Annual 19 99 - bursa.listedcompany.combursa.listedcompany.com › misc › ar1999.pdf · • Board of Directors– Dato’ Mohammed Azlan Hashim (Executive Chairman) Datuk Amirsham

Annual Report1999

KLSE

9919

PARTNERING TALENT WITH TECHNOLOGY

Entering a new millennium driven by

technology, KLSE continues its successful

partnership of people with technology.

Our investment in technology is matched by our

human resource development. Our competitive

edge is in the hands of talented people,

developing and managing innovative technology,

in the quest to make the KLSE a modern and

efficient bourse of the new millennium.

annual report

Subsidiary And Related Companies 38

Calendar Of Events 52

Financial Statements 54

KLSE Sub-Committees 88

Monthly High, Low And Closing Indices 90

Volume, Value And Indices 92

New Listings 98

Membership Report 99

KLSE Members 104

Notice Of Annual General Meeting 116

Form Of Proxy /Certificate Of Representation •

Corporate Information 2

Executive Chairman’s Statement 4

Market Report 18

Issues In Focus 21• Year 2000 Compliance

• Capital Adequacy Requirements• Revamp of Listing Requirements

• Informed Investing• Challenges for the Stockmarket

Committee Members 32

Management Team 34

C o n t e n t s

CorporateI n f o r m a t i o n

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K u a l a L u m p u r S t o c k E x c h a n g e

• Committee Members – Dato’ Mohammed Azlan Hashim(Executive Chairman)Chan Guan Seng(Deputy Chairman)Koh Kee TeeDato’ Hwang Sing LueMohaiyani ShamsudinBenny Ng Wu HongDato’ Ranita Mohd HusseinTan Kim LeongAbdul Kadir Hj Md Kassim

• President – Dato’ Mohd Salleh Abdul Majid• Deputy Presidents – Md Nor Ahmad

Ungku A Razak Ungku A Rahman• Company Secretary – Izlan Izhab• Auditors – Messrs Hanafiah Raslan & Mohamad• Tax Consultants – HRM (Tax Services) Sdn Bhd• Bankers – Bumiputra-Commerce Bank Berhad

Hongkong Bank Malaysia BerhadMalayan Banking Berhad

• Registered Office – Kuala Lumpur Stock Exchange14th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-206 7099 Fax: 03-206 3684

Kuala Lumpur Stock Exchange (KLSE) (30632-P)

• Board of Directors – Dato’ Mohammed Azlan Hashim(Executive Chairman)Chan Guan SengKoh Kee TeeDato’ Hwang Sing LueMohaiyani ShamsudinBenny Ng Wu HongDato’ Ranita Mohd HusseinTan Kim LeongAbdul Kadir Hj Md KassimDato’ Mohd Salleh Abdul MajidDato’ Hj Megat Najmuddin Khas

Dato’ Sri Dr Hj Megat KhasMd Nor Ahmad(Alternate director to

Dato’ Mohd Salleh Abdul Majid)

• General Manager – Ungku A Razak Ungku A Rahman• Company Secretaries – Izlan Izhab

Abdul Raihan Mohd Yusof• Auditors – Messrs Hanafiah Raslan & Mohamad• Tax Consultants – HRM (Tax Services) Sdn Bhd• Bankers – Malayan Banking Berhad

Multi-Purpose Bank BerhadSouthern Bank Berhad

• Registered Office – Securities Clearing AutomatedNetwork Services Sdn Bhd

8th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-206 8099 Fax: 03-206 3720

Securities Clearing Automated Network Services Sdn Bhd (SCANS) (109716-D)

• Board of Directors – Dato’ Mohammed Azlan Hashim(Executive Chairman)Datuk Amirsham A AzizChan Guan SengTan Kim LeongDato’ Seri Syed Zainol Anwar

Jamalullail ibni Tuanku Syed Putra Jamalullail

• General Manager – Ungku A Razak Ungku A Rahman• Company Secretaries – Izlan Izhab

Ahmad Aznan Nawawi• Auditors – Messrs Hanafiah Raslan & Mohamad• Tax Consultants – HRM (Tax Services) Sdn Bhd• Bankers – Bumiputra-Commerce Bank Berhad

Malayan Banking BerhadMulti-Purpose Bank Berhad

• Registered Office – Malaysian Central Depository Sdn Bhd6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-206 2099 Fax: 03-206 3719

Malaysian Central Depository Sdn Bhd (MCD) (165570-W)

• Board of Directors – Dato’ Mohammed Azlan Hashim(Chairman)Prof Datuk Abu Bakar Abdul Hamid(Deputy Chairman)Datuk Teh Ghee KokDato’ Mohd Salleh Abdul MajidSyed Jamil Syed JaafarShahzalan AdamMd Nor Ahmad(Alternate director to


• Company Secretaries – Izlan IzhabAbdul Raihan Mohd Yusof

• Auditors – Messrs Hanafiah Raslan & Mohamad• Tax Consultants – HRM (Tax Services) Sdn Bhd• Bankers – Malayan Banking Berhad• Registered Office – KLSE-Bernama Real-Time

Information Services Sdn Bhd8th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-206 8099 Fax: 03-206 3720

KLSE-Bernama Real-Time Information Services Sdn Bhd (KULBER) (152961-H)

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A n n u a l R e p o r t 1999

• Board of Directors – Dato’ Mohammed Azlan Hashim(Chairman)Tan Sri Zulkifli MahmoodMohamad Shuib Abdul GhaniDato’ Hj Megat Najmuddin Khas

Dato’ Sri Dr Hj Megat KhasShanaz Radhiah Zulkifli(Alternate director to

Tan Sri Zulkifli Mahmood)Haji Mustapha Hashim (Alternate director to

Mohamad Shuib Abdul Ghani)

• General Manager – Abdul Nasir Ahmad Daud• Company Secretaries – Izlan Izhab

Abdul Raihan Mohd Yusof• Auditors – Messrs Hanafiah Raslan & Mohamad• Tax Consultants – HRM (Tax Services) Sdn Bhd• Bankers – Malayan Banking Berhad• Registered Office – Malaysian Share Registration

Services Sdn Bhd8th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-206 8099 Fax: 03-206 3720

Malaysian Share Registration Services Sdn Bhd (MSRS) (378993-D)

• Board of Directors – Ramli Ibrahim(Executive Chairman/

Acting Chief Operating Officer)Mohamad Ariff Md YusofSA VanarDato’ Mohammed Azlan HashimDato’ Mohd Salleh Abdul MajidDato’ Ranita Mohd HusseinDato’ Hwang Sing LueMohd Ridzal Mohd SheriffOmar MericanChan Guan Seng(Alternate director to

Dato’ Mohammed Azlan Hashim)Md Nor Ahmad(Alternate director to


• General Manager – S Loganathan• Company Secretaries – Izlan Izhab

Linda Song• Auditors – Arthur Andersen & Co• Tax Consultants – Arthur Andersen HRM Tax Services & Co• Bankers – Malayan Banking Berhad

Bumiputra-Commerce Bank BerhadRHB Bank BerhadHong Leong Bank Berhad

• Registered Office – The Kuala Lumpur Options & Financial Futures Exchange Berhad

10th Floor, Wisma Chase PerdanaOff Jalan SemantanDamansara Heights50490 Kuala LumpurTel: 03-253 8199 Fax: 03-253 5911

The Kuala Lumpur Options & Financial Futures Exchange Bhd (KLOFFE) (261937-H)

• Board of Governors – Dato’ Mohammed Azlan Hashim(Chairman)Chan Guan SengDato’ Ranita Mohd HusseinTan Kim LeongBenny Ng Wu HongDato’ Mohd Salleh Abdul MajidProf Tan Sri Dato’ Dr Syed Jalaluddin

Syed Salim

• Director – Haji Wan Fauzi Wan Mahmood• Deputy Director – Abdullah Naib• Company Secretaries – Izlan Izhab

Abdul Raihan Mohd Yusof• Auditors – Messrs Hanafiah Raslan & Mohamad• Tax Consultants – HRM (Tax Services) Sdn Bhd• Bankers – Bumiputra-Commerce Bank Berhad• Registered Office – Research Institute of Investment

Analysts Malaysia6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-206 7099 Fax: 03-206 3701

Research Institute of Investment Analysts Malaysia (RIIAM) (139281-V)

• Board of Governors – Dato’ Mohammed Azlan Hashim(Chairman)Chan Guan SengAbdul Kadir Hj Md KassimHaji Abdul Karim HarunDato’ N Sadasivan a/l NN PillayDato’ Che Mohd Annuar

Che Mohd SenawiDato’ Syed Danial Syed Ahmad

• Company Secretaries – Izlan IzhabAbdul Raihan Mohd Yusof

• Auditors – Messrs Hanafiah Raslan & Mohamad• Tax Consultants – HRM (Tax Services) Sdn Bhd• Bankers – Malayan Banking Berhad• Registered Office – Yayasan BSKL

14th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-206 7099 Fax: 03-206 3684

Yayasan BSKL (464552-M)

Dato’ Mohammed Azlan HashimExecutive Chairman

THE LAST YEAR OF THIS MILLENNIUM SAW THE KUALA LUMPUR STOCK EXCHANGE TAKING FIRM STEPS

ON STILL SHAKY GROUND.

IF IT TAKES PLAIN SPEAKING TO DESCRIBE THE MAGNITUDE OF THE EXPERIENCE, THEN PLAIN SPEAKING

MUST BE EXCUSED. THERE WERE SO MANY NEEDS TO ADDRESS AT ONCE. THERE WAS THE NEED TO

PROTECT, THE NEED TO REBUILD, THE NEED TO EXPAND AND GROW. AND ALL THESE TO DO, AGAINST

A BACKDROP OF CHALLENGES THAT NEVER SEEMED TO TIRE IN TESTING THE COLLECTIVE WILL AND

RESOLVE OF THIS ECONOMY, AND THIS NATION.

IF INDEED IT WAS A PERIOD OF ANTICIPATING THE WORST TO COME, IT WAS ALSO A PERIOD OF

PREPARING FOR THE BEST THAT HAS YET TO ARRIVE.

This was certainly the belief shared by the 17 new companies being listed on the Kuala Lumpur Stock Exchange (KLSE) for the

period under review, raising RM474 million. As at the end of the financial year, the total number of companies listed on the

KLSE was 745, with 458 companies listed on the Main Board and 287 companies on the Second Board.

As efforts to rebuild the economy, financial system and capital markets continued to be strengthened, the confidence which

once ebbed from the economy, and the stockmarket, flowed to return.

The result was a series of record highs in the market, experienced to date. The highest ever daily volume of 1.6 billion

shares was recorded on 12 July 1999. The highest ever daily trade transactions of over 450,000 trades, was also recorded

on the same day. The highest ever daily order transactions of over 860,000 orders was recorded on 15 July 1999.

The overall investment environment we were operating in, however, was still characterised by recovery and growth. Fortunately,

the effort did not stop short of just looking to rebuild and recover in the aftermath of past challenges.

As we stand together at the cusp of a new Millennium, allow me to ask: Are we truly mindful of the enormity of new

challenges we may yet face in the coming age? Will we be standing on a strong foundation built from tested experience and

knowledge, or are there shifting sands of fear and insecurity beneath our feet, as we usher in the new era?

ExecutiveChairman’s S t a t e m e n t

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Executive Chairman’s Statement

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The new Rules also set significant parameters to

achieve greater clarity, transparency and consistency in

the conduct of business for stockbroking companies.

The key areas include:-

• best business practice

• dealing in securities

• rules on trading

• delivery and settlement

• financial resources and accounting requirements

• audit regulations

• disciplinary actions

To enhance transparency in securities trading,

new disclosure requirements were introduced on

31 August 1998 requiring stockbroking companies to

take all reasonable measures to know their clients –

when these clients deal on behalf of other persons,

to disclose the identity of those other persons.

To reinforce this, stockbroking companies were

no longer permitted to engage in ‘off-market’ dealings,

except only in the form of Direct Business

Transactions (DBTs).

DBTs are to be cleared and settled through SCANS,

and the rules of KLSE and SCANS were amended

to accommodate the clearing and settlement of DBTs.

Thus, in offering the following report, it is as much

a testament of examining our efforts in an eventful

time as it is an agenda for the many objectives

sought ahead.

One such objective sought is Enhancing Market

Transparency.

The recent experience of understanding and learning

of weak spots that need to be strengthened, led to key

amendments made to laws governing the securities

industry – the Securities Industry Act 1983 and the

Securities Industry (Central Depositories) Act 1991.

What this means for the KLSE in its role as market

regulator, is a tremendous opportunity to examine itself

and examine the industry to make it better by enhancing

market transparency. Consequent to these amendments,

changes were made to the rules of the KLSE in

operating its clearing house – Securities Clearing

Automated Network Services Sdn Bhd (SCANS) and its

central depository – Malaysian Central Depository

Sdn Bhd (MCD). Changes were also made to the

KLSE’s rules governing stockbroking companies.

For MCD, it meant an improvement towards the

trading and ownership of securities to be undertaken

by only beneficial owners or authorised nominees.

Securities transfers between accounts have been

restricted to certain approved reasons only; whilst the

deposit of scrip of all prescribed securities is made

mandatory except under certain instances.

On the part of stockbroking companies, the benefits of

strengthening the rules were immediately apparent in

their operations as well as to their clients – investors

at the KLSE.

The KLSE’s new Memorandum & Articles (M&A) and

Rules took effect from 1 July 1999. The new M&A and

Rules incorporated new and enhanced measures

adopted to strengthen the stockbroking industry.

Price limits on securities transacted in DBTs were

imposed on 22 March 1999. The effect was that

stockbroking companies were generally no longer

permitted to transact DBTs where the price limits were

breached, unless in corporate exercises, mergers or

take-overs involving genuine acquisitions or disposal of

shares which satisfy the prescribed criteria.

In continuing the effort to provide professionally

managed and financially strong conduits for investors to

access the stockmarket, prudential standards and

requirements were adopted for stockbroking companies.

KLSE issued standards for the classification and

treatment of interest on non-performing accounts.

Standards were also issued for the provision for bad

and doubtful debts in the financial statements of

stockbroking companies, effective from any financial

year beginning after 1 July 1999. These standards,

under the new Rule 16A for stockbroking companies,

achieves the significant objective of ensuring

consistency in the recognition of interest income on

non-performing accounts and the provision for bad

and doubtful debts.

At another level, to ensure the liquid capital of a

stockbroking company is sufficient to cover its total

measured risks, the Capital Adequacy Requirements

(CAR) was made effective on 28 May 1999. CAR is a

risk-based financial monitoring tool with separately

identifiable measures for the specific risks associated

with a stockbroking company’s business. CAR is

presently running parallel with the existing monitoring

tool, the Minimum Liquid Funds computation.

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To enhance investor confidence and participation in

the stockmarket, dealings between stockbroking

companies and their clients – investors of the KLSE –

were also examined with care. The proposed client

asset protection rules relating to stockbroking

companies’ dealings with clients’ assets and the

mandatory minimum criteria to conduct margin

financing activities, are being finalised for introduction

in the next financial period.

To address the concerns of participants in the conduct

of stockbroking activity, the KLSE approved a standard

remisiers’ agreement, which took effect on 9 February

1999. The agreement, whilst seeking overall equitable

protection for stockbroking companies and remisiers,

also covers the significant areas of:-

• Duties and obligations of remisiers

• Remisiers’ security deposit

• Remisiers’ commission

• Remisiers’ transfer

• Rights of the stockbroking company

• Duties of the stockbroking company


The effort in building a secure and efficient stockmarketis complemented by the task of making such astockmarket attractive for sustained investment and activetrading. Working towards such an objective is part of theduty of the KLSE in Enhancing Corporate Disclosure.

KLSE’s objective in enhancing corporate disclosure wasachieved at many levels – in offering efficient systemsand services and in fine-tuning rules and regulations.

One such service, which makes a significantcontribution in enhancing corporate disclosure, is the

KLSE LINK. As an internet-based, electronic documentmanagement system, the KLSE LINK enhances thecontent, consistency and timeliness of corporateannouncements.

With the KLSE LINK, public listed companies andmerchant banks will have a secure and efficientinfrastructure to submit corporate announcements tothe KLSE. Investors, in turn, will have timely and easyaccess to these announcements via the KLSE web-pageat www.klse.com.my.

In order to achieve wider dissemination ofannouncements, the KLSE LINK supplements theexisting Maklumat Saham (MASA) – the KLSE’s real-time share information system.

A significant part of the corporate announcements nowavailable through the KLSE LINK is the QuarterlyReporting of Financial Statements by Public ListedCompanies. The requirement for quarterly reportingwas announced on 11 March 1999, very much in linewith KLSE’s emphasis for greater corporate disclosurein content and frequency.

Dealers’ StockbrokingDisciplinary Action

Representatives Companies

Struck off 19 —

Suspended and fined 3 —

Fined 14 4

Reprimanded — 2

Total 36 6

Disciplinary Actions On Dealers’ Representatives AndStockbroking Companies During Financial Year Ended30 June 1999

Cases Brought Cases InitiatedForward From During Total Cases Cases

Category Financial Year 1998 Financial Year 1999 Cases Completed Outstanding

Buying-ins/potential short selling 2 124 126 92 34

Alleged defaulters 10 123 133 39 94

Potential misuse of clients’ accounts 56 61 117 42 75

Other complaints of improper conduct against dealers’ representatives 38 50 88 51 37

Complaints of improper conduct against stockbroking companies 59 75 134 89 45

Potential false trading/market rigging/market manipulation / insider trading 3 19 22 6 16

General complaints 14 8 22 19 3

Total 182 460 642 338 304

Status Of Investigation Cases As At 30 June 1999

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Just as the foundation building measures for stockbroking companies were carefully but surely put in place,

there was no let up in our monitoring for compliance and enforcement efforts, in dealing with improper conduct.

Of the over six hundred cases brought forward and initiated during the period under review, more than half were

completed. The following is a snapshot of KLSE’s compliance and enforcement efforts:-

Internet Internet

•PLCs

•Merchant Banks

•Company Secretaries

•Investors

•SBCs

•Researchers & Analysts

•Academicians

•PLCs

•Merchant Banks

•Company Secretaries

•Investors

•SBCs

•Researchers & Analysts

•Academicians

Prepare announcementslocally using the KLSE LINK

1

Connect to KLSE LINKvia the Internet

2 Announcementselectronically submittedto the KLSE LINK server

3 KLSE verifies announcementsand disseminates via KLSEweb server

4

Announcements on theKLSE web site availablefor public access

5

KLSE LINKServer

KLSE WEBServer

H O W T H E K L S E L I N K F U N C T I O N S

This quarterly reporting by public listed companiesseeks to:-

• make available to the investors material informationon the financial position of the public listedcompanies in a timely, adequate and accuratemanner to aid investors in making informedinvestment decisions.

• reduce the investment risk for investors as thetimely, regular and updated financial informationenables investors to better determine the returnsand sustainability of their investment.

• increase accountability of public listed companiesas increased frequency in financial reporting willresult in keeping the market informed of thefinancial position of public listed companies on amore regular basis.

• enhance corporate governance among public listedcompanies as corporate activities and the resultsthereof are made more transparent to investors.

There has been a high degree of support for KLSE by public listed companies in making quarterlyreporting with a compliance rate of 98% for reportsdue 30 September 1999.

Submission Of Quarterly Reporting – For Quarter Ended 31 July 1999

Submission Statistics No Of Companies

Total number of Quarterly Reports due on 30 September 1999 93

Total number complied 91Failure to submit by due date * 2

Compliance rate 98%

Note:- *Of the two companies which failed to submit, one subsequentlysubmitted on 1 October 1999.

This high compliance rate is testimony to the resolve ofpublic listed companies to further enhance theirstandards of transparency and accountability, and theKLSE commends them for this effort.

With greater availability of corporate information andgreater corporate disclosure to promote participation inthe stockmarket, investors would also benefit from thecontinuation of the fair and orderly trading ofsecurities. This forms one of the major considerationsfor KLSE in Strengthening its Suspension Policy.

9


The new policy addresses:-

• reasons for suspension requests by public listedcompanies.

• consideration to grant a request for suspension.• material announcements relating to the request for

suspension.• reduction in the suspension period.

The policy benefits shareholders and investors byenabling greater control in the conduct of theirinvestments through the continued trading ofsecurities, unless suspension is necessary fordissemination of information or to maintain a fair andorderly market. Its implementation also enhances theresponsibility and accountability of public listedcompanies in making corporate announcements andcorporate disclosure.

As a further step to promote corporate responsibilityand accountability for companies listed on the KLSE, on 11 March 1999, Restrictions on theNumber of Directorships, was announced. In implementing the restrictions, KLSE addressedthe corporate governance issues arising frommultiple directorships by allowing directors ofpublic listed companies to :-

• devote more and sufficient time and energy to theboards that they represent.

• acquire a higher level of understanding of eachcompany’s business.

• minimise or even eliminate conflict of interestbetween their duties to different companies orbetween their duty to the company and theirself interest.

• improve a director’s independence and enhancethe ability to effectively monitor the company’sexecutive management.

Given the recovery condition of the period underreview, it became more important than ever to havethe dedicated services of directors on the board ofpublic listed companies to further strengthen thefinancial and operational monitoring of the respectivecompanies. The restriction is also a means ofpromoting investor confidence in the public listedcompanies that make our market.

KLSE LINK

The amendments include the following:-

(a) Ensuring that all new securities are issued byway of crediting the securities account ofentitled persons.

(b) Increasing the penalty that may be imposedagainst a public listed company which breachesthe Listing Requirements, to RM1 million.

A new set of guidelines was also issued on 1 November 1998, to govern the purchase of ownshares by public listed companies.

• Malaysian Code on Take-Overs and Mergers 1999The Listing Requirements were also amended uponthe implementation of the new Malaysian Code on Take-Overs and Mergers 1999. The relevantprovisions in the Listing Requirements werestrengthened to enhance disclosure and transparency.

As in KLSE’s governance over stockbroking companies,which seeks to strike a balance between developmentaland enforcement efforts, similarly, there was alsocontinued vigilance in the supervision of the conductof public listed companies.


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Under the new requirements, a director of a publiclisted company shall not hold more than 25directorships in companies of which:-

• the number of directorships held in public listedcompanies shall not be more than 10, and

• the number of directorships in other companies ie.other than public listed companies, shall not bemore than 15.

Applicable only to directors of public listedcompanies, they had until 30 September 1999, six months from the date of implementation of 1 April1999, to file statutory declarations with the KLSE,confirming full compliance with these requirements.

The blueprint for the investibility of Malaysiancompanies listed on KLSE is largely contained in the Listing Requirements. To continue having acomprehensive view of the practical requirements ofthe industry, the Listing Requirements are continuouslyreviewed to ensure that they are consistent with thelaws and to address the needs of the industry andinvestors. Some of the significant changes made to theListing Requirements for the period under review are:-

• Rationalisation with the securities lawsIn conjunction with the amendments to thesecurities laws, the Listing Requirements were alsoamended to ensure consistency with the new laws.

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Cases Brought Cases InitiatedForward From During Total Cases Cases

Category Financial Year 1998 Financial Year 1999 Cases Completed Outstanding

Corporate Disclosure Policy of the KLSE 1 12 13 9 4

Acquisitions and Realisations — 39 39 19 20

Deferment of dividend payment — 1 1 1 —

Failure to make immediate disclosure of winding-up petition and appointment of receiver & manager — 2 2 — 2

Non-compliance of the notice for Books Closing Date– Section 23 MBLR — 1 1 1 —

Failure to release Half Yearly Results on time– Section 56 MBLR/Clause 3.20 SBLR 2 4 6 6 —

Failure to release Preliminary Financial Statement on time– Section 57 MBLR/Clause 3.21 SBLR 5 5 10 10 —

Failure to furnish Annual Report on time– Section 60 MBLR/Clause 3.22 SBLR 3 25 28 28 —

Total 11 89 100 74 26

Status Of Investigation Cases On Public Listed Companies As At 30 June 1999

Note:- MBLR – Main Board Listing RequirementsSBLR – Second Board Listing Requirements

No Of Cases

Type Of Cases PublicCaution Private Public

Reprimand Total& Impress Reprimand Reprimand

& Fine

Breaches of Corporate Disclosure Policy on immediatepublic disclosure of material information– Section 335 of MBLR, Clause 1.18 of SBLR 1 — 2 4 7

Breaches of Disclosure on Acquisitions and Realisations– Sections 36-37, 114-115 of MBLR,

Clauses 3.15, 3.16, 5.4-5.6, 5.8 of SBLR — — 7 6 13

Non-compliance of the notice for Books Closing Date– Section 23 of MBLR — 1 — — 1

Failure to release Half Yearly Results on time – Section 56 of MBLR/Clause 3.20 of SBLR — — 4 — 4

Failure to release Preliminary Financial Statement on time– Section 57 of MBLR/Clause 3.21 of SBLR — 3 — 2 5

Failure to furnish Annual Report on time– Section 60 of MBLR/Clause 3.22 of SBLR — 9 1 16 26

Total 1 13 14 28 56

Actions Taken For Breaches Of Listing Requirements From July 1998 To June 1999

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With enhanced corporate disclosure and betterinvestment opportunities provided by a larger numberof public listed companies developing exemplaryconduct, KLSE continues to emphasise the need toEnhance Investor Education.

KLSE Group’s training arm, Research Institute ofInvestment Analysts Malaysia (RIIAM), organised 154 training sessions encompassing both in-house andpublic programmes. For the period of January – June1999 alone, RIIAM conducted 118 training sessions.

During the period under review, 85 sessions of in-house training programmes comprising technicaland soft skills were conducted for KLSE Group. RIIAM developed its own modules for Staff Developmentand Management Development Programmes and a total of 1,823 participants attended the programmes.

The RIIAM Diploma in Investment Analysis programmeis in its sixth year of operations. At present, a total of7 classes are being conducted, with 3 classes in KualaLumpur, 2 classes in Penang and another 2 classes inKuching. The close co-operation between RIIAM andthe Royal Melbourne Institute of Technology (RMIT),since 1994, has seen 420 graduates of the RIIAMDiploma in Investment Analysis. Graduates of thisdiploma are strategically placed to contribute to thedevelopment of a well-informed investing community,who would base their investment decisions more onfundamentals and less on sentiments and perceptions.

RIIAM is also negotiating with local universities tooffer the diploma programme concurrently with theirbachelors degree programmes. A part-time bachelorsdegree, in collaboration with RMIT, is also beingformulated; this will offer yet another flexible, cost-effective option for professionals to obtain arecognised and relevant degree.

For the year under review, the network of investorinformation centres – Balai Maklumat BSKL -expanded, to now include cities like Penang, Johor Bahru and Kuching, in addition to the PublicInformation Centre in Kuala Lumpur.

