C O N T E N T S. Notice of the Sixth Annual General Meeting 2 ~ 6. Statement Accompanying Notice of the Sixth Annual General Meeting 7

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1 C O N T E N T S Notice of the Sixth Annual General Meeting 2 ~ 6 Statement Accompanying Notice of the Sixth Annual General Meeting 7 Corporate Information 8 Profile of Directors 9 ~ 11 Statement of Corporate Governance 12 ~ 18 Chairman s Statement 19 ~ 21 Audit Committee 22 ~ 23 Statement of Internal Control 24 ~ 26 Financial Statements 27 ~ 81 List of Properties 82 ~ 83 Analysis of Shareholdings 84 ~ 85 Proxy Form Enclosed AMTEL HOLDINGS BERHAD annual report 2002

2 NOTICE OF THE SIXTH ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Sixth ( 6th ) Annual General Meeting (AGM) of Amtel Holdings Berhad ("the Company") will be held at The Pan Pacific Glenmarie, 1 Jalan Usahawan U1/8, Seksyen U1, Shah Alam, Selangor Darul Ehsan on Wednesday, 28 May, 2003 at a.m. for the purpose of transacting the following businesses :- AGENDA 1. To receive and adopt the Audited Financial Statements for the financial year ended 30 November, 2002 together with the Reports of the Directors and Auditors thereon. RESOLUTION ON PROXY FORM Ordinary Resolution 1 2. To approve the increase in Directors fees to RM98,000 for the financial year ended 30 November, Ordinary Resolution 2 3. To re-elect as Director, Dato Abdul Hamid bin Hj. Md. Zainuddin who retires in accordance with Article 80 of the Company s Articles of Association. Ordinary Resolution 3 4. To re-elect as Director, Mr. Ng Ah Chong who retires in accordance with Article 80 of the Company s Articles of Association. Ordinary Resolution 4 5. To re-appoint Messrs. Moore Stephens as Auditors of the Company and to authorise the Directors to fix their remuneration. Ordinary Resolution 5 AS SPECIAL BUSINESS to consider and if thought fit, to pass the following resolutions :- 6. Authority to issue shares "THAT, subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of relevant government/regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue ordinary shares from the unissued capital of the Company at any time at such price, upon such terms and conditions, for such purposes and to such persons whomsoever the Directors may in their discretion deem fit and that the Directors be empowered to obtain the approval for the listing and quotation of the additional shares so issued on the Kuala Lumpur Stock Exchange provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10 percent of the issued share capital of the Company for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. " Ordinary Resolution 6 AMTEL HOLDINGS BERHAD annual report

3 7. Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions "THAT, subject always to the Companies Act, 1965 ("Act"), the Memorandum and Articles of Association of the Company and the Listing Requirements of the Kuala Lumpur Stock Exchange, approval be and is hereby given to the Company s subsidiary to renew the recurrent related party transactions of a revenue or trading nature from time to time, particulars of which are set out as item (i) of Section of the Circular to Shareholders dated 5 May, 2003 with the related party mentioned therein which are necessary for the subsidiary s day-to-day operations subject further to the following: (i) the transactions are in the ordinary course of business and are on normal commercial terms and on terms not more favourable to the related parties than those generally available to the public and not to the detriment of minority shareholders; and (ii) disclosure is made in the annual report of the aggregate value of such transactions conducted pursuant to the shareholders mandate during the financial year based on the type of transactions, names of the related parties and their relationship; AND THAT such approval shall continue to be in force until: (i) the conclusion of the next Annual General Meeting of the Company following the forthcoming 6th Annual General Meeting at which such mandate is passed, at which time it will lapse, unless by a resolution passed at such Annual General Meeting the authority is renewed; or (ii) the expiration of the period within which the next Annual General Meeting of the Company after that date is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or (iii) revoked or varied by a resolution passed by the shareholders in a general meeting; whichever is the earlier, AND THAT the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give full effect to the transactions contemplated and/or authorised by this ordinary resolution." Ordinary Resolution 7 AMTEL HOLDINGS BERHAD annual report

4 8. Proposed Shareholders Mandate for Recurrent Related Party Transactions "THAT, subject always to the Companies Act, 1965 ("Act"), the Memorandum and Articles of Association of the Company and the Listing Requirements of the Kuala Lumpur Stock Exchange, approval be and is hereby given to the Company s subsidiary to enter into recurrent related party transactions of a revenue or trading nature from time to time, particulars of which are set out as item (ii)(a) of Section of the Circular to Shareholders dated 5 May, 2003 with the related party mentioned therein which are necessary for the subsidiary s day-to-day operations subject further to the following: (i) the transactions are in the ordinary course of business and are on normal commercial terms and on terms not more favourable to the related parties than those generally available to the public and not to the detriment of minority shareholders; and (ii) disclosure is made in the annual report of the aggregate value of such transactions conducted pursuant to the shareholders mandate during the financial year based on the type of transactions, names of the related parties and their relationship; AND THAT such approval shall continue to be in force until: (i) the conclusion of the next Annual General Meeting of the Company following the forthcoming 6th Annual General Meeting at which such mandate is passed, at which time it will lapse, unless by a resolution passed at such Annual General Meeting the authority is renewed; or (ii) the expiration of the period within which the next Annual General Meeting of the Company after that date is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or (iii) revoked or varied by a resolution passed by the shareholders in a general meeting; whichever is the earlier, AND THAT the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give full effect to the transactions contemplated and/or authorised by this ordinary resolution." Ordinary Resolution 8 AMTEL HOLDINGS BERHAD annual report

5 9. Proposed Shareholders Mandate for Recurrent Related Party Transactions "THAT, subject always to the Companies Act, 1965 ("Act"), the Memorandum and Articles of Association of the Company and the Listing Requirements of the Kuala Lumpur Stock Exchange, approval be and is hereby given to the Company s subsidiary to enter into recurrent related party transactions of a revenue or trading nature from time to time, particulars of which are set out as item (ii) (b) of Section of the Circular to Shareholders dated 5 May, 2003 with the related party mentioned therein which are necessary for the subsidiary s day-to-day operations subject further to the following: (i) the transactions are in the ordinary course of business and are on normal commercial terms and on terms not more favourable to the related parties than those generally available to the public and not to the detriment of minority shareholders; and (ii) disclosure is made in the annual report of the aggregate value of such transactions conducted pursuant to the shareholders mandate during the financial year based on the type of transactions, names of the related parties and their relationship; AND THAT such approval shall continue to be in force until: (i) the conclusion of the next Annual General Meeting of the Company following the forthcoming 6th Annual General Meeting at which such mandate is passed, at which time it will lapse, unless by a resolution passed at such Annual General Meeting the authority is renewed; or (ii) the expiration of the period within which the next Annual General Meeting of the Company after that date is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or (iii) revoked or varied by a resolution passed by the shareholders in a general meeting; whichever is the earlier, AND THAT the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give full effect to the transactions contemplated and/or authorised by this ordinary resolution." Ordinary Resolution 9 AMTEL HOLDINGS BERHAD annual report

6 By Order of the Board CHIA MOH MUI HOH YIT FOONG Secretaries Petaling Jaya 5 May, 2003 Notes : 1. A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. 2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation, under its Common Seal or under the hand of an officer or attorney of the corporation duly authorised in that behalf, and shall be deposited with the Registered Office of the Company at No. 5, Jalan PJS 7/19, Bandar Sunway, Petaling Jaya, Selangor Darul Ehsan, not less than 48 hours before the time appointed for holding this meeting or adjourned meeting. 3. Where a member appoints more than one proxy, the appointment shall be invalid unless the proportions of holdings represented by each proxy is specified. 4. A member shall be entitled to appoint more than one proxy to attend and vote at this meeting provided that the provisions of Section 149(1)(c) of the Companies Act, 1965 are complied with. Explanatory Notes on Special Business 5. Authority to issue shares Resolution pursuant to Section 132D of the Companies Act, Ordinary Resolution No. 6 proposed under item (6) above, if passed, will give the Directors of the Company, from the date of the above general meeting, authority to issue and allot ordinary shares from the unissued share capital of the Company up to an aggregate amount of not exceeding 10 percent of the issued share capital of the Company for the time being. This authority unless revoked or varied at a general meeting, will expire at the next Annual General Meeting. 6. Resolutions pertaining to the Recurrent Related Party Transactions. For Ordinary Resolutions No. 7 to No. 9, the detailed text and rationale for the Recurrent Related Party Transactions are contained in the Company s Circular to Shareholders dated 5 May, 2003 which is despatched together with this Notice and the Company s Annual Report AMTEL HOLDINGS BERHAD annual report

7 STATEMENT ACCOMPANYING NOTICE OF THE SIXTH ANNUAL GENERAL MEETING (pursuant to Paragraph 8.28(8) of the Listing Requirements of the Kuala Lumpur Stock Exchange) 1. Names of Directors who are standing for re-election a) Dato Abdul Hamid bin Hj. Md. Zainuddin b) Mr. Ng Ah Chong 2. Details of attendance of Directors at board meetings Six (6) board meetings were held during the financial year ended 30 November, Details of attendance of Directors at the aforesaid board meetings are as follows:- Name Attendance (Nos. of meetings) Dato Abdul Hamid bin Hj. Md. Zainuddin 6 YM. Tunku Dato Seri Kamel bin Tunku Rijaludin 6 Mr. Koid Hun Kian 6 Mr. Ng Ah Chong 6 Mr. Siow Hock Lee 6 Mr. Goh Hock Hai 6 Ms. Ng Lee Fang (alternate to Mr. Ng Ah Chong) 3 3. Date, Time and Place of the Annual General Meeting Date : Wednesday, 28 May, 2003 Time : a.m. Venue : The Pan Pacific Glenmarie 1 Jalan Usahawan U1/8, Seksyen U1, Shah Alam, Selangor Darul Ehsan. 4. Further details of Directors who are standing for re-election The details of the two Directors seeking re-election are set out in the Profile of Directors of the Annual Report 2002 in pages 9 to 11 whilst their shareholdings in the Company are presented in the Directors Shareholdings in page 84 of the same Annual Report. 5. No individual (other than the abovementioned Directors) is seeking election or re-election as a Director at the 6th Annual General Meeting of the Company. AMTEL HOLDINGS BERHAD annual report

8 CORPORATE INFORMATION Board of Directors Dato Abdul Hamid bin Hj. Md. Zainuddin Executive Chairman Mr. Koid Hun Kian Managing Director YM. Tunku Dato Seri Kamel bin Tunku Rijaludin Mr. Ng Ah Chong Mr. Siow Hock Lee Mr. Goh Hock Hai Ms. Ng Lee Fang (Alternate Director to Mr. Ng Ah Chong ) Audit Committee YM. Tunku Dato Seri Kamel bin Tunku Rijaludin Independent Non-Executive Director / Chairman of the Committee Mr. Siow Hock Lee Independent Non-Executive Director/Member Mr. Koid Hun Kian Managing Director/Member Company Secretaries Ms. Chia Moh Mui (MIA 1886/MAICSA ) Ms. Hoh Yit Foong (LS 0018) Auditors Moore Stephens 8A, Jalan Sri Semantan Satu Damansara Heights Kuala Lumpur Tel : (603) Fax : (603) Registered Office No. 5, Jalan PJS 7/19 Bandar Sunway Petaling Jaya Selangor Darul Ehsan Tel : (603) Fax : (603) Share Registrars PFA Registration Services Sdn Bhd 1301, Level 13 Uptown 1 No. 1, Jalan SS21/58 Damansara Uptown Petaling Jaya Selangor Darul Ehsan Tel : (603) Fax : (603) Stock Exchange Listing The Kuala Lumpur Stock Exchange (Second Board) AMTEL HOLDINGS BERHAD annual report

9 PROFILE OF DIRECTORS DATO ABDUL HAMID BIN HJ. MD. ZAINUDDIN (Executive Chairman) Y Bhg Dato Abdul Hamid bin Hj. Md. Zainuddin, a Malaysian aged 67, is the Executive Chairman of Amtel Holdings Berhad ("the Company"). He was first appointed to the Board on 31 July, He is a major shareholder of the Company. He is an active Bumiputra investor and entrepreneur with equity participation in some local and overseas businesses in property development, manufacturing of electronic components and transportation services. He sits on the Board of several private companies unrelated to the Company and he is also a director of Bina GoodYear Berhad, a public company listed on the Second Board of the Kuala Lumpur Stock Exchange. He does not have any conflict of interest with the Company and has not been convicted of any offence in the past ten years. He attended all six of the meetings of the Board held during the financial year ended 30 November, YM. TUNKU DATO SERI KAMEL BIN TUNKU RIJALUDIN (Independent Non-Executive Director) YM. Tunku Dato Seri Kamel bin Tunku Rijaludin, a Malaysian aged 48, is an Independent and Non- Executive Director of Amtel Holdings Berhad ("the Company"). He was first appointed to the Board on 31 July, He is also the Chairman of the Audit Committee and a member of the Nomination and Remuneration Committees. Tunku Dato Seri Kamel graduated with a Bachelor of Science (Honours) degree and a Master in Business Administration from University of Tennessee, Knoxville, United State of America in 1977 and 1980 respectively. He began his career in Sycip Gorres and Velayors Kassim Chan Sdn Bhd, a management consultancy firm, as a management consultant in In 1983, he joined Kedah Cement Sdn Bhd, a company involved in the manufacturing and sale of cement, clinker and related products, as the International Sales Manager. In 1989, he joined Asli Jardine Insurance Brokers Sdn Bhd, an insurance broking company, as the Principal Officer and Director. In 1990, he joined Dagang Net Technologies Sdn Bhd, an information technology company and is currently the Chairman of the company. He is also a Director and Chairman of Fourseason (Malaysia) Berhad. He does not have any conflict of interest with the Company and has not been convicted of any offence in the past ten years. He attended all six of the meetings of the Board held during the financial year ended 30 November, KOID HUN KIAN (Managing Director) Mr. Koid Hun Kian, a Malaysian aged 47, is the Managing Director of Amtel Holdings Berhad ("the Company"). He was first appointed to the Board on 31 July, 1997 and is a member of the Audit Committee and Remuneration Committee. He is a major shareholder of the Company. Mr. Koid is an accountant by profession, having qualified as a member of the Association of Chartered Certified Accountants (United Kingdom) since 1985 and he is a member of Malaysian Institute of Accountants. He has wide experience in audit, telecommunications and cables manufacturing industries. Prior to joining the Company, he was attached to various public accounting firms from 1983 to In 1986, he joined FCW Industries Sdn Bhd, a company involved in investment holding, management services and the trading of telecommunications equipment, where he was the general manager and Director until He does not have any conflict of interest with the Company and has not been convicted of any offence in the past ten years. He attended all six of the meetings of the Board held during the financial year ended 30 November, AMTEL HOLDINGS BERHAD annual report

10 NG AH CHONG (Director) Mr. Ng Ah Chong, a Malaysian aged 59, is a Director of Amtel Holdings Berhad ("the Company") and a major shareholder of the Company. He was appointed as a Director of the Company on 31 July, Mr. Ng holds directorships in various subsidiary companies of the Group and oversees the operations of these subsidiaries. He has extensive experience in the telecommunications sector with more than 20 years experience as a works contractor. He also has experience in civil and construction works. He does not have any conflict of interest with the Company and has not been convicted of any offence in the past ten years. He attended all six meetings of the Board held during the financial year ended 30 November, SIOW HOCK LEE (Independent Non-Executive Director) Mr. Siow Hock Lee, a Malaysian aged 47, is an Independent and Non-Executive Director of Amtel Holdings Berhad ("the Company"). He has been a Director of the Company since its incorporation on 9 November, He is a member of the Association of Chartered Certified Accountants (United Kingdom) and Malaysian Institute of Accountants since 1985 and 1986 respectively. Mr. Siow was attached with various public accounting firms since 1976 before he started his own accounting practice under the name of Messrs. SC Associates in Mr. Siow is a member of the Audit Committee and Nomination and Remuneration Committees. He does not have any conflict of interest with the Company and has not been convicted of any offence in the past ten years. He attended all six of the meetings of the Board held during the financial year ended 30 November, GOH HOCK HAI (Director) Mr. Goh Hock Hai, a Malaysian aged 52, is a Director of Amtel Holdings Berhad ("the Company"). He was appointed to the Board on 2 February, Mr. Goh is a businessman involved in the forwarding and transportation sector as well as trading and manufacturing of industrial and food products since He holds several directorships in private limited companies in Malaysia and Singapore. Mr. Goh is a member of the Nomination Committee. He does not have any conflict of interest with the Company and has not been convicted of any offence in the past ten years. He attended all six meetings of the Board held during the financial year ended 30 November, AMTEL HOLDINGS BERHAD annual report

