YTLCorp-AnnualAuditedAccounts by pengxiang

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									Company No: 92647-H




                          YTL CORPORATION BERHAD
                             (Incorporated in Malaysia)

                      REPORTS AND FINANCIAL STATEMENTS
                        FOR THE YEAR ENDED 30 JUNE 2003
Company No: 92647-H

                          YTL CORPORATION BERHAD
                             (Incorporated in Malaysia)



                          CORPORATE INFORMATION



Board of Directors    -            YBhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay
                                   YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP
                                   YBhg Dato’ Yeoh Seok Kian
                                   YBhg Dato’ (Dr) Yahya Bin Ismail
                                   YBhg Mej. Jen. (B) Dato’ Haron Bin Mohd. Taib
                                   YBhg Dato’ Yeoh Seok Hong, JP
                                   YBhg Dato’ Michael Yeoh Sock Siong
                                   YBhg Dato’ Mark Yeoh Seok Kah
                                   YBhg Dato’ Yeoh Soo Min
                                   Ms. Yeoh Soo Keng
                                   Tuan Syed Abdullah Bin Syed Abd. Kadir
                                   YBhg Dato’ Lau Yin Pin @ Lau Yen Beng
                                   Mr. Eu Peng Meng @ Leslie Eu



Audit Committee       -            YBhg Dato’ (Dr) Yahya Bin Ismail
                                   YBhg Mej. Jen. (B) Dato’ Haron Bin Mohd. Taib
                                   YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP
                                   YBhg Dato’ Lau Yin Pin @ Lau Yen Beng



Company Secretary     -            Ms. Ho Say Keng (MIA 3708)



Auditors              -            Ler Lum & Co. (AF 0276)
                                   Chartered Accountants
                                   Associated worldwide with Jeffreys Henry International




Registered office     -            11th Floor, Yeoh Tiong Lay Plaza
                                   55, Jalan Bukit Bintang
                                   55100 Kuala Lumpur



Business office       -            11th Floor, Yeoh Tiong Lay Plaza
                                   55, Jalan Bukit Bintang
                                   55100 Kuala Lumpur
Company No: 92647-H

                          YTL CORPORATION BERHAD
                             (Incorporated in Malaysia)

                      REPORTS AND FINANCIAL STATEMENTS
                        FOR THE YEAR ENDED 30 JUNE 2003


    Contents

                                                          Page(s)

    Directors’ Report                                      1 - 22

    Statement By Directors                                  23

    Statutory Declaration                                   23

    Report Of The Auditors                                24 - 25

    Income Statements                                     26 - 27

    Balance Sheets                                        28 - 31

    Consolidated Statement Of Changes In Equity           32 - 34

    Statement Of Changes In Equity                          35

    Cash Flows Statements                                 36 - 44

    Notes To The Financial Statements                     45 - 134
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                                     DIRECTORS’ REPORT


The directors have pleasure in submitting their report together with the audited financial
statements of the Group and of the Company for the financial year ended 30 June, 2003.


PRINCIPAL ACTIVITIES

The principal activities of the Company are those of an investment holding and management
company.

The principal activities of the Group are that of an integrated infrastructure development
comprising construction contracting, power generation, property development, manufacturing of
industrial products and supplies, hotel development and management, consultancy, incubating
and advisory services for internet businesses, supply of water and the treatment and disposal of
waste water.

There have been no significant changes in the nature of these activities during the financial year.


FINANCIAL RESULTS
                                                                          Group              Company
                                                                           RM                  RM

      Net profit for the year                                        511,737,208         319,242,096
      Unappropriated profits brought forward
       - As previously reported                                    3,252,276,362        1,475,218,743
       - Prior year adjustments                                         2,836,708                   -
                                                                  ------------------   ------------------
      As restated                                                  3,255,113,070        1,475,218,743
                                                                  ------------------   ------------------
      Profits available for appropriation                          3,766,850,278        1,794,460,839
      Transfer to capital reserve                                      (1,210,319)                  -
      Gains recognised on deemed dilution of
       interest in subsidiary companies                               31,898,428                 -
      Dividends                                                     (78,336,525)       (78,336,525)
                                                                 ------------------ ------------------
      Unappropriated profits carried forward                      3,719,201,862      1,716,124,314
                                                                 =========== ===========

The Directors wish to draw your attention that in arriving at the results above, the Group has
incorporated certain accounting adjustments to comply with applicable approved accounting
standards in Malaysia. The adjustments are as follows :-




                                                 1
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                                     DIRECTORS’ REPORT


(a)   YTL Power International Berhad (“YTLPI”) a subsidiary of the Company has on 11 July
      2001, issued USD150 million nominal value 2.5% Exchangeable Guaranteed Unsecured
      Bonds ('Exchangeable Bonds') at 100% nominal value. The details of the Exchangeable
      Bonds are provided in note 32(F) to the financial statements. Should the Exchangeable
      Bonds not be exchanged by their holders to ordinary shares of YTLPI by 11 July 2006, the
      Exchangeable Bonds will be redeemed by YTLPI at 124.86% of their principal amounts.
      Up to 30 June 2003, YTLPI has recognised on an accrual basis the cumulative premium on
      redemption of the Exchangeable Bonds amounting to RM50.3 million. This adjustment is
      also in compliance with MASB 24 "Financial Instruments: Disclosure and Presentation"
      which defines liability under the Exchangeable Bonds to be that amount payable under
      conditions that are potentially unfavourable.

      The Directors are of the view that the premium on redemption (“premium”) represents a
      contingent liability, as the payment of the premium is contingent upon the Exchangeable
      Bonds being redeemed by YTLPI. Accordingly, the Directors are of the view that the
      application of MASB 24 may not lead to an appropriate presentation of the Consolidated
      Income Statement. If MASB 24 is not applied and the consolidated premium is treated as a
      contingent liability, YTLPI’s profit after taxation and minority interests and net tangible
      assets would increase by RM30.5 million being the premium accrued to-date.

(b)   YTLPI has applied MASB 25 "Income Taxes" to recognise fully the temporary differences
      arising out of YTLPI’s operations in the United Kingdom (‘UK’). The UK subsidiaries
      recognise their deferred tax liabilities on a discounted basis as permitted by applicable
      accounting standard in the UK. Discounting of deferred tax is specifically prohibited under
      MASB 25. Accordingly, an additional provision for deferred tax of RM41.3 million has
      been recognised in arriving at Group’s results above.

      The principal activities of YTLPI’s subsidiaries in the UK are the provision of water supply
      and waste water services. The property, plant and equipment of these subsidiaries comprise
      mainly of infrastructure assets and related equipment, which are required to be maintained
      to perpetuity.

      As the potential cash outflow arising in relation to these temporary differences is beyond
      the foreseeable future, the Directors are of the view that discounting of the deferred tax
      liabilities as allowed under the applicable accounting standards in the UK would be more
      representative of the value of the deferred tax liabilities as at 30 June, 2003. If, on
      consolidation, discounting had been applied to the deferred tax liabilities of these
      subsidiaries, the group’s profit after taxation and minority interests for the financial year
      ended 30 June, 2003 would have increased by RM41.3 million. The cumulative effect of
      the discounting of deferred tax liabilities as at 30 June, 2003 would have increased net
      tangible assets by RM633.3 million.

Whilst these adjustments have been made to comply with applicable approved accounting
standards in Malaysia, the Directors are continuing their efforts in seeking clarification as to how
a more appropriate presentation of the effects of these issues in the next financial year may be
achieved.

                                                 2
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                               DIRECTORS’ REPORT - (Continued)


If the premium arising on the Exchangeable Bonds is not provided for and if discounting of
deferred tax liabilities of the Group’s UK subsidiaries is allowed, the Group’s profit after taxation
and minority interests and net tangible assets for the financial year ended 30 June, 2003 would be
as follows :-
                                        Excluding the effects
                                       of accrual for premium
                                    and including discounting of             Based on these
                                        deferred tax liabilities          financial statements

       Profit after taxation and
        minority interest              RM583.5 million                     RM511.7 million
       Net tangible assets             RM5,142.1 million                   RM4,478.3 million
       Net tangible assets per share * 354.6 sen                           308.8 sen

This is calculated based on net tangible assets of the Group over the number of outstanding shares
in issue and fully paid as at 30 June, 2003 of 1,450,212,272 ordinary shares.


DIVIDENDS

The amount of dividend paid since the end of the last financial year was as follows :-

       In respect of the year ended 30 June, 2002 as reported in the directors’ report of that year :-
                                                                                                RM
            First and final dividend of 15% less 28% tax,
             paid on 17 January, 2003                                                     78,336,525
                                                                                        ==========
The Board of Directors has recommended a first and final dividend of 15% less 28% tax for the
current financial year ended 30 June, 2003.


RESERVES AND PROVISIONS
There were no material transfers to or from reserves and provisions during the financial year
except as disclosed in the Notes to the financial statements.


SHARE CAPITAL
Repurchase of shares
--------------------------
The shareholders of the Company granted a mandate to the Company to repurchase its own
shares at the Annual General Meetings held on 18 December, 2002. The directors of the
Company are committed to enhance the value of the Company to its shareholders and believe that
the repurchase plan can be applied in the best interest of the Company and its shareholders.
                                                  3
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                               DIRECTORS’ REPORT - (Continued)


The Company’s purchase of its own shares on the Kuala Lumpur Stock Exchange are
summarised as follows :-

                                     No. of shares               Average price
Financial year ended          repurchased/(distributed)        paid/(distributed)              Total
-------------------------     ------------------------------    -------------------            -------
                                                                   RM/Share                     RM

    30 June, 2001                       52,024,000                    4.81               249,979,832
    30 June, 2002                     (28,425,050)                    4.81              (136,585,208)
    30 June, 2003                          775,000                    3.38                  2,621,528
                                      ---------------                                    ---------------
    Total                               24,373,950                                       116,016,152
                                      =========                                          =========

The purchase transactions were financed by internally generated funds. The repurchased shares
are being held as treasury shares in accordance with the requirement of Section 67A of the
Companies Act, 1965.


WARRANTS AND EMPLOYEES’ SHARE OPTION SCHEME

The Warrants 1997/2007 and Warrants 1999/2009 were constituted under the Deed Poll dated 20
September, 1997 and 31 July, 1999 respectively.

As at 30 June, 2002, the total number of warrants that remain unexercised are as follows :-

         Warrants 1997/2007                                            88,839,208
         Warrants 1999/2009                                           364,524,301
                                                                      =========

At an Extraordinary General Meeting held on 16 October, 2001, the Company’s shareholders
approved the establishment of a New Employees’ Share Options Scheme (“New ESOS”) for
eligible employees and executive directors of the Group.

       The main features of the New ESOS are as follows :-

       (i)    The New ESOS shall be in force for a period of ten (10) years, effective from 30
              November, 2001.

       (ii)   The maximum number of shares which may be made available under the New ESOS
              shall not exceed ten per cent (10%) of the total issued and paid-up share capital of the
              Company at the time of offering the option.



                                                      4
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                             DIRECTORS’ REPORT - (Continued)


     (iii) Any employee (including executive directors) of the Group shall be eligible to
           participate in the New ESOS if, as at the date of offer for an option (‘‘Offer Date’’)
           the employee :-

            (a)   has attained the age of eighteen (18) years ;

            (b)   is employed by and on payroll of a company within the Group; and

            (c)   has been in the employment of the Group for a period of at least one (1) year of
                  continuous service prior to and up to the Offer Date, including service during
                  the probation period, and is confirmed in service. The Options Committee may,
                  at its discretion, nominate any employee (including executive directors) of the
                  Group to be an eligible employee despite the eligibility criteria under Clause
                  4.1(iii) of the Bye-Laws not being met, at any time and from time to time.

     (iv)   The price payable for shares under the New ESOS shall be based on the five-day
            weighted average market price of the underlying shares at the time the option is
            granted, with a discount of not more than 10%, if deemed appropriate.

     (v)    Subject to Clause 14 of the Bye-Laws, the Options Committee may, at any time and
            from time to time, before or after an Option is granted, limit the exercise of the
            Options to a maximum number of new YTL Corporation Shares and/or such
            percentage of the total YTL Corporation Shares comprised in the Options during
            such period(s) within the Option Period and impose any other terms and/or
            conditions deemed appropriate by the Options Committee in its sole discretion
            including amending/varying any terms and conditions imposed earlier.
            Notwithstanding the above, and subject to Clause 11 and 12 of the Bye-Laws, the
            Options can only be exercised by the Grantee three (3) years after the Offer Date, by
            notice in writing to the Company, provided however that the Options Committee may
            at its discretion or upon the request in writing by the Grantee allow the Option to be
            exercised at any earlier or other period.

            The Grantee shall be prohibited from disposing the YTL Corporation Shares so
            allotted to him for a period of twelve (12) months from the date on which the Options
            are exercised. However, the Options Committee may as its discretion or upon request
            in writing by the Grantee allow the disposal of such YTL Corporation Shares at any
            earlier or other period.

The Company has on 16 October, 2002 granted options under the New ESOS for 33,742,000
shares at a subscription price of RM2.79.




                                                 5
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                              DIRECTORS’ REPORT - (Continued)


Information with respect to the number of option granted under the New ESOS is as follows :-

                                                                        Number of
                                                                       share options

      Granted                                                         33,742,000
      Lapsed                                                           (1,264,000)
                                                                     ---------------
      At 30 June, 2003                                                32,478,000
                                                                     =========

Details of share options granted during the financial year :-
                                                                        Number of
      Exercise period             Exercise price                       share option
                                      RM                                   RM

      30.11.2001-29.11.2011            2.79                           33,742,000
                                                                     =========

The terms of share options outstanding as at the end of the financial year are as follows :-

                                                                        Number of
      Exercise period             Exercise price                       Share option
                                      RM                                   RM

      30.11.2001-29.11.2011            2.79                           32,478,000
                                                                     =========

New ESOS holder can exercise the options 3 years after the New ESOS is granted to them.
Hence, the New ESOS is only exercisable in 2005 until the date of expiration, which is 10 years
after the New ESOS is granted.

The Company has been granted exemption by the Companies Commission of Malaysia from
having to disclose the names of option holders granted less than 500,000 options each during the
year pursuant to the New ESOS. The names of option holders, other than directors, who have
been granted options of 500,000 or more in the financial year are as follows :-

                                                                        Number of
                                                                       share options

        YBhg Puan Sri Datin Seri Tan Kai Yong
         @ Tan Kay Neong                                               1,500,000
        Lim Khoon Hai                                                    500,000
        Harald Edwin Burchardt                                           500,000

The names of directors who have been granted share options is disclosed in the director’s interest
section in this report.
                                              6
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                             DIRECTORS’ REPORT - (Continued)


DIRECTORATE

The directors who served on the Board of the Company since the date of the last report are :-

        YBhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay
        YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP
        YBhg Dato’ Yeoh Seok Kian
        YBhg Dato’ (Dr) Yahya Bin Ismail
        YBhg Mej. Jen. (B) Dato’ Haron Bin Mohd. Taib
        YBhg Dato’ Yeoh Seok Hong, JP
        YBhg Dato’ Michael Yeoh Sock Siong
        YBhg Dato’ Mark Yeoh Seok Kah
        YBhg Dato’ Yeoh Soo Min
        Ms. Yeoh Soo Keng
        Tuan Syed Abdullah Bin Syed Abd. Kadir
        Dato’ Lau Yin Pin @ Lau Yen Beng (Appointed on 31.3.03)
        Mr. Eu Peng Meng @ Leslie Eu (Appointed on 31.3.03)

In accordance with Articles No. 84 and 90 of the Company’s Articles of Association, YBhg Dato’
Yeoh Soo Min, YBhg Dato’ Michael Yeoh Sock Siong, Ms. Yeoh Soo Keng, Dato’ Lau Yin Pin
@ Lau Yen Beng and Mr. Eu Peng Meng @ Leslie Eu retire from the Board at the forthcoming
Annual General Meeting and, being eligible, offer themselves for re-election.

YBhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay and YBhg Dato’ (Dr) Yahya Bin Ismail, being
over seventy years of age, retire in accordance with Section 129 of the Companies Act, 1965 and
offer themselves for re-appointment to hold office until the conclusion of the next Annual
General Meeting.


DIRECTORS’ INTERESTS

The directors holding office at the end of the financial year and who have interests in the share
capital, warrants and options over shares in the Company and its related corporation are as
follows :-

YTL Corporation Berhad
                                   ----------------- Ordinary Shares Of 50 Sen Each -----------------
                                       Balance                                           Balance
                                     at 1.7.2002       Acquired         Disposed      at 30.6.2003
                                   ---------------     ------------     ------------  ---------------

DIRECT INTERESTS IN THE COMPANY

YBhg Tan Sri Dato’ Seri (Dr) Yeoh
 Tiong Lay                        5,064,351                -                -             5,064,351

                                                7
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                              DIRECTORS’ REPORT - (Continued)


                                    ----------------- Ordinary Shares Of 50 Sen Each -----------------
                                        Balance                                           Balance
                                      at 1.7.2002       Acquired         Disposed      at 30.6.2003
                                    ---------------     ------------     ------------  ---------------

YBhg Tan Sri Dato’ Francis Yeoh
 Sock Ping, JP                        9,269,482             -                -             9,269,482

YBhg Dato’ Yeoh Seok Kian             3,183,760             -                -             3,183,760

YBhg Dato’ (Dr) Yahya Bin Ismail        409,416             -                -               409,416

YBhg Dato’ Yeoh Soo Min               3,671,696             -                -             3,671,696

YBhg Dato’ Yeoh Seok Hong, JP         3,153,460             -                -             3,153,460

YBhg Dato’ Michael Yeoh Sock
 Siong                                2,750,623             -                -             2,750,623

Yeoh Soo Keng                         3,180,156             -                -             3,180,156

YBhg Dato’ Mark Yeoh Seok Kah         1,617,108           20,000             -             1,637,108

Tuan Syed Abdullah
 Bin Syed Abd. Kadir                       2,448            -                -                  2,448

SHARES HELD BY
 YEOH TIONG LAY & SONS
 HOLDINGS SDN. BHD.
 (HOLDING COMPANY)
 IN THE COMPANY                     685,751,057        1,747,000             -          687,498,057

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., YBhg Tan
Sri Dato’ Seri (Dr) Yeoh Tiong Lay, YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg
Dato’ Yeoh Soo Min, YBhg Dato’ Yeoh Seok Kian, YBhg Dato’ Yeoh Seok Hong, JP, YBhg
Dato’ Michael Yeoh Sock Siong, Ms. Yeoh Soo Keng and YBhg Dato’ Mark Yeoh Seok Kah are
deemed to be interested in the shares of the Company held by Yeoh Tiong Lay & Sons Holdings
Sdn. Bhd.

None of the other directors holding office at the end of the financial year held any ordinary shares
in the Company during the financial year.




                                                   8
Company No: 92647-H

                             YTL CORPORATION BERHAD
                               (Incorporated in Malaysia)

                            DIRECTORS’ REPORT - (Continued)


                                   ----------------------- Number Of Warrants -----------------------
                                    Balance at                       Exercised/         Balance at
                                     1.7.2002          Acquired       Disposed           30.6.2003
                                   -------------      ------------    ------------      -------------

DIRECT INTERESTS IN THE COMPANY

YBhg Tan Sri Dato’ Seri (Dr) Yeoh
 Tiong Lay
 - Warrants 1997/2007               298,920              -                  -               298,920
 - Warrants 1999/2009             1,117,350              -                  -             1,117,350

YBhg Tan Sri Dato’ Francis Yeoh
 Sock Ping, JP
 - Warrants 1997/2007                573,600             -                  -               573,600
 - Warrants 1999/2009              2,147,472             -                  -             2,147,472

YBhg Dato’ Yeoh Seok Kian
 - Warrants 1997/2007                175,200             -                  -               175,200
 - Warrants 1999/2009                655,866             -                  -               655,866

YBhg Dato’ (Dr) Yahya Bin Ismail
 - Warrants 1997/2007                 34,320             -                  -                34,320
 - Warrants 1999/2009                110,550             -                  -               110,550

YBhg Dato’ Yeoh Soo Min
 - Warrants 1997/2007                180,000             -                  -               180,000
 - Warrants 1999/2009                775,098             -                  -               775,098

YBhg Dato’ Yeoh Seok Hong, JP
 - Warrants 1997/2007                172,800             -                  -               172,800
 - Warrants 1999/2009                648,372             -                  -               648,372

YBhg Dato’ Michael Yeoh Sock Siong
 - Warrants 1997/2007              144,000               -                  -               144,000
 - Warrants 1999/2009              550,110               -                  -               550,110

Yeoh Soo Keng
 - Warrants 1997/2007                156,000             -                  -               156,000
 - Warrants 1999/2009                654,600             -                  -               654,600

YBhg Dato’ Mark Yeoh Seok Kah
 - Warrants 1999/2009                271,800             -                  -               271,800



                                               9
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                              DIRECTORS’ REPORT - (Continued)


                                     ----------------------- Number Of Warrants -----------------------
                                      Balance at                       Exercised/         Balance at
                                       1.7.2002          Acquired       Disposed           30.6.2003
                                     -------------      ------------    ------------      -------------

Tuan Syed Abdullah
 Bin Syed Abd. Kadir
 - Warrants 1999/2009                        600            -                  -                   600

WARRANTS HELD BY
 YEOH TIONG LAY & SONS
 HOLDINGS SDN. BHD.
 (HOLDING COMPANY)
 IN THE COMPANY
 - Warrants 1997/2007                56,238,885             -                  -           56,238,885
 - Warrants 1999/2009               178,116,597             -                  -          178,116,597

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., YBhg Tan
Sri Dato’ Seri (Dr) Yeoh Tiong Lay, YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg
Dato’ Yeoh Soo Min, YBhg Dato’ Yeoh Seok Kian, YBhg Dato’ Yeoh Seok Hong, JP, YBhg
Dato’ Michael Yeoh Sock Siong, Ms. Yeoh Soo Keng and YBhg Dato’ Mark Yeoh Seok Kah are
deemed to be interested in the warrants of the Company held by Yeoh Tiong Lay & Sons
Holdings Sdn. Bhd.

None of the other directors holding office at the end of the financial year held any warrants in the
Company during the financial year.

                                                              No of options over
                                          -------------- ordinary shares of 50 sen each ----------------
                                            Balance                      Exercised/         Balance
                                          at 1.7.2002       Granted       Disposed       at 30.6.2003
                                          -------------    ------------   ------------   ---------------

DIRECT INTERESTS IN THE COMPANY

YBhg Tan Sri Dato’ Seri (Dr) Yeoh
 Tiong Lay                                     -          2,500,000            -             2,500,000

YBhg Tan Sri Dato’ Francis Yeoh
 Sock Ping, JP                                 -          2,500,000            -             2,500,000

YBhg Dato’ Yeoh Seok Kian                      -          1,750,000            -             1,750,000

YBhg Dato’ Yeoh Seok Hong, JP                  -          1,500,000            -             1,500,000

YBhg Dato’ Michael Yeoh Sock Siong             -          1,500,000            -             1,500,000
                                                   10
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                             DIRECTORS’ REPORT - (Continued)


                                                             No of options over
                                         -------------- ordinary shares of 50 sen each ----------------
                                           Balance                      Exercised/         Balance
                                         at 1.7.2002       Granted       Disposed       at 30.6.2003
                                         -------------    ------------   ------------   ---------------

YBhg Dato’ Mark Yeoh Seok Kah                 -          1,500,000            -             1,500,000

YBhg Dato’ Yeoh Soo Min                       -          1,500,000            -             1,500,000

Yeoh Soo Keng                                 -          1,500,000            -             1,500,000

Tuan Syed Abdullah Bin
 Syed Abd. Kadir                              -          1,500,000            -             1,500,000

None of the other directors holding office at the end of the financial year held any share options
in the Company during the financial year.

Holding company - Yeoh Tiong Lay & Sons Holdings Sdn. Bhd.

                                        --------------- Ordinary Shares Of RM1 Each ---------------
                                           Balance                                      Balance
                                         at 1.7.2002      Acquired      Disposed     at 30.6.2003
                                        -------------     ------------  ------------ ---------------

DIRECT INTERESTS IN THE COMPANY

YBhg Tan Sri Dato’ Seri (Dr) Yeoh
 Tiong Lay                                8,220,004           -               -             8,220,004

YBhg Tan Sri Dato’ Francis Yeoh
 Sock Ping, JP                            5,000,000           -               -             5,000,000

YBhg Dato’ Yeoh Seok Kian                 5,000,000           -               -             5,000,000

YBhg Dato’ Yeoh Soo Min                   1,250,000           -               -             1,250,000

YBhg Dato’ Yeoh Seok Hong, JP             5,000,000           -               -             5,000,000

YBhg Dato’ Michael Yeoh Sock Siong        5,000,000           -               -             5,000,000

Yeoh Soo Keng                             1,250,000           -               -             1,250,000

YBhg Dato’ Mark Yeoh Seok Kah             5,000,000           -               -             5,000,000


                                                  11
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                              DIRECTORS’ REPORT - (Continued)


By virtue of the directors’ interests in the Company through their substantial interests in Yeoh
Tiong Lay & Sons Holdings Sdn. Bhd., YBhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay, YBhg
Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’ Yeoh Soo Min, YBhg Dato’ Yeoh Seok
Kian, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato’ Michael Yeoh Sock Siong, Ms. Yeoh Soo
Keng and YBhg Dato’ Mark Yeoh Seok Kah are deemed to be interested in the shares of all the
subsidiaries (except for YTL Cement Berhad, YTL Power International Berhad, YTL Land &
Development Berhad and YTL E-Solutions Berhad) which are disclosed in the following
paragraph of the Company to the extent of the Company’s interests in the respective subsidiaries
as disclosed under Note 11 to the financial statements.

None of the other directors holding office at the end of the financial year held any ordinary shares
in the holding company during the financial year.

The directors’ interests in the share capital of YTL Cement Berhad, YTL Power International
Berhad, YTL Land & Development Berhad and YTL E-Solutions Berhad are as follows :-

YTL Cement Berhad
                                           ------------- Ordinary Shares Of RM1 Each ----------------
                                            Balance                                      Balance
                                          at 1.7.2002       Acquired     Disposed     at 30.6.2003
                                          -------------    ------------  ------------ ---------------

DIRECT INTERESTS IN THE COMPANY

YBhg Tan Sri Dato’ Seri (Dr) Yeoh
 Tiong Lay                                    78,400           -             -               78,400

YBhg Tan Sri Dato’ Francis Yeoh
 Sock Ping, JP                                78,400           -             -               78,400

YBhg Dato’ Yeoh Seok Kian                     92,400           -             -               92,400

YBhg Dato’ (Dr) Yahya Bin Ismail              39,200           -             -               39,200

YBhg Mej. Jen. (B) Dato’ Haron
 Bin Mohd. Taib                               21,360           -             -               21,360

YBhg Dato’ Yeoh Soo Min                       78,400           -             -               78,400

YBhg Dato’ Yeoh Seok Hong, JP                 78,400           -             -               78,400

YBhg Dato’ Michael Yeoh Sock Siong            78,400           -             -               78,400

Yeoh Soo Keng                                 31,360           -             -               31,360


                                                12
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

                            DIRECTORS’ REPORT - (Continued)


                                        ------------- Ordinary Shares Of RM1 Each ----------------
                                         Balance                                      Balance
                                       at 1.7.2002       Acquired     Disposed     at 30.6.2003
                                       -------------    ------------  ------------ ---------------

SHARES HELD BY YTL
 INDUSTRIES BERHAD                     80,226,720           -             -           80,226,720

SHARES HELD BY YTL
 CORPORATION BERHAD                    10,266,080       558,000           -           10,824,080

SHARES HELD BY YEOH
 TIONG LAY & SONS
 HOLDINGS SDN. BHD.                       467,500           -             -              467,500

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., which has
a substantial interest in YTL Industries Berhad and YTL Corporation Berhad, YBhg Tan Sri
Dato’ Seri (Dr) Yeoh Tiong Lay, YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’
Yeoh Soo Min, YBhg Dato’ Yeoh Seok Kian, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato’
Michael Yeoh Sock Siong, Ms. Yeoh Soo Keng and YBhg Dato’ Mark Yeoh Seok Kah are
deemed to be interested in the shares of YTL Cement Berhad held by YTL Industries Berhad,
YTL Corporation Berhad and Yeoh Tiong Lay & Sons Holdings Sdn. Bhd.

YTL Power International Berhad
                                        ------------- Ordinary Shares Of RM1 Each ----------------
                                         Balance                                      Balance
                                       at 1.7.2002       Acquired     Disposed     at 30.6.2003
                                       -------------    ------------  ------------ ---------------

DIRECT INTERESTS IN THE COMPANY

YBhg Tan Sri Dato’ Seri (Dr) Yeoh
 Tiong Lay                                301,134           -             -              301,134

YBhg Tan Sri Dato’ Francis Yeoh
 Sock Ping, JP                          1,085,805           -             -            1,085,805

YBhg Dato’ Yeoh Seok Kian                 257,728           -             -              257,728

YBhg Dato’ (Dr) Yahya Bin Ismail          287,487           -             -              287,487

YBhg Mej. Jen. (B) Dato’ Haron
 Bin Mohd. Taib                            48,960           -             -               48,960

YBhg Dato’ Yeoh Soo Min                   222,937           -             -              222,937

                                              13
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

                            DIRECTORS’ REPORT - (Continued)


                                        ------------- Ordinary Shares Of RM1 Each ----------------
                                         Balance                                      Balance
                                       at 1.7.2002       Acquired     Disposed     at 30.6.2003
                                       -------------    ------------  ------------ ---------------

YBhg Dato’ Yeoh Seok Hong, JP             187,328           -             -              187,328

YBhg Dato’ Michael Yeoh Sock Siong        158,514           -             -              158,514

Yeoh Soo Keng                             186,170           -             -              186,170

YBhg Dato’ Mark Yeoh Seok Kah             135,007       678,000           -              813,007

Tuan Syed Abdullah
 Bin Syed Abd. Kadir                      177,480        11,000           -              188,480

YBhg Dato’ Lau Yin Pin @
 Lau Yen Beng                              12,240           -             -               12,240

SHARES HELD BY
 YTL CORPORATION
 BERHAD                             1,367,538,304     1,470,000           -        1,369,008,304

SHARES HELD BY YEOH
 TIONG LAY & SONS
 HOLDINGS SDN. BHD.                    46,593,716       667,000           -           47,260,716

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., which has
a substantial interest in YTL Corporation Berhad, YBhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay,
YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’ Yeoh Soo Min, YBhg Dato’ Yeoh
Seok Kian, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato’ Michael Yeoh Sock Siong, Ms. Yeoh
Soo Keng and YBhg Dato’ Mark Yeoh Seok Kah are deemed to be interested in the shares of
YTL Power International Berhad held by YTL Corporation Berhad and Yeoh Tiong Lay & Sons
Holdings Sdn. Bhd.




                                              14
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

                            DIRECTORS’ REPORT - (Continued)


YTL Land & Development Berhad
                                       -------------- Ordinary Shares Of RM1 Each ----------------
                                          Balance                                     Balance
                                        at 1.7.2002      Acquired     Disposed     at 30.6.2003
                                       -------------    ------------  ------------ ---------------

DIRECT INTERESTS IN THE COMPANY

SHARES HELD BY
 YTL CORPORATION
 BERHAD                               100,000,000           -             -          100,000,000

SHARES HELD BY
YEOH TIONG LAY & SONS
 HOLDINGS SDN BHD                            -           163,000          -               163,000

                                                        Irredeemable Convertible
                                        ------------ Preference Shares Of RM1 Each ---------------
                                         Balance                                       Balance
                                       at 1.7.2002       Acquired      Disposed     at 30.6.2003
                                       -------------     ------------  ------------ ---------------

SHARES HELD BY
 YTL CORPORATION
 BERHAD                                      -        185,142,529         -          185,142,529

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., which has
a substantial interest in YTL Corporation Berhad, YBhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay,
YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’ Yeoh Soo Min, YBhg Dato’ Yeoh
Seok Kian, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato’ Michael Yeoh Sock Siong, Ms. Yeoh
Soo Keng and YBhg Dato’ Mark Yeoh Seok Kah are deemed to be interested in the shares of
YTL Land & Development Berhad held by YTL Corporation Berhad and Yeoh Tiong Lay &
Sons Holdings Sdn Bhd.

