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YTL e-Solutions Berhad Company No: 236137-K11th Floor, Yeoh Tiong Lay Plaza55 Jalan Bukit Bintang55100 Kuala Lumpur, MalaysiaTel : 603-2142 6633Fax : 603-2141 2703

Website : www.ytlcommunity.com

YTL e-Solutions Berhad (Company No: 236137-K)

Solutions

cont

ents Notice of Annual General Meeting 2

Statement Accompanying Notice of 4Tenth Annual General Meeting

Corporate Information 5

Profile of the Board of Directors 6

Statement of Directors’ Responsibilities 11

Audit Committee Report 12

Statement on Corporate Governance 15

Chairman’s Statement 20

Analysis of Shareholdings 28

Statement of Directors’ Interests 30

Financial Statements 33

Proxy Form

Annual Report 2002 1

We continuously seek to explore and understand the

vast business plains that surround us. An odyssey offering unmatched

opportunities that will bring out the best in us,

in striving for success.

...the journey continues

2 YTL e-Solutions Berhad

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Tenth Annual General Meeting

of YTL e-Solutions Berhad will be held at Starhill 2, Level 4, JW Marriott Hotel Kuala Lumpur

183 Jalan Bukit Bintang, 55100 Kuala Lumpur on Wednesday, the 18th day of December, 2002

at 12.00 noon to transact the following business:-

As Ordinary Business

1 To receive the Audited Financial Statements for the year

ended 30 June 2002 together with the Reports of the

Directors and Auditors thereon; Resolution 1

2 To re-elect the following Directors who retire pursuant

to Article 83 of the Company’s Articles of Association:-

i Mr Loh Mun San Resolution 2

ii Mr Amarjit Singh Chhina Resolution 3

iii Tuan Syed Abdullah

Bin Syed Abd. Kadir Resolution 4

3 To re-elect Y Bhg Dato’ Lau Yin Pin @ Lau Yen Beng

who retires pursuant to Article 90 of the Company’s

Articles of Association; Resolution 5

4 To approve the payment of Directors’ Fees amounting to

RM80,000.00 for the financial year ended 30 June

2002; Resolution 6

5 To re-appoint the Auditors and to authorise the Directors

to fix their remuneration. Resolution 7

As Special Business

To consider and, if thought fit, pass the following resolutions:-

ORDINARY RESOLUTION 1

6 PROPOSED AUTHORITY TO ALLOT SHARES PURSUANT

TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT subject to the Companies Act, 1965 and the

Articles of Association of the Company, the Directors be

and are hereby authorised to allot and issue shares in

the Company at any time until the conclusion of the next

Annual General Meeting and upon such terms and

conditions and for such purposes as the Directors may,

in their absolute discretion, deem fit provided that the

aggregate number of shares to be issued does not

exceed ten per centum (10%) of the issued and paid-up

share capital of the Company for the time being and that

the Directors be and are also empowered to obtain the

approval for the listing and quotation for the additional

shares so issued on the Kuala Lumpur Stock Exchange.”

Resolution 8


ORDINARY RESOLUTION 2

7 PROPOSED ISSUE OF ANNUAL REPORT IN CD-ROM FORMAT

“THAT subject to the compliance with the requirements 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 30 June 2003 and that the approval given by

the shareholders of the Company shall be subject to renewal at the next Annual General Meeting.” Resolution 9

By Order of the Board,

HO SAY KENG

Secretary

KUALA LUMPUR

26 November 2002

Notes:A member entitled to attend and vote at the meeting may appoint a proxy, who need not be

a member to vote in his stead. Where a member appoints two proxies, the appointments shall

be invalid unless he specifies the proportion of his holding to be represented by each proxy.

The instrument appointing a proxy or proxies, in the case of an individual, shall be signed by

the appointer or his attorney and in the case of a corporation, either under seal or under the

hand of an officer or attorney duly authorised in writing. An instrument appointing a proxy

shall be deposited at the Registered Office of the Company at least 48 hours before the

appointed time for holding the meeting.

Resolution pursuant to Section 132D of the Companies Act, 1965The Company is actively pursuing business opportunities in prospective areas so as to broaden

the operating base and earnings potential of the Company. Such expansion plans may require

the issue of new shares not exceeding ten per centum (10%) of the Company’s issued share

capital. With the passing of the Resolution 8 mentioned above by the shareholders of the

Company at the forthcoming Annual General Meeting, the Directors would avoid delay and cost

of convening further general meetings to approve issue of such shares for such purposes.

Resolution pursuant to the Authority To Issue Company’s Annual Report in CD-ROM FormatIn the face of the emerging trend towards information technology, and with the objective to

leverage and take advantage of the new technologies, the Company has taken a step further

to issue its annual reports in Compact Disc-Read Only Memory (CD-ROM) format. The issue

of annual reports in CD-ROM format would not only provide savings in printing and storage

costs for the Company but also increase administrative efficiency and reduce postages

involved in the despatch of the annual reports to shareholders.

The passing of Resolution 9 as set out in the notice of the Tenth Annual General Meeting of

the Company would approve the issue of the Company’s Annual Report for the financial year

ending 30 June 2003 in CD-ROM format. 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 2003 will be

available upon request, whether verbal or written and a contact number will be designated to

attend to shareholders’ requests. Shareholders who require assistance or encounters any

problems with the CD-ROM can contact Mr Lee Chew Keat (Registrar) or Mr John Ho (Senior

IT analyst) at telephone number (03) 2142 6633, ext 8651/8366.


Statement Accompanying Notice of Tenth Annual General Meeting

1 The names of individuals who are standing for

re-election

Directors retiring by rotation pursuant to Article 83

of the Articles of Association

• Mr Loh Mun San

• Mr Amarjit Singh Chhina

• Tuan Syed Abdullah Bin Syed Abd. Kadir

Director retiring pursuant to Article 90 of the Articles

of Association

• Y Bhg Dato’ Lau Yin Pin @ Lau Yen Beng

2 The details of attendance of directors at Board

Meetings

There was no Board of Directors’ Meeting held during

the financial year ended 30 June 2002.

3 10th Annual General Meeting of YTL e-Solutions

Berhad

Place

Starhill 2, Level 4

JW Marriott Hotel Kuala Lumpur

183 Jalan Bukit Bintang

55100 Kuala Lumpur

Date & Time

18 December 2002 at 12.00 noon

4 Further details of Directors who are standing for

re-election

Details of Directors who are standing for re-election

are set out in the Directors’ Profile appearing on

pages 6 to 10 of the Annual Report. Information

relating to the Directors’ securities holdings in the

Company and its subsidiaries is presented on page 32

of the Annual Report.


Corpora te Information

COMPANY SECRETARY

Ms Ho Say Keng (MIA 3708)

REGISTERED OFFICE

11th Floor, Yeoh Tiong Lay Plaza55 Jalan Bukit Bintang55100 Kuala LumpurTel : 03-2142 6633Fax : 03-2141 2703

BUSINESS OFFICE

Level 3, Annexe BlockLot 10 Shopping Centre50 Jalan Sultan Ismail50250 Kuala LumpurTel : 03-2148 9877Fax : 03-2148 4885

REGISTRAR

YTL Corporation Berhad11th Floor, Yeoh Tiong Lay Plaza55 Jalan Bukit Bintang55100 Kuala LumpurTel : 03-2142 6633Fax : 03-2141 2703

SPONSOR

Commerce International Merchant Bankers Berhad8th Floor, Bangunan CIMBJalan Semantan, Damansara Heights50490 Kuala LumpurTel : 03-2084 8888Fax : 03-2084 8899

SOLICITORS

Lee, Perara & Tan

AUDIT COMMITTEE

Y Bhg Dato’ Lau Yin Pin @ Lau Yen Beng(Committee Chairman and Independent Non-Executive Director)

Y Bhg Tan Sri Dato’ Seri Dr Md NoordinBin Md Sopiee(Independent Non-Executive Director)

Mr Loh Mun San(Executive Director)

AUDITORS

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

PRINCIPAL BANKEROF THE GROUP

Bumiputra-Commerce Bank Berhad

STOCK EXCHANGE LISTING

Kuala Lumpur Stock ExchangeMESDAQ Market(02.07.2002)

BOARD OF DIRECTORS

Executive Chairman and Managing Director

Y Bhg Tan Sri Dato’ Francis Yeoh Sock PingPSM, SIMP, DPMS, DPMP, JMN, JPB Sc (Hons) CIV ENG, FFB, F Inst D, MBIM, RIM

Y Bhg Tan Sri Dato’ Seri Dr Md Noordin Bin Md SopieePSM, DIMP, DMSM, DGPN, National Order of Merit (Ordre National-du Merite) by the French GovernmentB Sc (Econ) (First Class), Ph D in Political Science/International Relations

Y Bhg Dato’ Lau Yin Pin @ Lau Yen BengDPMT, ASM, JPDiploma, Commerce

Y Bhg Dato’ Yeoh Seok HongDSPN, JPBE (Hons) Civil & Structural Engineer, FFB

Y Bhg Dato’ Michael Yeoh Sock SiongDIMPBE (Hons), Civil & Structural Engineer, FFB

Y Bhg Dato’ Mark Yeoh Seok KahDSSALLB (Hons) King’s College London Barrister-At-Law (Gray’s Inn)

Tuan Syed Abdullah Bin Syed Abd. KadirB Sc (Engineering Production) & B Com (Economics)

Toh Muda Rizal Ashram Bin Tan Sri RamliY.D.H Toh Muda Orang Kaya-Kaya Seri Agar DirajaBA, Business Administration

Mr Loh Mun SanSystem Engineer (QuickStart – Newport Beach, CA)

Mr Amarjit Singh ChhinaCIOB I (Eng), Reg. Rep. London Stock Exchange,Dealers Rep. Stock Exchange of Singapore

Profile of the Board of Directors


Y BHG TAN SRI DATO’ FRANCIS YEOH SOCK PING

Malaysian, aged 48, was appointed to the Board of the Company on 26 April 2000 as Executive Chairman and

Managing Director. Y Bhg Tan Sri Dato’ Francis Yeoh had his secondary education in Victoria Institution, Malaysia in which

he was the Head Boy. He obtained his Bachelor of Science (Hons) Degree in Civil Engineering from Kingston University,

United Kingdom in 1978. He joined Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd as a Director in October 1978 and is

presently the Managing Director of that company. He currently serves as a Member of the Malaysian Business Council,

Malaysian Capital Market Advisory Council, Malaysian Pacific Basin Economic Council, Malaysian Industry-Government

Group for High Technology, Commonwealth Partnership for Technology Management, the Malaysian South-South

Association and The Nature Conservancy Asia Pacific Council. He is the International Council Member of The Asia Society

and Board Member of SEI for Advanced Studies in Management - Wharton School and also Asian Business Council.

He was also the President of the Kuala Lumpur Symphony Orchestra Society, the Founder President of the famous Eastern

and Orient Express train and the Vice President of the Federal Public Listed Companies Association. He was appointed to

the Board of YTL Corporation Berhad on 6 April 1984 and has been the Group Managing Director of that company since

April 1988. On 19 March 1992, 18 October 1996 and 10 May 2001, he was appointed to the Board of YTL Cement

Berhad, YTL Power International Berhad and YTL Land & Development Berhad (formerly known as Taiping Consolidated

Berhad) respectively. He also serves on the Board of YTL Industries Berhad, a wholly-owned subsidiary of YTL Corporation

Berhad. Y Bhg Tan Sri Dato’ Francis Yeoh Sock Ping is the brother of Y Bhg Dato’ Yeoh Seok Hong, Y Bhg Dato’ Michael

Yeoh Sock Siong and Y Bhg Dato’ Mark Yeoh Seok Kah. He has no conflict of interest with the Company and he has not

been convicted of any offences in the past ten (10) years.

Malaysian, aged 57, was appointed to the Board of the Company on 19 February 2001 as an Independent Non-Executive

Director. Y Bhg Tan Sri Dato’ Seri Dr Md Noordin Bin Md Sopiee is currently the Chairman and Chief Executive Officer of

Institute of Strategic and International Studies Malaysia and Chairman of the Malaysia National Committee for Pacific

Economic Cooperation. He also serves on the Board of Bank Negara Malaysia, Kulim (Malaysia) Berhad and Reliance

Pacific Berhad, Sunway Holdings Incorporated Berhad, YTL Power International Berhad and YTL Land & Development

Berhad (formerly known as Taiping Consolidated Berhad). He holds a First Class Division in Bachelor of Science

(Economics) degree from the London School of Economics and a Doctorate of Philosophy from the University of London.

He does not have any family relationship with any directors and/or major shareholder of the Company and has no conflict

of interest with the Company. He has not been convicted of any offences within the past ten (10) years.

Y BHG TAN SRI DATO’ SERI DR MD NOORDIN BIN MD SOPIEE


Y BHG DATO’ LAU YIN PIN @ LAU YEN BENG

Malaysian, aged 53, was appointed to the Board of the Company on 7 January 2002 as an Independent Non-Executive

Director. He is also a Non-Executive Director of YTL Power International Berhad since 18 February 1997. He was appointed

to the Board of the former Lembaga Letrik Negara on 1 October 1988 and now serves on the Board of Tenaga Nasional

Berhad, the successor to Lembaga Letrik Negara. He obtained a Diploma in Commerce with distinction from Tunku Abdul

Rahman College in 1974. In 1987, he became a graduate member of the Institute of Chartered Secretaries and

Administrators, United Kingdom, and in 1981 was made a Fellow of the Chartered Association of Certified Accountants of

the United Kingdom. He has been a member of the Malaysian Institute of Accountants since 1979. He is the Chairman of

the Board for Matang Holdings Berhad as well as the Chairman of Koperasi Serbaguna Malaysia Berhad, a cooperative

registered under the Cooperative Societies Act. He does not have any family relationship with any directors and/or major

shareholder of the Company and has no conflict of interest with the Company. He has not been convicted of any offences

within the past ten (10) years.

Malaysian, aged 43, was appointed to the Board of the Company on 26 April 2000 as an Executive Director. He is also

a Director of YTL Corporation Berhad and YTL Power International Berhad since 19 June 1985 and 18 October 1996

respectively. He obtained his Bachelor of Engineering (Hons) Degree in Civil Engineering from the University of Bradford,

United Kingdom in 1982. He is a member of the Faculty of Building, United Kingdom. Y Bhg Dato’ Yeoh Seok Hong has

vast experience in the construction industry, being the Executive Director responsible for the YTL Group’s construction

division. A few of the testimony of his work in which he acted as the Project Director include the 12 storey Citibank N.A.

