Annual Report - Bursa Malaysia Berhad

w w w . k l s e . c o m . m y

KUALA LUMPUR STOCK EXCHANGE BERHAD (30632-P)

A n n u a l R e p o r t 2 0 0 3

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K U A L A L U M P U R S T O C K E X C H A N G E B E R H A D

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• Corporate Information 4 - 7

• KLSE Highlights 8

• Executive Chairman’s Statement 12 - 45

• Market Report 46 - 50

• KLSE Composite IndexChart for Year 2003 52 - 53

• Shareholding and Trading on KLSE 54 - 55

• KLSE Berhad Board Members 58 - 59

• Group Board Members 60 - 64

• Board of Governors 65

• LFX Committee Members 66

• KLSE Group Management 67 - 76

• KLSE Group - Company Report and Profiles 77 - 97

• Calendar of Events 98 - 102

• Financial Statements 106 - 148

• KLSE Committees 149

• MSEB Committees 150

• KLSE Monthly High, Low And Closing Indices 151 - 153

• Market Indicators 154 - 161

• New Companies Listedon KLSE and MESDAQ Market 164 - 167

• Membership Report 168 - 171

• KLSE Members 172 - 177

contents

A N N U A L R E P O R T 2 0 0 3K U A L A L U M P U R S T O C K E X C H A N G E B E R H A D

The Stock Exchange ofMalaysia in BangkokBank building, 1967

Kuala Lumpur StockExchange in Damansara

Heights, 1973

Kuala Lumpur StockExchange in Exchange

Square, DamansaraHeights, 1987

From One Journey To AnotherFrom One Journey To Another

Kuala Lumpur Stock Exchange in Exchange Square,Bukit Kewangan, 1997

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K U A L A L U M P U R S T O C K E X C H A N G E B E R H A D A N N U A L R E P O R T 2 0 0 3

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A N N U A L R E P O R T 2 0 0 3

Corporate Information

KUALA LUMPUR STOCKEXCHANGE BERHAD (KLSE)(Company No. 30632-P)

Board of DirectorsDato' Mohammed Azlan Hashim

(Executive Chairman)Yusli Mohamed Yusoff

(Chief Executive Officer)Datuk Mohaiyani Shamsudin

(Deputy Chairman)Tan Kim Leong, JP Abdul Kadir Hj. Md. KassimAbdul Jabbar Abdul MajidPeter Leong Tuck Leng Datin Mariam Prudence YusofAbdul Rauf Ramli

Chief Operating OfficerDato’ Noorazman Abd Aziz

Chief Regulatory OfficerMd. Nor Ahmad

Company SecretaryAzman Shah Md. Yaman

Joint Company SecretaryYong Hazadurah Md Hashim

AuditorsMessrs. Ernst & Young

Tax ConsultantsMessrs. Ernst & Young

BankersBumiputra-Commerce Bank BerhadHSBC Bank Malaysia BerhadMalayan Banking BerhadSouthern Bank Berhad

Registered OfficeKuala Lumpur Stock Exchange Berhad6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-20267099 Fax: 03-20263684

MALAYSIA DERIVATIVESEXCHANGE BERHAD (MDEX)(Company No. 261937-H)

Board of DirectorsAbdul Jabbar Abdul Majid

(Executive Chairman)Yusli Mohamed YusoffDato’ Mohammed Azlan HashimDato’ Seri Hwang Sing LueYAM Tunku Dato' Seri

Nadzaruddin Tuanku Ja'afarAlvin Kwan Wing Yew Md. Nor AhmadMohd Zain OmarWong Fook Wah

Alternate DirectorKhairussaleh Ramli (alternate to Dato' Mohammed Azlan Hashim & Md Nor Ahmad)

Company SecretaryAzman Shah Md Yaman




BankersBumiputra-Commerce Bank BerhadMalayan Banking BerhadRHB Bank BerhadHong Leong Bank Berhad

Registered OfficeMalaysia Derivatives Exchange Berhad 10th Floor, Exchange SquareBukit Kewangan50200 Kuala Lumpur Tel: 03-20267099 Fax: 03-20263684

LABUAN INTERNATIONAL FINANCIAL EXCHANGE INC. (LFX) (Company No. LL02032)

Board of DirectorsDato’ Mohammed Azlan Hashim

(Chairman)Yusli Mohamed YusoffDato’ Ahmad Johan RaslanDato’ Dr. Awang Adek HussinAbdul Kadir Hj. Md. KassimPeter Leong Tuck LengDatin Mariam Prudence YusofEncik Md. Nor AhmadDato’ Noorazman Abd AzizDr Zaha Rina Zahari

Resident Company SecretaryAzizan Mohd Som

Joint Company SecretaryAzman Shah Md Yaman

Exchange Committee MembersDato’ Dr. Awang Adek Hussin

(Chairman)Abdul Kadir Hj. Md. KassimAbdul Jabbar Abdul MajidMohd Nasir AliProf. Madya Dr. Mohd Daud BakarMd. Nor AhmadVaseehar Hassan Abdul Razack Raymond Wong Jeremy C. CampsLouise Paul


BankersCitibank Berhad Citibank Malaysia (L) Ltd.Malayan Banking Berhad Maybank International (L) Ltd.

Registered OfficeLabuan International Financial Exchange Inc.Unit Level 7(B), Main Office TowerFinancial Park Labuan, Jalan Merdeka87000 Labuan Federal Territory, MalaysiaTel: 087-451359 Fax: 087-451379

Resident Company Secretary’s OfficeZI Labuan Trust Company Sdn BhdUnit Level 13(E), Main Office TowerFinancial Park Labuan, Jalan Merdeka87000 Labuan Federal Territory, MalaysiaTel: 087-451688 Fax: 087-453688

MALAYSIA SECURITIESEXCHANGE BERHAD (MSEB)(Company No. 635998-W)


(Chairman)Datuk Mohaiyani Shamsudin Yusli Mohamed YusoffPeter Leong Tuck Leng Abdul Kadir Hj. Md. KassimTan Kim Leong, JP




BankersMalayan Banking Berhad

Registered OfficeMalaysia Securities Exchange Berhad6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-20267099 Fax: 03-20263684

SECURITIES CLEARINGAUTOMATED NETWORK SERVICESSDN. BHD. (SCANS) (Company No. 109716-D)


(Executive Chairman)Datuk Mohaiyani ShamsudinYusli Mohamed Yusoff Tan Kim Leong, JPAbdul Kadir Hj. Md. KassimDato’ Seri Hj. Megat Najmuddin

Datuk Seri Dr Hj. Megat KhasAbdul Jabbar Abdul MajidPeter Leong Tuck Leng Datin Mariam Prudence YusofAbdul Rauf RamliDato’ Noorazman Abd Aziz


Joint Company SecretaryYong Hazadurah Md. Hashim



BankersMalayan Banking BerhadAlliance Bank BerhadSouthern Bank BerhadStandard Chartered Bank (M) Berhad

Registered OfficeSecurities Clearing Automated Network Services Sdn. Bhd.6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-20267099 Fax: 03-20263684

MALAYSIAN DERIVATIVESCLEARING HOUSE BHD (MDCH)(Company No. 358677-D)

Board of DirectorsYusli Mohamed Yusoff (Chairman)Md. Nor Ahmad (resigned w.e.f.

5 January 2004)Mohd Ridzal Mohd Sheriff

(Chief Executive Officer)Alvin Kwan Wing YewAhmad Hizzad BaharuddinLaren Tan Kian Seng

(resigned w.e.f. 5 January 2004)Ng Chin Leng

(resigned w.e.f. 5 January 2004)Noripah KamsoRaghbir Singh Bhart

(resigned w.e.f. 5 January 2004)Steven Lai Choon Lim

(resigned w.e.f. 5 January 2004)Dr Zaha Rina ZahariKhairussaleh Ramli

(resigned w.e.f. 5 January 2004)Dato’ Noorazman Abd Aziz



AuditorsPricewaterhouseCoopers

Tax ConsultantsPricewaterhouseCoopers

BankersMalayan Banking Berhad Citibank BerhadRHB Bank BerhadABN Amro Berhad HSBC Bank Malaysia Berhad

Registered OfficeMalaysian Derivatives Clearing House Bhd6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-20267099 Fax: 03-20263684

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Registered OfficeKLSE Information Services Sdn Bhd 6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-20267099 Fax: 03-20263684

KLSE TECHNOLOGY SDN BHD(Company No. 213411-K)


(Chairman)Ungku A. Razak Ungku A. Rahman

(Executive Director)Yusli Mohamed YusoffAbdul Jabbar Abdul MajidDato' Seri Hwang Sing LueAbdul Hamid Sh. Mohamed

(Resigned w.e.f. 1 December 2003)Md. Nor Ahmad

(Resigned w.e.f. 5 January 2004)Dato’ Noorazman Abd AzizRavindran Navaratnam





BankersMalayan Banking BerhadBank Utama (M) Berhad

Registered OfficeKLSE Technology Sdn Bhd6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-20267099 Fax: 03-20263684

KLSE TRAINING SDN BHDFormerly known as I-MESDAQ Sdn Bhd(Company No. 520353 U)


(Chairman)Datuk Mohaiyani ShamsudinYusli Mohamed Yusoff Tan Kim Leong, JPDatin Mariam Prudence YusofAhmad Tajuddin Abdul CarrimMd Nor Ahmad

(Resigned w.e.f. 31 December 2003)Abdul Hamid Sh. Mohamed

(Resigned w.e.f. 29 December 2003)






Registered OfficeKLSE Training Sdn. Bhd.6th Floor, Exchange SquareBukit Kewangan, 50200 Kuala LumpurTel: 03-20267099Fax: 03-20263684

KLSE PROPERTY MANAGEMENTSDN. BHD. (KPM)(Company No. 147792-H)


(Chairman)Yusli Mohamed YusoffTan Kim Leong, JPMd. Nor Ahmad Abdul Razak Mohd Amin






Registered OfficeKLSE Property Management Sdn. Bhd.6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-20267099 Fax: 03-20263684

YAYASAN BSKL (YBSKL) (Company No. 464552-M)

Board of Governors:Dato’ Mohammed Azlan Hashim

(Chairman)Abdul Kadir Hj. Md. KassimDatuk Hj. Abdul Karim HaronDato’ N. Sadasivan A/L N. N. PillayDato’ Che Mohd Annuar

Che Mohd SenawiTan Sri Dato’ Dr. Abdullah Sanusi

Hj. Ahmad (Ceased w.e.f. 29 December 2003)

Dato’ Mohd Salleh Abdul Majid (Resigned w.e.f. 1 May 2003)

Othman Abdullah Abdul Razak Mohd Amin





Registered OfficeYayasan BSKL6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-20267099 Fax: 03-20263684

MALAYSIAN CENTRAL DEPOSITORYSDN. BHD. (MCD) (Company No. 165570-W)


(Executive Chairman)Yusli Mohamed YusoffAbdul Rauf RamliDatuk Amirsham A. AzizAhmad Subri AbdullahChan Guan SengTan Kim Leong, JPDatuk Azlan Mohd ZainolDato’ Noorazman Abd Aziz





BankersBumiputra-Commerce Bank BerhadMalayan Banking BerhadAlliance Bank Berhad

Registered OfficeMalaysian Central Depository Sdn. Bhd.6th Floor, Exchange SquareBukit Kewangan50200 Kuala LumpurTel: 03-20267099 Fax: 03-20263684

KLSE INFORMATION SERVICES SDN.BHD. (KLSE IS)Formerly known as KLSE-Bernama Real-Time Information Services Sdn Bhd(KULBER)(Company No.152961-H)


(Chairman)Yusli Mohamed YusoffAbdul Jabbar Abdul Majid Md. Nor Ahmad

(resigned w.e.f. 5 January 2004)Abdul Hamid Sh. Mohamed

(resigned w.e.f. 1 December 2003) Fathi Ridzuan Ahmad Fauzi Dato’ Noorazman Abd Aziz

Corporate InformationKLOFFE INFORMATION SYSTEMSSDN. BHD. (KLOFFE INFO)(Company No. 319465 T)

Board of DirectorsMd Nor Ahmad

(Resigned w.e.f. 5 January 2004) Yusli Mohamed Yusoff Ungku A. Razak Ungku A. Rahman





BankersNil

Registered OfficeKLOFFE Information Systems Sdn. Bhd.6th Floor, Exchange SquareBukit Kewangan, 50200 Kuala LumpurTel: 03-20267099Fax: 03-20263684

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300

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100

0

Dec

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640.28

481.62

403.49

572.31

532.04

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906865

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773745


KLSE Highlights

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124.20

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206.34

193.20

88.90

304.71

135.93

No. of listed companies Total market valuation (RM billion)

Total trading volume (billion units) Total trading value (RM billion)

98

A N N U A L R E P O R T 2 0 0 3

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FromProgressto Success

Expanding Value Investments

• Diversified Sectors and Instruments

• Growing Choice of Securities Investments

• Sound Economic Fundamentals

• Good Value, High Growth Companies

• Efficient Capital Mobilisation

A N N U A L R E P O R T 2 0 0 3

Executive Chairman’s Statement

Dato’ Mohammed Azlan HashimExecutive Chairman

From One Journey To Another

It is in the course of life, that when one journey ends, another begins.

One such journey began in a year that challenged our faith–1998. Our faith in

rebuilding confidence in our economy and our markets after the financial crisis of

1997. In 1998, the question was: Do we still have faith? Do we only see markets

as they are, without seeing how they were, how they may yet become?

Through the challenges and changes of the intervening years, some may have

lost a little of that faith. For others, faith took time to restore. However, there were

enough of us amongst industry and market participants who decided to take

action in order for others to continue to have faith in us, in our markets and our

economy.

With the objective of restoring confidence, strengthening the securities industry

and capital market and maintaining a competitive position internationally, a series

of actions were undertaken for the securities industry and capital market in the

intervening years commencing in 1998 leading to the demutualisation of the

exchange in January 2004.

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Thus, a journey begun in times of uncertainty and doubt, came to a close in a year

optimistic with renewal and vigour. A year that will be renowned in the country’s history

as one of successful transitions and of implementing changes to overcome challenges.

The year 2003 marked the beginning of a new journey of transformation for nation, industry

and market. From success to achievements, from Kuala Lumpur Stock Exchange to Kuala

Lumpur Stock Exchange Bhd, from one journey to another.

1. Demutualisation

Demutualisation is a process of change – an enabler for the exchange to broaden its

interests and capability to better represent the needs and requirements of all

stakeholders, the industry, the capital market and the nation, and respond faster and

adapt more quickly to changes in the market place.

- Dato’ Mohd Azlan Hashim‘Briefing on Demutualisation’

21 November 2002

Demutualisation, from the legal perspective, is the conversion of KLSE from a non-profit

mutual entity limited by the guarantee of its members, into a public company limited by

shares. This was successfully completed on 5 January 2004 with the successful

conversion of KLSE to become the exchange holding company – Kuala Lumpur Stock

Exchange Berhad (KLSE Bhd) and its wholly owned subisidary Malaysia Securities

Exchange Berhad (MSEB) – the operating stock exchange.

From a business strategy perspective, demutualisation, supported by business

transformation initiatives, is an enabler and facilitator for the KLSE Group to further

enhance its corporate, organisational and governance structures to respond to the

challenges of a globalising and increasingly competitive capital market.

Demutualisation places the KLSE Group in a better position to respond to the collective

interests of its broader stakeholders and consequently to be more customer-driven and

market-oriented. It will also facilitate the enhancement of liquidity resulting in a more

attractive market place for the trading of securities, thereby benefiting all industry and

market participants, including the government, economy and the capital market.

1998 1999 2000 2001 2002 2003

KLSE CI (points) 586.13 812.33 679.64 696.09 646.32 793.94

Market Capitalisation 374.5 552.7 444.4 465.0 481.6 640.3(RM Billion)

Average Daily Volume 247.4 363.5 309.1 225.2 254.0 504.8(Million Units)

Average Daily Value 496.6 805.0 1,000.2 393.5 533.8 838.7(RM Million)

Total Number of 736 757 795 812 865 906Listed Companies

Kuala Lumpur Stock Exchange Market Performance: 1998-2003

The performance of Kuala Lumpur Stock Exchange (KLSE) in the financial year ended 31

December 2003 underscored the key initiatives implemented thus far. The Kuala Lumpur

Stock Exchange Composite Index (KLSE CI) closed the year at 793.94, posting a gain of

147.62 points or 22.84% compared to 646.32 at end-2002. Market capitalisation on 31

December was RM640.28 billion, an increase of RM158.66 billion or 32.94% compared

to RM481.62 billion at the end of 2002. Total volume transacted on the KLSE surged by

97.96% to 124.20 billion units compared to 62.74 billion units in 2002. This translated

into an average daily volume of 504.88 million units in 2003 compared to 253 million units

in 2002. Meanwhile total value traded increased by 56.48% to RM206.34 billion

compared to RM131.86 billion in 2002 or an average daily value of RM838.77 million in

2003 in contrast to RM531.68 million in 2002.