YTL E-Solutions Berhad
                                       -------------- Ordinary Shares Of RM1 Each ----------------
                                          Balance                                     Balance
                                        at 1.7.2002      Acquired     Disposed     at 30.6.2003
                                       -------------    ------------  ------------ ---------------

DIRECT INTERESTS IN THE COMPANY

YBhg Dato’ (Dr) Yahya Bin Ismail           52,700           -             -                52,700



                                                 15
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                              DIRECTORS’ REPORT - (Continued)


                                         -------------- Ordinary Shares Of RM1 Each ----------------
                                            Balance                                     Balance
                                          at 1.7.2002      Acquired     Disposed     at 30.6.2003
                                         -------------    ------------  ------------ ---------------

Tuan Syed Abdullah Bin
 Syed Abd. Kadir                              30,000           -              -                30,000

YBhg Dato’ Lau Yin Pin @
 Lau Yen Beng                                 15,000           -              -                15,000

SHARES HELD BY
 YTL CORPORATION
 BERHAD                                 100,000,000            -              -          100,000,000

SHARES HELD BY
 YEOH TIONG LAY & SONS
 HOLDINGS SDN BHD                               -          108,000            -               108,000

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., which has
a substantial interest in YTL Corporation Berhad, YBhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay,
YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’ Yeoh Soo Min, YBhg Dato’ Yeoh
Seok Kian, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato’ Michael Yeoh Sock Siong, Ms. Yeoh
Soo Keng and YBhg Dato’ Mark Yeoh Seok Kah are deemed to be interested in the shares of
YTL E-Solutions Bhd. held by YTL Corporation Berhad and Yeoh Tiong Lay & Sons Holdings
Sdn Bhd.

The directors holding office at the end of the financial year and who have interests in the warrants
in YTL Cement Berhad and YTL Power International Berhad, during the financial year were as
follows :-

YTL Cement Berhad
                                          ------------------- Number Of Warrants ----------------------
                                            Balance                      Exercised/        Balance
                                          at 1.7.2002       Acquired     Disposed       at 30.6.2003
                                          -------------     ------------ ------------   ---------------

DIRECT INTERESTS IN THE COMPANY

YBhg Tan Sri Dato’ Seri (Dr) Yeoh
 Tiong Lay                                    30,078           -              -                30,078

YBhg Tan Sri Dato’ Francis Yeoh
 Sock Ping, JP                                30,078           -              -                30,078

YBhg Dato’ Yeoh Seok Kian                     30,078           -              -                30,078
                                                16
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

                            DIRECTORS’ REPORT - (Continued)


                                       ------------------- Number Of Warrants ----------------------
                                         Balance                      Exercised/        Balance
                                       at 1.7.2002       Acquired     Disposed       at 30.6.2003
                                       -------------     ------------ ------------   ---------------

YBhg Dato’ Yeoh Soo Min                    30,078           -              -                30,078

YBhg Dato’ Yeoh Seok Hong, JP              30,078           -              -                30,078

YBhg Dato’ Michael Yeoh Sock Siong         30,078           -              -                30,078

Yeoh Soo Keng                              12,030           -              -                12,030

WARRANTS HELD BY YTL
 INDUSTRIES BERHAD                     30,782,510           -              -           30,782,510

WARRANTS HELD BY YTL
 CORPORATION BERHAD                     3,209,920           -              -             3,209,920

WARRANTS HELD BY YEOH
 TIONG LAY & SONS
 HOLDINGS SDN. BHD.                        85,754           -              -                85,754

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., which has
a substantial interest in YTL Industries Berhad and YTL Corporation Berhad, YBhg Tan Sri
Dato’ Seri (Dr) Yeoh Tiong Lay, YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’
Yeoh Soo Min, YBhg Dato’ Yeoh Seok Kian, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato’
Michael Yeoh Sock Siong, Ms. Yeoh Soo Keng and YBhg Dato’ Mark Yeoh Seok Kah are
deemed to be interested in the warrants of YTL Cement Berhad held by YTL Industries Berhad,
YTL Corporation Berhad and Yeoh Tiong Lay & Sons Holdings Sdn. Bhd.

YTL Power International Berhad
                                       -------------------- Number Of Warrants ---------------------
                                         Balance                      Exercised/        Balance
                                       at 1.7.2002       Acquired     Disposed       at 30.6.2003
                                       -------------     ------------ ------------   ---------------

DIRECT INTERESTS IN THE COMPANY

YBhg Tan Sri Dato’ Seri (Dr) Yeoh
 Tiong Lay                                 74,000           -              -                74,000

YBhg Tan Sri Dato’ Francis Yeoh
 Sock Ping, JP                            267,000           -              -               267,000

YBhg Dato’ Yeoh Seok Kian                  64,000           -              -                64,000
                                             17
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

                            DIRECTORS’ REPORT - (Continued)


                                       -------------------- Number Of Warrants ---------------------
                                         Balance                      Exercised/        Balance
                                       at 1.7.2002       Acquired     Disposed       at 30.6.2003
                                       -------------     ------------ ------------   ---------------

YBhg Dato’ (Dr) Yahya Bin Ismail           72,000           -              -                72,000

YBhg Mej. Jen. (B) Dato’ Haron
 Bin Mohd. Taib                            12,000           -              -                12,000

YBhg Dato’ Yeoh Soo Min                    55,000           -              -                55,000

YBhg Dato’ Yeoh Seok Hong, JP              46,000           -              -                46,000

YBhg Dato’ Michael Yeoh Sock Siong         39,000           -              -                39,000

Yeoh Soo Keng                              46,000           -              -                46,000

YBhg Dato’ Mark Yeoh Seok Kah                1,000          -              -                 1,000

Tuan Syed Abdullah
 Bin Syed Abd. Kadir                       43,500           -              -                43,500

WARRANTS HELD BY
 YTL CORPORATION
 BERHAD                               363,049,023           -              -          363,049,023

WARRANTS HELD BY YEOH
 TIONG LAY & SONS HOLDINGS
 SDN. BHD.                             11,355,221           -              -           11,355,221

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., which has
a substantial interest in YTL Corporation Berhad, YBhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay,
YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’ Yeoh Soo Min, YBhg Dato’ Yeoh
Seok Kian, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato Michael Yeoh Sock Siong, Ms. Yeoh
Soo Keng and YBhg Dato’ Mark Yeoh Seok Kah are deemed to be interested in the warrants of
YTL Power International Berhad held by YTL Corporation Berhad and Yeoh Tiong Lay & Sons
Holdings Sdn. Bhd.


DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangement subsisted to which the Company is a
party, with the object or objects of enabling directors of the Company to acquire benefits by
means of the 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 New ESOS.
                                                18
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                               DIRECTORS’ REPORT - (Continued)


Since the end of the previous financial year, no director has received or become entitled to
receive any benefit (other than benefits included in the aggregate amount of remuneration
received or due and receivable by directors as shown in the financial statements of the Group and
of the Company) by reason of a contract made by the Company or a related corporation with the
director or with a firm of which he is a member, or with a company in which he has a substantial
financial interest except as disclosed in the Notes to the financial statements.


INFORMATION ON THE FINANCIAL STATEMENTS

Before the financial statements of the Group and of the Company were made out, the directors
took reasonable steps :-

(a)     to ascertain that proper action had been taken in relation to the writing off of bad debts
        and the making of allowance for doubtful debts and satisfied themselves that all known
        bad debts have been written off and that adequate allowance has been made for doubtful
        debts; and

(b)     to ensure that any current assets which were unlikely to realise their values as shown in
        the accounting records of the Group and of the Company in the ordinary course of
        business have been written down to an amount which they might be expected so to
        realise.

At the date of this report, the directors are not aware of any circumstances :-

(a)     which would render the amount written off for bad debts or the amount of the allowance
        for doubtful debts in the financial statements of the Group and of the Company
        inadequate to any substantial extent; or

(b)     which would render the values attributed to current assets in the financial statements of
        the Group and of the Company misleading; or

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

At the date of this report, there does not exist :-

(a)     any charge on the assets of the Group and of the Company which has arisen since the end
        of the financial year which secures the liability of any other person; or

(b)     any contingent liability of the Group and of the Company which has arisen since the end
        of the financial year.

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, in the opinion of the
directors, will or may affect the ability of the Group and of the Company to meet their obligations
as and when they fall due.
                                                  19
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                              DIRECTORS’ REPORT - (Continued)


OTHER STATUTORY INFORMATION

The directors state that :-

At the date of this report, they are not aware of any circumstances not otherwise dealt with in this
report or the financial statements of the Group and of the Company which would render any
amount stated in the respective financial statements misleading.

In their opinion,

(a)   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 except as disclosed in the Notes to the financial statements; and

(b)   there has not arisen in the interval between the end of the financial year and the date of this
      report any item, transaction or event of a material and unusual nature likely to affect
      substantially the results of the operations of the Group and of the Company for the financial
      year in which this report is made.


HOLDING COMPANY

The Company regards Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., a company incorporated in
Malaysia as its holding company.


SIGNIFICANT EVENTS DURING THE YEAR

(A)   Acquisition of companies and related issues

      Following the Securities Commission approval on 26 September 2002 and the shareholders
      approval obtained on 18 December 2002 at an Extraordinary General Meeting, of YTL
      Land & Development Berhad (“YTL L&D”), the Group acquired the equity interests as set
      out below :-

      (i)    Acquisition of 1,350,000 ordinary shares of RM1.00 each representing 45% equity
             interest in Syarikat Kemajuan Perumahan Negara Sdn Bhd (“SKPN”) from Syarikat
             Pembenaan Yeoh Tiong Lay Sdn Bhd (“SPYTL”) for a purchase consideration of
             RM46,910,392 to be satisfied through the issue of 46,910,392 new irredeemable
             convertible preference shares in YTL L&D, a subsidiary of the Company (“ICPS B”)
             at an issue price of RM1.00 per ICPS B;

      (ii)   Acquisition of 150,000 ordinary shares of RM1.00 each representing 5% equity
             interest in SKPN from Pemasaran Simen Negara Sdn Bhd (“PSN”) for a purchase
             consideration of RM5,212,266 to be satisfied through the issue of 5,212,266 new
             ordinary shares in YTL L&D at an issue price of RM1.00 per new ordinary share;
                                              20
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

                           DIRECTORS’ REPORT - (Continued)


    (iii) Acquisition of 500,000 ordinary shares of RM1.00 each representing 100% equity
          interest in Bayumaju from the Company by YTL L&D for a purchase consideration
          of RM38,540,074 to be satisfied through the issue of 38,540,074 new ICPS B in YTL
          L&D at an issue price of RM1.00 per ICPS B;

    (iv)   Acquisition of 4,250,000 ordinary shares of RM1.00 each representing 100% equity
           interest in Pakatan Perakbina Sdn Bhd (“Pakatan”) from SPYTL and Dato’ Hj Mohd
           Zainal Abidin Hj Abd Kadir for a purchase consideration of RM147,593,936 to be
           satisfied through the issue of 7,100,000 new ordinary shares in YTL L&D at an issue
           price of RM1.00 per new ordinary share in YTL L&D and the balance by way of
           issue of 140,493,936 new ICPS B in YTL L&D at an issue price of RM1.00 per ICPS
           B and the settlement of debt of RM40,654,488 owing by Pakatan to Construction
           Lease (M) Sdn Bhd to be satisfied through the issue of 40,654,488 new ICPS B in
           YTL L&D at an issue price of RM1.00 per ICPS B;

    (v)    Acquisition of 12,588,204 ordinary shares of RM1.00 each representing 30% equity
           interest in Udapakat Sdn Bhd from UDA Holdings Berhad, for a purchase
           consideration of RM20,879,461 to be satisfied through the issue of 7,100,000 new
           ordinary shares in YTL L&D at an issue price of RM1.00 per new ordinary share and
           the balance by way of issue of 13,779,461 new ICPS B in YTL L&D at an issue price
           of RM1.00 per ICPS B; and

    (vi)   Acquisition of 12,500 ordinary shares of RM1.00 each representing 5% equity
           interest in PYP Sendirian Berhad from YM Raja Dato’ Wahid Bin Raja
           Kamaralzaman for a purchase consideration of RM1,948,219 to be satisfied through
           the issue of 1,948,219 new ordinary shares in YTL L&D at an issue price of RM1.00
           per new ordinary share.

    (Collectively referred to as the “Acquisitions”)

    In connection with the Acquisitions, the shareholders of YTL L&D on 18 December 2002
    also granted approval for the following :-

    (i)    Amendments to the Memorandum and Articles of Association to increase the
           authorised capital of YTL L&D to RM2,500,000,000 comprising RM1,500,000,000
           ordinary shares of RM1.00 each and RM1,000,000,000 preference shares of RM1.00
           each comprising RM300,000,000 preference shares A of RM1.00 each and
           RM700,000,000 preference shares B of RM1.00 each;

    (ii)   Increase YTL L&D’s authorised share capital from RM800,000,000 to
           RM2,500,000,000 comprising 1,500,000,000 ordinary shares of RM1.00 each and
           1,000,000,000 preference shares of RM1.00 each; and

    (iii) Issue 100,000 ICPS B in YTL L&D to Commerce International Merchant Bankers
          Berhad at an issue price of RM1.00 each, as primary subscriber, to facilitate the
          listing of the new ICPS B.
                                          21
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

                            DIRECTORS’ REPORT - (Continued)


(B)   On 2 July, 2002, YTL E-Solutions Berhad, a subsidiary of the Company, was officially
      listed on the MESDAQ market of the Kuala Lumpur Stock Exchange.


AUDITORS

The auditors, Messrs. Ler Lum & Co., Chartered Accountants, have expressed their willingness to
continue in office.

                                                     On behalf of the Board,




                                                     ---------------------------------------------------
                                                     Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay




Dated : 30 October 2003                              ---------------------------------------------------
Kuala Lumpur                                         Tan Sri Dato’ Francis Yeoh Sock Ping, JP




                                              22
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                                  STATEMENT BY DIRECTORS

We, TAN SRI DATO’ SERI (DR) YEOH TIONG LAY and TAN SRI DATO’ FRANCIS YEOH
SOCK PING, JP, being two of the directors of YTL CORPORATION BERHAD, do hereby state
that, in the opinion of the directors, the accompanying financial statements 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 state of affairs of the Group and of the
Company as at 30 June, 2003 and of the results of the operations and cash flows of the Group and of
the Company for the year ended on that date.

                                                       On behalf of the Board,




                                                       -------------------------------------------------------
                                                       Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay




Dated : 30 October 2003                                -------------------------------------------------------
Kuala Lumpur                                           Tan Sri Dato’ Francis Yeoh Sock Ping, JP


                                  STATUTORY DECLARATION

I, TAN SRI DATO’ FRANCIS YEOH SOCK PING, JP, being the director primarily responsible for
the financial management of YTL CORPORATION BERHAD, do solemnly and sincerely declare
that to the best of my knowledge and belief the accompanying financial statements are 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.




                                                       -------------------------------------------------------
                                                       Tan Sri Dato’ Francis Yeoh Sock Ping, JP

Subscribed and solemnly declared
at Kuala Lumpur on 30 October 2003

Before me :




Soh Ah Kau AMN
Commissioner for Oaths
                                                 23
Company No : 92647-H




                        AUDITORS’ REPORT TO THE MEMBERS OF

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)


We have audited the financial statements set out on pages 26 to 134. These financial statements
are the responsibility of the Company’s directors. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. These
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 amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by directors, as
well as evaluating the overall financial statements presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion :-

(a)   the financial statements have been prepared in accordance with the provisions of the
      Companies Act, 1965 and applicable approved Accounting Standards in Malaysia so as to
      give a true and fair view of :-

      (i)    the matters required by Section 169 of the Companies Act, 1965 to be dealt with in
             the financial statements of the Group and of the Company; and

      (ii)   the state of affairs of the Group and of the Company as at 30 June, 2003 and of the
             results of the operations and cash flows of the Group and of the Company for the
             year ended on that date;

and

(b)   the accounting and other records and the registers required by the Companies Act, 1965 to
      be kept by the Company and its subsidiaries, of which we are the auditors, have been
      properly kept in accordance with the provisions of the said Act.

The names of the subsidiaries of which we have not acted as auditors are indicated in Note 11 to
the financial statements. We have considered the financial statements of these subsidiaries and the
auditors’ report thereon except as disclosed in Note 11(b) to the financial statements.




                                                24
Company No: 92647-H




                        AUDITORS’ REPORT TO THE MEMBERS OF

                               YTL CORPORATION BERHAD
                            (Incorporated in Malaysia) - (Continued)


We are satisfied that the financial statements of the subsidiaries that have been consolidated with
the Company’s financial statements are in form and content appropriate and proper for the
purposes of the preparation of the consolidated financial statements and we have received
satisfactory information and explanations as required by us for these purposes.

The auditors’ report on the financial statements of the subsidiaries were not subject to any
qualification and did not include any comment made under subsection (3) of Section 174 of the
Companies Act, 1965.




                                                                    LER LUM & CO.
                                                                (Firm Number: AF 0276)
                                                                 Chartered Accountants




                                                                 LUM TUCK CHEONG
                                                                    1005/3/05(J/PH)
Dated : 30 October 2003                                            Partner of the Firm
Kuala Lumpur




                                                25
Company No: 92647-H


                                    YTL CORPORATION BERHAD
                                      (Incorporated in Malaysia)

                                   INCOME STATEMENTS
                              FOR THE YEAR ENDED 30 JUNE 2003


                                                         Group                              Company
                                                2003              2002               2003              2002
                                                                (Restated)
                              Note               RM                RM                RM                 RM

REVENUE                         3      4,026,836,822 2,567,941,202            442,670,471        148,702,819

COST OF SALES                          (2,124,638,427) (1,500,001,160)                  -                 -
                                        ----------------- ----------------- ----------------- -----------------
GROSS PROFIT                            1,902,198,395 1,067,940,042           442,670,471       148,702,819

OTHER OPERATING
 INCOME                                    66,534,448        85,150,272                -               50,035

SELLING &
 DISTRIBUTION COSTS                       (35,433,784)      (23,494,605)               -                 -

ADMINISTRATION
 EXPENSES                                (236,319,847) (100,642,132)           (10,819,449)      (11,405,934)

OTHER OPERATING
 EXPENSES                                 (73,620,782) (50,568,715)                     -                 -
                                        ----------------- ----------------- ----------------- -----------------
PROFIT FROM
 OPERATIONS                     4      1,623,358,430        978,384,862       431,851,022       137,346,920

FINANCE COSTS                   5        (675,299,501) (202,269,005)           (40,300,854)      (31,843,850)

PROFIT FROM DISPOSAL
 OF INVESTMENTS                            44,054,514            818,016        38,197,928           135,827

SHARE OF PROFITS
 OF ASSOCIATED
 COMPANIES                                   4,729,976       22,279,542                 -                 -
                                        ----------------- ----------------- ----------------- -----------------
PROFIT BEFORE
 TAXATION                                 996,843,419       799,213,415       429,748,096       105,638,897




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                    26
Company No: 92647-H

                                    YTL CORPORATION BERHAD
                                      (Incorporated in Malaysia)

                                 INCOME STATEMENTS
                       FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


                                                            Group                            Company
                                                2003                2002              2003              2002
                                                                  (Restated)
                              Note               RM                  RM               RM                RM

TAXATION
 - Company and subsidiaries              (208,682,659)        (209,317,213) (110,506,000)        (31,326,235)
 - Associated companies                       (703,740)          (1,753,210)             -                 -
                                        -----------------    ----------------- ---------------   ---------------
                                6        (209,386,399)        (211,070,423) (110,506,000)        (31,326,235)
                                        -----------------    ----------------- ---------------   ---------------
PROFIT AFTER
 TAXATION                                787,457,020          588,142,992      319,242,096        74,312,662

MINORITY INTERESTS                       (275,719,812) (224,792,098)                     -                 -
                                        ----------------- -----------------    ---------------   ---------------
NET PROFIT FOR
 THE YEAR                                511,737,208 363,350,894               319,242,096        74,312,662
                                        ========== ==========                  =========         =========

Earnings per share

 - Basic                        7          35.28 sen  25.06 sen
                                        ========== ==========

 - Diluted                      7          34.74 sen  24.53 sen
                                        ========== ==========

Gross dividend
 per ordinary share             8            7.5 sen    7.5 sen
                                        ========== ==========




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                    27
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                             BALANCE SHEETS AS AT 30 JUNE 2003


                                                       Group                                 Company
                                               2003               2002                2003          2002
                                                                (Restated)
                            Note                RM                 RM                  RM                RM

PROPERTY, PLANT
 & EQUIPMENT                  9      13,136,147,278 11,818,531,403                1,963,973         1,529,321
                                     ------------------- ------------------- ----------------- -----------------

INVESTMENT
 PROPERTIES                   10         531,250,215         430,961,933                 -                 -
                                     ------------------- ------------------- ----------------- -----------------

INVESTMENT IN
 SUBSIDIARIES                 11         196,869,846         196,869,846 2,559,604,359 2,369,184,227
                                     ------------------- ------------------- ----------------- -----------------

INVESTMENT IN
 ASSOCIATED
 COMPANIES                    14         303,414,640         308,171,104       139,571,441       133,943,001
                                     ------------------- ------------------- ----------------- -----------------

QUOTED
 INVESTMENTS                 15            20,474,266          20,322,207           462,864           685,010
                                     ------------------- ------------------- ----------------- -----------------

UNQUOTED
 INVESTMENTS                  16         243,600,994         142,125,994          6,950,000         5,050,000
                                     ------------------- ------------------- ----------------- -----------------

DEVELOPMENT
 EXPENDITURE                  17         566,964,733         256,030,284                 -               -
                                     ------------------- ------------------- ----------------- -----------------

CAPITAL WORK-IN-
 PROGRESS                                   4,960,482           4,960,482                -               -
                                     ------------------- ------------------- ----------------- -----------------




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                    28
Company No: 92647-H

                                     YTL CORPORATION BERHAD
                                       (Incorporated in Malaysia)

                      BALANCE SHEETS AS AT 30 JUNE 2003 - (Continued)


                                                            Group                             Company
                                                 2003              2002                2003              2002
                                                                 (Restated)
                              Note               RM                 RM                 RM                 RM

CURRENT ASSETS

    Inventories                 18        200,120,014         128,283,560                -                 -
    Property development
     projects                   19        163,690,574   170,854,355                      -                 -
    Trade debtors               20      1,266,702,858 1,494,802,908                      -                 -
    Amount due from
     contract customers         21         24,322,618          31,824,149                -                 -
    Other debtors, deposits
     & prepayments              22        777,229,654         587,163,774        63,005,104         62,074,733
    Tax recoverable                        59,166,040          33,048,196        52,132,594         41,262,952
    Amount due from
     holding company            23             226,998              70,253               -                 -
    Amount due from
     subsidiaries               11                 -                   -        979,550,937 1,306,948,504
    Amount due from
     related companies          24         14,622,830          13,060,143            622,229           616,864
    Amount due from
     associated companies       14         14,152,882          30,499,752         13,632,794           288,321
    Short term investments      25        108,976,117           29,195,586        10,299,787       10,006,086
    Fixed deposits              26      5,481,348,128       4,461,371,976       495,995,807         34,154,336
    Cash & bank balances        26          96,089,916          89,365,265           854,079         6,110,736
                                        -----------------   ----------------- ----------------- -----------------
                                        8,206,648,629       7,069,539,917 1,616,093,331 1,461,462,532
                                        -----------------   ----------------- ----------------- -----------------




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                       29
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                      BALANCE SHEETS AS AT 30 JUNE 2003 - (Continued)


                                                          Group                               Company
                                                  2003             2002                2003              2002
                                                                 (Restated)
                                 Note             RM                RM                 RM                 RM

LESS : CURRENT LIABILITIES

    Amount due to contract
     customers                    21        29,238,598        27,433,206                -                 -
    Trade creditors               27       211,191,928       398,925,995                -                 -
    Other creditors & accruals    28       680,190,999       487,204,335           3,840,925         4,756,052
    Property maintenance
     funds                        29          2,543,492         2,477,189              -                  -
    Hire purchase liabilities     30          1,935,769           317,899              -                  -
    Finance lease liabilities     31          6,687,730        60,515,250              -                  -
    Amount due to subsidiaries    11               -                 -          154,851,575         39,335,110
    Amount due to related
     companies                    24             86,364           103,379             16,719             23,753
    Amount due to associated
     companies                    14        27,995,553        22,802,079                 -               -
    Bonds                         32       125,000,000       425,061,462                 -        300,061,462
    Short term bank
     borrowings                   33     1,884,487,796 2,268,406,385            479,455,000       179,455,000
    Bankers acceptances           34        69,258,826    72,170,273                   -                 -
    Bank overdrafts               34        86,572,152    54,610,403                   -                 -
    Employees share option                       7,271         5,816                  7,271             5,816
    Taxation                                65,101,353   137,454,668                   -                 -
    Dividends                                     -           26,463                   -               26,463
    Provision for liabilities
     and charges                  35         24,612,702        38,861,728                -                 -
                                        ------------------ ----------------- ----------------- -----------------
                                         3,214,910,533 3,996,376,530           638,171,490       523,663,656
                                        ------------------ ----------------- ----------------- -----------------

NET CURRENT ASSETS                       4,991,738,096 3,073,163,387           977,921,841       937,798,876
                                        ------------------ ----------------- ----------------- -----------------
GOODWILL
 ON CONSOLIDATION                 36        533,693,762       527,055,828                 -                 -
                                         ------------------ ----------------- ----------------- -----------------
                                        20,529,114,312 16,778,192,468 3,686,474,478 3,448,190,435
                                        =========== ========== ========== ==========



The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                     30
Company No: 92647-H

                                      YTL CORPORATION BERHAD
                                        (Incorporated in Malaysia)

                      BALANCE SHEETS AS AT 30 JUNE 2003 - (Continued)

                                                         Group                                 Company
                                                  2003              2002                2003              2002
                                                                  (Restated)
                                Note              RM                 RM                 RM                 RM
FINANCED BY :-
SHARE CAPITAL                    37        737,293,111         737,293,111       737,293,111       737,293,111
SHARE PREMIUM                    38        549,073,205         549,073,205       549,073,205       549,073,205
CAPITAL RESERVE                 38          60,959,292          24,576,682                -                 -
RESERVE ON
 CONSOLIDATION                  38              346,429                 -                 -                 -
EXCHANGE DIFFERENCE
 RESERVE            38                      63,189,432          13,832,610                -                 -
UNAPPROPRIATED
 PROFITS                                 3,719,201,862      3,255,113,070 1,716,124,314 1,475,218,743
TREASURY SHARES,
 AT COST                        37        (116,016,152) (113,394,624) (116,016,152) (113,394,624)
                                        ------------------ ----------------- ----------------- -----------------
SHARE CAPITAL AND
 RESERVES                                5,014,047,179      4,466,494,054 2,886,474,478 2,648,190,435
MINORITY INTERESTS                       1,972,069,179      1,765,363,750                 -                 -
LONG TERM LIABILITIES
    Provision for liabilities
     & charges                  35          59,598,998         55,797,072               -                 -
    Long term creditors         39          93,498,594         89,830,590               -                 -
    Bonds                       32       4,586,285,708      4,478,951,147        500,000,000       500,000,000
    Bank borrowings             33       6,064,921,968      3,853,887,071        300,000,000       300,000,000
    Hire purchase
     liabilities                30             3,306,531              85,388               -                 -
    Finance lease liabilities   31          293,120,057                  -                 -                 -
    Deferred income             40          137,890,398        131,831,424                 -                 -
    Deferred taxation           41        2,304,375,700 1,935,951,972                      -                 -
                                         ------------------ ------------------ ----------------- -----------------
                                        20,529,114,312 16,778,192,468 3,686,474,478 3,448,190,435
                                        =========== =========== ========== ==========

Net tangible assets per share             308.8 sen         271.4 sen
                                    ===========          =========
The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                       31
Company No: 92647-H

                                                                      YTL CORPORATION BERHAD
                                                                        (Incorporated in Malaysia)

                                                     CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                            FOR THE YEAR ENDED 30 JUNE 2003
                                 Share              Share            Capital          Reserve      Translation          Unappropriated         Treasury
                                 capital          premium            reserve      on consolidation   reserve               profits              shares              Total
Group                             RM                 RM                RM               RM             RM                   RM                   RM                 RM
Balance at 1.7.2002
 - as previously
     reported              737,293,111        549,073,205        24,576,682       129,441,538         29,835,926      3,252,276,362      (113,394,624)      4,609,102,200
 - prior years
     adjustments                      -                 -                 -      (129,441,538) (16,003,316)                2,836,708                -        (142,608,146)
                          ----------------- ----------------- ----------------- ----------------- -----------------   ----------------- -----------------   -----------------
 - as restated              737,293,111       549,073,205         24,576,682                -         13,832,610      3,255,113,070 (113,394,624)           4,466,494,054
Currency translation
 differences                        -                  -                 -                  -         49,356,822                 -                 -           49,356,822
Net gain not
 recognised in the
 income statement                   -                  -                 -                  -         49,356,822                 -                 -           49,356,822
Capital reserve
 on consolidation                   -                  -                 -             346,429               -                   -                 -               346,429
Net profit for the year               -                 -                 -                 -                 -         511,737,208                 -         511,737,208
                          ----------------- ----------------- ----------------- ----------------- -----------------   ----------------- -----------------   -----------------
Balance carried
 forward                   737,293,111        549,073,205        24,576,682            346,429        63,189,432      3,766,850,278      (113,394,624)      5,027,934,513

The notes set out on pages 45 to 134 form an integral part of these financial statements.
                                                                                       32
Company No: 92647-H

                                                                  YTL CORPORATION BERHAD
                                                                    (Incorporated in Malaysia)

                                                  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                    FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


                               Share             Share           Capital          Reserve      Translation        Unappropriated        Treasury
                               capital         premium           reserve      on consolidation   reserve             profits             shares               Total
Group                           RM                RM               RM               RM             RM                 RM                  RM                  RM

Balance brought
 forward                 737,293,111       549,073,205        24,576,682          346,429       63,189,432      3,766,850,278      (113,394,624)      5,027,934,513

Gains recognised on
 deemed dilution of
 interest in subsidiary
 companies                        -                -                -                   -               -          31,898,428                -           31,898,428
Transfer                          -                -           1,210,319                -               -          (1,210,319)               -                 -
Accretion arising from
 additional shares issued         -                -          35,172,291                -               -                      -             -           35,172,291

Dividends paid                    -                -                 -                  -               -         (78,336,525)               -          (78,336,525)

Treasury shares                 -                 -                 -                 -                 -                   -         (2,621,528)         (2,621,528)
                    ----------------- ----------------- ----------------- ----------------- -----------------   ----------------- -----------------   -----------------
Balance at 30.6.2003 737,293,111        549,073,205         60,959,292           346,429        63,189,432      3,719,201,862 (116,016,152)           5,014,047,179
                    ========== ========== ========== ========== ==========                                      ========== ==========                 ==========