Headquarters in Kuala Lumpur, the Apera-ULG building at Jalan Raja Chulan, Kuala Lumpur, the 29 storey UMBC Tower

Annexe and the 15 storey Bank Negara Building at Kota Kinabalu. When YTL Group was awarded the first Independent

Power Producer (“IPP”) licence in the country, he was the Director principally responsible for the development of the

project and the construction of the two power stations owned by YTL Power Generation Sdn Bhd. He continues to be

actively involved in the construction activities of the YTL Group and is also responsible for developing the power and utility

businesses of the YTL Group. He also serves on the Board of YTL Industries Berhad and YTL Land & Development Berhad

(formerly known as Taiping Consolidated Berhad). Y Bhg Dato’ Yeoh Seok Hong is the brother of Y Bhg Tan Sri Dato’

Francis Yeoh Sock Ping, Y Bhg Dato’ Michael Yeoh Sock Siong and Y Bhg Dato’ Mark Yeoh Seok Kah. He has no conflict

of interest with the Company and he has not been convicted of any offences in the past ten (10) years.

Y BHG DATO’ YEOH SEOK HONG


Y BHG DATO’ MICHAEL YEOH SOCK SIONG

Malaysian, aged 42, was appointed to the Board of the Company on 15 May 2000 as an Executive Director. On 19 June

1985, 1 September 1985 and 21 October 1996, he was appointed to the Board of YTL Corporation Berhad, YTL Cement

Berhad and YTL Power International Berhad respectively. He graduated from the University of Bradford, United Kingdom in

1983 with a Bachelor of Engineering (Hons) Civil & Structural Engineering Degree. He is primarily responsible for

YTL Group’s Manufacturing Division which activities involve cement manufacturing, ready-mixed concrete, transportable

cabins and other building material industries. He is also currently sitting on the Board of YTL Industries Berhad, YTL Land

& Development Berhad (formerly known as Taiping Consolidated Berhad) and Sentul Raya Golf Club Berhad. Y Bhg Dato’

Michael Yeoh Sock Siong is the brother of Y Bhg Tan Sri Dato’ Francis Yeoh Sock Ping, Y Bhg Dato’ Yeoh Seok Hong and

Y Bhg Dato’ Mark Yeoh Seok Kah. He has no conflict of interest with the Company and he has not been convicted of any

offences in the past ten (10) years.

Y BHG DATO’ MARK YEOH SEOK KAH

Malaysian, aged 37, was appointed to the Board of the Company on 26 April 2000 as an Executive Director. He graduated

from King’s College, University of London with an LLB (Hons) and was subsequently called to the Bar at Gray’s Inn, London

on 28 July 1988. He chambered at Messrs Shook Lin & Bok and in August 1989, he joined YTL Group. He is presently

the Executive Director responsible for the Hotels and Resorts Division of the YTL Group. He was appointed to the Board

of YTL Corporation Berhad on 22 June 1995. He is also a Director of YTL Power International Berhad since 21 October

1996 and YTL Land & Development Berhad (formerly known as Taiping Consolidated Berhad) since 10 May 2001. He

represents the YTL Group on the Board of Eastern & Oriental Express Limited, a company incorporated in Bermuda, which

owns and operates the Eastern & Oriental Express luxury train service between Bangkok and Singapore. Y Bhg Dato’ Mark

Yeoh Seok Kah is the brother of Y Bhg Tan Sri Dato’ Francis Yeoh Sock Ping, Y Bhg Dato’ Yeoh Seok Hong and Y Bhg

Dato’ Michael Yeoh Sock Siong. He has no conflict of interest with the Company and he has not been convicted of any

offences in the past ten (10) years.



TOH MUDA RIZAL ASHRAM BIN TAN SRI RAMLI

Malaysian, aged 26, was appointed to the Board of the Company on 24 September 2001 as an Independent Non-Executive

Director. He graduated from Indiana University and American Intercontinental University in 1997 and 2000 respectively. Toh

Muda Rizal Ashram Bin Tan Sri Ramli is currently the Chief Executive Officer of Integrasi Teguh Sdn Bhd. He is also an

Independent Non-Executive Director of Suri Travel & Tours Sdn Bhd, a subsidiary of YTL Corporation Berhad. He does not

have any family relationship with any directors and/or major shareholder of the Company and has no conflict of interest

with the Company. He has not been convicted of any offences within the past ten (10) years.

Malaysian, aged 48, was appointed to the Board of the Company on 26 April 2000 as an Executive Director. He graduated

from the University of Birmingham in 1977 with a Bachelor of Science (Engineering Production) and a Bachelor of

Commerce (Economics) Double Degree. He has extensive experience in banking and financial services, having been with

Bumiputra Merchant Bankers Berhad from 1984 to 1994, holding the position of general manager immediately prior to

his departure from the Bank. Prior to joining YTL Corporation Berhad Group, he was the general manager of Amanah

Capital Partners Berhad (formerly known as South East Asia Development Corporation Berhad), a public listed company

with subsidiaries involved in, inter alia, discount, money broking, unit trusts, finance and fund management operations

from November 1994 to February 1996. He also serves on the Board of YTL Corporation Berhad, YTL Power International

Berhad, Iris Corporation Berhad, Malaysian South-South Corporation Berhad and AE Multi Holdings Berhad. He does not

have any family relationship with any directors and/or major shareholder of the Company and has no conflict of interest

with the Company. He has not been convicted of any offences in the past ten (10) years.

TUAN SYED ABDULLAH BIN SYED ABD. KADIR


MR LOH MUN SAN

Malaysian, aged 46, was appointed to the Board of the Company on 26 April 2000 as an Executive Director and has been

the General Manager of the Company since 1 May 2000. He completed his Systems Engineer training with QuickStart

Technologies Inc. in both Los Angeles and Newport Beach, California, USA in May 1995. He has 12 years experience in

Information Technology. He was responsible for setting up the regional IT network of PT Sempati Air (the second largest

Indonesian Airline) in 1994, and acted as its IT Consultant until 1997. He was one of the founder members of the Malaysia

Airlines Boeing B747 & B777 Aircraft Acceptance Team, responsible for the Aircraft interior and In-flight Audio and Video on

Demand Computer entertainment system, in terms of Software and Hardware trouble shooting, recovery, operation and

implementation. He does not have any family relationship with any directors and/or major shareholder of the Company and

has no conflict of interest with the Company. He has not been convicted of any offences within the past ten (10) years.

British, aged 35, was appointed to the Board on 26 April 2000 as an Executive Director. He has been a member of the

Institute of Bankers (U.K.), has attained professional qualifications from the London International Stock Exchange and the

Stock Exchange of Singapore and has been licensed by the Securities and Futures Authority (U.K.) and the Monetary Authority

of Singapore. He has 12 years of international investment and equity market experience, beginning his career in the Fund

Management Department of Grieveson Grant & Co. in London (which was later acquired by Kleinwort Benson PLC) and last

held the position of a UK Equity Fund Manager with Kleinwort Benson Investment Management (managing Institutional

Pension Funds and Unit Trusts). In 1990, he joined Barclays de Zoete Wedd Securities Ltd. (“BZW”) in London as a UK Building

and Construction Sector Analyst. He has advised on a number of equity capital raisings for listed UK Building & Construction

companies (pricing, structuring and marketing of new equity related issues) and acted as one of the advisors to Steetley PLC

in its defence of the USD1.2 billion hostile takeover bid from Redland PLC. In 1993, he was seconded to BZW Asia and over

the next 5 years held posts with BZW in Hong Kong, Singapore and Malaysia, held the position of Associate Director in

Singapore and Malaysia. In 1998, he was appointed Associate Sales Director of HSBC Securities Pte. Ltd. in Singapore, leaving

to become a founding Director of Quantaflex S.E.A. Sdn Bhd, a high technology manufacturing company. He does not have

any family relationship with any directors and/or major shareholder of the Company and has no conflict of interest with the

Company. He has not been convicted of any offences within the past ten (10) years.

MR AMARJIT SINGH CHHINA



Statement of D i rectors ’ Responsibilities in respect of the Audited Financial Statements

The Directors are required by law to prepare financial statements for each financial year which

give a true and fair view of the state of affairs of the Group and of the Company at the end of

the financial year and of the results and cash flows of the Group and of the Company for the

financial year then ended.

The Directors consider that, in preparing the financial statements for the financial year ended

30 June 2002, the Group has used appropriate accounting policies and applied them

consistently and made judgements and estimates that are reasonable and prudent. The Directors

also consider that all applicable approved accounting standards have been followed and confirm

that the financial statements have been prepared on a going concern basis.

The Directors are responsible for ensuring that the Group and the Company keep accounting

records which disclose with reasonable accuracy at any time the financial position of the Group

and of the Company and which enable them to ensure that the financial statements comply with

the provisions of the Companies Act, 1965 and the applicable approved accounting standards

in Malaysia.

Audi t Committee Report


7 Review existing practices and recommend to Management to

formalise an ethics code for all executives and members of

the staff of the Group.

8 Create a climate of discipline and control which will reduce

opportunity of fraud.

MEMBERSHIP

1 The Committee shall be appointed by the Board from amongst

their number and shall be composed of no fewer than three (3)

members, majority of whom should be Independent Directors.

2 The members of the Committee shall elect a Chairman from

amongst their number who shall be an Independent Director.

3 The Board must ensure that the chief executive officer shall

not be a member of the Audit Committee.

AUTHORITY

The Committee shall in accordance with the procedure determined

by the Board and at the cost of the Company:-

a have explicit authority to investigate any matter within its

terms of reference;

b have the resources which are required to perform its duties;

c have full and unrestricted access to any information pertaining

to the Company;

PRIMARY PURPOSES

The Committee shall:

1 Provide assistance to the Board in fulfilling its fiduciary

responsibilities relating to the corporate accounting and

practices for YTL e-Solutions Berhad and all its wholly and

majority owned subsidiaries (“Group”).

2 Improve the Group’s business efficiency, the quality of the

accounting function, the system of internal controls and audit

function and strengthen the confidence of the public in the

Group’s reported results.

3 Maintain through regularly scheduled meetings, a direct line of

communication between the Board and the external auditors

as well as internal auditors.

4 Enhance the independence of both the external and internal

auditors’ function through active participation in the audit process.

5 Strengthen the role of the Independent Directors by giving them a

greater depth of knowledge as to the operations of the Company

and the Group through their participation in the Committee.

6 Act upon the Board of Directors’ request to investigate and

report on any issues or concerns in regard to the management

of the Group.

COMPOSITION

The Company has established its Audit Committee on 15 January 2002. For the financial year ended 30 June 2002, the Committee comprised

the following members:-

TERMS OF REFERENCE

MEMBERS

Y Bhg Tan Sri Dato’ Seri Dr Md Noordin Bin Md Sopiee• Independent Non-Executive Director

Mr Loh Mun San• Executive Director

CHAIRMAN

Y Bhg Dato’ Lau Yin Pin @ Lau Yen Beng• Independent Non-Executive Director


d have direct communication channels with the external

auditors and person(s) carrying out the internal audit function;

e be able to obtain independent professional or other advice

and to secure the attendance of outsiders with relevant

experience and expertise if it considers this necessary; and

f be able to convene meetings with the external auditors

excluding the attendance of the executive members of the

Company, whenever deemed necessary.

FUNCTIONS AND DUTIES

The Committee shall, amongst others, discharge the following

functions:-

1 Review the following and report the same to the Board

of the Company:-

a with the external auditors, the audit plan;

b with the external auditors, his evaluation of the quality

and effectiveness of the entire accounting system, the

adequacy and the integrity of the internal control

system and the efficiency of the Group’s operations

and efforts and processes taken to reduce the Group’s

operational risks;

c with the external auditors, the audit report;

d the assistance given by the employees of the Company

to the external auditors;

e the adequacy of the scope, functions and resources of

the internal audit functions and that it has the necessary

authority to carry out its work;

f the internal audit programme, processes, the results of

the internal audit programme, processes or

investigation undertaken and whether or not

appropriate action is taken on the recommendations of

the internal audit function;

g the quarterly results and year end financial statements,

prior to the approval by the Board of Directors, focussing

particularly on:-

• changes in or implementation of major accounting

policy changes

• significant and unusual events

• the accuracy and adequacy of the disclosure of

information essential to a fair and full presentation

of the financial affairs of the Group

• compliance with accounting standards, other

statutory and legal requirements and the going

concern assumption.

h any related party transaction and conflict of interest

situation that may arise within the Company/Group and

any related parties outside the Group including any

transaction, procedure or course of conduct that raises

questions of management integrity;

i any letter of resignation from the external auditors of

the Company;

j whether there is reason (supported by grounds) to

believe that the Company’s external auditors are not

suitable for re-appointment;

k all areas of significant financial risk and the

arrangements in place to contain those risks to

acceptable levels; and

l any significant audit findings, reservations, difficulties

encountered or material weaknesses reported by the

external and internal auditors.

2 Recommend the nomination of a person or persons as

external auditors and the external audit fee.

3 Promptly report to the Kuala Lumpur Stock Exchange

(“KLSE”) on any matter reported by it to the Board of the

Company which has not been satisfactorily resolved

resulting in a breach of the KLSE Listing Requirements.

4 Carry out any other function that may be mutually agreed

upon by the Committee and the Board which would be

beneficial to the Company and ensure the effective

discharge of the Committee’s duties and responsibilities.


Audi t Committee Report

MEETINGS

1 During the financial year ended 30 June 2002, there was no

meeting convened since the establishment of the Audit

Committee on 15 January 2002.

2 A minimum of two members present shall form the quorum.

3 The Committee shall meet at least five (5) times a year,

although additional meetings may be called at any time at the

Audit Committee Chairman’s discretion. An agenda shall be

sent to all members of the Committee and any other persons

who may be required/invited to attend. All meetings to review

the quarterly results and annual financial statements, shall be

held prior to such quarterly results and annual financial

statements being presented to the Board for approval.

