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Contents

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1 Corporate Information

2 Board Of Directors

3 - 5 Directors’ Profile

6 - 7 Notice of Annual General Meeting

8 - 12 Corporate Governance Statement

13 Additional Compliance Information

14 - 16 Audit Committee

17 - 19 Chairman’s Statement

20 - 22 Group Managing Director’s Review

24 - 28 Directors’ Report

29 - 30 Balance Sheets

31 Income Statements

32 Statements of Changes in Equity

33 - 36 Cash Flow Statements

37 - 69 Notes to the Financial Statements

70 Statement by Directors

71 Statutory Declaration

72 - 73 Report of the Auditors

74 - 76 List of Properties

77 - 79 Shareholdings Structure

80 - 81 Warrant Holdings Structure

82 - 83 Statement of Directors’ Interests

84 Corporate Structure

Form of Proxy

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Corporate Information

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STOCK EXCHANGE LISTINGMain Board of the Kuala Lumpur Stock Exchange,Malaysia

AUDITORSMonteiro & HengChartered Accountants

SHARE REGISTRARSectrars Services Sdn. Bhd. (92781-X)No. 28-1, Jalan Tun Sambanthan 3Brickfields, 50470 Kuala Lumpur.Tel : (603) 22746133Fax : (603) 22741016

REGISTERED OFFICEJalan Desa, Bandar Country Homes, 48000Rawang, Selangor Darul Ehsan.Tel : (603) 6092 8333Fax : (603) 60913188

COMPANY SECRETARIESChan Keng YewChoi Siew Fun

Yong Poi Leong- Executive Director

Tan Lee Sing- Executive Director

Loh Siew Cheang- Non-Independent, Non-Executive Director

Dato' Dr. Mohd. Noordin bin Haji Keling- Independent Non-Executive Director

Dato' Dr. Mohd. Aminuddin bin Mohd. Rouse- Independent Non-Executive Director

James Wong Kwong Yew- Group Executive Director

Dato' Tan Jing Nam- Group Managing Director

Aznan bin Abdul Aziz- Deputy Chairman / Executive Director

Dato' Ali bin Hassan- Independent Non-Executive Chairman

PRINCIPAL BANKERSArab-Malaysian Merchant Bank Bhd (23742-V)Hong Leong Bank Berhad (97141-X)Malayan Banking Berhad (3813-K)

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directors

YONG POI LEONGExecutive Director

TAN LEE SINGExecutive Director

LOH SIEW CHEANGNon-Independent

Non-Executive Director

DATO' DR. MOHD.NOORDIN BIN HAJI

KELINGIndependent Non-Executive Director

DATO' DR.MOHD. AMINUD-DIN BIN MOHD.

ROUSE Independent Non-Executive Director

JAMESWONG KWONG YEWGroup Executive Director

DATO' TAN JING NAMGroup Managing Director

AZNAN BIN ABDULAZIZ

Deputy Chairman /Executive Director

DATO' ALI BIN HASSANIndependent,Non-

Executive Chairman

Board Of Directors

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Directors’ Profiles

DATO' ALI BIN HASSAN Independent, Non-Executive Chairman - Malaysian, Aged 60

Dato' Ali bin Hassan was appointed as Chairman of Tanco Holdings Berhad ("THB") on 16 February 2001.He graduated with a B.A (Hons) from University of Malaya (1964) and also holds a D.P.A from University of Malaya(1969) and a M.P.A from University of Southern California, Los Angeles, in U.S.A. (1978). Prior to venturing into theprivate sectors, Dato's Ali held various senior positions in the public services such as the Public Service Department,the Prime Minister's Department, the Ministry of Finance, the Ministry of Energy, Telecommunications and PostsMalaysia. Dato's Ali has also served as Executive Chairman of Inland Revenue Board of Malaysia from 1 March 1996to 1 December 1997. He also served as Chairman of Telekom Malaysia Berhad before his appointment as Chairman ofTHB. Currently, he is also the Chairman of RHB Bank Berhad.

He does not have any family relationship with any other directors and/or major shareholders of THB. Neither does hehave any conflict of interest with THB. He has not been convicted for offences within the past ten years.

He is the Chairman of the Nomination Committee, a member of the Remuneration Committee and a member of theAudit Committee of THB.

He attended all the five Board Meetings held during the financial year ended 31 December 2001.

ENCIK AZNAN BIN ABDUL AZIZDeputy Chairman / Executive Director - Malaysian, Aged 44

Encik Aznan bin Abdul Aziz was appointed as Deputy Chairman of THB since 8 January 1997. He holds a Diplomain Mechanical Engineering. He has extensive hand-on experience in property development and construction sectors.Over the last 22 years, he had been involved in various major development projects such as Bandar Country Homes, a730 acres of self-contained township in Rawang, 682 units of mixed housing development for Koperasi Polis Diraja,Kelab Darul Ehsan, Taman Keramat, Taman Bukit Chedang and Taman Abdul Razak.

He does not have any family relationship with any other directors and/or major shareholders of THB. He is deemed inconflict of interest with THB by virtue of his interest in certain privately-owned companies which are also involved inproperty development business. However, these privately-owned companies are not in direct competition with thebusiness of THB. He has not been convicted for offences within the past ten years.

He attended four out of the five Board Meetings held during the financial year ended 31 December 2001.

DATO' TAN JING NAMGroup Managing Director - Malaysian, Aged 46

Dato' Tan Jing Nam was appointed as Director of THB on 28 July 1995 and is presently the Managing Director of thegroup (appointed on 23 October 1995). He has over 25 years of experience in theproperty and construction sectors. Under his leadership, the Tanco Group diversified from plantationbusiness to property development, construction and leisure businesses. He is the driving force behind the successfuldevelopment of Bandar Country Homes, a self-contained township in Rawang.

He is the brother of Madam Tan Lee Sing, a Director of THB. Save as aforesaid, he does not have anyfamily relationship with any other directors and/or major shareholders of THB. He is deemed in conflict of interest withTHB by virtue of his interest in certain privately-owned companies which are also involved in property developmentbusiness. However, these privately-owned companies are not in direct competition with the business of THB. He hasnot been convicted for offences within the past ten years.

He is a member of the Remuneration Committee of THB.


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MR. JAMES WONG KWONG YEWGroup Executive Director - Malaysian, Aged 55

Mr. James Wong Kwong Yew was appointed as Director of THB in 28 July 1995 and was subsequently appointed as GroupExecutive Director on 23 October 1995. He is a Chartered Accountant (England and Wales since 1971). With over 30 yearsof experience in professional firms and the commercial sector, he is well versed in the field of accounting, corporate finance,banking and property development. Prior to joining THB, he was the Executive Vice President/Director of a listed financialservices group.

He does not have any family relationship with any other directors and/or major shareholders of THB. He does not have anyconflict of interest with THB. He has not been convicted for offences within the past ten years.

He is a member of the Audit Committee of THB.


DATO' DR MOHD AMINUDDIN BIN MOHD ROUSE Independent Non-Executive Director - Malaysian, Aged 56

Dato' Dr Mohd Aminuddin bin Mohd Rouse was appointed as Director of THB since 20 October 1997. Hegraduated with a B. Sc (Hons) in Biochemistry from University Malaya and holds a Ph.D in Agriculture Chemistry fromUniversity of Adelaide. Prior to venturing into commercial sector, he was an academician for 14 years having started as alecturer in University of Pertanian Malaysia (now University Putra Malaysia) and serve as Professor in University SainsMalaysia. While in academia, he held numerous positions including Head of Biochemistry and Microbiology, Deputy Dean,Dean and Professor of Biochemistry.

He ventured into corporate world in 1983. He is presently the President & CEO of the Malaysian Technology DevelopmentCorporation Sdn Bhd and also sits on the board of several public listed company including Konsortium Logistik Bhd, StarPublications (Malaysia) Bhd, Ajiya Bhd and Globetronics Technology Bhd. He is also a director of Deutsche Bank MalaysiaBhd and Malaysian South - South Corporation Bhd.

He does not have any family relationship with any other directors and/or major shareholders of THB. He does not have anyconflict of interest with THB. He has not been convicted for offences within the past ten years.

He is the Chairman of the Remuneration Committee, a member of the Nomination Committee and a member of the AuditCommittee of THB.


DATO' DR MOHD. NOORDIN BIN HAJI KELINGIndependent Non-Executive Director - Malaysian, Aged 75

Dato' Dr Mohd. Noordin bin Haji Keling was appointed as Director of THB on 1 July 1994. A veterinary surgeon byprofession, he graduated from Bengal Veterinary College, Calcutta in 1950 and in 1956 from the Royal Veterinary College,University of London as a Member of the Royal College of Veterinary Surgeons, England. While ingovernment service, he obtained post-graduate qualifications in tropical veterinary medicine at the University of Edinburghin 1960 and in veterinary public health at the University of Toronto in 1966. He later obtained the Bachelor of Laws degree,LLB (Hons) from the University of London and the Certificate in Legal Practice (C.L.P) awarded by the Legal ProfessionQualifying Board, Malaysia. He was admitted as an Advocate and Solicitor of the High Court, Malaysia in December 1996.He had a distinguished career in the Veterinary Department, Malaysia, retiring in 1982 as the Director-General of the NationalLivestock Development Authority. On retirement he served for two years as Executive Vice-Chairman of MAX AgricultureSdn Bhd, a company with principal activities in the manufacture and trading of fertilizers. Currently he also sits on the boardof several private limited companies.

Directors’ Profiles

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Directors’ ProfilesTANCO

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He does not have any family relationship with any other directors and/or major shareholders of THB. He does not haveany conflict of interest with THB. He has not been convicted for offences within the past ten years.

He is the Chairman of the Audit Committee, a member of the Nomination Committee and a member of the RemunerationCommittee of THB.


MR. LOH SIEW CHEANGNon-Independent Non-Executive Director - Malaysian, Aged 49

Mr. Loh Siew Cheang was appointed as Director of THB on 2 December 1997. He is a lawyer by profession. He holdsLL.B (Hons) from University of Malaya and has been an Advocate & Solicitor, High Court, Malaysia since 1978. He isthe Managing Partner of the Cheang & Ariff. He is a Co-ordinator of Advoc-Asia (a network of Asian Commercial LawFirms).

He does not have any family relationship with any other directors and/or major shareholders of THB. He does not haveany conflict of interest with THB. He has not been convicted for offences within the past ten years.

He is a member of the Audit Committee, Nomination Committee and Remuneration Committee of THB.

He attended three out of the five Board Meetings held during the financial year ended 31 December 2001.

MADAM TAN LEE SINGExecutive Director - Malaysian, Aged 42

Madam Tan Lee Sing was appointed as Director of THB on 28 July 1995. She graduated from the University ofMelbourne, Australia with a degree in Commerce in 1980. She has over ten years of experience in theproperty and construction sectors.

She is the sister of Dato' Tan Jing Nam, the Group Managing Director of THB. Save as aforesaid, she does not have anyfamily relationship with any other directors and/or major shareholders of THB. She is deemed in conflict of interest withTHB by virtue of her interest in certain privately-owned companies which is also involved in property developmentbusiness. However, these privately-owned companies are not in direct competition with the business of THB. She hasnot been convicted for offences within the past ten years.

She attended all the five Board Meetings held during the financial year ended 31 December 2001.

MR. YONG POI LEONGExecutive Director - Malaysian, Aged 47

Mr. Yong Poi Leong was appointed to the Board of THB on 2 December 1997. He holds a Degree in Accounting andFinancial Management from the University of Buckingham, United Kingdom and a Diploma in Marketing from theChartered Institute of Marketing, United Kingdom. He has vast experience in the leisure, property and fast foodindustries. Over the years, he has structured various innovative vacation ownership concepts and products. He is alsoactively involved in the development and promotion of the timeshare industry in Malaysia. Currently, he is the ManagingDirector of Tanco Resorts Berhad ("TRB"), a wholly owned subsidiary of THB. TRB is a leading timeshare operator inMalaysia and in the Asia-Pacific Rim.

He does not have any family relationship with any other directors and/or major shareholders of THB. Neither does hehave any conflict of interest with THB. He has not been convicted for offences within the past ten years.

He attended four out of five Board Meetings held during the financial year ended 31 December 2001.

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TANCOHOLDINGSBERHAD Notice of Annual General Meeting

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NOTICE IS HEREBY GIVEN THAT the Forty-ThirdAnnual General Meeting of the Company will be held inAgong & Madura Hall at Duta Palms Resort & Anglers'Club, Jalan Desa Permai, Bandar Country Homes, 48000Rawang, Selangor Darul Ehsan on Thursday, 27 June 2002 at10.30 a.m. for the following purposes: -

AGENDA1. To receive and adopt the Audited Accounts for the

financial year ended 31 December 2001 together with the Reports of the Directors and the Auditors thereon. (Resolution 1)

2. To approve payment of Directors' Fees ofRM135,000 in respect of the financial year ended31 December 2001. (Resolution 2)

3. To re-elect the following Directors who retireunder Article 101 of the Company's Articles ofAssociation: -

(a) Dato' Tan Jing Nam (Resolution 3)(b) En. Aznan bin Abdul Aziz (Resolution 4)(c) Madam Tan Lee Sing (Resolution 5)

4. To consider, and if thought fit, to pass the following resolution: -

"THAT Dato' Dr. Mohd Noordin bin Haji Keling,who retires in compliance with Section 129(6)of the Companies Act, 1965 be and is herebyappointed as a Director of the Company and to holdoffice until the conclusion of the next Annual General Meeting of the Company."

(Resolution 6)

5. To re-appoint Messrs. Monteiro & Heng as auditorsof the Company and to authorise the Board of Directors to fix their remuneration.11111111111111

(Resolution 7)

AS SPECIAL BUSINESS: -To consider and if thought fit, to pass the followingresolutions as Ordinary Resolutions: -

6. PROPOSED ISSUE OF ANNUAL REPORT INCD-ROM FORMAT

"THAT, subject to the compliance with therequirements of Kuala Lumpur Stock Exchange and any other relevant authorities, if any, the Company be and is hereby authorised to issue its Annual Report in CD-ROM Format for the financial year ending 31 December 2002 and that the

approval given by the shareholders of the Company shall be subject to renewal at the nextAnnual General Meeting." (Resolution 8)

7. APPROVAL FOR ISSUANCE OF NEWORDINARY SHARES PURSUANT TO SECTION132D OF THE COMPANIES ACT, 1965

"THAT, subject always to the Companies Act, 1965, the Articles of Association of the Company and approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Companies Act, 1965 to issue new ordinary shares of RM1.00 each in the Company, from time to time and upon such terms and conditions and for such purposes and to such persons whomsoever as the Directors may, in their absolute discretion deem fit and expedient in the interest of the Company,provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued and paid-up share capital of theCompany for the time being AND THAT theDirectors be and are hereby also empowered to obtain approval from the Kuala Lumpur Stock Exchange for the listing of and quotation for the additional shares issued AND THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company." (Resolution 9)

8. To transact any other business for which due notice hasbeen given in accordance with the Company's Articles of Association and the Companies Act, 1965.

By Order of the Board

Chan Keng YewChoi Siew FunCompany Secretaries

Selangor Darul Ehsan5 June 2002

Notes:(i) A member entitled to attend and vote at the meeting is

entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company.

(ii) A member shall be entitled to appoint more than oneproxy to attend and vote at the same meeting.

(iii) Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies theproportions of his holdings to be represented by each proxy.

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Notice of Annual General Meeting

(iv) The instrument appointing a proxy shall be in writingunder the hand of the appointer or of his attorneyduly authorised in writing or, if the appointer is acorporation, either under seal or under the hand of anofficer or attorney duly authorised.

(v) The instrument appointing a proxy must be deposited atthe Company's Registered Office at Jalan Desa, Bandar Country Homes, 48000 Rawang, Selangor Darul Ehsan not less than 48 hours before the time for holding the meeting or any adjournment thereof.

Explanation note on Special Business.

(i) Resolution pursuant to the authority to issue Company's Annual Report in CD-ROM Format

In the face of the emerging trend towards information technology based reporting, and with the objective to leverage and take advantage of this newtechnologies which is also more cost effective, the Company has decided to issue its annual reports in Compact Disc-Read Only Memory (CD-ROM)format. The issue and deliver of annual reports in CD-ROM Format would not only provide savings in printing and storage costs for the Company but also reduce postages involved in the despatch of the annual reports to shareholders.

The passing of Ordinary Resolution No. 8 as set out in the notice of the Forty-Third Annual General Meeting of the Company would approve the issue of the Company's Annual Report for the financial year ending 31 December 2002 in CD-ROMformat. Shareholders' approval will be sought on yearly basis if the Company decides to issue its annual report in CD-ROM format for future years.

Shareholders are however informed that printed copy of the Annual Report 2002 will be available upon request, whether verbal or written and acontact number will be designated to attend to shareholders' requests. Shareholders are further assured that person(s) will be assigned by the Company to answer your queries relating to the use of CD-ROM.

(ii) Resolution pursuant to Section 132D of theCompanies Act, 1965

The proposed Ordinary Resolution No. 9, if passed, will empower the Directors of the Company to issue and allot shares in the Company up to anaggregate amount not exceeding 10% of the issued share capital of the Company for the time being for such purposes as they consider would be in the interest of the Company. This authority unless revoked or varied at a general meeting will expire at the next Annual General Meeting.

