MMC Annual Report 2001

A N N U A L
R E P O R T
2 0 0 1
MALAYSIA MINING CORPORATION BERHAD

(30245-H) (Incorporated In Malaysia)
Contents
23 4 10 11 12 13 14 15 16 26 27 28 29 34 35 75
Notice of Annual General Meeting Corporate Information Financial Highlights Audit Committee Chairmans Statement Review of Operations Shareholding Statistics List of Properties Financial Statements Proxy Form
Cover Rationale The cover concept seeks to capture the very essence of MMCs two-pronged approach, one of continued focus and the other, new acquisitions. As a key regional player, MMC, while continuing to remain firmly committed to its involvement in mining, highway privatisation, natural gas distribution, engineering and construction is venturing into infrastructure projects power and ports which are complimentary and synergistic with the Groups core business activities. It is a timely move that will place the Group on an even stronger footing in the years ahead.
Notice of Meeting
NOTICE IS HEREBY GIVEN THAT the Twenty-Fifth Annual General Meeting (AGM) of members of Malaysia Mining Corporation Berhad will be held at the Crown Princess Kuala Lumpur, Ballroom 3, 10th Floor, City Square Centre, 182 Jalan Tun Razak, 50450 Kuala Lumpur, Malaysia on Friday, 27 July 2001 at 10.00 a.m. for the purpose of considering and, it thought fit, passing the following as ordinary resolutions:
1.
THAT the Directors Report and Financial Statements for the year ended 31 January 2001 and the Auditors Report thereon be and are hereby received and adopted. THAT the final dividend of 3 sen per share tax exempt and a special dividend of 3 sen per share tax exempt for the year ended 31 January 2001 be and is hereby approved and declared payable on 10 August 2001 to the members of the Company registered at the close of business on 13 July 2001. THAT the following Directors, who retire in accordance with Articles 77 and 84 of the Companys Articles of Association, be and are hereby re-elected Directors of the Company: a) b) c) d) e) f) Tan Sri Ibrahim Menudin (Article 77); Datuk Ab. Sukor Shahar (Article 77); Dato Mohd Desa Pachi (Article 77); Dato Syed Abdul Jabbar Syed Hassan (Article 84); Dato Hilmi bin Mohd Noor (Artcile 84); Dr. Aziuddin bin Ahmad (Article 84).
2.
3.
4.
THAT YBhg Tan Sri Dato Thong Yaw Hong, who retires pursuant to Section 129(6) of the Companies Act, 1965, be and is hereby re-appointed a Director of the Company to hold office until the conclusion of the next AGM. THAT the Directors fees for the year ended 31 January 2001 amounting to RM252,120 be and is hereby approved. THAT Messrs KPMG, who are eligible and have given their consent for reappointment, be and are hereby re-appointed the Companys Auditors for the period until the conclusion of the next AGM and that the remuneration to be paid to them be fixed by the Board.
5.
6.
FURTHER NOTICE IS HEREBY GIVEN THAT a Depositor shall be eligible to attend this meeting only in respect of: a. Shares deposited into the Depositors securities account before 12.30 p.m. on 11 July 2001 in respect of shares which are exempted from mandatory deposit; Shares transferred into the Depositors securities account before 12.30 p.m. on 13 July 2001 in respect of ordinary transfers; and Shares bought on the Kuala Lumpur Stock Exchange (KLSE) on a cum entitlement basis according to the Rules of the KLSE.
b.
c.
Closure Of Books
NOTICE IS ALSO HEREBY GIVEN THAT the Register of Members of the Company will be closed from 16 July 2001 to 17 July 2001 (both dates inclusive) for the determination of dividend entitlement. The dividend, if approved, will be paid on 10 August 2001 to shareholders whose duly completed transfers are received by the Companys Registrar, Pernas Charter Management Sendirian Berhad, 32nd Floor, Menara PNB, 201A Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia at the close of business at 5.00 p.m. on 13 July 2001.
FURTHER NOTICE IS HEREBY GIVEN THAT a Depositor shall qualify for dividend entitlement only in respect of: a. Shares deposited into the Depositors securities account before 12.30 p.m. on 11 July 2001 in respect of shares which are exempted from mandatory deposit; Shares transferred to the Depositors securities account before 12.30 p.m. on 13 July 2001 in respect of ordinary transfers; and Shares bought on the KLSE on a cum entitlement basis according to the Rules of the KLSE.
b.
c.
By Order of the Board
Suseela Sundram Abd. Hadi Abd. Ghani Secretaries Kuala Lumpur 29 June 2001
Notes: i. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a member of the Company. A proxy form is enclosed and to be valid must reach the Registrars office at Pernas Charter Management Sendirian Berhad, 32nd Floor, Menara PNB, 201A Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia not less than forty-eight (48) hours before the meeting.
ii.
Corporate Information
Dato Syed Abdul Jabbar Syed Hassan A former Executive Chairman of Malaysia Chief Executive Officer of Kuala Lumpur 1998, YBhg Dato Syed Abdul Jabbar independent, non-executive Chairman on Monetary Exchange from 1980 to 1996 and Commodity Exchange (KLCE) from 1996 to Syed Hassan, 61, was appointed the non7 July 2000.
He is also the current Chairman of MMC Engineering Group Berhad and a Board member of Star Publications Berhad. YBhg Dato Syed Abdul Jabbar Syed Hassan is a Malaysian citizen and holds a Bachelor of Economics and Masters of Science in Marketing.
Tan Sri Ibrahim Menudin An Accountant by profession, YBhg Tan Sri Ibrahim Menudin, 53, is the Group Chief Executive of Malaysia Mining Corporation Berhad. He was appointed to the Board on 1 August 1985 and is an Executive Director. He was previously the Accountant General of Sabah State Government from 1976 to 1979 and Chief Executive Officer of Permodalan Bumiputra Sabah Berhad from 1980 to 1985. He is currently the Chairman of Malaysia Smelting Corporation Berhad and Malakoff Berhad. He is also a member of the Board of MMC Engineering Group Berhad and Tronoh Mines Malaysia Berhad. YBhg Tan Sri Ibrahim Menudin is a Malaysian citizen and holds a Bachelor of Commerce from the University of Western Australia. He is a member of the Institute of Chartered Accountants in Australia and a member of the Malaysian Association of Certified Public Accountants and Malaysian Institute of Accountants.
Datuk Ab. Sukor Shahar An Engineer by profession, YBhg Datuk Ab. Sukor Shahar, 54, is an Executive Director of Malaysia Mining Corporation Berhad. He was appointed to the Board on 10 March 1995. He is the former Managing Director of Pernas Charter Management Sendirian Berhad from 1990 to 1993 and Chief Executive Officer of Gas Malaysia Sendirian Berhad from 1993 to 1995. He is currently the Chairman of Berjuntai Tin Dredging Berhad and Kramat Tin Dredging Berhad and also a Board member of Malaysia Smelting Corporation Berhad, MMC Engineering Group Berhad, Tronoh Mines Malaysia Berhad and Hillgrove Gold NL. YBhg Datuk Ab. Sukor Shahar is a Malaysian citizen and holds a Bachelor of Science (Hons.) in Mining from Imperial College of Science & Technology, London.
Abdul Samad Haji Alias A Certified Public Accountant by profession, Encik Abdul Samad Haji Alias, 58, joined the Board on 10 October 1981 and is an independent non-executive Director. He is an advisor of Arthur Andersen & Co and the President of Malaysian Association of Certified Public Accountants and Malaysian Institute of Accountants. He is a member of the Audit Committee of the Board. He is also a Board member of IGB Corporation Berhad and MMC Engineering Group Berhad. He is a Malaysian citizen and holds a degree of Bachelor of Commerce from University of Western Australia. He is a fellow of the Institute of Chartered Accountants in Australia and a member of Malaysian Association of Certified Public Accountants and Malaysian Institute of Accountants.
Dato Mohd Desa Pachi A Chartered Accountant by profession, YBhg Dato Mohd Desa Pachi, 67, joined the Board on 11 November 1981 and is a non-independent, non-executive Director. He was formerly the Executive Chairman of Malaysia Mining Corporation Berhad from 1982 to 1984. He is the Chairman of the Audit Committee of the Board. He is currently the Chairman of Commerce Asset-Holding Berhad and a Board member of Landmarks Berhad, Lay Hong Berhad, Leader Steel Holdings Berhad, Malaysia Smelting Corporation Berhad, Petaling Garden Berhad, Saujana Consolidated Berhad, YA Horng Electronic (M) Berhad and Amanah Saham Nasional Berhad. He is a Malaysian citizen and a member of Institute of Chartered Accountants (Australia).
Tan Sri Dato Thong Yaw Hong A former Secretary-General of the Ministry of Finance, YBhg Tan Sri Dato Thong Yaw Hong, 71, joined the Board on 27 October 1986 and is an independent, non-executive Director. He is also a member of the Audit Committee of the Board. He is currently the Chairman of Public Bank Berhad and the Public Bank group of companies. He is also on the Boards of Batu Kawan Berhad, Berjaya Land Berhad, Chemical Company of Malaysia Berhad, Gleannealy Plantations (M) Berhad, Kuala Lumpur Kepong Berhad, Public Finance Berhad, Malaysia Airports Holdings Berhad and Public Merchant Bank Berhad. He is a Malaysian citizen and holds a Bachelor of Arts (Hons) in Economics (University of Malaya), MPA Specialising in Development Planning and Public Administration (Havard University) and Advanced Management Programme (Havard University).
Tan Sri Dato Dr. Abdul Khalid bin Sahan A former Director General of Health Ministry, YBhg Tan Sri Dato Dr. Abdul Khalid bin Sahan, 67, joined the Board on 10 March 1989 and is a non-independent, nonexecutive Director. He is currently the Chairman of Tronoh Mines Malaysia Berhad and also the Chairman of Rating Agency Malaysia Berhad. He is also a Board member of Daibochi Plastic & Packaging Industry Berhad, Kejora Harta Berhad and PSC Industries Berhad. He is a Malaysian citizen and holds a M.B.B.S. (Malaya), D.P .H. (London) and D.I.H. (England).
Jamiah Abd. Hamid Puan Jamiah Abdul Hamid, 46, joined the Board on 1 August 1995 and is a nonindependent, non-executive Director. She is currently employed as the General Manager of Corporate Finance, Communication & International Division at Permodalan Nasional Berhad (PNB). She is also a Board member of Mesiniaga Berhad and UMW Holdings Berhad. Puan Jamiah is a Malaysian citizen and holds a Diploma in Public Administration (MARA Institute of Technology), Bachelor of Science in Finance (Northern Illinois University) and Master of Business Administration (UKM).
Datuk Alladin Hashim A former Director General of FELDA, YBhg Datuk Alladin Hashim, 62, joined the Board on 24 July 1999 and is a non-independent, non-executive Director. He is also a member of the Audit Committee of the Board. He is currently the Chairman of the Malaysian Rubber Board. He is also a Board member of MMC Engineering Group Berhad, Tronoh Mines Malaysia Berhad, PK Resources Berhad, Timberwell Berhad and UAC Berhad. YBhg Datuk Alladin Hashim is a Malaysian citizen and holds a Bachelor of Agricultural Science (University Malaya), a Master of Science in Agricultural Economics (University of Massachusetts) and a Fellow of the Academy of Sciences of Malaysia.
Tan Sri Dato Ir. (Dr.) Wan Abdul Rahman bin Haji Wan Yaacob A former Director General of Public Works Department, YBhg Tan Sri Dato Ir. (Dr.) Wan Abdul Rahman bin Haji Wan Yaacob, 60, joined the Board on 26 August 1999 as a non-independent, non-executive Director. He is a Board member of IJM Corporation Berhad, Lingkaran Trans Kota Holdings Berhad, Lysaght Galvanised Steel Berhad, Malaysian International Development Finance Berhad, Powertek Berhad and Saujana Consolidated Berhad. He is a Malaysian citizen and holds a Diploma in Civil & Structural Engineering (Brighton College of Technology, UK) and is a member of Chartered Institute of Buildings (UK), Institute of Highway & Transportation (UK) and Institute of Civil Engineers (UK).
Dr. Aziuddin bin Ahmad Dr. Aziuddin bin Ahmad, 46, joined the Board on 10 October 2000 as a nonindependent, non-executive Director. A holder of an investment manager representatives license issued by the Securities Commission Malaysia, he currently practices Corporate Finance & Advisory specializing in Islamic Financial Services. He is a Malaysian citizen and holds a Bachelor of Science with Honours in Electrical and Electronics Engineering from Kings College, London, a Ph.D. in Reactor Neutron Physics and a DIC in Nuclear Reactor Engineering, both from Imperial College of Science & Technology, London.
Dato Hilmi bin Mohd Noor A former Secretary-General of the Ministry of Energy & Multimedia, YBhg Dato Hilmi bin Mohd Noor, 59, joined the Board on 10 October 2000 as a non-independent, nonexecutive Director. He is also a Board member of CN Asia Berhad, Johor Port Berhad and MCB Holdings Berhad. He is a Malaysian citizen and holds a Masters in Business Administration (Marshall University).
Board and Committee Attendance The number of Directors meetings and meetings of committees of Directors held in the period each Director held office during the financial year and the number of meetings attended by each Director are as follows: Number of meetings attended (first figure)/number of meetings held while in office (second figure). Name Dato Syed Abdul Jabbar Syed Hassan Tan Sri Ibrahim Menudin Datuk Ab. Sukor Shahar Abdul Samad Haji Alias Dato Mohd Desa Pachi Tan Sri Dato Thong Yaw Hong Tan Sri Dato Dr. Abdul Khalid bin Sahan Jamiah Abd. Hamid Datuk Alladin Hashim Tan Sri Dato Ir. (Dr.) Wan Abdul Rahman bin Haji Wan Yaacob Dr. Aziuddin bin Ahmad Dato Hilmi bin Mohd. Noor Raja Tan Sri Muhammad Alias bin Raja Muhammad Ali (resigned on 16 June 2000) Zain Azahari bin Zainal Abidin (resigned on 20 June 2000) Directors Remuneration The aggregate Directors remuneration paid or payable or otherwise made available to all Directors of the Company during the financial year are as follows: Salaries & Other Benefit Fees Emoluments in kind Categor y (RM000) (RM000) (RM000) Executive Directors Non-Executive Directors 252 1,002 116 71 29 Board 8/8 10/11 8/11 8/11 6/11 9/11 11/11 6/11 9/11 6/11 4/5 2/5 2/2 -/2 Audit Committee 4/5 5/5 4/5 3/5 Remuneration Committee 1/1 -/1 1/1 1/1 Exco 1/1 5/5 3/5 3/5 5/5 3/5 4/4 3/4
The number of Directors of the Company whose income from the Company falling within the following bands are: Executive Directors RM400,000 to RM450,000 RM550,000 to RM600,000 Non-executive Directors Less than RM50,000 RM50,000 to RM100,000 Directors Responsibility Statement In respect of the preparation of the audited financial statements (as required under paragraph 15.27(a) of the Kuala Lumpur Stock Exchange (KLSE) listing requirements): The Directors are required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and Group and of their results and cash flows for that year. In preparing those financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements. Number 1 1 Number 10 2
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act, 1965. They have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company, to prevent and detect fraud and other irregularities. 8
Other Information Conflict of Interest None of the Directors has any family relationship with other Directors or major shareholders of the Company. None of the Directors has any conflict of interest in the Company except for Dr. Aziuddin bin Ahmad who is deemed interested via his interest in Impian Teladan Sendirian Berhad, a major shareholder of the Company. Convictions for Offences None of the Directors has been convicted for offences within the past ten (10) years other than traffic offences, if any. Utilisation of Proceeds During the year, part of the proceeds of the rights issue raised in 1996 were utilised for the partial acquisition of 22.7% interest in Malakoff Berhad by the Company. Share Buybacks During the financial year, there were no share buybacks by the Company. Options, Warrants or Convertible Securities No options, warrants or convertible securiites were exercised by the Company in the financial year. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme During the financial year, the Company did not sponsor any ADR or GDR programme. Imposition of Sanctions/Penalities There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies. Non-audit Fees The amount of non-audit fees paid to the external auditors by the Company for the financial year amounted to RM0.61 million. Profit Estimate, Forecast or Projection There was no variance between the results for the financial year and the unaudited results previously announced. The Company did not make any release on the profit estimate, forecast or projections for the financial year. Profit Guarantees During the year, there were no profit guarantees given by the Company. Material Contracts During the year, there were no material contracts on the Company and its subsidiaries involving Directors and major shareholders interests. Contracts Relating to Loans There were no contracts relating to loans by the Company in respect of the abovesaid item. Revaluation of Landed Properties The Company does not have a revaluation policy on landed properties. 9
Management
Tan Sri Ibrahim Menudin (Group Chief Executive) Datuk Ab. Sukor Shahar (Executive Director, Operations and Technical) Phan Leong Kim (Group Chief Financial Officer)
Secretaries
Suseela Sundram Abd. Hadi Abd. Ghani
Registered Office
32nd Floor, Menara PNB 201A Jalan Tun Razak 50400 Kuala Lumpur Telephone No.: 03-2161 6000 Fax No: 03-2163 3137 E-mail: [email protected]
Registrar
Pernas Charter Management Sendirian Berhad 32nd Floor, Menara PNB 201A Jalan Tun Razak 50400 Kuala Lumpur Telephone No.: 03-2161 6000 Fax No: 03-2163 3137 E-mail: [email protected]
Auditors
KPMG Public Accountants
Principal Banker
Bumiputra Commerce Bank Berhad
Stock Exchange Listing

