaan perniagaan baru Bahagian Automotif di Kuala Lumpur. Penghutang Dagangan meningkat kepada RM631.4 juta disebabkan sebahagian besar oleh pertumbuhan portfolio Hap Seng Credit Sdn Bhd sebanyak RM161 juta dan hutang dagangan yang berkaitan dengan peningkatan prestasi jualan di lain-lain bahagian. Pinjaman bank meningkat sebanyak RM469 juta ke RM735 juta adalah termasuk Pinjaman Bertempoh sebanyak RM236 juta untuk membiayai sebahagian daripada pengambilalihan MUI Plaza serta menyokong portfolio pinjaman bertempoh Hap Seng Credit Sdn Bhd. Nisbah Pinjaman Keseluruhan setakat 31 Januari 2005 adalah 0.89 (2004 : 0.36) dengan Aset Ketara Bersih meningkat sebanyak 12% ke RM820 juta (2004 : RM733 juta).

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

63

Chairman's Statement

Divisional Performance

MML Tiles Manufacturing and Distribution

In the face of very challenging trading conditions, intense local competition and low price imports mainly from China, MML Tiles Manufacturing and Distribution Division increased Net Revenue by 18%. The Division continued to focus on quality, offering premium value homogenous tiles with new and innovative designs. Approximately 40% of sales were to export markets mainly in Europe, Middle East and Australia. Six Sigma management programs further improved production and distribution efficiencies, unit costs, margins and expense controls. The Division operated at near full production capacity achieving increased Operating Profit and Return on Assets Employed. To further encourage domestic retail sales and increase awareness of the superior quality and variety of the Division's products, a new wing was added to the MML Gallery at Petaling Jaya. The Division now has five galleries located at Petaling Jaya, Kluang, Johor Baru, Butterworth and Singapore. RM1,037 (2004 : RM731) per metric ton. With cost escalations mainly in fertilizer and diesel supplies and rehabilitation of flood damaged areas, the average production cost of CPO (excluding PK Revenue Credit) increased by 10.5% to RM758 per metric ton for the year. The Division contributed substantially to the overall results of the Group.

Property Holding and Development Division

The completion of the Group's Property Rationalization Scheme at the end of the previous financial year enabled the Group to capitalize on the "Hap Seng" brand name. The Division benefited from the prevailing low mortgage interest rate regime and maintained its leadership position in Sabah, focusing mainly on low rise landed residential projects in the major urban centres in Sabah. The Division launched a total of 837 new units of residential houses and shop houses in Tawau, Lahad Datu and Sandakan during the year under review. The recent acquisitions of MUI Plaza and the adjoining land in the Golden Triangle of Kuala Lumpur City Centre further enhanced the Group's Property Holding and Development Division role as a meaningful player in the Malaysian Property Sector. For the year under review, the Division achieved Net Revenue of RM107 million and an Operating Profit of RM30 million.

Plantation Division

Crop was affected by severe flooding generally experienced by oil palm plantations in Sabah in the early part of the financial year. Nevertheless, Fresh Fruit Bunch (FFB) production for the full year recovered and at 759,116 metric tons was 4% higher than the previous year. Crude Palm Oil (CPO) production for the financial year increased marginally over the previous year to 158,735 (2004 : 154,919) metric tons. Average CPO price realization for the year was higher than the preceding year at RM1,621 (2004 : RM1,501) per metric ton whilst physical sales of CPO were marginally lower. The average Oil Extraction Rate (OER) of the Group's four mills at 21.75% (2004 : 21.97%) was marginally affected by the wet weather and a higher proportion of younger palms. Palm Kernel (PK) production for the year at 33,854 metric tons was also 4% higher than the previous year with an extraction rate of 4.64% (2004 : 4.61%). Palm Kernel average selling price for the year was

64

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pengerusi

Prestasi Bahagian

Bahagian Pembuatan dan Pengedaran Jubin MML

Walaupun berdagang dalam suasana pasaran yang mencabar dan menghadapi persaingan sengit dalam pasaran tempatan dan pengimportan jubin berharga rendah terutamanya dari China, Bahagian Pembuatan dan Pengedaran Jubin MML masih mencatatkan peningkatan Perolehan Bersih sebanyak 18%. Bahagian ini terus menumpukan fokus kepada kualiti, menawarkan jubin homogen yang berkualiti unggul dengan rekaan baru dan inovatif. Kira-kira 40% daripada jualannya dieksport ke Eropah, Timur Tengah dan Australia. Program pengurusan Six Sigma mempertingkatkan lagi keefisienan pengeluaran dan pengedaran, memperbaiki kos unit, margin serta kawalan perbelanjaan. Dengan beroperasi pada paras hampir kapasiti pengeluaran penuh, Bahagian ini mencapai prestasi yang lebih baik dari segi Keuntungan Operasi dan Pulangan keatas Dana Bersih. Demi menggalakkan pertumbuhan jualan runcit domestik dan meningkatkan kesedaran mengenai keunggulan kualiti serta pelbagai produk Bahagian, sebuah sayap baru telah ditambahkan kepada galeri MML di Petaling Jaya. Bahagian kini mempunyai lima buah galeri di Petaling Jaya, Kluang, Johor Baru, Butterworth dan Singapura. pada paras 4.64% (2004 : 4.61%). Harga purata jualan Isirong Sawit pada tahun ini adalah RM1,037 (2004 : RM731) setan metrik. Dengan kos yang melambung tinggi khususnya dalam pembekalan baja dan diesel serta kerja baik pulih di kawasan yang dilanda banjir, kos purata pengeluaran MSM (dikecualikan Perolehan Kredit IS) melonjak sebanyak 10.5% ke RM758 setan metrik bagi tahun ini. Bahagian ini menyumbang dengan ketaranya terhadap keputusan keseluruhan Kumpulan.

Bahagian Pemegangan dan Pembangunan Hartanah

Penyempurnaan Skim Rasionalisasi Hartanah Kumpulan pada akhir tahun kewangan lepas membolehkan Kumpulan mengambil untung dari jenama "Hap Seng". Bahagian ini manfaat dari kadar faedah pinjaman yang rendah dan mengekalkan kedudukan kepimpinannya di Sabah, memfokuskan terutamanya kepada projek perumahan yang bertingkat rendah di pusat bandar-bandar utama di Sabah. Bahagian ini telah melancarkan sejumlah 837 unit baru rumah kediaman dan rumah kedai di Tawau, Lahad Datu dan Sandakan dalam tahun dibawah tinjauan. Pengambilalihan MUI Plaza dan tanah yang bersebelahannya di Segi Tiga Emas Pusat Bandar Kuala Lumpur yang baru ini terus memperkukuhkan peranan Bahagian Pemegangan dan Pembangunan Hartanah Kumpulan sebagai pemaju bermakna dalam Sektor Hartanah Malaysia.

Bahagian Perladangan

Hasil tanaman dipengaruhi oleh masalah banjir yang melanda ladangladang minyak sawit di Sabah pada awal tahun kewangan. Walau bagaimanapun, pengeluaran Buah Tandan Baru (BTB) pulih semula dan pada 759,116 tan metrik adalah 4% lebih tinggi daripada tahun lepas. Pengeluaran Minyak Sawit Mentah (MSM) bagi tahun kewangan ini meningkat sedikit ke 158,735 (2004 : 154,919) tan metrik. Harga realisasi purata MSM untuk tahun ini adalah lebih tinggi daripada tahun lepas pada RM1,621 (2004 : RM1,501) setan metrik sementara jualan fizikal MSM adalah sedikit lebih rendah. Kadar Perahan Minyak (KPM) purata dari keempat-empat buah kilang milikan Kumpulan pada paras 21.75% (2004 : 21.97%) sedikit banyak dipengaruhi oleh keadaan cuaca basah dan proporsi kelapa sawit muda yang lebih tinggi. Pengeluaran Isirong Sawit (IS) dalam tahun ini pada 33,854 tan metrik juga adalah 4% lebih tinggi daripada tahun lepas dengan kadar perahan minyak

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

65

Chairman's Statement

Credit Financing Division

The Group's Credit Financing Division improved its performance for the year under review with solid growth in its loan portfolio which increased to RM358 million at the end of the financial year from RM197 million in the previous year. The Division finished the financial year with a network of seven branches, three in East Malaysia and four in Peninsula Malaysia. The Division achieved satisfactory progress with an improvement in Operating Profit and Profit Before Tax. Si Khiong Industries Sdn Bhd in East Malaysia performed well with a 15% increase in logging truck unit sales. Light Vehicles unit sales increased by 8% over the previous financial year. Overall, the Division recorded a satisfactory improvement in Operating Profit for the full year.

Sasco Fertilizer Trading Division

Sasco experienced extremely competitive conditions in a turbulent fertilizer trading market. Overall sales increased by 39% to RM492 million (2004 : RM354 million). The Division further strengthened its presence in the Peninsula Malaysia market with physical sales volume growth of 9% over the previous year and maintained its leading position in East Malaysia with a 6% growth in physical volume. The Division delivered 690,682 metric tons of various fertilizers during the year, representing an overall increase in volume of approximately 7% over the previous year. The Division achieved a satisfactory increase in Operating Profit and Profit Before Tax for the year.

Quarry and Building Materials Division

The Quarry and Building Materials Division performed satisfactorily during the first year of operations. Various measures were put in place to improve efficiency and reduce production costs. The Division has embarked on a RM10.5 million brick factory expansion at Jalan Sin Onn Tiku, Tawau which will enable the Division to increase its market share in the East Coast of Sabah. The Division reported positive earnings for the year under review.

Automotive Division

On 16 August 2004, the Group reached another milestone of progress with the appointment by DaimlerChrysler Malaysia Sdn Bhd of Si Khiong Star Sdn Bhd (a wholly-owned subsidiary of Si Khiong Industries Sdn Bhd which in turn is a wholly-owned subsidiary of Hap Seng Consolidated Berhad (HSCB), the listed subsidiary of the Company) as the third authorized passenger car dealer in the Klang Valley. The Division is operational and has in place a comprehensive start up program to address this unique opportunity. A temporary car showroom is established at the MUI Plaza ground floor area. An outdoor covered piazza show area is in place on the land adjacent to MUI Plaza. This strategic location will house a state of the art Mercedes-Benz dealer Autohaus showroom to be operational by the end of 2005.

Associated Companies

Vintage Heights Sdn Bhd and EAC Holdings (Malaysia) Sdn Bhd both reported improved earnings whilst Paos Holdings Berhad results were comparatively lower than the previous financial year. Overall, the Group's share of Associated Companies results was marginally higher than the previous financial year.

66

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pengerusi

Dalam tahun yang ditinjau, Bahagian ini mencapai Perolehan Bersih sebanyak RM107 juta dan Keuntungan Operasi sebanyak RM30 juta.

Bahagian Pembiayaan Kredit

Bahagian Pembiayaan Kredit Kumpulan memperbaiki prestasinya dalam tahun yang ditinjau dengan pertumbuhan kukuh dalam portfolio pinjaman yang meningkat ke RM358 juta daripada RM197 juta dalam tahun kewangan lepas. Bahagian ini menutup tirai tahun kewangan ini dengan jaringan tujuh cawangan di mana tiga cawangan terletak di Malaysia Timur dan empat cawangan di Semenanjung Malaysia. Bahagian ini mencapai kemajuan yang memuaskan dengan peningkatan dalam Keuntungan Operasi dan Keuntungan Sebelum Cukai.

bersebelahan MUI Plaza. Lokasi strategik ini akan menempatkan bilik pameran canggih Autohaus wakil penjual Mercedez-Benz yang dijadualkan akan beroperasi pada hujung 2005. Si Khiong Industries Sdn Bhd di Malaysia Timur memaparkan prestasi yang baik dengan peningkatan sebanyak 15% dalam unit jualan trak pembalakan. Unit jualan Kenderaan Ringan turut bertambah sebanyak 8% berbanding dengan tahun kewangan lepas. Secara keseluruhannya, Bahagian ini mencatatkan peningkatan yang memuaskan dalam Keuntungan Operasi untuk tahun sepenuhnya.

Bahagian Perdagangan Baja Sasco

Sasco mengharungi persaingan yang sengit sekali di pasaran baja yang bergelora. Jualan keseluruhannya meningkat sebanyak 39% ke RM492 juta (2004 : RM354 juta). Bahagian ini terus memperkukuhkan kedudukannya di pasaran baja Semenanjung Malaysia dengan pertumbuhan kuantiti jualan fizikal sebanyak 9% berbanding dengan tahun kewangan lepas dan turut mempertahankan kedudukan kepimpinannya di pasaran Malaysia Timur dengan pertumbuhan sebanyak 6% dalam kuantiti jualan fizikal. Dalam tahun ini, Bahagian telah mengagihkan pelbagai jenis baja sebanyak 690,682 tan metrik, merupakan pertumbuhan kuantiti keseluruhan sebanyak 7% berbanding dengan tahun kewangan lepas. Bahagian ini mencapai kenaikan yang memuaskan dalam Keuntungan Operasi dan Keuntungan Sebelum Cukai bagi tahun ini.

Bahagian Kuari dan Bahan Binaan

Bahagian Kuari dan Bahan Binaan mencapai prestasi yang memuaskan dalam tahun pertama operasinya. Pelbagai langkah telah diambil untuk memperbaiki keefisienan dan mengurangkan kos pengeluaran. Untuk mempertingkatkan bahagian pasarannya di Pantai Timur Sabah, Bahagian telah memulakan pengembangan kilang batu-bata yang bernilai RM10.5 juta di Jalan Sin Onn Tiku, Tawau. Bahagian ini melaporkan perolehan positif dalam tahun yang ditinjau.

Bahagian Automotif

Pada 16 Ogos 2004, Kumpulan mencapai satu lagi titik kemajuan yang bermakna dengan perlantikan Si Khiong Star Sdn Bhd (sebuah subsidiari milik penuh Si Khiong Industries Sdn Bhd yang juga dimiliki penuh oleh Hap Seng Consolidated Berhad (HSCB), iaitu sebuah subsidiari tersenarai milikan Syarikat) oleh DaimlerChrsyler Malaysia Sdn Bhd sebagai wakil penjual kereta penumpang yang ketiga di Lembah Klang. Bahagian ini kini beroperasi dan telah merangka sebuah program pelancaran yang komprehensif untuk menepati peluang unik ini. Sebuah bilik pameran kereta sementara telah didirikan di tingkat bawah MUI Plaza. Sebuah medan pameran luar yang berteduh turut dibina di sebidang tanah

Syarikat-syarikat Bersekutu

Vintage Heights Sdn Bhd dan EAC Holdings (Malaysia) Sdn Bhd kedua-duanya telah melaporkan perolehan yang lebih baik sementara keputusan Paos Holdings Berhad adalah lebih rendah berbanding dengan tahun kewangan lepas. Prestasi Syarikat Bersekutu Kumpulan pada amnya, meningkat sedikit berbanding dengan tahun kewangan lepas.

· Annual Report 2005 ·

Malaysian Mosaics Berhad

Company No: 5371-V

67

Chairman's Statement

Outlook

Overall, the Group completed another successful year in 2004/2005. The Board is mindful of the influence of commodity prices on Group results and has considered appropriate strategies to maintain and improve the quality and stability of the Group's future earnings. Investment in additional plantation land remains an option which is continuously under review by management. The challenge is to accelerate contributions from the Group's other business units. The MML Tiles Manufacturing and Distribution Division is committed to further expansion and diversification of manufacturing capacity of porcelain homogenous tiles and decorative glazed ceramic tiles. When these initiatives are in place, the Division will be a full range premium ceramic and porcelain tile manufacturer with flexible production facilities enabling the Division to optimize benefits of scale throughout the material sourcing, production, logistics, distribution and marketing chain. With the acquisition of various properties under the Group Property Rationalization Scheme in the previous financial year and the purchase of MUI Plaza and the adjoining land and other landed properties in the year under review, the Group has committed substantial resources to the Property Holding and Development Division. Management is focused on optimizing returns from these property assets to achieve a stable and improving level of earnings in the years ahead. Hap Seng Credit Sdn Bhd has also been identified as a source for solid growth. Major initiatives are underway to drive Hap Seng Credit Sdn Bhd to achieve accelerated growth of the loan portfolio over the next several years. In-house credit control and monitoring systems are in place as are experienced senior credit industry management. The Quarry and Building Materials Division was established at the end of the previous financial year on completion of the Group Property Rationalization Scheme. The Division is currently upgrading the quarries in Kota Kinabalu and Tawau and expanding brick manufacturing capacity in Tawau. There are synergistic opportunities for the Division downstream from the quarry operations and in support of Property Holding and Development Division's aggressive expansion in Sabah. The Automotive Division opportunity is immeasurably enhanced with the Group's appointment during the financial year by DaimlerChrysler Malaysia Sdn Bhd to a full line Mercedes-Benz passenger car dealer in the Klang Valley. The responsibility for meeting and surpassing customers' expectations is fully accepted by our new management team, determined to make a success of this exciting enterprise. Within the last two financial years, the Sasco Fertilizers Trading Division has made remarkable progress with fertilizer sales volume and market share in Peninsula Malaysia and is focused on maintaining this momentum and retaining its market leadership in East Malaysia.

68

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pengerusi

Pandangan Masa Depan

Secara keseluruhannya, Kumpulan telah menyempurnakan satu lagi tahun yang cemerlang di 2004/2005. Lembaga sentiasa prihatin terhadap pengaruhan harga komoditi keatas keputusan Kumpulan dan telah mempertimbangkan strategi yang berpatutan untuk mempertahankan dan memperbaiki kualiti dan kestabilan perolehan masa depan Kumpulan. Pelaburan untuk memperluaskan tanah perladangan masih merupakan satu pilihan yang senantiasa dikaji oleh pihak pengurusan. Cabarannya ialah untuk mempercepatkan sumbangan daripada unit-unit perniagaan lain dalam Kumpulan. Bahagian Pembuatan dan Pengedaran Jubin MML komited untuk mengembang dan mempelbagaikan lagi kapasiti pembuatan jubin porselin homogen dan jubin seramik bersepuh hiasan. Apabila inisiatif-inisiatif ini dilaksanakan, Bahagian akan menjadi pembuat jubin seramik dan porselin kepelbagaian penuh yang unggul dengan kemudahan pengeluaran yang fleksibel dan membolehkan Bahagian mengoptimumkan manfaat berskel dalam keseluruhan rangkaian pembelian bahan, pengeluaran, logistik, pengedaran dan pemasaran. Dengan pengambilalihan pelbagai hartanah melalui Skim Rasionalisasi Hartanah Kumpulan dalam tahun kewangan lepas dan pembelian MUI Plaza dan tanah yang bersebelahannya serta lain-lain hartanah bertanah dalam tahun ditinjau, Kumpulan telah komited sebahagian besar sumber kepada Bahagian Pemegangan dan Pembangunan Hartanah. Pihak pengurusan berfokus untuk mengoptimumkan pulangan daripada aset hartanah ini bagi mencapai paras pendapatan yang stabil dan bertambah baik pada tahun-tahun dimasa depan. Hap Seng Credit Sdn Bhd juga telah dikenalpasti sebagai satu sumber pertumbuhan kukuh Kumpulan. Pelbagai inisiatif utama sedang dijalankan untuk merangsang Hap Seng Credit Sdn Bhd mencapai pertumbuhan portfolio pinjaman yang lebih tinggi pada beberapa tahun yang seterusnya. Kawalan kredit dalaman dan sistem pemonitoran sedia ada disamping kakitangan pengurusan kanan yang berpengalaman dalam industri kewangan. Bahagian Kuari dan Bahan Binaan ditubuhkan pada akhir tahun kewangan yang lepas atas penyempurnaan Skim Rasionalisasi Hartanah Kumpulan. Bahagian ini sedang mengemas tingkat kuari di Kota Kinabalu dan Tawau disamping mengembangkan kapasiti pembuatan batu-bata di Tawau. Terdapat peluang sinergi bagi Bahagian di hiliran operasi kuari serta dalam sokongan kepada pengembangan agresif Bahagian Pemegangan dan Pembangunan Hartanah di Sabah. Potensi Bahagian Automotif kini begitu memberangsangkan dengan perlantikan Kumpulan oleh DaimlerChrysler Malaysia Sdn Bhd sebagai wakil penjual lengkap kereta penumpang Mercedes-Benz di Lembah Klang dalam tahun kewangan. Pihak pengurusan baru kami bersemangat tinggi untuk menunaikan tanggungjawabnya menjangkau jangkaan pelanggan dan menjayakan perniagaan hebat ini. Dalam masa dua tahun kewangan yang lepas, Bahagian Perdagangan Baja Sasco telah mencatatkan peningkatan jualan baja dan bahagian pasaran yang membanggakan di Semenanjung Malaysia dan kini menumpukan fokus untuk mengekalkan momentum ini dan terus mengekal kepimpinan pasarannya di Malaysia Timur.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

69

Chairman's Statement

Significant Events

On 25 March 2004, Menara Hap Seng Sdn Bhd (formerly known as Euro-Asia Agrochemical Sdn Bhd), a wholly-owned subsidiary of HSCB entered into a conditional sale and purchase agreement to acquire two contiguous parcels of freehold land together with the 22-storey building erected thereon known as MUI Plaza in Kuala Lumpur City Centre for a cash consideration of RM166 million. Simultaneously, another wholly-owned subsidiary of HSCB, SKI Star Sdn Bhd (formerly known as Oriental Horticulture (Malaysia) Sdn Bhd) entered into a separate conditional sale and purchase agreement to acquire two contiguous parcels of freehold vacant land for a cash consideration of RM24 million. Both agreements were completed on 23 June 2004. On 23 April 2004, HSCB disposed of its entire 12.099% equity interest comprising 29,444,411 shares in Lam Soon (Hong Kong) Limited for HK$2.50 per share or approximately HK$73.3 million (RM35.5 million) which after deducting the relevant costs incidental to the disposal, resulted in a gain of RM13 million. On 11 August 2004, HSCB disposed of its entire 5.49% equity interest comprising 5,500,000 unquoted shares in Aviva Insurance Berhad for a total cash consideration of RM11 million which resulted in a gain of RM3.5 million.