During the year, 58 new companies were listed, the highest number in 5 years. Of the 58

newly listed companies, 16 companies were listed on the Main Board, 22 on the Second

Board and 20 on the MESDAQ Market. In 2002, total number of companies listed were

51, with 22 companies each on the Main Board and Second Board and 8 on the

MESDAQ Market.

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The governance structures for the Exchanges of the Group have also been defined in

order to ensure that Board of Directors within the group are guided and driven by the

same standards to enhance corporate governance practices, transparency, public

interest and international best practices.

Malaysia Securities Exchange Berhad (MSEB)

MSEB DisciplinaryCommittee

MSEB ParticipationCommittee

MSEB ListingCommittee

MSEB Compensation

Fund

Board of Directors MSEB

• Governance Structure

The governance structure of the demutualised exchange reflects the best commercial

and governance practices. To achieve this objective, the demutualised exchange group

has adopted a single and consolidated governance structure for the whole

demutualised exchange group.

This is via the creation of a Board of Directors where representation is derived not just

from shareholders, but also public interest representatives. This ensures the objectivity

of the demutualised exchange in performing its regulatory functions, whilst pursuing its

business objectives.

Whilst the Board of Directors will be responsible for ascertaining policies of the

company, Board Committees will be delegated powers to perform specific executive

functions of the Board of Directors. What is important to note is that the governance

structure has incorporated essential elements of corporate governance practices,

transparency, public interest policies and international best practices.

Board of Directors

ExecutiveCommittee

Audit

Nomination andCompensation

InvestmentAdvisory

RiskManagement

Appeals

SecuritiesMarket

DerivativesMarket

Clearing, Settlement and

Depository

Board Committees Consultative Panels

KLSE Bhd Governance Structure

Governance Structure of Exchanges

Labuan International Financial Exchange Berhad (LFX)

Board of DirectorsLFX

ListingCommittee

LicensingCommittee

DisciplinaryCommittee

LFX ExchangeCommittee

Malaysia Derivatives Exchange Berhad (MDEX)

DisciplinaryCommittee

ParticipationCommittee

MDEX Fidelity

Committee

Board of Directors MDEX

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• Group Management Structure

The corporate structure of the demutualised exchange group has been established with

the main objective to enable more effective and efficient management of the

organisation, in balancing between commercial and regulatory functions and obligations

of the demutualised exchange.

The holding company has been established to house all of the subsidiaries of the

demutualised exchange. There are four core business units of the group, namely –

Exchanges, Clearing, Settlement & Depository, Information Services and Technology.

The regulatory functions of the group are centralised and independent of the business

units. The regulatory unit is headed by a Chief Regulatory Officer. Common support

services, such as Finance & Strategy, Corporate Services and Information Technology,

have been established and centralised to provide backing to the business units and

operations of the group.

The new management structure closely supports the full function of the demutualised

exchange in offering the consolidated services for equity, derivatives and offshore

investments, together with all its trade related services.

KLSE Bhd Group Management Structure

As the demutualised exchange moves forward, its business strategy will be focused on

three strategic principles:

• Boost market liquidity and velocity

• Strengthen revenue base by enhancing products and services

• Achieve operational scale and efficiency

Head, InternalAudits

Head, Exchange

Head, Clearing Settlement &

Depository

Head, Information

Services

Head, Exchange Systems

ChiefExecutive Officer

ChiefOperating Officer

Head, Human Resources

Head, Group Legal

Chief Financial Officer

Chief RegulatoryOfficer

Company Secretary & Compliance

Chief InformationOfficer

KLSE BHD – 3 KEY STRATEGIES, MOVING FORWARD

I. Boost Market Liquidity and Velocity

KLSE Bhd will boost market liquidity and velocity through three main initiatives:

First, it will aggressively market and promote itself to a wider pool of market

participants with diverse and complementary trading strategies, including relying

on strategic alliances with other exchanges to attract new participants.

Second, it will introduce innovative market models and enhanced order types

through its new trading platform, to improve price discovery, encourage trading

activity, and enhance information accessibility.

Third, it will broaden access to the market to encourage direct participation from

domestic and international investors and intermediaries who can direct new or

more trading volume to the market. However, this will be implemented in a phased

manner to retain the stability of the local stockbroking industry, in line with the

national industry consolidation policy.

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• Listing of Kuala Lumpur Stock Exchange Berhad

The timing of the eventual listing would depend on prevailing market conditions, as

prevalent in any capital market exercises. The listing of KLSE Bhd will facilitate greater

diversity of exchange ownership, thus allowing for enhanced public representation in

the governance of the demutualised Exchange. Upon listing, KLSE Bhd will have a

wider capital base with which to expand and further develop its scope and scale of

operations. KLSE Bhd would also be continually subject to high levels of transparency

and accountability, to the benefit of its stakeholders.

In contributing towards a more efficient investing environment, KLSE continued with

initiatives to improve market infrastructure.

2. Market Infrastructure

In enhancing market infrastructure, KLSE will continue to deploy relevant and

applicable technology to better serve the Malaysian Securities industry towards

achieving greater operational scale, efficiency, reliability and cost effectiveness.

- Dato’ Mohd Azlan Hashim‘Briefing to Stockbroking Member Companies on Technology Alliance’

18 July 2003

KLSE BHD – 3 KEY STRATEGIES, MOVING FORWARD (CONTD.)

II. Strengthen revenue base by enhancing products and services

KLSE Bhd recognises the importance of being more innovative in introducing

products and services to continue to meet the increasing sophistication and

demand of its customers, and to create a more diverse revenue base that is not

too dependent on equity trading volumes.

It will be more focused on market innovation, and will collaborate with all parties

to launch new products such as new and enhanced derivative contracts and

exchange-traded funds. In addition, it also plans to introduce new services such

as real time and value-added information services, and other listing services.

The current market framework can be enhanced by streamlining and recognising

the different market segments according to the needs of market participants, and

to further improve clarity and understanding of the market.

III. Achieve operational scale and efficiency

The exchange industry is one where scale is a very important factor. To this end,

KLSE Bhd plans to pursue various initiatives to achieve economies of scale and

streamline its operational efficiency. This includes embarking on its next

generation technology platform through a strategic partnership, and consolidating

equities and derivatives trading and clearing systems to achieve capital efficiency.

The Exchange has also been streamlining its organisational resources and will

continue to do so, taking advantage of automation opportunities from the new

technology system. However, while it plans to reduce staff requirements in various

operational areas, it will continue to selectively increase headcount to inject new

critical skills, such as sales and marketing, business development, corporate

finance, technology and risk management.

• Standardisation of Board Lots to 100 Units

On 26 May 2003, KLSE successfully completed and implemented the standard board

lot of 100 units for all securities listed and quoted on the KLSE.

The rationale for standardisation of board lot to 100 units is essentially to eliminate the

multiples board lot of 1,000 units, 200 units and 100 units into one single board lot of

100 units for all securities listed and quoted on the KLSE. The elimination of multiple

board lots reduces confusion among investors and enables easier computation of

stock prices for the investors and comparison of one’s portfolio value. Other objectives

for the introduction of a single board lot of 100 units is to reduce investor holdings of

odd lots. These odd lots shares which is less than 1,000 units are now more

marketable with the board lot size of 100 units. This will eventually creates greater

opportunity for retail investing leading to wider shareholding spread of securities and

more efficient price discovery, thus benefiting investors, issuers and intermediaries alike.

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The standard board lot of 100 units was implemented in 3 stages commencing early

April 2003 and successfully completed within 2 months. The phased approach

strategy was to ensure the rollout was carried out in a smooth and orderly manner and

to avoid unnecessary confusion to the market participants.

Upon full implementation on 26 May 2003, total odd lots reduced to 39.5 million. With

Standard Board Lot of 100 units, there was a reduction of odd lots from 578.9 million

(as at 4 April 2003) to 39.5 million (as at 26 May 2003) i.e. a total of 539.4 million shares

became more marketable. This represented a 93.2% reduction in odd lots. The bulk of

reduction in odd lots was in the Main Board, accounting for 80% of the overall

reduction.

Trading activities have increased significantly after implementation of the standard

board lot, assisted in part by positive market sentiments, i.e. the government stimulus

package, overall global equity sentiment and end of SARS and the Iraq war.

• Common Trading Platform

To continue to deploy relevant and applicable technology to improve market

infrastructure, KLSE initiated the development of the Common Trading Platform (CTP).

CTP will ensure KLSE’s trading system is equipped with functionality and features

which are on par with major global exchanges. In the long term it will enable KLSE to

achieve the architecture goals of an integrated package solution to standardise the

technology and platforms for the trading, clearing and settlement systems. This will

ensure IT delivery that is more reliable, available and serviceable and aligned to the

business strategy to create opportunities.

In 2003, KLSE completed the evaluation of CTP solutions; identification of ATOS

Euronext (AEN) as the potential solution provider followed by the signing of the Heads

of Agreement (HOA) between KLSE and AEN in July 2003. The HOA covers the CTP

implementation, the outsourcing study and creation of a joint venture IT company

between KLSE Bhd and AEN. By the end of 2003, KLSE with AEN had completed the

implementation study for the CTP and work on the design and development has

commenced, with a phased roll out program beginning at the end of 2004.

3. Regulations

In any system of checks and balances, everyone has to be involved.

Lest we forget, given time and opportunity - the irregular is always on the move,

evolving, testing the parameters of proper conduct for any loopholes, any

weaknesses.

For transparency and proper conduct to quickly become business practice and

corporate culture - all stakeholders - Industry participants, company directors,

corporate executives and of course regulators - must work collectively and

contribute positively towards the establishment of better corporate governance.

Dato’ Mohd Azlan Hashim‘International Conference on Corporate Governance

- Trends and Challenges in the Millennium’29 October 2002

As a front line regulator, KLSE continues to strengthen its efforts through balanced,

efficient and effective regulation of the markets and its participants to provide a secure,

fair and orderly regulatory environment that fosters investor confidence and enhances

market integrity.

In this respect, the Exchange will continue to improve its efficiency in surveillance,

monitoring for compliance and enforcing the Listing Requirements.

• Enforcement Actions

KLSE has completed 425 investigation cases with actions taken on 201 cases for

various breaches of the Listing Requirements during the financial year ended 31

December 2003 whilst during the 18-month period ended 31 December 2002, a total

of 437 investigation cases were completed for which actions were taken on 289 cases.

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Status of Investigation Cases on Public Listed Companies as at 31 December 2003

Type of Cases Cases Cases Total Cases Cases Cases Brought iniated handled completed outstandingForward during during the during the as at 31

from the financial financial year DecemberFinancial financial year ended ended 31 2003

period year ended 31 December Decemberended 31 31 2003 2003

December December2002 2003

1 Failure to comply with the policy on - 2 2 (1) 1Response to Unusual Market Activity/ Failure to promptly provide information or documents to the Exchange- Sections 99, 338 of MBLR- Clause 1.18 of SBLR- Part F of Chapter 9 of the LR- Part IV of Guidenance Notes 1 of

Chapter 7 of MMLR

2 Failure to comply with the share buy 1 8 9 (9) - back guidelines Chapter 12 of the LR

3 Failure to comply with requirements 144 129 273 (208) 65 on Corporate Disclosure Policy and Immediate Announcements- Sections 22-41, 335-341(excl.338) of

the MBLR- Clause 1.18, 3.4,3.11-3.16 of the SBLR- Chapter 9 (except for Part F,

Paragraphs 9.22- 9.26 of the LR- Part IV and V of Chapter 7 of MMLR

4 Failure to comply with requirements 28 33 61 (54) 7 on Transactions- Part 4 of the MBLR/ Part 5 of the SBLR - Chapter 10 of the LR- Chapter 4 and 6 of MMLR

5 Failure to comply with Approved 2 4 6 (5) 1 Accounting Standards - Section 65 of MBLR- Clause 3.27 of the SBLR- Paragraph 9.26 of the Listing

Requirements

6 Failure to comply with the 11 5 16 (14) 2requirements on Financial Conditions and Level of Operations- Paragraph 8.14 (PN4); and - Paragraph 8.16 (PN10) of the LR

7 Failure to comply with the Definitions - 8 8 (7) 1and Interpretation requirements- Chapter 1 of the LR

8 Failure to comply with General requirements 2 7 9 (6) 3 - Chapter 2 of LR

9 Failure to comply with New Issues of - 4 4 (3) 1Securities- Chapter 6 of LR

10 Failure to comply with Continuing 1 4 5 (3) 2 Listing Obligations- Chapter 8 of LR- Chapter 7 (except for Part IV and V) of

MMLR

Sub-total 193 204 393 (310) 83

Status of Investigation Cases on Public Listed Companies as at 31 December2003 (Contd.)

LR: Listing RequirementsMBLR: Main Board Listing Requirements

MMLR: Mesdaq Market Listing RequirementsSBLR: Second Board Listing Requirements

Type of Cases Cases Cases Total Cases Cases Cases Brought iniated handled completed outstandingForward during during the during the as at 31




11 Failure to comply with requirements 28 41 69 (64) 5on dealings in securities (by directors and principal officers)- Chapter 14 of LR- Chapter 12 of MMLR

12 Failure to comply with requirements - 1 1 (1) - for Advisers and Sponsors- Chapter 14 of MMLR

13 Failure to comply with Corporate - 2 2 (2) - Governance- Chapter 15 of LR

14 Suspension, Withdrawal, De-Listing 2 44 46 - 46and Enforcement- Chapter 16 of LR

15 Failure to release Quarterly Reports 13 7 20 (8) 12on time- Section 56A of MBLR / Clause 3.20A of

SBLR- Paragraph 9.22(1) of LR

16 Failure to furnish Annual Audited 17 17 34 (27) 7Accounts on time- Section 60(b) of MBLR / Clause 3.22 (b)

of SBLR- Paragraph 9.23(b) of LR

17 Failure to furnish Annual Reports on time 8 10 18 (13) 5- Section 60(a) of MBLR / Clause 3.22(a)

of SBLR - Paragraph 9.23(a) of LR

Total 257 326 583 (425) 158

Status of Investigation Cases on Public Listed Companies: 1998 - 2003

1998 1999 2000 2001 2002 2003

Cases brought forward for FYE N/A 11 35 108 249 257

Cases initiated during FYE N/A 98 200 373 445 326

Total Cases Handled N/A 109 235 481 694 583

Cases completed N/A 74 127 (232) (437) (425)

Cases outstanding 11 35 108 249 257 158

2726


Enforcement action taken against Public Listed Companies for the financialyear ended 31 December 2003

Type of Cases Number of cases

Caution Private Public Public Total Fine& Impress Reprimand Reprimand Reprimand RM

& Fine

1 Failure to comply with the policy on 1 - - - 1 - Response to Unusual Market Activity/ Failure to promptly provide information or documents to the Exchange- Sections 99, 338 of MBLR- Clause 1.18 of SBLR- Part F of Chapter 9 of the LR- Part IV of Guidance Notes 1 of

Chapter 7 of MMLR

2 Failure to comply with the share 1 3 2 - 6 - buy back guidelines - Chapter 12 of the LR

3 Failure to comply with requirements on 25 33 37 8 103 75,000 Corporate Disclosure Policy andImmediate Announcements- Sections 22-41, 335-341(excl.338) of

the MBLR- Clause 1.18, 3.4,3.11-3.16 of the SBLR- Chapter 9 (except for Part F,

Paragraphs 9.22- 9.26 of the LR- Part IV and V of Chapter 7 of MMLR

4 Failure to comply with requirements 4 23 3 4 34 200,000 on Transactions- Part 4 of the MBLR/ Part 5 of the SBLR - Chapter 10 of the LR- Chapter 4 and 6 of MMLR

5 Failure to comply with Approved 1 1 - - 2 - Accounting Standards - Section 65 of MBLR- Clause 3.27 of the SBLR- Paragraph 9.26 of the Listing Requirements

6 Failure to comply with the requirements 2 4 3 - 9 - on Financial Conditions and Level of Operations- Paragraph 8.14 (PN4); and - Paragraph 8.16 (PN10) of the LR

7 Definitions and intrepretation 1 6 - - 7 -- Chapter 1 of LR

8 Failure to comply with General - - 1 1 2 32,000 requirements - Chapter 2 of LR

9 Failure to comply with New Issues - - 1 - 1 -of Securities- Chapter 6 of LR

Sub-total 35 70 47 13 165 307,000

Types of cases

No. of cases 1998 1999 2000 2001 2002 2003

Caution & Impress N/A 1 23 19 38 37

Private Reprimand N/A 13 40 37 74 70

Public Reprimand N/A 14 19 26 52 55

Public Reprimand & Fine N/A 28 42 37 125 39

Total N/A 56 124 119 289 201

Enforcement action taken against Public Listed Companies for the financialyear ended 31 December 2003 (Contd.)