KLSE’s network of Balai Maklumat is a valuablerepository of investment information and provides thelatest information on public listed companies, marketanalysis reports, trading reports of public listed

companies and information on the KLSE Group andsecurities markets.

Towards the continued growth and development of theKLSE, the progress made thus far in developing rules,measures, systems and services, are made possible inthe strategic partnering of KLSE’s talented humanresources with innovative technology.

In Improving Information Technology, KLSE continuesto streamline, fine-tune and upgrade its informationtechnology systems.

The broker front-end trading system, WinSCORE, was enhanced to include:-

• Improved company announcements in terms of content and display format. The improvement on the timeliness and content of companyannouncements i s made poss ib le by the KLSE LINK.

• Introduction of an Investor Alert Indicator tohighlight critical financial information of publiclisted companies which require closer monitoringby investors.

• Changes to the direct business transaction moduleto be compliant with the KLSE’s new rule on directbusiness transactions.

The KLSE Help Desk Online Services System, an internet-based system, was introduced to allstockbroking companies on 15 January 1999. The service was introduced with the aim of improvingKLSE’s communication to stockbroking companies,facilitate timely dissemination of circulars and providea broad spectrum of information on the informationtechnology services provided by the KLSE Group.

Another system, the Message-Based MiddlewareSystem, fully implemented in October 1998,revolutionised the manner in which messages are sentfrom the central trading system and the broker front-end trading system. With its implementation, averageresponse time improved by more than 50% to 3 seconds or less for about 99% of transactions. Other benefits gained include:-

• More than 1,100 units of personal computers usedas gateways to the central trading system could bere-deployed to be used for other purposes by the stockbroking companies.

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• Improved security of message transmission.• More efficient usage of the network and also

improved network availability.

Given the trend towards increasing use of informationtechnology and electronics, the KLSE introduced theElectronic Client Ordering System (ECOS) Code inNovember 1995. The code was to guide stockbrokingcompanies to implement services related to ECOS,such as electronic order routing and trade confirmationto clients. Stockbroking companies approved tooperate ECOS have since introduced internet-basedservices for order routing and trade confirmation.

In dealing with the most significant issue of Year 2000(Y2K) Compliance, no effort has been spared,including industry-wide tests, to ensure that all missioncritical systems continue to operate reliably before, on and after the year 2000.

The objective is to minimise the impact to theMalaysian securities market upon the roll-over to thenew Millennium. Various levels of testing wereconducted ranging from unit tests to End-to-EndIndustry-Wide Tests.

To date, 4 Y2K End-to-End Industry-Wide Tests have been conducted, involving various industryparticipants. The purpose of these tests is to allowindustry participants to perform integrated testing oftheir systems with the KLSE Group systems.

Currently, the KLSE Group and all stockbrokingcompanies are Y2K compliant, whilst over 95% of public listed companies will be Y2K compliant by November 1999.

Y2K Compliance Of The Securities IndustryAs At October 1999

KLSE Group Of Companies 100%

Stockbroking Companies* 100%

Public Listed Companies + Main Board 89.18%

Second Board 93.66%

Note:- *For stockbroking companies, 61 active members are fullycompliant while 2 inactive members (Labuan Securities andHalim Securities) are not compliant and have beensuspended from trading.

+For the 746 public listed companies comprising 462 MainBoard companies and 284 Second Board companies, full compliance is expected by December 1999.

An external independent auditor was engaged tospecifically review and ensure that all processes andactivities carried out by the KLSE Group address theY2K problem comprehensively.

In addition, the KLSE Group has developed detailedaction plans towards the full development ofcomprehensive contingency plans.

Y2K Compliance Of Public Listed Companies For 1999

Public Listed Companies’ Y2K Main Board Second BoardCompliance Status

October 1999 412 89.18% 266 93.66%

November 1999 440 95.24% 277 97.53%

December 1999 462 100% 284 100%

The KLSE regularly updates its Y2K status on its website – www.klse.com.my.

With improvements in information technology, equal ifnot greater emphasis is placed by the KLSE onDeveloping its Human Resources.

A group restructuring, effective 1 February 1999, wasundertaken in line with the expansion of KLSE’s role instrengthening the securities industry. The reinforcedstructure of the KLSE is to achieve:-

• a unified decision making structure to ensuregreater consistency in the enforcement of rules,regulations and requirements,

• an organisation of increased capability forinnovation, growth and industry development,

• a greater scope for co-operation with thegovernment, Ministry of Finance, other regulatorsand industry participants.


KLSE COMMITTEE

PRESIDENTKLOFFE

AUDIT SUB-COMMITTEE

EXTERNALAUDITOR

GROUP INTERNALAUDIT

EXECUTIVE CHAIRMAN'SOFFICE

GROUP HUMAN RESOURCE

POLICY & DEVELOPMENT

MARKET SUPERVISIONGROUP

RIIAM

DEPUTY PRESIDENT

LISTING GROUP

• Operations• Financial Review &

Surveillance• Legal Advisory

FINANCE, TREASURY& ADMINISTRATION

• Finance• Treasury• Administration

CORPORATE &LEGAL AFFAIRS

• Legal• Group Corporate Affairs• Membership

PUBLICINFORMATION

• Research / Publications• Public Information Centre• Industry Specialists

DEPUTY PRESIDENT

• SCANS• MCD• KULBER• MSRS

SUPPORT SERVICES

• Facilities Management• Information Services / Information Technology

INFORMATIONTECHNOLOGY

MARKETINFRASTRUCTURE

GROUPCOMMUNICATIONS

EXECUTIVE CHAIRMAN

KLSE

Subsidiary and Related Companies / External Auditors


14

With the restructuring exercise, the manpower resources will be used more efficiently and effectively to achieve theKLSE’s operational objectives. More than 200 staff within the KLSE Group were involved in the restructuring exercise.The rationalisation also included the establishment of several new divisions and departments.

With the improvement in the nature of work of thepast, new patterns of work have emerged. Previouswork patterns have been modified and new onesadded to suit the changing needs of the investors andinvestment environment.

In continuously improving its role and responsibilities,the KLSE Group continued its contribution toDeveloping the Securities Industry in exploringopportunities to broaden and deepen the industry.

KLSE Group entered into an agreement with theMalaysian Exchange of Securities Dealing & Automated

Quotation Berhad (MESDAQ) to provide clearing,settlement and depository services. These services were first used following the commencement of its operations on 30 April 1999. To date, 23 stockbroking companies are subscribing to morethan 230 WinMESDAQ terminals.

In broadening investment options, the KLSE SyariahIndex (KLSE SI), was launched on 17 April 1999. The launch of the KLSE SI is to cater for increasingdemand by local and foreign investors who seek toinvest in securities and instruments which are in linewith Syariah principles.

15


AS AN INSTITUTION INTEGRAL TO THE MALAYSIAN ECONOMY,

THE KUALA LUMPUR STOCK EXCHANGE IN LOOKING

FORWARD WILL CONTINUE TO CONTRIBUTE SIGNIFICANTLY TO

THE MOBILISATION O F CA P I TA L , T H E C R E AT I O N A N D

D I S T R I B U T I O N O F W E A LT H A N D SUPPORTING THE

GOVERNMENT IN IMPLEMENTING NATIONAL POLICIES.

ISS is a significant development in the KLSE’s move tocontinually improve and place itself on par with otherjurisdictions in terms of settlement of trades. There isno doubt that the ISS will facilitate increasedinstitutional participation in the KLSE.

To date, 12 institutions comprising institutionalinvestors and custodian banks have been approved asNon-Trading Clearing Members to benefit from the ISS.

Jawatankuasa Antara Agensi Kawalselia (JAK), a committee comprising regulatory agencies involvedin the capital market and securities industry wasestablished in April 1999. JAK was formed to discussand enhance the co-ordination of cross-jurisdictionalissues and developmental matters. The Ministry ofFinance, Bank Negara Malaysia, Securities Commission,Registrar of Companies and KLSE are the members ofJAK with KLSE acting as the Secretariat.

To encourage and further enhance the participation ofBumiputera in the securities industry, the KLSEestablished a Bumiputera Unit. Since its establishment,the Unit has been involved in dialogue sessions,exhibitions and meetings with various Bumiputerabodies and agencies to promote their involvement inthe securities market.

KLSE completed its acquisition of KLOFFE Berhad, theoperator of the Kuala Lumpur Options and FinancialFutures Exchange (KLOFFE), on 31 December 1998.The acquisition was a step forward in enabling therationalisation of equity and derivatives markets andthe optimal utilisation of resources for both thesecurities and future exchanges. KLSE’s participation inthe futures industry is expected to further enhance thedevelopment of the securities industry.

In 1998, the KLSE conducted a joint survey withPricewaterhouseCoopers on corporate governance. A key finding of the survey was that corporategovernance is an essential factor in enhancing investorconfidence.

The KLSE SI is a weighted-average all share index withits components currently made up of 274 Main Boardcompanies approved by the Syariah Advisory Council(SAC) of the Securities Commission.

In ensuring that the KLSE SI closely reflects the latest developments and changes in Syariahapproved investments, the KLSE SI components will be periodically updated in line with SAC’s list of approved securities.

On 3 May 1999, the KLSE announced that it hadenhanced foreign interest in Malaysian shares throughthe regulation of depository receipts. The regulation of depository receipts was put in place withamendments to the KLSE’s Listing Requirements as wellas the rules of MCD.

Among the important benefits the regulation ofdepository receipts will achieve, in contributing toenhancing foreign interest in Malaysian shares, are:-

• increase the profile and liquidity of Malaysianshares whilst enabling Malaysian companies tomaintain an international profile.

• provide foreign investors with options to trade inMalaysian securities.

• attract long-term investors.

To facilitate the settlement of trades of investorsdirectly with the clearing house, the KLSE launchedthe Institutional Settlement Service (ISS) on 15 July1999. Offered by SCANS, the system enhanced thecurrent Delivery versus Payment (DVP) environment by extending the clearing membership to includeresident custodian banks and institutional investors asNon-Trading Clearing Members.

Whilst the KLSE’s present T+5 rolling settlement system remains, the ISS provides an additional option for institutional investors and custodian banks to participate directly in the clearing andsettlement process.


advices in Bahasa Malaysia and English. The availabilityof CDS forms in Bahasa Malaysia enables MCD tofacilitate more investors to open CDS accounts inorder to invest in the stockmarket.

The KLSE, in seeking to grow and develop further by learning and understanding from industryparticipants, locally and abroad, continued to focus on Strengthening International Relations.

KLSE hosted four major international events namely:-

• FIBV Annual General Assembly from 25 – 27October 1998.

• Association of National Numbering Agencies(ANNA) Extraordinary General Meeting from 30 November – 1 December 1998.

• Asian Securities Analysts Federation (ASAF) AnnualGeneral Meeting & Conference 1999 from 10 – 12October 1999.

• International Council of Investment Analysts (ICIA)Biannual General Meeting 1999 on 10 October 1999.

FIBV is the international federation of 54 stock exchangeswhilst ANNA implements and maintains standards andpractices to facilitate cross border trading and settlement.ASAF represents over 23,000 investment professionalsfrom 12 member countries including Japan, Taiwan,Hong Kong, Australia, New Zealand and Malaysia. ASAF is a member of ICIA – an internationalorganisation for securities analysts’ societies in Europe,North America, South America and Asia.

KLSE also participated in the East Asian and OceanianStock Exchanges Federation (EAOSEF), which is afederation of 13 member stock exchanges.

KLSE was admitted as an affiliate member of theInternational Organisation of Securities Commissions(IOSCO) in May 1999. IOSCO has 164 membersocieties worldwide.

The KLSE Group in setting the standard for the role ofcorporate citizens in Providing for the Community,has made contributions to a number of organisationsvia Yayasan BSKL, which was established in 1998. To date, Yayasan BSKL has contributed RM260,465 to benefit organisations including children’s homes,homes for the elderly, the disabled and the poor.

The KLSE Group also initiated an industry contributionto the JE Trust Fund. The KLSE Group together with

Over half of the institutional groups surveyed indicatedthat if further improvements were made to theprevailing corporate governance regime, they would beencouraged to invest in Malaysia. Almost one thirdindicated that the prevailing standards of corporategovernance are an incentive for investing in Malaysia.

The survey findings served as valuable input to theFinance Committee on Corporate Governance informulating their recommendations.

On 16 November 1998, the KLSE, in recognising thecontribution by various other institutions to the securitiesindustry, extended the categories of institutions eligiblefor rebates on brokerage commission to include:-

• life insurance companies• general insurance companies• superannuation or employees provident funds• finance companies• asset management companies and unit trust

management companies• trust companies or institutions

This rebate reduces transaction costs for the institutions.Greater participation from institutions in the stockmarketis expected to encourage longer term investments basedon fundamentals, leading to greater market stability.

Beginning February 1999, investors can obtain Bahasa Malaysia Forms from their stockbrokingcompanies, to facilitate the following services:-

• Opening and closing of CDS accounts• Updating of CDS accounts

Since December 1998, CDS account holders havebeen receiving bilingual monthly statements and

16


17


17 stockbroking companies and 140 public listedcompanies contributed RM1 million. The special fundwas set up not only to provide assistance to victims ofthe Japanese Encephalitis virus but also to sponsor theactivities involved in containing the outbreak.

In building the Milestones to the Millennium, KLSElaunched the KLSE Corporate Awards at the inauguralEvening with KLSE Listed Companies on 18 August1999. More than 700 senior representatives from over500 public listed companies attended the event. The awards serve to recognise and honour publiclisted companies with excellent corporate conduct. The awards seek not only to reward the deserving, butalso to continue to motivate and develop high standardsof corporate conduct among public listed companies.

The KLSE Corporate Awards will be presented annuallycommencing with the KLSE Corporate Awards 2000.All public listed companies will have until next year tovie for the awards.

As in previous years, through the National AnnualCorporate Report Awards (NACRA) 1999, KLSEencourages public listed companies to use the mediumof annual reports to provide shareholders moreinformation on the companies’ initiatives andobjectives, adherence to corporate governance, auditcommittee report and value added information on employees, fixed assets and employment costs. The information is to enable investors to make moreinformed investment decisions.

For the year 2000, a new award on environmentalreporting has been introduced to address and recogniseefforts towards its preservation.

As an institution integral to the Malaysian economy, theKLSE in Looking Forward will continue to contributesignificantly to the efficient mobilisation of capital, the creation and distribution of wealth and supportingthe government in implementing national policies.

Even as we talk of a transition into the next Millennium,lest we forget, transition is not only transformation, it is also creation.

In creating a Millennium for ourselves, our readiness andcapability will depend on numerous factors, including:-

• Emphasising information technology as a usefulmechanism to channel valuable and scarce resources.

• Dealing with globalisation and liberalisation.• Dealing with the challenges of a borderless market.• Reviewing the role of securities industry participants

in light of internet trading, electronic broking, crossborder trading and listing.

Key among these challenges is the increasing dominanceof an investors’ market and shareholders’ activism, whichwill drive stockmarkets to look even more critically atoperations and systems, changing them, recreating themto meet these evolving requirements.

The present push forward will continue, so as toachieve an efficient, cost effective and secure market,in making the KLSE an exchange for the Millennium.

In closing, our Commendations to the KLSE CommitteeMembers for the well considered guidance anddirection, the close support and co-operation, inmanaging the challenges of the year.

To the Boards of Directors of Securities ClearingAutomated Network Services Sdn Bhd, MalaysianCentral Depository Sdn Bhd, The Kuala LumpurOptions & Financial Futures Exchange Bhd, KLSE-Bernama Real-Time Information Services Sdn Bhd,Malaysian Share Registration Services Sdn Bhd and theBoards of Governors of the Research Institute ofInvestment Analysts Malaysia and Yayasan BSKL –thank you all for your dedication and commitment tothe KLSE Group.

On behalf of the KLSE Committee, our sincereappreciation to the Right Honourable Prime Minister inguiding policies for continued growth and improvement.Our acknowledgement for the support of the Ministryof Finance, Securities Commission, Bank NegaraMalaysia, Registrar of Companies and related regulatoryauthorities in working closely together.

To all staff of the KLSE Group, we appreciate andvalue greatly your belief and continued dedication tothe organisation, which has benefitted from your effort,professionalism and contribution.

In working together, we unite in building a progressiveKLSE for the new Millennium.

DATO’ MOHAMMED AZLAN HASHIMExecutive Chairman


MarketR e p o r t 1 July 1998 to 30 June 1999

18

The financial year ended 30 June 1999 witnessed asignificant strengthening of the stockmarket. The KLSEComposite Index (KLSE CI) closed above the 800-pointlevel on 24 June 1999 for the first time in twentymonths. The last time it traded above this level was inOctober 1997. At the close of the financial year ended30 June 1999, the KLSE CI had gained 355.46 pointsor 78 per cent at 811.10, compared to 455.64 on 30 June 1998. During the same period, total marketcapitalisation increased by 86 per cent to RM532 billionfrom RM286 billion a year ago. Total volume likewiseincreased to 72 billion units compared to 67 billionunits in the previous year, although total transactedvalue decreased to RM136 billion from RM254 billiona year ago.

Stabilisation measures continued to be implemented by the Government and its agencies to restore investor and consumer confidence, as well as to revive the economy.

The first two months of the financial year saw the KLSECI fall by 152.73 points or 34 per cent to 302.91 at the close of 28 August 1998, from 455.64 at theclose of 30 June 1998. Total market capitalisation

shrank by 30 per cent to RM200 billion from RM286 billion during the same period. Average dailyvolume during the two months dwindled to 123 millionunits. This was in line with the state of the localeconomy, and the weakness of regional markets. The ringgit remained weak a year after the flotation ofthe Thai baht. Investors’ concerns that the weak ringgitwould cause companies’ earnings to fall, as well assome companies not being able to service their loansdue to high interest rates, became a reality. Sentimentweakened as the performance of financial institutionsand corporations worsened, with some even seekingprotection against creditors under Section 176 of theCompanies Act.

Confidence was also shaken by ratings’ downgrade byforeign agencies. Standard & Poor’s lowered Malaysia’ssovereign rating to a negative outlook, and downgradedMalaysia’s long-term foreign and local currency ratings.Moody’s Investors Service similarly lowered Malaysia’slong-term and short-term currency country ceilings fordebts. The market was also affected by instability inregional currencies. The weakening of the Japaneseyen led to fears of a Chinese renminbi devaluation,while the Hong Kong dollar came under speculative

Note:- * launched on 17.4.1999

30.06.1999 vs 30.06.1998

KLSE Indices 30.06.1999 30.06.1998 Points Change % Change

EMAS 207.56 115.36 92.20 79.92

Composite 811.10 455.64 355.46 78.01

Industrial 1,380.58 915.83 464.75 50.75

Consumer Products 169.52 121.18 48.34 39.89

Industrial Products 86.44 56.96 29.48 51.76

Construction 237.39 93.27 144.12 154.52

Trading/Services 128.84 71.07 57.77 81.29

Finance 6,328.23 2,419.22 3,909.01 161.58

Property 1,064.73 580.35 484.38 83.46

Plantations 1,766.92 1,604.78 162.14 10.10

Mining 264.46 153.35 111.11 72.46

Syariah* 125.65 — — —

Second Board 179.77 97.99 81.78 83.46

19


attack, forcing the Hong Kong government to increasethe interbank rate to defend the currency. This led tothe fall in the Hang Seng Index. Even the devaluationof the Russian rouble unnerved the local market. Wall Street was not spared either, suffering its secondlargest single-day point loss in history of 512.61 pointson 31 August 1998 amid worries over the globaleconomic situation.

To strengthen the economy and improve the investmentenvironment, stabilisation measures were undertakenby the Government and its agencies. Among thesewere the formation of special purpose vehicles,namely, Pengurusan Danaharta Nasional Berhad andDanamodal Nasional Berhad, to strengthen thebanking system. The Corporate Debt RestructuringCommittee was also established to aid in loanrestructuring of the corporate sector. The NationalEconomic Action Council (NEAC), in July 1998,released the National Economic Recovery Plan (NERP)which outlined the comprehensive framework fornational economic recovery. To complement thesemeasures, Bank Negara Malaysia (BNM) eased thethree-month intervention rate three times in August,from 11.00 per cent to 9.50 per cent, and raised thehire-purchase financing ceiling to 85 per cent.

To enhance transparency and make Malaysia thepremier market for the trading of Malaysian securities,measures were introduced by the KLSE on 31 August1998. With immediate effect, all dealings in securities listed on KLSE must be effected through KLSE or arecognised exchange.

On 1 September 1998, the Government announced itsdecision to insulate the Malaysian economy fromexternal forces by imposing selective exchangecontrols on foreign exchange transactions. The threemajor controls were international non-convertibility ofthe ringgit, pegging of the ringgit to the US dollar(RM3.80 to US$1), and one-year holding rule forportfolio capital.

The initial reaction to the selective exchange controlsresulted in the KLSE CI falling by 40.21 points or 13 per cent to 262.70. This was compounded by the512.61-point overnight plunge on Wall Street. Market

capitalisation shrank on the same day to RM181billion from RM200 billion the previous day. However,after having absorbed the news fully, the market madea turnaround on the following day and almost recoveredthe previous day’s loss by gaining 31.89 points.

On 4 September 1998, the Stock Exchange of Singaporeannounced that trading of Malaysian securities on theCentral Limit Order Book (CLOB) would be discontinued.Trading ceased permanently on 16 September 1998.

By 7 September 1998, the KLSE CI had gained 182.36points or 69 per cent from its low on 1 September1998 to close at 445.06. The rise, however, did notsustain for long and for the remaining period ofSeptember, and the first half of October, trading wasrange-bound between 360.10–393.25. The expectationsof an expansionary budget and the U.S. FederalReserve’s decision to cut its key interest rates by 25 basis points were among factors that helped to lift market sentiment in the latter half of October. The KLSE CI closed at 405.33 on 30 October 1998.

In November, the KLSE CI eventually crossed the 500-point level to close at 501.47 on 30 November1998. During the month, the Securities Commission(SC) announced the extension of the warrants period to a maximum of ten (10) years, followed by the new guidelines for fund management. Sentiment wasbuoyed by better economic data which showed thetrade balance recording a surplus for the eleventhconsecutive month in September 1998, while foreignreserves rose to RM89.3 billion as at end October1998 from RM81.5 billion as at end September 1998.BNM announced another reduction in the three-monthintervention rate from 7.50 per cent to 7.00 per cent.

Market sentiment continued to improve and steadygains in the KLSE CI throughout the month of Decemberresulted in the Index ending the year at 586.13. Withinfour months since the selective exchange controls wereimposed, the KLSE CI had gained 323.43 points or 123per cent, and total market capitalisation had increasedby RM194 billion or 107 per cent to RM375 billion.Average daily volume transacted during the monthincreased to 372 million units (RM705 million) from330 million units (RM515 million) in November.

Market Report 1 July 1998 to 30 June 1999


20

By 21 January 1999, the KLSE CI had crossed the 600-point level to close at 614.52. Trading activity,however, slowed to an average daily volume of 207 million units (RM455 million). Several measureswere implemented during the month. The new Take-Overs & Mergers Code and the Capital AdequacyRequirements for stockbroking companies wereintroduced. The latter will replace the Minimum LiquidFunds requirement for stockbroking companies. This wasfollowed by BNM allowing repatriation of contra-tradeprofits by foreigners and allowing stockbrokingcompanies to provide margin financing for non-residents.

In the following month of February, the market turned quiet on lack of buying support ahead of theChinese New Year holidays. An average daily volume of140 million units (RM330 million) was recorded. The KLSE CI traded within the range of 526.10 – 579.55 during the month. Measures continued to beimplemented to strengthen confidence. On 4 February1999, BNM announced a graduated exit levy forportfolio investments, to be implemented on 15 February1999, to replace the existing selective exchange controls.

Investors remained sidelined in the face of uncertaintyover the possibility of poor corporate results and in theabsence of fresh leads. Consequently, the average dailyvolume in March was further reduced to only 80 million units (RM169 million) while the KLSE CItraded within a tight range of 494.97 – 531.54.

Confidence returned to the market in the second quarterof 1999 on the back of ratings upgrade and animproved economic environment. In the month of April,Standard & Poor’s raised its outlook for Malaysia’s debtratings from negative to stable. Malaysia’s improvedstanding was acknowledged with Moody’s also revisingits outlook for Malaysia’s long-term foreign currencycountry ceilings from negative to stable. Subsequently,Fitch IBCA restored Malaysia to investment grade, fromBB to BBB-. Morgan Stanley Capital International (MSCI)indicated that Malaysia is likely to be readmitted in theMSCI indices in February 2000.

The success of the issuance of the US$1 billionsovereign bonds by the Malaysian Government inMay raised hopes of the availability of funds to

stimulate the economy. Share prices also rose as aresult of improved liquidity in the banking system,and on BNM’s decision to reduce the three-monthintervention rate from 7.00 per cent to 6.50 per centon 5 April 1999 followed by a further reduction to 6.00 per cent with effect from 3 May 1999. The positive regional outlook was also a drivingforce that pushed the Index past the 700-level inMay. Volume recorded a high of 1,142 million unitson 19 May 1999.

Investors’ confidence in the prospects of the economy,

spurred by an improvement in economic figures,

further strengthened market sentiment in the following

month of June. The last two weeks of the financial year

saw heavy trading, with volume averaging approximately

727 million units daily. The KLSE CI moved above the

800-point level to close at 811.10 at the end of the

financial year. Retailers took the cue from institutional

buying to enter the market. The SC’s decision to allow

the issuance and listing of new warrants to replace

existing warrants created further retail buying interest,

particularly in warrants and loan stocks. While talk of

an early election helped to lift market sentiment,

investors were also mindful of the direction of interest

rates in the United States.

During the period under review, 17 new companies

were listed, raising RM474 million. Of the 17 new

companies, 3 were listed on the Main Board. As at the

end of the financial year, the total number of

companies listed on the KLSE was 745, with 458

companies listed on the Main Board and the remaining

287 on the Second Board.

Issues

21


I n F o c u s

Year 2000 Compliance

The KLSE Group has undertaken an industry-wide

effort to address the Year 2000 problem to ensure that

all critical systems continue to operate reliably before,

on and after the Year 2000. The aim is to minimise the

impact to the Malaysian capital market during the

roll-over to the new Millennium.

Roles and Responsibilities

The objective of the KLSE Group’s Year 2000 Project is

to promote awareness of the Year 2000 issue, to

conduct remediation programmes and to provide

appropriate levels of support to stockbroking

companies to ensure that there are no trading

disruptions when the Year 2000 arrives.

The roles and responsibilities within KLSE are assigned

as follows:-

Y2K Steering Committee – The Y2K Steering

Committee is chaired by the Deputy Chairman of KLSE

and is composed of KLSE Committee Members,

directors of subsidiary companies and senior

management of the KLSE Group. The Y2K Steering

Committee provides strategic and tactical guidance

to the Information Technology Task Force (Y2K)

and the Listing Disclosures Management Team.