STATEMENT ACCOMPANYING THE NOTICE OFANNUAL GENERAL MEETING

1) NAMES OF DIRECTORS STANDING FORRE-ELECTION

Directors retiring by rotation pursuant to Article 101 of the Articles of Association

Dato' Tan Jing NamEncik Aznan bin Abdul AzizMadam Tan Lee Sing

Director retiring pursuant to Section 129(6) of the Companies Act, 1965

Dato' Dr. Mohd Noordin bin Haji Keling

2) DETAILS OF ATTENDANCE OF DIRECTORSAT BOARD MEETINGS

There were five (5) Board meetings held during the financial year ended 31 December 2001. The details of attendance of the Directors are presented on

pagepage 8 of the Annual Report.

3) PLACE, DATE & HOUR OF MEETING

The details of place, date and hour of Boardmeetings are presented on page 8 of the Annual Report.

4) DETAILS OF DIRECTORS SEEKING FOR RE-ELECTION OR RE-APPOINTMENT AT THE ANNUAL GENERAL MEETING

Details of Directors who are seeking for re-election or re-appointment are set out in the Directors' Profile appearing on pages 3 to 5 of the Annual Report. Information relating to the Directors'securities holdings in the Company and itssubsidiaries is presented on pages 82 & 83 of the Annual Report.

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TANCOHOLDINGSBERHAD Corporate Governance Statement

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The Board of Directors ("the Board") of Tanco Holdings Berhad is committed to ensuring that the highest standards ofcorporate governance are practised throughout the Group as a fundamental part of discharging its responsibilities toprotect and enhance shareholder value. Accordingly, the Board fully supports the recommendations of the MalaysianCode of Corporate Governance (the Code).

Set out below is a statement of how the Group has applied the principles of the Code and compliance with the bestpractice provisions.

DIRECTORS

The Board

The Group is led and controlled by an effective Board. The Board meets on a scheduled basis, at least four (4) times ayear, with additional meetings convened as necessary. All Board members bring an independent judgement to bear onissues of strategy, performance, resources and standards of conduct.

The Board has delegated specific responsibilities to three (3) sub-committees (Audit, Nomination and RemunerationCommittees), the details of which are set out below. These Committees have the authority to examine particular issuesand report back to the Board with their recommendation. The ultimate responsibility for the final decision on all matters,however, lies with the entire Board.

Board Balance

The Board has a balanced composition of executive and non-executive directors so that no individual or small group ofindividuals can dominate the Board's decision making. The Board currently comprises nine (9) members, of which five(5) executive Directors and four (4) non-executive Directors (including the Chairman), three (3) of whom areindependent.

During the financial year ended 31 December 2001, five (5) Board meetings were held. The composition of the Boardtogether with the attendance of the respective Directors at Board meetings are as follows:-

Date ofAppointment

Rawang,Selangor

27.02.20014.00 p.m.

Rawang,Selangor

24.05.200111.30 a.m.

Rawang,Selangor

30.08.20014.00 p.m.

Rawang,Selangor

29.11.200111.30 a.m.

Rawang,Selangor

28.12.200110.30 a.m.

Dato' Ali binHassan

16.02.2001

Aznan bin AbdulAziz

08.01.1997

Dato' Tan JingNam

28.07.1995

James WongKwong Yew

28.07.1995

Dato' Dr. Mohd.Aminuddin binMohd Rouse

20.10.1997

Dato' Dr. Mohd.Noordin bin HajiKeling

01.07.1994

Loh Siew Cheang 02.12.1997

Tan Lee Sing 28.07.1995

Yong Poi Leong 02.12.1997

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Corporate Governance StatementTANCO

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Together, the Directors bring a wide range of business and financial experience relevant to the direction of anexpanding Group. A brief description of the background of each Director is presented on pages 3 to 5 of the Annualreport.

The role of the Chairman and the Group Managing Director are distinct and separate; the Chairman being Non-Executive,is not involved in the management and day-to-day operations of the Group.

Dato' Dr Mohd Noordin bin Haji Keling was appointed as the Senior Independent Non-Executive Director, to whom allconcerns may be conveyed.

The presence of independent non-executive Directors in the Board provides objectivity and they are of the calibrenecessary to carry sufficient weight in Board decisions. Although all the Directors have an equal responsibility for theGroup's operations, the role of the independent non-executive Directors is particularly important in ensuring that thestrategies proposed by the executive management are fully discussed and examined, and take account of the long terminterests, not only of the shareholders, but also of employees, customers, suppliers, and the many communities in whichthe Group conducts business.

Supply of Information

All directors are provided with an agenda and a set of Board papers, prior to every board meeting. The Board paperscirculated include quarterly and annual financial statements, minutes of meetings, major operational and financialmatters, and performance report of the Group. All matters requiring Board approvals are also circulated prior to theBoard Meetings and during Board Meetings these matters are duly discussed and deliberated with senior managementbefore decisions are made.

All Directors have access to the advice and services of the Company Secretaries and where necessary, in the furtheranceof their duties, take independent professional advice at the Group's expense.

Appointments to the Board

New appointments to the Board are recommended by the Nomination Committee to the Board for their approval. Theother responsibilities of the Nomination Committee include making recommendations to the Board on the appointmentof members of Board Committees, the review on an annual basis of the Board structure, size and composition, andassessment of the effectiveness of the Board, its Committees and the contribution of each Board.

The Board has approved the setting up of the Nomination Committee on 24 May 2001. It consists of whollyNon-Executive Directors, a majority of whom are independent and its composition is as follows:-

Designation

Dato' Ali bin Hassan - Chairman of the Nomination Committee,Independent Non-Executive Director

Dato' Dr. Mohd. Aminuddinbin Mohd. Rouse - Independent Non-Executive Director

Dato' Dr. Mohd. Noordinbin Haji Keling - Independent Non-Executive Director

Mr Loh Siew Cheang - Non-Independent, Non-Executive Director

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Corporate Governance Statement

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TANCOHOLDINGSBERHAD

Directors' Training

All directors have attended the Mandatory Accreditation Programme organised by RIIAM, the training arm ofKLSE and will attend similar training programmes to equip themselves to discharge their duties more effectively.New directors are given essential Board and Company information and shall have the benefit of a familiarizationprogramme aimed at deepening their understanding of the Group's business operations.

Re-election

In accordance with the Company's Articles of Association, at least one third of the Directors are required to retireby rotation at each Annual General Meeting and can offer themselves for re-election at the Annual GeneralMeeting. Directors who are appointed by the Board to fill a casual vacancy or as an addition to the existing Boardare subject to election by shareholders at the next Annual General Meeting following their appointment. TheDirectors also shall retire from office at least once in three years, but shall be eligible for re-election.

Directors over seventy (70) years of age are required to submit themselves for re-appointment annually inaccordance with Section 129 (6) of the Companies Act, 1965.

DIRECTORS' REMUNERATION

Remuneration Policy

The Remuneration Committee reviews annually and recommends to the Board, the Group's remuneration policy forExecutive Directors to ensure that the Executive Directors are rewarded appropriately for their contributions to theGroup's growth and profitability, and that the remuneration policy supports the Group's objectives andshareholders' interest.

In framing the Group's remuneration policy, the Remuneration Committee obtains the advice and information fromexternal source, if necessary. It is, nevertheless, the ultimate responsibility of the entire Board to approve theremuneration of these Directors.

The determination of the remuneration of the non-executive Directors including Non-Executive Chairman is amatter for the Board as a whole.

Procedure

In line with the Code, a Remuneration Committee was set up on 24 May 2001, comprising five (5) members ofwhich one (1) is executive director and four (4) non-executive directors, three (3) of whom are independent and itscomposition is as follows

Designation

Dato' Dr. Mohd. Aminuddin - Chairman of the Remuneration Committee,bin Mohd. Rouse Independent Non-Executive Director

Dato' Ali bin Hassan - Independent Non-Executive Director

Dato' Dr. Mohd. Noordinbin Haji Keling - Independent Non-Executive Director

Dato' Tan Jing Nam - Group Managing Director

Mr Loh Siew Cheang - Non Independent, Non-Executive Director

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Corporate Governance Statement

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Disclosure

A summary of the remuneration of the Directors for the financial year ended 31 December 2001, distinguishingbetween executive and non-executive Directors in aggregate, with categorization into appropriate componentsand the number of Directors whose remuneration falls into each successive band of RM50,000 are as follows:

Executive Non-Executive TotalDirectors Directors

Directors' Fees (RM) 135,000 135,000Salaries (RM) 2,825,600 2,825,600Meeting Allowances 8,500 8,500Benefits-in-kind (RM) 67,750 23,950 91,700

Directors' Remuneration0 - RM50,000 - 3 3RM50,001 - RM100,000 - 1 1RM100,001 - RM200,000 - - -RM200,001 - RM250,000 1 - 1RM250,001 - RM300,000 - - -RM300,001 - RM350,000 1 - 1RM350,001 - RM400,000 - - -RM400,001 - RM450,000 1 - 1RM450,001 - RM850,000 - - -RM850,001 - RM900,000 1 - 1RM900,001 - RM1,000,000 - - -RM1,000,001 - RM1,050,000 1 - 1

Detail remuneration of each Director is presented under Note 33 of the Financial Statements on page 65 of theAnnual Report.

SHAREHOLDERS

Dialogue between the Company and Investors

The Board recognizes the importance of communication and proper dissemination of information to itsshareholders, stakeholders and the public generally. However, any information that may be regarded asundisclosed material information about the Group will not be given. The following are the channels ofcommunication of the Company to its shareholders, stakeholders, analysts and the public:-

1) the distribution of annual reports and circulars to shareholders;2) timely quarterly results announcements and various disclosures and announcements made to

the Kuala Lumpur Stock Exchange;3) company's website at www.tancoresorts.com.

Annual General Meeting

At each Annual General Meeting, the Board presents the progress and performance report of the Group andencourages shareholders to participate and pose questions to the Board in the Question and Answer session.

Each item of special business included in the notice of the meeting will be accompanied by a full explanation ofthe effects of a proposed resolution. Separate resolutions are proposed for substantially separate issues at themeeting.

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TANCOHOLDINGSBERHAD Corporate Governance Statement

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ACCOUNTABILITY AND AUDIT

Financial Reporting

In presenting the annual financial statements and quarterly announcement to shareholders, the Directors aim topresent a balanced and understandable assessment of the Group's position and prospects. This also applies toother price-sensitive public reports and reports to regulators.

Audit Committee

The terms of reference of the Audit Committee have recently been revised to conform to the ListingRequirements of the KLSE. The terms of reference and activities of the Audit Committee during the financialyear ended 31 December 2001 are provided separately in this Annual Report.

Internal Control

The Board acknowledges its responsibility for establishing an efficient and effective system of internal controlscovering not only financial controls but also controls relating to operational, compliance and risk managementto safeguard shareholders' investment and the Group's assets. Such system can, however, only providereasonable and not absolute assurance against material misstatement, loss or fraud.

Relationship with the Auditors

The Company has established transparent and appropriate relationships with the Company's auditors through theAudit Committee. The auditors has continued to report to shareholders of the Company on their findings whichare included as part of the Company's financial reports with respect to each year's audit on the statutoryfinancial statements. From time to time, the auditors would highlight to the Audit Committee matters thatrequire their attention.

Directors' Responsibility Statement for Preparing the Financial Statements

The Directors are required by the Companies Act 1965 to prepare financial statements for each financial yearwhich have been made out in accordance with the applicable Approved Accounting Standards and give a trueand fair view of the state of affairs of the Group and Company for the financial year.

In preparing the financial statements, the Directors have:* selected suitable accounting policies and applied them consistently;* made judgments and estimates that are reasonable and prudent;* ensured that all applicable accounting standards have been followed; and* prepared financial statements on the going-concern basis as the Directors have a reasonable expectation,

having made enquiries, that the Group and Company have adequate resources to continue in operationalexistence for the foreseeable future.

The Directors have responsibility for ensuring that the Company keeps accounting records which disclose thefinancial position of the Group and Company and which enable them to ensure that the financial statementscomply with the Companies Act 1965.

The Directors have overall responsibilities for taking such steps as are reasonably open to them to safeguard theassets of the Group to prevent and select and detect fraud and other irregularities.

This Statement is made accordance with the Board of Directors' resolution dated 9 May 2002.

ANNUAL b/w 23/5 3/6/02 9:46 AM

TANCOHOLDINGS

BERHADAdditional Compliance Information

13

To comply with the Listing Requirements of Kuala Lumpur Stock Exchange, the following additional informationis provided:-

i) Material Contracts Save as disclosed in clause (ix) below and Note 33 of the Financial Statement for the financial year ended 31 December 2001, there were no other material contracts entered into by the Company and its subsidiary companies, involving Directors and major shareholders.

ii) Utilisation of Proceeds No proceeds were raised by the Company during the financial year as the Company's corporate exercise was only implemented after the financial year.

iii) Share buybacksDuring the financial year, there were no share buybacks by the Company.

iv) Options, warrants or convertible securitiesOn 15 November 2001, the Company had allotted 56,737,588 new ordinary shares of RM1.00 each in the Company at an issued price of RM1.41 per share as settlement towards the RM80,000,000.00 nominal value 6% Irredeemable Convertible Unsecured Loan Stock 1997/2002.

v) American Depository Receipt (ADR) or Global Depository Receipt (GDR) programmeDuring the financial year, the Company did not sponsor any ADR or GDR programme.

vi) Imposition of sanctions/penaltiesThere were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies during the financial year.

vii) Non-audit fees The amount of non-audit fees paid or payable to the external auditors, Messrs Monteiro & Heng, by the Company for the financial year ended 31 December 2001 is RM2,000.00

viii) Profit estimate, forecast or projectionThere is no material variance between the results for the financial year and the unaudited results previously announced by the Company. The Company did not issue any profit estimate, forecast or projections for the financial year.

ix) Profit guarantee On 28 September 2001, Dato' Tan Jing Nam ("DTJN") and Encik Aznan bin Abdul Aziz ("AAA") have entered into the Settlement of the Profit Guarantee Agreement with the Company to settle partially the amended fourth guaranteed amount of RM23,750,000.00 for the financial yearending 31 December 2001 by setting off the amount of RM10,009,727.00 owing by the Company and its subsidiaries as stipulated therein to DTJN and AAA. The settlement agreement has been completed on even date.

The balance of the guaranteed profit amount of RM13,740,273.00 had been met. The external auditors, Messrs Monteiro & Heng had vide their letter dated 3 May 2002 to the Companyconfirmed this.

x) Recurrent related party transactions statement There was no recurrent related party transaction of a revenue nature, which requires shareholders' mandate during the financial year.

xi) Revaluation of landed propertiesThe Company has not revalued its landed properties.

ANNUAL b/w 23/5 3/6/02 9:46 AM

Audit Committee

14

TANCOHOLDINGSBERHAD

MembersDesignation

Dato' Dr. Mohd. Noordin bin Haji Keling - Chairman of the Audit CommitteeIndependent Non-Executive Director

Dato' Ali bin Hassan - Independent Non-Executive DirectorJames Wong Kwong Yew - Group Executive DirectorDato' Dr. Mohd. Aminuddin bin Mohd. Rouse - Independent Non-Executive DirectorLoh Siew Cheang - Non Independent, Non-Executive Director

Composition of Audit Committee1. The Committee shall be appointed by the Board of Directors from among its members and shall be

consist of not less than three (3) members of whom a majority must be independent directors.2. The Audit Committee shall include at least one director who is a member of the Malaysian Institute of

Accountants or alternatively, a person who must have at least three (3) years working experience and have passed the examination specified in Part 1 of the First Schedule of the Accountants Act, 1967 or is a member of one of associations specified in Part II of the said Schedule.

3. No alternate director shall be appointed a member of the Audit Committee.4. The members of the audit committee shall elect a chairman from among their number who shall be an

independent non-executive director. 5. If a member of the Committee resigns, dies or for any other reason ceases to be a member with the

result that the number of members is reduced below three (3), the board of directors shall, within three (3) months of that event, appoint such number of new members as may be required to make up theminimum number of three (3) members.

Terms of Memberships

The term of office of committee members should be reviewed by the Board once every three (3) years.

Authority

The Committee is authorised by the Board to investigate any activity of the Company and its Subsidiarieswithin its terms of reference, the resources which it needs to do and full access to information.

The Committee is also authorised by the Board to obtain outside legal or other independent professional adviceand to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

Duties

The duties of the Committee should include the following:-

(i) To consider the appointment of the external auditor, the audit fee and any questions of resignation or dismissal;

(ii) To review with the external auditor before the audit commences, the nature and scope of the audit and their audit plan;

(iii) To review the assistance given by the company's officers to the internal and external auditors;(iv) To review the quarterly and year-end financial statements of the Company, prior to the approval of the

board of directors, focusing particularly on:-· any changes in accounting policies and practices;· significant adjustments arising from the audit;· the going concern assumption;· compliance with accounting standards and other legal requirements;

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ANNUAL b/w 23/5 6/10/02 11:27 AM

Number of Meetings & Details of Attendance

During the financial year ended 31 December 2001, the Audit Committee held a total of four (4) meetings. Thedetails of attendance of the Committee members are as follows:

N/A - Not Applicable as Dato' Ali bin Hassan was appointed after the dates of the respective meetings.

Summary of Activities of the Audit Committee

The following activities were performed by the Audit Committee during the financial year ended 31 December2001: -(a) Reviewed the audit plans for the year for the Company and the Group prepared by the external

auditors;(b) Reviewed the audit reports for the Company and the Group prepared by the external auditors and

consideration of major findings by the auditors and management's responses thereto;(c) Reviewed the quarterly and annual results of the Company and the Group prior to submission to the

Board of Directors for consideration and approval; (d) Reviewed related party transactions entered into by the Company and the Group;(e) Reviewed the revised Audit Committee Charter in compliance with the Listing Requirements of Kuala

Lumpur Stock Exchange.