Type of Cases Number of cases

Caution Private Public Public Total Fine& Impress Reprimand Reprimand Reprimand RM

& Fine

10 Failure to comply with Continuing 1 - - - 1 -Listing Obligations- Chapter 8 of LR- Chapter 7 (except for Part IV and V)

of MMLR

11 Failure to release Quarterly Reports - - - 6 6 164,250on time- Section 56A of MBLR / Clause 3.20A

of SBLR- Paragraph 9.22(1) of LR

12 Failure to furnish Annual Audited - - 4 16 20 405,500 Accounts on time- Section 60(b) of MBLR / Clause 3.22 (b)

of SBLR- Paragraph 9.23(b) of LR

13 Failure to furnish Annual Reports on time 1 - 4 4 9 68,750- Section 60(a) of MBLR / Clause 3.22(a)

of SBLR - Paragraph 9.23(a) of LR

Total 37 70 55 39 201 945,500

LR - Listing Requirements

MBLR - Main Board Listing Requirements

MMLR - Mesdaq Market Listing Requirements

SBLR – Second Board Listing Requirements

Enforcement actions taken against Public Listed Companies: 1998 - 2003

2928


PN4 Companies as at 31 December 2003

• Practice Note No 4/2001 – Companies with Unsatisfactory Financial Condition

Since the introduction of Practice Note No 4/2001 (PN4) in February 2001 until

December 2003, 122 PN4 Companies were identified. Of these 122 PN4 Companies,

55 companies have regularised their financial position whilst 9 companies have been

delisted. As at 31 December 2003, there were 58 PN4 Companies, of which 33 were

Main Board companies and 25 were Second Board Companies. These 58 PN4

Companies are now at various stages of their restructuring with only 9 companies that

have yet to announce an appropriate restructuring plan.

PN4 Companies Total Main Board Second Board

No. of PN4 Companies 58 33 25

No. of companies that have obtained 32 18 14regulatory approvals of their plans but pending implementation

No. of companies that have submitted 17 10 7their plans to the relevant authorities but pending approvals

No. of companies that have not submitted 9 5 4 their plans to the relevant authorities for approvals

PN4 Companies Total Main Board Second Board

No. of PN4 Companies that KLSE has 23 10 13commenced de-listing procedures

No. of companies de-listed 9 2 7

No. of companies pending disposal of 3 3 -appeal against de-listing decision

No. of companies that the KLSE will await 8 3 5 the outcome of application to the relevant authorities

No. of companies pending due process on 3 2 1de-listing procedures

A N N U A L R E P O R T 2 0 0 3

PN4 Companies – De-listing Status as at 31 December 2003

On 6 January 2003, KLSE announced the commencement of the de-listing procedures

against PN4 Companies, which had not submitted their applications to the relevant

regulatory authorities for approval of plans to regularise their financial condition.

The commencement of de-listing procedures against the affected PN4 Companies is

necessary in the interest of continuing investor protection and maintenance of market

integrity.

However, prior to any decisions on affected PN4 Companies, KLSE continues to accord

due process to the affected PN4 Companies, including allowing these companies an

opportunity to make representations to KLSE as to why their securities should not be

de-listed from the Official List of the KLSE. Upon due consideration of the matter and

conclusion of the relevant due processes accorded, only then will KLSE make its decision.

KLSE continues to closely monitor the restructuring efforts by PN4 Companies with the

aim to hasten the pace of restructuring of the PN4 Companies. It is encouraging to note

that almost half of the PN4 Companies identified have succeeded in regularising their

financial condition whilst the majority of the remaining companies have reached

advanced stages in their plans to regularise their financial condition. With the completion

of the companies’ restructuring plans, there will be greater compliance with the on-going

listing requirements by the public companies listed on KLSE, which will ultimately

promote greater investor confidence in the marketplace.

3130


LISTING REQUIREMENTS - KEY RULE DEVELOPMENTS IN 2003

1. Amendments pursuant to Demutualisation

On 29 December 2003, the Exchange announced amendments to the Listing

Requirements for both the Main Board and Second Board and the MESDAQ

Market in consequence of the demutualisation of KLSE and the transfer of the

stock exchange business to Malaysia Securities Exchange Berhad ("MSEB").

These amendments were also aimed at enhancing the effectiveness and

efficiency of regulation of the securities market.

The key changes encompassed in the amendments include the following:

• rationalising the provisions for consistency with the relevant amendments to

the securities laws, including the addition and modification of relevant

definitions to cater for MSEB and the demutualised KLSE;

• deleting provisions relating to the preparation of accounts in accordance with

approved accounting standards of Malaysian Accounting Standards Board; and

• deleting provisions on minimum content of offer and offeree documents in

relation to take-overs and mergers and vetting of the same by MSEB.

These amendments shall take effect from 5 January 2004.

2. Subdivision of shares

On 17 November 2003, the Exchange announced amendments to the Listing

Requirements for both the Main Board and Second Board and the MESDAQ

Market to provide a framework for listed companies wishing to undertake a

subdivision of shares. These amendments provided an avenue for listed

companies with high priced shares to reduce the par value of their shares and

increase the number of shares, thereby reducing the price of shares to a more

affordable and attractive level.

These amendments, which took effect from 1 December 2003, prescribed

among other things:

• the criteria for eligibility to undertake a subdivision of shares;

• the requirements and procedures involved in relation to a subdivision of shares;

• the minimum content of relevant disclosures pertaining to subdivision of

shares; and the fees payable.

A N N U A L R E P O R T 2 0 0 3

LISTING REQUIREMENTS - KEY RULE DEVELOPMENTS IN 2003 (CONTD.)

3. Documents to apply for quotation

On 31 October 2003, the Exchange announced amendments to the Listing

Requirements for the Main Board and Second Board in relation to the

documents to be filed with an application for quotation. These amendments

were implemented in conjunction with the reduced timeframe for initial public

offerings announced by the Securities Commission on 29 October 2003.

Prior to these amendments, an application for quotation of securities by a listed

company was required to include a confirmation that all notices of allotment have

been issued and despatched to all successful applicants. Following these

amendments, such confirmation is no longer required. In substitution thereof, the

application for quotation is now required to include an undertaking that all

notices of allotment will be issued and despatched to all successful applicants

prior to the date for listing and quotation of the securities. The said amendments

took effect from 1 December 2003.

4. Share buy-backs

On 2 October 2003, the Exchange announced amendments to the Listing

Requirements for the Main Board and Second Board in relation to share buy

backs. The key changes encompassed in the said amendments are as follows:

• for the purposes of renewing an existing shareholder mandate for purchase of

own shares, listed companies have the option of either issuing a shareholders’

circular or alternatively issuing a statement (containing the minimum prescribed

information) accompanying the notice of general meeting;

• a listed company may appoint up to two Member Companies for the purpose

of purchasing its own shares or reselling treasury shares on the Exchange; and

• more flexibility is given in respect of the resale price of treasury shares.

These amendments, which took effect from 1 November 2003, were aimed at

facilitating listed companies in undertaking share buy-backs by allowing,

amongst others, greater flexibility in respect of the renewal of shareholder

authorisation for purchase of own shares. This in turn will assist in reducing

cost and expediting the process. These amendments were part of the

continuing efforts of the Exchange to enhance expediency and efficiency in

the market.

3332


LISTING REQUIREMENTS - KEY RULE DEVELOPMENTS IN 2003 (CONTD.)

5. Reduction of timeframe for listing and quotation of securities

On 25 August 2003, the Exchange announced amendments to the Listing

Requirements in respect of both the Main Board and Second Board and the

MESDAQ Market in relation to the reduction of timeframe for listing and quotation

of securities after receipt of the application for quotation, from 3 clear market days

to 2 clear market days after receipt of the application for quotation together with

the requisite documents, provided all documents are complete in all respects.

These amendments, which took effect from 1 September 2003, were part of the

continuing efforts of the Exchange to enhance efficiency in the market and reduce

time to market.

6. Rationalisation with Securities Commission Guidelines

On 25 August 2003, the Exchange announced amendments to the Listing

Requirements in respect of both the Main Board and Second Board and the

MESDAQ Market for the purpose of rationalisation with the guidelines issued by

the Securities Commission.

The said amendments in respect of the Main Board and Second Board relate to

the following key areas:

• admission criteria;

• advertisement of prospectuses;

• requirements pertaining to call warrants; and

• requirements pertaining to property trust funds.

The amendments in respect of the MESDAQ Market relate to the advertisement of

abridged prospectuses. These amendments took effect from 1 September 2003

and were intended to streamline the relevant Listing Requirements with the

Securities Commission’s guidelines and to remove duplication of regulation.

A N N U A L R E P O R T 2 0 0 3

Intermediaries, now more than ever, are facing the challenges of an increasingly

liberalised and competitive marketplace.

Recognising that investor capital is mobile internationally, more securities markets

offer comprehensive and efficient services at lower cost. To remain attractive and

competitive, the Malaysian securities market will need to continually seek efficiency

and innovation as a means to continued prosperity.

Additionally, cost reduction is not the only factor in enhancing the overall

competitiveness of the malaysian securities market. Greater compliance to

prudential standards and risk management are also significant to enhance

confidence and create a more competitive market.

Dato’ Mohd Azlan Hashim‘Annual Dialogue, Association of Stockbroking Companies Malaysia’

23 June 2003

4. Intermediary Development & Supervision

Just as KLSE continues to enhance regulations, initiatives continue to be developed for

intermediaries to meet the challenges of greater competition.

• Intermediary Development

A key initiative to further develop intermediaries is the consolidation effort to strengthen

the industry to establish a group of well-capitalised domestic stockbroking companies,

which can provide efficient and cost-effective intermediation services for investors.

It is envisaged that these stockbroking companies should also be robust and resilient

in managing risks inherent in the stockbroking business. More importantly, the

consolidation of stockbroking companies is to prepare the industry to face the

challenges of liberalisation and globalisation.

In general, mergers of the stockbroking companies pursuant to the consolidation

programme have progressed in the financial period under review. As at 31 December

2003, there are 38 stockbroking companies in operation, with a network of 55 branch

offices throughout the country.

3534


* A Universal Broker is a stockbroking company, which is permitted to offer additional range of products and services within the

capital market including corporate finance and private debt securities. To qualify as a Universal Broker, a stockbroking company

must meet various quantitative and qualitative criteria besides acquiring and merging with 3 or more stockbroking companies. The

emergence of universal brokers is part of the industry strengthening process to be more competitive.

** An EAF is a physical site, location or premises of a Stockbroking Company equipped with electronic devices that facilitate

investors to obtain investment advice and route orders in respect of shares transactions via the Stockbroking Company's front-

end trading system.

*** An EAF-PA provides the same facilities as that of an EAF. However,an EAF-PA is also permitted to station Dealer’s

Representatives at the site and is allowed to handle certain CDS and back-office operations.

Growth Indicators for Stockbroking Companies: 1998-2003

Consolidated for all stockbroking 1998 1999 2000 2001 2002 2003 Companies(as at 31.12.03)

No. of Stockbroking 64 64 63 55 40 38Companies (SBCs) in operations (3 UB)* (6 UB)* (6 UB)*

No. of Branches of SBCs 1 2 6 30 52 55in operations

Paid-up Capital 5791 6503 7.705 7.458 6.566 6.494(RM billion)

Reserves (RM billion) (857) (1551) (0.127) 0.916 1.136 1.174

Shareholder’s Funds 4934 4952 7.578 8.387 7.702 7.668(RM billion)

No. of conventional - - - - 2 8 Electronic Access Facilities (EAF)**

No. of Electronic Access - - - - 34 48Facilities with Permitted Activities (EAF-PA)***

Growth Indicators for Investor Activity: 1998-2003

INTERMEDIARY DEVELOPMENT-KEY ENHANCEMENTS IN 2003

• Flexibility granted to Universal Brokers and Non-Universal Brokers

To encourage further growth and expansion for stockbroking companies, flexibility

was granted to Universal Brokers and Non-Universal Brokers, which include:

• futures broking business by a Universal Broker’s licensed futures broking

subsidiary or related company being permitted at the Universal Broker’s branch

offices subject to conditions prescribed by SC.

• fund management services by a Universal Broker’s licensed fund management

services subsidiary or related company being permitted at the Universal Broker’s

branch offices subject to conditions prescribed by SC.

• dealings in debt securities by Universal Broker and Non-Universal Broker. In the

case of Non-Universal Brokers, such dealings are limited to the secondary

market (with the exception of sub-underwriting activities and acting as

placement agent) of listed debt securities or unquoted securities issued by a

public listed company, whilst for Universal Brokers, there are no similar limitations

imposed.

Year Todate 1998 1999 2000 2001 2002 2003

No.of nett CDS Accounts 2.38 2.39 2.74 2.82 3.00 3.23Opened (million)

No. of securities immobilised 155.84 170.65 190.09 201.00 234.33 263.84(billion)

No. of companies prescribed 738 759 799 822 878 934into CDS

Book Entry settlement of 168.09 249.66 325.37 380.47 443.56 566.30 traded securities (billion)

No. of Ordinary Transfer 6.15 6.82 7.55 8.19 8.93 9.59 transaction (million)

No of Record of Depositors 33,087 46,113 59,075 72,352 85,850 100,587 (ROD)

Category Cases Cases Total Cases Cases Cases Brought iniated handled completed outstandingForward during during the during the as at 31




Buying-in/potential short-selling 25 50 75 53 22

Alleged Defaulter 25 9 34 27 7

Potential misuse of clients’ account 17 12 29 11 18

Depository Account 43 65 108 28 80

Other Complaints of Improper Conduct 31 19 50 23 27 Against Dealer’s Representative

Complaint of Improper Conduct Against 19 8 27 13 14Stockbroking Companies

Potential False Trading / Market Rigging/ 191 18 209 66 143 Market Manipulation / Insider Trading

General Complaints 2 10 12 5 7

Total 353 191 544 226 318

INTERMEDIARY DEVELOPMENT-KEY ENHANCEMENTS IN 2003 (CONTD.)

• Electronic Client Ordering System (ECOS)

In enhancing competitiveness, more stockbroking companies began to make use

of Internet infrastructure in providing ECOS facilities to their clients. Stockbroking

companies' ECOS clients are given the option to access ECOS facilities via any

personal computer with Internet access devices (located anywhere in the world) or

to continue to use the dedicated remote terminal installed within the ECOS Intranet.

As at 31 December 2003, the Exchange has granted approval to 31 stockbroking

companies to implement ECOS.

• Electronic Access Facilities by Universal Brokers

The guidelines for Universal Brokers to set up electronic access facilities were

introduced by SC in August 2001. "Electronic access facility" (EAF) is a generic term

which refers to a range of physical sites, locations or premises which contain

facilities enabling clients to initiate orders or obtain market or investment advisory

information electronically. The introduction of the guidelines is in line with SC’s

efforts to create a framework for the orderly and effective implementation of

electronic commerce in the capital market.

The SC has on 16 May 2002 issued Practice Note 1- Guidelines on the

Establishment of Electronic Access Facilities by Universal Broker to complement

the aforesaid guidelines on EAFs. In essence, Universal Brokers are permitted to

offer a wider range of services at their EAFs. As at 31 December 2003, 48 EAFs

have been approved.

The additional activities permitted to be undertaken by Universal Brokers at their

EAF includes :

• placement of licensed dealer's representatives, futures broker's representatives

and dual licence holders

• opening and closing of trading accounts and/or securities accounts

• receipt and payment of clients monies

• marketing and selling of approved financial products and services provided by

Universal Brokers

• placement and utilisation of broker-front-end and Central Depository System

(CDS) terminals and/or servers at the electronic access facility.