Employees' Share Options Scheme

The Company does not have an Employees' Share Options Scheme. The Company's listed subsidiary, HSCB has 5,636,000 unexercised share options as at 31 January 2005 granted to its eligible employees and employees of its subsidiaries under its Employees' Share Options Scheme which commenced on 13 September 1997 pursuant to the approval by shareholders on 26 June 1997. At an Extraordinary General Meeting held on 4 December 2000, approval was granted by HSCB's s h a r e h o l d e r s t o e x t e n d t h e Employees' Share Options Scheme by a further period of five years, to expire on 12 September 2007. During the financial year under review, HSCB allotted and issued 1,765,000 ordinary shares of RM1.00 each pursuant to the said Scheme. As at 31 January 2005, a cumulative total of 2,847,000 ordinary shares of RM1.00 each have been issued and allotted by HSCB pursuant to the said Scheme.

Recurrent Related Party Transactions

The Group is seeking a renewal of the mandate for its Recurrent Related Party Transactions at the forthcoming Extraordinary General Meeting on 28 July 2005.

70

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pengerusi

Peristiwa Penting

Pada 25 Mac 2004, Menara Hap Seng Sdn Bhd (dahulunya dikenali sebagai Euro-Asia Agrochemical Sdn Bhd), sebuah subsidiari dimilik penuh HSCB memeterai perjanjian jual beli bersyarat untuk mengambilalih dua bidang tanah pegangan bebas yang bersebelahan dan sebuah bangunan 22 tingkat yang terletak di atas tanah tersebut dikenali sebagai MUI Plaza yang terletak di Pusat Bandar Kuala Lumpur dengan pertimbangan tunai sebanyak RM166 juta. Pada masa yang sama, sebuah lagi subsidiari dimilik penuh HSCB, SKI Star Sdn Bhd (dahulunya dikenali sebagai Oriental Horticulture (Malaysia) Sdn Bhd) memeterai perjanjian jual beli bersyarat yang berasingan untuk mengambilalih dua bidang tanah kosong pegangan bebas yang bersebelahan dengan pertimbangan tunai sebanyak RM24 juta. Kedua-dua perjanjian telah disempurnakan pada 23 Jun 2004. Pada 23 April 2004, HSCB melupuskan keseluruhan 12.099% kepentingan ekuitinya yang terdiri daripada 29,444,411 saham dalam Lam Soon (Hong Kong) Limited pada harga HK$2.50 sesaham atau kira-kira HK$73.3 juta (RM35.5 juta) di mana selepas ditolak kos yang berkaitan dengan pelupusan tersebut, memberikan keuntungan sebanyak RM13 juta. Pada 11 Ogos 2004, HSCB melupuskan keseluruhan 5.49% kepentingan ekuitinya yang terdiri daripada 5,500,000 saham tidak tersenarai dalam Aviva Insurance Berhad untuk pertimbangan tunai sebanyak RM11 juta yang seterusnya memberikan keuntungan sebanyak RM3.5 juta.

Skim Opsyen Saham Kakitangan

Syarikat tidak mempunyai Skim Opsyen Saham Kakitangan. HSCB, sebuah subsidiari tersenarai dimiliki Syarikat, mempunyai 5,636,000 opsyen saham yang belum tamat tempoh pada 31 Januari 2005, yang telah diberikan kepada para kakitangan HSCB dan subsidiari-subsidiarinya yang layak dibawah Skim Opsyen Saham Kakitangan yang telah dilancarkan pada 13 September 1997 menurut kelulusan para pemegang sahamnya pada 26 Jun 1997. Pada Mesyuarat Agung Luar Biasa yang diadakan pada 4 Disember 2000, kelulusan telah diberi oleh para pemegang saham HSCB untuk melanjutkan Skim Opsyen Saham Kakitangan selama lima tahun lagi sehingga tamat tempohnya pada 12 September 2007. Dalam tahun kewangan yang ditinjau ini, HSCB telah memperuntukkan dan menerbitkan 1,765,000 saham biasa pada RM1.00 sesaham menurut Skim tersebut. Setakat 31 Januari 2005, jumlah kumulatif sebanyak 2,847,000 saham biasa pada RM1.00 sesaham telah diterbitkan dan diperuntukkan oleh HSCB menurut Skim ini.

Urusniaga Parti Berkaitan Yang Berulang

Kumpulan akan memperbaharui mandat untuk Urusniaga Parti Berkaitan Yang Berulang pada Mesyuarat Agung Luar Biasa yang akan di adakan pada 28 Julai 2005.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

71

Chairman's Statement

Share Buy Back

The Company obtained shareholders' approval to purchase its own shares at an Extraordinary General Meeting held on 23 June 2004. As at 31 January 2005, 715,200 shares at a total cost of RM1.149 million averaging RM1.61 per share were bought back and retained as treasury shares. The Company's issued and paid up share capital remained unchanged at 438,002,899 ordinary shares of RM1.00 each as at 31 January 2005. The Company will be seeking a new mandate from shareholders at the forthcoming Extraordinary General Meeting on 28 July 2005. Pursuant to the mandate granted by the shareholders of HSCB on 17 November 1998, and thereafter annually at HSCB's General Meetings, as at 31 January 2005, HSCB has repurchased 35,431,100 shares for a total cost of RM77.6 million averaging RM2.19 per share. 1,201,900 shares were repurchased by HSCB during the year. The shares repurchased were retained as treasury shares and there was no resale of shares bought back during the year under review. During the financial year under review, 1,765,000 shares were cancelled by HSCB. As at 31 January 2005, HSCB has 32,584,100 ordinary shares held as treasury shares. Since the first Share Buy Back mandate granted by shareholders of HSCB, a cumulative total of 2,847,000 treasury shares have been cancelled by HSCB and an equivalent number of 2,847,000 new ordinary shares were issued pursuant to its Employees' Share Option Scheme. Hence, the issued and paid up share capital of HSCB remained unchanged at 622,660,000 ordinary shares of RM1.00 each. HSCB will seek a new mandate from its shareholders at their forthcoming Extraordinary General Meeting on 28 June 2005.

Dividends

The Board is recommending a final dividend of 3.0 sen (2004 : 3.0 sen) per ordinary share less income tax of 28%. An interim dividend of 2.5 sen less income tax of 28% (2004 : 11.5 sen comprising interim dividend of 2.5 sen less income tax of 28%, special interim of 6.5 sen less income tax of 28% and 2.5 sen tax exempt dividend) per ordinary share was paid on 3 November 2004. The total distribution for the financial year ended 31 January 2005 will amount to 5.5 sen (2004 : 14.5 sen) per ordinary share. The final dividend is subject to the approval of shareholders and will be payable on 10 August 2005 to shareholders whose names appear in the Register of Members or Record of Depositors of the Company on 3 August 2005.

Current Year's Prospects

The Group's Plantation Division results and the overall performance of the Group will be mainly influenced by CPO and PK commodity price movements in the second half of the year. FFB yield and OER are expected to be maintained, subject to normal weather conditions.

72

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pengerusi

Pembelian Balik Saham

Syarikat telah mendapat kelulusan para pemegang saham di Mesyuarat Agung Luar Biasa yang diadakan pada 23 Jun 2004 untuk membeli balik saham sendiri. Setakat 31 Januari 2005, sebanyak 715,200 saham dengan kos berjumlah RM1.149 juta pada harga purata RM1.61 sesaham telah dibeli balik dan disimpan sebagai saham perbendaharaan. Modal terbitan dan berbayar Syarikat tidak berubah dengan 438,002,899 saham biasa pada RM1.00 sesaham setakat 31 Januari 2005. Syarikat bercadang untuk memperolehi mandat baru daripada para pemegang saham di Mesyuarat Agung Luar Biasa yang akan diadakan pada 28 Julai 2005. Menurut mandat yang diberi oleh para pemegang saham HSCB pada 17 November 1998 dan kemudiannya pada setiap tahun di Mesyuarat Agung Tahunan HSCB, setakat 31 Januari 2005, HSCB telah membeli balik 35,431,100 saham dengan kos berjumlah RM77.6 juta pada harga purata RM2.19 sesaham. Sejumlah 1,201,900 saham telah dibeli balik oleh HSCB semasa tahun kewangan. Saham yang dibeli balik disimpan sebagai saham perbendaharaan dan tiada penjualan semula saham yang dibeli balik dalam tahun di bawah tinjauan. Dalam tahun kewangan yang ditinjau, sejumlah 1,765,000 saham telah dibatalkan oleh HSCB. Setakat 31 Januari 2005, HSCB memiliki 32,584,100 saham biasa yang dipegang sebagai saham perbendaharaan. Semenjak mandat pertama Pembelian Balik Saham yang diluluskan oleh para pemegang saham HSCB, jumlah kumulatif sebanyak 2,847,000 saham perbendaharaan telah dibatalkan oleh HSCB dan bilangan yang sama berjumlah 2,847,000 saham biasa baru telah diterbitkan menurut Skim Opsyen Saham Kakitangannya. Oleh itu, modal terbitan dan berbayar HSCB tidak berubah dengan 622,660,000 saham biasa pada RM1.00 sesaham. HSCB akan mendapatkan mandat baru daripada para pemegang sahamnya di Mesyuarat Agung Luar Biasa yang akan diadakan pada 28 Jun 2005.

Dividen

Lembaga Pengarah mengesyorkan dividen akhir sebanyak 3.0 sen (2004 : 3.0 sen) sesaham biasa ditolak cukai pendapatan pada kadar 28%. Dividen interim 2.5 sen ditolak cukai pendapatan pada kadar 28% (2004 : 11.5 sen yang terdiri daripada dividen interim 2.5 sen ditolak cukai pendapatan pada kadar 28%, dividen interim khas 6.5 sen ditolak cukai pendapatan pada kadar 28% dan 2.5 sen dividen yang dikecualikan cukai) sesaham biasa telah dibayar pada 3 November 2004. Jumlah pengagihan bagi tahun kewangan berakhir 31 Januari 2005 akan berjumlah 5.5 sen (2004 : 14.5 sen) sesaham biasa. Dividen akhir adalah tertakluk kepada kelulusan para pemegang saham dan akan dibayar pada 10 Ogos 2005 kepada para pemegang saham yang namanya tersenarai dalam Daftar Keahlian atau Rekod Pendeposit Syarikat pada 3 Ogos 2005.

Prospek Tahun Semasa

Keputusan Bahagian Perladangan dan prestasi keseluruhan Kumpulan akan terutamanya dipengaruhi oleh pergerakan harga komoditi MSM dan IS dalam pertengahan tahun kedua. Hasil BTB dan KPM dijangka kekal, tertakluk kepada keadaan cuaca yang normal.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

73

Chairman's Statement

Appreciation

MML Tiles Manufacturing and Distribution Division operates in a challenging environment with competition from local manufacturers and importation of low priced mainly China sourced tiles. The Division's strategy is to achieve continuous improvement in efficiency and productivity, supplying innovative quality premium products at competitive prices. The Property Holding and Development Division will benefit from the current favourable mortgage financing environment and from on going projects and several new projects commencing in the current year. Sasco Fertilizers Trading Division is expected to further expand its customer base in Peninsula Malaysia and improve its overall position in the Malaysian fertilizers market. The Quarry and Building Materials Division will broaden the product line and increase market share in East Malaysia with the commissioning of its new brick factory in Tawau and upgrading of quarry operations in the third quarter of the current year. Overall, the Automotive Division is expected to remain profitable with improved sale of logging trucks in East Malaysia as it continues to build Si Khiong Star Mercedes-Benz passenger car market acceptance and position in Peninsula Malaysia. The Credit Financing Division will mainly focus on improvement in visibility and presence in Peninsula Malaysia and overall expansion of the loan portfolio. Management anticipates a very challenging year ahead and is committed to giving a good account of itself. On behalf of the Board, I would like to express our appreciation to Tan Sri Datuk Seri Panglima Lau Gek Poh and Datuk Seri Panglima Lau Cho Kun for their invaluable and sterling services to the Group over these many years. I would also like to congratulate Mr. Edward Lee Ming Foo who assumed the position of Managing Director on 31 March 2005 and to Mr. Lee Wee Yong who assumed the position as Deputy Managing Director on the same date. On behalf of the Board, I would also like to express our thanks and appreciation to the management and staff for their loyalty and hard work during the year which has contributed so much to the satisfactory results now before us.

David Park Executive Chairman 15 June 2005

74

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Penyata Pengerusi

Penghargaan

Bahagian Pembuatan dan Pengedaran Jubin MML beroperasi dalam suasana perdagangan yang mencabar dengan persaingan sengit daripada pembuat tempatan dan pengimportan jubin berharga rendah terutamanya dari China. Strategi Bahagian ialah untuk mencapai pembaikan berterusan dalam keefisienan dan produktiviti serta membekalkan produk berkualiti unggul pada harga yang kompetitif. Bahagian Pemegangan dan Pembangunan Hartanah akan menikmati manfaat daripada environ pembiayaan gadaian semasa yang baik dan dari projek-projek semasa serta beberapa projek-projek baru yang akan bermula dalam tahun ini. Bahagian Perdagangan Baja Sasco dijangka akan memperluaskan lagi jaringan pelanggannya di Semenanjung Malaysia dan memperbaikikan kedudukan keseluruhannya dalam pasaran baja Malaysia. Bahagian Kuari dan Bahan Binaan akan meluaskan kepelbagaian produknya dan meningkatkan bahagian pasaran di Malaysia Timur dengan permulaan operasi kilang batu-bata barunya di Tawau dan kerjakerja mengemas tingkat operasi kuarinya dalam suku tahun ketiga dalam tahun ini. Secara keseluruhannya, Bahagian Automotif dijangka akan tetap menguntung dengan jualan trak pembalakan yang bertambah baik di Malaysia Timur sementara ia terus meningkatkan posisi dan sambutan terhadap Si Khiong Star dalam bahagian pasaran kereta penumpang Mercedes-Benz di Semenanjung Malaysia. Bahagian Pembiayaan Kredit akan memberi fokus terutamanya untuk meningkatkan kehadirannya di Semenanjung Malaysia dan memperluaskan lagi portfolio pinjamannya secara keseluruhan. Pihak pengurusan menjangka suatu tahun kewangan yang mencabar dan adalah komited untuk mencapai kecemerlangan. David Park Pengerusi Eksekutif 15 Jun 2005 Bagi pihak Lembaga Pengarah, saya ingin merakamkan penghargaan kepada Tan Sri Datuk Seri Panglima Lau Gek Poh dan Datuk Seri Panglima Lau Cho Kun atas khidmat cemerlang yang tidak ternilai mereka kepada Kumpulan selama ini. Saya juga ingin mengucapkan tahniah kepada Encik Edward Lee Ming Foo yang menyandang jawatan Pengarah Urusan pada 31 Mac 2005 dan Encik Lee Wee Yong yang menyandang jawatan Timbalan Pengarah Urusan pada hari yang sama. Bagi pihak Lembaga Pengarah, saya juga ingin merakamkan terima kasih dan penghargaan kepada pihak pengurusan dan kakitangan atas kesetiaan dan kegigihan mereka sepanjang tahun, yang banyak menyumbang kepada pencapaian yang memuaskan seperti yang telah dibentangkan ini.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

75

Directors' Report

For the year ended 31 January 2005 The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 31 January 2005. PRINCIPAL ACTIVITIES The Company is principally engaged in investment holding and the manufacture and sale of mosaic and homogeneous ceramic tiles. The principal activities of the subsidiaries are as stated in Note 37 to the financial statements. There has been no significant change in the nature of the principal activities during the financial year. RESULTS Group RM'000 Net profit for the year RESERVES AND PROVISIONS There were no material transfers to or from reserves and provisions during the year except as disclosed in the financial statements. DIVIDENDS Since the end of the previous financial year, the Company paid: (i) a final dividend of 3% per share less tax totalling RM9,460,819 in respect of the year ended 31 January 2004 on 23 July 2004; and 102,551 Company RM'000 30,079

(ii) an interim dividend of 2.5% per share less tax totalling RM7,884,016 in respect of the year ended 31 January 2005 on 3 November 2004. The final dividend recommended by the Directors in respect of the year ended 31 January 2005 is 3% per share less tax. No dividend is payable in respect of shares repurchased which were held as treasury shares. DIRECTORS OF THE COMPANY Directors who served since the date of the last report are: David Park, AMN (appointed as Executive Chairman on 4.8.2004) Datuk Henry Chin Poy-Wu (Independent Non-Executive Director and Deputy Chairman) Edward Lee Ming Foo, JP (appointed as Managing Director on 31.3.2005; ceased as alternate Director to David Park

and appointed as Executive Director on 4.8.2004)

Lee Wee Yong (appointed as Deputy Managing Director on 31.3.2005) Tuan Haji Nik Ariff bin Nik Hassan (Independent Non-Executive Director) Dato' Richard Ong Guan Seng (Independent Non-Executive Director) Tan Ghee Kiat (Independent Non-Executive Director) Liew Chor Beng @ Lau Cho Beng (Non-Independent Non-Executive Director) Datuk Simon Shim Kong Yip, JP (Non-Independent Non-Executive Director) Sim Siew Meng (ceased as alternate Director to Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak

and appointed as alternate Director to Edward Lee Ming Foo, JP on 4.8.2004)

Tan Sri Datuk Seri Panglima Lau Gek Poh (Non-Independent Non-Executive Director and Chairman; resigned on 4.8.2004) Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak (Executive Director; resigned on 4.8.2004)

76

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Directors' Report

For the year ended 31 January 2005 DIRECTORS OF THE COMPANY (continued) The holdings and deemed holdings in the ordinary shares of the Company and shares of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at year end as recorded in the Register of Directors' Shareholdings are as follows: Number of ordinary shares At 1.2.2004 Shareholdings in which Directors have direct interests: Malaysian Mosaics Berhad ("MMB") Ordinary shares of RM1 each Tuan Haji Nik Ariff bin Nik Hassan Dato' Richard Ong Guan Seng 474,000 45,000 474,000 45,000 Bought Sold At 31.1.2005

None of the other Directors holding office at 31 January 2005 had any interest in the ordinary shares of the Company and of its related corporations during the financial year. Datuk Simon Shim Kong Yip, JP, Tan Ghee Kiat and Lee Wee Yong retire by rotation under Article 87 of the Company's Article of Association and, being eligible, offer themselves for re-election. Edward Lee Ming Foo, JP, retires under Article 91 of the Company's Articles of Association and, being eligible, offers himself for re-election. DIRECTORS' BENEFITS Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than as disclosed in Note 34 to the financial statements. There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. ISSUE OF SHARES AND DEBENTURES There were no changes in the issued and paid up capital of the Company during the financial year.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

77

Directors' Report

For the year ended 31 January 2005 SHARE REPURCHASE The shareholders of the Company granted authority to the Directors at the Extraordinary General Meeting held on 23 June 2004 to repurchase the Company's shares from the open market. During the financial year, the Company repurchased 715,200 of its issued ordinary shares from the open market for a total cost of RM1,148,930. The repurchase was financed from the Company's internal funds. The average cost paid for the shares repurchased during the year was RM1.61 per share. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965 (see Note 18 to the financial statements). OPTIONS GRANTED OVER UNISSUED SHARES No options were granted to any person to take up unissued shares or debentures of the Company during the year. HOLDING COMPANY The Directors regard Gek Poh (Holdings) Sdn. Bhd., a company incorporated in Malaysia, as the immediate and ultimate holding company. SIGNIFICANT EVENTS DURING THE YEAR (i) As disclosed in the Directors' Report of the previous year, on 25 March 2004, a wholly-owned subsidiary of Hap Seng Consolidated Berhad ("HSCB"), Menara Hap Seng Sdn. Bhd. (formerly known as Euro-Asia Agrochemical Sdn. Bhd.) ("MHS") entered into a conditional sale and purchase agreement with MUI Plaza Sdn. Bhd. to acquire two (2) contiguous parcels of freehold land together with the twenty-two storeys building erected thereon known as MUI Plaza for a cash consideration of RM166,000,000. On the same day, another wholly-owned subsidiary of HSCB, SKI Star Sdn. Bhd. (formerly known as Oriental Horticulture (Malaysia) Sdn. Bhd.) ("SKI") entered into a separate conditional sale and purchase agreement with Ming Fung Sdn. Bhd. and Shun Fung Sdn. Bhd. to acquire two (2) contiguous parcels of freehold vacant land for a cash consideration of RM24,000,000. The aforementioned acquisitions were completed on 23 June 2004. (ii) On 23 April 2004, HSCB disposed of 29,444,411 shares representing approximately 12.099% shareholding in Lam Soon (Hong Kong) Limited, a public company listed on The Stock Exchange of Hong Kong Limited, at HK$2.50 per share for a cash consideration of HK$73.3 million (RM35.5 million) after deducting brokerage fees and relevant costs incidental to the disposal. The disposal gave rise to a gain of approximately RM13 million to the Group during the year. On 12 June 2004, HSCB announced the completion of the incorporation of a wholly-owned subsidiary in Indonesia, namely Sasco Indonesia, PT ("Sasco, PT") with an issued and paid-up share capital of USD100,000 comprising 100,000 ordinary shares of USD1.00 each. Sasco, PT is to be principally involved in the distribution and marketing of the Group's agricultural products such as fertilizers and agrochemicals in Indonesia.