Internal Audit Function

The Group has outsourced its internal audit function to a professional consulting firm, Nexia Consulting. Theinternal audit function is therefore independent of the activities of the Group and performs its duties withimpartiality, objectivity and due professional care.

The internal audit review of the Group's operations encompasses an independent assessment of the Company'scompliance with its internal controls and makes recommendation for improvements.

During the financial year ended 31 December 2001, the internal auditors reviewed the adequacy andeffectiveness of the accounting and operational internal control system of a core subsidiary of the Group. Theaudits focused on controls to safeguard assets, secure the accuracy and reliability of records, compliance withpolicies and procedures, and promote efficiency of operations. In view of the changing role of internal auditfunction, the internal auditors will plan its activities on risk based approach in the coming year.

Rawang,Selangor

27.02.20013.00 p.m.

Rawang,Selangor

24.05.200110.30 a.m.

Rawang,Selangor

30.08.20013.00 p.m.

Rawang,Selangor

29.11.200110.30 a.m.

Dato' Dr. Mohd. Noordinbin Haji Keling

Dato' Ali bin Hassan(Appointed 24.05.2001)

N/A N/A

James Wong Kwong Yew

Dato' Dr. Mohd. Aminuddinbin Mohd. Rouse

Loh Siew Cheang

TANCOHOLDINGSBERHAD

16

Audit Committee

ANNUAL b/w 23/5 3/6/02 9:46 AM

Chairman’s Statement

On behalf of the Board ofDirectors, I am pleased topresent the Annual Reportand Financial Statements ofthe Company and the Groupfor the year ended 31December 2001.

Operating BackgroundFor most of the financialyear under review, theGroup was operating in achallenging economicenvironment. The robustrebound experienced in the

property development sectorin 1999 continued into thefirst half of 2000, but then

began to slow down. 2001 saw a further weakening,which inevitably was intensified by the uncertaintiesfollowing the events of September 11 in the UnitedStates. Market sentiment remained depressed andconsumer spending became selective and cautious.

Fortunately, low interest rates, easy housing loanaccessibility, and other supportive measures by theGovernment (such as waiving stamp duty and increasing

housing loans to civil servants) helped to support themarket.The Government's expansionary fiscal andmonetary policies (from the RM3 billion pre-emptivemeasures introduced in March 2001 to the RM4.3 billionConstruction and Service sector package in September2001) also cushioned some of the blows.

All this to some extent affected the performance of ourproperty division, particularly in Palm Springs. On theother hand, it is heartening to note that the Group'svacation ownership business continued to thrive in spiteof increasing competition, further consolidating itsposition of dominance and leadership.

Financial PerformanceFor the financial year ended 31 December 2001, theGroup achieved a profit before tax and minority interestof RM0.620 million, as compared to RM2.410 million in2000. Included in previous year's profit, however, was anexceptional gain of RM13.254 million. The gain arosefrom an asset swap transaction involving the disposal ofthe Group's entire equity investment in a subsidiary andtwo of its associates, in exchange for 21.6 acres of landadjacent to our Palm Springs project. Without this gain,the Group would have suffered a loss before tax ofRM10.844 million in that year.

Dato’ Ali bin Hassan,Chairman

TANCOHOLDINGS

BERHAD

17Cloth Hall, England

PROFILE4 23/5 4col 3/6/02 11:31 AM

Meanwhile, Group turnover increased from RM106.7 toRM122.32 million. This was due mainly to the continuedgood performance of our vacation ownership business.

In view of the terms of our debt restructuring scheme,and the need to shore up the Group's financial position,the Board does not recommend a dividend for the yearended 31December 2001.

Corporate RestructuringOn 29 September 2001, in an Extraordinary GeneralMeeting the shareholders approved the Group'srestructuring exercise, which mainly involves the fol-lowing :-

i) The settlement of the Company's RM80 million ICULS via the issue of 56,737,588 new sharesin the Company at an issue price of RM1.41 per share. (This settlement was completed by the Company on 13 November 2001.)

ii) A renounceable two-call rights issue of up to167,443,363 new shares in the Company, with u pto 167,443,363 free warrants to theshareholders on the basis of one Rights Share and one free Warrant for every one share held in the Company (after the ICULS settlement) at anissue price of RM1 per Rights Share. The first call at RM0.28 per share is payable in cash by the subscribers, while the second call is to be capitalised from the reserves of thecompany. (The Rights have since been fully subscribed, and the Company allotted its new shares, together with the free warrants, to itssubscribers on 18 February 2002.)

On 5 December 2001 the Group obtained the approval ofits Bankers to enter into a Supplemental Agreement to

proceed with the restructuring of its Bank Borrowingswith shareholders’ approval, and under the auspices ofthe Corporate Debt Restructuring Committee ("CDRC").As a result, on 1 March 2002 the Bank Borrowings weresuccessfully restructured into a six-year term loan with a 24-month moratorium on interest payments,and a 36-month moratorium on principalrepayments.

Your Board is confident that the Group will emerge fromthe financial restructuring process financially fortified,and well positioned to take on futurechallenges. Coupled with the continuingcost-cutting measures that have so successfully sustainedthe Group's operations during the past three challengingyears, this will enable us to progress more aggressively,and consolidate our position as a major player in theindustry.

Corporate GovernanceYour Board fully appreciates the importance of goodcorporate governance in conducting the affairs of theGroup, in order to safeguard and enhance shareholderinvestment and value, as well as to ensure that the inter-ests of our other stakeholders are protected.

Your Board therefore supports the recommendations ofthe Malaysian Code on Corporate Governance and istaking steps to prepare the Group to adopt, implementand fulfill the Code's best practices, together with therevamped listing requirements of the Kuala LumpurStock Exchange.

ProspectsThe global economic outlook remains uncertain,particularly in the aftermath of September 11. Consumerand investor confidence has been dampened and remainscautious.

18

Chairman’s Statement (cont’d)

TANCOHOLDINGSBERHAD

Havenfield Hall, England

PROFILE4 23/5 4col 3/6/02 11:31 AM

TANCOHOLDINGS

BERHAD

19

Chairman’s Statement (cont’d)

However, most governments, including our own, haveresponded speedily by introducing packages to shore upbusiness confidence and commitment, strengthen domesticdemand,and generate growth. We are hopeful of themeasures taken by our Government to boost waning marketsentiment. In addition, interest rates are expected to remainlow, providing a conducive operating environment for theGroup.

With the financial restructuring in place, we can now aim toachieve sustained profitability by leveraging on strengthsand paring down debts so as to enable us to capitalise onfuture opportunities. Baring unforeseen circumstances, weare confident of a reasonably good performance for thecurrent year. At the same time, we expect our vacationownership business should further consolidate its dominantposition.

AcknowledgementsI wish to convey my profound appreciation to our Board ofDirectors, our management team and our staff for theirdedicated performance and unstinting loyalty. Without these,it would have been impossible for the Group to have comethrough its financial restructuring, which started in late 1998.Those years have challenged our wits and resources, and it isthrough sheer determination that we have finally succeeded.

We could not have succeeded, however, without the supportof our customers, business associates, bankers, the publicand the CDRC; and for this, on behalf of the Board ofDirectors, I wish to convey heart felt thanks. I would alsolike to express our appreciation to all government agenciesand regulatory authorities for their guidance and assistance.

Finally, I offer our sincere gratitude to all ourshareholders for standing by us during these trying times.

Dato' Ali bin HassanChairman

Le Village Beach Resort, Kuantan

PROFILE4 23/5 4col 3/6/02 11:31 AM

TANCOHOLDINGSBERHAD Group Managing Director’s Review

20

2001 was a milestone in theGroup's corporate history,with the Group securingapproval and support fromits shareholders andbankers for its financialrestructuring proposal. Thiswill put the Group on amuch firmer footing to takeon the challenges that lieahead. The restructuringmarks the culmination ofthree years' hard work, andhas cleared up theuncertainties that havehampered our performance.We can now focus on ourplan to strengthen ourfinancial platform so as tomake the most of future

opportunities as they arise.

The year was marked by events that tested our resolve:events relating not only to the financialrestructuring, but also to an economic situation thatimpacted on both domestic and external markets. In the faceof all these trials, the Group proved its resilience byremaining profitable. This is a tribute mainly to anothersterling performance by our vacation ownership business.

Property Development Bandar Country HomesBandar Country Homes is ideally located at the RawangInterchange of the North-South Highway, just 20 minutes from Kuala Lumpur and Petaling Jaya. The development

spreads over 730 acres and is today a busy and bustlingtownship with more than 7,000 homes delivered and occu-pied, and a total population of more than 30,000 people. It isnearing completion, with 2311 housing units left for devel-opment.

Conveniences such as schools, kindergartens,polyclinics, petrol stations, a wet and dry market, 368 unitsof shops and offices, a club-house known as the Duta PalmsResort & Anglers' Club, and a surau are all within thevicinity of the development. When the opportunities arise,future developments will include a private college, a privatemedical centre and two shopping complexes. Convenientlocation, easy access to modern amenities, affordablepricing, and innovative designs that boast a host of value-added features to suit modern lifestyles - these are theunique features that have made Bandar Country Homessuch a success.

Dato’ Tan Jing Nam,Group Managing

Director

Corporate Offices

Celebration Mall, BandarCountry Homes

Celebration Mall, BandarCountry Homes

PROFILE4 23/5 4col 3/6/02 11:31 AM

TANCOHOLDINGS

BERHAD

21

Group Managing Director’s Review (cont’d)

For the year under review, in spite of the prevailing marketconditions, 688 units were sold, with a total sales value ofRM30.95 million. A total of 513 units were delivered in theyear, and 1,293 units are at various stages of development.The bulk of the sales were of medium and low costapartments, for which demand remains strong; and this typeof property will remain our primary focus for the immediatefuture. Meanwhile, we will wait for more favourableconditions before launching higher end housing andcommercial units.

Palm SpringsAn integrated, self-contained resort, Palm Springs spreadsover 500 acres of prime seaside land in Port Dickson. It isthe biggest and most attractive resort development along thatstretch. Its vicinity being just over an hour's drive fromKuala Lumpur and a 30 minute drive from the KualaLumpur International Airport in Sepang adds considerablyto its attractions. Today, it already offers a golf club with an18-hole golf course, a clubhouse, and a club villagefeaturing a variety of modern amenities such as a sand pool,a fun pool, a reflexology pool, a tennis court, outdoorjacuzzis and caravan parks. The club, operated by RoyalPalm Springs Golf Club, has already established itselfamong the golf fraternity, and both the number of tourna-ments and the number of participants are increasing. Byearly 2003, the golf course will have nine of its 18 holesfloodlit. This will certainly increase its popularity and statusas one of Malaysia's premier clubs.

Aside from the golf course, Palm Springs has on show 282completed and elegantly finished Riverine Villas, with a fur-ther 378 units at the final stages of construction. These rep-resent the resort's first phase of development. Due to unex-pected circumstances, the project ran into financial diffi-culties, forcing us to progress slowly until the situation wasresolved. But now, with the completion of our capi-tal-raising exercise, we can pick up speed, and aim to com-plete this phase of the project by 2002.

2001 saw Palm Springs receive more than 70,000visitors. With the growing popularity of Palm Springs as adestination, we expect the number to increasefurther. The completion of more than 300 units by 2002,both for timeshare and rental, should enable us to meet thisanticipated surge in demand.

We remain confident of the potential of this project despitethe setbacks. With the problems now behind us, we areactively planning the next stages.

Regal ResortsDuring the year, we disposed of approximately 3.48 acres ofour 12.09 acres of land to the Immigration Department ofMalaysia for RM3.6 million, at a profit to the Group ofRM591 thousands. We will now look at replanning theremaining land to maximise its potential.

Taman Sri RajawaliThis project adjoins a major development in Seremban andis next to the PD-Seremban Highway. We arecurrently exploring various ways of complementing thisdevelopment in order to maximise its potential.

Vacation OwnershipsTanco Resorts BerhadSince entering the local vacation ownership business in1993, Tanco Resorts Berhad (TRB) has not only carved aniche for itself, but has gained dominance both in Malaysiaand across the Asia Pacific region. Its success has attractedthe attention of many property owners - and even that of ourcompetitors, with some of whom we have formed strategicalliances. Today, we are the biggest operator in the country,with a membership base of over 26,000 (and still growing)and with 18 resorts either fully owned or indirectlycontrolled by our management.

Royal Palm Springs Golf Club,Port Dickson

PROFILE4 23/5 4col 3/6/02 11:31 AM

TANCOHOLDINGSBERHAD Group Managing Director’s Review (cont’d)

22

For the financial year ended 31 December 2001, in spite ofincreasing competition, the TRB Group continued tooutpace its competitors, chalking up a landmark turnover ofover RM76 million. This is the third year in succession inwhich we have achieved a turnover of over RM70 million,despite difficult market conditions. We are confident thatTRB will continue to perform well in the future, furtherconsolidating its position through its innovative strategies and broadening market reach.

We recognise the need to maintain our level of service andexcellence in order to stay ahead of ourcompetitors. We have therefore over the yearsbroadened our choice of resort locations to offer ourmembers a wider selection of holiday experiences; andinvested in upgrading our systems to deliverstate-of-the-art customer care facilities. I am also proud tonote that we are the first and only vacationownership company in the world to achieve ISO-9002registration: a splendid tribute to our superlative qualitystandards.

SummaryWhile 2001 posed many challenges, we have come throughunscathed - remaining profitable thanks mainly to anothersterling performance by our vacation ownership business. Inthe year ahead, we will focus on further increasing TRB'sprofitability.

Although the economic situation in 2002 remains uncertain,we are optimistic about the outlook for the Group and itsbusinesses - particularly for TRB. Meanwhile, on theproperty development front, we are poised to launch ourhigher end products whenever the market improves. Tillthen, the emphasis will necessarily be on medium andlow-cost residential products.

The successful completion of our capitalisation and debt-restructuring exercise bodes well for our future, and demonstrates the confidence of our shareholders andbankers. With the much needed funding that we have nowsecured, we can swiftly address the critical issues that have

been affecting the Group, particularly in Palm Springs. Inaddition, the time concession given to us by our bankers willalso allow us to work diligently on strengthening the Group'sfinances to take on new challenges and opportunities.

Dato' Tan Jing NamGroup Managing Director

Duta Sands, Kuantan

PROFILE4 23/5 4col 3/6/02 11:31 AM

Reports & Financial StatementsTANCO

HOLDINGSBERHAD

23

24 - 28 Directors’ Report

29 - 30 Balance Sheets

31 Income Statements

32 Statements of Changes in Equity

33 - 36 Cash Flow Statements

37 - 69 Notes to the Financial Statements

70 Statement by Directors

71 Statutory Declaration

72 - 73 Report of the Auditors

ANNUAL b/w 23/5 3/6/02 9:46 AM

24

Directors’ Reportfor the year ended 31st December 2001

TANCOHOLDINGSBERHAD

The directors hereby submit their report together with the audited financial statements of the Group andof the Company for the financial year ended 31st December 2001.

PRINCIPAL ACTIVITIESThe principal activities of the Company consist of investment holding and provision of managementservices. The principal activities of its subsidiary and associated companies are disclosed in Notes 5 and6 to the financial statements.

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

RESULTS

DIVIDENDNo dividend was paid or declared by the Company since the end of the previous financial year.

The directors do not recommend the payment of any dividend in respect of the financial year ended 31stDecember 2001.

RESERVES AND PROVISIONSAll material transfers to and from reserves and provisions during the financial year have been disclosedin the financial statements.

BAD AND DOUBTFUL DEBTSBefore the income statements and balance sheets of the Group and of the Company were made out, thedirectors took reasonable steps to ascertain that action had been taken in relation to the writing off of baddebts and the making of provision for doubtful debts, and satisfied themselves that all known bad debtshad been written off and that adequate provision had been made for doubtful debts.

At the date of this report, the directors of the Company are not aware of any circumstances that wouldrender the amount written off for bad debts, or the amount of the provision for doubtful debts in thefinancial statements of the Group and of the Company inadequate to any substantial extent.

CURRENT ASSETSBefore the income statements and balance sheets of the Group and of the Company were made out, thedirectors took reasonable steps to ensure that any current assets, other than debts, which were unlikely torealise in the ordinary course of business, their values as shown in the accounting records of the Groupand of the Company had been written down to an amount that they might be expected to realise.

At the date of this report, the directors are not aware of any circumstances that would render the valuesattributed to the current assets in the financial statements of the Group and of the Company misleading.

Group CompanyRM’000 RM’000

Profit for the year after taxation 676 336 Minority interest (1) -

Net profit for the year 675 336

ANNUAL b/w 23/5 3/6/02 9:46 AM

25

TANCOHOLDINGS

BERHAD

Directors’ Reportfor the year ended 31st December 2001(cont’d)

VALUATION METHODSAt the date of this report, the directors are not aware of any circumstances which have arisen whichrender adherence to the existing method of valuation of assets or liabilities of the Group and of theCompany misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIESAt the date of this report, there does not exist:-

(i) any charge on the assets of the Group and of the Company that has arisen since the end ofthe financial year which secures the liability of any other person, or

(ii) any contingent liability in respect of the Group and of the Company that has arisen sincethe end of the financial year, except as stated in Note 31 to the financial statements.

No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial yearwhich, in the opinion of the directors, will or may substantially affect the ability of the Group and ofthe Company to meet its obligations as and when they fall due.

CHANGE OF CIRCUMSTANCESAt the date of this report, the directors are not aware of any circumstances, not otherwise dealt with inthis report or the financial statements of the Group and of the Company, that would render any amountstated in the respective financial statements misleading.

ITEMS OF AN UNUSUAL NATUREThe results of the operations of the Group and of the Company for the financial year were not, in theopinion of the directors, substantially affected by any item, transaction or event of a material andunusual nature.