The Y2K Steering Committee meets regularly to review

the progress and issues in relation to Y2K compliance.

Information Technology Task Force (Y2K) –

The Information Technology Task Force (Y2K) was

formed in early 1998 and is headed by the Senior Vice

President, Facilities Management Division of KLSE.

Its main objectives are as follows:-

• To ensure that all KLSE Group computer systems

and supporting facilities comply with and are

tested to be Y2K compliant.

• To co-ordinate Y2K compliance by:-

– Stockbroking companies, which are Member

Companies of KLSE, Clearing Members

of SCANS and Authorised Depository Agents

(ADAs) of MCD

– Authorised Direct Members (ADMs) of MCD

The Information Technology Task Force (Y2K) is

accessible as a Year 2000 knowledge and resource

centre to provide compliance effort support to individual

businesses and system areas within the KLSE Group.

Issues In Focus


22

KLSE Group – Y2K Status

KLSE Group Mission Critical Systems

Mission critical systems are systems that are used by the KLSE Group to run its core businesses. Allmission critical systems, as listed below, have beensuccessfully tested and confirmed Y2K ready:-

• System on Computerised Order Routing & Execution(SCORE) – Trading system which provides orderrouting and matching of all trades for KLSE.

• Maklumat Saham (MASA) – KLSE’s real-time pricedissemination system, which broadcasts real-timemarket information to stockbroking companies andinformation vendors.

• Broker Front-end Trading System (WinSCORE) –Front-end trading system that provides riskmanagement, order entry and trade confirmationfacilities for KLSE stockbroking companies.

• Fixed Delivery & Settlement System (FDSS) –Clearing and settlement system that settles alltrades done at KLSE.

• Central Depository System (CDS) – Electronic scripcustody and book entry system to keep track of themovement of shares.

• Surveillance Information System (SIS) – On-linesurveillance system for monitoring market activities.

Listing Disclosures Management Team – The team hasbeen assigned to co-ordinate disclosures of all publiclisted companies in relation to their efforts in resolvingY2K related issues. The team is headed by the SeniorVice President, Listing Operations, Listing Group of KLSE.

Y2K Standards

KLSE has adopted the Year 2000 ConformityRequirement Standards (DISC PD2000-1) as defined bythe British Standards Institution (BSI) as the Y2Kstandard for all computer systems.

Y2K Testing

In ensuring Y2K compliance, great emphasis has beenplaced on testing, which comprises Unit Tests,Integration Tests and End-to-End Industry-Wide Tests.

Y2K End-to-End Industry-Wide Tests – The purpose ofthese tests is to allow participants to perform integratedtesting of their systems with the KLSE Group’s systems.

Four Y2K End-to-End Industry-Wide Tests have beencompleted. All testings involved participation fromvarious organisations, including:-

• KLSE Group• Stockbroking companies• Authorised Direct Members (ADMs)• Information vendors• Public listed companies

23


Public Listed Companies’ Y2K Main Board Second BoardCompliance Status

October 1999 412 89.18% 266 93.66%

November 1999 440 95.24% 277 97.53%

December 1999 462 100% 284 100%

Note:- For the 746 public listed companies comprising 462 MainBoard companies and 284 Second Board companies, full compliance is expected by December 1999.

External User Systems

External user systems are systems used by the KLSE

Group that interface with external users or which are

directly accessible by the public. There are 15 systems

which fall under this category, all of which have been

tested and confirmed Y2K ready.

Internal User Systems

All internal user systems actively used by the KLSE

Group are Y2K ready.

Mission Critical IT Infrastructures

KLSE’s network, which includes both the data

communication hardware and software, have been

tested and confirmed Y2K compliant. Likewise all

KLSE’s data centre infrastructures including security,

environmental, electrical and fire-fighting systems have

also been tested and confirmed to be Y2K ready.

Although all KLSE’s systems and IT infrastructures have

been declared Y2K ready, continuity of KLSE’s services

in the new Millennium depend highly on the Y2K

compliance status of the external services on which it

relies, such as telecommunication carriers and

national power supply providers. Nevertheless, the

necessary steps have been taken to minimise the

impact if any of these external services are disrupted

due to Y2K non-compliance. This is addressed in

KLSE’s contingency plans.

Stockbroking Companies – Y2K Status

As at October 1999, 61 active stockbroking companies

have confirmed Y2K readiness. Two (2) remaining

stockbroking companies are not compliant and have

been suspended from trading.

Public Listed Companies – Y2K Status

Based on the disclosures received up to October 1999,

the state of readiness of Public Listed Companies

is as follows:-

Independent Auditor Status Review

KLSE Group has also taken the initiative to appoint an

external independent auditor, PricewaterhouseCoopers,

to specifically review and ensure that all processes

and activities carried out by the KLSE Group address

the Y2K problem properly and comprehensively.

The independent auditor has completed the review

from early January 1999 to mid February 1999,

through interviews with the KLSE Group staff.

They have also examined statements, inventories,

responses from suppliers to inquiries made by KLSE,

task schedules and resource plans. The scope of

work focused on the mission critical systems and

was also extended to include a general review of

the Year 2000 project.

Issues In Focus


24

Similarly, the stockbroking companies have also been

requested to engage independent auditors to review

their status. Copies of the status review reports are

required to be extended to KLSE.

The National Y2K Committee headed by the Ministry

of Energy, Communications and Multimedia has also

conducted a review to verify the Y2K status of the

KLSE Group in June 1999. The National Y2K

Committee has indicated that they are satisfied with

KLSE’s Y2K readiness.

Contingency Plans

Despite comprehensive preparation to ensure Y2K

compliance, the KLSE Group has in place detailed

contingency plans. Similarly, the Exchange has also

made it mandatory for stockbroking companies to

develop contingency plans to ensure minimum

disruption during the roll-over to the new Millennium.

The KLSE Group has also declared 31 December 1999

a non-trading and non-settlement day.

Capital Adequacy Requirements

As part of KLSE’s continuing efforts in enhancing

investor protection and ensuring an orderly and fair

market for securities transactions, the financial year

1998/1999 has seen the emergence of KLSE’s Capital

Adequacy Requirements (CAR). The capital adequacy

regulatory framework encourages stockbroking

companies as market intermediaries to adopt a more

relevant approach to risk management and to assess

the risk of their operations on a daily basis.

The focus of KLSE’s CAR is in ensuring that the liquid

capital of a stockbroking company is at all times

adequate to cover total measured risks. The imposition

of these capital adequacy standards will provide

stockbroking companies with an effective tool to better

manage their risks and will not hamper the reasonable

expansion of stockbroking companies.

The CAR rules were approved by the Securities

Commission (SC) on 31 December 1998. The first

stage of implementation involved the issuance

and dissemination, on 28 May 1999, of the rules to

the stockbroking industry. The second stage of

implementation will be the complete shift to the

CAR regime and replacement of the existing concept

of Minimum Liquid Funds. In its development as a

front-line regulatory organisation, KLSE is committed

to complete the second stage of implementation of

the CAR in the financial year 1999/2000.

25


One major milestone has been the commissioning of

the KLSE Risk Management System (KLSE RMS) in July

1998 at KLSE and the stockbroking companies.

The applications within the KLSE RMS provide

stockbroking companies with a means to monitor and

calculate on a daily basis the inherent risks of the

business, identified as operational risk, position risk,

counterparty risk, large exposure risk and underwriting

risk, and the required amounts of capital to meet those

risks. The KLSE RMS operates through a pre-defined

interface with the stockbroking company’s back-office

to capture a daily image of the back-office data,

which is then stored for risk computation.

Compliance with CAR is monitored through the daily

transmission of the CAR report, which displays the

stockbroking company’s aggregate risks, associated

capital requirements and its liquid capital. Any material

fluctuations or irreconcilable positions can be further

verified by remote interrogation of the KLSE RMS

application at the reporting stockbroking company.

The coming into effect on 1 July 1999 of the KLSE’s

new guidelines on Suspension of Interest and Provision

for Bad and Doubtful Debts has standardised interest

income recognition and provisioning for bad and

doubtful debts across the stockbroking industry.

This complements the CAR, in that, the standardisation

of the treatment of bad and doubtful debts will result

in the financial reports of the stockbroking companies

being more reflective of their true financial position.

The CAR is a dynamic tool and is constantly being

refined and upgraded to keep abreast with changes in

the Malaysian capital market and developments in

international exchanges.

Revamp of Listing Requirements

The revamped Listing Requirements have been formulated

and submitted to the Securities Commission (SC) for

approval under Section 9 of the Securities Industry Act

1983. This is the first revamp undertaken by the KLSE

since the introduction of the present rules in 1987.

The objectives of the revamp include the following:-

• To strengthen the provisions in areas of concern,

namely, disclosure, financial reporting, continuing

listing obligations and corporate governance;

• To benchmark against rules of developed markets;

• To rationalise the provisions of the Listing

Requirements with existing laws, in particular the

Securities Industry Act 1983 and the Companies

Act 1965;

• To codify unwritten rules, procedures and regulations

of the KLSE relating to listed companies; and

• To remove all ambiguities and plug loopholes, if any,

in the provisions.

The main aim of the KLSE is to produce a

comprehensive and easily comprehensible rule book

that adequately governs both the companies listed on

the Main Board and the Second Board. In that regard,

the Main Board Listing Requirements and the Second

Board Listing Requirements have been merged into

one single rule book. Existing guidelines were also

reviewed and incorporated into the revamped Listing

Requirements. The KLSE also took into account the

need to provide the rules in a clear, succinct and

easily comprehensible manner. Accordingly, in

addition to emphasis on the substance of the rules,

Issues In Focus


26

equal emphasis has also been given to the format of

the Requirements so as to produce a rule book that

will facilitate easy understanding and application.

The enhancement of standards of corporate governance

and transparency amongst public listed companies

underpins some of the proposed new requirements.

In this regard, the recommendations of the Finance

Committee on Corporate Governance in relation to the

Listing Requirements made in its report dated February

1999 have also been adopted.

The revamp exercise was carried out in consultation

with the industry. The KLSE also held informal

discussions with selected industry participants as well

as industry professionals to obtain their view points on

specific issues arising from the revised provisions of

the Listing Requirements. The extensive consultation

process is to ensure that any new rule proposed to be

introduced will continue to promote business efficacy

and achieve the intended objectives.

To provide guidance and assist market participants in

complying with the revamped Listing Requirements,

the KLSE will also issue Practice Notes on pertinent

areas. These Practice Notes will provide an explanation

and clarification to the provisions of the revamped

Listing Requirements to minimise ambiguity in the

interpretation and increase clarity, thus achieving

consistent application of the same.

Prior to the implementation of the revamped Listing

Requirements, the KLSE will ensure that sufficient

opportunity is given to the relevant market participants

to understand and familiarise themselves with the

revamped requirements.

The KLSE is relentless in its efforts to promote the

exchange as a premier market with adequate investor

protection rules. It is believed that the implementation of

the revamped Listing Requirements will positively

contribute towards efforts in making KLSE a more

attractive market for capital raising and investment.

27


Informed Investing

One of the objectives of KLSE is to promote the orderlyconduct and expansion of the stockmarket. Investoreducation plays an important role towards this end asan informed investing public is essential to the growthand well-being of the capital market. A well-informedinvesting public would base its investment decisionsmore on fundamentals rather than rumours, perceptionor sentiment, and tend to invest for the longer term,thereby contributing to the stability of the market.

Investor education is also an important tool in theenhancement of the level of disclosure andtransparency in the Malaysian securities market. A higher degree of transparency, complemented by greater professionalism among market participants,would contribute towards the success of a disclosure-based market.

Recognising the importance of investor education,various efforts have been and will continue to beundertaken by the KLSE Group to meet the diverseinformation and training needs of existing andpotential market participants.

Among others, the Research Institute of InvestmentAnalysts Malaysia (RIIAM), the training arm of KLSE,offers a wide selection of public courses, ranging frombasic to more in-depth subject matters. These includethe Malaysian Securities Industry Introductory Course,Stockmarket Outlook Seminar and the RIIAM Diplomain Investment Analysis (a joint-venture effort betweenRIIAM and the Royal Melbourne Institute of Technology)

programmes. Also, in collaboration with the MalaysianAccounting Standards Board (MASB), briefings/seminarsessions on the “Technical and Practical Overview ofMASB Standards” have been organised throughout thecountry to educate all relevant parties on thesestandards which became effective 1 July 1999.

The establishment of Balai Maklumat BSKL (KLSEInformation Centres) in Penang, Johor Bahru and Kuching, as well as the Public Information Centre at Exchange Square in Kuala Lumpur, also assist inpromoting informed investing as complete informationis made available to all investors. To date, the facilitiesand services offered in these centres have been wellreceived by the public, especially information on listedcompanies, market analysis and trading information oflisted companies. We expect the public response toincrease further with the expansion of trainingprogrammes and courses related to the securitiesindustry to be held at the centres. The network of Balai Maklumat BSKL will be expanded to other cities.

Securities industry information is also availableelectronically. KLSE’s web-site (www.klse.com.my)provides comprehensive information on the Exchangeand the Malaysian securities industry. The KLSE web-site underwent major structural and designchanges in February 1999 to further improve the

Issues In Focus


28

timely dissemination of information and to providevisitors with a more user-friendly web-site. Based on asurvey carried out to obtain feedback from site visitorsas well as from research, the restructured web-siteprovides a more efficient categorisation of the mainsections/topics. The web-site has also been commendedfor having “good hyperlinks and very timely updates”.

In addition to the KLSE web-site, the KLSE-RIIAMInformation System, accessible through the internet at no cost (www.klse-ris.com.my), provides moredetailed financial data and information through its three main modules, namely the KLSE-RIS Trader,KLSE-RIS Pricing Package and KLSE-RIS SecuritiesAnalysis Package.

Another internet-based facility is the KLSE ListingInformation Network (KLSE LINK) which wasintroduced on 8 October 1999. Accessible via theKLSE’s web-site, KLSE LINK provides investors withtimely and easy access to the corporate announcementsand other financial information submitted by thepublic listed companies, free of charge. This facilityenhances investors’ ability to make well-consideredinvestment decisions.

Besides providing the above avenues and facilities that are accessible to the public, KLSE personnel alsogive briefing sessions to various groups of people such as students, fund managers, government officialsand directors of corporations. The types of briefingsvary depending on the type of visitors and theobjectives of their visits. The usual topics covered arethe workings of the KLSE Group, recent developmentsof the KLSE and of the Malaysian securities market.The KLSE received a total of 4,500 visitors, for theperiod under review.

However, we recognise that investor education is best developed in a proactive manner. Valuable lessonscan be learned from the exchange of ideas and viewsbetween the regulators and market participants. Thus, dialogue sessions have been organised by the KLSE with various groups, among others, theMalaysian Investors Association and the MalaysianInstitute of Directors. These sessions, aimed at fosteringa better and closer relationship with industryparticipants, are ongoing. These groups of industryparticipants can also act as strategic partners of theKLSE in the effort to help educate investors.

In addition to these sessions, the KLSE also reaches outto the public in the market place through the organisationand/or participation in roadshows or seminars.

For example, KLSE sponsored and participated inroadshows/seminars organised by the BumiputeraRemisiers Association (Pribumi) held in variouslocations such as Kuala Lumpur, Penang, Johor Bahruand Kuching. KLSE also jointly organised, with theAsian Strategy and Leadership Institute, The NationalSecurities Industry Summit. In addition, KLSE was themain sponsor of the International Conference onMalaysia’s Capital Market Investment (ICOMVEST)1999 jointly organised by Universiti TeknologiMalaysia Skudai and the Association of RemisiersMalaysia. A KLSE information booth was also set up at the ICOMVEST 1999 to promote the KLSE and the courses offered by RIIAM.

29


On the international front, briefing sessions were also

held for the officers of Wisma Putra as they play an

important role in the promotion of the Malaysian

securities market abroad. The opportunity was also

taken during overseas visits to brief officials at

Malaysian diplomatic missions and the Malaysian

business community abroad on KLSE measures and

new initiatives. In addition, KLSE also participated

in investment related conferences and business council

meetings overseas.

Last but not least, the various KLSE publications such

as the Daily Diary, Investors’ Digest, KLSE Statistics

and the Annual Companies Handbook, complement

the above investor education efforts. Additional

publications and enhancement of existing publications,

to be more tailored to the diverse needs of current and

potential market participants, are in the pipeline in

order to further promote the KLSE.

Thus, various efforts have been directed towards

investor education. In line with KLSE’s stance of

obtaining feedback for further improvement, a

Malaysian Securities Industry Survey will be conducted

on existing investors. One of the objectives of the

survey is to gauge investors’ knowledge level of the

local securities industry in order to improve and

develop the information currently provided by KLSE.

As we embrace disclosure-based regulation, KLSE,

as a front-line regulator, would have to assume a larger

role in instilling greater awareness among investors on

the importance of fundamentals in making their

investment decisions, at the same time strengthening

our capital market.

Challenges for the Stockmarket

The new Millennium sees the dawn of new challenges

for stockmarkets. Challenges here stem from a variety

of issues that would have significant impact on the

facade of the global securities industry. The KLSE for its

part must comprehend these changes and challenges

in order to survive and to excel in an increasingly

competitive securities industry environment. Here, we

look at a number of priority issues that loom over

KLSE as its major challenges.

Information Technology

Advances in information technology have led to

significant changes in securities markets. A major

impact has seen the lowering of entry barriers towards

establishing new exchanges. This has led to the

widespread emergence of alternative and proprietary

trading systems that are executing trades outside

traditional exchanges between large participants at low

cost and competitive speed. This technology which has

facilitated easier market access by these new electronic

networks or exchanges, now threatens the business

and even the existence of a number of exchanges.

Issues In Focus

Internet

The growth of the internet in the commercial sector

has significantly impacted on the fascia of markets and

further accelerated developments in the securities

industry. In fact, the impact of the internet can be seen

as three-fold, as it has allowed intermediaries and

exchanges to have wider access to investors globally,

minus the physical barriers that previously existed.

Firstly, on-line internet brokerages now threaten the

business of conventional brokerages by offering

reduced rates for transactions and providing wider

access to investors. Secondly, there is the prospect of

disintermediation in the securities industry, as a

number of exchanges will be or will consider

introducing new trading systems allowing investors to

trade directly on the bourse instead of going through

brokers. And finally, exchanges also face the

challenging prospect of issuers raising capital directly

from the public without going through the exchange.

Economic Liberalisation

Many governments and their securities authorities are

undertaking or considering broad-based deregulation

of their securities industries resulting in the reduction

of regulatory protection granted to national markets

and participants to enhance competition and efficiency

of their economies and markets. The aim is to increase

and attract international participation as it is perceived

that these markets are more competitive and efficient.

International participation also brings in a larger and

more diverse investor base, enabling not only transfer

of knowledge and skills but also fast injection of funds

to further develop the economy. However, efforts

towards this end will be undertaken in gradual stages

and, in consultation with market participants, to ensure

that the industry is ready to face the new set of

challenges posed by economic liberalisation.

Investors’ Markets

The phenomenal growth of investor participation in the

securities markets has led to increased investor

activism in the markets that they participate in,

especially in relation to institutional investors who seek

global diversification and efficient methods of trade

execution. Their search for alternative and cost

effective ways of trading has led to fierce competition

among existing exchanges and has encouraged the

growth of alternative and proprietary trading systems.

The search by investors for better value is also resulting

in increasing disintermediation of brokers in the

trading process and is leading to demands from

investors for:-

• Direct access to stock exchanges, and

• Representation in the governance of the markets.

In summary, the balance of power in the markets

appears to be shifting from intermediaries to investors.


30

31


Cross-Border Trading and Listing

The ability of issuers and investors to migrate from one

market to another basically poses a huge threat to

markets that fail to respond to their needs. In facing

competition offered by more developed and bigger

exchanges, small and large markets have begun

pooling their resources to further promote their

markets. For example, merger of exchanges is one

method to strengthen the resources of exchanges,

indifferent to the size and location of the markets.

Another method is through the establishment of

alliances between markets, the objective being to

widen the investor base and investor participation,

which indirectly attracts intermediaries and issuers.

Regional Competition

Asia-Pacific exchanges have notably embarked on

a number of initiatives to raise their competitiveness

not only in terms of operations, but also in attracting

market participants to their exchanges. Methods

used include reduction of operating costs, widening

access, ensuring operational efficiency, and utilising

current technology.

Global Competition

Markets have begun to embark on the creation of

larger markets through consolidation, mergers or

alliances. The outcome of these initiatives could be the

creation of regional and inter-linked markets offering

24-hour access to worldwide participants. This is a

primary example of the impact of globalisation and

liberalisation in financial markets, boosted by

technological developments and spurring the creation

of a financial world without boundaries. The removal

of physical and legal barriers accentuates the influence

of the financial sector on the policies of nations.

Conclusion

The challenges faced by KLSE in the next Millennium

are basically all about competition, especially

competition between KLSE and other market institutions.

The ability of KLSE to handle all these challenges

efficiently would certainly reflect on the competitiveness

and attractiveness of KLSE as an internationally

recognised market for the mobilisation of capital.

KLSE will continue to monitor the challenges

facing the securities industry and will engage all

participants in formulating a plan of action to ensure

its continued development.


CommitteeM e m b e r s

32

Left to right:

Abdul Kadir Hj Md Kassim

Dato’ Hwang Sing Lue

Tan Kim Leong, JP

Dato’ Ranita Mohd Hussein

Dato’ Mohammed Azlan HashimExecutive Chairman

Mohaiyani Shamsudin

Chan Guan SengDeputy Chairman

Benny Ng Wu Hong

Koh Kee Tee

DATO’ MOHAMMED AZLAN HASHIMExecutive Chairman

• Bachelor of Economics (Accounting)(Monash University, Australia);

• Member of Malaysian Institute of Accountants;• Member of Institute of Chartered Accountants,

Australia;• Government appointed Committee Member:

18.12.1996 – 31.12.1997;• Government appointed Executive Chairman: 1.1.1998.

CHAN GUAN SENGDeputy Chairman

• Bachelor of Commerce (Hons.) (University of Melbourne, Australia);

• Member of Australian Society of Accountants;• Member of Institute of Chartered Accountants,

Australia;• Admitted to Membership of the Exchange: 7.3.1984;• Appointed Corporate Nominee: 1.6.1991;• Elected to the Committee: 13.12.1986 – 18.12.1988;

6.12.1989 – 18.12.1994;• Elected to the Committee and as Deputy Chairman:

5.12.1996 – present.*

KOH KEE TEE

• Admitted to Membership of the Exchange: 30.6.1973;• Appointed as Corporate Nominee: 5.10.1995;• Elected to the Committee: 20.12.1980 – 13.12.1986;

19.12.1987 – 19.12.1992; 18.12.1994 – 18.12.1996;26.11.1997 – present.*

BENNY NG WU HONG

• Bachelor of Commerce (Deakin University, Australia);• Appointed as Corporate Nominee: 3.1.1995;• Elected to the Committee: 5.12.1996 – 28.11.1998;

1.1.1999 – present.*

MOHAIYANI SHAMSUDIN

• Master of Business Administration (Finance) (Cornell University, New York);

• Bachelor of Arts (Economics) (Knox College, Illinois);• Admitted to Membership of the Exchange: 8.8.1985;• Elected to the Committee: 28.11.1998 – present.*

33


DATO’ HWANG SING LUE

• Director of Malaysian Exchange of SecuritiesDealing & Automated Quotation Bhd (MESDAQ);

• Admitted to Membership of the Exchange: 30.6.1973;• Appointed as Corporate Nominee: 1.12.1992;• Elected to the Committee: 10.12.1977 – 8.12.1982;

14.12.1991 – 26.11.1997; 28.11.1998 – present.*

TAN KIM LEONG

• Member of Malaysian Institute of Accountants;• Fellow of Institute of Chartered Accountants, Australia;• Member of Malaysian Association of Certified

Public Accountants;• Fellow of Malaysian Association of the Institute of

Chartered Secretaries & Administrators;• Government appointed Committee Member:

18.12.1996 – present.

DATO’ RANITA MOHD HUSSEIN

• Bachelor of Laws (Hons.) (University of Singapore);• Advocate & Solicitor, Malaysia and Brunei;• Member, Panel of Arbitrators, The Kuala Lumpur

Options and Financial Futures Exchange Bhd;• Government appointed Committee Member:

18.12.1996 – present.

ABDUL KADIR HAJI MD KASSIM

• Bachelor of Laws (Hons.) (University of Singapore);• Government appointed Committee Member:

1.3.1998 – present.

* Redesignated as Dealing Members of the Exchangeeffective 1 July 1999 under the Exchange’s new Rules.