(iii)

78

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Directors' Report

For the year ended 31 January 2005 SIGNIFICANT EVENTS DURING THE YEAR (continued) (iv) On 17 June 2004, Si Khiong Industries Sdn. Bhd., a wholly-owned subsidiary of HSCB, acquired 2 ordinary shares of RM1.00 each representing the entire issued and paid-up share capital of Rebuild Truck Sdn. Bhd. (formerly known as Great Fleet (M) Sdn. Bhd.) for a cash consideration of RM2. The aforementioned acquisition was completed during the year. On 4 August 2004, Si Khiong Industries Sdn. Bhd. ("Si Khiong"), a wholly-owned subsidiary of HSCB acquired 2 ordinary shares of RM1.00 each representing the entire issued and paid-up share capital of Si Khiong Star Sdn. Bhd. ("Si Khiong Star") for a cash consideration of RM2. Si Khiong Star is principally involved in the trading of automotives, automotive parts as well as repair and service of automotives. Subsequently, on 14 August 2004, the issued and paid-up share capital of Si Khiong Star was increased to RM6,000,000 by issuance of 5,999,998 shares of RM1.00 each to Si Khiong for a cash consideration of RM5,999,998. On 16 August 2004, Si Khiong Star entered into a dealer agreement with DaimlerChrysler Malaysia Sdn. Bhd. for appointing Si Khiong Star as an authorised dealer for the sale and service of Mercedes-Benz vehicles. (vi) On 11 August 2004, HSCB disposed of its entire 5.49% equity interest comprising 5,500,000 unquoted shares in Aviva Insurance Berhad for a cash consideration of approximately RM11 million. The disposal gave rise to a gain of RM3.5 million to the Group during the year.

(v)

(vii) On 5 October 2004, Forward Supreme Sdn. Bhd. ("FSSB"), an inactive wholly-owned subsidiary of HSCB, was placed under member's voluntary liquidation. The placement of the subsidiary under liquidation is not expected to have material financial impact on the Group. FSSB shall be dissolved on 28 March 2005 upon the expiration of three months from the date of lodgement of the Return by Liquidator Relating to Final Meeting and Liquidator's Statement of Final Account with the Companies Commission of Malaysia. (viii) On 20 January 2005, the wholly-owned subsidiaries of HSCB, namely Hap Seng Realty Sdn. Bhd. ("HSR"), Hap Seng Property Investment Sdn. Bhd. (formerly known as Bestearn Sdn. Bhd.) ("HSPI") and Hap Seng Properties Development Sdn. Bhd. ("HSPD") entered into four (4) separate sale and purchase agreements to acquire various household assets and machinery from Pembangunan Melati Sdn. Bhd. ("PM") and Hap Seng Properties Sdn. Bhd. ("HSP"), both wholly-owned subsidiaries of Gek Poh (Holdings) Sdn. Bhd. ("Gek Poh"), for an aggregate purchase price of RM139,437. The aforementioned acquisitions were completed during the year. (ix) On 20 January 2005, HSPD entered into a sale and purchase agreement with Soon Fatt Enterprise Sdn. Bhd., a wholly-owned subsidiary of Hap Seng Sdn. Bhd. which in turn is a wholly-owned subsidiary of Gek Poh, to acquire a piece of vacant land held under CL055011811 situated at Kudat Agung Road, Kota Kinabalu, Sabah for a cash consideration of RM50,000. The aforementioned acquisition was completed during the year.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

79

Directors' Report

For the year ended 31 January 2005 SIGNIFICANT EVENTS DURING THE YEAR (continued) (x) On 20 January 2005, HSR entered into a sale and purchase agreement with PM, a wholly-owned subsidiary of Gek Poh, to acquire a three storeys bungalow located at Jalan Teluk Likas, Kota Kinabalu, Sabah for a purchase price of RM2,975,000. The aforementioned acquisition was completed during the year. On 20 January 2005, HSPI entered into a sale and purchase agreement with HSP, a wholly-owned subsidiary of Gek Poh, to acquire a piece of vacant land held under CL105518947 situated at the District of Tawau, Sabah for a purchase price of RM156,900. The aforementioned acquisition was completed during the year.

(xi)

(xii) On 20 January 2005, HSR entered into a sale and purchase agreement to acquire 250,000 ordinary shares of RM1.00 each representing the entire issued and paid-up capital of Tg. Batu Recreation Complex Sdn. Bhd. from HSP, a wholly-owned subsidiary of Gek Poh, for a cash purchase price of RM1.00. The aforementioned acquisition was completed during the year. (xiii) Pursuant to the authority granted by the shareholders of HSCB to their directors at the Extraordinary General Meeting held on 22 June 2004, HSCB repurchased during the year an additional 1,201,900 of its issued ordinary shares from the open market for a total cost of RM3,288,019. The repurchase was financed by HSCB's internal funds. The average cost paid for the additional shares repurchased was RM2.74 per share. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965. During the financial year, HSCB cancelled 1,765,000 of the shares previously repurchased. The remaining number of repurchased shares held after the cancellation as of 31 January 2005 was 32,584,100.

80

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Directors' Report

For the year ended 31 January 2005 OTHER STATUTORY INFORMATION Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that: (i) (ii) all known bad debts have been written off and adequate provision made for doubtful debts, and 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) (ii) (iii) (iv) 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 Company inadequate to any substantial extent, or that would render the value attributed to the current assets in the Group and in the Company financial statements misleading, or which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report, there does not exist: (i) (ii) 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 liabilities of any other person, or 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 period of 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 Group and of the Company to meet their obligations as and when they fall due. In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year ended 31 January 2005 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report. AUDITORS The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment. Signed in accordance with a resolution of the Directors:

David Park, AMN Petaling Jaya, 15 June 2005

Edward Lee Ming Foo, JP

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

81

Statement by Directors

Pursuant to Section 169(15) of the Companies Act, 1965 In the opinion of the Directors, the financial statements set out on pages 86 to 143 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 January 2005 and of the results of their operations and cash flows for the year ended on that date.

Signed in accordance with a resolution of the Directors:

David Park, AMN

Edward Lee Ming Foo, JP

Petaling Jaya, 15 June 2005

82

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Statutory Declaration

Pursuant to Section 169(16) of the Companies Act, 1965 I, Lee Wee Yong, the Director primarily responsible for the financial management of Malaysian Mosaics Berhad, do solemnly and sincerely declare that the financial statements set out on pages 86 to 143 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the above named at Kuala Lumpur in Wilayah Persekutuan on 15 June 2005.

Lee Wee Yong

Before me:

No: 12, Jalan Tun H.S. Lee, 50000 Kuala Lumpur.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

83

Report of the Auditors to the Members

Of Malaysian Mosaics Berhad We have audited the financial statements set out on pages 86 to 143. The preparation of the financial statements is the responsibility of the Company's Directors. It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility towards any other person for the content of this report. We conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards require that we plan and perform the audit to obtain all the information and explanations which we consider necessary to provide us with evidence to give reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. An audit also includes an assessment of the accounting principles used and significant estimates made by the Directors as well as evaluating the overall adequacy of the presentation of information in the financial statements. We believe our audit provides 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 approved accounting standards in Malaysia so as to give a true and fair view of: (i) (ii) the state of affairs of the Group and of the Company at 31 January 2005 and the results of their operations and cash flows for the year ended on that date; and the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company; 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 of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act.

The subsidiaries in respect of which we have not acted as auditors are identified in Note 37 to the financial statements and we have considered their financial statements and the auditors' reports thereon. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company's financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

84

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Report of the Auditors to the Members

Of Malaysian Mosaics Berhad Without qualifying our opinion, we draw attention to Note 40, pertaining to the prior year adjustments in respect of the reversal of the gain attributable to the disposal of subsidiaries to minority interests arising from a change in accounting treatment of the gain on disposal of Hap Seng Land Development Sdn. Bhd. (formerly known as Agritim Corporation Sdn. Bhd.) ("HSLD") and its subsidiaries to Hap Seng Land Sdn. Bhd. ("HSL"), a subsidiary of HSCB and the disposal of Si Khiong Industries Sdn. Bhd. ("SKI") and Sasco Sdn. Bhd. ("Sasco") to HSCB. In the current financial year, the Directors having reconsidered the accounting treatment adopted in the previous financial years, have eliminated in full the gain on disposal of HSLD and its subsidiaries to HSL, a subsidiary of HSCB and the disposal of SKI and Sasco to HSCB, in strict compliance with the provisions of MASB Standard 11. Accordingly, the effects of these changes have been reflected in the comparatives of the current financial statements as disclosed in Note 41.

KPMG Firm Number: AF 0758 Chartered Accountants Kuala Lumpur, 15 June 2005

Seow Yoo Lin Partner Approval Number: 1497/02/07(J)

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

85

Balance Sheets

At 31 January 2005 Group Note 2005 RM'000 2004 RM'000 As restated 912,188 143,827 160,008 53,366 94,532 5,725 165,612 20,987 1,556,245 291,325 35,705 223,595 29,269 4,603 27,948 612,445 137,853 1,432 266,356 12,695 16,581 434,917 177,528 1,733,773 Company 2005 2004 RM'000 RM'000 Property, plant and equipment Investment properties Investments in subsidiaries Investments in associates Other investments Land held for property development Goodwill on consolidation Long term receivables Deferred tax assets 2 3 4 5 6 7 8 9 10 883,848 375,368 154,596 23,288 124,769 4,411 285,468 21,956 1,873,704 Current assets Inventories Property development costs Trade and other receivables Tax recoverable Related companies' balances Cash and cash equivalents 11 12 9 13 14 447,325 76,191 346,015 34,662 18 32,433 936,644 Current liabilities Trade and other payables Related companies' balances Borrowings (unsecured) Taxation Provisions 15 13 16 17 152,005 812 499,017 15,442 12,557 679,833 Net current assets 256,811 2,130,515 Financed by: Capital and reserves Share capital Reserves 146,401 624,860 134 21,517 792,912 54,496 18,221 21,837 23,099 1,214 118,867 20,977 7,277 33,931 90 62,275 56,592 849,504 140,751 624,860 134 19,830 785,575 44,484 7,737 21,669 27,182 370 101,442 20,879 10,929 17,242 250 49,300 52,142 837,717

18 19

438,003 387,688 825,691

438,003 300,708 738,711 738,711 826,955 163,636 4,471 1,733,773

438,003 409,903 847,906 (1,149) 846,757 2,747 849,504

438,003 397,169 835,172 835,172 2,545 837,717

Less: Treasury shares Shareholders' fund Minority shareholders' interests Long term and deferred liabilities Borrowings (unsecured) Deferred tax liabilities Deferred liabilities

18

(1,149) 824,542

20 16 10 21

897,209 236,000 166,790 5,974 2,130,515

The financial statements were approved and authorised for issue by the Board of Directors on 15 June 2005.

The notes set out on pages 92 to 143 form an integral part of, and should be read in conjunction with, these financial statements.

86

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Income Statements

For the year ended 31 January 2005 Group Note 2005 RM'000 2004 RM'000 As restated 1,123,847 201,675 (8,709) 3,796 3,573 200,335 (52,495) 147,840 (72,333) 75,507 17.24 14.50 5.50 14.50 Company 2005 2004 RM'000 RM'000 Revenue Operating profit Financing costs Interest income Other non-operating items Share of profit of associates Profit before taxation Tax expense Profit after taxation Less: Minority interests Net profit for the year Basic earnings per ordinary share (sen) Dividends per ordinary share - gross (sen) 27 28 26 22 22 24 25 1,416,228 247,729 (20,512) 1,027 16,458 3,690 248,392 (59,422) 188,970 (86,419) 102,551 23.42 5.50 174,283 37,718 (614) 35 37,139 (7,060) 30,079 30,079 194,004 75,568 (23,380) 5,023 195,711 252,922 (9,095) 243,827 243,827

The notes set out on pages 92 to 143 form an integral part of, and should be read in conjunction with, these financial statements.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

87

Statement of Changes in Equity

For the year ended 31 January 2005 Note Group At 1 February 2003 Prior year adjustments Restated balance Net profit for the year Prior year adjustments Restated balance Dividends Final for the year ended 31 January 2003 Interims and specials for the year ended 31 January 2004 28 Exercise of ESOS of HSCB Translation differences At 31 January 2004 Shares repurchased Net profit for the year Dividends Final for the year ended 31 January 2004 Interim for the year ended 31 January 2005 438,003 28 438,003 Note 18 1,058 716 14,910 Note 19 (9,461) (7,884) (17,345) 372,778 Note 19 (1,149) Note 18 (9,461) (7,884) (17,345) 1,058 716 824,542 201 785 13,136 (9,461) (39,333) (48,794) 287,572 102,551 (1,149) (9,461) (39,333) (48,794) 201 785 738,711 (1,149) 102,551 NonShare distributable Distributable Treasury capital Reserves Reserves shares RM'000 RM'000 RM'000 RM'000 438,003 438,003 12,150 12,150 291,057 (30,198) 260,859 164,325 (88,818) 75,507 Total RM'000 741,210 (30,198) 711,012 164,325 (88,818) 75,507

40

40

Exercise of ESOS of HSCB Translation differences At 31 January 2005

88

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Statement of Changes in Equity

For the year ended 31 January 2005 Note Company At 1 February 2003 Net profit for the year Dividends Final for the year ended 31 January 2003 Interims and specials for the year ended 31 January 2004 NonShare distributable Distributable Treasury capital Reserves Reserves shares RM'000 RM'000 RM'000 RM'000 438,003 28 At 31 January 2004 Shares repurchased Net profit for the year Dividends Final for the year ended 31 January 2004 Interim for the year ended 31 January 2005 438,003 28 At 31 January 2005 438,003 Note 18 1,497 Note 19 (9,461) (7,884) (17,345) 408,406 Note 19 (1,149) Note 18 (9,461) (7,884) (17,345) 846,757 1,497 (9,461) (39,333) (48,794) 395,672 30,079 (1,149) (9,461) (39,333) (48,794) 835,172 (1,149) 30,079 1,497 200,639 243,827 Total RM'000 640,139 243,827

The notes set out on pages 92 to 143 form an integral part of, and should be read in conjunction with, these financial statements.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

89

Cash Flow Statements

For the year ended 31 January 2005 Group 2005 RM'000 Cash flows from operating activities Profit before taxation 248,392 Adjustments for: Amortisation of goodwill 2,846 Depreciation 39,491 Dividend income (6,540) Gain on disposal of property, (1,658) plant and equipment Gain on disposal of other investments (16,458) Gain on disposal of investment in subsidiaries 20,512 Financing costs Interest income (1,027) Property, plant and equipment written off 3,481 Impairment loss on property, plant and equipment 281 Allowance for retirement benefits Allowance for doubtful recovery of amount due from a subsidiary written back Share of profit of associates (3,690) Operating profit before working capital changes (Increase) / Decrease in working capital: Inventories Property development costs Receivables Payables Cash (used in) / generated from operations Income tax paid Interest paid Interest received Land held for property development Retirement benefits paid Real property gains tax paid Tax refunded Net cash (used in) / generated from operating activities 285,630 (155,529) (25,676) (237,070) 10,725 (121,920) (60,120) (20,512) 1,027 (38,891) (66) (51) 1,271 (239,262) 2004 RM'000 As restated 200,335 1,415 36,959 (4,906) (2,720) 8,709 (3,796) 1,452 354 1,015 (3,573) 235,244 (38,848) 15,694 (84,624) 2,452 129,918 (49,989) (6,112) 577 (27,062) (78) (4,672) 15,736 58,318 Company 2005 2004 RM'000 RM'000

37,139 13,118 (31,841)

252,922 12,680 (70,204)

(391) (46) - (171,773) 614 23,380 (35) (5,023) 2,998 362 268 976 21,870 (10,012) (6,401) (3,714) 1,743 (614) 35 (66) 1,098 (23,938) 19,336 5,263 (3,300) 8,869 30,168 (679) (78) 13,979 43,390

90

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Cash Flow Statements

For the year ended 31 January 2005 Group 2005 RM'000 Cash flows from investing activities Acquisition of business (1,500) Acquisition of subsidiaries, net of cash acquired (Note 38) 7 Capital reduction from associate 7,000 Dividends received from associates 1,726 Dividends received from subsidiaries Dividends received from other investments 5,648 Purchase of investment properties (200,007) Interest received Proceeds from disposal of subsidiaries Proceeds from disposal of property, plant and equipment 3,147 Proceeds from disposal of other investments 46,535 Purchase of property, plant and equipment (53,591) Purchase of shares in a subsidiary Repayment of loans and advances to ultimate holding company upon the acquisition of subsidiaries Net cash (used in) / generated from investing activities Cash flows from financing activities Dividends paid to minority shareholders Dividends paid Interest paid Interest received Repayment of bank borrowings Proceeds from borrowings Proceeds from issue of shares to minority shareholders Shares repurchased Repayment of advances to subsidiary Repayment of loans and advances by subsidiaries Proceeds from issue of preference shares by a subsidiary to minority shareholders Net cash generated from / (used in) financing activities Net (decrease) / increase in cash and cash equivalents Adjustment on exchange differences Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year (191,035) (17,857) (17,345) 452,820 3,876 (4,438) 1,500 418,556 (11,741) 385 6,020 (5,336) 2004 RM'000 As restated (22,002) 1,428 4,567 (46,702) 3,219 7,879 (30,789) (12,881) (95,281) (53,711) (48,794) (2,597) (67,172) 137,394 735 (4,896) (39,041) (76,004) 374 81,650 6,020 Company 2005 2004 RM'000 RM'000

22,926 493 (21,868) 1,551

(436) 55,789 24 239,188 321 (10,655) (28,000) 256,231

(17,345) (48,794) (22,701) 4,999 (67,172) 12,687 (1,149) - (349,500) 184,040 -

(5,807) (299,128) (3,158) (1,983) (5,141) 493 (2,476) (1,983)

Cash and cash equivalents Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts: Group 2005 RM'000 Deposits with licensed banks Cash and bank balances Bank overdrafts 7,138 25,295 (37,769) (5,336) 2004 RM'000 3,982 23,966 (21,928) 6,020 Company 2005 2004 RM'000 RM'000 1,214 (6,355) (5,141) 370 (2,353) (1,983)

The notes set out on pages 92 to 143 form an integral part of, and should be read in conjunction with, these financial statements.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

91

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following accounting policies are adopted by the Group and by the Company and are consistent with those adopted in previous years except for the adoption of MASB 32, Property Development Activities. Apart from the new policies and extended disclosures where required by this new standard, there is no effect on 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 notes to the financial statements and in compliance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia. (b) Basis of consolidation Subsidiaries are those enterprises controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control effectively commences until the date that control effectively ceases. Subsidiaries are consolidated using the acquisition method of accounting. A subsidiary is excluded from consolidation when either control is intended to be temporary if the subsidiary is acquired and held exclusively with a view of its subsequent disposal in the near future and it has not previously been consolidated or it operates under severe long term restrictions which significantly impair its ability to transfer funds to the Company. Subsidiaries excluded on these grounds are accounted for as investments. Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of during the year are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries' net assets are determined and these values are reflected in the Group financial statements. The difference between the acquisition cost and the fair values of the subsidiaries' net assets is reflected as goodwill or negative goodwill as appropriate. Intragroup transactions and balances and the resulting unrealised profits are eliminated on consolidation. Unrealised losses resulting from intragroup transactions are also eliminated unless cost cannot be recovered. (c) Associates Associates are those enterprises in which the Group has significant influence, but not control, over the financial and operating policies. The consolidated financial statements include the total recognised gains and losses of associates on an equity accounted basis from the date that significant influence effectively commences until the date that significant influence effectively ceases. Unrealised profits arising on transactions between the Group and its associates which are included in the carrying amount of the related assets and liabilities are eliminated partially to the extent of the Group's interests in the associates. Unrealised losses on such transactions are also eliminated partially unless cost cannot be recovered. Goodwill on acquisition is calculated based on the fair value of net assets acquired.

