kumpulan h & l high-tech berhad - insage

Kumpulan H & L High-Tech BerhadIncorporated in Malaysia (317805-V)

A N N U A L R E P O R T 2 0 0 1

annual report 2001

Corporate Information

Board of Directors’ Prof i le

5 Years’ F inancial Highl ights

Chairman’s Statement

Corporate Structure

Corporate Governance Statement

Directors’ Information

Audit Committee

Remuneration Committee

Nomination Committee

Financial Statements

Analysis of Shareholdings

Other Information

List of Propert ies

Notice of Annual General Meeting

Form of Proxy

Contents2

3

4

5

8

9

13

14

17

18

19

46

47

48

49

Kumpulan H & L High-Tech Berhad wasincorporated in 1994 and listed on the SecondBoard of the Kuala Lumpur Stock Exchange in1998. Under its holdings are five subsidiarycompanies, namely H & L High-Tech Sdn Bhd,Plastik STC Sdn Bhd, H & L High-TechHoldings Sdn Bhd, Teong Choon Realty SdnBhd and STC Technology Sdn Bhd. TheGroup’s core business activities are mainly:

1) Manufacture and Sale of PrecisionEngineering Mould, tool & die, jigs andfixtures and other precision machinedparts;

2) Manufacture and Sale of CustomisedPrecision Engineering Plastic InjectionMoulded thermoplastic and thermosettparts and components for automotive,electrical and electronic industries.

The Group’s products are mainly for exportmarket, which includes countries like Japan,France, United Kingdom, Hong Kong,Singapore, Thailand, Indonesia, Belgium andChina.

c o r p o r a t e p r o f i l ecorporate pro f i l e

Chu Kan Chairman/Independent Non-Executive Director

Tan Lye HuatGroup Executive Chairman and Managing Director

Samat bin Junai Independent Non-Executive Director

Chong Yew Kiang (appointed 25 April 2001) Independent Non-Executive Director

Suite 1701, 17th FloorWisma Hamzah-Kwong HingNo. 1 Leboh Ampang 50100 Kuala LumpurTel: (03) 2032 1300Fax: (03) 2031 2892

No. 6 Jalan TSB 1Taman Industri Sungai Buloh47000 Sungai BulohTel: (03) 6157 6339Fax: (03) 6156 8918

Tan Kim Chin, MIA 3620Lim Hooi Mooi, MAICSA 0799764

KUMPULAN H & L HIGH-TECH BERHAD (Incorporated in Malaysia) 317805-V

page 2

Corporate Information

AU D I T CO M M I T T E E

BO A R D O F DI R E C T O R S

RE G I S T E R E D OF F I C E

SE C R E TA R I E S

PR I N C I PA L PL A C E O F BU S I N E S S

Messrs. BDO BinderPublic Accountants

EON Bank BerhadMalayan Banking BerhadSouthern Bank BerhadOversea Union Bank Berhad

Second Board of the Kuala Lumpur Stock Exchange

Malaysian Share Registration Services Sdn Bhd8th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: (03) 2026 8099Fax: (03) 2026 3736

AU D I T O R S

PR I N C I PA L BA N K E R S

SH A R E RE G I S T R A R S

ST O C K EX C H A N G E LI S T I N G

Tan Lye Huat Group Executive Chairman and Managing Director

Tan Kim Lai Executive Director

Tan Ho Foot Executive Director

Cheang Kam Hong Executive Director

Chong Yew Kiang (appointed on 25 April 2001)

Independent Non-Executive Director

Chu Kan Independent Non-Executive Director


Muhidin bin Arifin (Alternate Director to Samat bin Junai)

annual report 2001

annual report 2001


page 3

Board of Directors’ Profile

INDEPENDENT NON-EXECUTIVE DIRECTOR

Chu Kan, aged 58, was appointed as an Independent Non-ExecutiveDirector of Kumpulan H&L High-Tech Berhad on 2 September 1997.Hehas been a member of the Institute of Internal Auditors since 1980 andhe became a fellow member of the Institute of Financial Accountants in1974. In 1969, he began his career as an office manager cumaccountant with General Ceramic Bhd (now known as GeneralCorporation Bhd). He left in 1986 as the assistant group internal auditor.In 1987, he joined Redland Prestige Ceramic Sdn Bhd, a wholly ownedsubsidiary of Johan Holdings Bhd, which is principally involved inmanufacturing of ceramic tiles, as a finance and administration manager.He retired from employment in early 1997 and currently sits on board ofseveral private limited companies.


Samat Bin Junai, aged 43, was appointed as an Independent Non-Executive Director on 27 July 1999. Samat holds a Master’s Degree inBusiness Administration (Ohio University), Bachelor of Business Studies(Finance) and Diploma in Public Administration. He joined YayasanSarawak as an Assistant Clerk D11 in 1978, and now currently holds theposition of Deputy Administrator N2. He also sits on the board in one ofthe company, PSSB under the H&L Group and a number of other privatelimited companies.


Chong Yew Kiang, aged 53, was appointed as an Independent Non-Executive Director on 25 April 2001 and is a member of MalaysianInstitute of Accountants and Canadian Institute Of Accountants. He holdsa Master’s Degree in Science (Business Administration) University ofBritish Columbia, Vancouver, Canada and a Bachelor of Economics (2ndClass Upper) University of Malaya. He currently works as a DealerRepresentative with K&N Kenanga Berhad, a stockbroking company. Heholds directorship in a number of other private limited companies.

(ALTERNATE DIRECTOR TO SAMAT BIN JUNAI)Muhidin bin Arifin, aged 39, was appointed as an Alternate Director to theIndependent Non-Executive Director, Samat Bin Junai on 27 July 1999. He isalso an Alternate Director to the said Samat Bin Junai in PSSB. He holds aMaster’s Degree in Mechanical Engineering majoring in Automation &Robotics from a joint-research between University of Tokyo, Japan andUniversity Technology Malaysia (UTM), and B. Sc. in Mechanical Engineeringfrom Northern University of Massachusetts, USA. He is a member of Boardof Engineers Malaysia as a professional engineer since 1988. Prior to joiningMalaysian Technology Development Corporation (MTDC), Muhidin has beenwith an electronic manufacturing firm before pursuing lecturing, and researchand consultancy for 10 years with UTM. He joined MTDC as an AssistantManager in Feb 1992 and has been attached to various departments withinMTDC, which include Technology Transfer, Technology Development andInvestment Department. He is the pioneer in the establishment of the MTDCTechnology Infrastructure Group and MTDC Consulting Group beforepromoted to Assistant General Manager to establish a new IT &Communication Group in 1998. In January 2000, Muhidin was promoted toGeneral Manager to continue develop the IT & Communication Group as wellas to oversees the business development of ICT Group of MTDC Investeecompanies. He sits as an Executive Director responsible for the overallperformance, business development, strategic planning for all groups ofcompanies under the ICT Industrial Group of companies.During his 9 yearstenure with MTDC, he has developed strategic alliances with Internationalcompanies mainly the United States, Taiwan, China and the Netherlands. Heholds directorship in a number of other private limited companies.

GROUP EXECUTIVE CHAIRMAN AND MANAGING DIRECTOR

Tan Lye Huat, aged 48 was appointed as Group Executive Chairman andManaging Director of Kumpulan H&L High-Tech Berhad (H&L) on 2September 1997. He is a businessman by profession and the founder ofH&L High-Tech Sdn Bhd (HHT), Plastik STC Sdn Bhd (PSSB), H&L High-Tech Holdings Sdn Bhd (HHSB) and Teong Choon Realty Sdn Bhd(TCR). He founded Hup Lee Engineering Works (HLEW) in 1976 as apartnership in the mould and dies industry and incorporated thepartnership under HHT on 9 November 1988. With more than 25 yearsexperience of closely managing the production and marketing operationsof HHT and HLEW, he possess in-depth knowledge and experience inthe overall operations of HHT as well as the industry in general. He sitson the Board of all companies under the H&L Group and also holdsdirectorships in a number of other private limited companies.

EXECUTIVE DIRECTOR

Tan Kim Lai, aged 50 was appointed as Executive Director of H&L on 2September 1997. He is a businessman by profession and a foundingpartners of HLEW and became a shareholder and director of HHT uponits incorporation in 1988. He is responsible for the administrative mattersof H&L Group as he has garnered a wide experience in the administrativeaspect of the precision mould and die business since the partnershipbusiness of HLEW began in 1976. He sits on the Board of all companiesunder the H&L Group and also holds directorship in a number of otherprivate limited companies.

EXECUTIVE DIRECTOR

Tan Ho Foot, aged 51 was appointed as Executive Director of H&L on 2September 1997. He is one of the founding partners of HLEW andbecame a shareholder and director of HHT upon its incorporation in1988. He was the chief technician for the fabrication of machine partsand tooling of HLEW since 1982 and this function continued in HHT. Heis primary responsible for the fabrication functions in HHT. He sits on theBoard of few companies under the H&L Group and also holdsdirectorship in a number of other private limited companies.

EXECUTIVE DIRECTOR

Cheang Kam Hong, aged 52, was appointed as Executive Director ofH&L on 2 September 1997. He is an associate member of the MalaysianInstitute of Purchasing and Material Handling Management since 1982.He holds a Diploma in Marketing Management from the NationalProductivity Centre and Malaysian Association of Productivity, which heobtained in 1979. He has gained extensive experience in marketing andhas held various senior positions prior to his appointment as a director ofPSSB in 1988. He began his career as a sales executive in MegaChemicals Berhad, a company involved in manufacturing of industrialchemicals and insecticides, in 1971 and joined Hagemeyer Industries (M)Sdn Bhd in 1976, a company involved in plastic injection moulding ofindustrial parts and electrical and electronic components as a MarketingExecutive. He later served as the Marketing Manager in Lion MetalIndustries Sdn Bhd, a company involved in manufacturing of steelproducts during 1985 to 1986, Sales Manager with Atlas-Intek (M) SdnBhd, a company involved in precision plastics injection moulding andmetal die casting, in 1987 and Operation Manager with Seksun MetalIndustries Sdn Bhd, a company involved in precision metal stamping, in1988. He is responsible for the plastics injection moulding business ofthe Group. He sits on the Board of all companies under the H&L Groupand also holds directorship in a number of other private limitedcompanies.

TAN LYE HUAT CHU KAN

SAMAT BIN JUNAI

CHONG YEW KIANG

MUHIDIN BIN ARIFIN

TAN KIM LAI

TAN HO FOOT

CHEANG KAM HONG

GROUP REVENUE AND PROFIT BEFORE TAX (RM’000)

Group Revenue

Pro f i t Be fo re Tax

TOTAL ASSETS AND SHAREHOLDERS’ FUND (RM’000)

Tota l Assets

Shareho lders ’ Fund

annual report 2001


page 4

5 Years’ Financial Highlights25

,629

27,8

96 31,9

12 35,9

88

27,9

16

6,12

5

7,05

4

7,00

7

6,42

1

2,67

6

1997 1998 1999 2000 2001

40

35

30

25

20

15

10

5

0

14

12

10

8

6

4

2

0

53,2

87

53,6

46

58,0

33

61,6

02

59,9

69

39,1

77

46,7

50

51,8

56

55,0

31

55,4

27

1997 1998 1999 2000 2001

100

80

60

40

20

0

100

80

60

40

20

0

NET EARNINGS PERSHARE (SEN)

20.5

21.1

17.2

6

12.7

8

4.65

25

20

15

10

5

01997 1998 1999 2000 2001

NET TANGIBLEASSETS PER SHARE

(RM)

1.39

1.56

1.73

1.38

1.37

2.0

1.5

1.0

0.5

01997 1998 1999 2000 2001

GROSS DIVIDEND RATE (%)

0

8

6

5 5

10

8

6

4

2

01997 1998 1999 2000 2001

1997 1998 1999 2000 2001RM 000 RM 000 RM 000 RM 000 RM 000

Group Revenue 25,629 27,896 31,912 35,988 27,916

Profit Before Tax 6,125 7,054 7,007 6,421 2,676

Profit After Tax 5,793 6,197 6,906 5,112 1,865

Total Assets 53,287 53,646 58,033 61,602 59,969

Shareholders’ Equity 39,177 46,750 51,856 55,031 55,427

Gross Dividend Rate % 0 8 6 5 5

Net Earnings Per Share (sen) 20.5 21.1 17.26 12.78 4.65

Net Tangible Assets Per Share (RM) 1.39 1.56 1.73 1.38 1.37

Dear Shareholders,

On behalf of the Board of Directors, it gives me greatpleasure to present to you the Annual Report and AuditedAccounts of Kumpulan H&L High-Tech Berhad and theGroup for the financial year ended 31 October 2001.

CU R R E N T OP E R AT I N G EN V I R O N M E N T

The slowdown in US economy and the global electronicindustry slump has not shown sign of recovery. In thischallenging environment, our precision engineering mouldand plastic injection moulding business continues to remainthe core activities and revenue generator for the Group.

FI N A N C I A L OV E R V I E W

The financial results for the year under review reflectedthe Group’s was vulnerable to the global electronicslump, which caused a 22.4% decreased in revenuewhen compared to the previous financial year’s results.The Group’s profitability was affected by lower sellingprice and high cost of sales caused by under absorptionof fixed cost whereby the consolidated profit before taxdropped by 58.3% to RM2.676 million from RM6.421million in the previous financial year. As for the profitattributable to shareholders has further declined by63.5% to RM1.865 million from RM5.112 million in theprevious year as a result of lower profit and highereffective tax rate. Our Group’s net tangible assets

backing stand at 137 sen per share. As at the end of thefinancial year end, the Group’s balance sheet had showna healthy bank balance of RM17.510 million, which isadvantageous for future core business expansion. TheGroup continues to look for investment opportunities, theprimary targets being expansions and acquisitions, whichcomplement or increase our involvement in the corebusinesses of the Group.