3736


• Intermediary Supervision

During the period under review, 191 new investigation cases were initiated compared

to 499 cases in the previous financial period, a decline of 62%. Given that there has

been no let up in surveillance and monitoring for compliance, the decline is

encouraging as it represents a greater degree of compliance by participants during the

financial period under review. The drop is mainly in the area of suspected short-selling

and market manipulation cases which recorded a decreasing number of cases with

only 68 cases in the period ended 31 December 2003 compared to 362 cases in the

previous financial year period.

Effective 1 September 2003, investigation cases from Malaysian Central Depository

(MCD) were transferred to Marker Surveillance & Investigation and a new category of

case, ‘Depository Account’ has been included in the statistics. There were 43 cases

brought forward from previous financial year 2002, 65 cases initiated and 28 cases

investigated and completed during this financial year.

Status of Investigation Cases As At 31 December 2003

3938


Status of Investigation Cases: 1998 - 2003

Disciplinary Actions on Directors, Dealer’s Representatives and StockbrokingCompanies as at 31 December 2003:

Disciplinary Actions on Directors, Dealer’s Representatives and StockbrokingCompanies: 1998 - 2003

*Including 43 MCD cases brought forward on 1.9.03

Disciplinary Action Directors Dealer’s StockbrokingRepresentatives Companies

Struck Off - 2 -

Fined - 4 9

Suspension - - -

Reprimand 4 21 6

Total 4 27 15

Disciplinary Action Directors Dealer’s StockbrokingRepresentatives Companies

1998 - 26 -

1999 - 48 6

2000 - 20 -

2001 - 8 2

2002 - 9 16

2003 4 27 15

1998 1999 2000 2001 2002 2003

Cases brought forward N/A 182 304 371 276 353*

Cases Initiated N/A 460 472 299 499 191

Total Cases N/A 642 776 670 775 544

Cases Completed N/A 338 405 394 465 226

Cases Outstanding N/A 304 371 276 310 318

• Inspections

During the year under review, there were 106 inspections conducted in the following

areas:-

• 16 annual audits on stockbroking companies to determine their compliance with the

Rules of KLSE;

• 30 audits on Authorised Depository Agents ("ADA") to determine their compliance

with the Rules on Malaysian Central Depository ("MCD")

• 6 Readiness Audit on Universal Brokers (UB) to determine their readiness to

commence certain capital market activities; and

• 18 Readiness Audits to determine the readiness of stockbroking company branches

and Electronic Access Facilities with Permitted Activities, to commence operations.

The wealth of information and facilities provided by KLSE is an example of its

significant investment in one of the principal groups it serves – the investors.

KLSE has been unrelenting in its efforts to promote investments in the stockmarket

based on fundamentals and knowledge gained from understanding the market.

Investing hard earned money should not be determined by speculation and rumours.

The continued ability of investors to participate in KLSE, and invest well, is of

paramount importance to the exchange.

An informed investor is a more prudent investor.

- Dato’ Mohd Azlan Hashim‘KLSE Investors’ Week 2002’

23 September 2002

5. Investor Education

A N N U A L R E P O R T 2 0 0 3

4140


The effort to remain integrated with the international community continued in 2003 as

KLSE remained actively involved in various activities to ensure timely, accurate and

comprehensive information of Malaysia’s economic and investment opportunities

continues to reach the world.

No. of International Roadshows Organised 5

No. of fund managers met during Roadshows 62

No. of international organisations met (excl. Roadshows) 162

No. of International Conferences/Seminars/Forums Attended 21

Summary of International Relations Efforts for 2003:

In ensuring investors benefit from the enhancements implemented by KLSE Bhd, the

effort to keep investors updated through investor education and investor awareness

programmes continue to be organised.

For the period under review, a total of 38 informed investing briefings were conducted at

the network of Balai Maklumat BSKL in Johor, Kuantan, Penang and Kuching. These

briefings attracted in excess of 5,000 participants including investors, shareholders,

industry professionals, teachers and students.

Topics covered ranged from awareness and update on the stockmarket, principles of

smart investing, market fundamentals and investor rights. These briefings in turn, created

understanding and greater interest in the use of facilities and services offered by the

Public Information Centre and the network of Balai Maklumat BSKL which continued to

serve over 60,000 users for 2003.

KLSE also provided information kiosks on the Malaysian securities industry and the

capital market at two international events :

• The Non-Aligned Movement Summit from 19 to 26 February 2003

• The Malaysia Derivatives Exchange Annual Palm & Lauric Oils Conference from 17-19

March 2003

As in previous years, KLSE continues to contribute to industry effort in investor

education. KLSE expanded its participation in Minggu Amanah Saham PNB from 20 to

27 April 2003 by providing :

• Information Kiosk

• Consultations with representatives from stockbroking and futures broking companies

• Daily briefings for the duration of the event covering smart investing principles and

investment opportunities on KLSE

KLSE programmes organised during Minggu Amanah Saham PNB 2003 were very

successful and attracted over 80,000 participants.

Markets are not islands. Exchanges are not fortresses. Investor capital is like the sea,

with exchanges as the ports of call – each with the infrastructure, facilities,

investment opportunities – for the sea to bring in the right ships . It is therefore best

for exchanges to be ready for the ebb and flow in the tide of investor capital.

Thus, it is in learning from being part of a global operation, sharing knowledge and

experiences and understanding local requirements - that KLSE has instituted its own

measures, going forward.

- Dato’ Mohd Azlan Hashim‘World Federation of Exchanges:

Forum on Managing Exchanges in Emerging Economies’16 December 2002

6. International Relations

4342


Everyone has to account for performance.

There is no one performance more important than another. Scoring a winning goal

is never the effort of just one team member.

The making of a winning team takes all of learning, commitment, best practice,

talent, innovation, confidence and teamwork.

- Dato’ Mohd Azlan Hashim‘Handover Ceremony’

27 February 2004

7. Commendations

From one journey to another, from 1998 to 2003, from challenges to changes. In setting

the course of a journey that remains true to its destination, it would not have been

possible without the unwavering support and commitment of all parties working together

with KLSE, the Malaysian securities industry and capital market.

These were the women and men from all levels of industry and market participants – our

leaders, captains of industry, industry professionals - who had the courage of conviction

in making the right decisions, whilst substantiating it with unflinching effort and

commitment.

On behalf of the KLSE Board of Directors and Group Management, our sincere

appreciation to YAB Dato’ Seri Abdullah Ahmad Badawi, Prime Minister and Finance

Minister of Malaysia and to YABhg. Tun Dr Mahathir Mohamad, the recently retired Prime

Minister and Finance Minister of Malaysia. These leaders have continuously focused on

raising the standard of achievement to ensure change and progress for the capital

market and securities industry. Our appreciation also for the teamwork and support of

the Ministry of Finance, Bank Negara Malaysia, the Securities Commission, the

Companies Commission of Malaysia and related regulatory authorities.

• Participation in International Roadshows and Events

Annual international roadshows conducted continued in 2003, with roadshows

conducted in Tokyo, Hong Kong, London, Edinburgh, Boston and New York. Most of

these roadshows were with the participation of senior representatives from the KLSE

Group, Bank Negara Malaysia and Securities Commission. These meetings provided

the opportunity to provide the latest updates on the economic and investment

environment in Malaysia, address and clarify any concerns expressed and take on

recommendations for further improvements to the Malaysia investment environment.

The KLSE Group was also invited to speak and participate at various international

forums in several financial centres including Dubai and Hong Kong, and participation

at these events were maximised to promote Malaysia as an investment destination.

The KLSE Group also participated in the MIDA Trade and Investment Mission

delegation to Korea.

As part of the international promotional initiatives, the supporting effort implemented

was in the form of advertisements published in international publications and

newspapers to coincide with KLSE’s international roadshows. Additionally, articles on

the latest developments in relation to the Malaysian market were contributed for

publication in international magazines and journals.

4544


As Chairman and CEO respectively, both have been appointed based on established

track records, including in being well qualified, widely experienced and respected in their

chosen areas of expertise.

Both have also built a sound and consistent reputation for a high degree of commitment

towards achieving outstanding performance and results. We look forward to their

contribution in propelling KLSE Bhd and the Malaysian securities industry and capital

market to greater heights of capabilities and achievements.

With these appointments, what is important to remember is that there will continue to be

a group of qualified and experienced senior executives who lead organisations to achieve

success. Continued success, however, is always a collective effort – equally determined

by capable leaders and the support and co-operation of capable teams.

Finally, my best wishes to all staff of the KLSE Group - past, present and future. In

reflecting on the journey just ended, and another that has begun - we will realise in the

passage of service, team leaders and team members will come and go. What is

important is that the organisation continues to be the best it can be.

As long as there are journeys to be made and objectives to accomplish, the life of KLSE

as an organisation is shaped by continued excellence, growth and progress. Just as the

lives of the women and men making the journey for KLSE Bhd, should continue to be

one of excellence, growth and progress, insyaallah.

DATO’ MOHAMMED AZLAN HASHIM

Executive Chairman

Within the KLSE Group, our appreciation to the continued invaluable contribution and

unwavering support of members of the KLSE Committee and the recently appointed

Inaugural Board together with the various sub-committees of the Exchange and KLSE

Group.

To the board of directors of :

• Malaysia Derivatives Exchange Berhad (MDEX)

• Labuan International Financial Exchange Inc. (LFX)

• Securities Clearing Automated Network Services Sdn Bhd (SCANS)

• Malaysia Derivatives Clearing House Berhad (MDCH)

• Malaysian Central Depository Sdn Bhd (MCD)

• KLSE Information Services Sdn Bhd (KLSE IS)

• KLSE Technology Sdn Bhd (KLSE TECH)

• Malaysian Share Registration Services Sdn Bhd (MSRS)

• KLSE Property Management Sdn Bhd (KPM), and

• the Board of Governors of the Research Institute of Investment Analysts Malaysia

(RIIAM) and Yayasan BSKL

– thank you all for your dedication and commitment to change, continued growth and

progress.

I would also like to wish RIIAM and MSRS continued development. As part of the on-

going effort to streamline the operational and business objectives of the demutualised

exchange, KLSE disposed of its interest in RIIAM on 1 January 2004 and MSRS on 5

January 2004.

Besides everyone at KLSE Group, I would like to thank market and industry participants

and members of the media whom I have worked with and provided valuable support and

advice during my tenure as Executive Chairman of KLSE. Through the ups and downs,

through challenges and change – my appreciation and gratitude to all of you for the team

spirit and commitment to results that you have shown.

At the end of this journey and the beginning of another, on behalf of KLSE Bhd, we

welcome the appointments of Y.A.Bhg Tun Mohamed Dzaiddin Hj. Abdullah as Chairman

and Yusli Mohamed Yusoff as Chief Executive Officer, with effect from 1 March 2004.


KLSE Market Report

COMMENDABLE PERFORMANCE AND SIGNIFICANT INCREASE IN

TRADING ACTIVITY IN 2003

The Kuala Lumpur Composite Index (KLCI) finished the year at 793.94, posting a gain of

147.62 points or 22.84% compared to 646.32 at end-2002. Market valuation on 31

December was RM640.28 billion, an increase of RM158.66 billion or 32.94% compared

to RM481.62 billion at the end of 2002. Total volume transacted on the KLSE surged by

97.96% to 124.20 billion units compared to 62.74 billion units in 2002. This translated

into an average daily volume of 504.88 million units in 2003 compared to 253 million units

in 2002. Meanwhile total value increased by 56.48% to RM206.34 billion compared to

RM131.86 billion in 2002 or an average daily value of RM838.77 million in 2003 in

contrast to RM531.67 million in 2002.

During the year, 58 new companies were listed, the highest number in 5 years. Out of the

58, 16 companies were listed on the Main Board, 22 on the Second Board and 20 on

the MESDAQ Market. In 2002, total number of companies listed were 52, 22 companies

each on the Main Board and Second Board and 8 on the MESDAQ Market.

2003 was an exceptional year as it not only marked the sterling performance across

global equity markets, but also the ability of these markets to sustain their momentum in

the midst of much uncertainty. It was, after all, a year that unravelled a succession of

negative news such as the US -led war on Iraq, outbreak of the Severe Acute Respiratory

Syndrome (SARS) and terrorist attacks. Through it all, the Asian economies and stock

markets had remained fairly resilient. Positive fundamentals shone, as manifested in

Asia’s growing economic confidence, accommodative monetary stance, stronger export

data and also an improving risk appetite for Asian equities. The KLSE was no exception,

finishing the year with an impressive double-digit growth of 22.84% after three years of

modest performance.

MARKET PERFORMANCE AND INTERNATIONAL UNCERTAINTY

Year 2003 began on a quiet note, driven by sentiment rather than fundamentals due to

uncertainty in external issues. The uncertainty was mainly due to the sluggish outlook for

global economic growth, threat of a US-Iraq war and its consequence on global

economy and markets. Adding to the gloom were rising oil prices and lower consumer

confidence in the US. Despite the negative development globally, news that the

government-backed asset management company, Valuecap Sdn Bhd, had begun

operations in January caused some excitement in the market. Within 8 days following

news of Valuecap’s operations, the CI gained 49 points, pushing the CI to 675.87.

However, the excitement was short-lived as market risks remained high. Rising

geopolitical worries, once again, weighed down sentiment on the KLSE. Investors

exercised caution, resulting in thin trading activity. At end-February, the CI broke through

the 650-support level, to close at 646.80.

When bombs were dropped over Baghdad in March, the initial expectation was a swift

end to the US-led war in Iraq. However, the expectation gave way to fears that the war

might prolong after strong resistance shown by the Iraqi forces. The announcement by

the acting Prime Minister of the 10 measures to boost the Malaysian capital market was

positively regarded by analysts but was weighed down by caution that the economic and

financial market situation could be adversely affected.

Performance of Indices on the Kuala Lumpur Stock Exchange in 2003

4746

0

100

200

300

400

500

600

700

1997 1998 1999 2000 2001 2002 2003

Main Board Second Board MESDAQ Market

444(25)

454(6)

282(22)

474(10)

499(12)

283(11)

296(26)

1(1)

3(2)

520(6)

292(14)

561(22)

292(22)

12(8)

598(16)

276(22)

32(20)4

(1)

264(63)

0

MESDAQ MKT152.25

0.1 0.2 0.3

82.9%

74.8%

43.2%

38.8%

33.9%

33.2%

31.3%

28.8%

24.6%

24.4%

24.0%

23.2%

22.8%

18.3%

17.7%

0.4 0.5 0.6 0.7 0.8 0.9

MINING338.7

2ND-BOARD140.64

PROPERTY750.7

TECHNOLOGY60.3

FINANCE6472.17

INDUSTRIAL1772.39

CONSUMER216.29

CONSTRUCTION187.97

EMAS195.57

IND-PROD81.39

SYARIAH122.86

COMPOSITE793.94

TRAD/SERV115.34

PLANTATION2180.93

per cent change(figures on vertical axis indicate closing levels)

Number of Companies Listed by Board(Numbers in bracket indicate new listings for the year)

4948


KLSE Market Report

INTEREST IN OIL AND GAS, WATER SECTORS

Trading activity in October continued to focus on stocks deemed to benefit from the

2004 Budget proposals such as those in the oil and gas, plantation, property and

construction. Water-related stocks gained following news of the Government’s projected

multi-billion ringgit spending plan in water supply infrastructure whilst interest in oil and

gas stocks returned on talk of Shell striking a new oilfield off Sabah coast and on the

announcement by Petronas that it will open seven new deepwater blocks for oil

exploration. Plantation stocks also attracted investors’ buying interest following higher

CPO prices. Before the month ended, Plantation Index hit the year’s high of 2240.57.

UPGRADE IN SOVEREIGN RATING AND MARKET HITS 18-MONTH

HIGH IN OCTOBER

Meanwhile, in early October, Standard & Poor’s upgraded Malaysia’s foreign currency

credit rating to ‘A-‘, putting Malaysia on par with South Korea. The upgrade attracted

foreign portfolio inflows, catapulting the KLCI to surpass the 800-point level for the first

time in nearly 18 months. The highest trading value for the year of over RM2.5 billion was

also transacted in early October. The smooth hand-over of the premiership was well

received by investors. The CI hit the year’s high of 817.12 on 31 October, the day Tun Dr

Mahathir Mohamed handed over his post as the prime minister of Malaysia, after 22

years of service, to Datuk Seri Abdullah Ahmad Badawi. Also in October, Astro All Asia

Networks Plc (Astro), the biggest IPO in 2003, made its debut on the KLSE Main Board.