92

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Property, plant and equipment (i) Assets Property, plant and equipment except for freehold land are stated at cost or valuation less accumulated depreciation and accumulated impairment losses, if any. Property, plant and equipment retired from active use and held for disposal are stated at the carrying amount at the date when the asset is retired from active use, less impairment losses, if any. Depreciation Freehold land is not amortised. Leasehold land is amortised in equal instalments over the period of the respective leases which range from fifty-six (56) to nine hundred and ninetynine (999) years while buildings are depreciated on a straight-line basis over the shorter of ten (10) to fifty (50) years. Dwelling houses in the plantations are depreciated on a straight-line basis over the shorter of ten (10) to thirty-three (33) years depending on the year of construction and type of structure. The straight-line method is used to write off the cost of the other assets over the term of their estimated useful lives at the following principal annual rates: Plant and machinery Office equipment, furniture, fixtures and fittings Motor vehicles (ii) Plantation development expenditure Expenditure incurred on land clearing and upkeep of trees to maturity is capitalised under land cost and is not amortised. In this context, new planting expenditure is defined as the total cost incurred from land clearing to point of maturity. Upon maturity, all subsequent maintenance expenditure is charged to the income statement. Replanting expenditure is charged to the income statement in the period in which the expenditure is incurred. (e) Investments (i) Investment properties Investment properties consist of investments in land and buildings that are not substantially occupied for use by, or in the operations of, the Group. Investment properties are treated as long-term investments and are stated at cost or valuation. Revaluations are based on valuations by an independent valuer at least once every five (5) years. Any surplus arising from revaluation is dealt with in the investment revaluation reserve. Any deficit arising is offset against the revaluation reserve to the extent of a previous increase from the same investment. In all other cases, a decrease in the carrying amount is charged to the income statement. A revaluation surplus is recognised as income in the income statement to the extent that it reverses a revaluation deficit of the same investment property previously recognised as an expense in the income statement. Upon disposal of a revalued investment property, the difference between the net disposal proceeds and the carrying amount is recognised in the income statement and the portion of the revaluation surplus pertaining to that investment property will be realised and transferred to revenue reserves. 5% 10% 20% 25% 33 1/3% 25%

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

93

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (e) Investments (continued) (ii) Investments in subsidiaries and associates Investments in subsidiaries and associates are stated at cost in the Company, less impairment loss where applicable. (iii) Other investments Other investments are stated at cost. An allowance is made when the Directors are of the view that there is a diminution in their value which is other than temporary. (f) Land held for property development Land held for property development comprises freehold and long term leasehold land or such portions thereof on which no development activities have been carried out or where development activities are not expected to be completed within the Group's normal operating cycle. Such land is classified as non-current asset and is stated at cost less accumulated impairment losses. Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the Group's normal operating cycle. Land held for property development comprise cost associated with the acquisition of land and all cost incurred subsequent to the acquisition but prior to reclassification to property development costs on activities necessary to prepare the land for its intended use. Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies. Where the Group had previously recorded the land at revalued amount, it continues to retain this amount as its surrogate cost as allowed by MASB 32. (g) Goodwill and negative goodwill Goodwill represents the excess of the cost of acquisition over the fair values of the net identifiable assets acquired and is stated at cost less accumulated amortisation and accumulated impairment losses (refer Note 1 (p)). Goodwill arising from the acquisition of a subsidiary, Hap Seng Properties Development Sdn. Bhd. which is involved in property development, is amortised over twenty five (25) years or the period of development by reference to the post-acquisition profit earned during the period compared to the total estimated post-acquisition profit, whichever is the shorter period. Negative goodwill represents the excess of the fair values of the net identifiable assets acquired over the cost of acquisition. To the extent that negative goodwill relates to expectation of future losses and expenses that are identified in the plan of acquisition and can be measured reliably, but which are not identifiable liabilities at the date of acquisition, that portion of negative goodwill is recognised in the income statement when the future losses and expenses are recognised. Goodwill and negative goodwill in relation to the acquisition of other subsidiaries is amortised/ recognised in the income statement over twenty five (25) years.

94

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (h) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined principally as follows: Completed properties held for resale Agricultural produce Raw materials and consumables - specific identification method - weighted average cost method - weighted average cost method except for first-in first-out method used in the trailer fabrication industry - first-in first-out method - weighted average cost method - specific identification method - weighted average cost method - weighted average cost method

Work-in-progress - trailers - others Finished goods and goods held for resale - Trading inventories (vehicles and trucks) - Trading inventories except vehicles and trucks - Manufactured inventories

Completed properties held for resale consists of costs associated with the acquisition of land, direct costs and appropriate proportions of common costs attributable to developing the properties to completion. Cost of agricultural produce stocks includes estate production cost, processing and transport charges where applicable. Cost of work-in-progress and finished goods produced by the Group include costs of direct materials, labour and a proportion of production overheads. (i) Property development costs Property development costs comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities. Property development costs not recognised as an expense is recognised as an asset and is stated at the lower of cost and net realisable value. The excess of revenue recognised in the income statement over billings to purchasers is shown as accrued billings under trade and other receivables and the excess of billings to purchasers over revenue recognised in the income statement is shown as progress billings under trade and other payables. (j) Trade and other receivables and related companies' balances Trade and other receivables and related companies' balances are stated at cost less allowances for doubtful debts. Specific allowance is made for debts which have been identified as bad or doubtful. In addition, general allowance is made to cover possible losses which are not specifically identified.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

95

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (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 an insignificant risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents are presented net of bank overdrafts and pledged deposits. (l) Liabilities Related companies' balances, trade and other payables and borrowings are stated at cost. (m) Provisions A provision is recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation (legal or constructive) as a result of a past event and a reliable estimate can be made of the amount. The bases upon which the provisions of the Group and Company have been recognised are as disclosed in Note 17. (n) Share capital (i) Repurchase of shares When shares are repurchased, the amount of consideration paid, including directly attributable costs, is recognised as a change in equity. Repurchased shares are reclassified as treasury shares and presented as a deduction from total equity. When share repurchased are cancelled, the nominal value of the shares repurchased is cancelled by a debit to share capital and an equivalent amount is transferred to capital redemption reserve. The consideration, including any acquisition cost and premium or discount arising from the shares repurchased, is adjusted to share premium or any other suitable reserve. (ii) Preference share Preference share capital is classified as equity if it is non-redeemable and dividends are discretionary at the option of issuer. Preference share is classified as liability if it is redeemable on a specific date or at the option of the shareholders and dividends thereon are recognised in the income statement as interest expense. (o) Employee benefits (i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by the employees of the Group. Short term accumulated compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occurred.

96

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (o) Employee benefits (continued) (ii) Defined contribution plans The Group and the Company operate defined contribution plans for eligible employees based on a certain percentage of their basic salary. Obligations for contributions to defined contribution plans are recognised as an expense in the income statement as incurred. (iii) Equity compensated benefits The Hap Seng Consolidated Berhad Employees' Share Option Scheme allows HSCB Group's employees to acquire shares of HSCB. No compensation cost or obligation is recognised. When the options are exercised, equity of HSCB is increased by the amount of the proceeds received. (p) Impairment The carrying amount of assets, other than inventories, property development costs, deferred tax assets and financial assets (the financial assets in this context do not include investments in subsidiaries, associates and joint ventures), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or the cash-generating unit to which it belongs exceeds its recoverable amount. Impairment losses are recognised in the income statement, unless the asset is carried at a revalued amount, in which case the 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 future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable 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 exceptional nature 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 the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have determined, net of depreciation or amortisation, if no impairment loss has been recognised. The reversal is recognised in the income statement, unless it reverses an impairment loss on a revalued asset, in which case it is taken to equity. (q) Income tax Tax on the profit or loss for the year comprises current and deferred taxes. Income tax is recognised in the income statement except to the 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 enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

97

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (q) Income tax (continued) Deferred tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for goodwill not deductible for tax purposes and the initial recognition of assets or liabilities that at the time of the transaction affects neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets 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 the asset can be utilised. (r) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to Ringgit Malaysia at rates of exchange ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Ringgit Malaysia at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated to Ringgit Malaysia at the foreign exchange rates ruling at the date of the transactions. (ii) Financial statements of foreign operations The Group's foreign operations are not considered an integral part of the Company's operations. Accordingly, the assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to Ringgit Malaysia at exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to Ringgit Malaysia at average exchange rates applicable throughout the year. Foreign exchange differences arising on translation are recognised directly in equity. The closing rates used in the translation of foreign currency monetary assets and liabilities and the financial statements of foreign operations are as follows: 2005 RM 0.46 3.80 0.48 2.32 4.91 0.09 0.04 2004 RM 0.46 3.80 0.49 2.24 4.72 0.09 ­

1RMB 1USD 1HKD 1SGD 1EUR 1THB 100 IDR

98

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (s) Derivative financial instruments Derivative financial instruments are not recognised in the financial statements on inception. Forward foreign exchange contracts Derivative financial instruments are not recognised in the financial statements on inception. The Group uses forward foreign exchange contracts to limit its exposure to foreign exchange risks arising from operational activities. Derivative financial instruments used for hedging purposes are accounted for on an equivalent basis as the underlying assets, liabilities or net positions. The underlying foreign currency assets or liabilities are translated at their respective hedge exchange rate and all exchange gains or losses are recognised as income or expense in the income statement in the same period as the exchange differences on the underlying hedged items. Exchange gains and losses arising on contracts entered into as hedges of anticipated future transactions are deferred until the date of such transaction, at which time they are included in the measurement of such transactions. (t) Revenue (i) Goods sold Revenue from the sale of goods is measured at the fair value of the consideration receivable and is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. (ii) Property development Revenue from property development activities is recognised based on the stage of completion measured by reference to surveys of work performed. Where the financial outcome of property development activities cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on the development units sold are recognised as an expense in the period in which they are incurred. An expected loss on a development project, including costs to be incurred over the defects liability period, is recognised immediately in the income statement. (iii) Completed properties held for resale Revenue from sale of investment properties and completed properties held for resale are recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. (iv) Rental income Rental income is derived from letting out of properties and recognised as it accrues.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

99

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (t) Revenue (continued) (v) Hire purchase and finance lease Income on hire purchase and finance lease is recognised on the "Rule of 78" method. Where the repayment of an account is in arrears for six months and more, the uncollected interest from that account is suspended until it is realised on a cash basis. (vi) Dividend income Dividend income is recognised when the right to receive payment is established. (vii) Interest income Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset. (u) Expenses (i) Operating lease payments Payments made under operating leases are recognised in the income statement on a straightline basis over the term of the lease. (ii) Financing costs All interest and other costs incurred in connection with borrowings, other than that capitalised in accordance with note 1(v), are expensed as incurred. (v) Capitalisation of borrowing costs Borrowing costs incurred on capital work-in-progress, property development costs and plantation development are capitalised. Capitalisation of borrowing costs will cease when the assets are ready for their intended use. The actual borrowing costs incurred on borrowings made specifically for the purpose of financing a specific capital work-in-progress and property development costs will be capitalised. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

100

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

2. PROPERTY, PLANT AND EQUIPMENT Long term plantation Office land and equipment, plantation Plant furniture, Freehold Leasehold land development and fixtures Motor land Long term Short term Buildings expenditure machinery and fittings vehicles RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 10,659 48,014 11,401 230,533 507,750 342,460 30,789 23,033

Group

Capital work-inprogress RM'000

Total RM'000

Cost / Valuation At 1 February 2004 Additions arising from acquisition of subsidiaries Additions Disposals Write off Transfers Transfer to other assets Exchange translations At 31 January 2005 Representing items at: Cost Directors' valuation - 1981 - 1995 At 31 January 2005 Depreciation At 1 February 2004 Additions arising from acquisition of subsidiaries Charge for the year Disposals Write off Transfer to other assets Exchange translations At 31 January 2005 Net book value At 31 January 2005 At 31 January 2004 Depreciation charge for the year ended 31 January 2004 19,739 10,659 28,819 44,352 3,597 9,661 143,880 162,177 500,749 495,773 158,823 167,977 11,469 8,841 8,531 4,860 8,241 7,888 883,848 912,188 3,662 1,740 68,356 11,977 174,483 21,948 18,173 300,339 7,888 1,212,527

12,840 (3,529) (231) 19,739 18,400 1,339 19,739

741 (120) (16,970) 31,665 31,665 31,665

(18) (7,613) 129 3,899 3,899 3,899

4,541 (795) (2,041) 2,145 (27,215) 124 207,292 204,610 2,682 207,292

2,691 3,529 513,970 290,277 223,693 513,970

14,079 (4,679) (10,394) 4,037 166 345,669 345,669 345,669

168 5,807 (850) (101) 217 17 36,047 36,047 36,047

6,085 (1,575) 55 2 27,600 27,600 27,600

6,807 (6,454) -

168 53,591 (8,037) (12,536) (52,029) 438

8,241 1,194,122 8,241 966,408 4,021 223,693

8,241 1,194,122

-

40 (9) (847) 2,846

129 (4) (1,573) 10 302

8,586 (58) (1,677) (11,804) 9 63,412

1,244 13,221

24,050 (4,482) (7,285) 80 186,846

167 3,133 (581) (93) 4 24,578

2,309 (1,414) 1 19,069

-

167 39,491 (6,548) (9,055) (14,224) 104 310,274

-

637

333

7,863

1,242

22,372

2,931

1,581

-

36,959

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

101

Notes to the Financial Statements

2. PROPERTY, PLANT AND EQUIPMENT (continued) Plant Office equipment, Freehold and furniture, fixtures Motor land Buildings machinery and fittings vehicles RM'000 RM'000 RM'000 RM'000 RM'000 Capital work-inprogress Total RM'000 RM'000 Company

Cost / Valuation At 1 February 2004 Additions Disposals Write off Transfers At 31 January 2005 Representing items at: Cost Directors' valuation - 1981 At 31 January 2005 Depreciation At 1 February 2004 Charge for the year Disposals Write off At 31 January 2005 Net book value At 31 January 2005 At 31 January 2004 Depreciation charge for the year ended 31 January 2004 19,739 6,899 42,130 42,730 79,541 82,286 2,936 3,111 1,942 1,559 113 146,401 4,166 140,751 7,133 1,025 8,158 67,771 9,931 (66) (5,228) 72,408 11,201 1,354 (42) (9) 12,504 5,514 808 (989) 5,333 91,619 13,118 (1,097) (5,237) 98,403 6,899 12,840 19,739 49,863 397 28 50,288 150,057 6,184 (105) (8,224) 4,037 151,949 14,312 1,131 (44) (11) 52 15,440 7,073 1,197 (1,050) 55 7,275 4,166 232,370 119 21,868 - (1,199) - (8,235) (4,172) 113 244,804

18,400 1,339 19,739

47,606 2,682 50,288

151,949 151,949

15,440 15,440

7,275 7,275

113 240,783 4,021 113 244,804

-

1,018

9,467

1,470

725

-

12,680

102

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

2. PROPERTY, PLANT AND EQUIPMENT (continued) Revaluation Certain land, buildings, long term plantation land and plantation development expenditure are stated at Directors' valuation based on professional valuations on the open market basis. Surpluses arising from revaluation are dealt with in the revaluation reserve account. It is the Group's policy to state its property, plant and equipment at cost. Revaluation of certain property, plant and equipment were carried out primarily for the purpose of reflecting the fair value of these assets as part of certain corporate exercises undertaken by the Group in the past. It was not intended to effect a change in the accounting policy to one of revaluation of assets. In accordance with the transitional provisions issued by the Malaysian Accounting Standards Board ("MASB") upon adoption of International Accounting Standard No. 16 (Revised), Property, Plant and Equipment, the valuation of these assets have not been updated, and they continue to be stated at their existing carrying amounts less accumulated depreciation. Had the land, buildings, long term plantation land and plantation development expenditure been carried at historical cost less accumulated depreciation, the carrying amount of the revalued assets that would have been included in the financial statements at the end of the year would be as follows: Group 2005 2004 RM'000 RM'000 Freehold land Buildings Long term plantation land and plantation development expenditure 883 354 203,775 205,012 3. INVESTMENT PROPERTIES Group 2005 2004 RM'000 RM'000 At cost Freehold land and buildings Long term leasehold land and buildings 200,192 191,569 391,761 Less: Accumulated impairment (16,393) 375,368#

#

Company 2005 2004 RM'000 RM'000 883 354 1,237 883 389 1,272

883 389 204,670 205,942

4,321 155,899 160,220 (16,393) 143,827

Included in investment properties as at 31 January 2005 are assets transferred from property, plant and equipment during the year at net book value of RM31,534,000.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

103

Notes to the Financial Statements

4. INVESTMENTS IN SUBSIDIARIES Company 2005 2004 RM'000 RM'000 At cost Quoted shares Unquoted shares Less: Accumulated impairment At 1 February 2004 / 2003 Reversal during the year At 31 January 624,860 Market value of quoted shares Details of the subsidiaries are shown in Note 37. 773,800 (2,000) 2,000 624,860 842,443 623,424 1,436 624,860 623,424 1,436 624,860

5.

INVESTMENTS IN ASSOCIATES Group 2005 2004 RM'000 RM'000 At cost Quoted shares Unquoted shares Share of post-acquisition reserves Less: Accumulated impairment losses - quoted shares 49,711 118,923 5,369 174,003 (19,407) 154,596 Represented by: Group's share of net assets Goodwill on acquisition 148,723 5,873 154,596 Market value of quoted shares 36,182 49,711 125,923 3,781 179,415 (19,407) 160,008 154,135 5,873 160,008 31,358

104

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

5. INVESTMENTS IN ASSOCIATES

(continued)

The associates of the Group, which are held by HSCB, as at 31 January are as follows: Percentage of equity held by HSCB 2005 2004 % % 25.0 20.0 20.0 25.0 20.0 20.0

Name of company Quoted Paos Holdings Berhad Unquoted Vintage Heights Sdn. Bhd. EAC Holdings (Malaysia) Sdn. Bhd.

Principal activities

Country of incorporation

Investment holding Cultivation of oil palm and property development Investment holding and rental of properties

Malaysia Malaysia Malaysia

6.

OTHER INVESTMENTS Group 2005 2004 RM'000 RM'000 At cost Quoted shares (outside Malaysia) Less : Accumulated allowance for diminution in value 37,998 (14,909) 23,089 Unquoted shares Other investment 65 134 23,288 Market value of quoted shares 40,455 60,576 (14,909) 45,667 7,565 134 53,366 70,782 Company 2005 2004 RM'000 RM'000 134 134 134 134 -

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

105

Notes to the Financial Statements

7. LAND HELD FOR PROPERTY DEVELOPMENT Group 2005 2004 RM'000 RM'000 At Cost At 1 February 2004 / 2003 Additions Transfer from property, plant and equipment at net book value Transfer to property development costs Disposals At 31 January Less : Accumulated impairment losses At 1 February 2004 / 2003 Impairment losses for the year Transfer to property development costs At 31 January Carrying amount at 31 January Representing items at: Cost Freehold land Long term leasehold land Land development expenditure Net realisable value: Long term leasehold land 95,211 38,891 6,271 (14,996) (115) 125,262 68,189 27,062 5,992 (5,874) (158) 95,211

(679) 186 (493) 124,769

(186) (493) (679) 94,532

47,305 73,959 3,128 124,392 377 124,769

46,561 38,514 8,814 93,889 643 94,532

106

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

8. GOODWILL ON CONSOLIDATION Group 2005 RM'000 Cost Goodwill arising on consolidation At 1 February 2004 / 2003 Acquisition of subsidiaries At 31 January Negative goodwill arising on consolidation At 1 February 2004 / 2003 Acquisition of subsidiaries At 31 January Net total Less : Accumulated amortisation At 1 February 2004 / 2003 Amortisation charge for the year At 31 January Net book value (32,631) (2,846) (35,477) 4,411 (31,216) (1,415) (32,631) 5,725 (13,243) (13,243) 39,888 (1,241) (12,002) (13,243) 38,356 51,599 1,532 53,131 51,599 51,599 2004 RM'000

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

107

Notes to the Financial Statements

9. TRADE AND OTHER RECEIVABLES Group 2005 RM'000 Trade receivables Loan receivables Associates Accrued billings Hire purchase receivables Lease receivables Other receivables, deposits and prepayments 259,242 233,195 154 20 126,957 11,026 27,076 657,670 Less: Interest in suspense Less: Allowance for doubtful debts Amount receivable within one year included in current assets Amount receivable after one year included in long term receivables (7,960) (18,227) 631,483 (346,015) 285,468 2004 RM'000 188,404 168,621 164 114 25,029 9,011 15,156 406,499 (1,821) (15,471) 389,207 (223,595) 165,612 Company 2005 2004 RM'000 RM'000 11,364 7,057 18,421 (200) 18,221 (18,221) 6,674 1,563 8,237 (500) 7,737 (7,737) -

Group The amount due from associates is in respect of reimbursable expenses and are unsecured, interest free and have no fixed terms of repayment. Included in the loan receivables are amounts due from an associate of HSCB amounting to RM65 million (2004 : RM75 million). The loan was granted by a subsidiary of HSCB, which is principally involved in provision of financial services. This amount is secured and bears interest at 1% per annum above the prevailing base lending rate of a financial institution. The loan is repayable within 84 months from the date of full disbursement of the entire facility amount of RM90 million, i.e. by 25 February 2009.

