Bonia AR2002 Corporate W - libapps2.nus.edu.sglibapps2.nus.edu.sg/nus_hl/bonia2002.pdf · 7 The Board of Bonia Corporation Berhad has considered the manner in which it has applied

C O N T E N T S

R A T I O N A L E

CORPORATE

Corporate Information 02

Profile Of Directors 03

Statement On Corporate Governance 07

Audit Committee 15

Statement On Internal Control 20

Directors' Responsibility Statement 21

Chairman's Statement 22

EVENT HIGHLIGHTS 24

FINANCIAL STATEMENTS

Directors' Report 28

Statement By Directors 32

Statutory Declaration 32

Report Of The Auditors 33

Balance Sheets 34

Income Statements 35

Statements Of Changes In Equity 36

Cash Flow Statements 38

Notes To The Financial Statements 40

Analysis Of Shareholdings 66

List Of Properties 68

Notice Of Annual General Meeting 70

Statement Accompanying The Notice Of Annual General Meeting 72

Proxy Form 73

The design of 2002 Annual Report cover reflects ayear of triumph with splash of colours forcelebration. Where colours from nature,effectively depict difference characters, eachevoking a special mood, a unique feeling.

Splashes add movement and liveliness to eachcolour, set against the simple backdrop of white,each dynamic splash of colour is brought to thefore with maximum effect, capturing the variousmoods and personality of the wearer.

Splash plays on the designs within the collectionsthat fan and splash out attractively according tothe difference patterns featured. IL Biancofeatures colours like whites, beige, blue, while ILParco plays on green and its various hues and LaTerra celebrates warm earthy shades and hues ofbrown. Blue brings to mind tranquility, calmnessand coolness and green evokes feeling offreshness, space and peace.

The Splash Collection reflects Bonia's triumph indelivering high quality craftsmanship, presentingcontemporary Italian design and inspiration thatresonate with times.

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BOARD OF DIRECTORS

Chiang Sang Sem(Executive Chairman)

Chiang Heng Kieng(Managing Director)

Chiang Sang Bon(Executive Director)

Chong Chin Look(Finance Director)

Datuk Nik Hussain Bin Nik Ali(Independent Non-Executive Director)

Datuk Ng Peng Hay(Independent Non-Executive Director)

Dato' Shahbudin Bin Imam Mohamad(Non-Independent Non-Executive Director)

Lim Fong Boon(Independent Non-Executive Director)

COMPANY SECRETARIES

Ting Oi LingTeoh Kok Jong

AUDITORS

BDO BinderChartered Accountants

REGISTERED OFFICE

Suite 1701, 17th FloorWisma Hamzah-Kwong HingNo. 1 Leboh Ampang50100 Kuala LumpurTel : 03 - 2032 1300 Fax : 03 - 2031 2892

SHARE REGISTRAR

Bina Management (M) Sdn BhdLot 10 The Highway CentreJalan 51/20546050 Petaling JayaSelangor Darul EhsanTel : 03 - 7784 3922Fax : 03 - 7784 1988

STOCK EXCHANGE LISTING

Kuala Lumpur Stock ExchangeSecond Board

CORPORATE INFORMATION

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Mr Chiang Sang Sem, a Malaysian, aged 49, wasappointed to the Board on 16 June 1994 as ExecutiveChairman of the Company. He also holds the post ofExecutive Chairman of several other subsidiary andrelated companies of the Company. He is thefounder of Bonia. His involvement in the leatherindustry spans a period of over 30 years. Hepossesses in-depth knowledge, skills and expertisein all aspects of the leatherwear trade. He isresponsible for the overall business developmentand formulating the Group's strategic plans andpolicies. To ensure that the Group is very much inline with the trend of the fashion and technologicalchanges in the leatherwear and fashion accessoriesindustry, he travels extensively to Italy, France,Germany, Japan, Hong Kong, Taiwan and China. Hedoes not have any other directorships of publiccompanies.

He is the eldest brother in the Chiang's family and amajor shareholder of Bonia Holdings Sdn Bhd. He hasno conflict of interest with the Company and hashad no convictions for offences within the past tenyears.

Mr Chiang Sang Sem attended all the five BoardMeetings of the Company held during the financialyear ended 30 June 2002.

Mr Chiang Heng Kieng, a Malaysian, aged 40, wasappointed to the Board on 16 June 1994 and is theManaging Director of the Company and of its severalother subsidiary and related companies. He isextensively and directly involved in day-to-daymanagement, decision-making and operations of theGroup. He is also responsible for the developmentand implementation of the marketing strategy andproduct distribution functions of the Group. He is also the Vice President of the Malaysian Retailer-Chains Association. He does not have anyother directorships of public companies.

He is the brother of Mr Chiang Sang Sem and Mr Chiang Sang Bon. He is the major shareholder ofBonia Holdings Sdn Bhd. He has no conflict ofinterest with the Company and has had noconvictions for offences within the past ten years.

Mr Chiang Heng Kieng attended all the five BoardMeetings of the Company held during the financialyear ended 30 June 2002.

Mr Chiang Sang Bon, a Malaysian, aged 47, wasappointed to the Board on 16 June 1994 and is theExecutive Director of the Company. He started hiscareer with a leather manufacturer in Singapore in1974. Todate, he has gained over 25 years' vastexperience in technical skills in manufacturing ofleatherwear. In his current capacity, he isresponsible for the overall factory and productionoperations. He is also in-charge of product qualitycontrol. He does not have any other directorships ofpublic companies.

He is the brother of Mr Chiang Sang Sem and Mr Chiang Heng Kieng and is also the majorshareholder of Bonia Holdings Sdn Bhd. He has noconflict of interest with the Company and has hadno convictions for offences within the past tenyears.

Mr Chiang Sang Bon attended all the five BoardMeetings of the Company held during the financialyear ended 30 June 2002.

Mr Chong Chin Look, a Malaysian, aged 39, wasappointed to the Board on 20 June 1994. He is theFinance Director of the Company and holds aposition of Financial Controller of the Group since1992. He is responsible for the overall financial andcorporate functions of the Group. He graduatedwith a Bachelor of Economics degree with a major inBusiness Administration from the University ofMalaya in 1987. He is also a member of TheMalaysian Institute of Certified Public Accountants(MICPA) and a Chartered Accountant with theMalaysian Institute of Accountants (MIA). Prior tohis current position, he was attached to KPMG PeatMarwick, an international firm of CharteredAccountants, where he gained four and a half yearsexperience in auditing, accounting, taxation andmanagement consultancy. He is also a member ofthe Audit Committee of the Company. He does nothave any other directorships of public companies.

He does not have any family relationship with anyother Director and/or major shareholder of theCompany and has no conflict of interest with theCompany. He has had no convictions for offenceswithin the past ten years.

Mr Chong Chin Look attended all the five BoardMeetings of the Company held during the financialyear ended 30 June 2002.

PROFILE OF DIRECTORS

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5

Datuk Nik Hussain Bin Nik Ali, D.J.M.K., P.M.K., aMalaysian, aged 71, was appointed to the Board on20 June 1994. He is an Independent Non-ExecutiveDirector of the Company. He is a Barrister at Law(London) and a Senior Partner of Nik Hussain andPartners. He has also served in the governmentservice for some 18 years as Assistant DistrictOfficer, Magistrate, President Session Court, SeniorFederal Counsel and Deputy ParliamentaryDraughtsman. His last post with the Governmentwas from 1971 to 1974 as the Registrar ofCompanies. During his tenure of office in theGovernment, he was a member of the formerCapital Issues Committee and the ForeignInvestment Committee. Presently, he also sits onthe board of Muda Holdings Berhad.

Datuk Nik Hussain Bin Nik Ali does not have anyfamily relationship with any other Director and/ormajor shareholder of the Company and has noconflict of interest with the Company. He has hadno convictions for offences within the past tenyears.

Datuk Nik Hussain Bin Nik Ali attended all the fiveBoard Meetings of the Company held during thefinancial year ended 30 June 2002.

Datuk Ng Peng Hay, D.M.S.M., D.S.M., P.J.K., aMalaysian, aged 50, was appointed to the Board on 20 June 1994. He is an Independent Non-Executive Director and the Chairman of theAudit Committee of the Company. He was theSenator of Dewan Negara from March 1987 to April1993 and the Malacca State Assemblyman from 1982to 1986. He is currently the Investment Coordinatorof the Malacca State Development Corporation,Chairman of the Malacca 7th Branch of theMalaysian Chinese Association (MCA) and he sits onthe Board of Directors of the Malacca ChineseChamber of Commerce and Industry. He also holdsdirectorships in Sinmah Resources Berhad,Komarkcorp Berhad and TA Win Holdings Berhad.

Datuk Ng Peng Hay does not have any familyrelationship with any other Director and/or majorshareholder of the Company and has no conflict ofinterest with the Company. He has had noconvictions for offences within the past ten years.

Datuk Ng Peng Hay attended all the five BoardMeetings of the Company held during the financialyear ended 30 June 2002.

Dato' Shahbudin Bin Imam Mohamad, D.S.A.P.,D.I.M.P., S.A.P., J.S.M., P.J.K., a Malaysian, aged 60,was appointed to the Board on 1 March 1998. He isa Non-Independent Non-Executive Director of theCompany. He is the representative of PermodalanNasional Berhad (PNB) on the Board of Directors ofthe Company. He has served in the governmentservice in various capacities for some 31 years. Hislast post with the Government was from 1996 to1997 as the Deputy Secretary General (Operation),Ministry of Finance prior to his retirement in 1997.He also serves as Director in Amanah CapitalPartners Berhad and MWE Holdings Berhad.

Dato' Shahbudin Bin Imam Mohamad does not haveany family relationship with any other Directorand/or major shareholder of the Company and hasno conflict of interest with the Company. He hashad no convictions for offences within the past tenyears.

Dato' Shahbudin Bin Imam Mohamad attended all thefive Board Meetings of the Company held during thefinancial year ended 30 June 2002.

Mr Lim Fong Boon, a Malaysian, aged 53, wasappointed to the Board on 20 June 1994. He is anIndependent Non-Executive Director and a memberof the Audit Committee of the Company. He hasbeen a district councilor of Tanjung Malim since1987, the Managing Partner of Hin Lee Goldsmithsince 1978 and also the Managing Director of TanmaHoldings Sdn Bhd, a property investment holdingcompany since 1980. He does not have any otherdirectorships of public companies.

He does not have any family relationship with anyother Director and/or major shareholder of theCompany and has no conflict of interest with theCompany. He has had no convictions for offenceswithin the past ten years.

Mr Lim Fong Boon attended all the five BoardMeetings of the Company held during the financialyear ended 30 June 2002.

PROFILE OF DIRECTORS (Continued)

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The Board of Bonia Corporation Berhad has considered the manner in which it has applied the Principles ofthe Malaysian Code on Corporate Governance ("the Code") and the extend to which it has complied with theBest Practices of the Code, the analysis of which is reported in this Statement.

THE BOARD OF DIRECTORS

The Board has the overall responsibility for corporate governance, strategic direction and overseeing theinvestments of the Company.

The Board meets at least five times a year, with additional meetings convened as necessary. Five Boardmeetings were held during the year ended 30 June 2002. Details of the attendance of the Directors at theBoard Meetings are disclosed in their respective personal profiles set out on pages 3 and 5.

Board Balance

The Board is composed of eight directors, three of whom are Independent Non-Executive Directors within themeaning of Chapter 1.01 of the Listing Requirements and one Non-Independent Non-Executive Director. TheBoard therefore fulfilled the Listing Requirements under Paragraph 15.02, which states that one-third of theboard members must be Independent Directors.

A brief profile of each Director is presented on pages 3 and 5.

The Company is led by an experienced Board under a Chairman who is an Executive Director. The roles of theChairman and the Managing Director are separated and each has a clearly accepted division of responsibilitiesto ensure balance of power and authority. The Board has within it, professionals drawn from variedbackgrounds, bringing in-depth and diversity in experience, expertise and perspectives to the Group's businessoperations. The Board is ensured of a balance and independent view at all Board deliberations largely due tothe presence of its Independent Non-Executive Directors and are independent from the Management andmajor shareholders of the Company. The Independent Directors are also free from any business dealing andother relationships that could materially interfere with the exercise of their independent judgement.Together with the Executive Directors who have intimate knowledge of the Group's businesses, the Board isconstituted of individuals who are committed to business integrity and professionalism in all their activities.

Supply of Information

All Directors are provided with an agenda and relevant and timely information, such as quarterly financialresults, progress report of the Group's businesses, corporate development, regulatory and audit reports toenable them to discharge their duties and responsibilities.

All Directors have access to the advice and services of the Company Secretaries, the external auditors andother independent professionals in carrying out their duties.

Appointment of Directors

There will be a familiarisation programme in place for new Board members, including visits to the Group'sbusinesses and meetings with senior management as appropriate, to facilitate their understanding of theGroup.

Training sessions have been held for Directors of the Group to keep them abreast of current and regulatory issues.

STATEMENT ON CORPORATE GOVERNANCE

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Re-election of Directors

In accordance with the Company's Articles of Association, all Directors who are appointed by the Board aresubject to election by shareholders at the first Annual General Meeting after their appointments.

In accordance with the Articles of Association, one-third of the remaining Directors or if the number is not amultiple of three, then the number nearest to one-third shall retire from office, except the Managing Director,were required to submit themselves for re-election by rotation at each Annual General Meeting. In compliancewith the Kuala Lumpur Stock Exchange's Listing Requirements which came into effect on 1 June 2001, theManaging Director will now also be required to submit himself for re-election by rotation. The proposed newArticles of Association to be tabled for adoption provides for all Directors to submit themselves for re-electionat least once in every three years.

Directors of and over seventy years of age are required to submit themselves for re-appointment annually inaccordance with Section 129(6) of the Companies Act, 1965.

Directors' Training

All Directors have successfully completed the Mandatory Accreditation Programme (MAP) conducted by theResearch Institute of Investment Analysis Malaysia (RIIAM), an affiliated company of Kuala Lumpur StockExchange. The Board believes that Directors should receive continuous training from time to time, particularlyon relevant new laws and regulations and changing commercial risks.

Directors' Remuneration

Non-Executive Directors are paid attendance allowance for each Board or Audit Committee Meeting theyattend. Directors’ fees are paid to Executive and Non-Executive Directors and these are approved byshareholders at the Annual General Meeting. Executive Directors are not paid attendance allowance.

