MENANG CORPORATION (M) BERHAD (Company No : 5383-K)

Notes on Quarterly Report on consolidated results for the financial quarter ended 31 March 2001

1.	 A statement that the same accounting policies and methods of computation are followed in the quarterly financial statements as compared with the most recent annual financial statement or, if those policies or methods have been changed, a description of the nature and effect of the change.
The quarterly financial statements have been prepared based on the same accounting policies and methods of computation adopted in the last annual financial statements.

2.	The nature and amount of each exceptional item.
	During the financial quarter, there were no exceptional item.		
				
3.	The nature and amount of each extraordinary items.
During the financial quarter, there were no extraordinary item.

4.	Whether tax figures contain any deferral tax and/or adjustment for under and over-provisions in respect of prior years.
The tax figures do not contain any deferred tax and/or adjustment for under or over provisions in respect of prior years.

5.	The amount of any pre-acquisition profits for the current financial year to date.
There were no pre-acquisition profits included in the results of the Group for the current financial quarter.

6.	The amount of profits on any sale of investment and/or properties for the current    financial year to date.
There were no amount of profits arising from the sale of investment and properties for the current financial quarter.

7.	The following particulars of any purchase or disposal of quoted securities by all companies except closed-end funds, insurance companies, stockbroking companies, financial institutions and such other companies as may be exempted by the Exchange :-
There were no dealing in quoted securities during the period under review.

The cost, carrying and market value of the quoted investments of the Group as at end of the reporting quarter are as follows :-
							RM’000		
		Cost				      	      2			
		Carrying Value			      2	
		Market Value				      5

8.	The effect of changes in the composition of the company for the current financial year to date including business combination, acquisition or disposal of subsidiaries and long term investments, restructuring and discontinuing operations.
There were no material changes in the composition of the Group for the current financial quarter that will materially affect the financial results and state of affairs of the Group.

9.	Status of corporate proposals announced but not completed at the latest practicable date which shall not be earlier than 7 days from the date of issue of the quarterly report.
a)	Proposed Schemes of Arrangement Pursuant to Section 176 of the Companies Act, 1965 between Menang Corporation (M) Berhad, Menang Development (M) Sdn Bhd and Menang Saujana Sdn Bhd and their respective scheme creditors. (“Proposed Schemes Of Arrangement”);
b)	Proposed share capital reduction and proposed consolidation and sub-division of share capital. (“Proposed Capital Reconstruction”);
c)	Proposed share premium account reduction pursuant to Section 60(2) and 64 of the Companies Act, 1965;
d)	Proposed Acquisition of the ongoing Seremban 3 integrated township development project (comprising 797.947 acres of freehold development land and 2.573 acres of access land) from Titian Hartanah (M) Sdn Bhd (“Titian”), a wholly owned subsidiary of Maymerge (M) Sdn Bhd for a total purchase consideration of RM200 million to be satisfied in full by the issue of 200,000,000 fully paid up new ordinary shares at par of RM1.00 each in Menang. (“Proposed Acquistion”);
e)	Proposed issue of 40,070,400 new warrants 2001/2006 to the minority shareholders of Menang on the basis of two (2) warrants for every three (3) ordinary shares held upon completion of the Proposed Capital Reconstruction at an issue price of RM0.10 per warrant;
f)	Proposed non-renounceable restricted offer for sale of 20,035,200 ordinary shares of RM1.00 each in Menang by Titian to the minority shareholders of Menang on the basis of one (1) ordinary share of Menang (to be issued pursuant to the Proposed Acquisition) for every three (3) ordinary shares held after the Proposed Capital Reconstruction at an offer price of RM1.00 per ordinary share; and
g)	Proposed Exemption to the major shareholders of Menang and parties acting in concert from the obligation to extend a mandatory general offer for the remaining shares in Menang upon the completion of the Proposed Acquisition. (“Proposed Exemption from MGO”).
		(Collectively “The Proposals”)

As at May 09, 2001,  all the approvals from the relevant authorities have been obtained except for the KLSE approval for the listing and quotation of the Company’s new shares and warrants, listing and quotation for the new shares arising from the conversion and exercise of the RCLS and warrants respectively.

The Company targets to complete the proposals within the next 3 months.

10.	Explanatory comments about the seasonality or cyclicality of operations.
As previously reported,  the operations of the Group were affected by the economic crisis which started in the second half of 1997.  The Group is presently under restructuring.

11.	Details of issuances of repayment of debt and equity securities, share buy-backs, share cancellations, shares held as treasury shares and resale of treasury shares for current financial year to date.
There were no issuances of  repayment of debt and equity securities,  share buy backs,  share cancellations,  shares held as treasury shares and resale of treasury shares for the current financial year to date.

12.	Group borrowings and debt securities as at the end of the reporting period :-

	Short Term Borrowings	Long Term Borrowings	
	RM’000	RM’000	
Secured	48,382	34,762	
Unsecured	-	-	

13.	Details of contingent liabilities at the latest practicable date which shall not be earlier than 7 days from the date of issue of the quarterly report.
There were no contingent liabilities as at the date of this report other than mentioned in note 15.
									