There has not arisen in the interval between the end of the financial year and the date of this reportany item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financialyear in which this report is made.

ISSUE OF SHARES AND DEBENTURESDuring the financial year, the Company's authorised share capital was increased fromRM500,000,000/- to RM1,000,000,000/- by the creation of 500,000,000 new ordinary shares ofRM1/- each.

During the financial year, 56,737,588 new ordinary shares of RM1/- each were issued by the Companythrough the settlement of RM80,000,000/- nominal value of 6% Irredeemable Convertible UnsecuredLoan Stocks 1997/2002 ("ICULS 1997/2002") at the issue price of RM1.41 per share.

ANNUAL b/w 23/5 3/6/02 9:46 AM

TANCOHOLDINGSBERHAD


26

DIRECTORSThe directors in office since the date of the last report are:-

Dato' Ali Bin HassanAznan Bin Abdul AzizDato' Tan Jing NamJames Wong Kwong YewDato' Dr. Mohd. Aminuddin Bin Mohd. RouseDato' Dr. Mohd. Noordin Bin Haji KelingLoh Siew CheangTan Lee SingYong Poi Leong

In accordance with Article 101 of the Company's Articles of Association, Aznan Bin Abdul Aziz,Dato' Tan Jing Nam and Tan Lee Sing retire and being eligible, offer themselves for re-election.

In accordance with Section 129 of the Companies Act, 1965, Dato' Dr. Mohd. Noordin Bin HajiKeling retires and being eligible, offers himself for re-election.

DIRECTORS' INTERESTSAccording to the Register of Directors' Shareholdings, the interests of those directors who heldoffice at the end of the financial year in shares and ICULS 1997/2002 in the Company and itsrelated corporations during the financial year are as follows:-

Number of ordinary shares of RM1/- each

At AtThe Company:- 1.1.2001 Bought Sold 31.12.2001Tanco Holdings Berhad

Aznan Bin Abdul Aziz- direct 6,661,185 16,495,844 - 23,157,029 Dato’ Tan Jing Nam- direct 10,060,000 16,500,100 - 26,560,100 James Wong Kwong Yew- direct 5,000 - - 5,000 - indirect 2,500,000 375,656 - 2,875,656 Dato’ Dr. Mohd. Aminuddin Bin Mohd. Rouse- direct 70,000 - - 70,000 Dato’ Dr. Mohd. Noordin Bin Haji Keling- direct 27,000 4,255 - 31,255 Loh Siew Cheang- indirect 2,500,000 375,656 - 2,875,656 Tan Lee Sing- direct 2,500 - - 2,500

ANNUAL b/w 23/5 3/6/02 9:46 AM


TANCOHOLDINGS

BERHAD

27

Number of ICULS 1997/2002 of RM1/- each

At At1.1.2001 Bought Settled Sold 31.12.2001

Aznan Bin Abdul Aziz- direct 23,259,144 - (23,259,144) - - Dato’ Tan Jing Nam - - direct 23,265,143 - (23,265,143) - - James Wong Kwong Yew- direct 1,000 - - (1,000) - - indirect 529,675 - (529,675) - - Dato’ Dr. Mohd. Noordin - Bin Haji Keling- direct 6,000 - (6,000) - - Loh Siew Cheang - - indirect 529,675 - (529,675) - -


At At1.1.2001 Bought Sold 31.12.2001

Tanco Enterprise Sdn. Bhd.

Aznan Bin Abdul Aziz- direct 15,002 - - 15,002 Dato’ Tan Jing Nam- direct 15,002 - - 15,002


At At1.1.2001 Bought Sold 31.12.2001

Medan Melati Sdn. Bhd.

Dato’ Dr. Mohd. Aminuddin Bin Mohd. Rouse- direct 200 - - 200

Other than as stated above, none of the other directors in office at the end of the financial yearhad any interest in shares in the Company and its related corporations during the financial year.

By virtue of their interests in the Company, all the directors are also deemed interested in theshares of all the other subsidiary companies to the extent the Company has an interest.

ANNUAL b/w 23/5 3/6/02 9:46 AM

Directors’ Reportfor the year ended 31st December (cont’d)

TANCOHOLDINGSBERHAD

28

DIRECTORS' BENEFITSSince the end of the previous financial year, no director of the Company has received or becomeentitled to receive any benefits (other than as disclosed in the financial statements) by reason of acontract made by the Company or a related corporation with the director or with a firm of which thedirector is a member, or with a company in which the director has a substantial financial interest.

Neither during nor at the end of the financial year was the Company a party to any arrangement whoseobject was to enable the directors to acquire benefits by means of the acquisition of shares in, ordebentures of, the Company or any other body corporate.

AUDITORSThe auditors, Messrs Monteiro & Heng, have expressed their willingness to continue in office.

On behalf of the Board,

…………………………………………........DATO' ALI BIN HASSANDirector

………………………………………............DATO' TAN JING NAMDirector

Kuala Lumpur

Date: 08 MAR 2002

ANNUAL b/w 23/5 3/6/02 9:46 AM

TANCOHOLDINGS

BERHAD

Balance Sheetsas at 31st December 2001

29

Group CompanyNote 2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

PROPERTY, PLANT AND EQUIPMENT 3 239,050 238,028 198 257 LAND AND DEVELOPMENT EXPENDITURE- NON CURRENT PORTION 4 195,047 194,538 - - INVESTMENT IN SUBSIDIARY COMPANIES 5 - - 163,745 172,293 INVESTMENT IN ASSOCIATED COMPANIES 6 - - - - OTHER INVESTMENTS 7 167,258 167,216 2 2 AMOUNT OWING BY SUBSIDIARY COMPANIES 8 - - 263,567 252,888 TRADE DEBTORS 9 6,239 3,127 - -

CURRENT ASSETS

Land and development expenditure- current portion 4 80,711 113,313 - - Stocks 10 27,101 18,182 - - Trade debtors 9 66,410 51,616 - - Sundry debtors, deposits and prepayments 11 18,442 7,174 901 826 Amount owing by an associated company 12 490 71 - - Tax recoverable - - 565 - Bank balances and deposits 13 3,017 3,935 3 22

196,171 194,291 1,469 848

Less:

CURRENT LIABILITIES

Trade creditors 14 21,254 21,684 - - Sundry creditors, deposits and accruals 15 87,315 85,846 1,981 1,968 Amount owing to directors 16 50 11,263 24 3,417 Short term borrowings 17 22,090 9,245 2,857 - Provision for taxation 19,280 18,395 - 362

149,989 146,433 4,862 5,747

NET CURRENT ASSETS/(LIABILITIES) 46,182 47,858 (3,393) (4,899)

653,776 650,767 424,119 420,541

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TANCOHOLDINGSBERHAD

Balance Sheetsas at 31st December 2001 (cont’d)

30

Group CompanyNote 2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Financed by:

SHARE CAPITAL 19 167,443 110,706 167,443 110,706 RESERVES 20 148,976 125,038 126,587 102,988

SHAREHOLDERS' FUNDS 316,419 235,744 294,030 213,694

MINORITY INTEREST 45 44 - - LONG TERM LIABILITIES 21 308,310 379,315 130,089 206,847 DEFERRED TAXATION 24 29,002 35,664 - -

653,776 650,767 424,119 420,541

The accompanying notes form an integral part of these financial statements.

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Income Statementsfor the year ended 31st December 2001

TANCOHOLDINGS

BERHAD

31

Group Company2001 2000 2001 2000

Note RM'000 RM'000 RM'000 RM'000

REVENUE 25 122,320 106,677 10,468 9,508

Cost of sales (47,795) (43,354) - -

GROSS PROFIT 74,525 63,323 10,468 9,508

Other operating income 4,540 6,939 - - Administrative expenses (58,190) (62,184) (1,076) (1,441)

OPERATING PROFIT 26 20,875 8,078 9,392 8,067

Finance costs (net) 27 (20,255) (18,422) (8,885) (10,003) Share of results of associated companies - (500) - - Net gain on disposal of investments 28 - 13,254 - 14,844

PROFIT BEFORE TAXATION 620 2,410 507 12,908

Taxation 29 56 (910) (171) (6)

PROFIT FOR THE YEAR AFTER TAXATION 676 1,500 336 12,902

Minority interest (1) (2) - -

NET PROFIT FOR THE YEAR 675 1,498 336 12,902

Earnings per share (sen) 30 Basic 0.57 1.35 Fully diluted - 0.79


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Group Company

Share Share Retained Share Share RetainedCapital Premium Profit Total Capital Premium Profit TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Balance at 1st January 2000 110,706 49,503 74,037 234,246 110,706 49,503 40,583 200,792

Net profit for the year - - 1,498 1,498 - - 12,902 12,902

Balance at 31st December 2000 110,706 49,503 75,535 235,744 110,706 49,503 53,485 213,694

Issued during the year 56,737 - - 56,737 56,737 - - 56,737 Premium arising from settlement of ICULS 1997/2002 - 23,263 - 23,263 - 23,263 - 23,263 Net profit for the year - - 675 675 - - 336 336

Balance at 31st December 2001 167,443 72,766 76,210 316,419 167,443 72,766 53,821 294,030


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TANCOHOLDINGS

BERHAD

Cash Flow Statementsfor the year ended 31st December 2001

33

2001 2000 2001 2000RM'000 RM'000 RM'000 RM'000

CASH FLOW FROM OPERATING ACTIVITIES:

Profit before taxation 620 2,410 507 12,908

Adjustments for:

Amortisation 72 351 - - Attributable profit to development work performed todate (245) (4,833) - - Bad debts written off 286 - - - Depreciation 4,817 3,525 59 59 Deposit written off - 424 - 424 Dividend income - - (6,791) (6,038) Gain on disposal of property, plant and equipment (42) (52) - - Interest income (203) (438) (3,407) (3,200) Interest expenses 20,458 18,860 8,885 10,003 Loss on disposal of property, plant and equipment 21 - - - Provision for foreseeable loss - 185 - - Property, plant and equipment written off 15 3 - - Share of results of associated company - 500 - - Provision for doubtful debts 3,380 2,086 - - Net gain on disposal of investments - (13,254) - (14,844) Unrealised (gain)/loss on foreign exchange (72) 1,358 - - - Operating Profit/(Loss) Before Working Capital Changes 29,107 11,125 (747) (688)

Increase in land and development expenditure net of depreciation of RM Nil (2000: RM413,736/-) and interest expenses of RM22,309/-(2000 : RM6,845,098/-) (18,561) (19,985) - - (Increase)/decrease in debtors (32,840) 1,908 (42) (823) Decrease in stocks 2,307 3,551 - - Increase/(decrease) in creditors 714 4,203 (7) (903) Increase in progress billings 24,003 24,783 - -

Net Cash Generated From/(Used In) Operations 4,730 25,585 (796) (2,414)

Group Company

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TANCOHOLDINGSBERHAD

Cash Flow Statementsfor the year ended 31st December 2001 (cont’d)

34

2001 2000 2001 2000RM'000 RM'000 RM'000 RM'000

Interest received 203 438 - - Tax paid (1,908) (43) - (745) Tax refund 664 2,934 664 2,934

Net Cash Generated From/(Used In) Operating Activities 3,689 28,914 (132) (225)

CASH FLOW FROM INVESTING ACTIVITIES:

Acquisition of a subsidiary company (Note D) - (4,721) - - Acquisition of additional shares in subsidiary companies - - - (8) (Increase)/decrease in amount owing by associated company (419) 2,578 - 2,025 Reduction in cost of investment in subsidiary company - - 8,548 - Dividend received - - 6,791 6,038 Investment in associated companies - (500) - - Increase in amount owing by subsidiary companies - - (9,034) (27,965) Decrease in amount owing to subsidiary companies - - (77) (122) Purchase of property, plant and equipment (Note B) (3,432) (34,766) - Purchase of vehicle stocks (Note C) - (288) - - Purchase of other investments (114) (16,705) - - Proceeds from disposal of -associated companies - 18,732 - 22,000 -a subsidiary company (Note E) - 5,130 - - -property, plant and equipment 181 1,959 - - Withdrawal of deposits 662 1,516 - 50

Net Cash (Used In)/From Investing Activities (3,122) (27,065) 6,228 2,018

Group Company

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B. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

C. PURCHASE OF VEHICLE STOCKS


TANCOHOLDINGS

BERHAD

35

2001 2000 2001 2000RM'000 RM'000 RM'000 RM'000

CASH FLOW FROM FINANCING ACTIVITIES:

Drawdown of loans 7,018 7,497 - - Increase/(decrease) in directors' accounts 298 2,213 (3,373) - Interest paid (2,194) (8,618) - (1,096) Repayment of term loans (3,383) (5,140) (2,747) (729) Payments to hire purchase and lease creditors (2,309) (1,770) - -

Net Cash Used In Financing Activities (570) (5,818) (6,120) (1,825)

NET DECREASE IN CASH AND CASH EQUIVALENTS (3) (3,969) (24) (32) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 2,260 6,229 22 54

CASH AND CASH EQUIVALENTS AT END OF THE YEAR (NOTE A) 2,257 2,260 (2) 22

NOTES ON THE CASH FLOW STATEMENTS

A. CASH AND CASH EQUIVALENTS:

The cash and cash equivalents comprise the following:-

Bank balances and deposits 3,017 3,935 3 22 Bank overdrafts (79) (331) (5) -

2,938 3,604 (2) 22 Less: Deposit held as security value 108 226 - - Monies placed with trustee 573 1,118 - -

2,257 2,260 (2) 22

Group Company

During the financial year, the Group acquired property, plant and equipment amounting toRM6,108,694/- (2000 : RM39,025,056/-) of which RM1,162,858/- (2000 : RM2,916,045/-) wereacquired by means of hire purchases and of which RM1,712,802/- (2000 : RM1,854,223/-)pertained to interest expenses capitalised. Cash payments amounting to RM198,721/- (2000 :RM511,006/-) were made towards the hire purchases.

In 2000, the Group acquired stocks amounting to RM737,766/- of which RM566,766/- werepurchased under hire purchase. Cash payments amounting to RM116,766/- were made towards thehire purchase.

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TANCOHOLDINGSBERHAD


36

D. ANALYSIS OF ACQUISITION OF A SUBSIDIARY COMPANY:

2000RM'000

Investment properties 15,179 Property, plant and equipment 1,121 Debtors 125 Stocks 27 Cash and bank balances 57 Creditors (1,309) Hire purchase creditors (15) Director's account (7,718) Bank borrowings (2,689)

Total purchase consideration 4,778 Less: Cash and bank balances (57)

Net cash from acquisition of a subsidiary company 4,721

On 17th October 2000 the Group entered into a sale and purchase agreement for theacquisition of 100% equity interest in Gem Beach Resort Sdn. Bhd. ("GB") for a totalconsideration of RM4,777,964/-.

E. ANALYSIS OF DISPOSAL OF A SUBSIDIARY COMPANY

2000RM'000

Net assets disposed: Property, plant and equipment 5,366 Other debtor 5

Net assets disposed 5,371 Exceptional loss on disposal (241)

Total consideration received from disposal 5,130 Less: Cash and bank balances disposed -

Net cash from disposal of a subsidiary company 5,130

On 30th September 2000, Palm Springs Development Sdn. Bhd., a wholly owned subsidiarycompany completed the disposal of its entire equity interest in Tanah Bijana Sdn. Bhd.("TB") for a consideration of RM5,130,000/-.


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Notes To The Financial StatementsTANCO

HOLDINGSBERHAD

37

1. GENERAL INFORMATION

The principal activities of the Company consist of investment holding and provision of managementservices. The principal activities of its subsidiary and associated companies are disclosed in Notes 5 and 6 to the financial statements. There have been no significant changes in the nature of these principalactivities during the financial year.

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

The registered office is located at Jalan Desa, Bandar Country Homes, 48000 Rawang, Selangor Darul Ehsan.

The number of employees of the Group and of the Company at the end of the year are 863 (2000 : 1,135) and 2 (2000 : 2) respectively.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of AccountingThe financial statements of the Group and of the Company have been prepared under the historicalcost convention. Certain assets of the subsidiary companies are stated in the Group's financialstatements at value reflecting approximately the effective acquisition costs by the Group of theseassets (group cost).

The financial statements of the Group and of the Company have also been prepared in accordance with applicable approved accounting standards in Malaysia and on a going concern basis which is dependent upon the successful completion of the debt restructuring scheme as stated in Note 35 (iv) to the financial statements.

(b) Basis of ConsolidationThe consolidated financial statements include the financial statements of the Company and itssubsidiary companies, made up to the end of the financial year.

The financial statements of the subsidiary companies are consolidated using the acquisition method of accounting. Under the acquisition method of accounting, the results of subsidiary companies acquired or disposed of during the financial year are included in the consolidated income statement from the effective date of their acquisition or up to the date of their disposal. The proportion of the profit or loss applicable to minority shareholders is deducted in arriving at the profit attributable to the shareholders of the Company.

The assets and liabilities of subsidiary companies are included in the Group's balance sheet whilst the interest of minority shareholders in the net assets employed are stated separately. All significantinter-company transactions and balances are eliminated on consolidation.

The excess of the purchase consideration over the net tangible assets of property developmentsubsidiary companies acquired has been ascribed to development properties and included in group cost as fair value and is amortised over the period of development by reference to the development profit earned during the year compared to the total estimated post-acquisition development profit.

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Notes To The Financial Statements (cont’d)

TANCOHOLDINGSBERHAD

38

(c) Subsidiary CompaniesSubsidiary companies are companies in which the Company, directly or indirectly, control more than halfof the voting power or issued share capital or control the composition of the board of directors.

