Lay Hong Berhad a n n u a l r e p o r t y e a r 2 0 0 0layhong.com.my › website › pdf › LHB-AR-2000.pdf · a n n u a l r e p o r t y e a r 2 0 0 0 egg… “Lay Hong” brand

a n n u a l r e p o r t y e a r 2 0 0 0egg… “Lay Hong” brand guarantees the quality of contents, in the eggs that it pro d u c e s.

I n c o r p o rated in Malaysia company no: 10 71 2 9 - H

Lay Hong Berhad

cover rationale

c h i c k e ns. eggs. coop. feed.

T h a t ’s all most people think goes into

egg production. Of course it’s a lot more.

I t ’s a business like any other. And it’s a bus i n e s s

unlike any other. And no one knows that

b usiness better than Lay Hong.

c o n t e n t s L a y H o n g B e r h a d an nua l r e po r t 2 00 0

0 2 C o r p o rate Information

0 3 B o a rd of Dire c t o rs

0 4 Audit Committee

0 6 Notice of Annual General Meeting

10 C h a i r m a n ’s Statement

1 4 G roup Financial Highlights

D i re c t o rs’ Report 1 7

Statement by Dire c t o rs 2 5

Statutory Declaration 2 5

A u d i t o rs’ Report 2 6

C o nsolidated Balance Sheet 2 7

C o nsolidated Profit and Loss Account 2 8

C o nsolidated Cash Flow Statement 2 9

Balance Sheet 31

P rofit and Loss Account 3 2

Notes to the Accounts 3 3

A n a l ys is of Share h o l d i n gs 4 9

P roperties Owned by Lay Hong Berhad Group of Companies 51

P roxy Fo r m

corporate information

top left : 1 Yap Hoong Chai

f rom left to right : 2 Yip Kim Hoong 3 Yeap Fock Hoong 4 Lai Kum Sim 5 Dato’ Mohd Desa bin Pachi 6 Gan Soo Jin 7 Yeap Weng Hong

company secre tar ies

Lim King Hua, ACIS

( MAICSA 0798613 )

Nancy Teoh, LS03084

re g is t e red off i ce

26, Jalan Is t a n a

41000 Klang

S e l a n g o r

Tel: 03 - 33710 611

c o r p o rate o f f ic e

41-A, Jalan 5, Ka w a san 16

Taman Intan, 41300 Klang

S e l a n g o r

Tel: 03 - 33434888

sh a re re g is t rar

Securities Services (Holdings) Sdn Bhd

L e vel 22, Menara Milenium

Jalan Damanlela

P usat Bandar Damansa ra

D a m a nsa ra Heights

50490 Kuala Lumpur

Tel: 03 - 2557077

s u b s id iar ies

Hing Hong Sdn Bhd

Innofarm (Klang) Sdn Bhd

E ve rg reen Organic Fe r t i l is e rs Sdn Bhd

Sri Tawau Farming Sdn Bhd

Innobrid Sdn Bhd

Innobrid Marketing Sdn Bhd

a u d i t o rs

Arthur Andersen & Co.

L e vel 23A, Menara Milenium

Jalan Damanlela


D a m a nsa ra Heights

50490 Kuala Lumpur

princ ipa l b ankers

B u m i p u t ra - C o m m e rce Bank (M) Berhad

C o m m e rce International Merc h a n t

B a n k e rs Bhd

M a l a yan Banking Berhad

RHB Bank Berhad

Phileo Allied Bank (Malaysia) Berhad

so l i c i to r

Zaid Ibrahim & Co.

L e vel 19, Menara Milenium

Jalan Damanlela


50490 Kuala Lumpur

b o a rd o f d ire c t o rs

Chairman & Group Managing Director

Yap Hoong Chai

Directors

Dato’ Mohd Desa bin Pa c h i

Yip Kim Hoong

Yeap Weng Hong

Yeap Fock Hoong

Gan Soo Jin

Lai Kum Sim

audi t c ommitt ee

Chairman & Independent Non Executive Director


Independent Non-Executive Director

Gan Soo Jin

Executive Director

Yap Hoong Chai

b o a r d o f d i r e c t o r s

1

2 3 4 5 6 7

We constantly strive to increase profitability and market share to enhance shareholder value

audi t commit tee

c o m p o si t i o n

The Committee shall cons ist of not less than 3 members of the Board, a majority of whom shall be non-exe c u t i ve dire c t o rs. The members of theCommittee shall elect a Chairman who is a non-exe c u t i ve director fro mamong their number. If the number of members is less than 3, the Board shall within 3 months, appoint new members to make up the minimumnumber of 3 members.

m e e t i n gs and minutes

The Committee shall meet at least twice a year; and as many times as theCommittee deems necessa r y. Minutes of each meeting shall be kept andd istributed to each member of the Committee and of the Board .The Chairman of the Committee shall report on each meeting to the Board .The Secretary to the Committee shall be the Company Secre t a r y.

audi t committee

The Audit Committee of

Lay Hong Berhad cons ists of

the following members :

c h a i r m a n

Dato’ Mohd Desa bin Pa c h iIndependent Non Executive Director

Gan Soo Jin Independent Non Executive Director

Yap Hoong Chai Executive Director

q u o r u m

A quorum shall be 2 members.

t e r ms of re f e re n c e

The Committee is authorised by the Board to investigate any activity within its terms of re f e rence and shall haveu n restricted access to any information it re q u i res from any employee and all employees are directed to co-opera t ewith any request made by the Committee.

The Committee is empowered to retain pers o ns having special competence as necessary to assist the Committee infulfilling its re sp o ns i b i l i t y. The Committee is authorised by the Board to obtain external legal or other independentp rofessional advice as necessa r y.

d u t i e s

The duties of the Committee shall be:( i ) to consider the appointment of the external auditors, the audit fee and any questions of resignation or dism is sa l ;

( i i ) to review with the auditors :the audit plans ;the audit reports; andthe maintenance of an effective internal accounting system and contro l ;

( i i i ) to review als o :the assistance given by the Company’s and the Gro u p ’s officers to the auditors ;the scope of internal audit pro c e d u re s ;the financial statements and annual reports of the Company and the Group prior to submission to the Board ofD i re c t o rs and the KLSE; and any related party tra nsa c t i o n within the Company or the Gro u p ;

( i v ) any such other functions as may be agreed to by the Committee and the Board of Dire c t o rs.

You need more than just a quality chicken to produce a quality egg. At Lay Hong, we take both a micro and

m a c ro approach to quality; from practical measures such as producing better tra ys to reduce breakages and using the

best grade of feed to the extens i ve use of automation and modern technology in our production pro c e s s e s.

not ice of annual genera l meeting

not ice is he re by give n

that the Sixteenth Annual General

Meeting of Lay Hong Berhad will be

held at Grand BlueWave Hotel Shah

Alam, Gasing 1, Level 2, Pe r s i a r a n

Perbandaran, Seksyen 14, 40000

Shah Alam, Selangor on

6th September 2000 at 11.00 a.m.

for the following purposes:

1 , To re c e i ve the Audited Accounts for the year ended 31st March 2000 together with the Dire c t o rs’ and Auditors ’Reports there o n . Resolution 1

2 , To declare a first and final dividend of 10% less tax at 28% for the year ended 31st March 2000. Resolution 2

3 , To approve Dire c t o rs’ fees for the year ended 31st March 2000. Resolution 3

4 , To re-elect the following Dire c t o rs who re t i re in accordance with the Company’s Articles of Association, viz:i. Mr. Yeap Fock Hoong Resolution 4ii. Mr. Yip Kim Hoong Resolution 5

5 , To re-appoint Arthur Andersen & Co as Auditors to hold office until the conclusion of the next Annual Genera lMeeting of the Company at a re m u n e ration to be fixed by the Dire c t o rs. Resolution 6

spec ia l busi n e s s

6 , To consider and, if thought fit, adopt the following Resolution with or without any amendment as an Ord i n a r yR e s o l u t i o n :“That subject always to the Companies Act, 1965 and the approva ls of the re l e vant governmental and/orregulatory authorities, the Dire c t o rs be and are here by empowered pursuant to Section 132D of the CompaniesAct, 1965, to issue sh a res in the Company from time to time at such price, upon such terms and conditions,for such purposes and to such person or pers o ns whoms o e ver as the Dire c t o rs may deem fit provided that thea g g regate number of sh a res issued pursuant to this resolution does not exceed 10% of the issued sh a re capitalof the Company for the time being and that such authority shall continue in force until the conclusion of thenext Annual General Meeting of the Company. ” Resolution 7

7 , To tra nsact any other ordinary business of which due notice shall have been given in accordance with theCompanies Act 1965 and the Company’s Articles of Association.

R e c ycling is nothing new; nature has been doing it for billions of ye a rs. Recycling is not only economically sensible – it

contributes substantially to Lay Hong’s profitability by reducing wastage and costs – but is also environmentally the

right thing to do as it cons e r ves pre c i o us natural re s o u rc e s.

notice of annual genera l meet ing

not ice of books c losure

N OTICE IS ALSO HEREBY GIVEN that the Share Tra ns f e rB o o ks and Register of Members will be closed from 20th September 2000 to 22nd September 2000 (both datesi n c l us i ve), for the pre p a ration of the dividend entitlement.

Subject to the approval of the sh a re h o l d e rs at the Annual General Meeting, a first and final dividend of10% less income tax will be paid on 4th October 2000 to thesh a re h o l d e rs re g is t e red in the Books of the Company as at the close of business on 19th September 2000. A depositorshall qualify for entitlement to the dividend only in re spect of:

a , S h a res tra ns f e r red into the Depositor’s Securities Ac c o u n tb e f o re 12.30p.m. on 19th September 2000 in re spect ofo rdinary tra ns f e rs; and

b, S h a res bought on the Kuala Lumpur Stock Exchange ona cum entitlement basis according to the Rules of theKuala Lumpur Stock Exc h a n g e .

no tes :

1 , E very member entitled to attend and vote at the Meeting is entitled toappoint a proxy (or in the case of a corporation, to appoint are p re s e n t a t i ve) to attend and vote on his/her stead. A proxy need notbe a member of the Company.