RE V I E W O F GR O U P OP E R AT I O N S

a) Manufacture and Sale of Precision EngineeringMoulds

H & L High-Tech Sdn Bhd’s contribution to the Group’sprofit before tax has declined to 53.6% from 77.1% inthe previous corresponding year. This was due to theprofit before tax dropped by 70.8% to RM1.447 millionfrom RM4.949 million in the previous correspondingyear. The substantially decline in profitability was due toa drop in revenue by 25.8% from RM16.179 million toRM12.011 million when compared with thecorresponding year’s results and also because ofgross profit dropped by 48.5% due to lower sellingprice, together with high cost of sales caused by underabsorption of fixed cost. Over the year, more than 50%of the Company’s product were exported overseasand to the Free Trade Zone with the balance soldlocally. With the prevailing economic condition andbarring unforeseen circumstances, we expect the profitbefore tax for the next financial year to be compatible.


annual report 2001page 5


he Group continues to look for investment

opportunities, the primary targets being expansions and

acquisitions, which complement or increase our involvement

in the core businesses of the Group.

T

b) Manufacture and Sale of CustomisedEngineering Plastic Injection Mouldedthermoplastics and thermosett parts andcomponents for automotive, electrical andelectronic industries.

Plastik STC Sdn Bhd’s contribution to the Group’sProfit before Tax was improved to 42.8% from 24.3%in the previous corresponding year due to effectivecost control. But, however due to revenue dropped by28.5% to RM13.711 million from RM19.179 million inthe previous corresponding year, the profit before taxhas declined by 28.5% to RM1.156 million fromRM1.558 million in the previous corresponding year.With the prevailing economic condition, we expect theprofit before tax for the next financial year to becompatible.

YE A R 2000 CO M P L I A N C E

I am also pleased to report that the Company’s transitioninto the new millennium was smooth and incident free.Nevertheless the Group will continue to monitor the riskexposure from other bug dates.

FU T U R E CH A L L E N G E S A N D OP P O RT U N I T I E S

The Malaysian economy will be affected by the prolongedworldwide downturn. The global electronic industrydownturn will continue to affect consumer confidence


page 6annual report 2001


and thus has an adverse impact on us. In view of theuncertainty, and the expected costdown requested bycustomer and stiff competition in this business, the Boardanticipates the next year Group’s Profits before tax to becompatible. The Board will continue to remain vigilant,seek and exploit new opportunities to ensure long-termgrowth.

CO R P O R AT E DE V E L O P M E N T S

During the year, an additional 410,000 new ordinaryshares of RM1.00 were issued due to allotment toemployees under the Employees Share Option Scheme(ESOS).

On 22nd August 2001, its wholly owned subsidiary,H&L High-Tech Sdn Bhd, has increased its investmentin an Associate Company, H&L Technology Co. Ltd.through a further subscription of 8,330 new ordinaryshares at par value of 100 Baht each to maintain 49%equity interest in the share capital of the said H&LTechnology Co. Ltd.

For the purpose of updating and incorporating therelevant changes under the revamped new ListingRequirements and to be consistence with the provisionsof other regulatory and statutory requirements, theshareholders of the Company have approved the specialresolution to effect the amendments to the Company’sMemorandum and Articles of Association of theCompany at the EGM held on 27th December 2001.




DI V I D E N D

For the financial year ended 31st October 2001, theBoard is pleased to recommend a first and final tax-exempt dividend of 5 sen per share (2000: 5 sen pershare) based on the paid-up capital of RM40,429,085amounting to RM2,021,454.25 subject to theshareholders’ approval at the forthcoming Annual GeneralMeeting.

DI R E C T O R AT E

Mr. Tan Ah Heng resigned from the Company on 1 April2001.

On behalf of the Board and Management, I would like tothank him for his contributions to your Company duringhis tenure of service.

Mr. Chong Yew Kiang was appointed to the Board on 25 April 2001. I would like to extend a warm welcome tohim on your behalf and look forward to working closelywith him.

AC K N O W L E D G E M E N T A N D AP P R E C I AT I O N

As part of the Group’s effort to continuously providecustomer satisfaction and excellent quality service, I amglad to announce that a wholly owned subsidiary - PlastikSTC Sdn Bhd, had achieved the MS ISO 9001:2000

certification in Manufacture of plastik injection mouldingfor electronics and electrical, automotive and furnitureparts in September 2001, by Lloyd’s Register QualityAssurance.

This year we have celebrated the 25th anniversary of ourwholly owned subsidiary H&L High-Tech Sdn Bhd on 1 July 2001 at Sunway Lagoon Resort hotel.

I would like to express my sincere thanks to all my fellowcolleagues on the Board and the entire management andstaffs of the Group, whose dedication have beeninstrumental in making the financial year another success.

My fellow directors and I would also like to convey ourdeepest appreciation to our valued customers both localand abroad, business associates, financial institutions,government agencies and shareholders for theircontinued support and confidence in us.

TA N LY E HU AT

Group Executive Chairman and Managing Director

8 February 2002

annual report 2001


page 8

Corporate Structure

H & L High-Tech Holdings Sdn Bhd

H & L TechnologyCo. Ltd.

Teong Choon Realty Sdn Bhd

STC TechnologySdn Bhd

100%100%

49%

100%

100%

100%

H & L High-Tech Sdn Bhd

Plastik STC Sdn Bhd

Kumpulan H & L High-Tech Berhad

The Board is therefore committed in supporting therecommendations of the Malaysian Code onCorporate Governance (the "Code") and steps arecurrently undertaken to prepare the Company toadopt, implement and fulfil the Code’s best practicesand the recently revamped listing requirements of theKuala Lumpur Stock Exchange ("KLSE ListingRequirement").

THE BOARD

The Board of Directors of the Company comprisedmembers with a wide range of business, financial andtechnical service background. The directors alsohave experience and expertise in other related andunrelated industries. The Board meets every three (3)months in regular Board of Directors’ Meetings duringthe year to approve the quarterly results and theaudited financial statements on a pre-scheduledbasis. Additional meetings are convened when urgentand important decisions need to be taken betweenscheduled meetings. During the financial year 2001,the Company held five (5) meetings of the Board ofDirectors. All directors fulfilled the requirements of theArticles of Association in respect of board meetingattendance.

To enable the Board to carry out its duties, regularstatus report and board papers, including quarterlyand year-to-date performance report are provided tothe Board.

Where a potential conflict of interest may arise, it ismandatory practice for the Director concerned to

declare his or her interest and abstain from thedecision making process.

The Board has also established the Employee ShareOption Scheme ("ESOS") Committee, InvestmentCommittee and Audit Committee which is delegatedwith certain responsibilities as well as operates withinthe clearly define terms of reference. The Chairman ofAudit Committee reports the outcomes of committeemeetings to the Board and such reports areincorporated as part of the minutes of the Boardmeetings.

The Board may, whenever required, set up BoardCommittees delegated with specific powers andresponsibilities. In cognizance of the recommendationof the Code, the Board has recently on 27thDecember 2001 established the BoardRemuneration and Nomination Committee.

BOARD COMPOSITION

The Board currently consists of eight (8) directors;comprising four (4) Executive Directors, three (3)Independent Non-Executive Directors and one (1)Alternate Independent Non-Executive Director.

There is sufficient balance of executive directors andindependent non-executive directors such thatdecision made are fully discussed and examinedtaking into account the long term interest ofshareholders, employees, customers and the manycommunities in which the Group conducts itsbusiness. A brief profile of each director and their




he Board of Directors of Kumpulan H&L High-Tech Berhad ("H&L" or the

"Company") recognises that the exercise of good corporate governance in conducting

the affairs of the company with integrity, transparency and professionalism are key

components for the Company’s continued progress and success as these would not

only safeguard and enhance shareholders investment and value but ensuring at the

same time that the interests of other stakeholders are protected.

T

respective attendance in Board Meetings is presentedon pages 3 and 13 of this annual report. TheCompany has complied with the Board composition inline with the revamped KLSE Listing Requirement.

The roles of the Chairman and Managing Director arecurrently not separated. The Managing Director isprimarily responsible for the orderly conduct and theworking of the Board, day to day running of thebusiness and implementation of Board policies anddecisions. The presence of Independent Non-Executive Directors is essential as they provideunbiased and independent views, advice andjudgement as well to safeguard the interest of otherparties such as minority shareholders.

RE-ELECTION

The Articles of Association of the Company providesthat at least one third of the directors excluding theManaging Director, are subject to retirement byrotation at each Annual General Meeting but shall beeligible for re-election. An amendment has beenmade to the Articles of Association to provide that alldirectors including the Managing Director shall retirefrom office once at least in each three (3) years butshall be eligible for re-election.

SUPPLY OF INFORMATION TO THE BOARD

Prior to each Board meeting, every director is given anagenda and a set of Board papers for each agendaitem to be deliberated. The Managing Director will leadthe presentation of Board papers and provideexplanation of pertinent issue. All directors are entitledto call for additional clarification and information toassist them in matters that require their decision.

All Board members have access to the advice andservices of the Company Secretaries and may seekindependent professional advice should the needarise.

DIRECTOR TRAINING

During the financial year, all directors have attendedthe Mandatory Accreditation Programme pursuant toparagraph 15.09 of the Listing Requirements of KualaLumpur Stock Exchange.

THE AUDIT COMMITTEE

The Audit Committee currently comprises three (3)Independent Non-Executive Directors and theExecutive Director, namely Mr. Chu Kan (Chairman-Independent Non-Executive Director), Mr. Chong YewKiang (Independent Non-Executive Director) EncikSamat Bin Junai (Independent Non-ExecutiveDirector) and Mr. Tan Lye Huat (Chairman- GroupExecutive Chairman and Managing Director). Mr.Chong Yew Kiang is a member of the MalaysianInstitute of Accountants.

The Committee meets not less than four (4) times ayear and is governed by clearly defined terms ofreference. In the financial year 2001, the Committeemet on five (5) occasions.

The Committee’s set terms of reference andattendance record are both set out on pages 14 to16 of the Annual Report. Its prime tasks includereview of financial statements, accounting policies,appointment of external auditors and theirremuneration. During the year of review, theCommittee has reviewed the internal control systemof its subsidiaries H&L High-Tech Sdn Bhd andPlastik STC Sdn Bhd. In conducting its activities theBoard of Audit Committee has full access to both theemployees and external auditors.

THE EMPLOYEE SHARE OPTION SCHEME COMMITTEE

(“ESOS”)

The ESOS Committee comprises three (3) membersnamely Mr. Tan Lye Huat (Chairman-Group ExecutiveChairman and Managing Director) Mr. Cheang KamHong (Executive Director) and Mr. Chu Kan(Independent Non-Executive Director). TheIndependent Non-Executive Director do notparticipate in the scheme.

The ESOS Committee shall within the duration of theScheme, make Offers to any Eligible Employee whomthe ESOS Committee may in its discretion select tosubscribe for new H&L Shares.

THE INVESTMENT COMMITTEE

The Investment Committee comprises three (3)members namely Mr. Tan Lye Huat (Chairman- Group






Executive Chairman and Managing Director) Mr. TanHo Foot (Executive Director) and Encik Samat BinJunai (Independent Non-Executive Director).

– Investment policy on Quoted Securities The maximum size of the fund (inclusive ofsubsidiaries) which shall be from surplus funds tobe set aside for investment in quoted securitiesshall not be more than RM1, 500,000 or suchother sum as may be set by the Board ofDirectors. The Company or its subsidiaries maynot make any borrowing to finance any proposedinvestments. The funds may be used to invest insecurities quoted on the Kuala Lumpur StockExchange or in government bonds but not morethan 30 % of the total fund may be used to investin those securities quoted on Kuala Lumpur StockExchange that are non-Trustee securities.

THE REMUNERATION COMMITTEE

The Remuneration Committee comprises four (4)directors, the majority of whom are independent non-executive directors. They are Mr. Chong Yew Kiang(Chairman-Independent Non-Executive Director), Mr.Tan Lye Huat (Group Executive Chairman andManaging Director), and Encik Samat Bin Junai(Independent Non-Executive Director) Mr. Chu Kan(Independent Non-Executive Director).

The Remuneration Committee formed as per resolutionpassed by the directors on 27th December 2001.

The Remuneration Committee’s terms of referenceand attendance record are both set out on page 17of the annual report. Its prime task includes reviewand recommends to the Board on remunerationpackages and benefits extended to the ExecutiveDirectors and the overall human resourcedevelopment plan. Remuneration packages ofExecutive Directors will be a matter to be decided bythe Board as a whole with the Director concernedabstaining in deliberations and voting on decisions inrespect of his / her individual remuneration.

THE NOMINATION COMMITTEE

The Nomination Committee comprises four (4)directors namely Encik Samat Bin Junai (Chairman-Independent Non-Executive Director), Mr. Tan Lye

Huat (Group Executive Chairman and ManagingDirector), Mr. Chu Kan (Independent Non-ExecutiveDirector) and Mr. Chong Yew Kiang (IndependentNon-Executive Director)

The Nomination Committee formed as per resolutionpassed by the Directors on 27th December 2001.