(d) Associated CompaniesAssociated companies are companies, other than subsidiary companies, in which the Company has a long term investment of between 20% to 50% equity interest and is in a position to exercise a significantinfluence over its financial and operating policies.

The consolidated income statement includes the Group's share of results of associated companies based on the latest management financial statements of the companies concerned. In the consolidated balance sheet, the Group's interest in associated companies is stated at cost plus the Group's share ofpost-acquisition retained profit and reserves.

(e) Investments(i) Investments in subsidiaries, associated companies, quoted and unquoted shares are stated at cost.

Provision is made for diminution in value of investments if, in the opinion of the directors, thediminution in value is considered permanent in nature.

(ii) Investment in resort properties and rights in resort properties are stated at group cost or at cost.Depreciation is not provided on resort properties as it is the Group's practice to maintain all its resort properties in the high standard and condition in order to maintain their image and market share.Because of this, the resort properties maintain residual values at least equal to their respective book values such that depreciation would be insignificant. The related maintenance expenditure is dealt with in the income statements.

In order to establish whether resort properties have maintained residual value at least equal to theirrespective book values, all resort properties are appraised at least once in every five years.Anysurplus arising therefrom will be dealt with in the Capital Reserve Account. Any deficit is set-off against the Capital Reserve Account only to the extent of surplus credited from the previousrevaluation of properties and the excess of the deficit is charged to the income statements.

(iii) Other investments are stated at cost less amortisation over the remaining period of the investments ona straight line basis.

(f) Interest CapitalisationInterest incurred on borrowings related to property, plant and equipment and development properties arecapitalised during the period in which the activities on planning, developing and constructing the assetsare carried out. Capitalisation will cease when the relevant assets are ready for their intended use.

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TANCOHOLDINGS

BERHADNotes To The Financial Statements (cont’d)

39

(g) Property, Plant and Equipment and DepreciationProperty, plant and equipment are stated at cost or group cost less accumulated depreciation.

Depreciation is not provided on the freehold land. No depreciation is provided on the leasehold land withan unexpired lease in excess of fifty years as it is the Group's practice to continually upgrade the golf course which is situated on the leasehold land with regular maintenance and repairs, and the Group has alsoadopted an impairment review at each year end to ascertain the carrying value of the said land. Nodepreciation is provided for construction-in-progress until the relevant assets are ready for their intended use. All other property, plant and equipment are depreciated over their estimated useful lives on a straight line basis at the following annual rates:-

(h) Land and Development ExpenditureLand and development expenditure account consists of land under development and other related costsincluding financial and administrative expenses during the period of development and portion of profit or loss attributable to development work performed todate, less progress billings. Provision for foreseeablelosses is made when the estimated future revenue realisable is lower than the carrying amount of theproject. Provision for liquidated damages is made if there is a delay in the handing over of vacantpossession of the developed properties based on the estimated liability to be incurred.

That portion of land and development expenditure in respect of which significant development work has been undertaken and which is expected to be completed within the normal operating cycle of two to three years is considered as a current asset. The portion classified as current asset which is stated at the lower of carrying amount and net realisable value, includes the related profit attributable to development workperformed todate, less the applicable progress billings but excludes that portion of development property and expenditure which the Group does not currently intend to sell.

(i) StocksStocks have been valued at the lower of cost and net realisable value.

Stocks of completed units, vacant lands and vacation ownership intervals under the time sharing schemeinclude direct costs of construction and proportionate land cost and other development costs. Stocks ofvehicles represent unsold points for usage of vehicles under time sharing scheme. Stocks of food, beverages and golf accessories are determined on a first-in first-out basis.

(j) DebtorsKnown bad debts are written off and specific provision is made for any debts considered to be doubtful of collection. In addition, a general provision based on a percentage of trade debtors is made to coverpossible losses which are not specifically identified.

(k) Leases/Hire PurchaseAssets financed by finance lease and hire purchase arrangements which transfer substantially all the risksand rewards of ownership to the Group are capitalised as property, plant and equipment and vehicle stocks, and the corresponding obligations are treated as liabilities. The assets so capitalised are depreciated in accordance with the accounting policy on property, plant and equipment. Finance charges are charged tothe income statements in equal annual instalments over the period of the respective agreements.Leasepayments for assets under operating lease where substantially all the risk and benefits remain with thelessor, are recognised as an expense in the income statements on a straight-line basis over the lease term.

over Golf course and club village 97 yearsFurniture, fittings and equipment 5 - 20%Boats and motor vehicles 10 - 20%Buildings 2 - 4%

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TANCOHOLDINGSBERHAD Notes To The Financial Statements (cont’d)

40

(l) Deferred TaxationProvision is made for deferred taxation, using the liability method, in respect of all material timingdifferences except where such differences are not expected to reverse in the foreseeable future.

(m) Recognition of Income(i) Income from property development is recognised on the percentage of completion method.

(ii) Income from sales of vacation ownership intervals and points based schemes are recognised based on agreements signed with purchasers upon expiration of the "cooling-off" period. Income from clubmemberships is recognised upon admission of the applicants to memberships.

(iii) Income from club operations, sales of tour packages, rental income and interest are recognised upon delivery of products and customer acceptance, if any, or when the rights to receive has been established.

(iv) Dividend income are recognised in the income statements on receipt basis.

(v) Income from services rendered are recognised upon performance of services.

(n) Foreign CurrenciesTransactions in foreign currencies are converted into Ringgit Malaysia at the exchange rates prevailing atthe transaction dates. Where settlement has not taken place at the end of the financial year, conversion into Ringgit Malaysia is at the approximate exchange rates prevailing at that date. Foreign exchange gains orlosses are taken up in the income statements.

For consolidation purposes, monetary and non-monetary items of foreign subsidiary companies aretranslated at exchange rates ruling at the balance sheet date and at historical rates respectively whereas income statement items are translated at average rates for the financial year. All exchange differences ardealt with through the income statement.

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

(o) Cash andCash EquivalentsCash and cash equivalents consist of cash in hand, deposits, bank balances and other short term, highlyliquid investments that are readily convertible to cash and are subject to insignificant risk of change in value.

2001 2000RM RM

1 US Dollar 3.788 3.7881 Australian Dollar 1.942 2.0941 New Zealand Dollar 1.578 1.664

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Long Golf course Furniture, Boats and Freehold Construction Freehold leasehold and club fittings and motor land and - in-progress

land land village equipment vehicles buildings Marina club Others Total2001 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

CostAt 1st January 34,797 18,118 22,981 23,713 8,603 3,452 37,581 104,521 253,766 Additions - - - 4,178 185 - 14 1,732 6,109 Disposals/write offs - - (25) (195) (150) - - (18) (388) Transfers - - - - - 13,251 - (13,301) (50)

At 31st December 34,797 18,118 22,956 27,696 8,638 16,703 37,595 92,934 259,437

Accumulated DepreciationAt 1st January - - 917 8,615 5,716 490 - - 15,738 Charge for the year - - 234 2,867 1,322 394 - - 4,817 Disposals/write offs - - - (28) (140) - - - (168) - At 31st December - - 1,151 11,454 6,898 884 - - 20,387

Net Book Value at 31st December 34,797 18,118 21,805 16,242 1,740 15,819 37,595 92,934 239,050

Cost is represented by:- Group Cost 7,117 18,118 - - - - - 57,266 82,501 - Cost 27,680 - 22,956 27,696 8,638 16,703 37,595 35,668 176,936

34,797 18,118 22,956 27,696 8,638 16,703 37,595 92,934 259,437

3. PROPERTY, PLANT AND EQUIPMENTGroup

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3. PROPERTY, PLANT AND EQUIPMENT (continued)

Long Golf course Furniture, Boats and Freehold Construction Freehold leasehold and club fittings and motor land and - in-progress

land land village equipment vehicles buildings Marina club Others Total2000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

CostAt 1st January 12,483 18,118 22,981 16,229 7,651 2,921 38,129 102,272 220,784 Acquisition of a subsidiary company - - - 1,846 46 - - - 1,892 Additions 27,680 - - 7,964 1,149 531 67 2,249 39,640 Disposal of a subsidiary company (5,366) - - - - - - - (5,366) Disposals - - - (2,326) (243) - - - (2,569) Transfer - - - - - - (615) - (615)

At 31st December 34,797 18,118 22,981 23,713 8,603 3,452 37,581 104,521 253,766

Accumulated DepreciationAt 1st January - - 681 6,118 4,428 225 - - 11,452 Acquisition of a subsidiary company - - - 748 23 - - - 771 Charge for the year - - 236 2,207 1,466 265 - - 4,174 Disposals - - - (458) (201) - - - (659)

At 31st December - - 917 8,615 5,716 490 - - 15,738

Net Book Value at 31st December 34,797 18,118 22,064 15,098 2,887 2,962 37,581 104,521 238,028

Cost is represented by:- Group Cost 7,117 18,118 - - - - - 57,266 82,501 - Cost 27,680 - 22,981 23,713 8,603 3,452 37,581 47,255 171,265

34,797 18,118 22,981 23,713 8,603 3,452 37,581 104,521 253,766

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TANCOHOLDINGS


Furniture,fittings

andequipment Total

2001 RM'000 RM'000

CostAt 1st January 571 571 Additions - - Disposals - -

At 31st December 571 571

Accumulated DepreciationAt 1st January 314 314 Charge for the year 59 59 Disposals - -


Net Book Value at 31st December 198 198

2000

CostAt 1st January 571 571 Additions - - Disposals - -


Accumulated DepreciationAt 1st January 255 255 Charge for the year 59 59 Disposals - -


Net Book Value at 31st December 257 257

3. PROPERTY, PLANT AND EQUIPMENT (continued)Company

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TANCOHOLDINGSBERHAD

44

Included in construction-in-progress of the Group are interest expenses incurred during the yeartotalling RM1,712,802/- (2000 : RM1,854,223/-).

The following assets of the Group, stated at net book value, have been charged to licensed banks tosecure the bank borrowings stated in Notes 17 and 21 to the financial statements:-

The net book value of property, plant and equipment of the Group includes the following property,plant and equipment acquired under hire purchase and finance lease agreements:-

2001 2000RM'000 RM'000

Freehold land 7,117 7,117 Long leasehold land 18,118 18,118 Golf course and club village 21,805 22,064 Freehold land and buildings 15,819 2,962 Construction-in-progress- Marina club 37,595 37,581 - others 91,351 102,938

191,805 190,780

At Net Book Value

2001 2000RM'000 RM'000

Furniture, fittings and equipment 2,595 2,340 Boats and motor vehicles 1,056 2,363

3,651 4,703

3. PROPERTY, PLANT AND EQUIPMENT (continued)

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TANCOHOLDINGS

BERHAD

45

4. LAND AND DEVELOPMENT EXPENDITURE

Group2001 2000

RM'000 RM'000

Freehold land- at cost 23,838 24,368 - at group cost 99,697 121,328 Long leasehold land- at cost 1 - - at group cost 8,692 10,851

132,228 156,547 Development expenditure - at cost 159,182 256,956

Total land and development expenditure 291,410 413,503

Portion of profit attributable to development work performed todate 25,082 32,374 Provision for foreseeable loss (1,886) (2,071)

314,606 443,806

Progress billings (38,848) (135,955)

275,758 307,851 Less:

Current portion 80,711 113,313

Non-current portion 195,047 194,538

Current charges to development expenditure account include the following:-

Group2001 2000

RM'000 RM'000

Depreciation - 414 Director's fees - 20 Interest expenses- current 515 6,845 - overprovision in previous year (493) -

The freehold land of the Group have been charged to licensed banks to secure thebank borrowings as stated in Notes 17 and 21 to the financial statements.

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TANCOHOLDINGSBERHAD

46

5. INVESTMENT IN SUBSIDIARY COMPANIES

Company2001 2000

RM'000 RM'000

Unquoted shares - at cost 163,745 172,293

The directors are of the opinion that there is no permanent impairment to the value of theinvestments which are held on a long term basis. Accordingly, the directors do not consider it necessary to make provision for diminution in value of any investment.

The following information relates to the subsidiary companies:-

Effective EquityCountry of Interest

Name of Company Incorporation Principal Activities 2001 2000 % %

Held directly:-

Cool-Wheels SuperClub Malaysia Dormant 100 100 Bhd.Medan Melati Sdn. Bhd. Malaysia Investment holding 70 70 Mighty Sails SuperClub Malaysia Dormant 100 100 Sdn. Bhd.(currently known as Palm Springs Islands Sdn. Bhd.)Palm Springs Leisure Malaysia Property management 100 100 Sdn. Bhd.Palm Springs Resort Malaysia Hotel operator 100 100 Management BerhadPentapeak Properties Malaysia Investment holding 100 100 Sdn. Bhd.Point Resort Club Malaysia Investment holding 100 100 Sdn. Bhd.Popular Elegance (M) Malaysia Investment holding 100 100 Sdn. Bhd.*SuperExchange Limited Labuan Provision of exchange 100 100

services in relation to vacation ownership schemes

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TANCOHOLDINGS

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Tanco Development Malaysia Property development 100 100 Sdn. Bhd.*Tanco Resorts Berhad Malaysia Investment holding, 100 100

and the management and operation of vacation ownership interval and points based schemes

TimeClub.com Ltd. British Virgin Dormant 100 100 Islands

Wheels, Sails & Wings Malaysia Operator of points 100 100 SuperClub Bhd. based schemeWorld Vacation Malaysia Provision of consultancy 100 100 Ownership Sdn. Bhd. services and

investment holding

5. INVESTMENT IN SUBSIDIARY COMPANIES (continued)



Held directly :-

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48




Held indirectly:-

BizCredit Sdn. Bhd. Malaysia Money lending business 100 100 (formerly known as Tanco Trading Sdn. Bhd.)*Burnham Global British Virgin Investment holding 100 100 Inc. Islands*Gem Beach Resort Malaysia Resort operator 100 100 Sdn. Bhd.Gerak Gaya Land Malaysia Property development 42 42 Sdn. Bhd.JKMB Development Malaysia Property development 100 100 Sdn. Bhd.*Noreast Co. Ltd. British Virgin Property holding 100 100

IslandsPalm Springs Club Malaysia Investment holding 100 100 Sdn. Bhd.Palm Springs Malaysia Property development 100 100 Development Sdn. Bhd.Palm Springs Resort Malaysia Operator of golf and 100 100 Bhd. marina clubsRegal Resort Sdn. Bhd. Malaysia Property development 100 100 SuperTime.com Ltd. British Virgin Dormant 100 100

IslandsTanco Builders Malaysia Contracting and 100 100 Sdn. Bhd. building worksTanco Club Berhad Malaysia Club operator 100 100 Tanco Dot Com Sdn. Bhd. Malaysia Multimedia related 100 100

business*Tanco Enterprise Malaysia Property investment 90.32 90.32 Sdn. Bhd.*Tanco Holidays Malaysia Travel and tour agent 100 100 Sdn. Bhd.*Tanco Lake Resorts Malaysia Resort operator and 100 100 Sdn. Bhd. also provides food

and other related services

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TANCOHOLDINGS


49

Country of InterestName of Company Incorporation Principal Activities 2001 2000

% %Held indirectly:-

Tanco Land Sdn. Bhd. Malaysia Property development 100 100 Tanco Leisure Holdings Malaysia Dormant 100 100 Sdn. Bhd.Tanco Properties Malaysia Property development 100 100 Sdn. Bhd.*Tanco Recreational Malaysia Property management 100 100 Holdings Sdn. Bhd.*Tanco Resorts Australia Management of resorts 100 100 (Australia) Pty. Ltd.*Tanco Resorts (NZ) New Zealand Property investment 100 100 Ltd. and resort management*TRB Leisure Mauritius Property investment 100 100 (Mauritius) Pte. Ltd.*TRB Vacation Mauritius Property investment 100 100 (Mauritius) Pte. Ltd.

* Subsidiary companies not audited by Monteiro & Heng

6. INVESTMENT IN ASSOCIATED COMPANIES

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Unquoted shares, at cost 500 500 - - Group's share of post-acquisition results (500) (500) - -

- - - -


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50

The following information relates to the associated companies:-

Country of Effective EquityName of Company Incorporation Principal Activities Interest

2001 2000% %

Sunshine Genius Sdn. Bhd.+ Malaysia Provision of timeshare 50 50 exchange activities

Sunshine Genius Co. Ltd.+ United State Provision of timeshare 50 50 of America exchange activities

7. OTHER INVESTMENTS

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Quoted shares in Malaysia, at cost 23 23 23 23 Provision for diminution in value (21) (21) (21) (21)

2 2 2 2

Unquoted shares in Malaysia, at cost 2,580 2,580 - - Rights In Resort Properties, at cost 22,563 22,563 - - Resort properties- at group cost 106,168 106,168 - - - at cost 33,103 32,989 - -

Other investments, at cost 3,145 3,145 - - Accumulated amortisation (303) (231) - -

2,842 2,914 - -

167,258 167,216 2 2

Market value of quoted shares 4 4 4 4

6. INVESTMENT IN IN ASSOCIATED COMPANIES (continued)

+ Held indirectly

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51

7. OTHER INVESTMENTS (continued)

Group

Rights In Resort Properties, at cost represent cost of rights to use the resort properties. The rights to use the resorts properties are conferred on a subsidiary company by virtue of a sale andpurchase agreement dated 23rd November 1998 between the subsidiary company and the ownerof the resort properties. The subsidiary company will have beneficial ownership to the resortproperties upon full settlement of the rights to use.

