Conditional Sale Agreement for Business

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Conditional Sale Agreement for Business Powered By Docstoc
					   Mah Sing Group Berhad
   (230149 P)



   CONDENSED CONSOLIDATED INCOME STATEMENTS
   For the financial quarter ended 30 September 2003

                                      Current          9 months      Comparative         Comparative
                                      quarter        cumulative           quarter            9 months
                                       ended                  to           ended         cumulative to
                                   30.09.2003         30.09.2003       30.09.2002           30.09.2002
                                     (RM'000)           (RM'000)         (RM'000)          (RM'000)

   Revenue                             58,534           138,444              34,592              137,907

   Operating expenses                 (52,119)         (126,702)             (32,761)           (129,723)

   Other operating income                 656             4,045                  293               1,083

   Profit from operations               7,071            15,787                2,124               9,267

   Finance costs                         (983)            (3,102)             (1,137)              (3,722)
   Interest income                        158                212                 192                  677

   Profit before taxation               6,246            12,897                1,179               6,222

   Taxation
   - Group                             (2,240)            (3,632)               (271)              (2,400)

   Profit after taxation                4,006             9,265                  908               3,822

   Minority interest                     (101)             (349)                (161)                199

   Net profit                           3,905             8,916                  747               4,021

   Earnings per share:
   - Basic (sen)                         8.88             20.27                 1.70                 9.14

   - Diluted (sen)                       N/A                N/A                 N/A                  N/A




   (The Condensed Consolidated Income Statements should be read in conjunction with the Annual
   Financial Report for the year ended 31 December 2002)




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          MAH SING GROUP BERHAD
          (230149 P)



          CONDENSED CONSOLIDATED BALANCE SHEETS
          As at 30 September 2003
                                                                        Quarter ended                Year ended
                                                                           30.09.2003                 31.12.2002
                                                                              (RM'000)                  (RM'000)

                Property, plant and equipment                                  64,036                      79,146
                Investment in associated companies                                 99                         710
                Long term investments                                               1                           1
                Real property assets                                           22,997                      22,997
                Intangible assets                                                  55                          60
                Current Assets
                      Development properties                                  127,495                      92,187
                      Inventories                                               7,761                      12,074
                      Trade and other receivables                              58,733                      29,551
                      Deposits with licensed banks                                 80                          50
                      Project accounts                                          6,768                       8,402
                      Cash and bank balances                                    4,313                       3,656
                                                                              205,150                    145,920
                Current Liabilities
                      Trade and other payables                                 87,370                      46,805
                      Term loans                                               15,637                      17,377
                      Short term borrowings                                    33,988                      35,867
                      Bank overdrafts                                          11,529                       6,799
                      Taxation                                                  4,464                       4,153
                                                                              152,988                    111,001
                Net Current Assets/(Liabilities)                               52,162                      34,919
                                                                              139,350                    137,833
                Shareholders' Funds
                Share capital                                                  43,978                      43,978
                Reserves
                      Share premium                                            47,199                      47,199
                      Capital reserve                                             852                         852
                      Exchange fluctuation reserve                              6,003                       6,003
                      Retained profit/accumulated loss                          1,581                      (7,018)
                                                                               99,613                      91,014
                Preference shares                                              14,000                      14,000
                Minority interest                                               2,276                       1,928
                Long term borrowings                                           19,637                      28,543
                Deferred payables                                               1,867                         732
                Deferred taxation                                               1,957                       1,616
                                                                              139,350                    137,833

                Net tangible assets per share (RM)                                2.26                       2.07

          (The Condensed Consolidated Balance Sheets should be read in conjunction with the Annual Financial
          Report for the year ended 31 December 2002)




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Mah Sing Group Berhad
(230149 P)



CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the financial quarter ended 30 September 2003

                                                Reserve          Reserve     (Accumulated
9 months                          Share    attributable     attributable           losses)/
ended 30 September 2003          capital     to capital     to revenue      Retained profits            Total
                               (RM'000)       (RM'000)         (RM'000)           (RM'000)           (RM'000)

Balance at beginning of the      43,978         54,054              -                 (7,018)          91,014
year

Net profit for the financial
period                              -              -                -                  8,916            8,916

Dividends for the year              -              -                -                   (317)            (317)
ended : 31.12 .2002