11 NG LEE FANG (Alternate Director) Ms. Ng Lee Fang, a Malaysian aged 29, is an Alternate Director of Amtel Holdings Berhad ("the Company"). She was appointed on 2 February, 2001 as Alternate Director to Mr. Ng Ah Chong. She holds a Bachelor of Science in Economics from the London School of Economics and is a Chartered Financial Analyst since Ms. Ng is currently a senior investment analyst with Straits-G.K. Goh Research Sdn Bhd. She has more than eight years of experience as an investment analyst in Malaysia. Prior to joining Straits-G.K. Goh Research Sdn Bhd, she worked in Hwang-DBS Securities Sdn Bhd, Peregine Research Malaysia, Affin-UOB Securities Berhad and G.K. Goh Research Pte Ltd. Ms. Ng is the daughter of Mr. Ng Ah Chong and she has no conflict of interest with the Company. She has not been convicted of any offence during the past ten years. She attended three out of the six Board meetings held during the financial year ended 30 November, AMTEL HOLDINGS BERHAD annual report

12 STATEMENT OF CORPORATE GOVERNANCE THE CODE In March 2000, the Finance Committee on Corporate Governance issued the Malaysian Code on Corporate Governance ("the Code"). The Code sets out principles and best practices on structures and processes that companies may use in their operations towards achieving the optimal governance framework. BOARD OF DIRECTORS COMMITMENT The Board of Directors ("the Board") of the Company is fully committed to the principles of Corporate Governance in the Code. The Board is pleased to report that various affirmative measures have been implemented to comply with the Principles in Part 1 of the Code. The Company has made meaningful progress on the full compliance with the Best Practice as Recommended in Part 2 of the Code. 1) THE BOARD OF DIRECTORS a) Composition of the Board The Board currently has six substantive members and one Alternate Director. Of the six, there are three Executive Directors, two Independent Non-Executive Directors and one Non-Independent Non-Executive Director. The Board has the overall responsibility for corporate governance, strategic direction, formulation of policies and overseeing the investments and operations of the Group. The roles of Chairman and Managing Director are distinct and separate with responsibilities clearly drawn out to ensure a balance of power and authority. The Chairman is responsible for ensuring Board effectiveness and conduct while the Managing Director has overall responsibilities over the operating units, organizational effectiveness and implementation of Board policies and decisions. b) Board Meetings and Supply of Information The Board meets at least once every quarter. Additional Special Meetings of the Board are held as and when required. During the financial year, six meetings were held and the attendance of the Directors at Board Meetings are as follows: - Directors Attendance of meeting Dato Abdul Hamid bin Hj. Md. Zainuddin 6 Mr. Koid Hun Kian 6 YM. Tunku Dato Seri Kamel bin Tunku Rijaludin 6 Mr. Ng Ah Chong 6 Mr. Siow Hock Lee 6 Mr. Goh Hock Hai 6 Ms. Ng Lee Fang (Alternate Director to Mr Ng Ah Chong) 3 In order to discharge their duties effectively and efficiently, the Directors are provided with full and timely written reports and supporting information prior to Board meetings and are free to seek any further information they consider necessary. Board reports and papers include information on major investment, financial, operational and corporate matters as well as the activities and performance of the Group. AMTEL HOLDINGS BERHAD annual report

13 Where necessary the Directors may obtain independent professional advice in the furtherance of their duties, at the Company s expense. All Directors have access to the advice and services of the Company Secretaries in carrying out their duties. c) Appointment to the Board The Code endorses as good practice, a formal procedure for appointments to the Board. Accordingly, the Board has given the approval for the formation of a Nomination Committee on 17 July, The Nomination Committee comprises: i) YM. Tunku Dato Seri Kamel bin Tunku Rijaludin (Non-Executive Independent Director); ii) Mr. Siow Hock Lee (Non-Executive Independent Director); and iii) Mr. Goh Hock Hai (Non-Executive Non-Independent Director). The Terms of Reference of the Nomination Committee shall be: To recommend to the Board, candidates for all directorships; To consider, in making its recommendation, candidate for directorships proposed by the Managing Director, within the bounds of practicability, by any other senior executive or any Director or shareholder; and To assist the Board in reviewing and assessment of effectiveness of the Board as a whole and the committees of the Board. d) Retirement and Re-election of Directors In accordance with the Company s Memorandum and Articles of Association, one-third of the Directors shall retire from office at each Annual General Meeting and they could offer themselves for re-election. Directors who are appointed by the Board are eligible for election by the shareholders at the next Annual General Meeting held following their appointments. e) Directors Training All Directors have attended the Mandatory Accreditation Programme recognised by Research Institute of Investment Analysis Malaysia in accordance with the Kuala Lumpur Stock Exchange ( KLSE ) Listing Requirements. f) Remuneration of Directors The Board adopted the policy recommended by the Code. The Board ensures that the level of remuneration is sufficient to attract and retain Directors needed to run the Company successfully. The component part of remuneration have been structured to link rewards to corporate and individual performance for Executive Directors whilst the Non-Executive Directors remuneration reflect the experience and level of responsibilities undertaken by individual Non-Executive Directors. AMTEL HOLDINGS BERHAD annual report

14 The Board has given the approval for the formation of a Remuneration Committee on 17 July, The Remuneration Committee comprises: i) YM. Tunku Dato Seri Kamel bin Tunku Rijaludin (Non-Executive Independent Director); ii) Mr. Siow Hock Lee (Non-Executive Independent Director); and iii) Mr. Koid Hun Kian (Group Managing Director). The Terms and Reference of the Remuneration Committee shall be as follows:- To recommend to the Board the remuneration of the Executive Directors in all its forms, drawing from outside advice if necessary; and To carry out any other responsibilities and functions as may be delegated or defined by the Board from time to time. The Board, as a whole, determines the remuneration of each Director and the Directors do not participate in decisions regarding their own remuneration packages. The annual fees payable to the Directors is subject to the shareholders approval at the Annual General Meeting. The levels of remuneration for Non-Executive Directors reflect the experience and level of responsibilities undertaken by them. The remuneration of the Directors of the Company for the financial year ended 30 November, 2002 are as follows: - Executive Directors (RM 000) Non-Executive Directors (RM 000) Fees Remuneration Other Emoluments 25 - Benefits-in-kind 32 - Total The number of Directors who received fees and remuneration for the financial year ended 30 November, 2002 falls in each successive band of RM50,000/- are as follows: - Executive Directors Non-Executive Directors Below RM50,000-3 RM50,001 to RM100, RM100,001 to RM200, Total 3 3 AMTEL HOLDINGS BERHAD annual report

15 2) RELATIONSHIP AND COMMUNICATIONS WITH SHAREHOLDERS AND INVESTORS The Board acknowledges the need for the shareholders and investors to be informed of material business and relevant matters to the Group. This is achieved through announcements via the KLSE LINK, annual reports and circular to shareholders. The Annual General Meeting represents the principal forum for dialogue and interaction with all shareholders. At each Annual General Meeting, the Board presents the progress and performance of the Group s business and encourages shareholders to participate in the question and answer session. 3) ACCOUNTABILITY AND AUDIT a) Financial Reporting The Board assisted by the Audit Committee, ensures that the accounts and the other financial reports of the Company are prepared in accordance with approved accounting standards and aims to present a balanced and understandable assessment of the Group s financial position and prospects in all its financial reports. b) Internal Controls The Board acknowledges the overall responsibility to maintain a sound system of internal controls to safeguard the Group s assets and consequently, the shareholders investment in the Company. However, such systems can only provide reasonable and not absolute assurance against material misstatements or losses. The Audit Committee was formed in 1 August, 1997 whilst the Internal Audit Department was established in September 2002, which reports directly to the Audit Committee and assists the Board to undertake regular and systematic reviews of the systems of internal controls. The scope of Internal Audit covers the audit of all units and operations, including the review of adequacy of operational controls, compliance with law and regulations and the management of assets. c) External Auditors The appointments of the external auditors are recommended by the Audit Committee, which determines the remuneration of the external auditors. Through the Audit Committee, the Group has established a transparent and appropriate relationship with the Group s external auditors. An Audit Committee Report and the terms of reference are set out on pages 22 to 23. 4) DIRECTOR S RESPONSIBILITY STATEMENT The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which have been made out in accordance with the applicable approved accounting standards and give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results of the operations, charges in equity and cash flows of the Group and of the Company for the financial year. AMTEL HOLDINGS BERHAD annual report

16 In preparing the financial statements, the Directors have adopted appropriate accounting policies that are consistently applied and supported by reasonable as well as prudent judgements and estimates, and that all accounting standards which they consider applicable have been followed during the preparation of the financial statements. The Directors have responsibility for ensuring that the Company keeps proper accounting records which disclose with reasonable accuracy the financial position of the Group and of the Company and which enable them to ensure that the financial statements comply with the Companies Act, The Directors are also responsible for the assets of the Group and of the Company and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities. 5) MATERIAL CONTRACTS INVOLVING DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTERESTS Profit Guarantee and Stakeholders Agreement dated 14 October, 1997 and Supplemental Agreement dated 20 July, 2000 between the Company, the Guarantors* and Commerce International Merchant Bankers Berhad as stakeholder. (*Guarantors are Dato Abdul Hamid bin Hj. Md. Zainuddin, Mr. Koid Hun Kian, Mr. Ng Ah Chong who are the Directors and substantial shareholders of the Company and Simfoni Kilat Sdn. Bhd. which is a substantial shareholder of the Company). 6) OTHER INFORMATION a) Share Buybacks During the financial year, there were no share buybacks by the Company. b) Issue of Shares The shareholders of the Company at the Extraordinary General Meeting ("EGM") held on 28 May, 2002 approved the Bonus Issue of 10,466,667 new ordinary shares of RM1/- each in the Company on the basis of one (1) new ordinary share of RM1/- each for every three (3) existing ordinary shares held. On 5 August, 2002, the Company increased its issued and paid up shares from 31,400,000 ordinary shares to 41,866,667 ordinary shares of RM1/- by a Bonus Issue of 10,466,667 new ordinary shares of RM1/- each on the basis of one (1) new ordinary share for every three (3) existing ordinary shares held. The purpose of the Bonus Issue was to enable the Company to meet the minimum issued and paid-up share capital requirements of at least RM40 million for companies listed on the Second Board of the Kuala Lumpur Stock Exchange. AMTEL HOLDINGS BERHAD annual report

17 This Bonus Issue has been effected by the capitalisation of the Company s Capital Redemption Reserve of RM600,000/- and Share Premium Account of RM9,866,667/-. c) Option, Warrants or Convertibles Securities The Company did not issue any option, warrants or convertible securities during the financial year. d) American Depository Receipts ("ADR") or Global Depository Receipts ("GBR") During the financial year, the Company did not sponsor any ADR or GDR programme. e) Imposition of Sanctions/Penalties There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies. f) Non-Audit Fee There were no non-audit fees paid to external auditors during the financial year. g) Variation in Results There is no material variance between the results for the financial year and the unaudited results previously announced. The Company did not make any release on the profit estimate, forecast or projections for the financial year. h) Profit Guarantee Pursuant to the Supplement Agreement to Profit Guarantee and Stakeholder s Agreement entered into between the guarantors namely, Dato Abdul Hamid bin Hj. Md. Zainuddin, Koid Hun Kian, Ng Ah Chong and Simfoni Kilat Sdn. Bhd., the stakeholder, namely Commerce International Merchant Bankers Berhad, and the Company on 20 July, 2000, the guarantors have guaranteed a consolidated profit before taxation but after minority interest ( PBTAMI") of RM3,233,800/- for the financial year ended 30 November, Based on the PBTAMI for the financial year ended 30 November, 2002 of RM2,902,628/- and the excess of PBTAMI over the guaranteed profit for the financial year ended 30 November, 2001 of RM394,991/- which is to be aggregated with the PBTAMI for the financial year ended 30 November, 2002 in determining the achievability of the guarantee profit for the said financial year as provided by the Supplement Agreement to the Profit Guarantee and Stakeholder s Agreement, the said guaranteed profit had been met. i) Recurrent Related Party Transactions Save as disclosed below, there are no transactions of the Company and/or its subsidiaries which involve the Directors or substantial shareholders of the Company and/or subsidiaries during the financial year ended 30 November, 2002: AMTEL HOLDINGS BERHAD annual report

18 Transaction Value Company in for the Financial the Amtel Group Interested Year Ended 30 Involved Related Party Related Party Nature of Transaction November, 2002 (RM 000) Topweb Sdn. Bhd. Widenet Distributor Chang Chee Seng* Provision of rental services 13 ( "TWSB") Sdn. Bhd. ("WDSB") Cross purchases of different 19 telecommunication products for trading and distribution Cross selling of different 56 telecommunication products for trading and distribution 88 Topweb Sdn. Bhd. J-Pos Sdn. Bhd. Chang Chee Seng** Cross purchases of different 222 ( J-Pos ) telecommunication products for trading and distribution Cross selling of different 1,320 telecommunication products for trading and distribution Amtel Industries Koid Hung Kuan Koid Hun Kian*** Consultancy fee 30 Sdn. Bhd. ( AISB ) * Mr. Chang Chee Seng is a Director of TWSB and WDSB. He is also a substantial shareholder of TWSB and WDSB by virtue of his 49.75% and 100% equity interest in TWSB and WDSB respectively. His spouse, Mdm. Lim Saw Kheng, also has direct shareholdings of 13,333 shares in the Company. ** Mr. Chang Chee Seng is a Director and substantial shareholder of TWSB by virtue of his 49.75% equity interest in TWSB. J-Pos is a 99.99% owned subsidiary of TWSB. He is deemed a substantial shareholder of J-Pos by virtue of his indirect equity interest of 99.99% in this company held through TWSB. *** Mr. Koid Hun Kian is the Managing Director and substantial shareholder of the Company. He is also a Director of AISB. Mr. Koid Hun Kian has a direct equity interest of 10.69% in the Company, which in turn holds 100% equity interest in AISB. Mr. Koid Hung Kuan is the brother of Mr. Koid Hun Kian. The Directors confirmed that the recurrent related party transactions were conducted at arm s length on commercial terms based on prevailing market prices which are not more favourable to the Related Parties than those extended to the general public and are not the detriment of the minority shareholders. j) Revaluation of Landed Properties The Company does not have a revaluation policy on landed properties. AMTEL HOLDINGS BERHAD annual report

19 CHAIRMAN S STATEMENT It gives me great pleasure to present, on behalf of the Board of Directors, the Annual Report and Financial Statements of the Company and Group for the financial year ended 30 November, INDUSTRY OVERVIEW The recovery of the Malaysian economy gained momentum in 2002 with real gross domestic product (GDP) expanding by 4.2% (2001 : 0.4%). Economic growth was broad based, with the main impetus emanating from the services and manufacturing sectors. The favourable growth was attributed to the continued expansion in both domestic demand and exports and the strong underlying fundamentals in the economy which was supported by the continuing fiscal and monetary policies adopted by the Government. Malaysia also benefited from some diversion of foreign investment flows, particularly through outsourcing and relocation exercises as well as the setting up of various types of regional centres by several MNCs. TELECOMMUNICATIONS INDUSTRY The telecommunications industry worldwide has seen growing deregulation and privatisation of stateowned entities. This trend is not unique to Malaysia. Over the past few years, the Malaysian government has called for telecommunication companies to join forces and merge in order to provide a more efficient and competitive front. Arising from this, we have witnessed Malaysia s telecommunication players undergo an intense phase of consolidation in The telecommunication sector is expected to register an average annual sales growth of 10%. The number of cellular phone subscribers is expected to hit 9 million by the end of 2003 as compared to 7.5 million in Moving forward, analysts agree that pre-paid will have the louder ring. Prices of pre-paid starter packs have also reduce significantly. This has led to a drastic increase in the number of pre-paid subscribers over the past two years. TIMBER INDUSTRY The export-oriented wood-based sector continues to be amongst the most dynamic sectors in manufacturing. In 2001, Malaysia exported RM14.3 billion worth of timber products worldwide. The current world economic situation, in particular the softening of the US, European Union (EU) and Japanese economy, the immense competition from lower cost producers such as China and Vietnam, and the increasing demand for certified timbers from environment-sensitive markets invariably will have an impact on the performance of our timber industry. On this note, Malaysia has made significant progress in promoting our timber products in the international front. For example, although Malaysia s overall exports to the EU declined by 18.3% in 2001, in contrast, Malaysia s exports to non-traditional markets in Europe recorded an increase of 13.4%. And with the launching of our national timber certification scheme soon, we hope to assuage any lingering concerns of our overseas buyers that they may have on the issue of sustainability of our forests. AMTEL HOLDINGS BERHAD annual report