2 , The Proxy Form in the case of an individual shall be signed by theappointer or his/her attorney, and in the case of a corporation eitherunder its common seal or under the hand of an officer or attorneyduly authoris e d .

3 , If the Proxy Form is returned without any indication as to how thep roxy shall vote, the proxy will vote or abstain as he/she thinks fit.

4 , If no name is inserted in the space for the name of your prox y, theChairman of the Meeting will act as your prox y.

5 , P roxies or other instruments of appointment shall not be treated asvalid unless they are deposited at the Regis t e red Office of the

Company not less than 48 hours before the time fixed for holding themeeting or any adjournment thereof, or in the case of a poll, not less than24 hours before the time appointed for the holding of the poll.

explanatory notes on item 6 of the agenda

The Ordinary Resolution proposed under item 6 of the Agenda, if passed,will give the Dire c t o rs of the Company from the date of the Annual Genera lMeeting, authority to allot and issue ordinary sh a res from the unis s u e dcapital of the Company up to an amount not exceeding in total 10% of theissued capital of the Company for such purposes as the Dire c t o rs cons i d e rwould be in the interest of the Company. This authority will, unless re vo k e dor varied by the Company at a general meeting, expire at the next AnnualG e n e ral Meeting of the Company.

By Order Of The Board

S e c re t a r y

Lim King Hua (F)

MAICSA 07 9 8 61 3

21st August 2000

K l a n g

Which came first, the great management team or the great employees? As with most successful companies, it’s hard

to sa y. At Lay Hong, we strongly believe in the importance of teamwork and attribute the effectiveness of our

m a n a g e m e n t ’s leadership to the dedication and hard work of our employe e s.

chairman’ s s ta tement

“On behalf of the Board of Directors, I am pleased to present to you the

Annual Report and Audited Accounts of the Group and Company for

the financial year ended 31st March 2000.

During the year under review, we saw a recovery in the Malaysian

economy principally driven by strong exports from the manufacturing

s e c t o r. Growth in the agriculture sector was slower but nevertheless

our overall performance has been relatively good.”

rev i ew of re s u l ts

The Group made a profit before taxand minority interest of RM8.11 millionas compared to RM8.31 mill ion in thep re v i o us financial ye a r. The Group's net earnings per sh a re was lower at33.5 sen as compared to last year's 42.7 sen which was a tax free ye a r. Net tangible asset backing per sh a rehas increased to 249 sen from 223 senas at 31st March 2000.

The Group re c o rded higher turnover for the current financial year asc o m p a red to last year as a result of the consolidation into the gro u pof our new subsidiary company Innobrid Sdn Bhd (ISB) as well as thei n c rease in production from the new investment in broiler bre e d e ro p e ra t i o ns under the Sabah opera t i o ns.

Our Sabah opera t i o ns through our 50% subsidiary, Sri Tawau Fa r m i n gSdn Bhd (STF) has done well during the financial year under re v i e wwith profit before tax of RM1.7 million as compared to a loss ofR M 119,000 in the pre v i o us ye a r. STF enjoyed good egg and bro i l e rprices during the ye a r. We are optimistic that this subsidiary willcontinue to yield us good re t u r ns.

On 1st February 2000, the Company subscribed for 1,000,001 new ordinarysh a res at par value in ISB, a company principally invo l ved in the bro i l e rbusiness. ISB became a 50% subsidiary of Lay Hong through the new sharesubscription which has enabled the Lay Hong Group to expand further intothe broiler business. ISB made a small profit of RM166,000 for the 2 monthsended 31st March 2000. We are confident that our new investment into thebroiler business will assist us in improving our earnings base in the future.

Our organic fertiliser division through our 51% subsidiary, Eve rg reen Org a n i cFe r t i l is e rs Sdn Bhd performed below expectations and achieved a lower pro f i tb e f o re tax of RM52,000 during the financial year under re v i e w. This was dueto poor demand for fertilis e rs but we hope to be able to improve on this are aof opera t i o ns.

Unlike our chickens, we’re never content to sit on the product of our labours. At Lay Hong we’re constantly hatching

new plans and ideas to increase profitability and market sh a re.

chairman’s sta tement

d i v i d e n d s

The Board is pleased to re c o m m e n da final dividend of 10 sen per sh a reless Malaysian tax at 28% for thefinancial year ended 31st March 2000.Subject to approval of sh a re h o l d e rs atthe forthcoming Annual Genera lMeeting, this dividend will be paid on4th October 2000.

p ro sp e c ts fo r current ye a r

The outlook for the financial ye a rending 31st March 2001 appearsp o s i t i ve with GDP growth projected toi m p rove further. Although egg andb roiler prices for the first quarterended 30th June 2000 have been low,we expect demand to increase andb e l i e ve both egg and broiler pricesshould improve later in the ye a r.

Baring unforeseen circ u ms t a n c e s,we expect another profitable year forthe Lay Hong Gro u p .

a p p re c i a t i o n

On behalf of the Board, I wish to express our thanks to themanagement and staff of the Lay Hong Group for their hard work,l oyalty and dedication. I also express our gratitude to all cus t o m e rs,s u p p l i e rs, bankers, regulatory authorities for their continued support.

To our sh a re h o l d e rs, I thank you for investing in the Company and I hope you will continue to be re w a rded with steady dividend incomeand in the longer term with an increasing value of your inve s t m e n t .

Yap Hoong ChaiChairman and Managing Director

c o r p o ra te deve l o p m e n t

The Securities Commission has on 9th March 1999 re v ised theminimum issued and paid-up capital for Second Board Companies on the KLSE to a minimum of RM40 million.

Ac c o rd i n g l y, the Board of Dire c t o rs has on 30th March 2000p roposed a fund ra ising exe rc ise for the Company, which uponcompletion will result in the Company increasing its paid-up capitalf rom RM17.500 million to 55.902 million.

The pro p o sal will ra ise gross proceeds of up to RM19.201 million andsh a re h o l d e rs will be re w a rded with a bonus issue of one new ord i n a r ysh a re in the Company for every one existing ordinary sh a re held.

We hope this exe rc ise will be fully completed during the financial ye a rending 31st March 2001 .

The proceeds from the rights issue will be used to construct new laye rf a r ms in Klang, Selangor and on full completion will increase eggp roduction of the Lay Hong Group by some 400,000 eggs per day. The expansion in the egg operation is expected to contributep o s i t i vely to the future earnings of the Lay Hong Gro u p .

At Lay Hong, we constantly strive to increase productivity by combining technological expertise with human re s o u rc e s,

f rom employing more efficient farming methods to the use of automation and computerisation to optimal exploitation

of economies of scale.

g r o u p f i n a n c i a l h i g h l i g h t s

g ro up tur nove r RM ’00 0

8 0 0 0 0

7 0 0 0 0

6 0 0 0 0

5 0 0 0 0

4 0 0 0 0

3 0 0 0 0

2 0 0 0 0

10 0 0 0

0

9 6 9 7 9 8 9 9 0 0

9 6 9 7 9 8 9 9 0 0

10 0 0 0

8 0 0 0

6 0 0 0

4 0 0 0

2 0 0 0

0

Hing Hong 10 0 . 0 0 %Sdn BhdB reeder farmH a t c h e r yL a yer farm

I n n o f a r m 7 0 . 0 0 %( K l a n g )Sdn BndL a yer farm

S r i Ta w a u 5 0 . 0 0 %Farming Sdn BhdFe e d m i l lL a yer farmB roiler farmB reeder farm

E ve rg re e n 51 . 0 0 %O rg a n i cFe r t i l is e rsSdn BhdO rg a n i c

f e r t i l is e rp ro d u c t i o n

I n n o b r i d 5 0 . 01 %S d n B h dB reeder farmH a t c h e r yB roiler farm

I n n o b r i d 51 . 0 0 %M a r k e t i n gS d n B h dP rocessing &

marketing ofb ro i l e rs

g roup structure and opera t i o ns

L e a d e r w a y 2 8 . 5 7 %Network (M)S d n B h dMulti Leve l

m a r k e t i n g

Feedmill, Layer Fa r ms, Chick Fa r m ,Management and Supervision of Gro u p

O p e ra t i o ns

g ro up pro f i t be fo r e ta xa t ion RM’000

direc tors ’ report

The directors have pleasure in submitting their report together with the

audited accounts of the Company and of the Group for the financial

year ended 31st March 2000.

pr inc ipal a ct iv i t ies

The principal activity of the Company cons ists of poultry farming. The principal activities of the subsidiaries cons ist ofpoultry farming, processing and marketing of poultry and organic fertilis e rs.

T h e re have been no significant changes in these activities during the financial ye a r.

re s u l tsG ro u p C o m p a n y

R M R M

P rofit after taxation but before minority intere s t s 6 , 9 41 , 1 8 3 5 , 7 9 2 , 1 9 9Minority intere s t s ( 1 , 0 71 , 7 0 6 ) -

P rofit after taxa t i o n 5 , 8 6 9 , 4 7 7 5 , 7 9 2 , 1 9 9Retained profits brought forward 2 0 , 4 8 2 , 4 7 9 1 5 , 7 5 9 , 9 0 8

P rofits available for appro p r i a t i o n 2 6 , 3 51 , 9 5 6 21 , 5 5 2 , 10 7D i v i d e n d s ( 1 , 2 6 0 , 0 0 0 ) ( 1 , 2 6 0 , 0 0 0 )

Retained profits carried forward 2 5 , 0 91 , 9 5 6 2 0 , 2 9 2 , 10 7

d i v i d e n d s

The amount of dividends paid by the Company since the end of the pre v i o usfinancial year were as follows :

R MIn re spect of financial year ended 31st March 1999

Final dividend of 10% less taxation of 28% 1 , 2 6 0 , 0 0 0

Special dividend of 2.5% less taxation of 28% 31 5 , 0 0 0

The dire c t o rs recommend a final ordinary dividend of 10% less taxation of 28%amounting to RM1,260,000 in re spect of the current financial ye a r.

re s e r ves and prov i si o ns

T h e re were no material tra ns f e rs to or from re s e r ves or prov is i o ns during thefinancial year other than as disclosed in Note 16 to the accounts.


bad and doubtful debts

B e f o re the profit and loss accounts and balance sheets were made out, the dire c t o rs took reasonable steps to ascertainthat action had been taken in relation to the writing off of bad debts and the making of prov ision for doubtful debtsand sa t isfied thems e l ves that all known bad debts had been written off and that adequate prov ision had been made fordoubtful debts.