The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                                                   33
Company No: 92647-H
                                                                                    YTL CORPORATION BERHAD
                                                                                      (Incorporated in Malaysia)
                                                               CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                 FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)
                                     Share                   Share                  Capital              Reserve                 Translation          Unappropriated               Treasury
                                     capital               premium                  reserve          on consolidation              reserve               profits                    shares                    Total
Group                                 RM                      RM                      RM                   RM                        RM                   RM                         RM                       RM
Balance at 1.7.2001
 - as previously reported     736,529,324             681,915,851               23,493,843                       -              22,797,147          2,925,067,796           (249,979,832)           4,139,824,129
 - prior year adjustments            -                       -                        -                          -                    -                 1,851,117                   -                   1,851,117
                            ---------------------   ---------------------   ---------------------   ---------------------   ---------------------   ---------------------   ---------------------   ---------------------
 - as restated               736,529,324              681,915,851               23,493,843                       -              22,797,147          2,926,918,913           (249,979,832)           4,141,675,246
Currency translation
 differences                             -                       -                       -                       -              (8,964,537)                      -                       -              (8,964,537)
Net loss not
 recognised in the
 income statement                        -                       -                       -                       -              (8,964,537)                      -                       -              (8,964,537)
Net profit for the year                  -                       -                       -                       -                       -            363,350,894                        -            363,350,894
Gains recognised on dilution
 of interest in subsidiary
 companies                               -                       -                       -                       -                       -              17,083,350                       -              17,083,350
Dividends in kind of
 treasury shares                         -          (136,585,208)                        -                       -                       -                       -            136,585,208                        -
Dividends paid                           -                       -                       -                       -                       -            (51,157,248)                       -            (51,157,248)
Transfer                                 -                       -               1,082,839                       -                       -               (1,082,839)                     -                       -
Issue of share capital              763,787               3,742,562                      -                       -                       -                       -                       -               4,506,349
                            ---------------------   ---------------------   ---------------------   ---------------------   ---------------------   ---------------------   ---------------------   ---------------------
Balance at 30.6.2002         737,293,111             549,073,205              24,576,682                   -                  13,832,610            3,255,113,070            (113,394,624)          4,466,494,054
                            ==========              ==========              ==========              ==========              ==========              ==========              ==========              ==========
The notes set out on pages 45 to 134 form an integral part of these financial statements.
                                                                                                           34
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                             STATEMENT OF CHANGES IN EQUITY
                              FOR THE YEAR ENDED 30 JUNE 2003


                               Share                Share        Unappropriated          Treasury
                               capital            premium           profits               shares           Total
Company                         RM                   RM              RM                    RM              RM

Balance at 1.7.2001          736,529,324        681,915,851 1,452,063,329 (249,979,832) 2,620,528,672

Net profit for the year               -                  -           74,312,662              -           74,312,662

Dividends paid                        -                  -          (51,157,248)             -          (51,157,248)

Dividends in kind of
 treasury shares                      -        (136,585,208)                -        136,585,208                -

Issue of share capital            763,787          3,742,562                -                -            4,506,349

                           -----------------   ----------------- ----------------- ----------------- -----------------
Balance at 30.6.2002         737,293,111         549,073,205 1,475,218,743 (113,394,624) 2,648,190,435

Net profit for the year               -                  -         319,242,096               -          319,242,096

Dividends paid                        -                  -          (78,336,525)             -          (78,336,525)

Treasury shares                       -                   -                 -          (2,621,528)       (2,621,528)
                           -----------------   ----------------- ----------------- ----------------- -----------------
Balance at 30.6.2003         737,293,111         549,073,205 1,716,124,314 (116,016,152) 2,886,474,478
                           ==========          ========== ========== ========== ==========




The notes set out on pages 45 to 134 form an integral part of these financial statements.
                                                       35
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                                   CASH FLOW STATEMENTS
                               FOR THE YEAR ENDED 30 JUNE 2003

                                                         Group                               Company
                                                2003              2002                2003               2002
                                                                (Restated)
                                                 RM                RM                  RM                 RM

Cash flows from operating activities

      Profit before taxation             996,843,418        799,213,415        429,748,096        105,638,897

      Adjustments for :-

          Amortisation of bond
           arrangement and
           underwriting fee               10,374,213           -            -             -
          Allowances for doubtful
           debts -net                      1,359,867     2,999,395          -             -
          Amortisation of development
           expenditure                       207,260       207,260          -             -
          Bad debts written off            1,570,747     4,364,313          -             -
          Bonus issue expenses,
           bonds issue expenses &
           rating fees                        86,500       334,881        86,500       192,449
          Development expenditure
           written off                     9,167,928     4,933,770          -             -
          Depreciation                   476,261,339   178,237,007       257,320       151,698
          Dividend income                (66,721,820)     (547,803) (432,508,968) (147,230,555)
          Gain on disposal of
           associate                     (21,125,324)          -            -             -
          Gain on disposal of
           investments                    (4,176,403)     (818,016)     (157,854)     (135,827)
          Gain on disposal of
           property, plant & equipment (1,302,081)      (1,401,376)         -          (50,000)
          Gain on deemed disposal
           of subsidiary shares           (1,310,746)        -              -             -
          Gain on disposal of
           subsidiary                    (22,929,190)     (170,407) (38,040,074)          -
          (Gain)/Loss on dilution of
           interest in subsidiaries             -       (1,218,487)         -             -
          Interest expenses              675,299,501   202,269,005    40,300,852    31,843,850
          Interest income               (136,186,939) (122,316,203) (10,158,500)    (1,471,745)
          Loss on disposal of property,
           plant & equipment               2,899,265             51         -             -
          Share issue expenses
           written off                       524,995           -            -             -
          Term loan arrangement fees       5,991,508           -            -             -

                                       ------------------ ------------------ ------------------ ------------------
          Balance carried forward       1,926,834,038 1,066,086,805              (10,472,626) (11,061,233)

The notes set out on pages 45 to 134 form an integral part of these financial statements.


                                                    36
Company No: 92647-H

                                    YTL CORPORATION BERHAD
                                      (Incorporated in Malaysia)

                                 CASH FLOW STATEMENTS
                        FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


                                                           Group                               Company
                                                  2003              2002                2003               2002
                                                                  (Restated)
                                                   RM                RM                  RM                 RM

         Balance brought forward 1,926,834,038 1,066,086,805                   (10,472,626) (11,061,233)
         Preliminary & pre-operating
          expenses written off                        -            1,800                -                  -
         Property, plant & equipment
          written off                        435,771            995,495               1,908                -
         Provision for restructuring
          costs                            1,507,531          4,047,456                 -                  -
         Reversal of investment
          written off                                 -          (20,730)               -              (20,730)
         Share of profit of
          associated companies            (4,729,976) (22,279,542)                      -                  -
         Unrealised gain on
          foreign exchange - net         (10,172,089) (31,002,711)                      -                  -
         Write back of liquidated
          ascertained damages             (7,654,730) (12,519,000)                      -                  -
                                     ------------------ ------------------ ------------------ ------------------
      Operating profit/(loss) before
       changes in working capital     1,906,220,545 1,005,309,573              (10,470,718) (11,081,963)

          Amount due from/(to)
           customers for contract
           works                             14,048,915       147,982,256                 -                  -
          Inventories                       (68,750,996)        4,691,006                 -                  -
          Property development
           projects                          (55,118,383) (50,453,666)                      -                  -
          Debtors                             90,282,389       184,423,801            (930,371)         5,432,132
          Creditors                        (144,230,601) (64,878,618)               (2,096,496)            (47,732)
          Holding company                     65,258,642           (909,916)                -                  -
          Subsidiaries                                -                  -        441,964,506         39,118,513
                                         ------------------ ------------------ ------------------ ------------------
          Balance carried forward         1,807,710,511 1,226,164,436             428,197,877          33,420,950




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                      37
Company No: 92647-H

                                     YTL CORPORATION BERHAD
                                       (Incorporated in Malaysia)

                                 CASH FLOW STATEMENTS
                        FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


                                                              Group                             Company
                                                   2003             2002                 2003               2002
                                                                  (Restated)
                                                   RM                RM                  RM                 RM

          Balance brought forward         1,807,710,511 1,226,164,436             428,466,919          33,420,950
          Related companies                   34,769,567        (25,725,304)            (12,399)           (23,294)
          Associated companies                21,706,704         (1,042,657) (13,344,473)              11,948,858
                                         ------------------ ------------------ ------------------ ------------------
      Cash generated from
       operations                         1,864,186,782 1,199,396,475             415,110,047         45,346,514

          Dividends received from
           a subsidiary                              -                  -         311,633,055         97,271,273
          Dividends received from
           associated companies                1,051,615          6,571,600                -            8,722,000
          Dividends received from
           other investments                 65,670,205       542,011                    -                12,726
          Interest paid                    (675,299,501) (194,935,996)            (37,476,630)       (32,421,645)
          Interest received                 136,235,173   119,963,893               9,145,009          1,468,483
          Payment to a retirement
           benefit scheme                       (994,970) (23,417,424)                      -                  -
          Taxation paid                    (131,804,773) (219,923,301)                (499,729)        (2,699,514)
                                         ------------------ ------------------ ------------------ ------------------
      Net cash from operating
       activities                         1,259,044,531        888,197,258        697,911,752        117,699,837
                                         ------------------ ------------------ ------------------ ------------------

Cash flows from investing activities

      Acquisition of additional
       shares in existing subsidiaries      (5,650,103)          (802,662) (190,920,132) (42,500,002)
      Subscription of shares in a quoted
       subsidiary                                                      -                  -                  -
      Preliminary expenses paid                                     (1,800)               -                  -
                                       ------------------ ------------------ ------------------ ------------------
      Balance carried forward               (5,650,103)          (804,462) (190,920,132) (42,500,002)




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                         38
Company No: 92647-H

                                    YTL CORPORATION BERHAD
                                      (Incorporated in Malaysia)

                                 CASH FLOW STATEMENTS
                        FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


                                                           Group                             Company
                                                  2003             2002               2003              2002
                                                                 (Restated)
                                                   RM               RM                 RM                RM

      Balance brought forward              (5,650,103)          (804,462) (190,920,132) (42,500,002)
      Acquisition of subsidiaries
       (net of cash acquired)            (23,906,927) (3,222,796,851)                    -                  -
      Cash in subsidiary previously               -
       not consolidated                                               -                  -                  -
      Deferred expenditure                        -                   -                  -                  -
      Development expenditure             (26,816,234)        (5,242,527)                -                  -
      Grants received in respect of
       infrastructure assets               29,547,613          4,625,664                 -                  -
      Grants received in respect of
       non-infrastructure assets           28,944,600          1,156,416                 -                  -
      Proceeds from disposal of
       property, plant & equipment         11,127,018          8,387,026                 -               50,000
      Proceeds from disposal of subsidiary        -                   -         38,540,074                  -
      Proceeds from disposal of
       quoted investments                     384,634          3,392,169            380,000            387,105
      Purchase of investment properties (11,842,906)          (4,724,740)                -                  -
      Purchase of property, plant &
       equipment                      (1,060,272,418) (171,471,787)                (693,880)            (86,468)
      Purchase of shares in associated
       companies                           (6,378,440)        (9,804,900)        (5,628,440)        (9,800,000)
      Purchase of short term
       investments                        (76,333,212)        (9,189,500)                -                  -
      Purchase of unquoted
       investments                      (191,912,324)         (1,900,000)        (1,900,000)        (1,900,000)
      Purchase of subsidiaries’
       shares by subsidiaries              (3,777,436) (13,224,762)                      -                  -
                                      ------------------ ------------------ ------------------ ------------------
      Net cash used in
       investing activities           (1,336,886,135) (3,421,598,254) (160,222,378) (53,849,365)
                                      ------------------ ------------------ ------------------ ------------------



The notes set out on pages 45 to 134 form an integral part of these financial statements.




                                                      39
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                                CASH FLOW STATEMENTS
                       FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


                                                    Group                                Company
                                            2003             2002                 2003               2002
                                                           (Restated)
                                             RM               RM                   RM                 RM

Cash flows from financing activities

   Dividends paid                    (78,336,525) (51,254,618)              (78,336,525)       (51,254,618)
   Dividends paid to minority
    shareholders of a subsidiary (135,414,885) (85,655,916)                        -                   -
   Employees’ share option scheme           1,455                -                1,455                -
   Purchase of own shares             (2,621,528)                -           (2,621,528)               -
   Purchase of own shares by
    subsidiaries                      (6,335,510) (47,391,150)                       -                 -
   Proceeds from bank
    borrowings                    8,762,176,195 3,159,143,626                        -                 -
   Proceeds from issue of shares
    to minority interests in
    subsidiaries                           94,561        84,460,947                 -                 -
   Proceeds from issue of bonds                        561,835,019                  -                 -
   Proceeds from issue of shares         100,000          4,506,349                 -            4,506,349
   Repayment of bonds              (300,061,462) (125,000,000)                   (61,462)             -
   Repayment of block discount
    payables                                  -                  -                   -                 -
   Repayment of finance lease           (350,000)                -                   -                 -
   Repayment of hire purchase
    creditors                           (584,988)          (477,602)                 -                 -
   Repayment of bank borrowings(7,158,905,068) (23,211,318)                          -                 -
   Shares/warrants/bonds issue
    expenses                              (86,500)         (334,881)              (86,500)         (192,449)
   Term loan arrangement fee          (5,991,508)                -                    -                  -
                                 ------------------ ------------------   ------------------ ------------------
   Net cash from/(used in)
    financing activities          1,073,684,237 3,476,620,456                (81,104,560) (46,940,718)
                                 ------------------ ------------------   ------------------ ------------------




The notes set out on pages 45 to 134 form an integral part of these financial statements.
                                                 40
Company No: 92647-H

                                     YTL CORPORATION BERHAD
                                       (Incorporated in Malaysia)

                                CASH FLOW STATEMENTS
                       FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


                                                             Group                               Company
                                                  2003               2002                 2003               2002
                                                                   (Restated)
                              Note                RM                  RM                  RM                 RM

Net changes in cash and
 cash equivalents                          995,842,633        943,219,460        456,584,814         16,909,754
                                        ------------------ ------------------ ------------------ ------------------

Effects of exchange rate changes             (4,138,334)         3,287,330                 -                  -
                                        ------------------ ------------------ ------------------ ------------------

Cash and cash equivalents
 brought forward

   As previously reported                4,496,126,838        3,549,584,018          40,265,072       23,355,318
   Effects of exchange rate changes           3,034,754                36,030                -                  -
                                        ------------------   ------------------ ------------------ ------------------
   As restated                           4,499,161,592        3,549,620,048          40,265,072        23,355,318
                                        ------------------   ------------------ ------------------ ------------------
Cash and cash equivalents
 carried forward                27      5,490,865,891 4,496,126,838 496,849,886 40,265,072
                                       =========== =========== =========== ===========




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                      41
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                                CASH FLOW STATEMENTS
                       FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


NOTES TO CONSOLIDATED CASH FLOW STATEMENTS

(a)   Summary of net assets acquired :-
                                                                                           Group
                                                                               2003                  2002
                                                                               RM                     RM
                                                                                                   (Restated)

      Property, plant & equipment                                             496,207        8,308,232,962
      Goodwill                                                             14,164,747                    -
      Quoted investments                                                        46,086              730,592
      Investment in associated companies                                 100,336,424                     -
      Property development expenditure                                   182,525,520                     -
      Inventories                                                           1,249,463            17,849,951
      Investments                                                                  -              3,890,180
      Debtors                                                              17,747,209          596,554,185
      Cash and cash equivalents                                            25,880,056           (15,962,336)
      Creditors                                                           (66,454,930)        (478,453,732)
      Borrowings                                                                   -        (2,053,744,736)
      Bonds                                                                        -        (1,908,394,488)
      Taxation                                                             (5,489,095)        (158,070,304)
      Deferred taxation                                                   (57,205,349)      (1,338,568,843)
      Provision for restructuring costs                                            -            (32,788,660)
      Provision for retirement benefits                                            -            (53,628,910)
      Deferred income                                                              -          (125,597,240)
      Minority interests                                                (100,854,749)            (8,328,774)
                                                                      ------------------      ----------------
      Net assets acquired                                                112,441,589         3,435,029,475
      Goodwill on acquisition                                              32,990,070          442,366,643
      Reserve on consolidation                                               (346,429)                   -
      Amount previously accounted for as associate
       (including fair value adjustment)                                 (84,690,876)         (234,696,846)
      Expenses directly attributable to the acquisition,
       paid in cash                                                          (906,949) (175,195,737)
      Dividends paid out of pre-acquisition reserves                               -      498,215,333
                                                                      ------------------ ----------------
      Total purchase consideration                                        59,487,405 3,531,854,111




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                   42
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                               CASH FLOW STATEMENTS
                      FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


                                                                                          Group
                                                                               2003                2002
                                                                               RM                  RM

      Purchase consideration satisfied by issue of shares                (58,420,927)          (2,000,000)
      Expenses directly attributable to the acquisition,
       paid in cash                                                          906,949     175,195,737
      Dividends paid out of pre-acquisition reserves                              -     (498,215,333)
      Cash and cash equivalents in subsidiaries acquired                 (25,880,054)       15,962,336
                                                                     ------------------ ----------------
      Net cash (acquired)/paid                                           (23,906,627) 3,222,796,851
                                                                     =========== ==========

(b)   Summary of net assets disposed :-

                                                                                          Group
                                                                               2003                2002
                                                                               RM                  RM

      Property, plant & equipment                                                 -                 10,992
      Cash in hand                                                                -                        2
      Creditors                                                                   -              (181,399)
                                                                     ------------------     ----------------
                                                                                  -              (170,405)
      Gain on disposal of subsidiary                                              -               170,407
                                                                     ------------------     ----------------
      Proceeds from disposal of subsidiary                                        -                        2
      Cash and cash equivalents in subsidiary disposed                            -                       (2)
                                                                     ------------------     ----------------
      Net cash disposed                                                           -                    -
                                                                     ===========           ==========




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                  43
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                                CASH FLOW STATEMENTS
                       FOR THE YEAR ENDED 30 JUNE 2003 - (Continued)


(c)   Analysis of acquisition of property, plant & equipment

                                                      Group                             Company
                                             2003               2002                 2003              2002
                                             RM                 RM                   RM                RM

      Cash                       1,060,272,418        171,471,787                  693,880              86,468
      Hire purchase arrangements      5,424,000              85,000                     -                  -
      Intercompany debts                350,000        10,050,010                       -                  -
      Other creditors                        -           4,859,258                      -                  -
                                ------------------ ------------------      ------------------ ------------------
                                 1,066,046,418        186,466,055                  693,880              86,468
                               =========== ===========                     =========== ===========

(d)   Analysis of investment properties
                                                                                            Group
                                                                                     2003              2002
                                                                                     RM                RM

      Cash                                                                      11,842,906          4,724,740
      Inter-company debts                                                       88,445,376                 -
                                                                           ------------------ ------------------
                                                                              100,288,282           4,724,740
                                                                           =========== ===========

(e)   Analysis of investment in associated companies

                                                    Group                               Company
                                          2003                2002                   2003              2002
                                          RM                  RM                     RM                RM

      By way of cash                     6,378,440          9,804,900            5,628,440          9,800,000
      By way of capitalisation
       of inter company debt                    -           3,800,000                   -            3,800,000
                                   ------------------ ------------------    -----------------   -----------------
                                         6,378,440        13,604,900             5,628,440         13,600,000
                                   =========== ==========                   ==========          ==========




The notes set out on pages 45 to 134 form an integral part of these financial statements.

                                                     44
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                         NOTES TO THE FINANCIAL STATEMENTS


1.   GENERAL INFORMATION

     The principal activities of the Company are those of an investment holding and management
     company. The principal activities of the subsidiary companies are set out in Note 11 to the
     financial statements.

     The Company is a limited liability company, incorporated and domiciled in Malaysia, and is
     listed on the Main Board of the Kuala Lumpur Stock Exchange and foreign section of the
     Tokyo Stock Exchange.

     The address of the registered office of the Company is as follows :-

     11th Floor, Yeoh Tiong Lay Plaza
     55, Jalan Bukit Bintang
     55100 Kuala Lumpur

     The address of the principal place of business of the Company is as follows :-

     11th Floor, Yeoh Tiong Lay Plaza
     55, Jalan Bukit Bintang
     55100 Kuala Lumpur


2.   SIGNIFICANT ACCOUNTING POLICIES

     (a)   Basis of preparation

           The financial statements of the Group and of the Company have been prepared under the
           historical cost convention (unless stated otherwise in the significant accounting policies
           below) and comply with the provisions of the Companies Act, 1965 and applicable
           approved Accounting Standards in Malaysia.

           The new accounting standards adopted in these financial statements are as follows :-

           MASB 22                Segment Reporting
           MASB 23                Impairment of Assets
           MASB 24                Financial Instruments : Disclosure and Presentation
           MASB 25                Income Taxes
           MASB 27                Borrowing Costs

           With the exception of MASB 25, there are no changes in accounting policy that affect
           the opening balances of retained profits of prior and current year as a result of the
           adoption of the above standards in these financial statements.

           The effect of adopting MASB 25 is disclosed in Note 48 to the financial statements.

                                                  45
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


          The preparation of financial statements in conformity with the applicable approved
          Accounting Standards in Malaysia and the provisions of the Companies Act requires the
          directors to make estimates and assumptions that affect the reported amounts of assets
          and liabilities and disclosure of contingent assets and liabilities at the date of the
          financial statements and the reported amounts of revenue and expenses during the
          reported period. Actual results could differ from those estimates.

          The accounting policies have been used consistently in dealing with items which are
          considered material in relation to the financial statements.

    (b)   Property, plant & equipment

          Property, plant & equipment except for freehold land and infrastructure assets are stated
          at cost/valuation less accumulated depreciation and accumulated impairment losses.

          Certain freehold and leasehold land and buildings were revalued by the directors in 1983
          based on valuations carried out by independent professional valuers on the open market
          basis. In accordance with the transitional provisions issued by the Malaysian Accounting
          Standards Board (MASB) on the adoption of Standard 15, “Property, Plant &
          Equipment”, the valuation of these property, plant & equipment have not been updated
          and they continue to be stated at their previously revalued amounts less depreciation.

          Infrastructure assets comprise a network of systems of mains and sewers, impounding
          and pumped raw water storage reservoirs, dams, sludge pipelines, sea outfalls and
          infrastructure investigations and studies. Expenditure on infrastructure assets relating to
          enhancements of the network is treated as additions, which are included after deducting
          connection charges and grants. The system or network is required to be maintained in
          perpetuity and on this basis is deemed to have no finite useful economic life.
          Accordingly, no depreciation is charged to the income statement in relation to the use of
          the infrastructure assets during the financial year. Maintenance costs incurred in respect
          of infrastructure assets are charged to the Income Statement as incurred.

          Property, plant and equipment retired from active use and held for disposal are stated at
          the lower of net book value and net realisable value.
          The carrying amounts of property, plant and equipment are reviewed at each balance
          sheet date to determine whether there is any indication of impairment. If such an
          indication exists, the assets recoverable amount is estimated. The impairment loss is
          charged to the Income Statement. Any subsequent increase in recoverable amount is
          reduced by the amount that would have been recognised as depreciation had the write-
          down or write-off not accrued. Such subsequent increase in recoverable amount is
          recognised in the Income Statement.




                                               46
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


          Freehold land and freehold oil palm plantation are not amortised whilst assets under
          construction are not depreciated. Depreciation for such assets and will only be charged
          when the construction of the assets are completed for their intended use.

          Depreciation on all other property, plant & equipment is calculated on the straight line
          basis at rates required to write off the cost of the property, plant & equipment over their
          estimated useful lives.

          The principal annual rates of depreciation used are as follows :-

          Leasehold land & buildings                                  Over the remaining period
                                                                       of the respective leases

                                                                                  %
          Factory & other buildings                                              2 - 20
          Mains & lines                                                            5
          Infrastructure & site facilities                                       5 - 20
          Plant, machinery & equipment                                           4 - 20
          Furniture, fixtures & equipment                                       10 - 50
          Motor vehicles & accessories                                          10 - 20
          Yachts & boats                                                        10 - 20
          Helicopter                                                               10
          Aircraft                                                                 10
          Crockery & other operating assets                                     10 - 50

    (c)   Investment properties

          Investment properties, principally comprising land and buildings which are held for
          investment potential and rental income and are not occupied by the Group. These
          properties are stated at cost less allowance for any diminution in value other than
          temporary. Investment properties are not subject to depreciation. Increases in their
          carrying amount are credited to revaluation reserves. Decreases that offset previous
          increases of the same asset are charged against revaluation reserve; all other decreases
          are charged to the Income Statement.

          Upon disposal of an investment property, the difference between the net disposal
          proceeds and the carrying amount is charged or credited to the Income Statement; any
          amount in revaluation reserve relating to that investment property is transferred to
          retained earnings.




                                                47
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


    (d)   Investment in subsidiaries and basis of consolidation

          Investment in subsidiaries is stated at cost less allowance made or amount written off for
          any diminution in value other than temporary. Diminution in value other than temporary
          of an investment is recognised as an expense in the period in which the diminution is
          identified.
          Subsidiaries are companies in which the Group has power to exercise control over their
          financial and operating policies so as to obtain benefits from their activities.
          The consolidated financial statements include the financial statements of the Company
          and its subsidiaries. The results of the subsidiaries acquired or disposed off during the
          year are included in the consolidated financial statements from the date of their
          acquisition or up to the date of their disposal.

          A subsidiary is excluded from consolidation when control is intended to be temporary if
          the subsidiary is acquired and held exclusively with a view of its subsequent disposal in
          the near future and it has not previously been consolidated or it operates under severe
          long term restrictions which significantly impair its ability to transfer funds to the
          company. Subsidiaries excluded on these grounds are accounted for as investments.
          The excess or deficit of the cost of acquisition over the fair value of the Group’s share of
          the identifiable net assets of the subsidiaries at the date of acquisition is included in the
          consolidated balance sheet as goodwill or reserve arising on consolidation as
          appropriate.
          The Company adopts the acquisition method of accounting in preparing the consolidated
          financial statements.
          All significant inter-company transactions and balances and the resulting unrealised
          profits are eliminated on consolidation. Unrealised losses resulting from inter-company
          transactions are also eliminated unless cost cannot be recovered.
          The financial statements of the subsidiaries which have been consolidated are based on
          the financial statements as at 30 June, 2003.

    (e)   Investment in associated companies

          Investment in associated companies is stated at cost less allowance made or amount
          written off for any diminution in value other than temporary. Diminution in value other
          than temporary of an investment is recognised as an expense in the period in which the
          diminution is identified.

          Associated companies are those companies in which the Group is in a position to
          exercise significant influence. Significant influence is the power to participate in the
          financial and operating policy decisions, but not control over their policies.


                                                48
Company No: 92647-H


                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)
                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


          Investment in associated companies is accounted for by the equity method of accounting
          in the consolidated financial statements. The Group’s share of results and reserves of the
          associated companies acquired or disposed of are included in the consolidated financial
          statements from the date of acquisition or up to the date of disposal based on the latest
          audited or management financial statements of the companies concerned.

          Unrealised profits arising on transactions between the Group and its associated
          companies which are included in the carrying amount of the related assets and liabilities
          are eliminated partially to the extent of the Group’s interests in the associated
          companies. Unrealised losses on such transactions are also eliminated partially unless
          cost cannot be recovered.

          Goodwill/Premium on acquisition is calculated based on the fair value of net assets
          acquired.

    (f)   Joint Ventures

          Joint controlled entities

          Jointly controlled entities are corporations, partnerships or other entities over which
          there is contractually agreed sharing of control by the Group with one or more parties.
          The Group’s interest in jointly controlled entities are accounted for in the consolidated
          financial statements by the equity method of accounting.

          Equity accounting involves recognising in the income statement the Group’s share of the
          results of jointly controlled entities for the financial year. The Group’s investments in
          jointly controlled entities are carried in the balance sheet at an amount that reflects its
          share of the net assets of the jointly controlled entities and includes goodwill on
          acquisition.

          Unrealised gains on transactions between the Group and its jointly controlled entities are
          eliminated to the extent of the Group’s interest in the jointly controlled entities;
          unrealised losses are also eliminated unless the transaction provides evidence on
          impairment of the asset transferred. Where necessary, in applying the equity method,
          adjustments are made to the financial statements of jointly controlled entities to ensure
          consistency of accounting policies with those of the Group.

          Jointly controlled operations

          Jointly controlled operations are formed to combine the operations, resources and
          expertise of the Group with third parties. Assets controlled and liabilities and expenses
          incurred by the Group are recognised directly in the financial statements of the relevant
          subsidiary companies and consequently in the consolidated financial statements of the
          Group.


                                               49
Company No: 92647-H


                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)
                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


    (g)   Investments

          Investments held on long term basis are stated at cost. An allowance is made when
          the directors are of the opinion that there is a diminution other than temporary in their
          value.

          Short term unquoted investments are stated at cost while short term quoted
          investments are carried at the lower of cost and market value, determined on an
          aggregate portfolio basis by category of investment. Cost is derived at on the
          weighted average basis. Market value is calculated by reference to quoted selling
          prices at the close of business on the balance sheet date. Increases or decreases in the
          carrying amount of short term investments are credited/charged to the Income
          Statement. An allowance is made when the Directors are of the opinion that there is a
          diminution in their value which is other than temporary.

    (h)   Deferred income

          Deferred income comprises grants and contributions in respect of specific
          expenditure on non-infrastructure fixed assets and are treated as deferred income and
          recognised in the income statement over the expected useful economic lives of the
          related assets.

          Other deferred income, which is included in other creditors, is related to unutilized
          airtime of prepaid telephony services packages. The deferred income will be
          progressively recognised as revenue based on actual airtime utilisation of the
          services.

    (i)   Development expenditure

          (i)    Land and development expenditure

                 Land and development expenditure which consist of land held for future
                 development and development costs are stated at cost of acquisition including
                 all related costs incurred subsequent to the acquisition on activities necessary to
                 prepare the land for its intended use.

          (ii)   Project development expenditure

                 Development expenditure incurred are capitalised and charged to contract
                 expenses upon commencement of the project. Where relevant and necessary,
                 they are written down to their recoverable amounts.




                                               50
Company No: 92647-H


                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)
                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


          (iii) Internet portal development expenditure

                 Development expenditure is charged to the Income Statement as and when
                 incurred except for development expenditure relating to specific projects with
                 technical and commercial viability, in which the Group has sufficient resources
                 to complete the development and there is clear indication of the marketability
                 of the products being developed. Such development expenditure is capitalised
                 and charged to the Income Statement on a straight line basis over a five-year
                 period or over the periods in which benefits are expected to be derived,
                 whichever is shorter, commencing in the year in which the related sales are
                 first made.

    (j)   Capital work-in-progress

          Capital work-in-progress, stated at cost, consist of development expenses incurred for
          the construction of cement plant.

    (k)   Amount due from/(to) contract customers
          Amount due from contract customers for construction contracts is the net amount of
          costs incurred plus recognised profits less the sum of recognised losses and progress
          billings, for all contracts in progress for which costs incurred plus recognised profits
          less recognised losses exceed progress billings.

          Where progress billings exceed the aggregate amount due from contract customers
          plus recognised profits less recognised losses, the net credit balance on all such
          contracts is shown in trade and other creditors as amount due to contract customers.
          Cost on construction contracts includes the cost of materials, direct labour,
          subcontract costs and attributable overheads which include interest expenses relating
          to the financing of the construction.

    (l)   Inventories
          (i)    Development properties
                 Inventories of developed properties held for resale are stated at the lower of
                 cost and net realisable value. Cost of developed properties is determined using
                 an appropriate basis of allocation and consists of land cost, construction costs
                 and related expenses.
          (ii)   Other inventories
                 Inventories are stated at the lower of cost and net realisable value on the
                 weighted average or first-in-first-out basis. Cost of finished goods and work-in-
                 progress consists of raw materials, direct labour, other direct charges and an
                 appropriate proportion of factory overheads.
                                              51
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


    (m)   Property development projects
          Property development projects are stated at cost plus attributable profits less foreseeable
          losses, net of progress billings.

          Cost comprises the cost of land acquired for development and relevant development
          expenditure including interest cost on loans and advances utilised to finance on-going
          development. Allowance is made for all anticipated losses.

    (n)   Bad and doubtful debts

          Known bad debts are written off and doubtful debts are provided for based on estimates
          of possible losses which may arise from non-collection of certain debtor accounts.

    (o)   Property maintenance funds

          Property maintenance funds relate to the accounts maintained in respect of the
          maintenance of the condominiums on behalf of the purchasers. All services charges and
          attributable expenses incurred have been credited/charged to these accounts. The excess
          of income over expenditure will be utilised for repairs and renewals in the future.
    (p)   Goodwill on consolidation

          Goodwill represents the excess of the cost of acquisition over the fair values of the
          identifiable net assets acquired.