Te a m

34

Left to right:

Md Nor AhmadDeputy President

Dato’ Mohd Salleh Abdul MajidPresident

Ungku A Razak Ungku A RahmanDeputy President

Left to right:

Izlan IzhabExecutive Vice President, Corporate & Legal Affairs

Ku Abdul Rahman Ku SulaimanSenior Vice President, Market Infrastructure

Devanesan EvansonSenior Vice President, Compliance & Inspection,Market Supervision Group

Left to right:

Tan Chun WengSenior Vice President, Financial Review

& Surveillance, Listing Group

Lew Lup SeongSenior Vice President, Finance & Administration

Latifah Hj Mohd YusofSenior Vice President, Listing Operations, Listing Group

Management

35


Left to right:

Abdul Razak Mohd AminSenior Vice President, Group Human Resource

Qua Gek KimSenior Vice President, Public Information

Abdul Hamid Sh MohamedSenior Vice President, Policy & Development

Left to right:

Wong Kay YongVice President, Surveillance & Investigation,Market Supervision Group

Chuah Mei LinLegal Advisor, Market Supervision Group

Alice ThomasSenior Manager, Group Communications

Left to right:

Selvarany RasiahLegal Advisor, Listing Group

Ch'ng Boon HuatVice President, Financial Review & Surveillance,Listing Group


36

Left to right:

Tai Yoke PengVice President, Organisation & Methods,Market Infrastructure

John DugganGroup Advisor, Derivatives Markets

Yew Kim KeongSenior Vice President, Facilities Management

Left to right:

Mohamad Azam AliSenior Manager, Public Affairs,Executive Chairman’s Office

Johan AbdullahVice President, Listing Operations,Listing Group

Chee Yaw SoonSenior Manager, Trading Services,Listing Group

Left to right:

Shukoriah Mohd NoorSenior Manager, Public Information

Winnie ChoongSenior Manager, Public Information

Zulkifli HarunSenior Vice President,Information Services/ Information Technology

37


Left to right:

Abdul Raihan Mohd YusofSenior Manager, Secretarial Affairs, Corporate & Legal Affairs

Low PhengSenior Manager, Group Internal Audit

Left to right:

Haji Hayata EliasManager, Security

Ayub MohamedSenior Manager, Corporate & Legal Affairs

Lee ChoySenior Manager, Administration

&Related Companies

Subsidiary

39


KLSEGroup Of Companies

The Kuala Lumpur Options& Financial FuturesExchange Bhd (KLOFFE)

Securities ClearingAutomated NetworkServices Sdn Bhd (SCANS)

Yayasan BSKL

MCD Nominees Sdn Bhd

Kuala LumpurStock Exchange (KLSE)

Malaysian CentralDepository Sdn Bhd (MCD)

Malaysian ShareRegistration ServicesSdn Bhd (MSRS)

KLSE-BernamaReal-Time InformationServices Sdn Bhd (KULBER)

Research Instituteof InvestmentAnalysts Malaysia (RIIAM)


40

Group DirectorsAnd Governors

Left to right:

Abdul Kadir Hj Md Kassim(KLSE/SCANS)

Datuk Amirsham A Aziz(MCD)

Koh Kee Tee(KLSE/SCANS)

Tan Kim Leong(KLSE/SCANS/MCD/RIIAM)

Left to right:

Ramli Ibrahim(KLOFFE)

Dato’ Seri Syed Zainol Anwar Jamalullailbin Tuanku Syed Putra Jamalullail

(MCD)

Dato’ Mohd Salleh Abdul Majid(SCANS/KULBER/KLOFFE/RIIAM)

Dato’ Hj Megat Najmuddin Khas Dato’ Sri Dr Hj Megat Khas

(SCANS/MSRS)

Left to right:

Chan Guan Seng(KLSE/SCANS/MCD/RIIAM)

Dato’ Mohammed Azlan Hashim(KLSE/SCANS/MCD/KULBER/MSRS/KLOFFE/RIIAM)

Dato’ Ranita Mohd Hussein(KLSE/SCANS/KLOFFE/RIIAM)

Benny Ng Wu Hong(KLSE/SCANS/RIIAM)

41


Left to right:

Syed Jamil Syed Jaafar(KULBER)

Mohamad Ariff Md Yusof(KLOFFE)

Mohaiyani Shamsudin(KLSE/SCANS)

Dato’ Hwang Sing Lue(KLSE/SCANS/KLOFFE)

Not in picture:

SA Vanar(KLOFFE)

Left to right:

Prof Datuk Abu Bakar Abdul Hamid(KULBER)

Datuk Teh Ghee Kok(KULBER)

Prof Tan Sri Dato’ Dr SyedJalaluddin Syed Salim

(RIIAM)

Shahzalan Adam(KULBER)

Left to right:

Tan Sri Zulkifli Mahmood(MSRS)

Mohd Ridzal Mohd Sheriff(KLOFFE)

Omar Merican(KLOFFE)

Mohamad Shuib Abdul Ghani(MSRS)


42

SCANSSecurities Clearing AutomatedNetwork Services Sdn Bhd

For the financial year ending June 1999, SCANS

has achieved a net profit before tax and before

extraordinary items of RM84 million.

Activities/projects undertaken by SCANS for the year

under review include:

• Review of the Operations of SCANS as Malaysia’s

National Clearing House

An on-going review of the operations of SCANS as

Malaysia’s national clearing house was undertaken.

The review was undertaken to enhance SCANS’

role in the securities industry as the central

clearing house, and thus, to realise its vision of

ensuring the soundness of the Malaysian securities

industry through the development of centralised,

standardised, post-trade automated processing

solutions that will increase efficiency, minimise

settlement risk and reduce settlement costs.

The review includes:-

– review and recommendations on the corporate

structure and governance of SCANS

– proposal for appropriate model for guaranteeing

of trade settlement

– review and recommendations on operational

procedures and rules of SCANS

– proposal on risk management procedures

Left to right:

Azman Shah Md YamanLegal Advisor, Corporate Affairs,Legal & Compliance

Lim Boon HangSenior Manager, Risk Management,Compliance & Surveillance

Lim Lean BengSenior Manager, Clearing

Ungku A Razak Ungku A RahmanGeneral Manager

Fathi Ridzuan Ahmad FauziAssistant General Manager,Finance & Administration

43


– review and recommendations on insolvency

laws that impact on the settlement operations

of SCANS

– proposal for the establishment of clearing

guarantee fund

– review and recommendations on interface

procedures with the central depository and

stock exchanges, and

– proposal for appropriate model for automated

securities lending facilities

A concept paper for the overall review has been

completed and adopted.

• Institutional Settlement Service (ISS)

ISS is a service offered by SCANS to institutional

investors, aimed at achieving an enhanced

Delivery Versus Payment (DVP) environment that is

consistent with practices of other jurisdictions.

The main objectives of ISS are to reduce the

settlement risk of institutional investors and to

enable SCANS to make payment directly to the

institutional investors’ settlement agents upon

delivery of securities on the settlement date.

In order to realise the enhanced DVP environment for

the institutional investors, SCANS opened its

clearing membership to eligible financial

institutions to be Non-Trading Clearing Members

(NTCMs) of SCANS. This will enable the NTCMs to

directly report, clear and settle securities

transactions through SCANS, on behalf of their

institutional investors.

Amendments to SCANS’ Rules were effected to

allow the clearing membership to be extended to

NTCMs and ancillary provisions were introduced

to cater for the ISS.

This project was successfully launched on

15 July 1999.

• Direct Business Transactions (DBT)

In line with the amendments made to the KLSE’s

Rules on DBT, SCANS had consequentially made

several amendments to its Rules to give effect to the

clearing and settlement of DBT. The amendments

came into effect on 1 September 1998.


44

For the financial year ended June 1999, KULBER has achieved

a net profit before tax and before extraordinary items of

RM3.28 million, as compared to RM4.12 million achieved during

the previous financial year showing a decrease in profits of

RM0.84 million or 20.4%.

KULBER is currently pursuing a new business strategic

plan to steer the company in providing better and enhanced

financial and investment information services to the investors,

locally and abroad.

KULBERKLSE-Bernama Real-TimeInformation Services Sdn Bhd

For the year under review, MSRS participated in

various activities, which amongst others included

attending to clients’ and shareholders’ queries, assisting

clients in their restructuring exercises and also

extending assistance to relevant regulatory authorities.

MSRS also provided specific services as Special

Registrar for mandatory take-over offers of companies.

As at 30 June 1999, there are 81 listed and non-listed

companies which have appointed MSRS as their

share registrar.

MSRSMalaysian Share RegistrationServices Sdn Bhd

Abdul Nasir Ahmad DaudGeneral Manager

45


MCDMalaysian CentralDepository Sdn Bhd

Amendments to the Securities Industry (Central

Depositories) Act 1991 (SICDA) and to the Rules of

MCD were made during the financial year of July

1998 to June 1999 with the objective of promoting

transparency in trading and ownership of securities in

the stock exchange, to attain full immobilisation of

securities within the Central Depository System (CDS)

and maintain KLSE as the premier market for trading in

Malaysian securities.

Transparency in Securities Trading and Ownership

1. Beneficial owner/Authorised nominee – All

securities accounts must be opened in the name

of either the beneficial owner of the securities or

an authorised nominee, and dealings in deposited

securities can only be effected by these parties.

The categories of persons recognised to act as

authorised nominees are defined in the Rules of MCD.

Left to right:

Ahmad Aznan Haji NawawiLegal Advisor, Corporate Affairs,Legal & Compliance

Ungku A Razak Ungku A RahmanGeneral Manager

Nadzirah Abdul RashidManager, Finance & Administration

Haji Zainuddin Alang MamatAssistant General Manager, Depository

Ang Ting KangSenior Manager, Information Technology


46

Year In Review

During the period under review, the accumulated

shares in the system increased from 122.4 billion

shares to 157.6 billion whilst the number of companies

that prescribed their securities to be deposited into the

CDS has increased from 734 to 746.

The mandatory deposit requirement resulted in the

deposit of 26 billion additional shares before its

deadline on 1 December 1998.

As at 30 June 1999, the percentage of securities

immobilised into the CDS stood at 98.52 per cent whilst

the total number of shares withdrawn by the depositors

up to termination of the withdrawal facility on

1 September 1998 was 222.0 million or 0.18 per cent

of the total number of shares in the system.

In the year in review, the CDS settled a total number

of 65.2 billion shares traded on the KLSE and

facilitated more than 1.1 million CDS ordinary

transfers involving 99.8 billion shares.

The number of CDS accounts opened during the year

was 521,421 bringing the total number of CDS

accounts opened as at 30 June 1999 to 2,447,866.

During this period, MCD appointed two new

stockbroking companies as its Authorised Depository

Agents (ADAs) bringing the total number of ADAs to 66,

in addition to the 48 Authorised Direct Members (ADMs).

2. One account one beneficial owner – An authorised

nominee shall hold deposited securities for one

beneficial owner in respect of each securities

account and the full name of the beneficial owner

must be furnished to MCD, unless exempted

by order of the Minister of Finance (MOF).

Immobilisation of Securities

1. Mandatory deposits – All prescribed securities

were required to be deposited with MCD on or

before 1 December 1998, failing which the

securities would be transferred to the MOF.

A person whose securities had been transferred to

the MOF could appeal to the Securities

Commission (SC) by 1 June 1999, failing which

the MOF can dispose the securities and deal

with the proceeds of the disposal as if they were

moneys paid to him pursuant to the law relating

to unclaimed moneys. In the case of securities

prescribed into the CDS after 1 November 1998,

the securities must be deposited into the CDS

within the prescribed period.

Certain classes of securities are exempted from

mandatory deposit.

2. Prohibition on withdrawals – Depositors shall not

withdraw securities which have been deposited

with MCD except when it is to facilitate share

buy back, conversion of debt securities, company

restructuring process, for rectification of error and

in any other circumstances determined by MCD.

KLSE as the Premier Market

To achieve this objective and further to the amendments

to the SICDA, the rules were also amended to the effect

that ordinary transfers are allowed only if the reason for

the transfer is an approved reason and further effective

from 8 September 1998, the express transfer facility has

been suspended for an indefinite period of time.

47


MCD was appointed as the Central Depository for the

Malaysian Exchange of Securities Dealing and

Automated Quotation (MESDAQ) on 6 October 1997.

The first MESDAQ listed counter was prescribed into

the CDS on 22 March 1999.

Currently, MCD provides services to 69 share

registrars who represent 746 public listed companies

in the CDS. During the period in review, a total of

13,120 Record of Depositors (ROD) detailing investor

holdings in prescribed companies were produced

upon issuers’ request.

Between June 1998 and August 1998, MCD together

with the rest of the KLSE Group completed two

Y2K Integration Tests. In October 1998 and April 1999,

the CDS also passed the first and second Y2K

End-to-End Industry Wide Tests. All the ADAs and

ADMs participated in this exercise.

MCD CALL-DIRECT

IN ITS EFFORTS TO PROVIDE A MORE USER-

FRIENDLY SERVICE, MCD LAUNCHED AN

INTERACTIVE VOICE RESPONSE SYSTEM CALLED

MCD CALL-DIRECT ON 22 OCTOBER 1999.

MCD CALL-DIRECT ENABLES THE CENTRAL

DEPOSITORY SYSTEM (CDS) ACCOUNT

HOLDERS AMONGST OTHERS, TO OBTAIN THE

BALANCES OF THEIR CDS ACCOUNTS VIA THE

TELEPHONE. ACCOUNT HOLDERS CAN ALSO

REQUEST FOR A FAXED COPY OF THEIR

STATEMENT OF ACCOUNT IF THE CALL IS

PLACED THROUGH A PHONE/FAX MACHINE.

IN ADDITION, GENERAL INFORMATION ON

OTHER SERVICES OFFERED BY MCD IS ALSO

AVAILABLE TO MCD CALL-DIRECT USERS.

THIS FACILITY IS THUS, NOT ONLY FOR CDS

ACCOUNT HOLDERS BUT ALSO FOR THE

GENERAL PUBLIC. INVESTORS WILL ALSO BE

LINKED TO MCD’S HELPDESK SHOULD THERE

BE ANY ENQUIRIES ON MCD CALL-DIRECT.


48

The Kuala Lumpur Options &Financial Futures Exchange Bhd

The Kuala Lumpur Options and Financial Futures

Exchange Bhd (KLOFFE) had a challenging year both

in 1998 and 1999, seeing many new developments

and changes in the industry.

One of the more significant events was the signing

of the Sale and Purchase Agreement in July 1998

between KLSE and the shareholders of KLOFFE Capital

Sdn Bhd (the holding company of KLOFFE), namely

Renong Bhd, HLG Capital Bhd, New Straits Times

Press (M) Bhd and Rashid Hussain Bhd. The take-over

was finalised in December 1998 when KLSE

completed the acquisition of KLOFFE Capital. KLSE

and KLOFFE are currently working together in

identifying areas where both parties would be able to

maximise the benefits from the acquisition.

Additionally, the Futures Industry Act 1993 was

amended in October 1998 to allow the participation of

asset managers and unit trusts in the futures industry.

In tandem, the Securities Commission (SC) also issued

guidelines for the licensing of futures fund managers

and futures fund managers’ representatives. This paves

the way for asset managers to obtain futures fund

managers’ licences and trade in futures contracts.

In addition to this, unit trust companies subject to the

SC’s Guidelines on Unit Trust Funds will be exempted

from licensing requirements under the Act, and can

now trade in futures contracts. This is a development

that is expected to increase participation in KLOFFE

and enhance volume levels.

Left to right:

S LoganathanGeneral Manager

Mohd Shah ShariffSenior Manager, Information Technology

Janita CheahSenior Manager, Business Development

Linda SongCompany Secretary/Manager, Legal

KLOFFE

49


Prior to May 1999, KLOFFE provided front-end clearing

functions while the Malaysian Derivatives Clearing

House (MDCH) performed the back-end clearing

functions for KLOFFE traded products. It was later

decided, at industry level, that MDCH should provide

both front and back end clearing functions for KLOFFE.

Hence, in early 1999, KLOFFE focused on the

completion and implementation of the new derivatives

industry solution and at the same time, addressed its

Y2K readiness. The following summarises the steps taken

by the various industry partners in achieving this goal.

a) Renovation/Replacement/Internal Testing

In order to address Y2K issues and extend the level

of services provided to the industry, KLOFFE

undertook renovation exercises, whereas MDCH

implemented a new clearing system. The Malaysian

derivatives industry is fortunate in some ways, in

that its Y2K application related issues will be

encountered well in advance of the roll-over to the

new millennium. This is because the industry trades

future contracts and Y2K application related issues

arise with the introduction of Y2K expiring

contracts. KLOFFE and MDCH have all thoroughly

tested their internal solutions, inclusive of their

applications, hardware and operating systems.

b) Joint Integration Testing

Other than undertaking their own internal testing

exercises, KLOFFE and its members worked

together to undertake testing at industry level,

addressing the relevant 1999 and 2000 dates. The

joint integration testing exercises proved the Y2K

readiness of the industry solution in terms of

systems and operational procedures.

c) End to End Testing

Subsequent to the joint integration testing exercises

and prior to the launch of the various systems, the

industry had the opportunity to utilise the solution

in a production mirrored environment. This

afforded the members an opportunity to test their

internal systems against the new Y2K ready

industry solution in a meaningful and realistic

manner. It should be noted that most of the

systems solutions utilised by KLOFFE members are

provided and monitored by KLOFFE and its

clearing house. This will minimise the risks of

member Y2K system failures having an adverse

impact on the industry.

d) Roll-out

On 10 May 1999, KLOFFE implemented its Y2K

ready solution as part of the roll-out of the

Malaysian derivatives Y2K industry solution.

e) Contingency Planning

KLOFFE is in the process of finalising its own

internal Y2K contingency plans and is an active

member of the Malaysian Capital Markets

Contingency Planning Y2K Steering Committee.

The aim of this Steering Committee is to ensure

that Y2K contingency planning is addressed at

industry level.

f) Change Freeze

As a Y2K precautionary measure, the industry has

collectively decided to implement a change freeze

during the last quarter of 1999.


50

Future Plans

Future plans include the launch of options on the KLSE

Composite Index (which will position KLOFFE as the

first exchange to trade options contracts in Malaysia)

and individual stock options, to provide investors with

a wider range of equity derivative instruments to hedge

their underlying portfolio. In terms of new product

research, KLOFFE is looking into the possibility of

introducing a KLSE-based sectoral index derivative in

the future.

Education

To further build a strong presence in both the local

and international market, KLOFFE lined up a number

of projects to help increase its trading volume and

market awareness in 1998/1999. Amongst them are

ongoing educational symposiums and roadshows in

collaboration with KLOFFE’s trading members which

are targeted at the investing public. More emphasis

will be placed on conducting presentations for fund

managers, remisiers and members of other professions

in the financial industry. These presentations will be

divided into different levels, from the basics of trading

to other topics of interest.

Promotion

On the marketing and promotion front, the focus for

1999 has been to promote KLOFFE more aggressively

in view of the current regional competition faced and

to place KLOFFE as a creditable futures and options

exchange in the region. KLOFFE will continue its

annual participation in the European Derivatives

Exhibition organised by Futures & Options World

(UK). This year KLOFFE participated as part of a

delegation with the Commodity and Monetary

Exchange of Malaysia (COMMEX) and MDCH. The

purpose of participating in these exhibitions is to

market and promote KLOFFE, its product(s) and the

benefits to the investing public. Such exhibitions also

enable us to update ourselves on the latest

developments in the futures and options industry by

meeting the various representatives of international

derivatives exchanges and by attending the special

presentations by other exchanges.

RIIAM

51


Research Institute of Investment Analysts Malaysia

Haji Wan Fauzi Wan MahmoodDirector1998/99 was a very significant year for RIIAM.

The planned activities revolved around training

programmes tailored for the investors, market

participants and the KLSE Group.

RIIAM organised some 154 training sessions/

programmes, encompassing customised in-house and

public programmes for KLSE Group staff, as well as

other programmes for various target audiences in the

industry. This works out to an average of about

13 sessions per month.

Working Together

The various recent regulatory changes and the current

economic crisis also caused a significant shift in the

focus of RIIAM’s programmes. We started some

specially designed programmes to address some of the

current issues such as risk management, corporate

governance, Y2K and regulatory updates. In running

such programmes, we solicited the co-operation of

some relevant professional organisations, such as the

Malaysian Association of Certified Public Accountants

(MACPA), the Institute of Internal Auditors Malaysia

(IIAM) as well as local universities.

Widening Reach

The RIIAM Diploma in Investment Analysis programme

has come into its sixth year in 1999. A total of seven

classes, three in KL and two each in Penang and

Kuching were conducted. In addition to existing

strength, more local lecturers were recruited to cater to

the needs of the classes.

With the restructuring of the KLSE Group in June 1998,

RIIAM was entrusted with the responsibility of taking

over as the training arm of the KLSE Group; RIIAM was

also required to function as a financially separate

entity. During the period, 85 sessions of in-house

training programmes comprising technical and

soft skills were conducted for KLSE Group. RIIAM

developed it own modules for Staff Development and

Management Development Programmes and a total of

1,823 participants attended these programmes.

Growth of KLSE-RIS

The KLSE-RIS web-site (www.klse-ris.com.my) gained

tremendous popularity in 1999. Its enhancement

project was completed during the first quarter of the

year whereby its capacity was expanded from a

monthly maximum of 4 million hits to 10 million hits.

The system recorded a monthly average of more than

7 million hits and had almost 30,000 users from

almost 80 countries.

International Linkages

On the international front, in 1999, RIIAM continued

to play an active role as a member society of the

Asian Securities Analysts Federation (ASAF),

representing Malaysia. RIIAM is proud to have been

given the trust and honour to host the 1999 ASAF

Annual Conference which was held from 10-12

October 1999. The Conference “Planning for Economic

Recovery: Platform for a Better Future”, was well

attended by international and local participants.

RIIAM will continue to pursue its objectives of

providing choice investor education programmes whilst

attending to the training needs of the industry and

KLSE Group.


CalendarO f E v e n t s

52

FIBV General Assembly

The KLSE successfully hosted the 38th FIBV GeneralAssembly and Annual Meeting in Kuala Lumpur from 25 – 27 October 1998, with over 125 delegatesfrom 40 countries participating in the assembly. KLSE has been a member of FIBV (abbreviated from the French – Federation Internationale desBourses de Valeurs) since 1975.

Amendments to Listing Requirements

The KLSE announced several amendments to the ListingRequirements relating to take-overs and mergers thatwould promote enhanced disclosure by public listedcompanies. The amendments were consequential to theprescription of the new Malaysian Code on Takeoversand Mergers 1998, which superceded and repealed the previous Code of Take-overs and Mergers 1987.

KLSE Group Hari Raya & Chinese New Year Lunch

The KLSE celebrated the Hari Raya and Chinese NewYear festivities on 4 February 1999 at the Annex,Exchange Square. More than 800 KLSE Group staffattended the event where the opportunity was alsotaken by Yayasan BSKL to make financial contributionsto 55 charitable organisations.

Standard Remisiers’ Agreement

The KLSE approved a standard remisiers’ agreementwhich would apply to all stockbroking companies andtheir remisiers. Amongst the significant areas coveredby the agreement are the duties and obligations of remisiers, remisiers’ security deposits as well as therights and duties of the stockbroking companies. The agreement took effect on 9 February 1999.

25 –

27

Oct

ober

199

8

ANNA Extraordinary General Meeting

The KLSE hosted the Association of NationalNumbering Agencies (ANNA) Extraordinary GeneralMeeting from 30 November – 1 December 1998.ANNA is the umbrella body for agencies responsiblefor issuing International Securities IdentificationNumbers (ISINs) for their respective countries. 16 countries were represented at this meeting.

30 N

ovem

ber

– 1

Dec

embe

r 19

98

PACAP/FMA Finance Conference

KLSE sponsored the 10th Annual PACAP/FMA FinanceConference held from 26 – 28 October 1998 in Kuala Lumpur. Organised by the Pacific Basin CapitalMarkets (PACAP) Research Centre and the FinancialManagement Association International (FMA), theConference brought together almost 200 delegatesfrom over 20 countries. PACAP also organised a joint session with the FIBV delegates to discussissues and challenges experienced recently by Asia-Pacific financial markets.

26 –

28

Oct

ober

199

8

4 Ja

nuar

y 19

994

Febr

uary

199

99

Febr

uary

199

922nd KLSE Annual General Meeting

The 22nd KLSE Annual General Meeting held on 28 November 1998, had close to 100 attendeescomprising KLSE Committee Members, representativesof stockbroking companies and KLSE Group SeniorManagement.

28 N

ovem

ber

1998

Visits to the Exchange

The KLSE received two prominent visits from YB Dato’ Nazri Abdul Aziz, Deputy Minister of FinanceII and the Hon. John Moore, Australian Minister ofDefence on 23 and 24 February 1999, respectively.Detailed briefings on the current and futuredevelopments of KLSE were conducted for both visits.

23 –

24

Febr

uary

199

9

4 February 1999 23 February 1999

28 November 1998

25 – 27 October 1998


KLSE strengthens corporate accountability of publiclisted companies

The KLSE announced requirements on quarterlyreporting of financial statements by public listedcompanies, to enhance corporate disclosure. To enhance corporate governance, KLSE alsoannounced restrictions on the number of directorships.

11 M

arch

199

9

10th Annual KLSE-FPLC Golf Tournament & Lunch

The 10th Annual KLSE-FPLC Golf Tournament & Lunch which was held on 20 March 1999 marked a farewell to DYMM Seri Paduka Baginda Yang di-Pertuan Agong Tuanku Jaafar ibni Almarhum TuankuAbdul Rahman whose term as the Agong ended in April 1999.20

Mar

ch 1

999

End

May

199

96

July

199

915

Jul

y 19

9926

Jul

y 19

99

KLSE launches Syariah Index

The KLSE launched a new index called the KLSESyariah Index, to expand participation in thestockmarket from local and foreign investors who are keen to invest in securities approved by the Islamicprinciples of Syariah.

Familiarisation visits to public listed companies

The Executive Chairman led a group of seniormanagement team members to PROTON Bhd on 23 April 1999 for the first familiarisation visit for 1999.Subsequently, similar visits to Star Publications Berhad(30 July 1999) and Artwright Holdings Berhad (3 September 1999) were organised.

Commencement of industry dialogues

The KLSE began another series of industry dialoguesessions with previous and new industry dialoguepartners. These sessions provide KLSE with theopportunity to participate in an open forum whichallows for the interchange of ideas and thoughts onissues relating to all parties concerned.

Institutional Settlement Service

The Institutional Settlement Service (ISS) was launchedon 15 July 1999 to facilitate the settlement of trades ofinstitutional investors directly with the clearing house.Offered by SCANS, the ISS will enhance the currentDelivery versus Payment (DVP) environment byextending clearing membership to include residentcustodian banks and institutional investors.

Opening of Balai Maklumat BSKL

In line with KLSE’s objectives to enhance investoreducation, the Exchange opened its third BalaiMaklumat BSKL, in Johor Bahru on 26 July 1999which was officiated by YAB Dato’ Haji Abdul Ghanibin Othman, the Menteri Besar of Johor. Subsequently,the fourth Balai Maklumat BSKL, in Kuching wasofficially opened on 26 October 1999 by the Chief Minister of Sarawak, YAB Datuk Patinggi Tan Sri Dr Haji Abdul Taib Mahmud.

8 O

ctob

er 1

999

22 O

ctob

er 1

999

KLSE Listing Information Network (KLSE LINK)

On 8 October 1999, the KLSE launched the KLSE LINKto the public. An internet-based facility, the KLSE LINKenhances corporate disclosure for investors.

MCD Call-Direct

MCD Call-Direct was launched on 22 October 1999 toassist CDS account holders to obtain their CDS accountbalances via the telephone. General information on other services offered by MCD is also available.

Affiliate membership of IOSCO

KLSE became an affiliate member of the InternationalOrganisation of Securities Commissions (IOSCO) inMay 1999. The membership will serve as anotherplatform for KLSE to learn from other members, andalso present its views and opinions in various areas ofsecurities regulation.

Contribution to JE Trust Fund

The KLSE, stockbroking companies and public listedcompanies jointly contributed RM1 million to theJapanese Encephalitis (JE) Trust Fund at a ceremony heldon 6 July 1999. The Trust Fund is a special fund to provideassistance to the victims and to sponsor the activitiesinvolved in containing the outbreak of the disease.

17 A

pril

1999

23 A

pril

1999

23 A

pril

1999

6 July 1999

26 July 1999

22 October 1999

20 March 1999

23 April 1999

StatementsFinancial

Report Of The Committee 55

Statement By The Committee 60

Statutory Declaration 60

Auditors’ Report 61

Balance Sheets 62

Income And Expenditure Accounts 63

Consolidated Cash Flow Statement 64

Notes To The Accounts 67

ReportO f T h e C o m m i t t e e

55


The Committee hereby submit their report together with the audited accounts of the Exchange and of the Group for

the financial year ended 30 June, 1999.