At the date of this report, the dire c t o rs are not aware of any circ u mstances which would render the amounts written offas bad debts or the amount of prov ision for doubtful debts in the accounts of the Company and of the Gro u pinadequate to any substantial extent.

cont ingent and other l i ab il i t ies

At the date of this report, there does not exis t :

( a ) any charge on the assets of the Company or of the Group which has arisen since the end of the financial year whichs e c u res the liabilities of any other person; or

( b ) any contingent liability of the Company or of the Group which has arisen since the end of the financial ye a r.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelvem o n t hs after the end of the financial year which, in the opinion of the dire c t o rs, will or may substantially affect the abilityof the Company or of the Group to meet their obligations when they fall due.

va luation me thods

At the date of this report, the dire c t o rs are not aware of anyc i rc u mstances which have arisen which render adherence to thee x isting methods of valuation of assets or liabilities of theCompany and of the Group misleading or inappro p r i a t e .

c u r rent assets

B e f o re the profit and lossaccounts and balance sheets weremade out, the dire c t o rs tookreasonable steps to ens u re thatany current assets which wereunlikely to be re a l ised in theo rdinary course of business theirvalues as shown in theaccounting re c o rds of theCompany and of the Group havebeen written down to an amountwhich they might be expected soto re a l is e .

At the date of this report, thed i re c t o rs are not aware of anyc i rc u mstances which wouldrender the values attributed tothe current assets in the accountsof the Company and of theG roup misl e a d i n g .

directors ’ report

change of circ u ms t a n c e s

At the date of this report, the dire c t o rs are not aware ofany circ u mstances not otherwis edealt with in this report or theaccounts of the Company or ofthe Group which would re n d e rany amount stated in theaccounts misl e a d i n g .

i t e ms of an unus u a ln a t u re

The results of the opera t i o ns ofthe Company and of the Gro u pduring the financial year werenot, in the opinion of thed i re c t o rs, substantially affectedby any item, tra nsaction or eve n tof a material and unusual nature .

T h e re has not arisen in thei n t e r val between the end of thefinancial year and the date oft h is report any item, tra nsa c t i o nor event of a material andu n usual nature likely, in theopinion of the dire c t o rs, to affectsubstantially the results of theo p e ra t i o ns of the Company or ofthe Group for the financial ye a rin which this report is made.

sign if i cant eve n ts

During the financial year, the Company:

(a) subscribed for 1,000,001 new ordinary shares of RM1 each, representing a50% interest in the enlarged issued and paid-up share capital of InnobridSdn Bhd, for a cash consideration of RM1,000,001.

(b) subscribed for 200,000 new ordinary shares of RM1 each, representing a28.57% interest in the enlarged issued and paid-up share capital ofLeaderway Network (M) Sdn Bhd for a cash consideration of RM200,000.

(c) entered into agreements to purchase 2 pieces of farm land measuring 5and 4.819 acres respectively which are located in the Mukim of Jeram,Kuala Selangor, Selangor, for a total cash consideration of RM1,130,090.The transactions have not been completed.

(d) proposed a bonus issue of up to 19,201,000 new ordinary shares of RM1each in the Company on the basis of one bonus share for every oneexisting share held (“the Proposed Bonus Issue”);

(e) proposed rights issue of up to 19,201,000 new ordinary shares of RM1each on the basis of one rights share for every existing ordinary share heldbefore the Proposed Bonus Issue (“the Proposed Rights Issue”); and

(f) proposed an increase in authorised share capital from RM20,000,000comprising 20,000,000 ordinary shares of RM1 each to RM100,000,000comprising 100,000,000 ordinary shares of RM1 each (“the ProposedIncrease in Authorised Share Capital”).

The Proposed Bonus Issue, Rights Issue and Increase in Authorised ShareCapital are subject to approvals from the shareholders and relevantauthorities.

subsequen t eve n t

The Company entered into an agreement to purchase a piece of land measuring 4.875 acres, which is located in the Mukimof Jeram, Kuala Selangor, Selangor, for a cash consideration of RM390,000. The transaction has not been completed.

direc tors’ report

e m p l oyees’ sh a re option scheme (‘E S O S’ )

The Company’s ESOS was approved by the sh a re h o l d e rs at the Extra o rdinary General Meeting held on 27th September1996 and became effective on 16th November 1996.

The main features of the ESOS are as follows :

( a ) Eligible pers o ns are employees of the Group (including exe c u t i ve dire c t o rs) who have been confirmed in thee m p l oyment of the Group and have served for at least one year and any non-Malaysian employee who has serve dthe Group on a full time basis for a continuous period of at least five ye a rs before the date of the offer.The eligibility for participation in the ESOS shall be at the dis c retion of the ESOS Committee appointed bythe Board of Dire c t o rs.

( b ) The total number of sh a res to be offered shall not exceed in aggregate 10% of the issued sh a re capital of theCompany at any point of time during the duration of the ESOS, which shall be in force for a period of five ye a rsf rom 16th November 1996.

( c ) The option price for each sh a re shall be the ave rage of the mean market quotation of the sh a res as shown in theDaily Official List issued by the Kuala Lumpur Stock Exchange for the five trading days preceding the date of offeror the par value of the sh a re, whichever is the higher.

( d ) No offer shall be made for less than 1,000 sh a res nor more than 500,000 sh a res to any eligible employe e .

( e ) An option granted under the ESOS shall be capable of being exe rc ised by the grantee by notice in writing to theCompany before the expiry of five ye a rs or such shorter period as may be specified in such offer.

( f ) The sh a res under option shall remain unissued until the option is exe rc ised and shall on allotment rank pari passuin all re spects with the existing sh a res of the Company at the time of allotment sa ve that they will not entitle theh o l d e rs thereof to re c e i ve any rights and bonus issues announced or to any dividend or other distribution declare dto the sh a re h o l d e rs of the Company as at a date which precedes the date of the exe rc ise of the option.

The options over unissued sh a res which have been granted to eligible employees are as follows :

O p t i o ns ove ro rdinary sh a res of Option Price

Date gra n t e d RM1 each R M

2 3 rd December 1996 7 4 2 , 0 0 0 7 . 7 8

28th July 1997 1 , 0 0 2 , 0 0 0 6 . 6 6

T h e re is no movement in the options to take up unissued new ordinary sh a res of RM1 each.


d i re c t o rs

The dire c t o rs who served since the date of the last report are:

Yap Hoong Chai

Yip Kim Hoong

Yeap Weng Hong

Yeap Fock Hoong


Gan Soo Jin

Lai Kum Sim

In accordance with the Company’sArticles of Association, Yip KimHoong and Yeap Fock Hoong re t i reat the forthcoming Annual Genera lMeeting and, being eligible, offert h e ms e l ves for re - e l e c t i o n .

d i re c t o rs’ benefits

During and at the end of the financial ye a r, no arrangements subsisted to which the Company or its subsidiaries are aparty with the object of enabling dire c t o rs of the Company to acquire benefits by means of the acquisition of sh a res inor debentures of the Company or any other body corpora t e .

Since the end of the pre v i o us financial ye a r, no director has re c e i ved or become entitled to re c e i ve a benefit(other than the ESOS options granted and a benefit included in the aggregate amount of emoluments re c e i ved or dueand re c e i vable by the dire c t o rs as shown in the accounts or the fixed salary of a full time employee of the Company or itsrelated companies) by reason of a contract made by the Company or a related corporation with the director or with a firmof which he is a member or with a company in which he has a substantial financial intere s t .


d i re c t o rs’ intere s ts

Ac c o rding to the re g ister of dire c t o rs’ sh a re h o l d i n gs, the interests of dire c t o rs in office at the end of the financial year inthe sh a res of the Company and its related corpora t i o ns during the financial year were as follows :

Number of Ordinary Shares of RM1 Each

1st April 31st Marc h 21st AprilThe Company 1 9 9 9 B o u g h t S o l d 2 0 0 0 2 0 0 0

Yap Hoong Chai- indire c t 7 , 8 7 5 , 0 0 0 - - 7 , 8 7 5 , 0 0 0 7 , 8 7 5 , 0 0 0

Yip Kim Hoong- indire c t 7 , 8 7 5 , 0 0 0 - - 7 , 8 7 5 , 0 0 0 7 , 8 7 5 , 0 0 0

Yeap Fock Hoong- dire c t - 5 , 0 0 0 - 5 , 0 0 0 5 , 0 0 0- indire c t 7 , 8 7 5 , 0 0 0 - - 7 , 8 7 5 , 0 0 0 7 , 8 7 5 , 0 0 0

Yeap Weng Hong- dire c t 5 , 0 0 0 - ( 2 , 0 0 0 ) 3 , 0 0 0 3 , 0 0 0- indire c t 7 , 8 7 5 , 0 0 0 - - 7 , 8 7 5 , 0 0 0 7 , 8 7 5 , 0 0 0

Lai Kum Sim 5 41 , 0 0 0 - - 5 41 , 0 0 0 5 41 , 0 0 0Gan Soo Jin 2 , 0 0 0 1 8 , 0 0 0 - 2 0 , 0 0 0 2 0 , 0 0 0Dato’ Mohd Desa bin Pa c h i 1 , 0 0 0 - - 1 , 0 0 0 1 , 0 0 0