The Committee’s terms of reference and attendancerecord are both set out on page 18 of the annualreport. Its prime task includes proposing newnominees to the Board and the appointment, transferand promotion of all executives.

DIRECTORS’ REMUNERATION

For the year under review, all of the Independent Non-Executive Directors has received director fees.

The Independent Non-Executive Directors were alsopaid meeting allowance. None of the IndependentNon-Executive Directors has received more thanRM25, 000 each in meeting allowance.

The details of the director’s remuneration during thefinancial year ended 31 October 2001 are as shownon page 12.

RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

The Company values its dialogue with bothinstitutional shareholders and private investors andrecognises that timely and equal dissemination ofrelevant information be provided to them. In thisregard, it strictly adheres to the disclosurerequirements of the KLSE.

The Annual General Meeting (AGM) is the principalforum of dialogue with the shareholders. Shareholdersare notified of the meeting and provided with a copy ofthe Company ‘s Annual Report before the meeting. Ateach AGM, the Board presents the progress andperformance of the Company as contained in theAnnual Report and shareholders are encouraged toparticipate and are given the opportunity to raisequestions or to seek for more information. During themeeting, the Chairman and Board members areavailable to respond to all shareholders’ queries.

Discussion were also held from time to time betweenthe Company Managing Director, Chairman AuditCommittee and Company financial controller with





1. Aggregate remuneration of Directors categorised into appropriate components:

Category Fees Salaries & Other Benefits in Kind Total(RM) Emolument (RM) (RM) (RM)

Executive Director NIL 673,788 62,708 736,496

Independent Non-Executive Director 22,000 6,600 NIL 28,600

Total 22,000 680,388 62,708 765,096

2. The number of Directors of the Company whose total remuneration fall within the following bands for the financial yearended 31st October 2001 are as follows:-

Range of Remuneration inclusive Executive Director Independent Non-Executive DirectorAttendance Allowance (RM)

Below 25,000 3

25,001 – 50,000 1

50,001 – 100,000 1

100,001 – 150,000 2

150,001 – 200,000

200,001 – 250,000

250,001 – 300,000

300,001 – 500,000 1

analyst/investors throughout the year. However anyinformation provided are those within the disclosurerequirements of KLSE.

H&L also maintains a website (www.hlhitech.com)through which shareholders and the general publiccan gain access to information about the Group aswell as its products.

FINANCIAL REPORTING

The Company’s financial statements are drawn up inaccordance with the provision of the Companies Act1965 and applicable approved accounting standards inMalaysia. The Board is responsible to ensure that thefinancial statements of the Company give a true and fairview of the state of affairs of the Company. In thisregard, the Board will also ensure that the Companyhas used appropriate accounting policies for its financialstatements, consistently applied and supported byreasonable and prudent judgements and estimates.

Prior to release to KLSE, the quarterly and year endfinancial statements are presented to the Board AuditCommittee and reviewed by the Board of Directorstowards ensuring that the financial statements

present a balanced and understandable assessmentof the Company ‘s position and prospects.

RELATIONSHIP WITH AUDITORS

The role of the audit committee in relation to theexternal auditors is stated on page 14 to 16.

COMPLIANCE WITH THE CODE

Save as disclosed below, the Group has substantiallycomplied with the Principles and Best Practices of theCode.

The Board is mindful of the dual roles held by theGroup Executive Chairman/Managing Director but is ofthe view that there are sufficient independent mindedDirectors with wide boardroom experience to providethe necessary check and balance. Besides, the Boardhas various Board Committees to discuss and decideon policy matters and related issues on a regular basis.The Group Executive Chairman/ Managing Director asa rule abstains from all deliberations and voting onmatters, which he is directly or deemed interested.

Name of Nationality Directorship Directorship in Family Convictions for AttendanceDirector in Listed Non Listed Relationships Offences within the Board

Companies Companies past 10 years other Meetingthan Traffic Offences

1 Tan Lye Huat Malaysian Kumpulan H&L Affluent Future Sdn Bhd Brother of Tan Ho Foot NIL 5/5High-Tech Berhad Tan Lye Huat Holdings Sdn Bhd and Tan Kim Lai

Teong Choon Realty Sdn Bhd H&L High-Tech Holdings Sdn BhdPlastik STC Sdn BhdSTC Technology Sdn BhdH&L High-Tech Sdn BhdH&L Technology Co Ltd, Thailand

2 Tan Ho Foot Malaysian Kumpulan H&L Affluent Future Sdn Bhd Brother of Tan Lye Huat NIL 4/5High-Tech Berhad Tan Yu Goo Holdings Sdn Bhd and Tan Kim Lai

Teong Choon Realty Sdn Bhd H&L High-Tech Holdings Sdn BhdSTC Technology Sdn BhdH&L High-Tech Sdn Bhd

3 Tan Kim Lai Malaysian Kumpulan H&L Affluent Future Sdn Bhd Brother of Tan Lye Huat NIL 5/5High-Tech Berhad STC Technology Sdn Bhd and Tan Ho Foot

Teong Choon Realty Sdn Bhd H&L High-Tech Holdings Sdn BhdPlastik STC Sdn BhdTan Yu Goo Holdings Sdn BhdH&L High-Tech Sdn BhdH&L Technology Co, Ltd, Thailand.

4 Cheang Kam Hong Malaysian Kumpulan H&L Affluent Future Sdn Bhd None NIL 5/5High-Tech Berhad Tan Lye Huat Holdings Sdn Bhd

Teong Choon Realty Sdn Bhd H&L High-Tech Holdings Sdn BhdPlastik STC Sdn BhdSTC Technology Sdn BhdH&L High-Tech Sdn Bhd

5 Chu Kan Malaysian Kumpulan H&L Polyplanter Enterprise Sdn Bhd None NIL 5/5High-Tech Berhad Plant Cultivator Sdn Bhd

Setapak Indah( M) Sdn BhdAssociated Refractories

Manufacturing Sdn Bhd

6 Samat Bin Junai Malaysian Kumpulan H&L Pometia Sdn Bhd None NIL 4/5High-Tech Berhad Hexza Chem (Sarawak) Sdn Bhd

Petronesa Engineering Sdn BhdPetronesa Trading Sdn BhdSanjung Etika Sdn BhdSOP Plantation (Niah) Sdn BhdTanahMas (Sarawak) Sdn BhdPlastik STC Sdn BhdPetronesa Sdn bhd

7 Muhidin Bin Arifin Malaysian Kumpulan H&L Androitech Sdn Bhd None NIL NIL(Alternate Director High-Tech Berhad Chembell Technology Sdn Bhdto Samat Bin Junai) MTDC Internet Inter Network Multimedia

Ventures Berhad Solutions Sdn BhdLKT Amcosem Sdn BhdMalaysian Electroplating

Technology Sdn BhdMTDC Technology

Infrastructure Sdn BhdPlastic STC Sdn BhdRaidah.com Sdn BhdUM-MTDC Technology

Corporation Sdn BhdEXS Communication Sdn Bhd

(formerly known as UT Starcom (M) Sdn Bhd)

8 Chong Yew Kiang Malaysian Kumpulan H&L Exponential Progress Sdn Bhd None NIL 2/2High-Tech Berhad Prestasi Indera Sdn Bhd



Directors’ Information



Audit Committee

MEMBERSHIP

The Committee shall be appointed by the Board fromamongst its number and shall consist not less thanthree (3) members, the majority of whom must beIndependent Non-Executive Directors. AnIndependent Director shall be one who fulfils therequirement as provided in the KLSE ListingRequirements.

At least one (1) member of the Audit Committee mustbe a member of the Malaysian Institute ofAccountants; or if he is not a member of the MalaysianInstitute of Accountants, must have at least three (3)years working experience and either have passed theexaminations specified in Part I of the First Schedule ofthe Accountants Act 1967; or a member of one of theassociations of accountants specified in Part II of theFirst Schedule of the Accountants Act 1967.

The Chairman of the Committee shall be appointedby the members of the Audit Committee who shall bean Independent Non Executive Director.

Members of the Committee may relinquish theirmembership with prior written notice to the CompanySecretary and may continue to serve as Director ofthe Company.

In the event of any vacancy in the Committee, thevacancy shall be filled within 3 months and theNomination Committee shall review and recommendfor the Board’s approval another appropriate Directorto fill the vacancy.

The Board must ensure that no Alternate Director isappointed as a member of the Audit Committee.

TERMS OF REFERENCE

OBJECTIVE

• To serve as a focal point for communicationbetween non-Committee Directors and externalauditors, internal auditors and the managementon matters in connection with financialaccounting, reporting and controls.

• To assist the Board of Directors in fulfilling its fiduciaryresponsibilities relating to corporate accounting,system of internal controls, management andfinancial reporting practices of the Group.

• To enhance the independence of the functions ofthe Company’s external auditors and internalauditors through active participation in the auditprogress.

AUTHORITY & RIGHTS

The Committee shall in accordance with theprocedure determined by the Board and at the costof the Company:

(a) has authority to investigate any activity within itsTerms of Reference;

(b) has the resources which are required to performits duties;

(c) has full and unrestricted access to anyinformation pertaining to the Group;

CO M P O S I T I O N

Chu Kan (Chairman)Independent Non-Executive Director


Chong Yew Kiang (appointed on 25 April 2001)

Independent Non-Executive Director


The Audit Committee was established since March 1998 and its composition complies with the Listing Requirements of theKuala Lumpur Stock Exchange.



Audit Committee

(d) has direct communication channels with theExternal Auditors and person(s) carrying out theinternal audit function or activity(if any);

(e) has authority to obtain independent professionalor other advice and to secure the attendance ofoutsiders with relevant experience and expertise ifit considers this necessary; and

(f) be able to convene meetings with External Auditors,excluding the attendance of executive membersof the Group, whenever deemed necessary.

DUTIES AND RESPONSIBILITIES

(a) To consider the appointment of the externalauditors, the audit fee and questions ofresignation or dismissal;

(b) To discuss with the external auditors before theannual audit commences, the nature and scopeof the audit plan;

(c) To review the quarterly, and annual financialstatements of the Company and the Groupfocussing particularly on:

(i) Any changes in accounting policies andpractices.

(ii) Significant adjustments arising from the audit.

(iii) The going concern assumption.

(iv) Compliance with accounting standards andother legal requirements.

(d) To discuss problems and reservations arisingfrom the final and any interim audits, evaluation ofthe system of internal controls and any mattersthe external auditors may wish to discussincluding assistance given by the employees ofthe Group to the auditors; and to review theauditors’ audit report, management letter andmanagement’s response;

(e) To consider any related party, inter companytransactions and conflict of interest that may arisewithin the Company/Group and any relatedparties outside the Group including anytransaction, procedure or course of conduct thatraises questions of management integrity;

(f) To review the scope, functions, procedures ofinternal audit and results of any internal auditconducted and whether or not appropriateactions, where necessary have been taken; and

(g) Such other functions as may be agreed by theAudit Committee and the Board of Directors.

MEETING AND MINUTES

The meeting shall be held not be less than four (4)times a year. Additionally, the Chairman shall convenea meeting of the Committee if requested to do so byits member, management or the internal or externalauditors to consider any matters within the scope andresponsibilities of the Committee. The externalauditors have the right to appear and be heard at anymeeting of the Committee and shall appear beforethe Committee when required to do so by theCommittee. The Committee may invite any Boardmember or any member of the Senior Managementor any relevant employee within the Company whothe Committee thinks fit to attend its meetings toassist in resolving and clarifying matters raised in auditreports. Any two (2) members of the Committeepresent at the meeting shall constitute a quorum. If atany meeting the Chairman of the Committee is notpresent within 10 minutes after the time appointed forholding the meeting, the Members present maychoose one of their numbers who is an IndependentNon-Executive Director to be Chairman of themeeting.

An Agenda shall be sent to all the members of theCommittee and any persons that may be required toattend. Minutes of each meeting shall be kept anddistributed to each member of the Company and alsothe members of the Board of Directors.

The Company Secretary shall be Secretary of theCommittee.

SUMMARY OF ACTIVITIES

During the year under review, five (5) meetings of theCommittee were held. These meetings wereattended in full by all the members of the Committee.



Audit Committee

(a) The Audit Committee met at scheduled times,with due notices of meetings issues and agendasplanned and itemised so that issues raised inrespect of financial statements were deliberatedand discussed in a focused and detailed manner.

(b) At each of these Audit Committee’s meetings, theaccountants were invited to brief the AuditCommittee on specific issues.

(c) The reviews of the Group’s quarterly and annualfinancial statements were held before the Boardmeetings at which the financial statements wereto be approved. During the respective BoardMeetings, the chairman of the Audit Committeebriefed the Board on issues raised in respect of the financial statements and therecommendations of the Committee thereon.

(d) During the review of the Group’s twelve month’sfinancial results, representatives of the externalAuditors, Messrs, BDO Binder were invited todiscuss the Group Accounts for the year ended31 Oct 2001 (audited by them); Management’sresponse to all pertinent issues and findings hadbeen raised and noted by the External Auditorsduring their examination of the said GroupAccounts; together with recommendation inrespect of the findings.