4 Notwithstanding paragraph 3 above, upon the request of any

member of the Committee, the external auditors or the internal

auditors, the Chairman of the Committee shall convene a

meeting of the Committee to consider any matters which should

be brought to the attention of the directors or shareholders.

5 The external auditors and internal auditors have the right to

appear and be heard at any meeting of the Committee and

shall appear before the Committee when required to do so by

the Committee.

6 The Committee may invite any Board member or any member

of the Senior Management or any relevant employee within

the Company who the Committee thinks fit to attend its

meetings to assist in resolving and clarifying matters raised in

audit reports.

7 The internal auditors shall be in attendance at meetings of the

Committee to present and discuss the audit reports of findings

and the recommendations relating thereto and to follow up on

decisions made at these meetings.

8 At least once a year, the Committee shall meet with the

external auditors without any Executive Director present.

9 The Committee may establish any regulations from time to

time to govern its administration.

RETIREMENT AND RESIGNATION

In the event of any vacancy in the Audit Committee, the Company

must fill the vacancy within two months, but in any case not later

than three months.

MINUTES

1 The Committee shall cause minutes to be duly entered in the

books provided for the purpose of all resolutions and

proceedings of all meetings of the Committee. Such minutes

shall be signed by the Chairman of the meeting at which the

proceedings were held or by the Chairman of the next

succeeding meeting and is so signed, shall be conclusive

evidence without any further proof of the facts thereon stated.

2 Minutes of each meeting shall also be distributed to all

attendees at the meetings and members of the Committee.

3 Detailed minutes of the Committee’s meetings will be made

available to all Board members. A summary of significant

matters and resolutions will be reported to the Board by the

Committee.

4 The books containing the minutes of proceedings of any

meeting of the Committee shall be kept by the Company at

the registered office of the Company and shall be open to the

inspection of any member of the Committee and the Board.

SECRETARY

The Secretary to the Committee shall be the Company Secretary.


Statement on Corpora te Governance

INTRODUCTION

The Board of Directors is committed to ensuring that the highest standards of

corporate governance are practiced throughout the Group. Good corporate

governance is a fundamental part of the Group’s responsibility to protect and

enhance long term shareholder value and the financial performance of the

Group, whilst taking into account the interests of other stakeholders.

The Board has taken steps to introduce various measures both prior to

and since its listing on the MESDAQ Market of the Kuala Lumpur Stock

Exchange (“MESDAQ”) on 2 July 2002. In assessing its corporate

governance practices, the Group is governed by the Listing Requirements

of the MESDAQ and Guidance Notes 2 on Corporate Governance

(“Guidance Notes”), both of which were issued in March 2002. The

Guidance Notes represent the recommended best practices with which

listed companies are expected to comply. The Group has also

endeavoured to comply with the Malaysian Code on Corporate

Governance (“Code”) which was issued in January 2001 as a guide for

public listed companies.

This section of the Annual Report details the measures implemented by

the Group to enhance its corporate governance practices and

compliance with the MESDAQ Listing Requirements, the Guidance Notes

and the Code.

A. General Duties of Board

The Board

YTL e-Solutions Berhad is led and managed by an experienced Board of

Directors with a wide and varied range of expertise. This broad spectrum

of skills and experience gives added strength to the leadership, thus

ensuring that the Group is under the guidance of an accountable and

competent Board of Directors. The Directors recognise the key role they

play in charting the strategic direction, development and control of the

Group and have adopted the five primary responsibilities as listed in the

Guidance Notes, which facilitate the discharge of the Board’s

stewardship responsibilities.

Board Balance

The Board currently has ten (10) directors comprising seven (7)

executive members and three (3) non-executive members, all three of

whom are independent. The Board complies with the MESDAQ Listing

Requirements for the Board to have at least two (2) independent

directors, and for the selection and appointment of independent directors

to be a matter for the Board as a whole.

Due to the strong independent component of the Board, the members

have not felt the necessity to divide the roles of the Managing Director

and Chairman, and both functions continue to be exercised by the same

person. He is primarily responsible for the orderly conduct and working

of the Board as well as responsible for the day-to-day running of the

business, implementation of Board policies and making operational

decisions. He is accountable to the Board for the profitable operation

and development of the Group consistent with the primary aim of

enhancing long term shareholder value. He is obliged to refer certain

major matters back to the Board.

The presence of independent non-executive directors brings an

additional element of balance to the Board and these independent non-

executive directors must be of the calibre necessary to carry sufficient

weight in Board’s decisions. The differing roles of executive and non-

executive directors are delineated, both having fiduciary duties towards

shareholders. Executive directors have a direct responsibility for business

operations whereas non-executive directors have the necessary skill and

experience to bring an independent judgement to bear on the issues of

strategy, performance and resources, including key appointments and

standards of conduct.


Although all directors have an equal responsibility for the Group’s operations,

the role of the independent non-executive directors is particularly important

in ensuring that the strategies proposed by the executive management are

fully discussed and examined and take account of the long term interests of

the public shareholders, employees, customers, suppliers and the many

communities in which the Group conducts its business. Together, the

Directors possess the wide range of business, commercial and financial

experience essential in the management and direction of a corporation with

global presence. No individual or group of individuals dominates the Board’s

decision-making and the number of directors reflects fairly the investment of

the shareholders. A brief description on the background of each Director is

presented in the Profile of the Board of Directors in this Annual Report.

To date, the Board has not found it necessary to identify a senior

independent non-executive to whom concerns may be conveyed mainly

because the Chairman encourages full deliberation of issues affecting the

Group by all members of the Board.

Directors’ Training

During the financial year, seven (7) directors of the Company attended and

successfully completed the Mandatory Accreditation Programme (“MAP”)

conducted by the Research Institute of Investment Analysts Malaysia

(“RIIAM”), the training arm and affiliate company of Kuala Lumpur Stock

Exchange (“KLSE”). The three (3) directors who have yet to attend the MAP

are currently awaiting notification of RIIAM’s next training programme. The

directors will continue to attend the Continuing Education Programme (“CEP”)

on annual basis once RIIAM commences the training programme for CEP.

Board Meetings

The Board did not meet during the financial year ended 30 June 2002 as

the Company was only listed on the MESDAQ on 2 July 2002.

Access to and Supply of Information and Advice

The Directors have full and unrestricted access to all information pertaining

to the Group’s business and affairs, whether as a full Board or in their

individual capacity, to enable them to discharge their duties. There are

matters specifically reserved for the Board’s decision to ensure that the

direction and control of the Group is firmly in its hands. Prior to the Board

meetings, all directors receive the agenda together with a full set of Board

papers containing information relevant to the business of the meeting. This

allows the directors to obtain further explanations/clarifications, where

necessary, in order to be properly briefed before the meetings.

All directors have full access to the advice and services of the Company

Secretary who ensures that Board procedures are adhered to at all times

during meetings and advises the Board on matters including corporate

governance issues, and directors’ responsibilities in complying with

relevant legislation and regulations. The directors may, if necessary, obtain

independent professional advice from external consultants at the

Company’s expense.

Appointments to the Board

The Code endorses as good practice, a formal procedure for appointment to

the Board, with a nomination committee making recommendations to the

Board. The Code, however, states that this procedure may be performed by

the Board as a whole, although, as a matter of best practice, it recommends

that this responsibility be delegated to a committee.

The Group has developed a transparent procedure for the appointments of

new directors to the Board. The Group Managing Director has been making

recommendations on the suitability of candidates nominated for appointment

to the Board and the final decision lies with the entire Board.

During the year under review, the Board did not establish a Nomination

Committee as suggested by the Code as the necessity to appoint new

directors did not arise subsequent to the Company’s listing in July 2002.

In addition, the existing mix of experience and expertise of the current

members of the Board is considered sufficient to address the issues

affecting the Group.

However, the formation of a Nomination Committee is seen as a priority

and the Group is in the process of identifying key elements required to

establish a Nomination Committee with the responsibility for proposing

nominees for appointment to the Board and for assessing directors on an

ongoing basis. The actual decision as to who should be appointed will be

the responsibility of the full Board after considering the recommendations

of such a committee. The Board, through the Nomination Committee, will

review annually the required mix of skills and experience and other

qualities, including core competencies which non-executive directors should

bring to the Board. In addition, the Committee will assess the effectiveness

of the Board as a whole, the Committees of the Board and the contribution

of each individual director.



Re-election of Directors

In accordance with the Company’s Articles of Association, one-third of

the directors shall retire from office at each Annual General Meeting

(“AGM”). Retiring directors can offer themselves for re-election.

Directors who are appointed by the Board during the financial year are

subject to re-election by the shareholders at the next AGM held following

their appointments.

Directors who are over seventy (70) years of age are required to submit

themselves for re-appointment annually in accordance with Section 129

of the Companies Act, 1965.

B. General Duties of Officers and Directors

The Group places great importance on the role of Officers in the

performance of their duties. Officers comprise the directors, the company

secretary, managers and promoters. The Group appreciates the merits of

the code of practice for Officers as set out in the Guidance Notes and is

in the process of identifying the best methods by which to effectively

apply it across the Group. Nevertheless, due to their breadth of

experience, the Officers of the Group are aware of their responsibilities in

carrying out their roles in the manner prescribed by the code.

C. Directors’ Remuneration

The Company has a transparent procedure for developing policy on executive

remuneration and for fixing the remuneration packages of individual directors.

The Company has adopted the objective as recommended by the Code to

determine the remuneration for a Director so as to attract and retain directors

of the calibre needed to run the Group successfully.

In general, the component parts of remuneration are structured so as to

link rewards to corporate and individual performance, in the case of

executive directors. In the case of non-executive directors, the level of

remuneration reflects the experience and level of responsibilities

undertaken by the particular non-executive concerned.

Following a review of the need to establish a remuneration committee

as recommended by the Code, the Board concluded that the

determination of directors’ remuneration is a matter for the Board.

However, directors do not participate in decisions regarding their own

remuneration packages and directors’ fees must be approved by the

shareholders at the AGM.

Aggregate remuneration of Directors categorised into appropriate components as at 30 June 2002:-

Fees Salaries Bonus Others Total

(RM) (RM) (RM) (RM) (RM)

Executive Directors 50,000 295,000 40,500 28,440 413,940

Non-Executive Directors 30,000 — — — 30,000

The number of directors of the Company whose total remuneration fall within the following bands for the financial year ended 30 June 2002 are as

follows:-

No. of Directors

Range of Remuneration Executive Non-Executive

Below RM50,001 5 3

RM50,001 – RM550,000 2 —

(for security and confidentiality reasons, the details of Directors’ remuneration are not shown with reference to Directors individually)



D. Shareholers

Dialogue between the Company and Investors

The Group values dialogue with investors as a means of effective

communication that enables the Board to convey information about the

Group’s performance, corporate strategy and other matters affecting

shareholders’ interests. The Board recognises the importance of timely

dissemination of information to shareholders and accordingly ensures

that they are well informed of any major developments of the Group. Such

information is communicated through the following channels:-

• The Annual Report;

• The various disclosures and announcements to KLSE including

quarterly and annual results; and

• A website developed by the Group known as ytlcommunity.com.

The Group Managing Director meets regularly with analysts, institutional

shareholders and investors throughout the year. Presentations based on

permissible disclosures are made to explain the Group’s performance and

major development programs. Price-sensitive and any information that may

be regarded as undisclosed material information about the Group is however

not disclosed in these exchanges until after the prescribed announcement

to KLSE has been made.

Annual General Meeting

The Annual General Meeting (“AGM”) is the principal forum for dialogue

with shareholders. The Board provides opportunities for shareholders to

raise questions pertaining to issues in the Annual Report, Audited Financial

Statements, corporate developments in the Group, the resolutions being

proposed and on the business of the Group in general at every AGM and

Extraordinary General Meeting of the Company. The Chairman and Sponsor

will respond to shareholders’ questions during the meeting. Representatives

of the Sponsor are also in attendance to answer questions. This ensures

a high level of accountability, transparency and identification with the

Group’s business operations, strategy and goals. Each item of special

business included in the notice of the meeting will be accompanied by an

explanatory statement for the proposed resolution to facilitate full

understanding and evaluation of issues involved.

E. Accountability and AuditAudit Committee

The Company has in place an Audit Committee which comprises of two

(2) non-executive directors and one (1) executive director. The Chairman

of the Audit Committee, Y Bhg Dato’ Lau Yin Pin @ Lau Yen Beng is a

member of the Malaysian Institute of Accountants.

The Audit Committee has not met since the establishment of the Audit

Committee on 15 January 2002. The Audit Committee holds quarterly

meetings, amongst others, to review the Group’s financial reporting, the

nature and scope of audit reviews, the effectiveness of systems on

internal control and compliance as well as to deliberate on findings of the

internal and external auditors.

Full details of the composition, complete terms of reference and the

activities of the Audit Committee during the financial year are set out

under the Audit Committee Report.

Financial Reporting

The Directors are responsible for ensuring that financial statements are

drawn up in accordance with the provisions of the Companies Act, 1965 and

applicable approved accounting standards in Malaysia. In presenting the

financial statements, the Company has used appropriate accounting policies,

consistently applied and supported by reasonable and prudent judgements

and estimates. The Directors also strive to ensure that financial reporting

present a fair and understandable assessment of the Company’s position and

prospects. Quarterly financial statements were reviewed by the Audit

Committee and approved by the Board of Directors prior release to KLSE and

Securities Commission.

The Statement by Directors made pursuant to Section 169 of the

Companies Act, 1965 is set out in this Annual Report.

Relationship with the Auditors

The Board has established a formal and transparent arrangements for

maintaining an appropriate relationship with the Company’s auditors. The

Company’s auditor, Messrs. Ler Lum & Co., has continued to report to

members of the Company on their findings which are included as part of the

Company’s financial reports with respect to each year’s audit on the statutory

financial statements. From time to time, the auditors highlight matters that

require attention to the Audit Committee and Board of Directors.


F. Internal Control

Introduction

The Board acknowledges its responsibilities for maintaining a sound

system of internal control to safeguard shareholders’ investment and the

Group’s assets, and for reviewing the adequacy and integrity of the

system. The system of internal control covers not only financial controls

but operational and compliance controls and risk management. However,

the Board recognises that reviewing the Group’s system of internal control

is a concerted and continuing process, designed to manage rather than

eliminate the risk of failure to achieve business objectives. Accordingly, the

Group’s system of internal control can only provide reasonable but not

absolute assurance against material misstatement, fraud and loss.