O p t i o ns over Ordinary Shares of RM1 Each

1st April 31st Marc h 21st April1 9 9 9 G ra n t e d E xe rc is e d 2 0 0 0 2 0 0 0

Yap Hoong Chai 3 3 0 , 0 0 0 - - 3 3 0 , 0 0 0 3 3 0 , 0 0 0Yip Kim Hoong 2 0 0 , 0 0 0 - - 2 0 0 , 0 0 0 2 0 0 , 0 0 0Yeap Weng Hong 2 0 0 , 0 0 0 - - 2 0 0 , 0 0 0 2 0 0 , 0 0 0Lai Kum Sim 2 0 0 , 0 0 0 - - 2 0 0 , 0 0 0 2 0 0 , 0 0 0

The options were granted pursuant to the Company’s ESOS which entitles the holders to subscribe for ordinary sh a res ofRM1 each for each option held at the option price of between RM6.66 to RM7.78 each.


d i re c t o rs’ intere s ts c o n t ’ dNumber of Ordinary Shares of RM1 Each

1st April 31st Marc h 21st AprilS u b si d i a r i e s 1 9 9 9 B o u g h t S o l d 2 0 0 0 2 0 0 0

Eve rg reen Organic Fe r t i l is e rs Sdn Bhd

Yap Hoong Chai- indire c t 1 4 7 , 0 0 0 - - 1 4 7 , 0 0 0 1 4 7 , 0 0 0

Yip Kim Hoong- indire c t 1 4 7 , 0 0 0 - - 1 4 7 , 0 0 0 1 4 7 , 0 0 0

Yeap Fock Hoong- indire c t 1 4 7 , 0 0 0 - - 1 4 7 , 0 0 0 1 4 7 , 0 0 0

Yeap Weng Hong- indire c t 1 4 7 , 0 0 0 - - 1 4 7 , 0 0 0 1 4 7 , 0 0 0

Lai Kum Sim- indire c t 1 4 7 , 0 0 0 - - 1 4 7 , 0 0 0 1 4 7 , 0 0 0

Innobrid Sdn Bhd

Yap Hoong Chai- indire c t 4 4 0 , 0 0 0 4 4 0 , 0 0 0 - 8 8 0 , 0 0 0 880,000

Yip Kim Hoong- indire c t 4 4 0 , 0 0 0 4 4 0 , 0 0 0 - 8 8 0 , 0 0 0 8 8 0 , 0 0 0

Yeap Fock Hoong- indire c t 4 4 0 , 0 0 0 4 4 0 , 0 0 0 - 8 8 0 , 0 0 0 8 8 0 , 0 0 0

Yeap Weng Hong- indire c t 4 4 0 , 0 0 0 4 4 0 , 0 0 0 - 8 8 0 , 0 0 0 8 8 0 , 0 0 0

Lai Kum Sim 6 0 , 0 0 0 6 0 , 0 0 0 - 1 2 0 , 0 0 0 1 2 0 , 0 0 0

Sri Ta wau Farming Sdn Bhd

Yap Hoong Chai- indire c t 1 5 0 , 0 01 - - 1 5 0 , 0 01 1 5 0 , 0 01

Yip Kim Hoong- indire c t 1 5 0 , 0 01 - - 1 5 0 , 0 01 1 5 0 , 0 01

Yeap Fock Hoong - indire c t 1 5 0 , 0 01 - - 1 5 0 , 0 01 1 5 0 , 0 01

Yeap Weng Hong- indire c t 1 5 0 , 0 01 - - 1 5 0 , 0 01 1 5 0 , 0 01


d i re c t o rs’ intere s ts c o n t ’ d

In addition, by virtue of their interests in the sh a res of the Company, Yap Hoong Chai, Yip Kim Hoong, Yeap Fock Hoongand Yeap Weng Hong are also deemed interested in the sh a res of all the subsidiaries of the Company to the extent theCompany has an intere s t .

Other than as stated above, none of the dire c t o rs in office at the end of the financial year had any interest in the sh a res ofthe Company or its related corpora t i o ns during the financial year and as at 21st April 2000.

a u d i t o rs

Arthur Andersen & Co. re t i re andh a ve indicated their willingnessto accept re - a p p o i n t m e n t .

Signed on behalf of the Board in accordance with a resolution of the dire c t o rs

Yap Hoong Chai

Yeap Weng Hong

Klang

Dated 17th July 2000

s t a t e m e n t b y d i r e c t o r s

s t a t u t o r y d e c l a r a t i o n

We, YAP HOONG CHAI and YEAP WENG HONG,being two of the directors of LAY HONG BERHAD,do here by state that, in the opinion of thed i re c t o rs, the accompanying balance sheets ofthe Company and of the Group as at 31st Marc h2000 and the profit and loss accounts of theCompany and of the Group and the cash flowstatement of the Group for the year then ended,together with the notes thereto, give a true andfair view of the state of affairs of the Companyand of the Group as at 31st March 2000 and ofthe results of the Company and of the Gro u pand cash flows of the Group for the year thenended, and have been properly drawn up ina c c o rdance with applicable approved accountings t a n d a rds in Malays i a .

Signed on behalf of the Board in accordance with a resolution of the dire c t o rs

Yap Hoong Chai

Yeap Weng Hong

K l a n gDated 17th July 2000

I, LAI KUM SIM, the director primarily re sp o nsible for the financial management of LAY HONG BERHAD, do solemnlyand sincerely declare that the accompanying balance sheets of the Company and of the Group as at 31st March 2000and the profit and loss accounts of the Company and of the Group and the cash flow statement of the Group for theyear then ended, together with the notes thereto are, to the best of my knowledge and belief correct, and I make thissolemn declaration cons c i e n t i o usly believing the same to be true and by virtue of the prov is i o ns of the StatutoryD e c l a ra t i o ns Act, 1960.

Subscribed and solemnly declared by thea b ovenamed LAI KUM SIM at Klang in Lai Kum SimSelangor Darul Ehsan on 17th July 2000

B e f o re me:

Yam Cheok WanC o m m issioner for Oaths B. 0 2 2

}

a u d i t o r s ’ r e p o r t to the sh a re h o l d e rs of Lay Hong Berhad

We have audited the accounts of LAY HONG BERHAD (the Company) and the consolidated accounts of LAY HONG BERHADAND ITS SUBSIDIARIES (the Group) as at 31st March 2000. These accounts are the re sp o nsibility of the Company’sd i re c t o rs. Our re sp o nsibility is to express an opinion on these accounts based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards re q u i re that weplan and perform the audit to obtain reasonable assurance about whether the accounts are free of material mis s t a t e m e n t .An audit includes examining, on a test basis, evidence supporting the amounts and dis c l o s u res in the accounts. An audita lso includes assessing the accounting principles used and significant estimates made by the dire c t o rs, as well as eva l u a t i n gthe ove rall accounts presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion,

( a ) the accounts give a true andfair view of the state of affairsof the Company and of theG roup as at 31st March 2000and of the results of theCompany and of the Gro u pand cash flows of the Gro u pfor the year then ended, andh a ve been properly drawn upin accordance with thep rov is i o ns of the CompaniesAct, 1965 and applicablea p p roved accounting standard sin Malaysia; and

( b ) the accounting and otherre c o rds and the re g is t e rsre q u i red by the Act to be keptby the Company and itssubsidiaries of which we haveacted as auditors have beenp roperly kept in accord a n c ewith the prov is i o ns of the Ac t .

We have cons i d e red the accounts and the auditors’ reports of subsidiaries ofwhich we have not acted as auditors, as indicated in Note 9 to the accounts,being accounts that have been included in the consolidated accounts

We are sa t isfied that the accounts of the subsidiaries that have beenc o nsolidated with the Company’s accounts are in form and contenta p p ropriate and proper for the purposes of the pre p a ration of thec o nsolidated accounts and we have re c e i ved sa t isfactory information ande x p l a n a t i o ns re q u i red by us for these purposes.

The audit reports on the accounts of the subsidiaries were not subject to anyqualification or any adve rse comment made under subsection (3) of Section174 of the Ac t .

Arthur Andersen & Co. P ushpanathan a/l S.A. Ka n a g a ra ya rNo. AF 010 3 No. 10 5 6 / 3 / 01 ( J / P H )Public Ac c o u n t a n t s Partner of the Firm

Dated 17th July 2000

c o nso l idated ba lance sh e e t as at 31st March 2000

Note 2000 1999RM RM

Current Assets

Cash and bank balances 572,257 261,343Placements with financial institutions 3 5,417,000 2,023,366Trade debtors 4 5,216,243 7,543,538Other debtors 985,441 1,505,860Stocks 5 17,064,861 12,584,174

29,255,802 23,918,281

Current Liabilities

Short term borrowings 6 10,704,286 3,771,535Trade creditors 5,397,544 6,132,274Other creditors 4,771,942 3,398,655Taxation 1,237,637 965,488Proposed dividend 1,260,000 1,575,000Due to a corporate shareholder 7 3,535,153 -

26,906,562 15,842,952

Net Current Assets 2,349,240 8,075,329Investments 9 823,988 658,038Fixed Assets 10 48,857,114 36,300,878Goodwill Arising On Consolidation 11 2,555,306 1,992,981Hire Purchase Creditors 12 (36,789) (15,000)Term Loans 13 (3,262,931) (1,657,270)Deferred Taxation 14 (3,967,000) (4,227,000)Minority Interests (3,682,318) (2,100,823)

43,636,610 39,027,133

Shareholders’ Funds

Share capital 15 17,500,000 17,500,000Reserves 16 26,136,610 21,527,133

43,636,610 39,027,133

The accompanying notes are an integral part of this balance sheet.

consol idated prof i t and loss account for the year ended 31st March 2000

Note 2000 1999RM RM

Turnover 17 77,553,371 69,981,403

Operating profit 18 8,147,102 8,309,837Share of loss of associated company (32,490) -

Profit before taxation 8,114,612 8,309,837Taxation 19 (1,173,429) (421,828)