Details of remuneration for Directors are as follows:

Category Fees Salaries and Other EmolumentsRM'000 RM'000

Executive Directors 213 1,353Non-Executive Directors 120 -

The number of Directors whose total remuneration falls within the following bands is as follows:

Range of Remuneration Executive Directors Non-Executive Directors

Below RM50,000 - 4

RM250,001 to RM300,000 1 -

RM300,001 to RM350,000 1 -

RM350,001 to RM400,000 1 -

RM550,001 to RM600,000 1 -

Dialogue between the Company and Investors

The Annual General Meeting (AGM) is the principal forum for dialogue with individual shareholders andinvestors. It is a crucial mechanism in shareholders communication for the Company. At the Company's AGM,shareholders have direct access to the Board and are given the opportunity to ask questions during the openquestion and answer session prior to the motion moving for the Company's and the Group's Directors' Reportand audited financial statements for the financial year. The shareholders are encouraged to ask questions both about the resolutions being proposed or about the Group's operations in general.

STATEMENT ON CORPORATE GOVERNANCE (Continued)

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ACCOUNTABILITY AND AUDIT

The Board aims to provide and present a balanced and meaningful assessment of the Group's financialperformance and prospects at the end of the financial year, primarily through the financial statements andthe Chairman's Statement in the Annual Report.

The Group's quarterly, half yearly and annual results announcements which are released to shareholderswithin the stipulated time frame reinforce the Board's commitment to ensure accurate and timelydissemination of financial and corporate announcements for greater accountability and transparency.

The Group's independent external auditors fill an essential role for the shareholders by enhancing thereliability of the Group's financial statements and giving assurance of that reliability to users of these financialstatements. The external auditors have an obligation to bring any significant defects in the Group's system ofcontrol and compliance to the attention of the Management; and if necessary, to the Audit Committee andthe Board.

Audit Committee

The Audit Committee of the Board comprises two Independent Non-Executive Directors and one ExecutiveDirector. The composition of the Committee may be found on pages 15, 17 and 19.

The Audit Committee met four times in the period under review. All the Committee members attended allmeetings. During these meetings, the Committee carried the duties as set out on pages 15, 17 and 19.

Financial Reporting

In presenting the annual financial statements and quarterly announcement of results to shareholders, theDirectors aim to present a balanced and understandable assessment of the Group's position and prospects.

The Directors consider that in preparing the financial statements, the Group has used appropriate accountingpolicies, consistently applied and supported by reasonable and prudent judgements and estimates. Allaccounting standards which the Board considers to be applicable have been followed, subject to anyexplanations and material departures disclosed in the notes to the financial statements.

Internal Control

The Directors acknowledge their responsibilities for the Company's system of internal control covering notonly financial control but also operational and compliance controls as well as risk management. The internalcontrol system involves each business and key management from each business, including the Board, and isdesigned to meet the Company's particular need and to manage the risks to which it is exposed. This system,by its nature, can only provide reasonable but not absolute assurance against material misstatement or loss.

The Board undertakes ongoing reviews of the key commercial and financial risks facing the Group's businessestogether with more general risks such as those relating to compliance with laws and regulations. Themonitoring arrangements in place give reasonable assurance that the structure of control and operation isappropriate to the Company's and the Group's situation and that there is an acceptable level of risk throughoutthe Group's businesses.

Relationship with Auditors

The role of the Audit Committee in relation to the external auditors is stated on pages 15, 17 and 19.


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OTHER INFORMATION

Share BuybacksDuring the financial year, there were no share buybacks by the Company.

Options, Warrants or Convertible SecuritiesDuring the financial year, no options, warrants or convertible securities were issued by the Company.

American Depository Receipt (ADR) or Global Depository Receipt (GDR) ProgrammeDuring the financial year, the Company did not sponsor any ADR or GDR programme.

Imposition of Sanctions/PenaltiesThere were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors ormanagement by the relevant regulatory bodies.

Non-audit FeesDuring the financial year, there were non-audit fees of RM75,000 paid to the external auditors in relation tothe Acquisition of Dominion Directions Sdn Bhd.

Variation in ResultsDuring the financial year, there were no variance of results which differ by 10% or more from any profitestimate / forecast / projection / unaudited results announced.

Profit GuaranteesDuring the financial year, there were no profit guarantees given by the Company.

Material ContractsDuring the financial year, there were no material contracts on the Company and its subsidiaries involvingDirectors' and major shareholders' interests.

Contract Relating to LoansThere were no contracts relating to loans by the Company.

Revaluation of Landed PropertiesThe Company does not have a revaluation policy on landed properties.

Recurrent Related Parties TransactionsDuring the financial year, there were no recurrent related parties transactions.

COMPLIANCE WITH THE CODE

Save for the exceptions set out below, the Group is in substantial compliance, throughout the financial year,with the Principles and Best Practices of the Code.

Pursuant to Best Practices Provision AA I, the Board is expected, in discharge of its stewardshipresponsibilities, to identify principal risks and ensure implementation of appropriate systems to manage theserisks. The need for proper risk assessment which is critical component of a sound system of internal controlis essential.

At present, the Group has at least in place, an effective internal control system which has ensured thefollowings:

· effectiveness and efficiency of the Group's operations;· reliability of financial information;· compliance with laws and regulations.

Nevertheless, the Board is of the view that a more structured approach to formalise the existing process bywhich risks are identified, assessed, controlled and reviewed, and the Board's involvement in the process,should be undertaken. In formulating this process, the Board will be guided by the "Guidance for Directors of Public Listed Companies" issued by an industry Task Force established by the Kuala Lumpur Stock Exchange on Internal Control in December 2000. The Guidance will assist the Board in evaluating the adequacy and integrity of the Group's system of internal control.


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The Audit Committee of the Company was established by a resolution of the Board on 20 June 1994.

ROLE

An independent Audit Committee assists the Board of Directors in fulfilling responsibilities as to accountingpolicies and reporting practices of the Group and of the Company and sufficiency of auditing in relatingthereto.

TERMS OF REFERENCE

Composition

The Committee shall comprise at least three directors, a majority of whom shall be independent. TheChairman shall be an Independent Non-Executive Director. One member of the Committee must be a memberof the Malaysian Institute of Accountants.

Attendance At Meeting

The Managing Director, the Executive Directors, any other Board Members, General Managers or any othersenior executive may attend the meetings upon the invitation by the Committee. The Committee shall at leastmeet with the external auditors once a year.

Quorum

The quorum shall be two, the majority of whom shall be Independent Non-Executive Directors.

Frequency of Meeting

Meeting shall be held not less than four (4) times a year. The external auditors may request a meeting if theyconsider that one is necessary.

Authority

The Committee is authorised by the Board to investigate any activity within its terms of reference. It isauthorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.

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

Functions

The functions of the Committee shall be:

a) to review with external auditors:

· the audit plan;· the evaluation of the system of internal accounting controls;· the scope and results of audit procedures;· the audit report;· the assistance given by the Company's officers to the auditors;· the financial statements of the Company and of the Group and thereafter to submit

them to the Board of Directors of the Company;· any related party transactions that may arise

within the Company or the Group;

AUDIT COMMITTEE

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Functions (Continued)

b) to consider and recommend to the Board the nomination of external auditors;

c) to review the internal audit plan, consider significant finding and management's response and report tothe Board together with such other functions as may be agreed by the Committee and the Board;

d) to review the quarterly, half yearly and annual financial statements of the Company before submissionto the Board, focusing particularly on:

· public announcement of results and dividend payment;· any changes in accounting policies and practices;· major judgemental areas;· significant adjustments resulting from audit;· the going concern assumptions;· compliance with accounting standards;· compliance with stock exchange and legal requirements;

e) any such other functions as may be agreed by the Committee and the Board.

Reporting Procedures

The Company Secretary shall circulate the minutes of meetings of the Committee to all members of theBoard.

The Company Secretary shall be responsible for keeping minutes of meetings of the Committee and circulatethem to all members of the Board.

MEMBERS AND MEETINGS

The composition of the Audit Committee is as listed below.

There were four (4) Audit Committee Meetings held during the financial year ended 30 June 2002. Details ofattendance of members at the Audit Committee Meetings are as follows:

Details of Composition of Audit Committee Members and their attendance at the Audit CommitteeMeetings

Name Status of Directorship Independent Attendance

Datuk Ng Peng Hay Non-Executive Director Yes 4 out of 4(Chairman of the Audit Committee)

Lim Fong Boon Non-Executive Director Yes 4 out of 4

Chong Chin Look Finance Director No 4 out of 4(A member of the Malaysian Institute of Accountants)

AUDIT COMMITTEE (Continued)

New York · London · Paris · Milan · Tokyo · Hong Kong · Ho Chi Minh City · Jakarta · Singapore · Kuala Lumpur

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Date, Time and Place of the Audit Committee Meetings held

Date Time Place

27 August 2001 11.00 a.m. BoardroomMonday Bonia Headquarters

No. 62 Jalan Kilang Midah Taman Midah, Cheras56000 Kuala Lumpur

21 November 2001 10.00 a.m. BoardroomWednesday Bonia Headquarters


26 February 2002 10.00 a.m. BoardroomTuesday Bonia Headquarters


23 May 2002 10.00 a.m. BoardroomThursday Bonia Headquarters


INTERNAL AUDIT FUNCTION

The Company does not have an Internal Audit Department but has appointed an external professional firm ofqualified accountants ("the Firm") to undertake this function. The internal audit function is independent ofthe activities or operation of its auditees. The Firm undertakes the audit of the Group's operating units;reviewing the units' compliance to internal control procedures; highlighting weaknesses and makingappropriate recommendations for improvement. The Firm reports directly to the Audit Committee and theBoard.

ACTIVITIES OF THE COMMITTEE

The Audit Committee met at the scheduled times; with due notice of meeting issued, and with agendasplanned and itemised so that issues raised in the audit reports by the Firm or external auditors in respect offinancial statements were deliberated and discussed in a focused and detailed manner.

At every Meeting of the Committee during the financial year, the audit reports of the Group's were reviewedand the audit findings, Auditors' recommendations and Management's responses were tabled and deliberated.

The Audit Committee also reviewed the Group's quarterly, half yearly and twelve months financial statements before each Board Meeting at which the financial statements were to be approved. During the respective Board Meetings, the Chairman of the Audit Committee briefed the Board on issues raised in respect of the financial statements and the recommendations of the Committee thereon.

AUDIT COMMITTEE (Continued)

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The Board has overall responsibility for the Group's system of internal control and for reviewing itseffectiveness whilst the role of the Management is to implement the Board's policies on risk and control. Thesystem of internal control is designed to manage rather than eliminate the risk of failure to achieve businessobjectives, and can only provide reasonable but not absolute assurance against material misstatement or loss.

The Board confirms that there is a continuous process to identify and manage the significant risks of the Groupand this has been in place during the financial year under review and up to the date of adoption of this AnnaulReport. The process is regularly reviewed by the Board and is generally in accordance with the guidance ascontained in the publication - Statement of Internal Control for Guidance of Public Listed Companies.

The key elements of the Group's internal control system are described below:

· There is a clearly defined delegation of responsibilities to the Audit Committee and the Management ofthe holding company and the operating units who ensure that appropriate risk management and controlprocedures are in place. The Group's Management operates a risk management process that identifiesthe key risks by line of business and key functional activities.

· There is a clearly defined framework for investment appraisal covering the acquisition or disposal of anyinvestment, application of capital expenditure and approval on borrowings. Post implementation reviewsare conducted and reported to the Board.

· Budgets, containing financial and operating targets, capital expenditure proposals and performanceindicators, are reviewed and approved by the Executive Directors and managers of the respectivesubsidiary companies.

· Performance reports are regularly provided to the Directors and discussed at Board meetings. The Boardregularly receives from the Management covering area such as quarterly financial review, businessdevelopment and other corporate matters.

· Comprehensive management accounts and reports are prepared monthly for effective monitoring anddecision-making.

The Board is aware of the importance of maintaining a control conscious culture and embedding strong controlfeatures throughout the Group. As such, the Group's organisation structure identifies the head of eachdepartment, their subordinates and superiors. This structure enables a clear line upward reporting to theBoard. The Board formally communicates its objectives and expectation throughout the Group through variousformal documents such as memorandum, and also communicated via informal regular business meetingbetween the Executive Board Members who are actively involved in the day-to-day operation of the Groupand all departmental heads.

In addressing the importance of a sound system of internal control, the Board has decided to outsource theinternal audit function of the Group. Subsequent to the financial year end, the Board has appointed anindependent audit firm to assist the Group in the internal audit function, risk management and corporategovernance activities.

STATEMENT ON INTERNAL CONTROL

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The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial yearwhich give a true and fair view of the state of affairs of the Company and of the Group and their results andcash flows for the financial year. In preparing the financial statements for the financial year ended 30 June 2002, the Directors have:

· selected suitable accounting policies and then apply them consistently;· made judgements and estimates that are reasonable and prudent;· stated whether applicable accounting standard have been followed, subject to any material departures

disclosed and explained in the financial statements.

The Directors are responsible for ensuring that proper accounting records are kept and which disclose withreasonable accuracy at any time the financial position of the Company and of the Group and to enable themto ensure that the financial statements comply with the Companies Act, 1965. They have a generalresponsibility for taking such steps as are reasonably open to them to safeguard the assets of the Companyand of the Group and to prevent and detect fraud and other irregularities.

DIRECTORS' RESPONSIBILITY STATEMENT

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On behalf of the Board of Directors, it is my pleasure to present to you the Annual Report and AuditedFinancial Statements of Bonia Corporation Berhad and its Group of Companies for the financial year ended 30 June 2002.

FINANCIAL REVIEW

It had been a challenging year for the Group in the light of the volatile global economic conditions.Nevertheless, we are pleased to report that we managed to achieve a reasonable good set of results.

The Group recorded a remarkable revenue growth of 12.9% on the back of RM93.0 million revenue ascompared to the previous financial year's results. The higher revenue enabled the Group to achieve a profitbefore tax of RM5.0 million, recording 17.4% higher in earnings growth over the previous year's results. Theimprovement in results was partly due to the contribution from our newly acquired wholly-owned subsidiary,Dominion Directions Sdn Bhd, contributing RM5.5 million and RM0.4 million respectively in revenue andearnings. This improvement was also in line with the continuing recovery of the Malaysian economy during thefinancial year under review.

