B. I. G. INDUSTRIES BERHAD (195285-D)
(Incorporated in Malaysia)

Interim Financial Report on Consolidated Results for The Period Ended 31 March 2004

A. 	NOTES REQUIRED UNDER MASB 26

A1 	Accounting Policies

The interim financial report is unaudited and has been prepared in compliance with the Malaysia Accounting Standards (‘MASB’) Standard No. 26, “Interim Financial Reporting” and paragraph 9.22 of Bursa Malaysia Securities Berhad’s (“BMSB” formerly known as “Malaysia Securities Exchange Berhad”) Listing Requirements and should be read in conjunction with the Group’s Annual Financial Statements for the year ended 31st December 2003.

The accounting policies and method of computation used in the preparation of this interim financial report are consistent with those adopted in the Annual Financial Report for the financial year ended 31st December 2003 

A2.	Qualification of the Financial Accounts	

The audit report of the Group’s preceding year financial statements for the year ended 31 December 2003 was an unqualified opinion.

A3.	Seasonal or Cyclical Factors

The business operations of the Group were not affected by any significant seasonal or cyclical factors.

A4.	Unusual Items Affecting Interim Financial Report

	There were no unusual items affecting assets, liabilities, equity, net income or cash flow during the current quarter under review.

A5.	Changes in Estimates

	There were no changes in the estimates of amounts reported in preceding quarter of the current financial year or changes in estimates of amounts reported in prior financial year that have a material effect in the current quarter under review.

A6. 	Debts and Equity Securities

On 5th February 2004, the issued and paid-up share capital of the Company was increased to RM 48,045,000 from RM 19,218,000 via Rights Issue with Warrants and Bonus Issue under item (a) and (b) of the Corporate Proposals as highlighted in Item B8 below.

A7.	Dividend Paid

No dividend was paid during the current financial quarter.

A8.	Segmental Information for the First Quarter and Financial period ended 
	31 March 2004

Revenue	Profit/(Loss) before Tax	
------------------ 3 months ended 31 March -------------	
	2004
RM’000	2003
RM’000	2004
RM’000	RM2003
RM’000	
Manufacturing	5,291	5,179	553	961	
Construction	9,387	5,547	(56)	(396)	
Transportation	715	747	54	(3)	
Others	-	-	(19)	(16)	
Total	15,393	11,473	532	546	

Revenue	Profit/(Loss) before Tax	
-----------------3 months ended 31 March --------------	
	2004
RM’000	2003
RM’000	2004
RM’000	RM2003
RM’000	
Manufacturing	5,291	5,179	553	961	
Construction	9,387	5,547	(56)	(396)	
Transportation	715	747	54	(3)	
Others	-	-	(19)	(16)	
Total	15,393	11,473	532	546	

A9.	Valuation of Property, Plant and Equipment

The valuation of Group’s landed properties, plant and equipment has been brought forward, without amendment from the previous annual financial statements.

A10.	Material Subsequent Events

There are no material events subsequent to the current financial period ended 31 March 2004 except as disclosed in Item B9 below.

A11.	Changes in Composition of the Group

There are no material changes in the composition of the Group during the current quarter under review.

A12.	Changes in Contingent Liabilities or Assets

There are no material changes in the contingent liabilities or assets of the Group since the last balance sheet date.

B.	  ADDITIONAL INFORMATION - THE BMSB’S LISITNG REQUIREMENTS

B1.	Review of Performance 
	
For the first quarter of 2004 under review, the Group turnover has increased by RM 3.92 million and profit before taxation has decreased by RM 0.014 million as compared to the corresponding period last year.  The increase in turnover is due mainly to the group’s construction division which benefited from the various projects initiated at the beginning of the year. However, the margin of profit is thinner than in the industrial gas sector.

B2.	Comparison with preceding quarter’s result

Group Results	Current quarter ended 31/03/2004
RM’000		Preceding quarter ended 31/12/2003
RM’000	
Turnover	15,393		14,955	
Profit Before Taxation	532		1,058	

The Group’s turnover has increased by RM 0.438 million (2.93%) and profit before taxation has decreased by RM 0.526 million (49.72%) respectively as compared to the last quarter. The increase in turnover was due to the Sabah construction subsidiaries securing two mega projects for the supply of ready mixed concrete. The Sarawak gas industry however was experiencing a slower off-take in the bulk gas market, resulting in reduced margin of profit as compared to the previous quarter.