BEST PERFORMER IN 2003 – MESDAQ MARKET

Trading activity on the MESDAQ Market had been improving since June on growing

market awareness, improved confidence and attractive value recognition of its stocks. In

early November, the MESDAQ Market Index touched the year’s high of 165.08, posting

a gain of 126% from the year’s low of 72.89 in early May. The index was the best

performing index on KLSE in 2003, registering a gain of 82.88% during the year.

Market weakness returned in mid-November, taking the cue from developments in the

US and the region. Investors in the US were cashing-in on gains made in the stock

markets as they feared that the market had risen too far in the recent rally. Weakness in

the US dollar against most major regional currencies also prompted active selling in

technology-related stocks and stocks of exporters in the region on fear that the value of

their overseas sales will erode. Some investors cited fears of a potential rising trend in

global interest rates after Australia and Britain announced interest rate hikes. Concern

that rising oil prices would hike costs also dampened sentiment.

SET, Thailand772.15

0 0.2-0.2 0.4 0.6 0.8 1 1.2 1.4

116.60%

JSE Composite, Indonesia691.90

62.82%

PSE Composite, Philippines1,442.37

41.63%

Hang Seng Composite, Hong Kong12,575.94

34.92%

Weighted, Taiwan5,890.69

32.30%

Straits Times, Singapore1,764.52

31.58%

KSE Price, South Korea810.71

29.19%

Nikkei-225, Japan10,676.64

24.45%

KLSE Composite, Malaysia793.94

22.84%

Shanghai-A Shares, China1,569.13

10.57%

Shanghai-B Shares, China104.94 -7.55%

per cent change(figures on vertical axis indicate closing levels)

Performance of Key Regional Indices in 2003

RETURN OF INVESTORS’ CONFIDENCE AND INTEREST

Interest returned to the KLSE in late May. The upturn began after the announcement of

the RM7.3 billion economic stimulus package on 21 May, which fostered optimistic

expectation of a boost to domestic demand and economic growth. Trading activity also

saw an improvement following the full implementation of smaller board lots of 100 units

each. The abating SARS epidemic within the region also helped sentiment. Globally,

financial and capital markets drew strength from the returning consumer confidence in

the US economy. The CI breached the 700-mark on 2 July, and on the following day, total

number of shares traded exceeded the one billion mark while total value exceeded RM2

billion. After touching the 730 level in early July, the market went into a consolidation

phase as investors cashed-in their profits. However, interest in the market remained

strong, supported by Technology and MESDAQ Market stocks on optimism of a recovery

in the global technology sector. Average daily volume exceeded half a million units during

the month, an improvement over the average daily volume of 284 million units in the first

six months of the year. Oil and gas stocks caught investors’ interest in July, following the

discovery of new oil reserves in Kikeh, off the coast of east Malaysia.

The upbeat sentiment was further boosted by a spate of upbeat corporate results which

showed that the impact of the Iraq war and SARS were not as bad as expected earlier.

The CI was also bolstered in September, in its bid to catch up with other regional

markets, which had been advancing on improved economic outlook in the US.

5150


Market activity was lackluster in December. While some fund managers closed their

books early after performing handsomely during the year, others were waiting for further

developments on government-related projects which had been awarded to contractors,

as the signal from the government was that it will be focusing on high priority

development projects.

20

0

500

0

1000

1500

2000

250

3000

Jan-02

40

60

80

100

120

140

160

180

200

Feb-02

Mar-02

Apr-02

May-02

Jun-02

Jul-02

Apr-03

Jul-03

Nov-03

Dec-03

Ind

ex

Volum

e (units) & Value (R

M)

millio

n

Volume Value MESDAQ Market Index

Aug-02

Sep-02

Oct-02

Nov-02

Dec-02

Jan-03

Feb-03

Mar-03

May-03

Jun-03

Aug-03

Sep-03

Oct-03

Jan-02

Feb-02

Mar-02

Apr-02

May-02

Jun-02

Jul-02

Apr-03

Jul-03

Nov-03

Dec-03

Market Valuation No. of Cos

Aug-02

Sep-02

Oct-02

Nov-02

Dec-02

Jan-03

Feb-03

Mar-03

May-03

Jun-03

Aug-03

Sep-03

Oct-03

0

55

32

12

10

15

20

25

30

35

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Num

ber

of

List

ed C

om

pan

ies

Market Valuatio

n(R

M b

illion)

High Low

MESDAQ Market Index: 177.53 72.89(26/03/02) (07/05/03)

Volume (units): 321.51m 1,000(28/08/03) (14/01/02)

Value (RM): 176.37m 700(28/08/03) (18/01/02)

High Low

Market Valuation: 3.91 0.27(30/12/03) (19/03/02)

MESDAQ Market - Index, Volume, Value2002 - 2003

MESDAQ Market - Market Valuation, Number of Companies Listed2002 - 2003

KLSE Market Report

Volume Value Composite

Volum

e (Units)/Value (R

M)

(Millio

n)

2000

4000

6000

8000

10000

12000

0

11-J

ul18

-Jul

25-J

ul1-

Aug

8-A

ug15

-Aug

22-A

ug29

-Aug

5-S

ep12

-Sep

19-S

ep26

-Sep

3-O

ct10

-Oct

17-O

ct24

-Oct

31-O

ct7-

Nov

14-N

ov21

-Nov

28-N

ov5-

Dec

12-D

ec19

-Dec

26-D

ec31

-Dec

Aug 4: Khazanahcall warrants listedon KLSE

Oct 8: S&P raisesMalaysia's sovereignrating to A- from BBB+

Oct 28: SC reduces time tomarket for IPO's from 25 to13 market days

Oct 31: Datuk SeriAbdullah Ahmad Badawisworn-in as 5th PM

Aug 27: 2Q GDPgrew at 4.4%year-on-year

Sep 22: Dollar declines afterG7 meet urged Asian nationsto accept flexible exchangerates

Dec 4: Listing ofKhazanahsecond-tranchecall warrants onKLSE

Sep 12: Tablingof Budget 2004

793.94

Ind

ex

100.00

3-Ja

n

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00

10-J

an17

-Jan

24-J

an31

-Jan

7-Fe

b14

-Feb

21-F

eb28

-Feb

7-M

ar14

-Mar

21-M

ar28

-Mar

4-A

pr11

-Apr

18-A

pr25

-Apr

2-M

ay9-

May

16-M

ay23

-May

30-M

ay6-

Jun

13-J

un20

-Jun

27-J

un4-

Jul

Jan 13: Valuecapbegins operation

End-Jan - Feb 17:Uncertainties overpossibility of US-ledwar against Iraq

Mar 11: DPMannounces 10measures toenhancecapital market Apr 8: US-led

forces controlparts of Baghdad

Mar 29: US-ledforces attack Iraq May 21:

RM7.3 billion EconomicStimulus Packageunveiled. BNM lowersintervention rate by 50bpto 4.5%

Apr 3: MerrillLynch upgradesMalaysia's equitymarket to overweight

May 2: USPresidentBush declaresmajor fighting inIraq as over

End-Mar - Apr:Concerns overimpact of SARS

May 26: Fullimplementation ofsmallerboard lots of 100shares each

633.50

5352


KLSE COMPOSITE INDEXChart for Year 2003

5554


Shareholding and Trading on KLSE

A N N U A L R E P O R T 2 0 0 3

Local and International Shareholdings vs. Market Capitalisation

Trading Pattern Local and International

Local International

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

1998 1999 2000 2001 2002 2003

RM

bill

ion

72.6%

83.1%

78.0%

16.9%

22.0%71.1%

67.7%

28.9%

32.3%

76.0%

24.0%

27.4%

Participation by local investors continued to be significant on the MSEB. For 2003, local investors comprised

76.0% based on total trading value of RM412.1 billion, compared to 67.7% in 2002 and 71.1% in 2001.

Trading activity of international investors has also been at significant levels. Based on submissions by

stockbroking companies, international investors accounted for 24.0% of total trading activity in the MSEB

in 2003.

The presence of trading activity attributable to international investors on MSEB demonstrated that international

investors have continued to be a major player in our market.

Source: Figures were based on the submissions by stockbroking companies.

Mar

ket

Valu

e (R

M b

illio

n)

Market C

apitalisatio

n (RM

billio

n)

0

100

0

100

200

300

400

500

600

700

200

300

400

500

600

1998

Local International Market Capitalisation

1999 2000 2001 2002 2003

76.9%

23.1%21.8%

19.5% 18.5% 18.1%19.0%

78.2%

80.5% 81.5% 81.9%

81.0%

International shareholding on the MSEB remains significant. In percentage terms, based on market value,

the shareholding of international investors stood at 19.0% as at December 2003, compared to 23.1% as at

December 1998. While this represented a decrease of 4.1%, in absolute terms, the market value of international

shareholding has increased from RM86.04 billion as at December 1998 to RM120.77 billion as at December

2003, an increase of RM34.73 billion or 40.4%.

The total market value of securities immobilised in the Central Depository System (CDS) increased from

RM372.3 billion as at December 1998 to RM637.1 billion in December 2003, or a 71.1% increase. This was

attributable to the number of new listings (188 in all) and the general market appreciation since the crisis

in 1998. [KLSE Composite Index (KLSE CI) end-December 1998: 586.13 versus KLSE CI end-December 2003:

793.94]

Source: Figures were based on CDS information.

As at 31 December 1998Local shareholding = RM286.28 billionForeign shareholding = RM86.04 billion

As at 31 December 2003Local shareholding = RM516.35 billionForeign shareholding = RM120.77 billion

5756


Human Resource Management• Skills Training

• Knowledge Enhancement

• Change Management

• Empowerment

• Open Communications

From Aspirers to Achievers

Ahmad Sahat1972Office Boy

Latifah Md Yusof1973Listing Officer

Qua Gek Kim1973Market Research Officer

Ahmad Sahat2003

Manager, Public Information Centre

Latifah Md Yusof2003

Senior Vice President,Listing Group

Lee Choy1974Statistical Clerk

Abdul Razak Amin1988Personnel Manager

Lee Choy2003

Head, Administration

Abdul Razak Amin2003

Senior Vice President,Group Human Resources

Qua Gek Kim2003

Senior Vice President,Public Information

5958

DATIN MARIAM YUSOFCommittee Member

• Certificate in Investment Analysis, Mara Institute of Technology;

• Bachelor of Arts (Hons) English, University of Malaya;

• Elected to the Committee: 1.1.2002 - present


KLSE Berhad Board Members(formerly known as KLSE Committee Members)

DATO’ MOHAMMED AZLAN HASHIMExecutive Chairman

• Bachelor of Economics (Accounting),Monash University, Australia;

• Member of Malaysian Institute ofAccountants;

• Member of Institute of CharteredAccountants, Australia;

• Government appointed CommitteeMember: 18.12.1996 – 31.12.1997;

• Government appointed ExecutiveChairman: 1.1.1998 – present

DATUK MOHAIYANI SHAMSUDINDeputy Chairman

• Master of Business Administration (Finance),Cornell University, Ithaca, New York, USA;

• Bachelor of Arts (Economics), Knox College,Galesburg, Illinois, USA;

• Elected to the Committee: 28.11.1998 -present;

• Elected as Deputy Chairman: 20.11.1999 –present

ABDUL KADIR HJ MD KASSIM Committee Member

• Bachelor of Laws (Hons.) University of Singapore;

• Advocate & Solicitor, Malaysia;• Government appointed Committee Member:

1.3.1998 – present

ABDUL JABBAR ABDUL MAJIDCommittee Member

• Member of Malaysian Institute of Accountants;• Member of Malaysian Association of Certified

Public Accountants;• Fellow of Institute of Chartered Accountants,

Australia;• Government appointed Committee Member:

18.1.2001 – present

PETER LEONG TUCK LENGCommittee Member

• Master of Science (Economics), School of Economics, London;

• Elected to the Committee Member: 1.1.2001 – present

YUSLI MOHAMED YUSOFFCommittee Member

• Bachelor of Arts (Hons.) Economics, University of Essex, England;

• Member of Institute of Chartered Accountants,England and Wales;

• Elected to the Committee: 1.1.2001 – present

ABDUL RAUF RAMLI Committee Member

• Bachelor of Economics (Analytical) University of Malaya;

• Diploma in Investment Analysis:-i. Malaysian Association of Productivity [MAP];ii. Permodalan Nasional Berhad [PNB]; andiii. Western Australian Institute of Technology

[WAIT]);• Elected to the Committee: 1.1.2002 – present

TAN KIM LEONG, JPCommittee Member

• Member of Malaysian Institute of Accountants; • Member of Malaysian Institute of Certified

Public Accountants;• Fellow of Institute of Chartered Accountants,

Australia;• Fellow of Malaysian Association of the Institute

of Chartered Secretaries & Administrators;• Government appointed Committee Member:

18.12.1996 - present


Group Board Members

Abdul Rauf RamliKLSE, MCD, SCANS

Datin Mariam YusofKLSE, LFX, SCANS, KLSE TRAINING, RIIAM

Yusli Mohamed YusoffKLSE, MDEX, KPM, KLSE TECH,SCANS, MSEB, LFX, MCD, MDCH

Datuk Mohaiyani ShamsudinKLSE, SCANS, KLSE TRAINING,MSEB

Dato’ Mohammed Azlan HashimKLSE, MDEX, LFX, KPM, KLSE IS,KLSE TECH, MCD, SCANS, YBSKL,KLSE TRAINING, MSEB

Abdul Jabbar Abdul MajidKLSE, MDEX, KLSE IS, KLSE TECH, SCANS

Peter Leong Tuck LengKLSE, LFX, SCANS, MSEB

Abdul Kadir Hj. Md KassimKLSE, LFX, SCANS, YBSKL, MSEB

Tan Kim Leong, JPKLSE, KPM, SCANS MCD, KLSE TRAINING, MSEB

Dato’ Seri Hwang Sing LueMDEX, KLSE TECH

Md Nor AhmadMDEX, LFX, KPM, KLSE IS, KLSE TRAINING, KLOFFE INFO

Alvin Kwan Wing YewMDEX, MDCH

6160


Group Board Members

Dato’ Dr. Awang Adek HussinLFX

Dato’ Ahmad Johan RaslanLFX

Dr Zaha Rina ZahariLFX. MDCH

NoorazmanLFX. KLSEB, KLSE TECH, MCD, MDCH, SCANS

Mohd Zain OmarMDEX

YAM Tunku Dato’ Seri Nadzaruddin Tuanku Ja’afarMDEX

Wong Fook WahMDEX

6362

Dato’ Seri Hj. Megat NajmuddinDatuk Seri Dr. Hj. Megat KhasSCANS

Ahmad Hizzad BaharuddinMDCH

Mohd Ridzal Mohd SheriffMDCH

Noripah KamsoMDCH

Ahmad Subri AbdullahMCD

Datuk Amirsham A. AzizMCD


Group Board Members

Chan Guan SengMCD

Datuk Azlan Mohd ZainolMCD

6564

Board Of Governors

Dato’ N. Sadasivan A/L N. N. PillayDatuk Hj. Abdul Karim Haron

Dato’ Che Mohd Annuar Che Mohd Senawi

Othman Abdullah

Abdul Razak Mohd AminKPM, YBSKL

Ravindran NavaratnamKLSE TECH

Yayasan BSKL

A N N U A L R E P O R T 2 0 0 3K U A L A L U M P U R S T O C K E X C H A N G E B E R H A D A N N U A L R E P O R T 2 0 0 3

LFX Committee Members

Vaseehar Hassan Abdul RazackLFX

Prof. Madya Dr. Mohd Daud BakarLFX

Mohd Nasir AliLFX

Louise PaulLFX

Jeremy C. CampsLFX

Raymond WongLFX

6766


KLSE Group Management

Yusli Mohamed YusoffChief Executive Officer - Designate

Devanesan EvansonHead, Internal Audit

Dato’ Mohammed Azlan HashimExecutive Chairman

Md Nor AhmadChief Regulatory Officer

Dato’ Noorazman Abd AzizChief Operating Officer

Ravindran NavaratnamChief Information Officer

Vacant


Dr. Zaha Rina ZahariHead, Exchanges

Mohd Ridzal Mohd SheriffHead, Clearing, Settlement &Depository

Fathi Ridzuan Ahmad FauziHead, Information Services

YM Ungku A. Razak bin Ungku A. RahmanHead, Exchange Systems

Ahmad Tajuddin CarrimHead, Group Human Resource

Manoj DevadasanHead, Group Legal

Azman Shah Md YamanHead, Group Corporate Secretarial &Compliance/Company Secretary