It is the Board’s view that in order to achieve a sound system of internal

control, it is first necessary to provide a control environment and

framework that is conducive to this objective. This means that the

Board, Management and all levels of employees must be aware of the

Group’s business objectives, the risks that could potentially impede the

Group in achieving these objectives and the policies and control

strategies that are required to manage these risks.

The Board believes that the Group’s system of internal control, financial

or otherwise, should provide reasonable assurance regarding the

achievement of the Group’s objectives in ensuring:-

• effectiveness and efficiency of operations;

• reliability and transparency of financial information; and

• compliance with laws and regulations.

As the Company was became a public listed issuer subsequent to its

financial year-end on 30 June 2002, the Board did not appoint an internal

auditor during the 2002 financial year. However, the Board is aware of the

importance of this function and is taking steps to out-source its internal

audit functions to a professional services firm, with the objective of

assisting the Audit Committee to discharge its duties and responsibilities.

This firm will be required to conducted a review of the organisation

system, structure, finance and accounting processes and controls and

operations of some of the companies in the Group in order to make a

preliminary evaluation of the adequacy and effectiveness of the system

of internal control.

Despite its relatively new status as a listed issuer, the Group does have

in place a pre-existing system of internal control and risk management,

which is essential given the nature of the business in identifying

potential incubatees for investment.

Principal Features and Key Processes of the Group’s System of

Internal Control

The principal features of the Group’s system of internal control can be

summarised as follows:-

• Definition of authorisation procedures and a clear line of accountability,

with strict authorisation, responsibility levels, approval and control

procedures within which senior management operates;

• Delegated authority levels for major tenders, capital expenditure

projects, acquisitions and disposals of businesses and other significant

transactions. The approval of capital and revenue proposals above

certain limits is reserved for decision by the Board;

• Guiding policies and procedures on the hiring and retention of staff

established at Group level, with individual business units having the

ability to adapt these policies for their specific staffing needs;

• Comprehensive management development plan that includes formal

training both inside and outside the Group;

• Comprehensive business planning and budgeting process each year,

to establish plans and targets against which performance is

monitored on an on-going basis. Key business risks are identified

during the business planning process and are reviewed regularly

during the year;

• Quarterly, interim and full year financial results and analyses of the

Group’s state of affairs are disclosed to shareholders and reviewed

by the external auditors;

• Monitoring of compliance with internal financial controls through

management reviews and reports which are internally reviewed by key

personnel. Regular updates of internal policies and procedures are

undertaken to reflect changing risks or resolve operational deficiencies;

• Regular reporting of legal, accounting and environmental developments

to the Board by all divisions of the Group.


Chai rman’s Statement for the year ended 30 June 2002

On behalf of the Board of Directors of YTL e-Solutions Berhad, I have

the pleasure of presenting to you the Annual Report and Audited Financial

Statements of the Group and the Company for the financial year ended

30 June 2002.

Y. Bhg. Tan Sri Dato’ Francis Yeoh Sock PingExecutive Chairman & Managing Director


OverviewYTL e-Solutions Berhad (“YTL e-Solutions”) became the

first technology incubator to be listed on the Malaysian

Exchange for Securities Dealing and Automated Quotation

(MESDAQ) Market of the Kuala Lumpur Stock Exchange

(KLSE) on 2 July 2002.

During the year under review, the Group continued to develop

and expand on its core competency of investing in and

incubating companies developing new evolving technologies

for their use and adoption in Malaysia. One of the main

competitive advantages of YTL e-Solutions is its ability to

leverage on its availability of funds to drive innovation at a

faster pace. Faster innovation, in turn, is expected to drive

productivity growth higher, lower inflation rates and

accelerate investment. Underscoring this vision is our belief

that IT, the Internet, communications and other related

technologies are here to stay over the longer term, and offer

excellent investment opportunities. This is especially true now

that valuations have corrected since the bursting of the

technology bubble.

The Group is well on its way to establishing its niche in

the Malaysian market, where the success of the Multimedia

Super Corridor (MSC) and the development of a K-economy

hinges on Malaysian companies developing and adopting

new technologies, as well as having a large pool of

knowledge workers with the right skill set. The development

of new technologies is in turn dependant to a large extent,

on the availability of “risk capital” from venture capital funds.

The potential of IT, as a means of conducting business

more efficiently is still largely untapped in Asia and

vast opportunities exist for the Group to increase both

Internet penetration in the region and investment in critical

new infrastructure.

The success of the Group’s first two incubatees,

Extiva Communications Sdn Bhd (“Extiva”) and the

www.PropertyNetAsia.com real estate portal, has served to

emphasise the reliability and integrity of the our selection

criteria and process. The focus is on developing ideas which

can be developed into services, products and solutions that

can be marketed to millions of customers – viable projects

to ensure strong growth.

In September 2002, the Group incorporated YTL Info Screen

Sdn Bhd, a wholly-owned subsidiary, to undertake the

development and provision of digital media solutions. YTL

Info Screen provides news, information and advertising

content utilising cutting-edge digital display technology such

as plasma display and liquid crystal display screens.

With its technological and investment expertise, YTL

e-Solutions is more than just a quasi-venture capitalist, it is

a provider of “smart capital” – i.e. financial capital, as well

as “real world” knowledge capital to eliminate many of the

risks associated with new technology investments. One of

the core aspects of the Group’s success is the ability to help

new entrepreneurs avoid common management pit-falls,

allowing them to focus on the areas where they can create

the most value.

These enterprises also benefit from the association with the

“YTL” brand name and access to YTL Group’s extensive

business networks, which have made it easier to attract

and retain staff, and generally speed up the development of

the company.

0

3

4

5

6

2

1

Earnings per Sharesen

200220012000

5.06

1.73

0.39



0

2,000

4,000

6,000

8,000

Profit After Taxation RM’000

200220012000

6,03

3

1,37

4

28

0

2,000

4,000

8,000

10,000

6,000

Profit Before Taxation RM’000

200220012000

76

8,80

4

1,95

2

0

0.6

0.8

1.0

1.2

0.4

0.2

Net Tangible Assetsper Share

RM

200220012000

1.06

1.00

1.00

0

3,000

4,000

5,000

6,000

2,000

1,000

Profit After Taxation& Minority Interest

RM’000

2002200120005,

205

1,29

8

28

FinancialPerformance336% Increase In Revenue, 383% Increase In

Profit

YTL e-Solutions recorded revenue of RM17.9 million

for the current financial year to date, an increase of

310% over the financial year ended 30 June 2001.

The improvement in revenue was substantially

contributed by the commercial roll-out of the YTL

Community portal, development and provision of

integrated information systems for its corporate

clients, an increase in gateway traffic and continuous

growth of real time voice, video and data

communications through the Voice over Internet

Protocol (VoIP) telephony services. For the financial

year under review, YTL e-Solutions registered a

consolidated profit before taxation of RM6.0 million, or

a 339% increase over the year ended 30 June 2001.

CorporateDevelopmentsOn 2 July 2002, the Company was listed on the

Mesdaq Market of the KLSE following its completion

of the issue of 34,000,000 new YTL e-Solutions

ordinary shares of RM1.00 each, by way of a

non-renounceable restricted issue to entitled

shareholders and eligible employees and directors of

YTL e-Solutions on the basis of one (1) Restricted

Issue Share for every five (5) existing YTL Corporation

ordinary shares.


0

5,000

10,000

15,000

20,000

Revenue RM’000

200220012000

17,9

24

4,37

3

–

0

120,000

150,000

30,000

90,000

60,000

Shareholders’ FundsRM’000

200220012000

145,

031

101,

326

50,0

28

0

50,000

100,000

150,000

200,000

Total Assets RM’000

200220012000

154,

442

104,

274

75,6

24

Review of Operations& Industry Developments

YTL e-Solutions’ expertise lies with its Information and

Communications Technology (ICT), which comprises

specialists in the areas of:-

• Information systems integration

• ICT project management and consultancy

• Telecommunication network administration

• Database administration and integration

• Web application development

• Host-based applications

• Digital transmission and communications

• Multimedia and graphics specialists

• ICT training and resource development

• System maintenance and support

YTL e-Solutions is also developing its non-ICT related expertise

in the form of investment and business analysts, and has access

to extensive entrepreneurial experience. Being part of the YTL

Group with its investment track record, it is in a good position

to advise, nurture and grow new companies and new

technologies, so that real benefits are derived and tangible

shareholder value is created over the longer term.


Chai rman’s Statementfor the year ended 30 June 2002

Investment Objectives

The Company continues to focus on incubating and investing in high

growth, knowledge-intensive companies that leverage on new

technologies., YTL e-Solutions’ primary objective is to realise high returns

through long-term capital appreciation, via equity or equity-related

investments or a combination of both.

YTL e-Solutions’ Targeted Technology Sectors

• Internet and e-commerce technologies and applications

• Cutting-edge hardware and software solutions

• Data warehouse infrastructure

• Web infrastructure

• Content management and delivery solutions

• Communications and networking solutions

• Enabling technologies (e.g. Internet appliances, security solutions,

biometric technologies, smart card and encryption technologies, etc)

• Digital technologies and services

• ICT technologies and services

• Multi-media technologies and services

• Wireless and broadband related technologies

YTL Info Screen

YTL Info Screen is the Group’s newest subsidiary, developing and

providing digital media solutions. This technology entails the use of digital,

plasma and liquid crystal display screens with the ability to support

dynamic advertising, news and information content. YTL Info Screen is

being positioned as an inexpensive, technologically advanced and more

effective replacement for conventional means of media communication.

This means of communication is ideal for buildings, pedestrianised areas

such as Bintang Walk and transportation systems such as the Express Rail

Link, where this technology is already in use.

VoIP Telecommunications

Extiva undertakes the Group’s Voice over Internet Protocol (VoIP)

telecommunications activities and obtained its “ASP-Individual License” from

the Communications and Multimedia Commission, Malaysia (CMC) on

23 July 2001. In addition to the development and marketing of VoIP

telephony, Extiva is also involved in the business of developing and marketing

advanced network media appliances for service providers and enterprise

telephony markets. Extiva provides total VoIP telecommunications solutions,

from hardware, software and consultation services called “ExtiNet”.

Founded in 1999, Extiva is already profitable, registering strong returns

on investment this year, despite stiff competition, a testament to the

quality of its management team, products and services.

Extiva is on the cutting edge of this fast-evolving industry. Traditionally, the

transmission of telecommunications has been conducted through circuit-

switched networks. With the advent of the Internet, data communication

traffic has increased at a significant pace. The circuit-switched networks

were initially designed to handle voice communications but have faced

significant capacity constraints. VoIP technology developed as the

alternative and, for smoother implementation of real-time VoIP


communication networks, industry standards and protocols have been

developed to promote interoperability of real-time communications over

packet networks. As packet networks provide effective and cost-saving for

real-time voice, video and data communications, the use of VoIP telephony

is expected to grow dramatically.

Integrated Real Estate Portal

PropertyNetAsia (Malaysia) Sdn Bhd (“PropertyNetAsia”) owns, develops

and operates the property portal known as PropertyNetAsia.com.my, a one-

stop comprehensive vertical portal catering to real-estate users in Malaysia

and adopting a B2B and B2C model catering to real estate users with

focused contents and online facil it ies. As a property portal,

www.PropertyNetAsia.com derives revenue from advertising, listing service

subscriptions paid by property developers who wish to launch on-line via

the portal and transaction charges for sales conducted through the portal.

Pursuant to a joint-venture agreement executed on 10 November 2000, YTL

e-Solutions holds a 60% equity interest in PropertyNetAsia, whilst Grierson

Pte. Ltd. (“Grierson”) holds the remaining 40%. Grierson, a company

incorporated in Singapore, will operate the www.PropertyNetAsia.com portal

in various parts of the Asia Pacific region.

YTL Community Portal

The YTL Community website, a lifestyle portal for YTL Group’s consumer

related businesses, is conceptualised, designed, developed and maintained

by YTL e-Solutions. Voted by The Edge as one of the Top 88 websites

recommended to net surfers, the site was listed in the “Public Listed

Companies” category with the remark: “YTL’s website is probably one of

the best by a KLSE-listed company. Community oriented with a lot of

personalisation functions. As not many local sites have this, it makes the

site stand out.”

The YTL Community Portal seeks to enhance and complement YTL Group’s

consumer related businesses by developing an online customer community

to complement its existing consumer “brick and mortar” businesses. The

portal is being developed as a fully integrated platform to manage and

maximise the value of its large customer base.

Integrated Construction Information System (ICIS)

Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd (“SPYTL”), a wholly-owned

subsidiary of YTL Corporation has commissioned YTL e-Solutions to

upgrade and streamline its existing in-house information management

system. An in-depth study into SPYTL’s requirements enabled the Company

to effectively formulate and develop the ICIS, a web enabled total

contracting and construction business and financial management software

package for SPYTL.

The software applications being developed for ICIS support a wide range

of operational needs and business processes pertaining to SPYTL’s

construction projects, including the whole process budget control, letters of

acceptance, purchase and delivery of materials, payments of

subcontractor, accounting processes, account payable processes, the

cheque issuance process and wages. The software applications/solutions

to be adopted will be a multi-tier client/server architecture, which forms

the fundamental framework for application scalability, manageability and

deployment, as well as future software expansion. The software being

developed is for the internal use of SPYTL and has the potential to be

commercialised in future.

Web Design and Hosting Projects

The Group has been engaged to undertake web site development, design

and hosting for external corporations and organisations, including tenants,

retailers and restaurants within the Lot 10 Shopping Complex, Star Hill

Centre and the popular Bintang Walk area.



FutureChallengesIn line with the business objectives of YTL e-Solutions, the

Group will continue to conduct strategic reviews of its existing

investments and search for potential new investments for

incubation. It will also explore methods, including upgrading

its existing skills and expertise, to continually respond to the

rapidly changing technology industry.

Improvement of existing services

Presently, the YTL e-Solutions Group offers a whole range

of services, both financial and technical, that it is able to

offer to its prospective incubatees and investee companies.

