MINHO (M) BERHAD ( 200930-H)
Incorporated in Malaysia

Notes to the Accounts for the Financial Quarter Ended 30 June 2000 

1.	Accounting Policies
	The accounts of the Group are prepared using the same accounting policies, method of computation and basis of consolidation as those used in the preparation of the most recent annual financial statement.

2.	Exceptional Items
	There were no exceptional items for the financial periods under review.

3.	Extraordinary Items
	 There were no extraordinary items for the financial periods under review

4.	Taxation
	Taxation comprises the following:
	
	Current Quarter ended 30.06.2000
RM’000	Current Year to Date
30.06.2000
RM’000	
Malaysian taxation	2,181	4,894	
Foreign taxation	66	97	
	2,247	4,991	
Malaysian taxation over / (under) provision in previous years	0	0	
Deferred taxation	0	0	
	2,247	4,991	
	
5.	Pre-acquisition profit
	There were no pre-acquisition profits or losses for financial periods under review.

6.	Profits on sale of investment and/ or Properties
	There were no profits on sale of investment and / or properties outside the ordinary course of the Group’s business for the financial periods under review.

7.	Quoted Securities
	There were no purchases or disposals of quoted securities for the current financial year to date.

8.	Changes in the Composition of the Group
	There were no changes in the composition of the Group during the current financial year to date.

9.	Status of Corporate Proposals
	On 21 October 1999, Perwira Affin Merchant Bank Berhad has on behalf of the Company announced the following fund raising exercise details of which were submitted to the Securities Commission on 28 February 2000 and have  subsequently been approved on 18 July 2000:-

(a)	Proposed Private Placement of up to 10,985,000 new ordinary shares of RM1.00 each (“Proposed Private Placement);

(b)	Proposed Special Issue of up to 10,985,000 new ordinary shares of RM1.00 each in Minho to Bumiputra investors to be approved / nominated by Ministry of International Trade and Industry (“Proposed Special Issue”);

MINHO (M) BERHAD ( 200930-H)
Incorporated in Malaysia

(c)	Proposed Issue of New Warrants (“Replacement Warrants”) in Minho on the basis of one (1) replacement warrant in substitution and upon the cancellation of one (1) existing warrant (“Existing Warrant”) (“Proposed Warrants Replacement”); and

(d)	Proposed Renounceable Two-Calls Rights Issue of up to 93,235,500 new ordinary shares of RM1.00  each in Minho at par on the basis of one (1) new ordinary share for every two (2) ordinary shares of RM1.00 each held (“Proposed Rights Issue”). 
	
	The approval from FIC, MITI and SC for the abovementioned Proposals has been obtained on 20 April 2000, 28 April 2000 and 18 July 2000 respectively (Please refer to the Perwira Affin Merchant Bank announcement on behalf of Minho on 24 July 2000 for the Conditions of SC approval). 

	On 25 July 2000, the issue price for the Proposed Special Issue and Proposed Rights Issue as well as the exercise price for the Replacement Warrants have been fixed as follows:-

(i)	the issue price for the Proposed Special Issue has been fixed at RM1.00 per share;

(ii)	the issue price for the Proposed Rights Issue has been fixed at RM1.00 per share (of which first call of RM0.80 is payable in cash on application and the second call of RM0.20 is payable out of the Company’s share premium account); and 

(iii)	the exercise price of the Replacement Warrants has been fixed at RM1.00 each for every one (1) new ordinary share of RM1.00 in Minho. 

However, on 17 August 2000, on behalf of the Board of Directors of Minho, Perwira Affin Merchant Bank Berhad has announced that, the exercise price of Replacement Warrants has been amended to RM1.15 each for every new ordinary share of RM1.00 each in Minho. 
	 
10.	Seasonal or Cyclical Factors
	The business operations of the Group are generally affected by the monsoon seasons and also the major festive seasons namely Hari Raya Puasa and Chinese New Year celebrations.

11.	Capital Issue and Dealings in Own Shares
	There were no issuance and repayment of debt and equity securities, share buy-backs and share cancellations during the financial year to date except for the transfer of the company to the Ministry of Finance pursuant to Section 29 of the Security Industry (Central Depositories) (Amendment) Act 1998 constituting of 203,535 ordinary shares and 283,915 warrants.

12.	Group Borrowings and Debt Securities
	Total group borrowings (secured) as at 30 June 2000 are as follows:-
					
							RM’000
	Short Term Bank Borrowing - Secured
	Bank Overdraft					  2,445
	Bankers’ acceptance				30,045
	Trust Receipts				 	     750
	Bills Payable					  2,177
	Current portion of long term loan			     690
							------------
	Total						36,107
							------------

MINHO (M) BERHAD ( 200930-H)
Incorporated in Malaysia

13.	Contingent Liabilities
	The Group does not have any contingent liabilities as at 23 August 2000, the latest practicable date which is not earlier than 7 days from the issue of this quarterly report. 

14.	Off Balance Sheet Financial Instruments
	The Group does not have any financial instruments with off balance sheet risk as at 23 August 2000, the latest practicable date which is not earlier than 7 days from the issue of this quarterly report.

15.	Material Litigation
	The Group does not have any pending material litigation as at 23 August 2000, the latest practicable date which is not earlier than 7 days from the issue of this quarterly report

16.	Segmental Reporting
				Turnover		Profit Before Taxation		Assets Employed
				RM’000			            RM’000			      RM’000	

	Timber Division		 151,491				 11,976		    	    425,941
	Non-timber division	     5,830				      221			      26,336
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				 157,321				  12,197			    452,277
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17.	Material Changes in the Quarterly Results Compared to the Results of the Preceding Quarter
	There were no material changes in the Quarterly Results compared to the results of the preceding quarter.

18.	Review of Performance of the Company and Its Principal Subsidiaries
	The Group reported a higher turnover of RM157.3 Million compared to RM127.0 Million recorded last year, up 23.8%. Operating profit before tax and minority interest improved accordingly to RM12.2 Million (c.f. RM10.3 Million last year). This was achieved despite the fact that the performance of our timber divisions such as kiln drying services, chemical preservative treatments, plywood production, timber mouldings manufacturing and export of kiln dried sawn timber was affected by the slowdown in the supply of logs from the logging division caused by the longer monsoon season in the first half of this year.

	Besides the core timber activities, the packaging division namely Indah Paper Industries Sdn Bhd experienced a drop in turnover by nearly 43% compared with the corresponding period as a result of the fire which damaged part of the division’s plant and equipment.
	
   19.	Prospects for the Current Financial Year
	Management expects the demand for the Group timber products such as plywood, kiln dried sawn timber, moulded timber and furniture parts as well as timber flooring to remain strong in the second half of the year, particularly from the overseas markets in Europe and United Kingdom. Despite the anticipated strong demand, the Group’s performance may be affected by the short timber supply situation caused by monsoon season in the logging area.

   20.	Variance of Actual Profit from Forecast Profit
	Not applicable.

MINHO (M) BERHAD ( 200930-H)
Incorporated in Malaysia

21.	Dividend
	No interim dividend has been proposed by the Board of Directors.

22.	Year 2000 (Y2K) Compliance
	The Group computer systems are Y2K compliant.