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

Notes to the Accounts for the Financial Year Ended 31 December 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 period under review.

3.	Extraordinary Items
	There was an extraordinary loss of RM2.05 million for the financial period under review.  This was due to the fire outbreak in the factory of the packaging division.

4.	Taxation
	Taxation comprises the following:
	
	Current Quarter ended 31.12.2000
RM’000	Current Year to Date
31.12.2000
RM’000	
Malaysian taxation	4,220	11,057	
Foreign taxation	24	144	
	4,244	11,201	
Malaysian taxation over / (under) provision in previous years	0	0	
Deferred taxation	0	0	
	4,244	11,201	
	
5.	Pre-acquisition profit
	There were no pre-acquisition profits or losses for the financial period 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 period 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
	During the year, the Group has acquired 51% equity interest in Abadi Canggih Sdn Bhd, which currently is a dormant company.

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. 

	However, on 19 December 2000, Perwira Affin Merchant Bank Berhad had on behalf of Minho announced that the Proposed Private Placement, Proposed Special Issue and Proposed Rights Issue will be deferred for another six months from the date of announcement in view of the current weak market sentiments.  The approval of SC for the above deferment has been obtained on 22 January 2001.

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 shares to the Ministry of Finance pursuant to Section 29 of the Security Industry (Central Depositories) (Amendment) Act 1998 constituting of 128,632 ordinary shares and 188,915 warrants. 

12.	Group Borrowings and Debt Securities
	Total group borrowings (secured) as at 31 December 2000 were as follows:-
					
							RM’000

	Short Term Bank Borrowing - Secured
	Bank Overdraft					    3,747  
	Bankers’ acceptance				  20,707
	Export Credit Refinancing                           	                  1,988
	Current portion of Term Loan		                72,090     
	Long Term Bank Borrowing – Secured
	Long term portion of Term Loan			  40,000													------------
	Total						138,532
							------------

13.	Contingent Liabilities
	The Group does not have any contingent liabilities as at 21 February 2001, 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 21 February 2001, 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 21 February 2001, 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		  285,837			 14,613		    	    395,817
	Non-timber division	     9,086				    -296			      22,902
             ------------------------------------------------------------------------------------------------------------------------------------
				 294,923				  14,317			    418,719
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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 132% lower compared to preceding quarter. This is mainly due to lower turnover and higher interest on borrowings incurred in the current quarter as compared to the preceding quarter.    

18.	Review of Performance of the Company and Its Principal Subsidiaries
	The Group experienced a slowdown in most of its core timber activities comprising of kiln drying services, chemical preservative treatments, timber mouldings and exports of kiln dried sawntimbers. For the year ended 31 December 2000, the Group recorded a turnover of RM294.9 million with consolidated operating profit before tax and minority interest of RM14.3 million representing a decline of approximately 4% and 27% respectively, compared with the preceding year. The decline in performance was mainly due to the slowdown in the supply of logs from the logging division caused by the monsoon season as well as to the overall weak timber market sentiments prevailing particularly in the last quarter of the year. However, the Group’s trading arm in the UK registered an encouraging improvement in its performance. Turnover and operating profit for the year increased by nearly 30% and 46% respectively compared with the preceding year.
	
   19.	Prospects for the Next Financial Year
	Management expects Group performance for the first quarter of year 2001 will be affected by the slowdown in timber supply but expects the market to improve towards the second quarter of 2001.

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

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