Principal Activities

The principal activities of the Exchange are to provide, regulate and maintain facilities for conducting the business

of a stock exchange in Malaysia.

The principal activities of the subsidiaries are described in Note 9 to the accounts.

There were no significant changes in these activities during the financial year, except for the addition of the options

and financial futures exchange activities as disclosed in the significant events note below.

Results

Group Exchange

RM RM

Excess of income over expenditure after taxation 192,562,788 177,308,879

Minority interests (3,511,981) —

Excess of income over expenditure after taxation and minority interests 189,050,807 177,308,879

Transfer to Compensation Fund (212,146,440) (206,000,000)

Accumulated funds brought forward 1,085,891,383 654,399,355

Accumulated funds carried forward 1,062,795,750 625,708,234

Reserves and Provisions

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

made to the Compensation Funds of Malaysian Central Depository Sdn. Bhd. and the Kuala Lumpur Stock Exchange

as disclosed in Notes 18 and 23 to the accounts respectively.

Membership Fees

As at 30 June, 1999

(i) membership fees received from past and present members at RM10,000 each amounted to RM2,950,000 (1998:

RM2,920,000); and

Report Of The Committee


56

Membership Fees (cont’d)

(ii) a total contribution of RM91,000,000 (1998: RM80,000,000) was received from members as follows:

No of Members Total Contributions

Brought Carried Contribution Brought Carried

forward Additions forward per Member forward Additions forward

RM’000 RM’000 RM’000 RM’000

3 2 5 5,000 15,000 10,000 25,000

50 1 51 1,000 50,000 1,000 51,000

5 — 5 3,000 15,000 — 15,000

58 3 61 80,000 11,000 91,000

Bad and Doubtful Debts

Before the income and expenditure accounts and balance sheets were made out, the Committee took reasonable

steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision

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

had been made for doubtful debts.

At the date of this report, the Committee is not aware of any circumstances which would render the amount written

off for bad debts or the amount of provision for doubtful debts in the accounts of the Exchange and of the Group

inadequate to any substantial extent.

Current Assets

Before the income and expenditure accounts and balance sheets were made out, the Committee took reasonable

steps to ensure that any current assets which were unlikely to be realised in the ordinary course of business their

values as shown in the accounting records of the Exchange and of the Group have been written down to an amount

which they might be expected so to realise.

At the date of this report, the Committee is not aware of any circumstances which would render the values attributed

to the current assets in the accounts of the Exchange and of the Group misleading.

Valuation Methods

At the date of this report, the Committee is not aware of any circumstances which have arisen which render

adherence to the existing methods of valuation of assets or liabilities of the Exchange and of the Group misleading

or inappropriate.

57


Contingent and Other Liabilities

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

(a) any charge on the assets of the Exchange or of the Group which has arisen since the end of the financial year

which secures the liabilities of any other person; or

(b) any contingent liability of the Exchange or of the Group which has arisen since the end of the financial year.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of

twelve months after the end of the financial year which, in the opinion of the Committee, will or may substantially

affect the ability of the Exchange or of the Group to meet their obligations when they fall due.

Change of Circumstances

At the date of this report, the Committee is not aware of any circumstances not otherwise dealt with in this report

or the accounts of the Exchange or of the Group which would render any amount stated in the accounts misleading.

Items of an Unusual Nature

The results of the operations of the Exchange and of the Group during the financial year were not, in the opinion

of the Committee, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item,

transaction or event of a material and unusual nature likely, in the opinion of the Committee, to affect substantially

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

Significant Events

(i) On 22 July, 1998, the Exchange entered into a Sales and Purchase Agreement for the acquisition of 19,998,002

ordinary shares of RM1 each in KLOFFE Capital Sdn. Bhd. (representing a 100% equity interest) for a cash

consideration of RM35,000,000. The said acquisition was completed on 31 December, 1998 at a revised cash

consideration of RM27,000,000.

(ii) On 2 December, 1996, Securities Clearing Automated Network Services Sdn. Bhd. (“SCANS”), a wholly owned

subsidiary, entered into an agreement with Virtual Commerce Holdings Sdn. Bhd. to dispose off its entire

interest in its subsidiary, KLSE Chilong Systems Sdn. Bhd. for a cash consideration of RM2,978,946. The said

disposal was completed upon obtaining the approval of the Securities Commission on 11 January, 1999.

Report Of The Committee


58

Group Rationalisation

During the year, the Group embarked onto a rationalisation exercise to streamline the Group’s activities and

structure. Pursuant to this exercise, subsequent to the financial year end, the Exchange entered into agreements with SCANS

to acquire:

(i) 1,020,000 ordinary shares representing 51% equity interest in Malaysian Share Registration Services Sdn. Bhd.

(“MSRS”), for a cash consideration of RM1,020,000.

(ii) 137,501 ordinary shares representing 55% equity interest in KLSE-Bernama Real-Time Information Services Sdn.

Bhd. (“KULBER”), for a cash consideration of RM8,190,207 which is to be adjusted based on the attributable

Net Tangible Assets on the expected completion date.

Subsequent Event

Subsequent to the financial year, the Exchange subscribed for all 20,000,000 new ordinary shares of RM1 each in

KLOFFE Capital Sdn. Bhd. (KLOFFE Capital), a wholly owned subsidiary. KLOFFE Capital in turn also subscribed for

all 20,000,000 new ordinary shares of RM1 each in The Kuala Lumpur Options & Financial Futures Exchange Bhd

(a wholly owned subsidiary of KLOFFE Capital). Both transactions were satisfied by way of capitalisation of inter-

company balances with the balance in cash.

Committee Members

The Committee Members who served since the date of the last report are:

Dato’ Mohammed Azlan Hashim

Chan Guan Seng (elected on 5 December, 1996)

Dato’ Ranita Mohd Hussein

Tan Kim Leong

Abdul Kadir Haji Md Kassim

Koh Kee Tee (elected on 26 November, 1997)

Dato’ Hwang Sing Lue (elected on 28 November, 1998)

Mohaiyani Shamsudin (elected on 28 November, 1998)

Ng Wu Hong (retired on 28 November, 1998 and re-elected effective 1 January, 1999)

Datuk Tiah Thee Kian (retired on 28 October, 1998)

Dato’ Nik Mohamed Nik Yahya (retired on 28 November, 1998)

Dato’ Mohammed Azlan Hashim, Dato’ Ranita Mohd Hussein, Tan Kim Leong and Abdul Kadir Haji Md Kassim

were appointed by the Minister of Finance pursuant to Section 8(3) of the Securities Industry Act, 1983 and are not

subject to retirement by rotation.

In accordance with Article 10.3(1) of the Exchange’s Articles of Association, two of the current Elected Committee

Members are required to retire at the 23rd Annual General Meeting. Pursuant to Article 10.3(2), the two so retiring

are Chan Guan Seng and Koh Kee Tee. Pursuant to Article 10.3(3), both gentlemen are eligible for re-election.

In accordance with Section 129 of the Companies Act, 1965, Dato’ Hwang Sing Lue retires on exceeding the age

of 70 years at the forthcoming Annual General Meeting, and being eligible, offers himself for re-election.

59


Committee Members’ Benefits

During and at the end of the financial year, no arrangements subsisted to which the Exchange or its subsidiaries is

a party with the object of enabling Committee Members of the Exchange to acquire benefits by means of the

acquisition of shares in or debentures of any other body corporate.

Since the end of the previous financial year, no Committee Member of the Exchange has received or become

entitled to receive a benefit (other than the fixed salary of a full-time employee of the Exchange, reimbursement of

expenditure incurred in attending Committee Meetings in the form of meeting allowances and any other benefits in

kind as disclosed in the accounts) by reason of a contract made by the Exchange or a related corporation with the

Committee Member or with a firm of which the Committee Member is a member, or with a company in which the

Committee Member has a substantial financial interest.

Committee Members’ Interests

The Exchange is a company limited by guarantee and thus has no shares in which the Committee Members could

have an interest. Similarly, the Exchange has not issued any debentures.

None of the Committee Members in office at the end of the financial year had any interest in shares in its related

corporations during the financial year.

Auditors

Our auditors, Messrs. Hanafiah Raslan & Mohamad, will be retiring at the forthcoming Annual General Meeting and

will be seeking re-appointment under the name of Arthur Andersen & Co.

Signed on behalf of the Committee in accordance

with a resolution of the Committee Members

DATO’ MOHAMMED AZLAN HASHIM

CHAN GUAN SENG

Kuala Lumpur

24 September, 1999


StatementB y T h e C o m m i t t e e

60

We, DATO’ MOHAMMED AZLAN HASHIM and CHAN GUAN SENG, being two of the Committee Members ofKUALA LUMPUR STOCK EXCHANGE, do hereby state that, in the opinion of the Committee, the accompanyingbalance sheets of the Exchange and of the Group as at 30 June, 1999 and the income and expenditure accountsof the Exchange and of the Group and the cash flow statement of the Group for the year then ended, together withthe notes thereto, give a true and fair view of the state of affairs of the Exchange and of the Group as at 30 June,1999 and of the results of the Exchange and of the Group and cash flows of the Group for the year then ended,and have been properly drawn up in accordance with applicable approved accounting standards.

Signed on behalf of the Committee in accordance with a resolution of the Committee Members

DATO’ MOHAMMED AZLAN HASHIM

CHAN GUAN SENG

Kuala Lumpur24 September, 1999

I, DATO’ MOHD SALLEH ABDUL MAJID, the officer primarily responsible for the financial management of KUALA LUMPUR STOCK EXCHANGE, do solemnly and sincerely declare that the accompanying balance sheets ofthe Exchange and of the Group as at 30 June, 1999 and the income and expenditure accounts of the Exchange andof the Group and the cash flow statement of the Group for the year then ended, together with the notes theretoare, to the best of my knowledge and belief correct, and I make this solemn declaration conscientiously believingthe same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the )abovenamed DATO’ MOHD SALLEH )ABDUL MAJID at Kuala Lumpur in )Wilayah Persekutuan on 24 September, 1999 ) DATO’ MOHD SALLEH ABDUL MAJID

Before me:

Commissioner for Oaths

StatutoryD e c l a r a t i o n

Auditors’R e p o r t

61


To the Members of KUALA LUMPUR STOCK EXCHANGE

We have audited the accounts of KUALA LUMPUR STOCK EXCHANGE (the Exchange) and the consolidated

accounts of KUALA LUMPUR STOCK EXCHANGE AND ITS SUBSIDIARIES (the Group) as at 30 June, 1999. These

accounts are the responsibility of the Committee Members. Our responsibility is to express an opinion on these

accounts based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the accounts are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

accounts. An audit also includes assessing the accounting principles used and significant estimates made by the

Committee Members, as well as evaluating the overall accounts presentation. We believe that our audit provides a

reasonable basis for our opinion.

In our opinion,

(a) the accounts give a true and fair view of the state of affairs of the Exchange and of the Group as at 30 June,

1999 and of the results of the Exchange and of the Group and cash flows of the Group for the year then

ended, and have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and

applicable approved accounting standards; and

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

subsidiaries have been properly kept in accordance with the provisions of the Act.

We are satisfied that the accounts of the subsidiaries that have been consolidated with the Exchange’s accounts are

in form and content appropriate and proper for the purposes of the preparation of the consolidated accounts and

we have received satisfactory information and explanations required by us for these purposes.

The audit reports on the accounts of the subsidiaries were not subject to any qualification or any adverse comment

made under subsection (3) of Section 174 of the Act.

HANAFIAH RASLAN & MOHAMAD WONG KANG HWEE

No. AF 0002 No. 1116/1/2000(J)

Public Accountants Partner of the Firm

24 September, 1999


BalanceS h e e t s 30 June, 1999

62

Group ExchangeNote 1999 1998 1999 1998

RM RM RM RM

CURRENT ASSETSCash and bank balances 3,205,102 4,328,978 666,542 258,314Short term deposits 3 649,477,970 917,440,259 162,774,887 292,501,137Debtors 4 128,159,446 63,130,112 39,353,052 20,063,966Stocks 248,018 290,562 248,018 290,562Investments 5 156,379,302 99,133,506 156,310,622 98,898,990Due from subsidiaries — — 5,923,266 28,683,584Due from associated company 801,865 — — —

938,271,703 1,084,323,417 365,276,387 440,696,553

CURRENT LIABILITIESBank overdrafts 6 21,176,649 15,543,670 — —Short term borrowings 7 3,600,000 — — —Trade creditors 5,077,758 4,831,472 — —Taxation — 138,596,590 — 732,300Due to subsidiaries 8 — — 13,570,261 26,286,172Sundry creditors 79,210,010 72,618,767 36,986,244 41,745,906

109,064,417 231,590,499 50,556,505 68,764,378

NET CURRENT ASSETS 829,207,286 852,732,918 314,719,882 371,932,175SUBSIDIARIES 9 — — 61,060,731 16,436,502ASSOCIATED COMPANY 10 5,680,328 — — —OTHER INVESTMENTS 11 172,372 497,567 — —FIXED ASSETS 12 443,674,737 440,187,994 383,374,481 393,610,167STAFF LOANS RECEIVABLE 13 15,015,081 15,901,930 14,055,638 9,027,647INTANGIBLE ASSETS 14 912,991 127,222 — —DEFERRED TAXATION 15 (6,743,000) (6,868,650) (3,601,000) (3,601,000)LONG TERM LIABILITY 16 (49,951,498) (50,086,136) (49,951,498) (50,086,136)

1,237,968,297 1,252,492,845 719,658,234 737,319,355

Represented by:MEMBERSHIP FEES 17 93,950,000 82,920,000 93,950,000 82,920,000ACCUMULATED FUNDS 1,062,795,750 1,085,891,383 625,708,234 654,399,355RESERVE ARISING ON

CONSOLIDATION — 9,958,835 — —

1,156,745,750 1,178,770,218 719,658,234 737,319,355COMPENSATION FUND 18 39,677,440 33,531,000 — —MINORITY INTERESTS 41,545,107 40,191,627 — —

1,237,968,297 1,252,492,845 719,658,234 737,319,355

The accompanying notes are an integral part of these balance sheets.

IncomeAnd Expendi ture Accounts for the year ended 30 June, 1999

63


Group Exchange

Note 1999 1998 1999 1998

RM RM RM RM

Operating revenue 19 313,414,864 392,352,337 253,739,233 213,892,648

Excess of income over

expenditure before taxation 20 183,645,072 82,133,352 209,120,179 61,381,075

Share of loss of

associated company (142,817) — — —

183,502,255 82,133,352 209,120,179 61,381,075

Taxation 22 9,060,533 (45,292,471) (31,811,300) (33,485,000)

Excess of income

over expenditure after taxation 192,562,788 36,840,881 177,308,879 27,896,075

Minority interests (3,511,981) (3,162,289) — —

Excess of income over

expenditure after taxation

and minority interests 189,050,807 33,678,592 177,308,879 27,896,075

Accumulated funds

brought forward 1,085,891,383 1,056,943,791 654,399,355 626,503,280

1,274,942,190 1,090,622,383 831,708,234 654,399,355

Transfer to

Compensation Funds 23 (212,146,440) (4,731,000) (206,000,000) —

Accumulated funds carried forward 1,062,795,750 1,085,891,383 625,708,234 654,399,355

The accompanying notes are an integral part of these accounts.


ConsolidatedC a s h F l o w S t a t e m e n t for the year ended 30 June, 1999

64

Note 1999 1998RM RM

CASH FLOW FROM OPERATING ACTIVITIESExcess of income over expenditure before taxation 183,645,072 82,133,352

Adjustment for:Transfer to KLSE Compensation Fund (206,000,000) —Share of loss of associated company 142,817 —Depreciation 69,046,109 59,616,786Fixed assets written off 278,574 1,273,828Amortisation of intangible assets 937,954 143,304Bad and doubtful debts 8,845,119 10,340,669Preliminary and pre-operating expenses written off — 145,639Gain on sales of fixed assets (68,974) (3,750,118)Goodwill on consolidation written off 1,326,098 —Net gain on disposal of a subsidiary (1,031,936) —(Write back)/provision for diminution in value

of investment securities (66,353,309) 52,232,121Recreational club memberships benefits 411,715 186,940(Gain)/loss on disposal of investments (3,352,226) 75,564,161Interest income (67,711,689) (93,076,481)Gross dividend income (3,526,849) (3,366,740)

(Deficit)/excess of income over expenditure before working capital changes (83,411,525) 181,443,461

(Increase)/decrease in debtors (65,029,334) 231,698,359Decrease in stocks 42,544 67,326Decrease in creditors (391,310) (40,563,121)Increase in amount due from associated company (228,159) —

Cash (used in)/generated from operations (149,017,784) 372,646,025Taxes paid (135,757,038) (73,999,964)

Net cash (used in)/generated from operating activities (284,774,822) 298,646,061

CASH FLOW FROM INVESTING ACTIVITIESDividends received 3,526,849 3,366,740Dividends paid to minority interests (1,710,000) (979,875)Purchase of a subsidiary * A (31,853,074) —Disposal of a subsidiary * B (1,993,890) —Increase in intangible assets (1,724,977) —Purchase of club memberships (86,520) (217,157)Decrease/(increase) in loans granted to staff 886,849 (5,840,100)Interest received 67,711,689 97,483,671Purchase of fixed assets (52,944,886) (163,365,763)Proceeds from sale of fixed assets 1,216,505 9,640,730Net sale/(purchase) of investment securities 12,531,771 (34,180,494)

Net cash used in investing activities (4,439,684) (94,092,248)

65


Note 1999 1998RM RM

CASH FLOW FROM FINANCING ACTIVITIESDecrease in long term liability (134,638) (538,561)Increase in membership fees 11,030,000 8,050,000

Net cash generated from financing activities 10,895,362 7,511,439

Net (decrease)/increase in cash and cash equivalents (278,319,144) 212,065,252Cash and cash equivalents at beginning of year 906,225,567 694,160,315

Cash and cash equivalents at end of year 627,906,423 906,225,567

Cash and cash equivalents comprise:Cash and bank balances 3,205,102 4,328,978Short term borrowings (24,776,649) (15,543,670)Short term deposits 649,477,970 917,440,259

627,906,423 906,225,567

* Notes to the Consolidated Cash Flow Statement

A. The fair values of assets acquired and liabilities assumed from the acquisition of KLOFFE Capital Sdn. Bhd., asubsidiary are as follows:

1999RM

Cash and bank balances 319,349Short term deposits 1,703,550Sundry debtors 1,294,361Due from associated company 573,706Bank overdraft (349,595)Short term borrowings (3,600,000)Short term loan (1,333,332)Sundry creditors (10,419,941)Fixed assets 23,281,164Intangible assets 15,746Investment in associated company 5,823,145Term loan (1,593,046)Preference shares (40)

Share of net assets acquired 15,715,067Goodwill on consolidation 11,284,933

Total purchase consideration 27,000,000Less: Cash and bank balances (4,853,074)

Cash flow on acquisition, net of cash acquired (31,853,074)


66

B. The fair values of assets disposed and liabilities relinquished from the disposal of KLSE Chilong Systems Sdn. Bhd., a subsidiary are as follows:

1999RM

Cash and bank balances 303,397Short term deposits 4,669,439Trade debtors 361,698Sundry debtors 691,494Due from associated company 350Trade creditors (3,742,412)Sundry creditors (1,206,458)Taxation (254,992)Due to related companies (679,230)Fixed assets 2,267,093Intangible assets 17,000Deferred taxation (125,000)Translation reserve (41,051)Minority interest (314,318)

1,947,010Gain on disposal 1,031,936

Proceeds from disposal 2,978,946Less: Cash and bank balances (4,972,836)

Cash flow on acquisition, net of cash disposed (1,993,890)

The accompanying notes are an integral part of this statement.

Consolidated Cash Flow Statement for the year ended 30 June, 1999

NotesTo T h e A c c o u n t s 30 June, 1999

67


1. Principal Activities

The principal activities of the Exchange are to provide, regulate and maintain facilities for conducting the

business of a stock exchange in Malaysia.

The principal activities of the subsidiaries are described in Note 9 to the accounts.

There were no significant changes in these activities during the financial year, except for the addition of the

options and financial futures exchange activities as disclosed in Note 24(i) to the accounts.

2. Significant Accounting Policies

(a) Basis of Accounting

The accounts are prepared under the historical cost convention and comply with applicable approved

accounting standards.

(b) Basis of Consolidation

The consolidated accounts include the accounts of the Exchange and all its subsidiaries made up to the

end of the financial year.

The results of subsidiaries are included in the consolidated income and expenditure account from the

effective dates of their acquisition. Related company transactions are eliminated on consolidation and the

consolidated accounts reflect external transactions only.

At the date of acquisition, the fair values of the subsidiary companies’ net assets are determined and these

values are incorporated in the consolidated accounts. The difference between the cost of investments and

the net assets of the subsidiary companies at the date of acquisition represents goodwill or reserve arising

on consolidation. Goodwill net of reserve, arising on consolidation is written off to the income and

expenditure account.

(c) Currency Conversion and Translation

Transactions in foreign currencies during the year are converted into Ringgit Malaysia at rates of exchange

approximating those ruling at the transaction dates. Foreign currency monetary assets and liabilities at the

balance sheet date are translated into Ringgit Malaysia at rates of exchange approximating those ruling at

that date. All exchange gains or losses are dealt with in the income and expenditure accounts.

(d) Fixed Assets and Depreciation

Fixed assets are stated at cost less accumulated depreciation. Depreciation on other fixed assets is

provided on a straight line basis calculated to write off the cost of each asset over its estimated useful

life as follows:

Leasehold land – long term 99 years

Building and office lots 2%

Renovations 20%

Office equipment, electrical installation, furniture and fittings 10% – 20%

Computers and office automation 20% – 33.33%

Motor vehicles 20%


68

Notes To The Accounts 30 June, 1999

2. Significant Accounting Policies (cont’d)

(d) Fixed Assets and Depreciation (cont’d)

Building under construction in the previous financial year was not depreciated. The useful life of certain

computer equipment belonging to a subsidiary acquired during the year has been reduced from 20%

(5 years) to an average ranging from 22% (4.5 years) to 67% (1.5 years) to address the Year 2000 issue.

The resultant accelerated depreciation charge of RM4,969,121 has been included in the Group’s current

year’s depreciation charge as reflected in the Group’s income and expenditure account.

(e) Stocks

Stocks representing handbooks, listing manuals and other souvenir items, are stated at the lower of cost

(applied on a first-in, first-out basis) and net realisable value.

(f) Subscriptions

The monthly subscription fees for members, dealers’ representatives, trainee dealers’ representatives and

corporate nominees for both the years 1998 and 1999 were RM400, RM250, RM50 and RM300 respectively.

(g) Provision for Retirement Benefits

Exchange

Non-executive staff

Retirement benefits of the Exchange for non-executive staff are paid to the Employees Provident Fund and

have been charged against income for the year.

Executive staff

With effect from 1 July, 1987, retirement benefits of the Exchange for executive staff are paid to an

approved scheme at a rate as determined by the Exchange with the advice of an actuary and such

payments have been charged against income for the year.

In accordance with the rules of the Retirement Benefit Scheme, a valuation of the fund must be performed

by an actuary at least once every three years.

Subsidiaries

(i) Securities Clearing Automated Network Services Sdn. Bhd.

(ii) Malaysian Central Depository Sdn. Bhd.

Retirement benefits of the above subsidiaries for executive and non-unionised staff are paid to an

approved scheme at a rate determined by the subsidiaries with the advice of an actuary and such

payments have been charged against income for the year.

In accordance with the rules of the Retirement Benefit Scheme, a valuation of the fund must be performed

by an actuary at least once every three years.

69


2. Significant Accounting Policies (cont’d)

(h) Leased Assets

The cost of assets acquired under finance lease agreements are capitalised. The depreciation policy on

these assets is similar to that of the Group’s other assets as set out in (d) above. Outstanding obligations

due under the lease agreements after deducting finance expenses are included as liabilities in the

accounts. The finance expenses of the lease rentals are charged to the income and expenditure accounts

over the period of the respective agreements.

Lease rental payments on operating leases are charged to the income and expenditure accounts in the

year they become payable.

(i) Investments

(i) Investments in subsidiaries are stated at cost less provision for any permanent diminution in value.

(ii) Short term investments comprising investment in quoted shares and loan stocks are stated at the

lower of cost and market value determined on an aggregate basis.

(j) Deferred Taxation

Deferred taxation is provided under the liability method in respect of all material timing differences except

where it is reasonably expected that the tax effects of such deferrals will continue in the foreseeable future.

(k) Intangible Assets

Intangible assets comprise:

(i) Central Depository System (CDS) development cost expenditure for the development and

implementation of the CDS. The CDS development cost is being amortised over a period of 7 years.

(ii) Preliminary and pre-operating expenses of dormant subsidiaries which are written off upon the

commencement of operations of these subsidiaries.

(iii) Value Added Network Services (VANS) license which is amortised over a period of 5 years.

(iv) Purchased goodwill is amortised over a twelve month period commencing January 1999. Purchased

goodwill relates to excess of purchased consideration over the value of physical assets purchased,

arising from the acquisition of the business of operating and maintaining the KLOFFE Automated

Trading System.



70

3. Short Term Deposits

Group Exchange1999 1998 1999 1998RM RM RM RM

Compensation FundDeposits with licensed banks — 206,000,000 — 206,000,000

OthersDeposits with:

Licensed banks 472,635,465 439,414,773 106,667,390 56,816,534Licensed finance companies 147,112,187 268,738,669 40,247,179 26,397,786Discount houses 29,730,318 3,286,817 15,860,318 3,286,817

649,477,970 917,440,259 162,774,887 292,501,137

Included in short term deposits are:Group Exchange

1999 1998 1999 1998RM RM RM RM

Deposits pledged with licensed banks for banking facilities granted 220,716,000 50,196,000 716,000 1,367,600

Short term deposits of the Group and Exchange amounting to RM20,312,887 (1998: RM19,444,539) aremanaged by fund managers on behalf of the Exchange. In the previous financial year, the Exchange hasallocated and set aside RM206 million in separate bank accounts to meet the needs of the KLSE CompensationFund as and when required. This amount was transferred in the current financial year to the KLSECompensation Fund itself as disclosed in Notes 23 and 27 to the accounts.

4. Debtors


Trade debtors 92,256,054 41,659,757 17,394,391 4,781,783Sundry debtors 55,085,954 32,277,029 26,680,566 15,521,629

147,342,008 73,936,786 44,074,957 20,303,412Provision for doubtful debts (19,182,562) (10,806,674) (4,721,905) (239,446)

128,159,446 63,130,112 39,353,052 20,063,966

71


4. Debtors (cont’d)

Included in trade debtors of the Group is an amount of RM41,399,220 (1998: RM24,255,430) owing by

Member companies of the Exchange to a subsidiary under a credit facility scheme.