20 FINANCIAL RESULTS For the year ended 30 November, 2002, the Group achieved a profit before tax of RM2.977 million as compared to RM3.915 million. As at 30 November, 2002, the Group s shareholders funds stood at RM million, an increase of RM1.904 million from the RM million recorded in the previous year. REVIEW OF PERFORMANCE Despite recording a lower Group turnover, the performance for 2002 has been encouraging, showing signs of advancement in many aspects. Operating expenses in 2002 had been slashed by as much as 35.6% and finance cost down 29% against a drop of 11.3% in the Group s turnover. Profits contributed by associated companies rose from RM78,000 to RM2.196 million in Had it not been for the exceptional gain of RM3.053 million derived from the disposal of subsidiary company in 2001, the profit for 2002 would have shown improvement from the preceding year. (a) Trading & Distribution At RM million, the trading and distribution division once again contributes in excess of 80% of the Group s turnover. Operating profit improved to RM2.232 million despite a drop of 14.2% in turnover, attributable partly from the Management s swift actions in implementing effective cost control measures. (b) Manufacturing and Services After recording losses for two consecutive years, Management s relentless effort to turnaround this division finally paid off. Operating results jumped from a loss of RM1.500 million to a profit position of RM63,000 in 2002 on the back of improved turnover of RM8.485 million. The division s share of the pre-tax profits from associated companies also recorded credible improvement from RM119,000 to RM2.096 million in Management believes there are still good opportunities for the Group to benefit from and will continue to place much emphasis in this division. In fact, expansion programs have already been implemented in 2002 in anticipation of increased activities from this division and its associated companies. (c) Infrastructure and Projects Turnover contracted by almost 20% to RM7.344 million as compared to RM9.156 million in However, Management s cautious approach in selecting projects enabled the division to turn in better operating profit at RM718,000 compared to RM237,000 previously. DIVIDEND The Board is not recommending any dividend for the financial year ended 30 November, AMTEL HOLDINGS BERHAD annual report

21 PROSPECTS The year 2003 is expected to remain difficult and competitive. The Malaysian economy and global outlook continues to be affected by the geopolitical and economic uncertainties and the adverse impact of US-led invasion on Iraq. Going forward, the Group will continue to focus on its current business through improved operational efficiency and cost control. Barring any unforeseen circumstances, the Group will continue to perform satisfactorily for the ensuing year. APPRECIATION On behalf of the Board, I would like to extend our gratitude and appreciation to our employees at all levels for their dedicated services and invaluable contribution to the Group. To our shareholders, valued customers, suppliers, bankers, consultants and the relevant authorities, I convey our sincere thanks for their continued support and confidence in the Group. DATO ABDUL HAMID BIN HJ. MD. ZAINUDDIN Executive Chairman 28 March, 2003 AMTEL HOLDINGS BERHAD annual report

22 AUDIT COMMITTEE COMPOSITION The Audit Committee ("the Committee") of Amtel Holdings Berhad ("the Company") was established on 1 August, The Committee presently comprises the following members: - YM. Tunku Dato Seri Kamel bin Tunku Rijaludin Chairman of the Committee/Independent Non-Executive Director Mr. Siow Hock Lee Member of the Committee/Independent Non-Executive Director* Mr. Koid Hun Kian Member of the Committee/Managing Director* *member of Malaysian Institute of Accountants MEETINGS The Committee held five meetings during the financial year ended 30 November, 2002 with all members of the Committee present at all these five meetings. TERMS OF REFERENCE I. Membership The Committee shall be appointed by the Board of Directors of the Company ("the Board") from among their members and shall comprise not less than three members, the majority of which must be independent and non-executive directors and must not be substantial shareholders, and be free from any relationships that in the opinion of the Board, may interfere with the exercise of independent judgement in carrying out the functions of the Audit Committee. At least one member of the Committee must be a member of Malaysian Institute of Accountants or posses equivalent qualifications recognised under the Accountants Act, No alternate director shall be appointed to the Committee. The Committee shall elect a chairman from among their number who shall be an independent director. The Board shall review the term of office and performance of the Committee and each of its members at least once every three years. II. Meetings The Committee shall meet not less than four times during each financial year with a quorum of at least two members who must be independent directors. Any member of the Committee, the Company s Chief Executive or the external auditors of the Company may request for a meeting of the Committee to be held if they consider it necessary. The Secretary of the Company or her representative shall act as secretary of the Committee. AMTEL HOLDINGS BERHAD annual report

23 III. Authority The Committee shall be authorised by the Board to perform and investigate any activity within its Terms of Reference and the Committee shall be empowered to obtain any information from the Company and/or its employees and to procure any professional and independent advice as may be necessary, in order to fulfill its responsibilities. IV. Functions To review with the auditors, the audit plan; To review with the auditors, their audit report and evaluation of the internal system of accounting controls; To review the assistance given by the employees of the Group to the auditors; To review the accounting policies adopted and any changes in accounting principles or practices; To review the internal audit functions and the effectiveness and quality of the management information systems and other systems of accounting controls within the Group; To review the compliance with accounting standards and requirements of the Stock Exchange; To review the quarterly results and year end financial statements prior to the approval of the Board; To review any related party transactions and conflict of interests situation that may arise within the Group; To consider and/or recommend the appointment of the external auditors and their remuneration and any issue arising from their resignation or dismissal; and To undertake any other functions as may be agreed between the Committee and the Board. SUMMARY OF ACTIVITIES During the financial year, the Committee has conducted its activities in accordance with its Terms of Reference. Apart from quarterly meetings to review the Quarterly Results, members of the Committee also met with the external auditors to discuss the scope of audit, the audit plan and review the audit reports and recommendations. The Committee also held meetings with members of the Management team to discuss and review the internal control policies and financial records of the Group and accounting issues to ensure compliance with the accounting standards issued by the Malaysian Accounting Standard Board. INTERNAL AUDIT FUNCTION In the discharge of its duties, the Audit Committee of the Company is supported by the Internal Auditors. The Internal Audit Department was formally established in September The Internal Auditors have conducted internal audits of financial and operational matters of the Group. A summary of the activities of the Internal Audit is set out under the Statement of Internal Control. Due to their independence, the Internal Auditors are able to undertake investigations on operational inefficiency and ineffectiveness within the Group. Such monitoring enable the Group to maintain and enhance the integrity and effectiveness of the Group s system of internal control. AMTEL HOLDINGS BERHAD annual report

24 STATEMENT OF INTERNAL CONTROL INTRODUCTION The Board of Directors is committed to maintain a sound system of internal control in the Group and is pleased to provide the following Statement of Internal Control in the Group which outlines the nature and scope of internal control of the Group during the year pursuant to paragraph 15.27(b) of the Kuala Lumpur Stock Exchange Listing Requirements. To this end, the Board of Directors also ensures that the external auditors review the Statement of Internal Control and report the results thereof to the Board of Directors annually. BOARD RESPONSIBILITY The Board of Directors acknowledges the importance of sound internal controls and risk management practices to good corporate governance. The Board affirms its overall responsibility for the Group s systems of internal controls and risk management, and for reviewing the adequacy and integrity of those systems. The system of internal control covers risk management and financial, organisational, management information system, operational and compliance controls. However, in view of the limitations that are inherent in any systems of internal control, it must be noted that these systems are designed to manage and not eliminate risk of failure in meeting business objectives. In other words, the internal control can only provide reasonable and not absolute assurance against material mismanagement or loss. The associated companies have not been dealt with as part of the Group for the purpose of this statement. INTERNAL AUDIT An Internal Audit Department was established in September 2002 with 3 main objectives: - To ensure that the management of the Company maintains a sound system of internal controls to safeguard the Company s assets and the investment of shareholders; To ensure the quality, integrity and adequacy of the accounting, financial reporting and systems of internal controls of the Company; and To provide reasonable but not absolute assurance against the risk of material misstatements in the financial statements of the Company. The duties of the Internal Auditor are as follows:- To audit all business units and operations, including the following: - Review of the adequacy of operational controls; Management of Company s assets; and Quality of management information systems and other systems of accounting controls within the Group. AMTEL HOLDINGS BERHAD annual report

25 To provide timely and accurate information to the Audit Committee covering the financial performance of all business units and the Group as a whole; To carry out regular visits to operating units which aims to monitor compliance with procedures and controls and assess the integrity of financial information; To conduct investigations with regard to specific areas of concern as requested by the Audit Committee and the Management; To document the internal policies and procedures of all business units of the Group and set up a series of Standard Manuals, which will be subject to regular review and improvement. Any lack of conformity together with the comments from Operations Heads will be noted in Internal Audit reports, which are to be distributed to the Audit Committee. Internal Audit Reports are to be tabled at Audit Committee Meetings for its review and subsequent recommendation to the Board. RISK ASSESSMENT The Board confirms that the Group is in the progress of developing and formalising an appropriate risk assessment covering the identification, evaluation and management of risks for the Group to ensure that all significant risks are adequately managed at various levels within the Group. This would involve establishing procedures for reporting and monitoring of risks and controls. The process will be regularly reviewed by the Board and shall be in accordance with the guidelines as contained in the publication, Statement on Internal Control: Guidance for Directors of Public Listed Companies. These initiatives will ensure that the Group has a formalised ongoing process in place to measure the significant risks affecting the achievement of its business objectives. KEY ELEMENTS OF INTERNAL CONTROLS The key elements of the Group s internal control systems are described below: - Clearly defined delegation of responsibilities to committees of the Board and to management of Head Office and operating units, including authorisation levels for all aspects of the business; Management meetings are carried out by the Group Managing Director together with Operations Heads and the Finance Department to identify, discuss and resolve operational, financial and key management issues. Reviews are also conducted to ensure that actual performance is in compliance with the agreed targets set by the Group Managing Director and that corrective actions are taken to rectify any discrepancies in a timely and effective manner; AMTEL HOLDINGS BERHAD annual report

26 Regular and comprehensive information provided to management, covering financial performance and key business indicators, such as average collection term given to customers, average inventory holding days and cash flow performance; Quarterly monitoring of results by the Board of Directors, with major variances being followed up and actions taken by the management, where necessary; The systems of internal controls are monitored internally by the Group Managing Director, the Finance Department together with the Internal Audit Department; Regular internal audit visits to monitor compliance with procedures and assess the integrity of financial information. CONCLUSION No significant internal control weaknesses were identified during the financial year that may have resulted in any material losses or uncertainties that would require disclosure in the Group s annual report. AMTEL HOLDINGS BERHAD annual report

27 FINANCIAL STATEMENTS Directors Report 28 ~ 34 Statement by Directors 35 Statutury Declaration 35 Report of the Auditors to the Members 36 ~ 37 Balance Sheets 38 ~ 39 Income Statements 40 Statements of Changes in Equity 41 ~ 42 Cash Flow Statements 43 ~ 45 Notes to the Financial Statements 46 ~ 81 AMTEL HOLDINGS BERHAD annual report 2002

28 DIRECTORS' REPORT The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 30 November, PRINCIPAL ACTIVITIES The principal activities of the Company are investment holding and the provision of management services. The principal activities of the subsidiary companies and associated companies are set out in note 3 and note 4 to the financial statements respectively. There have been no significant changes in the nature of these activities during the year. RESULTS GROUP RM COMPANY RM Profit/(Loss) before taxation 2,976,783) (273,815) Taxation (981,421) 11,490) Profit/(Loss) after taxation 1,995,362) (262,325) Minority interest (16,445) -) Profit/(Loss) for the year 1,978,917) (262,325) DIVIDEND No dividend has been paid or declared by the Company since the end of the previous financial year and the Directors do not recommend any dividend payment for the current financial year. RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the year other than those disclosed in the financial statements. BAD AND DOUBTFUL DEBTS Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and, the making of provisions for doubtful debts, and have satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts. At the date of this report, the Directors are not aware of any circumstances which would render the amount written off of bad debts, or the amount of provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent. AMTEL HOLDINGS BERHAD annual report

29 CURRENT ASSETS Before the income statements and the balance sheets of the Group and of the Company were made out, the Directors took reasonable steps to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise. At the date of this report, the Directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading. VALUATION METHODS At the date of this report, the Directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. CONTINGENT AND OTHER LIABILITIES At the date of this report, there does not exist:- (i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person, or (ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year. No contingent or other liability of the Group or of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group or of the Company to meet their obligations as and when they fall due. CHANGE OF CIRCUMSTANCES At the date of this report, the Directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. AMTEL HOLDINGS BERHAD annual report

30 ITEMS OF AN UNUSUAL NATURE In the opinion of the Directors:- (i) the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. (ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made. ISSUE OF SHARES During the financial year, the following issue of shares was made by the Company:- Class Number Terms of Issue Purpose of Issue Ordinary share 10,466,667 Bonus issue by way of To enable the Company to meet the of RM1/- each capitalisation of Capital minimum issued and paid-up share capital Redemption Reserve and requirement of at least RM40 million for Share Premium Account. company listed on the Second Board of the Kuala Lumpur Stock Exchange. DIRECTORS OF THE COMPANY The Directors in office since the date of the last report are as follow:- Dato' Abdul Hamid bin Hj. Md. Zainuddin Koid Hun Kian YM. Tunku Dato' Seri Kamel bin Tunku Rijaludin Ng Ah Chong Siow Hock Lee Goh Hock Hai Ng Lee Fang (Alternate Director to Ng Ah Chong) The interest of the Directors in office as at the end of the financial year in the shares of the Company and its subsidiary companies during the financial year according to the registers required to be kept under Section 134 of the Companies Act, 1965 are as follow:- AMTEL HOLDINGS BERHAD annual report

31 Interest in the Company Number of ordinary shares of RM1/- each At Bonus At Bought Issue Sold Direct interest Dato' Abdul Hamid bin Hj. Md. Zainuddin 4,940,000-1,646,666-6,586,666 Koid Hun Kian 3,357,000-1,118,999-4,475,999 Ng Ah Chong 1,090,500 1, ,000-1,456,000 Siow Hock Lee 49,000-16,333-65,333 Goh Hock Hai 10, (10,500) - Indirect interest Being shares held through a company in which the Director is deemed interested Ng Ah Chong 5,369,478-1,789,825 (315,000) 6,844,303 Other than the Directors' direct and indirect interests shown above, the Directors who have substantial interest in the shares of the Company are also deemed to have an interest in the shares of the subsidiary companies to the extent the Company has an interest. In accordance with Article 80 of the Company's Articles of Association, Dato' Abdul Hamid bin Hj. Md. Zainuddin and Mr. Ng Ah Chong retire by rotation at the forthcoming annual general meeting of the Company and, being eligible, offer themselves for re-election. DIRECTORS' BENEFITS Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by directors and the estimated value of benefit-in-kind shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest. Neither during nor at the end of the financial year, was the Company a party to any arrangement whose object is to enable the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. AMTEL HOLDINGS BERHAD annual report

32 SIGNIFICANT EVENTS (a) On 15 February, 2002, the Company applied to the Securities Commission ("SC") for a revision and extension of time for the utilisation of the remaining Listing Proceeds ("Proceeds") raised from the Rights Issue and Public Issue. On 8 March, 2002, the SC approved the Company's application as follows:- *Remaining Balance Of The Proceeds RM'000 Revised Utilisation RM'000 Research and development expenses 1,368 - Tools and mould costs Advertising and promotion expenses Working capital for production 1,445 - Infrastructure works of Amtel Communications Sdn. Bhd Purchase of prepaid cards/starter packs and manufacturing costs for starter packs by Topweb Sdn. Bhd. - 1,000 Infrastructure projects of Amtel Resources Sdn. Bhd. - 1,500 Assembly jobs by Amtel Industries Sdn. Bhd. - 1,231 General working capital - 1,000 4,731 4,731 * As approved by the SC on 6 December, 2000 in conjunction with the Listing Exercise. In the letter of approval, SC also granted the Company up to 5 September, 2002, for the revised utilisation of the remaining balance of the Proceeds. The Proceeds were fully utilised within the deadline given. (b) On 1 March, 2002, the Company via its wholly owned subsidiary company, Amtel Communications Sdn. Bhd., acquired the entire minority interest's shares in another subsidiary company, Sunrise Systems Sdn. Bhd., comprising 49 ordinary shares of RM1/- each for a cash consideration of RM49/-. (c) On 5 August, 2002, the Company increased its issued and paid-up share capital from RM31,400,000/- to RM41,866,667/- by a Bonus Issue of 10,466,667 ordinary shares of RM1/- each on the basis of one new ordinary share for every three existing ordinary shares held. The purpose of the Bonus Issue was to enable the Company to meet the minimum issued and paid-up share capital requirement of at least RM40 million for companies listed on the Second Board of the Kuala Lumpur Stock Exchange. This Bonus Issue has been effected by the capitalisation of the Company's Capital Redemption Reserve of RM600,000/- and Share Premium Account of RM9,866,667/-. AMTEL HOLDINGS BERHAD annual report

