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

Interim Financial Report on Consolidated Results for The Period Ended 30 June 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 RM48,045,000 from RM19,218,000 via Rights Issue with Warrants and Bonus Issue under item (a) and (b) of the Corporate Proposals as highlighted in Item B8 below. On 9th June 2004, the issued and paid up capital of the Company was increased to RM48,065,000 via exercise of 20,000 warrants.

A7.	Dividend Paid

No dividend was paid during the current financial quarter.

A8.	Segmental Information for the Second Quarter and Financial period ended 
	30 June 2004

Revenue	Profit before taxation	
------------------------ 3 months ended 30 June ----------------------	
	2004
RM’000	2003
RM’000	2004
RM’000	2003
RM’000	
Manufacturing	6,622	5,241	1,426	1,110	
Construction	6,834	6,975	(135)	(22)	
Transportation	629	804	3	46	
Others	-	-	(70)	(133)	
Total	14,085	13,020	1,224	1,001	

Revenue	Profit before taxation	
------------------------ 6 months ended 30 June ---------------------	
	2004
RM’000	2003
RM’000	2004
RM’000	2003
RM’000	
Manufacturing	11,913	10,419	1,979	2,070	
Construction	16,221	12,522	(191)	(418)	
Transportation	1,344	1,552	57	44	
Others	-	-	(89)	(150)	
Total	29,478	24,493	1,756	1,546	

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 were no material events subsequent to the current financial period ended 30 June 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 except as disclosed below:

a)	On 1 April 2004, the Company acquired 60% of the issued and paid-up share capital of B.I.G. Bahtera Sdn. Bhd. (formerly known as Lambaian Kurnia Sdn. Bhd.), a company incorporated in Malaysia, comprising 6 ordinary shares of RM1.00 each for a cash consideration of RM6.00.

b)	On 16 April 2004, the Company incorporated a 100% wholly owned subsidiary company namely B.I.G. Offshore Services Limited, a company incorporated in Labuan F.T. Malaysia under the Offshore Companies Act 1990 with an authorized capital of RM49,997 (US$13,157) shares of RM3.80 (US$1.00) each and paid-up share capital of RM38.00 (US$10.00) comprising 10 shares of RM3.80 (US$1.00) each.

c)	On 20 April 2004, the Company acquired the entire issued and paid-up share capital of B.I.G. Marine Sdn. Bhd. (formerly known as Element Teguh Sdn. Bhd.), a company incorporated in Malaysia, comprising 10 ordinary shares of RM1.00 each for a cash consideration of RM10.00.

A11.	Changes in Composition of the Group (cont’d)

d)	On 9 June 2004, the Company announced on proposed acquisition on 2 ordinary shares of RM1.00 each in Sistem SDS Sdn. Bhd. representing the entire issued and paid-up share capital of Sistem SDS Sdn. Bhd. from Ngiu Kee Corporation (M) Berhad for a cash consideration of RM2.00. The proposed acquisition has been completed as at the date of this announcement.

e)	On 28 June 2004, the Company acquired the entire issued and paid-up share capital of B.I.G. Ferry Services Sdn. Bhd. (formerly known as Ratu Arena Sdn. Bhd.), a company incorporated in Malaysia, comprising 10 ordinary shares of RM1.00 each for a cash consideration of RM10.00.
	
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 second quarter of 2004 under review, the Group turnover and profit before taxation has increased by RM1.07 million and RM0.22 million respectively as compared to the corresponding period last year.  The increase in turnover is due mainly to the demand for industrial gases from the oil & gas sector whilst the construction division has maintained a slightly reduced turnover. This has resulted in a better profit performance when compared to the previous year.

B2.	Comparison with preceding quarter’s result

Group Results	Current quarter ended 30/06/2004
RM’000		Preceding quarter ended 31/03/2004
RM’000	
Turnover	14,085		15,393	
Profit Before Taxation	1,224		532	

The Group’s turnover has decreased by RM1.308 million (8.50%) and profit before taxation has increased by RM0.692 million (130.08%) as compared to the last quarter. The decrease in turnover was due to the temporary slow down in the construction industry arising from the shortage of steel bars. However the increase in demand for the bulk gases from the oil & gas industry contributed to the better profit margin 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 additional purchases of quoted securities for the current financial period to date.