REVIEW OF OPERATIONS

During the year under review, we experienced a global economic slowdown and uncertain businessenvironment. This was aggravated by the events of September 11th terrorist attacks on the United States,rendering the global economy even more vulnerable. The Malaysian economy was also not spared butfortunately the Government's speedy measures to stimulate the economy and boost tourist arrivals had helpedto sustain the strength in domestic demand. Consumer spending was broad-based across the country andgained momentum as an important source of growth in the second quarter of 2002. The service sector, whichincludes retailing, remained resilient with a growth of 4.5% for the second quarter of 2002 as compared to4.4% for the first quarter of 2002.

Retailing

The retail industry remained competitive with the influx of new local and foreign retail players. In the lightof the tough economic conditions, our major challenge for the year was sustaining growth and strengtheningour leading position in the market.

Armed with our quality products, years of retail management skills and proactive measures undertakentowards the challenging business environment, our retail division managed to achieve greater improvementof 13.7% in turnover as compared to the last financial year. Our constant efforts in brand-building andpositioning coupled with the constant upgrading of retail outlets' image had given us added competitive edgewhich in turn, resulted in our better performance. The higher revenue and earnings were also partlycontributed by our newly acquired wholly-owned subsidiary, Dominion Directions Sdn Bhd, which markets anddistributes men's apparel and accessories under the brand names of Bonia Uomo and Valentino Rudy.

In line with the nation's aspirations to promote Malaysia as a shopping paradise for tourists, the Group hadembarked on opening of new outlets at tourist hotspots and international airports. During the year, two newoutlets were opened at the Langkawi International Airport and Penang International Airport to complementour existing boutique at the KL International Airport in Sepang. A new boutique was also opened at the FirstWorld Hotel in Genting Highland, Pahang.

CHAIRMAN'S STATEMENT

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Corporate Development

The proposed acquisition of the entire equity interest in Dominion Directions Sdn Bhd comprising 1,000,000ordinary shares of RM1.00 each was completed on 14 March 2002 with the allotment and issuance of 6,700,000new ordinary shares of RM1.00 each in Bonia Corporation Berhad at an issue price of RM1.10 per share. Theacquisition enables the Group to venture into the marketing and distribution of men's apparel and accessories,which is complementary to the current core business of the Group. With the completion of this acquisition,the Company has met the revised requirement of the Securities Commission, for companies listed on SecondBoard of the Kuala Lumpur Stock Exchange to have at least RM40 million in issued and paid-up capital.

FUTURE PROSPECTS

Prospects for the Malaysian economy remain favourable. According to the Economic Report 2002/2003,Malaysia is expected to chalk a growth rate of between 6% and 6.5% next year from an estimated 4% to 5% in2002. In the second half-year of 2002, growth is expected to be supported by continued expansion in domesticand external demand.

The Government's continuing efforts and fiscal measures to stimulate domestic activities and boost consumerspending, augur well for the retail industry. Nevertheless, the Group also recognises that the global economicconditions remain tough and the retail industry will stay competitive with the entry of new retailers especiallywhen AFTA comes into force. In order to stay competitive and be ahead in the competition, the Group isgearing up for added changes with the launch of new marketing strategies via advertising campaigns, fashionshows as well as upgrading of retail outlets. The Group has also teamed up with a renowned Italian leatherdesign house, Studio Pelleteria Alessandra, as part of our strategy to compete in the key regional markets.This strategic business alliance will definitely enhance the creativity and quality within the Group throughsharing of their creativity, technical know-how and fashion sense with our in-house designers and brandmanagers.

In order to further strengthen our leading position and competitive edge within the leather and fashionaccessories industry, we will continue our focus on brand management and constant upgrading of outlets'image as well as sourcing of a wide variety of high quality and value-for-money products with the rightmerchandising mix.

Barring unforeseen circumstances, the Board of Directors expects the performance of the Group to be satisfactory for the next financial year.

Dividend

The Board of Directors is pleased to recommend a first andfinal dividend of 5% less income tax of 28% for the financialyear ended 30 June 2002.

Appreciation

On behalf of the Board of Directors, I would like to take this opportunity to express our utmost and sinceregratitude to all our management and staff for their conscientious efforts, commitment, dedication andperseverance in their respective job duties.

I also would like to express our sincere appreciation and deep gratitude to our shareholders, customers,business associates, financial institutions and the various Government authorities for their continued supportand confidence in the Group.

CHIANG SANG SEMChairman

19 October 2002

CHAIRMAN'S STATEMENT (Continued)

24

24

The financial year ended 30 June 2002 witnessed a number of memorable and significant events undertakenby the Group.

FASHION TRENDS 2002/2003

The Group has established itself as a leading market trendsetter in new styles, designs and usage of materialin the leatherwear, footwear and menswear fashion industry. Our goal is to achieve recognition as world classbrands, with a very Asian flavour or homegrown brands, in management, research and design, marketing anddistribution. The Group is committed to providing innovative design, latest fashion and high quality productsto our faithful customers through continuous research anddevelopment.

For the 2002/2003 collection, the Group successfully launched agrand fashion show cum product exhibition at one of the leadinghotels in Kuala Lumpur, entitled "BONIA and Sembonia Celebrate ASplash of Colours in 2003". This event was attended by a largenumber of business associates, members of media and overseasbusiness partners from Italy, China, Japan, Hong Kong, Taiwan,Vietnam, Brunei and Indonesia.

The BONIA and Sembonia's 2003 collections evoke romantic feelings and nostalgic moods that translate intodesigns with intricate detailed finishing on the surfaces of the fine leather. These new collections promise tobe the best ever creations to have come from BONIA and Sembonia thus far. Both brands resemble uniquedesigns featuring soothing, nature-inspired colours with a touch of simplicity, specially created for theMalaysian and Asian markets. The designs incorporate excellent Italian-inspired craftsmanship, high qualityleather and accessories for the latest fashion statements.

Centred around the theme 'Splash', the BONIA 2003 collection is a true celebration of colour themes that haveturned to Nature for inspiration. 'Splash' plays on the designs within the collections that fan and splash outattractively according to the different patterns featured. There are three categories being introduced,namely IL Bianco, IL Parco and La Terra.

The IL Bianco category features colours like white, beige, blue and its variations. The IL Parco category playson green and its various hues, whilst La Terra celebrates the warm earthyshades and hues of brown.

The BONIA 2003 collection features a range of over 20 handbag designs,and the assortment covers hand carry, sling, overnight and travelling bags,with high quality leather from Italy being used extensively.

In turn, there is an emphasis this season on matching sets of handbags andshoes and in this section, there are over 30 selections to feast one's choice

on, ranging from slip-ons, court shoes, sling backs to sandals.Delicate floral designs and slim cuts set the trend for shoes thisseason. Intricate pocket items such as wallets, key holders and coinpouches are also included for each range in the BONIA 2003collection.

Sembonia also launched its new advertising campaign themed'Fashion Speaks Louder Than Words' at the product exhibition. Thecampaign helps strengthen Sembonia's brand attributes as a youngand trendy label, fashionable and up-to-date, and is especiallytargeted at the young executives.

EVENT HIGHLIGHTS

Sembonia's new collection is very much for young men andwomen leading a vibrant and active lifestyle. The collectionfeatures around 15 to 20 new lines of handbags, ranging fromsling bags, carry bags to travel bags as well as attractivelydesigned pocket items.

Black is the preferred colour for the Sembonia collection, giventhat the colour is an easy colour to mix and match with otheritems in a wardrobe, particularly for the young who are startingto invest in good pieces of clothing and accessories. The brandalso emphasises matching sets of handbags and shoes in theexecutive, casual and lifestyle ranges. A range of 20 ladies' shoesare featured in the new Sembonia collection, with court shoes,sling-backs, slip-ons and sandals to choose from.

In additional to the BONIA and Sembonia labels, the product exhibition also showcased new collections fromin-house men's label Bonia Uomo, which offers apparel such as suits, trousers, shirts, T-shirts, jackets,leatherwear such as shoes and accessories covering wallets, key holders, belts and briefcases.

Having held such exhibitions on an annual basis for the past 12 years, theGroup has found these gatherings to be helpful for fashion buyers andcustomers as it helps to update and inform them of new fashion trends, aswell as favoured colours and designs being introduced within the fashioncapitals of the world.

STRATEGIC BUSINESS ALLIANCE

The year 2002 and the forthcoming 2003 seasonspromise to be the most challenging years aheadfor any kind of business as the global economybecomes increasingly liberalised with free tradeexchange and AFTA comes into force next year.For us to stay competitive and ahead ofcompetition, we have geared ourselves toparticipate in business on a much bigger playingfield as well as prepare ourselves to competeefficiently in more competitive markets thatdemand higher quality products and sophisticateddesigns of international class caliber.

On this note, we have entered into a strategicbusiness alliance with Studio PelletteriaAlessandra, a renowned fashion consultantcompany based in Italy. It is founded by Mr BrunoSturaro and Mr Pierpaolo Simonut, who have awealth of experience designing for manyestablished fashion names and labels. This is a strategic business partnership that will definitely enhance thequality within the Group, as they work with us, sharing and transferring their creativity and fashion sense intoour new collections. Mr Sturaro and Mr Simonut will be instrumental in guiding our in-house designers tobecome the best design house in Asia, starting on a dedicated mission to come out with new BONIA collections,and concentrating on the ladies' handbags. The Group is positive that they will have a great deal to share withus on the forthcoming trends and help us to create even more memorable fashion statements.

EVENT HIGHLIGHTS (Continued)

25

BONIA'S GOLF TOURNAMENT 2002

This yearly event was held in conjunction with ourproduct exhibition at The Mines Resort & Golf Club,Selangor Darul Ehsan. The blazing sun did little todeter this year's participants. Turnout wasmarvelous as those who joined us came from as faras Italy, Japan, China, Taiwan, Hong Kong, Thailandand Singapore. This is one way of showing ourappreciation to our business associates and tofoster a better business relationship. Those whoattended the tournament enjoyed a mostchallenging and memorable game of golf.

Our heartfelt thanks to those who attended the tournament. We look forward to teeing off with you againnext year!

ANNUAL DINNER AND TRIP 2002

As a way of showing our appreciation to all our dedicated staff for their effort during the year, the Group hasgathered all staff for a dinner entitled "Malam Muhibah" on 1 March 2002, where long serving employees werepresented with awards in recognition of their loyalty and service throughout the years.

In the spirit of getting to know each other better, the Group organised a four-day trip to Hatyai/Songkhla on14 March 2002, allowing the management and staff to unwind and have fun.

Once again, a big Thank You to all dedicated staff!

EVENT HIGHLIGHTS (Continued)

26

28

The directors have pleasure in submitting their report and the audited financial statements of the Group andof the Company for the financial year ended 30 June 2002.

PRINCIPAL ACTIVITIES

The Company is principally an investment holding and management company. The principal activities of thesubsidiary companies are set out in Note 7 to the financial statements.

There have been no significant changes in the nature of the activities of the Group and of the Company duringthe financial year.

RESULTS

Group CompanyRM'000 RM'000

Net profit for the financial year 2,640 3,554

DIVIDENDS

A first and final dividend of 5 sen per ordinary share, less income tax, amounting to RM1,198,800 in respectof the financial year ended 30 June 2001 as proposed and included in last year's report was paid during thecurrent financial year.

The directors proposed a first and final dividend of 5 sen per ordinary share, less income tax, amounting toRM1,440,000 in respect of the current financial year subject to the approval of the shareholders at theforthcoming Annual General Meeting.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than thoseas disclosed in the financial statements.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the Company increased its issued and fully paid-up share capital from RM33,300,000to RM40,000,000 by way of the allotment and issuance of 6,700,000 new ordinary shares of RM1.00 each atan issue price of RM1.10 per share as part consideration for the acquisition of a subsidiary company.

All the new ordinary shares issued rank pari passu in all respect with the then existing shares of the Company.

The Company did not issue any debentures during the financial year.

DIRECTORS

The directors who held office since the date of the last report are as follows:

Chiang Sang SemChiang Heng KiengChiang Sang BonChong Chin LookDatuk Nik Hussain Bin Nik AliDatuk Ng Peng HayDato' Shahbudin Bin Imam MohamadLim Fong Boon

DIRECTORS’ REPORT

29

DIRECTORS (Continued)

In accordance with Article 96 of the Company's Articles of Association, Mr Chong Chin Look and Datuk Ng Peng Hay retire from the Board by rotation at the forthcoming Annual General Meeting and, being eligible,offer themselves for re-election.

Datuk Nik Hussain Bin Nik Ali retires in accordance with Section 129(2) of the Companies Act, 1965. The Boardrecommends that Datuk Nik Hussain Bin Nik Ali be re-appointed as director of the Company pursuant toSection 129(6) of the Companies Act, 1965, to hold office until the conclusion of the next Annual GeneralMeeting.

DIRECTORS' INTEREST

Except as stated below, no other director holding office at the end of the financial year had any beneficialinterest in the ordinary shares of the Company and related companies during the financial year ended 30 June 2002, as recorded in the Register of Directors' Shareholdings kept by the Company under Section 134of the Companies Act, 1965:

Number of ordinary shares of RM1.00 eachBalance at Balance at1.7.2001 Bought Sold 30.6.2002

Shares in the Company

Indirect interest

Chiang Sang Sem 17,634,664 - 469,000 17,165,664Chiang Heng Kieng 17,634,664 - 469,000 17,165,664Datuk Nik Hussain Bin Nik Ali 1,105,233 - - 1,105,233

By virtue of Section 6A of the Companies Act, 1965, Mr Chiang Sang Sem and Mr Chiang Heng Kieng are deemedto have an interest in shares of the subsidiary companies to the extent the Company has an interest.

DIRECTORS' BENEFITS

Since the end of the previous financial year, none of the directors have received or become entitled to receivea benefit (other than a benefit included in the aggregate amount of emoluments received or due andreceivable by the directors as disclosed in the financial statements) by reason of a contract made by theCompany or a related corporation with the director or with a firm of which the director is a member or witha Company in which the director has a substantial financial interest except for benefits which may be deemedto be derived by virtue of trade transactions entered into in the ordinary course of business between theGroup and companies in which certain directors of the Company have substantial financial interest asdisclosed in Note 36 to the financial statements.

There were no arrangements during and at the end of the financial year, to which the Company is a party,which had the object of enabling directors of the Company to acquire benefits by means of the acquisition ofshares in or debentures of the Company or any other body corporate.