Balance at end of the
financial period                 43,978         54,054              -                  1,581           99,613

                                                Reserve          Reserve
9 months                          Share    attributable     attributable      Accumulated
ended 30 September 2002          capital     to capital      to revenue             losses              Total
                               (RM'000)        (RM'000)         (RM'000)          (RM'000)           (RM'000)
Balance at beginning of the
year                             43,978         54,054              -                (11,692)          86,340

Net profit for the financial
period                              -              -                -                  4,021             4,021

Dividends for the year              -              -                -                   (633)             (633)
ended : 31.12 .2001

Balance at end of the
financial period                 43,978         54,054              -                  (8,304)         89,728




(The Condensed Consolidated Statements of Changes in Equity should be read in conjunction with the Annual
Financial Report for the year ended 31 December 2002)




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    MAH SING GROUP BERHAD
    (230149 P)



    CONDENSED CONSOLIDATED CASH FLOW STATEMENT
    For the financial quarter ended 30 September 2003
                                                                                 9 months             9 months
                                                                                    ended                ended
                                                                                30.09.2003           30.09.2002
                                                                                  (RM'000)             (RM'000)
    Operating activities
    Profit before taxation                                                          12,897                 6,222
    Adjustment for investing and financing activities and items not
    involving movement of cash and cash equivalents:-
          Non-cash items                                                             4,615                 7,983
          Non-operating items                                                        3,846                 3,777
    Operating profit before changes in working capital                              21,358                17,982

    Changes in working capital
        Net change in current assets                                               (46,708)               31,986
        Net change in current liabilities                                           40,059               (22,687)
    Cash from operations                                                            14,709                27,281
        Interest paid                                                               (4,967)               (6,288)
        Interest received                                                              212                   678
        Tax paid                                                                    (2,981)               (2,402)
    Net cash flows from operating activities                                         6,973                19,269

    Investing activities
        Property, plant and equipment
        - purchases                                                                  (2,419)              (3,437)
        - proceeds from disposals                                                     1,032                  902

    Financing activities
         Dividend paid                                                                 (317)                (633)
         Bank borrowings :
         - new drawdown                                                              6,360                 2,800
         - repayment                                                               (17,336)              (17,879)

    Net change in cash & cash equivalents                                            (5,707)               1,022
    Cash & cash equivalents at beginning of the year                                  5,259               (1,700)
    Cash & cash equivalents at end of the financial period                             (448)                (678)




    (The Condensed Consolidated Cash Flow Statement should be read in conjunction with the Annual Financial
    Report for the year ended 31 December 2002)




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                   MAH SING GROUP BERHAD                                                                                         -
                   (230149 P)

                   NOTES TO THE FINANCIAL STATEMENTS
                   For the financial quarter ended 30 September 2003

                   A     MASB 26 - Paragraph 16

                   A1    Accounting policies and methods of computation

                         The financial report is unaudited and has been prepared in accordance with MASB 26 Interim Financial
                         Reporting and paragraph 9.22 of the Listing Requirements of Kuala Lumpur Stock Exchange, and should be
                         read in conjunction with the Group's financial statements for the year ended 31 December 2002.

                         The accounting policies and presentation adopted for the interim financial report are consistent with those
                         adopted for the annual financial statements for the year ended 31 December 2002 except for the
                         adoption of new applicable approved accounting standards, MASB 25 - Income Taxes, issued by the
                         Malaysian Accounting Standards Board which became operative for the financial period beginning on or
                         after 1 July 2002.

                         The Group has adopted the balance sheet liability method as required by MASB 25 for the computation of
                         deferred taxation since 30 September 2002. Since the effect of the change in accounting estimate has
                         been reflected in the financial statements for the year ended 31 December 2002, only the results of the
                         preceding year corresponding quarter have been adjusted to conform with current year's presentation
                         and no prior year adjustment is required for brought forward retained earnings.

                         There are no other changes in accounting policy that affect the profit after tax for the quarter or
                         shareholders' equity as a result of the adoption of the new standards in this financial report.

                   A2    Preceding annual audit report status

                         The annual audit report of the annual financial statements for the financial year ended 31 December 2002
                         was not subject to any qualification.

                   A3    Seasonality or cyclicality factors

                         There is no seasonality or cyclicality effect on the Group's operations.