Hire purchase and lease receivables consists of the following: 2005 2004 Gross Unearned Net Gross Unearned Net Receivables Interest Receivables Receivables Interest Receivables RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Group Less than one year Between one and five years More than five years 54,727 102,294 742 157,763 (9,979) (9,643) (158) (19,780) 44,748 92,651 584 137,983 14,070 24,020 1,695 39,785 (2,591) (3,058) (96) (5,745) 11,479 20,962 1,599 34,040

108

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

10. DEFERRED TAX The recognised deferred tax assets are in respect of the following items: Group 2005 2004 RM'000 RM'000 Property, plant and equipment Unabsorbed capital allowances Unabsorbed reinvestment allowances Unutilised tax losses Others 21,161 (12,755) (26,815) (577) (2,970) (21,956) 21,223 (14,711) (23,886) (1,124) (2,489) (20,987) Company 2005 2004 RM'000 RM'000 19,837 (12,734) (26,815) (1,805) (21,517) 20,544 (14,708) (23,886) (1,780) (19,830)

The recognised deferred tax liabilities are in respect of the following items: Group 2005 2004 RM'000 RM'000 Property, plant and equipment - capital allowances - revaluation Unabsorbed capital allowances Unutilised tax losses Others 116,200 53,354 (2,852) 88 166,790 115,171 54,714 (1,178) (5,224) 153 163,636 Company 2005 2004 RM'000 RM'000 -

Deferred tax assets and liabilities are offset above where there is a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred taxes relate to the same taxation authority. No deferred tax asset has been recognised in the financial statements for the following items: Group 2005 2004 RM'000 RM'000 Unabsorbed capital allowances Unutilised tax losses Other deductible temporary differences 11,561 16,365 6,457 34,383 Potential deferred tax assets at 28% not recognised 9,627 5,875 10,733 8,963 25,571 7,160

The deductible temporary differences, unabsorbed capital allowances and unutilised tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits. The Group has tax losses carried forward of RM28,611,000 (2004 : RM33,404,000) which give rise to the recognised and unrecognised deferred tax assets in respect of unutilised tax losses above.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

109

Notes to the Financial Statements

11. INVENTORIES Group 2005 2004 RM'000 RM'000 Completed properties held for resale Raw materials and consumables Work-in-progress Agricultural produce Manufactured inventories Trading inventories 57,201 73,029 4,279 6,057 18,577 288,182 447,325 The following inventories are stated at net realisable value: Completed properties held for resale Raw materials and consumables Manufactured inventories Trading inventories 41,355 1,059 2,456 1,668 46,538 37,271 556 1,095 2,253 41,175 2,456 2,456 1,095 1,095 62,591 57,854 3,235 3,371 21,661 142,613 291,325 Company 2005 2004 RM'000 RM'000 33,506 2,413 18,577 54,496 21,760 1,063 21,661 44,484

110

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

12. PROPERTY DEVELOPMENT COSTS Group 2005 2004 RM'000 RM'000 At 1 February 2004 / 2003 Freehold land Long term leasehold land Development costs Accumulated costs charged to income statement 47 13,870 108,949 (87,161) 35,705 Transfer from land held for property development Development costs incurred during the year Transfer to inventories Costs charged to income statement 14,810 88,526 (62,850) 40,486 At 31 January Represented by: Freehold land Long term leasehold land Development costs Accumulated costs charged to income statement 47 21,252 204,903 (150,011) 76,191 47 13,870 108,949 (87,161) 35,705 76,191 47 11,579 123,788 (90,541) 44,873 5,874 44,207 (7,505) (51,744) (9,168) 35,705

Property development costs in respect of which significant development work has been undertaken and which is expected to be completed within the normal operating cycle of two to three years are considered current assets. Property development costs of previous year included RM350,000 carried at net realisable value.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

111

Notes to the Financial Statements

13. RELATED COMPANIES' BALANCES Group 2005 2004 RM'000 RM'000 Amount due from Subsidiaries - non-interest bearing Other related companies - non-interest bearing Company 2005 2004 RM'000 RM'000

18 18

4,603 4,603

23,099 23,099

27,182 27,182

Amount due to Subsidiaries - non-interest bearing Other related companies - non-interest bearing

812 812

1,432 1,432

6,869 408 7,277

10,817 112 10,929

The above balances are unsecured and trade in nature.

14. CASH AND CASH EQUIVALENTS Group 2005 2004 RM'000 RM'000 Deposits with licensed banks Cash and bank balances 7,138 25,295 32,433 3,982 23,966 27,948 Company 2005 2004 RM'000 RM'000 1,214 1,214 370 370

Included in cash and cash equivalents of the Group is RM4,189,000 (2004 : RM5,320,000), the utilisation of which is subject to the Housing Development (Housing Development Account) Regulations, 2002 and Housing (Control and Licensing of Developers) Enactment, 1978.

112

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

15. TRADE AND OTHER PAYABLES Group 2005 2004 RM'000 RM'000 Trade payables Progress billings Other payables and accrued expenses 67,939 11 84,055 152,005 57,843 80,010 137,853 Company 2005 2004 RM'000 RM'000 12,284 8,693 20,977 8,725 12,154 20,879

16. BORROWINGS (UNSECURED) Group 2005 2004 RM'000 RM'000 Current Bank overdrafts Bankers acceptances Revolving credits 37,769 239,348 221,900 499,017 Non-current Term loans 236,000 21,928 142,928 101,500 266,356 Company 2005 2004 RM'000 RM'000 6,355 17,576 10,000 33,931 2,353 14,889 17,242 -

The bank borrowings of the Group and Company are subject to interest ranging from 3.28% to 7.25% (2004 : 3.36% to 7.65%) per annum and 3.41% to 6.75% (2004 : 3.36% to 7.15%) per annum respectively. Bankers acceptances and revolving credits are either settled or rolled over on their due dates. Term loans repayable The term loans of the Group are repayable as follows: (i) (ii) (iii) (iv) RM30 million bullet repayment on 29 October 2007; RM50 million bullet repayment on 29 October 2008; RM86 million bullet repayment on 22 June 2009; and RM70 million bullet repayment on 29 October 2009.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

113

Notes to the Financial Statements

17. PROVISIONS Claims and warranties RM'000 2,760 1,569 (1,460) (2,353) 516 Closure Property of foreign development subsidiary's obligations operation RM'000 RM'000 7,471 1,302 (2,277) (688) 5,808 5,776 (123) 5,653 Sales incentives RM'000 574 445 (439) 580

Group Balance at 1 February 2004 Provision made during the year Provision used during the year Provision reversed during the year Balance at 31 January 2005

Total RM'000 16,581 3,316 (3,860) (3,480) 12,557 Claims RM'000 250 179 (339) 90

Company Balance at 1 February 2004 Provision made during the year Provision used during the year Balance at 31 January 2005 Claims and warranties The provision for claims and warranties comprise the following: i)

Claims against products sold - Group and Company Claims against products sold are estimated based on historical data. The liability is expected to be incurred on a continuous basis. (Group - RM168,000 (2004 : RM402,000); Company - RM90,000 (2004 : RM250,000)) Claims for loss of profit - Group Claims for loss of profit of RM Nil (2004 : RM2,125,000) is based on claims made against a subsidiary following the termination of its contractor's contract.

ii)

iii) Warranties for products/ services - Group The provision for warranties of RM348,000 (2004 : RM233,000) relates to production or services sold and is estimated based on historical data and a weighting of all possible outcomes against the associated probabilities. Sales incentives - Group i) Incentives Provision for incentives of RM Nil (2004 : RM161,000) was made when the distributors meet their sales targets on an ongoing basis. The incentives was computed based on targeted sales achieved by the distributors within a period of 6 months. Free services Provision for free services of RM580,000 (2004 : RM413,000) is recognised when the underlying products or services are sold. It is estimated based on historical data and a weighting of all possible outcomes against the associated probabilities.

ii)

114

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

17. PROVISIONS (continued) Property development obligations - Group The provision for property development obligations relates to infrastructure works of completed and current development projects undertaken by certain subsidiaries. The provision is estimated based on historical data associated with similar property development projects. Closure of foreign subsidiary's operation - Group This relates to a provision for closure of operations of a foreign subsidiary.

18. SHARE CAPITAL Group and Company 2005 2004 RM'000 RM'000 Ordinary shares of RM1.00 each Authorised Issued and fully paid 1,000,000 438,003 1,000,000 438,003

Share repurchase The shareholders of the Company granted authority to the Directors at the Extraordinary General Meeting ("EGM") held on 23 June 2004 to repurchase the Company's shares from the open market. During the financial year, the Company repurchased 715,200 of its issued ordinary shares from the open market for a total cost of RM1,148,930. The repurchase was financed from the Company's internal funds. The average cost paid for the shares repurchased during the year was RM1.61 per share. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965. Movement of shares repurchased No. of shares As of 1 February 2004 Repurchased during the year As of 31 January 2005 715,200 715,200 Average price per share RM 1,148,930 1,148,930 1.61 1.61

RM

The Directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that the repurchase plan would be applied in the best interests of the Company and its shareholders. Subsequent to year end, up to 15 June 2005, the Company repurchased additional shares of 2,012,600 at a total cost of RM3,285,527. The average cost paid for the additional shares repurchased was RM1.63 per share. Consequently, the number of repurchased shares held as treasury shares as at 15 June 2005 was 2,727,800 at a total cost of RM4,434,457.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

115

Notes to the Financial Statements

19. RESERVES Non-distributable Distributable Share Revaluation Capital Translation Capital Retained premium reserve reserve* reserve reserve profits RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 575 575 40 28 (9,461) (9,461) 1,367 1,367 7,000 7,000 3,208 3,208 278 278 290,779 (30,198) 260,581 164,325 (88,818) 75,507 Group At 1 February 2003 Prior year adjustments Restated balance Net profit for the year Prior year adjustments Restated balance Dividends Final for the year ended 31 January 2003 Interims and specials for the year ended 31 January 2004 Note Total RM'000 303,207 (30,198) 273,009 164,325 (88,818) 75,507

40

-

1,367 -

7,000 -

785 3,993 -

278 -

(39,333) (48,794) 287,294 102,551

(39,333) (48,794) 201 785 300,708 102,551

Exercise of ESOS of HSCB Translation differences ** At 31 January 2004 Net profit for the year Dividends Final for the year ended 31 January 2004 Interim for the year ended 31 January 2005 28

201 776 -

-

1,367

646 1,058 8,704

716 4,709

278

(9,461) (7,884) (17,345) 372,500

(9,461) (7,884) (17,345) 1,058 716 387,688

Transfers Exercise of ESOS of HSCB Translation differences ** At 31 January 2005

(646) 130

* The non-distributable capital reserve arose on the capitalisation of bonus shares out of the retained profits of a subsidiary and share premium from issuance of shares pursuant to Employee's Share Option Scheme of HSCB. ** Exchange differences on translation of the financial statement of foreign entities which represent net gains/(losses) not recognised in the income statement.

116

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

19. RESERVES (continued) Non-distributable Distributable Share Revaluation Retained premiun reserves profits RM'000 RM'000 RM'000 130 28 At 31 January 2004 Net profit for the year Dividends Final for the year ended 31 January 2004 Interim for the year ended 31 January 2005 28 At 31 January 2005 130 1,367 (9,461) (7,884) (17,345) 408,406 (9,461) (7,884) (17,345) 409,903 130 1,367 (9,461) (39,333) (48,794) 395,672 30,079 (9,461) (39,333) (48,794) 397,169 30,079 1,367 200,639 243,827 Company At 1 February 2003 Net profit for the year Dividends Final for the year ended 31 January 2003 Interims and specials for the year ended 31 January 2004 Note Total RM'000 202,136 243,827

Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit and tax exempt income to frank approximately RM48,401,000 (2004 : RM43,317,000) of its distributable reserves at 31 January 2005, if paid out as dividends.

20. MINORITY SHAREHOLDERS' INTERESTS This consists of the minority shareholders' proportion of ordinary share capital, preference shares and reserves of subsidiaries, net of their share of subsidiary's goodwill on consolidation and amortisation of goodwill charged to the minority shareholders.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

117

Notes to the Financial Statements

21. DEFERRED LIABILITIES Group 2005 2004 RM'000 RM'000 Deposits relating to lease receivables Employee benefits 3,156 2,818 5,974 1,868 2,603 4,471 Company 2005 2004 RM'000 RM'000 2,747 2,747 2,545 2,545

Movements in the liability recognised in the balance sheets Employee benefits Group 2005 2004 RM'000 RM'000 Liability at 1 February 2004 / 2003 Benefits paid Expense recognised in the income statement Liability at 31 January 2,603 (66) 281 2,818 1,666 (78) 1,015 2,603 Company 2005 2004 RM'000 RM'000 2,545 (66) 268 2,747 1,647 (78) 976 2,545

The employee benefits are in relation to the unfunded defined contribution plan for the staff under the tiles manufacturing and trading division of the Group. In the current year, the Group has provided for employee benefits based on commencement of employment of the staff. However, the staff is only entitled for these employee benefits once they have served for the qualifying years.

22. OPERATING PROFIT Group 2005 2004 RM'000 RM'000 Revenue - plantation produce, goods and services - property development - completed properties - property rental - hire purchase, leasing and term loan - dividends received - gross - tax exempt 1,281,076 80,172 11,424 15,542 21,474 3,190 3,350 1,416,228 Cost of sales and services - plantation produce, goods and services - property development - completed properties - property rental (940,589) (62,850) (5,361) (4,605) (1,013,405) 1,018,798 74,547 5,279 6,832 13,485 1,210 3,696 1,123,847 (747,747) (51,744) (4,343) (1,970) (805,804) Company 2005 2004 RM'000 RM'000 142,442 31,841 174,283 (114,921) (114,921) 123,800 51,483 18,721 194,004 (99,992) (99,992)

118

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

22. OPERATING PROFIT (continued) Group 2005 2004 RM'000 RM'000 Gross profit Distribution costs Administration expenses Other operating expenses Other operating income Operating profit Operating profit is arrived at after charging: Allowance for doubtful debts Amortisation of goodwill (Note 8) Auditors' remuneration - holding company auditors - other auditors Bad debts written off Depreciation (Note 2) Directors' remuneration - fees - directors of the Company - other directors - other emoluments - directors of the Company - other directors Hire of plant Impairment losses on land held for property development Impairment losses on property, plant and equipment Land and building rental Inventories written down Property, plant and equipment written off Retirement benefits charged Replanting expenditure 5,802 2,846 397 212 183 39,491 4,515 1,415 307 182 36,959 60 37 13,118 60 12,680 402,823 (84,928) (70,663) (9,133) 9,630 247,729 318,043 (54,728) (72,148) (5,652) 16,160 201,675 Company 2005 2004 RM'000 RM'000 59,362 (11,099) (8,237) (2,996) 688 37,718 94,012 (10,809) (7,721) 86 75,568

656 315 3,609 7,694 11,149 5,235 974 3,481 281 5,955

804 211 3,721 6,378 3,914 494 354 3,697 1,018 1,452 1,015 5,442

392 1,963 360 224 129 300 2,998 268 -

540 2,488 227 131 213 362 976 -

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

119

Notes to the Financial Statements

22. OPERATING PROFIT (continued) Group 2005 2004 RM'000 RM'000 and after crediting: Bad debts recovered Gain on disposal of property, plant and equipment Gross dividends received from subsidiaries - quoted in Malaysia - unquoted Tax exempt dividends received from subsidiaries - quoted in Malaysia Gross dividends received from other investments - unquoted Tax exempt dividends received from other investments - quoted outside Malaysia - unquoted Allowance for doubtful debts written back Rental income from properties Realised gain on foreign exchange Reversal on inventories written down 411 1,658 2,720 391 46 Company 2005 2004 RM'000 RM'000

-

-

21,841 10,000

51,483 -

-

-

-

18,721

3,190

1,210

-

-

2,910 440 1,325 707 354 946

2,706 990 1,891 1,764 376 718

300 18 278 -

18 329 651

The estimated monetary value of Directors' benefits-in-kind in respect of the Group and Company is RM404,000 (2004 : RM364,000) and RM76,000 (2004 : RM89,000) respectively.

23. EMPLOYEE INFORMATION Group 2005 2004 RM'000 RM'000 Staff costs 110,230 94,005 Company 2005 2004 RM'000 RM'000 27,478 25,892

Staff costs of the Group and the Company include contributions to Employees' Provident Fund of RM8,610,000 (2004 : RM7,085,000) and RM2,103,000 (2004 : RM1,701,000) respectively. The number of employees of the Group and Company (including Directors) at the end of the year was 7,113 (2004 : 6,901) and 947 (2004 : 947) respectively.

120

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

24. FINANCING COSTS Group 2005 2004 RM'000 RM'000 Bank borrowings Subsidiary companies interest 20,512 20,512 8,709 8,709 Company 2005 2004 RM'000 RM'000 614 614 3,276 20,104 23,380

25. OTHER NON-OPERATING ITEMS Group 2005 2004 RM'000 RM'000 Gain on disposal of other investments - quoted investment - unquoted investment Gain on disposal of investment in subsidiaries Allowance for doubtful recovery of amount due from a subsidiary written back 12,958 3,500 Company 2005 2004 RM'000 RM'000 171,773

16,458

-

-

23,938 195,711

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

121

Notes to the Financial Statements

26. TAX EXPENSE Group 2005 2004 RM'000 RM'000 Current tax expense Malaysian - current - prior year Overseas - current 58,554 (1,934) 193 56,813 Deferred tax expense Origination and reversal of temporary differences (Over) / Underprovision in prior years 47,073 (1,061) 89 46,101 Company 2005 2004 RM'000 RM'000 8,747 8,747 9,300 (205) 9,095

2,254 (72) 2,182

5,225 56 5,281 806 52,188 283 24 52,495

(1,687) (1,687) 7,060 7,060

9,095 9,095

Tax expense on share of profit of associated companies Real Property Gains Tax ("RPGT") - current - prior year

376 59,371 51 59,422

Reconciliation of effective tax expense Profit before taxation Income tax using Malaysian tax rates Effect of different tax rates in foreign jurisdictions Non-deductible expenses Non-taxable income Effect of 20% tax rate on certain small and medium enterprise subsidiaries Deferred tax assets not recognised during the year Utilisation of previously unrecognised deferred tax assets Effect of tax losses recognised Effect of additional reinvestment allowances during the year Permanent loss of capital allowances and agricultural allowances brought forward due to cessation of business Tax incentive Other items 248,392 69,550 6 5,930 (12,510) (350) 3,581 (1,114) (2,929) 200,335 56,094 (95) 5,701 (1,035) (187) (2,423) (2,699) (66) 37,139 10,399 363 (2,929) 252,922 70,818 601 (60,067) (1,493) -

(787) 61,377

312 (824) 54,778 (981) (1,302) 52,495

(773) 7,060 7,060

(559) 9,300 (205) 9,095

Overprovision in prior years RPGT Tax expense

(2,006) 51 59,422

122

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

27. EARNINGS PER ORDINARY SHARE - GROUP Basic earnings per ordinary share The calculation of basic earnings per ordinary share is based on the net profit attributable to shareholders of RM102.6 million (2004 : RM75.5 million) and the weighted average number of ordinary shares outstanding during the year of 437.9 million (2004 : 438.0 million) ordinary shares of RM1 each. For the purpose of this computation, the number of shares repurchased and held as treasury shares has been excluded from the weighted average number of ordinary shares outstanding during the year.

28. DIVIDENDS i) Paid and proposed dividend for the financial year ended 31 January 2005 Dividends per ordinary share as disclosed in the income statement is computed as follows: Group and Company 2005 2004 Interim paid: 2.5% per share less tax (2004 : 2.5% per share less tax) Special dividend paid: Nil (2004 : 2.5% special tax exempt per share) Nil (2004 : 6.5% special interim per share less tax) Proposed: 3% per share less tax (2004 : 3% per share less tax) 2.5 sen 3.0 sen 5.5 sen 2.5 sen 2.5 sen 6.5 sen 3.0 sen 14.5 sen

The proposed final dividend of 3% per share less tax has not been accounted for in the financial statements of the Group and Company as at 31 January 2005.

ii)

Dividends accounted for in the financial statements Group and Company 2005 2004 RM'000 RM'000 Final of the previous year: 3% per share less tax (2004 : 3% per share less tax) Interim paid: 2.5% per share less tax (2004 : 2.5% per share less tax) Special dividend paid: Nil (2004 : 2.5% special tax exempt per share) Nil (2004 : 6.5% special interim per share less tax) 9,461 9,461

7,884

7,884

7,884 17,345

10,950 20,499 39,333 48,794

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

123

Notes to the Financial Statements

29. SEGMENTAL INFORMATION Segment information is presented in respect of the Group's business. No segmental reporting by geographical segments has been provided as the Group is primarily involved in business operations in Malaysia. Inter-segment pricing is determined on a negotiated basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise tax recoverable, provision for taxation, borrowings, deferred tax assets/liabilities, financing costs, interest income, other non-operating items and corporate assets and expenses. Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period. Business segments The Group comprises the following main business segments: Manufacturing Trading and finance The manufacture and sale of mosaic and homogeneous ceramic tiles. The trading of edible oils and food products, fertilizers, agrochemicals, motor vehicles and spare parts and leasing, hire purchase and licensed money lending. Cultivation and processing of oil palm. Investment in properties, development of residential and commercial properties. Holdings of investment.

Agricultural Property Investment holdings

124

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

29. SEGMENTAL INFORMATION (continued) Trading and Manufacturing finance Agricultural RM'000 RM'000 RM'000 192,223 3,925 196,148 26,226 812,837 849 813,686 49,467 297,490 297,490 161,127 Property RM'000 107,138 514 107,652 29,699 Investment holdings Eliminations Consolidated RM'000 RM'000 RM'000 6,540 6,540 (12,358) (5,288) (5,288) (6,432) 1,416,228 1,416,228 247,729 (20,512) 1,027 16,458 3,690 248,392 (59,422) 188,970 (86,419) 102,551 259,297 35,077 885,038 9,616 655,994 674,068 109,903 124,737 2,599,134 154,596 56,618 2,810,348 26,746 73,870 23,256 44,535 2,941 171,348 917,249 1,088,597

2005 Revenue from external customers Inter-segment revenue Total revenue Operating profit

Financing costs Interest income Other non-operating items Share of profit of associates Profit before taxation Tax expense Profit after taxation Minority interest Net profit for the year Segment assets Investment in associates Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Other information Capital expenditure Depreciation and amortisation

1,163

1,927

-

600

-

-

23,747 14,029

7,208 7,985

17,167 17,609

4,650 1,278

819 1,436

-

53,591 42,337

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

125

Notes to the Financial Statements

29. SEGMENTAL INFORMATION (continued) Trading and Manufacturing finance Agricultural RM'000 RM'000 RM'000 161,595 4,260 165,855 20,674 599,431 679 600,110 22,859 271,257 271,257 149,834 Property RM'000 86,658 1,042 87,700 22,423 Investment holdings Eliminations Consolidated RM'000 RM'000 RM'000 4,906 4,906 (11,726) (5,981) (5,981) (2,389) 1,123,847 1,123,847 201,675 (8,709) 3,796 2,762 248 563 3,573 200,335 (52,495) 147,840 (72,333) 75,507 222,820 34,830 503,690 15,699 651,015 397,926 109,479 182,975 1,958,426 160,008 50,256 2,168,690 26,382 57,589 16,885 46,017 13,464 160,337 442,687 603,024

2004 Revenue from external customers Inter-segment revenue Total revenue Operating profit Financing costs Interest income Share of profit of associates Profit before taxation Tax expense Profit after taxation Minority interest Net profit for the year Segment assets Investment in associates Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Other information Capital expenditure Depreciation and amortisation

11,743 13,337

2,619 3,902

13,006 17,772

1,118 1,578

2,303 1,785

-

30,789 38,374

126

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

30. CONTINGENT LIABILITIES - UNSECURED Company 2005 2004 RM'000 RM'000 Guarantees to and contingencies relating to borrowings of subsidiaries in respect of balances outstanding as at 31 January 35,158

31. OPERATING LEASES Total future minimum lease payments under non-cancellable operating leases are as follows: Group 2005 2004 RM'000 RM'000 Less than one year Between one and five years More than five years 728 2,772 5,190 8,690 710 2,767 5,541 9,018 Company 2005 2004 RM'000 RM'000 67 129 196 67 196 263

The Group and the Company lease a number of office lots and warehouses under operating leases. The lease typically run for an initial period of three years, with an option to renew the leases. None of the leases include contingent rentals.