6968


Johan AbdullahHead, Issues & Listing

Selvarany RasiahHead, Legal Advisory

Khairul Annuar AziziHead, Market Surveillance &Investigation

Tan Chun WengHead, Intermediary Supervision

Low PhengHead, Group Risk Management

Wong Kay YongHead, Listing Compliance

Md Nor AhmadChief Regulatory Officer

Regulations

7170



Dr. Zaha Rina ZahariHead, Exchanges

Exchange Operations

Dato’ Noorazman Abd AzizChief Operating Officer

Mohd Ridzal Mohd SheriffHead, Clearing, Settlement & Depository


YM Ungku A. RazakUngku A. RahmanHead, Exchange Systems

Wong Chew SuitHead, Projects

Tai Yoke PengHead, Organisation & Methods

Norhan Che AwangHead, Vendor Management

Technology Support

Ravindran NavaratnamChief Information Officer




Azran Osman-RaniHead, Business Transformation Office

Khairussaleh RamliHead, Strategy & Corporate Finance

Lew Lup SeongHead, Financial Controller

Finance & Strategy

Teng Siew PengTreasurer

Mohamad Azam AliHead, Public Relations

Ong Li LeeHead, External Affairs

Vacant

7372

Exchange Operations

Dr. Zaha Rina ZahariHead, Exchange Business Unit

Sree Kumar C. K. NayarHead, Market & Product Development

S. LoganathanHead, Offshore Markets

Chua Kong KhaiHead, Depository

Cheah Sin KeatHead, Operations Risk Management

Lim Lean BengHead, Clearing, Settlement & Operations

Mohd Ridzal Mohd SheriffHead, Clearing, Settlement & Depository

Clearing, Settlement & Depository



7574


Michelle Tog Phui QuanHead, Customer Service

Azul Sidek AdnanHead, Multimedia Services

Jothimany d/o MuniandyHead, Business Development &Strategic Initiatives

Shukoriah Mohd NorHead, Public Information Centres

Khamarul Baharain SulaimanDeputy Head, Information Services

Information Services


Winnie Chong Ah NyokHead, Data Sevices

Yew Kim KeongHead, Facilities Management

Exchange Systems

YM Ungku A. Razak Ungku A. RahmanHead, Exchange Systems

Wan Asriah Wan AdnanHead, Business Continuity &Disaster Recovery

Ang Ting KangHead, IT Development & Services

Zulkifli HarunHead, Business Planning & Development



7776

Corporate Services

Manoj DevadasanHead, Group Legal

Ahmad Tajuddin CarrimHead, Group Human Resource

Azman Shah Md YamanHead, Group Corporate Secretarial &Compliance/Company Secretary

KLSE Group -Company Reports

and Profiles

contentsMalaysia Derivatives Exchange Berhad 78 - 83

Labuan International Financial Exchange 84 - 85

Securities Clearing Automated Network Services Sdn Bhd 86 - 87

Malaysian Derivatives Clearing House Berhad 88 - 91

Malaysian Central Depository Sdn Bhd 92 - 93

KLSE Information Services Sdn Bhd 94 - 95

KLSE Technology Sdn Bhd 96 - 97

Malaysia Derivatives Exchange Berhad

The Crude Palm Oil (CPO) Futures contract or "FCPO"

was still the most active contract traded, registering new

market records in 2003. Total turnover for 2003 was

1,429,959 lots, surpassing the 1 million contracts mark,

with an average daily volume of 5,813 lots. For a single

trading day, volume touched a high of 14,508 lots on

21 October 2003. October also recorded the highest

monthly volume transacted of 177,319 lots. A record daily

open interest of 32,073 contracts was achieved on

13 August 2003. Year-end open position stood at 21,149

contracts. Palm prices remained volatile in 2003, moving

upwards in the second half of the year due to a severe

drought in the USA soybean planting areas which caused

an unexpected fall in production. The slight increase in

Malaysian palm oil production could not match the

demand from consuming countries. Market demography

remained unchanged with Locals (35%) as the largest

contributors, followed by Domestic Retail (26%),

Domestic Institutions (18%), Foreign Institutions (17%),

Foreign Retail (3%) and Proprietary (1%).

Similarly, the 3-Month Kuala Lumpur Interbank Offered

Rate (KLIBOR) short-term interest rate Futures contract or

"FKB3" continued to show an increase in institutional

trading activities. Total volume in 2003 was up 86.1% to

119,659 lots, with an average daily volume of 486 lots.

Market records achieved in 2003 were a new highest daily

volume of 6,001 lots on 21 July 2003 and highest open

interest of 29,289 contracts on 26 May 2003. At the end

of 2003, open positions for the FKB3 market stood at

18,977 contracts. The market demography for FKB3 is as

follows: Local Institutions (87%), Domestic Retail (6%),

Foreign Institutions (6%) and Locals (1%). Interest rates

remained unchanged for the year and the bulk of activity

on the 3-Month KLIBOR Futures market was contributed

by activities in the local interest rate swap (IRS) market via

STRIP trading.

The global derivatives markets showed vigorous growth

for the first half of 2003 according to statistics published

by the Bank for International Settlements (BIS). The total

estimated notional amount outstanding for over-the-

counter (OTC) contracts stood at US$169.7 trillion (end-

June 2003), a 20% increase from end-December 2002.

This was largely attributed to the growth in financial

derivatives contracts, particularly interest rate swaps.

Organised exchanges posted a much stronger growth

than the OTC market with a 61% increase in notional

amounts outstanding in the first half of 2003.

The Malaysia Derivatives Exchange Berhad (MDEX) grew

from strength to strength in 2003. Total turnover for all

MDEX products in 2003 increased by 55.5% to

2,000,263 lots.Year-end open interest for all products

increased to 49,296 contracts; up 10.2% from the

previous year. In comparison, total volume for all

exchange-traded contracts in 2002 stood at 1,287,662

lots while the year-end open position was 44,739 contracts.

Total volume for the Kuala Lumpur Stock Exchange

Composite Index (KLSE CI) Futures or "FKLI" was

331,218 lots, averaging 1,346 lots a day. Year-end open

position for 2003 was 8,993 contracts. Relatively robust

growth in Asia, underpinned by a broad recovery in

exports in 2002, helped the local markets recover in

2003. In the first half of 2003, the outlook for Asia was

uncertain, following signs of weakness in external debt

and the spread of the severe acute respiratory syndrome

(SARS). The second half of 2003 was much better with

SARS under control and increased consumer and public

spending driving demand. This translated into better

volumes on the equity and derivatives market. FKLI

turnover was also helped by the modification of the

contract to a smaller value and an increased tick size

on19 September 2003, thus enabling a less costly entry

into the futures market. Additional measures are

underway to boost participation and interest in the KLSE

CI Options contract, which is still in the process of being

accepted by market participants. The market

demography for the FKLI contract in 2003 saw an

increase in Foreign Retail and Institutional participation to

35%. The rest of the breakdown is as follows: Domestic

Retail (45%), Locals (14%), Domestic Institutions (5%),

and Proprietary (1%).

Market Participants : KLSE CI Futures

60%

50%

40%

30%

20%

10%

0%

Categories

Per

cent

age

■ Year 2002 ■ Year 2003

Fore

ign

Inst

itutio

ns

Dom

estic

Inst

itutio

ns

Fore

ign

Ret

ail

Dom

estic

Ret

ail

Loca

ls

Pro

prie

tary

Market Participants : MGS Futures

0%

20%

40%

60%

80%

100%

120%

Categories

Per

cent

age

■ Year 2002 ■ Year 2003

Fore

ign

Inst

itutio

ns

Dom

estic

Inst

itutio

ns

Fore

ign

Ret

ail

Dom

estic

Ret

ail

Loca

ls

Pro

prie

tary

A N N U A L R E P O R T 2 0 0 3

7978


Market Participants : CPO Futures

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Categories

Per

cent

age

■ Year 2002 ■ Year 2003

Fore

ign

Inst

itutio

ns

Dom

estic

Inst

itutio

ns

Fore

ign

Ret

ail

Dom

estic

Ret

ail

Loca

ls

Pro

prie

tary

Market Participants : 3-month KLIBOR Futures

0%

10%

20%

30%

40%

50%

60%

70%

8 0%

90%

100%

Categories

Per

cent

age

■ Year 2002 ■ Year 2003

Fore

ign

Inst

itutio

ns

Dom

estic

Inst

itutio

ns

Fore

ign

Ret

ail

Dom

estic

Ret

ail

Loca

ls

Pro

prie

tary


8180


MDEX launched the 3-Year and 10-Year Malaysian Government Securities (MGS) bond futures contracts on 19 September

2003 to complement its existing 5-Year MGS Futures contract or "FMG5". In 2003, FMG5 registered a turnover of 118,635

lots, an increase of 47.5% from the previous year. Average daily volume for FMG5 was 482 lots. However, year-end open

position dropped to 127 contracts. The highest daily volume for a single day was recorded on 16 July 2003 with 3,215 lots

traded. Physical bond markets and bond futures contracts worldwide experienced a massive selldown in July 2003 due to

worries on US interest rates and US Treasuries. Malaysia was not spared and the bond market was listless for the rest of the

year. The quiet physical bond market affected volumes on the new bond futures contracts. The 3-Year MGS Futures contract

or "FMG3" and 10-Year MGS Futures contract or "FMGA" recorded a total yearly turnover of 781 lots and 11 lots respectively.

MDEX’s encouraging performance in the last two years augers well for 2004 as most products show a marked increase in

volumes and open positions. The Exchange expects the Crude Palm Kernel Oil Futures contract to be launched in early 2004

and this contract is expected to complement the existing Crude Palm Oil Futures contract.

The following are the significant developments and activities of MDEX in the last 12 months:

1. Investors Roadshow with MDEX Trading Members (Whole of 2003)

2. The 14th Annual Palm & Lauric Oils Conference & Exhibition: Price Outlook 2003/2004 (17-19 March 2003)

3. Media Workshop on MDEX and its Products (16 July and 7 August 2003)

4. Launch of the 3-Year and 10-Year MGS bond futures contracts and modification of the KLSE CI Futures contract

(19 September 2003)

Exchange Total Daily Volume & Open Interest

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

No

of

cont

ract

s

Op

en In

tere

st

2-Ja

n-03

10-J

an-0

3

20-J

an-0

3

28-J

an-0

3

10-F

eb-0

3

19-F

eb-0

3

27-F

eb-0

3

10-M

ar-0

3

18-M

ar-0

3

26-M

ar-0

3

3-A

pr-0

3

11-A

pr-0

3

21-A

pr-0

3

29-A

pr-0

3

8-M

ay-0

3

20-M

ay-0

3

28-M

ay-0

3

5-Ju

n-03

13-J

un-0

3

23-J

un-0

3

1-Ju

l-03

9-Ju

l-03

17-J

ul-0

3

25-J

ul-0

3

4-A

ug-0

3

12-A

ug-0

3

20-A

ug-0

3

28-A

ug-0

3

8-S

ep-0

3

16-S

ep-0

3

24-S

ep-0

3

2-O

ct-0

3

10-O

ct-0

3

20-O

ct-0

3

29-O

ct-0

3

6-N

ov-0

3

14-N

ov-0

3

27-N

ov-0

3

5-D

ec-0

3

15-D

ec-0

3

23-D

ec-0

3Trading Date: 31 December 2003Volume: 2,839Open Interest: 49,296

Trading Date: 02 January 2003Volume: 8,506Open Interest: 45,262

KLSE CI Futures VS KLSE CI

Ind

ex P

oin

ts

3-Ja

n-03

13-J

an-0

3

21-J

an-0

3

29-J

an-0

3

11-F

eb-0

3

20-F

eb-0

3

28-F

eb-0

3

11-M

ar-0

3

19-M

ar-0

3

27-M

ar-0

3

4-A

pr-0

3

14-A

pr-0

3

22-A

pr-0

3

30-A

pr-0

3

9-M

ay-0

3

21-M

ay-0

3

29-M

ay-0

3

6-Ju

n-03

16-J

un-0

3

24-J

un-0

3

2-Ju

l-03

10-J

ul-0

3

18-J

ul-0

3

28-J

ul-0

3

5-A

ug-0

3

13-A

ug-0

3

21-A

ug-0

3

29-A

ug-0

3

9-S

ep-0

3

17-S

ep-0

3

25-S

ep-0

3

3-O

ct-0

3

13-O

ct-0

3

21-O

ct-0

3

30-O

ct-0

3

7-N

ov-0

3

17-N

ov-0

3

28-N

ov-0

3

8-D

ec-0

3

16-D

ec-0

3

24-D

ec-0

3

Trading Date: 31 December 2003KLSE CI: 793.94FKLI: 792.0

Trading Date: 02 January 2003KLSE CI: 632.43FKLI: 627.6

FKLI vs KLSE CI835

815

795

775

755

735

715

695

675

655

635

615

595

575

KLSE CI Futures Daily Volume and Open Interest

Trading Date: 31 December 2003Volume: 1,159Open Interest: 8,993

Trading Date: 02 January 2003Volume: 298Open Interest: 1,504

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

0

1,000

2,00

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

No

of

cont

ract

s

Op

en In

tere

st

2-Ja

n-03

16-J

an-0

3

24-J

an-0

3

6-Fe

b-03

17-F

eb-0

3

25-F

eb-0

3

6-M

ar-0

3

14-M

ar-0

3

24-M

ar-0

3

1-A

pr-0

3

9-A

pr-0

3

17-A

pr-0

3

25-A

pr-0

3

6-M

ay-0

3

16-M

ay-0

3

26-M

ay-0

3

3-Ju

n-03

11-J

un-0

3

19-J

un-0

3

27-J

un-0

3

7-Ju

l-03

15-J

ul-0

3

23-J

ul-0

3

31-J

ul-0

3

8-A

ug-0

3

18-A

ug-0

3

26-A

ug-0

3

4-S

ep-0

3

12-S

ep-0

3

22-S

ep-0

3

30-S

ep-0

3

8-O

ct-0

3

16-O

ct-0

3

27-O

ct-0

3

4-N

ov-0

3

12-N

ov-0

3

20-N

ov-0

3

3-D

ec-0

3

11-D

ec-0

3

19-D

ec-0

3

30-D

ec-0

3


CPO Futures Daily Volume and Open Interest

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0 0

4,000

8,000

12,000

16,000

20,000

24,000

32,000

36,000

28,000

No

of

cont

ract

s

Op

en In

tere

st

6-Ja

n-03

14-J

an-0

3

22-J

an-0

3

30-J

an-0

3

13-F

eb-0

3

21-F

eb-0

3

3-M

ar-0

3

12-M

ar-0

3

20-M

ar-0

3

28-M

ar-0

3

7-A

pr-0

3

15-A

pr-0

3

23-A

pr-0

3

2-M

ay-0

3

12-M

ay-0

3

22-M

ay-0

3

30-M

ay-0

2

9-Ju

n-03

17-J

un-0

3

25-J

un-0

3

3-Ju

l-03

11-J

ul-0

3

21-J

ul-0

3

29-J

ul-0

3

6-A

ug-0

3

14-A

ug-0

3

22-A

ug-0

3

2-S

ep-0

3

10-S

ep-0

3

18-S

ep-0

3

26-S

ep-0

3

6-O

ct-0

3

14-O

ct-0

3

22-O

ct-0

3

31-O

ct-0

3

10-N

ov-0

3

18-N

ov-0

3

1-D

ec-0

3

9-D

ec-0

3

17-D

ec-0

3

26-D

ec-0

3

Trading Date: 31 December 2003Volume: 1,294Open Interest: 21,149

Trading Date: 02 January 2003Volume: 7,527Open Interest: 17,719

A N N U A L R E P O R T 2 0 0 3

8382


3-month KLIBOR Futures Daily Volume and Open Interest

No

of

cont

ract

s

Op

en In

tere

st

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500Trading Date: 31 December 2003Volume: 386Open Interest: 18,977