The Main Board Kuala Lumpur Stock Exchange
10
Financial Highlights
2001 Profit before tax Profit after tax and minority interest Profit attributable to shareholders Gross assets Shareholders funds Market value of quoted investments Pre-tax return on shareholders funds (%) Earnings per share (sen) Net dividend per share (sen) Net asset per share (sen) 419.9 400.0 400.0 2,967.4 1,904.2 1,571.2
2000 204.2 104.5 104.5 2,146.7 1,579.7 1,457.8
1999 38.6 5.8 5.8 2,170.7 1,514.2 1,706.3
1998 (229.9) (186.2) (186.2) 2,421.8 1,452.6 2,421.5
1997 89.2 41.1 102.4 2,658.4 1,756.3 3,121.1
22.1 47.8 7.0 228.0
12.9 12.5 6.0 189.0
2.5 0.7 4.0 181.0
(15.8) (22.3) 5.0 174.0
5.1 12.2 4.0 210.0
(All amounts in RM thousand)
(In RM 000)
(In RM 000)
(In RM 000)
(In sen)
1998 1997 1999 2000 2001 1997
1998 1999 2000 2001 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001
PROFIT BEFORE TAX
TOTAL ATTRIBUTABLE PROFIT
SHAREHOLDERS FUNDS
NET ASSET PER SHARE
11
Audit Committee
Members of the Committee

Dato Mohd Desa Pachi, Chairman (Non-independent, non-executive) Tan Sri Dato Thong Yaw Hong (Independent, non-executive) Abdul Samad Haji Alias (Independent, non-executive) Datuk Alladin Hashim (Non-independent, non-executive)
Terms of Reference
Consider the appointment of the external auditors, the audit fee and any questions of resignation or dismissal, and inquire into the staffing and competence of the external auditors in the performance of their work. Discuss the nature and scope of the audit in general terms and any significant problems that may be foreseen with the external auditors before the audit commences and ensure that adequate tests to verify the accounts and procedures of the Group are performed. Discuss the impact of any proposed changes in accounting principles on future financial statements. Review the results and findings of the audit and monitor the implementation of any recommendations made therein. Review the quarter, half-year and annual financial statements before submission to the Board, focussing particularly on: any changes in accounting policies and practices; major judgemental areas; significant adjustments resulting from the audit; the going concern assumptions; compliance with accounting standards; compliance with stock exchange and legal requirements.
The term of office of each member is subject to review every three years.
Secretary
One of the Company Secretaries as decided by the Chairman of the Committee.
Quorum
Two.
Frequency of Meetings
At least four times a year and as and when required. At least once a year, the Committee shall meet with the external auditors without executives being present.
Discuss problems and reservations arising from the interim and final audits, and any matters the auditor may wish to discuss (in the absence of Management where necessary).
12
Ensure that the Internal Audit is adequately resourced and has appropriate standing within the Company. Review the internal audit programme, consider the major findings of internal audit investigations and Managements response and ensure co-ordination between the internal and external auditors. Keep under review the effectiveness of internal control systems and, in particular, review the external auditors management letter and Managements response. Consider any related party transactions that may arise within the Company or Group. Carry out such other assignments as defined by the Board. g)
f)
discussion of the proposed changes in accounting policies in respect of the treatment of goodwill and capitalisation of post construction interest of a subsidiary, and others arising from changes in accounting standards; discussion of the significant areas highlighted by the external auditors before the audit commenced; review of the findings of the external auditors and follow-up on the recommendations.
h)
Audit Committee Report

During the financial year, the Committee met 5 times. The business covered by the Audit Committee was as follows: a) review of the annual budget of the Company for submission to the Board; review of the internal audit plan and major findings of internal audit reports; review of the performace/operations of subsidiaries/associates and making appropriate recommendations relating thereto; review of the quarterly results/ announcements of the Company and making relevant recommendations to the Board for approval; review of the annual accounts of the Group/Company and making of relevant recommendations to the Board for approval;
Internal Audit Activities Report

Summary of activities of the Group Internal Audit function during the year ended 31 January 2001 were as follows: regularly examining the controls over all significant Groups operations and systems to ascertain whether the system established provides reasonable assurance that the Groups objectives and goals will be met efficiently and economically; prepare the annual audit plan for deliberation by the Audit Committee; act on suggestions made by external examiners and/or senior management on concerns over operations or control; issue audit reports which identify weaknesses and problems and contain recommendations for improvements; issue audit reports to the appropriate level of management capable of achieving satisfactory audit results; determine whether corrective action was taken and is achieving the desired results.
b)
c)
d)
e)
13
Chairmans Statement
DEAR SHAREHOLDERS,
The financial year ended 31 January 2001 has been a year of transformation for the Malaysia Mining Corporation Berhad (MMC) Group of Companies.
With the MMC Groups continued consolidation of its business activities, the year marked a significant strategic shift from mining into the power and infrastructure sectors. As this change in strategy required considerable funding, the decision was taken to dispose MMCs entire 49.9% stake in the Australian diamond mining company, Ashton Mining Ltd (Ashton), resulting in an exceptional gain of about RM407.19 million on completion of the disposal. Part of the proceeds from the sale of MMCs equity in Ashton together with part of the remaining proceeds from the rights issue raised in 1996 were used for the acquisition of MMCs 22.7% equity stake in Malakoff Berhad (Malakoff) paving the way for MMCs emergence as a significant player in the resilient power industry. The Groups shift of concentration towards infrastructure was further enhanced when MMC signed a conditional share sale agreement with Seaport Terminal (Johore) Sendirian Berhad (Seaport) to acquire a 50.1% equity stake in Pelabuhan Tanjung Pelepas Sendirian Berhad (PTP), the developer and operator of the nations newest port for a purchase consideration of approximately RM1.65 billion. Payment for the acquisition of PTP will be satisfied partially by way of cash of approximately RM0.63 billion and the remainder by the issue of about 338.67 million ordinary shares of MMC at RM3.00 per share. The deal further includes MMCs agreement to
assume Seaports obligations with respect to 50.1% of the existing and future issues of PTPs Redeemable Convertible Subordinated Loan to a maximum amount of approximately RM506.01 million. The proposed acquisition of PTP is subject to approvals to be obtained from the relevant authorities and the shareholders. The proposed acquisition of PTP which is expected to be , completed by the third quarter of 2001, represents a significant business undertaking to be injected into the Group as a further extension in enhancing the Groups synergies following the reduction in the Groups mining activities. It is anticipated that these new developments will also provide a catalyst to increase shareholders value as well as attractiveness to investors, both local and foreign. With the promising outlook for sustained economic growth, the Group is well poised in its efforts towards strengthening the transformation of its business activities. Towards this end, the year 2001/2002 will witness the increasing growth in the Infrastructure/Utilities Division with its business activities in Malakoff, completion of the acquisition of PTP and the continued growth of Gas , Malaysia Sendirian Berhad (Gas Malaysia). The Engineering and Construction Division will be restructured to focus on the profitable niche markets particularly from possible spin-off projects from Malakoff and PTP which are synergistic with
14
the Groups strengths and resources. Despite the recent disposal of major mining investments, the Groups expertise in the mining sector will be maintained to enable the Group to pursue profitable mining ventures which are in tandem with the Groups businessess as a whole. The year 2001/2002 will also focus on the completion of the restructuring of Berjuntai Tin Dredging Berhad, Kramat Tin Dredging Berhad and Tronoh Mines Malaysia Berhad to enable these companies to contribute positively to the Groups earnings. For the year under review, the MMC Group posted a consolidated profit before taxation of RM419.95 million compared to RM204.24 million in the previous year. The increase was mainly due to the exceptional gain on the disposal of 160.93 million shares in Ashton which was partly offset by provisions made on certain investments and advances to associated companies. The Board has recommended a final dividend of 3 sen per share tax exempt and a special dividend of 3 sen per share tax exempt. With an interim gross dividend of 1.0 sen per share, tax exempt which was paid on 14 December 2000, the total annual gross dividend is 7 sen amounting to a total net distribution of RM58.53 million. The Infrastructure and Utilities Division saw continued commendable performance by Gas Malaysia and improved performance recorded by Konsortium Lebuh Raya Butterworth-Kulim (KLBK) Sendirian Berhad (KLBK). For KLBK, the good performance was mainly due to increase in the traffic volume resulting from a rise in the number of companies starting operations in the Kulim HiTech Park. With the completion of the acquisition of Malakoff on 31 October 2000, the Group had equity accounted its share of profit in Malakoff for the three months to 31 January 2001. The Engineering and Construction Division showed slight improvement compared to the preceding year. The Mining and Exploration Division had a mixed year in 2000/2001. Ashton had a good year, against the backdrop of favourable demand and strengthening of diamond prices. The Groups share of profit in Ashton was equity accounted to the month of October, before the completion of its sale on 6 November 2000. However, Hillgrove Gold NL continued to incur losses during the year partly attributable to the delay in construction and commissioning of the antimony trioxide plant which has resulted in lower turnover for the year. Meanwhile, exploration work carried out during the
year was mainly directed to the completion of evaluation and maintenance of prospecting areas. The Corporate Division comprising the Head Office, the Manufacturing & Processing and Property sections saw higher contribution from the Head Office due mainly to higher dividend received from Sime Darby Berhad as well as lower Head Office cost. The year witnessed the emergence of a new major shareholder, Impian Teladan Sendirian Berhad, which acquired a 19.9% equity interest in MMC from the controlling shareholder, Permodalan Nasional Berhad, forging a strategic partnership anchoring the transformation of MMC. On behalf of the Board of Directors, I would like to record our sincere appreciation and gratitude to the former Chairman and Director of MMC, Y.M. Raja Tan Sri Muhammad Alias bin Raja Muhammad Ali who resigned from the Board on 16 June 2000 and also to Encik Zain Azahari bin Zainal Abidin who resigned as a director of MMC on 20 June 2000, for their invaluable contributions to the Company. On behalf of the Board, I would also like to welcome YBhg Dato Hilmi bin Mohd Noor and Dr. Aziuddin bin Ahmad who both joined the Board on 10 October 2000. As the new Chairman of the MMC, I am deeply honoured by the confidence of my fellow members of the Board in affording me the opportunity to carry on the responsibilities at the helm of the MMC Group beginning 7 July 2000. In my capacity as Chairman, I shall be pleased to lend my support and guidance wherever possible towards the betterment of the Group. On behalf of the members of the Board, I would like to take this opportunity to thank our shareholders for their continued support and the management as well as the employees for their contribution, commitment, dedication and perseverance towards the success of the Group. Our heartfelt gratitude also goes to the bankers, business associates and the various relevant authorities for their cooperation and continued support. Finally, I would like to thank my fellow colleagues on the Board for their wise counsel and guidance. As we move forward, let us continue to upgrade our skills and capabilities in facing the challenges and the developments of the global environment towards achieving greater heights in the future.
Dato Syed Chairman
Abdul Jabbar Syed Hassan
Kuala Lumpur 30 May 2001
15
Review of Operations
MINING & EXPLORATION