Profit after taxation but before minority interests 6,941,183 7,888,009Minority interests (1,071,706) (420,160)

Profit after taxation 5,869,477 7,467,849Retained profits brought forward 20,482,479 15,129,071

Profits available for appropriation 26,351,956 22,596,920Dividends 20 (1,260,000) (1,575,000)Transfer to reserves - (539,441)

Retained profits carried forward 16 25,091,956 20,482,479

Retained by:The Company 18,340,907 14,579,338Subsidiaries 6,783,539 5,903,141Associated company (32,490) -

25,091,956 20,482,479

Earnings per share 21 33.5 sen 42.7 sen

The accompanying notes are an integral part of this account.

consol idated c a sh f low statement for the year ended 31st March 2000

2000 1999RM RM

Cash Flows From Operating Activities

Profit before taxation 8,114,612 8,309,837Adjustments for:

Share of loss in associated company 32,490 -Depreciation 3,134,090 2,825,651Provision for diminution in value of associated company 150,000 -Write-back of provision for diminution in value of investments (336,020) -Gain on disposal of fixed assets (162,407) (72,202)Gain on disposal of investments (325,087) -Amortisation of goodwill 106,471 -Interest income (213,810) (282,002)Interest expense 417,442 389,285Dividend income (12,050) (14,660)

Operating profit before working capital changes 10,905,731 11,155,909Decrease/(increase) in debtors 5,548,101 (3,484,917)Increase in stocks (2,382,790) (2,155,801)(Decrease)/increase in creditors (5,404,993) 325,686Increase in due to related company 20,656 -

Cash generated from operations 8,686,705 5,840,877Interest paid (417,442) (389,285)Taxes paid (1,161,280) (1,528,293)

Net cash generated from operating activities 7,107,983 3,923,299

Cash Flows From Investing Activities

Consolidation adjustment for Sri Tawau Farming Sdn Bhd - (1,128,812)Purchase of investments (70,000) -Proceeds from sale of investments 582,667 -Acquisition of subsidiaries net of cash acquired * (1,184,558) -Acquisition of interest in associated company (200,000) -Purchase of fixed assets (3,951,777) (3,718,799)Proceeds from sale of fixed assets 222,800 149,300Interest receivable 213,810 282,002Dividend receivable 12,050 14,660

Net cash used in investing activities (4,375,008) (4,401,649)

Cash Flows From Financing Activities

Drawdown of hire purchase creditors 140,880 51,000Repayment of hire purchase creditors (69,735) -Repayment of lease financing - (26,171)

consol idat ed c a sh f l ow statement for the year ended 31st March 2000

Cash Flows From Financing Activities (cont’d) 2000 1999RM RM

Drawdown of short term borrowings 3,171,000 738,000Repayment of term loans (787,663) (560,577)Dividend paid (1,575,000) (1,260,000)Dividend paid to minority interest (64,800) (64,800)

Net cash generated from/(used in) financing activities 814,682 (1,122,548)

Net increase/(decrease) in cash and cash equivalents 3,547,657 (1,600,898)Cash and cash equivalents at beginning of year 1,481,174 3,082,072

Cash and cash equivalents at end of year 5,028,831 1,481,174

Cash and cash equivalents comprise:

Cash and bank balances 572,257 261,343Placements with financial institutions 5,417,000 2,023,366Bank overdrafts (960,426) (803,535)

5,028,831 1,481,174

* Summary of acquisition of subsidiaries:2000

RM

Bank overdraft (184,557)Fixed assets 11,798,942Stocks 2,097,897Trade and other debtors 2,700,387Trade and other creditors (5,994,194)Amount due to related company (3,514,497)Term loan (3,768,184)Short term borrowings (2,230,000)

905,794Minority interest (574,589)

331,205Goodwill 668,796

Purchase consideration 1,000,001Add: Bank overdraft 184,557

Net cash flow on acquisition of subsidiaries 1,184,558

The accompanying notes are an integral part of this statement.

balance sh e e t as at 31st March 2000

Note 2000 1999RM RM

Current Assets

Cash and bank balances 237,050 92,144Trade debtors 4 1,269,156 3,773,160Other debtors 396,373 850,390Stocks 5 10,973,532 8,609,613Due from subsidiaries 9,523,984 4,712,552

22,400,095 18,037,859

Current Liabilities

Short term borrowings 6 4,790,015 1,674,691Trade creditors 2,625,125 3,798,728Other creditors 2,026,389 1,563,619Taxation 790,026 -Proposed dividend 1,260,000 1,575,000Due to subsidiaries 8 - 1,326,152

11,491,555 9,938,190

Net Current Assets 10,908,540 8,099,669Investment 9 8,479,700 7,281,259Fixed Assets 10 22,649,055 22,707,786Term Loans 13 (1,073,652) (1,657,270)Deferred Taxation 14 (3,029,000) (3,029,000)

37,934,643 33,402,444

Shareholders’ Funds

Share capital 15 17,500,000 17,500,000Reserves 16 20,434,643 15,902,444

37,934,643 33,402,444

The accompanying notes are an integral part of this balance sheet.

p rof i t and loss account for the year ended 31st March 2000

Note 2000 1999RM RM

Turnover 17 55,879,533 52,527,512

Profit before taxation 18 7,368,890 6,789,114Taxation 19 (1,576,691) (770,600)

Profit after taxation 5,792,199 6,018,514Retained profits brought forward 15,759,908 11,316,394

Profits available for appropriation 21,552,107 17,334,908Dividends 20 (1,260,000) (1,575,000)

Retained profits carried forward 16 20,292,107 15,759,908

The accompanying notes are an integral part of this account.

notes to the accounts 31st March 2000

1 . pr inc ipa l ac ti vi ties

The principal activity of the Company consists of poultry farming. The principal activities of the subsidiaries consist ofpoultry farming, processing and marketing of poultry and organic fertilisers.

There have been no significant changes in these activities during the financial year.

2 . signi f i can t ac count ing po l i c ies

(a) Basis of Accounting

The accounts are prepared under the historical cost convention modified by the revaluation of certain freeholdland and buildings and comply with applicable approved accounting standards in Malaysia.

(b) Basis of Consolidation

The consolidated accounts include the accounts of the Company and its subsidiaries made up to the end of thefinancial year. Inter-company transactions are eliminated on consolidation and the consolidated accounts reflectexternal transactions only.

The excess/shortfall of the fair value of the net assets of a subsidiary over the purchase price at the date ofacquisition is included in the consolidated balance sheet as reserve/goodwill arising on consolidation. Goodwillarising on consolidation is amortised over a period of twenty five years except where it is not supported by anyintrinsic value, it is written off to the profit and loss account.

(c) Associated Companies

The Group treats as associated companies those in which a long term equity interest of between 20 and 50percent is held and where it exercises significant influence through management participation.

The Group’s share of profits less losses of associated companies is included in the consolidated profit and lossaccount and the Group’s interest in associated companies is stated at cost plus adjustments to reflect changes inthe Group’s share of the net assets of the associated companies.

(d) Fixed Assets and Depreciation

Fixed assets are stated at cost or valuation less accumulated depreciation.

Freehold land is not depreciated. Leasehold land is depreciated over the period of the lease. Depreciation of otherfixed assets is provided on a straight line basis calculated to write off the cost or valuation of each asset over itsestimated useful life.

The principal annual rates of depreciation are:

Leasehold land 56 – 99 yearsBuildings 2% - 10%Plant and machinery 3% - 20%Motor vehicles 20%Office equipment 10% - 20%Furniture and fittings 5%


(e) Stocks

Stocks are stated at the lower of cost (determined on a first-in, first-out basis) and net realisable value. Cost represents cost of purchase, direct labour and attributable overhead costs.

(f) Currency Conversion and Translation

Transactions in foreign currencies during the year are converted into Ringgit Malaysia at rates of exchangeapproximating those ruling at the transaction dates. Foreign currency monetary assets and liabilities at thebalance sheet date are translated into Ringgit Malaysia at rates of exchange approximating those ruling at thatdate. All exchange gains or losses are dealt with in the profit and loss accounts.

(g) Deferred Taxation

Deferred taxation is provided under the liability method for all material timing differences except where there isreasonable evidence that these timing differences will not reverse in the foreseeable future.

(h) Lease Assets

The cost of assets acquired under finance lease agreements are capitalised. The depreciation policy on these assetsis similar to that of the Group’s other assets as set out in (d) above. Outstanding obligations due under the leaseagreements after deducting finance expenses are included as liabilities in the accounts. The finance expenses ofthe lease rentals are charged to the profit and loss accounts over the period of the respective agreements.

Lease rental payments on operating leases are charged to the profit and loss accounts in the year they becomepayable.

(i) Investments

The Company accounts for its investments in subsidiaries and other investments at cost less provision for anypermanent diminution in value.

3 . p l a c e m e n ts wi th f inancia l ins t i t u t i o ns

Group Company2000 1999 2000 1999

RM RM RM RM

Placements with licensed banks 5,417,000 1,607,000 - -Placements with licensed finance companies - 416,366 - -

5,417,000 2,023,366 - -


4 . t rade debtorsGroup Company

2000 1999 2000 1999RM RM RM RM

Trade debtors 8,129,222 11,335,752 1,927,025 4,657,344Provision for doubtful debts (2,912,979) (3,792,214) (657,869) (884,184)

5,216,243 7,543,538 1,269,156 3,773,160

5 . s t o c ksGroup Company

2000 1999 2000 1999RM RM RM RM

Livestock 7,321,413 5,233,140 2,177,146 2,129,267Eggs 352,422 353,826 102,830 133,175Raw materials 9,041,131 6,752,894 8,690,928 6,341,097Organic fertilisers 223,074 224,558 - -Packing materials 11,097 19,756 2,628 6,074Consumables 115,724 - - -

17,064,861 12,584,174 10,973,532 8,609,613

6 . short term borrow i n gsGroup Company

2000 1999 2000 1999RM RM RM RM

Bank overdrafts 960,426 803,535 217,015 395,691Bankers’ acceptances 7,769,000 2,368,000 3,973,000 679,000Term loan 1,974,860 600,000 600,000 600,000

10,704,286 3,771,535 4,790,015 1,674,691

The banking facilities of the Company are secured by way of a negative pledge over the assets of the Company.

