Multico-AnnualReport 2003 (190KB) PDF

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD
(193094-K)
CONTENTS
Page NOTICE OF ANNUAL GENERAL MEETING NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING CORPORATE INFORMATION BOARD OF DIRECTORS STATEMENT ON CORPORATE GOVERNANCE AUDIT COMMITTEE'S REPORT STATEMENT OF INTERNAL CONTROL STATEMENT OF DIRECTORS' RESPONSIBILITY IN RELATION TO THE FINANCIAL STATEMENTS PENYATA PENGERUSI CHAIRMAN'S STATEMENT DIRECTORS' REPORT STATEMENT BY DIRECTORS STATUTORY DECLARATION REPORT OF THE AUDITORS TO THE MEMBERS OF MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD INCOME STATEMENTS BALANCE SHEETS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY COMPANY STATEMENT OF CHANGES IN EQUITY CASH FLOW STATEMENTS NOTES TO THE FINANCIAL STATEMENTS LIST OF PROPERTIES ANALYSIS OF SHAREHOLDINGS SUBSTANTIAL SHAREHOLDERS DIRECTORS' SHAREHOLDINGS THIRTY LARGEST SHAREHOLDERS FORM OF PROXY 2 3 4 5-6 7-9 10 - 17 18 - 20 21 22 23 24 25 - 30 31 31 32 33 34 35 36 37 - 38 39 - 64 65 - 66 67 67 68 69 - 70
2 0 0 3 A N N U A L R E P O R T
(193094-K)
NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Thirteenth Annual General Meeting of the Company will be held at Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, 81100 Johor Bahru, Johor Darul Tazim on Monday, 29 December 2003 at 10.30 a.m. for the following purposes:AGENDA 1. 2. 3. 4. To receive and adopt the Audited Financial Statements for the year ended 31 July, 2003 and the Reports of the Directors and the Auditors thereon. To declare a Final dividend of 10% (tax exempt) for the year ended 31 July, 2003 To approve the payment of Directors fee of RM373,000.00 for the year ended 31 July, 2003 To re-elect the following Directors who are retiring under Article 76 of the Articles of Association of the Company :a) Dato Haji Sulaiman Bin Ahmad b) Goh Tong Huat c) Goh Chai Siong To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the directors to fix their remuneration.
Resolution 1 Resolution 2 Resolution 3
Resolution 4 Resolution 5 Resolution 6 Resolution 7
5.
As Special Business 6. To consider and if thought fit, to pass the following resolution as an Ordinary Resolution : Authority to Issue Shares THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares to be issued does not exceed 10 per cent of the issued share capital of the Company for the time being, subject always to the approval of all the relevant regulatory bodies being obtained for such allotment and issue. 7. Any Other Business To transact any other ordinary business of which due notice shall have been given.
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Resolution 8
(193094-K)
NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN that a Final Dividend of 10% (tax exempt) in respect of the financial year ended 31 July, 2003, if approved by the shareholders at the forthcoming Annual General meeting to be held on 29 December 2003 will be paid on 30 January 2004 to Depositors registered in the Records of Depositors at the close of the business on 19 January 2004. A depositor shall qualify for entitlement to the dividend only in respect of:a) b) shares transferred into the Depositors securities account before 4.00 p.m. on 19 January 2004 in respect of ordinary transfers; and shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement basis according to the rules of the Kuala Lumpur Stock Exchange.
BY ORDER OF THE BOARD,
TAN SOI LIM (LS 00565) SUJATA MENON A/P K.R.D.S. CHANDRAN (LS 02004) Secretaries Johor Bahru Dated: 4 December 2003
Notes: (a) A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation, under its Common Seal or the hand of its attorney. Where a member appoints two proxies, the appointments shall be invalid unless he specifies the proportions of his holding to be represented by each proxy. The Proxy Form must be deposited with the Secretary at the Registered Office of the Company at Suite 5.3A, Level 5, Menara Pelangi, No. 2, Jalan Kuning, Taman Pelangi, 80400 Johor Bahru, Johor, Malaysia not less than 48 hours before the time set for the meeting or any adjournment thereof. Explanatory Notes to Special Business Ordinary Resolution (8) Authority to Issue Shares (i) The proposed Ordinary Resolution 8 in relation to the authority to allot shares pursuant to Section 132D of the Companies Act, 1965, if passed will empower the Directors to issue shares up to an aggregate amount not exceeding 10% of the issued share capital of the Company for the time being, for such purposes as the Directors consider would be in the interests of the Company. This would avoid any delay and cost involved in convening a general meeting to approve such issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.
(b) (c)
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(d)
(193094-K)
Statement accompanying the Notice of Annual General Meeting

The Thirteenth Annual General Meeting of MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD will be held at Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, 81100 Johor Bahru, Johor Darul Tazim on Monday, 29 December 2003 at 10.30 a.m. Name of Directors who are standing for re-election are as follows : 1. DATO HAJI SULAIMAN BIN AHMAD (Non-Independent Non-Executive Director) 2. GOH TONG HUAT (Non-Independent Executive Director) 3. GOH CHAI SIONG (Non-Independent Non-Executive Director) Details of attendance of Directors at Board Meetings:The information on Board Meetings and attendance of the Directors are as in page 16 of the Annual Report. Profile of Directors standing for re-election and their shareholdings in the Company Their profiles are as in the page 7 of the Annual Report. Their Shareholdings in the Company are stated in page 26 of the Annual Report.
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(193094-K)
CORPORATE INFORMATION
BOARD OF DIRECTORS Chairman Managing Director Directors Dato Hj Sulaiman Bin Ahmad (Non-Independent Non-Executive Director) Goh Tong Huat (Non-Independent Executive Director) Goh Kar Chun (Non-Independent Executive Director) Goh Chai Siong (Non-Independent Non-Executive Director) Nora Lam Siew Wan (Non-Independent Non-Executive Director) Mohd. Nadzir Mahmud (Non-Independent Non-Executive Director) Dato Bahari Bin Haron (Independent Non-Executive Director) Huang Yan Teo (Independent Non-Executive Director) Chai Lai Koon (Independent Non-Executive Director)
AUDIT COMMITTEE Chairman Members Huang Yan Teo Mohd Nadzir Mahmud Nora Lam Siew Wan Dato Bahari Bin Haron Chai Lai Koon
REMUNERATION COMMITTEE Chairman Members Mohd Nadzir Mahmud Nora Lam Siew Wan Huang Yan Teo
NOMINATION COMMITTEE Chairman Member Chai Lai Koon Nora Lam Siew Wan Dato Bahari Bin Haron
SECRETARIES Tan Soi Lim (LS00565) Sujata Menon A/P K.R.D.S. Chandran (LS02004) REGISTERED OFFICE Suite 5.3A, Level 5, Menara Pelangi, No 2, Jalan Kuning, Taman Pelangi, 80400 Johor Bahru, Johor Tel: 07-3341750 Fax: 07-3318617
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(193094-K)
CORPORATE INFORMATION
REGISTRAR Securities Services (Holdings) Sdn Bhd (36869-T) Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur. Tel: 03-20849000 Fax: 03-20949940 AUDITORS Messrs. Ernst & Young PRINCIPAL BANKERS Public Bank Berhad Malayan Banking Berhad RHB Bank Berhad HSBC Bank Malaysia Berhad Affin Bank Berhad SUBSIDIARY COMPANIES Beaucar Accessories (M) Sdn Bhd (102803-P) Plasmet Industries (M) Sdn Bhd (393571-K) ASSOCIATED COMPANY Wirapadu Sistem Sdn Bhd (485384-M) STOCK EXCHANGE LISTING Second Board of The Kuala Lumpur Stock Exchange
2 0 0 3 A N N U A L R E P O R T
(193094-K)
BOARD OF DIRECTORS
DIRECTORS PROFILE DATO HAJI SULAIMAN BIN AHMAD Dato Haji Sulaiman Bin Ahmad, Malaysian, aged 66, is the Chairman and Non - Executive Director of the Company. He was appointed to the Board on 28 May 1996. He has over 30 years experience in automotive industry. He is deemed interested in recurrent related party transactions, for which a Shareholders Mandate was obtained at the Extraordinary General Meeting held on 23 December 2002. Details pertaining to these transactions are disclosed in Note 22 to the financial statements. He currently sits on the Board of Golden Pharos Berhad. He has had no convictions for any offences within the past 10 years. GOH TONG HUAT Goh Tong Huat, Malaysian, aged 49, is the Managing Director of the Company. He was appointed to the Board on 6 February 1990 . He holds a Bachelor of Science degree in Mechanical Engineering. Prior to joining the Group, he served as Head of the Quality Control Section at Amalgamated Steel Mills Sdn Bhd from year 1978 to year 1985. He started a car parts and accessories business since 1985. He is a brother of Goh Chai Siong, who is a Non-Executive Director and substantial shareholder of the Company, and an uncle of Goh Kar Chun, who is the Executive Director of the Company. He is also a brother-in-law of Chang Choon Cheng @ Chang Chu Chen, who is a substantial shareholder of the Company. He has had no convictions for any offences within the past 10 years. GOH CHAI SIONG Goh Chai Siong, Malaysian, aged 51, is a Non-Executive Director of the Company. He was appointed to the Board on 8 August 1990. He has over 30 years experience in the hardware and car accessories business. He is deemed interested in recurrent related party transactions, for which a Shareholders Mandate was obtained at the Extraordinary General Meeting held on 23 December 2002. Details pertaining to these transactions are disclosed in Note 22 to the financial statements. He is a brother of Goh Tong Huat, who is the Managing Director and substantial shareholder of the Company, and an uncle of Goh Kar Chun, who is the Executive Director of the Company. He is also a brother-in-law of Chang Choon Cheng @ Chang Chu Chen, who is a substantial shareholder of the Company. He has had no convictions for any offences within the past 10 years. NORA LAM SIEW WAN Nora Lam Siew Wan, Malaysian, aged 45, is a Non-Executive Director of the Company. She was appointed to the Board on 20 May 1997. She is also a member of the Audit Committee, Nomination Committee and Remuneration Committee. Ms Lam who holds a Law Degree, LLB (Hons), is a Barrister-at-law (Lincolns Inn, London) and a mediator (Bar Council) in Malaysia. She had previously practiced in a legal firm as a legal assistant from year 1983 to early of year 1987. Prior to joining the Group, she served as Legal Manager for 4 years at East Asiatic Company (M) Berhad from year 1987 to year 1991 and as Company Secretary for its subsidiaries. She is the Founder Partner of M/s Lam & Lim from year 1991 to year 1998, and subsequently she became the sole-proprietor of M/s Nora S.W. Lam & Associates from year 1998 to year 1999. Since the year 2000 she has been the Managing Partner of M/s Nora S.W. Lam & Associates. She is deemed interested in recurrent related party transactions, for which a Shareholders Mandate was obtained at the Extraordinary General Meeting held on 23 December 2002. Details pertaining to these transactions are disclosed in Note 22 to the financial statements. She has no family relationship with any directors and/ or substantial shareholders of the Company. She has had no convictions for any offences within the past 10 years.
2 0 0 3 A N N U A L R E P O R T
(193094-K)
BOARD OF DIRECTORS
HUANG YAN TEO Huang Yan Teo, Malaysian, aged 56, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 29 March 2002. He is also the Chairman of the Audit Committee, and a member of the Remuneration Committee. He is a Chartered Accountant and served for 8 years from year 1966 to year 1974 with an audit firm, Coopers & Lybrand before working as financial controller in the private sector from year 1974 to year 1981. He has been the principal of his own accounting firm since year 1981. Other directorships of public listed companies are London Biscuits Berhad and Pelangi Berhad. He has no family relationship with any directors/ or substantial shareholders of the Company and does not have any conflict of interest with the Company. He has had no convictions for any offences within the past 10 years. MOHD NADZIR MAHMUD Mohd Nadzir Mahmud, Malaysian, aged 62, is a Non-Executive Director of the Company. He was appointed to the Board on 2 August 1999. He is also the Chairman of Remuneration Committee and a member of the Audit Committee. He is a Barrister-at-law (Inner Temple, London) and holds a postgraduate qualification in Business Administration from the Harvard University, Graduate School of Business Administration, United States of America. He had previously held various senior management positions in both local and multinational corporations. He currently sits on the Board of Hock Seng Lee Berhad, a public listed company. He has no family relationship with any directors/ or substantial shareholders of the Company and does not have any conflict of interest with the Company. He has had no convictions for any offences within the past 10 years. GOH KAR CHUN Goh Kar Chun, Malaysian, aged 27, is the Executive Director of the Company. He was appointed to the Board on 27 December 2001. He had a degree of Bachelor of Medicine, Bachelor of Surgery and Bachelor of Obstretrics. He worked in General Practitioner Clinic in year 1994 and voluntary worked in Cerebral Palsy Centre in year 1996. He also had elective training in Subang Jaya Medical Centre and Penang General Hospital in year 1999. In year 2000, he worked as a doctor at ST. Vincent University Hospital, Ireland. He is the nephew of Goh Tong Huat, who is the Managing Director of the Company, and Goh Chai Siong, who is a Non-Executive Director of the Company. He is also the son of Chang Choon Cheng @ Chang Chu Chen, who is a substantial shareholder of the Company. He has had no convictions for any offences within the past 10 years.
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CHAI LAI KOON Chai Lai Koon, Malaysian, aged 46, is an Independent Non-Executive Director of the Company. He is also a member of Audit Committee and the Chairman of Nomination Committee. He was appointed to the Board on 29 March 2002. He is a qualified Chartered Accountant(M), FCCA and ATII. He was a partner of public accounting firm, namely SC Associates, from year 1993 to year 1997. He was also a city councilor of Majlis Bandaraya Johor Bahru from year 1994 to year 1998. He is now a principal of own accounting firm, namely CLK Associates since year 1998. He has no family relationship with any directors/ or substantial shareholders of the Company and does not have any conflict of interest with the Company. He has had no convictions for any offences within the past 10 years.
(193094-K)
BOARD OF DIRECTORS
DATO BAHARI BIN HARON Dato Bahari Bin Haron, Malaysian, aged 56, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 29 March 2002. He is a member of Audit Committee and Nomination Committee. He is a Barrister At Law (Inner Temple, London) and a Magistrate of Kuala Lumpur Court from year 1973 to year 1974. He started his own legal practice in year 1974 and was actively involved in UMNO Johor and made a candidate for the Labis Parliamentary Constituency for the General Election in year 1982. He won the seat uncontested. He was appointed as the State Exco Member in year 1989 and held the portfolio of Chairman of the State Housing and Local Government Committee. He is currently retired from active politics. Prior to joining the Group, he was involved in many business activities in the retail, property, food and manufacturing industries. He was the Director of Bank Rakyat for 5 years and was the Vice-Chairman of Kejora (Lembaga Kemajuan Johor Tenggara) for 8 years. He has no family relationship with any directors and/ or substantial shareholders of the Company and does not have any conflict of interest with the Company. He has had no convictions for any offences within the past 10 years.
2 0 0 3 A N N U A L R E P O R T
(193094-K)
STATEMENT ON CORPORATE GOVERNANCE