MINING MALAYSIA The Group continued with minor mining activities involving opencast tin mining on a tribute basis and retreatment of old amang dumps. The No. 3 dredge at Berjuntai Tin Dredging Berhad was reactivated in March 1999 to mine its remaining reserves under a contract arrangement. For the year ended 31 January 2001, production of tin concentrate was 117.01 tonnes compared to 98.27 tonnes in the preceding year. Other than the reactivated dredge at Berjuntai Tin Dredging Berhad, there were two idle dredges remaining within the Group the Sri Dermawan dredge at Timah Dermawan Sendirian Berhad and the No. 5 dredge at Southern Malayan Tin Dredging (M) Berhad. The No. 5 dredge has been donated to Perak State Government for the purpose of converting the dredge into a floating museum.
autoclave unit and ancillary equipment were in good condition after taking into consideration the corrosive properties of the process environment.
For the year ended 31 January 2001, Hillgrove recorded a loss before taxation of AUD7.79 million compared to a loss of AUD5.69 million in the previous year. The adverse result was mainly attributed to higher depreciation and amortization charges, unrealised foreign exchange loss and interest expense.
AUSTRALIA HILLGROVE GOLD NL The Groups interest in Hillgrove Gold NL (Hillgrove) is through its 52.3% subsidiary, Tronoh Mines Malaysia Berhad, which owns a 61.9% equity interest in Hillgrove. During the year under review, significant progress has been made to increase mine output and downstream processing of concentrate products. Development activity and preparation to increase the mining rate from 60,000 to 230,000 tonnes per annum is well advanced. The construction of the innovative antimony trioxide production facility commenced towards the end of the financial year following a further period of market testing of antimony trioxide samples from the pilot plant and detailed engineering design of all key process equipment. The antimony trioxide plant is scheduled to be commissioned in late 2001. The gold pressure oxidation plant, which was commissioned in November 1999, has operated at above design throughput for most of the year. A programmed shutdown inspection, after the first twelve months of operation, showed that the 16
The gold pressure oxidation plant installed at Hillgrove remains the only unit of its type in Australia.
EXPLORATION The Group concentrated its efforts on the completion of exploration projects, both locally and overseas. However, due to unstable metal prices, in particular, gold, and exploration results which were below expectation, the Group after having reviewed its involvement in these projects, has decided to proceed with outsourcing some of these high-risk ventures.
MALAYSIA TAVAI NICKEL-COBALT LATERITE PROSPECT, SABAH The first phase of a diamond drilling programme was conducted during the first quarter of the year. A total of 33 holes spaced between 500 and 1,000 metres were drilled with aggregated length of 741 metres, averaging 22.5 metres per hole. A sizeable amount of nickel and cobalt bearing laterites have been identified and an evaluation drilling programme comprising of 170 diamond drillholes and a metallurgical testwork programmes are being planned to be carried out
during the current financial year. Both programmes are designed to establish the economic potential of the nickel and cobalt bearing laterite resources in Tavai Plateau.
MERAPOH GOLD PROSPECT, PAHANG As analysis of results from the diamond and reverse circulation drillholes carried out in early 2000 indicated that gold mineralisation in Ulu Merlin was more restricted than initially indicated by the early soil and trenching works, decision was made to outsource the project.
mineral tenement. As the results were below the Groups expectations, fieldwork was suspended and invitations to outsource the project were extended to interested third parties. Owing to poor response, the Company notified the Lao Government of its decision not to proceed with the project.
INDONESIA CEMPAKA-DANAU SERAN ALLUVIAL DIAMOND PROJECT, KALIMANTAN Trial dredging operations continued in March 2000, with work concentrated mainly within the intermediate area between the Northern and Southern paleochannels. By September 2000, the dredge had excavated most of the upper alluvial sediments, which was earlier thought to be the main source of alluvial diamonds. However, diamond production and monthly recovered grades were much lower than the monthly budgeted figures. In view of the lower than initially anticipated diamond recovery, the Group decided to reduce its involvement in the project.
Inside Adit No. 2 at Taldy-Bulak Gold Project.
NEGERI SEMBILAN GOLD PROSPECT Following the signing of Memorandum of Understanding (MOU) between MMC and the Negeri Sembilan State Government in September 1999, a draft agreement for the discovery and development of commercial mineral resources within a 4,690 square kilometer area was prepared and submitted to the State Government for its consideration. Currently, negotiations are being held to finalise the Agreement.
KYRGYZ REPUBLIC TALDY-BULAK GOLD PROJECT The revised feasibility study undertaken by Minproc Limited, Australia was completed in March 2000. Findings of the study revealed a substantial reduction on capital cost, thus improving the projects internal rate of return (IRR). However, due to a sharp drop in the gold price, from a high of USD300 to a low of USD270 per oz, the IRR of the project was considered not viable at this juncture. Efforts are being made to address the technical issues with the relevant Kyrgyz Authorities, with a view to improving returns.
OVERSEAS LAO PEOPLES DEMOCRATIC REPUBLIC (LAO PDR) LAO GOLD AND BASE METAL PROJECT 10 trenches, comprising an aggregating 618 metres, were excavated in the first half of 2000 in the north-western and south-central sectors of the
17
ENGINEERING
KUANTAN KERTEH RAIL WAY PROJECT CIVIL WORKS (PACKAGE 2) The MMCE-Franky Consortium was awarded the Civil Works Package 2 by Petroliam Nasional Berhad (Petronas) in December 1999 involving the procurement, construction and commissioning of a 42 km. new stand alone railway system to provide a container shuttle service for refinery products between the Kerteh Industrial Complex, Terengganu Darul Iman and the Gebeng Industrial area as well as the port facilities at Kuantan Port, Pahang Darul Makmur. The general scope of work involves site clearance and earthworks, ground treatment works, bridge construction, road and drainage works, sub ballast, relocation of existing services for telephone and power lines and the laying of the water mains, box culverts as well as pipeline crossing. The project is scheduled for completion in July 2001 and has a contract value of RM167.0 million.
In March 2000, the company was awarded an additional project, the construction of a 8-storey podium block and 22-storey office tower block. The total project cost has increased to about RM53.0 million with construction period being extended to March 2001.
PROPOSED DEVELOPMENT OF KULIM POLYTECHNIC COMPLEX, KULIM HI-TECH, PADANG CINA, KULIM, KEDAH DARUL AMAN MMC-GTM was appointed by S.I. Pronas JV Sendirian Berhad as the sub-contractor for the Kulim Polytechnic Complex. The project, which is sited on a rectangular shaped oil palm land measuring 40 ha. is situated adjacent to the Kulim Hi-Tech Park which is about 30 km. east of Butterworth town, Penang. The project scope consists of earthworks, building works, external infrastructure, landscaping and security fencing. 30% of the total land area will be for building works with 62% being designated as a green lung zone and the balance, for other ancillary works. The construction started in June 2000 and is scheduled to be completed within 30 months.
MENARA GREAT EASTERN, JALAN AMPANG, KUALA LUMPUR MMC-GTM Bina Sama Sendirian Berhad (MMCGTM) was appointed by Obayashi Corporation, in July 1999, as the sub-contractor of a five-storey basement car park cum commercial area at Menara Great Eastern Life, Jalan Ampang. The general scope of work involves earthwork and sub-structure reinforced concrete works up to a total depth of 18.1 m. The construction method specified is a full top down system and the estimated rock volume (lime stone), is about 15,000 m.
Road over Rail Bridge ready for launching.
Superstructure: Construction work in progress Menara Great Eastern Life project.
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18
LUMUT COMBINED CYCLE POWER PLANT 3 PROJECT, LUMUT, PERAK DARUL RIDZUAN The MMCES-Zelan JV was appointed as the Turnkey Contractor by Alstom Power Asia Pacific Sendirian Berhad in December 2000. The project, which entails the design and construction of the civil and building works for the combined cycle equipment for the Lumut Combined Cycle Power Plant 3 Project, is progressing well on schedule. The general scope of work involves site clearance and earthworks, foundation for the combined cycle equipment facilities and control building, and mechanical and electrical works. The project is scheduled to be completed within 13 months at a contract value of RM65.0 million.
For the year under review, MMC O&G has secured and/or completed various projects for both offshore and onshore development. The major projects include: Irong Barat A expansion project for Esso Production Malaysia Inc. (EPMI). B-11 phase 2 conceptual design for Sarawak Shell Berhad. Detailed design of Host Tie Ins at Seligi A for EPMI. Extension of contract and work order for Helang Field Development for detailed engineering design and procurement services for Nippon Oil Exploration (Malaysia) Limited. Retrofit contracts as exclusive design consultant to Petra Resources Sendirian Berhad for EPMI. Detailed design of Semarang Revisit for Petronas Carigali Sendirian Berhad (PCSB). Structural integrity studies for 9 platforms for PCSB. Front end engineering design for NPK plant for NAFAS (Expansion to Petronas Fertiliser Kedah). Turnaround projects and modification works for Petronas Penapisan (Melaka) Sendirian Berhad. Additional Nitrogen Plant for Asean Bintulu Fertilizer Sendirian Berhad.
ENGINEERING DESIGN CONSUL TANCY SERVICES The market for design engineering services for the oil & gas sector last year increased significantly due to a large number of development projects for both green fields and brown fields being tendered by clients capitalising on strong world oil prices which are expected to continue well into year 2003. Equally, the MLNG 2 and MLNG 3 plants of Petronas show an increasing demand for gas which is expected to see a further development of gas fields in offshore Sarawak. MMC Oil & Gas Engineering Sendirian Berhad (MMC O&G) also continued to develop and secure projects for onshore plants in anticipation that the demand for services in this sector will gradually increase due to scheduled plant revamp, upgrade and maintenance.
Installation of embedded part of gas turbine block 1 in progress
Civil and building works at Segari power plant in Perak.
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MMC O&G also actively participated in engineering, procurement, construction and commissioning (EPCC) projects in collaboration with OGP Technical Services Sendirian Berhad (OGP) for the Ratawi Field Development in Iraq, Malaysian Shipyard and Engineering (MSE) and Brooke Dockyard Engineering Works Corporation (Brooke Dockyard) for Lundin PM3 CAA Packages 4, 5, 6 and Lundin PM3 CAA Package 3 respectively. The announcement of these awards will be made in 2001. MMC O&G has also started development work in collaboration with AMEC (Malaysia) Sendirian Berhad (AMEC) to expand into onshore design services, turnaround management and operation and maintenance services. To maintain the companys strong performance and in order to remain competitive in this business, MMC O&G will be adopting the following strategies: Increase existing client base by further promoting the companys services to new prospects in the industrial corridor covering Kerteh, Gebeng and Pasir Gudang. Further develop business with new oil and gas operators which include Murphy Oil, Santa Fe and Amerada Hess. Work in collaboration with AMEC, OGP and main offshore fabricators including MSE, Brooke Dockyard and Sime Semcorp to secure EPCC contracts. Continue to develop management and technical skills and strengthen core staff and other infrastructure. Develop new turnaround management and asset management skills and develop the business with AMEC who has vast experience in this field. Expand the existing design services to regional clients in Brunei, Thailand and Indonesia in collaboration with local contractors such as PT Rekayasa in Indonesia.
ENGINEERING, PROCUREMENT , CONSTRUCTION AND COMMISSIONING (EPCC) OF A NATURAL GAS DISTRIBUTION SYSTEM (NGDS) FOR YI LAI INDUSTRIES, KULAI, JOHOR DARUL TAKZIM MMC Engineering Services Sendirian Berhad (MMCES) was appointed by Gas Malaysia Sendirian Berhad in February 2000 to undertake a project involving the engineering, pro c u re m e n t , construction and commissioning of a Natural Gas Distribution System (NGDS) for Yi Lai Industries, in Kulai, Johor Darul Takzim.
Laying of pipeline for Natural Gas Distribution System to Yi Lai Industries Berhad, Kulai, Johor Darul Takzim.
The general scope of works involve supplying and laying 9 km. of 8 inches (steel) Natural Gas Pipeline, horizontal direct drilling works, pipe jacking works, backfilling and excavation works and the construction of an odorizer station. The project is scheduled to be completed by the end of April 2001 at a contract value of RM5.06 million.
HEAVY ENGINEERING FABRICATION
AND
MECHANICAL
During the financial year under review, Tepat Teknik Sendirian Berhad (Tepat Teknik) continued to register a reasonably good performance in the heavy engineering and mechanical fabrication sector. Tepat Teknik recorded a turnover of RM89.79 million and profit before tax of RM5.22 million, an increase of RM22.12 million and RM0.46 million respectively. The major
20
contributors to the total turnover were mainly from the traditional business sectors, namely the oil & gas, power generation, petrochemical and general industries. Total orders, however, amounted to RM53.74 million, which was 32% lower than the previous year. Some of the major contracts secured and implemented during the year include: Four units of process columns for Malaysia LNG 3 (MLNG 3) in Bintulu, Sarawak
Supply and installation of structural steel works at Segari II Power Plant extension in Lumut. 3 units of ductwork components for Manjung Power Station in Perak.
Tepat Teknik will continue to work with strategic partners to both complement and enchance its competitive edge. With the implementation of several power plant projects, port infrastructure and continued expansion of the upstream activities for the oil industry, Tepat Teknik has a bullish outlook for the coming financial year.
DEFENCE AND TRANSPOR TATION For the year under review, the Divisions Defence & Transport Engineering Sector completed another 30 vehicles under a contract to overhaul 150 units of Condor Armoured Personnel Carrier for the Ministry of Defence (Mindef). Negotiations to extend the contract for another 3 years to complete overhauling the remaining 90 vehicles is in its final phase. The new contract, when formalised, would be effective beginning year 2001 to 2003. The division is currently pursuing other defence projects such as overhauling and upgrading Scorpion Combat Vehicle Reconnaissance Tanks and Stormer Armoured Personnel Carriers, overhauling 168 units of Sibmas Armoured Fire Support Vehicle and supplying Main Battle Tanks.
240 MT steel oil production separator for Petronas Carigali Sendirian Berhad largest clad steel pressure vessel fabricated in Malaysia by Tepat Teknik.
6 units of heating coils for convection bank for MLNG 3 in Bintulu, Sarawak Fabrication of 2 units of heat recovery steam generator (HRSG) for export to Shell New Orleans, U.S.A. Fabrication of air & gas ducts, stacks and structural steel for Seraya project in Singapore. 3 units of air-cooled heat exchangers for MLNG Rejuvenation and Revamp (MRR) Project in Bintulu, Sarawak. 2 units of new equipment for additional demin train in Bintulu, Sarawak.
FOUNDR Y MMC Metal Industries Sendirian Berhad (MMC Metal) experienced a decline in sales to the mining, quarry and general engineering sectors due to a lack of demand and keen competition. However, sales to the cement plant sector increased due to orders received to supply special alloy castings to this sector. In the railway sector, the company received orders to supply bogies for the Kuantan Kerteh Railway project. Thus far, part deliveries have been made. MMI Precision Sendirian Berhad, a wholly-owned subsidiary of MMC Metal, recorded an increase in sales to the glass fittings, electrical switch gear and general engineering sectors.
21
INFRASTRUCTURE & UTILITIES