ATTENDANCE AT THE AUDIT COMMITTEE MEETINGS

Attendance

Chu Kan (Chairman) 5 out of 5Independent Non-Executive Director

Samat bin Junai 4 out of 5Independent Non-Executive Director

Chong Yew Kiang 2 out of 2Independent Non-Executive Director(appointed on 25 April 2001)

Tan Lye Huat 5 out of 5Group Executive Chairman andManaging Director

DATE, TIME AND PLACE OF THE AUDIT COMMITTEE

MEETINGS HELD

Date Time Place

21 December 2.30 p.m. Boardroom2000 6 Jalan TSB 1

Taman Industri Sungai Buloh47000 Sungai BulohSelangor Darul Ehsan

13 February 2.00 p.m. Boardroom2001 6 Jalan TSB 1


23 March 2.30 p.m. Boardroom2001 6 Jalan TSB 1


29 June 1.00 p.m. Boardroom2001 6 Jalan TSB 1


24 September 3.00 p.m. Boardroom2001 6 Jalan TSB 1


INTERNAL AUDIT FUNCTION

The Company does not have an Internal Auditfunction, but is in the midst of appointing a firm ofqualified professionals ("the Firm") to review andaccess the internal audit function of the Group on anad-hoc basis.

The internal audit function is independent of theactivities or operation of its auditees. The Firm shallundertakes the audit of the Group’s operating units;reviewing the units’ compliance to internal controlprocedure; highlighting weaknesses and makingappropriate recommendations for improvement. TheFirm shall report directly to the Audit Committee.

ME M B E R S H I P

(a) The members of the Remuneration Committeeshall be appointed by the Board from amongsttheir number, consisting wholly or mainly ofNon-Executives and shall consist not less thanthree (3) members.

(b) The members of the Committee shall elect theChairman from amongst their number who shallbe Independent Non-Executive Director.

(c) If the number of members for any reasons fallbelow three (3), the Board shall, within three (3)months of that event, appoint such numbers ofnew members as may be required to make upthe minimum number of three (3) members.

(d) The term of office for all members of theCommittee is subject to renewal on a yearlybasis.

(e) The Company Secretary shall be the Secretaryof the Committee.

(f) Directors do not participate in decisions on theirown remuneration packages.

TE R M S O F RE F E R E N C E

(a) To review and recommend to the Board theremuneration of each of the executive and non-executive directors in all its forms, drawing fromoutside advice as necessary.

(b) To recommend to the Board after reviewing themanagement’s proposals on:- overall annual salary increment

frameworks/policy.

- annual bonus limits/ guidelines andincentive scheme.

- fees and basic salary levels.- remuneration, benefits in kinds and other

terms and conditions of employment,which have to be introduced as part of thegroup’s overall human resourcedevelopment plan. This would includematters such as pegging the Groupsalaries in line with industry standards andmajor changes in benefits package.

ME E T I N G S A N D PR O C E D U R E S

Meetings are to be held as and when necessary. Thequorum for each meeting shall be two (2). TheManaging Director shall attend and makepresentations at meetings, whenever business is notrelated to Executive Directors’ remuneration. TheCommittee will decide its own procedures and otheradministrative arrangements.

Minutes of each meeting shall be kept by theSecretary as evidence that the Committee hasdischarged its functions. The Chairman of theCommittee will report to the Board after eachRemuneration Committee meeting.



Remuneration Committee


Chong Yew Kiang (Chairman)Independent Non-Executive Director


Chu KanIndependent Non-Executive Director


The Remuneration Committee was established on 27th December 2001 and its composition complies with the ListingRequirements of the Kuala Lumpur Stock Exchange.



(a) The members of the Nomination Committeeshall be appointed by the Board from amongsttheir number, consisting of wholly or mainlyNon-Executives and shall consist not less thanthree (3) members.

(b) The members of the Committee shall elect theChairman from amongst their number who shallbe Independent Non-Executive Director.

(c) If the number of members for any reasons fallbelow three (3), the Committee shall, withinthree (3) months of that event, review andrecommend for the Board’s approvalappropriate Director to fill the vacancy.

(d) The term of office for all members of theCommittee is subject to renewal on a yearlybasis.

(e) The Company Secretary shall be the Secretaryof the Committee.

(f) Directors do not participate in decisions on theirown nomination.

TE R M S O F RE F E R E N C E

(a) To propose new nominees for the Boards ofKumpulan H&L High-Tech Berhad and itssubsidiaries whether to be filled by Boardmembers, shareholders or executives.

The Committee shall also consider candidatesfor directorships proposed by the ManagingDirector and within the bounds of practicality byany other senior executive or any director orshareholder.

(b) To make recommendations to the Board onDirectors to fill seats on Board Committees.

(c) To assist the Board annually in reviewing therequired mix of skills of experience and otherqualities, including core competencies, whichNon-Executive Directors should bring to theBoard.

(d) To annually carry out the process to beimplemented by the Board for assessing theeffectiveness of the Board as a whole, theCommittees of the Board and for assessing thecontribution of each individual Director.

(e) To review management’s proposals for theappointment, dismissal, transfer andpromotions of all executives.

ME E T I N G S A N D PR O C E D U R E S

Meetings are to be held as and when necessary. Thequorum for each meeting shall be two (2). TheCommittee will decide its own procedures and otheradministrative arrangements.

Minutes of each meeting shall be kept by theSecretary as evidence that the Committee hasdischarged its functions. The Chairman of theCommittee will report to the Board after eachNomination Committee meeting.



Nomination Committee


Samat bin Junai (Chairman)Independent Non-Executive Director

Chong Yew KiangIndependent Non-Executive Director

Chu KanIndependent Non-Executive Director


The Nomination Committee was established on 27th Dec 2001 and its composition complies with the Listing Requirementsof the Kuala Lumpur Stock Exchange.

annual report 2001

Financial Statement

20

25

25

26

27

28

29

30

32

Di rec to rs ’ Repor t

S ta tement by D i rec to rs

Sta tu to r y Dec la ra t ion

Repor t o f the Aud i to rs

Ba lance Sheets

Income Sta tements

Sta tement o f Changes in Equ i ty

Cash F low Sta tements

Notes to the F inanc ia l S ta tements

annual report 2001

The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Companyfor the financial year ended 31 October 2001.

PRINCIPAL ACTIVITIES

The Company is principally an investment holding company.

The principal activities of the subsidiary companies are disclosed in Note 6 to the Financial Statements.

There have been no significant changes in the nature of the activities of the Company and of its subsidiary companies duringthe financial year.

RESULTSGroup Company

RM RM

Net profit for the financial year 1,864,760 373,123

DIVIDENDS

The dividends paid or proposed by the Company since the end of the previous financial year were as follows:-

(a) As approved by the shareholders at the Annual General Meeting held on 23 March 2001, a final dividend of 5%, taxexempt, amounting to RM2,001,454 in respect of the previous financial year was paid on 30 April 2001.

The amount paid of RM2,001,454 is in excess of the dividend of 5%, tax exempt, totalling RM2,000,954 as proposedin last year’s directors’ report and as reflected in the financial statements. The additional dividend paid of RM500 arosefrom the dividend paid on additional ordinary shares arising from the exercise of the share options under the ESOSsubsequent to the balance sheet date but prior to the date of the dividend payment.

(b) A proposed first and final dividend of 5%, tax exempt, amounting to RM2,021,454 has been recommended by thedirectors in respect of the current financial year, subject to the approval of shareholders at the forthcoming AnnualGeneral Meeting of the Company.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those as disclosed in thefinancial statements.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the issued and fully paid-up share capital of the Company was increased from RM40,019,085 toRM40,429,085 by the issue of 410,000 new ordinary shares of RM1.00 each pursuant to the exercise of the Employees’Share Option Scheme ("ESOS").

These new ordinary shares rank pari passu in all material respects with the then existing ordinary shares of the Company.

The Company has not issued any debentures during the financial year.

EMPLOYEES’ SHARE OPTION SCHEME ("ESOS")

The ESOS was approved by the shareholders at an Extraordinary General Meeting held on 15 March 2000.


page 20

Directors’ Report

EMPLOYEES’ SHARE OPTION SCHEME ("ESOS") (Cont’d)

The main features of the ESOS are as follows:-

(a) The ESOS is made available to eligible employees and full-time executive directors. Eligible employees and full-timeexecutive directors are those who are confirmed employees of the Group and have served for a period of at least one(1) year’s continuous service;

(b) The total number of shares to be offered under the ESOS shall not, in aggregate, exceed 10% of the issued and paid-up share capital of the Company at any time during the existence of the ESOS which will be in force for a period of 5years commencing 27 April 2000;

(c) The option price for a new share under the ESOS shall be the average of the mean market quotation of the shares asquoted and shown in the Daily Official List issued by the Kuala Lumpur Stock Exchange for the five market daysimmediately preceding the date of offer, or at the par value of the shares, whichever is higher;

(d) The actual number of shares which may be offered to any eligible employee shall be at the discretion of the ESOSCommittee provided that the number of shares to be offered shall not be less than one thousand (1,000) shares nor morethan the maximum allowable allotment of such eligible employee and shall be in multiples of one thousand (1,000) shares;

(e) An option granted under the ESOS may be exercised by the grantee on any working day during the period commencingfrom the date of offer to the expiry of the 5 year period commencing 27 April 2000; and

(f) The shares shall on issue and allotment rank pari passu in all material respects with the then existing issued shares ofthe Company.

The employees to whom the options have been granted are not eligible to participate, in any other employees’ share optionscheme that may be established by the Company or the Group subsequent hereto so long as such employees remain to holdoptions under the ESOS.

The movements in the Company’s unissued shares under options during the financial year are as follows:-

---------- Options over Ordinary Shares of RM1 each ----------Granted Exercised

Balance during the during the Balanceas at financial financial as at

1.11.2000 year Lapsed year 31.10.2001Number of unissued shares under options

at the following exercise price:-

- RM3.44 3,350,669 - (474,668) - 2,876,001- RM3.02 25,333 - (4,000) - 21,333- RM1.37 - 755,000 (77,000) (222,000) 456,000- RM1.32 - 340,000 (3,000) (188,000) 149,000

DIRECTORS

The directors who held office since the date of the last report are as follows:-

Tan Lye HuatTan Ho FootTan Kim LaiCheang Kam HongChu KanSamat bin JunaiMuhidin bin Arifin (Alternate director to Samat bin Junai)Chong Yew Kiang (Appointed on 25.4.2001)Tan Ah Heng (Resigned on 1.4.2001)



Directors’ Report

DIRECTORS (Cont’d)

In accordance with Article 97 of the Company’s Articles of Association, Messrs. Tan Lye Huat and Tan Kim Lai retire from theBoard by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

In accordance with Article 102 of the Company’s Articles of Association, Mr. Chong Yew Kiang retires from the Board at theforthcoming Annual General Meeting and, being eligible, offers himself for re-election.

DIRECTORS’ INTERESTS

Except as stated below, no other directors holding office at the end of the financial year had any beneficial interests in theordinary shares of the Company and related companies during the financial year ended 31 October 2001, as recorded in theRegister of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965:-

--------------Number of Ordinary Shares of RM1 each------------Balance Balance

as at as atShares of the Company 1.11.2000 Bought Sold 31.10.2001

Direct Interest

Tan Lye Huat 1,593,851 50,000 - 1,643,851Tan Ho Foot 521,807 34,000 - 555,807Tan Kim Lai 1,636,871 25,000 - 1,661,871Cheang Kam Hong 134,022 10,000 - 144,022

Indirect Interest

Tan Lye Huat 15,075,235 - - 15,075,235Tan Ho Foot 11,200,001 - - 11,200,001Tan Kim Lai 11,200,001 - - 11,200,001Cheang Kam Hong 11,200,001 - - 11,200,001

-------------Options over Ordinary Shares of RM1 each-------------

Balance Balance as at as at

1.11.2000 Granted Exercised 31.10.2001Share options in the Company

Tan Lye Huat 210,667 97,000 50,000 257,667Tan Ho Foot 157,333 34,000 34,000 157,333Tan Kim Lai 88,000 25,000 25,000 88,000Cheang Kam Hong 157,333 38,000 10,000 185,333

By virtue of their shareholdings in the Company, Messrs. Tan Lye Huat, Tan Ho Foot, Tan Kim Lai and Cheang Kam Hong arealso deemed to have beneficial interest in the shares of the subsidiary companies to the extent the Company has an interest.

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 emoluments received or due and receivable by the directors asshown in the financial statements) by reason of a contract made by the Company or a related corporation with the director orwith a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the objectof enabling directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of theCompany or any other body corporate.



Directors’ Report

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY:-

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the directorstook reasonable steps:-

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making ofprovision for doubtful debts and have satisfied themselves that there are no known bad debts and thatadequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their book values in the ordinary course ofbusiness had been written down to their estimated realisable values.

(b) In the opinion of the directors, the results of the operations of the Group and of the Company during the financialyear have not been substantially affected by any item, transaction or event of a material and unusual nature.

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(c) The directors are not aware of any circumstances:-

(i) which would necessitate the writing off of bad debts or render the amount of the provision for doubtful debtsin the financial statements of the Group and of the Company inadequate to any material extent; or

(ii) which would render the values attributed to current assets in the financial statements of the Group and of theCompany misleading; and

(iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities ofthe Group and of the Company misleading or inappropriate.

(d) In the opinion of the directors:-

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantiallythe results of the operations of the Group and of the Company for the financial year in which this report ismade; and

(ii) no contingent or other liability has become enforceable or is likely to become enforceable within the period oftwelve months after the end of the financial year which will or may affect the ability of the Group and of theCompany to meet their obligations as and when they fall due.

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of thefinancial year to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financialyear.