                   A4    Nature and amount of unusual items

                         In the opinion of the directors, no item or event of a material and unusual nature has arisen which would
                         affect substantially the results of the Group for the current quarter and financial period to-date ended 30
                         September 2003.

                   A5    Changes in estimates

                         There were no material changes in estimates from prior quarters which have a material effect in the
                         current quarter.

                   A6    Debts and equity securities

                         There were no major financing activities for the current quarter and financial period to-date ended 30
                         September 2003.


                   A7    Dividends paid

                         The first and final gross dividend of 1 sen per share, less income tax, on 43,978,000 ordinary share,
                         amounting to RM316,642 in respect of the financial year ended 31 December 2002 was paid on 19th
                         September 2003.




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                   MAH SING GROUP BERHAD                                                                                       -
                   (230149 P)

                   NOTES TO THE FINANCIAL STATEMENTS

                   A8    Segment reporting

                         9 months ended 30.09.2003
                                                                            Investment         Other
                                                 Properties      Plastics      Holding     Operations   Elimination   Consolidated
                         REVENUE                    RM'000       RM'000         RM'000        RM'000        RM'000         RM'000
                         External Sales
                               Malaysia              82,951      43,047           -              -            -           125,998
                               Indonesia                -        12,446           -              -            -            12,446
                         Inter-segment                  -           -                 45         -            (45)            -
                         Total revenue               82,951      55,493               45         -            (45)        138,444

                         RESULTS
                         Operating profit            13,248       4,092        (1,638)           (15)         100          15,787

                         Interest expense                                                                                   (3,102)
                         Interest income                                                                                       212
                         Income tax                                                                                         (3,632)
                         Profit after tax                                                                                    9,265
                         Minority interest                                                                                    (349)
                         Net profit                                                                                          8,916

                         OTHER INFORMATION
                         Depreciation                  847        5,750               11         -            -             6,608
                         Amortisation                  -              4           -              -            -                 4


                         9 months ended 30.09.2002
                                                                            Investment         Other
                                                 Properties      Plastics      Holding     Operations   Elimination   Consolidated
                                                    RM'000       RM'000         RM'000        RM'000        RM'000         RM'000
                         REVENUE
                         External Sales
                               Malaysia              79,824      46,217           -              -             -          126,041
                               Indonesia                -        11,866           -              -             -           11,866
                         Inter-segment                  -           -           1,263            -          (1,263)           -
                         Total revenue               79,824      58,083         1,263            -          (1,263)       137,907

                         RESULTS
                         Operating profit             6,990       3,291                6         (30)         (990)         9,267
                         Interest expense                                                                                   (3,722)
                         Interest income                                                                                       677
                         Income taxes                                                                                       (2,400)
                         Profit after tax                                                                                    3,822
                         Minority interest                                                                                     199
                         Net profit                                                                                          4,021

                         OTHER INFORMATION
                         Depreciation                  939        5,676                9                       -            6,624
                         Amortisation                  -              6           -              -             -                6


                   A9    Valuation of Property, Plant and Equipment

                         No valuation has been undertaken during the financial period.




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                   MAH SING GROUP BERHAD                                                                                              -
                   (230149 P)

                   NOTES TO THE FINANCIAL STATEMENTS

                   A10   Events subsequent to the balance sheet date

                         On 1st October 2003, Mah Sing Properties Sdn Bhd., a wholly-owned subsidiary company of Mah Sing
                         Group Berhad, entered into a Conditional Sale and Purchase Agreement with Kerjaya Bakti for the
                         proposed acquisition of approximately 17.438 acres of freehold development land held under HS(D) 55257
                         P.T. 12165, Mukim Sungai Buloh, Daerah Petaling, Selangor Darul Ehsan for a total cash consideration of
                         RM50 million, arrived at on a willing buyer-willing seller basis.

                         The total purchase consideration is to be satisfied wholly in cash on a staggered basis through internally
                         generated funds and/or banking borrowings.

                         The proposed acquisition is in line with the Group's objective of increasing its holdings of choice landbanks
                         in the Klang Valley to contrinue to focus on its core business of property development.

                         This SPA is conditional upon the approval from the Foreign Investment Committee and from the
                         shareholders of Mah Sing Properties Sdn Bhd and Mah Sing Group Berhad at an extraordinary general
                         meeting.