DIRECTORS’ REPORT (Continued)

30

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY:

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the income statements and balance sheets of the Group and of the Company were madeout, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts andthe making of provision for doubtful debts and have satisfied themselves that all known baddebts had been written off and that adequate provision had been made for doubtful debts;and

(ii) to ensure that any current assets which were unlikely to realise their book values in theordinary course of business had been written down to their estimated realisable values.

(b) In the opinion of the directors, the results of the operations of the Group and of the Companyduring the financial year have not been substantially affected by any item, transaction or event ofa material and unusual nature.

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(c) The directors are not aware of any circumstances:

(i) which would render the amount written off for bad debts or the amount of the provision fordoubtful debts in the financial statements of the Group and of the Company inadequate toany material extent; or

(ii) which would render the values attributed to current assets in the financial statements of theGroup and of the Company misleading; or

(iii) which have arisen which would render adherence to the existing method of valuation of assetsor liabilities of the Group and of the Company misleading or inappropriate.

(d) In the opinion of the directors:

(i) there has not arisen any item, transaction or event of a material and unusual nature likely toaffect substantially the results of the operations of the Group and of the Company for thefinancial year in which this report is made; and

(ii) 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 will or may affectthe ability of the Group and of the Company to meet their obligations as and when they falldue.

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since theend of the financial year to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since theend of the financial year.

(g) The directors are not aware of any circumstances not otherwise dealt with in the report or financialstatements which would render any amount stated in the financial statements of the Group and ofthe Company misleading.


31

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(i) On 19 July 2001, the Company entered into a conditional Sale and Purchase Agreement with third partiesto acquire 1,000,000 ordinary shares of RM1.00 each representing the entire equity interest in DominionDirections Sdn Bhd ("DDSB") for a total purchase consideration of RM11,600,000 to be satisfied by cashpayment of RM4,640,000 and the balance of RM6,960,000 via the allotment and issuance of 6,327,273new ordinary shares of the Company at an issue price of RM1.10 per share.

The original mode of purchase consideration of RM11,600,000 for the acquisition was then varied by aSupplemental Sale and Purchase Agreement entered into on 11 January 2002 by the Company and thirdparties to that of a cash payment of RM4,230,000 and the balance of RM7,370,000 via the allotment andissuance of 6,700,000 new ordinary shares of the Company at an issue price of RM1.10 per share. Theacquisition was completed on 14 March 2002.

(ii) On 19 July 2001, the directors of the Company announced an Executives' Share Option Scheme ("ESOS")for the eligible executives and executive directors of the Company and its subsidiary companies. TheESOS has been approved by the relevant authorities and shareholders of the Company. The ESOS wasimplemented on 16 October 2002.

(iii) On 29 September 2001, De Marts Marketing Sdn Bhd, a 100% subsidiary of the Company, increased itsissued and paid-up share capital from RM500,000 to RM1,500,000 by the allotment and issuance of1,000,000 ordinary shares of RM1.00 each, at par, for cash for the purpose of increasing its workingcapital.

AUDITORS

The auditors, Messrs BDO Binder, have expressed their willingness to continue in office.

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

CHIANG SANG SEMExecutive Chairman

CHIANG HENG KIENGManaging Director

Kuala Lumpur

19 October 2002


32

In the opinion of the directors, the financial statements set out on pages 34 to 65 have been drawn up inaccordance with applicable approved accounting standards in Malaysia so as to give a true and fair view of:

(i) the state of affairs of the Group and of the Company as at 30 June 2002 and of their results for thefinancial year then ended; and

(ii) the cash flows of the Group and of the Company for the financial year ended 30 June 2002.

On behalf of the Board,

CHIANG SANG SEMExecutive Chairman

CHIANG HENG KIENGManaging Director

Kuala Lumpur

19 October 2002

I, CHONG CHIN LOOK, being the director primarily responsible for the financial management of BONIA CORPORATION BERHAD, do solemnly and sincerely declare that the financial statements set out onpages 34 to 65 are, to the best of my knowledge and belief, correct and I make this solemn declarationconscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act,1960.

Subscribed and solemnly )declared by the abovenamed at )Kuala Lumpur this )19 October 2002 )

Before me:

P SETHURAMAN (No. W-217)Commissioner for OathsKuala Lumpur

STATEMENT BY DIRECTORS

STATUTORY DECLARATION

33

We have audited the financial statements set out on pages 34 to 65. These financial statements are theresponsibility of the directors. Our responsibility is to express an opinion on the financial statements basedon our audit.

We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by the directors, as well as evaluating the overallfinancial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements have been properly drawn up in accordance with applicable approvedaccounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true andfair view of the state of affairs of the Group and of the Company as at 30 June 2002 and of their resultsand cash flows of the Group and of the Company for the financial year then ended; and

(b) the accounting and other records and the registers required by the Act to be kept by the Company andits subsidiary companies of which we have acted as auditors have been properly kept in accordance withthe provisions of the Act.

We have considered the financial statements and the auditors' reports of the subsidiary companies of whichwe have not acted as auditors as indicated in Note 7 of the financial statements, being financial statementsthat have been included in the consolidated financial statements.

We are satisfied that the financial statements of the subsidiary companies that have been consolidated withthe Company's financial statements are in form and content appropriate and proper for the purposes of thepreparation of the consolidated financial statements and we have received satisfactory information andexplanations required by us for those purposes.

The auditors' reports on the financial statements of the subsidiary companies were not subject to anyqualification and did not include any comment made under sub-section (3) of Section 174 of the Act.

BDO BINDERAF : 0206Chartered Accountants

TAN KIM LEONG, JP235/06/03 (J/PH)Partner

Kuala Lumpur

19 October 2002

REPORT OF THE AUDITORSto the members of Bonia Corporation Berhad

34

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

BALANCE SHEETSas at 30 June 2002

Group Company2002 2001 2002 2001

NOTE RM'000 RM'000 RM'000 RM'000

ASSETS EMPLOYED

PROPERTY, PLANT AND EQUIPMENT 5 32,861 32,263 18,456 18,788

PROPERTY DEVELOPMENT EXPENDITURE 6 39,833 33,373 - -

INVESTMENT IN SUBSIDIARY COMPANIES 7 - - 43,673 31,073

INVESTMENT IN AN ASSOCIATED COMPANY 8 - - - -

INTEREST IN JOINT VENTURE 9 3,397 3,382 - -

INVESTMENT PROPERTIES 10 8,612 9,686 - -

LONG TERM INVESTMENTS 11 195 192 - -

INTANGIBLE ASSETS 12 10,528 5,866 - -

CURRENT ASSETS

Inventories 13 27,626 21,112 - -Trade receivables 14 13,670 9,440 - 216Other receivables, deposits and

prepayments 15 7,447 7,555 8 17Amounts owing by subsidiary companies 16 - - 9,119 9,406Amount owing by an associated company 17 180 179 180 179Fixed deposits with licensed banks 18 2,778 1,746 - -Cash and bank balances 1,507 1,819 8 5

53,208 41,851 9,315 9,823

LESS: CURRENT LIABILITIES

Trade payables 19 6,789 4,429 - -Other payables and accruals 7,941 3,570 356 308Hire-purchase and lease creditors 20 183 1 - -Amounts owing to subsidiary companies 16 - - 11,667 7,397Bank borrowings 21 32,266 24,855 1,682 1,535Bank overdrafts 22 19,382 17,790 612 898Taxation 1,693 1,279 78 156Proposed dividend - 1,199 - 1,199

68,254 53,123 14,395 11,493

NET CURRENT LIABILITIES (15,046) (11,272) (5,080) (1,670)

EXPENDITURE CARRIED FORWARD 23 - 18 - -

80,380 73,508 57,049 48,191

FINANCED BY

SHARE CAPITAL 24 40,000 33,300 40,000 33,300

RESERVES 25 18,329 15,270 12,640 8,750

SHAREHOLDERS' EQUITY 58,329 48,570 52,640 42,050

MINORITY INTERESTS 816 1,406 - -

LONG TERM AND DEFERRED LIABILITIES

Hire-purchase and lease creditors 20 216 - - - Term loans (secured) 26 20,916 23,470 4,409 6,141Deferred taxation 27 103 62 - -

80,380 73,508 57,049 48,191

35


Group Company2002 2001 2002 2001

NOTE RM'000 RM'000 RM'000 RM'000

Revenue 28 93,034 82,381 5,486 6,294

Cost of sales (46,779) (41,392) - -

Gross profit 46,255 40,989 5,486 6,294

Other operating income 376 423 9 1

Marketing and distribution expenses (15,648) (15,120) - -

General and administration expenses (21,998) (17,963) (1,744) (1,309)

Profit from operations 8,985 8,329 3,751 4,986

Finance cost (4,016) (4,096) (645) (799)

Profit before taxation 29 4,969 4,233 3,106 4,187

Taxation 30 (2,223) (1,548) 448 (1,220)

Profit after taxation 2,746 2,685 3,554 2,967

Minority interests (106) (265) - -

Net profit for the financial year 2,640 2,420 3,554 2,967

Basic earnings per ordinary share (sen) 31 7.5 7.3

Dividend per ordinary share (sen)Proposed first and final dividend of 5 sen

(2001: 5 sen) gross, less income tax 3.6 3.6 3.6 3.6

INCOME STATEMENTSfor the financial year ended 30 June 2002

36

STATEMENTS OF CHANGES IN EQUITYfor the financial year ended 30 June 2002


ForeignShare Share Capital exchange Retainedcapital premium reserve reserve profits TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000

GROUP

Balance as at 30 June 2000 33,300 1,386 382 1,812 10,736 47,616

Net profit for the financial year - - - - 2,420 2,420

Proposed first and final dividend of 5 sen per ordinary share, less income tax (Note 32) - - - - (1,199) (1,199)

Translation loss - - - (267) - (267)

Net loss not recognised in the income statement - - - (267) - (267)


Issue of shares as consideration for the acquisition of a subsidiary company 6,700 670 - - - 7,370

Share issue expenses - (334) - - - (334)Translation gain - - - 83 - 83

Net loss and gain not recognised in the income statement - (334) - 83 - (251)

Net profit for the financial year - - - - 2,640 2,640


37

Share Share Retainedcapital premium profits TotalRM'000 RM'000 RM'000 RM'000

COMPANY

Balance as at 30 June 2000 33,300 1,386 5,596 40,282

Net profit for the financial year - - 2,967 2,967

Proposed first and final dividend of 5 sen per ordinary share, less income tax (Note 32) - - (1,199) (1,199)


Issue of shares as consideration for the acquisition of a subsidiary company 6,700 670 - 7,370

Share issue expenses - (334) - (334)

Net loss not recognised in the income statement - (334) - (334)

Net profit for the financial year - - 3,554 3,554


STATEMENTS OF CHANGES IN EQUITY (Continued)for the financial year ended 30 June 2002


38

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 4,969 4,233 3,106 4,187

Adjustments for:

Amortisation of expenditure carried forward 18 18 - -Amortisation of trademarks 27 26 - -Bad debts written off 124 137 - -Depreciation of property, plant and equipment 2,533 2,316 367 366Dividend income - - (3,597) (4,122)Expenditure carried forward written off - 117 - -Impairment loss of investment properties 1,074 - - -Interest expense 3,497 3,578 644 796Interest income (71) (65) - (1)Loss on disposal of property, plant and equipment 140 159 - -Allowance for doubtful debts no longer required - (104) - -Unrealised loss on currency transactions - 33 - -

Operating profit before changes in working capital 12,311 10,448 520 1,226

Decrease/(Increase) in inventories 4,861 (2,631) - -(Increase)/Decrease in trade receivables (451) 435 - (216)Decrease in other receivables, deposits and

prepayments 1,438 448 226 165Decrease in trade payables (1,165) (1,715) - -Increase/(Decrease) in other payables and accruals 3,671 (210) 48 147

Cash generated from operations 20,665 6,775 794 1,322

Interest paid (3,497) (3,578) (644) (796)Interest received - 65 - 1Tax (paid)/ refund (3,097) (2,610) 368 (1,138)

Net cash from operating activities 14,071 652 518 (611)

CASH FLOW STATEMENTSfor the financial year ended 30 June 2002


39

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received 71 - - -Dividend received - - 3,597 4,122Placement of fixed deposits pledged (80) (57) - -Increase in property development expenditure (6,460) (1,298) - -Increase in interest in joint venture (15) - - -Acquisition of additional shares in a

subsidiary company - - (1,000) (400)Acquisition of a subsidiary company (Note 33) (5,165) (100) (4,230) (100)Proceeds from disposal of property, plant and

equipment 48 323 - -Purchase of property, plant and equipment (Note 34) (1,942) (2,865) (35) (72)Payment for trademarks (2) - - -

Net cash (used in)/from investing activities (13,545) (3,997) (1,668) 3,550

CASH FLOWS FROM FINANCING ACTIVITIES

Shares issue expenses paid (334) - (334) -Repayment to subsidiary companies - - - (4,098)Advance to an associated company (1) (1) (1) (1)Advance received from subsidiary companies - - 4,557 3,383Dividend paid (1,199) (719) (1,199) (719)Dividend paid to minority shareholders (851) (1,256) - -Repayment of term loans (2,598) (2,922) (1,584) (1,617)Net proceeds from bankers' acceptance and

trust receipts 1,788 4,645 - -Repayment of hire-purchase and lease creditors (87) (14) - -

Net cash (used in)/from financing activities (3,282) (267) 1,439 (3,052)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (2,756) (3,612) 289 (113)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR (14,708) (10,990) (893) (780)

FOREIGN EXCHANGE DIFFERENCES ON OPENING BALANCES 66 (106) - -

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR (Note 35) (17,398) (14,708) (604) (893)

CASH FLOW STATEMENTS (Continued)for the financial year ended 30 June 2002


40

1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed onthe Second Board of the Kuala Lumpur Stock Exchange.

The registered office of the Company is located at Suite 1701, 17th Floor, Wisma Hamzah-Kwong Hing, No. 1, Leboh Ampang, 50100 Kuala Lumpur.

The principal place of business of the Company is located at No. 62, Jalan Kilang Midah, Taman Midah,Cheras, 56000 Kuala Lumpur.

The financial statements are presented in Ringgit Malaysia.

2. PRINCIPAL ACTIVITIES

The Company is principally an investment holding and management company. The principal activities ofthe subsidiary companies are set out in Note 7 to the financial statements.

There have been no significant changes in the nature of these activities of the Group and of the Companyduring the financial year.

3. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements of the Group and of the Company have been prepared in accordance withapplicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of accounting

The financial statements of the Group and of the Company have been prepared in accordance withthe historical cost convention unless otherwise indicated in the significant accounting policies.

The preparation of financial statements in conformity with applicable approved accountingstandards in Malaysia and the provisions of the Companies Act, 1965 requires the directors to makeestimates and assumptions that affect the reported amounts of assets and liabilities and disclosureof contingent assets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period. Actual results could differ fromthose estimates.

4.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company andsubsidiary companies made up to the end of the financial year. Inter-company transactions andbalances are eliminated on consolidation and the consolidated financial statements reflect externaltransactions only.

All the subsidiaries are consolidated using the acquisition method of accounting except for CBHoldings (Malaysia) Sdn Bhd, CB Marketing Sdn Bhd and Ataly Industries Sdn Bhd, which wereconsolidated using the merger method of accounting in accordance with the Malaysian AccountingStandard No. 2, "Accounting for Acquisitions and Mergers", being the generally accepted accountingprinciples prevailing at that time.

NOTES TO THE FINANCIAL STATEMENTS30 June 2002

41

4. SIGNIFICANT ACCOUNTING POLICIES (Continued)

4.2 Basis of consolidation (Continued)

Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of areincluded from the effective date of acquisition up to the effective date of disposal. At the date ofacquisition, the fair values of the subsidiaries' net assets are determined and these values arereflected in the consolidated financial statements. The excess of the cost of acquisition over thefair value of the Group's share of the subsidiaries' identifiable net assets at the date of acquisitionis reflected as goodwill on consolidation.

Under the merger method of accounting, the results of the subsidiaries are presented as if themerger had been effected throughout the current and previous financial periods. On consolidation,the difference between the carrying value of the investment in these subsidiaries over the nominalvalue of the shares acquired is taken to merger reserve.

Goodwill arising on consolidation is subject to yearly review by the directors and will be writtendown when it is determined that there is a permanent diminution in the carrying value ofinvestment in subsidiary companies.

4.3 Investments

(i) Subsidiary companies

A subsidiary company is a company controlled by the Company. Control exists when theCompany has the power, directly or indirectly, to govern the financial and operating policiesof a company so as to obtain benefits from its activities.

Investments in subsidiary companies which are eliminated on consolidation are stated at costless provision for permanent diminution in value, if any.

(ii) Associated company

An associated company is a company in which the Group and the Company have a long termequity interest of between 20% and 50% and where the Group and the Company are in aposition to exercise significant influence over the financial and operating policies of theinvestee company through Board representation.

Goodwill or negative goodwill arising on acquisition represents the difference between thecost of investment and the Group's share of the fair value of net assets of the associatedcompanies at the date of acquisition.

Investment in associated companies are accounted using the equity method. The Group'sinterest in associated company is stated at cost plus adjustments to reflect changes in theGroup's share of the net assets of the associated company.

The Group's share of results of associated company acquired or disposed of are included in theconsolidated financial statements from the effective date of acquisition or up to the effectivedate of disposal.

NOTES TO THE FINANCIAL STATEMENTS (Continued)30 June 2002

42


4.4 Property, plant and equipment and depreciation

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

No depreciation is provided on freehold land. Long term leasehold land and buildings are amortisedevenly over the period of the respective leases which ranges from 50 to 100 years.

Properties under construction will only be depreciated upon completion.

Depreciation on other property, plant and equipment is calculated on the straight line basis to writeoff the costs of the assets evenly over their estimated useful lives at the following annual rates:

Freehold buildings 2%Plant and machinery 15%Furniture, fittings and counter fixtures 10 - 25%Office equipment 10 - 15%Renovation 10 - 20%Electrical installations 10%Motor vehicles 20%

4.5 Property development expenditure

Property development expenditure is stated at cost less provision for permanent diminution invalue, if any. It comprises the cost of land acquired under development and all incidentaldevelopment expenditure incurred in relation to the property development, including interestcharges directly related to the financing of the development.

Profit from sale of development properties is recognised based on the percentage of completionbasis. Where foreseeable losses on development projects are anticipated, full provision for theselosses is made in the financial statements.

Property development expenditure is shown as current asset when significant development workhas been undertaken and is expected to be completed within the normal operating cycle.

4.6 Interest in joint venture

Interest in joint venture comprises relevant development expenditure and the Group's share ofprofit and loss attributable to development work performed, less progress billings received andreceivable.

Profits from joint venture are recognised based on the percentage of completion method and fullprovision is made for foreseeable losses, if any.

4.7 Investment properties

Investment properties are held for their investment potential and rental income.

Investment properties are those properties in respect of which construction work and developmenthave been completed and are not occupied substantially for use by or in the operations of theGroup.

The carrying amounts of investment properties are reviewed at each balance sheet date todetermine whether there is any indication of impairment. If such an indication exists, the assets'recoverable amounts are estimated. An impairment loss is recognised whenever the carryingamount of an item of investment properties exceeds its recoverable amount. The impairment lossis charged to the income statement unless it reverses a previous revaluation in which case it willbe charged to equity. Increases in their carrying amount are credited to revaluation reserve.


43


4.8 Borrowing costs

Borrowing costs incurred to finance expenditure on assets that require a substantial period of timeto be ready for their intended use are capitalised. Capitalisation of borrowing costs will cease whenthe assets are ready for their intended use.

4.9 Investments

Investments in subsidiary companies, associated companies and other long term investments arestated at cost. Such investments are written down when the directors are of the opinion that thereis permanent diminution in their value.

4.10 Intangible assets

Cost of acquiring trademarks is capitalised and is charged to the income statement over seven yearsin equal instalments. Cost of renewing trademarks is treated as an expense and is charged to theincome statement in the period in which it is incurred.

4.11 Inventories

Inventories of raw materials, work-in-progress and finished goods are stated at the lower of cost(determined on a first-in, first-out basis) and net realisable value.

Costs of raw materials and consumables comprise the original cost of purchase plus the cost ofbringing the stocks to their present location and condition.

Costs of work-in-progress and finished goods comprise the cost of raw materials, direct labour anda proportion of manufacturing overheads.

4.12 Receivables

Known bad debts are written off and allowance is made for debts considered to be doubtful ofcollection.

4.13 Assets acquired under hire-purchase agreements and lease arrangements

Assets financed by hire-purchase agreements and leasing arrangements which transfer substantiallyall the risks and rewards of ownership to the Group and the Company are capitalised as property,plant and equipment and the corresponding obligations are treated as liabilities. The property,plant and equipment are depreciated on the same basis as owned assets.

Finance charges are allocated to the income statement over the period of the agreements to givea constant periodic rate of charge on the remaining hire-purchase and lease liabilities.

4.14 Expenditure carried forward

The cost of acquiring franchise rights is amortised over a period of seven years.

During the previous financial year, all other expenditure carried forward has been written off inaccordance with the requirement of Malaysian Accounting Standards Board ("MASB") Standard No. 1 - Presentation of Financial Statements.


44


4.15 Deferred taxation

Deferred taxation is provided for under the liability method at the current taxation rate in respectof all material timing differences except where it is reasonably probable that such timingdifferences will not crystallise in the foreseeable future.

Deferred tax benefits are recognised in the financial statements only when there is reasonableassurance of their realisation.

4.16 Foreign currency transactions and translations

(i) Transactions in foreign currencies

Transactions in foreign currencies are converted into Ringgit Malaysia at the rates of exchangeruling on transaction dates. Monetary assets and liabilities denominated in foreign currenciesat the balance sheet date are translated into Ringgit Malaysia at the approximate rates ofexchange at the balance sheet date. All gains or losses from currency transactions are takenup in the income statement.

(ii) Translation of foreign currency financial statements

For consolidation purposes, the assets and liabilities of foreign entities are translated intoRinggit Malaysia at the rates ruling at the balance sheet date. Income statements items aretranslated at exchange rates at the dates of transactions. The translation differences arisingtherefrom are taken up and reflected in the foreign exchange reserve.

The closing rates used are as follows:

2002 2001RM RM

1 Singapore Dollar 2.1475 2.08151 US Dollar 3.8000 3.80001 Hong Kong Dollar 0.4823 0.4930

4.17 Cash and cash equivalents

Cash and cash equivalents include cash and bank balances, bank overdrafts, deposits and othershort term, highly liquid investments which are readily convertible to cash and which are subjectto insignificant risk of changes in value.

4.18 Revenue recognition

Revenue of the Group are recognised upon delivery of products and customer's acceptance.

Royalty and rental income of the Group and of the Company are recognised on accrual basis.

Interest income earned by the Group and of the Company are recognised on accrual basis unlesscollectibility is in doubt.

Management fee of the Company from subsidiary companies are recognised on accrual basis.

Dividend income of the Group and of the Company are recognised when the shareholder's right toreceive payment is established.


45

5. PROPERTY, PLANT AND EQUIPMENT

AcquisitionGroup Balance of Translation Balance

at subsidiary Written Reclassi- adjust- at2002 1.7.2001 Additions company Disposals off fication ments 30.6.2002

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Cost

Freehold land 3,002 - - - - - - 3,002Freehold buildings 18,039 28 - - - - - 18,067Long term leasehold

land 277 - - - - - - 277Long term leasehold

buildings 6,805 - - - - - - 6,805Plant and machinery 5,077 81 27 (14) (923) - - 4,248Furniture, fittings and

counter fixtures 9,051 1,085 2,449 (38) - - 39 12,586Office equipment 7,156 359 380 (108) (28) - 96 7,855Office equipment

under lease - 296 - - - - - 296Renovation 3,390 240 73 (203) - - 77 3,577Electrical installations 484 52 48 - - - - 584Motor vehicles 954 4 452 (57) - 47 - 1,400Motor vehicles under

hire-purchase 93 57 - - - (47) - 103Properties under

construction 855 - - - - - - 855

55,183 2,202 3,429 (420) (951) - 212 59,655

Charge AcquisitionGroup Balance for the of Translation Balance

at financial subsidiary Written Reclassi- adjust- at2002 1.7.2001 year company Disposals off fication ments 30.6.2002


Accumulateddepreciation

Freehold buildings 1,033 361 - - - - - 1,394Long term leasehold

land 35 3 - - - - - 38Long term leasehold

buildings 737 88 - - - - - 825Plant and machinery 4,791 134 11 (14) (923) - - 3,999Furniture, fittings and

counter fixtures 6,658 1,009 1,880 (20) - - 37 9,564Office equipment 5,505 569 212 (89) (28) - 89 6,258Office equipment

under lease - 27 - - - - - 27Renovation 2,704 260 39 (52) - - 59 3,010Electrical installations 422 25 17 - - - - 464Motor vehicles 942 46 180 (57) - 47 - 1,158Motor vehicles under

hire-purchase 93 11 - - - (47) - 57

22,920 2,533 2,339 (232) (951) - 185 26,794


46

5. PROPERTY, PLANT AND EQUIPMENT (Continued)

AcquisitionGroup Balance of Translation Balance

at subsidiary Written Reclassi- adjust- at2001 1.7.2000 Additions company Disposals off fication ments 30.6.2001


Cost

Freehold land 3,002 - - - - - - 3,002Freehold buildings 17,973 66 - - - - - 18,039Long term leasehold

land 277 - - - - - - 277Long term leasehold

buildings 6,805 - - - - - - 6,805Plant and machinery 5,467 104 - (112) (398) 16 - 5,077Furniture, fittings and

counter fixtures 9,890 1,966 23 (2,767) (1) - (60) 9,051Office equipment 7,184 410 9 (231) (49) (16) (151) 7,156Renovation 3,422 319 - (236) - 5 (120) 3,390Electrical installations 484 - - - - - - 484Motor vehicles 959 - - (5) - - - 954Motor vehicles under

hire-purchase 93 - - - - - - 93Properties under

construction 860 - - - - (5) - 855

56,416 2,865 32 (3,351) (448) - (331) 55,183

Charge AcquisitionGroup Balance for the of Translation Balance

at financial subsidiary Written Reclassi- adjust- at2001 1.7.2000 year company Disposals off fication ments 30.6.2001


Accumulateddepreciation

Freehold buildings 673 360 - - - - - 1,033Long term leasehold

land 32 3 - - - - - 35Long term leasehold

buildings 649 88 - - - - - 737Plant and machinery 5,111 181 - (112) (398) 9 - 4,791Furniture, fittings and

counter fixtures 8,501 746 23 (2,554) (1) - (57) 6,658Office equipment 5,357 480 6 (143) (49) (9) (137) 5,505Renovation 2,530 317 - (57) - - (86) 2,704Electrical installations 387 35 - - - - - 422Motor vehicles 841 104 - (3) - - - 942Motor vehicles under

hire-purchase 91 2 - - - - - 93

24,172 2,316 29 (2,869) (448) - (280) 22,920


47


CompanyBalance at Balance at

2002 1.7.2001 Additions 30.6.2002RM'000 RM'000 RM'000

Cost

Freehold land 2,530 - 2,530Freehold building 16,867 28 16,895Furniture, fixtures and fittings 112 - 112Office equipment 181 7 188

19,690 35 19,725

Charge forBalance at the financial Balance at1.7.2001 year 30.6.2002RM'000 RM'000 RM'000

Accumulated depreciation

Freehold building 834 338 1,172Furniture, fixtures and fittings 28 11 39Office equipment 40 18 58

902 367 1,269

CompanyBalance at Balance at

2001 1.7.2000 Additions 30.6.2001RM'000 RM'000 RM'000

Cost

Freehold land 2,530 - 2,530Freehold building 16,801 66 16,867Furniture, fixtures and fittings 112 - 112Office equipment 175 6 181

19,618 72 19,690

Charge forBalance at the financial Balance at1.7.2000 year 30.6.2001RM'000 RM'000 RM'000

Accumulated depreciation

Freehold building 497 337 834Furniture, fixtures and fittings 17 11 28Office equipment 22 18 40

536 366 902


48


Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Net book value

Freehold land 3,002 3,002 2,530 2,530Freehold buildings 16,673 17,006 15,723 16,033Long term leasehold land 239 242 - -Long term leasehold buildings 5,980 6,068 - -Plant and machinery 249 286 - -Furniture, fittings and counter fixtures 3,022 2,393 73 84Office equipment 1,597 1,651 130 141Office equipment under lease 269 - - -Renovation 567 686 - -Electrical installations 120 62 - -Motor vehicles 242 12 - -Motor vehicles under hire-purchase 46 - - -Properties under construction 855 855 - -

32,861 32,263 18,456 18,788

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Net book value of property, plant and equipment pledged as securities for banking facilities granted:

Freehold land 3,002 3,002 2,530 2,530Freehold buildings 16,584 16,915 15,723 16,033Long term leasehold land 239 242 - -Long term leasehold buildings 5,980 6,068 - -Properties under construction 855 855 - -

26,660 27,082 18,253 18,563

6. PROPERTY DEVELOPMENT EXPENDITURE

Group2002 2001

RM'000 RM'000

Freehold land - at cost 20,415 20,415Development expenditure 19,418 12,958

39,833 33,373

Included in property development expenditure is interest capitalised during the financial year amountingto RM1,134,414 (2001: RM1,295,593).