Resort properties at group cost comprise long leasehold and freehold land and buildings of RM15,191,672/- (2000 : RM15,191,672/-) and RM90,976,542/- (2000 : RM90,976,542/-) respectively. The freehold land and building at group cost of RM6,627,630/- (2000 : RM6,627,630/-) is pledged to a merchant bank as security for a loan made available to acompany in which certain directors, Dato’ Tan Jing Nam, Aznan Bin Abdul Aziz and Tan LeeSing have interests, namely, Renown Projects Sdn. Bhd.. The sole purpose of the loan taken is to finance the construction of the said resort property. This arrangement has been entered into prior to the acquisition by the Group of the affected subsidiary company.

Resort properties at cost comprise freehold land and buildings of RM33,102,748/- (2000 : RM32,988,795/-).

The directors are of the opinion that the current market values of the above resort properties are at least equal to their net book value.

The following assets of the Group have been charged to licensed banks to secure the bankborrowings stated in Notes 17 and 21 to the financial statements:-

8. AMOUNT OWING BY/(TO) SUBSIDIARY COMPANIES

Company

The amount owing by/(to) subsidiary companies are unsecured, interest free and have no fixed terms of repayment except for amounts owing by certain subsidiary companies totalling RM230,855,424/- (2000 : RM225,056,854/-) which bear interest at rates ranging from 0.5% to 7% (2000 : 0.5% to 8%) per annum.

Group2001 2000

RM'000 RM'000

Resort properties at group cost- long leasehold land and buildings 15,192 15,192 - freehold land and buildings 72,322 72,322

Resort properties at cost- freehold land and buildings 12,671 12,671

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52

9. TRADE DEBTORS

Included in trade debtors of the Group are the following:-

(a) Amounts recoverable by instalment schemes totalling RM42,036,322/- (2000 : RM32,929,713/-). The instalment schemes are for periods ranging between six and sixty months.

In determining the extent of provision for doubtful debts, the directors have given dueconsideration to all information available to assess the likelihood of bad debts arising. Although uncertainty generally exists with regard to the recovery of debts, the directors are of the opinion that sufficient provision has been made and the amounts receivable net ofprovision for doubtful debts are expected to be substantially recovered, notwithstanding that debts amounting to RM6,754,368/- (2000 : RM2,352,560/-) are overdue.

(b) Certain trade debtor of the Group recorded at RM11,830,343/- (2000 : RM6,973,997/-) have been pledged to licensed financial institutions for credit facilities granted to the subsidiary company.

(c) Trade debtors amounting to RM114,228/- (2000 : RM213,319/-) have instituted legalproceedings against a subsidiary company for liquidated damages in respect of late delivery of vacant possession of completed units and for refunds due to terminated Sale and Purchase Agreements amounting to approximately RM1,843,657/-.

Group2001 2000

RM'000 RM'000

Trade debtors 78,443 57,157 Provision for doubtful debts (5,794) (2,414)

72,649 54,743

Amounts repayableCurrent- within twelve months 66,410 51,616 Long-term- after twelve months 6,239 3,127

72,649 54,743

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10. STOCKS

The unsold completed units and vacant land, and vacation ownership intervals have been charged to certain banks to secure the bank borrowings stated in Notes 17 and 21 to thefinancial statements.

Stocks of vehicles costing RM566,766/- (2000 : RM566,766/-) were acquired under hirepurchase instalment plans.

11. SUNDRY DEBTORS, DEPOSITS AND PREPAYMENTS

Group

Included in this account are the following:-

(a) an amount of RM1,000,000/- (2000 : RM1,000,000/-) representing a deposit paid towards securing a development project which is refundable. The Company is currently taking legal action to recover the said deposit. The directors are of the opinion that the said amount is recoverable.

(b) an amount of RM1,630,350/- (2000 : RM910,000/-) representing part payments made for an acquisition of a resort property at a consideration of RM2,500,000/-. The acquisition has yet to be completed as at the date of this report. The commitment is disclosed in Note 32 to the financial statements.

(c) an amount of RM10,766,734/- (2000 : RM Nil) representing a legal claim against acontractor for damages arising from the failure to perform construction work properly and satisfactorily. The directors are of the opinion that the said amount is recoverable.

12. AMOUNT OWING BY AN ASSOCIATED COMPANY

The amount owing by an associated company is unsecured, interest free and has no fixed termof repayment.

Group2001 2000

RM'000 RM'000

At cost, Unsold completed units and vacant land 21,920 13,109 Vacation ownership intervals 4,239 4,231 Vehicles 737 633 Food and beverages 151 155 Golf accessories 54 54

27,101 18,182

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TANCOHOLDINGSBERHAD

13. BANK BALANCES AND DEPOSITS

Cash held under Housing Development Account represents receipts from purchasers ofresidential properties less payments or withdrawals provided under the Housing Developers (Control and Licensing) Act, 1966.

Group

Cash and bank balances amounting to RM23,530/- (2000 : RM23,570/-) and deposits totalling RM549,547/- (2000 : RM1,093,721/-) placed with licenced finance companies, represent receipts from members of the clubs/vacation ownership schemes, which are held in trust by the Trustee in accordance with the Trust Deed established from the respective clubs/vacationownership schemes.

Deposits totalling RM108,371/- (2000 : RM226,156/-) placed with licensed banks and finance companies are pledged to the financial institutions for facilities granted to certain subsidiary companies.

14. TRADE CREDITORS

Group


(a) An amount of RM1,968,615/- (2000 : RM2,571,464/-) owing to Renown Projects Sdn. Bhd., a company in which certain directors, Dato' Tan Jing Nam, Aznan Bin Abdul Aziz and Tan Lee Sing have interests.

(b) An amount of RM439,883/- (2000 : RM439,883/-) owing to two joint contractors. A legal suit has been instituted by a subsidiary company against the contractors for all general damages arising from the failure to perform construction works in a proper andsatisfactory manner.

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Cash and bank balances 1,216 1,545 3 22 Cash held under Housing Development Account 814 976 - - Deposits placed with :- - licensed banks 417 293 - - - a merchant bank - 27 - - - licenced finance companies 570 1,094 - -

3,017 3,935 3 22

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15. SUNDRY CREDITORS, DEPOSITS AND ACCRUALS

Group


(a) Amounts totalling RM1,128,719/- (2000 : RM616,086/-) representing contributions towardssinking funds operated by Trustees of the respective clubs which consist of non-refundablecontributions made by new members and not less than 10% of the total subscription/anniversary fees paid by the club members. The funds would only be utilised in respect of any major repairs or replacements to the Resorts or of the facilities of the clubs as stated in the Prospectuses.

(b) An amount of RM3,013,138/- (2000 : RM6,480,656/-) representing the amount payable in respect of the Rights In Resort Properties as stated in Note 7 to the financial statements.

(c) An amount of RM840,000/- (2000 : RM 840,000/-) representing the short term portion of the total amount payable over a period of 37 months commencing from 17th December 2000 in respect of the acquisition of a subsidiary, Gem Beach Resort Sdn. Bhd..

(d) Provision for liquidated damages of the Group of RM14,253,080/- (2000 : RM16,773,400/-).

(e) Amounts totalling RM3,921,399/- (2000 : RM4,131,554/-) representing advances received fromhouse purchasers who have instituted legal proceedings against a subsidiary company forliquidated damages in respect of late delivery of vacant possession of completed units and for refunds due to termination of Sale and Purchase Agreements amounting to approximately RM5,182,248/-.

16. AMOUNT OWING TO DIRECTORS

The amount owing to directors are unsecured, interest free and have no fixed terms of repayment except for amounts owing to certain directors during the year totalling RM5,406,727/- (2000 : RM1,127,450/-) which bear interest at rates ranging from 3.45% to 10% (2000 : 3.20% to 3.45%) perannum. The said amounts were settled during the year.

17. SHORT TERM BORROWINGS

Group and Company

The revolving credits, bridging loan and bank overdrafts bear interest at rates ranging from 6.40% to 14.00% (2000 : 7.10% to 12.97%) per annum.

55


TANCOHOLDINGS

BERHAD

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Term loans, secured (Note 21) 6,384 - 2,852 - Revolving credits, secured (Note 9(b)) 11,830 6,974 - - Bridging loan, unsecured 2,162 - - - Bank overdrafts, unsecured 79 331 5 - Hire purchase and lease creditors (Note 18) 1,635 1,940 - -

22,090 9,245 2,857 -

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TANCOHOLDINGSBERHAD

18. HIRE PURCHASE AND LEASE CREDITORS

19. SHARE CAPITAL

Group2001 2000

RM'000 RM'000Minimum hire purchase and lease payments: not later than one year 1,833 2,298 later than one year and not later than five years 1,854 2,985 later than five years - -

3,687 5,283 Future finance charges (744) (995)

Present value of hire purchase and lease liabilities 2,943 4,288

Represented by:

Current (Note 17)- not later than one year 1,635 1,940 Long term (Note 21)

- later than one year and not later than five years 1,308 2,348 - later than five years - -

1,308 2,348

2,943 4,288

Group and Company2001 2000

RM'000 RM'000Authorised:

Ordinary shares of RM1/- eachAt 1st January 500,000 500,000 Created during the financial year 500,000 -

At 31st December 1,000,000 500,000

Issued and fully paid:

Ordinary shares of RM1/- eachAt 1st January 110,706 110,706 Issued pursuant to the settlement of ICULS 1997/2002 56,737 -

At 31st December 167,443 110,706

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TANCOHOLDINGS

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20. RESERVES

Company

Based on the estimated tax credits available and the prevailing tax rate applicable to dividends, the Company has sufficient tax credits under Section 108 of the Income Tax Act, 1967 and tax exemptincome under Section 12 of the Income Tax (Amendment) Act, 1999 to frank dividends ofapproximately RM9,557,000/- (2000 : RM9,116,000/-) out of its retained profit as at 31st December 2001, subject to the approval of the tax authorities.

21. LONG TERM LIABILITIES

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Share premium, non-distributable

At 1st January 49,503 49,503 49,503 49,503 Arising from the settlement of ICULS 1997/2002 23,263 - 23,263 -

At 31st December 72,766 49,503 72,766 49,503 Retained profit, distributable 76,210 75,535 53,821 53,485

Total reserves 148,976 125,038 126,587 102,988

Group Company2001 2000 2001 2000

Note RM'000 RM'000 RM'000 RM'000

Term loans 301,919 285,498 127,387 121,216 Less:Portion due within twelve months 17 6,384 - 2,852 -

Portion due after twelve months 295,535 285,498 124,535 121,216 Hire purchase and lease creditors payable after one year 18 1,308 2,348 - - ICULS 1997/2002 22 - 80,000 - 80,000 Other creditors 23 11,467 11,469 - - Amount owing to subsidiary companies 8 - - 5,554 5,631

308,310 379,315 130,089 206,847

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TANCOHOLDINGSBERHAD

21. LONG TERM LIABILITIES (continued)

Term loans include the short term borrowings and interest payable amounting to RM158,221,584/- and interest payable of RM48,820,996/- respectively which werepreviously classified as current liabilities and are currently being restructured into long term loans pursuant to the Supplemental Heads of Agreement ("Supplemental Agreement") entered into between the Company and certain subsidiary companies with the lenders on 5th December 2001 as stated in Note 35 (iv) to the financial statements. The Company and the subsidiary companies concerned are in the process of fulfilling certain conditions precedent to the Supplemental Agreement. The financial statements for the current and previous year therefore reflect the new repayment structure of the borrowings as stated below, assuming successful implementation of the debt restructuring scheme with the lenders:-

The term loans of the Group and the Company are secured by:-

(i) Fixed charges over certain portion of subsidiary companies' landed properties as stated in Notes 3, 4, 7 and 10 to the financial statements;

(ii) Debentures charge over all assets of certain subsidiary companies;(iii) Future income of development projects of certain subsidiary companies;(iv) Guarantee of the Company.

Term loans of the Company totalling RM74,276,084/- (2000 : RM71,812,776/-) areadditionally guaranteed by deposit over a subsidiary company shares and are jointly andseverally guaranteed by certain directors.

22. ICULS 1997/2002

Group and Company

The ICULS 1997/2002 issued pursuant to a Trust Deed dated 23rd December 1996, were fully settled on 15th November 2001 via the allotment of 56,737,588 new ordinary shares of RM1.00 each in the Company at the issue price of RM1.41 per share as stated in Note 35(i) to the financial statements.

Group Company2001 2001

RM'000 RM'000

Not later than two years 6,384 2,852 Later than two years but not later than five years 125,602 52,928 Later than five years 169,933 71,607

301,919 127,387

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23. OTHER CREDITORS

Group


(a) An amount of RM748,000/- (2000 : RM748,000/-) representing amounts redeemable from the preference shareholders of a subsidiary company upon the expiry of the duration of Golf Membership on 22nd October 2093.

(b) An amount of RM10,718,896/- (2000 : RM 10,720,591/-) representing long term portion payable in respect of the acquisition of a subsidiary as stated in Note 15(c) to the financial statements.

24. DEFERRED TAXATION

This account represents the tax effects of timing differences arising from differences between group cost and cost of lands held for development purposes of subsidiary companies. As at 31st December 2001, there were no timing differences on which deferred taxation has not beenprovided (2000 : RM Nil).

25. REVENUE

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Group2001 2000

RM'000 RM'000

At 1st January 35,664 37,890 Transfer to income statement (2,185) (2,226) Tax effect arising from a reduction on group cost of land and development expenditure (4,477) -

At 31st December 29,002 35,664

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Sales of development properties 42,916 31,146 - - Sales value of vacation ownership interval and points based schemes 67,420 63,012 - - Income from clubs operations 4,946 5,607 - - Sales of tour packages 5,583 5,678 - - Dividend income from subsidiary companies - - 6,791 6,038 Interest income from- subsidiary companies - - 3,407 3,200 - an associated company 238 33 - - Rental income 977 526 - - Property management services 240 175 - - Consultancy services - 500 - - Management fee - - 270 270

122,320 106,677 10,468 9,508

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60

26. OPERATING PROFIT

The estimated monetary value of Directors’ benefit-in-kind is RM91,700/- (2000 : RM116,700/-).

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Operating profit has beenarrived at after charging/(crediting):-

Auditors’ remuneration:- current 172 165 10 10 - underprovision in prior year 3 6 - - - other 2 2 - - Amortisation 72 351 - - Bad debts written off 286 - - - Deposit written off - 424 - 424 Depreciation 4,817 3,525 59 59 Directors’ remuneration- fees - current directors 112 84 20 20 - a former director 20 - 20 - - salaries 2,826 2,820 240 240 - other emoluments 9 6 9 6 Gain on foreign exchange- realised 14 (39) - - - unrealised (72) 1,358 - - Guarantee rental 769 488 - - Gain on disposal of property, plant and equipment (42) (52) - - Lease rental 89 1,164 - - Loss on disposal of property, plant and equipment 21 - - - Property, plant and equipment written off 15 3 - - Provision for doubtful debts 3,380 2,086 - - Provision for foreseeable losses - 185 - - Rental of premises 1,663 1,863 - - Rental of equipment and boats 157 263 - - Rental income (29) (499) - - Staff costs 28,651 37,631 - -

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27. FINANCE COSTS (Net)

28. NET GAIN ON DISPOSAL OF INVESTMENTS

29. TAXATION

Group

The current year's provision relates to tax on profit of certain subsidiary companies whichcannot be set-off against losses of other subsidiary companies for tax purposes as Group relief is not available.

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Loss on disposal of investment in subsidiary company - (241) - - Gain on disposal of investment in associated companies (net of Real Property Gains Tax of RM2,125,000/-) - 13,495 - 14,844

- 13,254 - 14,844

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Income tax- current year’s provision (2,133) (346) (171) - - over/(under)provision in prior years 35 (2,790) - (6) Deferred taxation (Note 24) 2,185 2,226 - - Real Property Gains Tax (31) - - -

56 (910) (171) (6)

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Interest income- licensed banks 42 435 - - - others 161 3 33 -

203 438 33 - Interest expenses- bank borrowings (19,773) (17,218) (8,918) (9,822) - hire purchase/lease (251) (371) - - - others (218) (918) - (181) - directors (216) (353) - -

(20,255) (18,422) (8,885) (10,003)

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29. TAXATION (continued)Group (continued)

A subsidiary company was granted Multimedia Super Corridor status on 17th September 2000 thereby making the subsidiary company eligible for Pioneer Status where tax exemption of 100% on the statutory income for a period of 5 years extendable to 10 years is given. As a result, the tax liabilities of the subsidiary company totalling RM3,938,361/- (2000 : RM2,064,684/-) has not been provided for in the accounts.

Company

The effective tax rate is higher than the statutory income tax rate due principally to certainexpenses being disallowed for tax reporting purposes.

In 2000 the profit before taxation arose mainly due to an exceptional gain which is not subject to income tax as it is capital in nature.

As at 31st December 2001, the Group and the Company have the following estimated unabsorbed tax losses and unabsorbed capital allowances available for set off against future taxable profits, subject to the approval of the tax authorities. The related tax benefits, if any, will be recognised on actual realisation.

30. EARNINGS PER SHARE

The basic earnings per share is calculated based on the Group's profit for the year after taxation and minority interest of RM674,892/- (2000 : RM1,497,951/-) and on the weighted number of ordinary shares in issue of 117,797,974/- (2000 : 110,705,775).

The fully diluted earnings per share in 2000 was calculated based on the Group's earnings of RM1,497,951/- and the number of shares issued and issueable of 190,705,775. The number of shares issued and issueable was calculated based on the number of shares in issue during that year and the shares issueable pursuant to the Proposed Revised ICULS 1997/2002 Settlement via the issue of 80,000,000/- new ordinary shares at an issue price of RM1.00 per share on theassumption that such shares were issued on 1st January 2000.

The ICULS 1997/2002 were fully settled on 15th November 2001.