32. COMMITMENTS Group 2005 2004 RM'000 RM'000 Capital commitments: Property, plant and equipment Contracted but not provided for in the financial statements Authorised but not contracted for Company 2005 2004 RM'000 RM'000

60,683 127,296 187,979

535 18,905 19,440

57,938 76,743 134,681

1,392 1,392

33. HOLDING COMPANY The immediate and ultimate holding company is Gek Poh (Holdings) Sdn. Bhd., a company incorporated in Malaysia.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

127

Notes to the Financial Statements

34. RELATED PARTIES Controlling related party relationships are as follows: i) The holding company; and ii) Its subsidiaries as disclosed in Note 37. Significant transactions and balances with other related parties are as follows: Group 2005 2004 RM'000 RM'000 Transactions - income/(expense) Director of a subsidiary of HSCB and his spouse: Lo Ah Kiong @ Loh Ket Kiong Sale of properties Director of the Company and his spouse: Edward Lee Ming Foo Sale of properties Foundation connected to Tan Sri Datuk Seri Panglima Lau Gek Poh ª, David Park, Tuan Haji Nik Ariff bin Nik Hassan, Edward Lee Ming Foo, Liew Chor Beng @ Lau Cho Beng, Datuk Seri Panglima Lau Cho Kun @ Lau Yu Chak ª and Sim Siew Meng, Directors of the Company: Lau Gek Poh Foundation # Donation Person connected to Tan Ghee Kiat, a Director of the Company: Shaun Tan Li Shung Sale of motor vehicles Company connected to Edward Lee Ming Foo, a Director of the Company: Corporated International Consultant Sdn. Bhd. Project consultancy fee payable Company in which Liew Chor Beng @ Lau Cho Beng, a Director of the Company, has interest: Anatoni International Co. Ltd. Sales of products # ª Company 2005 2004 RM'000 RM'000

-

876

-

-

-

986

-

-

(2,120)

(1,555)

-

-

304

-

-

-

(3,397)

(4,232)

-

-

-

76

-

76

an organisation principally involved in charitable activities resigned as Director of the Company on 4 August 2004

128

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

34. RELATED PARTIES (continued) Group 2005 2004 RM'000 RM'000 Transactions - income/(expense) Companies connected to Datuk Seri Panglima Lau Cho [email protected] Lau Yu Chak, a Director of the Company ª : Glenealy Plantations (Malaya) Berhad Group Sales of products Purchases Lingui Developments Berhad Group Sales of products Samling Strategic Corporation Sdn. Bhd. Group Sales of products Company in which Datuk Simon Shim Kong Yip, a Director of the Company, has interest: Shim, Pang & Co. Rental income Servicing of motor vehicles Legal fees Companies in which Anthony John Liddell Nightingale, a director of a subsidiary, has interest ^ : Cycle & Carriage Bintang Berhad Payment for software maintenance Purchase of motor vehicles and spare parts Revenue on servicing of motor vehicles Edaran Otomobil Nasional Berhad Purchase of motor vehicles and spare parts Revenue on servicing of motor vehicles Company in which Tong Chin Hen, a director of a subsidiary, has interest: Imaspro Resources Sdn. Bhd. Purchase of raw materials Purchase of agrochemicals Company in which Ong Euwan George, a director of a subsidiary*, is a director: Kumpulan Guthrie Berhad Sales of products Company in which Cheng Hooi, Paul Geh, a director of a subsidiary**, has interest: Lingui Developments Berhad Group Sales of products ª

^

Company 2005 2004 RM'000 RM'000

5,357 18,670 24,396

3,016 (6) 23,971 21,667

-

-

12 5 (1,439)

12 3 (1,213)

(144)

(153)

(744) 10 (158) 3

(1) (12,211) 116 (11,098) 81

-

(13) -

(325) (461)

(1,133) (781)

-

-

-

2,678

-

-

-

13,252

-

-

* **

resigned as Director of the Company on 4 August 2004 resigned as director of the subsidiary on 23 February 2004 resigned as director of the subsidiary on 17 September 2003 retired as director of the subsidiary on 25 June 2003

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

129

Notes to the Financial Statements

34. RELATED PARTIES (continued) Group 2005 2004 RM'000 RM'000 Transactions - income/(expense) Holding company Gek Poh (Holdings) Sdn. Bhd. and its other subsidiaries Rental income Sales of products Rental expenses Purchase of products Insurance premium Purchase of air tickets Construction work claim Purchase of properties Purchase of household assets and machinery Associates EAC Holdings (Malaysia) Sdn. Bhd. Rental expenses Transportation charges Vintage Heights Sdn. Bhd. Management fees received Lease rental income Interest income Rental income Sales of products Subsidiaries Dividend income Interest income Rental income Sales of products Share of management expenses Interest expenses Rental expenses Servicing of motor vehicles Purchase of products 31,841 18 82,573 3,948 (663) (41) (691) 70,204 4,999 18 73,192 4,540 (20,104) (615) (16) (210) (27) (3,136) 212 564 4,931 16 938 (16) (2,557) 221 604 5,847 16 543 (25) (3,079) (2,421) Company 2005 2004 RM'000 RM'000

37 10 (511) (5,583) (104) (3,182) (139)

141 4,390 (622) (7,245) (4,325) (299) (45) (28,920) -

(1,491) (4) -

(258) (887) (31) -

These transactions have been entered into in the normal course of business and have been established under negotiated terms. Sale of properties was based on the developer's selling price.

130

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

35. FINANCIAL INSTRUMENTS Financial risk management objectives and policies The Group's financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group's businesses whilst managing its credit, interest rate, foreign exchange and liquidity risks. The Group operates within clearly defined guidelines and it is the Group's policy not to engage in speculative transactions. Credit risk Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluation review is regularly performed for new customers and existing customers who trade on credit, and to mitigate exposure to credit risk. Where appropriate, the Group requires its customers to provide collateral before approvals are given to trade on credit. The Group does not have any significant exposure to any individual customer or counterparty, nor does it have any major concentration of credit risk related to any financial instruments except for receivable of RM65 million (2004 : RM75 million) extended to an associate. The maximum exposure to credit risk is represented by the carrying amount of each financial asset. Interest rate risk The Group's exposure to market risk for changes in interest rates relates primarily to fixed deposits and borrowings with financial institutions. The Group does not use derivative financial instruments to hedge debt obligation. The Group manages interest cost using floating rate bank facilities. Interest on loan receivables is based on prevailing commercial rates and hence, loan receivables are not exposed to interest rate risk. Foreign currency risk The Group is exposed to currency risk as a result of the foreign currency transactions entered into by subsidiaries in currencies other than their functional currency. These companies enter into forward foreign currency exchange contracts where appropriate to limit their exposure on foreign currency receivables and payables, and on cash flows generated from anticipated transactions denominated in foreign currencies. Liquidity risk As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash or cash equivalents and adequate amount of credit facilities to meet its working capital requirements. In addition, the Group strives to maintain flexibility in funding by keeping its credit lines available at a reasonable level. As far as possible, the Group raises funding from financial institutions and prudently balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

131

Notes to the Financial Statements

35. FINANCIAL INSTRUMENTS (continued) Effective interest rates and repricing analysis In respect of interest-earning financial assets and interest-bearing financial liabilities with interest rate risk, the following table indicates their effective interest rates at the balance sheet date and the periods in which they reprice or mature, whichever is earlier. 2005 Effective interest rate per Within annum Total 1 year % RM'000 RM'000 1.00 6.72 3.41 4.04 5.65 7,138 7,138 2004 Effective interest rate per annum % 1.00 6.76 3.46 3.76 -

Group Financial assets Deposits with licensed banks Financial liabilities Unsecured overdrafts Unsecured bankers' acceptances Unsecured revolving credits Unsecured term loans Company Financial liabilities Unsecured overdrafts Unsecured bankers' acceptances Unsecured revolving credits

1-5 years RM'000 236,000

Total RM'000 3,982

Within 1-5 1 year years RM'000 RM'000 3,982 -

37,769 37,769 239,348 239,348 221,900 221,900 236,000 -

21,928 21,928 142,928 142,928 101,500 101,500 -

6.50 3.44 4.10

6,355 17,576 10,000

6,355 17,576 10,000

-

6.50 3.50 -

2,353 14,889 -

2,353 14,889 -

-

132

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

35. FINANCIAL INSTRUMENTS (continued) Fair values Cash and cash equivalents, other receivables, other payables and bank borrowings The carrying amounts approximate fair values due to the relatively short term maturity of these financial assets and liabilities. Trade and loan receivables and trade payables The carrying amounts of receivables and payables approximate fair values because these are subject to normal trade credit terms. The aggregate fair values of other financial assets and liabilities carried on the balance sheet as at 31 January are represented in the following table: 2005 Carrying Fair amount value RM'000 RM'000 2004 Carrying Fair amount value RM'000 RM'000

Group Financial assets Other investments Quoted shares Unquoted shares Other investments

23,089 65 134 23,288

40,455# * *

45,667 7,565 134 53,366

70,782# * *

Company Financial assets Other investments 134 134 * 134 134 *

# The fair value of quoted other investments is determined by reference to stock exchange quoted market bid prices at the close of the business on the balance sheet date. * It is not practical to estimate fair value of the Group and Company's other investments and unquoted shares because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs. However, the Directors are of the opinion that the carrying amounts represent the recoverable values.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

133

Notes to the Financial Statements

35. FINANCIAL INSTRUMENTS (continued) Unrecognised financial instruments The valuation of financial instruments not recognised in the balance sheet reflects their current market rates at the balance sheet date. The contracted amount and fair value of financial instruments not recognised in the balance sheet as at 31 January 2005 are: Contracted amount RM'000 Group Forward foreign exchange purchase contracts Forward foreign exchange sale contracts Company Forward foreign exchange purchase contracts Forward foreign exchange sale contracts 6,460 (31,464) 6,344 (31,614) 40,440 (31,464) 40,499 (31,614) Fair value RM'000

The fair value of forward foreign currency contracts is the estimated amount which the Group would expect to pay on the termination of the outstanding position arising from such contracts. At the end of the financial year, the fair value of such contracts is determined by reference to the spot rate on that date.

36. SIGNIFICANT EVENTS DURING THE YEAR (i) As disclosed in the Directors' Report of the previous year, on 25 March 2004, a wholly-owned subsidiary of HSCB, Menara Hap Seng Sdn. Bhd. (formerly known as Euro-Asia Agrochemical Sdn. Bhd.) ("MHS") entered into a conditional sale and purchase agreement with MUI Plaza Sdn. Bhd. to acquire two (2) contiguous parcels of freehold land together with the twenty-two storeys building erected thereon known as MUI Plaza for a cash consideration of RM166,000,000. On the same day, another wholly-owned subsidiary of HSCB, SKI Star Sdn. Bhd. (formerly known as Oriental Horticulture (Malaysia) Sdn. Bhd.) ("SKI") entered into a separate conditional sale and purchase agreement with Ming Fung Sdn. Bhd. and Shun Fung Sdn. Bhd. to acquire two (2) contiguous parcels of freehold vacant land for a cash consideration of RM24,000,000. The aforementioned acquisitions were completed on 23 June 2004. (ii) On 23 April 2004, HSCB disposed of 29,444,411 shares representing approximately 12.099% shareholding in Lam Soon (Hong Kong) Limited, a public company listed on The Stock Exchange of Hong Kong Limited, at HK$2.50 per share for a cash consideration of HK$73.3 million (RM35.5 million) after deducting brokerage fees and relevant costs incidental to the disposal. The disposal gave rise to a gain of approximately RM13 million to the Group during the year. On 12 June 2004, HSCB announced the completion of the incorporation of a wholly-owned subsidiary in Indonesia, namely Sasco Indonesia, PT ("Sasco, PT") with an issued and paid-up share capital of USD100,000 comprising 100,000 ordinary shares of USD1.00 each. Sasco, PT is to be principally involved in the distribution and marketing of the Group's agricultural products such as fertilizers and agro-chemicals in Indonesia.

(iii)

134

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

36. SIGNIFICANT EVENTS DURING THE YEAR (continued) (iv) On 17 June 2004, Si Khiong Industries Sdn. Bhd., a wholly-owned subsidiary of HSCB, acquired 2 ordinary shares of RM1.00 each representing the entire issued and paid-up share capital of Rebuild Truck Sdn. Bhd. (formerly known as Great Fleet (M) Sdn. Bhd.) for a cash consideration of RM2. The aforementioned acquisition was completed during the year. On 4 August 2004, Si Khiong Industries Sdn. Bhd. ("Si Khiong"), a wholly-owned subsidiary of HSCB acquired 2 ordinary shares of RM1.00 each representing the entire issued and paid-up share capital of Si Khiong Star Sdn. Bhd. ("Si Khiong Star") for a cash consideration of RM2. Si Khiong Star is principally involved in the trading of automotives, automotive parts as well as repair and service of automotives. Subsequently, on 14 August 2004, the issued and paid-up share capital of Si Khiong Star was increased to RM6,000,000 by issuance of 5,999,998 shares of RM1.00 each to Si Khiong for a cash consideration of RM5,999,998. On 16 August 2004, Si Khiong Star entered into a dealer agreement with DaimlerChrysler Malaysia Sdn. Bhd. for appointing Si Khiong Star as an authorised dealer for the sale and service of Mercedes-Benz vehicles. (vi) On 11 August 2004, HSCB disposed of its entire 5.49% equity interest comprising 5,500,000 unquoted shares in Aviva Insurance Berhad for a cash consideration of approximately RM11 million. The disposal gave rise to a gain of RM3.5 million to the Group during the year. On 5 October 2004, Forward Supreme Sdn. Bhd. ("FSSB"), an inactive wholly-owned subsidiary of HSCB, was placed under member's voluntary liquidation. The placement of the subsidiary under liquidation is not expected to have material financial impact on the Group. FSSB shall be dissolved on 28 March 2005 upon the expiration of three months from the date of lodgement of the Return by Liquidator Relating to Final Meeting and Liquidator's Statement of Final Account with the Companies Commission of Malaysia. (viii) On 20 January 2005, the wholly-owned subsidiaries of HSCB, namely Hap Seng Realty Sdn. Bhd. ("HSR"), Hap Seng Property Investment Sdn. Bhd. (formerly known as Bestearn Sdn. Bhd.) ("HSPI") and Hap Seng Properties Development Sdn. Bhd. ("HSPD") entered into four (4) separate sale and purchase agreements to acquire various household assets and machinery from Pembangunan Melati Sdn. Bhd. ("PM") and Hap Seng Properties Sdn. Bhd. ("HSP"), both wholly-owned subsidiaries of Gek Poh (Holdings) Sdn. Bhd. ("Gek Poh"), for an aggregate purchase price of RM139,437. The aforementioned acquisitions were completed during the year. On 20 January 2005, HSPD entered into a sale and purchase agreement with Soon Fatt Enterprise Sdn. Bhd., a wholly-owned subsidiary of Hap Seng Sdn. Bhd. which in turn is a wholly-owned subsidiary of Gek Poh, to acquire a piece of vacant land held under CL055011811 situated at Kudat Agung Road, Kota Kinabalu, Sabah for a cash consideration of RM50,000. The aforementioned acquisition was completed during the year. On 20 January 2005, HSR entered into a sale and purchase agreement with PM, a wholly-owned subsidiary of Gek Poh, to acquire a three storeys bungalow located at Jalan Teluk Likas, Kota Kinabalu, Sabah for a purchase price of RM2,975,000. The aforementioned acquisition was completed during the year.

(v)

(vii)

(ix)

(x)

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

135

Notes to the Financial Statements

36. SIGNIFICANT EVENTS DURING THE YEAR (continued) (xi) On 20 January 2005, HSPI entered into a sale and purchase agreement with HSP, a wholly-owned subsidiary of Gek Poh, to acquire a piece of vacant land held under CL105518947 situated at the District of Tawau, Sabah for a purchase price of RM156,900. The aforementioned acquisition was completed during the year. On 20 January 2005, HSR entered into a sale and purchase agreement to acquire 250,000 ordinary shares of RM1.00 each representing the entire issued and paid-up capital of Tg. Batu Recreation Complex Sdn. Bhd. from HSP, a wholly-owned subsidiary of Gek Poh, for a cash purchase price of RM1.00. The aforementioned acquisition was completed during the year. Pursuant to the authority granted by the shareholders of HSCB to their directors at the Extraordinary General Meeting held on 22 June 2004, HSCB repurchased during the year an additional 1,201,900 of its issued ordinary shares from the open market for a total cost of RM3,288,019. The repurchase was financed by HSCB's internal funds. The average cost paid for the additional shares repurchased was RM2.74 per share. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965. During the financial year, HSCB cancelled 1,765,000 of the shares previously repurchased. The remaining number of repurchased shares held after the cancellation as of 31 January 2005 was 32,584,100.

(xii)

(xiii)

37. SUBSIDIARIES The principal activities of the subsidiaries, their places of incorporation and the interest of Malaysian Mosaics Berhad as at 31 January are as follows: Country of incorporation Equity interest held (%) 2005 2004

Name of subsidiaries Unquoted MML Marketing Sdn Bhd

Principal activities

Trading and distribution of mosaic and homogeneous ceramic tiles Trading and distribution of mosaic and homogeneous ceramic tiles

Malaysia

100

100

MML Marketing Pte Ltd *

Singapore

100

100

Quoted Hap Seng Consolidated Berhad ("HSCB")# Investment holding Malaysia 52.88 52.93

136

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

37. SUBSIDIARIES (continued) The details of subsidiaries of HSCB are as follow: Country of incorporation Equity interest held by HSCB(%) 2005 2004

Name of subsidiaries Unquoted Jeroco Plantations Sdn Bhd The River Estates Sdn Berhad # and its subsidiaries Wecan Enterprise Sdn Bhd # Tampilit Sdn Bhd # Ladang Kawa Sdn Bhd Hap Seng Agrotech Sdn Bhd Hap Seng Land Sdn Bhd # and its subsidiaries Hap Seng Land Development Sdn Bhd (formerly known as Agritim Corporation Sdn Bhd) and its subsidiaries Atlantic Overseas Sdn Bhd Hap Seng Land Development (Puchong)Sdn Bhd (formerly known as Euro- Asia Brewery Accessories Sdn Bhd)# Hap Seng Properties Development Sdn Bhd and its subsidiaries Hap Seng Commercial Development Sdn Bhd

Principal activities

Cultivation and processing of oil palm Cultivation and processing of oil palm Cultivation of oil palm Cultivation of oil palm Cultivation of oil palm Dormant Property development and investment holding Investment holding

Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia

66.07 100 100 100 100 100 100

66.07 100 100 100 100 100 100

Malaysia

100

100

Property development Dormant

Malaysia Malaysia

100 100

100 100

Property development and investment holding Property development

Malaysia

100

100

Malaysia Malaysia Malaysia

100 100 100

100 100 100

Yan Min Enterprise Sdn Bhd Property development Hap Seng Realty Sdn Bhd and its subsidiaries Property investment and investment holding

Menara Hap Seng Sdn Bhd Property investment (formerly known as Euro-Asia Agrochemical Sdn Bhd)# SKI Star Sdn Bhd (formerly known as Oriental Horticulture (Malaysia) Sdn Bhd) # Property investment

Malaysia

100

100

Malaysia

100

100

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

137

Notes to the Financial Statements

37. SUBSIDIARIES (continued) The details of subsidiaries of HSCB are as follow: Country of incorporation Equity interest held by HSCB(%) 2005 2004

Name of company Unquoted Hap Seng Property Investment Sdn Bhd (formerly known as Bestearn Sdn Bhd) Tg. Batu Recreation Complex Sdn Bhd Si Khiong Industries Sdn Bhd and its subsidiaries

Principal activities

Property investment

Malaysia

100

100

Providing recreational facilities and services Trading in motor vehicles and spare parts, servicing of motor vehicles and investment holding Trading in motor vehicles Fabrication and sales of commercial trailers Dormant

Malaysia Malaysia

100 100

100

SKI Segar Sdn Bhd Zarah Sdn Bhd Saruja Sdn Bhd Si Khiong Star Sdn Bhd

Malaysia Malaysia Malaysia

70 100 100 100

70 100 100 -

Trading in motor vehicles, Malaysia spare parts and servicing of motor vehicles Dormant Malaysia

Rebuild Truck Sdn Bhd (formerly known as Great Fleet (M) Sdn Bhd) Sasco Sdn Bhd and its subsidiaries Dewana Sdn Bhd

100

-

Trading and distribution of fertilisers and agro-chemicals Manufacturing and marketing of agro-chemicals Dormant Investment holding

Malaysia

100

100

Malaysia

70

70

Sasco Indonesia, PT # Hap Seng Trading Sdn Bhd (formerly known as Euro-Asia Strategic Holdings Sdn Bhd) # and its subsidiaries Hap Seng (Oil & Transport) Sdn Bhd