To ensure steady and positive growth in its operations, the

Group will seek to enhance the use of its services to cater

to the dynamic investment and incubation environment. In

this regard, Extiva plans to achieve maximum adaptation of

the VoIP services for its customers by designing a network

configuration which seamlessly integrates with existing

services, thereby mitigating or eliminating the need for

additional investment by clients.

Research & Development

YTL e-Solutions’ R&D activities are focused on system

integration which involves a package of total IT solutions

consisting of a combination of IT services and products

tailored to specific requirements, driven almost entirely by

the requirements of its incubatees.

The exception to this is the ICIS Project which requires

extensive programming and integration with the client’s

existing internal processes and IT platforms, to develop a

wholly integrated solution capable of managing a wide

range of functions. The integration of these existing

systems and processes is essential to enable each one to

be able to transfer data and information to the other, for

analysis, presentation and delivery to users.

Through Extiva, YTL e-Solutions’ other R&D activities are focused on

improving customised billing solutions, developing cost-effective,

reliable wireless solutions and utilising Private Automatic Branch

Exchanges (PABX) for “seamless” centralized VoIP telephony services.

Many other VoIP systems cannot be integrated with existing telephony

systems, and require “pin” numbers to be keyed in to handsets, to

allow entry into the VoIP gateway. YTL e-Solutions has already

developed solutions to partially integrate VoIP into PABX systems and

will continue to develop this to allow integration into more complex

PABX systems. This will give it a further significant competitive edge.

The Group’s R&D activities will continue to be geared towards

improving the attractiveness and competitiveness of its services,

both domestically and internationally, both to its prospective

incubatees and clients of its incubatees. Future R&D activities will

be driven entirely by the needs of YTL e-Solutions’ incubatees and

will include the development and systems integration for ICIS and

www.PropertyNetAsia.com. YTL e-Solutions is helping Extiva develop

its own hardware and software solutions for VoIP solutions and a

billing system.

Maintaining Brand Recognition

To ensure that the YTL e-Solutions Group will continue to have a

steady flow of incubation and project enquiries, YTL e-Solutions is

committed to developing brand status by way of focused or highly

targeted advertising or promotional activit ies, aimed at

“technopreneurs”, technology start ups and other venture capital

companies. The Group is also committed to delivering on the

message by focusing on service and product quality.

Anchor Relationships

The Group plans to cultivate long term relationships with its network

of contacts to maintain a high level of deal flow from anchor

relationships. Over the longer term it may be necessary to

implement an account management scheme, whereby a dedicated

member of the investment team will be responsible in co-ordinating

and managing all of YTL e-Solutions communication and interaction

with its network of contacts. This will ensure that the level of

service and attention to detail is sufficient to retain these key

contacts in the long term.


Outlook

The Group is confident of its prospects and believes that it is ideally placed to source

investments. A strong brand name and excellent reputation and track record in Malaysia

(and Asia) provide us with many investment opportunities. Furthermore, YTL e-Solutions will

continue to capitalise on its relationships with various leading corporations, business

leaders, investment banks and other international advisors to generate a steady stream of

potential new technology related deal flow.

The bursting of the “dotcom” bubble has strengthened the view that success is more than

a function of just capital, and therefore, the Group has ensured that its selection process

is geared towards companies promoting and developing new technologies that are viable

over the longer-term. Concomitantly, asking prices for technology companies have also

fallen significantly, with the bursting of the technology bubble on US National Association of

Securities Dealing and Automated Quotation (Nasdaq) and this development is seen as

providing YTL e-Solutions with a window of opportunity to enable it to acquire businesses

exposed to these key new technologies more cheaply.

FinancialReportingIn presenting the annual financial statements and

quarterly announcements to shareholders, the Board

of Directors seeks to provide a balanced and

objective assessment of the company’s current

development and future prospects. The statement by

the Directors in accordance with s169 of the

Companies Act 1965 is set out in this report.

AppreciationThe Board of Directors of YTL e-Solutions would like

to take this opportunity to extend our appreciation to

our customers, business associates, the regulatory

authorities and shareholders for their continuing

strong support, without which the Group would not

have been able to achieve its success this year.

I would also like to thank the Management and

Staff for their ongoing dedication and commitment

to the ideals of the Group. Our achievements are a

result of the concerted effort and contribution of the

entire team.

Y. BHG. TAN SRI DATO’ FRANCIS YEOH SOCK PING

PSM, SIMP, DPMS, DPMP, JMN, JP

Executive Chairman & Managing Director


Analysis of Sharehold ings as at 22 October 2002

Class of shares : Ordinary Shares of RM1.00 eachVoting rights : One vote per shareholder on a show of hands or One vote per ordinary share on a poll

Distribution of Shareholdings

No. of No. ofSize of Holding Shareholders % Shares %

Less than 100 3 0.06 100 0.00100 – 999 3,144 64.93 1,097,050 0.811,000 – 4,999 1,254 25.90 2,402,100 1.785,000 – 10,000 252 5.20 1,753,900 1.3010,001 – 100,000 166 3.43 4,785,150 3.54100,001 – 1,000,000 17 0.35 8,150,400 6.04Above 1,000,000 6 0.13 116,811,300 86.53

TOTAL 4,842 100.00 135,000,000 100.00

Twenty Largest Shareholders(without aggregating securities from different securities accounts belonging to the same person)

Name No. of Shares %

1 YTL Corporation Berhad 100,000,000 74.072 Lembaga Tabung Angkatan Tentera 8,763,800 6.493 Employees Provident Fund Board 4,895,800 3.634 DB (Malaysia) Nominee (Asing) Sdn Bhd 1,064,900 0.79

– Deutsche Bank Ag Singapore PBD for Steeloak International Limited5 Seri Yakin Sdn Bhd 1,055,200 0.786 Law Chin Wat 1,031,600 0.767 HSBC Nominees (Asing) Sdn Bhd 968,600 0.72

– AAB Sg Br for Flawless Beauty Limited8 Law Chin Wat 863,000 0.649 DB (Malaysia) Nominees (Asing) Sdn Bhd 847,000 0.63

– Deutsche Bank Ag Singapore PBD for Jamaican Gold Limited10 DB (Malaysia) Nominee (Asing) Sdn Bhd 831,500 0.62

– Deutsche Bank Ag Singapore PBD for Tien Shia International Limited11 UOBM Nominees (Asing) Sdn Bhd 717,400 0.53

– Deutsche Bank Ag Singapore Branch (PBD) for Windchime Developments Limited12 UOBM Nominees (Asing) Sdn Bhd 686,800 0.51

– Deutsche Bank Ag Singapore Branch (PBD) for Orchestral Harmony Limited13 UOBM Nominees (Asing) Sdn Bhd 673,700 0.50

– Deutsche Bank Ag Singapore Branch (PBD) for Velvet Properties Limited


Twenty Largest Shareholders (Cont’d)(without aggregating securities from different securities accounts belonging to the same person)

Name No. of Shares %

14 UOBM Nominees (Asing) Sdn Bhd 546,800 0.41– Deutsche Bank Ag Singapore Branch (PBD) for Water City Limited

15 Alliancegroup Nominees (Tempatan) Sdn Bhd 458,300 0.34– Pledged Securities A/c for Yap Swee Hang (100060)

16 Citicorp Nominees (Tempatan) Sdn Bhd 387,200 0.29– Pledged Securities A/c for Yap Swee Hang (472357)

17 JF Apex Nominees (Tempatan) Sdn Bhd 223,000 0.17– Pledged Securities A/c for Teo Siew Lai

18 EB Nominees (Tempatan) Sdn Bhd 214,400 0.16– Pledged Securities A/c for Yap Swee Hang

19 Cartaban Nominees (Tempatan) Sdn Bhd 192,400 0.14– Amanah SSCM Nominees (Tempatan) Sdn Bhd for Employees Provident Fund Board (A/c 2 – JF458)

20 DB (Malaysia) Nominee (Asing) Sdn Bhd 169,000 0.13– UBS Ag Singapore for Radiant Glory Group Limited

TOTAL 124,590,400 92.31

Substantial Shareholders(as per register of substantial shareholders)

No of Shares HeldName Direct % Indirect %

Yeoh Tiong Lay & Sons Holdings Sdn Bhd — — 100,000,000← 74.07YTL Corporation Berhad 100,000,000 74.07 — —Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay — — 100,000,000↑ 74.07Lembaga Tabung Angkatan Tentera 8,763,800 6.49 — —

← Deemed interested by virtue of its substantial shareholdings in YTL Corporation Berhad.↑ Deemed interested by virtue of his substantial shareholdings in Yeoh Tiong Lay & Sons Holdings Sdn Bhd.


Statement of D i rectors ’ Interests in the Company and Related Corporations as at 30 June 2002

The Company

YTL E-Solutions BerhadNo of Shares Held

Name Direct % Indirect %

Tan Sri Dato’ Francis Yeoh Sock Ping — — 100,000,000 74.07

Tan Sri Dato’ Seri Dr Md Noordin Bin Md Sopiee 102,600 0.08 — —

Dato’ Yeoh Seok Hong — — 100,000,000 74.07

Dato’ Michael Yeoh Sock Siong — — 100,000,000 74.07

Dato’ Mark Yeoh Seok Kah — — 100,000,000 74.07

Dato’ Lau Yin Pin @ Lau Yen Beng 15,000 0.01 — —

Toh Muda Rizal Ashram Bin Tan Sri Ramli 15,000 0.01 — —

Tuan Syed Abdullah Bin Syed Abd Kadir 30,000 0.02 — —

Loh Mun San 100,300 0.07 — —

Amarjit Singh Chhina 100,000 0.07 — —

Holding Company

YTL Corporation BerhadNo of Shares Held


Tan Sri Dato’ Francis Yeoh Sock Ping 5,064,351 0.35 686,535,375 47.31

Tan Sri Dato’ Seri Dr Md Noordin Bin Md Sopiee 44 — — —

Dato’ Yeoh Seok Hong 3,153,460 0.22 687,984,610 47.41

Dato’ Michael Yeoh Sock Siong 2,750,623 0.19 687,983,480 47.41

Dato’ Mark Yeoh Seok Kah 1,617,108 0.11 686,194,451 47.29

Tuan Syed Abdullah Bin Syed Abd Kadir 2,448 — 2,754 —

Loh Mun San 2,040 — — —

No of 1997/2007 Warrants HeldName Direct % Indirect %

Tan Sri Dato’ Francis Yeoh Sock Ping 573,600 0.65 56,274,885 63.34

Tan Sri Dato’ Seri Dr Md Noordin Bin Md Sopiee 22,800 0.03 — —

Dato’ Yeoh Seok Hong 172,800 0.19 56,370,022 63.45

Dato’ Michael Yeoh Sock Siong 144,000 0.16 56,384,085 63.47



No of 1999/2009 Warrants HeldName Direct % Indirect %

Tan Sri Dato’ Francis Yeoh Sock Ping 2,147,472 0.59 178,254,597 48.90



Dato’ Mark Yeoh Seok Kah 271,800 0.07 178,225,797 48.89

Tuan Syed Abdullah Bin Syed Abd Kadir 600 — 674 —

Ultimate Holding Company

Yeoh Tiong Lay & Sons Holdings Sdn BhdNo of Shares Held


Tan Sri Dato’ Francis Yeoh Sock Ping 5,000,000 12.28 — —

Dato’ Yeoh Seok Hong 5,000,000 12.28 — —

Dato’ Michael Yeoh Sock Siong 5,000,000 12.28 — —

Dato’ Mark Yeoh Seok Kah 5,000,000 12.28 — —

Related Corporations

YTL Cement BerhadNo of Shares Held






No of Warrants HeldName Direct % Indirect %






Statement of D i rectors ’ Interests in the Company and Related Corporations as at 30 June 2002

YTL Land & Development Berhad

(Formerly known as Taiping Consolidated Berhad)

No of Shares HeldName Direct % Indirect %

Tan Sri Dato’ Francis Yeoh Sock Ping — — 100,000,000 77.46

Dato’ Yeoh Seok Hong — — 100,000,000 77.46

Dato’ Michael Yeoh Sock Siong — — 100,000,000 77.46


YTL Power International BerhadNo of Shares Held


Tan Sri Dato’ Francis Yeoh Sock Ping 1,085,805 0.05 1,414,555,983 62.51

Tan Sri Dato’ Seri Dr Md Noordin Bin Md Sopiee 10,000 — — —

Dato’ Yeoh Seok Hong 187,328 0.01 1,414,849,642 62.52

Dato’ Michael Yeoh Sock Siong 158,514 0.01 1,414,702,215 62.52

Dato’ Mark Yeoh Seok Kah 135,007 0.01 1,414,534,343 62.51

Dato’ Lau Yin Pin @ Lau Yen Beng 12,240 — — —


Loh Mun San 1,020 — — —

No of Warrants HeldName Direct % Indirect %




Dato’ Mark Yeoh Seok Kah 1,000 — 374,413,244 65.44


Loh Mun San 250 — — —

By virtue of their interests in the shares of Yeoh Tiong Lay & Sons Holdings Sdn Bhd, the ultimate holding company, Tan Sri Dato’ Francis Yeoh

Sock Ping, Dato’ Yeoh Seok Hong, Dato’ Michael Yeoh Sock Siong and Dato’ Mark Yeoh Seok Kah are also deemed to be interested in the shares

of all subsidiaries of Yeoh Tiong Lay & Sons Holdings Sdn Bhd to the extent Yeoh Tiong Lay & Sons Holdings Sdn Bhd has an interest.

Directors’ Report 34

Statement by Directors 39

Statutory Declaration 39

Auditors’ Report to the Members 40

Income Statements 41

Balance Sheets 42

Statements of Changes in Equity 43

Cash Flow Statements 44

Notes to the Financial Statements 46

FinancialStatements


Directors ’ Report

The directors have pleasure in submitting their report together with the audited financial statements of the Group and of the Company for the financialyear ended 30 June 2002.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding, provision of incubation services including developing and incubating technologycompanies, internet contents of all descriptions and non-internet related businesses, provision of consultancy and advisory services in relation to thebusiness of electronic commerce or internet commerce solutions.

The principal activities of the subsidiaries are set out in Note 8 to the financial statements.