          Goodwill is retained in the Consolidated Balance Sheet at cost and an impairment loss is
          recognised only when the directors are of the opinion that there is a diminution in its
          value other than temporary.
    (q)   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 or
          substantively enacted at the balance sheet date.
          Deferred tax is recognised in full, using the liability method, on temporary differences
          arising between the amounts attributed to assets and liabilities for tax purposes and their
          carrying amounts in the financial statements.

          Deferred tax assets are recognised to the extent that it is probable that taxable profit will
          be available against which the deductible temporary differences or unused tax losses can
          be utilised.

          Deferred tax is recognised on temporary differences arising on investments in
          subsidiaries, associates and joint ventures except where the timing of the reversal of the
          temporary difference can be controlled and it is probable that the temporary difference
          will not reverse in the foreseeable future.


                                                52
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)



           Tax rates enacted or substantively enacted by the balance sheet are used to determine
           deferred tax.

           In previous financial years, deferred tax was recognised for all timing differences. The
           effect of the change in accounting policy in respect of the recognition of deferred
           taxation, is shown in Note 41.

   (r)     Repurchase of shares
           Shares repurchased by the Company are held as treasury shares and are accounted for on
           the cost method. The amount of the consideration paid, including directly attributable
           costs, is recognised as cost and set off against equity.

     (s)   Provisions

           Provisions are recognised when the Group has a present legal or constructive obligation as a
           result of past events, when it is probable that an outflow of resources will be required to
           settle obligation, and when a reliable estimate of the amount can be made. Where the Group
           expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but
           only when the reimbursement is virtually certain.

           Restructuring provision

           Restructuring provisions mainly comprise employee termination payments, and are
           recognised in the financial year in which the Group becomes legally or constructively
           committed to payment. Employee termination benefits are recognised only either after an
           agreement is in place with the appropriate employee representatives specifying the terms of
           redundancy and the number of employees affected or after individual employees have been
           advised of the specific terms. Costs related to the on-going activities of the Group are not
           provided in advance. Any property, plant and equipment that are no longer required for their
           original use are transferred to current assets and carried at the lower of the carrying amount
           and estimated net realisable value.

           Retirement benefits

           The cost of providing benefits is charged to the income statement on a basis designed to
           spread the cost over the average service lives of employees. Differences between the
           amount funded and amount charged to the income statement are treated either as
           provisions or prepayments in the balance sheet. The retirement benefits schemes are of
           the defined benefit type, which are externally funded and valued by independent actuary.




                                                  53
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)

    (t)   Finance lease

          Where assets are financed by leasing arrangements, which transfer substantially all the
          risks and rewards of ownership of an asset to the lessee (finance leases), the assets are
          treated as if they had been purchased and the corresponding capital cost is shown as an
          obligation to the lessor. Leasing payments are treated as consisting of a capital element
          and finance costs, the capital element reducing the obligation to the lessor and the finance
          charge being written off to the Income Statement over the period of the lease in reducing
          amounts in relation to the outstanding obligations. These assets are depreciated over the
          shorter of their useful lives and the period of the lease. All other leases are regarded as
          operating leases. Rental costs arising under operating leases are written off in the year
          they are incurred.
    (u)   Reserve on consolidation
          Reserve on consolidation represents the excess of the fair values of the identifiable net
          assets acquired over the cost of acquisition.
    (v)   Revenue recognition
          Revenue is recognised to the extent that it is probable that the economic benefits will
          flow to the Group and the revenue can be reliably measured. The specific recognition
          criteria for revenue are as follows :-
          (i)    Sale of goods and rendering of services
                 Revenue from sale of goods is measured at the fair value of the consideration
                 receivable and is recognised when the significant risks and rewards of ownership of
                 the goods have passed to the buyers.
                 Revenue from rendering of services is recognised in the Income Statement in
                 proportion to the stage of completion of the transaction at the balance sheet date.
                 The stage of completion is assessed by reference to the proportion that costs
                 incurred to date that reflect services performed to the total estimated costs of the
                 transaction. Where the outcome of the transaction cannot be estimated reliably,
                 revenue is recognised only to the extent of the expenses recognised that are
                 recoverable.
          (ii)   Sale of electricity
                 Revenue is recognised upon performance of services based on the invoiced value of
                 sale of electricity net of discounts allowed.
          (iii) Sale of water and the treatment and disposal of waste water
                 Revenue from supply of clean water and treatment and disposal of waste water
                 represents the amounts (excluding value added tax) derived from the provision of
                 goods and services to third party customers. The revenue also includes an estimate
                 of the value of services provided between the last meter reading date and the
                 financial year end.




                                                54
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


         (iv)   Property development projects
                Revenue from property development is recognised on the percentage of completion
                method. Where foreseeable losses are anticipated, full provision for these losses is
                made in the financial statements.
         (v)    Construction contracts
                Contract revenue from fixed price construction contracts is recognised on the
                percentage of completion method when the outcome of the contracts can be reliably
                estimated. The percentage of completion is measured by reference to the contract
                costs incurred for contract works performed to date compared to the total estimated
                contract costs.
                Where the outcome of a construction contract cannot be estimated reliably, revenue
                is recognised only to the extent of contract costs incurred that is probable to be
                recoverable and contract costs are recognised as an expense in the period in which
                they are incurred.
                An expected loss on a contract is recognised immediately in the Income Statement.
         (vi)   Interest
                Revenue is recognised as the interest income accrues, taking into account the
                effective yield on the asset.
         (vii) Dividends
                Revenue is recognised when the shareholders’ right to receive the payment is
                established.
         (viii) Rental
                Revenue is recognised on received and receivable basis unless collectibility is in
                doubt.
         (ix)   Hotel and restaurant operations
                Revenue from room rental is recognised on the accrual basis. Revenue from the
                sale of goods and beverages is recognised based on invoiced value of goods sold.
         (vii) Interest capitalisation
                Interest on borrowings relating to property, plant & equipment is capitalised as part
                of the cost of assets during the financial year or time that is required to complete
                and prepare the assets for its intended use. Interest on borrowings relating to
                development property is capitalised during the period in which the activities to
                prepare and develop the property are carried out.




                                                  55
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)

    (w)   Foreign currencies
          (i)    Transaction in foreign currencies
                 Foreign currency transactions in Group companies are accounted for at exchange
                 rates prevailing at the transaction dates, unless hedged by forward foreign exchange
                 contracts, in which case the rates specified in such forward contracts are used.
                 Foreign currency monetary assets and liabilities are translated at exchange rates
                 prevailing at the balance sheet date, unless hedged by forward foreign exchange
                 contracts, in which case the rates specified in such forward contracts are used.
                 Exchange differences arising from the settlement of foreign currency transactions
                 and from the translation of foreign currency monetary assets and liabilities are
                 included in the income statement.

          (ii)   Translation of financial statements of foreign entities

                 The Group’s foreign entities are those operations that are not an integral part of the
                 operations of the Company. Income statements of foreign entities are translated into
                 Ringgit Malaysia at average exchange rates for the financial year and the balance
                 sheets are translated at exchange rates ruling at the balance sheet date. Exchange
                 differences arising from the retranslation of the net investment in foreign entities and
                 of borrowings that hedge such investments are taken to ‘exchange difference reserve’
                 in shareholders’ equity. On disposal of the foreign entity, such translation differences
                 are recognised in the income statement as part of the gain or loss on disposal.

                 Goodwill and fair value adjustments arising on the acquisition of a foreign entity are
                 treated as assets and liabilities of the Company and are translated accordingly at the
                 exchange rate ruling at the date of the transaction.

          The exchange rates (Ringgit Malaysia per unit of foreign currency used) ruling at balance
          sheet date are as follows :-
                                                                      2003              2002
                                                                       RM                RM

          1 Australian Dollar                                              2.53               2.15
          1 Hong Kong Dollar                                               0.49               0.49
          1 Papua New Guinea Kina                                          1.09               0.95
          1 Singapore Dollar                                               2.16               2.15
          1 Sterling Pound                                                 6.28               5.78
          1 Thailand Baht                                                  0.09               0.11
          1 US Dollar                                                      3.80               3.80
          1 Euro                                                           4.34               3.76
          1 Great Britain Pound                                            6.28               5.78

    (x)   Financial instruments

          Financial instruments carried on the balance sheet include cash and bank balances,
          investments, receivables, payables, leases and borrowings. The particular recognition
          methods adopted are disclosed in the individual policy statements associated with each
          item, where applicable.

                                                 56
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)

          The Company and the Group are also parties to financial instruments that reduce exposure
          to fluctuations in interest rates. These instruments are not recognised in the financial
          statements on inception except that amounts paid on inception are recognised as prepaid
          interest and amortised as a component of interest expense over the period of the contract.

          Any other differential to be paid or received on an interest rate swap contract is
          recognised as a component of interest income or expense over the period of the contract.
          Gains and losses on early termination of interest rate swaps or on repayment of the
          borrowings are taken to the income statement. Interest rate swap contracts protect the
          Group and the Company from movements in interest rates.

          Fair value estimation for disclosure purpose

          The fair value or publicly traded derivates and securities is based on quoted market prices
          at the balance sheet date.

          The fair value of interest rate swaps is calculated at the present value of the estimated
          future cash flows.

          In assessing the fair value of non-traded derivatives and financial instrument, the Group
          uses a variety of methods and makes assumptions that are based on market conditions
          existing at each balance sheet date. Quoted market prices or dealer quotes for the specific
          or similar instruments are used for long term debt. Other techniques, such as estimated
          discounted value of future cash flows, are used to determine fair value for the remaining
          financial instruments. In particular, the fair value of financial liabilities is estimated by
          discounting the future contractual cash flows at the current market interest rate available
          to the Group for similar instruments.

          The face values of financial assets (less any estimated credit adjustments) and financial
          liabilities with a maturity period of less than one year are assumed to approximate their
          fair values.

          Comparatives and compound instruments are not disclosed upon first application of
          MASB 24, as permitted by the Standard.

    (y)   Borrowings

          Borrowings are initially recognised based on the proceeds received, net of transaction
          costs incurred, including underwriting expenses. In subsequent financial years,
          borrowings are stated at amortised cost using the effective yield method; any difference
          between proceeds (net of transaction costs) and the redemption value is recognised in the
          income statement over the period of the borrowings.

    (z)   Cash and cash equivalents

          Cash and cash equivalents consist of cash in hand and deposits held at call with financial
          institutions and highly liquid investments which have an insignificant risk of changes in
          value. For the purpose of the Cash Flow Statements, cash and cash equivalents are
          presented net of bank overdrafts.



                                                57
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)

     (aa) Segment reporting
           Segment reporting is presented for enhanced assessment of the Group’s risks and returns.
           Business segments provide products or services that are subject to risk and returns that
           are different from those of other business segments. Geographical segments provide
           products or services within a particular economic environment that is subject to risks and
           returns that are different from those components operating in other economic
           environments.
           Segment revenue, expense, asset and liabilities are those amounts resulting from the
           operating activities of a segment that are directly attributable to the segment and the
           relevant portion that can be allocated on a reasonable basis to the segment. Segment
           revenue, expenses, assets and liabilities are determined before intragroup balances and
           intragroup transactions are eliminated as part of the consolidated process, except to the
           extent that such intragroup balances and transactions are between group enterprises
           within a single segment.

     (bb) Government grants
           Government grants in respect of infrastructure assets are deducted directly against the
           cost of acquisition of infrastructure assets.
           Government grants relating to the purchase of non-infrastructure assets are included in
           non-current liabilities as deferred income and are credited to the income statement on a
           straight line basis over the expected lives of the related assets.


3.   REVENUE
                                                     Group                               Company
                                              2003               2002             2003              2002
                                              RM                 RM               RM                RM
     Sale of goods                    450,330,930        450,912,431                -                 -
     Rendering of services              54,938,003         73,455,223              3,003               519
     Sale of electricity            1,264,392,063 1,276,955,908                     -                 -
     Sale of water, treatment and
      disposal of waste water       1,735,136,692        136,832,923              -                  -
     Property development projects      64,047,405         88,145,738             -                  -
     Construction contracts           125,718,187        318,981,429              -                  -
     Interest                         105,921,383          90,901,158       10,158,500          1,471,745
     Gross dividends
      - quoted                          64,436,371            456,591      275,975,602       135,116,666
      - unquoted                                -                  -       156,533,366        12,113,889
     Rental                             55,838,207        39,949,607                 -                 -
     Hotel & restaurant operations    106,077,581         91,350,194                 -                 -
                                   ------------------ ------------------   ---------------   ---------------
                                    4,026,836,822 2,567,941,202            442,670,471       148,702,819
                                   =========== ===========                 =========         =========




                                                   58
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)


     Dividend income of the Company include dividends received from :-

                                                                             2003          2002
                                                                             RM            RM

     Quoted subsidiaries                                                275,966,477   135,098,991
     Unquoted subsidiaries                                              156,533,366          -
     Unquoted associated company                                                  -    12,113,889
                                                                        =========     =========


4.   PROFIT FROM OPERATIONS
                                                      Group                      Company
                                             2003           2002             2003        2002
                                                          (Restated)
                                             RM              RM              RM            RM
     Profit from operations is stated
      after charging :-
     Allowance for doubtful debts         1,359,867       3,091,294            -            -
     Amortisation of development
      expenditure                          207,260            207,260          -            -
     Building maintenance and other
      related cost                        1,825,376              -             -            -
     Directors’ remuneration
      - emoluments                        7,170,963       8,551,050           -          730,400
      - fees                              1,516,480         620,000        260,000       220,000
     Auditors’ remuneration
      - statutory
      - current                           2,552,612         941,301          98,000       95,000
      - prior year                           69,000           9,000            -            -
      - others                              142,000          11,800            -            -
     Bad debts written off                1,563,968       4,364,313            -            -
     Bonus issue expenses,
      Bonds issue expenses
      & rating fees                          86,500         334,881         86,500       192,449
     Depreciation (Note 9)              476,261,339     178,237,007        257,320       151,698
     Development expenditure
      written off                        10,049,746       4,933,770            -            -




                                               59
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

               NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                                     Group                      Company
                                             2003               2002        2003      2002
                                                              (Restated)
                                             RM                  RM         RM         RM

    Hiring of plant, machinery,
     equipment & motor vehicles          5,322,148        1,719,065         16,000    48,000
    Loss on disposal of property,
     plant & equipment                   2,899,265                  51        -         -
    Loss on foreign exchange
     - realised                          1,441,293              75,351        -         -
     - unrealised                          193,821             658,363      33,575      -
    Other debtors’ balance waived            6,779                -           -         -
    Other rental                           535,641                -           -         -
    Preliminary & pre-operating
     expenses written off                      -                 1,800        -         -
    Property, plant & equipment
     written off                           435,771          995,495          1,907      -
    Provision for restructuring cost     1,577,392             -              -         -
    Rental of cylinder                       1,202             -              -         -
    Rental of land & buildings          21,927,082        6,112,770        599,400   599,400
    Rental of network & system
     connectivity                             -                -            70,846   145,739
    Rental of office equipment             388,077          302,022           -         -
    Rental of plant & machinery         12,065,830        1,156,416           -         -
    Waiver of interest receivable
     from tenant                           96,468            -         -         -
                                       =========       ========= ========= =========

    And crediting (other than those disclosed in Note 3) :-

    Bad debts recovered                    687,359           32,500           -         -
    Fixed deposit interest             121,585,011       28,979,173           -         -
    Gain on dilution of interest in
     subsidiaries                              -          1,218,487           -         -
    Gain on disposal of property,
     plant & equipment                   1,302,081        1,401,376           -       50,000
    Gain on disposal of subsidiaries          -             170,407           -         -
    Gain on foreign exchange
     - realised                             39,758          223,265           -             35
     - unrealised                       11,613,382       31,661,074           -         -




                                              60
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

               NOTES TO THE FINANCIAL STATEMENTS - (Continued)

                                                      Group                 Company
                                            2003               2002     2003      2002
                                            RM                 RM       RM          RM
    Gross dividend from
     quoted investments
     - within Malaysia                     138,936             91,212     -            -
    Gross dividend from associated
     company                             1,168,472               -        -            -
    Hiring income on plant,
     machinery & equipment                 102,121               -        -            -
    Hire of motor vehicles                 108,517            293,765     -            -
    Interest income from associated
     company                               281,944             73,303     -            -
    Management fees received                12,000               -        -            -
    Net write back of liquidated
     ascertained damages                 7,542,000             -          -            -
    Other interest income                5,950,934        2,362,569       -            -
    Rental income                        1,145,790          898,146       -            -
    Reversal of investment written off        -              20,730       -          20,730
    Reversal of allowance for
     doubtful debts                           -                91,899     -            -
    Waiver of debt by related companies 183,517                  -        -            -
    Write back of liquidated
     ascertained damages                      -          12,519,000     -         -
                                       =========        ========= ========= =========
    Cost of inventories and cost of construction contracts recognised as an expense to the
    Income Statement included in cost of sales were as follows :-
                                                      Group
                                            2003               2002
                                            RM                 RM
    Cost of inventories (for goods
     sold, electricity and water sold)1,996,813,184     975,885,492
                                        =========       =========
    Cost of construction contracts    324,171,130       285,640,925
                                      =========         =========
    The aggregate remuneration of directors categorised into appropriate components as at 30
    June, 2003 are as follows :-
                                     Salaries      Fees       Bonus      Others      Total
                                       RM          RM          RM         RM          RM
    Executive directors              7,050,000  540,000 2,440,000 1,555,450 11,585,450
    Non-executive directors               -     180,000      -         -       180,000
                                     ======= ======= ======= ======= =======
                                             61
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)


     The number of directors of the Company whose total remuneration fall within the following
     bands for the financial year ended 30 June, 2003 are as follows :-
                                                                           No. of Directors
     Range of remuneration                                            Executive     Non-Executive

     Below RM50,001
     RM50,001 - RM550,000
     RM550,001 - RM600,000
     RM600,001 - RM700,000
     RM700,001 - RM750,000
     RM750,001 - RM800,000
     RM800,001 - RM850,000
     RM850,001 - RM1,150,000
     RM1,150,001 - RM1,200,000
     RM1,200,001 - RM1,300,000
     RM1,300,001 - RM1,350,000
     RM1,350,001 - RM1,400,000
     RM1,400,001 - RM1,850,000
     RM1,850,001 - RM1,900,000
     RM1,900,001 - RM1,950,000
                                                                          ========              ========


5.   FINANCE COSTS
                                                          Group                             Company
                                               2003                2002              2003               2002
                                               RM                  RM                RM                 RM

     Bonds interest                     236,971,511         135,538,118        11,372,409         11,372,409
     Bank overdrafts interest                729,847            762,717              -                  -
     Bankers acceptances, trust receipts,
      hire purchase & other interest 103,589,133               4,168,571               -                 -
     Interest paid to subsidiaries                -                 -                  -            1,748,987
     Term loans, revolving credits,
      time loans & bridging loans
      interest                          334,009,010           61,799,599        28,928,445        18,722,454
                                        ---------------     ---------------   ---------------    ---------------
                                        675,299,501         202,269,005        40,300,854         31,843,850
                                        =========           =========         =========          =========




                                                   62
Company No: 92647-H
                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)
                      NOTES TO THE FINANCIAL STATEMENTS - (Continued)


6.    TAXATION
                                                          Group                             Company
                                               2003                2002              2003              2002
                                               RM                  RM                RM                RM
      In Malaysia

       Tax expense
        - current                       150,854,666         144,649,041       110,506,000        30,433,215
- prior year                             (2,435,452)          2,328,608            -                893,020
       Transfer to deferred taxation    175,938,848          61,178,461            -                   -
       Share of tax of
        associated companies                 703,740           1,753,210             -                    -
                                        ---------------     ---------------   ---------------   ---------------
                                        325,061,802         209,909,320       110,506,000        31,326,235

      Outside Malaysia

      Tax expense
       - current                                   540         1,252,685                -                 -
       - prior year                    (115,675,943)              (91,582)              -                 -
                                        ---------------     ---------------   ---------------   ---------------
                                        209,386,399         211,070,423       110,506,000        31,326,235
                                        =========           =========         =========         =========

      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 :-
                                                     Group                      Company
                                             2003             2002            2003           2002
                                                           (Restated)
                                             RM                RM             RM              RM

      Profit before taxation            996,843,419         799,213,415       429,748,096       105,638,897
                                       ==========           =========         =========         =========




                                                   63
Company No: 92647-H
                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)
                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                                         Group                       Company
                                              2003              2002                2003             2002
                                                              (Restated)
                                              RM                 RM                 RM                RM

    Income tax using Malaysian
     tax rate of 28% (2002: 28%)       279,116,156         223,779,767       120,329,467        29,578,891
    (Deductible)/non deductible
     expenses                            (1,792,892)        10,261,931         (9,929,797)       1,043,355
    Reinvestment allowances              (5,609,847)        (2,579,107)              -                -
    Tax exempt income                    (3,974,694)       (29,707,662)              -                -
    Utilisation of
     - Industrial building allowances (7,786,479)                   -                 -                 -
     - unutilised capital allowances
         brought forward                 (3,916,518)         (8,722,466)              -                 -
     - unabsorbed tax losses               (380,266)               -                  -                 -
    Reversal of deferred tax assets
     not recognised in prior year        (2,998,766)         (4,086,729)              -                 -
    Difference tax rates in
     other countries                      5,159,290              897,252              -                 -
    Profit from subsidiaries acquired
     during the year of which taxation
     was provided before date
     of acquisition                      (6,074,959)                -                 -                 -
    Deferred tax assets
     not recognised                         892,246              101,822              -                 -
    (Over)/Under provision in prior
     year                               (41,812,920)         (4,184,824)               -            893,020
    Other items                          (1,433,952)         25,310,439           106,330          (189,031)
                                       ---------------     ---------------   ---------------   ---------------
    Taxation                           209,386,399         211,070,423       110,506,000        31,326,235
                                      =========            =========         =========         =========

    The unutilised capital allowances and unabsorbed tax losses of the Company carried forward as
    at 30 June, 2003 are estimated at RM1,385,376 (2002: RM1,231,078) and RM64,499,708
    (2002: RM64,499,708) respectively. These are, however, subject to confirmation by the Inland
    Revenue Board.

    Subject to agreement with the Inland Revenue Board, the Company has exempt income
    amounting to RM15,008,587(2002:RM15,008,587) pursuant to Section 12 of the Income Tax
    (Amendment) Act, 1999, from which tax exempt dividends can be declared.

    The Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 to frank
    the payment of dividends of RM112,829,292 (2002: RM141,266,038) out of its unapproriated
    profits as at 30 June, 2003. The extent of the unappropriated profits not covered at that date
    amounted to RM3,606,375,902 (2002: RM3,113,847,032). This is, however, subject to
    confirmation by the Inland Revenue Board.

                                                 64
Company No: 92647-H
                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)
                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


7.   EARNINGS PER SHARE (EPS)
                                                                                   Group
                                                                        2003                  2002
     Basic EPS

         Net profit for the year/Net profit attributable
          to ordinary shareholders (RM’000)                           511,737              363,351
                                                                 ---------------      ---------------
         Weighted average number of ordinary shares in
          issue for basic EPS (’000)                                1,450,674            1,449,958
                                                                 ---------------      ---------------

         Basic EPS (sen)                                              35.28               25.06
                                                                 =========           =========

     Basic EPS of the Group is calculated by dividing the net profit attributable to ordinary
     shareholders by the weighted average number of ordinary shares in issue during the year.

                                                                                   Group
                                                                        2003                  2002
     Diluted EPS
         Net profit for the year/Net profit attributable
          to ordinary shareholders (RM’000)                         511,737             363,351
                                                                 =========           =========
                                                                                Group
                                                                        2003              2002
                                                                         No. of shares (’000)
         Weighted average number of
          ordinary shares in issue for basic EPS as above          1,450,674               1,449,958
         Adjustments for :-
          - conversion of Convertible Bonds                                    -                  12
          - exercise of Options and
             warrants to ordinary shares                                       -              1,049
          - ordinary shares deemed issued
             for no consideration on assumed
             exercise of Options and Warrants                           22,380               30,341
                                                                 ---------------      ---------------
                                                                    1,473,054            1,481,360
                                                                 ---------------      ---------------
         Diluted EPS (sen)                                            34.74               24.53
                                                                 =========           =========
     For the diluted EPS calculation, the weighted average number of ordinary shares in issue is
     adjusted to assume conversion of all dilutive potential ordinary shares.
     The comparative EPS has been restated and adjusted retrospectively to take into account
     the effect of share dividends.
                                           65
Company No: 92647-H
                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)
                NOTES TO THE FINANCIAL STATEMENTS - (Continued)


8.   DIVIDENDS

     Dividends declared or proposed in respect of the respective financial year are as follows :-

                                                                                 Company
                                                                          2003               2002
                                                                          RM                 RM
     Ordinary
        Final proposed :-
        15 % per share less 28% tax
        (2002: 15% per share less 28% tax)                          78,311,463          78,353,313
                                                                   =========            ========

     At the forthcoming Annual General Meeting, a final gross dividend in respect of the year
     ended 30 June, 2003 of 7.5 sen per 50 sen share (2002: 7.5 sen per 50 sen share) amounting
     to RM78,311,463 (2002: RM78,353,313) will be proposed for shareholders’ approval. The
     financial statements do not reflect this final dividend which will be accrued as a liability in
     the year ending 30 June, 2004 when approved by shareholders.




                                                66
Company No: 92647-H
                                                                             YTL CORPORATION BERHAD
                                                                               (Incorporated in Malaysia)
                                                           NOTES TO THE FINANCIAL STATEMENTS - (Continued)


9.   PROPERTY, PLANT & EQUIPMENT

     Group
                                       ---------------------------------------------------------------------------- Cost/Valuation -----------------------------------------------------------------------------------
                                        Balance at         Arising on         Subsidiary                                                         Grants &          Transfers/       Translation          Balance at
                                         1.7.2002         acquisitions       disposed of        Additions Disposals Written off               Contributions          Others         differences          30.6.2003
                                       --------------     ---------------     -------------- ------------ ------------ -------------           ----------------- ------------ --------------             -------------
                                             RM                  RM               RM                 RM             RM          RM                  RM                 RM                 RM                  RM

     Freehold land
      - at cost                   92,909,649                 -                -                 4,283            -              -                   -                  -            6,225,660         99,139,592
      - at valuation               7,192,937                  -               -                  -               -              -                   -                  -                  -             7,192,937
     Long term leasehold land
      - at cost                   32,616,659                  -               -                  -               -              -                   -                  -            7,217,313         39,833,972
     Short term leasehold land
      - at cost                   17,096,905              122,691             -                  -               -              -                   -                  -                  -           17,219,596
      - at valuation               1,869,227                  -               -                  -        (1,669,227)           -                   -                  -                  -               200,000
     Buildings on freehold land
      - at cost                 108,290,367                  -                -              260,000             -              -                   -                                     -          108,550,367
      - at valuation               2,716,131                  -               -                  -               -              -                   -                  -                  -             2,716,131
     Buildings on long term
      leasehold land
      - at cost                 133,083,256                  -                -                  -               -              -                   -                        -            -          133,083,256
                                ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
     Balance carried forward    395,775,131               122,691             -              264,283 (1,669,227)                -                   -                        - 13,442,973            407,935,851




                                                                                                  67
Company No: 92647-H
                                                                               YTL CORPORATION BERHAD
                                                                                 (Incorporated in Malaysia)
                                                            NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                        ----------------------------------------------------------------------------- Cost/Valuation ----------------------------------------------------------------------------------
                                         Balance at       Arising on        Subsidiary                                                         Grants &         Transfers/          Translation           Balance at
                                          1.7.2002       acquisitions disposed of             Additions         Disposals Written off Contributions               Others            differences           30.6.2003
                                        -------------- --------------- --------------- -------------           ------------- -------------   ----------------- ------------          --------------       -------------
                                              RM                 RM             RM                 RM               RM              RM              RM               RM                    RM                  RM

   Balance brought forward         395,775,131             122,691            -              264,283       (1,669,227)              -                 -                -             13,442,973         407,935,851
   Building on short term
    leasehold land
    - at cost                        14,843,959                -              -              326,763               -                -                 -                -                     -           15,170,722
   Freehold oil palm plantation
    - at valuation                    2,000,000                -              -                  -                 -                -                 -                -                     -             2,000,000
   Factory & other buildings 3,299,889,940                   10,000           -         155,722,845           (603,013)        (15,382)               -                -            215,453,452 3,670,457,842
   Mining lease                         343,522                -              -                  -                 -                -                 -                -                     -               343,522
   Mains & lines                     22,699,942                -              -                  -                 -                -                 -                -                     -           22,699,942
   Infrastructure & site
    facilities                   3,706,974,862                9,120           -         209,239,918                -                -        (29,547,613)              -            318,907,194 4,205,583,481
   Plant, machinery &
    equipment                    4,751,975,862               72,600           -         473,596,417 (23,640,982) (1,383,078)                          -          3,591,893          182,784,725 5,386,997,437
   Furniture, fixtures &
    equipment                      177,490,845             773,298            -         102,550,864        (1,899,657)         (15,435)               -                -             11,979,531         290,879,446
   Motor vehicles                  159,778,466             406,828            -          14,513,746        (9,761,876) (1,593,394)                    -                -                 401,669        163,745,439
                                ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   Balance carried forward     12,531,772,529            1,394,537            -         956,214,836 (37,574,755) (3,007,289) (29,547,613)                        3,591,893          742,969,544 14,165,813,682




                                                                                                   68
Company No: 92647-H
                                                                               YTL CORPORATION BERHAD
                                                                                 (Incorporated in Malaysia)
                                                            NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                      ----------------------------------------------------------------------------------- Cost/Valuation --------------------------------------------------------------------------------
                                         Balance at           Arising on         Subsidiary                                                        Grants &           Transfers/ Translation                Balance at
                                          1.7.2002           acquisitions       disposed of        Additions Disposals Written off Contributions                        Others         differences          30.6.2003
                                        --------------       --------------- --------------- ------------ ------------- -------------- -----------------               ------------ --------------          -------------
                                               RM                   RM               RM                 RM              RM            RM                  RM               RM                RM                  RM

   Balance brought forward 12,531,772,529                  1,394,537              -         956,214,836 (37,574,755) (3,007,289) (29,547,613)                         3,591,893 742,969,544 14,165,813,682
   Motor vehicles accessories             35,703                 -                -                  -               -                -                    -                -                 -                 35,703
   Yachts & boats                   11,058,744                    -               -                  -               -                -                    -                -           4,128,321         15,187,065
   Helicopter                       15,152,214                    -               -                  -          (893,344)             -                    -                -                 -           14,258,870
   Aircraft                           1,323,708                   -               -                  -               -                -                    -                -                 -             1,323,708
   Crockery & other operating
    assets                              589,783                   -               -                  -               -                -                    -                -                 -               589,783
   Buildings & renovation
    work-in-progress               446,574,316                    -               -         109,831,582              -                -                    -         (3,607,643) 41,365,511              594,163,766
                            --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                               13,006,506,997              1,394,537              -      1,066,046,418 (38,468,099) (3,007,289)                   (29,547,613)           (15,750) 788,463,376 14,791,372,577
                           ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




                                                                                                   69
Company No: 92647-H
                                                                        YTL CORPORATION BERHAD
                                                                          (Incorporated in Malaysia)
                                                       NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                     -------------------------------------------------------------------- Accumulated Depreciation ------------------------------------------------------------
                                     Balance at       Arising on         Subsidiary          Charge                                   Grants & Transfers/ Translation Balance at
                                      1.7.2002       acquisitions        disposed of for the year Disposals Written off Contributions Others differences                           30.6.2003
                                     (Restated)
                                     ------------ ---------------        -------------- -------------- ------------ -------------- ----------------- ------------ -------------- ------------
                                          RM                RM               RM                  RM           RM        RM                  RM         RM             RM                RM
   Freehold land
    - at cost                            -                 -                -                   -               -            -                   -           -              -                 -
    - at valuation                       -                 -                -                   -               -            -                   -           -              -                 -
   Long term leasehold land
    - at cost                     1,532,053                -                -               486,034             -            -                   -           -              -           2,018,087
   Short term leasehold land
    - at cost                     3,713,502             36,250              -               726,800             -            -                   -           -              -           4,476,552
    - at valuation                  239,076                -                -                  4,000      (143,076)          -                   -           -              -             100,000
   Buildings on freehold land
    - at cost                     4,479,042                -                -               766,324             -            -               (36,100)        -              -           5,209,266
    - at valuation                    87,307               -                -                29,103             -            -                   -           -              -             116,410
   Buildings on long term
    leasehold land
    - at cost                       870,554                -                -               683,131             -            -                   -           -              -           1,553,685
   Buildings on short term
    leasehold land
    - at cost                       848,684                -                -               313,741             -            -                   -           -              -           1,162,425
   Freehold oil palm plantation
    - at valuation                       -                 -                -                   -               -            -                   -           -              -                 -
                              ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
   Balance carried forward       11,770,218             36,250              -            3,009,133        (143,076)          -               (36,100)        -              -         14,636,425