                         Completion of the acquisition of the land is expected to be in the 3rd quarter of 2004.




                   A11   Changes in the composition of the Group

                         There are no changes in the composition of the group for the current quarter and financial period ended
                         30 September 2003.


                   A12   Changes in contingent liabilities and contingent assets

                                                                                                             Contingent Liabilities

                   A12.1 Corporate guarantees                                                               30.09.2003      31.12.2002

                         Corporate guarantees issued to financial institutions in respect
                         of credit facilities granted to:
                         - subsidiaries                                                                            -               -
                         - associated companies                                                                    609            902
                                                                                                                   609            902

                   A12.2 Capital Commitments

                         Capital commitments not provided for in the financial statements are as follows:

                                                                                                               RM'000           RM'000
                         Contracted but not provided for in the accounts:
                              Property, plant and equipment                                                         -             819
                         Approved but not contracted for                                                            -              -
                                                                                                                    -             819


                   B     KLSE listing requirements (Part A of Appendix 9B)

                   B1    Review of performance-current quarter and financial period ended 30 September 2003

                         Compared to the previous year corresponding quarter, Group revenue for the current quarter increased
                         69% to RM58.53 million while profit before tax increased 5.3-fold to RM6.25 million due to the improved
                         performance of the property development division.

                         Likewise, for the third quarter ended 30 September 2003, the Group posted a higher profit before tax of
                         RM12.90 million on the back of revenue of RM138.44 million. Although Group revenue was relatively
                         unchanged, profit before tax increased 2-fold due largely to the higher margins from disposal of vacant
                         land at Sri Pulai Perdana and Austin Perdana development projects.




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                   MAH SING GROUP BERHAD                                                                                        -
                   (230149 P)

                   NOTES TO THE FINANCIAL STATEMENTS

                   B2    Material change in the profit before taxation-current quarter and immediate preceding quarter

                         Compared to the immediate preceding quarter, current quarter's Group revenue and profit before tax
                         were up 31% and 26% respectively with the property division accounting for the increase.


                   B3    Current year prospects

                          With the economy on the rebound, the Board is optimistic the Group's performance for the rest of the year
                         should improve.


                   B4    Variance of profit forecast

                         Not applicable for the current quarter and financial year ended 31 December 2003.


                   B5    Tax expense

                                                                               Current       9 months Comparative         9 months
                                                                               quarter     cumulative      quarter    cumulative to
                                                                                ended               to      ended                 to
                                                                            30.09.2003      30.09.2003  30.09.2002       30.09.2002
                                                                               RM'000          RM'000      RM'000           RM'000

                              Malaysian income tax                                2,304         3,289           91            2,028
                              Overprovision in respect of prior years               -               2          -                -
                              Transfer to / (from) deferred taxation                (66)          341          180              372
                                                                                  2,240         3,632          271            2,400



                         The effective tax rate of the Group was higher than the statutory rate of tax applicable due to losses
                         suffered by certain subsidiary companies for which no group relief is available and certain expenses which
                         were not deductible for tax purposes.


                   B6    Unquoted investment

                         There were no purchase or disposal of unquoted investments for the current quarter and current financial
                         period to-date ended 30 September 2003.

                   B7    Quoted securities

                          (a) There were no purchase or disposal of quoted securities for the current quarter and current financial
                              period to-date ended 30 September 2003.

                          (b) Total investments in quoted securities are as follows:

                                                                                                        30.09.2003        31.12.2002
                                                                                                             RM'000         RM'000

                           (i) At cost                                                                           4                  4

                           (ii) At carrying value/book value                                                     1                  1

                          (iii) At market value                                                                  1                  1




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                   MAH SING GROUP BERHAD                                                                                        -
                   (230149 P)

                   NOTES TO THE FINANCIAL STATEMENTS

                   B8    Proposed corporate fund raising exercise

                         On 31 October 2003, the Company submitted an application to Securities Commission for the approval of
                         the following:

                         (a)   a proposed private placement exercise of up to 43,978,000 new ordinary shares of RM1.00 each in
                               Mah Sing Group Berhad, representing 10% of the issued and paid-up share capital of the Company
                               immediately prior to the placement, to several placees;