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Unabsorbed tax losses 41,952 34,523 - 1,095 Unabsorbed capital allowances 6,473 5,141 102 102

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31. CONTINGENT LIABILITIES

As at 31st December 2001, the contingent liabilities were as follows:-

Subsequent to the balance sheet date, the Company is contingently liable for a further sum ofRM4 million in respect of an unsecured corporate guarantee issued for bank facilities granted to a subsidiary company.

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000Bank guarantees- secured over the earmark of RM20,000/- (2000 : RM20,000/-) against overdraft limit of a subsidiary company 20 20 - - - secured over fixed deposits of certain subsidiary companies 291 163 - - A resort property pledged to a merchant bank for a loan facility granted to Renown Projects Sdn. Bhd., a company in which certain directors, Dato' Tan Jing Nam, Aznan Bin Abdul Aziz and Tan Lee Sing have interests as stated in Note 7 to the financial statements 8,353 8,379 - - Unsecured corporate guarantees issued for bank facilities granted to- a corporation - 11,585 - 11,585 - subsidiary companies - - 140,063 130,711

8,664 20,147 140,063 142,296

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32. COMMITMENTS

33. SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES

Group2001 2000

RM'000 RM'000

Lease commitments:- within the next twelve months - 659 - after the next twelve months - 3,931 Expenditure authorised and contracted for but not provided in the financial statements 25,572 20,028 Rental guarantee- within the next twelve months 435 836 - after the next twelve months 1,051 2,857 Capital contracted for but not provided in the financial statements (Note 11(b)) 870 1,590

27,928 29,901

Company2001 2000

RM'000 RM'000

Transactions with subsidiary companies

Interest income (3,407) (3,199) Management fee received/receivable (270) (270) Dividend income (6,791) (6,038)

Group2001 2000

RM'000 RM'000

Transactions with associated companies

Interest income from Sunshine Genius Sdn. Bhd. (231) (33) Rental of equipment income from Sunshine Genius Sdn. Bhd. (71) (71) Consultancy services from Sunshine Genius Sdn. Bhd. - (500)

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33. SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (continued)

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000Transactions with directors of the Company, persons related to directors and companies, in which they have interestsRental expenses to Datin Tan Hooi Theng 600 500 - - Interest expenses to- Dato' Tan Jing Nam 109 178 - - - Aznan Bin Abdul Aziz 107 175 - - Share of membership sales by Renown Projects Sdn. Bhd., a company in which Dato' Tan Jing Nam, Aznan Bin Abdul Aziz and Tan Lee Sing have interests- sales 213 932 - - - cancellation (582) (113) - - Supply of furniture, from Samabagia Enterprises Sdn. Bhd., a company in which Tan Lee Sing has interest 237 1,546 - - Professional fees received from Millennium Land Sdn. Bhd., a company in which Dato' Tan Jing Nam and Aznan Bin Abdul Aziz, have interests (51) (12) - - Directors' fees to- Dato' Ali Bin Hassan 68 60 - - - Dato' Dr. Mohd. Noordin Bin Haji Keling 10 10 10 10 - Loh Siew Cheang 10 10 10 10 - Dato' Dr. Mohd. Aminuddin Bin Mohd. Rouse 24 4 - - Directors' salaries to- Dato' Tan Jing Nam 996 996 120 120 - Aznan Bin Abdul Aziz 864 864 120 120 - James Wong Kwong Yew 426 420 - - - Tan Lee Sing 240 240 - - - Yong Poi Leong 300 300 - - Directors' benefit-in-kind- Dato' Tan Jing Nam 26 26 - - - Aznan Bin Abdul Aziz 17 17 - - - James Wong Kwong Yew 13 13 - - - Tan Lee Sing 8 8 - - - Yong Poi Leong 4 4 - - - Dato' Dr. Mohd. Aminuddin Bin Mohd. Rouse 24 24 - - - Datuk Tengku Adnan Bin Tengku Mansor - 25 - 25Directors’ other emoluments to- Dato’ Dr. Mohd. Noordin Bin Haji Keling 6 5 6 5- Loh Siew Cheang 3 1 3 1

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33. SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (continued)

The Directors of the Company are of the opinion that the above transactions have been entered into the normal course of business and the terms are no less favourable than those arranged with third parties.

Balances with companies in which the directors have interests as at 31st December 2001 were as follows:-

Balances with associated company as at 31st December 2001 were as follows:-

Balances with the directors of the Company as at 31st December 2001 were as follows:-

Group2001 2000

RM'000 RM'000

Sunshine Genius Sdn. Bhd.- Trade 2,540 910 - Non-trade 490 71

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Dato' Tan Jing Nam (19) (5,749) (14) (1,709) Aznan Bin Abdul Aziz (5) (5,508) - (1,708) James Wong Kwong Yew (16) (6) - - Loh Siew Cheang (10) - (10) -

Group Company2001 2000 2001 2000

RM'000 RM'000 RM'000 RM'000

Company in which, Dato' Tan Jing Nam, Aznan Bin Abdul Aziz and Tan Lee Sing have interests Renown Projects Sdn. Bhd. - Trade (1,969) (2,571) - - - Non-trade (2) (2) - - Companies in which Dato' Tan Jing Nam and Aznan Bin Abdul Aziz have interests - Millennium Land Sdn. Bhd. - Trade 63 12 - - - Tanco Maju Sdn. Bhd. - Non-Trade (8) (8) - -

- Ivory Avenue Sdn. Bhd.- Non-Trade (1) (1) - -

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34. SEGMENTAL ANALYSIS

The activities of the Group are carried out mainly in Malaysia and as such, segmentalreporting by geographical locations is not presented.

35. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The shareholders of the Company had in an Extraordinary General Meeting held on 29th September 2001 approved the Group's corporate and restructuring proposal that had been approved by the Securities Commission on 7th June 2001 ("the Proposal"). The salient terms and conditions of the Proposal as approved and have since or to be implemented are asfollows:-

(i) The settlement of the Company's existing RM80 million ICULS 1997/2002 via the issue of 56,737,588 new ordinary shares of RM1.00 each in the Company at an issue price of RM1.41 per share. The issue price of RM1.41 per share being the price fixed by the Company on 10th May 2000 based on a discount of 10% to the five days weightedaverage market price prior to price fixing date of 10th May 2000. ("the Proposed ICULS Settlement"). The Proposed ICULS Settlement was completed on 15th November 2001 with the Company allotting 56,737,588 new ordinary shares of RM1.00 each in the Company as settlement of the ICULS 1997/2002;

Profit/(loss) TotalCost of before assets

Analysis by activity Revenue sales taxation employedRM'000 RM'000 RM'000 RM'000

Group

2001Property development/management 43,296 30,584 (593) 435,931 Resorts and Club Operation/Management 78,187 17,211 11,487 326,299 Investment holding 837 - (10,274) 41,535

122,320 47,795 620 803,765

2000Property development/management 31,360 24,562 (984) 439,105 Resorts and Club Operation/Management 74,329 18,792 475 314,257 Investment holding 988 - 2,919 43,838

106,677 43,354 2,410 797,200

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TANCOHOLDINGSBERHAD

68

35. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued)

(ii) The grant of options by Dato' Tan Jing Nam and Encik Aznan Abdul Aziz(collectively "the Grantor") to the existing shareholders of the Company (excluding the Grantors) to purchase the ordinary shares of RM1.00 each in the Company from the Grantors at RM1.41 per share on the basis of one option for every five existing ordinary shares held in the Company. The grant of options was completed on 20th November 2001 with the Grantors granting 18,796,918 options to the existingshareholders of the Company (excluding the Grantors);

(iii) The rights issue on a two-call basis of up to 167,443,363 new ordinary shares with 167,443,363 free attached warrants to the shareholders of the Company on the basis of one new ordinary share and one free warrant for every one share held after the Proposed ICULS Settlement. The Company had on 19th July 2001 fixed the first call at 28 cents per share with the second call of 72 cents being from the existing reserves of the Company. ("the Proposed Two-Call Rights Issue with Warrants"). The Proposed Two-Call Rights Issue with Warrants was fully subscribed and completed with the Company allotting the Rights Shares with the Warrants on 18th February 2002;

(iv) The restructuring of the Group's debts with the lenders as at 31st December 2001 amounting to RM301.919 million as at 31st December 2001, of which RM6.384million will be paid from the proceeds of the Proposed Two-Call Rights Issue with Warrants and with the balance of the debts being restructured into term loans. The lenders had on 5th December 2001 entered into the Supplemental Agreement with the Company and its affected subsidiaries to proceed with the restructuring of the loans.

As at the date of this report, the Company and the affected subsidiary companies are in the process of fulfilling certain conditions precedent to the Supplemental Agreement.

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TANCOHOLDINGS

BERHAD

69

36. COMPARATIVE FIGURES

The presentation and classification of the following comparative amounts in the financial statements have been reclassified to ensure comparability with the current financial year.

Group CompanyAs As previously As As previously

restated stated restated statedRM'000 RM'000 RM'000 RM'000

Balance SheetsInterest in subsidiary companies - - - 419,550 Investment in subsidiary companies - - 172,293 - Amount owing by subsidiary companies - - 252,888 - Trade debtors- current 51,616 53,357 - - - non-current 3,127 - - - Sundry debtors, deposits and prepayment 7,174 8,631 - - Amount owing by an associated company 71 - - - Sundry creditors, deposits and accruals (85,846) (134,423) (1,968) (20,369) Amount owing to the directors (11,263) (11,267) - - Short term borrowings (9,245) (167,467) - (47,567) Long term liabilities (379,315) (172,512) (206,847) (135,248)

Income StatementsExceptional items - 13,254 - 14,844 Net gain on disposal of investments 13,254 - 14,844 -

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TANCOHOLDINGSBERHAD Statement By Directors

70

We, DATO' ALI BIN HASSAN and DATO' TAN JING NAM, being two of the directors ofTanco Holdings Berhad, do hereby state that, in the opinion of the directors, the financialstatements set out on pages 29 to 69 are drawn up in accordance with applicable approved accounting standards in Malaysia, so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31st December 2001 and of the results and cash flows of the Group and of the Company for the year ended on that date.

On behalf of the Board,

………………………………………….......DATO' ALI BIN HASSANDirector

………………………………………...........DATO' TAN JING NAMDirector

Kuala Lumpur

Date: 08 MAR 2002

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TANCOHOLDINGS

BERHADStatutory Declaration

71

I, CHAN KENG YEW, being the officer primarily responsible for the financial managementof Tanco Holdings Berhad, do solemnly and sincerely declare that to the best of myknowledge and belief, the financial statements set out on pages 29 to 69 are correct, and Imake this solemn declaration conscientiously believing the same to be true, and by virtue ofthe provisions of the Statutory Declarations Act, 1960.

......................................CHAN KENG YEW

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the FederalTerritory on 08 MAR 2002

Before me,

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Report Of The AuditorsTo The Members Of Tanco Holdings Berhad

TANCOHOLDINGSBERHAD

72

We have audited the financial statements set out on pages 29 to 69. These financial statementsare the responsibility of the Company's directors. Our responsibility is to express anopinion on these financial statements based on our audit.

We conducted our audit in accordance with approved standards on auditing in Malaysia. Thosestandards require that we plan and perform the audit to obtain reasonable assurance whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by directors, as well as evaluating the overall financial statementspresentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:-

(a) the financial statements are properly drawn up in accordance with the provisionsof the Companies Act, 1965 and applicable approved accounting standards inMalaysia so as to give a true and fair view of:

(i) the state of affairs of the Group and of the Company as at 31st December 2001 and of the results and cash flows of the Group and of the Company for the year ended on that date; and

(ii) 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

(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 have acted asauditors have been properly kept in accordance with the provisions of the said Act.

We have considered the financial statements and the auditors' reports of the subsidiaries ofwhich we have not acted as auditors, which are indicated in Note 5 to the financialstatements, being financial statements that have been included in the consolidated financialstatements.

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Report Of The AuditorsTo The Members Of Tanco Holdings Berhad(cont’d)

TANCOHOLDINGS

BERHAD

73

We are satisfied that the financial statements of the subsidiary companies that have beenconsolidated with the financial statements of the Company are in form and content appropriate andproper for the purposes of the preparation of the consolidated financial statements and we havereceived satisfactory information and explanations required by us for those purposes.

The auditors' reports on the financial statements of the subsidiaries were not subject to anyqualification and did not include any comment made under subsection (3) of Section 174 of the Act.

Without qualifying our opinion, we draw your attention to Note 2(a) concerning the ability of theGroup and the Company to continue as a going concern which is dependent upon the successfulcompletion of the debt restructuring scheme as stated in Note 35(iv). The financial statements ofthe Group and of the Company do not include any adjustments relating to the amounts andclassifications of assets and liabilities that might be necessary should the Group and the Companybe unable to continue as a going concern.

Kuala Lumpur

Date: 08 Mar 2002

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TANCOHOLDINGSBERHAD

List of Propertiesas at 31st December 2001

74

Location Tenure Area(acres)

Description andExisting Use

Age ofProperties

Net BookValue

RM ' 000

13th mile of Port DicksonPasir Panjang main road,Mukim of Pasir Panjang,District of Port Dickson,Negeri Sembilan Darul KhususLot P.T. Nos.2676 to 27622764 to 27862790 to 28192821 to 29342936 to 2938

Freehold with theexception of thegolf course heldunder P.T. No.2760 which is

leasehold for 99years to expire in

the year 2093

423.02 Vacant land,approved for mixedresidential and resortdevelopment known

as Palm Springs

Resort

- 308,280

HS(D) No.12126 P.T. No.2604Mukim of Pasir Panjang,District of Port Dickson,Negeri Sembilan Darul Khusus

Leasehold for 99years to expire in

the year 2092

9.19 Vacant land,approved for Resort

Development

- 9,387

HS(D) No.13101 PT No. 2787 &HS(D) No. 22780 P.T. No. 5391Mukim of Pasir PanjangDistrict of Port DicksonNegeri Sembilan Darul Khusus

Freehold 21.46 Vacant landapproved for Resort

Development

- 27,680

H.S. (D) No. 22620 PT No. 7258Mukim of Rawang, District of Gombak,Selangor Darul Ehsan

Freehold 3.00 Vacant land,approved forCommercialDevelopment

- 16,392

C.T. No.19958, P.T.No. 12056being part of Lot No. 3512,Mukim of Rawang, District of Gombak, Selangor Darul Ehsan

Freehold 10.16 Vacant land,approved forResidential

Development

- 20,930

HS(D) No. 24713 P.T 9953HS(D) No. 22644 P.T 7282HS(D) No. 23709 to 23719P.T. 8347 to 8357 &HS(D) No. 23723 P.T 8361Mukim of Rawang,District of Gombak,Selangor Darul Ehsan,Lot 1039 Grant 44261,Lot 1033 Grant 44266Lot 1037 Grant 44268 & Lot 1038 Grant 44264,Bandar Kundang,District of Gombak,Selangor Darul Ehsan

Freehold 7.91 Vacant land,approved for Mixed

Development

- 15,576

Year ofAcquisition/

Revaluation

1993

1995

2000

1995

1995

1996

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List of Propertiesas at 31st December 2001(cont’d)

TANCOHOLDINGS

BERHAD

75



Age ofProperties

Net BookValue

RM ' 000

Lots P.T. 13769 to 14159,Lots P.T. 14271 to 14273,Lots P.T. 14275 to 14277,Lots P.T. 21681 to 21852,Lots P.T. 21953 to 22030,Lots P.T. 22123 to 22194,Lots P.T. 22196 &Lots P.T. 22199 to 22201Mukim of Rawang,District of Gombak,Selangor Darul Ehsan

Freehold 94.09 Vacant land,approved for Mixed

Development

- 97,320

HS(D) Nos 115131 to115133 PT Nos.8012 to 8014 &HS(D) Nos 115135 to115140 PT Nos.8016 to 8021Mukim of Rasah,District of Seremban,Negeri Sembilan Darul Khusus

Freehold 68.74 Vacant land,approved forCommercialResidential

Development

- 25,479

H.S.(D) No. 212162 PT No. 111260,H.S.(D) No. 212163 PT No. 111261,H.S.(D) No. 212180 PT No. 111278 &H.S.(D) No. 212181 PT No. 111279.Mukim of PlentongDaerah Johor BahruNegeri Johor Darul Takzim

Freehold 2.88 1 1/2 storeydetached &

Semi-detachedfactory

2 years 13,452

Lot No. 104, 105 and 106Geran 63, 64 and 65Town of Kuala LumpurNo. 1, Persiaran LedangOff Jalan Duta, Kuala Lumpur

Freehold 1.52 Serviced apartmentsand service outletscomprising a pub, a

coffee house, aseminar room, office and

business centres within theDuta Vista Executive Suite

9 years 17,791

H.S. (D). No. 22621 PT 7259Mukim of Rawang District of Gombak Selangor Darul Ehsan

Freehold 4.65 Existing Resortknown as DutaPalms Resort &Anglers' Club

6 years 25,796

H.S. (D) Nos. 717 to 719PT Nos. 35 to 37Mukim and District of Hulu TerengganuTerengganu Darul Iman

Leasehold for56 years toexpire in

the year 2054

172.88 Existing Resortknown as DutaLakes Resort

9 years 15,191

Plot No. 1, Part of Lot 2135Mukim of Batu RakitDistrict of Kuala TerengganuTerengganu

Freehold 6.00 Existing Resortknown as GemBeach Resort

5 years 14,482

Year ofAcquisition/

Revaluation

1996

1993

1996

1997

1997

1998

2000

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List of Propertiesas at 31st December 2001(cont’d)