The Board of directors of the Company is committed to ensuring that the highest standards of corporate governance are practiced throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders value and financial performance. The Principles and Best Practices of the Malaysian Code on Corporate Governance (the Code) issued in March 2000 were incorporated into the Revamped Listing Requirements of the Kuala Lumpur Stock Exchange ( KLSE) in January 2001. The Board is pleased to report on the manner the Company has applied the Principles, and the extent of compliance with the Best Practices of good governance as set out in Part 1 and Part 2 respectively of the Code pursuant to paragraph 15.26 of the Listing Requirements of the Kuala Lumpur Stock Exchange. COMPLIANCE STATEMENT The Company is in substantial compliance throughout the financial year with the Principles and Best Practices of the Code save for the following with which the Company has partly complied : a. Risk Management System. At present, the Group is in the process of implementing various internal controls relating to financial and operational matters. The Company has outsourced its Internal Audit function to assist the Audit Committee in discharging its duties in respect of the internal controls within the Group. A more structured approach to formalize the existing processes by which risks are identified, assessed, controlled and reviewed with the involvement of the Audit Committee and the Board, will be adopted. b. Investor Relations Programme or Shareholders Communications Policy It is the policy of the Company to communicate all important matters to shareholders on a timely basis. This has been done through the distribution of annual reports, general meetings of shareholders, and announcements to the Kuala Lumpur Stock Exchange. c.
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Directors Training The Board ensures that it recruits to the Board only individuals of caliber, knowledge and experience to fulfill the duties of a Director. All Directors have attended and completed the Mandatory Accreditation Programme(MAP) conducted by the Research Institute of Investment Analysis Malaysia(RIIAM). Pursuant to KLSE Practice Note No. 15/2003, Continuing Education Programme (CEP), directors who have completed the MAP or whose stipulated timeframes for completion of the MAP expire on or before 31 December 2002 must attend the CEP in the manner prescribed by the Exchange vide this Practice Note, beginning with the calendar year 2003. All directors have yet to attend CEP due to this Practice Note takes effects on 1 July 2003. Directors are provided with the opportunity for training on an ongoing basis to ensure they are kept up to date on relevant new legislation, regulations and changing commercial risks. Additionally, the seminars and continuing education programmes conducted by KLSE, other relevant regulatory authorities and professional bodies are notified to the Board for their participation.
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d. Relationship of the Board to Management Many of the responsibilities of the Board are delegated by the Board to management. A key principle to the effective functioning of the Board in assessing the direction of the Group and the performance of the management is that it is able to function independently of management. The Chairman is assigned with responsibility for managing the process of the Board and for ensuring that the Board discharges the responsibilities that was previously defined. e. Quality of Information The Board is supplied with relevant information and reports on financial, regulatory and audit matters by way of Board papers for informed decision-making and meaningful discharge of the duties. PRINCIPLE STATEMENT The principles of the Code are divided into four Sections: Section 1: The Board Section 2: Directors Remuneration Section 3: Shareholders Section 4: Accountability and Audit Set out below is a statement on the extent of the Groups application of the principles of the Code and compliance with the best practices provisions: SECTION 1: THE BOARD Composition of the Board The Company is led by a strong and experienced Board. The Board has nine members. Seven out of the nine members are non-executive directors, three of whom are independent. No individual or group of individuals dominates the Boards decision making and the number of directors reflects fairly the investment of the shareholders. The profile of the Board members are set out on pages 7 to 9. Dato Haji Sulaiman Bin Ahmad is the Chairman of the Board while Goh Tong Huat acts as the Managing Director. There is a clear division of responsibility between these two roles to ensure a balance of power and authority. The Managing Director has overall responsibilities over the operating units, organizational effectiveness and implementation of Board policies and decisions. The Chairmans responsibility is to ensure pivotal role in corporate accountability. The Company considers that its complement of non-executive directors provides an effective Board with a mix of industry-specific knowledge and broad business and commercial experience. This balance enables the Board to provide clear and effective leadership to the Group and to bring informed and independent judgement to many aspects of the Groups strategy and performance so as to ensure that the Group, on a global basis maintains the highest standards of conduct and integrity. More than two-third of the Board comprises non-executive directors since the Company recognises the contribution of non-executive directors as equal Board members to the development of the Groups strategy, the importance of representing the interests of public shareholders and providing a balanced and independent view to the Board.
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In accordance with the requirements of the Code, Mr Huang Yan Teo has been appointed as the Senior Independent Non-Executive Director to be available to deal with concerns regarding the Company where it could be inappropriate for these to be dealt with by the Chairman or the Managing Director of the Board. Board Responsibilities The Board retains full and effective control of the Company. This includes responsibility for determining the Companys overall strategic direction as well as, development and control of the Group. Key matters, such as approval of annual and interim results, acquisitions and disposals, as well as material agreements and budgets. During the financial year, the Board held five regular meetings where it deliberated and considered a variety of matters. At each regularly scheduled meeting, there is a full financial and business review and discussion, including financial performance to date against the annual budget previously approved by the Board for that year. The Board has also delegated certain responsibilities to other Board committees, which operate within clearly defined terms of reference. Standing committees of the Board include the Audit Committee (please refer to the Report on Audit Committee set out on pages 18 to 20, a Nomination Committee and a Remuneration Committee and an Options Committee. Supply of Information Each Board member receives quarterly operating results, including a comprehensive review and analysis. Reports providing updates on operational, financial and corporate issues as well as minutes of meetings of the Board Committees are circulated prior to the meetings to enable Directors to obtain further explanations/clarifications, where necessary, in order to be properly briefed before deliberation of the issues in the meeting. Directors have the right to seek independent professional advice at the Companys expense in furtherance of their duties. Before incurring such professional fee, the Director concerned must consult with the Chairman of the Board and such advice so obtained shall be made known to the other members of the Board for deliberation and decision. Directors have access to timely and accurate information within the Group whether as full board or in their individual capacity, in furtherance of their duties. Directors also have direct access to the advice and the services of the Groups Company Secretary who is responsible for ensuring that Board procedures are followed. Appointments of the Board and Re-election A Nomination Committee was formed on 6 May 2002 to assist the Board in the execution of its duties and it meets as and when required. The Committee held four (4) meetings during the financial year which were attended by all members. The members of the Committee, the majority of whom are Independent Non-Executive Directors are as follows : Chai Lai Koon (Chairman) Dato Bahari Bin Haron Nora Lam Siew Wan Independent Non-Executive Director Independent Non-Executive Director Non-Executive Director
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12
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The Nomination Committee is empowered to bring to the Board recommendations as to the appointment of any new executive or non-executive director, provided that the Chairman of the Nomination Committee, in developing such recommendations, consults all directors and reflects that consultation in any recommendation of the Nomination Committee are brought forward to the Board. The Nomination Committee also ensures that the Board has an appropriate balance of expertise and ability. For this purpose, the Committee will regularly review the profile of the required skills and attributes. This profile will be used to assess the suitability as executive or non-executive directors of candidates put forward by the directors. The effectiveness of the Board as a whole and the contribution of each individual director will be assessed by the Committee on a regular basis. The directors have direct access to the advice and the services of the Groups Company Secretary who is responsible for ensuring that all appointments are properly made and all necessary information is obtained from directors, both for the Groups own records and for the purposes of meeting the requirements of the Companies Act 1965, Listing Requirements of the KLSE and other regulatory requirements. On appointment, the directors will be briefed about the Groups business, the Board role, and the latest financial information about the Group in an informal manner by the management. Throughout their period in office, they are updated on the Groups business, the competitive and regulatory environments in which it operates and other changes, by briefings and meetings with senior executives. Directors are also advised on appointment of their legal and other obligations as a director of a listed company, both in writing and in face-to-face meetings with the Groups Company Secretary. They are reminded of these obligations each year and are encouraged to attend training courses at the Companys expense. In accordance with the Companys Articles of Association, all directors who are appointed by the Board are subject to election by shareholders at the first opportunity after their appointment. The Articles also provided that at least one-third of the Board including the Managing Director is subject to re-election at regular intervals and at least once every three years. SECTION 2: DIRECTORS REMUNERATION Remuneration Policy and Procedure A Remuneration Committee was set-up on 6 May 2002 and it meets as and when required. The number of Remuneration Committees meetings held during the members tenure in office in the current financial year and the number of meetings attended by each member are as follows : Name of Member Mohd. Nadzir Mahmud ( Chairman ) - Non-Executive Director Huang Yan Teo - Independent Non-Executive Director Nora Lam Siew Wan - Non-Executive Director No. of Meetings Attended 3 out of 3 3 out of 3 1 out of 2*
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* Nora Lam Siew Wan was appointed to the committee on 23 September 2002. The Remuneration Committee reviews and approves the annual salaries, incentive arrangements, service arrangements and other employment conditions for the executive directors. The determination of remuneration of non-executive directors is a matter for the Board as a whole. The non-executive directors abstain from discussion of their own remuneration. The policy of the Remuneration Committee is in line with the Groups overall practice on compensation and benefits. This is to reward employees competitively, taking into account performance, market comparisons and competitive pressures in the industry. The strategy for executive pay, in general terms, is for basic salaries to reflect the relevant market median, with total direct compensation (that is, basic salary, annual bonus payments) to be at the upper quartile for outstanding performance.
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The Committee considers that it is crucial to link a significant proportion of the total executive remuneration package to individual and corporate performance. It is the Committees policy to increase the proportion of the total remuneration package linked to performance to align executive performance and reward with the interests of shareholders. The remuneration package for the Chairman, Managing Director and other directors comprises some or all of the following elements: Basic Salaries and Fees In setting the basic salary and fees for each executive director, the Remuneration Committee takes into account the compensation practices of other companies and the performance of each individual director. Salaries are reviewed (although not necessarily increased) annually. Salaries are increased only where the Committee believes that adjustments are appropriate to reflect performance, increased responsibilities and/or market pressures. The Board determines fees payable to non-executive directors with the approval from shareholders at the Annual General Meeting. Annual Incentive Plan (Bonus Scheme) The Group operates a bonus scheme for all employees, including the executive directors. The criteria for the scheme are dependent on the financial performance of the Group based on an established formula. Bonus payable to the executive directors are reviewed by the Remuneration Committee and approved by the Board, and are shown on page 46. Contributions are made to the Employees Provident Fund (EPF), the national mandatory defined contribution plan, in respect of all Malaysian-resident executive directors. Benefits-in-kind Other customary benefits are available as appropriate. Directors Remuneration
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The details of the total remuneration of each director of the Company during the financial year are as disclosed in Note 5 to the financial statements. SECTION 3: SHAREHOLDERS Dialogue Between the Company and Investors As part of the Boards responsibility in developing and implementing an investor relations programme, meeting will be held between the Managing Director and analyst/investors throughout the year as and when required. Presentations based on permissible disclosures are made to explain the Groups performance and major development programmes. Pricesensitive information about the Group is, however, not disclosed in these exchanges until after the prescribed announcement to the KLSE has been made. In addition, the annual and quarterly reports, together with the Groups earnings and other announcements about the Group provides shareholders with an overview of the Groups performance and operations, are available at the KLSEs website.
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Annual General Meeting The Annual General Meeting is the principal forum for dialogue with shareholders. Notice of the Annual General Meeting and annual reports are sent out to shareholders at least 21 days before the date of the meeting. Besides the usual agenda for the Annual General Meeting, the Board presents the progress and performance of the business as contained in the annual report and provides opportunities for shareholders to raise questions pertaining to the business activities of the Group. All directors are available to provide responses to questions from the shareholders during these meetings. For re-election of directors, the Board ensures that full information is disclosed through the notice of meetings regarding directors who are retiring and who are willing to serve if re-elected. Items of special business included in the notice of the meeting will be accompanied by an explanatory statement to facilitate full understanding and evaluation of the issues involved. SECTION 4: ACCOUNTABILITY AND AUDIT Financial Reporting The Board always aims to present a balanced and fair assessment of the Groups financial performance and prospects to shareholders, investors and regulatory authorities. This assessment is primarily provided in the Annual Report through the Chairmans Statement, review of operations and the financial statements. The Company also presents the Groups financial results on a quarterly basis via public announcement to the KLSE. For financial reporting through quarterly reports to KLSE and the annual report to shareholders, the directors have a responsibility to present a fair assessment of the Groups position and prospects. The Audit Committee assists the Board in scrutinizing information for disclosure to ensure accuracy, adequacy and completeness. The Statement by Directors pursuant to Section 169 of the Companies Act 1965 is set out on page 31 of this annual report. Internal Control Information on the Groups internal control is presented in the Statement on Internal Control laid out on page 21. Options Committee The Options Committee was formed in February 2002 in accordance with the provisions of the By-Laws to administer the Employees Share Option Scheme of the Company. Mr Goh Tong Huat (Managing Director) sits as Chairman of the Options Committee and have one management representative, one operation co-ordinator, one secretary, two managers and one representative from sales office as his committee members. Relationship with Auditors The role of the Audit Committee in relation to the external auditors may be found in the Report on Audit Committee set out on pages 18 to 20. The Group has always maintained a close and transparent relationship with its auditors in seeking professional advice and ensuring compliance with the accounting standards in Malaysia.
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ATTENDANCE AT BOARD OF DIRECTORS MEETINGS The number of Board of Directors meetings held during the directors tenure in office in the current financial year and the number of meetings attended by each director are as follows : Number of Board meetings held during directors tenure in office 5 5 5 5 5 5 5 5 5 Number of meetings attended by directors 5 5 5 3 5 5 5 5 5
Directors Dato Haji Sulaiman Bin Ahmad Mohd Nadzir Mahmud Goh Tong Huat Goh Chai Siong Nora Lam Siew Wan Chai Lai Koon Dato Bahari Bin Haron Goh Kar Chun Huang Yan Teo
OTHER INFORMATION REQUIRED BY THE LISTING REQUIREMENTS OF THE KLSE Share Buybacks During the financial year, the Company did not enter into any share buyback transactions. Options or Warrants During the financial year, 3,738,000 share options under the Employees Share Options Scheme (ESOS) were granted to Eligible Employees in the Group pursuant to the ESOS of the Group that was established in March 2003. Each option holder is given a right to exercise one share option for one ordinary share in MCE at an option price of RM1.45 per share. During the financial year ended 31 July 2003, the Option Committee had accepted the exercise of options by the eligible employees of the Group for a total of 61,000 new ordinary shares. The company did not issue any warrants or convertible securities during the financial year. Further information on the ESOS is set out on pages 27 to 29. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme During the financial year, the Company did not sponsor any ADR or GDR programme. Imposition of Sanctions and Penalties There were no sanctions or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year.
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16
(193094-K)