                         (b)   a proposed renounceable rights issue of 80,626,333 new ordinary shares of RM1.00 each in Mah Sing
                               Group Berhad on the basis of 5 new Mah Sing Group Berhad shares for evey 3 existing Mah Sing
                               Group Berhad shares;

                         (c)   a proposed issue of 48,375,800 free warrants in Mah Sing Group Berhad on the basis of 3 free warrants
                               for 3 existing Mah Sing Group Berhad shares;

                         (d)   a proposed bonus issue of 16,125,267 new Mah Sing Group Berhad shares on the basis one 1 new
                               Mah Sing Group Berhad share for every 5 new Mah Sing Group Berhad shares subscribed pursuant to
                               the proposed rights issue with warrants;

                         (e)   a proposed employees' share option scheme subject to a maximum of 10% of the issued and paid-up
                               share capital of Mah Sing Group Berhad at the time of the offer with a duration of 5 years; and

                         (f)   a proposed increase in authorised share capital from 100 million to 500 million Mah Sing Group
                               Berhad shares.


                         The net proceeds raised from the private placement & rights issue shall be utilised as follows:
                                                                        Proposed        Proposed
                                                                        Private         Rights Issue
                                                                        Placement

                                                                                 RM'000         RM'000
                               Repayment of bank borrowings                           -         40,000
                               Working capital                                    5,251         39,126
                               Estimated incidental expenses of the                  70          1,500
                                                                                  5,321         80,626

                         The proposals are conditional upon the following approvals:

                         (a)   Foreign Investment Committee for proposed private placement;
                         (b)   Securities Commission for the proposals and registration of the abridged prospectus;
                         (c)   Companies Commission of Malaysia for the lodgement of the abridged prospectus;
                         (d)   KLSE for the listing and quotation of new Mah Sing Group Berhad shares and warrants;
                         (e)   shareholders of Mah Sing Group Berhad at an extraordinary general meeting to be convened(except
                               for the proposed private placement; and
                         (f)   any other relevant authorities/parties




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                   MAH SING GROUP BERHAD                                                                                           -
                   (230149 P)

                   NOTES TO THE FINANCIAL STATEMENTS
                   B9    Group borrowings and debt securities

                          Total group borrowings are as follows:
                                                                       Secured      Secured      Secured    Unsecured           Total
                                                                        RM'000       RM'000       RM'000       RM'000          RM'000
                         (Denominated in)                                 (RM)     (Rupiah)        (USD)         (RM)
                              Term loans
                               - payable within 12 months               12,508         163         2,966          -            15,637
                               - payable after 12 months                18,712         -             925          -            19,637
                                                                        31,220         163         3,891          -            35,274
                                 Long term borrowings                      -                                                      -
                                 Short term borrowings                   1,500        1,363        3,173       27,952          33,988
                                 Bank overdrafts                         4,120          689          -          6,720          11,529
                                                                         5,620        2,052        3,173       34,672          45,517
                                 Total                                  36,840        2,215        7,064       34,672          80,791



                   B10    Off balance sheet financial instruments

                          The Group does not have any financial instruments with off balance sheet risk at the date of issue of this
                          report.

                   B11    Changes in material litigation

                          There has been no change in the status of material litigation as disclosed in the Annual Financial Report for
                          the year ended 31 December 2002 for the current quarter and current financial period ended 30
                          September 2003.

                   B12    Dividend

                          No dividend has been proposed for the current quarter and current financial period to-date ended 30
                          September 2003.


                   B13    Earnings per share

                                                                                    Current     9 months Comparative    Comparative
                                                                                    quarter   cumulative      quarter       9 months
                                                                                     ended             to      ended    cumulative to
                                                                                 30.09.2003    30.09.2003  30.09.2002      30.09.2002

                                 Earnings per share is (sen)                           8.88        20.27         1.70             9.14

                          (i)    Net profit (RM'000)
                                                                                     3,905         8,916          747           4,021

                          (ii)   Total ordinary shares issued ('000)                43,978        43,978       43,978          43,978



                   BY ORDER OF THE BOARD


                   PHAN GAIK CHER
                   LEE LAY HONG
                   WONG FEN KONG

                   Secretaries

                   Kuala Lumpur

                   21 November 2003




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Description: Conditional Sale Agreement for Business document sample