B3.	Current Year Prospects 

Barring any unforeseen circumstances, the Group is expected to achieve better results for the financial year ended 31 December 2004 as compared to the financial year ended 31 December 2003.

B4.	Profit Forecast

	The company has not provided any profit forecast in a public document.

B5.	Taxation

The Group’s effective tax rate for the current quarter and financial year-to-date is lower than the statutory rate as certain wholly owned subsidiary of the Company has sufficient reinvestment allowance and capital allowances to offset taxable profit. 

B6.	Unquoted investment and Properties
					
		There were no profits/losses on sale of unquoted investments and properties for the current quarter and financial year to date.

B7.	Quoted Investment
					
(a)	There were no purchases or disposals of quoted securities for the current financial period to date.

(b)	Total Investments in quoted securities as at 31 March 2004:
			
								      31 March 2004			 							RM’000
(i)	Total investment at cost		    	     464
								=======
(ii)	Total investment at carrying
	value/book value (after provision 
	for diminution in value)			       9
								=======

(iii)	Total investment at market value
	@ 31/03/2003	                        			       9
								=======

(iv)	Shortfall in value (ii) – (iii)			     NIL
								=======

B8.	Status of Corporate Proposals

The following proposals announced by the Company on 29 August 2002 have been approved by Securities Commission (“SC”) vide its letter dated 3 December 2002 and Foreign Investment Committee (“FIC”) vide its letter dated 20 November 2002: -

a)	Proposed renounceable two-call rights issue of 19,218,000 new ordinary shares of RM1.00 each in B. I. G. (“Rights Shares”) together with 19,218,000 free warrants (“Warrants”) on the basis of one (1) new ordinary share with one (1) free Warrant for every one (1) existing ordinary share held, at an indicative issue price of RM1.00 per Rights Share, whereby the first call shall be in the form of a cash payment and the second call to be capitalized from the retained profits and share premium reserves of the Company (“Proposed Rights Issue with Warrants”);

b)	Proposed bonus issue of 9,609,000 new ordinary shares of RM1.00 each in   B. I. G. (“Bonus Shares”) on the basis of one (1) Bonus Share for every two (2) Rights Shares subscribed by the existing shareholders of B. I. G. and/or their renounces pursuant to the Proposed Rights Issue with Warrants (“Proposed Bonus Issue”);

c)	Proposed establishment of an ESOS by the Company for the eligible directors and employees of the Company and its subsidiaries (“Group”) (Proposed ESOS”); and

B8.	Status of Corporate Proposals (contd)

d)	Proposed private placement of new ordinary shares of RM1.00 each in         B. I. G. representing not more than 10% of the issued and paid-up share capital of the Company after the Proposed Rights Issue with Warrants and Proposed Bonus Issue (“Proposed Placement”).

The company has completed its Corporate Proposals on item (a) and (b) at the date of this announcement.

The additional 19,218,000 and 9,609,000 new ordinary shares of RM1.00 each issued pursuant to the aforesaid Rights Issue with Warrants and Bonus Issue respectively has been granted listing and quotation on the Second Board of the Bursa Malaysia Securities Berhad with effect from 18th February 2004.

The Company’s 19,218,000 warrants issued pursuant to the Rights Issue with Warrants have been granted listing and quotation on the Second Board of the Bursa Malaysia Securities Berhad with effect from 18th February 2004.

The abovementioned proposals are meant to ensure compliance with the minimum paid up capital of RM40 million as required under the Bursa Malaysia Securities Berhad’s Listing Requirements and to raise additional working capital for the Group.

The Company has implemented its Employees’ Share Option Scheme on 26 February 2004 for the benefit of the eligible employees and Executive Director of the Group.  This is to accord them the opportunity to participate in the overall growth of the Group in addition to reward them for their contributions.  A total of 4,247,000 options were offered to the eligible employees and Executive Director of the Group on 8 March 2004 at the exercise price of RM2.72 per new share.