0 0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

6-Ja

n-03

14-J

an-0

3

22-J

an-0

3

30-J

an-0

3

13-F

eb-0

3

21-F

eb-0

3

3-M

ar-0

3

12-M

ar-0

3

20-M

ar-0

3

28-M

ar-0

3

7-A

pr-0

3

15-A

pr-0

3

23-A

pr-0

3

2-M

ay-0

3

12-M

ay-0

3

22-M

ay-0

3

30-M

ay-0

2

9-Ju

n-03

17-J

un-0

3

25-J

un-0

3

3-Ju

l-03

11-J

ul-0

3

21-J

ul-0

3

29-J

ul-0

3

6-A

ug-0

3

14-A

ug-0

3

22-A

ug-0

3

2-S

ep-0

3

10-S

ep-0

3

18-S

ep-0

3

26-S

ep-0

3

6-O

ct-0

3

14-O

ct-0

3

22-O

ct-0

3

31-O

ct-0

3

10-N

ov-0

3

18-N

ov-0

3

1-D

ec-0

3

9-D

ec-0

3

17-D

ec-0

3

26-D

ec-0

3

5-Year MGS Futures Daily Volume and Open Interest

No

of

cont

ract

s

Op

en In

tere

st

500

1,000

1,500

2,000

2,500

3,000

3,500Trading Date: 31 December 2003Volume: 0Open Interest: 127


0 0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10000

11000

12000

27-D

ec-0

2

7-Ja

n-03

15-J

an-0

3

23-J

an-0

3

5-Fe

b-03

14-F

eb-0

3

24-F

eb-0

3

5-M

ar-0

3

13-M

ar-0

3

21-M

ar-0

3

31-M

ar-0

3

8-A

pr-0

3

16-A

pr-0

3

24-A

pr-0

3

5-M

ay-0

3

13-M

ay-0

3

23-M

ay-0

3

2-Ju

n-03

10-J

un-0

3

18-J

un-0

3

26-J

un-0

3

4-Ju

l-03

14-J

ul-0

3

22-J

ul-0

3

30-J

ul-0

3

7-A

ug-0

3

15-A

ug-0

3

25-A

ug-0

3

3-S

ep-0

3

11-S

ep-0

3

19-S

ep-0

3

29-S

ep-0

3

7-O

ct-0

3

15-O

ct-0

3

23-O

ct-0

3

3-N

ov-0

3

11-N

ov-0

3

19-N

ov-0

3

2-D

ec-0

3

10-D

ec-0

3

18-D

ec-0

3

29-D

ec-0

3

Market Information (as at December 2003)Labuan International Financial Exchange

The year 2003 continued on where Labuan International Financial Exchange (LFX) ended year 2002, with the secondary listing

of the USD265m RHB-Bond, issued by Rashid Hussain Berhad as part of its restructuring process, following the listing of the

USD400m Guaranteed Exchangeable Bonds by TNB Capital (L) Ltd on behalf of Tenaga Nasional Berhad. This further

indicates support for LFX from the local corporations despite being only in its third year of operations.

The next major event took place in May 2003 when the first primary listing of a mutual fund on the LFX was completed. The

Am-MacQuarie Sovereign Plus Fund is issued and managed by MacQuarie Investment Services Limited, operating within

Macquarie Funds Management, and is part of the Macquarie Bank Group, an Australian investment bank. The fund is an

open-ended fund with a maximum size of AUD40m (approximately USD20m) and it further enhanced LFX’s position as an

offshore exchange that offers a primary platform for the listing of a wide range of financial products

As the year ended, LFX recorded another secondary listing when the Genting Berhad group completed the listing of a

USD300.0 million exchangeable notes issue through its Labuan incorporated subsidiary, Prime Venture (Labuan) Limited (PVL).

With the latest listing, there are 13 instruments listed on LFX to date, comprising three Syariah compliant certificates (Sukuk),

six investment funds and four conventional debt instruments and exchangeable bonds, with a total market capitalisation of

USD2.26 billion.

Throughout the year, LFX continued taking steps to enhance its competitive edge. The signing of a Memorandum of

Understanding (MOU) with the Bahrain Stock Exchange (BSE) to facilitate the dual listings of instruments on both exchanges

and exchange of information of listed products will further assist in promoting LFX amongst the Middle-East countries, besides

increasing visibility of the instruments by having dual listings on both exchanges. This was evidenced by the recent listing on

the BSE of the USD600 million Malaysia Global Sukuk which had a secondary listing on the LFX in 2002. This will be

reciprocated in the near future with listings of Sukuks issued by Bahrain authorities on the LFX.

Further efforts by LFX to tap into the Middle-East market, is the pending establishment of a formal working relationship

between LFX and the Bahrain-based International Islamic Financial Market (IIFM). This will further enhance LFX’s status as

being one of the leading offshore exchanges in the world of Islamic finance.

LFX also hopes to establish more formal working arrangements with other offshore exchanges worldwide as it seeks to be

recognised as the offshore exchange in Asia, thus bridging the gap between the investors in other parts of the world and Asia.

Besides creating awareness and interest in LFX, this will hopefully enhance the breadth and depth of the financial instruments

listed on LFX.

More innovative instruments, based on either conventional or Syariah principles, issued by the public and private sectors,

locally and internationally are also expected to be listed, such as the Sukuk and Labuan Depository Receipts.

The Malaysian Government has also indicated its commitment towards the development of LFX by agreeing in principle to the

secondary listing of some of its foreign currency Notes already issued.

Being a customer-friendly and market-driven exchange, LFX is always looking into ways to provide added value to its

customers. With this in mind, LFX is also enhancing its clearing and settlement capabilities by creating a link between LFX

and other international clearing and settlement systems, thus catering to a more global trading environment. In addition,

the appointment of a second service provider for the depository and settlement services for LFX will also be completed soon.

No. Instruments Type Issuer Listing Listing Value Listing Class Date (USD) Sponsor

1. Floating Rate Debt Securities 1st Silicon Secondary 20 June 2001 250,000,000 K & N KenangaNotes 2001/2008 (Labuan) Inc. Holdings Berhad

2. Serial Islamic Debt Securities First Global Sukuk Primary 25 Jan 2002 50,000,000 Bank Islam (Labuan)Lease Sukuk (Islamic Notes) Inc. Limited

3. Serial Islamic Debt Securities First Global Sukuk Primary 25 Jan 2002 100,000,000 Bank Islam (Labuan)Lease Sukuk (Islamic Notes) Inc. Limited

4. IDB European Open-Ended IDB Asset Secondary 26 Mar 2002 * 61,133,570 EQ Funds ServicesBond Class B Funds Selection Sicav (Asia) Limited

[formerly known asInsinger Funds Services (Asia) Ltd]

5. IDB Multi- Open-Ended IDB Manager Secondary 26 Mar 2002 * 5,611,308 EQ Funds ServicesManager Asia Funds Selection Sicav (Asia) LimitedExJapan [formerly known as

Insinger Funds Services (Asia) Ltd]

6. IDB Multi- Open-Ended IDB Manager Secondary 26 Mar 2002 *163,774,840 EQ Funds ServicesManager Funds Selection Sicav (Asia) LimitedBalanced A [formerly known as


7. IDB Multi- Open-Ended IDB Manager Secondary 26 Mar 2002 * 56,901,010 EQ Funds ServicesManager Funds Selection Sicav (Asia) LimitedEquity A [formerly known as


8. Insinger De Open-Ended Insinger De Secondary 26 Mar 2002 *Suspended EQ Funds ServicesBeaufort Zeus Funds Beaufort Zeus (Asia) Limited(OS) Fund [formerly known as


9. Sukuk Al-Ijarah Debt Securities Malaysia Global Secondary 18 Sept 2002 600,000,000 AmInternationalTrust Certificates (Islamic Notes) Sukuk Inc. (Labuan) Limited2002/2007

10. Guaranteed Debt Securities TNB Capital (L) Secondary 26 Nov 2002 400,000,000 CIMB (Labuan) Exchangeable Limited LimitedBonds due 2007

11. RHB-Bond 2007 Debt Securities Rashid Hussain Secondary 12 Mar 2003 265,205,000 AmInternationalBerhad (Labuan) Limited

12. Am-Macquarie Open-Ended Macquarie Primary 23 May 2003 5,201,500 AmInternationalSovereign Plus Funds Investment (Labuan) LimitedFund Services Limited

13. Redeemable Debt Securities Prime Venture (L) Secondary 30 Dec 2003 300,000,000 CIMB (Labuan) Exchangeable Limited LimitedBonds

* Note: As at November 2003

Year Listed Instruments Closed-Ended Funds Open-Ended Funds Debt Securities Total (USD)

2000 0 0 0 0 0

2001 1 0 0 250,000,000 250,000,000

2002 10 0 229,048,993 1,400,000,000 1,629,048,993

2003 13 0 292,622,228 1,965,205,000 2,257,827,228

A N N U A L R E P O R T 2 0 0 3

8584


Detailed Market Information (as at December 2003)

8786


ISS Buy & Sell Instructions 2002 2003 % Change

OMT

No. of Transactions 197,333 202,196 2.46%

Volume 13,176,588,702 16,987,400,098 28.92%

Value (RM) 67,357,221,242 74,702,678,127 10.91%

DBT


Volume 497,152,159 1,032,096,602 107.60%

Value (RM) 1,412,829,138 2,832,653,369 100.50%

TOTAL OMT & DBT


Volume 13,673,740,861 18,019,496,700 31.78%

Value (RM) 68,770,050,380 77,535,331,496 12.75%

Total Shares Cleared 2002 2003 % Change

On Market Transactions ("OMT")

Volume 55,630,188,675 112,183,200,896 101.66%

Value (RM) 116,951,410,254 183,885,847,755 57.25%

Direct Business Transactions ("DBT")

Volume 7,114,331,483 12,017,045,978 68.91%

Value (RM) 14,903,786,777 22,452,434,897 50.65%

TOTAL OMT & DBT

Volume 62,744,520,168 124,200,246,874 97.95%

Value (RM) 131,855,197,031 206,338,282,652 56.49%

Securities Clearing Automated Network Services Sdn Bhd


2003 marks a year of rapid growth for Securities Clearing Automated Network Services Sdn Bhd (SCANS), driven by strong

interest in the stock market in the second half of the year. 124.20 billion units of shares valued at RM206.34 billion was cleared

and settled by SCANS in 2003. This represents a growth of 98% and 56% respectively as compared to the number and value

of shares cleared for the previous year.

A total of 203,645 Institutional Settlement Service ("ISS") Buy and Sell instructions involving 18.02 billion units of shares valued

at RM77.54 billion was cleared and settled through ISS. The corresponding figures for 2002 were 198,485 ISS Buy and Sell

instructions involving 13.67 billion units of shares valued at RM68.77 billion.

Developments for 2003

• Revision to the Timing of Settlement for Direct Business Transactions ("DBT") and Other Related ISS Payments

In seeking to enhance the settlement process, SCANS has been working towards implementing a revision of the timing of

settlement for DBT, and ISS payments relating to commission and turnaround proceeds for both ISS On-Market and ISS

Direct Business Transactions.

In relation to the above, the timing of settlement for securities and funds will be revised from 3.00p.m. to 12.00p.m., and

from 12.00p.m. to 11.00a.m. respectively, with effect from 12 January 2004.

The revised settlement times were determined pursuant to consultations with key market participants. Investors will

particularly benefit from this initiative, as it reduces investors’ settlement risk and exposure, due to earlier settlement of

securities and funds.

• Clearing, Settlement and Depository Conference 2003

To promote the continuous development of the securities industry, SCANS and MCD jointly organised the Clearing,

Settlement and Depository Conference 2003, which was held on 23 July 2003 at the Shangri-La Hotel, Kuala Lumpur. The

theme for the Conference was "CSD: Delivering Market Efficiency", and topics presented included among others, an

overview of developments in clearing, settlement & depository in Europe; and a profile of next-generation post trade

infrastructure. The Conference provided an opportunity for local industry participants to be updated on global

developments, and also afforded an occasion for networking and exchange of ideas between local and foreign participants.

Participants of the Conference included representatives from SCANS and MCD Members comprising stockbroking

companies and financial institutions/custodian banks, Bank Negara Malaysia, the Securities Commission, members of the

Asia-Pacific Central Securities Depositories Group ("ACG") and other associated organisations.

Equities Settlement – Statistics

Volume and Value of Shares Cleared

ISS Instructions Cleared and Settled

Total No. of Contracts As at As at % Change31 Dec 2002 31 Dec 2003

FKLI3 1,485 8,993 505.59%

OKLI 0 0 0

FKB3 21,114 18,977 -10.12%

FCPO 17,280 21,149 22.39%

FMG5 4,860 127 -97.39%

FMG32 n/a 50 n/a

FMGA2 n/a 0 n/a

TOTAL 44,739 49,296 10.19%

Total No. of Contracts 2002 2003 % Change

FKLI1 233,863 331,218 41.63%

OKLI 1 0 n/a

FKB3 64,307 119,659 86.07%

FCPO 909,095 1,429,590 57.25%

FMG5 80,419 118,635 47.52%

FMG32 N/a 780 n/a

FMGA22 N/a 11 n/a

TOTAL 1,287,685 1,999,893 55.31%

2002 2003Product (RM’000) (RM’000)

Highest Lowest Average Highest Lowest Average

FKLI 28,822 11,880 20,634 57,761 11,119 22,098 7.09%

OKLI 0 0 0 0 0 0 -

FKB3 15,052 10,689 12,105 39,662 10,708 17,933 48.15%

FCPO 89,676 24,921 47,145 156,368 57,009 80,403 70.54%

FMG5 13,422 1,046 7,626 12,514 254 6,061 -20.54%

FMG32 n/a n/a n/a 870 0 226 -

FMGA2 n/a n/a n/a 48 0 28 -

Malaysian Derivatives Clearing House Berhad

A N N U A L R E P O R T 2 0 0 3

2003 was a significant year for Malaysian Derivatives Clearing House Berhad (MDCH) in terms of development and

achievements for the derivatives industry. It also marked another year of strong growth with total contracts cleared increasing

by 55%. Interest in Crude Palm Oil Futures ("FCPO") remained strong, with 1.4 million contracts cleared in 2003, a 57%

volume increase from FY2002. A significant increase in volume by 86% was recorded for the 3-month KLIBOR Interest Rate

Futures ("FKB3"). The market also reacted positively to the downsizing of the Kuala Lumpur Composite Index Futures ("FKLI"),

recording an average daily volume of 2370 (20 Sep to 17 Dec 2003), vis-à-vis the average daily volume of 890 prior to the

downsizing (1 Jan to 19 Sep 2003). The modification facilitated retail investors’ access to the FKLI market by lowering the

margin requirements and break-even point.

Margin collected by MDCH also increased due to higher margin rates imposed and a higher average number of open

positions. Cash held as margin increased to RM118 million as at 31 December 2003 vis-à-vis RM52 million held on 31

December 2002. Collateral held as margin also increased to RM51 million as at end 2003 from RM37 million as at end 2002.

1 FKLI contract multiplier was downsized from 100 to 50 and the minimum tick movement increased from 0.1 to

0.5 on 19 September 2003. Total number of contracts cleared from 2 January 2003 to 18 September 2003:

157,585; 19 September 2003 to 31 December 2003: 173,633)

2 Contracts launched on 19 September 2003

3 FKLI Open Positions as at 31 December 2002: contract multiplier of 100; As at 31 December 2003: contract

multiple of 50)

Total Derivatives Contracts Cleared in 2003

Year End Open Position Summary in 2003

Margin Summary for 2003

Year End Margin Requirements by Product Group

200

150

100

50

0

1997 1998 1999 2000 2001 2002 2003 Year

RM (million)

■ Government Securities ■ Interest Rate ■ Equities Index ■ Palm Oil

Change inAverageMargin

MDCH

8988


A N N U A L R E P O R T 2 0 0 3


• Launch of FMG3 & FMGA

The 3-year MGS Futures Contract ("FMG3") and the 10-year MGS Futures Contract ("FMG10") were successfully launched

on 19 September 2003 pursuant to the successful launching of the 5-year MGS Futures Contract ("FMG5") on 29 March

2002. In preparation for the introduction of these new products, MDCH was responsible for ensuring system readiness of

the Derivatives Clearing System ("DCS"); and establishing risk management policy and procedures, such as assessing the

product risk profile, the setting of margining parameters and determining the settlement price methodology for the new

contracts.

With regards to FMG5, two reviews on the correlation between 3-Month Kuala Lumpur Interbank Offered Rate Futures

Contract ("FKB3") and FMG5 were conducted in February and September 2003 to analyse the possibility of a margin offset

between the two products. However, the studies revealed that the correlation between the two products was not significant

enough to allow for margin offset.