5. Investments

Group Exchange

1999 1998 1999 1998

RM RM RM RM

At cost:

Quoted shares:

– in Malaysia 133,141,057 137,022,620 133,105,127 136,285,737

– outside Malaysia 32,750 32,750 — —

Quoted loan stocks in Malaysia 482,444 1,858,048 482,444 1,858,048

Unit trusts 32,286,396 36,358,969 32,286,396 36,358,969

165,942,647 175,272,387 165,873,967 174,502,754

Less: Provision for diminution

in value (9,563,345) (76,138,881) (9,563,345) (75,603,764)

156,379,302 99,133,506 156,310,622 98,898,990

Market value 156,517,141 99,133,506 156,310,622 98,898,990

Investments of the Group and Exchange with a carrying value amounting to RM119,406,173

(1998: RM69,997,817) are managed by fund managers on behalf of the Group and the Exchange.

6. Bank Overdrafts

The bank overdrafts bear interest of between 7.25% to 11.90% (1998: 10.85% to 13.60%) per annum.

Bank overdraft of a subsidiary amounting to RM452,097 is unsecured. The remaining bank overdraft of the

Group of RM20,724,552 (1998: RM15,543,670) is secured against fixed deposits as stated in Note 3.

7. Short Term Borrowings

The short term borrowings of the Group bear interest of between 5.65% to 11.85% (1998: 9.55% to 15.7%)

per annum, of which RM2,000,000 is secured by a negative pledge over the assets of a subsidiary.



72

8. Due to Subsidiaries

Exchange

The amounts due to subsidiaries are unsecured, interest free and have no fixed terms of repayment.

9. Subsidiaries

Exchange

Note 1999 1998

RM RM

Investment in unquoted shares, at cost (i) 43,436,502 16,436,502

Amount due from a subsidiary (ii) 17,624,229 —

61,060,731 16,436,502

(i) Details of the subsidiaries are as follows:

Effective

Name of company interest Principal activities

1999 1998

% %

Incorporated in Malaysia:

(a) Securities Clearing 100 100 Providing facilities for clearing contracts

Automated Network Services between members of the Exchange

Sdn. Bhd. (“SCANS”) and computer and allied services

to the Group.

(b) KLSE-Bernama Real-Time

Information Services Sdn. Bhd. 55 55 Compiling, providing and disseminating

real-time share price and other relevant

financial economic information.

(c) KLSE Chilong Systems Sdn. Bhd. — 60 Distributing computerised display systems

to provide real-time linkages between a

stock exchange and all relevant

bodies within the securities industry.

(d) Malaysian Central 55 55 To operate and maintain a central

Depository Sdn. Bhd. depository system, providing custodian

and registration facilities in respect of

shares, stocks and other securities.

(e) Malaysian Share Registration 51 51 Providing share registration services.

Services Sdn. Bhd.

73


9. Subsidiaries (cont’d)

Effective


1999 1998

% %

(f) KLSE Realty Sdn. Bhd. 100 100 Dormant – intended principal activity

is real estate investment.

(g) Malaysian Central Depository To act as nominees for Malaysian

Nominees Sdn. Bhd. 55 55 Central Depository Sdn. Bhd. and

to receive securities and property

on deposit or for safe-custody or

management.

(h) KLOFFE Capital Sdn. Bhd.* 100 — Investment holding and the promotion

of derivative instruments and exchanges.

(i) The Kuala Lumpur 100 — To establish, maintain, conduct, operate

Options & Financial Futures and promote a market or markets for the

Exchange Bhd.* (KLOFFE) trading of futures and options contracts

and facilities for the registration of

dealings and settlement of trades in

such contracts.

(j) KLOFFE Information 100 — Dormant – intended principal activities

Systems Sdn. Bhd.* are to provide information technology

and management services.

Incorporated in the Republic

of Singapore:

(k) KLSE Chilong Systems — 60 Distributing computerised display

(Singapore) Pte. Ltd ** systems to provide real time linkage

between the Exchange and the relevant

bodies within the securities industry

in Singapore.

* Audited by Arthur Andersen & Co, Malaysia

** Audited by Arthur Andersen & Co, Singapore

(ii) The amount due from a subsidiary represents an unsecured advance to KLOFFE for working capital

purposes. Subsequent to the financial year, the Exchange capitalised these advances as additional capital

in KLOFFE Capital Sdn. Bhd. and KLOFFE as explained in Note 26 to the accounts.



74

10. Associated Company

Group

1999 1998

RM RM

Unquoted shares, at cost 4,000,000 —

Share of post acquisition profit 1,680,328 —

5,680,328 —

The analysis of the associated company is as follows:

1999 1998

RM RM

Group’s share of net tangible assets 5,680,328 —

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

Effective


1999 1998

% %

Malaysian Derivatives Clearing House Bhd. 50 — Providing clearing facilities for futures

and options contracts.

The acquisition of the associated company was derived from the acquisition of KLOFFE Capital Sdn. Bhd. as

explained in Note 9 to the accounts.

11. Other Investments

Group

1999 1998

RM RM

Recreational club memberships, at cost 497,567 467,350

Add: Acquired during the year 86,520 217,157

Less: Transferred to directors (411,715) (186,940)

172,372 497,567

The club memberships are for the use of directors of a subsidiary.

75


12. Fixed Assets

Group Office

equipment,

electrical

Land and installation, Computers

buildings furniture and office Motor

1999 Note 12(a) and fittings automation vehicles Total

RM RM RM RM RM

Cost

At beginning of year 367,315,086 50,754,509 218,747,562 9,440,862 646,258,019

Subsidiary acquired — 2,176,677 45,883,463 785,342 48,845,482

Subsidiary disposed (470,692) (1,352,992) (3,530,849) (162,721) (5,517,254)

Additions 11,379,868 9,600,745 29,306,668 2,657,605 52,944,886

Disposals — (924,875) (257,448) (2,678,483) (3,860,806)

At end of year 378,224,262 60,254,064 290,149,396 10,042,605 738,670,327

Accumulated

Depreciation


Subsidiary acquired — 816,939 24,251,072 496,307 25,564,318

Subsidiary disposed (198,524) (668,404) (2,236,159) (147,074) (3,250,161)

Charge for the year 7,701,736 11,466,884 47,647,631 2,229,858 69,046,109

Disposals — (248,388) (252,339) (1,933,974) (2,434,701)

At end of year 16,164,577 28,515,405 244,930,256 5,385,352 294,995,590

Net Book Value 362,059,685 31,738,659 45,219,140 4,657,253 443,674,737

1998

Cost


Additions 93,718,572 32,436,162 34,957,484 2,253,545 163,365,763

Disposals (6,724,411) (8,890,810) (62,497,308) (1,793,775) (79,906,304)

At end of year 367,315,086 50,754,509 218,747,562 9,440,862 646,258,019

Accumulated

Depreciation



Disposals (3,382,843) (5,939,634) (62,443,243) (1,517,645) (73,283,365)

At end of year 8,661,365 17,148,374 175,520,051 4,740,235 206,070,025

Net Book Value 358,653,721 33,606,135 43,227,511 4,700,627 440,187,994



76

12. Fixed Assets (cont’d)

Exchange Office

equipment,

electrical

Land and installation, Computers

buildings furniture and office Motor

1999 Note 12(a) and fittings automation vehicles Total

RM RM RM RM RM

Cost


Additions 11,375,914 9,228,489 5,719,667 2,169,870 28,493,940

Disposals — (387,884) — (327,572) (715,456)

At end of year 361,051,871 44,967,988 120,976,355 7,186,731 534,182,945

Accumulated

Depreciation



Disposals — (608) — (203,412) (204,020)

At end of year 13,905,219 20,849,763 112,324,066 3,729,416 150,808,464

Net Book Value 347,146,652 24,118,225 8,652,289 3,457,315 383,374,481

1998

Cost


Additions 84,221,183 24,403,890 13,349,450 1,515,125 123,489,648

Disposals (4,537,130) (6,900,316) (59,282,814) (783,606) (71,503,866)

At end of year 349,675,957 36,127,383 115,256,688 5,344,433 506,404,461

Accumulated

Depreciation



Disposals (1,622,822) (4,352,108) (59,282,814) (627,386) (65,885,130)

At end of year 7,362,363 11,662,797 91,238,647 2,530,487 112,794,294

Net Book Value 342,313,594 24,464,586 24,018,041 2,813,946 393,610,167

77


12. (a) Land and Buildings (cont’d)

Group Building

Leasehold under Building

1999 land construction and office lots Renovations Total

RM RM RM RM RM

Cost

At beginning of year 60,817,500 — 301,547,175 4,950,411 367,315,086

Additions — — 11,375,914 3,954 11,379,868

Subsidiary disposed — — — (470,692) (470,692)

At end of year 60,817,500 — 312,923,089 4,483,673 378,224,262

Accumulated

Depreciation

At beginning of year 2,693,140 — 5,473,632 494,593 8,661,365

Charge for the year 538,223 — 6,269,237 894,276 7,701,736

Subsidiary disposed — — — (198,524) (198,524)

At end of year 3,231,363 — 11,742,869 1,190,345 16,164,577

Net Book Value 57,586,137 — 301,180,220 3,293,328 362,059,685

1998

Cost


Additions 7,500,000 57,434,951 24,511,144 4,272,477 93,718,572

Transfer (out)/in — (269,572,225) 269,572,225 — —

Disposals — — (3,355,440) (3,368,971) (6,724,411)

At end of year 60,817,500 — 301,547,175 4,950,411 367,315,086

Accumulated

Depreciation

At beginning of year 2,154,579 — 1,009,567 3,028,558 6,192,704


Disposals — — (536,870) (2,845,973) (3,382,843)

At end of year 2,693,140 — 5,473,632 494,593 8,661,365

Net Book Value 58,124,360 — 296,073,543 4,455,818 358,653,721


78


Exchange Building

Leasehold under Building

1999 land construction and office lots Renovations Total

RM RM RM RM RM

Cost

At beginning of year 60,817,500 — 288,858,457 — 349,675,957

Additions — — 11,375,914 — 11,375,914

At end of year 60,817,500 — 300,234,371 — 361,051,871

Accumulated

Depreciation

At beginning of year 2,693,140 — 4,669,223 — 7,362,363

Charge for the year 538,223 — 6,004,633 — 6,542,856

At end of year 3,231,363 — 10,673,856 — 13,905,219

Net Book Value 57,586,137 — 289,560,515 — 347,146,652

1998

Cost


Additions 7,500,000 57,434,951 19,286,232 — 84,221,183

Transfer (out)/in — (269,572,225) 269,572,225 — —

Disposals — — (3,355,440) (1,181,690) (4,537,130)

At end of year 60,817,500 — 288,858,457 — 349,675,957

Accumulated

Depreciation

At beginning of year 2,154,579 — 469,762 1,026,227 3,650,568


Disposals — — (536,870) (1,085,952) (1,622,822)

At end of year 2,693,140 — 4,669,223 — 7,362,363

Net Book Value 58,124,360 — 284,189,234 — 342,313,594

Office lots represent office and car park space in multistorey buildings.


79



Included in the fixed assets of the Group and the Exchange are the following cost of fully depreciated assets

which are still in use:

Group Exchange

1999 1998 1999 1998

RM RM RM RM

Buildings, office lots and renovations 154,439 9,359 — —

Office equipment, furniture

and fittings 6,478,674 3,368,654 4,595,470 1,853,258

Computer equipment 138,204,825 90,630,305 57,061,814 43,598,180

Motor vehicles 1,249,569 709,593 1,113,700 353,682

13. Staff Loans Receivable

Group Exchange

1999 1998 1999 1998

RM RM RM RM

Housing loans 13,753,693 13,537,347 13,196,532 8,069,567

Vehicle loans 2,891,235 4,023,082 1,840,694 1,862,256

Computer loans 2,804 106,729 — —

Portion repayable within

twelve months included

in sundry debtors (1,632,651) (1,765,228) (981,588) (904,176)

15,015,081 15,901,930 14,055,638 9,027,647

The staff housing loans are secured against the properties of the borrowers.


80

14. Intangible Assets

Group

1999 1998

RM RM

At cost,

VANS license — 20,000

Less: Amortisation — (3,000)

— 17,000

CDS Development cost 982,130 982,130

Less: Amortisation (982,130) (904,282)

— 77,848

Preliminary expenses 65,682 28,450

Pre-operating expenses 385,433 149,563

Purchased goodwill 1,720,212 —

2,171,327 178,013

Less: Amount written off — (145,639)

Accumulated amortisation (1,258,336) —

912,991 32,374

912,991 127,222

Included in pre-operating expenses are audit fees for the year of RM800 (1998: RM300).

15. Deferred Taxation

Group Exchange

1999 1998 1999 1998

RM RM RM RM

(a) At beginning of year 6,868,650 7,153,000 3,601,000 3,601,000

Subsidiary disposed (125,650) — — —

Transfer from income and

expenditure accounts — (284,350) — —

At end of year 6,743,000 6,868,650 3,601,000 3,601,000


81


15. Deferred Taxation (cont’d)


(b) Timing differences between depreciation and corresponding capital allowances 28,086,617 32,585,869 16,645,319 19,083,486

Timing differences on provisions (4,004,617) (8,055,869) (3,785,319) (6,223,486)

Net amount of all timing differences 24,082,000 24,530,000 12,860,000 12,860,000

16. Long Term Liability

Group and Exchange1999 1998RM RM

Long term liability 50,490,059 50,624,697Less: Portion repayable within twelve months

included in sundry creditors (538,561) (538,561)

49,951,498 50,086,136

Long term liability relates to the amount payable to the Government of Malaysia for the purchase of leaseholdland. The amount is payable in 99 annual instalments of RM538,561 each.

17. Membership Fees

As at 30 June, 1999

(i) membership fees received from past and present members at RM10,000 each amounted to RM2,950,000(1998: RM2,920,000); and

(ii) a total contribution of RM91,000,000 (1998: RM80,000,000) was received from members as follows:

No of Members Total ContributionsBrought Carried Contribution Brought Carriedforward Additions forward per Member forward Additions forward

RM’000 RM’000 RM’000 RM’0001999

3 2 5 5,000 15,000 10,000 25,00050 1 51 1,000 50,000 1,000 51,0005 — 5 3,000 15,000 — 15,000

58 3 61 80,000 11,000 91,000



82

17. Membership Fees (cont’d)

No of Members Total ContributionsBrought Carried Contribution Brought Carriedforward Additions forward per Member forward Additions forward

RM’000 RM’000 RM’000 RM’0001998

3 — 3 5,000 15,000 — 15,00048 2 50 1,000 48,000 2,000 50,000

3 2 5 3,000 9,000 6,000 15,000

54 4 58 72,000 8,000 80,000

18. Compensation Fund

Group

1999 1998

RM RM

At beginning of year 33,531,000 28,800,000

Transfer from Income and Expenditure Accounts 6,146,440 4,731,000

At end of year 39,677,440 33,531,000

In 1997, a subsidiary, Malaysian Central Depository Sdn. Bhd. (“MCD”), established a compensation fund in

accordance with Rule 34 of the Rules of the Malaysian Central Depository Sdn. Bhd. Withdrawals from the Fund

are governed by the internal guidelines of Malaysian Central Depository Sdn. Bhd. for the Compensation Fund.

19. Operating Revenue

The operating revenue of the Exchange comprises gross dividend received from subsidiaries, fees from

members’ subscription, listing, registration, transfer and perusal, sales of publications, System on Computerised

Order Routing and Execution (SCORE) fees, equipment rental income, other income derived from the operation

of the Exchange and interest income.

The operating revenue of the Group further includes clearing fees for contracts between Member companies

of the Exchange, rental of computer terminals to subscribers, fees from Central Depository System (CDS)

operations, subscription, gross trade fees for option contracts less rebates, interest and dividend income.

83


20. Excess of Income Over Expenditure Before Taxation


This is arrived at after charging/(crediting):

Auditors’ remuneration 150,600 155,515 40,000 35,000Amortisation of intangible assets 937,954 143,304 — —Preliminary and pre-operating

expenses written off — 145,639 — —Depreciation 69,046,109 59,616,786 38,218,190 38,509,650Bad and doubtful debts 8,845,119 10,340,669 4,487,162 —Fixed assets written off 278,574 1,273,828 — 502,408(Gain)/loss on disposal of investments (3,352,226) 75,564,161 (2,685,558) 75,437,906Interest expense– subsidiary — — 10,049 —– others 809,793 1,180,558 — —Office rental – subsidiary — — 26,544 —– others 2,280,992 4,280,637 315,929 904,083(Writeback)/provision for diminution

in value of investments (66,575,536) 52,232,121 (66,040,419) 51,697,004Remuneration of – Committee Members

Fees 306,000 251,200 — —Other emoluments 520,200 879,173 — —

– Other directors of subsidiaries:Fees 236,200 363,973 — —Other emoluments 81,790 80,500 — —

Rental of equipment 366,698 1,373,036 — —Recreational club memberships

benefit to directors* 411,715 186,940 — —Retirement benefits 3,681,705 3,270,679 2,093,107 1,898,010Gross dividend income from – subsidiaries — — (145,970,833) (147,345,833)– investments quoted in Malaysia (3,526,849) (3,366,740) (3,526,849) (3,327,555)Equipment rental income (18,396,511) (17,439,649) (4,324,435) (15,839,694)Building rental – subsidiaries — — (10,869,696) (9,058,080)– others (897,679) — (614,991) —Net gain on sale of fixed assets (68,974) (3,750,118) (74,708) (3,161,755)Gain on disposal of a subsidiary (1,031,936) — — —Interest income from– subsidiary — — (557,991) —– others (67,711,689) (93,076,481) (24,343,826) (23,104,030)

* This represents cost of recreational club memberships transferred to directors of a subsidiary.



84

21. Significant Related Party Transactions

Exchange

1999 1998

RM RM

Transfer fees paid to subsidiary 54,271 —

Royalty paid to subsidiary 900,020 1,119,810

Information services income from subsidiary (111,247) —

Net service income from subsidiaries (1,085,226) (5,137,184)

22. Taxation

Group Exchange

1999 1998 1999 1998

RM RM RM RM

Current year charge 474,167 45,576,821 41,346,000 33,485,000

Overprovision in prior years (9,534,700) — (9,534,700) —

Transfer from deferred taxation — (284,350) — —

(9,060,533) 45,292,471 31,811,300 33,485,000

The tax charge for the current financial year is on dividend income. There is no tax charge on other income

from other sources as the amount payable for the year is waived in accordance with the Income Tax

(Amendment) Act, 1999.

85


23. Transfer to Compensation Funds

Group Exchange

1999 1998 1999 1998

RM RM RM RM

MCD Compensation Fund (Note 18) 6,146,440 4,731,000 — —

KLSE Compensation Fund 206,000,000 — 206,000,000 —

212,146,440 4,731,000 206,000,000 —

The transfer to KLSE Compensation Fund was made pursuant to Section 62 (d) of the Securities Industries Act, 1983.

24. Significant Events

(i) On 22 July, 1998, the Exchange entered into a Sales and Purchase Agreement for the acquisition of

19,998,002 ordinary shares of RM1 each in KLOFFE Capital Sdn. Bhd. (representing a 100% equity

interest) for a cash consideration of RM35,000,000. The said acquisition was completed on 31 December,

1998 at a revised cash consideration of RM27,000,000.

(ii) On 2 December, 1996, Securities Clearing Automated Network Services Sdn. Bhd. (“SCANS”), a wholly

owned subsidiary, entered into an agreement with Virtual Commerce Holdings Sdn. Bhd. to dispose off

its entire interest in its subsidiary, KLSE Chilong Systems Sdn. Bhd. for a cash consideration of

RM2,978,946. The said disposal was completed upon obtaining the approval of the Securities Commission on

11 January, 1999.

25. Group Rationalisation

During the year, the Group embarked onto a rationalisation exercise to streamline the Group’s activities and

structure. Pursuant to this exercise, subsequent to the financial year end, the Exchange entered into agreements

with SCANS to acquire:

(i) 1,020,000 ordinary shares representing 51% equity interest in Malaysian Share Registration Services

Sdn. Bhd. (“MSRS”), for a cash consideration of RM1,020,000.

(ii) 137,501 ordinary shares representing 55% equity interest in KLSE-Bernama Real-Time Information Services

Sdn. Bhd. (“KULBER”), for a cash consideration of RM8,190,207 which is to be adjusted based on the

attributable Net Tangible Assets on the expected completion date.



86

26. Subsequent Event

Subsequent to the financial year, the Exchange subscribed for all 20,000,000 new ordinary shares of RM1 each

in KLOFFE Capital Sdn. Bhd. (KLOFFE Capital), a wholly owned subsidiary. KLOFFE Capital in turn also

subscribed for all 20,000,000 new ordinary shares of RM1 each in The Kuala Lumpur Options & Financial

Futures Exchange Bhd (a wholly owned subsidiary of KLOFFE Capital). Both transactions were satisfied by way

of capitalisation of inter-company balances with the balance in cash.

27. KLSE Compensation Fund

The accounts of the KLSE Compensation Fund for the year ended 30 June, 1999 are as attached and have been

accounted for separately from all other properties of Kuala Lumpur Stock Exchange as required by Section 61

of the Securities Industry Act, 1983 (amended 1997).

28. Capital Commitments

Group Exchange

1999 1998 1999 1998

RM RM RM RM

Authorised and contracted for

– Office equipment 1,173,400 — 1,165,000 —

– Computer and related software 202,860 — 202,860 —

– Building 12,680,565 4,836,230 12,680,565 9,638,995

– Furniture and fittings 5,778,544 2,925,417 5,778,544 5,050,923

– Office automation 15,732,511 8,369,864 15,910,511 8,369,864

– Office renovation 57,500 — 57,500 —

35,625,380 16,131,511 35,794,980 23,059,782

Approved but not contracted for

– Furniture and fittings 2,874,510 — 2,874,510 —

– Office equipment 252,358 — 210,508 —

– Computer and related software 2,155,115 3,342,959 2,155,115 1,941,679

– Motor vehicle 899,500 — 899,500 —

– Office automation 1,102,174 3,566,667 1,102,174 3,566,667

– Office renovation 859,800 — 859,800 —

– Others 480,000 2,302,600 480,000 300,000

8,623,457 9,212,226 8,581,607 5,808,346

87


29. Incorporation

The Exchange was incorporated under the Companies Act, 1965 on 14 December, 1976 as a company limited

by guarantee and does not have a share capital. Membership fees and accumulated funds of the Exchange are

not distributable to the members of the Exchange.

30. Comparative Figures

Certain comparative figures have been reclassified to conform with current year presentation.

31. Currency

All amounts are stated in Ringgit Malaysia.

AUDIT SUB-COMMITTEE

Objectives

• Assist the KLSE Committee in discharging its

responsibilities relating to accounting practices of

KLSE and its Group of Companies.

• Ensure the adequacy, efficiency and effectiveness of

the Group’s administrative, operating and accounting

controls and procedures.

• Oversee and evaluate the quality of the audits

conducted both by the Group’s internal and

external auditors.

Members

1. Tan Kim Leong (Chairman)

2. Abdul Jabbar Majid

3. Chan Guan Seng

4. Benny Ng Wu Hong

BUDGET AND INVESTMENT SUB-COMMITTEE

Objectives

• Ensure that the KLSE and its Group of Companies

have a proper budgetary system in place that will

help to plan, co-ordinate, evaluate and control

financial activities effectively.

• Ensure that proper allocations are made to enable

effective and efficient:-

* operations of the KLSE and its Group of

Companies;

* implementation of the development plans of

the KLSE and its Group of Companies; and

* utilisation of financial resources.

• Review and monitor the financial position of the

KLSE and its Group of Companies.

• Ensure that the cash of the KLSE and its Group of

Companies is preserved and secured.

• Ensure that the funds are properly invested

and maintained with the view to maximise

returns/yields on investment.

• Appoint appropriate advisors in managing its

surplus funds.

• Formulate policies and guidelines for the

investment of the KLSE and its Group of

Companies’ surplus funds.

• Review the investment policy of the KLSE and

its Group of Companies to ensure that optimal

yield is achieved with minimum risk exposure

to the funds.

Members

1. Dato’ Mohammed Azlan Hashim (Chairman)

2. Dato’ Hwang Sing Lue

3. Koh Kee Tee

4. Harry K Menon

5. Datuk Ramly Ahmad

DISPUTES AND DISCIPLINARY SUB-COMMITTEE

Objectives

• Consider matters relating to disputes among

Member Companies.

• Consider disciplinary actions against Members,

Member Companies and Dealers’ Representatives

of the Exchange.

Members

1. Dato’ Ranita Mohd Hussein (Chairperson)

2. Abdul Jabbar Majid

3. Abdul Kadir Hj Md Kassim

4. Benny Ng Wu Hong

5. Nik Saghir Mohd Noor

6. Tan Kim Leong


KLSES u b-C o m m i t t e e s

88

89


RULES AND DEVELOPMENT SUB-COMMITTEE

Objectives

• Review changes, revisions or additions to the

KLSE Rules and Regulations to determine if they

are consistent with the mission and objectives

of the KLSE.

• Review the role and direction of the KLSE and

its Group of Companies in line with its mission

and vision.

Members



3. Chan Guan Seng


5. Johan Raslan Raslan Mohamad

6. Mohaiyani Shamsudin

7. Benny Ng Wu Hong

LISTING SUB-COMMITTEE

Objectives

• Assist the KLSE Committee in discharging all

matters relating to listing and post-listing functions

of the KLSE in a speedy and efficient manner.

Members



3. Chan Guan Seng


5. Koh Kee Tee


7. Benny Ng Wu Hong

8. Tan Kim Leong

9. Dato’ Ranita Mohd Hussein

INDEX SUB-COMMITTEE

Objectives

• Responsible for the construction and establishment

of new indices as directed by the KLSE Committee

or whenever necessary.

• Assist in other related securities areas, if possible,

as determined by the KLSE Committee.

Members


2. Azim Mohd Zabidi

3. Dr. Aziz Abu Hassan

4. Iskander Ismail

5. Izzaddin Idris

6. Jamiah Abdul Hamid

7. Dr. Kok Kim Lian

8. Dr. John Lee Hin Hock

MEMBERSHIP SUB-COMMITTEE

Objectives

• To consider and recommend to the KLSE

Committee applications for Membership of the

Exchange pursuant to the Exchange’s Articles of

Association and Rules, after having duly

interviewed the individual applicant, proposed

Dealing Members and Non-Dealing Members, as

the case may be.

