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

Notes to the Accounts for the Financial Quarter Ended 30 September 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 was no extraordinary items for the financial periods under review. 

4.	Taxation
	Taxation comprises the following:
	
	Current Quarter ended 30.09.2000
RM’000	Current Year to Date
30.09.2000
RM’000	
Malaysian taxation	1,943	6,837	
Foreign taxation	23	120	
	1,966	6,957	
Malaysian taxation over / (under) provision in previous years	0	0	
Deferred taxation	0	0	
	1,966	6,957	
	
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). Shareholders’ approval also has been obtained in the Extraordinary General Meeting held on 25 September 2000. 

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 133,882 ordinary shares and 206,415 warrants. 

On top of that, the Company’s RM190.0 million redeemable unsecured bank guaranteed bond (1995/2000) bearing a coupon rate of 3% p.a. has been fully redeemed. Funds for the redemption were derived from a combination of internally generated funds and short-term bank facilities. The later amounting to RM113.7 million are being refinanced as follows: RM63.7 million from the company’s current corporate fund raising exercise and RM50 million in the form of a 5-year term loan.

12.	Group Borrowings and Debt Securities
	Total group borrowings (secured) as at 30 September 2000 are as follows:-
					
							RM’000

	Short Term Bank Borrowing - Secured
	Bank Overdraft					    1,238
	Bankers’ acceptance				  24,565
	Trust Receipts				 	       783
	Export Credit Refinancing                           	                  2,832
	Current portion of Term Loan		                74,090     
	Long Term Bank Borrowing – Secured
	Long term portion of Term Loan			 40,000													------------
	Total						143,508
							------------

13.	Contingent Liabilities
	The Group does not have any contingent liabilities as at 22 November 2000, the latest practicable date which is not earlier than 7 days from the issue of this quarterly report. 
MINHO (M) BERHAD ( 200930-H)
Incorporated in Malaysia

14.	Off Balance Sheet Financial Instruments
	The Group does not have any financial instruments with off balance sheet risk as at 22 November 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 22 November 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		 236,162				 15,847		    	    418,783
	Non-timber division	     7,155				        34			      21,936
             ------------------------------------------------------------------------------------------------------------------------------------
				 243,317				  15,881			    440,719
             ------------------------------------------------------------------------------------------------------------------------------------

17.	Material Changes in the Quarterly Results Compared to the Results of the Preceding Quarter
	The operating profit before income tax, minority interests and extraordinary items for current year quarter is 14% lower compared to preceding quarter. This is mainly due to the higher amortisation charged in the current quarter as compared to preceding quarter.    

18.	Review of Performance of the Company and Its Principal Subsidiaries
	The Group reported a better performance from its core timber activities comprising of kiln drying services, chemical preservative treatments, timber mouldings and exports of kiln dried sawntimbers. For the three quarters ended 30 September 2000, the Group managed to achieve a turnover of RM243.3 million with consolidated operating profit before tax and minority interest of RM15.9 million representing approximately 20% and 8% higher respectively, compared with the preceding corresponding period. The better performance was mainly due to strong demand for our timber products from the higher end market in Europe in the first half of year 2000. The improved timber supplies situation as a result of the importation of sawntimber from the overseas has also attributed to the better performance for the said financial period. In addition, the Group’s trading arm in the UK has also improved its performance, where turnover and operating profit has increased by nearly 40% and 148% respectively.

	However, performance of the packaging division has suffer a setback with significant drop in turnover by nearly 54% compared with the corresponding period as a result of the fire outbreak in the factory in  May, 2000.
	
   19.	Prospects for the Current Financial Year
	The management expects the Group performance for the last quarter will be affected by the slowdown in timber supply situation caused by the monsoon season. The Group is also expected to incur an extraordinary losses of approximately RM4 million due to the fire outbreak in the factory of the packaging division. The insurance claim on the damages is expected to be finalised in the last quarter of 2000.

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

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

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