                                                                                          70
Company No: 92647-H
                                                                         YTL CORPORATION BERHAD
                                                                           (Incorporated in Malaysia)
                                                        NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                     ----------------------------------------------------------------------- Accumulated Depreciation ------------------------------------------------------------
                                     Balance at       Arising on          Subsidiary         Charge                                    Grants & Transfers/ Translation               Balance at
                                      1.7.2002       acquisitions        disposed of for the year Disposals Written off Contributions Others differences                             30.6.2003
                                     (Restated)
                                     ------------ ---------------         -------------- -------------- ------------ -------------- ----------------- ----------- --------------     -------------
                                          RM                 RM               RM                 RM             RM          RM               RM          RM              RM                RM
   Balance brought forward 11,770,218                     36,250              -            3,009,133        (143,076)             -            (36,100)        -                -         14,636,425
   Factory & other buildings 240,379,164                   1,666              -          96,647,712         (603,013)         (15,381)             -           -          2,935,419 339,345,567
   Mining lease                       343,519                -                -                   -               -               -                -           -                -             343,519
   Mains & lines                    8,512,478                -                -            1,134,997              -               -                -           -                -           9,647,475
   Infrastructure & site facilities 565,468                9,119                                8,713             -               -                -           -                -             583,300
   Plant, machinery &
    equipment                    752,851,936               5,683              -         322,356,420 (15,536,443) (955,726)                         -           -          9,892,039 1,068,613,909
   Furniture, fixtures &
    equipment                     51,036,527            578,301                          43,734,942 (1,279,664)                (8,811)             -           -          1,724,394       95,785,689
   Motor vehicles                109,043,351            218,889               -          12,298,990 (8,858,519) (1,593,351)                        -           -             50,675 111,160,035
   Motor vehicles accessories          35,700                -                -                   -               -              -                 -           -                -               35,700
   Yachts & boats                   6,515,668                -                -              917,778              -              -                 -           -                -           7,433,446
   Helicopter                       6,149,527                -                -              855,532        (268,003)            -                 -           -                -           6,737,056
   Aircraft                           317,688                -                -                79,423             -               -                -           -                -             397,111
   Crockery & other operating
    assets                            454,350                -                -                51,717             -               -                -           -                -             506,067
   Buildings & renovation
    work-in-progress                      -                  -                -                   -               -              -                 -           -                -                  -
                               -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                              1,187,975,594             849,908               -         481,095,357 (26,688,718) (2,573,269)                   (36,100)        -        14,602,527 1,655,225,299
                              -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                                           71
Company No: 92647-H
                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)
                NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                                                                     Depreciation for
                                                        Net Book Value                the year ended
                                                at 30.6.2003     at 30.6.2002            30.6.2002
                                                                  (Restated)             (Restated)
                                                ---------------  ---------------     --------------------
                                                        RM               RM                       RM

   Freehold land
    - at cost                                    99,139,592          92,909,649                    -
    - at valuation                                7,192,937           7,192,937                    -
   Long term leasehold land
    - at cost                                    37,815,885          31,084,606                499,912
   Short term leasehold land
    - at cost                                    12,743,044          13,383,403                718,434
    - at valuation                                  100,000           1,630,151                 51,692
   Buildings on freehold land
    - at cost                                   103,341,101        103,811,325                 818,744
    - at valuation                                2,599,721          2,628,824                  29,103
   Buildings on long term leasehold land
    - at cost                                   131,529,571        132,212,702                 676,996
   Building on short term leasehold land
    - at cost                                    14,008,297          13,995,275                228,358
   Freehold oil palm plantation
    - at valuation                               2,000,000           2,000,000                   -
   Factory & other buildings                 3,331,112,275       3,059,510,776             38,204,060
   Mining lease                                          3                   3                   -
   Mains & lines                                13,052,467          14,187,464              1,134,997
   Infrastructure & site facilities          4,205,000,181       3,706,409,394                 59,788
   Plant, machinery & equipment              4,318,383,528       3,999,123,926            121,033,485
   Furniture, fixtures & equipment             195,093,757         126,454,318             11,771,047
   Motor vehicles                               52,585,404          50,735,115              6,060,462
   Motor vehicles accessories                            3                   3                   -
   Yachts & boats                                7,753,619           4,543,076                916,000
   Helicopter                                    7,521,814           9,002,687                909,133
   Aircraft                                        926,597           1,006,020                 79,422
   Crockery & other operating assets                83,716             135,433                  9,194
   Buildings & renovation
    work-in-progress                            594,163,766        446,574,316                     -
                                           -------------------- ------------------    ------------------
                                            13,136,147,278 11,818,531,403                183,200,827
                                           ============ ===========                   ===========




                                                 72
Company No: 92647-H
                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)
                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)


   Depreciation charge for the year is allotted as follows :-
                                                       Group                           Company
                                              2003            2002                  2003       2002
                                                            (Restated)
                                              RM               RM                    RM                RM
   Income Statement (Note 4)            476,261,339       178,237,007            257,320             151,698
   Property maintenance fund
    (Note 29)                                 92,026             89,906               -                  -
   Amount due from contract
    customers (Note 21)                    4,741,992         4,873,914                 -                 -
                                      ----------------- -----------------   ---------------    ---------------
                                        481,095,357       183,200,827            257,320            151,698
                                      ========== ==========                 =========          =========
   Assets under hire purchase & finance lease

   The net book value of the property, plant & equipment of the Group acquired under finance lease
   and hire purchase arrangement are as follows :-

                                                                                    2003               2002
                                                                                    RM                 RM

   Plant & machinery                                                        318,573,450        437,703,456
   Motor vehicles                                                              6,147,722            664,561
   Office equipment                                                              280,000                 -
                                                                            ---------------    ---------------
                                                                            325,001,172        438,368,017
                                                                            =========          =========
   Security
   The net book value of the Group’s property, plant and equipment that have been charged to
   financial institutions for facilities granted to the Group are as follows :-

                                                                                   2003                2002
                                                                                   RM                  RM
   Freehold land                                                             14,334,896          14,034,896
   Long term leasehold land & buildings                                     24,188,570           17,249,367
   Short term leasehold land                                                  4,680,393            4,982,354
   Factory & other buildings                                               616,838,919          651,082,166
   Mains & lines                                                             13,052,467          14,187,464
   Plant & machinery                                                     1,857,835,498        1,893,493,256
   Furniture, fixtures & equipment                                            2,684,706            2,664,241
   Motor vehicles                                                            29,755,028          31,560,430
                                                                        ------------------    -----------------
                                                                         2,563,370,477        2,629,254,174
                                                                        ===========           ==========
                                                  73
Company No: 92647-H
                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)
                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


   Revaluation

   Certain land and buildings of the Group were revalued by the directors based on valuations in
   1983 carried out by independent professional valuers on the open market basis. The net book
   value of the property, plant & equipment that would have been carried at historical cost less
   accumulated depreciation are as follows :-
                                                                    2003                 2002
                                                                     RM                   RM

   Freehold land & buildings                                          4,365,604                 4,334,746
   Short term leasehold land & buildings                              1,338,231                 1,340,633
   Freehold oil palm plantation                                         916,128                   916,128
                                                                ------------------        ------------------
                                                                      6,619,963                 6,591,507
                                                                ===========               ===========

   Company                                  --------------------------- Cost ------------------------------
                                            Balance at                                         Balance at
                                             1.7.2002         Additions       Disposals        30.6.2003
                                            ------------      ------------    ----------- ---------------
                                                RM                 RM              RM              RM

   Freehold building                        1,207,372               -                -          1,207,372
   Yacht                                    1,959,397               -                -          1,959,397
   Furniture, fixtures & equipment             780,682          134,590            (2,080)        913,192
   Renovations                                  59,195              -                -              59,195
   Motor vehicles                           1,010,018           559,290           (54,726) 1,514,582
                                            ----------------------------------------------------------------
                                            5,016,664           693,880           (56,806) 5,653,738
                                            ----------------------------------------------------------------

                                           --------------- Accumulated Depreciation -----------------
                                             Balance at Charge for                       Balance at
                                              1.7.2002        the year    Disposals      30.6.2003
                                            ------------- --------------  ------------ --------------
                                                  RM             RM           RM              RM

   Freehold building                            174,442           24,147              -            198,589
   Yacht                                     1,947,959              4,616             -          1,952,575
   Furniture, fixtures & equipment              453,203           63,644              (173)        516,674
   Renovations                                   58,350               845             -              59,195
   Motor vehicles                               853,389          164,068           (54,725)        962,732
                                           ------------------------------------------------------------------
                                             3,487,343           257,320           (54,898) 3,689,765
                                           ------------------------------------------------------------------


                                              74
Company No: 92647-H
                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)
                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)

                                                                                              Depreciation for
                                                             Net Book Value                    the year ended
                                                    at 30.6.2003      at 30.6.2002                30.6.2002
                                                    ---------------   ---------------         -------------------
                                                            RM                RM                          RM

      Freehold building                                1,008,783             1,032,930                     24,147
      Yacht                                                 6,822                11,438                     4,587
      Furniture, fixtures & equipment                    396,518               327,479                     55,664
      Renovations                                             -                      845                    2,100
      Motor vehicles                                     551,850               156,629                     65,200
                                                      -------------         -------------            --------------
                                                       1,963,973             1,529,321                   151,698
                                                      ========              ========                =========

10.   INVESTMENT PROPERTIES
                                                                                            Group
                                                                                2003                       2002
                                                                                RM                         RM
      At cost / valuation
      Freehold land and buildings                                        394,626,336              297,950,639
      Long term leasehold land and buildings                             101,244,956              101,244,956
      Capital work-in-progress                                            35,378,923               31,766,338
                                                                       -----------------        -----------------
                                                                         531,250,215              430,961,933
                                                                       ==========               ==========
      Freehold land costing RM25 million of a subsidiary is subject to a charge in favour of the
      syndicate for the bridging loans granted (Note 33). The title of the land are pending registration
      of transfer in favour of the subsidiary.


11.   SUBSIDIARIES

      (a)
                                                 Group                                      Company
                                       2003               2002                  2003                       2002
                                       RM                 RM                    RM                         RM
      Quoted shares, at cost             -                 -           1,946,575,975            1,755,783,344
      Unquoted shares, at cost           -                 -             420,725,463              421,097,962
      Quoted warrants,
       at cost                 196,869,846        196,869,846            192,302,921              192,302,921
                               ---------------    ---------------     ------------------       ------------------
                               196,869,846        196,869,846          2,559,604,359            2,369,184,227
                               =========          =========           ===========              ===========

                                                     75
Company No: 92647-H
                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)
                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)

                                             Group                                        Company
                                     2003                 2002                  2003                         2002
                                     RM                   RM                    RM                           RM
    Market value
      - Quoted shares                -                    -           4,698,214,432            4,097,083,075*
      - Quoted warrants       326,559,032          338,817,146          275,767,890               291,719,906
                              =========            =========         ===========               ===========
    * The market value for investment in quoted shares of its subsidiary, YTL E-Solutions Berhad
      was not included as the shares were only publicly traded on the MESDAQ market of the
      KLSE on 2 July, 2002.
    The number of warrants held in the subsidiaries is as follows :-
                                               Group                                      Company
                                     2003                  2002                   2003                       2002
    Warrants in
     - YTL Cement Berhad          33,992,430              33,992,430             3,209,920            3,209,920
     - YTL Power
      International Berhad      363,049,023           363,049,023            363,049,023          363,049,023
                                =========             =========            ===========           ==========
    Every warrant has the right to subscribe for one ordinary share in YTL Cement Berhad and
    YTL Power International Berhad at a subscription price of RM1.55 and RM2.87 per share
    respectively.
    The warrants in YTL Cement Berhad & YTL Power International Berhad may be exercised at
    any time before 8 December, 2004 and 8 January, 2010 respectively; thereafter the outstanding
    warrants will cease to be valid.
    The warrants are quoted on the Kuala Lumpur Stock Exchange.
    Details of the subsidiaries are as follows :-
                                    Place of                                                Effective
    Name of Company             Incorporation         Principal Activities               Equity Interest
    -----------------------     ----------------      -----------------------          ---------------------
                                                                                        2003           2002
                                                                                          %              %
    Amanresorts Sdn. Bhd.         Malaysia            Inactive/Property                64.41             -
                                                       development
     Arah Asas Sdn. Bhd.        Malaysia              Dormant                            100           100
   * Austasia Metal             Malaysia              Inactive                           100           100
      Sdn. Bhd.
     Austasia Timbers           Malaysia              Property investment, realty        100           100
      Malaysia Sendirian Berhad                        & sub-contract
     Autodome Sdn. Bhd.         Malaysia              Operator of food &                 100           100
                                                       beverage &
                                                       entertainment centers

                                                     76
Company No: 92647-H
                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)
                     NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                     Place of                                        Effective
     Name of Company             Incorporation      Principal Activities          Equity Interest
     -----------------------     ----------------   -----------------------     ---------------------
                                                                                 2003           2002
                                                                                   %              %

    Awan Serunding Sdn. Bhd.       Malaysia         Investment holding          54.01          53.74
    Batu Tiga Quarry               Malaysia         Quarry operator              100            100
     Sdn. Bhd.
    Bayumaju Development           Malaysia         Property development        64.41           100
     Sdn. Bhd.
*   Boom Time Strategies           Malaysia         Dormant                     32.85          39.50
     Sdn. Bhd
    Budaya Bersatu Sdn. Bhd.       Malaysia         Dormant                      100            100
    Buildcon Concrete Sdn. Bhd.    Malaysia         Manufacture of ready-       67.51          67.17
                                                     mixed concrete
    Buildcon Concrete Enterprise   Malaysia         Investment holding          67.51          67.17
     Sdn. Bhd.
    Builders Brickworks            Malaysia         Manufacturers & dealers     64.26          64.26
     Sdn. Bhd.                                       of all kind of bricks
    Business & Budget              Malaysia         Investment holding &          100           100
     Hotels Sdn. Bhd.                                property investment
    Business & Budget Hotels       Malaysia         Hotel & resort operations     100           100
     (Ipoh) Sdn. Bhd.
    Business & Budget Hotels       Malaysia         Hotel & resort operations     51             51
     (Penang) Sdn. Bhd.
    Business & Budget Hotels       Malaysia         Hotel & resort operations     51             51
     (Seberang Jaya) Sdn. Bhd.
    Cane Creations Sdn. Bhd.       Malaysia         Manufacture & trading         100           100
                                                     of cane furniture
    Cane Creations (Marketing)     Malaysia         Trading in cane furniture     100           100
     Sdn. Bhd.
    C.I. Readymix Sdn. Bhd.        Malaysia         Manufacture of ready-       67.51          67.17
                                                     mixed concrete
    Construction Lease (M)         Malaysia         Hire purchase & credit        100           100
     Sdn. Bhd.
    Dynamic Marketing              Malaysia         Trading of building &         100           100
     Sdn. Bhd.                                       construction materials
    Dynamic Property               Malaysia         Property development          100           100
     Management Sdn. Bhd.
    Emerald Hectares               Malaysia         Property development          70             70
     Sdn. Bhd.
    Extiva Communications          Malaysia         Developing and marketing 51.85             51.85
     Sdn. Bhd.                                       of VoIP telephony services



                                                    77
Company No: 92647-H
                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)
                      NOTES TO THE FINANCIAL STATEMENTS - (Continued)

                                     Place of                                          Effective
      Name of Company            Incorporation      Principal Activities            Equity Interest
      -----------------------    ----------------   -----------------------       ---------------------
                                                                                   2003           2002
                                                                                     %              %
    First Commercial               Malaysia         Property investment             100           100
     Development Sdn. Bhd.
    Gemilang Pintar Sdn. Bhd.      Malaysia         Quarry operations &             70              -
                                                     trading of aggregates
    GKM-SPYTL JV                   Malaysia         Civil engineering works         100           100
     Sdn. Bhd.                                       & construction
    Intellectual Learning          Malaysia         Advancing knowledge,          74.07             -
     Sdn. Bhd.                                       skill & training
    Intellectual Mission Sdn. Bhd. Malaysia         Dormant                         100           100
    Island Air Sdn. Bhd.           Malaysia         Chartering of aircrafts         70             70
    Jaksa Quarry Sdn. Bhd.         Malaysia         Quarry operator                 100           100
    JDSB-SPYTL                     Malaysia         Dormant                         100            50
     Sdn. Bhd.
    Katagreen Development          Malaysia         Dormant                         100           100
     Sdn. Bhd.
    Lay Seng Oil Palm              Malaysia         Cultivation of oil palms        100           100
     Plantations Sdn. Bhd.
*   Lot Ten Security Sdn. Bhd. Malaysia             Dormant                       64.41          77.46
*   Mayang Sari Sdn. Bhd.          Malaysia         Dormant                       64.41          77.46
    Mini-Mix Sdn. Bhd.             Malaysia         Manufacture of ready-         67.51          67.17
                                                     mixed concrete
    Noriwasa Sdn. Bhd.          Malaysia            Property development          64.41            40
    Pakatan Perakbina Sdn. Bhd. Malaysia            Property development &        64.41            40
                                                     building construction
    PDC Heritage Hotel             Malaysia         Dormant                         51             51
     Sdn. Bhd.
    Pintar Projek Sdn. Bhd.        Malaysia         Dormant                        100            100
*   Prisma Tulin Sdn. Bhd.         Malaysia         Hotel development              59.3          59.30
    PropertyNetAsia (Malaysia)     Malaysia         To develop & operate          44.44          44.44
     Sdn. Bhd.                                       a property portal known as
                                                     PropertyNetAsia.com.my
    Puncak Serunding               Malaysia         Dormant                         100           100
     Sdn. Bhd.
    PYP Sendirian                  Malaysia         Property development          64.41            38
     Berhad
    Restoran Kisap Sdn. Bhd.       Malaysia         Restaurant business             100           100
    Satria Sewira Sdn. Bhd.        Malaysia         Property development            100           100
                                                     & investment
*   Sentul Raya Sdn. Bhd.          Malaysia         Property development &        45.09          54.22
                                                     property investment
*   Sentul Raya City Sdn. Bhd.     Malaysia         Property development &        45.09          54.22
                                                     property investment
                                                    78
Company No: 92647-H
                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)
                      NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                    Place of                                         Effective
      Name of Company           Incorporation      Principal Activities           Equity Interest
      -----------------------   ----------------   -----------------------      ---------------------
                                                                                 2003           2002
                                                                                   %              %

*   Sentul Raya Golf Club         Malaysia         Promotion of golf, other     45.09          54.22
     Berhad.                                        sports & hobbies
    Slag Cement Sdn. Bhd.         Malaysia         Manufacture & supply         67.51          67.17
                                                    of slag cement
    Slag Cement (Lumut)         Malaysia           Dormant                       67.51         67.17
     Sdn. Bhd.
    Slag Cement (Southern)      Malaysia           Manufacture & supply          67.51         67.17
     Sdn. Bhd.                                      of slag cement
    Specialist Cement Sdn. Bhd. Malaysia           Manufacture & sale of        57.38          57.09
                                                    dry concrete products
    Star Hill Hotel Sdn. Bhd.     Malaysia         Operator & management          100           100
                                                    of hotel
    Star Hill Living. Com         Malaysia         Trading of paintings and       100           100
     Sdn. Bhd.                                      related products
    Straits Cement Sdn. Bhd.      Malaysia         Dormant                       52.82         52.55
    Suri Travel & Tours           Malaysia         Car rental & air ticketing     90            85
     Sdn. Bhd.
    Syarikat Pembenaan            Malaysia         Civil engineering works        100           100
     Yeoh Tiong Lay Sdn. Bhd.                       & construction
    Syarikat Kemajuan             Malaysia         Property development          64.41           65
     Perumahan Negara
     Sdn. Bhd.
    Transportable Camps           Malaysia         Trading & rental of            100           100
     Sdn. Bhd.                                      transportable cabins &
                                                    wood based products
    Udapakat Bina Sdn. Bhd.       Malaysia         Property development         64.41           28
    Yap Yew Hup Brickworks        Malaysia         Rental of plant &            64.26          64.26
     (Perak) Sdn. Bhd.                              machinery
    Yeoh Tiong Lay                Malaysia         Inactive                       100           100
     Brickworks Sdn. Bhd.
    Yeoh Tiong Lay                Malaysia         Inactive                       100           100
     Management Sdn. Bhd.
    Yeoh Tiong Lay Realty         Malaysia         Realty, investment &           100           100
     Sdn. Bhd.                                      management services
    YTL Cement Berhad             Malaysia         Investment holding           67.51          67.17
    YTL Cement Marketing          Malaysia         Marketing of cement          67.51          67.17
     Sdn. Bhd.                                      products




                                                   79
Company No: 92647-H
                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)
                     NOTES TO THE FINANCIAL STATEMENTS - (Continued)
                                    Place of                                      Effective
     Name of Company            Incorporation      Principal Activities        Equity Interest
     -----------------------    ----------------   -----------------------   ---------------------
                                                                              2003           2002
                                                                                %              %
    YTL Charters Sdn. Bhd.        Malaysia         Chartering of aircrafts,      100         100
                                                    helicopters, ships & vehicles
    YTL Civil Engineering         Malaysia         Civil engineering works & 90               90
     Sdn. Bhd.                                      construction
    YTL Digital Sdn. Bhd.         Malaysia         Dormant                       100         100
    YTL E-Solutions Berhad        Malaysia         Investment in e-commerce 74.07           74.07
                                                    & internet related businesses
                                                    & provision of related
                                                    services
    YTL Energy Sdn. Bhd.          Malaysia         Dormant                       100         100
    YTL Heritage Hotels           Malaysia         Dormant                       100         100
     Sdn. Bhd.
    YTL Hotels & Properties       Malaysia         Investment holding &        100           100
     Sdn. Bhd.                                      management services
    YTL Hotels Central &          Malaysia         Dormant                     100           100
     Services Sdn. Bhd.
    YTL Hotel Management          Malaysia         Dormant                      70            70
     Services Sdn. Bhd.
    YTL Industries Berhad         Malaysia         Property development &      100           100
                                                    management
    YTL Info Screen Sdn. Bhd.     Malaysia         Creating, providing and    74.07            -
                                                    advertising content,
                                                    web media, and
                                                    up to date information
                                                    via electronic media
    YTL Land Sdn. Bhd.            Malaysia         Investment holding          100           100
*   YTL Land & Development        Malaysia         Provision of financial,    64.41         77.46
     Berhad                                         treasury & secretarial
                                                    services
    YTL Power Services            Malaysia         Operation & maintenance     100           100
     Sdn. Bhd.                                      of power station
*   YTL Power Generation          Malaysia         Power generation           60.57         60.45
     Sdn. Bhd.
*   YTL Power International       Malaysia         Investment holding         60.57         60.45
     Berhad
    YTL Premix Sdn. Bhd.          Malaysia         Supply of asphaltic concrete 100          100
    YTL Project Management        Malaysia         Provision of management      100          100
     Services Sdn. Bhd.                             services
    YTL Property Management       Malaysia         Dormant                     64.41        77.46
     Sdn. Bhd.



                                                   80
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                     NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                   Place of                                      Effective
     Name of Company           Incorporation      Principal Activities        Equity Interest
     -----------------------   ----------------   -----------------------   ---------------------
                                                                             2003           2002
                                                                               %              %

    YTL Quarry Sdn. Bhd.           Malaysia       Dormant                   67.51         67.17
     (formerly known as Slag
     Cement (Northern)
     Sdn. Bhd.)
    YTL Retail Services Sdn.       Malaysia       Retail services             100           100
     Bhd.
    YTL Technologies               Malaysia       Servicing & hiring of     87.00         86.87
     Sdn. Bhd.                                     equipment
*   Avalon Billing Services Ltd.   England &      Dormant                   60.57         60.45
                                    Wales
*   Aquator Ltd.                   England &      Dormant                   60.57         60.45
                                    Wales
*   Dynamic Marketing (UK)         England        Inactive                     100          100
     Limited
*   DWR Gwalia Cyfyngedig       England &         Dormant                   60.57         60.45
                                 Wales
*   SC Technology SG            Switzerland       Waste treatment processes 60.57         60.45
*   UK Water International Ltd. England &         Dormant                   60.57         60.45
                                 Wales
*   Water Management            England &         Dormant                   60.57         60.45
     International Ltd.          Wales
*   Wessex Logistics Ltd.       England &         Dormant                   60.57         60.45
                                 Wales
*   Wessex Property             England &         Dormant                   60.57         60.45
     Services Ltd.               Wales
*   Wessex Spring Water Ltd.    England &         Dormant                   60.57         60.45
                                 Wales
*   Wessex Water Enterprises    England &         Waste water services      60.57         60.45
     Ltd.                        Wales
*   Wessex Water Ltd.           England &         Investment holding        60.57         60.45
                                 Wales
*   Wessex Water Pension        England &         Dormant                   60.57         60.45
     Scheme Trustee Ltd.         Wales
*   Wessex Water Services       England &         Issue of bonds            60.57         60.45
     Finance PLC.                Wales
*   Wessex Water Services Ltd. England &          Water supply & waste      60.57         60.45
                                 Wales             water services
*   Wessex Water Trustee        England &         Dormant                   60.57         60.45
     Company Ltd.                Wales

                                                  81
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                      NOTES TO THE FINANCIAL STATEMENTS - (Continued)
                                      Place of                                         Effective
      Name of Company             Incorporation      Principal Activities           Equity Interest
      -----------------------     ----------------   -----------------------      ---------------------
                                                                                   2003           2002
                                                                                     %              %
*   Wessex Engineering              England &        Dormant                       60.57          60.45
     Services Limited                Wales
     (formerly known as
     MWH Wessex Limited)
*   Wessex Water                    England &        Dormant                      60.57         60.45
     Commercial Ltd.                 Wales
*   Wessex Water Engineering        England &        Dormant                      60.57         60.45
     Services Sdn. Bhd.              Wales
*   Wessex Water BV                 Netherlands      Financial services           60.57         60.45
*   YTL Cayman Limited              Cayman           Ownership & chartering        100           100
                                     Islands          of yachts & vessels
*   YTL Cement Singapore            Republic of      General importers and        67.51         67.17
     Pte. Ltd.                       Singapore        exporters of construction
                                                      materials
*   YTL Construction (SA)    South                   Inactive                       100          100
     (Proprietary) Ltd.       Africa
*   YTL Corporation (UK) PLC England                 Dormant                       100           100
*   YTL-CPI Power Limited    Hong Kong               Dormant                      30.89         30.83
                              SAR
*   YTL Engineering Ltd.     England &               Dormant                      60.57         60.45
                             Wales
    YTL Events Limited       England &               Carry on business of         60.57            -
                             Wales                    promoters of public
                                                      entertainments & operators
                                                      of public relations consultant
*   YTL (Guernsey) Limited          Guernsey         Investment holding            100           100
*   YTL Services Ltd.               England &        Dormant                      60.57         60.45
                                    Wales
    YTL Utilities Ltd.              Cayman           Investment holding           60.57         60.45
                                     Islands
    YTL Utilities Finance Ltd.      Cayman           Investment holding           60.57            -
                                     Islands
    YTL Utilities (UK) Ltd.         England and      Investment holding           60.57         60.45
*   YTL (PNG) Ltd.                  Papua New        Construction contracting     99.99         99.99
                                     Guinea
    YTL Power Australia             Cayman           Investment holding           60.57         60.45
     Limited                         Islands
*   YTL Power Finance               Cayman           Investment holding           60.57         60.45
     (Cayman) Limited                Islands
    YTL Power International         Cayman           Investment holding           60.57         60.45
     Holdings Limited                Islands
*   Yeoh Tiong Lay                  Republic of      Property investment            100          100
     Construction (S) Pte. Ltd.      Singapore
*   Subsidiaries not audited by Ler Lum & Co.
                                                     82
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


    (b)   Subsidiaries’ financial statements

          The unaudited financial statements of Buildcon Vietnam Limited, YTL Cayman
          Limited and YTL (Guernsey) Limited were consolidated in the Group’s financial
          statements as these subsidiaries were not required by their local legislations to have
          their financial statements audited.

    (c)   Amount due from/to holding company

          The amount due from/to holding company pertains mainly to advances and payments
          on behalf. The outstanding amount is unsecured, interest free and has no fixed terms
          of repayment.

    (d)   Amount due from/to subsidiaries

          The amount due from/to subsidiaries pertain mainly to payments on behalf and
          advances made and received. The outstanding amount is unsecured, interest free and
          has no fixed terms of repayment except for certain advances given to and received
          from subsidiaries which bear interest at rates ranging from 3.65 % to 3.75 % per
          annum (2002: 3.65% to 3.75% per annum).

    (e)   Significant subsidiaries acquired

          During the year, the Company and certain of its subsidiaries have acquired the
          following subsidiaries :-

          (i)    On 17 September 2002, YTL e-Solutions Berhad acquired two (2) ordinary
                 shares of RM1 each in YTL Info Screen Sdn. Bhd. (“YTL Info Screen”) at
                 cash consideration of RM2 resulting in the acquisition of 100% interest in YTL
                 Info Screen. The principal activities of YTL Info Screen are to create, provide
                 and advertise content, media, web media and up to date information via
                 electronic media.

          (ii)   On 21 March 2003, YTL e-Solutions Berhad acquired two (2) ordinary shares
                 of RM1 each in Intellectual Learning Sdn. Bhd. (“Intellectual Learning”) at
                 cash consideration of RM2 resulting in acquisition of 100% interest in
                 Intellectual Learning. Intellectual Learning was inactive during the year.