Material Contracts To the best of the Boards knowledge, there are no material contracts involving the Group with any of the substantial shareholders nor Directors in office as at 31 July 2003 except those disclosed under Recurrent Related Party Transactions. Revaluation Policy The Groups revaluation policy is stated in Note 2(d) to the Financial Statements. Non-Audit Fees The amount of non-audit fees for services provided by the external auditors to the Group and the Company for the financial year amounting to RM106,200 and RM95,000 respectively. Variance From Unaudited Results Previously Announced There were no variances of 10% or more for the audited results of the Group from the unaudited results as announced on 26 September 2003. Profit Guarantee During the financial year, there were no profit guarantees given by the Company. Statement made in accordance with the resolution of the Board of Directors dated 30 October 2003.
Dato Haji Sulaiman Bin Ahmad Chairman

2 0 0 3 A N N U A L R E P O R T
17
(193094-K)
AUDIT COMMITTEES REPORT

COMPOSITION OF MEMBERS For the financial year ended 31 July, 2003, the Committee comprised the following members : Chairman Mr Huang Yan Teo (Independent Non-Executive Director) Members Dato Bahari Bin Haron (Independent Non-Executive Director) Chai Lai Koon (Independent Non-Executive Director) Mohd. Nadzir Mahmud (Non-independent Non-Executive Director) Nora Lam Siew Wan (Non-independent Non-Executive Director) The Audit Committee is formally constituted with written terms of reference. All members of the Committee have a working familiarity with basic finance and accounting practices. TERMS OF REFERENCE Objectives The primary objectives of the Audit Committee are : i. ii. iii. to assist in the fiduciary duties of the Board in matters pertaining to business ethics, policies, financial management, internal control, accounting policies and financial reporting of the Company and its subsidiaries (the Group). to maintain and enhance a line of communication and independence between the Group and the external auditors. to ensure a system of internal control which will mitigate the likelihood of fraud or error.
Composition Compliance The members of the Audit Committee shall be appointed by the Board from amongst the directors which shall fulfil the following requirements: i. ii. iii. The Audit Committee must compose of no fewer than 3 members; The majority of the Audit Committee must be independent non-executive directors; At least one member of the Audit Committee: ! must be a member of the Malaysian Institute of Accountants (MIA); or ! if he is not member of the Malaysian Institute of Accountants, he must have at least 3 years working experience and : - he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or - he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967.
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The Board confirms that no alternate director has been appointed as a member of the Audit Committee. Mr Huang Yan Teo, who is a member of MIA and an Independent Non-Executive Director, chairs the Audit Committee. In the event of any vacancy in the Audit Committee resulting in the non-compliance of the above requirements, the Board must fill the vacancy within 3 months.
18
(193094-K)

Authority The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to cooperate with any request made by the Committee. The Committee is authorised by the Board to obtain legal or other independent professional advice subject to the Companys procedure on Access to Independent Advice as stipulated in the Companys Corporate Governance Manual and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. The Committee is authorised to convene meetings with the external auditors, excluding the attendance of the executive members of the Committee, whenever deemed necessary. Functions and Responsibilities The functions and responsibilities of the Audit Committee include the following :
! ! ! ! ! !
! ! !
To review the effectiveness of management information and other systems of internal control within the Group. To review with the external auditors the scope of their audit plan, their evaluation of the system of internal control and the audit reports on the financial statements. To review the quarterly and annual financial statements with management and external auditors prior to approval by the Board. To review the scope and recommendations in the internal audit reports and the effectiveness of the internal audit function. To carry out in-depth review on major findings of internal investigations and managements response and to recommend corrective measures. To consider compliance of statutory legislation or guidelines as imposed by relevant Authorities which will include, but are not limited to : a. The Securities Commission b. The Kuala Lumpur Stock Exchange To consider external auditors appointment and remuneration. To consider any related party transactions and conflict of interest situation that may arise within the Group including transaction, procedure or course of conduct that raises questions of management integrity. To consider other matters directed by the Board.
Meetings Number of Meetings The Committee shall meet at least four (4) times a year. The Chairman shall also convene a meeting of the Committee if requested to do so by any member, the management or the internal or external auditors to consider any matter within the scope and responsibilities of the Committee. As part of its duty to foster open communication, the Group Accounts Manager, General Manager and the representative from the external auditors are normally invited to attend the meetings. Quorum A quorum shall consist of a majority of Independent Non-Executive Directors. Secretary The Company Secretary shall be the Secretary of the Committee or, in her absence, another person authorised by the Chairman of the Committee.
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19
(193094-K)

Reporting Procedure The minutes of each meeting shall be circulated to all members of the Board.
!
The Groups Audit Committee held four (4) meetings during the year under review. The attendance of each Audit Committee member were as follows : Total no. of meetings held during directors tenure in office 4 4 4 4 4
Huang Yan Teo Dato Bahari Bin Haron Chai Lai Koon Mohd. Nadzir Mahmod Nora Lam Siew Wan Activities
Meetings attended by directors 4 4 3 4 2
During the financial year under review, the activities of the Audit Committee included :
! ! ! ! ! ! !
reviewing the unaudited quarterly financial results and announcements of the results prior to the approval by the Board of Directors; reviewing the audit reports with the external auditors; reviewing any related party transaction; reviewing the Companys compliance with the Listing Requirements of the Kuala Lumpur Stock Exchange; reviewing the recommendations in the quarterly internal audit reports and the effectiveness of the internal audit function; reviewing the internal audit plan for the financial year ended 31 July 2003 and financial year ending 31 July 2004; and discussing with the external auditors the audit plan and scope for the year as well as audit procedures to be utilized.
Internal Audit Function The Audit Committee is supported by an independent and adequately resourced internal audit function which is outsourced from Hanafiah Raslan and Mohamad. The Committee is aware of the fact that an independent and adequately resourced internal audit function is essential to assist in obtaining the assurance it requires regarding the effectiveness of the system of internal control. The committee is satisfied that the internal auditor has performed its role with impartiality, proficiency and due professional care. During the financial year, the internal audit activities were carried out according to the internal audit plan which have been approved by the Audit Committee.
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20
(193094-K)
STATEMENT ON INTERNAL CONTROL

RESPONSIBILITY The Board has overall responsibility for the Groups system of internal control and for reviewing its adequacy and integrity whilst the role of management is to implement the Boards policies on risk and control. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives. In pursuing these objectives, internal controls can only provide reasonable and not absolute assurance against material misstatement or loss. RISK MANAGEMENT FRAMEWORK The Board recognises that an important element for a sound system of internal control is to have in place a risk management framework in order to identify principal risks and implement appropriate controls to manage such risk. The present process of identifying and addressing risks is conducted informally. A more structured approach to formalise the existing processes by which risk are identified, assessed, controlled and reviewed with the involvement of the Audit Committee and the Board will be adopted. In ensuring its ongoing review of significant risks affecting the organisation, the internal control procedures with clear lines of accountability and delegated authority were established through a series of standard operating practice memorandum. KEY PROCESSES The key processes that the directors have established in reviewing the adequacy and integrity of the system of internal control are as follows:
! !
There is a system of financial reporting to the Board based on quarterly results; The Group outsourced its internal audit function to assist the Audit Committee in discharging its duties in respect of the internal controls within the Group. The internal auditors reporting to the Audit Committee, performs regular reviews of business processes to assess the effectiveness of internal controls and highlight significant risks impacting the Group. The Audit Committee conducts annual reviews on the adequacy of the internal audit scope of work and resources; The Audit Committee, on behalf of the Board, regularly reviews and holds discussions with management on the action taken on internal control issues identified in reports prepared by the internal auditors, the external auditors and the management. During the current financial year, four of such reports were received and reviewed by the Audit Committee; Close involvement in daily operations of the Group by the Managing Director and the Executive Director.
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A number of internal control weaknesses were identified during the year under review. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Groups annual report. Statement made in accordance with the resolution of the Board of Directors dated 30 October 2003.
Dato Haji Sulaiman Bin Ahmad Chairman
21
(193094-K)
STATEMENT OF DIRECTORS RESPONSIBILITY IN RELATION TO THE FINANCIAL STATEMENTS