The above freehold land is pledged as securities for banking facilities granted to the Group.


49

7. INVESTMENT IN SUBSIDIARY COMPANIES

Company2002 2001

RM'000 RM'000

Cost

Unquoted shares 43,673 31,073

The details of the subsidiary companies are as follows:

Country ofName of company incorporation Effective interest Principal activities

2002 2001% %

CB Marketing Sdn Bhd Malaysia 100 100 Designing, promoting and marketing offashionable leather goods

CB Holdings (Malaysia) Malaysia 100 100 Property investmentSdn Bhd

Ataly Industries Sdn Bhd Malaysia 100 100 Manufacturing of leather fashionaccessories

Luxury Parade Sdn Bhd Malaysia 100 100 Property investment

Eclat World Sdn Bhd Malaysia 100 100 Marketing and distribution ofleatherwear and carrywear

CB Franchising Sdn Bhd Malaysia 100 100 Franchising of leather goods and apparels

BCB Properties Sdn Bhd Malaysia 90 90 Property development

Pasti Anggun Sdn Bhd Malaysia 70 70 Property development

Long Bow Manufacturing Malaysia 100 100 Manufacturing and marketing of Sdn Bhd leather goods

De Marts Marketing Malaysia 100 100 Designing, promoting and marketing ofSdn Bhd fashionable footwear

* Active World Pte Ltd Singapore 70 70 Wholesale and retailing of fashionableleather goods and apparels

* Dominion Directions Malaysia 100 - Marketing and distribution of men's Sdn Bhd apparel and accessories

Subsidiary company of Dominion Directions Sdn Bhd

* VR Directions Sdn Bhd Malaysia 75 - Marketing and distribution of men's apparel and accessories

* Subsidiary companies not audited by BDO Binder.


50

7. INVESTMENT IN SUBSIDIARY COMPANIES (Continued)

The Company acquired the entire issued and fully paid up share capital of RM1,000,000 comprising1,000,000 ordinary shares of RM1.00 each in Dominion Directions Sdn Bhd for a total consideration ofRM11,600,000 satisfied by a cash payment of RM4,230,000 and the balance of RM7,370,000 via theallotment and issuance of 6,700,000 new ordinary shares of the Company at an issue price of RM1.10 pershare.

The effect of the acquisition of a subsidiary company, Dominion Directions Sdn Bhd, on the financialresult of the Group during the financial year is shown below:

2002RM'000

Revenue 5,482Cost of sales (2,973)

Gross profit 2,509Other operating income 78Operating cost (2,149)

Profit from operations 438Taxation (194)Minority interest 51

Increase in Group's net profit 295

The effect of the acquisition of a subsidiary company, Dominion Directions Sdn Bhd, on the financialposition of the Group at the end of the financial year is as follows:

2002RM'000

Property, plant and equipment 1,128Inventories 10,148Trade receivables 3,412Other receivables, deposits and prepayments 117Fixed deposits with licensed banks 1,810Cash and bank balances 148Trade payables (1,649)Other payables and accruals (248)Lease and hire-purchase creditors (210)Borrowings (7,065)Taxation (970)Minority interest (52)

Increase in Group's share of net assets 6,569

8. INVESTMENT IN AN ASSOCIATED COMPANY

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Cost

Unquoted shares - * - * - * - *

* RM40


51

8. INVESTMENT IN AN ASSOCIATED COMPANY (Continued)

The details of the associated company is as follows:

Country of Percentage ofName of Company Incorporation Equity Interest Principal Activity

2002 2001

Makabumi Sdn Bhd Malaysia 40% 40% Dormant

The financial results of Makabumi Sdn Bhd are not being equity accounted as it is dormant and theamounts involved are not significant.

9. INTEREST IN JOINT VENTURE

Group2002 2001

RM'000 RM'000

Development costs 3,397 3,382

Development costs represent expenditure incurred to develop a mixed commercial centre on the landbelonging to the joint venture partner pursuant to a joint venture agreement entered between asubsidiary company and a third party. The agreement provides that the subsidiary company shall bear allthe cost of the development in return for 80% of the total gross sales of all the completed units.

10. INVESTMENT PROPERTIES

Group2002 2001

RM'000 RM'000

Cost

Shoplots:- Freehold 3,009 3,009- Long term leasehold 6,677 6,677

9,686 9,686Impairment loss

Shoplots:- Freehold 493 - - Long term leasehold 581 -

1,074 - Carrying value

Shoplots:- Freehold 2,516 3,009- Long term leasehold 6,096 6,677

8,612 9,686

The indicative market values of the investment properties as provided by an independent professionalvaluer based on valuations carried out on 22 August 2001 are used in determining the recoverableamount of the investment properties.

All the investment properties are charged to banks for term loan facilities granted to the Group.


52

11. LONG TERM INVESTMENTS

Group2002 2001

RM'000 RM'000

Cost

Club memberships 195 192

12. INTANGIBLE ASSETS

GroupBalance at Translation Balance at

2002 1.7.2001 adjustment Additions 30.6.2002RM'000 RM'000 RM'000 RM'000

Cost

Goodwill on consolidation 5,802 - 4,685 10,487Trademarks 907 29 2 938

6,709 29 4,687 11,425

Accumulated amortisation

Trademarks 843 27 27 897

Net book value

Goodwill on consolidation 10,487Trademarks 41

10,528

Balance at Translation Balance at2001 1.7.2000 adjustment Additions 30.6.2001

RM'000 RM'000 RM'000 RM'000

Cost

Goodwill on consolidation 5,597 - 205 5,802Trademarks 954 (47) - 907

6,551 (47) 205 6,709

Accumulated amortisation

Trademarks 859 (42) 26 843

Net book value

Goodwill on consolidation 5,802Trademarks 64

5,866


53

13. INVENTORIES

Group2002 2001

RM'000 RM'000

Cost

Raw materials 1,930 2,167Work-in-progress 454 524Finished goods 25,098 18,270Consumables 144 151

27,626 21,112

14. TRADE RECEIVABLES

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Trade receivables 14,018 9,524 - 216Less: Allowance for doubtful debts, net of

bad debts written off of RM Nil (2001: RM432,725) (348) (84) - -

13,670 9,440 - 216

Included in trade receivables of the Group and of the Company in the previous financial year arebalances amounting to RM514,107 and RM216,153 respectively which are due from companies in whichcertain directors of the Group and of the Company are also directors and shareholders.

15. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Other receivables, deposits and prepayments 7,555 7,663 8 17Less: Allowance for doubtful debts (108) (108) - -

7,447 7,555 8 17

Included in other receivables, deposits and prepayments of the Group is a deposit of RM3,500,000 (2001: RM3,500,000) paid to a third party pursuant to a joint venture agreement entered between asubsidiary company and the third party.

16. AMOUNTS OWING BY/(TO) SUBSIDIARY COMPANIES

Company

The amounts owing by/(to) subsidiary companies represent mainly rental receivable and advances whichare unsecured, interest-free and have no fixed terms of repayment.


54

17. AMOUNT OWING BY AN ASSOCIATED COMPANY

Group and Company

The amount owing by an associated company represents advances which are unsecured, interest-freeand have no fixed terms of repayment.

18. FIXED DEPOSITS WITH LICENSED BANKS

Group

Fixed deposits of RM2,301,175 (2001: RM483,369) have been pledged to banks as securities for bankingfacilities granted to subsidiary companies.

19. TRADE PAYABLES

Group

Included in trade payables for year 2001 are balances amounting to RM176,919 which are due tocompanies in which certain directors of the Group are also directors and shareholders.

Included in trade payables for year 2001 is a balance amounting to RM380,292 which is due to a companyin which certain directors and shareholders of the Group are related.

20. HIRE-PURCHASE AND LEASE CREDITORS

Group2002 2001

RM'000 RM'000

Minimum hire-purchase and lease payments:

- not later than one year 168 1- later than one year and not later than five years 293 -

461 1Less: Future interest charges (62) -

Present value of hire-purchase and lease liabilities 399 1

Current:- not later than one year 183 1

Non-current:- later than one year and not later than five years 216 -

399 1


55

21. BANK BORROWINGS

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Secured

Bankers' acceptance 6,789 4,937 - -Term loans - current portion (Note 26) 4,488 4,532 1,682 1,535Revolving credits 4,900 4,900 - -

16,177 14,369 1,682 1,535

Unsecured

Bankers' acceptance 13,664 8,898 - -Trust receipts 1,975 778 - -Revolving credits 450 810 - -

16,089 10,486 - -

Total 32,266 24,855 1,682 1,535

The bank borrowings bear interest at rates ranging from 1.00% to 2.75% (2001: 1.00% to 2.75%) per annum above the banks' base lending rates.

Certain bank borrowings of the Group and of the Company are secured by first fixed charges over certainfreehold and leasehold land and buildings of the Company and subsidiary companies.

22. BANK OVERDRAFTS

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Secured 9,151 7,926 612 898Unsecured 10,231 9,864 - -

19,382 17,790 612 898

The bank overdrafts bear interest at rates ranging from 1.0% to 2.5% (2001: 1.5% to 2.5%) per annumabove the banks' base lending rates.

Certain bank overdrafts of the Group and of the Company are secured by first fixed charges over certainfreehold and leasehold land and buildings of the Company and subsidiary companies.


56

23. EXPENDITURE CARRIED FORWARD

Group2002 2001

RM'000 RM'000

Franchise rights 125 125Prototyping costs - 117

125 242Less: Accumulated amortisation (125) (107)

Written off - (117)

- 18

24. SHARE CAPITAL

Group / Company2002 2001

Number Numberof shares of shares

'000 RM'000 '000 RM'000

Ordinary shares of RM1.00 each

Authorised: 50,000 50,000 50,000 50,000

Issued and fully paid:

Balance at 1 July 2001/2000 33,300 33,300 33,300 33,300Issue pursuant to the acquisition of a

subsidiary company 6,700 6,700 - -

Balance at 30 June 2002/2001 40,000 40,000 33,300 33,300

The Company increased its issued and fully paid-up share capital from RM33,300,000 to RM40,000,000by way of the allotment and issuance of 6,700,000 new ordinary shares of RM1.00 each at an issue priceof RM1.10 per share as part consideration for the acquisition of a subsidiary company.

The newly issued shares rank pari passu in all respects with the then existing shares of the Company.

25. RESERVES

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Non-distributable

Share premium 1,722 1,386 1,722 1,386Capital reserve 382 382 - -Foreign exchange reserve 1,628 1,545 - -

3,732 3,313 1,722 1,386

Distributable

Retained profits 14,597 11,957 10,918 7,364

18,329 15,270 12,640 8,750


57


25. RESERVES (Continued)

The increase in the share premium account arose from the issuance of 6,700,000 new ordinary shares ofRM1.00 each at an issue price of RM1.10 per ordinary share and after deducting share issue expenses ofRM333,989.

Subject to the agreement of the Inland Revenue Board, the Company has sufficient tax credit underSection 108 of the Income Tax Act, 1967 to frank in full the payment of dividends out of all its retainedprofits as at 30 June 2002 without incurring any additional tax liabilities.

26. TERM LOANS (SECURED)

Group2002 2001

RM'000 RM'000

Term loan I at interest of 8.15% (2001: 9.30%) per annum repayable by 120 equal monthly instalments of RM5,671 each commencing since July 1999 246 290

Term loan II at interest of 8.15% (2001: 8.55%) per annum repayable by 120 equal monthly instalments of RM12,305 each commencing since March 1997 625 718

Term loan III at interest of 8.90% (2001: 9.30%) per annum to be repayable as follows:

- 21 monthly instalments of RM9,950 each commencing March 1997- 36 monthly instalments of RM11,632 each commencing December 1998- Thereafter, 72 monthly instalments of RM16,294 each 788 853

Term loan IV at interest of 8.65% (2001: 9.05%) per annum to be repayable as follows:

- 4 monthly instalments of RM16,887 each commencing January 1998- 176 monthly instalments of RM19,543 each commencing May 1998 973 1,115

Term loan V at interest of 8.65% (2001: 9.05%) per annum to be repayable as follows:

- 3 monthly instalments of RM36,694 each commencing February 1998- 177 monthly instalments of RM40,956 each commencing May 1998 2,045 2,343

Term loan VI at interest of 8.65% (2000: 9.05%) per annum to be repayable as follows:

- 7 monthly instalments of RM10,026 each commencing October 1997- 173 monthly instalments of RM12,252 each commencing May 1998 591 682

Term loan VII at interest of 9.45% (2001: 9.95%) per annum repayable by sixteen equal quarterly instalments of RM1 million each commencing 1 February 2002 and subsequently deferred to 1 February 2003 14,045 14,045

Term loan VIII at interest of 8.55% (2001: 8.55%) per annum repayable by 72 equal monthly instalments of RM65,243 each commencing April 1995 - 280

Term loan IX interest of 8.55% (2001: 8.55%) per annum repayable by 72 equal monthly instalments of RM180,007 each commencing November 1999 6,091 7,676

25,404 28,002

Company2002 2001

RM'000 RM'000

Term loan IX interest of 8.55% (2001: 8.55%) per annum repayable by 72 equalmonthly instalments of RM180,007 each commencing November 1999 6,091 7,676

58

26. TERM LOANS (SECURED) (Continued)

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Repayable as follows:

Within the next 12 months (included under current liabilities Note 21) 4,488 4,532 1,682 1,535

After the next 12 months (included under long term liabilities) 20,916 23,470 4,409 6,141

25,404 28,002 6,091 7,676

Term loans I, II, III and V are secured by means of a first fixed charged over leasehold land and buildingsof a subsidiary company and guaranteed by the Company.

Term loans IV, VI, VII and VIII are secured by a first fixed charge over freehold land and buildings of asubsidiary company and guaranteed by the Company.