(g) The directors are not aware of any circumstances not otherwise dealt with in this report or financial statements ofthe Group and of the Company which would render any amount stated in the financial statements misleading.



Directors’ Report

AUDITORS

The retiring auditors, Messrs. BDO Binder, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors.

.............................................. )Tan Lye Huat )

))) DIRECTORS))

............................................… )Tan Kim Lai

Kuala Lumpur



Directors’ Report

In the opinion of the directors, the financial statements set out on pages 27 to 45 have been drawn up in accordance withapplicable approved accounting standards in Malaysia so as to give a true and fair view of:-

(i) the state of affairs of the Group and of the Company as at 31 October 2001 and of their results for the financial yearthen ended; and

(ii) the cash flows of the Group and of the Company for the financial year ended 31 October 2001.

On behalf of the Board,

.............................................. )Tan Lye Huat )

)) DIRECTORS)

.............................................. )Tan Kim Lai

Kuala Lumpur

I, Choong Seong Lee, being the officer primarily responsible for the financial management of Kumpulan H & L High-TechBerhad, do solemnly and sincerely declare that the financial statements set out on pages 27 to 45 are, to the best of myknowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtueof the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly )declared by the abovenamed at )Kuala Lumpur this )

)

Before me:-



Statement by Directors

Statutory Declaration

We have audited the financial statements set out on pages 27 to 45. These financial statements are the responsibility of thedirectors. Our responsibility is to express an opinion on the financial statements based on our audit.

We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made by the directors, as well asevaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:-

(a) the financial statements have been properly drawn up in accordance with applicable approved accounting standards inMalaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of theGroup and of the Company as at 31 October 2001 and of their results and cash flows for the financial year then ended;and

(b) the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiarycompanies have been properly kept in accordance with the provisions of the Act.

We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’sfinancial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidatedfinancial statements and we have received satisfactory information and explanations required by us for those purposes.

The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and did notinclude any comment made under subsection (3) of Section 174 of the Act.

BDO BinderAF : 0206Chartered Accountants

Tan Kim Leong, JP235/6/03 (J/PH)Partner

Kuala Lumpur



Report of the Auditors to the members of Kumpulan H & L High-Tech Berhad

Group Company2001 2000 2001 2000

ASSETS EMPLOYED NOTE RM RM RM RM

PROPERTY, PLANT AND EQUIPMENT 5 31,055,628 33,264,192 - -

INVESTMENT IN SUBSIDIARY COMPANIES 6 - - 23,416,961 23,416,961

INVESTMENT IN AN ASSOCIATED COMPANY 7 76,563 4,900 - -

OTHER INVESTMENTS - At cost 8 939,043 921,197 - -

CURRENT ASSETS

Inventories 9 3,491,323 5,351,798 - -Trade receivables 10 5,886,447 7,192,438 - -Other receivables, deposits and

prepayments 319,959 770,247 8,474 7,384Tax recoverable 689,125 378,997 35,876 32,918Amounts owing by subsidiary

companies 11 - - 18,933,000 20,524,000Amount owing by an associated

company 12 - 143,645 - -Fixed deposits 13 16,484,164 12,112,677 550,298 45,872Cash and bank balances 1,026,329 1,461,742 54,676 18,420

27,897,347 27,411,544 19,582,324 20,628,594

CURRENT LIABILITIES

Trade payables 917,970 2,017,894 - -Other payables and accruals 655,031 1,817,275 54,349 24,588Taxation 14,281 122,971 - -Proposed dividend 2,021,454 2,000,954 2,021,454 2,000,954

3,608,736 5,959,094 2,075,803 2,025,542

NET CURRENT ASSETS 24,288,611 21,452,450 17,506,521 18,603,052

56,359,845 55,642,739 40,923,482 42,020,013

FINANCED BY

SHARE CAPITAL 14 40,429,085 40,019,085 40,429,085 40,019,085

RESERVES 15 14,997,419 15,012,313 494,397 2,000,928

SHAREHOLDERS’ EQUITY 55,426,504 55,031,398 40,923,482 42,020,013

DEFERRED LIABILITY

Deferred taxation 16 933,341 611,341 - -

56,359,845 55,642,739 40,923,482 42,020,013

The attached notes form an integral part of the Financial Statements.



Balance Sheets as at 31 October 2001

Group Company2001 2000 2001 2000

NOTE RM RM RM RM

Revenue 17 27,915,601 35,988,295 500,000 -

Cost of sales (21,529,404) (25,811,178) - -

Gross profit 6,386,197 10,177,117 500,000 -

Other operating income 633,369 611,033 2,567 4,525

Marketing and distribution expenses (643,785) (526,521) - -

Administration expenses (2,516,474) (2,604,701) (58,304) (44,847)

Other operating expenses (1,167,245) (1,224,529) (70,248) (176,170)

Profit/(Loss) from operations 2,692,062 6,432,399 374,015 (216,492)

Finance cost (15,669) (11,460) - -

Profit/(Loss) before taxation 18 2,676,393 6,420,939 374,015 (216,492)

Taxation 19 (811,633) (1,308,852) (892) (910)

Net profit/(loss) for the financial year 1,864,760 5,112,087 373,123 (217,402)

Basic earnings per ordinary share (sen) 20 4.65 12.78

Diluted earnings per ordinary share (sen) 20 4.60 -

Dividend per share (sen):-

Proposed first and final dividend of 5 sen (2000: proposed first and final dividend of 5 sen), tax exempt 5.00 5.00




Income Statements for the financial year ended 31 October 2001

Share Share Revaluation Retainedcapital premium reserve profits Total

GROUP RM RM RM RM RM

Balance as at 31 October 1999 30,000,002 2,904,092 4,158,976 14,792,935 51,856,005

Net profit for the financial year - - - 5,112,087 5,112,087

Appropriation:-

Proposed first and final dividend of 5%, tax exempt - - - (2,000,954) (2,000,954)

Share options exercised 14,000 50,260 - - 64,260

Bonus issue 10,005,083 (2,904,092) - (7,100,991) -

Balance as at 31 October 2000 40,019,085 50,260 4,158,976 10,803,077 55,031,398

Net profit for the financial year - - - 1,864,760 1,864,760

Appropriation:-

Proposed first and final dividend of 5%, tax exempt - - - (2,021,454) (2,021,454)

Additional dividend paid (Note 21) - - - (500) (500)

Share options exercised 410,000 142,300 - - 552,300

Balance as at 31 October 2001 40,429,085 192,560 4,158,976 10,645,883 55,426,504

Share Share Retainedcapital premium profits Total

COMPANY RM RM RM RM

Balance as at 31 October 1999 30,000,002 2,904,092 11,270,015 44,174,109

Net loss for the financial year - - (217,402) (217,402)

Appropriation:-

Proposed first and final dividend of 5%, tax exempt - - (2,000,954) (2,000,954)

Bonus issue 10,005,083 (2,904,092) (7,100,991) -

Share options exercised 14,000 50,260 - 64,260

Balance as at 31 October 2000 40,019,085 50,260 1,950,668 42,020,013

Net profit for the financial year - - 373,123 373,123

Appropriation:-

Proposed first and final dividend of 5%, tax exempt - - (2,021,454) (2,021,454)

Additional dividend paid (Note 21) - - (500) (500)

Share options exercised 410,000 142,300 - 552,300

Balance as at 31 October 2001 40,429,085 192,560 301,837 40,923,482




Statement of Changes in Equity for the financial year ended 31 October 2001

Group Company2001 2000 2001 2000

RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profit/(Loss) before taxation 2,676,393 6,420,939 374,015 (216,492)

Adjustments for:-

Dividend income (13,460) (5,450) (500,000) -Depreciation of property, plant and equipment 3,309,078 3,172,366 - -Allowance for doubtful debts 16,997 - - -Gain on disposal of quoted shares - (15,046) - -Gain on disposal of property, plant and equipment (25,288) (33,393) - -Interest expense 15,669 11,460 - -Interest income (450,050) (432,889) (2,349) (4,329)

Operating profit/(loss) before working capital changes 5,529,339 9,117,987 (128,334) (220,821)

Decrease/(Increase) in inventories 1,860,475 (625,725) - -Decrease/(Increase) in trade receivables 1,288,994 (6,588) - -Decrease/(Increase) in other receivables, deposits

and prepayments 450,288 - (1,090) (7,384)Decrease in trade payables (1,099,924) (285,751) - -(Decrease)/Increase in other payables and accruals (1,162,244) - 29,761 (50,724)

Cash generated from/(used in) operations 6,866,928 8,199,923 (99,663) (278,929)

Interest paid (15,669) (11,460) - -Tax paid (906,043) (1,027,883) (3,850) (65,631)

Net cash from/(used in) operating activities 5,945,216 7,160,580 (103,513) (344,560)

CASH FLOWS FROM INVESTING ACTIVITIES

Dividend received from quoted investment 11,052 4,722 - -Interest income received 450,050 432,889 2,349 4,329Acquisition of additional shares in an associated company (71,663) (2,900) - -Proceeds from disposal of property, plant and equipment 95,101 175,460 - -Proceeds from disposal of quoted shares - 128,942 - -Withdrawal of fixed deposits - 30,000 - -Purchase of property, plant and equipment (1,170,327) (4,932,126) - -Purchase of quoted shares (17,846) (709,393) - -Repayments from/(Advances to) an associated company 143,645 (40,454) - -

Net cash (used in)/from investing activities (559,988) (4,912,860) 2,349 4,329



Cash Flow Statements for the financial year ended 31 October 2001

Group Company2001 2000 2001 2000

RM RM RM RM

CASH FLOWS FROM FINANCING ACTIVITIES

Repayments from subsidiary companies - - 2,091,000 1,872,680Proceeds from issue of shares 552,300 64,260 552,300 64,260Dividend paid (2,001,454) (1,800,000) (2,001,454) (1,800,000)

Net cash (used in)/from financing activities (1,449,154) (1,735,740) 641,846 136,940

NET INCREASE/(DECREASE) IN CASHAND CASH EQUIVALENTS 3,936,074 511,980 540,682 (203,291)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 13,554,419 13,042,439 64,292 267,583

CASH AND CASH EQUIVALENTS ATEND OF THE FINANCIAL YEAR (NOTE 22) 17,490,493 13,554,419 604,974 64,292




Cash Flow Statements

1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia.

The registered office of the Company is located at Suite 1701, 17th Floor, Wisma Hamzah Kwong Hing, No. 1, LebohAmpang, 50100 Kuala Lumpur.

The principal place of business is located at No. 6, Jalan TSB 1, Taman Industri Sungai Buloh, 47000 Sungai Buloh,Selangor Darul Ehsan.

The financial statements are presented in Ringgit Malaysia.

2. PRINCIPAL ACTIVITIES

The Company is principally an investment holding company.

The principal activities of the subsidiary companies are disclosed in Note 6 to the Financial Statements.

There have been no significant changes in the nature of the activities of the Company and of its subsidiary companiesduring the financial year.

3. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements of the Group and of the Company have been prepared in accordance with applicable approvedaccounting standards in Malaysia and the provisions of the Companies Act, 1965.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of accounting

The financial statements of the Group and of the Company have been prepared under the historical costconvention (as modified by the revaluation of the freehold and long leasehold land, and buildings) unless otherwiseindicated in the significant accounting policies.

The preparation of financial statements in conformity with applicable approved accounting standards in Malaysiaand the provisions of the Companies Act, 1965 requires the directors to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dateof the financial statements and the reported amounts of revenue and expenses during the reporting period. Actualresults could differ from those estimates.

4.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all its subsidiarycompanies made up to the end of the financial year. Inter-company transactions and balances are eliminated onconsolidation and the consolidated financial statements reflect external transactions only. The Company adoptsboth the acquisition and merger method of consolidation.

Where the acquisition method is adopted, the difference between the purchase price and the fair value of the net assets ofsubsidiary companies at the date of acquisition is reflected in the financial statements as goodwill or reserve on consolidation.Goodwill on consolidation is stated at cost and is written down only when the directors are of the opinion that there is apermanent diminution in its value. The results of the subsidiary companies acquired or disposed of during the year areincluded in the consolidated financial statements from the date of their acquisitions or up to the date of their disposals.

Where the merger method is used, merger deficit being the excess of the cost of investment over the nominal valueof the shares transferred is written off against reserves, other than the share premium account, in the consolidatedfinancial statements. The results of subsidiary companies acquired are accounted for on a full year basis.



Notes to the Financial Statements 31 October 2001

4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

4.3 Investments

(i) Subsidiary companies

A subsidiary company is a company in which the Group has power to exercise control over the financial andoperating policies so as to obtain benefits from its activities.

Investment in subsidiary companies, which is eliminated on consolidation, is stated in the Company’s financialstatements at cost less provision for permanent diminution in value, if any.

(ii) Associated company

An associated company is a company in which the Group has a long term equity interest of between 20% to50% and where the Group is in a position to exercise significant influence over the financial and operatingpolicies of the investee company.

The Company’s investment in associated companies is stated at cost less provision for permanent diminutionin value, if any.

Premium or reserve arising on axquisition represents the difference between the cost of investment and theGroup’s share of the value of net assets of the associated companies at the date of acquisition.

The Group’s share of results and reserves of the associated companies acquired or disposed of are includedin the consolidated financial statements from the effectice date of acquisition or up to the effective date ofdisposal. The Group’s interest in the associated companies is stated at cost plus adjustments to reflectchanges in the Group’s share of the net assets of the associated companies.

(iii) Other investments

Other investments are stated at cost less provision for permanent diminution in value, if any.