This statement is prepared as required by the Listing Requirements of the Kuala Lumpur Stock Exchange. The directors are required by the Companies Act, 1965 (the Act) to prepare financial statements for each financial year so as to give a true and fair view of the financial position of the Group and of the Company and the results and cash flows of the Group and of the Company as at end of the financial year. During the preparation of the financial statements for the financial year ended 31 July 2003, the directors have ensured that :
! ! ! !
the Group and the Company have used appropriate accounting policies and are consistently applied; reasonable judgements and estimates that are prudent and reasonable have been used; all applicable Approved Accounting Standards in Malaysia have been followed. the accounting and other records required by the Act are properly kept and disclosed with reasonable accuracy at any time the financial position of the Group and of the Company which enable them to ensure the financial statements comply with the Act. the financial statements have been prepared on the going concern basis.
The directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group, and to prevent and detect fraud and other irregularities and material misstatements, as described more fully in the corporate governance section of this report. Such system, by their nature, can only provide reasonable and not absolute assurance against material misstatement, loss and fraud.
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22
(193094-K)
PENYATA PENGERUSI
Bagi pihak Lembaga Pengarah, saya dengan sukacitanya membentangkan Laporan Tahunan Multi-Code Electronics Industries (M) Berhad (MCE atau Syarikat) berserta dengan anakanak syarikat dalam kumpulannya ("Kumpulan") bagi tahun kewangan berakhir 31 Julai, 2003. GAMBARAN KESELURUHAN KEWANGAN Dalam tahun kewangan ini, Kumpulan telah mencapai perolehan sebanyak RM52.30 juta berbanding dengan RM71.51 juta dalam tahun 2002, menggambarkan penurunan sebanyak 26.86%. Ini adalah berikutan dengan penurunan kadar permintaan daripada pelangganpelanggan utama. Sejajar dengan penurunan perolehan ini, Kumpulan telah mencatatkan keuntungan selepas cukai dan kepentingan minoriti yang rendah sebanyak RM6.75 juta berbanding dengan RM8.96 juta pada tahun sebelumnya. PERKEMBANGAN KORPORAT Semasa tahun kewangan ini, Syarikat berbangga dengan kejayaan dalam peningkatan taraf pengiktirafan kepada ISO9001:2000. Pengiktirafan ke atas kualiti pengurusan yang cemerlang ini menunjukkan komitmen kami terhadap mutu barangan yang berkualiti tinggi dan juga adalah syarat penting untuk membolehkan syarikat kami membekal barangan kepada pelanggan-pelanggan utama. Pengilangan dan pembekalan alat kawalan jauh, alat penggera automatik, kunci pusat, tingkap berkuasa, pengesan undur, lampu berhenti, suis dan juga set kunci untuk kenderaan akan merupakan perniagaan utama dan penyumbang keuntungan Kumpulan bagi tahun kewangan berakhir 31 Julai 2004. PROSPEK Lembaga Pengarah menjangkakan prestasi Kumpulan bagi tahunan kewangan hadapan akan merosot berbanding dengan tahun kewangan semasa disebabkan oleh kekurangan permintaan daripada pelanggan-pelanggan. DIVIDEN Lembaga Pengarah telah mencadangkan dividen akhir sebanyak 10% dikecualikan cukai bagi tahun kewangan berakhir 31 Julai 2003. Ini tertakluk diatas persetujuan para pemegang saham dalam Mesyuarat Agung Tahunan yang akan datang. PENGHARGAAN Bagi pihak Lembaga Pengarah, saya ingin merakamkan penghargaan kami kepada pihak Pengurusan dan semua kakitangan di atas dedikasi dan usaha gigih mereka pada tahun lepas dan semua pelanggan, pembekal, bank, rakan niaga dan para pemegang saham di atas sokongan mereka yang berterusan dan keyakinan yang diberikan kepada Kumpulan. Saya juga ingin mengambil peluang ini untuk mengucapkan ribuan terima kasih kepada rakan-rakan sejawat di dalam Lembaga Pengarah ini di atas nasihat yang bernilai dan panduan yang telah diberikan oleh mereka dalam tahun lepas dan mengharap akan sokongan yang berterusan untuk masa yang mendatang.
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DATO HJ. SULAIMAN BIN AHMAD Pengerusi
23
(193094-K)
CHAIRMANS STATEMENT
On behalf of the Board of Directors, I am pleased to present the Annual Report of Multi-Code Electronics Industries (M) Berhad (MCE or the Company) and its subsidiaries (the Group) for the financial year ended 31 July 2003. FINANCIAL OVERVIEW For the year under review, the Group achieved a turnover of RM52.30 million compared to RM71.51 million in year 2002, representing a decrease of 26.86% is mainly due to decrease in demand from the main customers. In tandem with the lower turnover, the Group recorded a lower profit after tax and minority interest of RM6.75 million compared to RM8.96 million in the preceding year. CORPORATE DEVELOPMENTS During the year under review, the Company takes pride in that it has successfully been upgraded to ISO9001:2000 accreditation. This certification of quality management excellence marks our commitment to the high standard of product quality and is also a prerequisite for the supply of parts to our main customers. Manufacture and supply of remote control auto alarm, central locks, power window, reverse sensor, stop lamp, switches and key sets will be the Groups core business and earning contributor for the financial year ending 31 July 2004. PROSPECTS The Board anticipates that the Groups performance for the next financial year will be lower compared to the current financial year due to the expected weak demand by the customers. DIVIDENDS The Board has recommended a final 10% tax exempt dividend for the financial year ended 31 July 2003. This would be subject to the approval of shareholders at the forthcoming annual general meeting to be convened by the Company. APPRECIATION On behalf of the Board, I would like to express my appreciation to the Management and staff for their hard work and dedication during the past year and all customers, suppliers, bankers, business associates and shareholders for their continued cooperation and support to the Group. I would also like to take this opportunity to thank all my fellow Board members for their invaluable advice and guidance in the past year and look forward to their continued support in the future.
2 0 0 3 A N N U A L R E P O R T
DATO HJ. SULAIMAN BIN AHMAD Chairman
24
(193094-K)
DIRECTORS REPORT
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 July 2003. PRINCIPAL ACTIVITIES The principal activities of the Company are the manufacture and supply of remote control auto alarm, central locks, power window, reverse sensor, switches and stop lamp for motor vehicles. The principal activities of the subsidiaries are manufacture and supply of metal stamping and plastic injection parts and trading in auto accessories. There have been no significant changes in these activities during the financial year. RESULTS Group RM Profit after taxation Minority interests Net profit for the year 6,756,447 (6,760) 6,749,687 Company RM 8,597,430 8,597,430
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the statements of changes in equity. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. DIVIDENDS The amount of dividends paid by the Company since 31 July, 2002 were as follows :
2 0 0 3 A N N U A L R E P O R T
In respect of the financial year ended 31 July 2002 as reported in the directors report of that year Final tax exempt dividend of 10% paid on 28 January 2003
RM 4,361,170
At the forthcoming Annual General Meeting, a final dividend in respect of the financial year ended 31 July 2003 of 10% tax exempt on 43,672,700 ordinary shares amounting to a total dividend payable of RM4,367,270 (10 sen net per share) will be proposed for shareholders approval. The financial statements for the current year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in shareholders equity as an appropriation of retained profits in the financial year ending 31 July 2004.
25
(193094-K)
DIRECTORS REPORT
DIRECTORS The names of the directors of the Company in office since the date of the last report and at the date of this report are : Dato Hj Sulaiman bin Ahmad Goh Tong Huat Mohd. Nadzir Mahmud Goh Chai Siong Nora Lam Siew Wan Goh Kar Chun Huang Yan Teo Chai Lai Koon Dato Bahari Bin Haron DIRECTORS BENEFITS Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate, other than as may arise from the share options to be granted pursuant to the Employee Share Options Scheme ("ESOS"). Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 5 to the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest. DIRECTORS INTERESTS According to the register of directors shareholdings, the interests of directors in office at the end of the financial year in shares in the Company during the financial year were as follows:
2 0 0 3 A N N U A L R E P O R T
<---- Number of Ordinary Shares of RM1 Each ----> 1 August 31 July 2002 Bought Sold 2003 Direct interest Goh Tong Huat Goh Chai Siong Indirect interest Dato Hj Sulaiman bin Ahmad Goh Tong Huat 12,021,520 3,526,836 2,415,600 502,118 12,021,520 3,526,836 2,415,600 502,118
26
(193094-K)
DIRECTORS REPORT
The options to subscribe for shares pursuant to the ESOS of the Company are as follows : Number of Options Over Unissued Ordinary Shares of RM1 Each Multi-Code Electronics Industries (M) Berhad Direct interest Goh Tong Huat Goh Kar Chun 1 August 2002 Granted Exercised 31 July 2003
412,000 76,000
412,000 76,000
Other than as disclosed above, the other directors in office at the end of the financial year had no interest in shares in the Company. ISSUE OF SHARES During the financial year, the Company increased its issued and paid-up share capital from RM43,611,700 to RM43,672,700 by way of issuance of 61,000 ordinary shares of RM1 each at an issued price of RM1.45 per share pursuant to ESOS. The share premium arising amounted to RM27,450, and this has been credited to the share premium account. The new ordinary shares rank pari passu in all respects with existing ordinary shares. Subsequent to the financial year, the Company increased its issued and paid-up share capital from RM43,672,700 to RM43,702,700 by the issuance of 30,000 ordinary shares of RM1 each at an issued price of RM1.45 per share pursuant to ESOS. All the shares issued ranked pari passu in all respects with the existing shares of the Company. PROPOSED PRIVATE PLACEMENT (PPP) During the financial year, the Companys proposal of a private placement of 500,000 new ordinary shares of RM1.00 each representing approximately 1.15% of the issued and paid up share capital of the Company was approved by the Ministry of International Trade and Industry on 21 January 2003 and the Securities Commission (SC) on 6 March 2003. The SC had further approved the PPP on 25 July 2003 to be regulated under the SCs revised Policies and Guidelines on Issue/Offer of Securities which come into effect on 1 May 2003 and also approved the extension of time until 6 March 2004 to complete the PPP via its letter dated 5 September 2003. EMPLOYEE SHARE OPTIONS SCHEME ("ESOS") The Multi-Code Electronics Industries (M) Berhad ESOS is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 3 December 2001. The main features of the ESOS are as follows: (a) (b) The ESOS shall be in force for a period of five years from the date of the receipt of the last of the requisite approvals. Eligible persons are employees of the Group (including executive directors) who have been confirmed in the employment of the Group and have served for at least one year before the date of the offer. The eligibility for participation in the ESOS shall be at the discretion of the Options Committee appointed by the Board of Directors.
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27
(193094-K)
DIRECTORS REPORT
(c) (d) The total number of shares to be issued under the ESOS shall not exceed in aggregate 10% of the issued share capital of the Company at any point of time during the tenure of the ESOS. The option price for each share shall be the average of the mean market quotation of the shares of the Company in the daily official list issued by the Kuala Lumpur Stock Exchange for the five trading days preceding the date of offer, or the par value of the shares of the Company of RM1, whichever is the higher. No option shall be granted for less than 1,000 shares to any eligible employee. An option granted under the ESOS shall be capable of being exercised by the grantee by notice in writing to the Company commencing from the date of the offer but before the expiry of five years from the date of the receipt of the last of the requisite approvals. All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respects with the existing ordinary shares of the Company other than as may be specified in a resolution approving the distribution of dividends prior to their exercise dates. The persons to whom the options have been granted have no right to participate by virtue of the options in any share issue of any other company.
(e) (f)
(g)
(h)
Information with respect to the number of options granted under the ESOS is as follows : Number of Share Options At 1 August 2002 Granted Exercised Lapsed At 31 July 2003
2 0 0 3 A N N U A L R E P O R T
3,738,000 (61,000) (150,000) 3,527,000
Details of share options granted during the financial year : Exercise Period 21 March 2003 - 10 March 2007 Exercise Price RM 1.45 Number of Share Options 3,738,000
The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the list of option holders and their holdings.
28
(193094-K)
DIRECTORS REPORT
Details of share options exercised during the year and the fair value at the exercise date of shares issued are as follows : Consideration Received RM 8,700 13,050 24,650 33,350 8,700 88,450 The terms of share options outstanding as at the end of the year are as follows : Exercise Price RM 1.45 Number of Share Options Options Outstanding 3,527,000 Number of Share Options 6,000 9,000 17,000 23,000 6,000 61,000 Fair Values of Shares Issued RM 1.78 1.73 1.87 1.93 2.05
Exercise Date 13 June 2003 1 July 2003 8 July 2003 11 July 2003 15 July 2003
Exercise Price RM 1.45 1.45 1.45 1.45 1.45
Exercise Period 21 March 2003 - 10 March 2007 OTHER STATUTORY INFORMATION (a)
Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps : (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that there were no known bad debts and that adequate provision had been made for doubtful debts; and to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
2 0 0 3 A N N U A L R E P O R T
(ii)
(b)
At the date of this report, the directors are not aware of any circumstances which would render : (i) (ii) it necessary to write off any bad debts or the amount of the provision for doubtful debts inadequate to any substantial extent; and the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
(c)
At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.
(d)
29
(193094-K)
DIRECTORS REPORT
(e) As at the date of this report, there does not exist : (i) (ii) (f) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
In the opinion of the directors : (i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.
(ii)
AUDITORS The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors
GOH TONG HUAT

2 0 0 3 A N N U A L R E P O R T
DATO HJ SULAIMAN BIN AHMAD
Johor Bahru, Malaysia Date : 30 October 2003
30
(193094-K)
STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We, GOH TONG HUAT and DATO HJ SULAIMAN BIN AHMAD, being two of the directors of MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 33 to 64 are drawn up in accordance with applicable Approved Accounting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and of the Company as at 31 July 2003 and of the results and the cash flows of the Group and of the Company for the year then ended. Signed on behalf of the Board in accordance with a resolution of the directors
GOH TONG HUAT Johor Bahru, Malaysia Date : 30 October 2003
DATO HJ SULAIMAN BIN AHMAD
STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, ANG AI LING, being the officer primarily responsible for the financial management of MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 33 to 64 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by the abovenamed ANG AI LING at Johor Bahru in the State of Johor on 30 October 2003 Before me : Commissioner for Oaths ) ) ) )
2 0 0 3 A N N U A L R E P O R T
31
(193094-K)
REPORT OF THE AUDITORS TO THE MEMBERS OF MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD
We have audited the accompanying financial statements set out on pages 33 to 64. These financial statements are the responsibility of the Companys directors. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standards require that we plan and 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. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall presentation of the financial statements. 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 the provisions of the Companies Act, 1965 and applicable Approved Accounting Standards in Malaysia so as to give a true and fair view of : (i) (ii) (b) the financial position of the Group and of the Company as at 31 July 2003 and of the results and the cash flows of the Group and of the Company for the year then ended; and the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and
the accounting and other records and the registers required by the Act to be kept by the Company and by its subsidiaries have been properly kept in accordance with the provisions of the Act.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. The auditors reports on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act.
2 0 0 3 A N N U A L R E P O R T
Ernst & Young No. AF 0039 Chartered Accountants Johor Bahru, Malaysia Date : 30 October 2003
Abraham Verghese A/L T. V. Abraham No. 1664/10/04(J) Partner
32
(193094-K)
INCOME STATEMENTS FOR THE YEAR ENDED 31 JULY 2003

Group Note Revenue Other operating income Changes in inventories Raw materials and consumables used Purchase of trading inventories Staff costs Depreciation Other operating expenses Profit from operations Share of results of associate Profit before taxation Taxation Profit after taxation Minority interests Net profit for the year Basic earnings per share (sen) 7 3 2003 RM 52,300,788 1,049,208 674,864 (28,423,559) (3,179,573) (9,186,808) (2,282,808) (4,785,609) 4 6,166,503 3,029,750 6 9,196,253 (2,439,806) 6,756,447 (6,760) 6,749,687 15.5 2002 RM 71,514,187 1,075,406 (2,057,385) (37,632,278) (4,231,376) (9,409,481) (2,458,388) (7,604,594) 9,196,091 4,155,294 13,351,385 (4,150,800) 9,200,585 (244,647) 8,955,938 20.5 2003 RM 51,280,476 6,910,112 363,542 (33,279,317) (7,341,104) (1,995,376) (4,193,318) 11,745,015 11,745,015 (3,147,585) 8,597,430 8,597,430 Company 2002 RM 70,198,591 3,413,952 (1,173,390) (46,061,103) (7,409,536) (1,885,785) (6,911,200) 10,171,529 10,171,529 (3,259,388) 6,912,141 6,912,141
2 0 0 3 A N N U A L R E P O R T
The accompanying notes form an integral part of the financial statements.
33
(193094-K)
BALANCE SHEETS AS AT 31 JULY 2003