POWER GENERATION The year under review saw the Group venture into the power generation business with the completion of the acquisition of an initial 22.7% interest in Malakoff Berhad from Malaysian Resources Corporation Berhad on 31 October 2000. The Malakoff group (Malakoff) is principally involved in the power generation business. The other core businesses of the group include providing operation and maintenance services, distribution of electricity and the Centralised Chilled Water Plant project. For the financial year ended 31 August 2000, Malakoff recorded a profit before tax of RM544.16 million which was slightly lower than the RM546.79 million recorded in the previous year. The profit was achieved on a turnover of RM1,473.20 million, a decrease of 6.3% from a turnover of RM1,572.60 million recorded in the previous financial year. The lower turnover was attributed mainly to the completion of a land reclamation project by one of its subsidiaries in the previous year. The power generation business continued to expand during the period under review. There were several notable achievements that contribute towards the overall turnover and profit for the Malakoff group, one of which was the successful bid for a 40% stake in Tenaga Nasional Berhads (TNB) 2420 MW Sultan Salahuddin Abdul Aziz Power Station in Kapar, Selangor in April 2000.
With the successful Kapar bid, the Malakoff groups plant capacity will be doubled. In July 2000, another notable achievement was recorded with the successful bid to develop and operate an open cycle gas turbine power plant as an additional block to the existing Lumut Power Plant (LPP), commonly referred to as LPP Block 3, in Segari, Perak with a generation capacity of 430 MW. In August 2000, approval was given to convert the same to a 650 MW combined cycle gas turbine power plant after 12 months of open cycle operations. The extension of LPP Block 3 will ensure Malakoffs status as the largest Independent Power Producer (IPP) in Malaysia. Malakoff, through its wholly-owned subsidiary, Teknik Janakuasa Sendirian Berhad (TJSB), is also involved in providing engineering services, specialising in the provision of operations and maintenance (O&M) services for the generation and utilisation of power. Aside from providing the O&M services to LPP TJSB was also awarded , contracts to provide O&M services for 2 Centralised Utility Facilities, one at Kerteh and the other at Gebeng by Petronas Gas Berhad. Contracts were also awarded to provide O&M services for the LPP Block 3 Project and the Perai Power Plant where commercial operations are scheduled to start from December 2001 and early 2003 respectively. In June 2000, TJSB was awarded the prestigious ISO 9002 certification by Lloyds Registered Quality Assurance for the provision of O&M services to LPP . The electricity distribution business and Centralised Chilled Water Plant project are carried out by Malakoffs subsidiary, Wirazone Sendirian Berhad
A view of Malakof fs Lumut Power Plant at Segari, Perak from the main access road across a former tin mining pond.
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(Wirazone). Following the issuance of a licence by the Department of Electricity and Gas Supply to supply electricity to Kuala Lumpur Sentral through the Electrical Distribution System and the companys Bulk Supply Agreement with TNB on 8 July 1999, Wirazone has applied a state-of-the-art and dependable electrical distribution system. In July 2000, the Central Station and Depot were signed on as its first customers with a load demand of 5.0 MW and 1.5 MW respectively. The Centralised Chilled Water Plant (CCWP) project, which is a scaled-down version of a district cooling system, is currently being developed. To cater for the air-conditioning requirements of three blocks of office suites at Plaza Sentral, the CCWP will operate 2 units of electric centrifugal chillers, each having a capacity of 3000 Refrigerant Tons. The CCWP can be expanded for supply to other buildings as well as integrate with future plants to form a District Cooling System network within the KL Sentral. With an increasing demand for power as well as the restructuring and privatisation of overseas markets, the companys future prospects are promising as Malakoff foresees other avenues for expansion of its core business.
Gas Malaysia recorded a turnover of RM567.62 million for the financial year under review, up 52% from the previous year. In the same year, profit before tax rose by RM8.06 million to RM85.59 million against RM77.53 million the previous year. Sales revenue was 54% higher than the previous year due to higher sales volume and higher average tariff charged reflecting a higher average indexation factor compared to the previous year. During the year under review, Gas Malaysia continued to support the revival of industries with an energy rebate of 10% for small and medium size customers. Total sales volume achieved for the financial year 2000/2001 was 25.2 million mmBtu representing an increase of 6.7% compared to the previous years 23.6 million mmBtu. The growth was mainly attributable to increased consumption by existing customers in the non-metallic mineral products, basic metal, electrical & electronics, rubber, chemical and glass industries. As at January 2001, a total of 170 industrial customers, 846 residential customers and 86 commercial customers were supplied natural gas, an increase of 24, 204 and 6 customers respectively. The central region which has the highest number of industrial customers contributes 58% of the sales volume, followed by the southern, eastern and northern regions which contributed 27%, 14% and 1% respectively. In November 2000, Gas Malaysia established Gas Malaysia (LPG) Sendirian Berhad for the purpose of operating the LPG reticulation business. The trade name adopted for the business is Enagas. Gas
Gas pipe laying along the common utility trench (C.U.T.) in Precinct 2, Putrajaya.
NATURAL GAS DISTRIBUTION SYSTEM (NGDS) During the year under review, Gas Malaysia Sendirian Berhad (Gas Malaysia) continued to register strong sustainable growth and profitability. Sales growth was driven by the industrial sector whilst significant progress was made to supply the residential and commercial sectors.
Gas Malaysia owned area station for natural gas supply to residential customers in Precinct 9, Putrajaya.
23
Malaysias LPG licence was issued in December 2000 for a period of 20 years. The new business complements the companys strategy to supply the residential and commercial sectors and become an Energy Service company. The beginning of year 2001 saw Gas Malaysia supplying LPG to 24,030 residential customers and 43 commercial customers. Gas Malaysia is currently operating a total of 450 kilometres of pipeline. During the year, 22 kilometres of pipeline were commissioned and supply was expanded to Bangi, Selangor. The company is in the midst of laying 135 kilometres of pipeline and constructing a NGDS to serve new communities in Putrajaya, Cyberjaya, Petaling Jaya, Kulai in Johor and Jeram in Kuala Selangor. Gas Malaysia will continue to expand the distribution system to new communities and within existing communities with a view to ensuring maximum geographical coverage for gas supply and increase consumption. With the anticipated growth in consumption coupled with technical development and the implementation of new technology, Gas Malaysia is well poised to achieve continued growth and profitability in the current financial year.
BKE is a modern two-lane carriageway complete with full access control, a dedicated motorcycle track and a state-of-the-art elevated restaurant with public amenities. There was a marked improvement in total revenue collected for the year compared to the previous year due to a 22% increase in traffic volume. With annual traffic volume having surpassed the 15 million vehicles mark, the total toll revenue collected was approximately RM17.81 million. This
KLBKs Butterworth Kulim Expressway with the state-of-the-art elevated restaurant and dedicated motorcycle track.
BUTTERWORTH-KULIM HIGHW AY PRIVATISATION PROJECT Konsortium Lebuhraya Butterworth-Kulim (KLBK) Sendirian Berhad, a wholly-owned subsidiary, is the operator of the 17 kilometre open system toll highway, the Butterworth-Kulim Expressway (BKE), which links the new port, North Butterworth Cargo Terminal on the west with Kulim High Technology Park (KHTP) on the east. The BKE will form part of the soon-to-be completed alternative East-Coast Interstate National Road Network linking Butterworth, Baling and Grik with Kota Bharu.
was attributable to favourable developments in the KHTP area which saw a number of factories commencing operations leading to an increase in number of people being employed in the area. Many housing and mixed development projects in the vicinity have also started to come on stream. It is envisaged that the traffic volume will continue to increase as the year progresses, after taking into consideration the rapid progress of the surrounding developments, such as KHTP Padang , Meha Parkland and several new housing schemes within the Kulim area. Various promotional activities and safety campaigns are held from time to time to both boost the traffic volume as well as inculcate good driving attitudes among the road users.
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MANUFACTURING
SMELTING Malaysia Smelting Corporation Berhad (MSC) which undertakes the Groups tin smelting operations continued to maintain its impressive p e rf o rmance in year 2000 amidst a highly competitve and challenging global market environment. For the financial year ended 31 December 2000, MSC recorded a profit before taxation of RM27.48 million, an increase of 11%
smelting, refining and marketing of tin metal and associated value-added products. The companys newly acquired associate, Redring Solder (Malaysia) Sendirian Berhad, also expanded its business in the production and marketing of tin based industrial materials for the global electronics industries. The smelting and refining facilities were operating at maximum potential capacity levels during the year. The total intake of tin concentrates and tin bearing materials was 41,840 tonnes and approximately 15% of these materials contained some recoverable tantalum-bearing tin slag products. The main operating challenge during the year was to produce more high yield tantalumbearing products to meet the strong demand in the global electronics market and at the same time to ensure that MSC fully met all its contractual obligations for the delivery of tin metal. The flexibililty needed in determining capacity utilisation and materials mix was managed efficiently resulting in sharply increased returns in the second half of the year. Other areas where operating results had a positive impact on earnings were inventory management, focussing on efforts to reduce stocks of concentrates and managing intermediate materials to more efficient levels, aside from measures to achieve greater efficiencies in process materials usage and reduce energy consumption in order to control overall operating costs. The global economic slowdown which became evident during the early part of 2001 will have an adverse impact on the earnings of the metal and mineral sectors of the world. Amidst a growing and intense global competitiveness for feed materials, MSC is strengthening its global network to enable MSC to sustain its level of intake of tin concentrates and tin bearing materials to maintain the companys smelting plant operating at full capacity. With on-going proactive measures for continuous improvements in operating efficiencies and flexibilities, MSC believes that its operations will remain profitable in the year 2001 although the results are not expected to match the record earnings achieved in the previous year.
MSCs Electrolytic Grade High Purity Tin (Minimum 99.99% Sn)
compared to RM24.81 million posted in the previous year. This was achieved on a turnover of RM575.02 million, a decrease of 23% from RM742.95 million in the previous year due to low volume of physical trading of tin metal transacted during year 2000. The improved earnings were primarily attributable to the increase in operational efficiencies and the more flexible smelting operations which enabled the company to produce more profitable tantalum bearing tin slag to meet the robust demand in the global micro electronics and telecommunication industries. Stock management efficiency and improved earnings contributed significantly to the strengthening of the companys cash position. During the year, MSC further strengthened its global strategic position as the largest international tin smelter by focussing on its core business of
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WEATHERSTRIP The Groups participation in the manufacturing of weatherstrip is through Seginiaga Rubber Industries Sendirian Berhad (Seginiaga) which is a 66.1% subsidiary of MMC. Seginiaga has maintained its leadership position in weatherstrip manufacturing in Malaysia, with more than 70% share of the domestic passenger car weatherstrip market. For the financial year ended 31 January 2001, Seginiaga registered an impressive 15% increase in turnover to approximately RM31.23 million from RM27.26 million the previous year. Despite the higher turnover, Seginiaga incurred a marginal loss of RM0.02 million compared to a profit before tax of RM1.74 million before write back of provisions in the previous year. The loss was attributed to an increase in sales for models selling below production cost which were mainly Proton Waja, Perodua Kancil and Toyota Unser. To overcome the deficit, Seginiaga will continue to reduce the production costs whilst enhancing productivity. Measures are also being taken to address pricing issues with the customers. In order not to be over dependant on the automotive industry, Seginiaga is exploring the possibility of diversifying into the introduction of additional products for use in the construction and marine industries. Through the implementation of such strategies, Seginiaga intends to at least maintain its position in the market with a view to continuously enhance Seginiagas shareholders value in the future.
INVESTMENT
SIME DARBY BERHAD The Sime Darby Berhad (Sime Darby) group recorded a growth in performance for the financial year ended 30 June 2000 with the group achieving a profit before tax of RM1,199.10 million for the year, an increase of 18% from RM1,018.20 million in the previous year. The increase was achieved inspite of a 57% decline in the operating profit of the plantations division, thus reflecting the strength, resilience and diversity of the Sime Darby groups core businesses. The growth during the year came mainly from the groups operating divisions in Malaysia other than plantations as a result of the strong resurgence of economic activity in the country following the introduction of exchange controls and lower interest rates in the previous year. The decline in profits from the plantations division was due to lower average selling price of palm oil against that of the previous year. However, the tyre, manufacturing, heavy equipment and motor vehicle distribution and the property development divisions as well as the operating units in Malaysia, Hong Kong and Singapore reported higher pre-tax profits during the period under review compared to the previous year. For the half year ended 31 December 2000, Sime Darby reported a group pre-tax profit of RM575.20 million, an increase of 24% from the previous years pre-tax profit of RM463.70 million. The profit was achieved on a turnover of RM6,055.30 million as against RM5,273.80 million achieved the previous year. In view of the lower selling prices of palm oil products and the effects of an economic slowdown in the United States of America, Sime Darby does not anticipate a similar performance in the second half of the year.
Weatherstrip joining process.
MS ISO 9002 Certification Award to Gas Malaysia Sendirian Berhad.
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Shareholding Statistics
30 LARGEST SHAREHOLDERS AS AT 8 JUNE 2001 Name No. of Shares Held 388,370,232 166,392,000 59,968,300 15,400,947 6,881,800 4,680,000 4,660,000 4,093,000 3,724,000 3,702,000 3,485,000 3,384,000 3,290,000 3,232,000 2,891,000 2,267,000 2,111,000 2,096,000 2,060,000 2,000,000 1,904,514 1,762,000 1,761,000 1,724,000 1,671,000 1,644,000 1,631,600 1,600,000 1,547,000 1,421,400 701,354,793 % of Issued Capital 46.45 19.90 7.17 1.84 0.82 0.56 0.56 0.49 0.45 0.44 0.42 0.40 0.39 0.39 0.35 0.27 0.25 0.25 0.25 0.24 0.23 0.21 0.21 0.21 0.20 0.20 0.19 0.19 0.18 0.17 83.88
1. 2. 3. 4. 5. 6. 7. 8. 9.
Permodalan Nasional Berhad Mayban Nominees (Tempatan) Sendirian Berhad

Impian Teladan Sendirian Berhad
Employees Provident Fund Boar d Mayban Nominees (Asing) Sendirian Berhad

The Straits Trading Company Limited
Cartaban Nominees (Asing) Sendirian Berhad

Bernstein Emerging Markets Value Portfolio
Citicorp Nominees (Asing) Sendirian Berhad

Sunnyvale Holdings Ltd
Cartaban Nominees (Asing) Sendirian Berhad

Investors Pacific International Fund
HSBC Nominees (Asing) Sendirian Berhad

The State Teachers Retirement System of Ohio Sanford Emerging
Amanah Raya Nominees (Tempatan) Sendirian Berhad

Kuala Lumpur Growth Fund Kuala Lumpur Index Fund
10. Amanah Raya Nominees (Tempatan) Sendirian Berhad 11. Amanah Raya Nominees (Tempatan) Sendirian Berhad
Amanah Saham Wawasan 2020
12. Rothputra Nominees (Tempatan) Sendirian Berhad

Employees Provident Fund
13. HSBC Nominees (Tempatan) Sendirian Berhad

OSK-UOB Equity Trust
14. Mayban Nominees (Tempatan) Sendirian Berhad

Kuala Lumpur Balanced Fund

Kuala Lumpur Regular Savings Fund

Kuala Lumpur Ittikal Fund
17. Citicorp Nominees (Asing) Sendirian Berhad

Stichting Shell Pensioenfonds

Kuala Lumpur Industry Fund
19. BBMB Securities Nominees (Tempatan) Sendirian Berhad

Petroliam Nasional Berhad
20. OSK Nominees (Asing) Sendirian Berhad

Lee Kim Tah Private Limited
21. The Central Depository (Pte) Limited 22. Amanah Raya Nominees (Tempatan) Sendirian Berhad
Kuala Lumpur Savings Fund
23. Lembaga Kemajuan Tanah Persekutuan (FELDA)

Jabatan Kewangan Ibu Pejabat Felda
24. Universal Trustee (Malaysia) Berhad

Mayban Balanced Trust Fund
25. ABN Amro Nominees (Tempatan) Sendirian Berhad

Employees Provident Fund Board
26. Citicorp Nominees (Asing) Sendirian Berhad

Sanford C. Bernstein Group Trust
27. Pertubuhan Keselamatan Sosial 28. HSBC Nominees (Asing) Sendirian Berhad
Asia Growth Fund
29. HSBC Nominees (Asing) Sendirian Berhad
Fonditalia
30. Mayfin Nominees (Tempatan) Sendirian Berhad