33 (d) On 23 November, 2001, the Company via its wholly owned subsidiary company, Amtel Group Sdn. Bhd. ("AGSB") entered into a sale and purchase agreement with Cellstar Pacific Pte. Ltd. to acquire 1,320,000 ordinary shares of RM1/- each equivalent to 30% equity interest in Cellstar Amtel Sdn. Bhd. ("CASB") for a cash consideration of RM5/-. This transaction was completed on 29 July, With the completion of the agreement, CASB became a wholly owned subsidiary company of AGSB and on 4 September, 2002, its name was changed to Amtel Cellular Sdn. Bhd.. (e) On 1 August, 2002, J-Pos Sdn. Bhd. ("J-Pos") made an allotment of 49,998 ordinary shares of RM1/- each at par for cash to Topweb Sdn. Bhd. ("TWSB") which resulted in TWSB holding 99.99% equity interest in J-Pos. Prior to the allotment, J-Pos had an issued and paid-up share capital of RM2/- comprising 2 ordinary shares of RM1/- each held by AGSB. (f) On 25 October, 2002, the Company via its wholly owned subsidiary company, Amtel Industries Sdn. Bhd. entered into a sale and purchase agreement with Halgen Sdn. Bhd. to acquire a 60 years lease (expiring 7 September, 2054) over a piece of land together with industrial building erected thereon for a total cash consideration of RM1,650,000/-. (g) On 11 November, 2002, the Company via its wholly owned subsidiary company, Amtel Resources Sdn. Bhd., disposed of the entire investment in another subsidiary company, Amscope Corporation Sdn. Bhd., comprising 450,000 ordinary shares of RM1/- each for a cash consideration of RM5,400/-. (h) On 20 November, 2002, the entire equity interest in Metrarama Sdn. Bhd. comprising 2 ordinary shares of RM1/- each held by AGSB was sold to the Company, for a cash consideration of RM2/-. Subsequently on the 28 November, 2002, an additional allotment of 14,999,998 ordinary shares of RM1/- each was made by Metrarama Sdn. Bhd. to the Company satisfied by capitalisation of amount owing by Metrarama Sdn. Bhd. to the Company. PROFIT GUARANTEE Pursuant to the Supplemental Agreement to the Profit Guarantee and Stakeholder's Agreement entered into between the guarantors, namely Dato' Abdul Hamid bin Hj. Md. Zainuddin, Koid Hun Kian, Ng Ah Chong and Simfoni Kilat Sdn. Bhd., the stakeholder, namely Commerce International Merchant Bankers Berhad, and the Company on 20 July, 2000, the guarantors have guaranteed a consolidated profit before taxation but after minority interest of RM3,233,800/- for the financial year ended 30 November, Based on the consolidated profit before taxation but after minority interest ("PBTAMI") for the financial year ended 30 November, 2002 of RM2,902,628/- and the excess of PBTAMI over the guaranteed profit for the financial year ended 30 November, 2001 of RM394,991/- which is to be aggregated with the PBTAMI for the financial year ended 30 November, 2002 in determining the achievability of the guaranteed profit for the said financial year as provided by the Supplemental Agreement to the Profit Guarantee and Stakeholder's Agreement, the said guaranteed profit had been met. AMTEL HOLDINGS BERHAD annual report

34 AUDITORS The auditors, Messrs. Moore Stephens, have expressed their willingness to continue in office. On Behalf of the Board Dato' Abdul Hamid bin Hj. Md. Zainuddin Koid Hun Kian PETALING JAYA Date: 18 MARCH, 2003 AMTEL HOLDINGS BERHAD annual report

35 STATEMENT BY DIRECTORS We, the undersigned, being two of the Directors of the Company, do hereby state that in the opinion of the Directors, the accompanying financial statements as set out on pages 38 to 81, are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 November, 2002 and of the results of the operations, changes in equity and the cash flows of the Group and of the Company for the year ended on that date. On Behalf of the Board Dato' Abdul Hamid bin Hj. Md. Zainuddin Koid Hun Kian PETALING JAYA Date: 18 MARCH, 2003 STATUTORY DECLARATION I, Yong Chee Keong, NRIC No.: , being the person primarily responsible for the financial management of the Company, do solemnly and sincerely declare that the financial statements as set out on pages 38 to 81, are to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, Subscribed and solemnly declared at Petaling Jaya in the state of Selangor Darul Ehsan this 18th day of MARCH, 2003 Before me S. Arokiasamy (B003) Yong Chee Keong Commissioner of Oaths AMTEL HOLDINGS BERHAD annual report

36 REPORT OF THE AUDITORS TO THE MEMBERS OF AMTEL HOLDINGS BERHAD We have audited the financial statements set out on pages 38 to 81. The preparation of the financial statements are the responsibility of the Company's directors. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with the approved standards on auditing in Malaysia. These standards require that we plan and perform the audit to obtain all the information and explanations, which we considered necessary to provide us with sufficient evidence to give reasonable assurance that the financial statements are free of material misstatement. Our audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. Our audit includes an assessment of the accounting principles used and significant estimates made by the Directors as well as evaluating the overall adequacy of the presentation of information in the financial statements. We believe our audit provides a reasonable basis for our opinion. In our opinion, (a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of:- (i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company; and (ii) the state of affairs of the Group and of the Company as at 30 November, 2002 and of the results of the operations, changes in equity and cash flows of the Group and of the Company for the year ended on that date; and (b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and its subsidiary companies of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act. The names of the subsidiary companies of which we have not acted as auditors are indicated in note 3 to the financial statements. We have considered the financial statements of these subsidiary companies and their auditors' reports thereon. We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company's financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations as required by us for these purposes. AMTEL HOLDINGS BERHAD annual report

37 The auditors' reports on the financial statements of the subsidiary companies were not subject to any qualification and did not include any comment made under Section 174(3) of the Companies Act, MOORE STEPHENS CHARTERED ACCOUNTANTS (AF.0282) CHONG KWONG CHIN 707/04/04 (J/PH) PARTNER KUALA LUMPUR Date: 18 MARCH, 2003 AMTEL HOLDINGS BERHAD annual report

38 BALANCE SHEETS AS AT 30 NOVEMBER, 2002 GROUP COMPANY NOTE RM RM RM RM NON-CURRENT ASSETS Property, plant and equipment 2 21,808,909 19,608, , ,231 Investment in subsidiary companies ,995,746 16,037,993 Interest in associated companies 4 9,192,023 7,516, Other investments 5 944, , ,140 51,000 Long term receivable 6 513,000 1,554, Goodwill on consolidation 7 5,416 27, ,464,201 28,965,700 31,422,914 16,357,224 CURRENT ASSETS Inventories 8 5,957,094 5,613, Trade receivables 9 15,906,286 13,941, Other receivables, deposits and prepayments 10 2,968,193 3,685,120 8, ,055 Taxation assets ,652 1,050, ,490 - Amount owing by subsidiary companies ,998,898 31,123,472 Amount owing by associated company 13 1,255,084 2,537,985 4,174 1,075 Cash on deposits with licensed banks 14 4,858,619 6,029, ,893 Cash and bank balances 2,120,472 4,274, ,594 2,168,773 33,436,400 37,132,321 20,390,680 34,671,268 CURRENT LIABILITIES Trade payables 8,668,289 8,855, Other payables and accruals 4,555,107 3,823, , ,069 Amount owing to subsidiary companies ,790,149 3,273,118 Bank borrowings - secured 15 11,878,346 13,566, Hire purchase payables , ,939 18,305 73,344 Taxation liabilities 727,930 1,529,662-75,625 26,140,341 28,108,112 4,951,718 3,765,156 NET CURRENT ASSETS 7,296,059 9,024,209 15,438,962 30,906,112 39,760,260 37,989,909 46,861,876 47,263,336 AMTEL HOLDINGS BERHAD annual report

39 BALANCE SHEETS (Cont d) GROUP COMPANY NOTE RM RM RM RM CAPITAL AND RESERVES Share capital 17 41,866,667) 31,400,000 41,866,667 31,400,000 Reserves 18 (3,971,571) 4,591,354 4,995,209 15,845,031 Shareholders' equity 37,895,096) 35,991,354 46,861,876 47,245,031 Minority interest 1,499,227) 1,558, NON-CURRENT LIABILITIES Hire purchase payables ,178) 283,702-18,305 Deferred taxation ,759) 156, ,937) 440,112-18,305 39,760,260) 37,989,909 46,861,876 47,263,336 The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. AMTEL HOLDINGS BERHAD annual report

40 INCOME STATEMENTS FOR THE YEAR ENDED 30 NOVEMBER, 2002 GROUP COMPANY NOTE RM RM RM RM OPERATING REVENUE ,056,222) 130,873,148) 511,487) 1,222,000) COST OF SALES 21 (108,410,277) (120,042,943) -) -) GROSS PROFIT 7,645,945) 10,830,205) 511,487) 1,222,000) OTHER OPERATING REVENUE 3,051,392) 8,246,135) 15,023) 1,350,118) DISTRIBUTION COSTS (1,182,359) (3,106,822) -) -) ADMINISTRATIVE COSTS (4,879,853) (6,346,014) (517,301) (603,488) OTHER OPERATING COSTS (2,712,160) (4,178,451) (268,333) (1,159,228) (8,774,372) (13,631,287) (785,634) (1,762,716) PROFIT/(LOSS) FROM OPERATIONS 1,922,965) 5,445,053) (259,124) 809,402) FINANCE COSTS (1,142,157) (1,608,824) (14,691) (67,289) 780,808) 3,836,229) (273,815) 742,113) SHARE OF ASSOCIATED COMPANIES' RESULTS 2,195,975) 78,304) -) - PROFIT/(LOSS) BEFORE TAXATION 22 2,976,783) 3,914,533) (273,815) 742,113) TAXATION 23 (981,421) (553,083) 11,490) (355,625) PROFIT/(LOSS) AFTER TAXATION 1,995,362) 3,361,450) (262,325) 386,488) MINORITY INTEREST (16,445) 91,820) -) -) PROFIT/(LOSS) FOR THE YEAR 1,978,917) 3,453,270) (262,325) 386,488) EARNINGS PER ORDINARY SHARE (SEN) ) 8.2) The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. AMTEL HOLDINGS BERHAD annual report

41 STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 NOVEMBER, 2002 GROUP RETAINED CAPITAL PROFITS/ TOTAL SHARE SHARE REDEMPTION RESERVE ON TRANSLATION (ACCUMULATED SHAREHOLDERS' CAPITAL PREMIUM RESERVE CONSOLIDATION RESERVE LOSSES) EQUITY RM RM RM RM RM RM RM At ,400,000 14,811,345) 600,000) 44,271) 719,857) (14,357,510) 33,217,963) Net profit for the year - -) -) -) -) 3,453,270) 3,453,270) Acquisition of subsidiary companies - -) -) 57,933) -) -) 57,933) Compensation by guarantors pursuant to profit guarantee - -) -) 1,750,750) -) -) 1,750,750) Amortisation during the year - -) -) (1,768,705) -) -) (1,768,705) Foreign exchange translation differences - -) -) -) 20,287) -) 20,287) Disposal of subsidiary company - -) -) -) (740,144) -) (740,144) - -) -) 39,978) (719,857) -) (679,879) At ,400,000 14,811,345) 600,000) 84,249) -) (10,904,240) 35,991,354) Net profit for the year - -) -) -) -) 1,978,917) 1,978,917) Acquisition of a subsidiary company - -) -) 91,477) -) -) 91,477) Amortisation during the year - -) -) (45,822) -) -) (45,822) - -) -) 45,655) -) -) 45,655) Capitalisation as bonus issue 10,466,667 (9,866,667) (600,000) -) -) -) -) Bonus issue expenses incurred - (120,830) -) -) -) -) (120,830) At ,866,667 4,823,848) -) 129,904) -) (8,925,323) 37,895,096) AMTEL HOLDINGS BERHAD annual report

42 STATEMENTS OF CHANGES IN EQUITY (Cont d) COMPANY RETAINED CAPITAL PROFITS/ TOTAL SHARE SHARE REDEMPTION RESERVE ON TRANSLATION (ACCUMULATED SHAREHOLDERS' CAPITAL PREMIUM RESERVE CONSOLIDATION RESERVE LOSSES) EQUITY RM RM RM RM RM RM RM At ,400,000 14,811,345) 600,000) ,198) 46,858,543) Net profit for the year - -) -) ,488) 386,488) At ,400,000 14,811,345) 600,000) ,686) 47,245,031) Net loss for the year - -) -) - - (262,325) (262,325) Capitalisation as bonus issue 10,466,667 (9,866,667) (600,000) - - -) -) Bonus issue expenses incurred - (120,830) -) - - -) (120,830) At ,866,667 4,823,848) -) ,361) 46,861,876) The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. AMTEL HOLDINGS BERHAD annual report

43 CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 NOVEMBER, 2002 GROUP COMPANY NOTE RM RM RM RM CASH FLOWS FROM OPERATING ACTIVITIES Profit/(Loss) Before Taxation 2,976,783) 3,914,533) (273,815) 742,113) Adjustments for:- Amortisation of goodwill on consolidation 21,715) 21,676) -) -) Amortisation of reserve on consolidation (45,822) (1,768,705) -) -) Bad debts written off 397,387) 65,669) -) -) Accruals no longer required -) (322,056) -) (322,056) Depreciation of property, plant and equipment 1,216,871) 2,237,158) 123,482) 378,475) Dividend revenue (7,469) (5,555) -) -) Impairment loss on quoted shares 20,721) 34,370) -) -) Loss on dilution of equity interest in subsidiary company 15,821) -) -) -) Property, plant and equipment written off 1,282) 763,034) -) 173,462) (Gain)/Loss on disposal of property, plant and equipment (338,207) 77,247) -) 4,798) Gain on disposal of quoted investments (99,768) (29,679) -) -) Gain on disposal of subsidiary company (34,651) (3,053,216) -) -) Interest expenses 1,041,921 1,488,255) 13,200) 66,321) Interest revenue (168,593) (272,623) (3,624) (24,588) Unrealised gain on foreign exchange (3,201) -) -) -) Waiver of debts 9,246) -) 13,189) -) Allowance for doubtful debts no longer required (429,112) (181,508) -) -) Allowance/(Reversal of allowance) for obsolete inventories 9,863) (861,981) -) -) Obsolete inventories written off 101,506) 144,719) -) -) Balance carried down 4,686,293) 2,251,338) (127,568) 1,018,525) AMTEL HOLDINGS BERHAD annual report

44 CASH FLOW STATEMENTS (Cont d) GROUP COMPANY NOTE RM RM RM RM Balance brought down 4,686,293) 2,251,338) (127,568) 1,018,525) Share of results of associated companies (2,195,975) (78,304) -) -) Inventories written down -) 405,477) -) -) Operating Profit/(Loss) Before Working Capital Changes 2,490,318) 2,578,511) (127,568) 1,018,525) Decrease/(Increase) in amount owing by associated company 1,282,901) 389,581) (3,099) -) (Increase)/Decrease in inventories (455,421) 13,781,614) -) -) (Increase)/Decrease in trade and other receivables (1,272,235) 14,795,958) (876) 12,647) Increase/(Decrease) in trade and other payables 547,033) (32,597,024) (199,805) (1,102,256) Cash Generated From/ (Used In) Operations 2,592,596) (1,051,360) (331,348) (71,084) Interest paid (1,041,921) (1,488,255) (13,200) (66,321) Interest received 168,593) 272,623) 3,624) 24,588) Income tax refunded 730,045) -) -) -) Income tax paid (1,333,989) (698,762) (280,625) (280,000) Net Cash Generated From/ (Used In) Operating Activities 1,115,324) (2,965,754) (621,549) (392,817) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of additional shares in subsidiary companies (54) (15) -) (2,012,500) Acquisition of a subsidiary company -) -) (2) -) Compensation recovered pursuant to profit guarantee 666,407) 4,415,830) 666,407) 4,415,830) Disposal of a subsidiary company, net of cash disposed of 25 5,374) (8,753) -) -) Dividend received 7,469) 5,555) -) -) Dividend received out of pre-acquisition profit of a subsidiary company -) -) 42,247) -) Investment in associated company -) (400,000) -) -) Proceeds from disposal of other investment 700,000) -) -) -) Proceeds from disposal of property, plant and equipment 491,112) 515,331) -) 1,700) Balance carried down 1,870,308) 4,527,948) 708,652) 2,405,030) AMTEL HOLDINGS BERHAD annual report