The banking facilities of the subsidiaries are secured by way of a corporate guarantee from the Company and fixedcharge on certain landed properties of a subsidiary.

The short term borrowings bear interest of between 3.35% to 10.90% (1999 : 4.00% to 14.70%) per annum.

7 . due to a corporat e sh a re h o l d e r

The amount due to a corporate shareholder is unsecured, interest free and has no fixed terms of repayment.

8 . due t o subsi d i a r i e s

In the pre v i o us ye a r, the amounts due to subsidiaries were uns e c u red, interest free and had no fixed terms of re p a y m e n t .


9 . i n ve s t m e n ts

Group Company2000 1999 2000 1999

RM RM RM RM

(a) Subsidiaries

Unquoted shares-at cost - - 5,025,832 4,025,831

Provision for diminution in value - - (900,000) (900,000)

- - 4,125,832 3,125,831- at valuation - - 3,497,390 3,497,390

- - 7,623,222 6,623,221

(b) Associated company

Unquoted shares, at cost 200,000 - 200,000 -Provision for diminution in value (150,000) - (150,000) -Group’s share of post acquisition losses (32,490) - - -

17,510 - 50,000 -

(c) Other investments

Shares quoted in Malaysia 688,478 1,074,038 688,478 1,074,038Other investments 118,000 48,000 118,000 48,000Provision for diminution in value - (464,000) - (464,000)

806,478 658,038 806,478 658,038

Total investments 823,988 658,038 8,479,700 7,281,259

Market value of shares quoted in Malaysia 1,297,900 701,280 1,297,900 701,280

The unquoted investment in a subsidiary was revalued by the directors in an earlier year, and approved by the relevantauthorities, based on the net tangible assets of the subsidiary as at 31st August 1994. The surplus arising from therevaluation was credited to a revaluation surplus reserve account as shown in Note 16.


The subsidiaries, incorporated in Malaysia, are:Effective

Paid-up InterestName of Company Capital 2000 1999 Principal Activity

RM % %

Hing Hong Sdn Berhad 2,000,000 100 100 Poultry farmingInnofarm (Klang) Sdn Bhd * 400,000 70 70 Poultry farmingEvergreen Organic Fertilisers Sdn Bhd 300,000 51 51 Organic fertiliser

processingSri Tawau Farming Sdn Bhd * + 300,002 50 50 Poultry farmingInnobrid Sdn Bhd * ^ 2,000,001 50 - Poultry farmingInnobrid Marketing Sdn Bhd * 800,000 25.5 - Poultry processing

and marketing

* Subsidiaries not audited by Arthur Andersen & Co.+ Equity interest of 50% plus one special rights ordinary share^ Equity interest of 50% plus one share

The associated company incorporated in Malaysia is:Effective

Paid-up InterestName of Company Capital 2000 1999 Principal Activity

RM % %

Leaderway Network Sdn Bhd * 700,000 28.57 - Multi-levelmarketing ofpersonalhealth-care andbeauty products

* Associated company not audited by Arthur Andersen & Co.


10 . f i xed assets

At Cost

GROUP Officeequipment

andLand and Plant and Motor furniturebuildings machinery vehicles and fittings Total

2000 RM RM RM RM RM

Cost/Valuation

At 1st April 1999 30,343,962 15,154,156 3,178,230 1,798,087 50,474,435Subsidiaries acquired

during the year 11,286,572 1,748,605 408,618 62,539 13,506,334Additions 2,053,881 1,044,708 783,413 69,775 3,951,777Disposals - (39,500) (369,594) (3,300) (412,394)

At 31st March 2000 43,684,415 17,907,969 4,000,667 1,927,101 67,520,152

Accumulated Depreciation

At 1st April 1999 6,719,362 5,090,937 1,839,664 523,594 14,173,557Subsidiaries acquired

during the year 1,223,291 345,710 126,028 12,363 1,707,392Charge for the year 1,263,317 1,228,954 523,006 118,813 3,134,090Disposals - (36,620) (314,226) (1,155) (352,001)

At 31st March 2000 9,205,970 6,628,981 2,174,472 653,615 18,663,038

Net Book Value 34,478,445 11,278,988 1,826,195 1,273,486 48,857,114

1999

Cost/Valuation

At 1st April 1998 24,037,290 13,239,025 2,139,668 1,654,158 41,070,141Additions 2,002,396 1,101,547 525,800 89,056 3,718,799Disposals - (1,900) (309,778) (799) (312,477)Consolidation adjustment 4,304,276 815,484 822,540 55,672 5,997,972

At 31st March 1999 30,343,962 15,154,156 3,178,230 1,798,087 50,474,435


10 . f i xed assets ( c o n t ’ d )

At Cost

GROUP Officeequipment


1999 RM RM RM RM RM


At 1st April 1998 4,805,737 3,651,938 1,066,233 388,590 9,912,498Charge for the year 1,147,691 1,071,548 490,682 115,730 2,825,651Disposals - (583) (234,776) (20) (235,379)Consolidation adjustment 765,934 368,034 517,525 19,294 1,670,787

At 31st March 1999 6,719,362 5,090,937 1,839,664 523,594 14,173,557

Net Book Value 23,624,600 10,063,219 1,338,566 1,274,493 36,300,878

COMPANY

2000

Cost/Valuation

At 1st April 1999 16,410,119 8,826,397 2,081,830 1,538,762 28,857,108Additions 728,661 487,137 593,637 57,565 1,867,000Disposals - - (317,964) - (317,964)

At 31st March 2000 17,138,780 9,313,534 2,357,503 1,596,327 30,406,144


At 1st April 1999 2,737,422 2,010,061 994,593 407,246 6,149,322Charge for the year 662,223 713,759 380,883 101,629 1,858,494Disposals - - (250,727) - (250,727)

At 31st March 2000 3,399,645 2,723,820 1,124,749 508,875 7,757,089

Net Book Value 13,739,135 6,589,714 1,232,754 1,087,452 22,649,055



At Cost

COMPANY Officeequipment


1999 RM RM RM RM RM

Cost/Valuation

At 1st April 1998 16,049,453 8,357,365 1,640,808 1,457,962 27,505,588Additions 360,666 469,032 525,800 80,800 1,436,298Disposals - - (84,778) - (84,778)

At 31st March 1999 16,410,119 8,826,397 2,081,830 1,538,762 28,857,108


At 1st April 1998 2,090,258 1,403,919 755,886 307,125 4,557,188Charge for the year 647,164 606,142 323,483 100,121 1,676,910Disposals - - (84,776) - (84,776)

At 31st March 1999 2,737,422 2,010,061 994,593 407,246 6,149,322

Net Book Value 13,672,697 6,816,336 1,087,237 1,131,516 22,707,786

The freehold land and buildings were revalued by a firm of independent professional valuers in 1993 based on theiropen market values using the Cost Comparison Method of Valuation. The valuation of the freehold land and buildingswas approved by the relevant authorities in 1994. The directors have not adopted a policy of regular revaluations ofthese assets. As permitted under the transitional provisions of International Accounting Standard No. 16 (Revised):Property, Plant and Equipment as adopted by the Malaysian Accounting Standards Board, these assets are stated at their 1993 valuation less depreciation.


10 . f i xed a ssets ( c o n t ’ d )

The details of the land and buildings stated at cost and valuation are as follows:

GROUP

Valuation Cost Total2000 RM RM RM

Cost/Valuation

Land - Freehold 3,237,000 1,458,705 4,695,705- Leasehold - 1,468,648 1,468,648

Buildings 11,145,677 26,374,385 37,520,062

14,382,677 29,301,738 43,684,415


Land - Freehold - - -- Leasehold - 16,065 16,065

Buildings 3,424,777 5,765,128 9,189,905

3,424,777 5,781,193 9,205,970

Net Book Value 10,957,900 23,520,545 34,478,445

1999

Cost/Valuation

Land - Freehold 3,237,000 - 3,237,000- Leasehold - 1,321,897 1,321,897

Buildings 11,145,677 14,639,388 25,785,065

14,382,677 15,961,285 30,343,962


Land - Freehold - - -- Leasehold - 8,033 8,033

Buildings 2,839,195 3,872,134 6,711,329

2,839,195 3,880,167 6,719,362

Net Book Value 11,543,482 12,081,118 23,624,600



COMPANY

Valuation Cost Total2000 RM RM RM

Cost/Valuation

Land 2,047,000 - 2,047,000Buildings 8,302,542 6,789,238 15,091,780

10,349,542 6,789,238 17,138,780


Land - - -Buildings 2,300,253 1,099,392 3,399,645

2,300,253 1,099,392 3,399,645

Net Book Value 8,049,289 5,689,846 13,739,135

1999

Cost/Valuation

Land 2,047,000 - 2,047,000Buildings 8,302,542 6,060,577 14,363,119

10,349,542 6,060,577 16,410,119


Land - - -Buildings 1,909,119 828,303 2,737,422

1,909,119 828,303 2,737,422

Net Book Value 8,440,423 5,232,274 13,672,697

Included in the net book value of the fixed assets are plant and machinery amounting to RM251 , 414 (1999 : RM84,600)which are held under hire purchase agre e m e n t s.