Group Note NON-CURRENT ASSETS Property, plant and equipment Investment in subsidiaries Investment in associate 8 9 10 27,813,920 754,636 28,568,556 CURRENT ASSETS Inventories Trade receivables Other receivables Tax refundable Cash and bank balances 11 12 13 14 19,940,918 8,642,887 966,300 1,370,372 31,273,841 62,194,318 CURRENT LIABILITIES Trade payables Other payables 15 16 2,103,440 3,631,729 5,735,169 NET CURRENT ASSETS 56,459,149 85,027,705
2 0 0 3 A N N U A L R E P O R T
Company 2002 RM 2003 RM 26,421,917 2,391,942 5,000 28,818,859 2002 RM 26,077,627 2,391,942 5,000 28,474,569
2003 RM
27,612,394 2,468,887 30,081,281
25,885,541 15,883,340 1,519,053 797,406 19,433,840 63,519,180
18,106,928 8,185,064 705,176 868,396 30,022,953 57,888,517
24,114,207 15,330,078 1,377,339 524,769 18,715,327 60,061,720
6,316,297 4,728,382 11,044,679 52,474,501 82,555,782
2,541,168 3,383,150 5,924,318 51,964,199 80,783,058
7,772,262 4,466,075 12,238,337 47,823,383 76,297,952
FINANCED BY : Share capital Reserves Shareholders equity Deferred taxation Minority interests 17 43,672,700 38,758,052 82,430,752 1,402,133 1,194,820 85,027,705 43,611,700 36,268,959 79,880,659 1,314,863 1,360,260 82,555,782 43,672,700 35,708,225 79,380,925 1,402,133 80,783,058 43,611,700 31,371,389 74,983,089 1,314,863 76,297,952
18
34
(193094-K)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 JULY 2003
<------------ Non-distributable ------------> Revaluation Share buy Share reserve back premium (Note 19) reserve RM RM RM 4,343,713 4,343,713 (3,964,700) (92,175) 286,838 1,438,685 (210,726) 1,227,959 (162,137) (197,662) 868,160 352,000 352,000 352,000 Distributable Retained profits RM 29,770,723 29,770,723 8,955,938 (3,964,700) 34,761,961 Total RM 75,552,121 (210,726) 75,341,395 (162,137) (197,662) 8,955,938 (92,175) (3,964,700) 79,880,659
Note At 1 August 2001 As previously stated Prior year adjustments
Share capital RM 39,647,000 39,647,000 3,964,700 43,611,700
21
At 1 August 2001 (restated) Charged to deferred taxation 18 Deficit on revaluation of freehold land and buildings during the year Net profit for the year Bonus issue during the year Expenses incurred for the bonus issue during the year Dividend 20 At 31 July 2002
At 1 August 2002 As previously stated Prior year adjustments
21
43,611,700 43,611,700 61,000 43,672,700
286,838 286,838 27,450 314,288
1,241,023 (372,863) 868,160 (38,903) 112,029 941,286
352,000 352,000 352,000
34,761,961 34,761,961 6,749,687 (4,361,170) 37,150,478
80,253,522 (372,863) 79,880,659 88,450 (38,903) 112,029 6,749,687 (4,361,170) 82,430,752
At 1 August 2002 (restated) Issue of shares for cash pursuant to ESOS Charged to deferred taxation 18 Surplus on revaluation of freehold land and buildings during the year Net profit for the year Dividend 20 At 31 July 2003
2 0 0 3 A N N U A L R E P O R T
35
(193094-K)
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 JULY 2003
<------------ Non-distributable ------------> Revaluation Share buy Share reserve back premium (Note 19) reserve RM RM RM 4,343,713 4,343,713 (3,964,700) (92,175) 286,838 1,438,685 (210,726) 1,227,959 (162,137) (197,662) 868,160 352,000 352,000 352,000 Distributable Retained profits RM 26,916,950 26,916,950 6,912,141 (3,964,700) 29,864,391 Total RM 72,698,348 (210,726) 72,487,622 (162,137) (197,662) 6,912,141 (92,175) (3,964,700) 74,983,089
Note At 1 August 2001 As previously stated Prior year adjustments
Share capital RM 39,647,000 39,647,000 3,964,700 43,611,700
21
At 1 August 2001 (restated) Charged to deferred taxation 18 Deficit on revaluation of freehold land and buildings during the year Net profit for the year Bonus issue during the year Expenses incurred for the proposed bonus issue during the year Dividend 20 At 31 July 2002
At 1 August 2002 As previously stated Prior year adjustments
21
43,611,700 43,611,700 61,000 43,672,700
286,838 286,838 27,450 314,288
1,241,023 (372,863) 868,160 (38,903) 112,029 941,286
352,000 352,000 352,000
29,864,391 29,864,391 8,597,430 (4,361,170) 34,100,651
75,355,952 (372,863) 74,983,089 88,450 (38,903) 112,029 8,597,430 (4,361,170) 79,380,925
At 1 August 2002 (restated) Issue of shares for cash pursuant to ESOS Charged to deferred taxation 18 Surplus on revaluation of freehold land and buildings during the year Net profit for the year Dividend 20 2 0 0 3 A N N U A L R E P O R T At 31 July 2003
36
(193094-K)
CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 JULY 2003

Group 2003 RM CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Adjustments for : Depreciation Share of profit of associate Interest income Dividend income Provision for doubtful debts Bad debts written off Unrealised gain on foreign exchange Gain on disposal of plant and equipment Plant and equipment written off Reserve on consolidation written off Deficit on revaluation of land and buildings Provision for doubtful debts written back Operating profit before working capital changes Receivables Inventories Payables Cash generated from operations Income tax paid Income tax refund Net cash from operating activities 9,196,253 2,282,808 (3,029,750) (516,580) 151 (10,484) (156,000) 9,279 (1,520) 7,774,157 7,795,013 5,944,623 (5,299,215) 16,214,578 (2,139,437) 23,112 14,098,253 13,351,385 2,458,388 (4,155,294) (453,935) 34,871 175,512 (359,942) 120,011 (220,499) 1,971,541 (159,708) 12,762,330 (3,232,454) (2,936,880) 2,210,281 8,803,277 (4,922,911) 3,880,366 11,745,015 1,995,376 (515,518) (5,833,879) 151 (10,484) (156,000) 1,298 (1,520) 7,224,439 7,818,734 6,007,279 (6,303,724) 14,746,728 (1,824,437) 12,922,291 10,171,529 1,885,785 (452,874) (2,343,865) 34,871 13,804 (359,942) 120,011 1,762,336 10,831,655 (3,897,949) (3,484,419) 3,795,781 7,245,068 (4,098,657) 3,146,411
2 0 0 3 A N N U A L R E P O R T
Company 2002 RM 2003 RM 2002 RM
37
(193094-K)
CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 JULY 2003

Group 2003 RM CASH FLOWS FROM INVESTING ACTIVITIES Dividend received from the associate Dividend received from a subsidiary Interest received Purchase of property, plant and equipment Proceeds from disposal of plant and equipment Net cash from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Withdrawal of fixed deposit pledged to the bank for banking facilities Proceeds from issuance of ordinary shares Expenses incurred for bonus issue Dividend paid Dividend paid to minority shareholders Net cash used in financing activities
2 0 0 3 A N N U A L R E P O R T
3,895,671 516,580 (2,381,863) 156,280 2,186,668
1,367,783 453,935 (2,116,058) 367,830 73,490
3,895,671 319,800 515,518 (2,228,934) 156,000 2,658,055
1,367,783 319,800 452,874 (1,929,671) 367,830 578,616
88,450 (4,361,170) (172,200) (4,444,920)
1,074,775 (92,175) (3,964,700) (172,200) (3,154,300)
88,450 (4,361,170) (4,272,720)
1,074,775 (92,175) (3,964,700) (2,982,100)
NET INCERASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR (NOTE 14)
11,840,001 19,433,840
799,556 18,634,284
11,307,626 18,715,327
742,927 17,972,400
31,273,841
19,433,840
30,022,953
18,715,327
38
(193094-K)
NOTES TO THE FINANCIAL STATEMENTS - 31 JULY 2003

1. CORPORATE INFORMATION
The principal activities of the Company are the manufacture and supply of remote control auto alarm, central locks, power window, reverse sensor, switches and stop lamp for motor vehicles. The principal activities of the subsidiaries are described in Note 9. There have been no significant changes in the nature of these activities during the financial year. The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Second Board of the Kuala Lumpur Stock Exchange. The principal place of business of the Company is located at No. 2 & 4, Jalan Waja 7, Kawasan Perindustrian Pandan, 81100 Johor Bahru, Johor. The number of employees in the Group and in the Company at the end of the financial year were 463 (2002 : 593) and 364 (2002 : 472) respectively. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 30 October 2003. 2. (a) SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation
The financial statements of the Group and of the Company have been prepared under the historical cost convention except for the revaluation of freehold land and buildings. The financial statements comply with the provisions of the Companies Act, 1965 and applicable Approved Accounting Standards in Malaysia. During the financial year ended 31 July 2003, the Group and the Company adopted the following Malaysian Accounting Standards Board (MASB) Standards for first time : MASB 25 MASB 29 Income Taxes Employee Benefits
The effects of adopting MASB 25 are summarised in the Statements of Changes in Equity and further information is disclosed in Note 21. The adoption of MASB 29 has not given rise to any adjustments to the opening balances of retained profits of prior and current year or to changes in comparatives. (b) (i) Basis of Consolidation Subsidiaries The consolidated financial statements include the financial statements of the Company and all its subsidiaries. Subsidiaries are those companies in which the Group has a long term equity interest and where it has power to exercise control over the financial and operating policies so as to obtain benefits therefrom. Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. The assets and liabilities of a subsidiary are measured at their fair values at the date of acquisition and these values are reflected in the consolidated balance sheet. The difference between the cost of an acquisition and the fair value of the Groups share of the net assets of the acquired subsidiary at the date of acquisition is included in the consolidated balance sheet as goodwill or negative goodwill arising on consolidation.
2 0 0 3 A N N U A L R E P O R T
39
(193094-K)

Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered. The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Groups share of its net assets together with any unamortised balance of goodwill which were not previously recognised in the consolidated income statement. Minority interest is measured at the minorities share of the fair values of the identifiable assets and liabilities of the subsidiary. (ii) Associates Associates are those companies in which the Group has a long term equity interest and where it exercises significant influence over the financial and operating policies. Investment in associate is accounted for in the consolidated financial statements by the equity method of accounting based on the audited or management financial statements of the associate. Under the equity method of accounting, the Groups share of profits less losses of associate during the year is included in the consolidated income statement. The Groups interest in associate is carried in the consolidated balance sheet at cost plus the Groups share of postacquisition retained profits or accumulated losses and other reserves as well as goodwill on acquisition. (c) Investments in Subsidiaries and Associate
The Companys investments in subsidiaries and associate are stated at cost less impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(l). On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is recognised in the income statement. (d) Property, Plant and Equipment and Depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(l).
2 0 0 3 A N N U A L R E P O R T
Freehold land is stated at valuation less impairment losses. Revaluations are made once in five years from the date of last revaluation based on a valuation by an independent valuer. Any revaluation increase is credited to equity as a revaluation surplus, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case the increase is recognised in the income statement to the extent of the decrease previously recognised. A revaluation decrease is first offset against an increase on unutilised earlier valuations in respect of the same asset and is thereafter recognised as an expense. Upon the disposal of revalued assets, the attributable revaluation surplus remaining in the revaluation reserve is transferred to retained profits.
40
(193094-K)

Depreciation of other property, plant and equipment is provided for on a straight line basis to write off the cost of each asset to its residual value over the estimated useful life at the following annual rates: Buildings Moulds Plant and machinery Equipment, furniture and fittings Motor vehicles Renovation Electrical installation Loose tools Computer 2% 15% 20% 10% 20% 10% 10% 50% 50%
Upon the disposal of an item of property, plant or equipment, the difference between the net disposal proceeds and the net carrying amount is recognised in the income statement. (e) Inventories Inventories are stated at the lower of cost (determined on the first-in, first-out basis) and net realisable value. Cost of finished goods and work-in-progress includes direct materials, direct labour, other direct cost and appropriate production overheads. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. (f) Cash and Cash Equivalents For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank and fixed deposits which have an insignificant risk of changes in value. (g) Provision for Liabilities Provision for liabilities are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation. (h) Income Tax Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date. Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.
2 0 0 3 A N N U A L R E P O R T
41
(193094-K)

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill. Prior to the adoption of MASB 25 Income Taxes on 1 August 2002, deferred tax was provided for using the liability method in respect of significant timing differences and deferred tax assets were not recognised unless there was reasonable expectation of their realisation. This change in accounting policy has been accounted for retrospectively and the effects of this change are disclosed in Note 21. (i) (i) Employee Benefits Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur. Defined contribution plans As required by law, companies in Malaysia make contribution to the state pension scheme, the Employees Provident Fund.
(ii)
Prior to the adoption of MASB 29 Employee Benefits on 1 August 2002, no liability was recognised for the obligations in respect of short term employee benefits in the form of accumulating compensated absences. This change in accounting policy has not given rise to any adjustments to the opening balances of retained profits of the prior and current year or to changes in comparatives as the amount involved and the effect on the financial statements is insignificant. (j) Revenue Recognition
Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably.
2 0 0 3 A N N U A L R E P O R T
(i) (ii)
Sale of goods Revenue relating to sale of goods is recognised net of sales tax and discounts upon the transfer of risks and rewards. Interest and rental income Interest is recognised on a time proportion basis that reflects the effective yield on the asset and rental income is recognised on an accrual basis.
(iii) Dividend income Dividend income is recognised when the right to receive payment is established.
42
(193094-K)

k) Foreign Currencies Transactions
Transactions in foreign currencies are initially recorded in Ringgit Malaysia at rates of exchange ruling at the date of the transaction. At each balance sheet date, foreign currency monetary items are translated into Ringgit Malaysia at exchange rates ruling at that date. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined. All exchange rate differences are taken to the income statement. The principal exchange rates used for every unit of foreign currency ruling at the balance sheet date used are as follows: 2003 RM United States Dollar Singapore Dollar Taiwan New Dollar Japanese Yen (l) Impairment of Assets 3.805 2.180 0.112 0.032 2002 RM 3.805 2.200 0.112 -
At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication of impairment. If any such indication exists, impairment is measured by comparing the carrying values of the assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use, which is measured by reference to discounted future cash flows. An impairment loss is recognised as an expense in the income statement immediately unless the asset is carried at a revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any unutilised previously recognised revaluation surplus for the same asset. Reversal of impairment losses recognised in prior years is recorded when the impairment losses recognised for the asset no longer exist or have decreased. (m) Financial Instruments Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously. (i) Trade Receivables Trade receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date. Trade Payables Trade payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.
2 0 0 3 A N N U A L R E P O R T
(ii)
43
(193094-K)

(iii) Equity Instruments Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. The transaction costs of an equity transaction are accounted for as deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided. When issued shares of the Company are repurchased, the consideration paid, including any attributable transaction costs is presented as a change in equity. Repurchased shares that have not been cancelled are classified as treasury shares and presented as a deduction from equity. No gain or loss is recognised in the income statement on the sale, re-issuance or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount of the treasury shares is shown as a movement in equity. 3. REVENUE
Revenue of the Group and of the Company consist of invoiced value of sales of goods less returns and discounts. During the financial year, a customer and its associate contributed to approximately 78% (2002 : 80%) of the Group and the Company revenue.
2 0 0 3 A N N U A L R E P O R T
44
(193094-K)