45 CASH FLOW STATEMENTS (Cont d) GROUP COMPANY NOTE RM RM RM RM Balance brought down 1,870,308) 4,527,948) 708,652) 2,405,030) Proceeds from disposal of quoted investments 457,790) 752,628) -) -) Purchase of property, plant and equipment 26 (3,225,353) (851,294) (15,279) (51,535) Purchase of other investments (1,764,495) (92,919) (216,140) (10,000) Net Cash (Used In)/Generated From Investing Activities (2,661,750) 4,336,363) 477,233) 2,343,495) CASH FLOWS FROM FINANCING ACTIVITIES Bonus issue expenses incurred (120,830) -) (120,830) -) Increase in amount owing by subsidiary companies -) -) (3,888,613) (2,401,649) Increase/(Decrease) in amount owing to subsidiary companies -) -) 1,517,031) (338,780) Net proceeds from/ (repayment of) bills payable 916,444) (5,134,403) -) -) Net repayment of revolving credits (1,900,000) -) -) -) Payment to hire purchase payables (419,628) (438,484) (73,344) (75,562) Proceeds from issuance of shares to minority interest -) 397,500) -) -) Repayment from long term receivable 450,999) -) -) -) Net Cash Used In Financing Activities (1,073,015) (5,175,387) (2,565,756) (2,815,991) (2,619,441) (3,804,778) (2,710,072) (865,313) Translation differences -) 20,287) -) -) NET DECREASE IN CASH AND CASH EQUIVALENTS (2,619,441) (3,784,491) (2,710,072) (865,313) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 8,910,565) 12,695,056) 2,872,666) 3,737,979) CASH AND CASH EQUIVALENTS AT END OF THE YEAR 27 6,291,124) 8,910,565) 162,594) 2,872,666) The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. AMTEL HOLDINGS BERHAD annual report

46 NOTES TO THE FINANCIAL STATEMENTS 30 NOVEMBER, 2002 The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia together with early adoption of MASB No. 22 on Segment Reporting issued by the Malaysian Accounting Standards Board (MASB). 1. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Accounting The financial statements of the Group and of the Company have been prepared under the historical cost convention unless otherwise indicated in the respective accounting policies as set out below. (b) Basis of Consolidation The Group's financial statements incorporate the financial statements of the Company and all its subsidiary companies made up to the end of the financial year. The financial statements of the subsidiary companies acquired or disposed of during the year are included in the Group's financial statements based on the acquisition method from the effective date of acquisition or up to the effective date of disposal respectively. Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered. The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group s share of its net assets together with any unamortised balance of goodwill on acquisition and exchange differences. Goodwill or reserve on consolidation represents the difference between the consideration paid for the shares in the subsidiary and associated companies and the fair values of attributable net assets acquired as applicable. Any shortfall in a specified period below the profit level guaranteed by the guarantor is recognised when it becomes probable of collection and a reliable estimate can be made of the amount. When recognised, it is adjusted as a reduction in the cost of investment, with a consequential effect on goodwill or reserve arising from consolidation. (c) Subsidiary Companies Subsidiary companies are those enterprise controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. Investment in subsidiary companies are stated at cost less impairment loss, if any, in the Company's financial statements. AMTEL HOLDINGS BERHAD annual report

47 NOTES TO THE FINANCIAL STATEMENTS (Cont d) (d) Associated Companies An associated company is a company in which the Group has significant influence and which is neither a subsidiary company nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control over those policies. Investments in associated companies are stated at cost less impairment loss, if any, in the Company's financial statements. The consolidated income statements includes the Group's share of the associated companies' profits less losses based on the audited financial statements of the associated companies after adjustments for depreciation of depreciable assets stated at fair values to the Group and amortisation or write down of goodwill or reserve on acquisition of the associated companies. The share of losses of associated companies are limited to the carrying value of the investment determined on an individual basis. In the consolidated balance sheets, the Group's interest in associated companies is stated at cost plus the Group's share of post acquisition reserve of the associated companies after adjustments for depreciation of depreciable assets stated at fair values to the Group and amortisation or write down of goodwill or reserve on acquisition of the associated companies. (e) Amortisation of Goodwill and Reserve on Consolidation Goodwill or reserve on consolidation arising from acquisition of subsidiary companies and associated companies is amortised through the income statement over a period of 3 to 25 years or the expected useful life, whichever is the shorter, upon commencement of operation. Goodwill on consolidation is written down when there is an impairment in their carrying value. (f) Other Investments All investments including investments in quoted securities, unit trusts and golf club membership are stated at cost less any impairment in their value determined on an individual basis. (g) Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost less accumulated depreciation and impairment loss, if any. No amortisation is provided on freehold land. Depreciation is calculated on the straight line basis to write off the cost of the other property, plant and equipment over their estimated useful lives. AMTEL HOLDINGS BERHAD annual report

48 NOTES TO THE FINANCIAL STATEMENTS (Cont d) The principal annual rates used for this purpose are:- Leasehold land and buildings Over lease period of 52 years, 55 years and 99 years Apartment and freehold buildings 2% Plant and machinery, factory equipment and tools 10% % Renovation, furniture, fixture, fittings, office equipment and electrical installation 10% % Motor vehicles 20% (h) Impairment of Assets The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If such an indication exists, the asset's recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an item of assets exceeds its recoverable amount. An impairment loss is recognised as an expense in the income statement. Any subsequent increase in recoverable amount due to a reversal of impairment loss is restricted to the carrying amount that would have been determined (net of accumulated depreciation, where applicable) had no impairment loss been recognised in prior years. The reversal of impairment loss is recognised as revenue in the income statement. (i) Capital Work-In-Progress Capital work-in-progress consists of expenditure incurred on construction of property, plant and equipment which take a substantial period of time to be ready for their intended uses. This expenditure is stated at cost and no depreciation is provided. Upon completion, the cost will be transferred to property, plant and equipment. (j) Inventories Inventories are stated at the lower of cost and net realisable value and are determined on the first-in-first-out or weighted average cost basis, as applicable. Cost includes the actual cost of materials and incidentals in bringing the inventories into store and for manufactured inventories, it also includes labour and appropriate production overheads. In arriving at the net realisable value, due allowance is made for obsolete and slow moving inventories. AMTEL HOLDINGS BERHAD annual report

49 NOTES TO THE FINANCIAL STATEMENTS (Cont d) (k) Receivables Known bad debts are written off and specific allowance is made for those debts considered to be doubtful of collection. In addition, general allowance is made to cover possible losses, which are not specifically identified. (l) Hire Purchase Hire purchase instalment plans are agreements whereby the lender conveys to the hirer, in return for a series of instalment payments, the rights to use the assets involved with an option for hirer to purchase the assets upon full settlement of the instalment payments. Cost of property, plant and equipment acquired under the hire purchase instalment plans are capitalised as property, plant and equipment and depreciated in accordance with the Company's policy on depreciation of property, plant and equipment. The related finance charges are allocated to the income statement over the period of the instalment plans based on the sumof-digit method so as to produce a constant periodic rate of interest charges on the remaining balance of the liability. The total outstanding instalment payments after deducting the future finance charges, representing the present value of hire purchase liabilities, are included as liabilities in the financial statements. (m) Revenue Recognition Revenue from sales of goods and services rendered are recognised upon delivery of products and when the risks and rewards of ownership has been passed or upon completion of the performance of services rendered to customers respectively. Sales represent gross invoiced value of goods sold net of sales tax, trade discounts and allowances. Revenue from contracts is recognised on the percentage of completion method when the outcome of the contracts can be reliably estimated, in the proportion which total costs incurred to date bear to the total estimated costs of the contracts. Dividend revenue from investment in subsidiary companies and associated companies is recognised when the right to receive the dividend is established. Dividend revenue from quoted investment is recognised on receipt basis. Rental revenue and management fees are recognised on receivable basis. Interest revenue is recognised on a time proportion basis that reflects the effective yield on the asset. (n) Deferred Taxation Deferred taxation is provided for by the liability method for all timing differences except when there is reasonable evidence that these timing differences will not reverse in the foreseeable future. Deferred tax benefits are only recognised when there is a reasonable expectation of realisation in the near future. AMTEL HOLDINGS BERHAD annual report

50 NOTES TO THE FINANCIAL STATEMENTS (Cont d) (o) Foreign Currencies (i) Transactions in foreign currencies Transactions in foreign currencies are converted into Ringgit Malaysia at the rates of exchange ruling at the time of the transaction and where settlement had not taken place as at 30 November, 2002, at the rates ruling as at that date. All gains and losses on exchange are included in the income statement. (ii)translation of foreign currency financial statement Assets, liabilities and revenue reserves of foreign subsidiary companies are translated into Ringgit Malaysia at the rates of exchange as at the financial year end. Income statement items are translated at the average rate of exchange for the year. The translation differences arising therefrom are recorded as movement in translation reserve. The principal exchange rates (in unit of foreign currency per Ringgit Malaysia) used in translating foreign currency amounts are as follows:- Year End Rate Average Rate RM RM RM RM Australian Dollar N/A 1.97 N/A 1.96 U.S. Dollar Euro 3.60 N/A 3.57 N/A N/A denotes Not Applicable (p) Exceptional Items Exceptional items relate to items of income and expense within profit or loss from ordinary activities which are of such size, nature or incidence that their disclosure is relevant to explain the performance of the Group. (q) Cash and Cash Equivalents Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and highly liquid investments that are readily convertible to known amount of cash and are subject to insignificant risk of changes in value. AMTEL HOLDINGS BERHAD annual report

51 2. PROPERTY, PLANT AND EQUIPMENT RENOVATION, FURNITURE, FIXTURE, PLANT & FITTINGS, MACHINERY, OFFICE APARTMENT FACTORY EQUIPMENT & FREEHOLD LEASEHOLD & EQUIPMENT ELECTRICAL MOTOR LAND LAND BUILDINGS & TOOLS INSTALLATION VEHICLES TOTAL GROUP RM RM RM RM RM RM RM COST At ,231, ,797) 1,349,906) 4,244,190) 3,184,474) 4,094,390) 28,533,121) Disposal of subsidiary company - -) -) -) (82,427) -) (82,427) Additions - 810,000) 1,160,050) 1,050,092) 103,926) 447,119) 3,571,187) Disposals - -) -) (1,294,906) (92,212) (632,323) (2,019,441) Written off - -) -) -) (126,177) -) (126,177) At ,231,364 1,238,797) 2,509,956) 3,999,376) 2,987,584) 3,909,186) 29,876,263) ACCUMULATED DEPRECIATION At ,036) 144,748) 3,643,638) 2,316,701) 2,757,218) 8,924,341) Disposal of subsidiary company - -) -) -) (82,427) -) (82,427) Charge for the year - 9,238) 27,716) 194,737) 453,762) 531,418) 1,216,871) Disposals - -) -) (1,190,814) (76,466) (599,256) (1,866,536) Written off - -) -) -) (124,895) -) (124,895) At ,274) 172,464) 2,647,561) 2,486,675) 2,689,380) 8,067,354) NET BOOK VALUE At ,231,364 1,167,523) 2,337,492) 1,351,815) 500,909) 1,219,806) 21,808,909) At ,231, ,761) 1,205,158) 600,552) 867,773) 1,337,172) 19,608,780) Depreciation charge for the year ended ,936) 26,112) 762,461) 842,868) 597,781) 2,237,158) AMTEL HOLDINGS BERHAD annual report

52 2. PROPERTY, PLANT AND EQUIPMENT (Cont d) FURNITURE, FIXTURE, FITTINGS & OFFICE MOTOR COMPANY EQUIPMENT VEHICLES RENOVATION TOTAL RM RM RM RM COST At , ,583 49, ,626 Additions 15, ,279 At , ,583 49, ,905 ACCUMULATED DEPRECIATION At , ,928 10, ,395 Charge for the year 28,855 78,317 16, ,482 At , ,245 26, ,877 NET BOOK VALUE At , ,338 22, ,028 At , ,655 38, ,231 Depreciation charge for the year ended ,490 78,450 10, ,475 ANALYSIS OF LEASEHOLD LAND GROUP ACCUMULATED AMORTISATION COST DEPRECIATION NET BOOK VALUE FOR THE YEAR RM RM RM RM At Long leasehold land 1,105,538 37,799 1,067,739 6,675 Short leasehold land 133,259 33,475 99,784 2,563 1,238,797 71,274 1,167,523 9,238 At Long leasehold land 295,538 31, ,414 5,373 Short leasehold land 133,259 30, ,347 2, ,797 62, ,761 7,936 (a) Certain freehold land and leasehold land and buildings of the Group with net book value of RM15,700,814/- (2001 : RM15,714,388/-) are pledged as securities for banking facilities of the Group. AMTEL HOLDINGS BERHAD annual report

53 2. PROPERTY, PLANT AND EQUIPMENT (Cont d) (b) The motor vehicles under hire purchase instalment plans included in the above property, plant and equipment are as follow:- GROUP COMPANY RM RM RM RM Cost 1,455,629 1,918,436 96, ,583 Net book value 942,591 1,128,928 46, , INVESTMENT IN SUBSIDIARY COMPANIES COMPANY RM RM Unquoted shares, at cost At beginning of the year 21,786,500) 19,774,000) Additions 15,000,000) 2,012,500) Less: Dividend received out of pre-acquisition profit (42,247) -) 36,744,253) 21,786,500) Less: Compensation by guarantors pursuant to profit guarantee (5,748,507) (5,748,507) At end of the year 30,995,746) 16,037,993) The details of the subsidiary companies are as follow:- Country of Effective Name of Company Incorporation Equity Interest Principal Activities Held by the Company Amtel Group Malaysia 100% 100% Investment holding and provision Sdn. Bhd. of management services to its subsidiary companies. * Amtel Resources Malaysia 100% 100% Contractors for installation, Sdn. Bhd. jointing and testing of utilities, telecommunications and fibre optic cables and associated civil works. AMTEL HOLDINGS BERHAD annual report

54 3. INVESTMENT IN SUBSIDIARY COMPANIES (Cont d) Country of Effective Name of Company Incorporation Equity Interest Principal Activities * Amtel Networks Malaysia 100% 100% Contractors for installation, Sdn. Bhd. jointing and testing of utilities, telecommunications and fibre optic cables and associated civil works. Topweb Sdn. Bhd. Malaysia 50.25% 50.25% General trading and distribution of telecommunication products. Amtel Industries Malaysia 100% 100% Investment holding and providing Sdn. Bhd. for general assembly services of mechanical, plastic components and plastic injection moulding business. Metrarama Sdn. Bhd. Malaysia # 100% - Property investment. Held through Amtel Group Sdn. Bhd. Amtel Cellular Malaysia ** 100% 70% Import, distribution and servicing Sdn. Bhd. (formerly of cellular handphones and known as Cellstar related products and accessories. Amtel Sdn. Bhd.) Amtel Malaysia 100% 100% Import, distribution and servicing Communications of two way radio communications Sdn. Bhd. products and the design, implementation and management of telecommunications projects. Amtel Technology Malaysia 100% 100% Product design, development Sdn. Bhd. consultancy, full turnkey product development and supplies. Ideal Move Capital Malaysia 100% 100% Money lending. Sdn. Bhd. Metrarama Sdn. Bhd. Malaysia # - 100% Property investment. Held through Amtel Industries Sdn. Bhd. Viva-World Industries Malaysia 100% 100% Manufacturing of agricultural Sdn. Bhd. testing products for export. AMTEL HOLDINGS BERHAD annual report

55 3. INVESTMENT IN SUBSIDIARY COMPANIES (Cont d) Country of Effective Name of Company Incorporation Equity Interest Principal Activities Held through Amtel Communications Sdn. Bhd. Sunrise Systems Malaysia ** 100% 51% Import, export, distribution and Sdn. Bhd. servicing of two-way radios, high frequency radios and satellite communications products and the design, implementation and management of telecommunications projects. Held through Amtel Cellular Sdn. Bhd. (formerly known as Cellstar Amtel Sdn. Bhd.) Sunrise Mobile Malaysia ** 100% 70% Import, distribution and servicing Sdn. Bhd. of cellular handphones and related products. Held through Amtel Resources Sdn. Bhd. Amscope Malaysia - 60% Provision of electrical engineering Corporation Sdn. Bhd. and telecommunication services. Held through Topweb Sdn. Bhd. (99.99%; 2001 : Nil) and Amtel Group Sdn. Bhd. (0.01%; 2001 : 100%) J-Pos Sdn. Bhd. Malaysia 50.25% 100% General trading and distribution of telecommunication products. * The financial statements of these subsidiary companies are audited other than by the Company's auditors. ** The acquisition of additional interest in these subsidiary companies during the year have no material effect on the result and financial position of the Group. # During the current financial year, the entire equity interest in Metrarama Sdn. Bhd. held by Amtel Group Sdn. Bhd. was sold to Amtel Holdings Berhad. AMTEL HOLDINGS BERHAD annual report