Term loan IX is secured by means of a first legal charge on a freehold land and building of the Company.

27. DEFERRED TAXATION

Group2002 2001

RM'000 RM'000

At 1 July 2001/2000 62 99Transfer from/(to) income statements (Note 30) 41 (37)

At 30 June 2002/2001 103 62

28. REVENUE

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Sales of goods 91,068 80,437 - -Rental income 1,069 958 1,889 1,884Management fee - - - 288Dividend income - - 3,597 4,122Royalty income 897 986 - -

93,034 82,381 5,486 6,294


59

29. PROFIT BEFORE TAXATION

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Profit before taxation is arrived at:

After charging:

Amortisation of expenditure carried forward 18 18 - -Amortisation of trademarks 27 26 - -Auditors' remuneration:- statutory

- current year 94 87 10 10- under/(over) provision in prior years 2 (3) 2 1

- non statutory 4 - - 1Bad debts written off 124 137 - -Depreciation of property, plant and equipment 2,533 2,316 367 366Directors' remuneration:- Fee

- payable by the Company 240 240 240 240- payable by the subsidiary companies 135 118 - -

- Emoluments other than fees- payable by the Company 82 14 82 14- payable by the subsidiary companies 2,071 2,015 - -

Expenditure carried forward written off - 117 - -Impairment loss of investment properties 1,074 - - -Interest expense on:- term loans 1,068 1,359 576 723- overdrafts 1,328 1,195 68 73- others 1,101 1,024 - -Loss on currency transactions:- realised 73 51 74 -- unrealised - 33 - -Rental of premises 3,905 2,948 - -Loss on disposal of property, plant and

equipment 140 159 - -

And crediting:

Dividend income from subsidiary companies - - 3,597 4,122Interest income 71 65 - 1Rental income receivable from:- subsidiary companies - - 1,889 1,488- others 438 958 - 396Allowance for doubtful debts no

longer required - 104 - -


60

30. TAXATION

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Based on results for the financial year:

Current year 2,157 1,563 582 1,220Transfer to/(from) deferred taxation (Note 27) 41 (37) - -

2,198 1,526 582 1,220Under/(Over) provision in prior years 25 22 (1,030) -

2,223 1,548 (448) 1,220

Group

The tax charge of the Group in 2002 and 2001 reflects an effective tax rate which is higher than thestatutory tax rate due mainly to tax losses of certain subsidiary companies for which no Group relief isavailable, and certain expenses which are not deductible for tax purposes.

Company

The tax charge of the Company in for the current financial year reflects an effective tax rate which islower than the statutory tax rate due to certain income which are not subject to tax.

31. EARNINGS PER SHARE

Group

The basic earnings per ordinary share has been calculated by dividing the Group's profit after taxationand minority interests of RM2,640,000 (2001: RM2,420,000) by the weighted average number of ordinaryshares in issue of 35,282,466 ordinary shares (2001: the number of ordinary shares in issue of 33,300,000ordinary shares).

32. DIVIDENDS

Group/Company2002 2001

RM'000 RM'000

First and final dividend on ordinary shares of 5 sen (2001: 5 sen) gross, less income tax *1,440 1,199

* The directors propose a first and final dividend of 5 sen per ordinary share, less income tax, amountingto RM1,440,000 in respect of the current financial year. This dividend is not recognised as a liabilityas at the balance sheet date and will be accounted for as an appropriation of retained earnings in thefinancial year ending 30 June 2003 when approved by the shareholders at the forthcoming AnnualGeneral Meeting.


61

33. ACQUISITION OF A SUBSIDIARY COMPANY

During the financial year, the Group acquired the entire issued and fully paid-up share capital ofDominion Directions Sdn Bhd.

The fair value of the assets acquired and liabilities assumed were as follows:

Group2002 2001

RM'000 RM'000

Property, plant and equipment 1,090 3Inventories 11,218 - Trade receivables (net of allowance for doubtful debts of RM263,938) 3,861 - Other receivables, deposits and prepayments 1,261 - Fixed deposits with licensed banks 1,738 - Cash and bank balances 82 - Trade payables (3,498) (97)Other payables and accruals (523) (11)Lease and hire-purchase creditors (225) - Borrowings (inclusive of bank overdraft of RM1,017,000) (6,657) - Taxation (1,329) - Minority interest (103) -

Net assets/(liabilities) acquired 6,915 (105)Goodwill on acquisition 4,685 205

Purchase consideration 11,600 100Discharged by issue of shares (7,370) -

Balance of consideration paid by cash 4,230 100Add: Cash and cash equivalents acquired, net of fixed deposits pledged 935 -

Cash flow on acquisition, net of cash and cash equivalents acquired 5,165 100

34. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

During the financial year, the Group and the Company made the following cash payments to purchaseproperty, plant and equipment:

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Purchase of property, plant and equipment (Note 5) 2,202 2,865 35 72

Financed by hire-purchase and lease arrangements (260) - - -

Cash payments on purchase of property, plant and equipment 1,942 2,865 35 72


62

35. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash flow statements comprise the following balance sheetamounts:

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Cash and bank balances 1,507 1,819 8 5Fixed deposits with licensed banks 2,778 1,746 - -Bank overdrafts (19,382) (17,790) (612) (898)

(15,097) (14,225) (604) (893)Less: Fixed deposits pledged to licensed banks (2,301) (483) - -

(17,398) (14,708) (604) (893)

36. SIGNIFICANT RELATED PARTIES TRANSACTIONS

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Sales of goods to:- Scorpion Leather Products Pte Ltd - 106 - - - Jetbest Enterprise Pte Ltd - 409 - -

Purchase of goods from:- Scorpion Leather Products Pte Ltd - - - - - Jetbest Enterprise Pte Ltd - 38 - - - Dominion Directions Sdn Bhd - 3,747 - -

Rental income from:- Dominion Directions Sdn Bhd - 336 - 336- VR Directions Sdn Bhd - 55 - 55

Trademark royalty income from:- Dominion Directions Sdn Bhd - 986 - -

Directors' fee payable to:- Chiang Sang Sem, Chiang Sang Bon,

Chiang Heng Kieng and Chong Chin Look 213 202 120 120

- Datuk Ng Peng Hay, Datuk Nik Hussain Bin Nik Ali,- Dato' Shahbudin Bin Imam Mohamad,

Lim Fong Boon, Chiang Heng Pang, Chiang Boon Tian, Khoo Ju Pak, Chew Siew Moy, Khoo Siow May, Chan Fook Hong, Lee Poh Seong and Chiang Fong Yee 162 156 120 120


63

36. SIGNIFICANT RELATED PARTIES TRANSACTIONS (Continued)

Group Company2002 2001 2002 2001

RM'000 RM'000 RM'000 RM'000

Directors' emoluments other than fee payable to:- Chiang Sang Sem, Chiang Sang Bon,

Chiang Heng Kieng and Chong Chin Look 1,353 1,232 82 14

- Chiang Heng Pang, Chiang Boon Tian, Khoo Ju Pak, Khoo Siow May, Chiang Sang Yau, Chan Fook Hong, Lee Poh Seong and Chiang Fong Yee 800 797 - -

The above transactions are entered into in the ordinary course of business and have been establishedunder negotiated terms.

The relationships between the Group or the Company and the related parties are as follows:

Identities of related parties Relationship with the Group or the Company

Scorpion Leather Products Pte Ltd* ) Companies in which certain directors of theJetbest Enterprise Pte Ltd* ) Group are also director and/or shareholders.

Dominion Directions Sdn Bhd# ) Companies in which certain director of the VR Directions Sdn Bhd# ) Company and the Group are related.

* ceased to be a related party# companies acquired during the financial year

37. CAPITAL COMMITMENTS

Group2002 2001

RM'000 RM'000

Authorised and contracted for:

Properties under construction 1,108 1,108Property, plant and equipment 500 206

1,608 1,314

38. CONTINGENT LIABILITIES - UNSECURED

Company2002 2001

RM'000 RM'000

Corporate guarantees - unsecured 109,200 100,062

The Company is contingently liable for the following banking facilities utilised by the subsidiary companies

- secured 39,149 37,183- unsecured 26,891 20,289

66,040 57,472


64

39. SEGMENTAL REPORTING

Major segment by industry:

Profit/(Loss)Before Total Assets

Group Revenue Taxation EmployedRM'000 RM'000 RM'000

2002

Trading 91,986 6,934 51,439Manufacturing 203 (208) 6,241Investment and property development 845 (1,757) 90,954

93,034 4,969 148,634

2001

Trading 80,905 4,419 37,487Manufacturing 518 84 7,223Investment and property development 958 (270) 81,921

82,381 4,233 126,631

Major segment by geographical region:

ProfitBefore Total Assets

Group Revenue Taxation EmployedRM'000 RM'000 RM'000

2002

Malaysia 72,229 4,196 138,767Singapore 20,805 773 9,867

93,034 4,969 148,634

2001

Malaysia 60,127 3,230 115,208Singapore 22,254 1,003 11,423

82,381 4,233 126,631

Inter-segment pricings were on negotiated terms basis.

40. NUMBER OF EMPLOYEES AND STAFF COSTS

Group Company2002 2001 2002 2001

The number of employees, including executive directors, at the end of the financial year 479 376 6 4

Staff costs (RM'000) 12,732 11,283 181 14


65

41. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(i) On 19 July 2001, the Company entered into a conditional Sale and Purchase Agreement with thirdparties to acquire 1,000,000 ordinary shares of RM1.00 each representing the entire equity interestin Dominion Directions Sdn Bhd ("DDSB") for a total purchase consideration of RM11,600,000 to besatisfied by cash payment of RM4,640,000 and the balance of RM6,960,000 via the allotment andissuance of 6,327,273 new ordinary shares of the Company at an issue price of RM1.10 per share.

The original mode of purchase consideration for the acquisition of RM11,600,000 was then variedby a Supplemental Sale and Purchase Agreement entered into on 11 January 2002 by the Companyand third parties to that of a cash payment of RM4,230,000 and the balance of RM7,370,000 via theallotment and issuance of 6,700,000 new ordinary shares of the Company at an issue price ofRM1.10 per share. The acquisition was completed on 14 March 2002.

(ii) On 19 July 2001, the directors of the Company announced an Executives' Share Option Scheme("ESOS") for the eligible executives and executive directors of the Company and its subsidiarycompanies. The ESOS has been approved by the relevant authorities and shareholders of theCompany. The ESOS was implemented on 16 October 2002.

(iii) On 29 September 2001, De Marts Marketing Sdn Bhd, a 100% subsidiary of the Company, increasedits issued and paid-up share capital from RM500,000 to RM1,500,000 by the allotment and issuanceof 1,000,000 ordinary shares of RM1.00 each, at par, for cash for the purpose of increasing itsworking capital.

42. AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENTS

These financial statements were authorised for issue by the Board of Directors on 19 October 2002.


66

SHARE CAPITAL

Authorised Share Capital : RM50,000,000.00Issued and Fully Paid-up Share Capital : RM40,000,000.00Class of Shares : Ordinary Shares of RM1.00 eachVoting Rights : One Vote for each Ordinary Share

DISTRIBUTION OF SHAREHOLDINGS

No. of % of No. of % of Issued Size of Shareholdings Shareholders Shareholders Shares Share Capital

1 to 999 45 1.79 7,440 0.021,000 to 5,000 2,112 84.21 4,141,236 10.355,001 to 10,000 191 7.62 1,538,434 3.8510,001 to 100,000 142 5.66 3,616,660 9.04100,001 to 1,000,000 12 0.48 4,928,033 12.32Over 1,000,000 6 0.24 25,768,197 64.42

SUBSTANTIAL SHAREHOLDERS

Name No. of Shares %

1. Bonia Holdings Sdn Bhd 17,165,664 42.912. Permodalan Nasional Berhad 7,323,333 18.313. Sudisama Sdn Bhd 2,532,000 6.33

DIRECTORS' SHAREHOLDINGS as at 21 July 2002

Name Direct Indirect

1. Chiang Sang Sem - 17,165,6642. Chiang Heng Kieng - 17,165,6643. Chiang Sang Bon - -4. Chong Chin Look - -5. Datuk Nik Hussain Bin Nik Ali - 1,105,2336. Datuk Ng Peng Hay - -7. Dato' Shahbudin Bin Imam Mohamad - -8. Lim Fong Boon - -

LIST OF THIRTY LARGEST SHAREHOLDERS


1. AmSec Nominees (Tempatan) Sdn Bhd 9,727,864 24.32[AmFinance Berhad for Bonia Holdings Sdn Bhd]

2. Permodalan Nasional Berhad 7,323,333 18.31

3. AllianceGroup Nominees (Tempatan) Sdn Bhd 5,000,000 12.50[Bonia Holdings Sdn Bhd]

4. Alliance Trustee Berhad 1,333,000 3.33[Sudisama Sdn Bhd]

5. Sudisama Sdn Bhd 1,199,000 3.00

ANALYSIS OF SHAREHOLDINGSas at 4 October 2002

Total 2,508 100.00 40,000,000 100.00

67

LIST OF THIRTY LARGEST SHAREHOLDERS (Continued)


6. Alliance Trustee Berhad 1,185,000 2.96[Chiang Sang Yau]

7. HLG Nominee (Tempatan) Sdn Bhd 1,000,000 2.50[Bonia Holdings Sdn Bhd]

8. Bonia Holdings Sdn Bhd 804,000 2.01

9. Bonia Holdings Sdn Bhd 633,800 1.58

10. Nik Hatmah Binti Nik Hassan 630,000 1.58

11. Nissin Sdn Bhd 475,233 1.19

12. Alliance Trustee Berhad 445,000 1.11[Chan Fook Hong]

13. Chin Chin Seong 235,000 0.59

14. Chew Siong Yew 174,000 0.43

15. Chiang Sang Yau 155,000 0.39

16. Mayban Securities Nominees (Tempatan) Sdn Bhd 143,000 0.36[Lau Hock Lee]

17. Tan Khai Teck 123,000 0.31

18. Rajadevan a/l Vamadevan 110,000 0.28

19. Ng Choon Hua 100,000 0.25

20. Yong Tian Yang 100,000 0.25

21. HLG Nominee (Tempatan) Sdn Bhd 97,000 0.24[Lim Seow Kwi @ Lim Chew Kwi]

22. PRB Nominees (Tempatan) Sdn Bhd 81,666 0.20[Rubber Industry Smallholders Development Authority]

23. U B Nominees (Tempatan) Sdn Bhd 70,000 0.18[George Toh Kin Siang]

24. Leong Low Pew 66,000 0.16

25. Chan Fook Hong 58,000 0.14

26. Lim Ting Mei 55,333 0.14

27. Leong Kam Chee 55,000 0.14

28. RHB Nominees (Tempatan) Sdn Bhd 54,000 0.14[ING Asia Private Bank Ltd for Gan Eng Jin Aly]

29. Kenanga Nominees (Tempatan) Sdn Bhd 50,000 0.12[Yeo Siew Hee]

30. PRB Nominees (Tempatan) Sdn Bhd 50,000 0.12[Rubber Industry Smallholders Development Authority]

ANALYSIS OF SHAREHOLDINGS (Continued)as at 4 October 2002

Total 31,533,229 78.83

68

Age of Land Net Book DateExisting Building Area Value of

Location of Property Description Tenure Use (Year) (Sq Ft) RM'000 Acquisition

ATALY INDUSTRIES SDN BHD

HS(D) No. 55365 Lot No. 21085 Industrial Freehold Office 22 15,600 746 31/8/91No. 60 Jalan Kilang Midah Building cum FactoryTaman Midah, Cheras56000 Kuala Lumpur