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

FINANCIAL RESULTS

Group CompanyRM RM

Net profit for the year 5,204,564 3,145,261

Unappropriated profits brought forward 1,326,284 1,222,058

Unappropriated profits carried forward 6,530,848 4,367,319

DIVIDENDS

No dividends have been paid or declared by the Company since the end of the previous financial year.

RESERVES AND PROVISIONS

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

ISSUE OF SHARES

During the financial year, the following shares were issued by the Company:-

Class of Shares Number Term of Issue Purpose of Issue

Ordinary 34,000,000 Restricted issue Listing on the MESDAQ market of the KLSE

Ordinary 1,000,000 Public issue Listing on the MESDAQ market of the KLSE


DIRECTORS

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

YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JPYBhg Tan Sri Dato’ Seri Dr Md Noordin Bin Md SopieeYBhg Dato’ Yeoh Seok Hong, JPYBhg Dato’ Michael Yeoh Sock SiongYBhg Dato’ Mark Yeoh Seok KahYBhg Dato’ Lau Yin Pin @ Lau Yen Beng (Appointed on 7.1.2002)Toh Muda Rizal Ashram Bin Tan Sri RamliTuan Syed Abdullah Bin Syed Abd KadirLoh Mun SanAmarjit Singh ChhinaLim Man Onn (Resigned on 1.11.2001)

In accordance with Article No. 83 of the Company’s Articles of Association, Messrs. Tuan Syed Abdullah Bin Syed Abd Kadir, Loh Mun San and AmarjitSingh Chhina retire from the Board at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

In accordance with Article No. 90 of the Company’s Articles of Association, YBhg Dato’ Lau Yin Pin @ Lau Yen Beng retires from the Board at theforthcoming Annual General Meeting and, being eligible, offers himself for re-election.

DIRECTORS’ INTERESTS

The directors holding office at the end of the financial year and their interests in the share capital of the holding company and the Company duringthe financial year were as follows:-

Holding company – YTL Corporation BerhadOrdinary Shares Of 50 sen Each

Balance Balanceat 1.7.2001 Acquired Disposed at 30.6.2002

Direct interests in the holding companyYBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP 9,087,728 181,754 — 9,269,482YBhg Tan Sri Dato’ Seri Dr Md Noordin Bin Md Sopiee 2,200 12,844 15,000 44YBhg Dato’ Yeoh Seok Hong, JP 3,091,628 61,832 — 3,153,460YBhg Dato’ Michael Yeoh Sock Siong 2,696,690 53,933 — 2,750,623YBhg Dato’ Mark Yeoh Seok Kah 1,585,400 31,708 — 1,617,108Tuan Syed Abdullah Bin Syed Abd Kadir 2,400 48 — 2,448Loh Mun San 2,000 40 — 2,040

Shares held by Yeoh Tiong Lay & Sons Holdings Sdn. Bhd.(ultimate holding company) in the holding company 664,466,390 21,284,667 — 685,751,057

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato’ Michael Yeoh Sock Siong and YBhg Dato’ Mark Yeoh Seok Kah are deemed to be interested in the shares of YTL Corporation Berhad held by Yeoh Tiong Lay & Sons Holdings Sdn. Bhd.



DIRECTORS’ INTERESTS (CONT’D.)

The CompanyOrdinary Shares Of RM1 Each

Balance Balanceat 1.7.2001 Acquired Disposed at 30.6.2002

Direct interests in the companyYBhg Tan Sri Dato’ Seri Dr Md Noordin Bin Md Sopiee — 102,600 — 102,600YBhg Dato’ Lau Yin Pin @ Lau Yen Beng — 15,000 — 15,000Toh Muda Rizal Ashram Bin Tan Sri Ramli — 15,000 — 15,000Tuan Syed Abdullah Bin Syed Abd Kadir — 30,000 — 30,000Loh Mun San — 100,300 — 100,300Amarjit Singh Chhina — 100,000 — 100,000

Shares held by YTL Corporation Berhad (holding company) in the Company 100,000,000 — — 100,000,000

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., which has a substantial interest in YTL Corporation Berhad,YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato’ Michael Yeoh Sock Siong and YBhg Dato’ Mark Yeoh SeokKah are deemed to be interested in the shares of the Company held by YTL Corporation Berhad.

By virtue of their substantial interests in Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., which has a substantial interest in YTL Corporation Berhad,YBhg Tan Sri Dato’ Francis Yeoh Sock Ping, JP, YBhg Dato’ Yeoh Seok Hong, JP, YBhg Dato’ Michael Yeoh Sock Siong and YBhg Dato’ Mark Yeoh SeokKah are also deemed to be interested in the shares of the subsidiaries of the Company to the extent of the Company’s interest in the respectivesubsidiaries as disclosed under Note 8 to the financial statements.

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangement subsisted to which the Company is a party, with the object or objects of enabling directorsof the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

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

INFORMATION ON THE FINANCIAL STATEMENTS

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

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

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


INFORMATION ON THE FINANCIAL STATEMENTS (CONT’D.)

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

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

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

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

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

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

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

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of thefinancial year which, in the opinion of the directors, will or may affect the ability of the Group and of the Company to meet their obligations as andwhen they fall due.

OTHER STATUTORY INFORMATION

The directors state that:-

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

In their opinion,

a the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transactionor event of a material and unusual nature; and

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



SIGNIFICANT EVENT DURING THE YEAR

On 21 June 2002, in connection with the listing and quotation of the entire issued and paid-up share capital of the Company on the Malaysian Exchangeof Securities Dealings and Automated Quotation Bhd (“MESDAQ”) market of the Kuala Lumpur Stock Exchange (“KLSE”), the Company issued:-

i 34,000,000 new ordinary shares of RM1.00 each at an issue price of RM1.10 per new ordinary share by way of a non-renounceable restrictedissue to the entitled shareholders of YTL Corporation Berhad payable in full on application on a basis of one (1) ordinary share for every five (5)ordinary shares held in YTL Corporation Berhad; and

ii 1,000,000 new ordinary shares of RM1.00 each at an issue price of RM1.10 per new ordinary share by way of public issue to the eligibleemployees and directors of the Company payable in full on application.

On 2 July 2002, the Company was officially listed on the MESDAQ market of the KLSE.

ULTIMATE HOLDING COMPANY

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

AUDITORS

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

On behalf of the Board,

TAN SRI DATO’ FRANCIS YEOH SOCK PING, JP

LOH MUN SAN

Dated: 31 October 2002Kuala Lumpur


Statement by D i rectors

We, TAN SRI DATO’ FRANCIS YEOH SOCK PING, JP and LOH MUN SAN, being two of the directors of YTL E-SOLUTIONS BERHAD, do hereby state that,

in the opinion of the directors, the accompanying financial statements are drawn up in accordance with applicable approved Accounting Standards in

Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2002 and of the results of the

operations and cash flows of the Group and of the Company for the year ended on that date.

On behalf of the Board,

TAN SRI DATO’ FRANCIS YEOH SOCK PING, JP

LOH MUN SAN

Dated: 31 October 2002

Kuala Lumpur

Statutory Declara t ion

I, LOH MUN SAN, being the director primarily responsible for the financial management of YTL E-SOLUTIONS BERHAD, do solemnly and sincerely declare

that to the best of my knowledge and belief the accompanying financial statements are correct, and I make this solemn declaration conscientiously

believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

LOH MUN SAN

Subscribed and solemnly declared at Kuala Lumpur on 31 October 2002

Before me:

SOH AH KAU, AMN

Commissioner for Oaths


Audi tors ’ Report to the Members of YTL E-Solutions Berhad (Incorporated in Malaysia)

We have audited the financial statements set out on pages 41 to 62. These financial statements are the responsibility of the Company’s directors.

Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,

evidence supporting amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant

estimates made by directors, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis

for our opinion.

In our opinion:-

a the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable approved Accounting

Standards in Malaysia so as to give a true and fair view of:-

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

Company; and

ii the state of affairs of the Group and of the Company as at 30 June 2002 and of the results of the operations and cash flows of the Group

and of the Company for the year ended on that date;

and

b the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and its subsidiaries have

been properly kept in accordance with the provisions of the said Act.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and

content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information

and explanations as required by us for these purposes.

The auditors’ report on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under

subsection (3) of Section 174 of the Companies Act, 1965.

LER LUM & CO.

(Firm Number: AF 0276)

Chartered Accountants

LUM TUCK CHEONG

1005/3/03(J/PH)

Partner of the Firm

Dated: 31 October 2002

Kuala Lumpur


I ncome Statements for the year ended 30 June 2002

Group Company

2002 2001 2002 2001

Note RM RM RM RM

REVENUE 3 17,924,161 4,373,179 6,476,188 2,046,034

COST OF SALES (8,128,564) (3,236,892) (2,070,426) (1,925,556)

GROSS PROFIT 9,795,597 1,136,287 4,405,762 120,478

OTHER OPERATING INCOME 2,942,301 3,056,470 2,879,678 3,055,425

ADMINISTRATION EXPENSES (3,934,170) (2,240,910) (2,535,834) (1,520,768)

PROFIT FROM OPERATIONS 4 8,803,728 1,951,847 4,749,606 1,655,135

TAXATION 5 (2,770,232) (578,000) (1,604,345) (461,000)

PROFIT AFTER TAXATION 6,033,496 1,373,847 3,145,261 1,194,135

MINORITY INTERESTS (828,932) (75,486) — —

NET PROFIT FOR THE YEAR 5,204,564 1,298,361 3,145,261 1,194,135

Earnings per RM1 share

Basic (sen) 6 5.06 1.73

The notes set out on pages 46 to 62 form an integral part of these financial statements.


Balance Sheets as at 30 June 2002

Group Company2002 2001 2002 2001

Note RM RM RM RM

PROPERTY, PLANT & EQUIPMENT 7 2,177,766 1,976,600 1,143,819 1,329,830

INVESTMENTS IN SUBSIDIARIES 8 — — 1,626,000 126,001

DEVELOPMENT EXPENDITURE 9 1,987,514 1,159,365 979,666 1,031,517

UNQUOTED INVESTMENT 331,200 331,200 331,200 331,200

GOODWILL ON CONSOLIDATION 10 7,939 — — —

CURRENT ASSETSTrade debtors 11 2,952,093 834,409 35,481 22,442Other debtors, deposits & prepayments 12 890,290 375,165 831,943 362,360Amount due from holding company 13 1,122,224 — 1,122,152 —Amount due from subsidiaries 8 — — 135,228 516,398Amount due from related companies 14 3,174,333 967,616 3,122,778 765,677Fixed deposits 15 141,676,233 98,334,031 136,572,104 97,962,986Cash & bank balances 122,570 295,768 31,592 253,483

149,937,743 100,806,989 141,851,278 99,883,346

LESS: CURRENT LIABILITIESTrade creditors 4,096,467 1,604,397 512,206 801,856Other creditors & accruals 16 1,726,991 506,725 247,540 87,872Amount due to holding company 13 — 11,037 — 11,184Amount due to related companies 14 71,836 70,224 68,235 69,924Provision for taxation 1,233,663 372,000 753,663 346,000

7,128,957 2,564,383 1,581,644 1,316,836

NET CURRENT ASSETS 142,808,786 98,242,606 140,269,634 98,566,510

147,313,205 101,709,771 144,350,319 101,385,058

FINANCED BY:-SHARE CAPITAL 17 135,000,000 100,000,000 135,000,000 100,000,000SHARE PREMIUM 3,500,000 — 3,500,000 —UNAPPROPRIATED PROFITS 6,530,848 1,326,284 4,367,319 1,222,058

SHAREHOLDERS’ FUNDS 145,030,848 101,326,284 142,867,319 101,222,058MINORITY INTERESTS 1,966,357 129,487 — —LONG TERM LIABILITIES

Deferred taxation 18 316,000 254,000 163,000 163,000Deferred revenue 19 — — 1,320,000 —

147,313,205 101,709,771 144,350,319 101,385,058



S ta tements of Changes in Equity for the year ended 30 June 2002

Share Share Unappropriated

capital premium profits Total

GROUP RM RM RM RM

Balance at 1 July 2000 50,000,000 — 27,923 50,027,923

Issue of share capital 50,000,000 — — 50,000,000

Net profit for the year — — 1,298,361 1,298,361

Balance at 30 June 2001 100,000,000 — 1,326,284 101,326,284

Issue of share capital 35,000,000 3,500,000 — 38,500,000


Balance at 30 June 2002 135,000,000 3,500,000 6,530,848 145,030,848

Share Share Unappropriated

capital premium profits Total

COMPANY RM RM RM RM

Balance at 1 July 2000 50,000,000 — 27,923 50,027,923

Issue of share capital 50,000,000 — — 50,000,000


Balance at 30 June 2001 100,000,000 — 1,222,058 101,222,058

Issue of share capital 35,000,000 3,500,000 — 38,500,000


Balance at 30 June 2002 135,000,000 3,500,000 4,367,319 142,867,319



Cash Flow Statements for the year ended 30 June 2002

Group Company2002 2001 2002 2001

RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIESProfit from operations 8,803,728 1,951,847 4,749,606 1,655,135

Adjustments for:-Allowance for doubtful debts 406,908 — — —Bad debts written off — 5,899 — —Development expenditure written off 225,262 — 225,262 —Depreciation 663,333 461,800 364,423 300,107Preliminary expenses brought forward written off — 2,000 — —Pre-operating expenses brought forward written off — 11,350 — —Excess of compensation received over

net book value of property, plant and equipment (10,440) — (10,440) —Property, plant & equipment written off 976 — 976 —Interest income (2,930,260) (3,056,470) (2,867,637) (3,055,425)

Operating profit/(loss) before working capital changes 7,159,507 (623,574) 2,462,190 (1,100,183)Increase in debtors (2,951,189) (1,176,700) (400,090) (384,802)(Decrease)/Increase in creditors 3,712,336 2,092,291 (129,982) 878,227Net changes in holding company (254,181) (457,239) (989,905) (457,092)Net changes in subsidiaries — — 237,739 (516,398)Net changes in related companies (2,205,105) (965,562) (2,358,790) (763,923)

Cash generated from/(absorbed by) operations 5,461,368 (1,130,784) (1,178,838) (2,344,171)Taxation paid (1,846,569) — (1,196,682) —Interest received 2,842,652 3,056,470 2,785,105 3,055,425