Members

1. Chan Guan Seng (Chairman)


3. Koh Kee Tee



MonthlyH i g h , L o w A n d C l o s i n g I n d i c e s

90

COMPOSITE EMAS

High Low Closing High Low Closing1998July 478.20 385.97 402.65 119.29 99.47 102.97August 386.44 302.91 302.91 99.70 79.55 79.55September 445.06 262.70 373.52 115.55 71.60 99.34October 424.37 360.10 405.33 111.57 95.66 106.12November 502.15 419.78 501.47 134.56 109.81 134.56December 586.13 510.85 586.13 146.94 137.31 146.94

1999January 618.54 561.65 591.43 157.82 142.06 151.22February 579.55 526.10 542.23 147.47 133.79 137.34March 531.54 494.57 502.82 134.46 122.47 125.14April 674.96 527.56 674.96 166.63 131.30 166.63May 780.29 677.93 743.04 193.34 166.08 181.47June 829.72 731.01 811.10 211.07 179.44 207.56

INDUSTRIAL CONSUMER PRODUCTS

High Low Closing High Low Closing1998July 945.76 805.61 836.68 121.86 110.01 114.72August 812.40 639.44 639.44 112.70 83.86 83.86September 861.26 545.69 739.10 107.89 73.07 90.62October 828.15 719.55 789.79 98.88 88.47 95.19November 967.23 811.88 967.23 119.48 97.56 119.48December 1,043.52 983.50 1,043.52 127.73 120.82 127.30

1999January 1,132.55 1,012.93 1,074.75 136.83 124.46 132.05February 1,054.04 972.14 1,009.89 129.24 120.11 122.14March 1,001.12 912.27 921.39 120.88 113.58 115.18April 1,145.27 962.02 1,138.18 146.38 118.09 146.38May 1,337.36 1,143.85 1,275.14 164.46 145.33 157.16June 1,418.32 1,258.60 1,380.58 171.76 154.26 169.52

INDUSTRIAL PRODUCTS CONSTRUCTION



91


TRADING/SERVICES FINANCE

High Low Closing High Low Closing1998July 75.31 60.01 62.23 2,469.95 1,880.61 1,961.08August 60.29 47.36 47.36 1,890.42 1,616.02 1,695.38September 67.45 41.58 58.04 2,767.77 1,642.37 2,301.08October 66.20 56.18 63.13 2,674.13 2,223.92 2,535.42November 76.86 65.27 76.60 3,345.90 2,626.44 3,345.90December 90.92 78.22 90.92 3,720.09 3,429.15 3,669.63

1999January 96.61 86.67 91.67 4,123.29 3,527.83 3,900.68February 90.11 81.57 83.32 3,763.33 3,390.28 3,544.35March 81.13 74.40 75.34 3,475.04 3,235.26 3,381.13April 102.74 80.20 101.45 4,987.11 3,517.22 4,987.11May 121.06 102.31 114.51 5,759.80 4,927.46 5,362.08June 131.19 113.55 128.84 6,515.67 5,242.81 6,328.23

PROPERTY PLANTATION

High Low Closing High Low Closing1998July 583.89 474.40 486.34 1,654.90 1,513.08 1,573.10August 474.13 403.42 414.61 1,507.06 1,137.37 1,137.37September 668.32 408.25 560.20 1,462.45 1,017.18 1,259.58October 629.80 535.97 587.79 1,339.35 1,194.81 1,292.98November 783.99 608.76 783.99 1,706.49 1,362.12 1,706.49December 917.13 749.32 781.42 1,875.41 1,663.19 1,830.06

1999January 827.24 761.51 792.35 1,896.31 1,750.35 1,853.75February 768.09 687.39 704.74 1,805.91 1,613.47 1,659.49March 688.84 587.87 614.22 1,626.78 1,386.34 1,426.81April 812.13 648.75 807.83 1,714.41 1,478.64 1,686.14May 993.68 789.64 863.87 1,819.34 1,682.71 1,713.37June 1,080.31 867.29 1,064.73 1,802.65 1,690.88 1,766.92

MINING SECOND BOARD



SYARIAH*

High Low Closing1999April 106.56 98.10 105.97May 120.70 106.77 114.75June 127.34 113.64 125.65

* Officially launched on 17 April 1999

IndexKLSE COMPOSITE INDEX

MONTHLY CLOSING AND 200 DAYS MOVING AVERAGEJULY 1995 – JUNE 1999

J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J0

300

600

900

1,200

1,500

IndexKLSE EMAS INDEX

MONTHLY CLOSING AND 200 DAYS MOVING AVERAGEJULY 1995 – JUNE 1999


50

100

150

200

250

300

350

400

Composite Index Composite Index Moving Average

EMAS Index EMAS Index Moving Average


Volume,V a l u e A n d I n d i c e s

92

0

0.5

1.0

1.5

2.0

2.5

Volume & Value(Billions)

Index(Thousand)

KLSE INDUSTRIAL INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

Volume


5

10

15

20

25

Value Index

Volume & Value(Billions) Index

KLSE CONSUMER PRODUCTS INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

Volume


1

2

3

4

5

6

Value Index

93


Volume, Value And Indices


KLSE INDUSTRIAL PRODUCTS INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

Volume


2

4

6

8

10

12

Value Index

0

150

300

450

600


KLSE CONSTRUCTION INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

Volume


0.5

1.0

1.5

2.5

2.0

3.0

3.5

4.0

Value Index


94

0

100

500

300

700

400

200

600

800


KLSE MINING INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

Volume


0.6

0.4

0.2

0.8

1.0

1.2

1.4

1.6

Value Index

0

50

200

100

150


KLSE TRADING/SERVICES INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

Volume


2.5

5.0

7.5

10.0

Value Index

95



Index(Thousand)

KLSE FINANCE INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

Volume


3

2

1

4

5

6

7

8

Value Index

0

0.5

1.0

1.5

2.5

3.5

4.0

2.0

3.0


Index(Thousand)

KLSE PROPERTY INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

Volume


1

2

3

5

4

6

7

8

Value Index

Volume, Value And Indices


96

0

1.5

1.0

0.5

2.0

2.5

3.0

3.5


Index(Thousand)

KLSE PLANTATION INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

0

0.8

0.4

1.2

1.6

2.0

2.8

2.4

J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J

Volume Value Index

0

100

200

300

400

500

600

700


0

4

8

12

16

20

24

28

KLSE SECOND BOARD INDEX, VOLUME & VALUEMONTHLY CLOSING

JULY 1995 – JUNE 1999

J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J

Volume Value Index

97



NewL i s t i n g s

98

From 1 July 1998 to 30 June 1999 New listings: 17

Name of New Listings Board Listed Date Paid-up Capital when

first listed (RM)

1 Abric Berhad Second Board 11 Jan 1999 30,000,000

2 Ahmad Zaki Resources Berhad Second Board 9 Jun 1999 30,000,000

3 AKN Technology Berhad Second Board 2 Sep 1998 25,000,000

4 Astral Supreme Berhad Second Board 10 Feb 1999 45,000,000

5 Avangarde Resources Berhad Second Board 13 Aug 1998 35,000,000

6 CB Industrial Product Holding Berhad Second Board 31 May 1999 28,000,000

7 Chin Well Holdings Berhad Main Board 15 Jun 1999 90,000,000

8 Comsa Farms Berhad Second Board 28 Oct 1998 26,800,000

9 FW Industries Berhad Second Board 8 Jul 1998 26,888,000

10 Khind Holdings Berhad Second Board 12 Aug 1998 30,000,000

11 Malaysian AE Models Holdings Berhad Second Board 26 May 1999 33,000,000

12 Merge Energy Berhad Main Board 17 Nov 1998 67,000,000

13 Seacera Tiles Berhad Second Board 27 May 1999 39,999,000

14 SM Summit Holdings Berhad Second Board 1 Jun 1999 30,000,000

15 Takaso Resources Berhad Second Board 16 Mar 1999 23,000,000

16 Unisem (M) Berhad Main Board 30 Jul 1998 143,000,000

17 Yong Tai Berhad Second Board 15 Sep 1998 39,900,000

As at 30.6.1999 As at 30.6.1998

No. of listed companies 745 728

Total market capitalisation (RM billion) 532.04 285.88

1.7.1998 to 1.7.1997 to

30.6.1999 30.6.1998

Total volume (billion units) 72.02 66.84

Total value (RM billion) 135.93 253.55

MembershipR e p o r t

99


During the year under review (1 July 1998 to 30 June 1999):-

(1) Recognition of Three {3} New Member Companies:

No. Member Company Business Address Registered Address Date of Recognition

1 Utama Securities Sdn Bhd Lot 2465, Jalan Boulevard Utama Lot 363, Jalan Kulas 01.10.98Boulevard Commercial Centre 93400 Kuching98000 Miri SarawakSarawak Tel: 082-419296Tel: 085-435577 Fax: 082-424954Fax: 085-435511

2 Affin-UOB Securities Level 3, Menara Keck Seng Level 32, Menara Keck Seng 01.12.98Sdn Bhd 203, Jalan Bukit Bintang 203, Jalan Bukit Bintang

55100 Kuala Lumpur 55100 Kuala LumpurTel: 03-2438668 Tel: 03-2438668Fax: 03-2433663 Fax: 03-2433663

3 PTB Securities Sdn Bhd Tingkat 1, 2 & 3 3A01, Block B 15.01.99No. 61, Jalan Sultan Ismail Menara AmcorpPeti Surat 151 No. 18, Jalan Persiaran BaratPejabat Pos Besar 46050 Petaling Jaya20700 Kuala Terengganu Selangor Darul EhsanTerengganu Darul Iman Tel: 03-7543030Tel: 09-6235546 Fax: 03-7588716Fax: 09-6235532

(2) Three {3} Corporations were admitted to Membership of the Exchange, via the following Member Companies:

No. New Corporate Member Name of Member (Corporation) Date of Admission

1 Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.982 Affin-UOB Holdings Affin-UOB Securities Sdn Bhd 01.12.98

Sdn Bhd3 PTB Securities Holdings PTB Securities Sdn Bhd 15.01.99

Sdn Bhd

(3) Two {2} Natural persons resigned from Membership of the Exchange, viz:

No. Name Member Company Date of Resignation

1 Mohamed Nizam PB Securities Sdn Bhd 31.07.98Tun Abdul Razak

2 Sia Say Yee Amsteel Securities (M) Sdn Bhd 03.09.98

(4) Demise of Member:

No. Name Member Company Date of Demise

1 Datuk Haji Ali Esa Thong & Kay Hian 02.11.98Securities Sdn Bhd

Membership Report


100

(5) Seventeen {17} individuals were appointed as Corporate Nominees, viz:

No. Name Corporate Member Member Company Date of Admission

1 A. Bakar Buyong BBMB Securities (Holdings) BBMB Securities Sdn Bhd 23.07.98Sdn Bhd

2 Abrizah Dato’ Abdullah Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.983 Ahmad Ezzanee Azizan Straits Asset Holdings Sdn Bhd Straits Securities Sdn Bhd 12.11.98

Mohd Ali Azizan4 To’ Puan Siti Norizam Affin-UOB Holdings Sdn Bhd Affin-UOB Securities 01.12.98

Mohd Yusoff Sdn Bhd5 Abdul Wahab Mayban Securities (Holdings) Mayban Securities 08.12.98

Nan Abidin Sdn Bhd Sdn Bhd6 Ng Seng Leong Jardine Fleming (Malaysia) JF Apex Securities Bhd 15.12.98

Services Sdn Bhd7 Tan Chong Pen Smith Zain (Malaysia) Sdn Bhd Smith Zain Securities 28.12.98

Sdn Bhd8 Ban Chee Kheong Datavest Sdn Bhd Amsteel Securities (M) 29.12.98

Sdn Bhd9 Richard Anthony Magides RHB Capital Berhad Rashid Hussain 04.01.99

Securities Sdn Bhd10 Ang Poo Guan Malpac Holdings Berhad Malpac Securities Sdn Bhd 07.01.9911 Ismail Nik Man PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.9912 Yong Yoong Fa Public Consolidated PB Securities Sdn Bhd 11.02.99

Holdings Sdn Bhd13 Lee Eng Hua Pakatan Canggih Sdn Bhd Kota Bharu Securities 04.03.99

Sdn Bhd14 Lim Poh Ho Carta Bintang Sdn Bhd SJ Securities Sdn Bhd 14.04.9915 Najmiyah Abd Hasan Rentak Wira Sdn Bhd UT Securities Sdn Bhd 01.05.9916 Chang Tuck Chee Arab-Malaysian Securities Arab-Malaysian 01.06.99

@ Philip Chang Holding Sdn Bhd Securities Sdn Bhd17 Rashid Ismail MIDF Sisma Holdings Sdn Bhd MIDF Sisma 16.06.99

Securities Sdn Bhd

(6) Eleven {11} individuals resigned/ceased as Corporate Nominees, viz:

No. Name Corporate Member Member Company Date of Resignation

1 Looi Keng Hwa Olympia Industries Bhd Jupiter Securities Sdn Bhd 16.07.982 Tay Thin Hock Pengkalen Capital Bhd Kimara Equities Sdn Bhd 17.08.983 Lee Tak Suan Datavest Sdn Bhd Amsteel Securities 11.09.98

(M) Sdn Bhd4 Patrick Soh Kim Ngiap Carta Bintang Sdn Bhd SJ Securities Sdn Bhd 06.10.985 Abdul Wahab KAF-Seagroatt & KAF-Seagroatt & Campbell 30.10.98

Nan Abidin Campbell Berhad Securities Sdn Bhd6 Baharil Ihzan Hashim Mayban Securities (Holdings) Mayban Securities Sdn Bhd 08.12.98

Sdn Bhd7 Ng Seng Leong Apex Equity Holdings Berhad JF Apex Securities Bhd 15.12.988 Asnah Ahmad SimeSecurities Holdings Sdn Bhd SimeSecurities Sdn Bhd 16.12.989 Abdullah Abd Pakatan Canggih Sdn Bhd Kota Bharu Securities 04.03.99

Karim Bajerai Sdn Bhd10 Lee Siang Korn Arab-Malaysian Securities Arab-Malaysian Securities 01.04.99

@ Lee Siang Chin Holding Sdn Bhd Sdn Bhd11 Chia Kam Pooi RHB Capital Berhad Rashid Hussain Securities 31.05.99

Sdn Bhd

101


(7) Twenty-six {26} individuals were appointed as Non-Executive Directors, viz:

No. Name Corporate Member Member Company Date of Appointment

1 Leong Kam Weng TA Enterprise Bhd Botly Securities Sdn Bhd 10.07.982 Chang Tuck Chee @ TA Enterprise Bhd Botly Securities Sdn Bhd 10.07.98

Philip Chang3 Chan Gak Keong Pakatan Canggih Sdn Bhd Kota Bharu Securities 11.07.98

Sdn Bhd4 Dato’ Kamarudin Abu Smith Zain (Malaysia) Sdn Bhd Smith Zain Securities 24.08.98

Sdn Bhd5 Looi Kheng Hwa Olympia Industries Berhad Jupiter Securities Sdn Bhd 28.08.986 Nik Hashim Nik Yusoff Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.987 Haji Iskandar Haji Razali Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.988 Abdul Rashid Haji Aziz Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.989 Datuk Haji Abdul Aziz Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98

Haji Hussain10 Vaseehar Hassan Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.98

Abdul Razack11 Francis Ng Hee Chang Utama Capital Sdn Bhd Utama Securities Sdn Bhd 01.10.9812 Yu Choong Cheong Affin-UOB Holdings Sdn Bhd Affin-UOB Securities 01.12.98

Sdn Bhd13 Gn Hiang Meng Affin-UOB Holdings Sdn Bhd Affin-UOB Securities 01.12.98

Sdn Bhd14 Gen. (Rtd) Dato’ Affin-UOB Holdings Sdn Bhd Affin-UOB Securities 01.12.98

Ismail Hassan Sdn Bhd15 Faisol Zulkifli KAF-Seagroatt & Campbell KAF-Seagroatt & Campbell 23.12.98

Securities Holdings Bhd Securities Sdn Bhd16 Dato’ Mazlan @ PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.99

Mohd Nanri Hashim17 Raja Halinuddin PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.99

Raja Halid18 Mat Zaid Ibrahim PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.9919 Abdul Aziz PTB Securities Holdings Sdn Bhd PTB Securities Sdn Bhd 15.01.99

Mahmoud Salim20 Seah Sen Leang Kretam Holdings Berhad InnoSabah Securities 25.03.99

Sdn Bhd21 Dato’ Nik Mohd Sidek Uniphoenix Corporation Berhad Halim Securities Sdn Bhd 31.03.99

Nik Abu Bakar22 Ho Chun Fuat Uniphoenix Corporation Berhad Halim Securities Sdn Bhd 31.03.9923 Lee Siang Korn Arab-Malaysian Securities Arab-Malaysian Securities 01.04.99

@ Lee Siang Chin Holding Sdn Bhd Sdn Bhd24 Khet Kok Yin Pengkalen Capital Berhad Pengkalen Securities Sdn Bhd 12.04.9925 Dato’ Rastam Abdul Hadi Pengkalen Capital Berhad Pengkalen Securities Sdn Bhd 12.04.9926 Khadijah Abdul Khalid Assedina Sdn Bhd Kuala Lumpur City 27.04.99

Securities Sdn Bhd

Membership Report


102

(8) Twenty-three {23} individuals resigned as Non-Executive Directors, viz:

No. Name Corporate Member Member Company Date of Resignation

1 Zulkifli Abdul Malek Premier Capital Holdings Premier Capital Securities 29.07.98Sdn Bhd Sdn Bhd

2 Chong Ah Wah @ Premier Capital Holdings Premier Capital Securities 29.07.98Chong Kon Kooi Sdn Bhd Sdn Bhd

3 Haji Haris Abdul Hamid Johor Capital Holdings Sdn Bhd PJB Pacific Securities 27.08.98Sdn Bhd

4 Ahmad Farid Haji Omar Olympia Industries Berhad Jupiter Securities Sdn Bhd 19.09.985 Patrick Soh Kim Ngiap Carta Bintang Sdn Bhd SJ Securities Sdn Bhd 06.10.986 Paw Swee Choo Pan Pacific Asia Berhad Peninsula Securities Sdn Bhd 10.10.987 Leong Kam Weng TA Enterprise Berhad Botly Securities Sdn Bhd 07.12.988 Chang Tuck Chee TA Enterprise Berhad Botly Securities Sdn Bhd 07.12.98

@ Philip Chang9 Elizabeth Sam TCL Premier Holdings Berhad OCBC Securities 31.12.98

(Melaka) Sdn Bhd10 Ang Poo Guan Malpac Holdings Berhad Malpac Securities Sdn Bhd 07.01.9911 Tan Sri Mohamed Uniphoenix Corporation Berhad Halim Securities Sdn Bhd 14.01.99

Ngah Said12 Lynette Mohamed Uniphoenix Corporation Berhad Halim Securities Sdn Bhd 14.01.9913 Dato’ Yeoh Chin Kee Public Consolidated PB Securities Sdn Bhd 03.03.99

Holdings Sdn Bhd14 David Alexander K & N Kenanga Holdings Berhad K & N Kenanga Berhad 01.04.99

Cospatrick Douglas-Home15 Datuk Alladin BBMB Securities (Holdings) BBMB Securities Sdn Bhd 17.04.99

Mohd Hashim Sdn Bhd16 Dato’ Osman Assedina Sdn Bhd Kuala Lumpur City 26.04.99

Mohd Zain Securities Sdn Bhd17 Michael Wong Kuan Lee SimeSecurities Holdings Sdn Bhd SimeSecurities Sdn Bhd 29.04.9918 Dato’ Muhammad Johor Capital Holdings Sdn Bhd PJB Pacific Securities 07.05.99

Ali Hj Hashim Sdn Bhd19 Tan Sri Datuk (Dr) Johor Capital Holdings Sdn Bhd PJB Pacific Securities 07.05.99

Arshad Ayub Sdn Bhd20 Zainah Mustafa Johor Capital Holdings Sdn Bhd PJB Pacific Securities 07.05.99

Sdn Bhd21 Datuk Wong Boon Loong Kretam Holdings Berhad InnoSabah Securities 03.05.99

Sdn Bhd22 Mohamad Zubairi Malaysian General Investment MGI Securities Sdn Bhd 15.05.99

Ahmad Rubian Corporation Berhad23 Gn Hiang Meng Affin-UOB Holdings Berhad Affin-UOB Securities 19.05.99

Sdn Bhd

103


(9) Changes of Member Companies’ Name:

No. Member Company New Name Effective Date

1 United Traders UT Securities Sdn Bhd 06.01.99Securities Sdn Bhd

2 Faiz Securities Sdn Bhd Kota Bharu Securities Sdn Bhd 30.01.993 Capitalcorp Securities Fima Securities Sdn Bhd 20.05.99

Sdn Bhd

(10) Changes of Member Companies’ Business Address:

No. Member Company Business Address Effective Date

1 PB Securities Sdn Bhd 27th Floor 02.02.99Bangunan Public BankNo. 6, Jalan Sultan Sulaiman50000 Kuala LumpurTel: 03-2013011Fax: 03-2012533

2 JB Securities Sdn Bhd Level 6, 7 & 8 01.03.99Menara Sarawak EnterpriseNo. 5, Jalan Bukit Meldrum80300 Johor BahruJohor Darul TakzimTel (General): 07-3332000Tel (Dealing): 07-3332800Fax: 07-3354728

3 M & A Securities Sdn Bhd M & A Building 28.06.9952A, Jalan Sultan Idris Shah30000 Ipoh, Perak Darul RidzuanTel: 05-2419800Fax: 05-2551015


KLSEM e m b e r s as at 30 June 1999

104

MEMBER COMPANY FEDERAL TERRITORY OF KUALA LUMPUR

ARAB-MALAYSIAN 15th Floor Members: Corporate Nominees:SECURITIES Bangunan Arab-Malaysian Haji Ismail bin AbdullahSDN BHD No. 55, Jalan Raja Chulan Wong Tee Hing @

50200 Kuala Lumpur Wong Tee EngTel: 03-2382788/99 (General) Arab-Malaysian Mustafa bin Hj Mohd Nor

03-2321866/99 (Dealing) Securities Holdings Ahmad bin BachokFax: 03-2383162 Sdn Bhd Chang Tuck Chee @

03-2303175 Philip Chang(General & Dealing)

Telex: AMSEC MA 31796 MA 30869

AFFIN-UOB Level 3, Menara Keck Seng Member: Corporate Nominee:SECURITIES 203, Jalan Bukit Bintang Affin-UOB Holdings To’ Puan Siti Norizam SDN BHD 55100 Kuala Lumpur Sdn Bhd bt Mohd Yusoff

Tel: 03-2438668Fax: 03-2433663

BBMB SECURITIES Level 2, 3 & 4 Member: Corporate Nominees:SDN BHD Menara Olympia BBMB Securities Hassan bin Jaafar

Letter Box No. 2 (Holdings) Sdn Bhd A. Bakar BuyongNo. 8 Jalan Raja Chulan50200 Kuala LumpurTel: 03-2019900 (General)Fax: 03-2019819 (Finance)

03-2025087 (Dealing)Telex: MA36804 BBSEC (Finance)

BIMB SECURITIES 1st & 2nd Floor Member: Corporate Nominee:SDN BHD Podium Block BIMB Securities Dato’ Dr Abdul Halim

Bangunan AMDB (Holdings) Sdn Bhd bin Haji IsmailNo. 1, Jalan Lumut50400 Kuala LumpurTel: 03-4433533 (15 lines)Fax: 03-4413433/4412622

03-4414159

CIMB SECURITIES 9th Floor, Commerce Square Member: Corporate Nominees:SDN BHD Jalan Semantan CIMB Holdings Mohd Shukri bin Hussin

Damansara Heights Sdn Bhd Gan Soo Jin50940 Kuala Lumpur Kanajan a/l SamypullayTel: 03-2532288Fax: 03-2535533Telex: MA 30991 CIMSEC

105


FIMA SECURITIES Level 1 & 2, Block G Central Member: Corporate Nominee:SDN BHD Pusat Bandar Damansara Capitalcorp Holdings Mohd Yusof bin

Damansara Heights Sdn Bhd Pandak Yatim50490 Kuala LumpurTel: 03-2549966Fax: 03-2548595Telex: MA 28040

HLG SECURITIES 21st Floor, Wisma HLA Member: Corporate Nominees:SDN BHD Jalan Raja Chulan HLG Capital Bhd Omar bin Zolkifli

50200 Kuala Lumpur Lee Wai KokTel: 03-2022778

03-2452998 (General)Fax: 03-2022390Telex: MA 31097, MA 33802

INTER-PACIFIC Level 7, Menara Shahzan Insas Member: Corporate Nominees:SECURITIES No. 30, Jalan Sultan Ismail Inter-Pacific Capital Pang Poh PingSDN BHD 50250 Kuala Lumpur Sdn Bhd Abdul Majid bin Hj

Tel: 03-2441888 Mohd HarunFax: 03-2441686Telex: MA 31469 IPSEC

JUPITER Level 7, 8 & 9 Members: Corporate Nominee:SECURITIES Menara Olympia Olympia Industries Bhd Yee Yoke Leong SDN BHD No. 8, Jalan Raja Chulan Mohd Saleh bin

50200 Kuala Lumpur Md YusofTel: 03-2041888 (General) Lo Kok KeeFax: 03-2042288Telex: MA 33713 (JUPSSB)

K & N 801, 8th Floor Member: Corporate Nominees:KENANGA BHD Pernas International Building K & N Kenanga Tengku Noor Zakiah

Jalan Sultan Ismail Holdings Bhd binti Tengku Ismail50250 Kuala Lumpur Haji Abdul Aziz Tel: 03-2629080, 2621490 bin Hashim

(30 lines) Dato’ Ramli bin IsmailFax: 03-2614990, 2635927Telex: KEN MA 35231, 31276

(Admin)

KAF-SEAGROATT 26th-30th Floor, Menara Weld Member: Corporate Nominee:& CAMPBELL No. 76, Jalan Raja Chulan KAF-Seagroatt & Ahmad bin KadisSECURITIES 50200 Kuala Lumpur Campbell Holdings BhdSDN BHD Tel: 03-2081600

Fax: 03-2323464Telex: SEAGRO MA 32816

KLSE Members as at 30 June 1999


106

KUALA LUMPUR 3.07, Level 3 Member: Corporate Nominee:CITY SECURITIES Bangunan Angkasaraya Assedina Sdn Bhd Mohd Nasir bin AliSDN BHD Jalan Ampang

50450 Kuala LumpurTel: 03-2449322Fax: 03-2448099

LEONG & CO Level 18, Wisma Cyclecarri Members:SDN BHD No. 288, Jalan Raja Laut Leong Kun Kay

50350 Kuala Lumpur Yu Kwei SimTel: 03-2928899 (Admin) Anne Leong Sau LengFax: 03-2949088 (Admin) Leong Yuen LengTelex: SHABON MA 31363 Peter Leong Tuck Leng