4.4 Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost or valuation less accumulated depreciation and accumulatedimpairment losses.

Tools and utensils under construction and freehold land are not depreciated.

The freehold and long leasehold land, and buildings were revalued in 1997. After the first revaluation, the freeholdand long leasehold land, and buildings will be revalued at regular intervals of at least once in every five years.Where market conditions indicate that the carrying values of the revalued properties differ materially from themarket values, additional revaluations will be carried out in those intervening years.

Depreciation of all other property, plant and equipment is calculated on a straight line method at the followingprincipal annual rates to write off the cost or valuation of the assets over their estimated useful lives:-

Long leasehold land 92 yearsFreehold buildings 2%Freehold factory buildings 2%Long leasehold factory buildings 2%Plant and machinery 10%Motor vehicles 10%Office equipment, furniture and fittings 10%Warehouse 10%Renovation 10%Tools and utensils 10%Electrical installation 10%



Notes to the Financial Statements

4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

4.5 Inventories

Inventories are stated at the lower of cost (determined on a first-in, first-out basis) and net realisable value.

Cost of raw materials and consumables comprise the original cost of purchase plus the cost of bringing theinventories to their present condition and location.

Cost of work-in-progress and finished goods includes the cost of raw materials, direct labour and a proportion ofmanufacturing overheads.

4.6 Receivables

Known bad debts are written off and allowance is made for debts where the collectibility is considered doubtful.

4.7 Deferred taxation

Deferred taxation is provided for under the liability method at the current taxation rate in respect of all material timingdifferences except where it is reasonably probable that such timing differences will not crystallise in the foreseeablefuture.

Deferred tax benefits are only recognised in the financial statements when there are reasonable assurance of theirrealisation.

4.8 Foreign currency transactions and translations

Transactions in foreign currencies are converted into Ringgit Malaysia at rates of exchange ruling on transactiondates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translatedinto Ringgit Malaysia at the approximate rates of exchange at the balance sheet date. All gains or losses on foreignexchange are taken up in the income statement.

The principal closing rates used in the translation of foreign currencies are as follows:-

2001 2000RM RM

1 Singapore Dollar 2.20 2.201 US Dollar 3.80 3.80

4.9 Revenue recognition

Group

Revenue from sale of goods is recognised in the income statement upon delivery of goods and customers’acceptance.

Rental income is recognised in the income statement on an accrual basis.

Dividends are recognised when the shareholder’s right to receive payment is established.

Company

Dividends from subsidiary companies are recognised when proposed by the subsidiary companies.

4.10 Cash and cash equivalents

Cash and cash equivalents include cash and bank balances, deposits and other short term, highly liquidinvestments which are readily convertible to cash with insignificant risk of changes in value.




5. PROPERTY, PLANT AND EQUIPMENT

2001 Balance at Balance at1.11.2000 Additions Disposals 31.10.2001

Group RM RM RM RM

Cost unless otherwise stated

Freehold land- At 1997 valuation 3,866,000 - - 3,866,000Long leasehold land- At 1997 valuation 3,132,050 - - 3,132,050Freehold buildings- At 1997 valuation 269,000 - - 269,000Freehold factory buildings- At 1997 valuation 1,190,000 - - 1,190,000Long leasehold factory building- At cost 3,796,182 - - 3,796,182- At 1997 valuation 2,400,000 - - 2,400,000Plant and machinery 27,092,628 423,019 - 27,515,647Motor vehicles 3,026,934 47,909 (180,200) 2,894,643Office equipment, furniture and fittings 3,336,109 343,236 (25,704) 3,653,641Warehouse 272,183 5,000 - 277,183Renovation 214,182 14,836 - 229,018Tools and utensils 1,848,424 271,480 (3,900) 2,116,004Electrical installation 925,983 600 - 926,583Tools and utensils under construction - 64,247 - 64,247

51,369,675 1,170,327 (209,804) 52,330,198

Chargefor the

Balance at financial Balance at1.11.2000 year Disposals 31.10.2001

RM RM RM RMAccumulated depreciation

Freehold land- At 1997 valuation - - - -Long leasehold land- At 1997 valuation 34,044 34,044 - 68,088Freehold buildings- At 1997 valuation 23,742 5,936 - 29,678Freehold factory buildings- At 1997 valuation 119,597 28,393 - 147,990Long leasehold factory building- At cost 225,581 75,923 - 301,504- At 1997 valuation 192,000 48,000 - 240,000Plant and machinery 13,768,181 2,229,145 - 15,997,326Motor vehicles 1,273,717 253,108 (119,634) 1,407,191Office equipment, furniture and fittings 1,531,489 315,767 (17,367) 1,829,889Warehouse 86,767 25,032 - 111,799Renovation 118,413 12,495 - 130,908Tools and utensils 306,691 197,332 (2,990) 501,033Electrical installation 425,261 83,903 - 509,164Tools and utensils under construction - - - -

18,105,483 3,309,078 (139,991) 21,274,570




5. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

2000 Balance at Balance at1.11.1999 Additions Disposals 31.10.2000

Group RM RM RM RM


Freehold land- At 1997 valuation 3,866,000 - - 3,866,000Long leasehold land- At 1997 valuation 3,132,050 - - 3,132,050Freehold buildings- At 1997 valuation 269,000 - - 269,000Freehold factory buildings- At 1997 valuation 1,190,000 - - 1,190,000Long leasehold factory building- At cost 3,796,182 - - 3,796,182- At 1997 valuation 2,400,000 - - 2,400,000Plant and machinery 24,079,464 3,145,555 (132,391) 27,092,628Motor vehicles 2,988,420 172,779 (134,265) 3,026,934Office equipment, furniture and fittings 3,010,110 332,599 (6,600) 3,336,109Warehouse 253,605 18,578 - 272,183Renovation 177,182 37,000 - 214,182Tools and utensils 741,672 1,106,752 - 1,848,424Electrical installation 807,120 118,863 - 925,983

46,710,805 4,932,126 (273,256) 51,369,675

Chargefor the

Balance at financial Balance at1.11.1999 year Disposals 31.10.2000

RM RM RM RMAccumulated depreciation

Freehold land- At 1997 valuation - - - -Long leasehold land- At 1997 valuation - 34,044 - 34,044Freehold buildings- At 1997 valuation 17,807 5,935 - 23,742Freehold factory buildings- At 1997 valuation 91,204 28,393 - 119,597Long leasehold factory building- At cost 149,657 75,924 - 225,581- At 1997 valuation 144,000 48,000 - 192,000Plant and machinery 11,609,777 2,167,447 (9,043) 13,768,181Motor vehicles 1,128,811 266,942 (122,036) 1,273,717Office equipment, furniture and fittings 1,242,279 289,320 (110) 1,531,489Warehouse 62,835 23,932 - 86,767Renovation 102,752 15,661 - 118,413Tools and utensils 180,736 125,955 - 306,691Electrical installation 334,448 90,813 - 425,261

15,064,306 3,172,366 (131,189) 18,105,483




5. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Balance at Balance at31.10.2001 31.10.2000

RM RMNet book value

Freehold land- At 1997 valuation 3,866,000 3,866,000Long leasehold land- At 1997 valuation 3,063,962 3,098,006Freehold buildings- At 1997 valuation 239,322 245,258Freehold factory buildings- At 1997 valuation 1,042,010 1,070,403Long leasehold factory building- At cost 3,494,678 3,570,601- At 1997 valuation 2,160,000 2,208,000Plant and machinery 11,518,321 13,324,447Motor vehicles 1,487,452 1,753,217Office equipment, furniture and fittings 1,823,752 1,804,620Warehouse 165,384 185,416Renovation 98,110 95,769Tools and utensils 1,614,971 1,541,733Electrical installation 417,419 500,722Tools and utensils under construction 64,247 -

31,055,628 33,264,192

The freehold and long leasehold land and buildings were revalued by the directors and approved by the relevantauthorities in 1997 based on a revaluation carried out in 1996 by an independent firm of professional valuers using the"Open Market" value basis.

Had the revalued assets been carried at cost less accumulated depreciation, the carrying amounts would have been asfollows:-

Accumulated Net bookCost depreciation value

Group RM RM RM

2001

Freehold land 1,232,921 - 1,232,921Freehold buildings 463,489 89,630 373,859Freehold factory buildings 1,269,269 283,552 985,717Long leasehold land 2,265,731 49,420 2,216,311Long leasehold factory building 1,690,723 182,865 1,507,858

6,922,133 605,467 6,316,666

2000

Freehold land 1,232,921 - 1,232,921Freehold buildings 463,489 80,361 383,128Freehold factory buildings 1,269,269 258,166 1,011,103Long leasehold land 2,265,731 24,627 2,241,104Long leasehold factory building 1,690,723 149,051 1,541,672

6,922,133 512,205 6,409,928




6. INVESTMENT IN SUBSIDIARY COMPANIES

Company2001 2000

RM RM

Unquoted shares - At cost 23,416,961 23,416,961

Details of the subsidiary companies, which are all incorporated in Malaysia, are as follows:-

EffectiveName of Company Equity Interest Principal Activities

2001 2000

H & L High-Tech Sdn. Bhd. 100% 100% Manufacture and sale of precision engineering moulds,dies, jigs, fixtures, tools and other precision machineparts.

Plastik STC Sdn. Bhd. 100% 100% Manufacture and sale of customised precisionengineering plastic injection moulded thermoplastic andthermosett parts and components for electrical andelectronic industry.

H & L High-Tech HoldingsSdn. Bhd. 100% 100% Letting of properties and property investment.

Teong Choon Realty Sdn. Bhd. 100% 100% Letting of properties and property investment.

Subsidiary company ofPlastik STC Sdn. Bhd.

STC Technology Sdn. Bhd. 100% 100% Manufacture and sale of customised precisionengineering plastic injection moulded thermoplastic andthermosett parts and components for electrical andelectronic industry.

7. INVESTMENT IN AN ASSOCIATED COMPANY

Group2001 2000

RM RM

Unquoted shares - At cost 76,563 4,900

Details of the associated company is as follows:-

Country of EffectiveName of Company Incorporation Equity Interest Principal Activities

2001 2000

H & L Technology Thailand 49% 49% DormantCo. Ltd

The financial statements of the associated company are audited by a member firm of BDO International.

The Group’s share of results of the associated company is not equity accounted for in the consolidated financialstatements as the associated company has not commenced operations as at 31 October 2001 and, in the opinion ofthe directors, has no material effect on the financial statements of the Group.




8. OTHER INVESTMENTS - At cost

Group2001 2000

RM RM

Shares quoted in Malaysia 617,043 599,197Unquoted shares 50,000 50,000Golf club memberships 272,000 272,000

939,043 921,197

Market value of quoted shares 414,060 456,800

9. INVENTORIES

Group2001 2000

RM RM


Raw materials 1,315,629 2,106,092Work-in-progress 359,196 536,967Finished goods 1,816,498 1,984,548Finished goods - at net realisable value - 724,191

3,491,323 5,351,798

10. TRADE RECEIVABLES

Group2001 2000

RM RM

Trade receivables 5,903,444 7,192,438Less: Allowance for doubtful debts (16,997) -

5,886,447 7,192,438

11. AMOUNTS OWING BY SUBSIDIARY COMPANIES

Company

The amounts owing by subsidiary companies represent advances and payments made on behalf which are interest-free, unsecured and have no fixed terms of repayment.

12. AMOUNT OWING BY AN ASSOCIATED COMPANY

Group

The amount owing by an associated company arose mainly from expenses paid on behalf by the Company which isinterest-free, unsecured and has no fixed terms of repayment.




13. FIXED DEPOSITS

Group Company2001 2000 2001 2000

RM RM RM RMFixed deposits with:-

Licensed banks 16,484,164 10,989,611 550,298 45,872Finance company - 1,123,066 - -

16,484,164 12,112,677 550,298 45,872

Included in fixed deposits with licensed banks is an amount of RM20,000 (2000: RM20,000) belonging to a subsidiarycompany which has been pledged as security for banking facility granted to the subsidiary company.

14. SHARE CAPITAL

Group and Company2001 2000

Number Numberof shares RM of shares RM

Ordinary shares of RM1.00 each:-

Authorised 50,000,000 50,000,000 50,000,000 50,000,000

Issued and fully paid:-Balance as at 1 November 40,019,085 40,019,085 30,000,002 30,000,002ESOS 410,000 410,000 14,000 14,000Bonus issue - - 10,005,083 10,005,083

Balance as at 31 October 40,429,085 40,429,085 40,019,085 40,019,085

During the financial year, the issued and fully paid-up share capital of the Company was increased from RM40,019,085to RM40,429,085 by the issue of 410,000 new ordinary shares of RM1.00 each pursuant to the exercise of theEmployees’ Share Option Scheme ("ESOS").

These new ordinary shares rank pari passu in all material respects with the then existing ordinary shares of the Company.

The ESOS was approved by the shareholders at an Extraordinary General Meeting held on 15 March 2000.