Net cash from operating activities 6,457,451 1,925,686 409,585 711,254

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of unquoted investment — (331,200) — (331,200)Acquisition of subsidiaries (net of cash acquired) — 893 — —Development expenditure paid (1,053,411) (1,028,599) (173,411) (900,751)Proceeds from disposal of property, plant & equipment — — — 225,839Purchase of property, plant & equipment (908,035) (2,230,828) (221,948) (1,652,521)Subscription of shares in existing subsidiaries — — (179,999) (126,001)Proceeds from insurance claim 53,000 — 53,000 —

Net cash used in investing activities (1,908,446) (3,589,734) (522,358) (2,784,634)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of shares to minority interests in a subsidiary 119,999 3,998 — —Proceeds from issue of shares 38,500,000 25,000,000 38,500,000 25,000,000

Net cash from financing activities 38,619,999 25,003,998 38,500,000 25,000,000

Net changes in cash and cash equivalents 43,169,004 23,339,950 38,387,227 22,926,620Cash and cash equivalents brought forward 98,629,799 75,289,849 98,216,469 75,289,849

Cash and cash equivalents carried forward 141,798,803 98,629,799 136,603,696 98,216,469


Group Company2002 2001 2002 2001

RM RM RM RM

Notes to Cash Flow Statements:-

a Cash and cash equivalents comprise:-Fixed deposits 141,676,233 98,334,031 136,572,104 97,962,986Cash & bank balances 122,570 295,768 31,592 253,483

141,798,803 98,629,799 136,603,696 98,216,469

b Analysis of investment in subsidiaries:-Company

2002 2001RM RM

By way of cash 179,999 126,001By way of capitalisation of development expenditure 1,320,000 —

1,499,999 126,001

c Summary of net assets of subsidiaries acquired in previous year:-

Group2002 2001

RM RM

Property, plant & equipment — 4,317Other debtors, deposits & prepayments — 38,773Cash & bank balances — 893Other creditors & accruals — (7,330)Deferred expenditure — 13,350Less: Minority interests — (50,003)

Net assets acquired — —Cash and cash equivalents in subsidiaries acquired — (893)Net cash acquired — (893)



Notes to the Financial Statements

1 GENERAL INFORMATION

The principal activities of the Company are investment holding, provision of incubation services including developing and incubating technologycompanies, internet contents of all descriptions and non-internet related businesses, provision of consultancy and advisory services in relation tothe business of electronic commerce or internet commerce solutions. The principal activities of the subsidiaries are set out in Note 8 to thefinancial statements.

The Company is a limited liability company, incorporated and domiciled in Malaysia. On 2 July 2002, the Company was listed on the MalaysianExchange of Securities Dealing & Automated Quotation Bhd (“MESDAQ”) of the Kuala Lumpur Stocks Exchange (“KLSE”).

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

11th Floor, Yeoh Tiong Lay Plaza55, Jalan Bukit Bintang55100 Kuala Lumpur

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

Level 3, Annexe BlockLot 10 Shopping Centre50, Jalan Sultan Ismail50250 Kuala Lumpur

2 SIGNIFICANT ACCOUNTING POLICIES

a Basis of accountingThe financial statements of the Group and of the Company have been prepared under the historical cost convention (unless stated otherwisein the significant accounting policies below) and comply with the provisions of the Companies Act, 1965 and applicable approved AccountingStandards in Malaysia.

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

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

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

Subsidiaries are companies in which the Group has power to exercise control over their financial and operating policies so as to obtainbenefits from their activities.

The consolidated financial statements include the financial statements of the Company and its subsidiaries. The results of the subsidiariesacquired or disposed off during the year are included in the consolidated Income Statement from the date of their acquisition or up to thedate of disposal.


2 SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

b Investment in subsidiaries and basis of consolidationThe excess or deficit of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets of the subsidiaries at

the date of acquisition is included in the consolidated Balance Sheet as goodwill or reserve arising on consolidation as appropriate.

The Company adopts the acquisition method of accounting in preparing the consolidated financial statements.

All significant inter-company transactions and balances and the resulting unrealised profits are eliminated on consolidation. Unrealised losses

resulting from inter-company transactions are also eliminated unless cost cannot be recovered.

The financial statements of the subsidiaries which have been consolidated are based on the financial statements as at 30 June 2002.

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

Goodwill is retained in the consolidated Balance Sheet at cost and an impairment loss is recognised when the directors are of the opinion

that there is a permanent diminution in its value.

d Property, plant & equipment and depreciationProperty, plant & equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

Depreciation on the property, plant & equipment is calculated on the straight line basis at rates required to write off the cost of the property,

plant & equipment over their estimated useful lives.

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

Computer infrastructure & equipment 10% – 20%

Furniture, fixtures & equipment 10%

Motor vehicles 20%

Telecommunication equipment 20%

Property, plant & equipment retired from active use and held for disposal are stated at the lower of net book value and net realisable value.

The carrying amounts of property, plant & equipment are reviewed at each Balance Sheets date to determine whether there is any indication

of impairment. Where an indication of impairment exists, the asset’s recoverable amount is estimated. An impairment loss is recognised

whenever the carrying amount of an asset exceeds its recoverable amount. The impairment loss is charged to the Income Statements. Any

subsequent increase in recoverable amount is reduced by the amount that would have been recognised as depreciation had the write-down

or write-off not occurred. Such subsequent increase in recoverable amount is recognised in the Income Statements.

e Development expenditureCapitalised development expenditure is stated at cost less accumulated amortisation and accumulated impairment losses.

Development expenditure is charged to the Income Statements as and when incurred except for development expenditure relating to specific

projects with technical and commercial viability and there is clear indication of the marketability of the products being developed. Such

development expenditure is capitalised and charged to the Income Statements on the straight line basis over a five-year period or over the

periods in which benefits are expected to be derived, whichever is shorter, commencing in the year in which the related sales are first made.



2 SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

f Taxation

The tax expense in the Income Statements represent taxation at current tax rate based on profit earned during the year.

Deferred taxation is provided, on the liability method, on all timing differences. Deferred taxation benefits are only recognised where there

is a reasonable expectation of realisation in the near future.

g Bad and doubtful debts

Known bad debts are written off and doubtful debts are provided for based on estimates of possible losses which may arise from

non-collection of certain debtors accounts.

h Investments

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

other than temporary in their value.

i Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably

measured. The specific recognition criteria for revenue are as follows:-

i Sale of goods and rendering of services

Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised when the significant risks

and rewards of ownership of the goods have passed to the buyers.

Revenue from rendering of services is recognised in the Income Statements in proportion to the stage of completion of the transaction

at the Balance Sheets date. The stage of completion is assessed by reference to the proportion that costs incurred to date that reflect

services performed bear to the total estimated costs of the transaction. Where the outcome of the transaction cannot be estimated

reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

ii Interest

Revenue is recognised as the interest income accrues, taking into account the effective yield on the asset.

j Deferred revenue

The development fee revenue arising from the provision and maintenance of backend infrastructure facilities and development of website

has been deferred and amortised over a five (5) year period.

Other deferred revenue, which is included in other creditors, is related to unutilised airtime of prepaid telephony services packages.

The deferred revenue will be progressively recognised as revenue based on actual airtime utilisation of the services.

k Cash and cash equivalents

Cash and cash equivalents consist of cash in hand, balances and deposits with banks and highly liquid investments which have an

insignificant risk of changes in value.


3 REVENUE

Group Company

2002 2001 2002 2001

RM RM RM RM

Sale of goods 2,466,458 2,384,040 1,982,694 2,006,234

Services rendered 15,457,703 1,989,139 4,493,494 39,800

17,924,161 4,373,179 6,476,188 2,046,034

4 PROFIT FROM OPERATIONS

Group Company

2002 2001 2002 2001

RM RM RM RM

Profit from operations is stated after charging/(crediting):-

Directors’ remuneration

– fees 80,000 — 80,000 —

– emoluments 550,656 378,120 363,940 378,120

Allowance for doubtful debts 406,908 — — —

Auditors’ remuneration

– statutory 15,000 7,000 7,000 3,500

– others 11,800 6,500 6,000 4,000

Bad debts written off — 5,899 — —

Depreciation 663,333 461,800 364,423 300,107

Development expenditure written off 225,262 — 225,262 —

Preliminary expenses brought forward written off — 2,000 — —

Pre-operating expenses brought forward written off — 11,350 — —

Property, plant & equipment written off 976 — 976 —

Rental of equipment 6,306 — 5,490 —

Rental of premises 144,000 156,000 144,000 156,000

Staff costs (excluding directors’ emoluments) 1,525,513 1,058,867 1,272,454 674,550

Fixed deposit interest (2,930,260) (3,056,470) (2,867,637) (3,055,425)



4 PROFIT FROM OPERATIONS (CONT’D.)Cost of inventories recognised as an expense to the Income Statements included in cost of sales were as follows:-

Group Company2002 2001 2002 2001

RM RM RM RM

Cost of inventories 2,398,351 2,122,862 1,845,164 1,925,556

The aggregate remuneration of directors categorised into appropriate components as at 30 June 2002 are as follows:-

Fees Salaries Bonus Others TotalRM RM RM RM RM

Executive directors 50,000 295,000 40,500 28,440 413,940Non-executive directors 30,000 — — — 30,000

The number of directors of the Company whose total remuneration fall within the following bands for the financial year ended 30 June 2002 are as follows:-

No. of DirectorsRange of remuneration Executive Non-Executive

Below RM50,001 5 3RM50,001 – RM550,000 2 —

5 TAXATIONGroup Company

2002 2001 2002 2001RM RM RM RM

Malaysian taxation– current 2,397,000 324,000 1,322,000 298,000– prior year 311,232 — 282,345 —Transfer to deferred taxation 62,000 254,000 — 163,000

2,770,232 578,000 1,604,345 461,000

The provision for taxation of the Group reflects an effective tax rate higher than the statutory tax rate due mainly to certain expenses which arenot allowable for tax purposes.

The Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 to frank the payment of dividends of approximatelyRM4,031,600 out of its unappropriated profits as at 30 June 2002. This is, however, subject to confirmation by the Inland Revenue Board.


6 EARNINGS PER SHARE (EPS)

Group

2002 2001

RM RM

Basic EPS

Net profit for the year/Net profit attributable to ordinary shareholders 5,204,564 1,298,361

Weighted average number of shares in issue for basic EPS 102,916,667 75,000,000

Basic EPS (sen) 5.06 1.73

7 PROPERTY, PLANT & EQUIPMENT

Cost

Balance Written Balance

Group at 1.7.2001 Additions off Others at 30.6.2002

RM RM RM RM RM

Computer infrastructure & equipment 1,993,385 417,667 — — 2,411,052

Furniture, fixtures & equipment 77,999 17,128 (1,148) — 93,979

Motor vehicles 247,300 53,200 — (53,200) 247,300

Telecommunication equipment 142,300 420,040 — — 562,340

2,460,984 908,035 (1,148) (53,200) 3,314,671

Accumulated Depreciation

Balance Charge for Written Balance

at 1.7.2001 the year off Others at 30.6.2002

RM RM RM RM RM

Computer infrastructure & equipment 398,664 480,792 — — 879,456

Furniture, fixtures & equipment 7,800 9,973 (172) — 17,601

Motor vehicles 49,460 60,100 — (10,640) 98,920

Telecommunication equipment 28,460 112,468 — — 140,928

484,384 663,333 (172) (10,640) 1,136,905



7 PROPERTY, PLANT & EQUIPMENT (CONT’D.)

Depreciation for

Net Book Value the year ended

at 30.6.2002 at 30.6.2001 30.6.2001

RM RM RM

Computer infrastructure & equipment 1,531,596 1,594,721 376,080

Furniture, fixtures & equipment 76,378 70,199 7,800

Motor vehicles 148,380 197,840 49,460

Telecommunication equipment 421,412 113,840 28,460

2,177,766 1,976,600 461,800

Cost

Balance Written Balance

Company at 1.7.2001 Additions off Others at 30.6.2002

RM RM RM RM RM

Computer infrastructure & equipment 1,327,222 156,800 — — 1,484,022

Furniture, fixtures & equipment 77,999 11,948 (1,148) — 88,799

Motor vehicles 247,300 53,200 — (53,200) 247,300

1,652,521 221,948 (1,148) (53,200) 1,820,121

Accumulated Depreciation

Balance Charge for Written Balance

at 1.7.2001 the year off Others at 30.6.2002

RM RM RM RM RM

Computer infrastructure & equipment 265,431 295,386 — — 560,817

Furniture, fixtures & equipment 7,800 8,937 (172) — 16,565

Motor vehicles 49,460 60,100 — (10,640) 98,920

322,691 364,423 (172) (10,640) 676,302


7 PROPERTY, PLANT & EQUIPMENT (CONT’D.)

Depreciation for

Net Book Value the year ended

at 30.6.2002 at 30.6.2001 30.6.2001

RM RM RM

Computer infrastructure & equipment 923,205 1,061,791 242,847

Furniture, fixtures & equipment 72,234 70,199 7,800

Motor vehicles 148,380 197,840 49,460

1,143,819 1,329,830 300,107

8 SUBSIDIARIES

a Company

2002 2001

RM RM

Unquoted shares, at cost 1,626,000 126,001

The subsidiaries of the Company are as follows:-

Place of Effective

Name of Company Incorporation Principal Activities Equity Interest

2002 2001

% %

Extiva Communications Sdn. Bhd. Malaysia Developing and marketing of VoIP telephony services 70 70

PropertyNetAsia (Malaysia) Sdn. Bhd. Malaysia Developing and operating a property portal 60 50

known as PropertyNetAsia.com.my



8 SUBSIDIARIES (CONT’D.)

b Summary of the effect of the acquisition of subsidiariesIn the previous financial year, the Company acquired two subsidiaries, namely Extiva Communications Sdn. Bhd. and PropertyNetAsia (Malaysia)

Sdn. Bhd.

i The effect of the acquisition of these subsidiaries on the financial results of the Group in the previous financial year was as follows:-

2002 2001

RM RM

Revenue — 2,476,410

Cost of sales — (1,451,307)

Gross profit — 1,025,103

Other operating income — 1,045

Administration expenses — (729,436)

Profit from operations — 296,712

Taxation — (117,000)

Profit after taxation — 179,712

Minority interests — (75,486)

Increase in Group’s net profits — 104,226

ii The effect of the acquisition of these subsidiaries on the previous year’s financial position of the Group was as follows:-

2002 2001

RM RM

Property, plant & equipment — 646,770

Development expenditure — 127,848

Trade & other debtors — 824,772

Deposits, cash & bank balances — 413,330

Inter-company balances — (314,612)

Trade & other creditors — (1,221,394)

Taxation — (26,000)

Deferred taxation — (91,000)

Minority interests — (129,487)

— 230,227

Purchase consideration — (126,001)

Increase in Group’s net assets — 104,226


8 SUBSIDIARIES (CONT’D.)

c Amount due from subsidiaries

The amounts due from subsidiaries pertain mainly to trade receivables and payments on behalf. The outstanding amounts are unsecured,

interest free and have no fixed terms of repayment.