Indonesia Malaysia

100 100

100

Trading in petroleum products

Malaysia

100

100

138

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

37. SUBSIDIARIES (continued) Country of incorporation Equity interest held by HSCB(%) 2005 2004 Name of company Unquoted Otentik Sdn Bhd and its subsidiary Manufacturing and trading of bricks, operating of stone quarries and trading in building materials Dormant Dormant Packing, marketing and wholesale trading of edible oils and food products Packing and marketing of edible oils and food products Wholesale trading of edible oil products Provision of financial services In liquidation Investment holding Malaysia 100 100 Principal activities

Yu Lee Stone Quarry Sdn Bhd Aceford Food Industry Sdn Bhd Aceford Food Industry Pte Ltd # and its subsidiaries

Malaysia Malaysia Singapore

100 100 100

100 100 100

Wintercorn Edible Products Pte Ltd # Wintercorn Edible Products Pty Ltd # Hap Seng Credit Sdn Bhd Forward Supreme Sdn Bhd # Euro-Asia Food & Beverage (Bermuda) Limited ## and its subsidiaries Euro-Asia Brand Holding Company Sdn Bhd # Euro-Asia (South) BVI Investment Limited ## and its subsidiaries Hainan Euro-Asia Properties Company Limited # Hainan Euro-Asia Food Company Limited #

Singapore

100

100

Australia Malaysia Malaysia Bermuda

100 100 100 100

100 100 100 100

Dormant Investment holding

Malaysia British Virgin Islands China China

100 100

100 100

Dormant Dormant

100 100

100 100

* Audited by member firm of KPMG International in respective country # Audited by other firms of auditors ## Auditors not required to be appointed

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

139

Notes to the Financial Statements

38. ACQUISITION OF SUBSIDIARIES During the year, the Group acquired all the shares in Rebuild Truck Sdn. Bhd. (formerly known as Great Fleet (M) Sdn. Bhd.), Si Khiong Star Sdn. Bhd. and Tg. Batu Recreation Complex Sdn. Bhd. for a consideration of RM2, RM2 and RM1 respectively, satisfied by cash. The acquisition was accounted for using the acquisition method of accounting. The acquisition during the year had no material effect on the Group's financial position. In the previous year, the Group acquired all the shares in Otentik Sdn. Bhd. for a consideration of RM19,000,000 satisfied by cash. The acquisition was accounted for using the acquisition method of accounting. As the acquisition was completed at the end of the previous year, it had not contributed to the consolidated net profit for the previous year. Effect of acquisitions The acquisitions had the following effect on the Group's assets and liabilities: Group 2004 RM'000 23,125 735 23,860 35,161 (20,066) (7,896) 31,059 (12,002) 19,057 19,000 57 2,945 22,002

2005 RM'000 Non current assets Property, plant and equipment Deferred tax assets 1 1 Current assets Current liabilities Deferred tax liabilities Net assets Goodwill / (negative goodwill) on acquisition Consideration paid, satisfied in cash Consideration paid, satisfied in cash Stamp duty paid Cash and cash equivalent of subsidiaries acquired Net cash (inflow) / outflow 23 (56) (32) 32 (7) (7)

140

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

39. MATERIAL LITIGATION As disclosed in the financial statements of the previous year, HSCB had on 24 October 2002, been served with a Writ of Summons ("said Writ") in the High Court in Sabah and Sarawak at Kota Kinabalu ("Tongod Suit") wherein HSCB was named as the first defendant, Asiatic Development Berhad as the second defendant, Tanjung Bahagia Sdn. Bhd. as the third defendant, Director of Department of Lands and Surveys, Sabah as the fourth defendant and the Government of the State of Sabah as the fifth defendant. The Tongod Suit was instituted by certain natives of Sabah claiming Native Customary Rights ("NCR") over all that parcel of land held under Title No. CL095330724 situated in Sungai Tongod, District of Kinabatangan, Sandakan ("the Tongod Land") or part thereof. HSCB had on 9 May 2002 completed its disposal of the Tongod Land to Tanjung Bahagia Sdn. Bhd., the wholly-owned subsidiary of Asiatic Development Berhad. HSCB has filed its Statement of Defence and an application to strike out the said Writ on 11 February 2003 ("Striking Out Application"). As announced by HSCB on 13 June 2003, the learned Deputy Registrar dismissed HSCB's Striking Out Application with cost. HSCB is appealing against the said decision and the Court had adjourned its original hearing date of 15 April 2005 on the same to another date to be fixed. The Plaintiff had earlier filed an application for injunction restraining the second and third defendants from carrying out, inter alia, planting activities on the Tongod Land or part thereof. During the hearing held on 5 July 2004 on the said injunction application, the defendants had raised a preliminary objection to the Court's jurisdiction to determine Native Customary Rights. The Court has yet to fix a new date for decision on the said preliminary objection. HSCB's solicitors are of the opinion that the Plaintiff's claim to NCR against the alienated land after the issuance of the title is unlikely to succeed.

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

141

Notes to the Financial Statements

40. PRIOR YEAR ADJUSTMENTS The prior year adjustments are in respect of a reversal of the gains attributable to the disposal of subsidiaries to minority interests arising from a change in accounting treatment of the gain on disposal of: RM'000 (i) Hap Seng Land Development Sdn Bhd. (formerly known as 88,818 Agritim Corporation Sdn. Bhd.) ("HSLD") and its subsidiaries to Hap Seng Land Sdn. Bhd. ("HSL"), a subsidiary of HSCB (ii) Si Khiong Industries Sdn. Bhd. ("SKI") and Sasco Sdn. Bhd. ("Sasco") to HSCB 30,198 119,016

In the current financial year, the Directors having reconsidered the accounting treatment adopted in the previous financial years, have eliminated in full the gain on disposal of HSLD and its subsidiaries to HSL, a subsidiary of HSCB and the disposal of SKI and Sasco to HSCB, in strict compliance with the provisions of Malaysian Accounting Standard Board (MASB) Standard 11, Consolidated Financial Statements and Investments in Subsidiaries. In the previous financial years, the Directors had considered that the treatment adopted by the Group, which was a departure from the provisions of the MASB 11, was more appropriate as it reflected a true and fair view of the transactions. Accordingly, the Group had recognised the gain attributable to the disposal to minority interests in respect of the disposal of HSLD and its subsidiaries to HSL, a subsidiary of HSCB and the disposal of SKI and Sasco to HSCB. The acquisition of the subsidiaries by HSCB were approved by the minority shareholders of HSCB at an EGM of HSCB held on 15 January 2004 and 4 December 2000 respectively where the Company, together with persons connected to them, abstained from voting in respect of their direct and indirect shareholdings in HSCB. However, in accordance with the provisions of MASB Standard 11, the gain on disposal of HSLD and its subsidiaries to HSL, a subsidiary of HSCB and the disposals of SKI and Sasco to HSCB, should have been eliminated in full and thus the prior year adjustments now reflects this.

142

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Notes to the Financial Statements

41. COMPARATIVE FIGURES (a) The following comparatives have been restated to conform with the current year's presentation. Group As restated RM'000 Cash flow statements Cash flows from operating activities Land held for property development Cash flows from investing activities Purchase of land held for development As previously stated RM'000

(27,062)

-

-

(27,062)

(b) The following comparatives have been restated to conform with the provisions of Malaysian Accounting Standard Board ("MASB") Standard 11, as explained in Note 40. Group As restated RM'000 Balance sheet Property, plant and equipment Investment properties Land held for property development Goodwill on consolidation Inventories Property development costs Reserves Minority shareholders' interests Deferred tax liabilities Income statement Other non-operating items Profit before taxation Profit after taxation Net profit for the year Basic earnings per ordinary share (sen) Statement of changes in equity Distributable reserves at 1 February 2003 Distributable reserves at 31 January 2004 912,188 143,827 94,532 5,725 291,325 35,705 300,708 826,955 163,636 As previously stated RM'000 918,298 149,510 171,915 (217) 301,031 43,239 419,724 791,953 180,096

200,335 147,840 75,507 17.24

88,818 289,153 236,658 164,325 37.52

260,859 287,572

291,057 406,588

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

143

Other Information

PARTICULARS OF SANCTIONS AND / OR PENALTIES IMPOSED There were no sanctions and / or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies.

MATERIAL CONTRACTS There were no material contracts involving the Company and its subsidiaries with directors' and major shareholders' interests, either still subsisting at the end of the financial year or, if not then subsisting, entered into since the end of the financial year ended 31 January 2005, except for the following:i) On 25 March 2005, two separate sale and purchase agreements were entered into between HSCB's wholly-owned subsidiary, Hap Seng Properties Development Sdn Bhd ("HSPD"), on the one part and Chiew Kim Hua ("CKH") and Helen Lee Yun Oi ("LYO") on the other part respectively pursuant to which HSPD agreed to sell and:a) CKH agreed to acquire from HSPD all that parcel of property known as Lot No. 216 together with one unit of 2-storey shop office building (standard corner lot) situated at Sri Indah Tawau, Phase 2, Jalan Apas, Tawau, Sabah for a cash purchase price of RM338,000.00; and b) LYO agreed to acquire from HSPD all that parcel of property known as Lot No. 217 together with one unit of 2-storey shop office building (standard intermediate lot) situated at Sri Indah Tawau, Phase 2, Jalan Apas, Tawau, Sabah for a cash purchase price of RM308,000. LYO and CKH is the sister and brother-in-law respectively of Edward Lee Ming Foo, who is a director of the Company as well as HSPD. The sale consideration was based on the current developer's selling price. The aforementioned transactions were announced by HSCB on even date. ii) Related Party Transactions during the financial year ended 31 January 2005 were entered in the ordinary course of business and on terms no more favourable to the related party than those generally available to the public and are not detrimental to the minority interests, have been disclosed in Note 34 to the Financial Statements. The Company will be seeking Shareholders' Mandate for Recurrent Related Party Transactions at an Extraordinary General Meeting which will be convened on 28 July 2005.

144

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi KUALA LUMPUR Unit No. 16-3 and 16-3A Kiapeng Service Apartments Seksyen 57, Bandar Kuala Lumpur Lot 593 & 594, Seksyen 57, Jalan P. Ramlee Bandar Kuala Lumpur Lot 546 & 1246, Seksyen 57, Jalan P. Ramlee Bandar Kuala Lumpur SELANGOR Teluk Merbau Estate Sungai Pelek, Sepang No.1A, Jalan 205 Off Jalan Tandang Petaling Jaya B-7-02 & B-7-07 Sri Alam Condominium Jalan Kelab Golf 13/1, Seksyen 13, Shah Alam KEDAH PT Lots 4137 & 4138 Mukim Padang Meha, Kulim JOHOR Lot 6692 3 1/2 Miles, Jalan Mersing 86000 Kluang Lot 641, 642, 643 & 663 Mukim of Kluang PTD 53638 Mukim of Kluang SABAH KOTA KINABALU ST 010500080 G9, Wisma Sabah Jalan Haji Saman

Area Keluasan

559 m2

2 units of service apartments 22-storey office building for rental Land held for development

September 2003

Freehold

--

4

3,784

7,436 m2

June 2004

Freehold

--

32

171,151

2,896 m2

June 2004

Freehold

--

--

24,720

189 ha 15,173 m2

Oil palm plantation Showroom, office and warehouse Two units of penthouses

August 1995 August 2001

Freehold Leasehold 82 Years Leasehold 99 Years

-- 2057

-- 13

45,295 23,835

566.04 m2

January 2004

2102

6

1,130

15.96 ha

Land held for development

August 1995

Freehold

--

--

1,573

41,480 m2

Factory buildings and office Factory buildings and office Factory buildings and office

September 1981

Freehold

--

14 - 40

6,922

117,873 m2 121,406 m2

July 1995 May 2004

Freehold Leasehold 60 years

-- 2060

7 11

41,892 13,055

55 m2

1 unit of shoplot for rental

January 2004

Leasehold 99 years

2071

24

174

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

145

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi KOTA KINABALU (continued) TL 017512533 Wisma Gek Poh Jalan Haji Saman CL 015074745 Taman Kingfisher Sulaman Menggatal CL 015029008 / CL 015089175 / CL 015046607 Taman Kingfisher Sulaman Menggatal TL 017532624 KM 4 Tuaran Road CL 015376584 Mile 5 1/2 Tuaran Road TL 017512211 & TL 017532268 Jalan Telok Likas CL 215353601 Lok Kawi, Jalan Penampang CL 015359592 Taman Fortuna, Jalan Penampang CL 055011811 Agong Road, Kudat CL 215314024 Kg. Manantangah, Penampang CL 215269248 Kg. Madsiang, Penampang CL 215154144 / CL 215310740 / CL 215311532 / CL 215179329 Kg. Madsiang, Penampang

Area Keluasan

1,208 m2

5 1/2 storey office building for rental Land held for development Land held for development

January 2004

Leasehold 99 years Leasehold 999 years

2061

28

6,942

19,627 m2

March 2003

2935

--

2,087

154,015 m2

April 2004 May 2004

Leasehold 2924 / 2936 / 999 years 2924

--

26,032

2,226 m2 10,724 m2 2,369 m2

Land held for development Showroom, office and workshop 3-storey detached house with swimming pool Land held for development Land held for development Land held for development Agricultural land

January 2004 April 1984 January 2005

Leasehold 99 years Leasehold 99 years Leasehold 82 years/ 99 years Leasehold 60 years Leasehold 999 years Leasehold 999 years Leasehold 99 years Leasehold 99 years

2075 2065 2059

-- 26 4

360 3,225 2,975

10.1 ha 1,045 m2

March 1986 January 2004

2044 2907

-- --

4 300

15,030 m2 88,424 m2

January 2005 January 2004

2913 2073

-- --

50 452

40,752 m2 141,680 m2

Site office with a weighbridge 4 parcels of land for quarry operations

January 2004 January 2004

2061

2 --

967 948

Leasehold 2056 / 2061 / 99 years 2063 / 2067

146

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi SANDAKAN TL 077508742 Clunny Estate KM 2.1, North Road TL 077504799 Clunny Estate KM 2.3, North Road TL 077567938 / TL 077567901 Bandar Fajar, Jalan Leila TL 077544248 Wisma Hap Seng KM 2.7, Jalan Leila TL 077544239 KM 2.7, Jalan Leila CL 075095199 KM 4, Jalan Leila - Bokara CL 07514510 Jalan Sibuga CL 075394188 KM 6.5, Batu Sapi Road PL 076290572 Tg. Buli Kuku CL 075471868 / CL 075471706 / CL 075471859 Jalan Batu Sapi, Karamunting CL 075098127 KM 11, Airport Road TAWAU TB 2109 - 2112 KM 1.6, Jalan Tg. Batu Laut Taman Guan Soon TB 1647 - 1653, 1839 - 1856, TB 1944 KM 2, Jalan Tg. Batu Laut

Area Keluasan

2,865 m2

1 unit of single storey detached house 3-storey office building, showroom and workshop Land held for development Commercial land with 5-storey office building Undeveloped commercial land Land held for development Land held for development Si Khiong workshop Undeveloped land 2-storey recreation hall and detached house Land held for development

January 2004

Leasehold 99 years Leasehold 99 years Leasehold 999 years Leasehold 999 years Leasehold 999 years Leasehold 999 years Leasehold 999 years Leasehold 999 years Leasehold 60 years Leasehold 999 years Leasehold 999 years

2062

25

261

1,909 m2

May 1976

2052

31

1,069

4.14 ha 11,660 m2

January 2004 February 1985

2888 2911

-- 23

1,585 6,754

6,596 m2 0.12 ha 396,592 m2 10,098 m2 121,487 m2 2,767 m2

February 1985 February 1961 April 2004 April 1984 January 2004 January 1995

2911 2908 2883 2881 2038 2881

-- -- -- 26 -- 26

2,152 -- 8,541 4,016 729 364

5,450 m2

January 2004

2923

--

392

1,000 m2

4 units of 2-storey commercial shophouses 1 unit of 2-storey recreational clubhouse and 25 units of semi-permanent detached houses

January 2004

Leasehold 999 years Leasehold 99 years

2903

31

1,674

27,378 m2

January 2004

2075

30 - 31

3,230

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

147

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi TAWAU (continued) Taman Guan Soon TB 1532 - 1535, 1963 - 1964, KM 2, Jalan Tg. Batu Laut Taman Mosaic KM 2, Jalan Tg. Batu Laut PL 106142287 KM 5, Jalan Tg. Batu Laut CL 105518330 KM 5, Jalan Tg. Batu Laut CL 105163728 / PL 106142250 KM 5, Jalan Tg. Batu Laut

Area Keluasan

5,930 m2

6 units of semi-permanent detached houses 26 units of 2-storey detached houses 1 unit of warehouse for rental An industrial zoned land Residential zoned land, quarry yard with a weighbridge counter building, 6 units of labourlines and ancillary buildings at Kukusan quarry Industrial lands with buildings erected within a dockyard for rental Industrial lands with single-storey buildings for rental Industrial lands with single-storey buildings for rental Industrial zoned land on reclaimed area held for rental 9 units of 2-storey detached houses and a 2-storey club house VIP Guest house

January 2004

Leasehold 999 years Leasehold 99 years Leasehold 999 years Leasehold 99 years Leasehold 99 years / 999 years

2903

32

859

28,733 m2 29,502 m2 8,094 m2 65,114 m2

January 2004 January 2004 January 2004 January 2004

2073 2929 2094 2057 / 2928

24 15 -- 2 - 23

8,737 1,418 871 2,829

CL 105433716 & CL 105465825 Hap Seng Dockyard Jalan Tg. Batu Laut CL 105360674 & CL 105396647 KM 6, Jalan Tg. Batu Laut CL 105451607 & CL 105459158 KM 6, Jalan Tg. Batu Laut PL 106293010 KM 6, Jalan Tg. Batu Laut CL 105109859 & TL 107525959 Taman Yacht Club KM 1, Jalan Tg. Batu TL 107521291 Taman Yacht Club KM 1, Jalan Tg. Batu

121,406 m2

January 2004

Leasehold 99 years

2084 / 2087

13 - 23

15,836

198,215 m2

January 2004

Leasehold 99 years Leasehold 99 years Leasehold 99 years Leasehold 999 years / 99 years Leasehold 99 years

2076 / 2080

16 - 17

27,929

222,415 m2

January 2004

2086 / 2087

14 - 15

27,583

404,645 m2

January 2004

2089

--

23,331

24,342 m2

January 2004

2897 / 2084

28

3,824

1,639 m2

January 2004

2071

28

373

148

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi TAWAU (continued) CL 105518947 Taman Yacht Club KM 1, Jalan Tg. Batu TB 2681 - 2685, TB 2632, TB 2636 KM 2, Jalan Tg. Batu TL 107505233 TB 1408, Jalan Aman TL 107505288 TB 1482, Jalan Aman TL 107510323 KM 1.5, Jalan Kuhara TL 107510225 KM 1.5, Jalan Kuhara CL 105316256 / CL 105330318 / CL 105330327 No.1823, KM 1.5, Kuhara Road CL 105172843 / CL 105172852 Wisma Gek Poh TB 1144, Kuhara Road CL 105424208 KM 2, Kuhara Road TL 10751430 / TL 10751496 / TL 107517608 / TL 10751431 / & TL 107517591 Mile 1, Kuhara Road CL 105316318 / CL 105316327 CL 105316336 / CL 105316345 Jalan Tawau Lama KM 8, Jalan Apas CL 105478831 Mile 10, Jalan Apas

Area Keluasan

0.8 ha

Vacant Land

January 2005

Leasehold 99 years Leasehold 99 years / 999 years Leasehold 99 years Leasehold 99 years Leasehold 999 years Leasehold 999 years Leasehold 999 years

2094

--

157

7,455 m2

7 units of 2-storey detached houses for rental 1 unit of double storey detached house 1 unit of single storey detached house Land held for development Land held for development Vehicle Showroom cum office

January 2004

2073 / 2988

24

2,408

2,023 m2

January 2004

2061

33

293

2,671 m2

January 2004

2060

33

402

836 m2 572 m2 2,456 m2

January 2004 January 2004 May 1973

2895 2895 2894 / 2895

-- -- 31

618 164 2,644

4,577 m2

3 storey office building and 1 lot of adjoining commercial land Land held for development Land held for development

April 1984

Leasehold 999 years

2895

32

4,014

2,045 m2 3,305 m2

April 1976 May 2004

Leasehold 999 years Leasehold 999 years

2901 2895

-- --

1,767 2,208

1,000 m2

Land held for development Land held for development Land held for development

January 2004

Leasehold 999 years Leasehold 99 years Leasehold 99 years

2895

--

121

12,756 m2 103.8 ha

January 2004 January 2004

2081 2060

-- --

1,650 3,810

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

149

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi TAWAU (continued) Mile 10, Jalan Apas

Area Keluasan

323.6 ha

Oil palm plantation

January 2004

Leasehold 2049 / 2060 / 99 years 2061 / 2062 / 2073 Leasehold 2042 / 2081 / 60 years / 2060 99 years

--

4,050

Central workshop, CL 105420675 / CL 105420684 / 1,225,024 m2 CL 105420693 / CL 105420700 / heavy commercial CL 105420666 vehicle body fabrication Mile 10, Apas Road workshop, spare parts stores, staff quarters and open space CL 105240195 KM 23, Jalan Apas 14 Kms, Jalan Sin On Tiku PL 106149633 Mile 3 1/2, Jalan Sin Onn Mile 1, Salleh Road CL 105361653 / CL 105319337 / CL 105319328 / CL 105319355 Tengku Osman Road CL 105469752 KM 8, Jalan Utara CL 105127375 / CL 105127393 Apas Road, Tawau CL 105109902 Lot 24 - 29, Jalan Bunga Raya TL 107505126 TB 978, Jalan Dunlop TL 107524247 / TL 107505279 Jalan Dunlop TL 107514081 Jalan Bahagia TL 107525182 / TL 107525191 TB 3205 - 3206, Jalan Aman 116,792 m2 117.7 ha 100,686 m2 16,026 m2 4,124 m2 Land held for development Oil palm plantation with buildings Land held for development Land held for development Warehouses