TANCOHOLDINGSBERHAD

76



Age ofProperties

Net BookValue

RM ' 000

H.S. (M) No. 1238 to 1243PT No 2125 to 2130Mukim of BeserahDistrict of KuantanPahang Darul Makmur

Freehold 1.12 Existing Resortknown as Duta

Sands Beach Resort

9 years 13,497

H. S. (D) 4725 P.T. 6423Mukim and District of BentongPahang Darul Makmur

Freehold 0.62 Vacant land,approved for Resortdevelopment known

as Duta Heritage

- 3,403

H. M. Land Registry K444270Country of KentDistrict of Shepway, England

Freehold 5.00 Existing Resortknown as Havenfield

Hall

64 years 6,701

H. M. Land Registry K113517& K314104Country of Kent, District ofAshford, England

Freehold 19.48 Existing Resortknown as Cloth Hall

582 years 5,414

Part Lot 1 Deposited Plan 17510Section 67, Block VI, ShotoverSurvey DistrictDistrict of OtagoQueenstown, New Zealand

Freehold 6.41 Existing Resortknown as

Speargrass Lodge

26 years 4,348

4 On Rp 222092Parish of MudgeerabaCountry of WardQueensland, Australia

Freehold 120.09 Existing Resortknown as Coolalinga

Lodge

22 years 16,897

Year ofAcquisition/

Revaluation

1998

1998

1998

1998

1998

1998

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Shareholdings Structureas at 13th May 2002

TANCOHOLDINGS

BERHAD

77

Analysis of Shareholdings

Authorised Share Capital - RM1,000,000,000.00Issued and Paid-up Share Capital - RM334,886,726.00Type of Share - Ordinary Shares of RM1.00 eachNumber of Shareholders - 16,634Voting Rights - One vote per Ordinary Share

Distribution of Shareholdings

Thirty Largest Shareholders as per Register of Members

Range ofShareholdings

No ofShareholders

Percentage (%)of Shareholders

No of Shares Percentage (%)of Shares

Less than 1,000

1,000 - 10,000

10,001 - 100,000

100,001 to less than 5% of issued shares

5% and above ofissued shares

652

12,685

3,044

252

1

3.92

76.26

18.30

1.51

0.01

253,027

50,723,706

84,240,994

169,360,063

30,308,936

0.08

15.15

25.15

50.57

9.05

Total 16,634 100.00 334,886,726 100.00

Name No. of Shares Percentage (%)

Arab-Malaysian Nominees (Tempatan) Sdn BhdPledged Securities Account for Dato' Tan Jing Nam 30,308,936 9.05

Arab-Malaysian Nominees (Tempatan) Sdn BhdPledged Securities Account for Aznan bin Abdul Aziz 16,067,159 4.80



Michael Chai Sze Hou 7,513,000 2.24

Bumiputra-Commerce Nominees (Tempatan) Sdn BhdPledged Securities Account for Aznan bin Abdul Aziz 6,168,141 1.84

Arab-Malaysian Nominees (Tempatan) Sdn BhdPledged Securities Account for Lembah Koleksi Sdn Bhd 5,751,312 1.72

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Shareholdings Structure as at 13th May 2002 (cont’d)

TANCOHOLDINGSBERHAD

78



Permodalan Nasional Berhad 5,000,000 1.49

RHB Capital Nominees (Tempatan) Sdn BhdPledged Securities Account for Dato' Tan Jing Nam 3,900,709 1.16

Amsec Nominees (Tempatan) Sdn BhdP.T Arab-Malaysian Capital Indonesia for Saw Lip Kean 3,366,000 1.01

Cimsec Nominees (Tempatan) Sdn BhdPledged Securities Account for Dato' Tan Jing Nam 2,920,000 0.87

Sithambaram A/L Meyappan 2,565,134 0.77

Mohd Daim bin Ab Rahim 2,451,124 0.73

Maybank Nominees (Tempatan) Sdn BhdPledged Securities Account for Lau Kwai 2,000,000 0.60

Lim Sen @ Lim Jit Kuan 1,850,000 0.55

Amsec Nominees (Tempatan) Sdn BhdArab-Malaysian Finance Berhad for Chan Fook Choy 1,800,000 0.54

Amsec Nominees (Tempatan) Sdn BhdArab-Malaysian Finance Berhad for Michael Chai Sze Hou 1,800,000 0.54

Amsec Nominees (Tempatan) Sdn BhdArab-Malaysian Finance Berhad for Lim Sen @ Lim Jit Kuan 1,800,000 0.54

Lee Kee Hong 1,711,110 0.51

Aznan bin Abdul Aziz 1,558,448 0.47

Pook Jyh Long 1,491,000 0.45

Dato' Tan Jing Nam 1,315,704 0.39

Menteri Kewangan Malaysia(Section 29) 1,240,360 0.37

HLG Nominee (Tempatan) Sdn BhdPledged Securities Account for Dr Kartar Singh A/L Pall Singh 1,230,836 0.37

HSBC Nominees (Asing) Sdn BhdHSBC SG for Lee Rubber Company Pte Ltd 1,182,132 0.35

Botly Nominees (Tempatan) Sdn BhdPledged Securities Account for Wong Tak Ming 1,130,000 0.34

Alliancegroup Nominees (Tempatan) Sdn BhdPledged Securities Account for (Daphne) Lok Ping Yoke 1,078,000 0.32

Wu Oi Yau 1,011,000 0.30

Abd Halim bin Hj Zakaria 1,000,000 0.30

142,892,047 42.67

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Shareholdings Structure as at 13th May 2002 (cont’d)

TANCOHOLDINGS

BERHAD

79

Substantial shareholders as per the Register of Substantial Shareholders (Excluding Bare Trustees)

No. of shares heldName of Shareholders Direct Percentage (%) Indirect Percentage (%)

Dato' Tan Jing Nam 53,120,200 15.86 - -Aznan bin Abdul Aziz 43,510,058 12.99 - -

Notes: -1. Of the 53,120,200 shares, 44,274,568 are held through Arab-Malaysian Nominees (Tempatan) Sdn. Bhd., 2,920,000

are held through Cimsec Nominees (Tempatan) Sdn. Bhd., 709,219 are held through Mayban Nominees (Tempatan) Sdn. Bhd. and 3,900,709 are held through RHB Capital Nominees (Tempatan) Sdn. Bhd.

2. Of the 43,510,058 shares, 35,783,469 are held through Arab-Malaysian Nominees (Tempatan) Sdn. Bhd. and 6,168,141 are held through Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd.

1

2

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Warrant Holdings Structureas at 13th May 2002

80

TANCOHOLDINGSBERHAD

Analysis of 2002/2008 Warrants holdings

Type of securities - 2002/2008 WarrantsVoting rights - One vote per 2002/2008 warrant

Distribution of 2002/2008 Warrants holdings

Range of WarrantHoldings

No ofWarrant Holders

Percentage (%)of Warrant Holders

No of Warrants Percentage (%)of Warrants

Less than 1,000

1,000 - 10,000

10,001 - 100,000

100,001 to less than5% of issued

warrants

5% and above ofissued warrants

451

6,263

1,288

139

3

5.54

76.90

15.81

1.71

0.04

149,696

24,708,383

37,402,065

65,324,245

39,858,974

0.09

14.76

22.34

39.01

23.80

Total 8,144 100.00 167,443,363 100.00

Thirty Largest 2002/2008 Warrant Holders per Register of MembersName No. of Shares Percentage (%)




Michael Chai Sze Hou 7,675,000 4.58


Arab-Malaysian Nominees (Tempatan) Sdn BhdPledged Securities Account for Lembah Koleksi Sdn Bhd 2,875,656 1.72

Amsec Nominees (Tempatan) Sdn BhdP.T Arab-Malaysian Capital Indonesia for Saw Lip Kean 2,729,000 1.63


Mayban Nominees (Tempatan) Sdn BhdPledged Securities Account for Lau Kwai 2,500,000 1.49

ANNUAL b/w 23/5 3/6/02 9:46 AM

81

TANCOHOLDINGS

BERHAD

Warrant Holdings Structureas at 13th May 2002 (cont’d)


Mayban Nominees (Asing) Sdn BhdPledged Securities Account for Qiang Yan 2,000,000 1.19

Mohd Daim bin Ab Rahim 1,225,562 0.73

HDM Nominees (Tempatan) Sdn BhdPledged Securities Account for Lau Kwai 1,200,000 0.72

Affin-UOB Nominees (Tempatan) Sdn BhdPledged Securities Account for Chua Sewe Fua 1,010,000 0.60

Mayban Nominees (Tempatan) Sdn BhdPledged Securities Account for Chooi Wan Yuet 1,000,000 0.60

Chew Ching Chee @ Chew Key 860,000 0.51

Lee Kee Hong 757,514 0.45

Alliancegroup Nominees (Tempatan) Sdn BhdPledged Securities Account for (Daphne) Lok Ping Yoke 756,164 0.45

(Daphne) Lok Ping Yoke 673,291 0.40

Chan Fook Choy 588,000 0.35

OSK Nominees (Asing) Sdn BerhadPledged Securities Account for Tan Boon Chiang 580,000 0.35

Botly Nominees (Tempatan) Sdn BhdPledged Securities Account for Wong Tak Ming 565,000 0.34

Mayban Nominees (Tempatan) Sdn BhdPledged Securities Account for Kek Lian Lye 560,000 0.34

HLG Nominee (Tempatan) Sdn BhdPledged Securities Account for Dr Kartar Singh A/L Pall Singh 530,000 0.32

Mohd Azham bin Hussain 510,000 0.31

Mayban Nominees (Tempatan) Sdn BhdPledged Securities Account for Neo Say Yeow 501,000 0.30

Cimsec Nominees (Tempatan) Sdn BhdPledged Securities Account for Tay Kian Chuan 500,000 0.30

Citicorp Nominees (Tempatan) Sdn BhdPledged Securities Kok Choon Hoong 497,000 0.30

Tan Lye Seng 484,000 0.29

HLG Nominee (Tempatan) Sdn BhdPledged Securities Account for Harbans Kaur A/P Saudagar Singh 437,000 0.26

HSBC Nominees (Tempatan) Sdn BhdLee Rubber (Selangor) Sdn Bhd 435,264 0.26

81,166,580 48.47

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82

TANCOHOLDINGSBERHAD

The CompanyTanco Holdings Berhad

Ordinary Shares of RM1.00 eachNo. of ordinary shares of RM1.00 each

Name of Directors Direct % Indirect %

Dato' Ali bin Hassan - - - -Aznan bin Abdul Aziz 43,510,058 12.99 - -Dato' Tan Jing Nam 53,120,200 15.86 - -James Wong Kwong Yew 5,000 - 5,751,312 1.72Dato' Dr. Mohd. Aminuddin bin Mohd. Rouse 70,000 0.02 - -Dato' Dr Mohd. Noordin bin Haji Keling 62,510 0.02 - -Loh Siew Cheang - - 5,751,312 1.72Tan Lee Sing 5,000 - - -Yong Poi Leong - - - -

Note:(1) Less than 0.01%

2002/2008 WarrantsNo. of 2002/2008 Warrants


Dato' Ali bin Hassan - - - -Aznan bin Abdul Aziz 23,157,029 13.83 - -Dato' Tan Jing Nam 26,560,100 15.86 - -James Wong Kwong Yew - - 2,875,656 1.72Dato' Dr. Mohd Aminuddin bin Mohd Rouse - - - -Dato' Dr Mohd Noordin bin Haji Keling 31,255 0.02 - -Loh Siew Cheang - - 2,875,656 1.72Tan Lee Sing 2,500 - - -Yong Poi Leong - - - -


Option to purchase shares granted by Dato' Tan Jing Nam and Aznan bin Abdul Aziz arising from theissuance of new shares under the settlement of ICULS 1997/2002

No. of options over ordinary shares of RM1.00 eachName of Directors Direct % Indirect %

Dato' Ali bin Hassan - - - -James Wong Kwong Yew 1,000 - 500,000 2.66Dato' Dr. Mohd. Aminuddin bin Mohd Rouse 14,000 0.07 - -Dato' Dr Mohd. Noordin bin Haji Keling 5,400 0.03 - -Loh Siew Cheang - - 500,000 2.66Tan Lee Sing 500 - - -Yong Poi Leong - - - -


Statements of Directors’ Interestsin the company and related corporations as at 13th May 2002

(1)

(1)

(1)

(1)

(1)

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83

TANCOHOLDINGS

BERHAD

Subsidiary CompaniesMedan Melati Sdn Bhd

No. of ordinary shares of RM1.00 eachName of Director Direct % Indirect %

Dato' Dr. Mohd Aminuddin bin Mohd Rouse 200 10.00 - -

Tanco Enterprise Sdn BhdNo. of ordinary shares of RM1.00 each


Aznan bin Abdul Aziz 15,002 4.84 - -Dato' Tan Jing Nam 15,002 4.84 - -

By virtue of their interests in the Company, Aznan Bin Abdul Aziz, Dato' Tan Jing Nam, James Wong Kwong Yew, Dato' Dr. Mohd. Aminuddin Bin Mohd. Rouse, Dato' Dr. Mohd. Noordin Bin Haji Keling, Loh Siew Cheang andTan Lee Sing are also deemed interested in the shares of all the other subsidiary companies of the Company to theextent the Company has an interest.

Statements of Directors’ Interestsin the company and related corporations as at 13th May 2002 (cont’d)

ANNUAL b/w 23/5 3/6/02 9:46 AM

100%

70%

100%

68%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%50%

100%

100%

100%

100%

100%

90.32%

100%

100%

100%

100%

100%

100%

100%

100%

Gerak Gaya Land S/B

SuperTime.com Ltd

Sunshine Genius Co.

60%

100%

100%

100%

100%

100%

100%

100%

100%

Noreast Co Ltd

TRB Leisure (Mauritius) Pte Ltd

TRB Vacation (Mauritius) Pte Ltd

Palm Springs Club S/B

Regal Resort S/B

JKMB Development S/B

Palm Springs Development S/B

Tanco Leisure Holdings S/B

Sunshine Genius S/B

Tanco Builders S/B

Tanco Dot Com S/B

Tanco Club Berhad

Tanco Enterprise S/B

Tanco Holidays S/B

Tanco Lake Resorts S/B

Tanco Recreational Holdings S/B

Burnham Global Inc.

Tanco Resorts (Australia) Pty Ltd

Tanco Resorts (NZ) Ltd

Palm Springs ResortBerhad

100%

32%Gem Beach Resort Sdn Bhd

100%Tanco Land S/BTanco Properties S/B

Cool-Wheels SuperClub Berhad

Palm Springs Leisure S/B

Tanco Resorts Berhad

Tanco Development S/B

Medan Melati S/B

Palm Springs Resort Management Bhd

TimeClub.com Ltd

Wheels, Sails & Wings SuperClub Berhad

World Vacation Ownership S/B

Palm Springs Islands S/B(Formerly known as Mighty Sails SuperClub S/B)

SuperExchange Limited

Popular Elegance (M) S/B

Pentapeak Properties S/B

Point Resort Club S/B

TANCO HOLDINGS BERHAD

Corporate Structure

BizCredit S/B100%

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84

ANNUAL b

/w 23/5 3

/6/02 9

:46 AM P

age 86

TANCO HOLDINGS BERHAD (3326-K)

(Incorporated in Malaysia)

FORM OF PROXY

I/We __________________________________________________________ I.C. or Company No. ________________________

CDS Account No. _________________________________ of _____________________________________________________

being a member/members of TANCO HOLDINGS BERHAD (3326-K) hereby appoint ________________________________

____________________________________________ I.C. No. ____________________________ of ______________________

_________________________________________________________________________________________________________

or failing him/her, THE CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us and on my/our behalf at the

Forty-Third Annual General Meeting of the Company to be held on Thursday, 27 June 2002 at 10.30 a.m. and at any adjournment

thereof. My/our proxy is to vote as indicated below.

Please indicate with 'X' in the appropriate spaces how you wish your votes to be casted. If you do not indicate how you wish yourproxy to vote on any resolution, the proxy will vote as he thinks fit, or at his discretion, abstain from voting.

Signed this _____________________day of______________________2002.

Signature/Common Seal of MemberNotes:

(i) A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need notbe a member of the Company.

(ii) A member shall be entitled to appoint more than one proxy to attend and vote at the same meeting.(iii) Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be

represented by each proxy.(iv) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the

appointer is a corporation, either under seal or under the hand of an officer or attorney duly authorised.(v) The instrument appointing a proxy must be deposited at the Company's Registered Office at Jalan Desa, Bandar Country Homes, 48000

Rawang, Selangor Darul Ehsan not less than 48 hours before the time for holding the meeting or any adjournment thereof.

NO OF SHARES HELD

No Resolutions For Against

1. Adoption of Account and Reports for the year ended 31 December 2001

2. Approval of Directors’ fees

3. Re-election of Directors : -Dato’ Tan Jing Nam (Article 101)

4. Encik Aznan bin Abdul Aziz (Article 101)

5. Madam Tan Lee Sing (Article 101)

6. Re-appointment of Dato’ Dr. Mohd. Noordin bin Haji Keling as Director pursuant to Section 129 of the Companies Act, 1965

7. Re-appointment of auditors and fixing their remuneration

8. Approval for issuance of Annual Report in CD-ROM format

9. Approval for issuance of new ordinary shares pursuant to Section 132Dof the Companies Act, 1965

ANNUAL b/w 23/5 3/6/02 9:46 AM

Stamp

TANCO HOLDINGS BERHAD (3326-K)

Jalan Desa

Bandar Country Homes

48000 Rawang

Selangor Darul Ehsan

End Fold Here

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ANNUAL b/w 23/5 3/6/02 9:46 AM

COVER 22/5 3/6/02 9:36 AM Page 1

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