4. PROFIT FROM OPERATIONS Group 2003 RM This is stated after charging/(crediting) : Directors remuneration (Note 5) - holding company directors fee - holding company directors salaries, bonus and allowances - subsidiary directors salaries and bonus Auditors remuneration : - current year - under provision in prior year - Others - current year - overprovision in prior year Rental of hostels Provision for doubtful debts Provision for doubtful debts written back Bad debts written off Plant and equipment written off Deficit on revaluation of land and buildings Reserve on consolidation written off Rental income Gain on disposal of plant and equipment Gross dividend received from the associate Gross dividend received from a subsidiary company Management fee from the associate (Gain)/Loss on foreign exchange - realised - unrealised Interest income 421,000 687,855 70,070 46,000 106,200 (48,000) 96,000 (1,520) 151 9,279 (59,700) (156,000) (843) (10,484) (516,580) 335,834 613,153 58,600 45,000 8,000 128,500 232,776 34,871 (159,708) 175,512 120,011 1,971,541 (220,499) (249,779) (359,942) (24,000) 51,033 (453,935) 373,000 687,855 34,500 95,000 (48,000) 96,000 (1,520) 151 1,298 (162,876) (156,000) (5,389,712) (444,167) (866) (10,484) (515,518) 287,834 613,153 34,000 7,000 118,900 96,000 34,871 13,804 120,011 1,762,336 (218,076) (359,942) (1,899,698) (444,167) (24,000) 56,106 (452,874)
2 0 0 3 A N N U A L R E P O R T
45
(193094-K)

5. DIRECTORS REMUNERATION Group 2003 RM Directors of the Company Executive : Salaries and other emoluments Fees Bonus 499,505 108,000 116,350 723,855 Non-Executive : Salaries and other emoluments Fees 72,000 313,000 385,000 Other Directors Executive : Salaries and other emoluments 2002 RM 431,212 109,833 109,941 650,986 72,000 226,001 298,001 2003 RM 499,505 84,000 116,350 699,855 72,000 289,000 361,000 Company 2002 RM 431,212 85,833 109,941 626,986 72,000 202,001 274,001
70,070 70,070
58,600 58,600 1,007,587
1,060,855
900,987
Total
1,178,925
Number of Directors 2003 Executive directors : RM1 to RM50,000 RM50,001 to RM100,000 RM100,001 to RM150,000 RM150,001 to RM200,000 RM200,001 to RM250,000 RM250,000 and above Non-executive directors : RM1 to RM50,000 RM50,001 to RM100,000 RM100,001 to RM150,000 RM150,001 to RM200,000 RM200,001 to RM250,000 RM250,000 and above 1 1 5 1 1 2002 2 1 1 6 1 -
2 0 0 3 A N N U A L R E P O R T
46
(193094-K)

6. TAXATION Group 2003 RM Tax expense for the year Under/(Over)provided in prior years Share of taxation of the associate Deferred tax : Relating to origination and reversal of temporary differences (Note 18) 1,363,891 179,218 848,330 2002 RM 2,986,718 (941,400) 1,163,482 2003 RM 2,920,000 179,218 Company 2002 RM 3,264,000 (946,612) -
48,367 2,439,806
942,000 4,150,800
48,367 3,147,585
942,000 3,259,388
Domestic income tax is calculated at the Malaysian statutory tax rate of 28% (2002 : 28%) of the estimated assessable profit for the year. A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows : 2003 RM Group Profit before taxation and share of results of associate Taxation at Malaysian statutory tax rate of 28% (2002 : 28%) Taxation at Malaysian tax rate of 20% (2002 : 28%) for subsidiaries qualified for small and medium enterprise status Deferred tax assets not recognised during the year Expenses not deductible for tax pusposes Tax effect of group consolidation eliminating entries Utilisation of current years reinvestment allowances (Over)/Under provision of deferred tax in prior year Under/(Over) provision of income tax expense in prior years Share of tax of associate Tax expense for the year 6,166,503 1,726,621 (8,000) (8,778) 15,022 16,749 (292,517) (36,839) 179,218 848,330 2,439,806 9,196,091 2,574,905 57,510 690,715 (30,064) (216,286) 851,938 (941,400) 1,163,482 4,150,800 2002 RM
2 0 0 3 A N N U A L R E P O R T
47
(193094-K)

2003 RM Company Profit before taxation Taxation at Malaysian statutory tax rate 28% (2002 : 28%) Expenses not deductible for tax pusposes Utilisation of current years reinvestment allowances (Over)/underprovision of deferred tax in prior year Under/(Over) provision of income tax expense in prior years Tax expense for the year 11,745,015 3,288,604 9,119 (292,517) (36,839) 179,218 3,147,585 10,171,529 2,848,028 692,375 (186,341) 851,938 (946,612) 3,259,388 2002 RM
The Company has tax credits and tax exempt accounts to frank the payment of dividends out of its entire retained profits under the following Acts subject to agreement with the Inland Revenue Board : (a) (b) (c) (d) (e) Tax credits under Section 108 of Income Tax, 1967 of approximately RM19,460,000 (2002 : RM16,017,000). Tax exempt account under Section 133A of Income Tax Act, 1967 of approximately RM8,462,000 (2002 : RM7,417,000). Tax exempt account arising from pioneer status of approximately RM6,485,000 (2002 : RM10,846,000). Tax exempt account under Section 12 of Income Tax (Amendment) Act, 1999 of approximately RM4,158,000 (2002 : RM4,158,000). Tax exempt account arising out of tax exempt dividends received of approximately RM668,000 (2002 : RM614,000).
2 0 0 3 A N N U A L R E P O R T
48
(193094-K)

7. (a) EARNINGS PER SHARE Basic Basic earnings per share is calculated by dividing the net profit for the year by the weighted average number of ordinary shares in issue during the financial year. Group 2003 RM Net profit for the year (RM) Weighted average number of ordinary shares in issue Basic earnings per share (sen) (b) Diluted For the purpose of calculating diluted earnings per ordinary share, the net profit for the year and the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutive potential ordinary shares from the conversion of the ESOS. The adjusted weighted average number of ordinary share is the weighted average number of ordinary shares in issue during the financial year plus the weighted average number of ordinary shares which would be issued on the conversion of the outstanding options under the ESOS into ordinary shares. Group 2003 RM Net profit for the year (RM) Weighted average number of ordinary shares in issue Adjustment for assumed conversion Adjusted weighted average number of ordinary shares in issue and issuable Diluted earnings per share (sen) 6,749,687 43,616,784 3,527,000 47,143,784 14.3 6,749,687 43,616,784 15.5 2002 RM 8,955,938 43,611,700 20.5
2 0 0 3 A N N U A L R E P O R T
Comparative diluted earnings per share has not been presented as there was no potential ordinary shares outstanding during the previous financial year.
49
(193094-K)

8. PROPERTY, PLANT AND EQUIPMENT At Valuation <------------------------------------- At cost -------------------------------------> Freehold land Freehold land Mould, plant Motor *Other and buildings and buildings and machinery Vehicles assets RM RM RM RM RM 15,990,000 3,775,428 44,572 19,810,000 3,775,428 (3,775,428) 12,437,137 1,290,139 13,727,276 2,710,820 409,952 (356,490) 2,764,282 8,399,474 681,772 (950) (21,977) 9,058,319
Group Cost/Valuation At 1 August 2002 Additions Disposals Reclassification Write offs Revaluation At 31 July 2003 Accumulated Depreciation At 1 August 2002 Charge for the year Disposals Reclassification Write offs Revaluation At 31 July 2003 Net Book Value At 31 July 2003 At 31 July 2002
2 0 0 3 A N N U A L R E P O R T
Total RM 43,312,859 2,381,863 (357,440) (21,977) 44,572 45,359,877
151,171 58,248 (67,458) 141,961
58,248 (58,248) -
8,552,546 1,081,419 9,633,965
2,107,780 198,135 (356,490) 1,949,425
4,981,891 852,083 (7,775) (5,593) 5,820,606
15,700,465 2,282,808 (364,265) (5,593) (67,458) 17,545,957
19,668,039 15,990,000 132,910
3,717,180 22,100
4,093,311 3,884,591 1,206,476
814,857 603,040 220,527
3,237,713 3,417,583 876,375
27,813,920 27,612,394 2,458,388
Depreciation charge for 2002
50
(193094-K)

At Valuation <------------------------------------- At cost -------------------------------------> Freehold land Freehold land Mould, plant Motor *Other and buildings and buildings and machinery Vehicles assets RM RM RM RM RM 15,380,000 3,775,428 44,572 19,200,000 3,775,428 (3,775,428) 10,031,438 1,151,028 11,182,466 2,622,249 409,953 (356,490) 2,675,712 7,523,552 667,953 (6,489) 8,185,016
Company Cost/Valuation At 1 August 2002 Additions Disposals Reclassification Write offs Revaluation At 31 July 2003 Accumulated Depreciation At 1 August 2002 Charge for the year Disposals Reclassification Write offs Revaluation At 31 July 2003 Net Book Value At 31 July 2003 At 31 July 2002 Depreciation charge for 2002
Total RM 39,332,667 2,228,934 (356,490) (6,489) 44,572 41,243,194
148,971 58,248 (67,458) 139,761
58,248 (58,248) -
6,646,594 872,697 7,519,291
2,022,158 195,185 (356,490) 1,860,853
4,528,040 778,523 (5,191) 5,301,372
13,255,040 1,995,376 (356,490) (5,191) (67,458) 14,821,277
19,060,239 15,380,000 130,976
3,717,180 22,100
3,663,175 3,384,844 732,369
814,859 600,091 202,813
2,883,644 2,995,512 797,527
26,421,917 26,077,627 1,885,785

2 0 0 3 A N N U A L R E P O R T
* Other assets comprise of equipment, furniture and fittings, renovation, electrical installation, loose tools and computer.
51
(193094-K)

(a) The net book values of property, plant and equipment pledged to banks for banking facilities granted to the Group and the Company are as follows : Group and Company 2003 2002 RM RM 4,930,000 5,078,390 2,843,338 2,638,789 7,773,338 (b) 7,717,179
Freehold land Buildings
Included in property, plant and equipment of the Group and the Company are the cost of the following fully depreciated assets which are still in use : Group Plant and machinery Mould Motor vehicles Computer Renovation Loose tools and electrical installation Equipment Company Plant and machinery Mould Motor vehicles Computer Renovation Loose tools and electrical installation Equipment 621,770 4,617,850 1,514,309 677,632 162,411 862,861 410,481 8,867,314 618,989 4,517,634 1,741,796 363,034 157,211 856,106 404,826 8,659,596 2003 RM 2,276,922 4,617,850 1,663,724 687,101 206,097 925,793 469,944 10,847,431 2002 RM 1,437,732 4,517,634 1,741,796 363,034 200,897 919,038 461,989 9,642,120
2 0 0 3 A N N U A L R E P O R T
52
(193094-K)

(c) Valuation Details of independent professional valuation of freehold properties at 31 July, 2003 carried out by Samuel W.C. Tan (Bachelor Surveying (Hons) Property Management), a registered valuer of KGV - Lambert Smith Hampton are as follows : Year of valuation January 2003 Description of property 2 pieces of freehold land and buildings at Johor Bahru 16 pieces of freehold land and buildings at Johor Bahru 5 pieces of freehold land and buildings at Klang Amount RM 3,820,000 Basis of valuation Open market value
July 2002
13,070,000
Open market value
July 2002
2,920,000
Open market value
Had the revalued freehold land and buildings been stated at historical cost less accumulated depreciation, the net book value of each class of freehold land and buildings that would have been included in the financial statements at the end of the financial year are as follows : Group 2003 RM Freehold land Buildings 12,980,790 5,971,743 18,952,533 2002 RM 10,310,400 5,061,389 15,371,789 2003 RM 12,806,597 5,948,760 18,755,357 Company 2002 RM 10,136,207 5,037,871 15,174,078
2 0 0 3 A N N U A L R E P O R T
53
(193094-K)

9. INVESTMENT IN SUBSIDIARIES Company 2003 RM Unquoted shares, at cost Details of the subsidiaries are as follows : Country of Incorporation Malaysia Malaysia Equity Interest Held (%) 2003 2002 100 65 100 65 2,391,942 2002 RM 2,391,942
Name of Company Beaucar Accessories (M) Sdn. Bhd. Plasmet Industries (M) Sdn. Bhd.
Principal activities Trading in auto accessories Manufacture and supply of metal stamping and plastic injection parts Company
10. INVESTMENT IN ASSOCIATE Group 2003 RM Unquoted shares, at cost Share of post acquisition reserves 5,000 749,636 754,636 Represented by : Share of net tangible assets
2 0 0 3 A N N U A L R E P O R T
2002 RM 5,000 2,463,887 2,468,887 2,468,887
2003 RM 5,000 5,000
2002 RM 5,000 5,000
754,636
The results of the associate are based on the audited financial statements as at 31 December 2002 and management financial statements for the seven months ended 31 July 2003. Details of the associate are as follows : Country of Incorporation Malaysia Equity Interest Held (%) 2003 2002 50 50
Name of Associate Wirapadu Sistem (M) Sdn. Bhd.
Principal activities Trading in car spare parts and accessories
54
(193094-K)

11. INVENTORIES Group 2003 RM At cost : Raw materials Work-in-progress Finished goods Trading goods 11,088,443 333,125 7,823,370 695,980 19,940,918 12. TRADE RECEIVABLES Group 2003 RM Trade receivables Provision for doubtful debts Due from the associate Due from a subsidiary 4,741,859 (109,377) 4,632,482 4,010,405 8,642,887 2002 RM 8,642,165 (110,897) 8,531,268 7,352,072 15,883,340 2003 RM 3,987,261 (33,351) 3,953,910 4,010,405 220,749 8,185,064 Company 2002 RM 7,744,910 (34,871) 7,710,039 7,352,072 267,967 15,330,078 2002 RM 17,707,929 320,091 7,091,222 766,299 25,885,541 2003 RM 10,396,810 73,664 7,636,454 18,106,928 Company 2002 RM 16,767,631 183,365 7,163,211 24,114,207
The Groups normal trade credit term ranges from 30 to 60 days. Other credit terms are assessed and approved on a case-by-case basis. Included in the other trade receivables is a major customer who contributed to a substantial portion of the Group and the Company revenue. 13. OTHER RECEIVABLES Group 2003 RM Due from the associate Sundry deposits and prepayments Sundry receivables 26,000 672,916 267,384 966,300 2002 RM 8,000 400,736 1,110,317 1,519,053 2003 RM 26,000 457,814 221,362 705,176 Company 2002 RM 8,000 385,947 983,392 1,377,339
2 0 0 3 A N N U A L R E P O R T
The non-trade amount due from associate is interest free, unsecured and has no fixed terms of repayment. The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or groups of debtors.
55
(193094-K)