The main features of the ESOS are as follows:-

(a) The ESOS is made available to eligible employees and full-time executive directors. Eligible employees and full-time executive directors are those who are confirmed employees of the Group and have served for a period of atleast one (1) year’s continuous service;

(b) The total number of shares to be offered under the ESOS shall not, in aggregate, exceed 10% of the issued andpaid-up share capital of the Company at any time during the existence of the ESOS which will be in force for aperiod of 5 years commencing 27 April 2000;

(c) The option price for a new share under the ESOS shall be the average of the mean market quotation of the sharesas quoted and shown in the Daily Official List issued by the Kuala Lumpur Stock Exchange for the five market daysimmediately preceding the date of offer, or at the par value of the shares, whichever is higher;




14. SHARE CAPITAL (Cont’d)

(d) The actual number of shares which may be offered to any eligible employee shall be at the discretion of the ESOSCommittee provided that the number of shares to be offered shall not be less than one thousand (1,000) sharesnor more than the maximum allowable allotment of such eligible employee and shall be in multiples of onethousand (1,000) shares;

(e) An option granted under the ESOS may be exercised by the grantee on any working day during the periodcommencing from the date of offer to the expiry of the 5 year period commencing 27 April 2000; and

(f) The shares shall on issue and allotment rank pari passu in all material respects with the then existing issued sharesof the Company.

The employees to whom the options have been granted are not eligible to participate, in any other employees’ shareoption scheme that may be established by the Company or the Group subsequent hereto so long as such employeesremain to hold options under the ESOS.

The movements in the Company’s unissued shares under options during the financial year are as follows:-

---------- Options over Ordinary Shares of RM1 each ----------Granted Exercised

Balance during the during the Balanceas at financial financial as at

1.11.2000 year Lapsed year 31.10.2001Number of unissued shares

under options at thefollowing exercise price:-

- RM3.44 3,350,669 - (474,668) - 2,876,001- RM3.02 25,333 - (4,000) - 21,333- RM1.37 - 755,000 (77,000) (222,000) 456,000- RM1.32 - 340,000 (3,000) (188,000) 149,000

15. RESERVESGroup Company

2001 2000 2001 2000RM RM RM RM

Non distributable:-

Share premium 192,560 50,260 192,560 50,260Revaluation reserve 4,158,976 4,158,976 - -

Distributable:-

Retained profits 10,645,883 10,803,077 301,837 1,950,668

14,997,419 15,012,313 494,397 2,000,928

Subject to the agreement of the Inland Revenue Board:-

(i) The Company and the subsidiary companies have tax exempt accounts amounting to approximatelyRM9,600,000 (2000: RM9,200,000) and RM15,658,000 (2000: RM15,110,000) respectively available for thedistribution of tax exempt dividends.

(ii) The Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and tax exempt account tofrank and distribute the entire retained profits as at 31 October 2001 as dividends without incurring additional tax liability.




16. DEFERRED TAXATIONGroup

2001 2000RM RM

Balance at 1 November 611,341 -Transfer from income statement (Note 19) 322,000 611,341

Balance at 31 October 933,341 611,341

The tax effects of the surplus on revaluation of the freehold and long leasehold land and buildings have not beenrecognised in the financial statements as the Group has no intention of disposing of the revalued assets in theforeseeable future.

The tax effects in respect of timing differences of subsidiary companies on the excess of capital allowances over thecorresponding depreciation of property, plant and equipment which are not expected to reverse in the foreseeable futureand not accounted for in the financial statements amounted to approximately RM1,700,000 (2000: RM1,808,000).

17. REVENUE

Group Company2001 2000 2001 2000

RM RM RM RM

Sales of goods 27,756,621 35,836,295 - -Rental income 158,980 152,000 - -Dividend income - - 500,000 -

27,915,601 35,988,295 500,000 -

18. PROFIT/(LOSS) BEFORE TAXATIONGroup Company

2001 2000 2001 2000RM RM RM RM

This is arrived at:-After charging:-

Auditors’ remuneration:-- current year 45,200 40,400 14,000 12,000- underprovision in prior years 4,800 1,400 2,000 1,000Allowance for doubtful debts 16,997 - - -Depreciation of property, plant and equipment 3,309,078 3,172,366 - -Directors’ remuneration:-- emoluments other than fee 680,388 626,662 6,600 4,600- fees 22,000 - 22,000 -Interest on bank overdraft 15,669 11,460 - -Realised loss on foreign exchange 69,886 - - -Rental of premises 75,000 72,950 - -

The estimated monetary value of benefit-in-kind received by the directors otherwise than in cash from the Groupamounted to RM62,708 (2000: RM69,450).




18. PROFIT/(LOSS) BEFORE TAXATION (Cont’d)Group Company

2001 2000 2001 2000RM RM RM RM

And crediting:-

Realised gain on foreign exchange - (8,740) - -Interest income (450,050) (432,889) (2,349) (4,329)Rental income (85,690) (81,600) - -Gain on disposal of property, plant and equipment (25,288) (33,393) - -Gain on disposal of quoted shares - (15,046) - -Gross dividend from quoted investments (13,460) (5,450) - -Tax exempt dividend from subsidiary companies - - (500,000) -

19. TAXATION

Group Company2001 2000 2001 2000

RM RM RM RM

Provision for the year 445,992 697,511 650 910Underprovision in prior years 43,641 - 242 -

489,633 697,511 892 910Deferred taxation (Note 16):-- current year 322,000 474,254 - -- underprovision in prior years - 137,087 - -

322,000 611,341 - -

811,633 1,308,852 892 910

The tax charge of the Group in 2001 reflects an effective tax rate which is higher than the statutory tax rate due mainlyto certain expenses which are not allowable for taxation purposes.

The tax charge of the Group in 2000 reflects an effective tax rate which is lower than the statutory tax rate due mainlyto claim for reinvestment allowances and the non-recognition of the tax effects of timing differences not expected toreverse in the foreseeable future.

The tax charge of the Company in 2001 and 2000 are in respect of interest income.

20. EARNINGS PER ORDINARY SHARE

The basic earnings per ordinary share is calculated by dividing the consolidated profit after taxation of RM1,864,760(2000: RM5,112,087) by the weighted average number of shares in issue during the financial year of 40,066,668 (2000:40,011,502 ).

The diluted earnings per ordinary share is calculated based on the consolidated profit after taxation of RM1,864,760 andon the adjusted weighted average number of ordinary shares issued and issuable of 40,511,891. The adjusted weightedaverage number of ordinary shares issued and issuable has been arrived at based on the assumption that ESOS areexercised at the beginning of the financial year or the date of ESOS granted and the ordinary shares to be issued underESOS are deemed to have been issued for no consideration.




20. EARNINGS PER ORDINARY SHARE (Cont’d)

The weighted average number of ordinary shares outstanding plus the weighted average number of ordinary sharesdeemed to have been issued for no consideration upon exercise of ESOS is calculated as follows:-

2001

Weighted average number of ordinary shares in issue 40,066,668

Weighted average number of ordinary shares deemed to have been issued for no consideration upon exercise of ESOS 445,223

Weighted average number of ordinary shares for diluted earnings per share 40,511,891

The diluted earnings per ordinary share for the financial year ended 31 October 2000 is not disclosed as it is antidilution.

21. ADDITIONAL DIVIDEND PAID

As approved by the shareholders at the Annual General Meeting held on 23 March 2001, a first and final dividend of5%, tax exempt, amounting to RM2,001,454 in respect of the previous financial year was paid on 30 April 2001.

The amount paid of RM2,001,454 is in excess of the dividend of 5%, tax exempt, totalling RM2,000,954 as proposedin last year’s directors’ report and as reflected in the financial statements. The additional dividend paid of RM500 arosefrom the dividend paid on additional ordinary shares arising from the exercise of the share options under the ESOSsubsequent to the balance sheet date but prior to the date of the dividend payment.

22. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:-

Group Company2001 2000 2001 2000

RM RM RM RM

Cash and bank balances 1,026,329 1,461,742 54,676 18,420Fixed deposits 16,484,164 12,112,677 550,298 45,872

17,510,493 13,574,419 604,974 64,292Less: Fixed deposit pledged to a licensed bank (20,000) (20,000) - -

17,490,493 13,554,419 604,974 64,292

23. CAPITAL COMMITMENTSGroup

2001 2000RM RM

Approved and contracted for - 262,273




24. CONTINGENT LIABILITIES - Unsecured

Company

As at 31 October 2001, the Company has given a corporate guarantee amounting to RM17,300,000 (2000:RM17,300,000) to licensed banks for banking facilities granted to subsidiary companies. However, the banking facilitieshave not been utilised by the subsidiary companies as at 31 October 2001.

25. SEGMENTAL INFORMATION

No segmental reporting is presented as the Group is principally engaged in the moulds and dies industry and operatespredominantly in Malaysia.

26. NUMBER OF EMPLOYEES AND STAFF COST

Group2001 2000

RM RM

Number of employees, including executive directors, as at 31 October 210 247

Staff cost for the financial year (RM) 6,161,428 6,692,732

27. COMPARATIVE FIGURES

The comparative figure of other receivables, deposits and prepayments, and tax recoverable have been reclassified asfollows to be consistent with the current year’s presentation:-

Tax Other receivables,recoverable deposits and prepayments

RM RM

Amount as previously reported - 1,149,244Reclassification 378,997 (378,997)

Amount as restated 378,997 770,247





page 46 annual report 2001

Analysis of Shareholdings

DISTRIBUTION SCHEDULE OF SHARES AS AT 31 JANUARY, 2002

No of Holders Holdings Total Holdings %91 Less than 1,000 25,957 0.06

2,013 1,000 to 10,000 5,741,129 14.17187 10,001 to 100,000 4,721,319 11.6530 100,000 to less than 5% of Issued Shares 12,128,918 29.943 5% and above of Issued Shares 17,895,762 44.18

Total 2,324 40,513,085 100.00

LIST OF THIRTY (30) LARGEST SHAREHOLDERS AS AT 31 JANUARY, 2002

Name Shareholdings %

1. Affluent Future Sdn Bhd 11,200,001 27.652. Tan Lye Huat Holdings Sdn Bhd 3,875,234 9.573. Tan Ah Heng 2,820,527 6.964. Tan Kim Lai 1,661,871 4.105. Tan Lye Huat 1,643,851 4.066. Kenanga Nominees (Tempatan) Sdn Bhd - (Chia Kee Siong) 1,340,000 3.317. Arab-Malaysian Nominees (Tempatan) Sdn Bhd - (Arab-Malaysian Trustee Bhd For BHLB Pacific Dana Al-Ihsan) 717,000 1.778. Universal Trustee (Malaysia) Berhad - (BHLB Pacific Emerging Companies Growth Fund) 694,334 1.719. Yap Song Yung 691,667 1.7110. Tan Ho Foot 555,807 1.3711. Universal Trustee (Malaysia) Berhad - (BHLB Pacific High Growth Fund) 550,667 1.3612. Amanah Raya Berhad - (BHLB Pacific Double Growth Fund) 453,334 1.1213. PAB Nominee (Tempatan) Sdn Bhd - (Yayasan Terengganu (1115001178)) 300,000 0.7414. Perbadanan Kemajuan Negeri Kedah 299,378 0.7415. Yayasan Sarawak 299,378 0.7416. Employees Provident Fund Board 283,000 0.7017. Wong Kim Yong 282,000 0.7018. BIMSEC Nominees (Tempatan) Sdn Bhd - (Syarikat Takaful Malaysia Berhad) 267,000 0.6619. Ho Sam Foong 256,000 0.6320. Yayasan Kelantan Darulnaim 249,482 0.6221. Yap Nyet Yune 221,334 0.5522. Yap Shing @ Yap Sue Kim 207,334 0.5123. PRB Nominees (Tempatan) Sdn Bhd - (Rubber Industry Smallholders Development Authority) 206,667 0.5124. Kenanga Nominees (Tempatan) Sdn Bhd - (Lee Ah Cheok @ Lee Tze Shyaw) 173,000 0.4325. Cheang Kam Hong 144,022 0.3626. Chew Hoi Seng @ Chew Hooi Seng 143,001 0.3527. Wong Kai Fatt 120,667 0.3028. Shiantang Holdings Sdn Bhd 118,000 0.2929. Lee Lian Hwa 116,000 0.2930. Amsec Nominees (Tempatan) Sdn Bhd - (Chuah Choong Heong) 114,000 0.28

LIST OF SUBSTANTIAL SHAREHOLDERS (5% AND ABOVE) AS AT 31 JANUARY, 2002

Name Shareholdings %

Affluent Future Sdn Bhd 11,200,001 27.65

Tan Lye Huat Holdings Sdn Bhd 3,875,234 9.57

Tan Ah Heng 2,820,527 6.96

INFORMATION ON DIRECTORS’ SHAREHOLDINGS AS AT 31 JANUARY, 2002

Name of Directors NRIC NO. Designation Nationality Direct Holdings Indirect HoldingsNo. % No. %

Tan Lye Huat 531016-10-5521 Group Executive Chairman Malaysian 1,643,851 4.06 - -and Managing Director

Tan Kim Lai 520117-10-5439 Executive Director Malaysian 1,661,871 4.10 - -Tan Ho Foot 500925-10-5439 Executive Director Malaysian 555,807 1.37 - -Cheang Kam Hong 490901-07-5347 Executive Director Malaysian 144,022 0.36 - -Chu Kan 431126-01-5115 Independent Non-Executive Director Malaysian - - - -Samat Bin Junai 581211-12-5713 Independent Non-Executive Director Malaysian - - - -Muhidin Bin Arifin (Alternate Director to Samat Bin Junai) 620805-01-5865 Alternate Director Malaysian - - - -Chong Yew Kiang 480725-07-5209 Independent Non-Executive Director Malaysian - - - -

Authorised Share Capital : RM50,000,000Issued & Fully Paid-up Capital : RM40,513,085No. of Shareholders : 2,324

Class of shares : Ordinary Share of RM1.00 eachVoting rights : One vote per ordinary share (on a poll)



Other Information

1. Non Audit Fees

There are no non audit-fees paid to external auditors for the financial year 31 October 2001.