56 4. INTEREST IN ASSOCIATED COMPANIES GROUP RM RM Unquoted shares, at cost 4,757,590 4,757,590 Share of results of associated companies 4,434,433 2,759,088 9,192,023 7,516,678 Represented By:- Shares of net assets other than goodwill 9,192,023 7,516,678 The associated companies are as follow:- Country of Effective Name of Company Incorporation Equity Interest Principal Activities Held through Amtel Industries Sdn. Bhd. * Permata Makmur Malaysia 50% 50% Manufacturer and trading in Sdn. Bhd. semi-processed timber. Held through Permata Makmur Sdn. Bhd. * Permata Makmur Malaysia 25.5% 25.5% Manufacturer and trading in Industries Sdn. Bhd. rubber wood timber. Held through Amtel Resources Sdn. Bhd. * Kota Naluri Malaysia 50% 50% Housing development. Sdn. Bhd. * The financial statements of these associated companies are audited other than by the Company's auditors. AMTEL HOLDINGS BERHAD annual report

57 5. OTHER INVESTMENTS GROUP COMPANY RM RM RM RM At cost: Golf club membership 61,000) 51,000) 61,000) 51,000) Shares quoted in Malaysia 290,969) 145,258) -) -) Unit trusts quoted in Malaysia 676,313) 156,791) 206,140) -) 967,282) 302,049) 206,140) -) 1,028,282) 353,049) 267,140) 51,000) Less: Impairment losses on quoted shares (83,429) (93,948) -) -) 944,853) 259,101) 267,140) 51,000) Market value of quoted shares and unit trusts 896,963) 136,347) 206,140) -) 6. LONG TERM RECEIVABLE GROUP RM RM This represents amount owing by AmTech International Pty. Ltd. ("AIPL") (formerly known as Amtel Technology Australia Pty. Limited), a former subsidiary company 1,554,059) 2,005,058) Amount repayable within 1 year (note 10) (1,041,059) (450,999) Amount repayable after 1 year but not later than 5 years 513,000) 1,554,059) The amount is non-trade in nature, interest free, receivable in 11 quarterly instalments commencing on 1 December, 2001 and is secured over a first fixed and floating charges over the property, plant and equipment of AIPL. AMTEL HOLDINGS BERHAD annual report

58 7. GOODWILL ON CONSOLIDATION GROUP RM RM At beginning of the year 27,082) 48,748) Addition 49) 10) Less : Amortisation during the year (21,715) (21,676) 5,416) 27,082) 8. INVENTORIES GROUP RM RM At Cost:- Finished goods 5,757,387) 5,100,401) Raw materials and consumables 295,138) 248,931) Work-in-progress -) 175,977) 6,052,525) 5,525,309) Allowance for slow moving and obsolete inventories:- Finished goods (95,431) (85,568) 5,957,094) 5,439,741) At Net Realisable Value:- Finished goods -) 173,301) 5,957,094) 5,613,042) 9. TRADE RECEIVABLES GROUP RM RM Amount outstanding 16,704,591) 16,177,267) Less: Allowance for doubtful debts (798,305) (2,235,551) 15,906,286) 13,941,716) Included in trade receivables of the Group is an amount of retention sum of RM438,639/- (2001 : RM453,337/-) in respect of telecommunication infrastructure contracts. AMTEL HOLDINGS BERHAD annual report

59 10. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS GROUP COMPANY RM RM RM RM Other receivables, deposits and prepayments 2,713,283) 2,715,881) 1,000) 4,531) Less: Allowance for doubtful debts (44,160) -) -) -) 2,669,123) 2,715,881) 1,000) 4,531) Deposits 175,689) 185,459) 1,000) 1,000) Prepayments 123,381) 117,373) 6,524) 2,117) Compensation receivable from guarantors -) 666,407) -) 666,407) 2,968,193) 3,685,120) 8,524) 674,055) Included in other receivables of the Group is an amount of RM1,041,059/- (2001 : RM450,999/-) owing by a former subsidiary company, AmTech International Pty. Ltd. (formerly known as Amtel Technology Australia Pty. Limited) which is interest free, receivable and secured in the manner as disclosed in note 6 to the financial statements. 11. TAXATION ASSETS These comprise the following:- GROUP COMPANY RM RM RM RM Tax recoverable 244, , ,490 - Tax paid in advance 125, , ,652 1,050, ,490 - AMTEL HOLDINGS BERHAD annual report

60 12. AMOUNT OWING BY/(TO) SUBSIDIARY COMPANIES Amount owing by subsidiary companies:- COMPANY RM RM Amtel Group Sdn. Bhd. 10,104,564 16,537,786 Amtel Cellular Sdn. Bhd. (formerly known as Cellstar Amtel Sdn. Bhd.) 2,856,420 2,838,144 Amtel Communications Sdn. Bhd. 7,786 - Amtel Industries Sdn. Bhd. 5,871,486 4,212,873 Amtel Networks Sdn. Bhd. - 5,000 Amtel Technology Sdn. Bhd ,000 Amscope Corporation Sdn. Bhd. - 13,189 Metrarama Sdn. Bhd. 141,945 7,495,215 Sunrise Mobile Sdn. Bhd Ideal Move Capital Sdn. Bhd. 3,304 2,205 Topweb Sdn. Bhd. 1,013,098 13,260 19,998,898 31,123,472 Amount owing to subsidiary companies:- Amtel Communications Sdn. Bhd ,137 Viva-World Industries Sdn. Bhd. 2,235,402 2,295,402 Amtel Resources Sdn. Bhd. 2,554, ,579 4,790,149 3,273,118 These amounts are non-trade in nature, unsecured, interest free and have no fixed term of repayment. 13. AMOUNT OWING BY ASSOCIATED COMPANY GROUP COMPANY RM RM RM RM Permata Makmur Sdn. Bhd. Trade 1,250,910 2,536, Non-trade 4,174 1,075 4,174 1,075 1,255,084 2,537,985 4,174 1,075 The trade amount owing by the associated company is unsecured, bears interest at the rate of 14% (2001 : 14%) per annum on monthly rest basis and is repayable within the next 12 months. The nontrade amount relates to expenses paid on behalf and is unsecured, interest free and has no fixed term of repayment. AMTEL HOLDINGS BERHAD annual report

61 14. CASH ON DEPOSITS WITH LICENSED BANKS The cash on deposits with licensed banks of the Group amounting to RM2,693,453/- (2001 : RM1,278,312/-) have been pledged as securities for bank guarantee facilities of the Group. 15. BANK BORROWINGS - SECURED GROUP RM RM Bank overdrafts 687,967 1,393,011 Bills payable 4,590,379 3,673,935 Revolving credit 6,600,000 8,500,000 11,878,346 13,566,946 The bank overdrafts, bills payable and revolving credit facilities are repayable within one year, bear interest at rates ranging from 5.15% to 9.3% (2001 : 5.05% to 9.45%) per annum and are secured and supported on the following:- (a) first legal charges over the freehold land and leasehold properties of subsidiary companies, Metrarama Sdn. Bhd. and Viva-World Industries Sdn. Bhd. respectively; (b) debenture comprising fixed and floating charges over all property, plant and equipment of a subsidiary company, Viva-World Industries Sdn. Bhd.; (c) cash deposits with licensed banks of subsidiary companies, Topweb Sdn. Bhd. and Amtel Resources Sdn. Bhd.; and (d) corporate guarantees from the Company. The revolving credit facility limit is to be reduced progressively to RM5,610,000/- by 1 October, HIRE PURCHASE PAYABLES GROUP COMPANY RM RM RM RM Total instalment payments 600,318) 699,378) 21,604) 108,148) Less: Future finance charges (58,471) (83,737) (3,299) (16,499) Present value of hire purchase liabilities 541,847) 615,641) 18,305) 91,649) AMTEL HOLDINGS BERHAD annual report

62 16. HIRE PURCHASE PAYABLES (Cont d) GROUP COMPANY RM RM RM RM Repayable within 1 year Total instalment payments 349,947) 387,665) 21,604) 86,543) Less: Future finance charges (39,278) (55,726) (3,299) (13,199) Present value of hire purchase liabilities 310,669) 331,939) 18,305) 73,344) Repayable after 1 year but not later than 2 years Total instalment payments 190,473) 239,368) -) 21,605) Less: Future finance charges (11,675) (23,582) -) (3,300) Present value of hire purchase liabilities 178,798) 215,786) -) 18,305) Repayable after 2 years but not later than 5 years Total instalment payments 46,722) 72,342) -) -) Less: Future finance charges (4,768) (4,426) -) -) Present value of hire purchase liabilities 41,954) 67,916) -) -) Repayable after 5 years Total instalment payments 13,176) -) -) -) Less: Future finance charges (2,750) -) -) -) Present value of hire purchase liabilities 10,426) -) -) -) Present value of hire purchase liabilities 541,847) 615,641) 18,305) 91,649) Present value of hire purchase liabilities - Within 1 year 310,669) 331,939) 18,305) 73,344) - More than 1 year 231,178) 283,702) -) 18,305) 541,847) 615,641) 18,305) 91,649) AMTEL HOLDINGS BERHAD annual report

63 17. SHARE CAPITAL GROUP/COMPANY RM RM Ordinary shares of RM1/- each Authorised: 100,000,000 ordinary shares 100,000, ,000,000 Issued and fully paid: At beginning of the year 31,400,000 31,400,000 Bonus issue 10,466,667 - At end of the year 41,866,667 31,400, RESERVES GROUP COMPANY RM RM RM RM Non-distributable Share premium (note 28) 4,823,848) 14,811,345) 4,823,848) 14,811,345) Capital redemption reserve (note 29) -) 600,000) -) 600,000) Reserve on consolidation (note 30) 129,904) 84,249) -) -) 4,953,752) 15,495,594) 4,823,848) 15,411,345) Distributable (Accumulated Losses)/ Retained Profits At beginning of the year (10,904,240) (14,357,510) 433,686) 47,198) Profit/(Loss) for the year 1,978,917) 3,453,270) (262,325) 386,488) At end of the year (8,925,323) (10,904,240) 171,361) 433,686) Retained Profits/ (Accumulated Losses) By:- (3,971,571) 4,591,354) 4,995,209) 15,845,031) The Company 171,361) 433,686) Subsidiary companies (13,531,117) (14,097,014) Associated companies 4,434,433) 2,759,088) (8,925,323) (10,904,240) AMTEL HOLDINGS BERHAD annual report

64 19. DEFERRED TAXATION GROUP RM RM At beginning of the year 156,410) 193,613) Transfer to Income Statements (note 23) (21,651) (37,203) At end of the year 134,759) 156,410) This is in respect of estimated tax liabilities arising from timing differences as follow:- GROUP RM RM Capital allowances claimed on property, plant and equipment in excess of their depreciation charge 129,259) 160,410) Unabsorbed capital allowances -) (4,000) Other timing difference 5,500) - 134,759) 156,410) The estimated deferred tax liabilities/(benefits) arising from timing differences not provided in the financial statements are as follow:- GROUP COMPANY RM RM RM RM Capital allowances claimed on property, plant and equipment in excess of their depreciation charge 112,100) 156,900) 2,200) 8,300) Depreciation charge for property, plant and equipment in excess of their capital allowance (43,300) (48,500) -) -) Unutilised tax losses (6,831,000) (7,207,100) (32,400) -) Unabsorbed capital allowances (986,000) (1,098,000) (249,800) (241,100) Other timing differences (183,700) (181,000) -) -) (7,931,900) (8,377,700) (280,000) (232,800) The estimated unutilised tax losses and unabsorbed capital allowances are subject to agreement by the Inland Revenue Board and are not available for set-off within the Group. AMTEL HOLDINGS BERHAD annual report

65 20. OPERATING REVENUE Operating revenue of the Group and of the Company comprise the following:- GROUP COMPANY RM RM RM RM Sales of goods and services 108,462, ,446, Contract revenue 7,343,888 9,057, Management fees , ,000 Interest revenue 234, , Dividend revenue 16,100 20, ,487 1,000, ,056, ,873, ,487 1,222, COST OF SALES Cost of sales of the Group comprises the following:- GROUP RM RM Cost of sales of goods and services 102,509, ,071,906 Contract cost 5,900,677 7,971, ,410, ,042, PROFIT/(LOSS) BEFORE TAXATION (a) Profit/(Loss) before taxation is arrived at after charging/(crediting):- (i) Exceptional items GROUP COMPANY RM RM RM RM Gain on disposal of subsidiary company - (3,053,216) - - Waiver of advances (237,083) AMTEL HOLDINGS BERHAD annual report

66 22. PROFIT/(LOSS) BEFORE TAXATION (Cont d) (ii) Directors' remuneration GROUP COMPANY RM RM RM RM Directors of the Company - fees 98,000) 51,000 98,000 51,000 - other emoluments 403,010) 405, , ,000 - estimated monetary value of benefit-in-kind 32,400) 31,700-8, ,410) 487, , ,800 Directors of the subsidiary companies - fees - current year 120,000) 85, overprovision in prior year (36,000) other emoluments 572,931) 696, estimated monetary value of benefit-in-kind 55,875) 42, ,806) 823, The Directors who received the above remuneration are as follow:- Directors of the Company - Dato' Abdul Hamid bin Hj. Md. Zainuddin - Koid Hun Kian - Ng Ah Chong - Siow Hock Lee - Goh Hock Hai - YM. Tunku Dato' Seri Kamel bin Tunku Rijaludin Directors of the subsidiary companies - Chang Chee Seng - Lim Soon Ghee - Wong Tuck Kuan - Hj. Md. Arshad bin Md. Yusoff - Hj. Harun bin Hasan - Chin Wou Chau - Lee Chye Khern (Appointed on ) - Koay Soo Meng (Resigned on ) - Tan Woon Huei (Appointed on ) - Loo Kwang Yong (Resigned on ) - Chan Soh Hwa (Resigned on ) AMTEL HOLDINGS BERHAD annual report

67 22. PROFIT/(LOSS) BEFORE TAXATION (Cont d) (iii)other items GROUP COMPANY RM RM RM RM After charging/ (crediting):- Amortisation of goodwill on consolidation 21,715) 21,676) -) -) Auditors' remuneration - current year 87,700) 118,506) 16,000) 16,000) - underprovision/ (overprovision) in prior year 6,555) (10,585) -) (150) Bad debts written off 397,387) 65,669) -) -) Depreciation of property, plant and equipment 1,216,871) 2,237,158) 123,482) 378,475) Hire of machinery 11,947) 8,130) -) -) Impairment loss on quoted shares 20,721) 34,370) -) -) Interest expenses - bank overdraft 65,371) 243,851) -) -) - others 976,550) 1,244,404) 13,200) 66,321) Inventories written down -) 405,477) -) -) Loss on dilution of equity interest in subsidiary company 15,821) -) -) -) Obsolete inventories written off 101,506) 144,719) -) -) Property, plant and equipment written off 1,282) 763,034) -) 173,462) Rental of premises 607,295) 735,467) 39,000) 36,750) Waiver of debts 9,246) -) 13,189) -) Gain on disposal of subsidiary company (34,651) -) -) -) (Gain)/Loss on disposal of property,plant and equipment (338,207) 77,247) -) 4,798) (Gain)/Loss on foreign exchange - unrealised (3,201) -) -) -) - realised (36,843) 44,621) -) -) Accruals no longer required -) (322,056) -) (322,056) Allowance for doubtful debts no longer required (429,112) (181,508) -) -) Allowance/(Reversal of allowance) for obsolete inventories 9,863) (861,981) -) -) Amortisation of reserve on consolidation (45,822) (1,768,705) -) -) Bad debts recovered (717,295) (2,000) -) -) Dividend revenue (7,469) (5,555) -) -) AMTEL HOLDINGS BERHAD annual report