          (iii) Following the Securities Commission approval on 26 September 2002 and the
                shareholders approval obtained on 18 December 2002 at an Extraordinary
                General Meeting, YTL Land & Development Berhad (“YTL L&D”) acquired
                the equity interests as set out below :-




                                               83
Company No: 92647-H

                           YTL CORPORATION BERHAD
                             (Incorporated in Malaysia)

              NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                  •   Acquisition of 1,350,000 ordinary shares of RM1 each representing
                      45% equity interest in Syarikat Kemajuan Perumahan Negara Sdn.
                      Bhd. (“SKPN”) from Syarikat Pembenaan Yeoh Tiong Lay Sdn. Bhd.
                      (“SPYTL”) for a purchase consideration of RM46,910,392 satisfied
                      through the issue of 46,910,392 new irredeemable convertible
                      preference shares in YTL L&D (“ICPS B”) at an issue price of RM1
                      per ICPS B;

                  •   Acquisition of 150,000 ordinary shares of RM1 each representing 5%
                      equity interest in SKPN from Pemasaran Simen Negara Sdn. Bhd.
                      (“PSN”) for a purchase consideration of RM5,212,266 satisfied
                      through the issue of 5,212,266 new ordinary shares in YTL L&D at an
                      issue price of RM1 per new ordinary shares;

                  •   Acquisition of 500,000 ordinary shares of RM1 each representing
                      100% equity interest in Bayumaju Development Sdn. Bhd. from the
                      Company for a purchase consideration of RM38,540,074 satisfied
                      through the issue of 38,540,074 new ICPS B in YTL L&D at an issue
                      price of RM1 per ICPS B;

                  •   Acquisition of 4,250,000 ordinary shares of RM1 each representing
                      100% equity interest in Pakatan Perakbina Sdn. Bhd. (“Pakatan”) from
                      SPYTL and Dato’ Hj Mohd Zainal Abidin Bin Hj Abdul Kadir for a
                      purchase consideration of RM147,593,936 satisfied through the issue
                      of 7,100,000 new ordinary shares in YTL L&D at an issue price of
                      RM1 per new ordinary shares in YTL L&D and the balance by way of
                      issue of RM140,493,936 new ICPS B in YTL L&D at an issue price of
                      RM1 per ICPS B and the settlement of debt of RM40,654,488 owing
                      by Pakatan to Construction Lease (M) Sdn. Bhd. satisfied through the
                      issue of 40,654,488 new ICPS B in YTL L&D at an issue price of
                      RM1 per ICPS B;

                  •   Acquisition of 12,588,204 ordinary shares of RM1 each representing
                      30% equity interest in Udapakat Bina Sdn. Bhd. from UDA Holdings
                      Bhd. for a purchase consideration of RM20,879,461 satisfied through
                      the issue of 7,100,000 new ordinary shares in YTL L&D at an issue
                      price of RM1 per new ordinary shares and the balance by way of issue
                      of 13,799,461 new ICPS B in YTL L&D at an issue price of RM1 per
                      44ICPS B; and

                  •   Acquisition of 12,500 ordinary shares of RM1 each representing 5%
                      equity interest in PYP Sendirian Berhad from YM Raja Dato’ Wahid
                      Bin Raja Kamaralzaman for a purchase consideration of RM1,948,219
                      satisfied through the issue of 1,948,219 new ordinary shares in YTL
                      L&D at an issue price of RM1 per new ordinary shares;

                                          84
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)

            (iv)   On 7 February 2003, the Company, through one of its subsidiaries, acquired
                   One (1) ordinary share of RM1 each in JDSB-SPYTL Sdn. Bhd. for a cash
                   consideration of RM1 resulting in acquisition of 100% interest in JDSB-
                   SPYTL Sdn. Bhd. The intended principal activities of JDSB-SPYTL are to
                   engage in civil engineering works and construction.
                   On 25 June 2003, the Company, through one of its subsidiaries, acquired an
                   additional 100,000 ordinary shares of RM1 each in Suri Travel & Tours Sdn.
                   Bhd.
            (v)    On 18 March 2003, the Company, through one of its subsidiaries, acquired 2
                   ordinary share of RM1 each subsequently subscribe for 69,998 new ordinary
                   shares of RM1 resulting in Gemilang Pintar Sdn. Bhd for a cash consideration
                   of RM2 and RM69,998 respectively, representing 70% shareholdings in
                   Gemilang Pintar Sdn. Bhd.

12.   SUMMARY OF EFFECT OF ACQUISITION OF SUBSIDIARIES
      During the year the Group has completed the acquisition of certain subsidiaries, namely
      Gemilang Pintar Sdn. Bhd., YTL Info Screen Sdn. Bhd. and Intellectual Learning Sdn.
      Bhd., Previously, Pakatan Perakbina Sdn. Bhd., PYP Sendirian Berhad, Udapakat Bina
      Sdn. Bhd., Noriwasa Sdn. Bhd. and JDSB-SPYTL Sdn. Bhd. were associated companies of
      the Company. These acquisitions were accounted for using the acquisition method of
      accounting.
      (a)   The effect of the acquisition of these subsidiaries on the financial results of the Group
            for the financial year is as follows :
                                                                           2003                 2002
                                                                            RM                  RM
            Revenue                                                     6,008,809        166,106,669
            Cost of sales                                              (3,486,628)        (94,917,123)
                                                                   -----------------   -----------------
            Gross profit                                                2,522,181          71,189,546
            Other operating income                                        789,335          29,616,909
            Other operating expenses                                        (3,455)        (3,673,496)
            Administrative expenses                                    (3,056,781)         (3,401,268)
                                                                   -----------------   -----------------
            Profit from operations                                        251,280          93,731,691
            Finance costs                                                       (24)      (35,886,446)
                                                                   -----------------   -----------------
            Profit before taxation                                        251,256          57,845,245
            Taxation                                                     (298,291)         (4,598,074)
                                                                   -----------------   -----------------
            (Loss)/ Profit after taxation                                  (47,035)        53,247,171
            Minority interests                                             (11,133)          (155,575)
                                                                   -----------------   -----------------
            Increase in Group’s net (losses)/ profits                      (58,168)        53,091,596
                                                                   ==========          ==========
                                                85
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                NOTES TO THE FINANCIAL STATEMENTS - (Continued)

    (b)   The effect of the acquisition of these subsidiaries on the financial position as at 30
          June, 2003 is as follows :-
                                                                       2003              2002
                                                                        RM                RM
          Property, plant and equipment                               1,014,834      8,672,298,689
          Non-current property development projects                181,030,811                   -
          Quoted investments                                              46,086            709,510
          Investment in associated company                         100,336,424                   -
          Inventories                                                 1,206,337          16,844,231
          Investments                                                        -            4,047,456
          Property development projects                               8,827,747                  -
          Debtors                                                     3,672,577        456,647,967
          Inter-company balances                                    (57,235,060) (1,188,949,224)
          Deposits, cash and bank balances                           25,582,868        439,581,633
          Creditors                                                  (8,917,149)      (517,254,379)
          Borrowings                                                         -       4,521,272,385)
          Bonds                                                              -      (1,985,548,926)
          Dividend payable                                                   -           (5,508,000)
          Taxation                                                     (130,796)       (57,593,372)
          Deferred taxation                                         (57,205,349)      (815,869,788)
          Provision for liabilities & charges                                -         (38,161,728)
          Provision for retirement benefits                                  -          (32,379,648)
          Deferred income                                                    -        (131,831,424)
          Minority interests                                        (67,461,587)         (8,484,349)
          Goodwill on consolidation                                  13,840,546           1,666,781
          Reserve on consolidation                                           -        (214,135,444)
          Exchange difference reserve                                        -         (11,994,396)
                                                                   ---------------     ---------------
                                                                   144,608,289           62,813,204
           Cost of investment, previously associated companies                  (1)    (20,561,402)
           Share of loss of associated companies, now subsidiaries           (650)        6,835,105
           Dividend paid out of post acquisition reserve                     -           10,800,000
           Purchase consideration                                  (59,491,240)          (6,795,311)
                                                                   ---------------     ---------------
           Increase in Group’s net assets                          (85,116,398)          53,091,596
                                                                   =========           =========
    In compliance with the licence requirement, additional financial information to that
    contained in its statutory accounts have been prepared by Wessex Water Services Limited
    for its water and waste water business in accordance with guidance issued by the Director
    General of Water Services in the United Kingdom. These accounts measure profitability on
    the basis of real financial capital maintenance in the context of assets which are valued at
    the current cost value to the business. Specifically modern equivalent asset values arising
    from the latest periodic review are incorporated into the regulatory financial statements.
    Assets acquired and in operational use are valued at the replacement cost of their operating
    capability. Therefore, the tangible fixed asset value as at 31 March 2002 as disclosed in the
    current cost balance sheet of Wessex Water Services Limited was RM50,139.9 million
    (£9,250.9 million).
                                               86
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)


13.   INVESTMENT IN JOINTLY CONTROLLED ENTITIES

      (a)   Jointly controlled entity

            The Group has a 30.82% interest in an England and Wales incorporated jointly
            controlled entity, MWH Wessex Limited, which has a principal activity of providing
            engineering services. At the date of acquisition of Wessex Water Limited during the
            financial year, the Group’s share of net assets of these jointly controlled entities was nil.

            The Group's share of the assets and liabilities of the jointly controlled entity as at 30
            June, 2002 are as follows:
                                                                                           Group
                                                                                           2002
                                                                                            RM
            Current assets                                                                 1,747,634
            Current liabilities                                                           (1,747,634)
                                                                                          -------------
            Net assets                                                                            -
                                                                                          ========
            The joint venture was dissolved during the financial year. In January, 2003, the name of
            MWHM was changed to Wessex Engineering Services Limited. The Group acquired
            additional equity interest in Wessex Engineering Services Limited [Note 13].
      (b)   Jointly controlled operations
            The Group also has a 30.23% interest in a joint arrangement, Bristol Wessex Billing
            Services Limited, which was incorporated in England and Wales. On 28 June 2001,
            Wessex Water Limited and Wessex Water Services Limited entered into a joint
            arrangement with a third party, under which the billing and customer services of both
            groups were transferred to Bristol Wessex Billing Services Limited.
            The Group’s share of the assets, liabilities and expenses of the jointly controlled operations
            has been accounted for in the books of the relevant subsidiary companies as follows:
                                                                                      Group
                                                                               2003            2002
                                                                               RM              RM
            Current assets                                                        -        9,087,695
            Current liabilities                                                   -       (9,087,695)
                                                                         --------------   -------------
            Net assets                                                            -               -
                                                                         ========         ========
            Expenses                                                      28,489,084       3,844,794
                                                                          ========        ========
                                                   87
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)


14.   INVESTMENT IN ASSOCIATED COMPANIES

      (a)
                                                       Group                              Company
                                              2003              2002               2003              2002
                                                              (Restated)
                                               RM                RM                RM                 RM

      Unquoted shares, at cost,        259,263,191        257,749,725       139,571,441       133,943,001
      Share of post
       acquisition profits               35,268,693         41,476,613               -                 -
      Share of foreign
       exchange reserves                   8,882,756         8,944,766                -                 -
                                      ----------------- ----------------- ----------------- -----------------
                                        303,414,640       308,171,104       139,571,441       133,943,001
                                      ========== ========== ========== ==========

                                                       Group
                                              2003              2002
                                                              (Restated)
                                               RM                RM

      Represented by :-

      Share of net assets other
       than goodwill                   279,148,017        278,323,786
      Share of goodwill in
       associated companies
       own consolidated
       financial statements                       -          5,665,899
                                      ----------------- -----------------
                                        279,148,017       283,989,685
      Net premium on acquisition         24,266,623        24,181,419
                                      ----------------- -----------------
                                        303,414,640       308,171,104
                                      ========== ==========




                                                  88
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                     NOTES TO THE FINANCIAL STATEMENTS - (Continued)


    The associated companies of the Company are as follows :-
                                     Place of                                            Effective
     Name of Company             Incorporation      Principal Activities              Equity Interest
     -----------------------     ----------------   -----------------------         ---------------------
                                                                                     2003           2002
                                                                                       %             %
*   Bristol Wessex Billing         England &        Billing services                30.29             -
     Services Limited               Wales
    Buildcom-Cimaco                Malaysia         Manufacture of ready            34.06          33.89
     Concrete Sdn. Bhd.                              mixed concrete
*   Buildcon Vietnam Ltd.          British          Dormant                         47.26          47.02
                                    Virginia
                                    Islands
    Business & Budget Hotels       Malaysia         Hotel & resort                    50             50
     (Kuantan) Sdn. Bhd.                             operations
*   Eastern & Oriental Express     Bermuda          Ownership & management            32             32
     Ltd.                                            of the luxury train services
                                                     known as the ‘Eastern &
                                                     Oriental Express’
*   ERL Maintenance Support        Malaysia         Operations & maintenance         24.5             -
     Sdn. Bhd.                                       of train systems
*   Express Rail Link              Malaysia         Operation of train                50             40
     Sdn. Bhd.
    Fine Aggregate Resources       Malaysia         Sand selling                    27.50          27.50
     Sdn. Bhd.
    IBSB-SPYTL Sdn. Bhd.           Malaysia         Dormant                     50                  50
*   Jimah Power Generation         Malaysia         Developing, constructing, 29.68                29.62
     Sdn. Bhd.                                       completing, maintenance
                                                     and operating power plants
    North South Development        Malaysia         Property development        49                   49
     Sdn. Bhd.
*   Pahang Cement Sdn. Bhd.        Malaysia         Manufacture of cement           33.76          33.59
*   Pahang Cement Marketing        Malaysia         Marketing of cement             33.76          33.59
     Sdn. Bhd.
    Perwira YTL Corporation        Malaysia         Civil engineering works &         49             49
     Sdn. Bhd.                                       construction
*   Quarry Ventures Holdings       Malaysia         Investment holding                30             30
     Sdn. Bhd.
*   Quarry Ventures Sdn. Bhd.      Malaysia         Operator of quarry &              30             30
                                                     trading of sand, quarry
                                                     & building materials
    RME-SPYTL Sdn. Bhd.            Malaysia         Dormant                           50             50
    Skaarup & Jespersen            Malaysia         Management & consultancy          40             40
     (Malaysia) Sdn. Bhd.                            services
    Superb Aggregates              Malaysia         Extraction, removal,              50             50
     Sdn. Bhd.                                       processing & sale of sand


                                                    89
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                      NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                    Place of                                        Effective
      Name of Company           Incorporation      Principal Activities          Equity Interest
      -----------------------   ----------------   -----------------------     ---------------------
                                                                                2003           2002
                                                                                  %             %

*   Surin Bay Company             Thailand         Hotel & resort operations     49             49
     Limited
*   Tanming Aggregates            Malaysia         Extraction, removal,        25               25
     Sdn. Bhd.                                      processing & sale of sand
*   Teknologi Tenaga Perlis       Malaysia         Dormant                    18.17           18.14
     (Overseas) Consortium
     Sdn. Bhd.
    Trans-Pacific Hotels          Malaysia         Inactive                      50             50
     Sdn. Bhd.
    Trans-Pacific Resorts         Malaysia         Inactive                      50             50
     Sdn. Bhd.
    Tugas Sejahtera Sdn. Bhd.     Malaysia         Investment holding          47.26          47.02
    ZE-SPYTL Sdn. Bhd.            Malaysia         Dormant                      50             50

*   Companies not audited by Ler Lum & Co.

    (b)     Amount due from/to associated companies

            The amount due from/to associated companies pertain mainly to trade receivables and
            payables, fees charged, payments on behalf and advances. The outstanding amounts are
            unsecured, interest free and have no fixed terms of repayment except for RM1,351,073
            which is subject to interest at a rate of 10% per annum (2002: 10% per annum).




                                                   90
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                     NOTES TO THE FINANCIAL STATEMENTS - (Continued)


15.   QUOTED INVESTMENTS
      The investments are quoted shares of corporations within and outside Malaysia, stated at cost.
      The cost and market value of the quoted investments are as follows :-

                                                      Group                            Company
                                           2003                   2002             2003        2002
                                           RM                     RM               RM          RM
      Cost
      Within Malaysia                 15,957,357             16,168,617          356,730          578,876
      Outside Malaysia                 4,516,909              4,153,590          106,134          106,134
                                    ---------------        ---------------   --------------   --------------
                                     20,474,266             20,322,207           462,864          685,010
                                    =========              =========         ========         ========
      Market value
      Within Malaysia                 36,319,372             30,754,518          175,038          557,832
      Outside Malaysia                14,119,472             13,321,447            10,680           22,663
                                    ---------------        ---------------   --------------   --------------
                                     50,438,844             44,075,965           185,718          580,495
                                    =========              =========         ========         ========

      The market value at the balance sheet date of these investments approximated the fair value.


16.   UNQUOTED INVESTMENTS

                                                      Group                            Company
                                           2003                   2002             2003        2002
                                           RM                     RM               RM          RM
      Within Malaysia               238,575,000               5,050,000        6,950,000        5,050,000
      Outside Malaysia                 5,025,994           137,075,994               -                -
                                    ---------------        ---------------   --------------   --------------
                                    243,600,994            142,125,994         6,950,000        5,050,000
                                    =========              =========         ========         ========
      Included in unquoted investments outside Malaysia is 3,475 Preference Shares of US$1 each in
      YTL Power Investments Limited, a company incorporated in the Cayman Islands at a total
      subscription price of RM132,050,000 (USD34,750,000). These preference shares entitle the
      Group to 99% of all dividends declared and paid by the company, but carry no voting rights in
      any matters relating to the company and are redeemable at the option of the holders at any time
      on terms agreeable between the company and the holders thereof.




                                                      91
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


17.   DEVELOPMENT EXPENDITURE
                                                                                     Group
                                                                          2003                2002
                                                                          RM                  RM
      Land & development expenditure

      Freehold land, at cost                                       193,894,929          156,258,204
      Leasehold land, at cost                                        96,774,680          45,465,024
      Development expenditure                                      274,706,362           52,281,282
                                                                   ---------------      ---------------
                                                                   565,375,971          254,004,510
      Amortised during the year                                        (432,521)            (207,260)
                                                                   ---------------      ---------------
                                                                   564,943,450          253,797,250
                                                                   ---------------      ---------------

      Project development expenditure

      As at beginning of the year                                       245,520            2,511,261
      Capitalised during the year                                            -             2,442,767
      Written off during the year                                            -            (4,708,508)
                                                                   ---------------      ---------------
      As at end of the year                                             245,520              245,520
                                                                   ---------------      ---------------

      Internet portal development expenditure

      As at beginning of the year                                    1,987,514            1,159,365
      Capitalised during the year                                        13,511           1,053,411
      Written off during the year                                     (225,262)            (225,262)
                                                                  ---------------      ---------------
      As at end of the year                                          1,775,763            1,987,514
                                                                  ---------------      ---------------
                                                                  566,964,733          256,030,284
                                                                  =========            =========

      Freehold land costing RM126.1 (2002: RM67.4) million included in the land &
      development expenditure is subject to a charge in favour of the syndicate for the bridging
      loans granted (Note 33). The title deeds of the land are pending registration of transfer in
      favour of the subsidiary.




                                                92
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)


18.   INVENTORIES - at cost
                                                                                  Group
                                                                      2003                   2002
                                                                      RM                     RM

      Developed properties                                        66,255,000             6,272,745
      Finished goods                                               6,645,329             6,060,069
      Work-in-progress                                            18,972,718           13,664,100
      Raw materials                                               16,190,452             9,705,612
      Consumable stores                                            7,510,504           90,392,280
      Spare parts                                                 81,993,743                    -
      Spare parts in transit                                      22,651,064             2,188,754
      Less : Provision for foreseeable loss                     (20,098,796)                    -
                                                                ---------------       ---------------
                                                                200,120,014           128,283,560
                                                                =========             =========

      Inventories of developed properties amounting to RM46.2 million is subject to a charge in
      favour of the syndicate for the bridging loans (Note 33), granted to a subsidiary. The title deeds
      of the units are pending registration of transfer in favour of the subsidiary.


19.   PROPERTY DEVELOPMENT PROJECTS
                                                                                  Group
                                                                      2003                    2002
                                                                      RM                      RM

      Freehold land - at cost                                      3,270,000               3,270,000
      Leasehold land - at cost                                    10,319,878               9,670,438
                                                              -----------------         ---------------
                                                                 13,589,878              12,940,438
      Development expenditure                                   291,166,961             478,802,682
      Less : Adjustment                                                   -             (22,384,000)
                                                              -----------------        ----------------
                                                                304,756,839             469,359,120
      Less : Allowance for foreseeable losses                   (11,632,485)            (31,416,000)
                                                              -----------------        ----------------
                                                                293,124,354             437,943,120
      Add : Recognised profits                                    41,414,745              29,773,133
                                                              -----------------       -----------------
                                                                334,539,099             467,716,253
      Less : Progress billings                                 (170,848,525)           (296,861,898)
                                                              -----------------       -----------------
                                                                163,690,574             170,854,355
                                                              ==========              ==========

                                                  93
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


      Included in the development expenditure are current charges of :-
                                                                                      Group
                                                                           2003                 2002
                                                                           RM                   RM

      Loan interest                                                 10,275,000            7,118,000
      Rental of premises                                                  -                  24,500
      Staff costs                                                         -               1,163,110
                                                                   =========           ==========

      Freehold land costing RM13.59 million (2002: RM3.27 million) is subject to charge in
      favour of the syndicate for the bridging loans, referred to in Note 33, granted to a
      subsidiary. The title deeds of the land are pending registration of transfer in favour of the
      subsidiary.

      In prior year, the adjustment to property development expenditure arose from
      measurements by the consultants and project managers of work-in-progress on a project
      suspended in 1998 which are deemed final by the directors. A corresponding amount had
      been adjusted to reduce the provision previously made in respect of these works. The
      accounts do not include any adjustment that would arise should these measurements not be
      finally determined on the basis adopted.


20.   TRADE DEBTORS
                                                                                      Group
                                                                           2003                 2002
                                                                           RM                   RM
      Trade receivables                                          1,085,600,002         1,236,982,877
      Less : Allowance for doubtful debts                          (21,068,987)          (16,491,396)
                                                                 -----------------     -----------------
                                                                 1,064,531,015         1,220,491,481
      Progress billings & final
       sum receivables                                              196,907,646          186,344,263
      Retention sum                                                    5,264,197           87,967,164
                                                                -------------------    -----------------
                                                                  1,266,702,858        1,494,802,908
                                                                ===========            ==========




                                                94
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)


      Credit terms of trade receivables ranged from 7 days to 180 days.

      The Group has no significant concentration of credit risk that may arise from exposures to a
      single debtor or groups of debtors other than that related to its power generation business.
      As at 30 June 2003, 30% of trade debtors in a subsidiary was due from a customer in
      relation to the sales of electricity. The amount was fully settled after the financial year end.


21.   AMOUNT DUE FROM/TO CONTRACT CUSTOMERS
                                                                                        Group
                                                                             2003                  2002
                                                                             RM                    RM

      Aggregate costs incurred to date                                249,268,615     1,255,979,877
      Recognised profits less recognised losses                         52,058,842       77,659,892
                                                                    ----------------- -----------------
                                                                      301,327,457     1,333,639,769
      Progress billings                                              (306,243,437) (1,329,248,826)
                                                                    ----------------- -----------------
                                                                        (4,915,980)        4,390,943
      Amount due to contract works
       customers classified as current liabilities                      29,238,598          27,433,206
                                                                    -----------------    -----------------
      Amount due from contract customers                                24,322,618           31,824,149
                                                                    ==========           ==========

      Included in aggregate costs incurred to date are current charges/(credits) :-
                                                                                        Group
                                                                             2003                  2002
                                                                             RM                    RM

      Depreciation (Note 9)                                              4,741,992              4,873,914
      Hiring of motor vehicles                                               1,262                 28,988
      Hiring of plant, machinery & equipment                               137,834                 86,188
      Interest expenses
       - bankers acceptances, trust receipts,
           hire purchase & others                                        713,702              719,021
      Other rental                                                         7,700                1,500
      Rental of premises                                                       -               59,000
      Staff costs                                                     13,729,182           14,305,667
      Loss/(Gain) on foreign exchange - realised                          29,348              (29,348)
      Hiring income on plant & machinery                                  (2,481)                (774)
                                                                     =========            =========

      Included in the amounts due to contract customers of the Group are advances received from
      contract customers amounting to RM1,318,028 (2002: RM4,516,472) which is unsecured,
      interest free and will be recouped against the future progress billings.
                                                 95
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)


22.   OTHER DEBTORS, DEPOSITS & PREPAYMENTS

                                                      Group                            Company
                                           2003                2002             2003              2002
                                           RM                  RM               RM                RM

      Other debtors                 774,226,417        505,314,285        57,798,226        13,140,935
      Less : Allowance for
             doubtful debts        (265,423,000) (268,958,294)                     -                 -
                                    --------------- ---------------      ---------------   ---------------
                                    508,803,417 236,355,991               57,798,226        13,140,935

      Amount recoverable
       from a supplier              188,363,245        188,363,245                -                 -

      Deposits                         6,124,044           53,389,664         174,889       38,929,545

      Prepayments                     73,938,948       109,054,874          5,031,989       10,004,253
                                    ---------------    ---------------   ---------------   ---------------
                                    777,229,654        587,163,774        63,005,104        62,074,733
                                    =========          =========         =========         =========

      The amount recoverable from a supplier is due to the following :-

      A subsidiary has entered into a Gas Supply Agreement (“GSA”) on 15 March, 1993. Under this
      agreement, the price of gas to be supplied is calculated by reference to a market price-related
      formula. However, since 1 May, 1997, the Government of Malaysia has fixed the price of gas.
      Accordingly, the market price-related formula applicable under the GSA has not been used. As
      a consequence, a dispute exist over whether a discount provided for under the market price-
      related formula is applicable under the GSA. Although this dispute remains unresolved, the
      subsidiary has continued to pay the full fixed gas price and has accounted for the price discount
      as an amount recoverable from the supplier. The directors are confident that the amount is fully
      recoverable.

      Included in prepayments are the following prepaid expenses in relation to the RM500 million
      8.5% Redeemable Non-Guaranteed Unsecured Bonds 1999/2004 (Bonds 1999/2004) and
      RM750 million 7% Redeemable Non-Guaranteed Unsecured Bonds 2000/2007 (Bonds
      2000/2007).

      The Group has no significant concentration of credit risk that may arise from exposures to a
      single debtor or groups of debtors other than that related to its power generation business in
      respect of an amount recoverable from a supplier as described above.




                                                      96
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                                       Group                             Company
                                            2003                2002              2003              2002
                                            RM                  RM                RM                RM

      Bonds 1999/2004
      - prepaid interest                4,972,409           9,944,818         4,972,409         9,944,818

      Bonds 2000/2007
      - prepaid interest               22,185,916         28,524,749                 -                 -
                                     ---------------     ---------------   ---------------   ---------------
                                      27,158,325          38,469,567          4,972,409         9,944,818
                                     =========           =========         =========         =========

      The prepaid expenses in relation to the Bonds 1999/2004 are amortised over a period of 5
      years commencing from July, 1999 whereas the prepaid expenses in relation to the Bonds
      2000/2007 are amortised over 7 years commencing from January, 2000.


23.   HOLDING COMPANY

      The Company regards Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., a company incorporated
      in Malaysia as its holding company.

      The amount due from/to holding company pertains mainly to payments on behalf and
      advances. The outstanding amount is unsecured, interest free and has no fixed terms of
      repayment.


24.   AMOUNT DUE FROM/TO RELATED COMPANIES

      The amount due from/to related companies pertain mainly to trade receivables/payables,
      advances and payments on behalf. These are unsecured, interest free and have no fixed terms
      of repayment.


25.   SHORT TERM INVESTMENTS
                                                       Group                             Company
                                         2003                  2002               2003               2002
                                         RM                    RM                 RM                 RM

      Unquoted debt securities
       of corporations in Malaysia
       and unit trusts

      At cost                        108,976,117          29,195,586        10,299,787         10,006,086
                                     =========           =========         =========          =========
                                                       97
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)


26.   CASH & CASH EQUIVALENTS
                                                        Group                               Company
                                               2003               2002               2003               2002
                                               RM                 RM                 RM                 RM

      Fixed deposits
       - Licensed banks               4,989,092,406 3,749,076,309             484,997,289           6,325,402
       - Licensed finance
          companies                     443,231,315       680,433,119        10,397,453        27,828,934
       - Other corporations               49,024,407        31,862,548           601,065                -
                                      ----------------- ----------------- ----------------- -----------------
                                      5,481,348,128 4,461,371,976           495,995,807        34,154,336

      Cash & bank balances                96,089,916         89,365,265            854,079          6,110,736
      Bank overdrafts                    (86,572,152) (54,610,403)                      -                  -
                                     ------------------ ------------------ ------------------ ------------------
                                      5,490,865,892 4,496,126,838             496,849,886         40,265,072
                                     =========== =========== =========== ===========



      Fixed deposits of certain subsidiaries amounting to RM745,527,720 (2002: RM Nil) have been
      pledged to financial institutions for banking facilities granted to these subsidiaries.

      Cash and bank balances of the Group include an amount of RM3,500,523 (2002:
      RM5,416,901) which is held under a Housing Development Account under Section 7A of the
      Housing Developers (Control and Licensing) Act, 1966.

      No interest is earned on bank balance.

      The weighted average interest rates of deposits that were effective at the balance sheet were as
      follows :-
                                                             Group            Company
                                                                %                %

      Deposits with licensed banks                                 2.9               2.85
      Deposits with licensed finance companies                     2.9               2.85
      Deposits with other corporations                             2.8               2.85

      Deposits of the Group and Company have maturities ranging from 4 days to 365 days. Bank
      balances are deposits held at call with banks.




                                                   98
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


27.   TRADE CREDITORS

      Credit terms of trade creditors granted to the Group vary from 30 days to 150 days.


28.   OTHER CREDITORS & ACCRUALS
                                                        Group                               Company
                                                2003              2002               2003              2002
                                                RM                RM                 RM                RM

      Other creditors                     275,219,920       173,275,077          2,228,077         2,213,392
      Accrued expenses                    404,971,079       313,929,258          1,612,848         2,542,660
                                        ----------------- ----------------- ----------------- -----------------
                                          680,190,999       487,204,335          3,840,925         4,756,052
                                        ========== ========== ========== ==========

      Duties and other taxes payable of the Group are payable on an instalment basis from 1996
      to 2001 with interest accruing on the outstanding amounts at 4% per annum (2002: 4% per
      annum).

      Included in other creditors of a subsidiary is deferred income of RM1,558,034 (2002:
      RM730,696) in respect of unutilised airtime of prepaid telephony services packages sold to
      a distributor.


29.   PROPERTY MAINTENANCE FUNDS

      Included in property maintenance funds are current charges/(credits) :-

                                                                                       Group
                                                                              2003                 2002
                                                                              RM                   RM

      Depreciation (Note 9)                                                 92,026               89,906
      Rental of equipment                                                      360                  623
      Staff costs                                                        1,261,262            1,338,728
      Fixed deposit interest received                                      (28,194)             (57,804)
      Other interest received                                             (114,825)             (83,173)
      Rental income                                                        (33,672)             (30,056)
                                                                       =========             ========




                                                 99
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)


30.   HIRE PURCHASE LIABILITIES
                                                                                        Group
                                                                             2003               2002
                                                                             RM                 RM

      Minimum hire purchase payments

      Payable within one year                                            2,148,915         354,361
      Payable between one and two years                                  2,151,689           87,191
      Payable between two and five years                                 1,511,874            5,449
                                                                      --------------- ---------------
                                                                         5,812,478         447,001
      Less : Financing charges                                            (570,178)         (43,714)
                                                                      --------------- --------------
      Present value of hire purchase liabilities                         5,240,300         403,287
                                                                      ========= =========

      Present value of hire purchase liabilities :

      Payable within one year                                            1,935,769            317,899
      Payable between one and two years                                  1,946,143              80,002
      Payable between two and five years                                 1,360,388               5,386
                                                                      ---------------    ---------------
                                                                         5,242,300            403,287
                                                                      =========          =========

      Representing hire purchase liabilities :

      Current                                                            1,935,769            317,899
      Non-current                                                        3,306,531              85,388
                                                                      ---------------    ---------------
                                                                         5,242,300            403,287
                                                                      =========          =========

      The hire purchase is subject to a fixed interest rate ranging from 5.4% to 9% (2002: 5.4% to
      8.5%) per annum.




                                                     100
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)


31.   FINANCE LEASE LIABILITIES
                                                                                         Group
                                                                              2003               2002
                                                                              RM                 RM
      Minimum lease payments:

      Payable within one year                                            21,644,521              -
      Payable between one and five years                                 95,490,352              -
      Payable later than five years                                    336,173,015      61,594,951
      Less : Financing charges                                        (153,500,101) (1,079,701)
                                                                       --------------- ---------------
      Present value of lease payments                                  299,807,787      60,515,250
                                                                       ========= =========
      Present value of minimum lease payments:

      Payable within one year                                             6,687,730                 -
      Payable between one year and five years                            92,852,347                 -
      Payable later than five years                                    200,267,710                  -
                                                                       ---------------    ---------------
                                                                       299,807,787                  -
                                                                       =========          =========
      Represented by finance lease liabilities :

      Current                                                             6,687,730        60,515,250
      Non-current                                                      293,120,057                  -
                                                                       ---------------    ---------------
                                                                       299,807,787         60,515,250
                                                                       =========          =========

      The finance lease is subject to a fixed interest rate of 7.33% (2002: 7.33%) derived from the
      semi-annual lease rentals payable.