Law Kit Tat
Total
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HOLDINGS OF ISSUED SHARE CAPITAL AS AT 8 JUNE 2001
Size of Holdings Less than 1,000 1,000 to 10,000 10,001 to 100,000 100,001 to less than 5% of issued shares 5% and above of issued shares Total GEOGRAPHICAL Malaysia Singapore United Kingdom and others Total CATEGOR Y Individuals Banks Nominee Companies Insurance Companies Other Limited Companies Pension Funds and Trustees Others Total
No. of Shareholders 1,178 10,216 1,552 200 3 13,149
% of Shareholders 8.96 77.70 11.80 1.52 0.02 100.00
No. of Shares Held 414,173 34,806,668 43,581,897 142,605,940 614,730,532 836,139,210
% of Issued Capital 0.05 4.16 5.21 17.06 73.52 100.00
12,194 534 421 13,149
92.74 4.06 3.20 100.00
827,611,140 6,265,781 2,262,289 836,139,210
98.98 0.75 0.27 100.00
9,418 24 3,294 6 287 108 12 13,149
71.63 0.18 25.05 0.05 2.18 0.82 0.09 100.00
49,743,339 61,760,300 319,703,330 10,800 404,205,494 627,375 88,572 836,139,210
5.95 7.39 38.24 0.00 48.34 0.07 0.01 100.00
SUBSTANTIAL SHAREHOLDERS AS AT 8 JUNE 2001 No. of Shares Held % Deem Interested 46.14 19.92 8.01 1.84 1,446,000 166,392,000 166,392,000 385,775,232
Direct Permodalan Nasional Berhad 385,775,232 Impian Teladan Sendirian Berhad 166,392,000 Employees Provident Fund Board 66,990,300 The Straits Trading Company Limited 15,400,947 Dr. Aziuddin bin Ahmad Zainal Rashid bin Ab. Rahman Yayasan Pelaburan Bumiputera
% 0.17 19.92 19.92 46.14
Class of Shares Voting Rights
: :
Ordinary Shares of 10 sen Each One (1) Vote per Shar e
28
List of Properties
held by MMC and its Subsidiaries as at 31 January 2001
Location MALAYSIA Perak Dar ul Ridzuan Lot Nos. 39, 999, 1023, 1556, 1578, 1675, 2447, 2568, 2669, 2675, 2677 2679, 2907, 2951, 2954, 3031, 3064, 3065, 4263 & 6680 Batang Padang District of Batang Padang Lot Nos. 712 & 3501 Bidor District of Batang Padang
Tenure
Area (Hectares)
Year of Expir y
Description/ Existing Use
Net Book Value RM000
Age of Building (Years)
Year of Acquisition
Freehold
25.32
Agricultural land/ Vacant
482
Various years covering from 1968 to 1979
Freehold
1.21
14
1968 & 1978
Lot Nos. 5072, 5073 & 5078 Changkat Jong District of Hilir Perak Lot Nos. 1894, 2136 3386 3389, 3564, 3576, 3581 3583, 3586, 3631, 3634, 3794, 3796, 3798, 4095, 4100, 4101, 4124, 4127, 4129, 4131 32, 4157, 4163, 4788, 4793, 4794, 5532, 5533, 5828, 5853, 5856, 6236, 6543 6545, 6550 51, 6555 6557, 6569 80, 6585, 6586, 6588, 6593, 6654, 6961. Chenderiang District of Batang Padang
Freehold
8.51
99
1975
Freehold
81.56
612
Various years covering from 1979 to 1990
29
Location MALAYSIA Perak Dar ul Ridzuan (contd) Lot Nos. 1257, 1258, 1513 1516, 1682, 1683, 1685, 1687 1689, 1765 1784, 1786, 1789, 1792, 2116 2119, 2448 2450, 2446, 2447, 2451, 2452 2454, 2456 2462, 2464 2469, 2539, 2573, 2900, 2902, 4070 4077 Pasir Panjang Ulu District of Perak Tengah Lot Nos. 3741, 4871, 9472, 18023 & 33344 Kampar District of Kinta Lot No. 1642 Kampung Gajah District of Perak Tengah Lot Nos. 2732, 2909, 3156 & 4067 Pasir Panjang Ulu District of Perak Tengah Lot Nos. 8364 & 8365 Chenderiang District of Batang Padang Lot Nos. 1007, 74651, 158405 Sungai Terap District of Kinta Lot No. 10407 Batang Padang District of Batang Padang Lots 11352 11354, 11473 11475 Chenderiang District of Batang Padang
Tenure
Area (Hectares)
Year of Expir y
Year of Acquisition
Freehold
103.42
605
1992
Freehold
3.73
43
Various years from 1938 to 1948
Freehold
1.12
Agricultural land
1988
Leasehold
120.97
2002 2004
Mining land
1992
Leasehold
161.87
2002
Mining sublease
1984
Leasehold
7.29
2030 2050
Office/ workshop
4,825
1982
Leasehold
130.18
2004
Awaiting issue of mining titles
1981
Leasehold
34.53
2002 2004
Mining land
1992
30
Location MALAYSIA Perak Dar ul Ridzuan (contd) Lot Nos. 827, 2372, 3436 & 3501 Kg Gajah District of Perak Tengah Lot No. 35701 Tanjong Tualang District of Kinta Lot Nos. 42772 & 155488 Sungai Terap District of Kinta Lot No. 29667 & PT 1166 Tanjong Tualang District of Kinta Lot Nos. 10318, 12803 31672, 31673 & 42229 Sungai Terap District of Kinta Lot No. 437 Kampar District of Kinta PT 1338, PT 3081 & PT 3087 Chenderiang District of Batang Padang Chenderiang District of Batang Padang
Tenure
Area (Hectares)
Year of Expir y
Year of Acquisition
Leasehold 881.04
2002 2008
Mining land
1988
Leasehold
15.35
2011
Industrial land/ Campsite
122
1991
Leasehold
35.63
2009
Housing development site
1992
Leasehold
5.66
2001
Campsite
83
2001
Freehold
4.82
13
Various years covering from 1982 to 1990 1937
Leasehold
0.41
2885
Leasehold
63.42
2031
Industrial land
230
2001
Leasehold
12.00
Proposed limestone plant (pending issue of title) Campsite
192
2001
Lot 33 Ulu Selangor District of Ulu Bernam Lot Nos. 552, 596, 866, 867 & 1833 Ulu Selangor District of Batang Padang
Leasehold
9.11
2004
80
1983
Freehold
6.37
53
31
Location MALAYSIA Selangor Dar ul Ehsan Lot 25176 Bukit Rajah District of Klang PT 720 Shah Alam District of Petaling Lot Nos. 1604, 1605 & 1608 Klang District of Klang Lot Nos. 3521, 3522 & 7437 Ulu Langat District of Kajang
Tenure
Area (Hectares)
Year of Expir y
Year of Acquisition
Leasehold
2.33
2088
Industrial land
1,547
20
1992
Leasehold
0.71
2018
Workshop/Office building
11,542
10
1988
Freehold
4.25
Workshop
7,973
5 10
Freehold
5.84
Residential/ Vacant
471
32
1987
Negeri Sembilan Lot No. 7932 Labu District of Seremban Lot Nos. 762, 763 & PT 1479 Setul District of Seremban Lot Nos. 627 & 760 Pasir Panjang District of Port Dickson Lot Nos. 3920 & 3921 Pasir Panjang District of Port Dickson Freehold 0.43 Residential building 1,389 1 2000
Leasehold
5.56 2.02
2088 2089
Factory building/ Defence workshop
29,014 1,130
9 10
1992 1992
Freehold
0.50
Residential building/ Holiday bungalow
1,916
53
1956
Freehold
0.11
277
20
1983
Pulau Pinang Lot Nos. 87 & 88, 394 & 395 Mukim 17 District of Batu Ferringhi Freehold 11.97 Building site 6,775 1950
32
Location MALAYSIA Pahang Dar ul Makmur Lot No. 211 Tanah Rata, District of Cameron Highland PT 2846 Chenor District of Maran Lot 1821 Tras District of Raub
Tenure
Area (Hectares)
Year of Expir y
Year of Acquisition
Leasehold
0.35
2040
Vacant
147
1982
Leasehold
0.81
2045
Sawmill
679
16
1985
Leasehold
0.40
2028
375
49
1956
Terengganu Dar ul Iman Lot No. 580 Banggol District of Kemaman PT 4734 Teluk Kelung District of Kemaman Lot Nos. 986 1009, 1072 1095, Banggol District of Kemaman Freehold 0.81 Workshop 1,386 1990
Leasehold
4.05
2056
Industrial land/ Vacant
543
1996
Freehold
1.145
Building/ Vacant
503
10
1995
Kuala Lumpur 33 to 33-3, Freehold Jalan Setiawangsa 11-55A, Taman Setiawangsa 6, Persiaran Hampshire 4, Persiaran Hampshire 28, Langgak Golf 26, Langgak Golf PT 21 Persiaran Raja Chulan 34, Ampang Hilir Freehold Freehold Freehold Freehold Freehold 450 sq.m. Shophouse/ Office building 273 13 1994
0.51 0.52 0.61 0.53 0.61
Residential building Residential building Residential building Residential building Vacant land
2,408 2,378 3,321 2,886 3,377
49 58 48 48
1950 1992 1951 1951 2000
Freehold
0.42
Under development
1,961
1994
Strata title (22 units) Sri Kenny 28, Jalan Tun Ismail
Freehold
61,386 sq. ft.
Apartments
4,502
1994
33
Location OVERSEAS Australia Hillgrove Gold NL Freehold Mine # 1 Part portion 15 * Freehold Mine # 2 Lot 2, DP 979339 * Freehold Mine # 3 Lot 4, DP 596696 * Smiths Mine Lot 122 to 124, DP 755834 * NTH Proposed Tails Dam Part Portion 128 * Mill Site Lot 2, DP 597107 * Proposed Tailings Dam Site Lot 380, DP 755834 * Proposed Tailings Dam Site Lot 406, DP 755834 *
Tenure
Area (Hectares)
Year of Expir y
Net Book Value AUD000
Year of Acquisition
Freehold
5.4
Mining
16
Freehold
10.9
Mining
32
Freehold
9.7
Mining
28
Freehold
48.6
Mining
49
Freehold
14.2
Mining
41
Freehold
15.9
Mining land & buildings Mining
184
30
Freehold
15.6
46
Freehold
13.3
Mining
44
) ) ) ) ) ) ) ) ) ) Various ) years from ) 1906 to ) 1992 ) ) ) ) ) ) ) ) ) ) )
* Located at Shire of Dumaresq, Parish of Metz, Armidale, NSW 2350, Australia.
34
Financial Statements
36 39 40 40 41 42 43 44 45 47 48 75
Directors Report Statement by Directors Statutory Declaration Report of the Auditors Balance Sheets Income Statements Statements of Recognised Gains and Losses Cash Flow Statements Notes to the Financial Statements
35
Directors Report
for the year ended 31 January 2001
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 2001.
PRINCIPAL ACTIVITIES The Company undertakes mining and mineral exploration activities and also derives income from its investments. The principal activities of the Group are described in Note 30 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.
RESULTS Group RM000 Net profit for the year 400,012 Company RM000 207,986
RESERVES All material transfers to or from reserves and provisions during the year are disclosed in the financial statements.
DIVIDENDS Since the end of the previous financial year, the Company paid: i) a final dividend of 3.0 sen per share, less 28% tax, totalling RM18.061 million in respect of the year ended 31 January 2000 on 14 July 2000; a special dividend of 2.0 sen per share, tax exempt amounting to RM16.723 million in respect of the year ended 31 January 2000 on 14 July 2000. an interim dividend of 1.0 sen per share, tax exempt totalling RM8.361 million in respect of the year ended 31 January 2001 on 14 December 2000.
ii)
iii)
The Directors have recommended a final dividend of 3.0 sen per share, tax exempt and a special dividend of 3.0 sen per share, tax exempt totalling RM50.168 million.
36
DIRECTORS OF THE COMPANY Directors who served since the date of the last report are: Dato Syed Abdul Jabbar Syed Hassan, Chairman (appointed on 7 July 2000) Raja Tan Sri Muhammad Alias bin Raja Muhammad Ali (resigned on 16 June 2000) Tan Sri Ibrahim Menudin Datuk Ab. Sukor Shahar Abdul Samad Haji Alias Dato Mohd Desa Pachi Zain Azahari bin Zainal Abidin (resigned on 20 June 2000) Tan Sri Dato Thong Yaw Hong Tan Sri Dato Dr. Abdul Khalid bin Sahan Jamiah Abd Hamid Datuk Alladin Hashim Tan Sri Dato Ir (Dr.) Haji Wan Abdul Rahman bin Haji Wan Yaacob Dato Hilmi bin Mohd. Noor (appointed on 10 October 2000) Dr. Aziuddin bin Ahmad (appointed on 10 October 2000) In accordance with the articles of association of the Company, YBhg Tan Sri Ibrahim Menudin, YBhg Datuk Ab. Sukor Shahar and YBhg Dato Mohd Desa Pachi retire by rotation. YBhg Dato Syed Abdul Jabbar Syed Hassan, YBhg Dato Hilmi bin Mohd. Noor and Dr. Aziuddin bin Ahmad, who were appointed during the year, also retire at the forthcoming Annual General Meeting (AGM). All the six Directors, being eligible, offer themselves for re-election. YBhg Tan Sri Dato Thong Yaw Hong, having attained the age of seventy years, retires in accordance with Section 129 of the Companies Act 1965 and offers himself for re-appointment in accordance with Section 129(6) of the said Act, to hold office until the conclusion of the next AGM of the Company.
DIRECTORS INTEREST IN SHARES The deemed holdings in the ordinary shares of the Company and 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 date of appointment Shareholdings in which Director has deemed interest Interest of Dr. Aziuddin bin Ahmad in: Malaysia Mining Corporation Berhad Bought Sold At 31.1.2001
166,392,000
166,392,000
37
DIRECTORS BENEFITS Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements) by reason of a contract made by the Company or a related company 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, except as disclosed in 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.
SHARE CAPITAL There were no changes in the issued and paid-up capital of the Company during the year.
OPTIONS GRANTED OVER UNISSUED SHARES AND DEBENTURES No options were granted to any person to take up unissued shares of the Company during the year.
OTHER ST ATUTORY INFORMATION Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that: i) proper action has been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts have been written off and that adequate provision has been made for doubtful debts, and any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business have been written down to an amount which they might be expected so to realise.
ii)
At the date of this report, the Directors are not aware of any circumstances: i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group and in the 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.
ii)
iii)
iv)
38
At the date of this report there does not exist: i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the 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.
ii)
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, except as disclosed in the financial statements, the results of the operations of the Group and of the Company for the financial year ended 31 January 2001 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:
Dato Syed Abdul Jabbar Syed Hassan
Tan Sri Ibrahim Menudin
39
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 42 to 75, are drawn up in accordance with 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 2001 and of the results of their operations and of their cash flows for the year ended on that date. Signed in accordance with a resolution of the Directors:
Dato Syed Abdul Jabbar Syed Hassan
Tan Sri Ibrahim Menudin
Statutory Declaration
pursuant to Section 169(16) of the Companies Act, 1965
I, Phan Leong Kim , the officer primarily responsible for the financial management of Malaysia Mining Corporation Berhad, do solemnly and sincerely declare that the financial statements set out on pages 42 to 75 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 abovenamed Phan Leong Kim at Kuala Lumpur in the Federal Territory this 30 day of May 2001.
Before me: Ahmed Khalil b. Mohamed Ali (No. W.269) Commissioner for Oaths Kuala Lumpur
40
Report of the Auditors

to the members of Malaysia Mining Corporation Berhad
We have audited the financial statements set out on pages 42 to 75. The preparation of the financial statements is the responsibility of the Companys Directors. Our responsibility is to express an opinion on the financial statements based on our audit. 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) the state of affairs of the Group and of the Company at 31 January 2001 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;
ii) 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 30 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 Companys 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. The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under subsection (3) of Section 174 of the Act.
KPMG Firm Number: AF 0758 Public Accountants
Ampalavanar s/o Segarajah Partner Approval Number: 1293/10/02(J) Kuala Lumpur 30 May 2001
41
Balance Sheets
as at 31 January 2001
Group 2001 2000 RM000 RM000 476,465 941,793 359,085 19,746 1,161 25,247 337,622 806,292 1,169,161 Cur rent liabilities Trade and other payables Provisions Borrowings Taxation Proposed dividend 462,867 420,598 359,085 47,311 79,704 31,255 117,356 628,510 777,121 Company 2001 2000 RM000 RM000 7,177 862,649 47,129 2,000 402,498 (168,996) 204,955 369,270 574,225 7,630 651,656 107,868 2,000 270,521 (189,963) 14,154 8,899 216,361 225,260
Note
Property, plant and equipment Investment in subsidiaries Investment in associates Other investments Inter company receivables Inter company payables Other assets Current assets Inventories Trade and other receivables Cash and cash equivalents
2 3 4 5 6 6 7 8 9 10
11 12 13
177,243 39,000 453,583 38,322 50,168 758,316
136,402 17,356 25,122 34,784 213,664 563,457
16,649 450,000 26,518 50,168 543,335 30,890
9,081 11,371 34,784 55,236 170,024
Net cur rent assets
410,845
2,209,095
1,933,022
1,183,347
1,033,890
Financed by: Capital and reserves Share capital Reserves Shareholders funds Minority shareholders interests Long term and defer red liabilities Borrowings Deferred taxation
14 15
83,614 1,820,624 1,904,238 195,799 103,065 5,993 109,058 2,209,095
83,614 1,496,055 1,579,669 246,766 104,665 1,922 106,587 1,933,022
83,614 1,099,733 1,183,347 1,183,347
83,614 950,276 1,033,890 1,033,890
16 13 17
The notes set out on pages 48 to 75 form an integral part of, and, should be read in conjunction with, these financial statements.
42
Income Statements
Group 2001 2000 RM000 RM000 168,549 61,222 20,991 250,762 Contract costs recognised as an expense Cost of sales Cost of services 161,111 97,831 17,009 275,951 Company 2001 2000 RM000 RM000 74,924 74,924 33,737 33,737
Note
Revenue
contract revenue sale of goods services dividends
(150,125) (67,590) (8,362) (226,077)
(150,945) (102,909) (6,846) (260,700)
Distribution costs Administration expenses Other operating expenses Other operating income Operating (loss)/profit Interest expense Interest income Share of profit of associates Exceptional items Share of abnormal items of associates Profit before tax Tax expense Profit after taxation Less: Minority interests Net profit for the year 15 18
(835) (50,084) (15,072) 39,851 (1,455) (16,208) 26,048 136,904 274,666 419,955 (61,317) 358,638 41,374 400,012
(466) (55,610) (19,406) 31,280 (28,951) (16,086) 26,926 75,364 217,881 (70,889) 204,245 (17,973) 186,272 (81,810) 104,462
(13,539) (3,040) 2,071 60,416 (6,192) 13,029 141,141 208,394 (408) 207,986 207,986
(16,049) (15,532) 1,905 4,061 (325) 19,869 (13,452) 10,153 10,153 10,153
18 18
20
Basic earnings per ordinary share (sen) Before exceptional and abnormal items After exceptional and abnormal items
22 11.1 4.3
47.8
12.5
Dividends per ordinary share (sen)
23
7.0
6.0
7.0
6.0
43
Statements of Recognised Gains and Losses

Group 2001 2000 RM000 RM000 Company 2001 2000 RM000 RM000
Note
Exchange differences on translation of the financial statements of foreign entities Net gains/(losses) not r ecognised in the income statement Net profit for the year Total recognised gains/(losses) for the year
15
(16,914)
4,196
4,847
(16,914) 400,012
4,196 104,462
207,986
4,847 10,153
383,098
108,658
207,986
15,000
Effect of accounting policy change
21
(68,457)
(56,397)
44
Cash Flow Statements