14. CASH AND BANK BALANCES Group 2003 RM Cash in hand and at banks Fixed deposits with licensed bank Cash and cash equivalents 12,223,841 19,050,000 31,273,841 2002 RM 6,383,840 13,050,000 19,433,840 2003 RM 10,997,953 19,025,000 30,022,953 Company 2002 RM 5,690,327 13,025,000 18,715,327
Included in the fixed deposits of the Group and the Company are amounts of RM50,000 (2002 : RM50,000) and RM25,000 (2002 : RM25,000) respectively which have been pledged to a licensed bank as security for bank guarantee facility granted to the Group and the Company. The weighted average effective interest rates of deposits at the balance sheet date were as follows : Group 2003 RM Licensed banks Licensed finance company 3.7% 2.9% 2002 RM 3.7% 3.1% 2003 RM 3.2% 2.9% Company 2002 RM 3.2% 3.1%
The average maturities of deposits as at the end of the financial year were as follows : Group 2003 RM Licensed banks Licensed finance company
2 0 0 3 A N N U A L R E P O R T
Company 2002 RM 2003 RM 30 days to 365 days 30 days 2002 RM 30 days to 180 days 30 days
30 days to 365 days 30 days
30 days to 365 days 30 days
56
(193094-K)

15. TRADE PAYABLES Group 2003 RM Trade payables Due to a subsidiary 2,103,440 2,103,440 2002 RM 6,316,297 6,316,297 2003 RM 1,820,088 721,080 2,541,168 Company 2002 RM 5,713,144 2,059,118 7,772,262
The normal trade credit terms granted to the Group range from 30 to 60 days. 16. OTHER PAYABLES Group 2003 RM Due to a subsidiary Other payables and accruals 3,631,729 3,631,729 2002 RM 4,728,382 4,728,382 2003 RM 5,265 3,377,885 3,383,150 Company 2002 RM 34,652 4,431,423 4,466,075
The amount due to a subsidiary is unsecured, interest free and has no fixed terms of repayment. 17. SHARE CAPITAL Number of Ordinary Shares of RM1 Each 2003 2002 Authorised Issued and fully paid : At 1 August Issue and paid up during the year : - bonus issue - for cash pursuant to ESOS At 31 July 50,000,000 43,611,700 61,000 43,672,700 50,000,000 39,647,000 3,964,700 43,611,700 Amount 2003 RM 50,000,000 43,611,700 61,000 43,672,700 2002 RM 50,000,000 39,647,000 3,964,700 43,611,700
2 0 0 3 A N N U A L R E P O R T
57
(193094-K)

During the financial year, the Company increased its issued and paid-up share capital from RM43,611,700 to RM43,672,700 by the issuance of 61,000 ordinary shares of RM1 each at an issued price of RM1.45 per share pursuant to ESOS. All the shares issued during the financial year ranked pari passu in all respects with the existing shares of the Company. EMPLOYEE SHARE OPTIONS SCHEME (ESOS) The Multi-Code Electronics Industries (M) Berhad ESOS is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 3 December 2001. The main features of the ESOS are as follows: (a) (b) The ESOS shall be in force for a period of five years from the date of the receipt of the last of the requisite approvals. Eligible persons are employees of the Group (including executive directors) who have been confirmed in the employment of the Group and have served for at least one year before the date of the offer. The eligibility for participation in the ESOS shall be at the discretion of the Options Committee appointed by the Board of Directors. The total number of shares to be issued under the ESOS shall not exceed in aggregate 10% of the issued share capital of the Company at any point of time during the tenure of the ESOS. The option price for each share shall be the average of the mean market quotation of the shares of the Company in the daily official list issued by the Kuala Lumpur Stock Exchange for the five trading days preceding the date of offer, or the par value of the shares of the Company of RM1, whichever is the higher. No option shall be granted for less than 1,000 shares to any eligible employee. An option granted under the ESOS shall be capable of being exercised by the grantee by notice in writing to the Company commencing from the date of the offer but before the expiry of five years from the date of the receipt of the last of the requisite approvals. All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respects with the existing ordinary shares of the Company other than as may be specified in a resolution approving the distribution of dividends prior to their exercise dates. The persons to whom the options have been granted have no right to participate by virtue of the options in any share issue of any other company.
(c) (d)
(e) (f)
(g)
2 0 0 3 A N N U A L R E P O R T
(h)
Information with respect to the number of options granted under the ESOS is as follows : Number of Share Options 2003 2002 At 1 August Granted Exercised Lapsed At 31 July 3,738,000 (61,000) (150,000) 3,527,000 -
58
(193094-K)

Details of share options granted during the financial year : Exercise Period 21/03/2003 - 10/03/2007 Exercise Price RM 1.45 Number of Share Options 2003 2002 3,738,000 -
Details of share options exercised during the year and the fair value at the exercise date of shares issued are as follows : Consideration Received RM 8,700 13,050 24,650 33,350 8,700 88,450 Fair Values of Shares Issued RM 1.78 1.73 1.87 1.93 2.05
Exercise Date 13 June 2003 1 July 2003 8 July 2003 11 July 2003 15 July 2003
Exercise Price RM 1.45 1.45 1.45 1.45 1.45
Number of Share Options 2003 2002 6,000 9,000 17,000 23,000 6,000 61,000 -
The terms of share options outstanding as at the end of the year are as follows : Number of Share Options Outstanding 2003 2002 3,527,000 2 0 0 3 A N N U A L R E P O R T
Exercise Period 21/03/2003 - 10/03/2007
Exercise Price RM 1.45
18. DEFERRED TAXATION Group and Company 2003 2002 RM RM At 1 August Recognised in the income statement (Note 6) Recognised in equity (Note 19) At 31 July Presented after appropriate offsetting as follows : Deferred tax assets Deferred tax liabilities 1,402,133 1,402,133 1,314,863 1,314,863 1,314,863 48,367 38,903 1,402,133 210,726 942,000 162,137 1,314,863
59
(193094-K)

The components and movements of deferred tax liabilities during the financial year prior to offsetting are as follows : Accelerated capital allowances RM 942,000 45,431 987,431 Revaluation of freehold land and buildings RM 372,863 38,903 411,766
Group and Company At 1 August 2002 Recognised in the income statement Charged to equity At 31 July 2003 19. REVALUATION RESERVE
Others RM 2,936 2,936
Total RM 1,314,863 48,367 38,903 1,402,133
Group and Company 2003 2002 RM RM Revaluation reserve : Freehold land and buildings The movement in revaluation reserve was as follows : Group and Company 2003 2002 RM RM Balance at 1 August Revaluation increase/(decrease) Charged to deferred taxation (Note 18)
2 0 0 3 A N N U A L R E P O R T
941,286
868,160
868,160 112,029 (38,903) 941,286
1,227,959 (197,662) (162,137) 868,160
Balance at 31 July 20. DIVIDEND Amount 2003 RM Ordinary final dividend 10%* (2002 : 10%) tax exempt * 4,361,170 2002 RM 3,964,700
Dividend per share 2003 2002 Sen Sen 10 10
Dividends declared and proposed in year 2003 in respect of the financial year ended 31 July 2002 as reported in the directors report of that year.
60
At the forthcoming Annual General Meeting, a final dividend in respect of the financial year ended 31 July 2003 of 10% tax exempt on 43,672,700 ordinary shares amounting to a total dividend payable of RM4,367,270 (10 sen net per share) will be proposed for shareholders approval. The financial statements for the current year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in shareholders equity as an appropriation of retained profits in the financial year ending 31 July 2004.
(193094-K)

21. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS (a) Changes in Accounting Policies During the financial year, the Company applied two new MASB Standards, which became effective from 1 August 2002, and accordingly modified certain accounting policies. The changes in accounting policies which resulted in prior year adjustments is MASB 25 Income Taxes. The adoption of MASB 29 has not given rise to any adjustments to the amount involved and effect on the financial statements is immaterial. Under MASB 25, deferred tax liabilities are recognised for all taxable temporary differences. Previously, deferred tax liabilities were provided for on account of timing differences only to the extent that a tax liability was expected to materialise in the foreseeable future. In addition, the Company has commenced recognition of deferred tax assets for all deductible temporary differences, when it is probable that sufficient taxable profit will be available against which the deductible temporary differences can be utilised. Previously, deferred tax assets were not recognised unless there was reasonable expectation of their realisation. (b) Prior Year Adjustments The changes in accounting policy have been applied restrospectively and comparatives have been restated. The effects of changes in accounting policies are as follows : Group and Company 2003 2002 RM RM Effects on revaluation reserve : At 1 August, as previously stated Effects of adopting MASB 25 At 1 August, as restated Comparatives amounts as at 31 July 2002 have been restated as follows : Group and Company Revaluation reserve Deferred tax liability Previously Stated RM 1,241,023 942,000 Adjustments RM (372,863) 372,863 Restated RM 868,160 1,314,863
2 0 0 3 A N N U A L R E P O R T
1,241,023 (372,863) 868,160
1,438,685 (210,726) 1,227,959
61
(193094-K)

22. SIGNIFICANT RELATED PARTY TRANSACTIONS Significant related company transactions undertaken by the Company during the financial year were as follow : Company 2003 RM Sales of goods to a subsidiary, Beaucar Accessories (M) Sdn. Bhd. Purchases of materials from a subsidiary, Plasmet Industries (M) Sdn. Bhd. Rental income from a subsidiary, Plasmet Industries (M) Sdn. Bhd. 2,809,759 4,791,149 136,776 2002 RM 3,504,031 7,957,652 136,776
Significant transactions with other related parties undertaken by the Company during the financial year were as follows : Group 2003 RM Sales of goods to the associate Management fee received from the associate Other income received from the associate Sales of goods to Eng Siang International Pte. Ltd., a company in which a director, namely Goh Chai Siong has interest Motor vehicle purchased from Regensi Motor Sdn. Bhd., a company in which a director, namely Dato Hj Sulaiman Bin Ahmad has interest Professional fee paid to Nora S.W. Lam & Associates, a professional legal firm in which a director, namely Nora Lam Siew Wan is the Managing Partner 2002 RM 2003 RM 16,224,541 24,000 Company 2002 RM 23,844,581 24,000 -
6,940
17,600
6,940
17,600
2 0 0 3 A N N U A L R E P O R T
93,120
93,120
53,100
26,040
53,100
26,040
The directors of the Company are of the opinion that the above transactions have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties.
62
(193094-K)

23. COMMITMENTS Group 2003 RM Capital expenditure : Approved and contracted for 24. SIGNIFICANT EVENT During the financial year, the Companys proposal of a private placement (PPP) of 500,000 new ordinary shares of RM1.00 each representing approximately 1.15% of the issued and paid up share capital of the Company had been approved by the Ministry of International Trade and Industry on 21 January 2003 and the Securities Commission (SC) on 6 March 2003. The SC had further approved the PPP on 25 July 2003 to be regulated under the SCs revised Policies and Guidelines on Issue/Offer of Securities which come into effect on 1 May 2003 and also approved the extension of time until 6 March 2004 to complete the PPP via its letter dated 5 September 2003. 25. SUBSEQUENT EVENT Subsequent to the financial year, the Company increased its issued and paid-up share capital from RM43,672,700 to RM43,702,700 by the issuance of 30,000 ordinary shares of RM1 each at an issued price of RM1.45 per share pursuant to ESOS. All the shares issued ranked pari passu in all respects with the existing shares of the Company. 26. FINANCIAL INSTRUMENTS (a) Financial Risk Management Objectives and Policies The Groups financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Groups businesses whilst managing its interest rate, liquidity and credit risks. The Groups policy is not to engage in speculative transactions. Foreign Exchange Risk The Group is exposured to various currencies, mainly United States Dollar, Singapore Dollar, Taiwan New Dollar and Japanese Yen. Foreign currency denominated assets and liabilities together with the expected cash flows from highly probable purchases and sales given rise to foreign exposures. Liquidity Risk The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash to meet its working capital requirements. Credit Risk Credit risks, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and monitoring procedures. Credit risks are minimised and monitored via strictly limiting the Groups associations to business partners with high creditworthiness. Trade receivables are monitored on an ongoing basis via Group management reporting procedures. Fair Values The carrying value of current financial assets and current financial liabilities of the Group approximate their values due to their short term maturity.
2 0 0 3 A N N U A L R E P O R T
Company 2002 RM 228,344 2003 RM 118,340 2002 RM 181,879
118,340
(b)
(c)
(d)
(e)
63
(193094-K)