                                                   101
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)


32.   BONDS
                                                       Group                                  Company
                                               2003                 2002               2003               2002
                                               RM                   RM                 RM                 RM
      Current :-

      Fixed rate bonds [Note 32(A)]     125,000,000          125,000,000                 -                  -
      Zero Coupon Convertible
       Bonds due 2002 - unsecured
       [Note 32(B)]                              -                 61,462                -               61,462
      Zero Coupon Redeemable
       Unsecured Bonds
       1997/2002 [Note 32(C)]                    -           300,000,000                  -        300,000,000
                                      -----------------     ----------------   ----------------   ----------------
                                        125,000,000          425,061,462                  -        300,061,462
                                      -----------------     ----------------   ----------------   ----------------

      Non current :-

      Fixed rate bonds [Note 32(A)] 562,500,000              687,500,000                 -                  -
      8.50% Redeemable Non-
       Guaranteed Unsecured
       Bonds 1999/2004 [Note 32(D)] 500,000,000              500,000,000       500,000,000        500,000,000
      7% Redeemable Non-
       Guaranteed Unsecured
       Bonds 2000/2007 [Note 32(E)] 746,562,500              745,580,357                 -                  -
      2.5% Exchangeable
       Guaranteed Unsecured
       Bonds [Note 32(F)]            613,091,555             560,321,864                 -                  -
      5.875% Guaranteed
       Unsecured Bonds
       [Note 32(G)]                1,220,714,396           1,121,243,608                 -                  -
      Guaranteed Variable Coupon
       Bonds due 2009 [Note 32(H)] 612,515,580               563,637,158                 -                  -
      3.52% Retail Price Index
       Guaranteed Bonds [Note 32(I)] 330,901,677             300,668,160                 -                 -
                                   -----------------       ----------------- ----------------- -----------------
                                   4,586,285,708           4,478,951,147       500,000,000       500,000,000
                                   -----------------       ----------------- ----------------- -----------------

                                      4,711,285,708        4,904,012,609 500,000,000 800,061,462
                                      ==========           ========== ========== ==========




                                                     102
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                                  Group                               Company
                                       Carrying amount  Fair value         Carrying amount Fair value
                                            2003          2003                  2003          2003
                                             RM            RM                    RM            RM

      Fixed rate bonds             687,500,000           780,361,955                -                 -
      8.5% Redeemable Non-
       Guaranteed Unsecured
       Bonds                       500,000,000           500,000,000       500,000,000                -
          7% Redeemable Non-
       Guaranteed Unsecured
       Bonds                       746,562,500           651,434,000                -                 -
      2.5% Exchangeable
       Guaranteed Unsecured
       Bonds                       613,091,555           613,091,555                -                 -
      5.875% Redeemable
       Guaranteed Unsecured
       Bonds                     1,220,714,396         1,311,594,417                -                 -
      Guaranteed Variable Coupon
       Bonds due 2009              612,515,580           653,884,383                -                 -
      3.52% Retail Price Index
       Guaranteed Bonds            330,901,677           355,646,100                 -                 -
                                 -----------------     ----------------- ----------------- -----------------
                                 4,711,285,708         4,866,012,410       500,000,000                 -
                                 -----------------     ----------------- ----------------- -----------------


(A)   FIXED RATE BONDS

      The fixed rate bonds were issued pursuant to a Subscription Agreement dated 30 October,1993
      and bear interest at a rate of 10% per annum. The principle amount of the bonds issued under
      the Subscription Agreement was RM1,500,000,000.

      The fixed rate bonds are secured by fixed and floating charges over all assets of the subsidiary
      company, YTL Power Generation Sdn. Bhd. both present and future. The fixed rate bonds are
      repayable in half-yearly equal instalments commencing in the year 1999.




                                                 103
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


(B)   ZERO COUPON CONVERTIBLE BONDS DUE 2002

      The Zero Coupon Convertible Bonds due 2002 were constituted under Trust Deed dated 15
      August, 1995.

      The Bonds having a principal amount of US$50,000,000 carry no interest and have a
      maturity period of 7 years from the date of issue.

      The redemption and purchase of the Bonds may be made in the following manner :-

      (a)   Redemption at the option of the Bondholders

            The Bonds may be redeemed in whole or part in US dollar at the option of the
            Bondholders at their principal amount plus a payment of interest at 40.38% of their
            principal amount on 15 August, 2000.

      (b)   Redemption at the option of the Company

            The Bonds may be redeemed in US dollar at the option of the Company in whole but
            not in part at their principal amount plus a payment of interest at 40.38% of the
            principal amount at any time on or after 15 August, 1998.

      (c)   Purchase

            The Company or any of its subsidiaries may at any time and from time to time
            purchase Bonds at any price in the open market or otherwise.

      (d)   Cancellation

            All Bonds which are redeemed or converted or purchased by the Company or its
            subsidiaries will forthwith be cancelled.

      (e)   Conversion

            Each Bond (in integral multiples of US$5,000) will at the option of the Bondholder
            be convertible on or after 28 September, 1995 to 8 August, 2002 or 7 days before
            date of redemption, into ordinary shares of the Company at current conversion price
            of RM5.00 (initial conversion price was RM14.52 per share) with a fixed rate of
            exchange on conversion of RM2.4585 : US$1.00.

      (f)   Redemption at maturity

            Unless previously purchased and cancelled, redeemed or converted, the Bonds will
            be redeemed at their principal amount on 15 August, 2002 at an amount of
            RM12,292.50 for each US$5,000 principal amount of the Bonds.

                                             104
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                     NOTES TO THE FINANCIAL STATEMENTS - (Continued)


(C)   ZERO COUPON REDEEMABLE UNSECURED BONDS 1997/2002

      The Zero Coupon Redeemable Unsecured Bonds 1997/2002 with 79,015,814 warrants
      were constituted under a Trust Deed and Deed Poll both dated 20 September, 1997.

      The Bonds having a principal amount of RM300,000,000 carry no interest and have a
      maturity period of 5 years from the date of issue.

      The redemption and purchase of the Bonds may be made in the following manner :-

      (a)     Redemption and purchase

              (i)    Unless previously purchased as provided below, the Company shall redeem the
                     Bonds at its nominal amount of RM1.00 each on the maturity date i.e. 20
                     September, 2002 and may not subject to the provisions of Condition (b) below
                     redeem them in whole or in part prior to that date.

              (ii)   The Company or any of its subsidiaries may at any time purchase or otherwise
                     acquire the Bonds (and such Bonds purchased or acquired shall be deemed not
                     to remain outstanding) at any price by way of private treaty.

            (i)      All Bonds which are purchased or redeemed shall forthwith be cancelled. In the
                     event the Company wishes to cancel any Bonds which have been purchased by
                     the Company, the Company shall, in accordance with the provisions of the
                     Code of Conduct and Market Practices for Malaysia Bond Market and the
                     Depository Paying Agency Agreement instruct the Authorised Depository
                     Institution and the Central Depository to make the necessary entries in their
                     records.

      (b)     Early redemption at the option of the Company

              (i)    The Company may, on giving not less than thirty (30) days prior notice to the
                     Bondholders of its intention to redeem part or all of the then outstanding Bonds
                     at its nominal value or at a premium as the Company may at its absolute
                     discretion determine by stipulating in the said notice the date, time and place
                     and manner for redemption of the same.

              (ii)   In the case of any partial redemption, the directors of the Company shall have
                     the full power to make such provisions as they may consider appropriate in
                     relation to fractions (including provisions whereby, in whole or in part,
                     fractional entitlements are aggregated and purchased in lieu of redemption pro
                     tanto or are disregarded or are rounded up) so as to ensure that after such
                     redemption no Bond is held otherwise than in values or multiples of RM1.00.



                                                 105
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


(D)   8.5% REDEEMABLE NON-GUARANTEED UNSECURED BONDS 1999/2004

      The 8.50% Redeemable Non-Guaranteed Unsecured Bonds 1999/2004 with 303,775,911
      warrants were constituted under a Trust Deed and Deed Poll dated 28 June, 1999 and 31
      July, 1999 respectively.

      The Bonds carry interest at the rate of 8.50% per annum, which are payable semi-annually
      in arrears and which are redeemable on or before the fifth anniversary of date of Bonds
      issued. The Company entered into an associated interest rate swap agreement with a
      financial institution to reduce the annual coupon rate of 8.50% per annum to an annual
      coupon rate of 1.28% per annum.

      The redemption and purchase of the Bonds may be made in the following manner :-

      (a)   Redemption at maturity

            Unless previously redeemed, repurchased, cancelled as provided below, the
            Company shall redeem the Bonds at 100% of its nominal value together with unpaid
            interest on the surrender of the Bond certificate.

      (b)   Purchase

            The Company may at any time and from time to time purchase the Bonds at any price
            in the open market or by way of private treaty.

      (c)   Cancellation

            All the Bonds which are purchased or redeemed, shall forthwith be cancelled
            (together with all interest accrued cancelled therewith). All the Bonds so cancelled
            may not be reissued or resold.

(E)   7% REDEEMABLE NON-GUARANTEED UNSECURED BONDS 2000/2007

      Pursuant to a Trust Deed dated 5 January, 2000, a subsidiary company, YTL Power
      International Berhad issued RM750 million nominal value of a seven-year 7.0%
      Redeemable Non-Guaranteed Unsecured Bonds 2000/2007 with 572,166,338 detachable
      Warrants.

      The 7% Redeemable Non-Guaranteed Unsecured Bonds 2000/2007 with 572,166,338
      detachable warrants were constituted under a Trust Deed and Deed Poll dated 5 January,
      2000 and 13 March, 2000 respectively.




                                              106
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)

      The principle features of the Bonds are as follows :-
      (a)   The Bonds bear interest at 7.0% per annum, payable semi-annually on 11 July and 11
            January of each financial year. The subsidiary entered into an associated interest rate
            swap agreement with a financial institution to reduce the annual coupon rate of 7%
            per annum to an annual coupon rate of 0.725% per annum.
      (b)   The Bonds are redeemable on 11 July, 2007 (Maturity Date) at one hundred percent
            (100%) of its nominal value. Unless previously redeemed, repurchased, cancelled or
            otherwise satisfied by the subsidiary, the Bonds will be redeemed in full by the
            subsidiary on the Maturity Date at one hundred percent (100%) of its nominal value
            together with all accrued interest on the surrender of the Bond Certificate.
      The nominal value of the Bonds, with 572,166,338 detachable warrants, amounted to
      RM750,000,000 and remained outstanding as at 30 June, 2003, net of amortised fees and
      discount.
      The proceeds received by the subsidiary from the issue of the RM750 million Bonds on 11
      January, 2000 is currently placed under fixed deposits with licensed financial institutions
      pending investments in power generation assets.
(F)   2.5% EXCHANGEABLE GUARANTEED UNSECURED BONDS
      YTL Power Finance (Cayman) Limited, a wholly owned subsidiary company of YTL
      Power International Berhad had on 11 July, 2001 issued US$150,000,000 nominal value 5
      years Exchangeable Guaranteed Bonds at 100% nominal value (‘Exchangeable Bonds’).
      Each Exchangeable Bond entitles its registered holder to exchange for fully paid ordinary
      shares of the YTL Power International Berhad with a par value of RM1.00 each at an initial
      exchange price of RM3.12 per share at a fixed exchange rate of US$1.00 = RM3.80. The
      exercise price has been adjusted to RM2.95 per share in accordance with the basis set out in
      the Trust Deed. The proceeds received by YTL Power Finance (Cayman) Limited from the
      issue of the US$150,000,000 2.5% Exchangeable Guaranteed Bonds Due 2006 on 11 July,
      2001 has been invested into YTL Utilities Limited, a wholly-owned subsidiary of YTL
      Power International Berhad incorporated in Cayman Islands. YTL Utilities Limited in turn
      holds the entire issued and paid-up share capital of YTL Utilities (UK) Limited, which
      acquired the entire issued and paid-up share capital of Wessex Water Limited. The
      approval of the Securities Commission to extend the purpose for the use of proceeds for
      this investment was received vide its letter of 15 April, 2002.
      The principal features of the Exchangeable Bonds are as follows :-
      (a)   The bonds bear interest at 2.50% per annum, payable semi-annually on 11 July and
            11 January of each financial year.
      (b)   The bonds are redeemable on 11 July, 2006 (‘Maturity Date’) at 124.86% of their
            principal amounts in US Dollar. YTL Power Finance (Cayman) Limited may redeem
            all the bonds after 11 July, 2003 at their accreted principal amount.
      The nominal value of the 5 year 2.5% Exchangeable Bonds amounted to USD150,000,000 and
      remained outstanding as at 30 June, 2002, net of amortised fees and discount.
                                                107
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


(G)   5.875% REDEEMABLE GUARANTEED UNSECURED BONDS

      On 30 March, 1999, Wessex Water Services Finance PLC (‘Issuer’), a subsidiary company
      of the Group, issued GBP300,000,000 nominal value of 5.875 per cent Redeemable
      Guaranteed Unsecured Bonds due 2009 (‘RGU Bonds’) unconditionally and irrevocably
      guaranteed by Wessex Water Services Limited (‘Guarantor’), a subsidiary company of the
      Group. The RGU Bonds are constituted under a Trust Deed dated 30 March, 1999. The
      nominal value of RGU Bonds issued amounted to GBP300,000,000 and GBP197,597,000
      remained outstanding as at 30 June, 2003, net of amortised fees and discount. The net
      proceeds of the RGU Bonds were used for refinancing existing financial indebtedness and
      for general corporate purposes.

      The principal features of the RGU Bonds are as follows:

      (a)   The RGU bonds bear interest at 5.875% per annum, payable annually on 30 March of
            each financial year.

      (b)   Unless previously redeemed, repurchased, cancelled or otherwise satisfied by the Issuer,
            the RGU bonds will be redeemed in full by the Issuer on 30 March, 2009 at their
            nominal value together with all accrued interest on the surrender of the RGU bonds.

      (c)   The Issuer may, at any time, purchase the RGU bonds in any manner and at any price. If
            purchases are made by tender, tenders must be available to all bondholders alike. All
            RGU bonds purchased by the Issuer will forthwith be cancelled.

      (d)   The Issuer, by giving the appropriate notice and in accordance with the conditions laid
            out in the offering circular, may purchase the RGU bonds if there is a change in tax
            legislation or if it wishes to do so at a price determined by an agreed formula.

      (e)   The bondholders may put the RGU bonds to the Issuer if i) Wessex Water Services
            Limited loses its Appointment ii) the Issuer ceases to be a subsidiary of Wessex
            Water Services Limited iii) a Restructuring Event occurs which results in the RGU
            bonds being downgraded below investment grade. ‘Appointment’ refers to the
            Instrument of Appointment dated 1st September, 1989 under Section 11 of the Water
            Act 1989 (now Section 6 of the Water Industry Act, 1991) appointing the Guarantor
            as a water undertaker and sewerage undertaker for the areas described therein.
            ‘Restructuring Event’ refers to either: a) any material rights, benefits or obligations of
            Wessex Water Services Limited under the Appointment or any material terms of the
            Appointment are modified; b) any legislation is enacted removing, reducing or
            qualifying the duties or powers of the Secretary of State for the Environment and/or
            the Director General of Water Services.




                                                108
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)


(H)   GUARANTEED VARIABLE COUPON BONDS DUE 2009

      On 30 March, 2001, GBP100,000,000 nominal value of the RGU bonds were redeemed by
      the issue of GBP100,000,000 Guaranteed Variable Coupon Bonds (“GVC”) due 2009 by
      Wessex Water Services Finance Plc unconditionally and irrevocably guaranteed by Wessex
      Water Services Limited.

      The nominal value of GVC Bonds issued remained outstanding as at 30 June, 2003. Interest
      payable on the GVC bonds is calculated by reference to rating assigned to the bonds. The
      GVC Bonds are unsecured and interest rate since issuance of the Bonds was 5.875%
      payable semi-annually in arrears on 30 September and 30 March of each financial year.
      Other features of the GVC bonds remain similar to that of the RGU bonds mentioned
      previously.

(I)   3.52% RETAIL PRICE INDEX GUARANTEED BONDS

      On 10 December, 2001, Wessex Water Services Finance PLC (‘Issuer’) issued GBP
      50,000,000 nominal value of 3.52 per cent Guaranteed Retail Price Index with Zero Floor
      Bonds due 2023 (“RPIG Bonds”) unconditionally and irrevocably guaranteed by Wessex
      Water Services Limited (‘Guarantor’). The RPIG bonds were constituted under a Trust Deed
      dated 10 December, 2001 and are unsecured.

      The principal features of the RPIG Bonds are as follows :-

      (a) The RPIG bonds bear interest at 3.52% per annum until 30 January, 2003, payable
          semi-annually on 30 January and 30 July of each financial year. Thereafter interest is
          paid semi-annually on 30 January and 30 July at an indexed interest rate. The effective
          interest rate as at 30 June, 2003 is 6.17%.

      (b) Unless previously redeemed, repurchased, cancelled or otherwise satisfied by the Issuer,
          the RPIG bonds will be redeemed in full by the Issuer on 30 July, 2003 at their indexed
          value together with all accrued interest on the surrender of the RPIG bonds.

      (c) The Issuer may, at any time, purchase the RPIG bonds in any manner and at any RRIG
          price. If purchases are made by tender, tenders must be available to all bondholders alike.
          All bonds purchased by the Issuer will forthwith be cancelled.

      (d) The Issuer, by giving the appropriate notice and in accordance with the conditions laid out
          in the offering circular, may purchase the RPIG bonds if there is a change in tax legislation
          or if it wishes to do so at a price determined by an agreed formula.




                                                 109
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)

      (e) The bondholders may put the RPIG bonds to the Issuer if i) Wessex Water Services Limited
          loses its Appointment ii) the Issuer ceases to be a subsidiary of Wessex Water Services
          Limited iii) a Restructuring Event occurs which results in the RPIG bonds being downgraded
          below investment grade. ‘Appointment’ refers to the Instrument of Appointment dated 1st
          September 1989 under Section 11 of the Water Act 1989 (now Section 6 of the Water
          Industry Act, 1991) appointing the Guarantor as a water undertaker and sewerage
          undertaker for the areas described therein. ‘Restructuring Event’ refers to either: a) any
          material rights, benefits or obligations of Wessex Water Services Limited under the
          Appointment or any material terms of the Appointment are modified; b) any legislation is
          enacted removing, reducing or qualifying the duties or powers of the Secretary of State for
          the Environment and/or the Director General of Water Services.
          The nominal value of RPIG Bonds issued of GBP50,000,000 remained outstanding as at 30
          June, 2003, net of amortised fees and discount. The net proceeds of the RPIG Bonds were
          used to fund the capital investment programme of Wessex Water Services Limited.

33.   BANK BORROWINGS
                                                       Group                               Company
                                                2003              2002              2003              2002
                                                RM                RM                RM                RM
      Term loans [Note 33(A)]        3,013,708,984 1,075,749,419                      -                 -
      Revolving credits [Note 33(B)] 2,335,279,976 1,548,863,297            779,455,000       479,455,000
      Syndicate bridging loans
       [Note 33(C)]                    110,684,465        112,320,210                 -                 -
      Bank loans                                 -      2,351,206,612                 -                 -
      Committed bank loans
       [Note 33(D)]                  2,346,158,364        996,859,502                 -                 -
      Uncommitted bank loans
       [Note 33(E)]                    143,577,975         37,294,416                 -                 -
                                    ------------------ ------------------ ----------------- -----------------
                                     7,949,409,764 6,122,293,456            779,455,000       479,455,000
                                   =========== =========== ========== ==========
      Repayable within one year        1,884,487,796      2,268,406,385       479,455,000       179,455,000
      Repayable after one year
       and up to five years            4,941,942,526      3,241,606,647       300,000,000       300,000,000
      Repayable after five years
       and up to ten years             1,122,979,442        612,280,424                 -                -
                                      ------------------ ------------------ ----------------- ----------------
                                       7,949,409,764 6,122,293,456            779,455,000      479,455,000
                                      =========== =========== ========== ==========
      Current                          1,884,487,796 2,268,406,385            479,455,000      179,455,000
      Non current                      6,064,921,968 3,853,887,071            300,000,000      300,000,000
                                      ------------------ ------------------ ----------------- ----------------
                                       7,949,409,764 6,122,293,456            779,455,000      479,455,000
                                      =========== =========== ========== ==========
                                                    110
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


    The borrowing obtained by the subsidiary companies is on a non-recourse basis to the
    Company.
                                            Group                       Company
                                             2003                          2003
                                              %                             %
    Weight average effective interest rate

    Terms loans                                  3.76                                    -
    Revolving credits                            3.14                                  3.14
    Syndicate bridging loans                     1.50                                    -
    Committed bank loans                         4.30                                    -
    Uncommitted bank loans                       3.70                                    -
                                             ========                              ========

    The carrying amounts of the bank borrowings of the Group and Company at the balance sheet
    date approximated their fair values except as set below :-

                                               Group                                Company
                                    Carrying amount  Fair value          Carrying amount Fair value
                                         2003          2003                   2003          2003
                                          RM            RM                     RM            RM

    Terms loans                   2,345,462,820 2,345,562,820                      -                -
    Committed bank loans          2,346,158,364 2,346,158,364                      -                -
    Uncommitted bank loans          143,577,975        143,577,975                 -                -
                                 ------------------ ------------------ ----------------- ----------------
                                  4,835,199,159 4,835,199,159                      -                -
                                 =========== =========== ========== ==========




                                              111
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                    Group
                    Amount
             2003               2002     Securities
             RM                 RM

         5,417,964            6,298,299 - A first legal charge on the leasehold properties
                                               of a subsidiary
                                           - Letter of comfort from the Company
      114,549,762          112,320,210 - A private caveat over the freehold land of a subsidiary
       44,413,200           46,387,120 - A first party first fixed charge over the long term
                                              leasehold land and buildings of a subsidiary to be
                                              erected thereon
                                           - A debenture creating a first fixed and floating charge
                                               over a subsidiary’s present and future assets
       95,000,000                    -     - Corporate guarantee by it’s holding company
    3,293,470,975        1,663,357,573 - Clean
      430,000,000                    -     - Corporate guarantee by the Company
      979,800,450          900,000,000 - Secured by 2 pieces of properties of a subsidiary
                                           - by way of debenture over fixed and floating charges
    2,366,726,184        1,031,523,642 - Corporate guarantee by a subsidiary
        8,960,000           11,200,000 - A first legal charge on the freehold land of the subsidiary
                                           - An assignment of shareholders undertaking in favour of
                                               the lenders.
               -         2,351,206,612 - A first fixed and floating charge over the assets of a
                                               subsidiary
      611,071,229                    -     - Secured by fixed deposit of a subsidiary
    -----------------   ------------------
    7,949,409,764        6,122,293,456
    ==========          ===========

                 Company
                  Amount
             2003        2002            Securities
             RM          RM

      779,455,000 479,455,000 - Clean
     ========== ==========

    The Group’s bank borrowings are repayable by monthly, quarterly, semi-annual
    instalments and lump sum repayment.




                                                 112
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)


(A)   Term loans
                                                        Group                              Company
                                                2003              2002              2003              2002
                                                RM                RM                RM                RM

      Term loans comprise of the following :-

      The term loan denominated
       in Great Britain Pounds         1,476,622,500 1,011,864,000                    -                 -
      The term loan denominated
       in US Dollar                      868,840,320                -                 -                 -
      Term loan denominated
       in Ringgit Malaysia               668,246,164          63,885,419                -                -
                                      ------------------ ------------------ ----------------- ----------------
                                       3,013,708,894 1,075,749,419                      -                -
                                      =========== =========== ========== ==========

      (i)    Term loans denominated in Great Britain Pounds

             The term loans are unsecured of Wessex Water Services Limited and are guaranteed by
             Wessex Water Limited. The loans are repayable in full at GBP78,400,000 on 7 December
             2005, GBP21,600,000 on 15 December 2009 and GBP 75,000,000 on 15 June 2011. The
             loans bear interest rates of LIBOR plus 0.12%, LIBOR plus 0.15% and LIBOR plus a
             variable margin respectively. The effective interest rate as at 30 June 2003 is 3.76%
             (2002: 4.04%). For certain term loans, Wessex Water Services Limited entered into
             interest swap agreements as set out in Note 43.

             On 31 January 2003 Wessex Water Services Limited entered into a new term loan
             agreement. The loan was drawn down in full on 3 April 2003 and is unsecured. The loan
             is repayable in full at GBP60,000,000 on 31 January 2011. The loan bears an interest rate
             of LIBOR plus 0.90%. The interest rate since draw down has been 4.56%.

      (ii)   Term loans denominated in US Dollars

             During the financial year, the Company draw down an unsecured term loan of
             USD230,000,000. The loan is repayable in full on 18 December 2006. The loan bears
             interest rate of LIBOR plus 0.70% margin. The effective interest rate as at 30 June 2003
             is 1.99%.

(B)   Revolving credit

      Revolving credit of RM900,000,000 is secured by two pieces of properties of a subsidiary
      company and by way of debenture over fixed and floating charges. Interest is charged at
      average cost of 2.98% per annum plus a fixed margin of 0.75% per annum. The effective
      interest rate as at 30 June 2003 is 3.77%. The principal amount of revolving credit issued was
      RM900,000,000 and was repaid upon the final maturity date on 16 July 2003.
                                                 113
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


      The non current revolving credit is secured by fixed deposits of YTL Utilities Finance
      Limited. The facility bears an interest rate of LIBOR plus 0.10%. The effective interest rate
      is 3.77%. The initial amount draw down was GBP110,000,000 with final maturity on 20
      March 2006.

(C)   Syndicated bridging loan

      The syndicated bridging loan bears interest at 1.5% (2002: 1.5%) per annum over the
      financial institutions’ base lending rates and effective cost of funds and is secured by a
      charge over the freehold land of a subsidiary. The loan is repayable in 22 quarterly
      instalments over an eight year period commencing 33 months after 25 April 2001.

(D)   Committed Bank Loans

      Committed bank loans of RM977,171,520 (GBP169,000,000) which were outstanding as at 30
      June, 2002 were fully repaid during the financial year. These loans were senior unsecured
      loans of Wessex Water Services Limited. The facilities were at interest rates of LIBOR plus
      0.50% and LIBOR plus 0.45% respectively. Each Facility contains financial covenants
      governing minimum interest cover of 2.0x, maximum debt to Regulatory Asset Base (‘RAB’)
      of 89% and maximum senior debt to RAB of 75%.

      In addition there is a committed bank loan of RM21,263,364 (EUR4,873,600) (2002:
      RM19,687,982) (EUR5,445,363) which is a senior unsecured loan of SC Technology
      Nederland BV, a subsidiary of the Group, guaranteed by Wessex Water Limited. 70% of the
      loan is repayable in quarterly instalments of EUR95,294 ending 1 October 2011 and 30% of
      the loan is repayable in full on the same date. The loan bears an interest rate of EURO base
      rate plus 0.60% and varies depending on the credit ratings of Wessex Water Limited.

      During the financial year, senior unsecured loan facilities of RM2,824,895,458
      (GBP449,573,559) were granted to Wessex Water Services Limited. These are Revolving
      Credit Facilities of which GBP49,573,559 expires on 30 June, 2004, GBP160,000,000
      expires on 12 December, 2005 and GBP240,000,000 expires on 21 March, 2006. As at 30
      June, 2003, the drawn down committed bank loans amounted to RM2,324,895,000
      (GBP370,000,000). The facilities bear interest rates in the range of LIBOR plus 0.55% to
      0.625%. Each Facility contains financial covenants governing minimum interest cover of
      2.25x and maximum debt to Regulatory Assets Base (‘RAB’) of 75%.

(E)   Uncommitted bank loans

      The uncommitted bank loans are unsecured loans of Wessex Water Services Limited. The
      loans are drawn under facilities which expire on demand. The facilities bear an interest rate
      of LIBOR plus an agreed margin at the time of drawdown. The effective interest rate as at
      30 June 2003 is 3.70% (2002: 3.50%).



                                               114
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)


34.   BANKERS ACCEPTANCES & BANK OVERDRAFTS
                                                                                         Group
                                                                               2003                  2002
                                                                               RM                    RM
      Unsecured

      Bankers acceptances                                                 69,258,826             72,170,273
                                                                         =========               ========

      Bank overdrafts                                                     86,572,152             54,610,403
                                                                         =========               ========

      The interest charged on the unsecured bank overdrafts and bankers acceptances ranged
      from 2.90% to 8.15% (2002: 2.95% to 8.3%) per annum.


35.   PROVISION FOR LIABILITIES AND CHARGES
                                                                  Group
                                             Provision for     Restructuring      Retirement
                                              legal claim          costs           benefits               Total
                                                 RM                 RM               RM                   RM

      At 1 July, 2002 (restated)                700,000        38,161,728        55,797,072      94,658,800
      Currency translation differences                          3,309,372         4,796,896        8,106,268
      Charged to Income Statements                              1,570,875                -         1,570,875
      Utilised during the period               (700,000)               -           (994,970)      (1,694,970)
      Payment                                                (18,429,273)                -      (18,429,273)
                                         -----------------   ---------------   --------------- ----------------
      Balance at 30 June, 2003                       -         24,612,702        59,598,998      84,211,700
                                         ==========          =========         ========= =========

      Current                                        -         24,612,702               -           24,612,702
      Non current                                    -                 -         59,598,998         59,598,998
                                         -----------------   ---------------   ---------------     ---------------
                                                     -        24,612,702        59,598,998          84,211,700
                                         ==========          =========         =========           =========

      At 30 June, 2002
       - current                                700,000        38,161,728                -          38,861,728
       - non current                                 -                 -         55,797,072         55,797,072
                                         -----------------   ---------------   ---------------     ---------------
                                                700,000       38,161,728        55,797,072          94,658,800
                                         ==========          =========         =========           =========




                                                  115
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)

      Restructuring costs
      The restructuring costs relate to the scaling down of operations of certain subsidiaries of the
      Group. The provision is expected to be utilised within the next financial year.
      Retirement benefits
      Wessex Water Limited (‘WWL’), a subsidiary company of the Group, operates a defined
      benefit retirement scheme, the assets of which are held in a separate trustee-administered
      fund. The contributions are determined by a qualified actuary on the basis of triennial
      valuations using the projected unit method. The most recent valuation was at 31 December,
      2001. The next valuation will be due on 31 December, 2004.
      At the date of acquisition of WWL, the shortfall between the fair value of the Scheme’s
      assets and the expected pension liability accruing to members has been recognised as a
      provision in the financial statements.
      The contribution rate determine for the next 2 years is 15% of pensionable earnings.


36.   GOODWILL ON CONSOLIDATION
                                                                                        Group
                                                                           2003                 2002
                                                                                             (Restated)
                                                                            RM                   RM

      As at beginning of the year
       - as reported                                                  260,659,630          254,244,937
       - prior year adjustment                                        266,396,198                    -
                                                                    -----------------    -----------------
       - as restated                                                  527,055,828          254,244,937
      Arising from acquisition of
       additional shares in subsidiaries                                       -              1,075,436
      Reduction upon deemed disposal of shares in a subsidiary                 -             (6,120,851)
      Arising from deemed acquisition due to
       share buy-back by the listed subsidiaries                                -             9,373,577
      Arising from acquisition of subsidiaries                           6,637,934         268,062,979
      Others                                                                    -               419,750
                                                                    -----------------    -----------------
      As at end of the year                                           533,693,762          527,055,828
                                                                    ==========           ==========




                                                116
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)


37.   SHARE CAPITAL
                                                                            Group/Company
                                                                         2003           2002
                                                                         RM             RM
      Authorised :-

      As at beginning and end of the year

       - 3,000,000,000 ordinary shares of 50 sen each            1,500,000,000      1,500,000,000
                                                                 ==========         ==========
      Issued and fully paid :-

      As at beginning of the year
       - 1,474,586,222 (2002: 1,473,058,648) ordinary
           shares of 50 sen each                                   737,293,111       736,529,324

      Exercise of warrants
       - Nil (2002: 1,527,574) ordinary shares of
          50 sen each                                                        -            763,787
                                                                 ----------------   ----------------
      As at end of the year
       - 1,474,586,222 (2002: 1,474,586,222) ordinary
       shares of 50 sen each                                      737,293,111        737,293,111
                                                                 ==========         ==========
      (a)   Repurchase of shares

            The shareholders of the Company granted the authority to the directors to repurchase
            its own shares at an Extraordinary General Meeting held on 2 October, 2000 of which
            the mandate was subsequently renewed at the Annual General Meetings held on 30
            December, 2000 and 28 December, 2001. The directors of the Company are
            committed to enhance the value of the Company to its shareholders and believe that
            the repurchase plan can be applied in the best interest of the Company and its
            shareholders.