January 1980

30

7,155

January 2004 January 2004 June 2004 May 1982 February 1985

Leasehold 99 years Leasehold 99 years Leasehold 99 years Leasehold 999 years Leasehold 99 years Leasehold 999 years Leasehold 999 years Leasehold 999 years Leasehold 99 years Leasehold 99 years / 999 years Leasehold 99 years Leasehold 99 years

2061 2059 / 2060 2050 2902 2055

-- 7 - 38 -- -- 28

346 1,039 3,368 1,950 1,004

4,181 m2 24,281 m2 1,784 m2 318 m2 882 m2

Land held for development Land held for development Land held for development Commercial building 2 adjoining vacant commercial lots Workshop, office and staff quarters 2 units of 2-storey detached houses

January 2004 June 2004 September 1991 July 1975 January 2004

2926 2925 / 2928 2915 2062 2076 / 2893

-- -- -- 30 --

54 2,575 384 506 1,423

4,047 m2 4,736 m2

July 1980 January 2004

2067 2073

25 21

1,514 1,117

150

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi TAWAU (continued) CL 105243632 KM 5, Jalan Kukusan Apas Claremount Estate Mile 21, Jalan Quoin Hill Muul Hill Estate Mile 38, Jalan Bukit Kawa LAHAD DATU CL 115410234 KM 4 to KM 5, Jalan Silam TL 117507114 to TL 117507481 Lot 1 - 38, Cocoa Export Centre, KM 2.5, Jalan Kastam Baru CL 115408985 KM 2.5, Jalan Kastam Baru PL 116292758 KM 2.3 Jalan Dermaga CL 115363196 / CL 115363203 Jalan Dam FR 114008794 Kampong Tabanak CL 115409802 Mile 2, New Wharf Road CL 115329872 Taman Executive LABUAN TL 207527866 Jln Tun Mustapha CL 205224424 Kg. Lubuk Termiang

Area Keluasan

3,157 m2 552 ha 724 ha

Quarry yard and office site Oil palm plantation Oil palm plantation

January 2004 July 1996 July 1996

Leasehold 99 years Leasehold 99 years Leasehold 99 years

2064 2058 / 2065 2062 / 2074

24 -- -- } } } }

172

15,753

621,354 m2 5,278 m2

Land held for development Land held for development Light industrial / warehouse building Land held for development Land held for development Land held for development Building for rental and store 1 unit of bungalow

January 2004 January 2004

Leasehold 999 years Leasehold 99 years Leasehold 99 years Leasehold 99 years Leasehold 99 years Freehold Leasehold 99 years Leasehold 999 years

2908 2076

-- --

3,818 2,435

5,742 m2 80,937 m2 23.56 ha 63,738 m2 43,301 m2 1,036 m2

April 1984 January 2004 January 2004 December 2004 January 1995 January 1995

2066 2087 2044 -- 2066 2895

26 -- -- -- 26 25

770 1,680 870 744 6,569 242

3,387 m2 21,448 m2

Vacant light industrial land Land held for development

May 1985 January 2004

Leasehold 60 years Leasehold 99 years

2042 2061

-- --

296 182

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

151

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi SEMPORNA CL 125324996 KM 6, Bukit Lalang CL 125324987 KM 6, Bukit Lalang CL 125317222 & PL 126290748 Sungai Tinagan CL 125333388 1 1/2, Jalan Bubul Kg. Batu Miel CL 125317562 Taiko Plantation, Kalumpang

Area Keluasan

46,660 m2 35,774 m2 309,180 m2 35,572 m2

Land held for development Land held for development Land held for development Land held for development Brick factory Undeveloped aquacultural land

January 2004 January 2004 January 2004 May 2004

Leasehold 99 years Leasehold 99 years Leasehold 99 years Leasehold 99 years Leasehold 89 years Leasehold 99 years

2074 2076 2079 2098

-- -- -- --

92 72 214 541

632,443 m2

January 2004 January 2004

2073 2081

23 --

4,954 1,601

CL 125324709 / CL 125324718 4,011,244 m2 Sungai Pegagau KENINGAU PL 136207031 Ulu Masak 70,982 m2

Ex-workshop, Ex-training school with 12 units of timber semi-detached and terrace timber houses

January 2004

Leasehold 99 years

2063

21

1,424

KINABATANGAN Mile 32, Jalan Jeroco Off Sandakan - Lahad Datu Highway, District of Kinabatangan Tenegang Kecil District of Kinabatangan Wecan Estate Tampilit Estate 14,075 ha Oil palm plantation & buildings July 1996 Leasehold 99 years 2078 3 - 21 } } } } } } 13,554 2,140

256,969

42.4 ha

Oil palm plantation

July 2003

Leasehold 99 years Leasehold 99 years Leasehold 99 years

2098/ 2099

--

1,078 ha 202 ha

Oil palm plantation Oil palm plantation

August 1995 August 1995

2084 2084

-- --

152

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi

Area Keluasan

KINABATANGAN (continued) Tomanggong Estate 1,148 ha 1,431 ha 1,656 ha 568 ha 182 ha 124 ha Tagas Estate 1,466 ha 2,319 ha Litang Estate 998 ha 366 ha 1,434 ha 380 ha Sungai Segama Estate Bukit Mas Estate 3,843 ha 5,044 ha Oil palm plantation & buildings Oil palm plantation Oil palm plantation Oil palm plantation Oil palm plantation Oil palm plantation Oil palm plantation Oil palm plantation Oil palm plantation Oil palm plantation Oil palm plantation Oil palm plantation Oil palm plantation & buildings Oil palm plantation & buildings August 1995 August 1995 August 1995 August 1995 August 1995 August 1995 August 1995 August 1995 August 1995 August 1995 August 1995 August 1995 August 1995 August 1995 Leasehold 99 years Leasehold 99 years Leasehold 999 years Leasehold 99 years Leasehold 99 years Leasehold 99 years Leasehold 99 years Leasehold 999 years Leasehold 99 years Leasehold 99 years Leasehold 999 years Leasehold 999 years Leasehold 99 years Leasehold 99 years 2067 2076 2894 2094 2093 2097 2067 2894 2076 2091 2887 2900 2089 2089 36 -- -- -- -- -- -- -- -- -- -- -- 3 - 11 9 } } } } } } } } } } } } } } } } } } } } } } } } } } } } 298,087

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

153

Particulars of Group's Properties

Butir-butir Harta Tanah Kumpulan

Date of Acquisition / Revaluation Description Tarikh Perolehan / Deskripsi Penilaian Semula Approximate Net Book Age of Value Buildings (Yrs) At 31/1/2005 Anggaran Nilai Buku Umur Bersih Tenure Expiry Date Bangunan Pada 31/1/2005 Jangkamasa Tarikh Tamat (Tahun) RM'000

Location Lokasi SARAWAK Lot 46 & 47 Piasau Road, Miri Lot 495 Pujut - Lutong Road, Miri Lot 198, Sec 64 Tanah Puteh, Kuching Lot 697 Kemena Land District Sibiya Road, Bintulu Lot 656 Kampong Nyabor Road, Sibu SINGAPORE 15 Senoko Crescent, Sembawang, Singapore CHINA Qiongshan Shiziling Development, Hainan, China Qiongshan Shiziling Development, Hainan, China

Area Keluasan

4,474 m2 526 m2 9,834 m2 799 m2

Office and workshop 2 storey detached house Showroom cum office and factory Factory building and office 4 storey shophouse cum office

July 1979 August 1980 January 1985 June 1985

Leasehold 56 years Leasehold 60 years Leasehold 900 years Leasehold 60 years Freehold

2033 2040 2789 2043

23 24 25 21

1,750 143 4,918 365

165 m2

July 1980

--

25

542

10,221 m2

Factory and office

May 2001

Leasehold 60 years

2049

16

7,053

61,586 m2

Industrial land and buildings Industrial land and buildings

May 1996

Leasehold 68 Years Leasehold 68 Years

2066

12

--

10,068 m2

May 1996

2066

12

--

TOTAL / JUMLAH

1,196,921

154

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Analysis Of Shareholding

Analisa Pemegangan Saham

as at 8 June 2005

pada 8 Jun 2005

Authorised Share Capital / Modal Saham Dibenarkan : RM1,000,000,000 Issued and Fully Paid-up Capital / Modal Diterbitkan dan Berbayar Penuh : RM438,002,899 Class of Shares / Kelas Saham : Ordinary Share of RM1.00 each / Saham Biasa bernilai RM1.00 setiap satu Voting Rights / Hak Mengundi : One Vote per Ordinary Share / Satu Undi bagi setiap Saham Biasa Number of Shareholders / Bilangan Pemegang Saham : 8,678 DISTRIBUTION OF SHAREHOLDERS / PEMBAHAGIAN PEMEGANG-PEMEGANG SAHAM No. of Shareholders / Bil. Pemegang Saham 139 863 6,374 1,221 79 % of Shareholders / % Pemegang Saham 1.60 9.94 73.46 14.07 0.91 % of No. of Issued Shares Held* / Capital / Bil. Saham % Modal Dipegang* Diterbitkan 3,107 650,370 22,828,552 29,268,087 140,893,201 0.00 0.15 5.25 6.72 32.37

Size of Holding / Saiz Pemegangan Less than 100 / Kurang daripada 100 100 to 1,000 / 100 hingga 1,000 1,001 to 10,000 / 1,001 hingga 10,000 10,001 to 100,000 / 10,001 hingga 100,000 100,001 to less than 5% of issued shares / 100,001 hingga kurang daripada 5% modal yang diterbitkan 5% and above of issued shares / 5% dan lebih modal yang diterbitkan Total / Jumlah

2 8,678

0.02 100.00

241,646,782 435,290,099

55.51 100.00

* The number of 435,290,099 ordinary shares was the derivation of the original issued and paid-up share capital of 438,002,899 ordinary shares of the Company after excluding the number of 2,712,800 treasury shares retained by the Company / Bilangan saham biasa sebanyak 435,290,099 adalah derivasi daripada jumlah asal modal diterbitkan dan berbayar penuh Syarikat sebanyak 438,002,899 saham biasa selepas menolak 2,712,800 saham perbendaharaan yang disimpan oleh Syarikat

LIST OF 30 LARGEST SHAREHOLDERS / SENARAI 30 PEMEGANG SAHAM TERBESAR Shareholding/ Pemegangan Saham 1. 2. 3. 4. 5. 6. 7. RHB Capital Nominees (Tempatan) Sdn Bhd - Pledged Securities Account for Gek Poh (Holdings) Sdn Bhd UOBM Nominees (Asing) Sdn Bhd - Lei Shing Hong Securities Ltd for Chief Select Investments Limited UOBM Nominees (Asing) Sdn Bhd - Lei Shing Hong Securities Ltd for Giant China Group Limited UOBM Nominees (Asing) Sdn Bhd - Lei Shing Hong Securities Ltd for Lionasia Limited UOBM Nominees (Asing) Sdn Bhd - Lei Shing Hong Securities Ltd for Crown Pioneer Limited UOBM Nominees (Asing) Sdn Bhd - Lei Shing Hong Securities Ltd for Jetime Investments Limited UOBM Nominees (Asing) Sdn Bhd - Lei Shing Hong Securities Ltd for Peak Lumsden Limited 219,757,282 21,889,500 21,049,500 18,049,500 16,354,500 14,329,500 13,066,000 % 50.49 5.03 4.84 4.15 3.76 3.29 3.00

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

155

Analysis Of Shareholding

Analisa Pemegangan Saham

as at 8 June 2005

pada 8 Jun 2005

LIST OF 30 LARGEST SHAREHOLDERS (continued) / SENARAI 30 PEMEGANG SAHAM TERBESAR (sambungan) Shareholding/ Pemegangan Saham 8. 9. Liew Soong Cheng @ Lau Soong Cheng Employees Provident Fund Board 12,205,500 10,420,500 7,500,000 3,986,500 2,403,000 1,968,000 1,881,000 1,200,000 1,089,600 774,700 685,000 672,500 600,000 560,000 530,100 516,400 480,000 410,552 406,500 405,000 399,000 345,000 313,000 374,247,634 %

2.80 2.39 1.72 0.92 0.55 0.45 0.43 0.28 0.25 0.18 0.16 0.15 0.14 0.13 0.12 0.12 0.11 0.09 0.09 0.09 0.09 0.08 0.07 85.97

10. Permodalan Nasional Berhad 11. UOBM Nominees (Asing) Sdn Bhd - Lei Shing Hong Securities Ltd for Golden Lustre Incorporated 12. HDM Nominees (Tempatan) Sdn Bhd - Pledged Securities Account for LSM Enterprises Sdn Bhd 13. Citicorp Nominees (Asing) Sdn Bhd - CBNY for DFA Emerging Markets Fund 14. Pembangunan Melati Sdn Bhd 15. RHB Capital Nominees (Asing) Sdn Bhd - Kowa Company Ltd 16. Koperasi Sri Nilam Berhad 17. Lew Yit Hua 18. Quarry Lane Sdn Bhd 19. Niels John Madsen 20. HSBC Nominees (Asing) Sdn Bhd - HPBN for Hartlane Enterprises Inc 21. JF Apex Nominees (Tempatan) Sdn Bhd - Pledged Securities Account for Chong Wah Sin 22. Toh Kam Choy 23. Lim Shiu Ho 24. Neoh Choo Ee & Company, Sdn. Berhad 25. Menteri Kewangan Malaysia - Section 29 (SICDA) 26. Mayban Securities Nominees (Asing) Sdn Bhd - OCBC Securities Private Limited for Chong Koy Sen 27. RHB Nominees (Asing) Sdn Bhd - UOB Kay Hian Private Limited for Cheong Soh Chin Julie 28. Tuan Haji Nik Ariff Bin Nik Hassan 29. Lee Sau Choo 30. Leagrove Limited Total / Jumlah SUBSTANTIAL SHAREHOLDERS / PEMEGANG SAHAM UTAMA

Shareholding/ Pemegangan Saham Gek Poh (Holdings) Sdn Bhd UOBM Nominees (Asing) Sdn Bhd - Lei Shing Hong Securities Ltd for Chief Select Investments Limited 219,784,891 21,889,500

% 50.49 5.03

156

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Directors' Shareholding

Pemegangan Saham Para Pengarah

AS AT 8 JUNE 2005 / PADA 8 JUN 2005 Direct Shareholding / Pemegangan Saham Langsung No. of Shares / Bil. Saham Company / Syarikat Tuan Haji Nik Ariff Bin Nik Hassan Dato' Richard Ong Guan Seng 399,000 45,000 0.09 0.01 %* Indirect Shareholding / Pemegangan Saham Tidak Langsung No. of Shares / Bil. Saham %

* The number of 435,290,099 ordinary shares was the derivation of the original issued and paid-up share capital of 438,002,899 ordinary shares of the Company after excluding the number of 2,712,800 treasury shares retained by the Company / Bilangan saham biasa sebanyak 435,290,099 adalah derivasi daripada jumlah asal modal diterbitkan dan berbayar penuh Syarikat sebanyak 438,002,899 saham biasa selepas menolak 2,712,800 saham perbendaharaan yang disimpan oleh Syarikat

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

157

Share Buy Back Summary

Ringkasan Pembelian Balik Saham

No. of shares purchased and retained as treasury shares/ Bil. Saham yang dibeli dan disimpan sebagai Saham Perbendaharaan Lowest price paid per share/ Harga terendah dibayar sesaham (RM) Highest price paid per share/ Harga tertinggi dibayar sesaham (RM) Average Cost per share/ Kos Purata dibayar sesaham (RM)

Month/ Bulan

Total Cost/ Jumlah Kos (RM)

Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 TOTAL / JUMLAH

2,000 103,000 453,300 156,900 715,200

1.60 1.56 1.57 1.59 1.56

1.60 1.57 1.60 1.65 1.65

1.6122 1.5811 1.6022 1.6353 1.6064

3,224 162,858 726,264 256,584 1,148,930

During the financial year, all the repurchased shares by the Company were retained as treasury shares. None of the treasury shares were resold or cancelled during the financial year. As at 31 January 2005, a total of 715,200 ordinary shares were held as treasury shares. Dalam tahun kewangan, kesemua saham yang dibeli balik oleh Syarikat disimpan sebagai saham perbendaharaan. Tiada saham perbendaharaan dijual atau dibatalkan dalam tahun kewangan. Pada 31 Januari 2005, jumlah saham perbendaharaan adalah sebanyak 715,200 saham biasa.

158

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

Malaysian Mosaics Berhad

Company No: 5371-V

Form of Proxy

Borang Proksi

I/We Saya/Kami of beralamat being a member(s) of the above-mentioned Company, hereby appoint sebagai ahli/ahli-ahli Syarikat yang tersebut di atas, dengan ini melantik

No. of Shares/ Bil. Saham

CDS Account No./ No. Akaun CDS

NRIC No. of dari or failing him, the CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us on my/our behalf at the Forty-First Annual General Meeting of the Company to be held at Kristal Ballroom, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor Darul Ehsan on Thursday, 28 July 2005 at 10.00 a.m. or at any adjournment thereof, on the following resolutions referred to in the Notice of Annual General Meeting:atau jika gagal berbuat demikian, PENGERUSI MESYUARAT sebagai proksi saya/kami untuk mengundi bagi pihak saya/kami dalam Mesyuarat Agung Tahunan Syarikat yang ke-Empat Puluh Satu akan diadakan di Kristal Ballroom, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor Darul Ehsan pada hari Khamis, 28 Julai 2005 pada jam 10.00 pagi atau sebarang penangguhannya, ke atas resolusi-resolusi berikut yang dirujuk dalam Notis Mesyuarat Agung Tahunan:-

RESOLUTION / RESOLUSI FOR / MENYOKONG AGAINST / MENENTANG

1

2

3

4

5

6

7

8

Please indicate with a " " in the spaces above, how you wish your vote to be cast. In the absence of specific instructions, the proxy will vote or abstain at his/her discretion. Sila tandakan undian anda dengan " " dalam ruangan kosong di atas. Dalam keadaan tiada arahan tertentu, proksi anda akan mengundi atau tidak mengikut budibicaranya. Signed this / Ditandatangani pada day of / haribulan 2005

................................................................. Signature / Common Seal of appointor Tandatangan / Meterai Biasa Pelantik

Notes: A member entitled to attend and vote at this Meeting is entitled to appoint a proxy or proxies (but not more than two) to attend and vote in his/her stead. Where a member appoints more than one proxy, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy. A proxy does not need to be a member and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. The instrument appointing a proxy shall be in writing under the hands of the appointor or his attorney, duly authorised in writing, or if the appointor is a corporation, either under the seal or under the hand of an officer or attorney, duly authorised. The instrument appointing a proxy must be deposited at the Registered Office of the Company, 1A Jalan 205, Off Jalan Tandang, 46050 Petaling Jaya, Selangor Darul Ehsan, not less than forty eight (48) hours before the time appointed for holding the Meeting or any adjournment thereof. Nota-nota: Seorang ahli yang berhak menghadiri dan mengundi di Mesyuarat ini adalah berhak untuk melantik seorang proksi atau proksi-proksi (tetapi tidak melebihi dua orang) untuk menghadiri dan mengundi bagi pihaknya. Jika seorang ahli melantik lebih daripada seorang proksi, perlantikan tersebut adalah tidak sah kecuali beliau menyatakan bahagian pegangan beliau yang diwakili oleh setiap proksi. Seseorang proksi itu tidak semestinya ahli dan peruntukan Seksyen 149(1)(b) dalam Akta Syarikat, 1965 tidak berkuatkuasa di sini. Sekiranya ahli Syarikat adalah seorang nominee yang diberi kuasa seperti yang didefinasikan dibawah Akta Industri Sekuriti (Depositori Pusat), 1991, ia boleh melantik sekurang-kurangnya seorang proksi untuk setiap akaun sekuriti yang ia pegang dengan adanya saham-saham biasa Syarikat dalam kredit di akaun sekuriti tersebut. Suratcara perlantikan seseorang proksi itu mestilah secara bertulis di bawah tangan pelantik atau peguamnya yang diberi kuasa secara bertulis, atau sekiranya pelantik adalah sebuah perbadanan, maka suratcara tersebut hendaklah dimeterai atau ditandatangani oleh pegawai atau peguam yang diberi kuasa sewajarnya. Suratcara melantik proksi mestilah didepositkan di Pejabat Berdaftar Syarikat di 1A Jalan 205, Off Jalan Tandang, 46050 Petaling Jaya, Selangor Darul Ehsan, tidak Malaysian Mosaics Berhad Company No: 5371-V · Annual Report 2005 · lewat daripada empat puluh lapan (48) jam sebelum masa yang ditetapkan untuk Mesyuarat ini atau sebarang penangguhannya.

159

Fold Here / Lipat Disini

Postage

THE SECRETARY / SETIAUSAHA

MALAYSIAN MOSAICS BERHAD

(Company No. 5371-V)

No. 1A, Jalan 205, Off Jalan Tandang 46050 Petaling Jaya Selangor Darul Ehsan Malaysia

Fold Here / Lipat Disini

160

Malaysian Mosaics Berhad

Company No: 5371-V

· Annual Report 2005 ·

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