27. COMPARATIVES The presentation and classification of items in the current year financial statements have been consistent with the previous financial year except that certain comparative amounts have been adjusted as a result of changes in accounting policies as disclosed in Note 2(a) and Note 21. 28. SEGMENT INFORMATION No segment reporting is prepared as the Groups activities are carried out entirely in Malaysia and the Groups operations are in the trading and manufacturing of automotive parts.
2 0 0 3 A N N U A L R E P O R T
64
(193094-K)
LIST OF PROPERTIES
Location Tenure
(approximate age of building)
Description
Area in Square metres
Existing Use
Registered Owner
Net Book Value as at 31.07.2003 (RM) 1,787,200
Date of last revaluation
No 6, Jalan Waja 7, Kawasan Perindustrian Pandan, 81100 Johor Bahru, Johor Darul Takzim No 8, Jalan Waja 7, Kawasan Perindustrian Pandan, 81100Johor Bahru, Johor Darul Takzim HS(D)240365 to 240370 PTD34424 to 34429 Mukim of Tebrau, District of Johor Bahru, State of Johor No 24, Lebuh Pulau Pinang Pusat Perniagaan NBC, Batu 1 1/2 , Jalan Meru, 41050 Klang, Selangor Darul Ehsan
Freehold (11 years)
1 1/2 -storey semi-detached factories
1,280
Rented
Multi-Code Electronics Industries (M) Berhad
30 July,2002
Freehold (11 years)
1 1/2 -storey semi-detacted factories
1,280
Rented
1,787,200
30 July, 2002
Freehold (6 years)
6 continuos units of 3storey shop/ office
893
Vacant
2,299,100
30 July, 2002
Freehold (7 years)
4 1/2 storey shop/office
240
Vacant
1,786,100
30 July, 2002
No 2, Jalan Waja 7, Kawasan Perindustrian Pandan, 81100 Johor Bahru, Johor Darul Takzim
Freehold (9 years)
2-storey semidetached factories
1,281
Factory
2,326,200
30 July, 2002
No 4, Jalan Waja 7, Kawasan Perindustrian Pandan, 81100 Johor Bahru, Johor Darul Takzim No. 10, Jalan Permatang, Taman Desa Jaya, 81100 Johor Bahru, Johor Darul Takzim
Freehold (9 years)
2-storey semidetached factories
1,280
Factory
2,179,200
30 July, 2002
2 0 0 3 A N N U A L R E P O R T
Freehold (11 years)
1 1/2 storey semi-detached workshop
641
Vacant
447,240
30 July, 2002
No 12, Jalan Permatang, Taman Desa Jaya, 81100 Johor Bahru, Johor Darul Takzim
Freehold (11 years)
1 1/2 storey semidetached workshop
641
Rented
447,240
30 July, 2002
65
(193094-K)
LIST OF PROPERTIES
Location Tenure
(approximate age of building)
Description
Area in Square metres
Existing Use
Registered Owner
Net Book Value as at 31.07.2003 (RM) 447,240
Date of last revaluation
No 6, Jalan Permatang 17, Taman Desa Jaya, 81100 Johor Bahru, Johor Darul Takzim No 8, Jalan Permatang 17, Taman Desa Jaya, 81100 Johor Bahru, Johor Darul Takzim No 33, Jalan Permatang 21, Taman Desa Jaya, 81100 Johor Bahru, Johor Darul Takzim No 15, Jalan Kakak Tua, Taman Eng Ann, 41150 Klang, Selangor Darul Ehsan Off Sungai Rasah, 41150 Klang, Selangor Darul Ehsan HS(M)No 2845 to 2847 PT No 494 to 496 (Lots 13282 to 13284)
Freehold (11 years)
1 1/2 -storey semi-detached workshop
641
Rented
Multi-Code Electronics Industries (M) Berhad Multi-Code Electronics Industries (M) Berhad Multi-Code Electronics Industries (M) Berhad Multi-Code Electronics Industries (M) Berhad Multi-Code Electronics Industries (M) Berhad
30 July,2002
Freehold (11 years)
1 1/2 -storey semi-detacted workshop
641
Rented
447,240
30 July, 2002
Freehold (11 years)
2-storey terrace house
143
Hostel
188,700
30 July, 2002
Freehold (36 years)
Single-storey terrace house
186
Hostel
179,200
30 July, 2002
Freehold (12 years)
3 continuous units of 2storey with mazzanine workshop terrace light industrial buildings 1 1/2 storey semi-detached factories
453
Office & Warehouse
933,200
30 July, 2002
2 0 0 3 A N N U A L R E P O R T
No 7, Jalan Waja 8, Kawasan Perindustrian Pandan, 81100 Johor Bahru, Johor Darul Takzim No 9, Jalan Waja 8, Kawasan Perindustrian Pandan, 81100 Johor Bahru, Johor Darul Takzim
Freehold (11 years)
1,366
Factory
2,011,389
28 January, 2003
Freehold (11 years)
1 1/2 storey factories building
1,392
Vacant
1,793,790
28 January, 2003
No 92 & 92A, Jalan Meranti, Taman Melodies, 80250 Johor Bahru, Johor Darul Takzim
Freehold (20 years)
2-storey shophouse
156
Rented
Beaucar Accessories (M) Sdn Bhd
607,800
30 July, 2002
66
(193094-K)
ANALYSIS OF SHAREHOLDINGS
AS AT 6 NOVEMBER 2003 AUTHORISED SHARE CAPITAL ISSUED AND PAID-UP CAPITAL CLASS OF SHARES VOTING RIGHTS : : : : RM50,000,000 RM43,702,700 ORDINARY SHARE OF RM1.00 EACH ONE VOTE PER ORDINARY SHARE
DISTRIBUTION OF SHAREHOLDINGS Number Shareholders 3 244 1,784 89 9 8 2,137 REMARK : * Less than 5% of issued shares ** 5% and above of issued shares Number of Shares 110 177,800 3,503,400 2,166,790 3,391,018 34,463,582 43,702,700 Percentage of Issued Capital 0.00 0.41 8.01 4.96 7.76 78.86 100
1 99 100 1000 1,001 10,000 10,001 100,000 100,001 2,185,134 (*) 2,185,135 and above (**)
SUBSTANTIAL SHAREHOLDERS
AS AT 6 NOVEMBER 2003 Direct Goh Tong Huat Amanah Raya Nominees (Tempatan) Sdn Bhd Skim Amanah Saham Bumiputera Chang Choon Cheng @ Chang Chu Chen Goh Chai Siong DatoHj Sulaiman Bin Ahmad Regensi Motor Sdn Bhd Estate of Ong See Chuan @ Goh See Chuan * # > 12,021,520 6,600,000 6,004,240 3,526,836 2,415,600 2,388,586 No. of Shares % Deemed Interest 27.51 15.10 13.74 8.07 5.53 5.47 502,118* 2,388,586# 2,415,600> % 1.15 5.47 5.53 2 0 0 3 A N N U A L R E P O R T
Indirect interest through shares held by his spouse. Deemed interest by virtue of being the executrix of the estate of Ong See Chuan @ Goh See Chuan. Deemed interest by virtue of his shareholdings in Regensi Motor Sdn. Bhd.
67
(193094-K)
DIRECTORS SHAREHOLDINGS
AS AT 6 NOVEMBER 2003 Direct Dato Hj Sulaiman Bin Ahmad Goh Tong Huat Goh Chai Siong Goh Kar Chun Nora Lam Siew Wan Mohd Nadzir Mahmud Huang Yan Teo Chai Lai Koon Dato Bahari Bin Haron > * 12,021,520 3,526,836 No. of Shares % Deemed Interest 27.51 8.07 2,415,600> 502,118* % 5.53 1.15 -
Deemed interest by virtue of his shareholdings in Regensi Motor Sdn. Bhd. Indirect interest through shares held by his spouse.
2 0 0 3 A N N U A L R E P O R T
68
(193094-K)
THIRTY LARGEST SHAREHOLDERS

AS AT 6 NOVEMBER 2003 No. Name 1. GOH TONG HUAT 2. AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD SKIM AMANAH SAHAM BUMIPUTERA PERMODALAN NASIONAL BERHAD 3. CHANG CHOON CHENG @ CHANG CHU CHEN 4. AMFINANCE BERHAD PLEDGED SECURITIES ACCOUNT FOR REGENSI MOTOR SDN BHD (SMART) 5. KENANGA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR GOH TONG HUAT 6. GOH CHAI SIONG 7. GOH TONG HUAT 8. MAYFIN NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR CHANG CHOON CHENG & CHANG CHU CHEN (KLG) 9. GOH CHAI SIONG 10. PERMODALAN NASIONAL BERHAD 11. MAYFIN NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR ONG SEE CHUAN @ GOH SEE CHUAN (KLG) 12. AMMB NOMINEES (TEMPATAN) SDN BHD AMFINANCE BERHAD FOR GOH TONG HUAT (6/96-5) 13. AMMB NOMINEES (TEMPATAN) SDN BHD AMFINANCE BHD FOR ONG SEE CHUAN @ GOH SEE CHUAN (6/98-1) 14. KENANGA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LEE PUAY HENG 15. LEE SIEW KIAT 16. LEE SIEW HONG 17. AMFINANCE BERHAD PLEDGED SECURITIES ACCOUNT FOR YEE ENG KING (SMART) 18. YAP CHENG CHON 19. CHENG, PAO-YUAN 20. NG GEK HOON 21. TAN JIN TUAN 22. AMFINANCE BERHAD PLEDGED SECURITIES ACCOUNT FOR MOHD ARIFF BIN MOHD NOOR (SMART) 23. TASEC NOMINEES (ASING) SDN BHD MEESPIERSON ASIA LIMITED FOR SAVERN FINANCE LIMITED 24. HA KEE YUEH 25. TEO WEE WAH 26. SOUTHERN NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LEE JOO HOCK 27. TANG WENG HENG No. of shares 6,689,643 6,600,000 4,354,240 2,415,600 2,411,200 1,910,597 1,808,830 1,650,000 1,616,239 1,320,000 1,301,300 1,111,847 * 1,087,286 ** 887,900 502,118 430,100 347,500 289,900 281,600 145,200 143,700 134,200 132,000 100,000 87,500 80,000 74,700 % 15.31 15.10 9.96 5.53 5.52 4.37 4.14 3.78 3.70 3.02 2.98 2.54 2.49 2.03 1.15 0.98 0.80 0.66 0.64 0.33 0.33 0.31 0.30 0.23 0.20 0.18 0.17
2 0 0 3 A N N U A L R E P O R T
69
(193094-K)
THIRTY LARGEST SHAREHOLDERS

No. Name 28. KENANGA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR WAN ABDUL RAHMAN BIN WAN ABU SAMAH (RC) 29. CITICORP NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR BARRY LEE (473001) 30. AMFINANCE BERHAD PLEDGED SECURITIES ACCOUNT FOR WONG SHEE MENG (SMART) No. of shares 66,000 60,000 58,300 38,097,500 * ** % 0.15 0.14 0.13 87.17
The 1,111,847 shares are under dispute by Goh Tong Huat in respect of the unauthorized deposit of shares in the Malaysian Central Depository Sdn Bhd (MCD) by AMMB Nominees (Tempatan) Sdn Bhd and AmFinance Berhad. The 1,087,286 shares are under dispute by the estate of Ong See Chuan @ Goh See Chuan in respect of the unauthorized deposit of shares in the MCD by AMMB Nominees (Tempatan) Sdn Bhd and AmFinance Berhad.
2 0 0 3 A N N U A L R E P O R T
70
(193094-K)
FORM OF PROXY
I/We of a member / members of the abovenamed Company, hereby appoint Mr / Ms (Name) of or failing him / her, of (Address) (Name) (Address) (Name) (Address)
as *my / our proxy to vote for *me / us and on *my / our behalf at Thirteenth Annual General Meeting of the Company to be held on Monday, 29 December 2003 at the Ponderosa Golf & Country Club, 10-C, Jalan Bumi Hijau Tiga, Taman Molek, 81100 Johor Bahru, Johor Darul Tazim on at 10.30 a.m. and, at every adjournment thereof for / against the resolutions to be proposed thereat. My/Our Proxy is to vote as indicated below: No. 1. 2. 3. Resolutions To receive and adopt the Audited Financial Statements for the year ended 31 July, 2003 and the Reports of the Directors and the Auditors thereon. To declare a Final dividend of 10% (tax exempt) for the year ended 31 July, 2003 To approve the payment of Directors fee of RM373,000.00 for the year ended 31 July, 2003 To re-elect the following Directors who are retiring under Article 76 of the Articles of Association of the Company :4. 5. 6. 7. 8. DATO HAJI SULAIMAN GOH TONG HUAT GOH CHAI SIONG To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the directors to fix their remuneration. To consider and if thought fit, to pass the following resolution as an Ordinary Resolution : Authority to Issue Shares THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares to be issued does not exceed 10 per cent of the issued share capital of the Company for the time being, subject always to the approval of all the relevant regulatory bodies being obtained for such allotment and issue. For Against
2 0 0 3 A N N U A L R E P O R T
(Please indicate with an X in the space provided how you wish the vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his discretion). Signature of shareholder(s) Signed this day of 2003 No. of Share Held
Notes : (a) A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation, under its Common Seal or the hand of its attorney. (b) Where a member appoints two proxies, the appointments shall be invalid unless he specifies the proportions of his holding to be represented by each proxy. (c) The Proxy Form must be deposited with the Secretary at the Registered Office of the Company at Suite 5.3A, Level 5, Menara Pelangi, No. 2, Jalan Kuning, Taman Pelangi, 80400 Johor Bahru, Johor, Malaysia not less than 48 hours before the time set for the meeting or any adjourment thereof.
71

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MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

NOTICE OF ANNUAL GENERAL MEETING

Resolution 1 Resolution 2 Resolution 3

Resolution 4 Resolution 5 Resolution 6 Resolution 7

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

BY ORDER OF THE BOARD,

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

Statement accompanying the Notice of Annual General Meeting

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT ON CORPORATE GOVERNANCE

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT ON CORPORATE GOVERNANCE

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT ON CORPORATE GOVERNANCE

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT ON CORPORATE GOVERNANCE

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT ON CORPORATE GOVERNANCE

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT ON CORPORATE GOVERNANCE

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT ON CORPORATE GOVERNANCE

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT ON CORPORATE GOVERNANCE

Dato Haji Sulaiman Bin Ahmad Chairman

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

AUDIT COMMITTEES REPORT

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

AUDIT COMMITTEES REPORT

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

AUDIT COMMITTEES REPORT

Meetings attended by directors 4 4 3 4 2

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT ON INTERNAL CONTROL

Dato Haji Sulaiman Bin Ahmad Chairman

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT OF DIRECTORS RESPONSIBILITY IN RELATION TO THE FINANCIAL STATEMENTS

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

DATO HJ. SULAIMAN BIN AHMAD Pengerusi

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

DATO HJ. SULAIMAN BIN AHMAD Chairman

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

3,738,000 (61,000) (150,000) 3,527,000

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

Exercise Price RM 1.45 1.45 1.45 1.45 1.45

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

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

GOH TONG HUAT

DATO HJ SULAIMAN BIN AHMAD

Johor Bahru, Malaysia Date : 30 October 2003

MULTI-CODE ELECTRONICS INDUSTRIES (M) BERHAD

STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965