CT No. 28834 PT No. 20501 2-storey Freehold Hostel 20 1,540 111 21/5/92No. 29 Jalan Budiman TerraceTaman Midah, Cheras House56000 Kuala Lumpur

HS(D) No. 64078 Lot No. 10783 Townhouse Freehold Vacant 12 1,036 83 31/3/92No. 70 Jalan Midah 17/105Taman Midah, Cheras56000 Kuala Lumpur

HS(D) No. 27879-27880, 27882-27885 Apartment Freehold Rented Out 16 1,285 88 27/2/93Lot No. 19536 & 19537, 19539-195422G Jasmine Court100 Jalan Midah TimurTaman Midah, Cheras56000 Kuala Lumpur

BONIA CORPORATION BERHAD

HS(D) No. 86472 6-storey Freehold Office cum 4 24,374 18,253 1/12/98Lot No. 4197 Office cum Warehouse (Date of No. 62 Jalan Kilang Midah Warehouse completion)Taman Midah, Cheras56000 Kuala Lumpur

CB HOLDINGS (MALAYSIA) SDN BHD

QT No. 85228 Lot No. 2794 Shopping Freehold Rented Out 8 432 304 17/5/93UG-51 Upper Ground Floor ComplexPlaza Phoenix LotBatu 6 Jalan Cheras56000 Kuala Lumpur

PN No. 1339 Lot No. 385 Shopping Leasehold Boutique 16 1,806 4,112 29/8/94Unit 2B 3.04 & 3.05 Complex (ExpiringKOMTAR Shopping Complex Lot in 2084)10000 Pulau Pinang

PN No. 1339 Lot No. 385 Office Lot Leasehold Office 16 1,134 319 31/12/94Unit C2 4.03B (ExpiringKOMTAR Shopping Complex in 2092)10000 Pulau Pinang

Lot No. PTB 8370 Shopping Leasehold Rented Out 7 468 346 8/2/94Unit No. B-19, Plaza BCB Complex (ExpiringNo. 20 Jalan Bakawali in 2093)86000 Kluang, Johor

LONG BOW MANUFACTURING SDN BHD

PT No. 428 HS(M) 387 Industrial Leasehold Office cum 16 135,100 1,442 7/2/89Lot 18 Merlimau Industrial Estate Land and (Expiring in FactoryPhase ll Building 2085)77300 Merlimau Melaka

LIST OF PROPERTIESheld by the Group as at 30 June 2002

69

Age of Land Net Book DateExisting Building Area Value of

Location of Property Description Tenure Use (Year) (Sq Ft) RM'000 Acquisition

Lot No. PT 683 HS(D) No. 1499 Single-Storey Freehold Hostel 10 3,199 90 12/6/92No. 1483 Jalan Jasin Semi-detachedTaman Bunga Muhibbah House77300 Merlimau, Melaka

LUXURY PARADE SDN BHD

HS(D) No. 72947 PT No. 3865 6-storey Leasehold Rented Out 4 1,920 2,000 10/1/95No. 3 Jalan 8/146 The Metro Centre Shop Lot (Expiring (Partially)Bandar Tasik Selatan in 2087)57000 Sungai BesiKuala Lumpur

HS(D) No. 72948 PT No. 3866 6-storey Leasehold Rented Out 4 1,920 2,000 10/1/95No. 5 Jalan 8/146 The Metro Centre Shop Lot (Expiring (Partially)Bandar Tasik Selatan in 2087)57000 Sungai BesiKuala Lumpur

HS(D) No. 59989-59990 Shopping Freehold Rented Out 4 1,020 1,530 16/1/95PT No. 12201-12202 ComplexUnit No. G61 The Summit LotPersiaran KewajipanUSJ 1 UEP-Subang Jaya46700 Subang JayaSelangor Darul Eshan

HS(D) No. 9828 PT No. 30742 Shopping Leasehold Rented Out 4 1,598 1,326 26/1/95Unit No. G51 Kuantan Parade Complex (ExpiringJalan Haji Abdul Rahman Lot in 2094)25000 KuantanPahang Darul Makmur

HS(D) No. 182 PT SEK 4 Shopping Freehold Rented Out 4 1,038 986 19/3/95Unit No. G0.07 Plaza Bukit Mertajam Complex566 Jalan Arumugam Pillai Lot14000 Bukit Mertajam

HS(D) No. 55098 PT No. 4 Shopping Leasehold Vacant 5 1,098 770 26/5/95Unit No. 1.48 Level 3 Complex (ExpiringPlaza Uncang Emas Lot in 2086)No. 85 Jalan Loke Yew55200 Kuala Lumpur

HS(D) No. 76874-76878 PT No. 92 - 96 Shopping Leasehold Under N.A. 524 279 23/5/96Unit No. L1-046 Plaza Rakyat Complex (Expiring ConstructionPudu, Kuala Lumpur Lot in 2081)

Unit No. GF-13 Shopping Leasehold Under N.A. 495 576 3/4/96Bayan Bay Shopping Mall Complex (99 years) ConstructionPulau Pinang Lot(Reclaimed Land)

PASTI ANGGUN SDN BHD

Geran 2962 Lot No. 18112 Residential/ Freehold Vacant N.A. 997,740 39,833 12/7/96Mukim of Petaling Commercial (22.9 acres)District of Wilayah Persekutuan LandKuala LumpurWilayah Persekutuan

LIST OF PROPERTIES (Continued)held by the Group as at 30 June 2002

70

NOTICE IS HEREBY GIVEN THAT the Eleventh Annual General Meeting of the Company will be held atTournament Room, Kuala Lumpur Golf & Country Club, No. 10 Jalan 1/70D, off Jalan Bukit Kiara, 60000 KualaLumpur on Wednesday, 18 December 2002 at 9.30 a.m. for the following purposes:

1. To receive and adopt the financial statements for the financial year ended30 June 2002 together with the Reports of the Directors and the Auditorsthereon.

2. To declare a first and final dividend of 5% less Income Tax for the financialyear ended 30 June 2002.

3. To approve the payment of Directors' fees for the financial year ended 30 June 2002.

4. To re-appoint Datuk Nik Hussain Bin Nik Ali pursuant to Section 129 (6) ofthe Companies Act, 1965, as Director of the Company to hold office untilthe conclusion of the next Annual General Meeting.

5. To re-elect the following Directors who retire pursuant to Article 96 of theArticles of Association of the Company:

(i) Datuk Ng Peng Hay

(ii) Mr Chong Chin Look

6. To re-appoint Messrs BDO Binder as Auditors of the Company and toauthorise the Directors to fix their remuneration.

7. As SPECIAL BUSINESS - To consider and if thought fit, to pass the followingresolution with or without modifications as Ordinary Resolution of theCompany:

AUTHORITY FOR ISSUE OF SHARES

"That pursuant to Section 132D of the Companies Act, 1965, and subject tothe approvals of the relevant governmental and/or regulatory authorities,the Directors be and are hereby empowered to issue shares (other thanbonus or rights issue) in the Company from time to time and upon suchterms and conditions, for such purposes as the Directors may deem fitprovided that the aggregate number of shares issued in any one financialyear of the Company (other than by way of bonus or rights issue) does notexceed ten per centum (10%) of the issued share capital of the Companyfor the time being and that the Directors be and are also empowered toobtain approval from the Kuala Lumpur Stock Exchange the listing of andquotation for the additional shares so issued and that such authority shallcontinue in force until the conclusion of the next Annual General Meeting."

8. To transact any other business of which due notice shall have beenreceived.

NOTICE OF ANNUAL GENERAL MEETING

Ordinary Resolution 1








71

NOTICE OF DIVIDEND PAYMENT

NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the Eleventh Annual General Meeting, the First and Final Dividend of 5% less Income Tax in respect of the financial year ended 30 June 2002 shall be paid on 28 February 2003 to the shareholders registered in the Record of Depositors atthe close of business on 31 January 2003.

A Depositor shall qualify for the entitlement to the dividend only in respect of:

a) Shares transferred into the Depositor's Securities Account before 12.30 p.m. on 31 January 2003 inrespect of ordinary transfers;

b) Shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement basis accordingly to the Rulesof the Kuala Lumpur Stock Exchange.

By Order of the Board

TING OI LINGTEOH KOK JONGCompany Secretaries

Kuala Lumpur

15 November 2002

Notes:

1. A member is entitled to appoint a proxy (or in the case of a corporation, to appoint a representative) to attendand vote in his place. A proxy need not be a member of the Company.

2. The Proxy Form must be signed by the appointor or his attorney duly authorised in writing or in the case of acorporation, executed under its common seal or attorney duly authorised in that behalf.

3. All proxies must be deposited at the Company's Registered Office situated at Suite 1701, 17th Floor, Wisma Hamzah-Kwong Hing, No. 1, Leboh Ampang, 50100 Kuala Lumpur not less than forty-eight (48) hoursbefore the time for holding the Meeting or at any adjournment thereof.

Explanatory Note On Special Business

The proposed Ordinary Resolution 8, if passed, is to empower the Directors to issue shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delay and cost involved in convening a general meeting to approve such an issue of shares. This authority will, unless revoked or varied by the Company at a General Meeting, expire at the conclusion of the next Annual General Meeting or the expiration of the period within which the next Annual General Meeting is required by law to be held, whichever is the earlier.

NOTICE OF ANNUAL GENERAL MEETING (Continued)

72

1. Directors who are standing for re-appointment or re-election

a) The Director standing for re-appointment pursuant to Section 129(6) of the Companies Act, 1965 is:

(i) Datuk Nik Hussain Bin Nik Ali.

b) The Directors standing for re-election are:

(i) Datuk Ng Peng Hay;(ii) Mr Chong Chin Look.

The profiles of the above Directors are set out in the section entitled "Profile of Directors" on pages 3 and 5. Their respective shareholdings in the Company and its subsidiaries are set out in thesection entitled "Analysis of Shareholdings" on pages 66 and 67.

2. Details of Attendance of Directors at Board Meetings

A total of five (5) Board Meetings were held during the financial year ended 30 June 2002 and the aboveDirectors standing for re-appointment and re-election at the Annual General Meeting attended all thefive (5) Board Meetings held.

3. Date, Time and Place of the Annual General Meeting

The Eleventh Annual General Meeting of the Company will be held as follows:

Date Time Place

18 December 2002 9.30 a.m. Tournament RoomWednesday Kuala Lumpur Golf & Country Club

No. 10 Jalan 1/70DOff Jalan Bukit Kiara60000 Kuala Lumpur

STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETINGPursuant to Paragraph 8.28 (2) of the Listing Requirements of the Kuala Lumpur Stock Exchange

PROXY FORM

I/We _________________________________________________________________________________________(BLOCK LETTERS)

of ___________________________________________________________________________________________

being a member/members of BONIA CORPORATION BERHAD hereby appoint ____________________________

(I/C No.: ) of _____________________________________________________________

or failing him, the Chairman of the Meeting as my/our proxy to vote for and on my/our behalf at the Eleventh

Annual General Meeting of the Company to be held on Wednesday, 18 December 2002 and at any adjournment

thereof, as indicated below:

No. Resolutions For Against

1 Adoption of Financial Statements and Reports Ordinary Resolution 1

2 Declaration of First and Final Dividend Ordinary Resolution 2

3 Approval for the payment of Directors' fees Ordinary Resolution 3

4 Re-appointment of Datuk Nik Hussain Bin Nik Ali as Director Ordinary Resolution 4 pursuant to Section 129(6) of the Companies Act, 1965

5 Re-election of Directors pursuant to Article 96 of the Articles of Association of the Company:

(i) Datuk Ng Peng Hay Ordinary Resolution 5

(ii) Mr Chong Chin Look Ordinary Resolution 6

6 Re-appointment of Auditors, BDO Binder Ordinary Resolution 7

7 Special Business - Authority for Issue of Shares Ordinary Resolution 8

Please indicate with a ( √ ) in the appropriate box against the resolution how you wish your vote to be cast.If no specific direction as to voting is given, the proxy will vote or abstain at his discretion.

No. of Shares :

Signature/Company Seal : _______________________ Date : ___________________________

Notes:

1. A member is entitled to appoint a proxy (or in the case of a corporation, to appoint a representative) toattend and vote in his place. A proxy need not be a member of the Company.

2. The Proxy Form must be signed by the appointor or his attorney duly authorised in writing or in the caseof a corporation, executed under its common seal or attorney duly authorised in that behalf.

3. All proxies must be deposited at the Company's Registered Office situated at Suite 1701, 17th Floor, WismaHamzah-Kwong Hing, No. 1, Leboh Ampang, 50100 Kuala Lumpur not less than forty-eight (48) hours beforethe time for holding the Meeting or at any adjournment thereof.

AFFIXSTAMP

THE COMPANY SECRETARYBONIA CORPORATION BERHAD (223934-T)

SUITE 1701, 17TH FLOORWISMA HAMZAH-KWONG HING

NO. 1 LEBOH AMPANG50100 KUALA LUMPUR

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Bonia AR2002 Corporate W - libapps2.nus.edu.sglibapps2.nus.edu.sg/nus_hl/bonia2002.pdf · 7 The Board of Bonia Corporation Berhad has considered the manner in which it has applied