11 . goodwi l l a r ising on cons o l i d a t i o n

Group2000 1999

RM RM

At 1st April 1999/1998 1,992,981 1,992,981Arising from acquisition of subsidiaries 668,796 -Less: Accumulated amortisation (106,471) -

At 31st March 2,555,306 1,992,981

1 2 . h i re purchas e c re d i t o rs

Group2000 1999

RM RM

Hire purchase creditors 137,859 60,197Interest-in-suspense (15,714) (9,197)

122,145 51,000Repayment due within twelve months included in other creditors (85,356) (36,000)

36,789 15,000

1 3 . term loans

Group Company2000 1999 2000 1999

RM RM RM RM

4% term loan repayable by sixty equalmonthly instalments commencingDecember 1997 1,673,652 2,257,270 1,673,652 2,257,270

Floating rate term loan repayableby seventy-two monthly instalmentscommencing November 1997 1,628,013 - - -

Floating rate term loan repayableby fourty-five monthly instalmentscommencing November 1998 1,936,126 - - -

Less: Repayments due within 12 months(included in short term borrowings) (1,974,860) (600,000) (600,000) (600,000)

3,262,931 1,657,270 1,073,652 1,657,270

The term loans of the Group are secured by way of a negative pledge on the assets of the Company and fixed charge oncertain landed properties of a subsidiary. The floating rate term loans bear interest of between 9.05% to 10.90% (1999 : Nil).

The term loan of the Company is secured by way of a negative pledge on the assets of the Company.


1 4 . d e f e r red t axa t i o nGroup Company

2000 1999 2000 1999RM RM RM RM

(a) At 1st April 1999/1998 4,227,000 3,960,000 3,029,000 2,712,000Transfer (to)/from profit and

loss account (260,000) 267,000 - 317,000

At 31st March 3,967,000 4,227,000 3,029,000 3,029,000

(b) The deferred taxation providedin the accounts is in respect of:

Timing differences betweendepreciation and correspondingcapital allowances 16,396,000 15,626,000 11,877,000 11,048,000

Timing differences on unabsorbedreinvestment allowances (324,000) - - -

Timing differences on provisions (1,905,000) (530,000) (1,061,000) (231,000)

14,167,000 15,096,000 10,816,000 10,817,000

Deferred taxation is not provided on the surplus arising from the revaluation of freehold land and certain buildings as itis not the intention of the directors to dispose of these properties.

1 5 . sh a re capi t al2000 1999

RM RM

Ordinary shares of RM1 each:

Authorised 20,000,000 20,000,000

Issued and fully paid 17,500,000 17,500,000

1 6 . re s e r ve sGroup Company

2000 1999 2000 1999RM RM RM RM

Retained profits 25,091,956 20,482,479 20,292,107 15,759,908General reserves

- revaluation surplus 142,536 142,536 142,536 142,536- reserve on consolidation 362,677 362,677 - -- capital reserve 539,441 539,441 - -

26,136,610 21,527,133 20,434,643 15,902,444


17. t u r n ove r

Turnover for the Company and the Group represents the invoiced value of sales net of discounts. The cost of salesincurred in relation to turnover of the Company and the Group amounted to RM40,576,700 (1999 : RM38,622,652) andRM48,265,070 (1999 : RM45,486,001) respectively.

The cost of sales in relation to turnover consist of cost of raw materials.

1 8 . o p e rat ing pro f i tGroup Company

2000 1999 2000 1999RM RM RM RM

Operating profit is stated after charging/ (crediting):

Audit fee 47,580 46,500 16,000 16,000Directors’ remuneration:

- Fees 250,000 234,000 82,000 82,000- Salaries and other emoluments 1,558,409 1,149,246 1,220,492 899,046

Hire of plant and machinery 30,399 16,685 - 5,950Hiring charges paid to a subsidiary - - 30,000 30,000Depreciation 3,134,090 2,825,651 1,858,494 1,676,910Rental 176,824 141,464 40,276 40,276Interest expense

- subsidiaries - - 21,957 97,448- others 417,442 389,285 176,567 135,685

Bad debts recovered (6,000) (3,827) (6,000) (4,290)Bad debts written off 11,243 - - -Provision for doubtful debts 686,878 - 150,000 -Provision for diminution in value of associated company 150,000 - 150,000 -Write back of provision for diminution

in quoted investments (336,020) - (336,020) -Gain on disposal of fixed assets (162,407) (72,202) (123,563) (17,998)Gain on disposal of investments (325,087) - (325,087) -Interest income

- subsidiaries - - (313,874) (342,849)- others (213,810) (282,002) (24,371) (62,847)

Rental income- subsidiary - - (3,600) (3,600)- others (14,400) (24,900) (5,400) (5,400)

Gross dividends from- subsidiaries - - (2,710,000) (1,610,000)- others (12,050) (14,660) (12,050) (14,660)

Management fees receivable from subsidiaries - - (288,000) (288,000)Gain on foreign exchange (59,726) (462,840) (27,443) (125,487)Amortisation of goodwill 106,471 - - -

The estimated monetary value of other benefits not included in the above received by the directors of the Company wasRM64,225 (1999 : RM41,600).


1 9 . t a xa t i o nGroup Company

2000 1999 2000 1999RM RM RM RM

Current year’s charge 1,435,500 2,800 1,580,800 453,600Transfer from/(to) deferred taxation (260,000) 267,000 - 317,000(Over)/under provision in prior years (2,071) 152,028 (4,109) -

1,173,429 421,828 1,576,691 770,600

The disproportionate taxation charge for the Company and the Group in the current year is due principally toreinvestment allowances granted under Schedule 7A of the Income Tax Act, 1967 being allowed as deductions fortaxation purposes subject to agreement with the Inland Revenue Board.

Other than the tax charge on dividend income, there was no tax charge for the previous financial year as the amountpayable was waived in accordance with the provisions of the Income Tax (Amendment) Act, 1999. The chargeableincome of RM1,757,000 on which tax was waived shall be credited to an exempt account from which tax exemptdividends can be declared, subject to agreement with the Inland Revenue Board.

In addition, as at 31st March 2000, the Company has available tax exempt income under Schedule 7A of the IncomeTax Act, 1967 which can be used to declare tax exempt dividends amounting to approximately RM7,429,000 (1999 :RM6,070,000), subject to agreement with the Inland Revenue Board.

The Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and sufficient balance in the taxexempt account under the provisions of the Income Tax (Amendment) Act, 1999, to frank the payment of dividends outof its entire retained profits as at 31st March 2000.

2 0 . d i v i d e n d s2000 1999

RM RM

Proposed:

Final dividend of 10% (1999 : 10%) less taxation of 28% (1999 : 28%) 1,260,000 1,260,000Special dividend of nil (1999 : 2.5% less taxation of 28%) - 315,000

1,260,000 1,575,000


21 . e a r n i n gs per sh a re

The earnings per share is calculated by dividing the Group’s profit after taxation and minority interests of RM5,869,477(1999 : RM7,467,849) by the number of shares in issue during the year of 17,500,000 (1999 : 17,500,000) ordinaryshares.

2 2 . other s igni f icant re la ted party t ra nsa c t i o nsCompany

2000 1999RM RM

Purchases from subsidiaries 1,714,329 1,783,685Sales to subsidiaries 18,571,087 17,019,756Sales to related party - 7,258,007

The directors are of the opinion that the above transactions have been entered into in the normal course of businessand have been established under terms that are no less favourable than those arranged with third parties.

2 3 . capi ta l commitmentsGroup Company

2000 1999 2000 1999RM RM RM RM

Approved and contracted for 1,724,000 287,375 1,724,000 237,600

Approved but not contracted for 1,090,000 - - -

2 4 . con tingen t l i ab i l i t iesCompany

2000 1999RM RM

Corporate guarantee issued tofinancial institutions for credit facilitiesgranted to subsidiaries 7,800,000 7,800,000


25. sign if i cant eve n ts

During the financial year, the Company:

(a) subscribed for 1,000,001 new ordinary shares of RM1 each, representing a 50% interest in the enlarged issuedand paid-up share capital of Innobrid Sdn Bhd, for a cash consideration of RM1,000,001.

(b) subscribed for 200,000 new ordinary shares of RM1 each, representing a 28.57% interest in the enlarged issuedand paid-up share capital of Leaderway Network Sdn Bhd for a cash consideration of RM200,000.

(c) entered into agreements to purchase 2 pieces of farm land measuring 5 and 4.819 acres respectively which arelocated in the Mukim of Jeram, Kuala Selangor, Selangor, for a total cash consideration of RM1,130,090. The transactions have not been completed.

(d) proposed a bonus issue of up to 19,201,000 new ordinary shares of RM1 each in the Company on the basis ofone bonus share for every one existing share held (“the Proposed Bonus Issue”);

(e) proposed rights issue of up to 19,201,000 new ordinary shares of RM1 each on the basis of one rights share forevery existing ordinary share held before the Proposed Bonus Issue (“the Proposed Rights Issue”); and

(f) proposed an increase in authorised share capital from RM20,000,000 comprising 20,000,000 ordinary shares ofRM1 each to RM100,000,000 comprising 100,000,000 ordinary shares of RM1 each (“the Proposed Increase inAuthorised Share Capital”).

The Proposed Bonus Issue, Rights Issue and increase in Authorised Share Capital are subject to approvals from the shareholders and relevant authorities.

2 6 . subsequent eve n t

The company entered into an agreement to purchase a piece of land measuring 4.875 acres, which is located in the Mukim of Jeram, Kuala Selangor, Selangor, for a cash consideration of RM390,000. The transaction has not been completed.

2 7 . f inanc ial informat ion by segment

The Group’s activities are primarily in one industry segment of poultry farming, and are principally conducted inMalaysia.