Significant transactions with these subsidiaries during the financial year were as follows:-

Company

2002 2001

RM RM

Sale of computer equipment to

– Extiva Communications Sdn. Bhd. 133,792 147,335

Disposal of property, plant & equipment to

– Extiva Communications Sdn. Bhd. — 225,839

Advances paid/payments on behalf

– Extiva Communications Sdn. Bhd. — 136,670

– PropertyNetAsia (Malaysia) Sdn. Bhd. 10,380 143,431

The above transactions were entered into in the normal course of business and carried out on arm’s length basis.

9 DEVELOPMENT EXPENDITURE

This is in respect of expenditure incurred for the development of internet portal.

Group Company

2002 2001 2002 2001

RM RM RM RM

At beginning of the year 1,159,365 130,766 1,031,517 130,766

Capitalised during the year 1,053,411 1,028,599 173,411 900,751

Less: Charged to Income Statement (225,262) — (225,262) —

At end of the year 1,987,514 1,159,365 979,666 1,031,517

Included in the development expenditure are current charges of:-

Rental of office equipment 9,150 7,320 9,150 7,320

Staff costs 33,616 32,589 33,616 32,589



10 GOODWILL ON CONSOLIDATIONGroup

2002 2001

RM RM

At beginning of the year — —

Arising from the acquisition of additional interest in a subsidiary 7,939 —

At end of the year 7,939 —

11 TRADE DEBTORS

Group Company

2002 2001 2002 2001

RM RM RM RM

Trade debtors 3,359,001 834,409 35,481 22,442

Less: Allowance for doubtful debts (406,908) — — —

2,952,093 834,409 35,481 22,442

12 OTHER DEBTORS, DEPOSITS & PREPAYMENTS

Group Company

2002 2001 2002 2001

RM RM RM RM

Other debtors 123,007 15,145 83,468 10,840

Deposits 12,200 10,175 3,500 1,675

Prepayments 755,083 349,845 744,975 349,845

890,290 375,165 831,943 362,360


13 HOLDING COMPANIES

The Company is a 74.07% (2001: 100%) owned subsidiary of YTL Corporation Berhad, a public listed company incorporated in Malaysia and the

ultimate holding company is Yeoh Tiong Lay & Sons Holdings Sdn. Bhd., a company incorporated in Malaysia.

The amount due from/to holding company pertains mainly to trade receivable, advances and payments on behalf. The outstanding amount is

unsecured, interest free and has no fixed terms of repayment.

Significant transactions with its holding company, YTL Corporation Berhad, during the financial year were as follows:-

Group Company

2002 2001 2002 2001

RM RM RM RM

Revenue 1,178,448 90,502 1,177,868 90,110

Advances received/Receipts on behalf — 2,591,487 — 2,591,487

Advances paid/Payments on behalf 9,024 3,047,387 8,952 3,047,387

The above transactions were entered in the normal course of business and carried out on arm’s length basis.

14 AMOUNT DUE FROM/TO RELATED COMPANIES

The amounts due from/to related companies pertain mainly to trade receivables, rental charges and payments on behalf. The outstanding amounts

are unsecured, interest free and have no fixed terms of repayment.

Significant transactions with its related companies during the year were as follows:-

Group Company

2002 2001 2002 2001

RM RM RM RM

Revenue

– Autodome Sdn. Bhd. 9,842 — 9,842 —

– Batu Tiga Quarry Sdn. Bhd. 186,542 149,929 155,642 134,604

– Buildcon-Cimaco Concrete Sdn. Bhd. 65,747 — 47,356 —

– Buildcon Concrete Sdn. Bhd. 262,496 362,001 231,157 344,971

– Business & Budget Hotels (Penang) Sdn. Bhd. 113,243 89,687 — 1,979

– C.I. Readymix Sdn. Bhd. 91,171 — 90,707 —

– Intellectual Mission Sdn. Bhd. 31,270 — 31,270 —

– Prisma Tulin Sdn. Bhd. 47,548 — — —

– Island Air Sdn. Bhd. 24,416 — 24,416 —

– Sentul Raya Sdn. Bhd. 12,566 — 12,566 —

– Slag Cement Sdn. Bhd. 24,818 32,875 22,971 28,093

– Slag Cement (Southern) Sdn. Bhd. 7,525 — 5,460 —



14 AMOUNT DUE FROM/TO RELATED COMPANIES (CONT’D.)

Significant transactions with its related companies during the year were as follows:-

Group Company

2002 2001 2002 2001

RM RM RM RM

Revenue

– Star Hill Hotel Sdn. Bhd. 305,001 354,314 10,600 10,140

– Syarikat Kemajuan Perumahan Negara Sdn. Bhd. 9,912 — 9,912 —

– Syarikat Pembenaan Yeoh Tiong Lay Sdn. Bhd. 863,920 118,476 815,334 32,915

– YTL Cement Berhad 109,912 — 109,912 —

– YTL Cement Marketing Sdn. Bhd. 33,554 20,017 30,039 13,344

– YTL Hotels & Properties Sdn. Bhd. 165,642 261,837 163,977 261,110

– YTL Land Sdn. Bhd. 2,869,705 656,620 2,869,232 656,394

– YTL Power Generation Sdn. Bhd. 275,399 138,771 255,301 116,910

– YTL Technologies Sdn. Bhd. 27,266 59,029 18,480 50,463

– YTL Land & Development Berhad

(Formerly known as Taiping Consolidated Berhad) 45,536 — 45,536 —

– YTL Power Services Sdn. Bhd. 30,899 — 10,826 —

Rental of premises

– YTL Land Sdn. Bhd. 144,000 156,000 144,000 156,000

The above transactions were carried out in the normal course business and on arm’s length basis.

15 FIXED DEPOSITS

Group Company

2002 2001 2002 2001

RM RM RM RM

Licensed banks 97,881,423 95,371,597 95,399,386 95,371,597

Licensed finance companies 43,294,335 2,862,288 41,172,718 2,591,389

Other corporation 500,475 100,146 — —

141,676,233 98,334,031 136,572,104 97,962,986


16 OTHER CREDITORS & ACCRUALS

Group Company

2002 2001 2002 2001

RM RM RM RM

Other creditors 1,093,414 300,080 160,540 84,372

Accruals 633,577 206,645 87,000 3,500

1,726,991 506,725 247,540 87,872

Included in other creditors of a subsidiary is deferred revenue of RM730,696 (2001: RM Nil) in respect of unutilised airtime of prepaid telephony

services packages sold to a distributor.

17 SHARE CAPITAL

Company

2002 2001

RM RM

Authorised:-

1,000,000,000 ordinary shares of RM1 each 1,000,000,000 1,000,000,000

Issued and fully paid:-

At beginning of the year

– 100,000,000 (2001: 50,000,000) ordinary shares of RM1 each 100,000,000 50,000,000

Allotted during the year


At end of the year




18 DEFERRED TAXATION

Group Company

2002 2001 2002 2001

RM RM RM RM

At beginning of the year 254,000 — 163,000 —

Transfer from Income Statement 62,000 254,000 — 163,000

At end of the year 316,000 254,000 163,000 163,000

The deferred tax provided in the financial statements is in respect of timing differences between depreciation and corresponding capital allowances

on property, plant & equipment.

19 DEFERRED REVENUE

This represents the unearned development fees for the provision and maintenance of backend infrastructure facilities and development of website.

20 RELATED PARTIES

Controlling related party relationships are as follows:-

i The holding and ultimate companies as disclosed in note 13; and

ii Its subsidiaries as disclosed in note 8.

In addition to the related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party

transactions. The related party transactions were carried out on arm’s length basis.

Significant related party transactions with the associated companies of the respective holding companies during the financial year are as follows:-

Group Company

2002 2001 2002 2001

RM RM RM RM

Revenue

– East-West Ventures Sdn. Bhd. 248,801 255,256 14,752 27,485

– Jimah Power Generation Sdn. Bhd. 11,461 — 11,461 —

– Pahang Cement Sdn. Bhd. 97,082 21,767 93,034 21,331

– Prisma Tulin Sdn. Bhd. — 70,281 — 20,993


20 RELATED PARTIES (CONT’D.)

Significant balances as at year end with the associated companies of the respective holding companies are as follows:-

Group Company

2002 2001 2002 2001

RM RM RM RM

Trade debtors

– East-West Ventures Sdn. Bhd. 37,555 76,312 — 11,800

– Pahang Cement Sdn. Bhd. 21,832 — 21,555 —

21 EMPLOYEES INFORMATION

Group Company

2002 2001 2002 2001

RM RM RM RM

Staff costs (excluding directors’ emoluments) 1,559,129 1,091,456 1,306,070 707,139

The number of employees of the Group and of the Company (excluding directors) at the end of the financial year was 41 (2001: 27) and 33

(2001: 20) respectively.

22 CONTINGENT LIABILITY

The Company has given corporate guarantees amounting to RM300,000 (30.6.2001: RM Nil) to a financial institution for facility granted by the

financial institution to a subsidiary as follows:-

Total amount guaranteed Amount utilised

2002 2001 2002 2001

RM RM RM RM

Bankers guarantees 300,000 — 200,000 —



23 COMMITMENTS

Group

2002 2001

RM RM

Lease commitments:

Plant and equipment

Contracted but not provided for in the financial statements 350,000 —

24 SIGNIFICANT EVENT DURING THE YEAR

On 21 June 2002, in connection with the listing and quotation of the entire issued and paid-up share capital of the Company on the MESDAQ

market of the KLSE, the Company issued:-

i 34,000,000 new ordinary shares of RM1.00 each at an issue price of RM1.10 per new ordinary share by way of a non-renounceable

restricted issue to the entitled shareholders of YTL Corporation Berhad payable in full on application on a basis of one (1) ordinary share

for every five (5) ordinary shares held in YTL Corporation Berhad; and

ii 1,000,000 new ordinary shares of RM1.00 each at an issue price of RM1.10 per new ordinary share by way of public issue to the eligible

employees and directors of the Company payable in full on application.

On 2 July 2002, the Company was officially listed on the MESDAQ market of the KLSE.

25 SEGMENTAL INFORMATION

No segmental information is prepared as the Group’s activities are predominantly in one industry segment and occur predominantly in Malaysia.

26 EVENT AFTER BALANCE SHEET DATE

On 17 September 2002, the Company acquired two (2) ordinary shares of RM1 each in YTL Info Screen Sdn. Bhd. (“YTL Info Screen”) at cash

consideration of RM2 resulting in acquisition of 100% interest in YTL Info Screen. The intended principal activities of YTL Info Screen are to create,

provide and advertise web media and updated information on all commuters transportation.

27 AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENTS

The financial statements have been authorised for issue by the Board of Directors in accordance with the Directors’ Resolution dated 31 October 2002.

Lodged by : YTL E-SOLUTIONS BERHAD

Address : 11th Floor, Yeoh Tiong Lay Plaza

55, Jalan Bukit Bintang

55100 Kuala Lumpur

Tel. No. : 03-2142 6633

Proxy Form

I/We (full name as per NRIC/company name in block capitals)

NRIC/Company No. (new and old NRIC Nos)

CDS Account No. (for nominee companies only)

of (full address)

being a member of YTL e-Solutions Berhad hereby appoint (full name as per NRIC in block capitals)

NRIC No. (new and old NRIC Nos)

of (full address)

or failing him/her, the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the 10th Annual General Meeting ofthe Company to be held at Starhill 2, Level 4, JW Marriott Hotel Kuala Lumpur, 183 Jalan Bukit Bintang, 55100 Kuala Lumpur on Wednesday,18 December 2002 at 12.00 noon and any adjournment thereof.

My/Our proxy/proxies is/are to vote as indicated below:-

Dated this _______________________ day of ____________________, 2002.

No. of shares heldSignature of shareholder

Notes:1. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member to vote in his stead. Where a member

appoints two proxies, the appointments shall be invalid unless he specifies the proportions of his holding to be represented by each proxy.2. This form of proxy and the Power of Attorney or other authority (if any) under which it is signed or notarily certified an office copy thereof must

be lodged at the Registered Office, 11th Floor, Yeoh Tiong Lay Plaza, 55 Jalan Bukit Bintang, 55100 Kuala Lumpur not less than 48 hours beforethe time appointed for the Meeting.

3. In the case of a corporation, this proxy should be executed under its Common Seal or under the hand of some officer of the corporation dulyauthorised in writing on its behalf.

4. Unless voting instructions are indicated in the spaces provided above, the proxy may vote as he thinks fit.

NO. RESOLUTIONS FOR AGAINST

1. Receipt of Reports and Audited Financial Statements

2. Re-election of Mr Loh Mun San

3. Re-election of Mr Amarjit Singh Chhina

4. Re-election of Tuan Syed Abdullah Bin Syed Abd. Kadir

5. Re-election of Y Bhg Dato’ Lau Yin Pin @ Lau Yen Beng

6. Approval of the payment of Directors’ Fees

7. Re-appointment of Messrs Ler Lum & Co as Company Auditors

8. Authorisation for Directors to Allot and Issue Shares

9. Proposed Issue of Annual Report in CD-ROM Format

Solutions

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The Company SecretaryYTL e-Solutions Berhad11th Floor, Yeoh Tiong Lay Plaza55, Jalan Bukit Bintang55100 Kuala LumpurMalaysia

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ytl e-solutions berhad 236137-k · ytl e-solutions berhad 236137-k ytl e-solutions ... he was...

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