68 22. PROFIT/(LOSS) BEFORE TAXATION (Cont d) GROUP COMPANY RM RM RM RM Gain on disposal of quoted investments (99,768) (29,679) -) -) Interest revenue (168,593) (272,623) (3,624) (24,588) Rental revenue (34,800) -) -) -) Revenue from hire of machinery (83,289) (44,401) -) -) (b) Employees Information GROUP COMPANY RM RM RM RM Staff costs 4,573,275) 5,431,830) 254,742) 301,220) The number of employees including full time Directors of the Group and of the Company as at financiall year end were 211 (2001 : 244) and 3 (2001 : 2) respectively. 23. TAXATION GROUP COMPANY RM RM RM RM Based on results for the year 418,942) 579,150) -) 187,000) Transfer from deferred taxation (note 19) (21,651) (37,203) -) -) Underprovision/(Overprovision) in prior year 63,500) (134,423) (11,490) 168,625) Share of taxation of associated companies 520,630) 145,559) -) -) 981,421) 553,083) (11,490) 355,625) There is no tax charge during the year for the Company due to operating loss incurred. The relatively higher effective tax rate applicable to the profits of the Group for the current financial year is mainly due to certain expenses not allowed for tax purposes. The Company has an estimated tax exempt income account of RM653,000/- (2001 : RM653,000/-) available for distribution by way of tax exempt dividend, subject to agreement by the Inland Revenue Board. The tax exempt income is in respect of chargeable income waived in accordance with the Income Tax (Amendment) Act AMTEL HOLDINGS BERHAD annual report

69 23. TAXATION (Cont d) The Company has an estimated unutilised tax losses and unabsorbed capital allowances of RM116,000/- (2001 : Nil) and RM892,000/- (2001 : RM861,000/-) respectively, subject to agreement by the Inland Revenue Board, available for set-off against future taxable profits. The Company has an estimated tax credit of RM2,313,600/- (2001 : RM2,313,600/-) under Section 108 of the Income Tax Act, 1967, to frank future payment of dividends of approximately RM5,949,000/- (2001 : RM5,949,000/-), without incurring additional tax liability, subject to agreement by the Inland Revenue Board. The Group has an estimated unutilised tax losses and unabsorbed capital allowances of RM24,395,000/- (2001 : RM25,739,600/-) and RM3,521,800/- (2001 : RM3,922,600/-) respectively, subject to agreement by the Inland Revenue Board, available for set-off against future taxable profits. 24. EARNINGS PER ORDINARY SHARE The earnings per ordinary share of the Group is calculated based on the profit after taxation and minority interests of RM1,978,917/- (2001 : RM3,453,270/-) divided by the number of ordinary shares of RM1/- each in issue of 41,866,667 (2001 : 41,866,667 after adjustment for bonus issue) ordinary shares of RM1/- each. 25. DISPOSAL OF A SUBSIDIARY COMPANY The subsidiary company, Amscope Corporation Sdn. Bhd. ("ACSB"), has been disposed on 11 November, For the financial year ended 30 November, 2001, the subsidiary company disposed was AmTech International Pty. Ltd. ("AIPL") (formerly known as Amtel Technology Australia Pty. Limited). i. Effect On Consolidated Income Statements The results of the subsidiary company incorporated into the consolidated results of the Group for the current period up to the effective date of disposal and for the previous year are as follow: GROUP ACSB AIPL RM RM RM Revenue -) -) 100,852) Cost of sales -) -) (50,354) Gross profit -) -) 50,498) Other operating revenue 121,583) -) 16,868) Selling and distribution costs -) (87) (270,683) Administrative costs (8,071) (2,275) (644,837) Other operating costs (1,950) (13,271) -) (10,021) (15,633) (915,520) Profit/(Loss) from operations 111,562) (15,633) (848,154) Finance costs (90) (2,661) (10,132) Profit/(Loss) for the year 111,472) (18,294) (858,286) AMTEL HOLDINGS BERHAD annual report

70 25. DISPOSAL OF A SUBSIDIARY COMPANY (Cont d) ii. Effect On Consolidated Financial Position The financial position of the subsidiary company as at the effective date of disposal and as at the end of the previous year are as follow: GROUP ACSB AIPL RM RM RM Property, plant and equipment -) -) 320,440) Inventories -) -) 529,351) Trade receivables -) -) 12,461) Other receivables -) 2,050) 47,306) Cash and bank balances 26) 12,514) 8,763) Trade payables (28,751) (28,751) (353,222) Other payables and accruals (526) (107,050) (2,692,975) Amount owing to ultimate holding company -) (13,189) -) Amount owing to related companies -) (6,296) -) Hire purchase payables -) -) (135,811) Amount owing to director -) -) (49,375) Translation reserves -) -) (740,144) (29,251) (140,722) (3,053,206) Gain on disposal of subsidiary company 34,651) 3,053,216) Proceeds from disposal of subsidiary company 5,400) 10) Less: Cash and bank balances of subsidiary company disposed (26) (8,763) Cash flow on disposal, net of cash disposed of 5,374) (8,753) AMTEL HOLDINGS BERHAD annual report

71 26. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT During the year, the Group and the Company acquired property, plant and equipment with aggregate cost of RM3,571,187/- (2001 : RM1,251,294/-) and RM15,279/- (2001: RM51,535/-) respectively which are satisfied by the following:- GROUP COMPANY RM RM RM RM Hire purchase financing 345, , Cash payments 3,225, ,294 15,279 51,535 3,571,187 1,251,294 15,279 51, CASH AND CASH EQUIVALENTS Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:- GROUP COMPANY RM RM RM RM Cash and bank balances 2,120,472) 4,274,159) 162,594 2,168,773 Cash on deposits with licensed banks 4,858,619) 6,029,417) - 703,893 Bank overdrafts (687,967) (1,393,011) - - 6,291,124) 8,910,565) 162,594 2,872,666 Cash and cash equivalents which are not freely available for the Group's use are cash on deposits with licensed banks amounting to RM2,693,453/- (2001 : RM1,278,312/-) pledged for bank guarantee facilities granted to certain subsidiary companies. These deposits can only be utilised to repay the said facilities. 28. SHARE PREMIUM - NON-DISTRIBUTABLE GROUP/COMPANY RM RM At beginning of the year 14,811,345) 14,811,345 Less: Capitalisation as bonus issue 9,866,667) - Bonus issue expenses written off 120,830) - (9,987,497) - At end of the year 4,823,848) 14,811,345 AMTEL HOLDINGS BERHAD annual report

72 29. CAPITAL REDEMPTION RESERVE GROUP/COMPANY RM RM At beginning of the year 600,000) 600,000) Less: Capitalisation as bonus issue (600,000) -) At end of the year - 600,000) This is in respect of the par value of the Company's ordinary shares previously bought back and cancelled. 30. RESERVE ON CONSOLIDATION GROUP RM RM At beginning of the year 84,249) 44,271) Additions: Compensation by guarantors pursuant to profit guarantee -) 1,750,750) Acquisition of additional shares in subsidiary companies 91,477) 57,933) Less: Amortisation during the year (45,822) (1,768,705) At end of the year 129,904) 84,249) 31. CONTINGENT LIABILITIES - UNSECURED COMPANY RM RM In respect of corporate guarantees given by the Company to financial institutions and creditors for banking and credit facilities granted to the subsidiary companies:- Amtel Group Sdn. Bhd. 6,600,000 8,500,000 Topweb Sdn. Bhd. 1,969,821 - Amtel Industries Sdn. Bhd. 860, ,850 Amtel Cellular Sdn. Bhd. (formerly known as Cellstar Amtel Sdn. Bhd.) 2,066,000 1,645,991 Amtel Communications Sdn. Bhd. 358,945 2,973,703 11,855,070 13,449,544 AMTEL HOLDINGS BERHAD annual report

73 32. SIGNIFICANT RELATED PARTY TRANSACTIONS (a) The significant transactions with related companies are as follow:- Interest payable to subsidiary companies COMPANY RM RM Amtel Networks Sdn. Bhd. -) 6,904) Amtel Resources Sdn. Bhd. -) 45,740) Management fees charged to subsidiary companies -) 52,644) Amtel Communications Sdn. Bhd. (72,000) (90,000) Amtel Networks Sdn. Bhd. -) (12,000) Amtel Resources Sdn. Bhd. (12,000) (12,000) Amtel Technology Sdn. Bhd. -) (60,000) Viva-World Industries Sdn. Bhd. (60,000) (48,000) (144,000) (222,000) Gross dividend received from subsidiary companies Amtel Networks Sdn. Bhd. (400,000) -) Amtel Resources Sdn. Bhd. -) (1,000,000) (400,000) (1,000,000) Waiver of debts owing by subsidiary companies Sunrise Systems Sdn. Bhd. -) 237,083) Amscope Corporation Sdn. Bhd. 13,189) -) 13,189) 237,083) Acquisition of Metrarama Sdn. Bhd. from a subsidiary company, Amtel Group Sdn. Bhd. Allotment of 14,999,998 new ordinary shares of RM1/-each by Metrarama Sdn. Bhd. to the Company satisfied by capitalisation of debt owing by Metrarama Sdn. Bhd. Acquisition of Amtel Industries Sdn. Bhd. and Topweb Sdn. Bhd. from a subsidiary company, Amtel Group Sdn. Bhd. 2) -) 14,999, ,611,000 AMTEL HOLDINGS BERHAD annual report

74 32. SIGNIFICANT RELATED PARTY TRANSACTIONS (Cont d) (b) The significant transactions of the Group with associated company, Permata Makmur Sdn. Bhd., are as follow:- GROUP RM RM Interest charged by subsidiary company, Ideal Move Capital Sdn. Bhd. (234,153) (348,753) Repayment of loan to subsidiary company, Ideal Move Capital Sdn. Bhd. (1,500,000) (500,000) (c) The significant transaction with a director of the Company is as follows:- In the financial year ended 30 November, 2001, a subsidiary company, Amtel Group Sdn. Bhd., acquired 19% equity interest in Amtel Cellular Sdn. Bhd. (formerly known as Cellstar Amtel Sdn. Bhd.) from Dato' Abdul Hamid bin Hj. Md. Zainuddin for a purchase consideration of RM5/-. The Directors are of the opinion that the transactions disclosed in (a), (b) and (c) above have been entered into in the normal course of business and have been established under terms mutually agreed upon between the parties involved. (d) The amounts received and receivable from certain directors and substantial shareholders of the Company, namely Dato' Abdul Hamid bin Hj. Md. Zainuddin, Koid Hun Kian, Ng Ah Chong and Simfoni Kilat Sdn. Bhd., as guarantors in respect of compensation pursuant to the profit guarantee are as follow:- COMPANY RM RM At beginning of the year 667,407) 3,331,487) Compensation receivable during the year -) 1,750,750) 667,407) 5,082,237) Received during the year (667,407) (4,415,830) At end of the year -) 666,407) AMTEL HOLDINGS BERHAD annual report

75 33. SEGMENTAL ANALYSIS - GROUP Segment information is presented in respect of the Group's business and geographical segments. Segment results, assets and liabilities include items directly attributable to segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets and revenue, interest-bearing loans and expenses. Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one year. Business Segments The Group comprises the following main business segments:- Investment holding Investment holding and provision of management services. Infrastructure Contractors for installation, jointing and testing of utilities, telecommunications and fibre optic cables and associated civil works. Manufacturing and services Manufacturing of agricultural testing products, general assembly services of mechanical and plastic components and plastic injection moulding and money lending activities. Trading Import, trading and distribution of telecommunications products and accessories, the design, implementation and management of telecommunications projects. Housing development Housing development. Geographical Segments The businesses of the Group are solely operated in Malaysia except for trading business which had also been operated in Australia in the previous financial year. AMTEL HOLDINGS BERHAD annual report

76 33. SEGMENTAL ANALYSIS - GROUP (Cont d) (a) Major Business Segment 2002 INVESTMENT MANUFACTURING HOUSING HOLDING INFRASTRUCTURE & SERVICES TRADING DEVELOPMENT ELIMINATIONS CONSOLIDATED RM RM RM RM RM RM RM REVENUE External revenue 16,100) 7,343,888 8,389, ,306, ) 116,056,222) Inter-segment revenue 645,753) - 95, (741,155) -) Total revenue 661,853) 7,343,888 8,485, ,306,326 - (741,155) 116,056,222) RESULT Segment result (1,555,834) 718,609 62,972 2,231,597 - (357,753) 1,099,591) Dividend revenue -) ) 7,469) Gain on disposal of subsidiary company -) 34, ) 34,651) Gain on disposal of quoted investments -) ) 99,768) Interest revenue -) ) 168,593) Interest expenses -) ) (629,264) Share of results of associated companies -) - 2,095, ,208 -) 2,195,975) Taxation -) ) (981,421) Profit after taxation 1,995,362) Minority interests (16,445) Net profit for the year 1,978,917) OTHER INFORMATION Segment assets 71,764,885) 18,423,909 14,806,982 24,163,175) - (72,821,025) 56,337,926) Investment in associated company -) 263,632 8,928,391 -) - -) 9,192,023) Tax recoverable and paid in advance -) - - -) - -) 370,652) Consolidated total assets 65,900,601) Segment liabilities 19,292,374) 7,424,677 13,959,834 17,193,914) - (38,827,210) 19,043,589) Taxation -) - - -) - -) 727,930) Deferred taxation -) - - -) - -) 134,759) Unallocated corporate liabilities 6,600,000) Consolidated total liabilities 26,506,278) AMTEL HOLDINGS BERHAD annual report

77 33. SEGMENTAL ANALYSIS - GROUP (Cont d) INVESTMENT MANUFACTURING HOUSING HOLDING INFRASTRUCTURE & SERVICES TRADING DEVELOPMENT ELIMINATIONS CONSOLIDATED RM RM RM RM RM RM RM Capital expenditure 40,926) 231,895 2,878,006) 420,360) -) -) 3,571,187) Amortisation of goodwill (35,000) - 56,666) 49) -) -) 21,715) Depreciation of property, plant and equipment 369,070) 134, ,919) 501,208) -) -) 1,216,871) Non-cash expenses other than depreciation Bad debts written off 1,515) - -) 395,872) -) -) 397,387) 2001 REVENUE External revenue 20,920) 9,156,290 4,783,874) 116,912,064) -) -) 130,873,148) Inter-segment revenue 1,456,000) - 1,301,255) 31,866) -) (2,789,121) -) Total revenue 1,476,920) 9,156,290 6,085,129) 116,943,930) -) (2,789,121) 130,873,148) RESULT Segment result 1,576,794) 236,683 (1,499,558) 1,957,035) -) (1,000,000) 1,270,954) Dividend revenue -) - -) -) -) -) 5,555) Gain on disposal of subsidiary company -) - -) 3,053,216) -) -) 3,053,216) Gain on disposal of quoted investments -) - -) -) -) -) 29,679) Interest revenue -) - -) -) -) -) 272,623) Interest expenses -) - -) -) -) -) (795,798) Share of results of associated companies -) - 118,634) -) (40,330) -) 78,304) Taxation -) - -) -) -) -) (553,083) Profit after taxation 3,361,450) Minority interests 91,820) Net profit for the year 3,453,270) AMTEL HOLDINGS BERHAD annual report

78 33. SEGMENTAL ANALYSIS - GROUP (Cont d) INVESTMENT MANUFACTURING HOUSING HOLDING INFRASTRUCTURE & SERVICES TRADING DEVELOPMENT ELIMINATIONS CONSOLIDATED RM RM RM RM RM RM RM OTHER INFORMATION Segment assets 80,213,568) 18,670,023 12,867,389 23,705,149 - (77,925,668) 57,530,461 Investment in associated company -) 163,424 7,353, ) 7,516,678 Tax recoverable and paid in advance -) ) 1,050,882 Consolidated total assets 66,098,021 Segment liabilities 38,876,085) 8,004,331 11,291,245 19,080,144 - (58,889,653) 18,362,152 Taxation -) ) 1,529,662 Deferred taxation -) ) 156,410 Unallocated corporate liabilities 8,500,000 Consolidated total liabilities 28,548,224 Capital expenditure 68,430) 70, ,658 1,008, ) 1,251,294 Amortisation of goodwill (35,000) - 56, ) 21,676 Depreciation of property, plant and equipment 676,498) 154, , , ) 2,237,158 Non-cash expenses other than depreciation Inventories written off -) , ) 405,477 Property, plant and equipment written off 173,462) - 547,119 42, ) 763,034 Inter-segment revenue of investment holding segment are in respect of dividend and fee revenue received. All other inter-segment revenue are in respect of sales between the segments which are charged at cost plus a percentage profit mark-up. AMTEL HOLDINGS BERHAD annual report