Group 2001 2000 RM000 RM000 Cash flows from operating activities Profit before taxation Adjustments for: Deferred cost expensed Depreciation and depletion (Gain)/Loss on disposal of property, plant and equipment Provision for mining exploration expenditure Exceptional items Interest income Interest expense Dividend income (Profit)/Loss retained in associates Unrealised foreign exchange loss Operating profit/(loss) before working capital changes (Increase)/Decrease in working capital Inventories Trade and other receivables Trade and other payables Cash (used in)/generated from operations Mining exploration expenditure Income taxes paid Interest paid Net cash (absorbed by)/generated from operating activities 419,955 959 17,099 (1,107) 3,040 (274,666) (26,048) 16,208 (28,549) (87,072) 4,956 204,245 332 13,168 (1,829) 6,386 (217,881) (26,926) 16,086 (23,970) 20,459 208,394 661 (977) 3,040 (141,141) (13,029) 6,192 (74,924) 10,153 1,059 834 6,386 13,452 (19,869) 325 (33,737) Company 2001 2000 RM000 RM000
44,775 6,008 (220,266) 40,841 (128,642) (3,040) (13,302) (10,016)
(9,930) 30,848 7,163 (6,382) 21,699 (6,386) (12,973) (16,086)
(11,784) (196,056) 7,568 (200,272) (3,040) (3,268)
(21,397) 32,837 (2,247) 9,193 (6,386) (10,892)
(155,000)
(13,746)
(206,580)
(8,085)
45
Group 2001 2000 RM000 RM000 Cash flows from investing activities Acquisition of increase in shares in subsidiary Purchase of interest in associates (746,808) Purchase of property, plant and equipment (39,175) Purchase of investments Purchase of interest in mineral properties (45,448) Proceeds from sale of investments 20,864 Project recovery/(expense) 668 Proceeds from sale of subsidiaries Proceeds from sale of associates 666,454 Proceeds from sale of property, plant and equipment 2,188 Foreign deposits for foreign projects 36,867 Interest received 26,048 Dividends received 28,549 Inter company receivables (1,328) (5,948) (25,107) (33,981) 385,987 (13,045) 2,476 8,425 (3,125) 26,926 23,970 18,634
Company 2001 2000 RM000 RM000
(212,622) (1,463) (1,126) 20,864 668 1,628 199,818 1,895 14,154 13,029 74,924 (152,943)
(319) (10,662) (13,045) 8,258 230 554 19,869 33,737 (135,121)
Net cash generated from investing activities Cash flows from financing activities Interest paid Repayment of term loans Dividends paid Repayment of short term borrowings Proceeds from loans
(51,121)
385,212
(41,174)
(96,499)
(6,192) (3,200) (43,145) (14,540) 450,566
(126,259) (33,445) (35,347)
(6,192) (43,145) 450,000
(325) (33,153) (33,445)
Net cash generated from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Adjustment on exchange difference Cash and cash equivalents at beginning of year
383,489
(195,051)
400,663
(66,923)
177,368 (1,387)
176,415 (1,498)
152,909
(171,507)
627,294
452,377
216,361
387,868
Cash and cash equivalents at end of year
803,275
627,294
369,270
216,361
46
i)
Summary of the effects of acquisition of subsidiary: Group 2001 2000 RM000 RM000 Fixed assets Net current assets 6,574 5,959 12,533 1,163 (3,027) (4,674) 5,995 (47) 5,948
Goodwill on acquisition Minority interest Interest previously owned Total purchase price Cash Cash flow on acquisition net of cash acquired
ii)
Cash and cash equivalents Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts: Group 2001 2000 RM000 RM000 Cash and bank balances Deposits Bank overdraft 3,596 802,696 (3,017) 803,275 9,366 619,144 (1,216) 627,294 Company 2001 2000 RM000 RM000 1,241 368,029 369,270 944 215,417 216,361
47
Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following accounting policies are adopted by the Group and the Company and are consistent with those adopted in previous years, except as disclosed in notes 1(d), 1(j), 1(n) and 1(p). (a) Basis of accounting The financial statements of the Group and of the Company are prepared under the historical cost convention as modified by the revaluation of certain property and in compliance with applicable approved accounting standards in Malaysia. The going concern basis of accounting on which the financial statements of a subsidiary has been prepared is dependent upon the subsidiary continuing to maintain their business relationship with its major customer and on continuing to be able to use the land on which the factory is situated. The Directors are confident that the business relationship will be maintained and that the state authorities will grant the subsidiary a lease over the land. (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. Where there is a continuity of the amalgamating businesses and the ownership of the separate companies have been pooled into one common ownership, the consolidation of Malaysia Mining Corporation Berhad (MMC) and its subsidiaries (the Group) has been carried out on the basis of merger accounting. All other subsidiaries have been consolidated using the acquisition method and goodwill, if any, arising on consolidation is dealt with in accordance with the policy stated in Note 1(j). Under the acquisition method of accounting, the results of subsidiaries acquired or disposed 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 reserve on consolidation as appropriate. Under the merger method of accounting, the difference between the cost of acquisition and the nominal value of the share capital and reserves of the subsidiaries is taken to merger reserve. 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.
48
(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 Groups 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. The Group equity accounts for its share of post-acquisition results of associates based on the latest audited and unaudited interim financial statement available.
(d) Joint ventur e A joint venture is a contractual agreement whereby the Group and other parties have joint control over an economic activity. In respect of its interest in jointly controlled entities, the Group uses the equity method to account for its interest. In the previous year, the proportionate consolidation method was used. The Group changed its accounting policy to the equity method in line with the approach taken in Malaysian Accounting Standard Boards 16, Financial Reporting of Interests in Joint Venture, which does not allow the proportionate consolidation method. The change has no effect on the Groups financial results and net tangible assets per share except for reclassification of certain items in the preceding years balance sheet. Unrealised profits or losses arising from transactions between the Group and its joint venturers are recognised only to the extent of that portion of the gains or losses which is attributable to the interests of the other venturers. Unrealised losses are, however, recognised in full when the transaction provides evidence of a reduction in the net realisable value of current assets or a decline, other than temporar y, in the carrying amount of long-term assets. (e) Property, plant and equipment It is the Groups policy to state property, plant and equipment at cost less accumulated depreciation. Revaluation of certain properties in 1988 was carried out primarily as a one-off exercise and was not intended to effect a change in the accounting policy to one of revaluation of properties. The carrying amounts of property, plant and equipment are reviewed at each balance sheet date to determine whether there is any indication of impairment. If such an indication exists, the assets recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an item of property, plant and equipment exceeds its recoverable amount. In determining the recoverable amount of property, plant and equipment, expected future cash flows are not discounted to their present values. The impairment loss is charged to the income statement unless it reverses a previous revaluation in which case it will be charged to equity. Any subsequent increase in recoverable amount is reduced by the amount that would have been recognised as depreciation had the write-down or write-off not occurred. Such subsequent increase in recoverable amount is recognised in the income statement unless it reverses an impairment loss on a revalued asset, in which case it is taken to equity.
49
(f)
Depreciation Depreciation on non-mining assets is provided at rates which are considered adequate to write off property, plant and equipment over their estimated useful lives. No amortisation is provided on freehold land while leasehold land is amortised over the period of the lease. Buildings are depreciated at the rate of 2% per annum. The principal annual depreciation rates are between 10% and 25% for plant and machinery. Depreciation and depletion on mining assets is calculated by reference to output for the year so as to write off these assets, less estimated residual value, over the estimated life of the ore reserves which will be worked before the expiry of the leases. Expressway development expenditure comprises development and upgrading expenditure (including interest charges relating to financing of the development) incurred in connection with a privatised highway project. The cumulative actual expenditure incurred is amortised to each balance sheet date over the concession period based on the following formula:Cumulative toll revenue to date Projected total toll revenue of the concession x Cumulative actual expressway expenditure
(g) Investments Subsidiaries accounted for under the merger method are stated at nominal value of shares acquired or issued while investments in other subsidiaries are stated at cost. Investments in associates are stated at cost and, in the Group, inclusive of share of post acquisition retained results. Other investments are stated at cost. Provision is made against cost of investment when, in the opinion of the directors, a permanent diminution in value has arisen. (h) Mining exploration expenditur e Expenditure on exploration and evaluation of mining areas of interest is charged to the income statement as incurred by the creation of provisions until such time as an area of interest reaches the stage where such expenditure is considered to be capable of being recouped through development or sale. Where a mining area of interest is expected to proceed to commercial development or where its value is capable of recoupment through sale, the provision relating to the expenditure incurred is credited to the income statement to the extent it reflects the present estimate of the recoverable value of the area of interest concerned. The accumulated expenditure attributable to an area of interest which is no longer considered to have any commercial value is written off against the provision. (i) Amount due from contract customers The amount due from contract customers on construction contracts is stated, using the percentage completion method, at cost plus attributable profits less foreseeable losses and less progress billings. Cost includes all direct construction costs and other related costs. Where progress billings exceed the aggregate amount due from contract customers plus attributable profits less foreseeable losses, the net credit balance on all such contracts is shown in other payables as amount due to contract customers.
50
(j)
Intangible assets Goodwill Goodwill arising on an acquisition represents the excess of the cost of the acquisition over the fair values of the net identifiable assets acquired. From this year, goodwill is stated at cost as the Directors consider that this policy will more fairly reflect the continuing value of the companies acquired. In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associates. In previous years, goodwill arising on acquisition was written off. The amounts written off for the remaining subsidiaries and associates (after Ashton Mining Ltd. was sold) was RM15.7 million of which RM5.2 million would have been written off for impairment. The balance of RM10.5 million is not considered sufficiently material to reinstate.
(k) Inventories Inventories are stated at the lower of cost and net realisable value with cost being either on the first-in, first-out or weighted average cost basis. For work-in-progress and manufactured inventories, cost consists of materials, direct labour and an appropriate proportion of fixed and variable production overheads. (l) 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. (m) Taxation The tax expense in the income statement represents taxation at current tax rates based on profit earned during the year. Deferred taxation is provided on the liability method for all timing differences except where no liability is expected to arise in the foreseeable future and there are no indications the timing differences will reverse thereafter. Deferred tax benefits are only recognised where there is a reasonable expectation of realisation in the near future. (n) Foreign cur rencies (i) Foreign currency transactions Foreign currency assets and liabilities of the Company and its Malaysian subsidiaries outstanding at balance sheet date are translated into Ringgit Malaysia at rates of exchange prevailing at that date or, where forward exchange contracts exist, at the rates fixed in such contracts. Foreign currency transactions during the year have been translated into Ringgit Malaysia at rates of exchange prevailing at transaction dates. Exchange differences are dealt with through the income statement. (ii) Financial statements of foreign operations The Groups foreign operations are not considered an integral part of the Companys 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 (2000 at year end rates. If the average rates were used last year, the results would not have been materially different). 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: AUD USD RM2.08 RM3.80 51
(o)
Revenue i) Goods sold Revenue from 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) Construction contracts Revenue from long term fixed price construction contracts is recognised on the percentage of completion method, measured by reference to completion of a physical proportion of the contract work. When the outcome of a construction contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs incurred that is probable will be recoverable and contract costs are recognised as an expense in the period in which they are incurred. An expected loss on a contract is recognised immediately in the income statement. iii) Dividend income Dividend income is recognised when the right to receive payment is established. iv) Interest income Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the amount.
(p)
Financing costs All interest and other costs incurred in connection with borrowings are expensed as incurred. Interest on borrowed funds utilised for assets that require a substantial period of time to get them ready for their intended use is capitalised as part of the cost of the assets up to the date of commencement of operations. During the year, the Group changed its policy on post-construction interest i.e the interest incurred on borrowings after completion of construction of privatised projects until full repayment of these borrowings (see Note 21).
52
2.
PROPERTY, PLANT AND EQUIPMENT Mining leases, properties and building RM000
Group Cost/Valuation At 1 February 2000 Additions Disposals Exchange difference At 31 January 2001
Freehold properties RM000
Long term leasehold properties RM000
Shor t term leasehold properties RM000
Plant, machiner y and equipment RM000
Dredges and other mining equipment RM000
Expressway development expenditur e RM000
Capital work in progress Total RM000 RM000
46,106 214 (296) 46,024
34,399 (994) 33,405
8,946 8,946
10,744 (2) (1,543) 9,199
176,968 26,328 (4,626) (3,625) 195,045
1,397 (7) 1,390
305,454 297 305,751
12,336 12,336
584,014 39,175 (5,629) (5,464) 612,096
Representing items at: Cost Directors valuation 1988 At 31 January 2001 20,414 25,610 46,024 31,679 1,726 33,405 8,446 500 8,946 9,199 9,199 195,045 195,045 1,390 1,390 305,751 305,751 12,336 12,336 584,260 27,836 612,096
Depreciation At 1 February 2000 Charge for the year Disposals Exchange difference At 31 January 2001 2,219 400 46 2,665 1,146 101 (81) 1,166 2,178 237 2,415 107,221 12,510 (4,467) 1,887 117,151 8,383 3,851 12,234 121,147 17,099 (4,548) 1,933
135,631
Net book value At 31 January 2001 43,359 32,239 6,531 9,199 77,894 1,390 293,517 12,336 476,465
At 31 January 2000 Depreciation charge for the year ended 31 January 2000
43,887
33,253
6,768
10,744
69,747
1,397
297,071
462,867
462
110
135
9,669
2,792
13,168
53
2.
PROPERTY, PLANT AND EQUIPMENT (CONTD) Mining leases, properties and building RM000 Dredges and other mining equipment RM000
Company Cost/Valuation At 1 February 2000 Additions Disposals At 31 January 2001
Freehold properties RM000
Long term leasehold properties RM000
Plant, machiner y and equipment RM000
Total RM000
826 826
6,615 (994) 5,621
347 347
10,044 1,126 (417) 10,753
35 35
17,867 1,126 (1,411) 17,582
Representing items at: Cost Directors valuation 1988 At 31 January 2001 826 826 4,115 1,506 5,621 347 347 10,753 10,753 35 35 16,076 1,506 17,582
Depreciation At 1 February 2000 Charge for the year Disposals At 31 January 2001 640 57 (81) 616 9,597 604 (412) 9,789 10,237 661 (493) 10,405
Net book value At 31 January 2001 826 5,005 347 964 35 7,177
At 31 January 2000 For the year ended 31 January 2000 Depreciation charge
826
5,975
347
447
35
7,630
65
994
1,059
54
2.
PROPERTY, PLANT AND EQUIPMENT (CONTD) Certain Group properties in Malaysia and the Companys leasehold properties in Malaysia are stated at Directors valuation on 31 January 1988 based on a professional valuation on open market basis conducted in February 1988. In accordance with the transitional provisions issued by the Malaysian Accounting Standards Board (MASB) on adoption on International Accounting Standard No. 16 (Revised) Property, plant and equipment, the valuation of these assets has not been updated and they continue to be stated at their existing carrying amounts less depreciation. Had the revalued properties 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 2001 2000 RM000 RM000 Freehold property Long term leasehold properties Short term leasehold properties 672 1,542 57 2,271 672 1,699 62 2,433 Company 2001 2000 RM000 RM000 1,542 1,542 1,699 1,699
Tin mining related fixed assets and fixed assets of a subsidiary which ceased operations are stated at their estimated realisable values.
3.
INVESTMENTS IN SUBSIDIARIES Company 2001 2000 RM000 RM000 Quoted shares Unquoted shares 77,856 791,138 868,994 Less: Provision for diminution in value Unquoted shares (6,345) 862,649 77,856 580,170 658,026 (6,370) 651,656
Market value of quoted investments: Quoted in Malaysia
126,613
180,370
55
4.
INVESTMENTS IN ASSOCIATES Group 2001 2000 RM000 RM000 Shares quoted in Malaysia Shares quoted outside Malaysia (Note (i)) Unquoted shares (Note (ii)) Share of post-acquisition reserves 795,984 60,933 84,876 941,793 50,638 311,223 60,933 (2,196) 420,598 Company 2001 2000 RM000 RM000 46,994 135 47,129 46,994 60,739 135 107,868
Represented by: Groups share of net assets other than goodwill Groups share of goodwill in associates own consolidated financial statements Goodwill on acquisition (Note (iii))
592,688
27,448 321,657 941,793
Market value of quoted associates: Quoted in Malaysia Quoted outside Malaysia (Note (i)) 686,294 686,294 111,931 290,608 402,539 82,949 82,949 99,094 130,315 229,409
i)
Investments quoted outside Malaysia last year represented the Groups interest in Ashton Mining Limited (Ashton), which was disposed of in October 2000. The Groups share of the results of Ashton has been taken up to the date of disposal based on its quarterly announcements prepared in accordance with approved Australian Accounting Standards. Unquoted investments include an investment of RM24.846 million (2000 RM24.846 million) in Gas Malaysia Sendirian Berhad (Gas Malaysia), a company in which a subsidiary holds a 55% shareholding. Although Gas Malaysia is a subsidiary under the Companies Act, 1965, the Group does not have the power to govern its financial and operating policies due to certain restrictions contained in the Memorandum and Articles of Association of that company. Due to the above circumstances, Gas Malaysia has been treated as an associate on the basis of the Groups 41.8% effective interest.
ii)
iii)
The preliminary calculation of the goodwill on acquisition of Malakoff Berhad (Malakoff) was based on the net book value of net assets of Malakoff at the date of acquisition of the original 22.7% (31 October 2000). The fair value review is expected to be completed by 31 January 2002. Details of the Groups associates are shown in Note 30 to the financial statements.
iv)
56
5.
OTHER INVESTMENTS Group 2001 2000 RM000 RM000 Shares quoted in Malaysia Shares quoted outside Malaysia Unquoted shares 255,289 100,099 3,697 359,085 Market value of quoted investments: Shares quoted in Malaysia Shares quoted outside Malaysia 603,102 155,184 758,286 640,027 234,838 874,865 255,289 100,099 3,697 359,085 Company 2001 2000 RM000 RM000 2,000 2,000 2,000 2,000
6.
INTER COMPANY RECEIVABLES AND P
AYABLES Group 2001 2000 RM000 RM000 Company 2001 2000 RM000 RM000
Receivables Amount due from subsidiaries Amount due from associates
19,746 19,746
47,311 47,311
384,844 17,654 402,498
253,793 16,728 270,521
Payables Amount due to subsidiaries
168,996
189,963
The amounts due are non-trade in nature, unsecured, interest free (except for shareholders advances of RM17.379 million (2000 RM16.278 million) to Berjuntai Tin Dredging Berhad (Berjuntai) which bear interest at 1.5% above the base lending rate of Bumiputra Commerce Bank Berhad and are not repayable during the next twelve months except in so far as such repayment will not adversely affect the ability of the respective companies to meet their liabilities when due. The shareholders advances to Berjuntai are secured via a debenture by way of a first fixed and floating charge over all the present and future properties, assets and undertakings of Berjuntai.
57
7.
OTHER ASSETS Group 2001 2000 RM000 RM000 (a) Mining exploration expenditure Cost Provision: At 1 Februar y Charge for the year Written off At 31 January Company 2001 2000 RM000 RM000
44,670 41,649 3,040 (19) 44,670
41,649 102,789 6,386 (67,526) 41,649
42,221 39,200 3,040 (19) 42,221
39,200 100,340 6,386 (67,526) 39,200
(b)
Deferred expenditure Preliminary and pre-operating expenses Amounts expensed
19,579 (19,579)
19,579 (18,620) 959
(c)
Interest equalisation account Cost incurred Accumulated amortisation Written off (Note 21)
71,261 (2,804) (68,457)
58,583 (2,186) (56,397)
(d)
Interest in mineral properties
1,161
41,878
(e)
Foreign currency deposits earmarked for foreign projects
36,867
14,154
Total other assets
1,161
79,704
14,154
8.
INVENTORIES Group 2001 2000 RM000 RM000 Minerals Stores and spares Raw materials Work-in-progress Manufactured inventories 3,743 3,364 8,461 6,959 2,720 25,247 7,916 14,489 1,652 5,066 2,132 31,255 Company 2001 2000 RM000 RM000
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9.
TRADE AND OTHER RECEIVABLES Group 2001 2000 RM000 RM000 Trade receivables Amount due from contract customers Other receivables, deposits and prepayments 49,109 4,669 283,844 337,622 61,600 5,998 49,758 117,356 Company 2001 2000 RM000 RM000 204,955 204,955 8,899 8,899
Included in other receivables, deposits and prepayments is the RM190 million (2000 Nil) deposit paid for the proposed acquisition of 50.1% of Pelabuhan Tanjung Pelepas Sendirian Berhad and, in the Group, RM77 million of overseas tax witheld from the proceeds from the sale of Ashton. Amount due from contract customers Group 2001 2000 RM000 RM000 Aggregate costs incurred to date Add: Attributable profit Less: Provision for foreseeable losses 69,973 19,306 (1,183) 88,096 (84,413) 3,683 986 4,669 Progress billings receivable Included in progress billings receivable are retentions amounting to RM3,300,000 (2000 RM5,267,000). 69,842 5,894 (1,037) 74,699 (69,935) 4,764 1,234 5,998
Less: Progress billings
Transfer to amount due to contract customers (Note 11)
10. CASH AND CASH EQUIVALENTS Group 2001 2000 RM000 RM000 Deposits are placed with: Licensed banks Finance companies Other corporations Company 2001 2000 RM000 RM000
629,395 11,341 161,960 802,696 3,596 806,292
58,773 306,136 254,235 619,144 9,366 628,510
109,343 258,686 368,029 1,241 369,270
15,000 10,521 189,896 215,417 944 216,361
Cash and bank balances
59
11. TRADE AND OTHER P AYABLES Group 2001 2000 RM000 RM000 Trade payables Other payables and accrued expenses Transfer from amount due from contract customers (Note 9) 31,249 145,008 986 177,243 40,087 95,081 1,234 136,402 Company 2001 2000 RM000 RM000 16,649 16,649 9,081 9,081
Other payables in the Group include a provision of RM77 million equivalent to the overseas tax witheld discussed in Note 9. 12. PROVISIONS Group 2001 2000 RM000 RM000 Provision for corporate guarantee for an associate (Note 25) 13. BORROWINGS Group 2001 2000 RM000 RM000 Current Term and bridging loans unsecured Overdrafts secured Other borrowings unsecured 450,566 3,017 453,583 Non-current Long term loans secured unsecured 1,600 1,216 14,540 17,356 Company 2001 2000 RM000 RM000 450,000 450,000 39,000 Company 2001 2000 RM000 RM000
103,065 103,065
103,065 1,600 104,665 122,021
450,000
Total borrowings Terms and debt repayment schedule i)
556,648
The unsecured bank overdrafts of the Group carry interest rates which vary according to prevailing base lending rates or interbank offer rates. Interest rates charged during the year ranged from 1 2% above the prevailing base lending rates (BLR) (2000 1% above BLR). The unsecured loans of the Group and Company bear interest mainly at 4.05% (2000 7.25% and 9.55%) per annum.
ii)
60
13. BORROWINGS (CONTD) iii) The secured term loan is secured by a fixed and floating charge over all of the assets amounting to RM301,790,000 (2000 RM305,776,000) and assignment of relevant contracts of a subsidiary company and bears interest at rates between 8.04% and 8.63% (2000 7.10% and 9.80%) per annum and is due for repayment as follows: 2001 RM000 Analysis of repayment: Within 1 year From 1 to 2 years From 2 to 5 years After 5 years 2000 RM000
103,065 103,065
103,065 103,065
14. SHARE CAPITAL Group and Company 2001 2000 RM000 RM000 Authorised 1,000,000,000 ordinary shares of RM0.10 each Issued and fully paid 836,139,210 ordinary shares of RM0.10 each
100,000
100,000
83,614
83,614
15. RESERVES Group 2001 2000 RM000 RM000 Non distributable Share premium Revaluation reserves 487,129 30,139 487,129 30,139 487,129 487,129 Company 2001 2000 RM000 RM000
Capital reserves Transfer from revenue reserves
194,959 10,791 205,750
194,959 194,959
211,963 211,963
211,963 211,963
Total non distributable reserves Distributable Capital reserves At 1 February Transfer from revenue reserves At 31 January
723,018
712,227
699,092
699,092
850,823 68,679 919,502
683,157 167,666 850,823
154,362 88,712 243,074
154,362 154,362
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15. RESERVES (CONTD) Group 2001 2000 RM000 RM000 Revenue reserves At 1 February As previously stated Prior year adjustment (Note 21) As restated Net profit for the year Appropriations: Transfer to distributable capital reserves Transfer to non-distributable capital reserves Dividends (Note 23) Exchange adjustments on translation : Foreign subsidiary companies Profit retained in foreign associates Reversed on disposal in 2001 Foreign currency borrowings At 31 January Company 2001 2000 RM000 RM000
1,462 (68,457) (66,995) 400,012
91,555 (56,397) 35,158 104,462
96,822 96,822 207,986
124,967 124,967 10,153
(68,679) (10,791) (58,529) 5,765 (22,679) 178,104
(167,666) (43,145) (228) (423) 4,847 (66,995)
(88,712) (58,529) 157,567
(43,145) 4,847 96,822
Total distributable reserves
1,097,606
783,828
400,641
251,184
Total reserves
1,820,624
1,496,055
1,099,733
950,276
The transfer to distributable capital reserves from revenue reserves represents the exceptional items including the balance of exceptional and abnormal items in the previous three years (2000 profit on sale of investments and properties) net of minority interest where applicable. The transfer to non-distributable capital reserves from revenue reserves is in respect of a bonus issue by a subsidiary. Subject to the agreement of Inland Revenue Board, the Section 108 credit available under the Income Tax Act, 1967 is sufficient to pay net dividends of RM10.5 million out of the distributable reserves of the Company. In addition, the Company has tax exempt income available to frank tax exempt dividends of RM40.3 million before the proposed final and special dividends for the year.
16. MINORITY SHAREHOLDERS INTERESTS This consists of minority shareholders proportion of share capital and reserves of subsidiaries.
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17. DEFERRED TAXATION Group 2001 2000 RM000 RM000 At 1 Februar y Transfer to income statement At 31 January 1,922 4,071 5,993 1,922 1,922 Company 2001 2000 RM000 RM000
Deferred tax is principally in respect of timing differences on fixed assets. Subject to the agreement of the relevant tax authorities, certain subsidiaries have tax losses and capital allowances available for carry forward of RM188 million and RM116 million respectively (2000 RM173 million and RM105 million respectively) which have not been included in the computation of deferred taxation.
18. OPERATING PROFIT/(LOSS) Group 2001 2000 RM000 RM000 i) Operating profit/(loss) is arrived at after charging/(crediting): Directors remuneration: Fees Salaries and other emoluments Estimated money value of benefits Depreciation and depletion Deferred cost expensed Rent of land and buildings Auditors remuneration: Malaysia Overseas Hire of plant and machinery Provision for mining exploration expenditure Foreseeable losses and claims Bad debts Gross dividend income (Note (ii)) Rental income (Gain)/Loss on disposal of property, plant and equipment Realised (gain)/loss on foreign exchange Unrealised loss on foreign exchange Company 2001 2000 RM000 RM000
408 1,118 100 17,099 959 4,575 378 171 794 3,040 7,273 6,798 (28,549) (4,766) (1,107) (809) 4,956
278 1,139 124 13,168 332 4,256 397 132 2,465 6,386 679 18,253 (23,970) (2,798) (1,829) 8,966
252 1,118 100 661 1,514 60 119 3,040 (74,924) (157) (977) (780)
44 1,139 124 1,059 1,462 60 6,386 (33,737) (111) 834 8,966
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18. OPERATING PROFIT/(LOSS) (CONTD) Group 2001 2000 RM000 RM000 ii) Gross dividend income is from: Investments quoted in Malaysia Investments quoted outside Malaysia Associates: Quoted in Malaysia Quoted outside Malaysia Subsidiaries: Quoted in Malaysia Unquoted 27,078 1,471 28,549 19,693 4,277 23,970 5,054 6,774 1,893 61,203 74,924 4,774 3,653 1,892 23,418 33,737 Company 2001 2000 RM000 RM000
iii)
Exceptional items (nil tax effect, except where stated) comprise: Bad debts in respect of loans to associates/(reversed) Gain on sale of investments Gain on sale of associates, net of overseas tax Goodwill written off Investment written down Interest in mineral properties written down Projects (recovered)/written of f Provision for corporate guarantee
28,893 (20,864) (407,192) 86,165 (668) 39,000 (274,666)
(30,082) (245,845) (447) 1,163 10,295 33,990 13,045 (217,881)
(20,864) (119,609) (668) (141,141)
(30,082) 30,489 13,045 13,452
iv)
Share of abnormal items of associates comprises: Group 2001 2000 RM000 RM000 Provision against carrying value of investments/assets 70,889
v)
Professional fees The profit for the year is stated after charging Nil (2000 RM0.858 million) for the Group and Company for professional services rendered by firms in which two Directors are partners.
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19. EMPLOYEE INFORMATION Group 2001 2000 RM000 RM000 Staff costs 59,377 59,062 Company 2001 2000 RM000 RM000 6,874 6,512
The number of employees of the Group and of the Company (including Directors) at the end of the year was 1,450 (2000 1,363) and 150 (2000 141) respectively.
20. TAX EXPENSE Group 2001 2000 RM000 RM000 Current tax expense Malaysian current prior year Deferred tax expense Malaysian current Company 2001 2000 RM000 RM000
11,170 (2,674)
(3,251) 126
3,332 (2,924)
4,071 12,567
(3,125) 21,098 17,973
408 408
Tax expense on share of profit of associates
48,750 61,317
The Groups effective tax rate is higher than the prima facie tax rate as the tax charge relates to tax on profits of certain subsidiaries which cannot be set-off against losses of other subsidiaries for tax purposes as Group relief is not available. The Companys effective tax rate is lower than the prima facie tax rate due to certain income not being subject to income tax. 21. PRIOR YEAR ADJUSTMENT GROUP The prior year adjustment arose from a change in policy in the treatment of post-construction interest on privatised projects applied retrospectively such that the cumulative impact to 31 January 2001 has been accounted for as a prior year adjustment and the relevant comparative figures restated accordingly. The Directors decided to adopt International Accounting Standards No.23 (IAS 23), Capitalisation of Borrowing Costs, and change the accounting policy in respect of post-construction interest ie. now expensed as incurred. In previous years, post-construction interest was deferred via an Interest Equalisation Account which was amortised to each balance sheet date in accordance with the following formula: Cumulative revenue to date Projected total revenue of the project x Projected total interest to be incurred post-construction
The effect of the change in the Group financial statements is a decrease in profit before tax of RM7.09 million and RM12.06 million for the year ended 31 January 2001 and 31 January 2000, respectively.
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22. EARNINGS PER ORDINARY SHARE GROUP Basic earnings per shar e The calculation of basic earnings per share is based on the net profit attributable to ordinary shareholders of RM400.01 million (2000 RM104.46 million) and the number of ordinary shares outstanding during the year of 836.139 million ordinary shares (2000 836.139 million ordinary shares). A pre-exceptional and abnormal calculation based on the net profit attributable to ordinary shareholders but before exceptional and abnormal items of RM92.96 million (2000 RM35.65 million) is provided for comparative purposes. 23. DIVIDENDS Ordinary Interim: 1.0 sen per share, tax exempt (2000 1.0 sen per share, tax exempt) Final proposed: 3.0 sen per share, tax exempt (2000 3.0 sen per share, less 28% tax) Special proposed: 3.0 sen per share, tax exempt (2000 2.0 sen per share, tax exempt) Group and Company 2001 2000 RM000 RM000 8,361 25,084 25,084 58,529 24. SEGMENTAL INFORMATION Segmental information is presented in respect of the Groups business and geographical segments. Inter-segment pricing is determined based on negotiated terms. Revenue 2001 2000 RM000 RM000 Mining: Malaysia Australia Exploration: Malaysia Indonesia Infrastructure and utilities Engineering Investments and deposits Manufacturing and processing Others Interest expense 711 234,121 342,177 193,817 250,827 2,549 675 290,366 174,138 227,115 317,307 7,137 Gross assets 2001 2000 RM000 RM000 34,870 61,491 705 1,191,960 112,078 1,161,844 133,601 270,862 2,967,411 36,309 326,482 650 23,988 405,236 131,654 1,057,970 130,261 34,136 2,146,686 Profit/(loss) before tax 2001 2000 RM000 RM000 (1,937) 44,981 (3,040) 75,890 (4,247) 329,264 10,522 (15,270) (16,208) 419,955 (1,789) (52,276) (6,386) 39,757 (17,415) 282,287 11,522 (35,369) (16,086) 204,245 8,361 18,061 16,723 43,145
1,024,202 1,016,738 Groups share of turnover of associates (Note (i))
(773,440) 250,762
(740,787) 275,951
2,967,411
2,146,686
419,955
204,245
(i) (ii)
The revenue of associates represents the Groups share of the revenue as disclosed in the financial statements of the associates. All geographical segments are Malaysian based unless otherwise indicated.
66
25. CONTINGENT LIABILITIES UNSECURED Group 2001 2000 RM000 RM000 Guarantees for bank facilities extended to associates/joint venture Company 2001 2000 RM000 RM000
35,213
51,300
In addition, the Group and Company have contingent liabilities which are not readily ascertainable in respect of filling and levelling conditions on the Groups and Companys mining leases and relating to the deviation of the Kinta River. There were similar contingent liabilities at 31 January 2000 for the Group and Company. Arising from a change in foreign tax legislation, a Group company may be subjected to a capital gains tax liability of approximately RM230 million in respect of a share exchange completed in 1998. No provision has been made in the financial statements as the Board is of the opinion that the effect of the legislation is dependent on the operation of the relevant double tax agreements. The Group is obtaining further legal and tax advice on this matter. Suasa Unik (M) Sendirian Berhad (Suasa Unik), an associate, defaulted on its loans from its lending financial institutions. Under a condition of the loan agreement with the financial institutions, the shareholders of Suasa Unik provided a proportionate corporate guarantee. Tronohs share of the corporate guarantee of approximately RM39 million has been provided for following the closure of Suasa Unik on 8 February 2001.
26. COMMITMENTS Group 2001 2000 RM000 RM000 Capital commitments: Property, plant and equipment Authorised but not contracted for Contracted but not provided for in the financial statements Company 2001 2000 RM000 RM000
24,245 2,742 26,987
25,218 8,089 33,307
2,163 2,163
16,820 10 16,830
Investments: Contracted but not provided for in the financial statements
1,646,000 1,646,000
1,646,000 1,646,000
1,672,987
33,307
1,648,163
16,830
67
27. RELATED PARTIES Identity of related parties The Group has a related party relationship with its substantial shareholders, associates, joint ventures and with its Directors and key management personnel and the close members of their families. Related party transactions Significant related party transactions other than those disclosed elsewhere in the financial statements are as follows: Group Company 2001 2000 2001 2000 RM000 RM000 RM000 RM000 Major shareholder Rental payable to PNB 2,182 2,449 1,237 1,294 Associates Interest received (1,400) (3,151) (1,400) (3,151) Management fee payable 229 Joint venture Progress billing receivable (8,486) (10,341)
These transactions have been entered into in the normal course of business and have been established under negotiated terms.
28. EVENT SUBSEQUENT TO THE BALANCE SHEET DATE Suasa Unik ceased operations on 8 February 2001. The amounts due from it and the proportionate corporate guarantee given on its behalf have been provided for.
29. COMPARATIVE FIGURES Following the adoption of MASB Standards in the preparation of this set of financial statements, the presentation and classification of certain items in the financial statements have been amended. Accordingly, comparative amounts for those items have been reclassified and/or expanded to ensure comparability with the cur rent financial year. Comparatives have also been amended to reflect the effect of the prior year adjustment discussed in Note 21 and the change in treatment of joint ventures (Note 1(d)).
68
30. COMPANIES IN THE GROUP The principal activities of the companies in the Group, their places of incorporation and the interest of the Group are shown below: Subsidiaries Issued and paid-up capital at 31.1.2001 Group s effective interest 2001 2000 (%) (%) 100 100
Name of company
Country of incorporation
Principal activities during the year
Anglo-Oriental (Annuities) Sendirian Berhad
Malaysia
572,642,318 shares of RM1 each
Investment holding
Anglo-Oriental (Malaya) Malaysia Sendirian Berhad Anglo-Oriental (Malaya) Malaysia Trustees Sendirian Berhad ** Anglo-Oriental (Nominees) Australia Pty Limited Australia
2,142,857 shares 100 of RM1 each 857 shares of RM1 each 100
100
Property and investment holding Trust management
100
70,400,001 shares and 43,480,000 cumulative redeemable preference shares with no par value 17,997 shares of NLG 1,000 each 324,515,344 shares with no par value
100
100
Investment holding
Golden Solitaire (Australia) B. V. Hillgrove Gold NL (a 52.3% subsidiary holds 61.9% of this company) Kilang Papan Bukit Indah Sendirian Berhad Konsortium Lebuh Raya Butterworth Kulim (KLBK) Sendirian Berhad Kramat Tin Dredging Berhad Labohan Dagang Galian Sendirian Berhad
Netherlands
68.2
68.2
Investment holding
Australia
32.4
32.4
Gold and antimony mining
Malaysia
200,003 shares of RM1 each
100
100
Rental of sawmill
Malaysia
5,000,000 shares 100 of RM1 each
100
Construction and operation of privatised highway
Malaysia
3,960,000 shares 52.9 of RM1 each 2 shares of RM1 each 100
52.9
Tin mining operations (winding down) Investment holding
Malaysia
100
69
30. COMPANIES IN THE GROUP (CONTD) Subsidiaries Issued and paid-up capital at 31.1.2001 Group s effective interest 2001 2000 (%) (%) 100 100
Name of company
** Malaysia Mining Corporation Australia Pty Limited MMC Engineering Group Berhad
Australia
1,345,002 shares with no par value
Australian representative office of MMC Investment holding in engineering, construction and manufacturing Engineering
Malaysia
75
75
MMC Engineering Services Sendirian Berhad MMC Kinta Sendirian Berhad (a 75% owned subsidiary holds 60% of this company) MMC Oil & Gas Engineering Sendirian Berhad MMC Power Sendirian Berhad
Malaysia
35,000,000 shares of RM1 each 200,000 shares of RM1 each
75
75
Malaysia
45
45
Civil and construction works
Malaysia
75
75
Specialised engineering services Erection of power transmission lines and maintenance of electrical substations Investment holding
Malaysia
75
75
MMC Shapadu (Holdings) Sendirian Berhad
Malaysia
25,255,000 shares of RM 1 each 9,720,000 shares of RM1each
76
76
MMC Metal Industries Malaysia Sendirian Berhad (a 75% subsidiary holds 75.8% of this company) Singapore Steel Singapore Pte. Ltd. (a 75% subsidiary holds 75.8% of this company)
56.9
56.9
Manufacture of steel castings
2,500,000 shares of SGD1 each
56.9
56.9
Trading in castings and forgings
70
30. COMPANIES IN THE GROUP (CONTD) Subsidiaries Issued and paid-up capital at 31.1.2001 Group s effective interest 2001 2000 (%) (%) 56.9 56.9
Name of company
MMI Precision Malaysia Sendirian Berhad (a 75% subsidiary holds 75.8% of this company) MMCAK Sendirian Berhad (2 shares) Pernas Charter Management Sendirian Berhad Pesiaran Properties Sendirian Berhad Seginiaga Rubber Industries Sendirian Berhad Tepat Teknik Sendirian Berhad (a 75% owned subsidiary holds 70% of this company) Tepat Teknik (Kejuruteraan) Sendirian Berhad (a 75% owned subsidiary holds 70% of this company) Tepat Teknik (Sarawak) Sendirian Berhad (a 75% owned subsidiary holds 70% of this company) @ Timah Dermawan Sendirian Berhad Malaysia
Manufacture of precision castings
2 shares of RM1 each
41.3
41.3
Civil construction works
Malaysia
1,000,000 shares of RM1 each 2 shares of RM1 each 12,550,002 shares of RM1 each 6,645,000 shares of RM1 each
100
100
Mine management
Malaysia
100
100
Property investment
Malaysia
66.1
66.1
Manufacture of weather strips
Malaysia
52.5
52.5
Construction and fabrication
Malaysia
52.5
52.5
Malaysia
52.5
52.5
Malaysia
10,000,000 shares of RM1 each 470,000 shares of RM1 each
55.7
55.7
Tin mining operations
Timah Securities Berhad
Malaysia
100
100
Property investment
71
30. COMPANIES IN THE GROUP (CONTD) Subsidiaries Issued and paid-up capital at 31.1.2001 Group s effective interest 2001 2000 (%) (%) 100 100
Name of company
Tronoh Holdings (Selangor) Sendirian Berhad Tronoh Mines Malaysia Berhad
Malaysia
Property investment
Malaysia
52.3
52.3
Investment holding and tin mining operations (reduced scale)
i)
The financial statements of all the above subsidiaries used for inclusion in the consolidated financial statements are those for the year to 31 January 2001. The keys to the symbols used against the subsidiaries are as follows: * Not audited by KPMG. ** Audited by overseas KPMG firms. @ Audited by KPMG Desa Megat & Co, an associated firm of KPMG.
ii)
Associates Name of company (Particulars of issued share capital fully paid shares of RM1 each, unless stated otherwise)
Group s effective interest 2001 2000 (%) (%) 49 49
Accounting date for inclusion of company results
Ajil Minerals Sendirian Berhad (1.0 million shares) Ashton Mining Limited (338.9 million shares with no par value) Ashton-MMC Pte Limited (5 shares of SGD1 each) Berjuntai Tin Dredging Berhad (30.5 million shares)
Malaysia
= Year to Ilmenite mining 31.12.2000
Australia
47.2
= Period to @30.9.2000
Mining of precious metals and minerals and exploration
Singapore
40
40
= Year to Investment holding 31.12.2000 * Half-year to Tin dredging * 30.4.2000 operations + Half-year to (winding down) 31.10.2000
Malaysia
28.6
28.6
72
30. COMPANIES IN THE GROUP (CONTD) Associates Name of company (Particulars of issued share capital fully paid shares of RM1 each, unless stated otherwise)
Group s effective interest 2001 2000 (%) (%) 41.8 41.8
Gas Malaysia Sendirian Berhad (42,800 shares of RM1,000 each) Kuala Langat Mining Sendirian Berhad (60 million shares) Malakoff Berhad (278.144 million shares) Malaysia Smelting Corporation Berhad (75 million shares) Mining and General Management Company Limited (10,000 shares of Baht 100 each) MMC - GTM Bina Sama Sendirian Berhad (5 million shares) MMC-LDAH Concrete Sendirian Berhad (2 shares) M.O.S.T. Power JV Sendirian Berhad (0.25 million shares) PKB-MMC Sendirian Berhad (3.8 million shares) PT Cempaka Mining Services (Formerly known as PT Malaysia Mining Corporation Indonesia) (250,000 shares of RP1,829) Suasa Unik (M) Sendirian Berhad (30.2 million shares)
Malaysia
= Year to 31.1.2001
Construction and operation of natural gas distribution system
Malaysia
32.6
32.6
= Year to Tin dredging 31.12.2000 operations (winding down) @Quarter to Power generation 30.11.2000 = Year to Tin smelting 31.12.2000 + Year to Mine management 31.12.2000
Malaysia Malaysia
22.3 38.2
38.2
Thailand
35
35
Malaysia
37.5
37.5
= Year to Highway construction 31.12.2000 = Year to 31.1.2000 Concrete batching
Malaysia
33.7
33.7
Malaysia
22.5
22.5
+ Period to Erection of power 31.12.2000 transmission lines = Year to Tribute mining 31.12.2000 = Period to Providing geology 31.12.2000 survey/research and general mining services
Malaysia
49
49
Indonesia
40
40
Malaysia
26.2
26.2
= Year to 31.1.2000
Manufacture of ductile iron pipes
73
30. COMPANIES IN THE GROUP (CONTD) Associates Name of company (Particulars of issued share capital fully paid shares of RM1 each, unless stated otherwise)
Group s effective interest 2001 2000 (%) (%) 40.0 40.0
Taldy-Bulak Mining Corporation (100,000 shares of US$1 each)
Kyrgyz Republic
+ Period to Exploration and 31.12.2000 mining of metals
The keys to the symbols used against the accounting date are as follows: = Audited financial statements. ** Audited financial statements for the financial year less the previous half-yearly unaudited interim financial statements. + Unaudited financial statements. @ Quarterly interim announcement.
Principal investments Groups effective interest 2001 2000 (%) (%) 5.3 5.3 Principal activities during the year
Name of company
Sime Darby Berhad
Plantations, trading, manufacturing, financial services and property development Gold mining and related activities Investment holding with interests in the oil and gas industry
Homestake Mining Corporation CityView Energy Corporation Limited
3.1 18.3
3.1 29.3
74
30. COMPANIES IN THE GROUP (CONTD) Inactive subsidiaries Name of company Country of incorporation Groups effective interest 2001 2000 (%) (%) 75 100 100 75.7 100 100 100 100 75 52.3 100 100 100 90 100 100 100 100 100 100 75 75 100 100 75.7 100 100 100 100 75 52.3 100 100 100 90 100 100 100 100 100 100 100
* * * * * *
* *
Alam Dergahayu (Johor) Sendirian Berhad Amalan Rantau (M) Sendirian Berhad Anglo-Oriental Nominees Sendirian Berhad Associated Mines (Malaya) Sendirian Berhad Bidor Malaya Tin Sendirian Berhad Bracken Services Limited Dana Vision Sendirian Berhad D.V. Research Sendirian Berhad Eastern Waste Management Sendirian Berhad Enzymas Naturales Sendirian Berhad London Tin (Malaysia) Berhad MMC Aviation Sendirian Berhad MMC Belgium NV MMC EG Co. Ltd MMC Exploration & Production (Thailand) Ltd MMC Exploration & Production (BV) MMC Exploration & Production (Philippines) MMC Frigstad Offshore Sendirian Berhad MMC Japan Limited MMC Marketing Sendirian Berhad MMC Transport Engineering Sendirian Berhad (formerly known as MMC Mining and Engineering Consultants Sendirian Berhad) MMC Ports Sendirian Berhad MMC Resources Corporation MMC (US) Inc MMC Utilities Berhad MMC (Vietnam) Holdings Sendirian Berhad MMC Engineering & Construction Sendirian Berhad (formerly known as MMC Water Resources Sendirian Berhad) More Furniture Ideas (M) Sendirian Berhad Projek Lebuhraya Timur Sendirian Berhad Sumbangan Rantau (M) Sendirian Berhad Southern Kinta Consolidated Limited Southern Kinta Consolidated (M) Berhad Southern Malayan Tin Dredging (M) Berhad MMC Defence Sendirian Berhad (formerly known as Tepat Teknik (Urusan) Sendirian Berhad) Wangsa Struktur Sendirian Berhad MMI Foundry Sendirian Berhad
Malaysia Malaysia Malaysia Malaysia Malaysia England Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Belgium Mongolia Thailand Netherlands Philippines Malaysia Japan Malaysia Malaysia
Malaysia Canada USA Malaysia Malaysia Malaysia
100 100 100 100 75
100 93.1 100 100 100 100
Malaysia Malaysia Malaysia England Malaysia Malaysia Malaysia
100 100 100 100 100 100 75
100 100 100 100 100 100 100
Malaysia Malaysia
65 56.9
65 56.9
The key to the symbol used against the subsidiaries is as follows: * Not audited by KPMG.
75
MALAYSIA MINING CORPORATION BERHAD