Gross proceeds arising from the Rights Issue with Warrants amounting to 	 RM12,107,340 has been utilised as follows:-

Utilisation	
Proposed
Utilisation	

Utilised	         Balance not
yet utilised	
		RM’000	RM’000	RM’000	
					
1)	Repayment of bank borrowings	10,000,000	11,000,000	(1,000,00)	
2)	Working capital requirements	1,107,340	335,870	771,470	
3)	Estimated corporate exercise expenses	1,000,000	374,405	625,595	
	Total proceeds	12,107,340	11,710,275	397,065	

B9.	Subsequent events

	On 5 May 2004 the Company announced the following:-

a)	Proposed acquisition of 40,000,000 ordinary shares of SGD0.10 each in Penguin Boat International Limited (“PBIL”) representing 20% of the issued and paid up share capital of PBIL by B.I.G. Industries Berhad (“the Company”) for a purchase consideration of SGD10,000,000 or SGD0.25 per PBIL share to be wholly satisfied by the issuance of new ordinary shares of RM1.00 each in the Company at an issue price of RM2.478 per share.
b)	Proposed acquisition of 10,952,625 warrants in PBIL representing approximately 13.7% of the total outstanding PBIL warrants by the Company for a purchase consideration of SGD657,157.50 or SGD0.06 per PBIL warrant to be wholly satisfied by the issuance of new ordinary shares of RM1.00 each in the Company at an issue price of RM2.478 per share.
c)	Proposed granting of Call and Put Options for the purchase of 54,480,308 ordinary shares of SGD0.10 each in PBIL representing 27.2% of the existing issued and paid up share capital of PBIL by the Company for a purchase consideration of SGD13,620,077 or SGD0.25 per PBIL share to be wholly satisfied by way of cash.

The latest date for fulfilment of the conditions of the agreement of (a) & (b) above is within nine months from the date of the agreement or such later date as mutually agreed by the two parties.

As for (c) above, the call option period shall commence on the later of 
•	The first market day after the anniversary of the option agreement and
•	The first market day after the completion of (a) and (b) above

And shall expire at 5.00 p.m. on the second anniversary of the option agreement

The put option period shall commence on the market day immediately after the expiry of the call option period and shall expire at 5.00 p.m. ten market days thereafter.

The above proposals are conditional upon approvals/confirmation being obtained from the following authorities/parties:-
•	Securities Commission for the Proposed acquisitions
•	Bank Negara Malaysia for any investments abroad
•	Ministry of International Trade and Industry for the Proposed acquisitions
•	Bursa Malaysia Securities Berhad for the listing and quotation of the consideration shares to be issued pursuant to the Proposed acquisitions
•	Shareholders of the Company at an extraordinary meeting to be convened for the Proposals
•	The Securities Industry Council of Singapore
•	any other relevant authorities

The above proposals have not been completed as at the date of this announcement.

On 6 May 2004 the Company further announced the Proposed acquisition of a motor vessel known as Penguin 33 by Elemen Teguh Sdn. Bhd., a wholly owned subsidiary of the Company from Penguin Boat International Limited for a cash consideration of USD600,000.   

B9.	Subsequent events (contd)

The above proposal is conditional upon approvals/confirmation being obtained from the following authorities/parties:-
•	Bank Negara Malaysia (if required)
•	Shareholders of the Company at an extraordinary meeting to be 
	convened (if required)
•	any other relevant authorities

The proposed vessel acquisition is expected to be completed in the last quarter of 2004
 
B10.	Group Borrowings and Debt Securities

              a) Short Term Borrowings

              b) Long Term Borrowings

	 ** Note: For term loans repayable within 1 year – include under short-term borrowings.

None of the Group’s borrowings as at the financial year to date are denominated in foreign currency.

B11.	Off Balance Sheet Financial Instruments

The Group did not have any financial instruments with off balance sheet risk at the date of issue of these interim financial statements.

B12.	Changes in Material Litigation

There was no material litigation at the date of issue of these interim financial statements.

B13.	Dividend

No dividend has been proposed or declared for the current quarter.

B14.	EARNINGS PER SHARE