(b)	Total Investments in quoted securities as at 30 June 2004:
			
								      30 June 2004			 							RM’000
(i)	Total investment at cost		    	     2,064								=======
(ii)	Total investment at carrying
	value/book value (after provision 
	for diminution in value)			       1,609
								=======

(iii)	Total investment at market value
	@ 30/06/2004	                        			       1,609
								=======

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

B8.	Status of Corporate Proposals

1) The following proposals announced by the Company:-

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”);

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

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)

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 and 150,000 options were offered to the eligible employees and Executive Director of the Group on 8 March 2004 and 10 April 2004 at the exercise price of RM2.72 and RM2.83 per new share respectively.

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”).

On 2 August 2004, the Company has made an application to Securities Commission for an extension of time from 18 August 2004 up to 18 February 2005 to fully implement the proposed placement. The Company is still waiting for the approval from the Securities Commission as at the date of this announcement. 

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	(1,000,000)	
2)	Working capital requirements	1,107,340	705,003	402,337	
3)	Estimated corporate exercise expenses	1,000,000	402,337	597,663	
	Total proceeds	12,107,340	12,107,340	0	

2) 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.

B8.	Status of Corporate Proposals (contd)

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.

On 2 August 2004, the Company further announced that the application for the proposed acquisition which was originally expected to be submitted to the Securities Commission (“SC”) within three (3) months from the date of the previous announcement dated 5 May 2004 has now been re-scheduled to be submitted to the SC within 4 months from 2 August 2004. The above proposals have not been completed as at the date of this announcement.

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

4) On 25 May 2004, the Company announced that a 5-year term loan facility of RM45 million has been secured under a Primary Collateralised Loan Obligations Programme arranged by Alliance Merchant Bank Berhad. The funds to be disbursed under the term loan facility will be utilized primarily for expansion, working capital and retirement of certain bank borrowing. 

5) On 8 June 2004, the Company announced that the Company had entered into a Memorandum of Understanding (MOU) with Penguin Boat International Limited (“PBIL”) to jointly establish commercial entities through the incorporation of one or more joint venture companies to undertake any or all of the following types of business:

a)	Ownership, operation, charter, leasing and management of crew boats and vessels for the oil and gas industry.
b)	Ownership and operation of a shipyard for aluminium boat building including repair and maintenance of boats.
c)	Ferry operation in Malaysia. 

B8.	Status of Corporate Proposals (contd)

6) On 30 June 2004, the Company had announced its attention to seek its shareholders’ approval for the following:-

a) 	Proposed Shareholders’ Mandate for the BIG Group to enter into recurrent related party transactions of a revenue or trading nature with Related Parties in the ordinary course of business which are necessary for the BIG Group’s day-to-day operations (“Proposed Shareholders’ Mandate”).

The ordinary resolution as per the circular dated 11 August 2004 pertaining to the Proposed Recurrent Related Party Transactions of a Revenue or Trading Nature had been duly approved by the shareholders of the Company at the Extraordianry General Meeting duly convened and held on 26 August 2004.

B9.	Subsequent events

On 17 July 2004, the Company had announced its attention to seek its shareholders’ approval for the following:-

a) 	Proposed purchase of the Company’s own shares for the amount up to ten per centum (10%) of its issued and paid-up share capital (Proposed Share Buy Back).

The ordinary resolution as per the circular dated 11 August 2004 pertaining to the proposed Share Buy Back had been duly approved by the shareholders of the Company at the Extraordianry General Meeting duly convened and held on 26 August 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

Final dividend in respect of the financial year ended 31 December 2003 of 1% tax exempt on 48,065,000 ordinary shares of RM1.00 each, amounting to a total dividend of RM480,650 has been declared on 15 June 2004 and paid on 20 August 2004.

B14.	EARNINGS PER SHARE

By Order of the Board

Chan Sau Leng (MAICSA 7012211)
Hon Li Chueng (MIA 17951)
Joint Secretaries

Kuching
30th August 2004