(Incorporated in Malaysia)
(30245-H)
Proxy Form
No. of shares held
I/We,
(block letters)
of being a member/members of Malaysia Mining Corporation Berhad hereby appoint
of or failing him, the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at Annual General Meeting of the Company to be held on 27 July 2001 and at any adjournments thereof, on the following resolutions referred to in the notice of the Annual General Meeting:
No. 1. 2. 3.
Resolutions Adoption of Report and Accounts Declaration of Dividend Re-election of Directors: a) b) c) d) e) f) Tan Sri Ibrahim Menudin Datuk Ab. Sukor Shahar Dato Mohd Desa Pachi Dato Syed Abdul Jabbar Syed Hassan Dato Hilmi bin Mohd Noor Dr. Aziuddin bin Ahmad
For
Against
4. 5. 6.
Re-appointment of Tan Sri Dato Thong Yaw Hong Directors fees Re-appointment of Auditors
Dated:
Notes: 1. 2.
Signature:
This proxy form must be deposited at the Registrars office at Pernas Charter Management Sendirian Berhad, 32nd Floor, Menara PNB, 201A Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia not less than forty-eight (48) hours before the meeting. In the case of a corporation, this proxy form should be under common seal or under the hand of an officer or attorney duly authorised on its behalf. A proxy need not be a member of the Company and a member may appoint any person to be the proxy. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. A corporation may, by resolution of its directors or other governing body, if it is a member of the Company, authorise such person as it thinks fit to act as its representative and a person so authorised shall be entitled to exercise the same powers on behalf of the corporation as the corporation could exercise if it were an individual member of the Company. In the case of joint holders, the signature of any one of them will suffice. Unless voting instructions are indicated in the spaces provided above, the proxy may vote as he/she thinks fit.
3.
4. 5.
FOLD HERE
STAMP
To: The Registrar Malaysia Mining Corporation Berhad 32nd Floor, Menara PNB 201A Jalan Tun Razak 50400 Kuala Lumpur Malaysia
(30245-H)
FOLD HERE