2. Revaluation Policy on Landed Properties

The group has not adopted a policy of regular revaluation of its landed properties as at end of the financial year 31 October2001.

3. Share Buybacks

The Company has on 27th December 2001 amended its Memorandum and Articles of Association in order to comply withthe revamped new Listing Requirements as well as with the recent changes to the Securities Industry (Central Depositories)Act and the Rules of the Malaysian Central Depository which also includes the provision to grant the Company the requiredpowers / authority to purchase its own shares in the manner provided for under the Companies Act, 1965 and therevamped Listing Requirements. Therefore there was no share buyback scheme implemented during the financial yearended 31 October 2001.

4. Sanctions and /or Penalties Imposed

There were no sanctions and / or penalties imposed on the Company, its other subsidiaries, directors or management byany other relevant authorities.

5. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme

Kumpulan H&L High-Tech Berhad has not sponsored any ADR or GDR programme.



List of Properties as at 31 October 2001

Location Revaluation Description/ Land area/ Tenure/ Net Book Date Existing Use built-up area age of buildings Value

(sq metres) (years) RM

Lot No PT 1541 1997 2-storey Terrace Factory/ 185.8/371.6 Freehold/15 668,30848, Jalan 25/28 rented outMukim of Sungai BulohDistrict of PetalingSelangor



Lot No PT 1539 1997 2-storey Terrace Factory 481.2/987.8 Freehold/15 1,652,88952, Jalan 25/28 (Corner Unit)/Mukim of Sungai Buloh rented outDistrict of PetalingSelangor

Lot No PT 20033 1997 Industrial building/ 3715/5183 99 year leasehold 4,993,4226, Jalan TSB 1 Factory (24/3/2091)/5Mukim of Sungai Buloh District of PetalingSelangor

Lot No PT 19770 1997 Factory Warehouse 3633/3189 99 year leasehold 3,725,2187, Jalan TSB 9 and office space (24/2/2091)/5Mukim of Sungai BulohDistrict of PetalingSelangor

Lot No PT 1155 1997 2-storey Terrace house/ 149.8/217.5 Freehold/20 270,55761, SS25/39 rented outMukim of Sungai BulohDistrict of PetalingSelangor

Lot No PT 1338 1997 2-storey Terrace house/ 149.8/218.9 Freehold/20 279,99317, SS25/20 staff quartersMukim of Sungai BulohDistrict of PetalingSelangor

Lot No PT 1542 1997 Factory/ 185.8/371.6 Freehold/15 665,00046, SS25/28 rented outMukim of Sungai BulohDistrict of PetalingSelangor

Lot No PT 1241 1997 2-storey Terrace house/ 149.6/219.5 Freehold/20 274,77241, SS25/37 staff quartersMukim of Sungai BulohDistrict of PetalingSelangor




NOTICE IS HEREBY GIVEN THAT the Seventh Annual General Meeting of the Company will be held at Dewan Berjaya, BukitKiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Thursday, the 28th dayof March, 2002 at 10.00 a.m. for the following purposes:-

AGENDA

1. To receive and adopt the audited Financial Statements for the year ended 31st October 2001 and the Report of theDirectors and Auditors thereon.. (Resolution 1)

2. To approve the payment of a first and final tax exempt dividend of 5% in respect of the financial year ended 31st October2001 (Resolution 2)

3. To approve the payment of Directors’ Fees for the year ended 31st October 2001. (Resolution 3)

4. To re-elect the following Directors who retire in accordance with Articles 97 and 102 of the Company’s Articles ofAssociation:-

- Mr Tan Lye Huat (Resolution 4)

- Mr Tan Kim Lai (Resolution 5)

- Mr Chong Yew Kiang (Resolution 6)

5. To re-appoint Messrs. BDO Binder as Auditors and to authorise the Directors to fix their remuneration (Resolution 7)

6. As SPECIAL BUSINESS, to consider, and if thought fit, to pass the following Ordinary Resolutions:-

(i) Authority to issue shares to eligible employees pursuant to the Employees’ Share Option Scheme

(Ordinary Resolution)

"THAT pursuant to Section 132D of the Companies Act, 1965, approval be and is hereby given for the Directorsto issue shares in the Company in accordance with the terms and conditions of the Employees’ Share OptionScheme approved by the shareholders at the Extraordinary General Meeting held on 15th March 2000, providedthat the total number of shares already issued and to be issued shall not exceed 10% of the total issued sharecapital of the Company for the time being and that such approval shall continue in force until the conclusion of thenext annual general meeting of the Company." (Resolution 8)

(ii) Authority to issue shares not exceeding 10% of the Issued Capital of the Company (Ordinary Resolution)

"THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approval of the relevantgovernmental / regulatory authorities (if any shall be required), the Directors be and are hereby empowered to issueshares (other than bonus or right issues) in the Company from time to time and upon such terms and conditionsand for such purposes as the Directors may deem fit provided that the aggregate number of shares issued in anyone financial year of the Company (other than by way of bonus or rights issues) does not exceed 10% of theissued capital of the Company for the time being and that the Directors be and are hereby also empowered toobtain approval from the Kuala Lumpur Stock Exchange for the listing of and quotation for the additional sharesso issued and that such authority shall continue in force until conclusion of the next annual general meeting of theCompany." (Resolution 9)

7. To transact any other ordinary business of the Company for which due notice have been given.

By Order of the Board

TAN KIM CHINLIM HOOI MOOICompany Secretaries

Kuala Lumpur1st March 2002




NOTICE OF DIVIDEND ENTITLEMENT

NOTICE IS ALSO HEREBY GIVEN that subject to the approval of the shareholders at the Seventh Annual General Meeting on28th March 2002, the first and final tax exempt dividend of 5% in respect of the financial year ended 31st October 2001 willbe payable on 25th April 2002 to Depositors whose names appear in the Record of Depositors on 15th April 2002.

A Depositor shall qualify for entitlement to the dividend only in respect of: -

(a) shares transferred into the depositor’s securities account before 12.30 p.m. on 15th April 2002 in respect of ordinarytransfers; and

(b) shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement basis according to the rules of the KualaLumpur Stock Exchange.

EXPLANATORY NOTES ON ITEMS 6 (i) AND 6 (ii) OF THE AGENDA

1. Item 6 (i) of the Agenda

The Ordinary Resolution proposed under item 6 (i) of the Agenda, if passed, is to empower the Directors to issue andallot shares in the Company pursuant to the terms and conditions of the Employees’ Share Option Scheme which wasapproved at the Extraordinary General Meeting on 15th March 2000.

2. Item 6 (ii) of the Agenda

The Ordinary Resolution proposed under item 6 (ii) of the Agenda, if passed, is to empower the Directors to issue up toa maximum of 10% of the issued share capital of the Company for the time being without convening a general meetingfor such purposes as the Directors consider would be in the interest of the Company. This authority unless revoked orvaried by the Company at a general meeting will expire at the next Annual General Meeting.

Notes:1 The proxy may but does not need to be a member of the Company.

2. To be valid, the proxy form duly completed must be deposited at the Registered Office of the Company at Suite 1701,17th Floor, Wisma Hamzah-Kwong Hing, No 1, Leboh Ampang, 50100 Kuala Lumpur not less than 48 hours before thetime set for holding the meeting.

3. A member shall be entitled to appoint more than one proxy to attend and vote at the same meeting and where a memberappoints more than one proxy, the appointments shall be invalid unless he/she specifies the proportions of his/hershareholdings to be represented by each proxy.

4. If the appointor is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.



Contents of Statement Accompanying Notice of Annual General Meeting

ANNEXURE A

1. The name of individuals who are standing for election or re-election:-

Mr. Tan Lye HuatMr. Tan Kim LaiMr. Chong Yew Kiang

2. The details of attendance of existing Directors at Board meetings.

During the financial period, 5 Board meetings were held.

Attendance

Tan Lye Huat 5 out of 5Tan Kim Lai 5 out of 5Tan Ho Foot 4 out of 5Cheang Kam Hong 5 out of 5Chu Kan 5 out of 5Samat Bin Junai 4 out of 5Chong Yew Kiang (appointed on 25.04.2001) 2 out of 2Muhidin bin Arifin (alternate director to Samat Bin Junai) NIL

3. Annual General Meeting of Kumpulan H&L High-Tech Berhad

Place : Dewan Berjaya, Bukit Kiara Equestrian &Country Resort,Jalan Bukit KiaraOff Jalan Damansara, 60000 Kuala Lumpur

Date & Time : 28th March 2002 at 10.00 a.m.

4. Further details of the individuals who are standing for election or re-election:-

A Name : TAN LYE HUAT

Age : 48

Nationality : Malaysian

Qualification : Businessman

Position in the Company : Group Executive Chairman and Managing Director

Date of Appointment to : 2nd September 1997the Board

Working Experience and : Have more than 25 years experience closely managing production and marketing Occupation operations of Kumpulan H&L High-Tech Berhad and its subsidiaries. Process in-

depth knowledge and experience in Tooling and Moulding services. GroupExecutive Chairman and Managing Director of Kumpulan H&L High-Tech Berhadsince 2nd September 1997

Any other Directorships : None Of public companies

The securities holdings : Securities Holding No. of Shares PercentageIn the Company and its Ordinary shares of RM1.00 each 1,643,851 4.06subsidiaries

Family relationship with : Brother of Tan Kim Lai and Tan Ho Foot, Directors in Affluent Future Sdn. Bhd.any Director and/or major and Tan Lye Huat Holdings Sdn. Bhd. both major shareholdersCompany of the Company

Any conflict of interest : Nonethat he has with the Company




List of convictions for : NoneOffences within the past 10 years other than trafficoffences, if any

Details of attendance at : 5 out of 5 Board Meetings

B Name : TAN KIM LAI

Age : 50


Qualification : Businessman

Position in the Company : Executive Director

Date of Appointment to : 2nd September 1997the Board

Working Experience and : He is a businessman by profession and has garnered a wide experience in theOccupation administrative aspect of the precision mould and die business.


The securities holdings : Securities Holding No. of Shares PercentageIn the Company and its Ordinary shares of RM1.00 each 1,661,871 4.10subsidiaries

Family relationship with : Brother of Tan Lye Huat and Tan Ho Foot, Director in Affluent Future Sdn. Bhd.,any Director and/or major a major shareholder of the CompanyCompany




C Name : CHONG YEW KIANG

Age : 53


Qualification : M. Sc (Business Administration) University of British Columbia, Vancouver, Canada,Bachelor of Economics, University of Malaya, Chartered Accountant, CanadaMember of Malaysian Institute of Accountants

Position in the Company : Independent Non-Executive Director

Date of Appointment to : 25th April 2001the Board

Working Experience and : Dealers Representative with K & N Kenanga Berhad since 1986Occupation


The securities holdings : Securities Holding No. of Shares PercentageIn the Company and its Ordinary shares of RM1.00 each - -subsidiaries




Family relationship with : Noneany Director and/or majorCompany




I/We NRIC No.

of being a member(s) of KUMPULAN H&L

HIGH-TECH BERHAD, hereby appoint

of or failing him / her

or failing him / her the Chairman of the Meeting as my / our proxy to attendand vote on my /our behalf at the Seventh Annual General Meeting of the Company to be held at Dewan Berjaya, Bukit KiaraEquestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on the 28th day of March 2002 at 10.00a.m. or at any adjournment thereof on the following resolutions referred in the notice of Seventh Annual General Meeting in the mannerindicated below:-

Resolutions For Against

To receive and adopt the Directors’ Report and Financial Statements.

To declare the first and final tax exempt dividend of 5% in respect of the financial year ended 31st October 2001.

To approve the payment of Directors’ Fee for the year ended31st October 2001.

To re-elect Mr. Tan Lye Huat as Director.

To re-elect Mr. Tan Kim Lai as Director.

To re-elect Mr. Chong Yew Kiang as Director.

To re-appoint M/s. BDO Binder, as Auditors and to authorise the Directors to fixtheir remuneration.

To authorise the Directors to issue shares to eligible employees pursuant to the Employees’ Share Option Scheme.

To authorise Directors to issue shares not exceeding 10% of the issued capitalof the Company.

(Please indicate with an “X” in the spaces provided, how you wish your vote to be cast. If no specific direction as to voting isgiven, the proxy will vote or abstain at his discretion.)

As witness my hand this day of 2002

Number of Shares held Signature

Notes:

1. A member of the Company who is entitled to attend and vote at the Meeting is entitled to appoint one or more Proxies, but not exceeding two,to attend and vote in his stead. Where a member appoints two Proxies, the appointment shall be invalid unless he specifies the proportion of hisholdings to be represented by each Proxy. A Proxy need not be a member of the Company but must attend the Meeting in person to vote. Theinstrument appointing a Proxy must be in writing under the hand of the appointor or his attorney duly authorised in writing, or if the appointer is acorporation under its common seal or under the hands of duly authorised officer or attorney.

2. Any alteration in this form must be initialled.

3. All forms of Proxy must be deposited at the Company’s Registered Office at not less than 48 hours before the time appointed for holding theMeeting or at any adjournment thereof.

Form of Proxy

KUMPULAN H & L HIGH-TECH BERHAD Company No. 317805-V(Incorporated in Malaysia)

kumpulan h & l high-tech berhad - insage

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