14.	Details of financial instruments with off balance sheet risk at the latest practicable date which shall not be earlier than 7 days from the date of issue of the quarterly report, including the following information :-
No off balance sheet financial instruments were utilised for the current financial quarter.

15.	Details of any pending material litigation at the latest practicable date which shall not be earlier than 7 days from the date of issue of the quarterly report.
There are  pending material litigations  as at May 09, 2001 as follows :-

a)	A legal suit has been instituted by a creditor against Maztri Padu Sdn Bhd, a subsidiary to claim an amount of RM404,806.96 plus interest on August, 13 1992 for goods sold and delivered and services rendered in connection with a building contract.

The subsidiary had disputed the claim and made a counterclaim against the creditor for RM144,345.96 plus interest.

The aforesaid matter was fixed for mention on December 12, 2000 for both parties to explore the possibility of an out of court settlement.  The case was subsequently fixed for further mention on April 20, 2001 to enable the plaintiff to transfer the matter to the Civil Division.

On April 20, 2001, the learned Judge fixed a new date for mention on June 29, 2001 as the Plaintiff’s solicitors have yet to write to the Chief Judge of Malaya to apply for the case to be transferred to the Civil Division.

The solicitors representing the subsidiary are of the opinion that it is too early to determine the final outcome at this stage.

b)	A contractor,  has initiated legal action on May 22, 1998 against Hicom Menang Properties Sdn Bhd (HMP), a 49% associate company for a sum of RM1,264,367.68 together with interest at 8% per annum from December 03, 1997 to date of full settlement for loss and expenses from breach of contract.

The learned Senior Assistant Registrar has on November 11, 1999 awarded Judgement in  favour of the contractor.  HMP has filed an application for stay of execution on the Judgement and also an Appeal against the Judgement. 

The Appeal was heard on February 02, 2001 before the High Court  and was dismissed with costs in favour of the Contractor by the learned Judge on March 29, 2001.  HMP  had decided to file an application for a stay of execution and an appeal against the decision of the learned Judge.  The Notice of Appeal was filed to the  Court of Appeal on April 06, 2001 and in the interim,  HMP’s solicitors is applying for a stay of execution at the High Court,  pending the appeal.

Meanwhile, on March 11, 2000,  the said contractor had petitioned for the winding up petition of  HMP under Section 218 of the Companies Act, 1965 (Petition) for failing to pay the Judgement Sum.  On December 12, 2000 the Learned Judge ordered that the money equivalent to the Judgement Sum deposited by HMP with a third party firm of solicitors as stake holder be transferred to the Plaintiff lawyers and further ordered that the Petition be struck out.  Therefore,  there  is no winding-up pending against HMP.

The Group has already provided for its 49% share of the potential loss arising from the above in the accounts.

16.	Segment revenue, segment result and segment assets employed for business segments or geographical segments, whichever is the company’s primary basis of segment reporting for the current financial year to date.

SEGMENTAL ANALYSIS	TURNOVER
(RM’000)	LOSS AFTER TAXATION (RM’000)	ASSETS EMPLOYED
(RM’000)	
Property Development	 - 	(1,828)	116,598	
Project Management & Investment holding	59	(1,692)	9,366	
Others	-	(4)	5	
	59	(3,524)	125,969	

17.	Explanatory comments on any material change in the profit before taxation for the quarter reported on as compared with the preceding quarter.
There were no material change in the losses before taxation for the quarter reported on as compared with the preceding quarter.

18.	Review of the performance of the company and its principal subsidiaries, setting out material factors affecting the earning and/or revenue of the company and the group.  A commentary by the directors on the results of the period reported on, identifying any material factors affecting the earnings and/or income of the company and group, together with any significant trend or event in this regard which may have occurred between the end of the reporting period and the latest practicable date which shall not be earlier than 7 days from the date of issue of the quarterly report.
The Group is presently in the midst of completing its Restructuring Exercise as mentioned under item 9 above.  There are no material income recorded in this quarter as there is no ongoing project carried out by the Group.  The losses reported for the period under review were mainly interest expense and fixed overheads.

19.	A commentary on current year prospects, including the factors that are likely to influence the company’s prospects.
With the completion of the Restructuring Exercise as mentioned under item 9 above, prospects for the current financial year ending 2001 are expected to improve as the Group recognition of the contributions from the ongoing development of Seremban 3 will commence.

20.	Explanatory notes for any (only applicable to the final quarter) :-

(a)	variance of actual profit from forecast profit (where the variance exceeds 10%) :
(b)	shortfall in the profit guarantee
		Not applicable.

21.	Dividend : To be completed if a decision regarding dividend has been made.
No interim dividend has been recommended by the Board for the financial quarter ended 31 March 2001.