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A N N U A L

MALAYSIA MINING CORPORATION BERHAD

By Order of the Board

Stock Exchange Listing

2000 204.2 104.5 104.5 2,146.7 1,579.7 1,457.8

1999 38.6 5.8 5.8 2,170.7 1,514.2 1,706.3

1998 (229.9) (186.2) (186.2) 2,421.8 1,452.6 2,421.5

1997 89.2 41.1 102.4 2,658.4 1,756.3 3,121.1

22.1 47.8 7.0 228.0

12.9 12.5 6.0 189.0

2.5 0.7 4.0 181.0

(15.8) (22.3) 5.0 174.0

5.1 12.2 4.0 210.0

(All amounts in RM thousand)

1998 1997 1999 2000 2001 1997

PROFIT BEFORE TAX

TOTAL ATTRIBUTABLE PROFIT

NET ASSET PER SHARE

Members of the Committee

Audit Committee Report

Internal Audit Activities Report

Dato Syed Chairman

Abdul Jabbar Syed Hassan

Kuala Lumpur 30 May 2001

MINING & EXPLORATION

Inside Adit No. 2 at Taldy-Bulak Gold Project.

Superstructure: Construction work in progress Menara Great Eastern Life project.

Installation of embedded part of gas turbine block 1 in progress

Civil and building works at Segari power plant in Perak.

HEAVY ENGINEERING FABRICATION

INFRASTRUCTURE & UTILITIES

MSCs Electrolytic Grade High Purity Tin (Minimum 99.99% Sn)

Weatherstrip joining process.

MS ISO 9002 Certification Award to Gas Malaysia Sendirian Berhad.

Permodalan Nasional Berhad Mayban Nominees (Tempatan) Sendirian Berhad

Employees Provident Fund Boar d Mayban Nominees (Asing) Sendirian Berhad

Cartaban Nominees (Asing) Sendirian Berhad

Citicorp Nominees (Asing) Sendirian Berhad

Cartaban Nominees (Asing) Sendirian Berhad

HSBC Nominees (Asing) Sendirian Berhad

Amanah Raya Nominees (Tempatan) Sendirian Berhad

Amanah Saham Wawasan 2020

12. Rothputra Nominees (Tempatan) Sendirian Berhad

13. HSBC Nominees (Tempatan) Sendirian Berhad

14. Mayban Nominees (Tempatan) Sendirian Berhad

15. Mayban Nominees (Tempatan) Sendirian Berhad

16. Mayban Nominees (Tempatan) Sendirian Berhad

17. Citicorp Nominees (Asing) Sendirian Berhad

18. Mayban Nominees (Tempatan) Sendirian Berhad

19. BBMB Securities Nominees (Tempatan) Sendirian Berhad

20. OSK Nominees (Asing) Sendirian Berhad

23. Lembaga Kemajuan Tanah Persekutuan (FELDA)

24. Universal Trustee (Malaysia) Berhad

25. ABN Amro Nominees (Tempatan) Sendirian Berhad

26. Citicorp Nominees (Asing) Sendirian Berhad

29. HSBC Nominees (Asing) Sendirian Berhad

30. Mayfin Nominees (Tempatan) Sendirian Berhad

HOLDINGS OF ISSUED SHARE CAPITAL AS AT 8 JUNE 2001

No. of Shareholders 1,178 10,216 1,552 200 3 13,149

% of Shareholders 8.96 77.70 11.80 1.52 0.02 100.00