MAYBAN 30th Floor, Menara Maybank Member: Corporate Nominee:SECURITIES No. 100, Jalan Tun Perak Mayban Securities Abdul Wahab bin SDN BHD 50050 Kuala Lumpur (Holdings) Sdn Bhd Nan Abidin

Tel: 03-2323822/33Fax: 03-2323807Telex: MA 20294 MAYSEC

MGI SECURITIES 1st & 2nd Floor, Wisma MGIC Member: Corporate Nominee:SDN BHD No. 38, Jalan Dang Wangi Malaysian General No appointment as at

50100 Kuala Lumpur Investment 30.6.1999Tel: 03-2911889 (General) Corporation BhdFax: 03-2930628 (General)Telex: MA 33186 CBSB

MIDF SISMA 17th & 18th Floor Member: Corporate Nominees:SECURITIES Empire Tower MIDF Sisma Holdings Datin Mariam SDN BHD No. 182, Jalan Tun Razak Sdn Bhd Prudence bte Yusof

50400 Kuala Lumpur Rashid bin IsmailTel: 03-2668888Fax: 03-2669999Telex: MIDFS MA 32827

OSK SECURITIES 10th Floor, Plaza OSK Member: Corporate Nominees:BHD Jalan Ampang OSK Holdings Bhd Dato’ Nik Mohamed

50450 Kuala Lumpur bin Nik YahyaTel: 03-2624388 Chin Cheng MeiFax: 03-2618254 Wong Chong Kim

Ong Leong Huat @ Wong Joo Hing

Nik Halim @ Nik Ghazibin Haji Nik Daud

107


PB SECURITIES 27th Floor Member: Corporate Nominee:SDN BHD Bangunan Public Bank Public Consolidated Yong Yoong Fa

No. 6, Jalan Sultan Sulaiman Holdings Sdn Bhd50000 Kuala LumpurTel: 03-2013011Fax: 03-2012533

PENGKALEN 1st Floor Members: Corporate Nominee:SECURITIES Menara Pengkalen Noorjehan Rahima bt SDN BHD No. 2, Jalan Changkat Ceylon Abdul Hamid Jumat

50200 Kuala Lumpur Leong Kok WahTel: 03-2448055 (10 lines) Pengkalen Capital Bhd Loo Kok YuenFax: 03-2448082Telex: MA 31186

RASHID HUSSAIN Level 1, 2, 3 & 5 Member: Corporate Nominees:SECURITIES Tower One, RHB Centre RHB Capital Berhad Tan Sri Dato’ AbdulSDN BHD Jalan Tun Razak Rashid bin Haji Hussain

50400 Kuala Lumpur Tajul Ariffin bin Tel: 03-9852233 Mohd TahirFax: 03-9855522 Saiful Bahri bin ZainuddinTelex: MA 31790 RHSSB Richard Anthony Magides

SIMESECURITIES 21st Floor Member: Corporate Nominee:SDN BHD Bangunan Sime Bank SimeSecurities No appointment as at

No. 4, Jalan Sultan Sulaiman Holdings Sdn Bhd 30.6.199950000 Kuala LumpurTel: 03-2749288/778Fax: 03-2749907

03-2749908 (Trading)Telex: MA 20288 SIMESEC

TA Menara TA One Member: Corporate Nominees:SECURITIES BHD No. 22, Jalan P Ramlee TA Enterprise Bhd Datuk Tiah Thee Kian

50250 Kuala Lumpur Dato’ Mahmud bin Tel: 03-2321277 Haji AliFax: 03-2322369 Datin Tan Kuay FongTelex: TASEC MA 30848 Teh Ghee Kok

Ignatius Luke Jr. TanKeng Hee

MEMBER COMPANY SELANGOR DARUL EHSAN – KAJANG

JF APEX 3rd Floor, Wisma Apex Members: Corporate Nominees:SECURITIES BHD 145A-C, Jalan Bukit Apex Equity Chan Guan Seng

43000 Kajang Holdings Bhd Kharul Hurri bin Selangor Darul Ehsan Khalid AbbasTel: 03-8361118 Jardine Fleming (M) Ng Seng LeongFax: 03-8374532 Services Sdn Bhd

(Admin/Acc)Telex: MA 31617 CHLICK



108

MEMBER COMPANY SELANGOR DARUL EHSAN – KLANG

AMSTEEL 1st, 2nd, 3rd & 4th Floors Members: Corporate Nominees:SECURITIES (M) Wisma Amsteel Securities Datavest Sdn Bhd Ban Chee KheongSDN BHD No. 1, Lintang Pekan Baru Ee Beng Guan

Off Jalan Meru Dato’ Hj Abdul Rahim41050 Klang bin Mohd. IbrahimSelangor Darul EhsanTel: 03-3439999 (28 lines)Fax: 03-3442343/3442350

MEMBER COMPANY SELANGOR DARUL EHSAN – PETALING JAYA

HALIM No. 68, Jalan Selangor (52/6) Members: Corporate Nominee:SECURITIES P O Box 561 Uniphoenix No appointment SDN BHD 46770 Petaling Jaya Corporation Bhd as at 30.6.1999(Cessation of dealing Selangor Darul Ehsan Tengku Abdul Halimactivities by the Tel: 03-7555777 Alhaj Ibni Almarhum Securities Commission Fax: 03-7554612 Sultan Ibrahimon 8 June 1998) Hassim bin Haji Baba

Chua Hock SengLoo Khee KwongMohd Yusof bin

Mohd Rashidi

MOHAIYANI 1st, 2nd & 3rd Floor Members: Corporate Nominee:SECURITIES Plaza Damansara Utama Mohaiyani bt SDN BHD No. 2, Jalan SS21/60 Shamsudin

47400 Petaling Jaya Abdul Hamid bin Selangor Darul Ehsan Abdul SamadTel: 03-7197345 (6 lines) Nik Aminaldin bin Fax: 03-7181357 Nik Jaafar

Abdul Ghani bin AhmadAsia Equity (Malaysia) Chin Kok Keng

Holdings Ltd

SJ SECURITIES Level 3, Holiday Villa Member: Corporate Nominees:SDN BHD No. 9, Jalan SS12/1 Carta Bintang Sdn Bhd Ahmad Azman bin

Subang Jaya Abdul Manaf47500 Petaling Jaya Abdul Rauf bin RamliSelangor Darul Ehsan Lim Poh HoTel: 03-7340202 (General)Fax: 03-7330649 (General)Telex: SJSEC MA 36157

109


MEMBER COMPANY SELANGOR DARUL EHSAN – SHAH ALAM

OMEGA 15th Floor Member: Corporate Nominees:SECURITIES Plaza Perangsang Omega Holdings Bhd Abdullah bin AyubSDN BHD Persiaran Perbandaran Yeo Lee Hoe(Dealer’s licence 40990 Shah Alam Tiah Thee Pengrevoked by the Selangor Darul EhsanSecurities Commission Tel: 03-5594900 (20 lines)on 5 June 1998) Fax: 03-5599682 (Admin)

03-5597723Telex: AT SSB MA 39863

MEMBER COMPANY JOHOR DARUL TAKZIM – JOHOR BAHRU

ENG SECURITIES No. 95, Jalan Tun Abdul Razak Member: Corporate NomineesSDN BHD 80000 Johor Bahru Inter-Pacific Capital Lim Khuan Eng

Johor Darul Takzim Sdn Bhd Mohd Fuad Foo binTel: 07-2231211/2238212 AbdullahFax: 07-2246266

JB SECURITIES Suite 8.2, Level 8 Members: Corporate Nominees:SDN BHD Menara Sarawak Enterprise Idris bin Osman

No. 5, Jalan Bukit Meldrum Dynamic Pearl Sdn Bhd Wan Malek Shahril80300 Johor Bahru bin Wan OmarJohor Darul Takzim Yap Kai KengTel: 07-3332800 (Dealing)

07-3332000 (General)Fax: 07-3348259Telex: JBSEC MA060166

PENINSULA Level 2, Menara Pelangi Member: Corporate Nominees:SECURITIES Jalan Kuning, Taman Pelangi Pan Pacific Asia Bhd Er Chin Her @ Er EeSDN BHD 80400 Johor Bahru Haji Rahmat bin Awi

Johor Darul TakzimTel: 07-3333600 (General)Fax: 07-3343770

PJB PACIFIC Podium 2A & 3 Member: Corporate Nominee:SECURITIES Menara Ansar Johor Capital Holdings Johari bin HassanSDN BHD No. 65, Jalan Trus Sdn Bhd

80000 Johor BahruJohor Darul TakzimTel: 07-2222692/2768787Fax: 07-2765201

MEMBER COMPANY JOHOR DARUL TAKZIM – MUAR

KESTREL 57, 59 & 61, Jalan Ali Member: Corporate Nominee:SECURITIES 84000 Muar Tongkah Holdings Bhd Leow Woon Kong @ SDN BHD Johor Darul Takzim Leow Woon Kuang

Tel: 06-9532222/9531222Fax: 06-9516660



110

MEMBER COMPANY JOHOR DARUL TAKZIM – BATU PAHAT

SOUTH JOHOR 3rd Floor, Penggaram Complex Member: Corporate Nominees:SECURITIES No. 1, Jalan Abdul Rahman South Johor Equities Koh Kee TeeSDN BHD 83000 Batu Pahat Sdn Bhd Ng Say Keow

Johor Darul Takzim Chan Chau YangTel: 07-4342282 (Admin) Soh Kim EngFax: 07-4327982 Husni bin HussainTelex: MA 65310 SJSSB

MEMBER COMPANY KEDAH DARUL AMAN

ALOR SETAR Lot T-30, 2nd Floor Members: Corporate Nominee:SECURITIES Wisma PKNK Mansor bin Hussin SDN BHD Jalan Sultan Badlishah Kelanamas Capital Dato’ Dr Haji Sallehuddin

05000 Alor Setar Sdn Bhd bin KassimKedah Darul AmanTel: 04-7317088Fax: 04-7318428

MEMBER COMPANY PERLIS INDERA KAYANGAN

UPEN SECURITIES 2nd Floor, Podium Block Members: Corporate Nominee:SDN BHD Bangunan KWSP Abang Zainal Abidin

01000 Kangar bin Abang AhmadPerlis Indera Kayangan Amal Bakti Sdn Bhd Wong Kum PiewTel: 04-9765200Fax: 04-9760411

MEMBER COMPANY KELANTAN DARUL NAIM

KOTA BHARU No. 298, Jalan Tok Hakim Member: Corporate Nominee:SECURITIES 15000 Kota Bharu Pakatan Canggih Lee Eng HuaSDN BHD Kelantan Darul Naim Sdn Bhd

Tel: 09-7432288 (General)Fax: 09-7485366 (General)

MEMBER COMPANY MELAKA

MALACCA No. 1, 3 & 5, Jalan PPM 9 Members:SECURITIES Plaza Pandan Malim Sim Swee TinSDN BHD Business Park, Balai Panjang Sim Cheng Khuan

75250 Melaka Zainuddin bin Haji DinTel: 06-3371533 (8 lines)Fax: 06-3371550/3371577

111


OCBC SECURITIES 579, 580 – 581A & B Member: Corporate Nominees:(MELAKA) Taman Melaka Raya TCL Premier Jimmy Tan Soo SumSDN BHD 75000 Melaka Holdings Bhd Yoichiro Sano

Tel: 06-2825211 (General) Loh Teck YenFax: 06-2844861 (Admin) Latiff bin Datuk Telex: OSM MA 062658 Tamby Chik

Chow Yook Hey @Chow Yoke Pui

STRAITS Lot 9 & 10, 1st Floor Member: Corporate Nominees:SECURITIES Bangunan Tabung Haji Straits Asset Holdings Goh Choon HockSDN BHD Jalan Banda Kaba Sdn Bhd Ahmad Ezzanee

75740 Melaka Azizan bin MohdTel: 06-2833622 Ali AzizanFax: 06-2833771Telex: MA 62855

MEMBER COMPANY NEGERI SEMBILAN DARUL KHUSUS

KIMARA 2nd, 9th & 10th Floor Member: Corporate Nominee:EQUITIES Bangunan Yayasan Negeri Pengkalen Capital Bhd Elias bin Abdullah NgSDN BHD Sembilan, Jalan Yam Tuan

70000 SerembanNegeri Sembilan Darul KhususTel: 06-7633888 (General)

06-7638999Fax: 06-7633889Telex: KIMARA MA 63989

MALPAC 1st, 2nd & 3rd Floor Members: Corporate Nominee:SECURITIES No. 19 – 21, Jalan Kong Sang Chew Loy CheeSDN BHD 70000 Seremban Gan Teck Chong @

Negeri Sembilan Darul Khusus Gan Kwan ChongTel: 06-7623131 (20 lines) Tan Chon Sing @Fax: 06-7620537 Tan Kim TiengTelex: CTSEC MA 63951 Malpac Holdings Bhd Ang Poo Guan

MEMBER COMPANY PAHANG DARUL MAKMUR

WK SECURITIES A-397, A-399 & A-401 Member: Corporate Nominee:SDN BHD Taman Sri Kuantan III Omega Holdings Bhd Zainal bin Ahmad

Jalan Beserah25300 KuantanPahang Darul MakmurTel: 09-5660800 (Admin)

09-5660700 (Trading)Fax: 09-5660801



112

MEMBER COMPANY PENANG

A A ANTHONY No. 41-1-1 & 41-2-1 Members:& CO SDN BHD Jalan Cantonment Lim Tiong Chin

10250 Penang Haji Abdul Rahman Tel: 04-2299318 (General) bin Haji AhmadFax: 04-2268788 Lim Teong Khoon

HWANG-DBS Levels 2, 3, 4, 7 & 8 Member: Corporate Nominees:SECURITIES BHD Wisma Sri Pinang Hwang-DBS (Malaysia) Dato’ Hwang Sing Lue

No. 60, Green Hall Berhad Tunku Nadzaruddin10200 Penang ibni Tuanku Ja’afarTel: 04-2636996 (50 lines) Tan Poh ChyeFax: 04-2639597 Hwang Lip TeikTelex: HWANG MA 40909

Shah Alam Branch16th, 18th-20th Floor, Plaza MasalamNo. 2, Jalan Tengku Ampuan ZabedahE9/E, Section 940100 Shah AlamSelangor Darul EhsanTel: 04-5533288Fax: 04-5538288

KE-ZAN Wisma Ke-Zan Member: Corporate Nominees:SECURITIES No. 64, Bishop Street Ke-Zan Holdings Md Yusoff bin Dato’ Md AliSDN BHD 10200 Penang Sdn Bhd Mohd Idris bin Ahmad Jais

Tel: 04-2634222Fax: 04-2622299/2618011Telex: MA 40323 KE ZAN

SMITH ZAIN 7th & 8th Floor Member: Corporate Nominees:SECURITIES Menara PSCI, No. 39 Smith Zain (Malaysia) Mun Kong HoeSDN BHD Jalan Sultan Ahmad Shah Sdn Bhd Tan Chong Pen

10050 Penang Tan Giap HowTel: 04-2283355Fax: 04-2299513

(Finance & Accounts)04-2297108 (Dealing)04-2295692 (Settlement)

Telex: MA 041341

SOON THEAM No. 111, Jalan Macalister Members:SECURITIES 10400 Penang Yeo Khee NamSDN BHD Tel: 04-2281868 (Pilot Line) Yeo Khee Bee

Fax: 04-2263912 Ahmad MydinYeo Khee Aik

113


THONG & Level 5 & 6 Members: Corporate Nominee:KAY HIAN Wisma Sri Pinang Thong Wai LoenSECURITIES No. 60 Green Hall Thong Yue LeongSDN BHD 10200 Penang Kay Hian (M) Holdings Thong Miew Peng

Tel: 04-2635481 Sdn BhdFax: 04-2635741Telex: MA 40675 THONG

UT SECURITIES 12th Floor Member: Corporate Nominees:SDN BHD Bangunan Mayban Trust Rentak Wira Sdn Bhd Frederick Ng Kweng Chan

No. 3, Penang Street Lee Seong Chong10200 Penang Najmiyah bt Abd HasanTel: 04-2626644/6660 (General)Fax: 04-2617312

MEMBER COMPANY BUTTERWORTH

MERCURY Ground, 1st, 2nd & 3rd Floor Members:SECURITIES Wisma UMNO Chew Sing GuanSDN BHD Lorong Bagan Luar Dua Mat Zuki bin Mahmud

12000 Seberang PeraiButterworth, PenangTel: 04-3322123Fax: 04-3231813/3312195

MEMBER COMPANY PERAK DARUL RIDZUAN – IPOH

BOTLY SECURITIES 1st Floor, Plaza Teh Teng Seng Member: Corporate Nominees:SDN BHD No. 227, Jalan Kampar TA Enterprise Bhd Ee Beng Wat

30250 Ipoh Too Hai OngPerak Darul RidzuanTel: 05-2531313 (12 lines)Fax: 05-2557950

05-2536785

KIN KHOON & CO A23 – A29 Member: Corporate Nominee:SDN BHD Jalan Dato’ Tahwil Azhar Asian Pac Holdings Bhd Abdul Molok bin

Wisma Kota Emas Abu Bakar30300 IpohPerak Darul RidzuanTel: 05-2543311(General)Fax: 05-2545567

M & A SECURITIES M & A Building Members: Corporate Nominee:SDN BHD No. 52A, Jalan Sultan Idris Shah Choo Sen Yoong

30000 Ipoh Thong Kok YoonPerak Darul Ridzuan Insas Bhd No appointment Tel: 05-2419800 (Trading) as at 30.6.1999Fax: 05-2551015 (Trading)



114

MBf NORTHERN No. 71, Jalan Lim Bo Seng Member: Corporate Nominee:SECURITIES 30300 Ipoh MBf Capital Bhd Chong Sem ShoongSDN BHD Perak Darul Ridzuan

Tel: 05-2548999/2552887Fax: 05-2412716

PHILEO ALLIED Wisma Phileo Member: Corporate Nominees:SECURITIES No. 63, Persiaran Greenhill Phileo Allied Berhad Ahmad bin AbdullahSDN BHD 30450 Ipoh Din bin Mohd Hassan

Perak Darul RidzuanTel: 05-2558233Fax: 05-2534333Telex: MA 44151 PPSEC

PREMIER CAPITAL Wisma Premier Capital Member: Corporate Nominees:SECURITIES No. 21 Jalan Seenivasagam Premier Capital Holdings Fung Yan KhaiSDN BHD 30450 Ipoh Sdn Bhd Wong Kim Lin @

Perak Darul Ridzuan Wong Kim LingTel: 05-2415100 (5 lines)Fax: 05-2553903

SBB SECURITIES 51-53 Persiaran Greenhill Members: Corporate Nominees:SDN BHD 30450 Ipoh Raja Puan Sri Dato’

Perak Darul Ridzuan Noora Ashikin btTel: 05-2530888 (General) Raja AbdullahFax: 05-2537666 SBB Capital Markets Lee Seang SengTelex: MA 44150 SBBSEC Sdn Bhd Lau Yew Kong

MEMBER COMPANY PERAK DARUL RIDZUAN – TAIPING

TAIPING No. 21, Jalan Stesen Members: Corporate Nominees:SECURITIES 34000 Taiping Durapark Corporation Ahmad bin Haji Ibni HajarSDN BHD Perak Darul Ridzuan Sdn Bhd Harris bin Haji Ismail

Tel: 05-8060888 (General) Muhammad Nadzri05-8061188 (Trading) bin Hamzah

Fax: 05-8060088 (General)05-8063388 (Trading)

MEMBER COMPANY TERENGGANU DARUL IMAN

FA SECURITIES 3rd Floor, Wisma UMNO Member: Corporate Nominee:SDN BHD Jalan Masjid Abidin FA Peninsular Bhd Isa bin Mustapha

20100 Kuala TerengganuTerengganu Darul ImanTel: 09-6238128Fax: 09-6238129

115


PTB SECURITIES 1st, 2nd & 3rd Floor Member: Corporate Nominee:SDN BHD No. 61 Jalan Sultan Ismail PTB Securities Holdings Ismail bin Nik Man

Peti Surat 151 Sdn BhdPejabat Pos Besar20700 Kuala TerengganuTerengganu Darul ImanTel: 09-6235546

09-6235532

MEMBER COMPANY SARAWAK

SARAWAK Wisma Mahmud Member: Corporate Nominees:SECURITIES Jalan Sungai Sarawak CMS Capital Sdn Bhd Dato’ Haji Onn SDN BHD 93100 Kuching, Sarawak bin Mahmud

Tel: 082-338000 (General) Benny Ng Wu HongFax: 082-338222 Shahnaz bt Abdul MajidTelex: SASEC MA 70080

UTAMA Lot 2465 Member: Corporate Nominee:SECURITIES Jalan Boulevard Utama Utama Capital Sdn Bhd Abrizah bt Dato’ AbdullahSDN BHD Boulevard Commercial Centre

98000 MiriSarawakTel: 085-435577Fax: 085-435511

MEMBER COMPANY SABAH

INNOSABAH 11 Equity House, Block K Members: Corporate Nominee:SECURITIES Sadong Jaya, Karamunsing Faidzan bin HassanSDN BHD 88100 Kota Kinabalu, Sabah Kong Kok Keong

Tel: 088-234090 Kretam Holdings Bhd Mohd Zahir bin AhmadFax: 088-234100

MEMBER COMPANY FEDERAL TERRITORY OF LABUAN

LABUAN Level 2, Wisma Oceanic Members:SECURITIES Jalan OKK Awang Besar Dr. Abdul HadiSDN BHD 87007 Wilayah Persekutuan bin Derani(Dealer’s licence Labuan YB Abdol Mulok binsuspended by the Tel: 087-410621 Awang DamitSecurities Commission Fax: 087-410620 Abdul Hakim Mordanion 12 May 1998) bin Abdul Hadi

Number of Members : 110Number of Corporate Nominees : 110Number of Member Companies : 65Absent Members : Sia Say Yee Zabidi bin Mohd Zain Zainuddin bin Hayati Meah

NoticeO f A n n u a l G e n e r a l M e e t i n g

NOTICE IS HEREBY GIVEN THAT the Twenty Third Annual General Meeting of the Exchange will be held at theKLSE Theatrette, Lower Ground Floor, Exchange Square, Bukit Kewangan, 50200 Kuala Lumpur on Saturday, 20November 1999 at 11:30 a.m. to transact the following business:

1. To confirm the Minutes of the Twenty Second Annual General Meeting held on 28 November 1998 at 11:30 a.m.

2. To receive and consider the report of the Committee, the Income and Expenditure Accounts for the year ended30 June 1999 and the Balance Sheet as at 30 June 1999 with Auditors’ Report thereon in respect of Kuala Lumpur Stock Exchange and Kuala Lumpur Stock Exchange Compensation Fund.

3. To consider and if thought fit, to pass the following resolution pursuant to Section 129 of the Companies Act, 1965:-

“THAT Dato’ Hwang Sing Lue, who is over the age of seventy years and retiring in accordance with Section129 of the Companies Act, 1965, be and is hereby re-appointed as a Committee Member of the Exchange andto hold office until the conclusion of the next Annual General Meeting.”

4. To elect two (2) Committee Members.

5. To elect a Deputy Chairman.

6. To elect Auditors and to authorise the Committee to fix their remuneration.

7. To transact any other business which may be properly transacted at an Annual General Meeting.

BY ORDER OF THE COMMITTEE

IZLAN IZHAB[LS No: 01843]Company Secretary

Kuala Lumpur29 October 1999

NOTE:A. APPOINTMENT OF PROXY

RE: ARTICLES OF ASSOCIATION OF THE EXCHANGE

1. ARTICLE 24.7(a) in the case of a Voting Member, only one of its executive directors shall be entitled to attend and vote on its behalf at the

general meeting and in the event such executive director is unable to attend the general meeting, the Voting Member shall,subject to Article 26.4(1), be entitled to appoint a proxy to attend and vote on behalf of the Voting Member;

(b) in the case of Non-Voting Members who are entitled to attend and vote and where the circumstances referred to in Article4.2(2) apply, such Members are entitled to appoint proxies to attend and vote on their behalf, respectively.

2. ARTICLE 26.4(1)A Member shall not be entitled to appoint a natural person who is not a Member as its proxy.

3. ARTICLE 4.2(1) Every Non-Voting Member shall have the right to receive any notice of and to attend and to speak at all general meetings

of the Exchange.

(2) In addition to the rights conferred under Article 4.2(1) a Non-Voting Member shall also have the right to vote upon anyresolution which varies or affects his rights or privileges as a Non-Voting Member under the Memorandum of Association orthese Articles.

(30632-P)

116

FormOf Proxy/Cer t i f ica te Of Representa t ion

We

of

being a Member of Kuala Lumpur Stock Exchange

hereby appoint

of

as our proxy/ representative to vote for us and on our behalf at the Twenty Third Annual General Meeting of the

Exchange to be held on Saturday, 20 November 1999 at 11:30 a.m. and at any adjournment thereof.

Made this _______________ day of _______________ 1999.

Signature of Director/Attorney authorised to act on

behalf of the Member

Common Seal of Member affixed in the presence

of the persons authorised by the Board of Directors

EXPLANATORY NOTESA. APPOINTMENT OF PROXY

RE: ARTICLES OF ASSOCIATION OF THE EXCHANGE

(1) ARTICLE 24.7(a) in the case of a Voting Member, only one of its executive directors shall be entitled to attend and vote on its behalf at the

general meeting and in the event such executive director is unable to attend the general meeting, the Voting Member shall,subject to Article 26.4(1), be entitled to appoint a proxy to attend and vote on behalf of the Voting Member;

(b) in the case of Non-Voting Members who are entitled to attend and vote and where the circumstances referred to in Article4.2(2) apply, such Members are entitled to appoint proxies to attend and vote on their behalf, respectively.

(2) ARTICLE 26.4(1)A Member shall not be entitled to appoint a natural person who is not a Member as its proxy.

(3) ARTICLE 4.2(1) Every Non-Voting Member shall have the right to receive any notice of and to attend and to speak at all general meetings

of the Exchange.

(2) In addition to the rights conferred under Article 4.2(1) a Non-Voting Member shall also have the right to vote upon anyresolution which varies or affects his rights or privileges as a Non-Voting Member under the Memorandum of Association orthese Articles.

B. INSTRUMENT APPOINTING PROXY/REPRESENTATIVE TO BE DEPOSITED

The instrument appointing a proxy/representative shall be deposited at the registered office of the Exchange not less than twenty four(24) hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote.

To confirm receipt of the above by the Exchange, kindly contact: Izlan Izhab – Tel: 03-2063498 Marhani Hamzah – Tel: 03-2317327

(30632-P)

Documents

Annual 19 99 - bursa.listedcompany.combursa.listedcompany.com › misc › ar1999.pdf · • Board of Directors– Dato’ Mohammed Azlan Hashim (Executive Chairman) Datuk Amirsham