79 (b) Segment by Geographical Location 2002 MALAYSIA AUSTRALIA CONSOLIDATED RM RM RM Total revenue from external customers 116,056, ,056,222 Segment assets 56,337,926-56,337,926 Capital expenditure 3,571,187-3,571, Total revenue from external customers 130,772, , ,873,148 Segment assets 57,530,461-57,530,461 Capital expenditure 1,251,294-1,251,294 There is no material inter-segment sales within the geographical location. 34. SIGNIFICANT EVENTS (a) On 15 February, 2002, the Company applied to the Securities Commission ("SC") for a revision and extension of time for the utilisation of the remaining Listing Proceeds ("Proceeds") raised from the Rights Issue and Public Issue. On 8 March, 2002, the SC approved the Company's application as follows:- *Remaining Balance Of The Proceeds RM'000 Revised Utilisation RM'000 Research and development expenses 1,368 - Tools and mould costs Advertising and promotion expenses Working capital for production 1,445 - Infrastructure works of Amtel Communications Sdn. Bhd Purchase of prepaid cards/starter packs and manufacturing costs for starter packs by Topweb Sdn. Bhd. - 1,000 Infrastructure projects of Amtel Resources Sdn. Bhd. - 1,500 Assembly jobs by Amtel Industries Sdn. Bhd. - 1,231 General working capital - 1,000 4,731 4,731 * As approved by the SC on 6th December, 2000 in conjunction with the Listing Exercise. AMTEL HOLDINGS BERHAD annual report

80 34. SIGNIFICANT EVENTS (Cont d) In the letter of approval, SC also granted the Company up to 5 September, 2002, for the revised utilisation of the remaining balance of the Proceeds. The Proceeds were fully utilised within the deadline given. (b) On 1 March, 2002, the Company via its wholly owned subsidiary company, Amtel Communications Sdn. Bhd., acquired the entire minority interest's shares in another subsidiary company, Sunrise Systems Sdn. Bhd., comprising 49 ordinary shares of RM1/- each for a cash consideration of RM49/-. (c) On 5 August, 2002, the Company increased its issued and paid-up share capital from RM31,400,000/- to RM41,866,667/- by a Bonus Issue of 10,466,667 ordinary shares of RM1/- each on the basis of one new ordinary share for every three existing ordinary shares held. The purpose of the Bonus Issue was to enable the Company to meet the minimum issued and paid-up share capital requirement of at least RM40 million for companies listed on the Second Board of the Kuala Lumpur Stock Exchange. This Bonus Issue has been effected by the capitalisation of the Company's Capital Redemption Reserve of RM600,000/- and Share Premium Account of RM9,866,667/-. (d) On 23 November, 2001, the Company via its wholly owned subsidiary company, Amtel Group Sdn. Bhd. ("AGSB") entered into a sale and purchase agreement with Cellstar Pacific Pte. Ltd. to acquire 1,320,000 ordinary shares of RM1/- each equivalent to 30% equity interest in Cellstar Amtel Sdn. Bhd. ("CASB") for a cash consideration of RM5/-. This transaction was completed on 29 July, With the completion of the agreement, CASB became a wholly owned subsidiary company of AGSB and on 4th September, 2002, its name was changed to Amtel Cellular Sdn. Bhd.. (e) On 1 August, 2002, J-Pos Sdn. Bhd. ("J-Pos") made an allotment of 49,998 ordinary shares of RM1/- each at par for cash to Topweb Sdn. Bhd. ("TWSB") which resulted in TWSB holding 99.99% equity interest in J-Pos. Prior to the allotment, J-Pos had an issued and paid-up share capital of RM2/- comprising 2 ordinary shares of RM1/- each held by AGSB. (f) On 25 October, 2002, the Company via its wholly owned subsidiary company, Amtel Industries Sdn. Bhd. entered into a sale and purchase agreement with Halgen Sdn. Bhd. to acquire a 60 years lease (expiring 7 September, 2054) over a piece of land together with industrial building erected thereon for a total cash consideration of RM1,650,000/-. (g) On 11 November, 2002, the Company via its wholly owned subsidiary company, Amtel Resources Sdn. Bhd., disposed of the entire investment in another subsidiary company, Amscope Corporation Sdn. Bhd., comprising 450,000 ordinary shares of RM1/- each for a cash consideration of RM5,400/. (h) On 20 November, 2002, the entire equity interest in Metrarama Sdn. Bhd. comprising 2 ordinary shares of RM1/- each held by AGSB was sold to the Company, for a cash consideration of RM2/-. Subsequently on the 28 November, 2002, an additional allotment of 14,999,998 ordinary shares of RM1/- each was made by Metrarama Sdn. Bhd. to the Company satisfied by capitalisation of amount owing by Metrarama Sdn. Bhd. to the Company. AMTEL HOLDINGS BERHAD annual report

81 35. COMPARATIVE FIGURES Certain comparative figures on segment information in note 33 to the financial statements have been restated to conform with the format as prescribed by MASB Standard No. 22 on Segment Reporting. 36. GENERAL INFORMATION The Company is a public limited company domiciled in Malaysia, and incorporated under the Companies Act, 1965 with its shares listed on the Second Board of the Kuala Lumpur Stock Exchange. Registered Office and Principal Place of Business No. 5, Jalan PJS 7/19, Bandar Sunway, Petaling Jaya, Selangor Darul Ehsan. Date of Authorisation for Issue The financial statements were authorised for issue in accordance with a Board of Directors' resolution dated 18 March, AMTEL HOLDINGS BERHAD annual report

82 LIST OF PROPERTIES AS AT 30 NOVEMBER, 2002 Land area/ Approximate Built-up Date of Age of Net Description and area Acquisition/ Building Book Value Location Existing use Tenure (sq. feet) Completion (Years) RM P.T.57 HS (M) 7/ storey building 99 years 10,890/ ,867 Kawasan Perusahaan annexed with a single Sub-lease approximately Mergong Peringkat 2 storey high roof store expiring on 6,900 Mukim Mergong office and District of Kota Setar storage space Kedah Darul Aman Geran storey residential Freehold 840/ / 4 74,418 Mukim Sungai Petani link house 1, District of Kuala Muda Rent-out Kedah Darul Aman Geran storey residential Freehold 840/ / 4 74,418 Mukim Sungai Petani link house 1, District of Kuala Muda Rent-out Kedah Darul Aman Lot No. TH B storey town house Leasehold 1, / 1 100,802 Mukim Kajang (Upper Floor) Daerah Hulu Langat Selangor Darul Ehsan Lot No. TH A storey town house Leasehold ,699 Mukim Kajang (Ground Floor) Daerah Hulu Langat Selangor Darul Ehsan 290 Geran /2 storey light Freehold 1,798/ / 5 204,256 Mukim of Pumpong industrial building 2, District of Kota Setar Vacant Kedah Darul Aman 291 Geran /2 storey light Freehold 2,579/ / 5 227,298 Mukim of Pumpong industrial building 2, District of Kota Setar Vacant Kedah Darul Aman P.T HS (D) 1 1 /2 storey light 66 years 19,994/ , /92 Mukim Sungai Petani industrial building leasehold 8,540 Daerah Kuala Muda Factory-cum-office expiring on Kedah Darul Aman Lot No. P.T. 401 H.S.(D) Single storey industrial 60 years 67,738/ ,796, /94 Mukim of Pekula building sub-lease 26,541 District of Kuala Muda Factory-cum-office expiring on Kedah Darul Aman Lot No. 41 Commercial land Freehold 43, ,238,932 Advance Certificate of Title Vacant (Perakuan Pendahuluan Mengenai Hakmilik) Province Wellesley Central Penang Lot No. 80 Commercial land Freehold 70, ,758,071 Advance Certificate of Title Vacant (Perakuan Pendahuluan Mengenai Hakmilik) Province Wellesley Central Penang AMTEL HOLDINGS BERHAD annual report

83 LIST OF PROPERTES (Cont d) Land area/ Approximate Built-up Date of Age of Net Description and area Acquisition/ Building Book Value Location Existing use Tenure (sq. feet) Completion (Years) RM Lot No Commercial land Freehold 5, ,485 Advance Certificate of Title Vacant (Perakuan Pendahuluan Mengenai Hakmilik) Province Wellesley Central Penang Lot No Commercial land Freehold 2, ,995 Advance Certificate of Title Vacant (Perakuan Pendahuluan Mengenai Hakmilik) Province Wellesley Central Penang Lot No Commercial land Freehold 131, ,432,314 Geran Mukim (First Grade) Vacant No. GM 135 Province Wellesley Central Penang Lot No Commercial land Freehold 2, ,864 Geran Mukim (First Grade) Vacant No. GM 136 Province Wellesley Central Penang Lot No Commercial land Freehold 2, ,239 Geran Mukim (First Grade) Vacant No. GM 137 Province Wellesley Central Penang Lot No Commercial land Freehold 38, ,040 Geran Mukim (First Grade) Vacant No. GM 138 Province Wellesley Central Penang Lot No Commercial land Freehold 61, ,498,501 Geran Mukim (First Grade) Vacant No. GM 139 Province Wellesley Central Penang Lot No Commercial land Freehold 17, ,536 Geran Mukim (First Grade) Vacant No. GM 140 Province Wellesley Central Penang Lot No Commercial land Freehold 83, ,069,554 Geran Mukim (First Grade) Vacant No. GM 141 Province Wellesley Central Penang Lot No Commercial land Freehold 3, ,402 Geran Mukim (First Grade) Vacant No. GM 142 Province Wellesley Central Penang Lot No Commercial land Freehold 141, ,851,624 Geran Mukim (First Grade) Vacant No. GM 143 Province Wellesley Central Penang Lot No Commercial land Freehold 10, ,132 Geran Mukim (First Grade) Vacant No. GM 144 Province Wellesley Central Penang TOTAL 18,736,379 AMTEL HOLDINGS BERHAD annual report

84 ANALYSIS OF SHAREHOLDINGS as at 27 March, 2003 Authorised Capital : RM100,000,000 Issued and Paid-up Capital : RM41,866,667 Class of Shares : Ordinary shares of RM1/- each Total Number of Shares Issued : 41,866,667 Voting Rights : 1 vote per ordinary shares No. of Shareholders : 3,119 ANALYSIS OF SHAREHOLDINGS Size of Shareholdings No. of Shareholders % No. of Shares % of Issued Capital , ,000-10,000 2, ,380, , , ,638, ,001-2,093, ,671, ,093,333 AND ABOVE ,163, Total 3, ,866, SUBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS AS AT 27 MARCH, 2003 No. of shares No. of shares in in which substantial which substantial shareholders are shareholders have deemed to have Name direct interest % an interest % Simfoni Kilat Sdn Bhd 6,844, * - Dato' Abdul Hamid bin Hj. Md. Zainuddin 6,586, * - Koid Hun Kian 4,475, * - Ng Ah Chong 1,456, ,844,303* Md. Arshad bin Md Yusoff 306, ,844,303* Hj Harun bin Hasan 69, ,844,303* * Deemed interested by virtue of his interest in Simfoni Kilat Sdn Bhd pursuant to Section 6A of the Companies Act, 1965 DIRECTORS' SHAREHOLDINGS AS AT 27 MARCH, 2003 Direct Direct Indirect Indirect Name No. of shares held % No. of shares held % Dato' Abdul Hamid Bin Hj. Md. Zainuddin 6,586, * - Koid Hun Kian 4,475, * - YM. Tunku Dato' Seri Kamel bin Tunku Rijaludin - - -* - Ng Ah Chong 1,456, ,844,303* Siow Hock Lee 65, * - Goh Hock Hai - - -* - Ng Lee Fang (Alternate to Ng Ah Chong) - - -* - * Deemed interested by virtue of his interest in Simfoni Kilat Sdn Bhd pursuant to Section 6A of the Companies Act, 1965 AMTEL HOLDINGS BERHAD annual report

85 THIRTY LARGEST SHAREHOLDERS AS PER THE REGISTER OF MEMBERS AS AT 27 MARCH, 2003 Name of Shareholder No. Shares Held % 1. CIMB Nominees (Tempatan) Sdn Bhd 3,920, Qualifier : Pledged Securities Account for Simfoni Kilat Sdn Bhd 2. CIMB Nominees (Tempatan) Sdn Bhd 3,826, Qualifier : Pledged Securities Account for Dato' Abdul Hamid bin Hj. Md. Zainuddin 3. AllianceGroup Nominees (Tempatan) Sdn Bhd 2,760, Qualifier : AFB Nominees (Tempatan) Sdn Bhd for Abdul Hamid bin Hj. Md. Zainuddin 4. AllianceGroup Nominees (Tempatan) Sdn Bhd 2,657, Qualifier : AFB Nominees (Tempatan) Sdn Bhd for Koid Hun Kian 5. AllianceGroup Nominees (Tempatan) Sdn Bhd 1,906, Qualifier : AFB Nominees (Tempatan) Sdn Bhd for Simfoni Kilat Sdn Bhd (1) 6. CIMB Nominees (Tempatan) Sdn Bhd 1,688, Qualifier : Pledged Securities Account for Koid Hun Kian 7. Employees Provident Fund Board 1,509, Ng Ah Chong 928, Chew Boon Seng 918, AllianceGroup Nominees (Tempatan) Sdn Bhd 840, Qualifier : AFB Nominees (Tempatan) Sdn Bhd for Simfoni Kilat Sdn Bhd (2) 11. Ong Ah Ong Poh Gaik 736, Ong Huey Peng 624, CIMB Nominees (Tempatan) Sdn Bhd 528, Qualifier : Pledged Securities Account for Ng Ah Chong 14. Chin Wou Chau 424, Mayban Nominees (Tempatan) Sdn Bhd 309, Qualifier : Mayban Trustees Berhad for MBF Balanced Fund (N ) 16. Md Arshad bin Md Yusoff 306, RHB Nominees (Tempatan) Sdn Bhd 292, Qualifier : GK Goh SPL for Chan Heng Koon (68/44469) 18. Tan Kim Leong 268, Tasec Nominees (Asing) Sdn Bhd 266, Qualifier : Meespierson Asia Limited for Savern Finance Limited 20. Thong & Kay Hian Nominees (Asing) Sdn Bhd 258, Qualifier : UOB Kay Hian Pte Ltd for Tan Hian Theng 21. OSK Nominees (Tempatan) Sdn Bhd 236, Qualifier : Chan Heng Koon 22. Kamala Veni A/P S. Suppiah 216, Loh Yoke Peng 212, Tasec Nominees (Tempatan) Sdn Bhd 204, Qualifier : Pledged Securities Account for Chin Nyook Fong 25. Ng Keng Ngooi Keng Lim 192, Chang Kar Mei 176, Simfoni Kilat Sdn Bhd 165, Kuala Lumpur City Nominees (Tempatan) Sdn Bhd 165, Qualifier : Pledged Securities Account for Liew Siew Ling 29. Ng Weng Keong 152, OSK Nominees (Tempatan) Sdn Bhd 150, Qualifier : Pledged Securities Account for Lee Thiam Loy Total 26,836, AMTEL HOLDINGS BERHAD annual report

86 Amtel Holdings Berhad ( A) (Incorporated in Malaysia) PROXY FORM (Before completing this form, please see notes) I/We (NRIC No. ) * Pledged Securities Account for of being a member/members of AMTEL HOLDINGS BERHAD ("the Company"), do hereby appoint of or failing whom of (NRIC No. ) or failing him/her, the Chairman of the meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Sixth (6th) Annual General Meeting of the Company to be held at The Pan Pacific Glenmarie, 1 Jalan Usahawan U1/8, Seksyen U1, Shah Alam, Selangor Darul Ehsan on Wednesday, 28 May, 2003 at a.m. and any adjournment thereof. My/our proxy/proxies shall vote on the Resolutions set out in the Notice of the Meeting as indicated with an "X" in the appropriate spaces herein below. If no specific direction as to the voting is given, the proxy will vote or abstain from voting at his/her discretion. Item Resolution No. Description of Resolution No. For Against 1 Adoption of Audited Financial Statements and Reports for financial year ended 30 November, Approval of Directors fees 2 3 Re-election of Dato Abdul Hamid bin Hj. Md. Zainuddin as Director 3 4 Re-election of Mr. Ng Ah Choong as Director 4 5 Re-appointment of Auditors 5 6 Authority to Directors to allot and issue shares 6 7 Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions set out as item (i) of Section of the Circular to Shareholders 7 8 Proposed Shareholders Mandate for Recurrent Related Party Transactions set out as item (ii)(a) of Section of the Circular to Shareholders 8 9 Proposed Shareholders Mandate for Recurrent Related Party Transactions set out as item (ii)(b) of Section of the Circular to Shareholders 9 Dated this.. day of Signature/Common Seal No. of Shares held Notes: 1. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 2. To be valid, this form, duly completed must be deposited at the Registered Office of the Company at No. 5, Jalan PJS 7/19, Bandar Sunway, Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time for holding the meeting or any adjournment thereof. 3. A member shall be entitled to appoint more than one (1) proxy to attend and vote for him provided that the provisions of Section 149(1)(c) of the Companies Act, 1965 are complied with. 4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. 5. If the appointer is a corporation this form must be executed under its Common Seal or under the hand of an officer or attorney duly authorised.