            The Company’s purchase of its own shares on the Kuala Lumpur Stock Exchange are
            summarised as follows :-
                                              No. of shares           Average price
            Financial year ended repurchased/(distributed) paid/distributed              Total
            ------------------------ ------------------------------ ------------------- -------
                                                                       (RM/Share)         RM

            30 June, 2001                        52,024,000         4.81             249,979,832
            30 June, 2002                      (28,425,050)         4.81            (136,585,208)
            30 June, 2003                           775,000         3.38                2,621,528
                                               ---------------                       ---------------
            Total                                24,373,950                          116,016,152
                                               =========                             =========
                                              117
Company No: 92647-H

                             YTL CORPORATION BERHAD
                               (Incorporated in Malaysia)

                NOTES TO THE FINANCIAL STATEMENTS - (Continued)

         The purchase transactions were financed by internally generated funds. The
         repurchased shares are being held as treasury shares in accordance with the
         requirement of Section 67A of the Companies Act, 1965.


         WARRANTS AND EMPLOYEES’ SHARE OPTION SCHEME

         The Warrants 1997/2007 and Warrants 1999/2009 were constituted under the Deed
         Poll dated 20 September, 1997 and 31 July, 1999 respectively.

         As at 30 June, 2002, the total number of warrants that remain unexercised are as
         follows :-

         Warrants 1997/2007                                        88,839,208
         Warrants 1999/2009                                       364,524,301
                                                                  =========

         At an Extraordinary General Meeting held on 16 October, 2001, the Company’s
         shareholders approved the establishment of a New Employees’ Share Options
         Scheme (“New ESOS”) for eligible employees and executive directors of the Group.

         The main features of the New ESOS are as follows :-

         (i)    The New ESOS shall be in force for a period of ten (10) years, effective from
                30 November, 2001.

         (ii)   The maximum number of shares which may be made available under the New
                ESOS shall not exceed ten per cent (10%) of the total issued and paid-up share
                capital of the Company at the time of offering the option.

         (iii) Any employee (including executive directors) of the Group shall be eligible to
               participate in the New ESOS if, as at the date of offer for an option (‘‘Offer
               Date’’) the employee :-

                (a)   has attained the age of eighteen (18) years ;

                (b)   is employed by and on payroll of a company within the Group; and

                (c)   has been in the employment of the Group for a period of at least one (1)
                      year of continuous service prior to and up to the Offer Date, including
                      service during the probation period, and is confirmed in service. The
                      Options Committee may, at its discretion, nominate any employee
                      (including executive directors) of the Group to be an eligible employee
                      despite the eligibility criteria under Clause 4.1(iii) of the Bye-Laws not
                      being met, at any time and from time to time.


                                             118
Company No: 92647-H

                              YTL CORPORATION BERHAD
                                (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)

          (iv)   The price payable for shares under the New ESOS shall be based on the five-
                 day weighted average market price of the underlying shares at the time the
                 option is granted, with a discount of not more than 10%, if deemed appropriate.

    The Company has on 16 October, 2002 granted options under the New ESOS for
    33,742,000 shares at a subscription price of RM2.79.

    Information with respect to the number of option granted under the New ESOS is as
    follows :-

                                                                      Number of
                                                                     share options

    Granted                                                         33,742,000
    Lapsed                                                           (1,264,000)
                                                                   ---------------
    At 30 June, 2003                                                32,478,000
                                                                   =========

    Details of share option granted during the financial year :-
                                                                      Number of
    Exercise period             Exercise price                       Share option
                                    RM                                   RM
    30.11.2001-29.11-2011            2.79                           33,742,000
                                                                   =========
    The terms of share options outstanding as at the end of the financial year are as follows :-
                                                                      Number of
    Exercise period             Exercise price                       Share option
                                    RM                                   RM
    30.11.2001-29.11.2011             2.79                          32,478,000
                                                                   =========
    New ESOS holder can exercise the options 3 years after the New ESOS is granted to them.
    Hence, the New ESOS is only exercisable in 2005 until the date of expiration, which is 10
    years after the New ESOS is granted.




                                              119
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)

38.   NON-DISTRIBUTABLE RESERVES
      (a)   Share premium
                                                                             Group/Company
                                                                           2003          2002
                                                                           RM            RM
            As at beginning of the year                             549,073,205          681,915,851
            Dividends in kind of treasury shares                              -         (136,585,208)
            Shares issued upon exercise of warrants                           -             3,742,562
                                                                  -----------------    -----------------
            As at end of the year                                   549,073,205          549,073,205
                                                                  ==========           ==========
      (b)   Capital reserve
                                                                                      Group
                                                                           2003                 2002
                                                                           RM                   RM
            As at beginning of the year                             24,576,682            23,444,843
            Transfer from unappropriated profits                     1,210,319                  -
            Acreation arising from additional shares issued         35,172,291                  -
            Capitalised from unappropriated profits due to redemption
             of preference shares of a subsidiary                           -               1,082,839
                                                                -----------------      -----------------
            As at end of the year                                   60,959,292             24,576,682
                                                                ==========             ==========

      (c)   Reserve on consolidation
                                                                                      Group
                                                                           2003                  2002
                                                                                              (Restated)
                                                                           RM                     RM

            At beginning of the year
             - as previously reported                               129,441,538                     -
             - prior year adjustment                               (129,441,538)                    -
                                                                  -----------------     -----------------
             - as restated                                                    -                     -
            Arising from acquisition of subsidiary company               346,429                    -
                                                                  -----------------     -----------------
            At end of the year                                           346,429                    -
                                                                  ==========            ==========




                                               120
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


      (d)   Exchange differences reserve
                                                                                   Group
                                                                        2003               2002
                                                                                        (Restated)
                                                                        RM                  RM

            At beginning of the year
             - as previously reported                              29,835,926           22,797,147
             - prior year adjustment                             (16,003,316)                   -
                                                               -----------------    -----------------

             - as restated                                         13,382,610           22,797,147
            Currency translation differences                       49,356,822           (8,964,537)
                                                               -----------------    -----------------
            At end of the year                                     63,189,432          13,832,610
                                                               ==========           ==========


39.   LONG TERM CREDITORS
                                                                                   Group
                                                                        2003                 2002
                                                                        RM                   RM

      Syndicate bridging loan                                       1,847,349                   -
      Acquisition of subsidiary                                    20,994,733           20,178,920
      Currency translation differences                              1,820,655              815,813
      Amount due to KTMB                                           68,835,857          68,835,857
                                                               -----------------    -----------------
                                                                  93,498,594           89,830,590
                                                               ==========           ==========
      Long term creditors comprise deposits received from developers of housing development in
      relation to the provision of water and sewerage infrastructure.
      Amount due to Keretapi Tanah Melayu Berhad (“KTMB”) represents payment in kind
      portion of the total purchase consideration of not less than RM105,616,000 for the
      acquisition of Sentul Raya Development Project Site from KTMB. The amount outstanding
      will be settled by way of phased development, construction and completion of the Railway
      Village by the Company for KTMB at its sale cost and expense, of which the total project
      cost thereof shall not be less than RM69,216,000 in accordance with the provisions of the
      development agreement between the Company and KTMB. Pursuant to the Supplementary
      Development Agreement with KTMB dated 21 December, 2000, the completion date of the
      Railway Village was deferred to 31 December, 2007.




                                               121
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


40.   DEFERRED INCOME
                                                                                  Group
                                                                        2003                2002
                                                                        RM                  RM
      Acquisition of subsidiary                                  131,831,424       125,597,240
      Currency translation differences                             11,432,376         5,077,768
      Received during the period                                           -          1,156,416
      Transfer to income statement                                 (5,373,402)               -
                                                               ----------------- -----------------
                                                                 137,890,398       131,831,424
                                                               ========== ==========

41.   DEFERRED TAXATION
                                                                                  Group
                                                                       2003                 2002
                                                                       RM                   RM
      As at beginning of the year
      - as previously stated                                  1,343,686,375          506,032,398
      - prior year adjustment                                   592,265,597                    -
                                                              -----------------     ----------------
      - as restated                                           1,935,951,972          506,032,398
      Transfer from/(to) Income Statement
       - Property, plant & equipment                            285,545,277       61,178,461
       - Revaluation surplus from freehold land                      324,770               -
       - Retirement benefits                                       9,327,398               -
       - Advance corporate fax                                 (121,808,525)               -
       - General provision                                         2,549,928               -
      Acquisition of a subsidiary company                         66,300,000 1,315,554,592
      Currency translation difference                           126,184,880        53,186,521
                                                              ----------------- ----------------
      As at end of the year                                   2,304,375,700 1,935,951,972
                                                              ========== ==========




                                              122
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


        Deferred tax assets have not been recognised in the respect of the following items :-

                                                                                        Group
                                                                             2003               2002
                                                                                             (Restated)
                                                                             RM                  RM

      Unabsorbed tax losses                                            39,932,745           33,920,733
      Unutilised capital allowances                                     7,211,533           17,252,215
      Deductible temporary differences
       - Provision for liquidated ascertained damage                   24,501,000           32,641,000
       - Provision for foreseeable losses                              11,632,000           31,731,000
       - Others                                                           339,000              150,000

                                                                     ----------------     ----------------
                                                                       83,616,278          115,694,948
                                                                      =========          ==========

      Potential tax benefits calculated at 28% (2002: 28%)
       tax rate                                                       23,412,558           32,394,585
                                                                     =========           ==========

      The unabsorbed tax losses and unutilised capital allowances are subject to agreement with
      the Inland Revenue Board.


42.   EMPLOYEES INFORMATION
                                                     Group                        Company
                                           2003              2002             2003        2002
                                           RM                RM               RM          RM

      Staff costs (excluding
       directors’ remuneration)        380,118,858     105,690,943        2,547,966          2,516,467
                                       =========        ========         ========           ========

      The number of employees of the Group and of the Company (excluding directors) at the
      end of the financial year was 4,895 (2002: 4,554) and 30 (2002: 29) respectively.


43.   FINANCIAL INSTRUMENTS

      Interest rate swaps

      Under the interest rate swaps, the Group agree with other parties to exchange, the
      differences between interest amounts calculated by reference to the agreed national
      principal amounts and payment terms.


                                               123
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

               NOTES TO THE FINANCIAL STATEMENTS - (Continued)


    The interest rate swaps contracts outstanding as at 30 June 2003 are as follows :-

    (a)   In respect of the 7% Redeemable Non-Guaranteed Unsecured Bonds Note 33,
          subsidiary entered into an associated interest rate swap agreement with a financial
          institutions to reduce the annual coupon rate of 7% per annum to an annual coupon
          rate of 0.725% per annum.

    (b)   In respect of the secured bank loans Note 33, a subsidiary company entered into an
          interest rate swap agreement with a financial institution for a notional principal
          amount of GBP410,000,000.

          The GBP410,000,000 swapped quarterly floating of LIBOR plus a margin 0.85% to
          quarterly fixed 5.51% plus the 0.85% margin with a tenure to maturity of 2 years.

          During the financial year, the secured bank loans GBP410,000,000 were repaid in full.
          The corresponding interest rate swap is retained and is subsequently applied to other
          floating rate borrowings of Wessex Water Services Limited

    (c)   In respect of certain term loans Note 33, a subsidiary company entered into interest
          rate swap agreements with financial institutions for a total notional principal amount
          of GBP70,800,000 and with expiry periods ranging from 3 to 7 years. Average
          floating interest rates ranged from 3.51% to 4.06% (2002: 3.98% to 4.09%) per
          annum payable quarterly as compared to fixed interest rates of 5.76% (2002: 5.76%)
          per annum payable semi-annually as a result of the swap agreements.

                                                   The Group
                                        Contract or
                                     national principal
                                          amount           Favourable         Unfavourable
                                            RM                RM                  RM

          Interest rate swaps        3,771,106,800         155,031,137       (106,580,000)

    Due to the transitional provision of MASB 24, the fair value information as at 30 June
    2002 is not presented.




                                             124
Company No: 92647-H

                                    YTL CORPORATION BERHAD
                                      (Incorporated in Malaysia)

                      NOTES TO THE FINANCIAL STATEMENTS - (Continued)


44.   RELATED PARTIES
                                                                                                 Group
                                                                                        2003               2002
      Entity                        Relationship          Type of transactions          RM                 RM

      Business & Budget Hotels      Associated company    Management fees &           354,282                -
       (Kuantan) Sdn. Bhd.           of the Company        data processing fees
                                                          Software maintenance        240,000                -
                                                           cost charges
  *   Express Rail Link Sdn. Bhd.   Associated company    Progress billings on      38,525,107     164,118,384
                                     of the Company        construction contracts
                                                           awarded to a
                                                           subsidiary
      Pahang Cement Sdn. Bhd.       Associated company    Sale of cement             7,360,097           8,075,041
                                     of a subsidiary      Travelling services           69,753            88,148
                                                           rendered
                                                          Hiring & services          7,086,415               -
                                                           rendered
      Pahang Cement Marketing       Associated company    Purchase of cement        54,373,947       8,200,000
       Sdn. Bhd.                     of a subsidiary      Transport charges          4,451,232            -
                                                          Sale of cement &           5,695,827       1,484,718
                                                           related products
                                                          Hiring & services          3,347,837               -
                                                           rendered
      Syarikat Pelanchongan         Subsidiary of the     Management & data         1,082,723            986,906
       Pangkor Laut Sdn. Bhd.        holding company       processing fees
      Superb Aggregates Sdn. Bhd.   Associated company    Purchases                  2,551,455       2,080,608
                                     of a subsidiary      Management fee                96,000          96,000
                                                           income

      *        The Engineering Procurement Construction Contract (“EPC Contract”) for the ERL
               project has been awarded to SYZ Consortium where Syarikat Pembenaan Yeoh Tiong
               Lay Sdn. Bhd., a wholly-owned subsidiary of the Company is a member. The value of
               the portion of civil works contract under the EPC Contract attributable to the subsidiary
               is approximately RM800 million.




                                                    125
Company No: 92647-H

                                  YTL CORPORATION BERHAD
                                    (Incorporated in Malaysia)

                   NOTES TO THE FINANCIAL STATEMENTS - (Continued)

45.   CONTINGENT LIABILITIES - unsecured
      (a)   The Company has given corporate guarantees amounting to RM919,813,000 (2002:
            RM455,300,000) to financial institutions for facilities granted by the financial
            institutions to its subsidiaries as follows :-
                                                                           Total Amount
                                                                            Guaranteed
                                                                        2003            2002
                                                                       RM’000          RM’000
            Block discounting/hire purchase facility                      28,900           23,900
            Bank overdrafts                                               33,900           33,900
            Letters of credit/trust receipts/bankers acceptances/
             shipping guarantees                                         154,800         164,800
            Revolving loans/advances                                     124,413         105,000
            Suppliers credit facility                                        500             500
            Bankers guarantees :-
            Advance payment bonds/performance bonds,
             pre-bid bonds and other related guarantees                    77,300        127,200
            Commercial papers/medium term notes                          500,000              -
                                                                     --------------   -------------
                                                                         919,813         455,300
                                                                     ========         ========
                                                                          Amount Utilised
                                                                        2003              2002
                                                                       RM’000           RM’000
            Block discounting/hire purchase facility                        4,202             350
            Bank overdrafts                                                 9,002             929
            Letters of credit/trust receipts/bankers acceptances/
             shipping guarantees                                          19,425           27,926
            Revolving loans/advances                                     109,413           90,000
            Suppliers credit facility                                        346              488
            Bankers guarantees :-
            Advance payment bonds/performance bonds,
             pre-bid bonds and other related guarantees                    64,754        110,631
            Commercial papers/medium term notes                          430,000              -
                                                                    ---------------   -------------
                                                                         637,142         230,324
                                                                    =========         ========
      (b)   YTL Land & Development Berhad, a quoted subsidiary, has contingent liability relating
            to claims made by third parties in respect of fees and debts totaling RM0.975 million.
            The directors of the subsidiary in consultation with legal opinion are of the view that
            there are no merits to the claims.

                                                 126
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


46.   COMMITMENTS

      Capital commitments :-
                                                                                    Group
                                                                         2003                2002
                                                                         RM                  RM
      Property, plant & equipment
        Contracted but not provided
         for in the financial statements                          881,374,350         362,626,570
                                                                  =========           =========

      Investments
        Contracted but not provided
         For in the financial statements #                        612,341,398         383,622,000
                                                                  =========           =========

      Lease rental on sublease of land
      Not later than one year                                          566,280           2,955,617
      Later than one year and not later than five years              2,265,120           3,153,744
      Later than five years                                         12,407,340         11,797,500
                                                                  ---------------     ---------------
                                                                   15,238,740          17,906,861
                                                                  =========           =========

      #   Included are put option granted by its subsidiary, YTL L&D, to Keretapi Tanah
          Melayu Berhad (“KTMB”) for the purchase of KTMB’s 30% equity interest in a
          subsidiary at a consideration of RM100 million to be satisfied by issue of new ordinary
          shares of RM1 each at RM3.90 each by YTL L&D and proposed acquisition of
          property development companies of RM282,622,000 by YTL L&D. The put option is
          exercisable by KTMB within three (3) months after the date of approval by
          shareholders of YTL L&D in general meeting adopting the subsidiary’s audited
          financial statements for the financial year ending 2007.




                                                127
Company No: 92647-H
                                                                                             YTL CORPORATION BERHAD
                                                                                               (Incorporated in Malaysia)
                                                                        NOTES TO THE FINANCIAL STATEMENTS - (Continued)

47.   SEGMENTAL INFORMATION
      The Group is organised into eight main business segments :-
      (i)     Construction                                                                          (v)      Management services & others
      (ii)    Information technology & e-commerce related business                                  (vi)     Property development
      (iii)   Hotel & restaurant operations                                                         (vii)    Power generation
      (iv)    Manufacturing & trading                                                               (viii)   Water & sewerage
      (a)     Primary reporting business segments
                                                              Information technology              Hotel &                                      Management
                                                                   & e-commerce                  restaurant           Manufacturing             services              Property               Power           Water &
                                         Construction             related business               operations            & trading                & others            development            generation        sewerage               Total
                                          RM’000                      RM’000                      RM’000                RM’000                  RM’000                RM’000                RM’000           RM’000                RM’000
      30 June, 2003
      Revenue                                  126,157                       20,436                 107,569                    465,654               190,527              116,966          1,264,392         1,735,136           4,026,837
                                        -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
      Results
      Segment result (external)                 39,903                        9,219                   9,003                     87,829               157,344               53,530            576,286           667,780          1,600,878
      Unallocated income                                                                                                                                                                                                            66,534
                                                                                                                                                                                                                               -------------
      Profit from operations                                                                                                                                                                                                    1,667,412
      Finance cost                                                                                                                                                                                                               (675,299)
      Share of results of associated
       company                                                                                                                                                                                                                       4,730
                                                                                                                                                                                                                               -------------
      Profit from ordinary activities
       before tax                                                                                                                                                                                                                 996,843
      Tax                                                                                                                                                                                                                        (209,386)
                                                                                                                                                                                                                               -------------
      Profit from ordinary activities
       after tax                                                                                                                                                                                                                 787,457
                                                                                                                                                                                                                               ========
      At 30 June, 2003
      Other information
      Segments assets                          480,530                     162,768                 216,923                    548,820             6,098,883            1,557,961           3,085,118       10,769,497          22,920,500
      Allocated assets                                                                                                                                                                                                            823,525
                                                                                                                                                                                                                               -------------
      Total assets                                                                                                                                                                                                             23,744,025
                                                                                                                                                                                                                               ========
      Segment liabilities                      (57,466)                      (7,965)                (26,589)                 (129,437)               (42,380)            (166,162)            (73,331)        (763,632)        (1,266,855)
      Unallocated liabilities                                                                                                                                                                                                 (15,491,053)
                                                                                                                                                                                                                               -------------
      Total liabilities                                                                                                                                                                                                       (16,757,908)
                                                                                                                                                                                                                               ========
      Capital expenditure                         2,651                       5,220                   1,679                     23,878                12,423              412,770             60,483           970,548          1,487,652
      Depreciation & amortisation                  -                          1,201                   4,010                     16,082                10,913                1,709            133,606           313,662            481,183
                                                                                                                   128
Company No: 92647-H
                                                                                               YTL CORPORATION BERHAD
                                                                                                 (Incorporated in Malaysia)
                                                                          NOTES TO THE FINANCIAL STATEMENTS - (Continued)

                                                          Information technology              Hotel &                                       Management
                                                               & e-commerce                  restaurant           Manufacturing              services              Property              Power            Water &         Exceptional
                                      Construction            related business               operations            & trading                 & others            development           generation         sewerage           gain              Total
                                       RM’000                     RM’000                      RM’000                RM’000                   RM’000                RM’000               RM’000            RM’000           RM’000             RM’000
    30 June, 2002

    Revenue                                 322,755                       14,980                  91,350                   464,812                128,437              131,818          1,276,956           136,833              -            2,567,941
                                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Results
    Segment result (external)                12,424                        5,994                   3,796                    66,065                 64,085               35,271            642,866            63,548                   3        894,052
    Unallocated income                                                                                                                                                                                                                           85,150
                                                                                                                                                                                                                                          ---------------
    Profit from operations                                                                                                                                                                                                                     979,202
    Finance cost                                                                                                                                                                                                                              (202,269)
    Share of results of associated
     company                                                                                                                                                                                                                                     22,280
                                                                                                                                                                                                                                          ---------------
    Profit from ordinary activities
     before tax                                                                                                                                                                                                                                799,213
    Tax                                                                                                                                                                                                                                       (211,070)
                                                                                                                                                                                                                                          ---------------
    Profit from ordinary activities
     after tax                                                                                                                                                                                                                               588,143
                                                                                                                                                                                                                                          =========
    At 30 June, 2002
    Other information
    Segments assets                        572,701                      149,819                 221,968                    490,219             4,892,332            1,106,441          3,524,849         9,148,751                         20,107,080
    Unallocated assets                                                                                                                                                                                                                         667,489
                                                                                                                                                                                                                                          =========
    Total assets                                                                                                                                                                                                                           20,774,569
    Segment liabilities                     (86,091)                      (5,745)               (30,730)                  (122,599)               (49,381)           (166,368)           (632,994)         (161,391)                        (1,255,299)
                                                                                                                                                                                                                                          =========
    Unallocated liabilities                                                                                                                                                                                                               (13,287,412)
                                                                                                                                                                                                                                          ---------------
    Total liabilities                                                                                                                                                                                                                     (14,542,711)
                                                                                                                                                                                                                                          =========
    Capital expenditure                       1,309                        1,961                     559                    62,177                  7,551               14,676             46,881            61,868                            196,982
                                                                                                                                                                                                                                          =========
    Depreciation & amortisation               7,836                          663                   4,677                    16,097                  4,297                1,646            125,284            24,285                            184,785


                                                                                                                     129
Company No: 92647-H

                                           YTL CORPORATION BERHAD
                                             (Incorporated in Malaysia)

                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)


(b)   Secondary reporting format - geographical segments

      Although the Group’s business segments are managed on a worldwide basis, they operate
      in two main geographical areas :-

      (i)    Malaysia                       -       Construction
                                            -       Information technology & e-commerce related business
                                            -       Hotel & restaurant operations
                                            -       Manufacturing & trading
                                            -       Management services & others
                                            -       Property development
                                            -       Power generation
                                            -       Water & sewerage
      (ii)   United Kingdom                 -       sales of water and disposal of waste water activities

                                            Sales                                      Total assets                         Capital expenditure
                               2003                   2002                    2003                    2002                2003             2002
                               RM                     RM                      RM                      RM                  RM                RM

      Malaysia             2,170,050,075          2,414,362,781         12,807,516,095          11,463,061,634          495,931,691 68,512,542
      United Kingdom       1,735,136,692             136,832,923        10,500,970,577            8,916,679,320         891,679,320 61,868,256
      Other countries        121,650,055              16,745,497            435,538,173             394,828,044           11,189,205              -
                        --------------------------------------------------------------------------------------------------------------------------------
                           4,026,836,822          2,567,941,202         23,744,024,845          20,774,568,998 1,477,669,314 130,380,798
                        ============================================================================



48.   PRIOR YEARS ADJUSTMENTS

      During the financial year, the Group changed its accounting policies with respect to the
      depreciation of hotel properties in compliance with MASB 15 “Property, Plant and
      Equipment” and recognition of deferred tax in compliance with MASB 25 “Income Taxes”.
      These changes in policies have the effect on the accounting treatments for property, plant
      and equipment and deferred tax as follows :-

      (i)    Property, plant and equipment

             In previous years, hotel properties of a subsidiary in depreciated to write off the cost
             of the properties over their estimated useful lives. The Group has now changed this
             accounting policy to that of not providing for depreciation on hotel properties as it is
             Group’s practice to maintain the hotel properties at a high standard and condition
             such that the residual value is at least equal to the book value and consequently
             depreciation would be immaterial. The related maintenance expenditure is charged to
             the Income Statement.




                                                                    130
Company No: 92647-H

                                   YTL CORPORATION BERHAD
                                     (Incorporated in Malaysia)

                    NOTES TO THE FINANCIAL STATEMENTS - (Continued)


    (ii)     Deferred tax

             During the financial year, the Group applied the accounting policy with respect to the
             recognition of deferred tax assets and liabilities in compliance with MASB Standard 25
             “Income Taxes”. In previous financial year, deferred tax was recognised for all timing
             differences. The Group has now applied the accounting policy to recognise deferred tax
             on temporary differences, the details of which are provided in Note 2(q) to the financial
             statements. This application of the accounting policy has been accounted for
             retrospectively.

    (iii) Fair value adjustments

             As permitted by MASB 21, “Business Combinations”, certain fair value adjustment
             relating to the acquisition of subsidiary company during the previous financial year has
             also been accounted for retrospectively.

    The application of the accounting policies has been accounted for retrospectively and
    comparatives have been restated. The effects of the changes are as follows :-
                                                                     Effect of
                                               As previously        change in              As
                                                  reported            policy            restated
                                                     RM                 RM                RM
    Group
    At 1 July 2001
     - unappropriated profits
    Year ended 30 June 2002                 2,925,067,796          1,851,117      2,926,918,913

           Other operating expenses               51,945,581         (1,376,866)      50,568,715
           Share of results of associated
            companies                            21,996,153          283,389         22,279,542
           Minority interest                    224,117,434          674,664        224,792,098
           Net profit for the year              362,365,303          985,591        363,350,894
                                               ==========        ==========        ==========




                                                 131
Company No: 92647-H

                               YTL CORPORATION BERHAD
                                 (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


                                                            Effect of
                                         As previously      change in       Fair value          As
                                           reported          policy         adjustment       restated
                                             RM               RM               RM              RM
      At 30 June 2002

          Other debtors, deposit and
           prepayments                  651,435,202         -     (64,271,428) 587,163,774
          Property, plant and
           equipment                 11,814,859,760    3,671,643         -    11,818,531,403
          Investment in associated
           companies                    307,206,934      964,170         -       308,171,104
          Deferred tax liabilities    1,343,686,375  592,265,597         -     1,935,951,972
          Goodwill on consolidation     260,659,630  214,667,563   51,728,635    527,055,828
          Capital reserve on
           consolidation                129,441,538 (129,441,538)        -              -
          Unappropriated profits      3,252,276,362    2,836,708         -     3,255,113,070
          Exchange difference
           reserves                      29,835,926  (13,912,114)  (2,091,202)    13,832,610
          Minority interests          2,033,033,222 (232,452,558) (35,216,914) 1,765,363,750
          Taxation                       79,633,868         -      57,820,800    137,454,668
                                      ========== ========== ========== ==========

      There is no financial effect on the Company’s financial statements.


49.   COMPARATIVE INFORMATION

      Comparative figures have been adjusted to conform with current financial year
      presentation.

      Included in other creditors and accruals as at 30 June, 2002 is an amount of RM23,417,424,
      being provision for retirement benefits. This amount has been reclassified to provision for
      liabilities and charges under long term liabilities in accordance with its nature.




                                               132
Company No: 92647-H

                                 YTL CORPORATION BERHAD
                                   (Incorporated in Malaysia)

                  NOTES TO THE FINANCIAL STATEMENTS - (Continued)


      The effects on the financial statements of the Group as at 30 June, 2002 are as follows :-

                                                  As previously                               As
                                                    reported        Reclassification       restated
                                                      RM                 RM                  RM

      Group
      Long term liabilities
      Provision for liabilities and charges       32,379,648         23,417,424         55,797,072
      Current liabilities
      Other creditors and accruals              510,621,759         (23,417,424)       487,204,335
                                               ==========           =========          =========


50.   FINANCIAL INSTRUMENTS

      Financial risk management and objectives

      The Group’s activities expose it to a variety of financial risks, including foreign currency
      exchange risk, interest risk, market risk, credit risk, liquidity and cash flow risk. The
      Group’s overall financial risk management objective is to ensure that the Group creates
      value of its shareholders. The Group focuses on the unpredictability of financial markets
      and seeks to minimise potential adverse effects on the financial performance of the Group.
      Financial risk management is carried out through risk reviews, internal control systems and
      adherence to Group financial risk management policies. The Board regularly review these
      risk and approves the treasury, which covers the management of these risks.

      (a)   Foreign currency risk

            The Group’s exposure to currency risk as a result of the foreign currency transactions
            is limited because its subsidiaries trade and obtain borrowings predominantly in their
            respective functional currency. Where necessary, the Group enters into forward
            foreign currency exchange contracts to limit its exposure on foreign currency
            receivable and payables, and on cash flows generated from anticipated transactions
            denominated in foreign currencies.

      (b)   Interest rate risk

            The Group’s income and operating cash flows are substantially independence of
            changes in market interests rates. Interest rate exposure arises from the Group’s
            borrowings, deposits and short-term investment, and is managed through the use of
            fixed and floating rate debt and derivative financial instruments. Derivative financial
            instruments are used, where appropriate, to generate the desired interest rate profile.



                                               133
Company No: 92647-H

                                YTL CORPORATION BERHAD
                                  (Incorporated in Malaysia)

                 NOTES TO THE FINANCIAL STATEMENTS - (Continued)


      (c)   Credit risk

            Credit risk is the potential financial loss resulting from the failure of a counter party
            to settle their obligations to the Group. Credit risk of the Group arises mainly from
            trade receivables, fixed deposits, short term investments and interest rate swaps.

            The Group seeks to invest cash assets safely and profitably with creditworthy
            institutions. All derivative financial instruments are executed with creditworthy
            counter parties with a view to limit the credit risk exposure risk of the Group.

            In the Group’s Power Generation business, trade receivables are solely from its off
            taker, a national electricity utility company and the counter party risk is considered to
            be minimal. As for the Group’s Water and Sewerage business, the credit risk of
            receivables is mitigated through strict collection procedures. In addition, the directors
            are of the view that credit risk arising from the Water and Sewerage business is
            limited due to its large customer base.

            The Group considers the risk of material loss in the event of non-performance by a
            financial counter party to be unlikely.

      (d)   Liquidity and cash flow risk

            The Group practices prudent liquidity risk management policies and maintains
            sufficient levels of cash and credit facilities for working capital and contingent
            funding requirements.

      (e)   Fair values

            The fair value of financial assets and financial liabilities approximate their respective
            carrying values on the balance sheets of the Group and Company.

            There are no fair values of financial instruments not recognised on the balance sheets
            of the Group and Company as at 30 June, 2003 that are required to be disclosed.


51.   AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENTS

      The financial statements have been authorised for issue by the Board of Directors in
      accordance with the Directors’ Resolution dated 30 October 2003.

Lodged by :     YTL Corporation Berhad
Address   :     11th Floor, Yeoh Tiong Lay Plaza
                55, Jalan Bukit Bintang
                55100 Kuala Lumpur
Tel. No.    :   03-21426633


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