2 8 . c u r re n c y

All amounts are stated in Ringgit Malaysia.

a n a l y s i s o f s h a r e h o l d i n g s as at 20th July 2000

Authorised Share Capital - RM20,000,000

Issued & Fully Paid-Up Capital - RM17,500,000

Class of Shares - RM1.00 Ordinary Share

Voting Rights - One vote per share

d is t r ibut ion of sh a re h o l d i n gs

% ofSize of No. of % No. of Issued ShareShareholding Shareholders Shareholders Shares Held Capital

1 - 1,000 1,187 56.55 1,184,000 6.771,001 - 5,000 705 33.59 1,988,000 11.365,001 - 10,000 122 5.81 962,000 5.5010,001 - and above 85 4.05 13,366,000 76.38

2,099 100.00 17,500,000 100.00

substan tia l re g is t e red sh a reho lder(s )

No. of Shares %

Innofarm Sdn Bhd 7,875,000 45.00Lembaga Tabung Haji 690,000 3.94Lai Kum Sim 541,000 3.09UOBM Nominee (Asing) Sdn Bhd for Yao Hsia Fen 426,000 2.43

a n a l y s i s o f s h a r e h o l d i n g s as at 20th July 2000

t wen ty largest re g is t e red sh a re h o l d e rs

Name of shareholder No. of Shares %

1 • Innofarm Sdn Bhd 7,875,000 45.00

2 • Lembaga Tabung Haji 690,000 3.94

3 • Lai Kum Sim 541,000 3.09

4 • UOBM Nominees (Asing) Sdn Bhd for Yao Hsia Fen 426,000 2.43

5 • Ong Har Hong 330,000 1.89

6 • Tan Ching Ching 319,000 1.82

7 • Universal Trustee (Malaysia) Berhad for BHLB Pacific Emerging Companies Growth Fund 201,000 1.15

8 • Universal Trustee (Malaysia) Berhad for BHLB Pacific High Growth Fund 200,000 1.14

9 • Arab Malaysia Nominees (Tempatan) Sdn Bhd for BHLB Pacific Dana Al-Ihsan 200,000 1.14

10 • Amanah Raya Berhad for BHLB Pacific Double Growth Fund 200,000 1.14

11 • Lim Yoke Sim 174,000 0.99

12 • Tan Han Chuan 150,000 0.86

13 • Alliedbank Nominees (Tempatan) Sdn Bhd for Cheng Ying Ying 150,001 0.86

14 • Lim Soon Far 105,000 0.60

15 • Azmi bin Abdullah 100,000 0.57

16 • Amanah Raya Nominees (Tempatan) Sdn Bhd for Amanah Saham Selangor 100,000 0.57

17 • Ban Seng Guan Sdn Bhd 79,000 0.45

18 • Poo Choo @ Ong Poo Choi 77,000 0.44

19 • Pos Malaysia Berhad 72,000 0.41

20 • Tawakar Enterprise Sdn Bhd 55,000 0.31

Total 12,044,001 68.80

as at 31st March 2000

L o c a t i o n D e s c r i p t i o n A p p rox i m a t e Te n u re Age of N B V& A re a & B u i l d i n g ( R M ’ 0 0 0 )

E x isting Us e ( Ac re s ) Expiry Date ( Ye a rs )

S e l a n g o r

No. 39 & 41 , Office Buildings 9111 F re e h o l d 1 5 5 5 6Jalan 5, Ka w a san 16 Sq. ft.Taman Intan, 41300 Klang

Lot No. 4858, Poultry Fa r m 1 2 Land under 1 6 1 , 0 5 6Mukim of Jera m Te n a n t ’s LeaseD istrict of Kuala Selangor May 2006

Lot N0. 4857 Poultry Fa r m 1 2 . 8 F re e h o l d 1 - 1 6 1 , 4 9 5Mukim of Jera m & Fe e d m i l lD istrict of Kuala Selangor

Lot No. 559 Poultry Fa r m 3 4 F re e h o l d 1 - 8 10 , 7 4 6Mukim of IjokKuala Selangor

Lot No. 1640 Poultry Fa r m 5 F re e h o l d 5 - 9 4 5 9Mukim of IjokKuala Selangor

Lot Nos. 4847/8 Poultry Fa r ms 2 6 Land Under 1 - 1 3 6 5 7Mukim of Jera m Te n a n t ’s LeaseD istrict of Kuala Selangor Aug 2006

Lot No. 4859 Fertilizer Plant 4 . 3 Land Under 4 - 6 2 5 2Mukim of Jera m & Building Te n a n t ’s LeaseD istrict of Kuala Selangor N ov 2004

Lot Nos. 1632/3 Po u l t r y Fa r m 10 F re e h o l d 1 - 8 1 , 01 7Mukim of Ijok & HatcheryKuala Selangor

Lot No. 807 B roiler Fa r m 5 F re e h o l d 1 - 5 7 6 7Mukim Ujong Pe r m a t a n gKuala Selangor


Lot Nos. 708/9 B roiler Fa r ms 10 F re e h o l d 1 - 4 1 , 4 7 9Mukim Ujong Pe r m a t a n gKuala Selangor


Lot Nos. 683/4 & 685 B roiler Fa r ms 1 5 Land Under 1 - 3 1 , 0 0 6Mukim Ujong Pe r m a t a n g Te n a n t ’s LeaseKuala Selangor April / May 201 2

Lot Nos. 1475/6, B reeder Fa r ms 1 8 F re e h o l d 1 - 2 2 , 3 31Lot Nos. 253 & 244Mukim Pa sa n g a nKuala Selangor

Lot No. 1011 Vacant Land 3 F re e h o l d - 1 51Mukim Pa sa n g a nKuala Selangor

properties owned by Lay Hong Berhad group of companies

as at 31st March 2000properties owned by Lay Hong Berhad group of companies

Location Description Approximate Tenure Age of NBV& Area & Building (RM’000)

Existing Use (Acres) Expiry Date (Years)

M e l a k a

Lot Nos. 1717/8/9 and 1720 Poultry Fa r m 4 0 . 4 F re e h o l d 6 - 1 5 2 , 6 5 5Mukim of Ayer Pa n a sJasin, Melaka

S a b a h

CL 04501 6 9 2 4 8 B roiler Fa r m 10 . 7 L e a s e h o l d 4 9 0 6Kampung Indai Jan 2060Tu a ran, Sabah

NT No. 0431 7 6 0 3 0 B roiler Fa r m 6 . 4 L e a s e h o l d 5 1 , 0 7 4Lubok Bagiang June 2094Tu a ran, Sabah

NT No. 0431 71 6 51 Vacant Land 9 . 4 L e a s e h o l d - 1 4 7Kampung Serus u p June 2094Tu a ran, Sabah

CL 10 5 2 4 5 010 Vacant Land 1 6 . 5 L e a s e h o l d - 1 3 4Mile 12, Ranggu Road Jan 2064Tawau, Sabah

CL 10 5 2 4 4 6 4 8 Vacant Land 8 . 8 L e a s e h o l d - 6 8Tawau, Sabah May 2064

CL 04511 5 9 2 8 L a yer Fa r m 8 9 L e a s e h o l d 10 9 5 7Tu a ran, Sabah & Fe e d m i l l Jan 2938

CL 025308043 B roiler Bre e d e r 1 9 . 2 L e a s e h o l d 3 1 , 4 9 3Pa p a r, Sabah Fa r m Jan 2063

CL 0251 6 6 71 4 Vacant Land 1 8 . 8 L e a s e h o l d - 10 5Pa p a r, Sabah Jan 2056

CL 0251 6 6 7 0 5 Vacant Land 1 9 . 7 L e a s e h o l d - 10 5Pa p a r, Sabah Jan 2056

NT No. 0431 4 0 9 0 5 Vacant Land 5 L e a s e h o l d - 21 2Kampung Serus u p Feb 2099Tu a ran, Sabah

NT No. 0431 4 0 914 Vacant Land 2 . 7 L e a s e h o l d - 5 2Kampung Lok Bagiang Aug 2098Tu a ran, Sabah

p r o x y f o r mLay Hong Berhad Company No: 10 71 2 9 - H

re g is t e red office ~ 26, Jalan Istana, 41000 Klang, Selangor Darul Ehsa n

I/We

of

N R I C No./Co. No.

being a member/members of Lay Hong Berhad here by appoint

of

or failing him/her

of as my/our proxy to vote for me/us and on my/our behalf at the Sixteenth Annual General Meetingof the Company to be held on Wednesday, 6th September 2000 at 11.00 a.m. at Grand BlueWaveHotel Shah Alam, Gasing 1, Level 2, Persiaran Perbandaran, Seksyen 14, 40000 Shah Alam, Selangorand at any adjournment thereof. My/our proxy is to vote as indicated below:-

( Please indicate with an ‘X’ in the appropriate spaces how you wish to cast your vote. If you donot indicate how you wish your proxy to vote on any Resolution, the proxy will vote as he thinksfit or, at his dis c retion, abstain from voting. )

Signed this day of 2 0 0 0

S i g n a t u re of Shareholder or Common Seal No of sh a res held

notes :1. Every member entitled to attend and vote at the Meeting is entitled to appoint a proxy

( or in the case of a corporation, to appoint a representative ) to attend and vote in his/herstead. A proxy need not be a member of the Company.

2. The Proxy Form in the case of an individual shall be signed by the appointer or his/herattorney, and in the case of a corporation either under its common seal or under the handof an officer or attorney duly authorised.

3. If the Proxy Form is returned without any indication as to how the proxy shall vote, theproxy will vote or abstain as he/she thinks fit.

4. If no name is inserted in the space for the name of your proxy, the Chairman of theMeeting will act as your proxy.

5. Proxies or other instruments of appointment shall not be treated as valid unless they aredeposited at the Registered Office of the Company not less than 48 hours before the timefixed for holding the meeting or any adjournment thereof, or in the case of a poll, not lessthan 24 hours before the time appointed for the holding of the poll.

resolution o rdinary re s o l u t i o ns f o r a g a i ns t

1 • To re c e i ve the Audited Accounts for the year ended 31st March 2000

2 • To declare a First and Final Dividend of 10% less income tax

3 • To approve Dire c t o rs’ Fe e s

4 • To re-elect Mr. Yeap Fock Hoong as a Dire c t o r

5 • To re-elect Mr Yip Kim Hoong as a Dire c t o r

6 • To re-appoint Arthur Anderson as Auditors

7 • To authorise the issue of sh a res up to10% of Issued Capital

LAY HONG BERHAD

26, Jalan Istana

41000 Klang

Selangor Darul Ehsan

Malaysia

s t a m p

f o l d h e r e

f o l d h e r e

Documents

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