• Negotiable Storage Receipts ("NSRs") Value to Offset Clients’ Debit Balances

The increase in tender frequency (physical settlement) of the Crude Palm Oil Futures Contract ("FCPO") and the increase in

notional value due to higher prices for FCPO had resulted in recurring instances where clearing members were on the verge

of breaching their Adjusted Net Capital ("ANC") requirements. With effect from 1 October 2003, clearing members are now

allowed to offset the value of the NSR from their clients’ debit balances with the value of NSRs for computation of ANC.

• New Derivatives Clearing Funds Model

MDCH maintains a Clearing Fund for the purpose of indemnity against losses arising from the failure of any clearing

members, financial institutions or other clearing house organisations in performing their obligations. Currently, the Clearing

Fund solely comprises contributions from its clearing members.

A new Clearing Fund model to determine adequacy of Clearing Funds was implemented on 1 September 2003. The new

model made improvements to the existing model incorporating enhancements in terms of default assumptions, stress

condition, and other input parameters used. The enhancement is in line with the development of more derivatives products

listed, consolidation of the market which resulted in fewer clearing members, and a general increase in open positions.

Some of the shortcomings in the existing model due to unavailability of market data have also been subsequently rectified.

• MDCH Settlement Price Methodology Review

The Settlement Price Methodology for all listed derivatives products was reviewed in June 2003 to assess the adequacy of

the existing methodology. Some minor amendments were made to take into consideration the timing and the minimum

quantity of bid/offer quotes before market close, in order to contain manipulation of settlement prices via last minute

bid/offer quotes. In addition, spread bid and offer quotes are now used in computing the best bid and offer for the FMG5

Contract, in order to narrow the price spread used for computing the daily settlement price of this product.

• Shares as Collateral

MDCH, in consultation with MDEX, has established infrastructure for the lodging of shares as margin collateral for derivatives

trading, and is expected to launch this facility by 1st quarter 2004. This initiative will widen the types of non-cash collateral

that can be used for derivatives trading, and will allow investors more flexibility in structuring their financial requirements to

meet initial margin obligations for derivatives trading.

Clients will be able to lodge selected shares with futures brokers that are also clearing members of MDCH. These shares

are then onward pledged to MDCH. These clients will be able to use the value of their shareholdings as margin deposit for

derivatives trading, and will only be required to pay cash to meet mark-to-market losses due to daily price fluctuations of

their derivatives positions. Pledged shares will be re-valued at the end of each business day according to the closing price

of the shares, and is subject to a 30% haircut by MDCH to address the risk of share price fluctuations. MDCH has selected

12 shares to be accepted as collateral initially. The list of acceptable shares will be expanded in due course as the demand

for this facility grows. In addition, MDCH has also set concentration limits for each share and exposure limit for total shares

lodged as collateral.

• Palm Kernel Oil Futures Contract ("FPKO")

With the success of the FCPO Contract for the last two decades as an effective hedging and trading instrument for the palm

oil market, another palm oil related contract in the form of FPKO will be launched in the first half of 2004.

As preparation for the launch of this new contract, MDCH has already completed the testing for the readiness of the DCS,

established risk management policy and procedures, determined the margin requirement and the settlement price

methodology.

• Other Initiatives

MDCH is in the process of formulating the rules and operational procedures in relation to the clearing of over-the-counter

contracts. MDCH is currently in discussions with potential market players and the regulators and is targeting to launch this

initiative during the first half of 2004.

Malaysian Derivatives Clearing House BerhadMDCH

9190


Malaysian Central Depository Sdn Bhd

Malaysian Central Depository Sdn Bhd ("MCD") celebrated its 10th anniversary of operations in 2003, with a record of

impressive development for the last past 10 years. MCD has along the way contributed positively to the development of the

securities industry through its securities immobilisation exercise and book-entry movement of securities.

As testimony to the growth of MCD, the number of Central Depository System ("CDS") accounts maintained with MCD has

increased from 181,000 accounts in 31 December 1993 to more than 3.2 million accounts in December 2003. Similarly, the

number of securities immobilised with MCD has increased from 663 million securities in December 1993 to more than 260

billion securities as at December 2003.

MCD will continue to support and participate actively towards the

development of an efficient securities industry by emphasiszing on

development projects that support its participants’ and market

intermediaries’ back office processes.


• Standard Board Lot Size

The Kuala Lumpur Stock Exchange ("KLSE") implemented the Standard Board Lot ("SBL") size of 100 units for the trading

of securities on KLSE in April 2003. Prior to the introduction of SBL, there were three types of board lot sizes traded on the

KLSE, namely 100 units for counters traded on the MESDAQ market, 200 units for selected counters, whilst the remaining

counters were traded at 1,000 units.

The purpose of implementing SBL is to facilitate the investment in high quality securities that are relatively expensive; add

liquidity to the stock market; and enable odd lot holders to trade their securities. It is also envisioned that the initiative will

attract new investors to the stock market.

MCD facilitated the introduction of SBL by supporting the book-entry settlement of securities traded on KLSE. Securities

immobilised with MCD are in tangible form, thus providing continuity in book-entry transactions to the investors before and

after implementation of SBL.

• Enhancement to Public Issue and Corporate Action Verification Processes

The Public Issue and Corporate Action module was enhanced in May 2003 to further expedite the processing of allotment

tape verification. The enhancement was introduced after consultations with the Share Registrars and Issuing Houses, and

incorporation of the feedback received, to ensure practical and user friendly processes are implemented.

This enhancement would allow for partial confirmation of allotment verification records. The Share Registrars and Issuing

Houses are no longer required to re-submit the entire allotment records to MCD for re-verification in the event that allotment

records verified by MCD contain rejection records. Subsequently, the processing time taken to verify allotment verification

tapes has been reduced by 30% percent. This enhancement provides Share Registrars and Issuing Houses with better

control in managing their back office processes in completing fund raising corporate activities, which will ultimately benefit

the market players, namely Issuers, Investors and Financial Intermediaries.

• Ownership of Malaysian Central Depository Sdn Bhd (MCD)

2003 year marked a change in MCD’s shareholding structure. On 13 May 2003, KLSE increased its shareholding in MCD

from 55% to 75%, by acquiring the 20% stake in MCD previously held by Ambilan Tradisi Sdn Bhd.

Pursuant to the acquisition, MCD is now 75% owned by KLSE, with ABM-MCD Holdings Sdn Bhd holding the remaining

25% of MCD shares.

• Enhancement to Transfer of Securities Request Form

MCD introduced a new Transfer of Securities Request Form in July 2003. Amendments were made to the Form to allow

the Transferor to transfer more than one securities using a single Form.

The amendments were made pursuant to a study that has indicated that approximately 30 % of investors transfer more

than one securities at any one time. The new Form will reduce the time taken by the investors in completing their transfer

requests. In addition, Authorised Depository Agents ("ADAs") will be able to improve their efficiency in processing transfer

of securities requests, whilst continuing to maintain high standards of security control.

• Reduction of Time to Market for Initial Public Offering (IPO)

In December 2003, the Securities Commission approved a new timeline for the completion of IPO processing. Pursuant to

the implementation of the new timeline from T+25 to T+13, IPO processing must be completed to enable the listing of the

IPO securities by T+13 from the date of the issuance of the prospectus. The revised timeline was determined through

numerous consultations with the market institutions involved in IPO exercises. The shortening of the IPO timeline will further

elevate KLSE’s status as a premier source for fund raising.

To facilitate the implementation of the T+13 IPO timeline, CDS accounts are now mandatory for all IPO applicants.

Prospective IPO applicants who do not have a CDS account are encouraged to open their CDS accounts through the

network of ADAs’ principal offices and branches available throughout the country. The opening of CDS accounts is

executed on-line through the CDS.

Central Depository Operations – Statistics

A N N U A L R E P O R T 2 0 0 3

Operational Summary 2002 2003 % Change

Records of Depositors Produced 13,498 14,737 9.18%

Transfers 731,381 866,952 18.54%(No. of Transactions)

CDS Accounts Opened 251,784 262,172 4.13%

9392


KLSE Information Services Sdn Bhd

In today’s economy, where information is a driving force in investment decision-making, KLSE Information Services Sdn Bhd

(KLSE IS) positions itself as a premier source of stock market information in Malaysia. KLSE IS provides accurate, reliable

data and strives to deliver information via various mediums in an endeavour to give its customers the maximum advantage

they expect.

About KLSE IS

KLSE IS, formerly known as KLSE-Bernama Real-Time Information Services Sdn Bhd (KULBER), is a wholly owned subsidiary

of the KLSE. KLSE IS compiles and disseminates comprehensive market information on the Malaysian stock market, both real

time and historical, as well as develops and markets, value added information products and services. The target markets for

KLSE IS include intermediaries, institutional investors, private investors, the academia, the media, the Government sector and

the investing public. KLSE IS is a market-oriented, technology driven entity, which aims to leverage and maximise the potential

of the intellectual resources. The main objectives of KLSE IS are to be market-driven and customer service oriented, to be

efficient, reliable and timely in providing high quality market information products and services, and to maintain a motivated

and creative work team.

The Products and Services of KLSE IS

KLSE IS has the advantage of being the distributor of KLSE’s information assets. Currently, KLSE IS offers the following

standard information products for sale.

1. Real-Time Information, both equities and derivatives which comprises of a range of market data such prices, volumes and

indices, all of which are available on each market day.

2. Delayed Information, which comprises of the opening, high, low, closing and volumes of all equities traded on Kuala

Lumpur Stock Exchange available at approximately 1700h Kuala Lumpur local time from Mondays to Fridays.

3. Indices, which includes the KLSE Composite Index as well as indices for all sectors available on a real-time or a delayed

basis.

4. Historical Data Services and Products, which includes company database, share prices, stock indices, market valuation

data, financial ratios by companies and sectors and company announcements.

5. Updating Services for Subscribers, which includes mainly periodic updating services for historical information. This service

is often customised according to customer needs. Other related services include search for legal firms on stock and shares

information.

6. New Products and Services. KLSE IS is currently developing a range of new information products and services to be

launched soon. These include media products, like news services and those that deliver news in all dimensions of

multimedia: text, television images, still pictures, sound and graphics and risk management products, that include analytical

tools and information to users to manage their financial, investment and business risks wisely.

KLSE IS will also launch on-line real-time market quote services and historical information accessing facilities. This will

enable buyers to access real time market data and historical data both on equities or derivatives markets via the internet.

KLSE IS will also be undertaking web hosting services, in order to provide comprehensive services enabling clients to

optimally design their internet homepage, from concept through to the web-site designing, right up to the development of

appropriate information products and their hosting. KLSE IS advantage as the source for the information from KLSE,

guarantees the highest level of authenticity and neutrality. Applications will be customised to individual requirements. These

services will include consultancy, development, content and hosting.


For the information services business in the KLSE Group and for KLSE IS, the financial period under review, from 31 December

2002 to 31 December 2003 was an eventful one. New management and staff structures were established and new business

and corporate strategies were drawn up to move forward in KLSE Group.

In the year 2003, KLSE IS focused on customer relations management, with a view to understand customer needs, to improve

customer services and to establish good relationships with existing customers. KLSE IS has also explored new horizons for

information products and services and met with numerous businesses in the industry in considering strategic business

alliances.

KLSE IS met with its customers and stakeholders in 2003 in an endeavour to establishing quality relationships, exploring

business opportunities and exchanging knowledge.

As information is the key to prudent investment in the financial market and as timely accurate information is crucial in

promoting informed investing, KLSE IS is poised to play a significant role in meeting the needs of its customers today.

A N N U A L R E P O R T 2 0 0 3

9594


KLSE Technology Sdn Bhd

The year 2003 is the first full year that KLSE Technology operates as a commercial entity. The focus for the year has been on

the internal development of the company to transform itself into a service-based organisation. At the same time, we have also

invested substantial time and effort to work with our customers, albeit the business units within the KLSE Group, to ensure

they are comfortable with the new business-based relationship and to also better utilise the IT services offered by KLSE

Technology.

In general, we have made significant progress in the tasks that we have set for ourselves. KLSE Technology is now in a better

position to be an IT service provider to KLSE and the industry.

Services and Business Units of KLSE Technology

The business units of KLSE Technology have been aligned with our aspiration of becoming a full-fledge IT Service company.

The following are the business units and the services provided by each.

1. IT Development and Services

• The provision and maintenance of Information Systems across a number of technology platforms, including:

i. Tandem, Guardian

ii. Amdahl, VSE/ESA

iii. Alpha, Open VMS

iv. Sun, Solaris

v. Windows

vi. Unix

• The provision of services for IT related exercises such as Project Management, Systems and Products acquisition and User

Education

2. Business Continuity Services

• The implementation and update of Business Continuity Plans (BCP)

• Ensure readiness of Customers’ BCP

3. Facilities Management

• The operations of Information Systems to deliver information as required by customers in a cost-effective manner

• The provision of network services for users of Information Systems, both internal and external

• The management of IT operating sites and IT Assets including the installation of equipment and IT Assets

4. Business Development

• Customer Relationship management

• Organisational development

• Product and Service development

Activities and Projects

The customers served by KLSE Technology comprise the companies within the KLSE Group and Member Companies of the

Exchanges. Key projects and activities undertaken by KLSE Technology include:

• The continuous enhancements of KLSE Trading Systems to include new products to be traded, additional features for the

supervision of the market and to improve operational efficiency

• Enhancements to the systems and network infrastructures of the KLSE Group and Member Companies

• Preparation of site and infrastructure for Member Companies

• Management and development of updates for office automation facilities

• Creation of new information systems and modules for business units of the KLSE Group

• Systems impact and requirement studies for KLSE’s Common Trading Platform initiative

• Planning for technology alliance joint venture

• Outsourcing study for the KLSE Group

• KLSE Group Business Continuity Plans

• Workshops, Training and familiarisation sessions

• Plan and organisation update

• The inclusion of MDCH within the KLSE BCP

• Testing of Plans

• Presentation of papers at conferences

• The introduction of internal procedures for the management of services provided

• The compilation of services provided within a common service catalogue

A N N U A L R E P O R T 2 0 0 3

9796


9998


Calendar of Events 2003

14 January 2003 Venture 2002 “Malaysia’s Business PlanCompetition” Awards Presentation

10 winners were presented with awards and cash

prizes presented by the Deputy Prime Minister YAB

Dato’ Seri Abdullah Haji Ahmad Badawi at the Final

Awards Presentation Ceremony.

23 January 2003Minister of State for Finance, Uganda and CapitalMarkets Authority of Uganda visits KLSE

KLSE hosted a visit by Honourable Professor Peter

Kasenene, Minister of State for Finance, Uganda and

Capital Markets Authority of Uganda and delegation.

20 - 25 February 2003Non-Aligned Movement (NAM) Summit

In conjunction with the 13th Non-Aligned Movement

(NAM) Summit, KLSE set up an information kiosk from

20 - 25 February 2003. The primary objective of the

KLSE Information Kiosk was to update participants and

members of the media on recent developments in the

Malaysian capital market and securities industry.

3 March 2003Seminar on Going Public on the MESDAQ Market

The inaugural seminar on Going Public on the

MESDAQ Market which was held in Penang on 3

March 2003 was officiated by the Chief Minister of

Penang, YAB Tan Sri Dato’ Dr Koh Tsu Koon. Similar

seminars were subsequently held in Melaka on 3

August 2003, in Johor Bahru on 4 August 2003 and in

Kuching on 21 October 2003.

17-19 March 2003Annual Palm & Lauric Oils Conference & Exhibition

MDEX organised its Annual Palm & Lauric Oils

Conference & Exhibition: Price Outloook 2003 / 2004

from 17 - 19 March 2003 in Kuala Lumpur. This was the

14th event in this series.

26 March 2003Dinner in Conjunction with the Fifth AsianRoundtable on Corporate Governance

KLSE co-hosted a dinner with Securities Commission

in conjunction with the Fifth Asian Roundtable on

Corporate Governance organised by the Organisation

for Economic Co-operation and Development (OECD)

on 26 March 2003. A special dinner address was

delivered by YBhg Tan Sri Dato’ Sri Dr Zeti Akhtar Aziz,

Governor, Bank Negara Malaysia.

12 April 20038th RIIAM Convocation

A total of 95 graduates of the RIIAM Diploma in

Investment Analysis programme received their scrolls at

the Graduation Ceremony held at the KLSE on 12 April

2003.

20 - 27 April 2003Minggu Saham Amanah Malaysia 2003

KLSE participated in the Minggu Saham Amanah

Malaysia 2003 held at the Merdeka Stadium, Kuala

Lumpur from 20 - 27 April 2003. Apart from public

briefings conducted, members of the public were also

able to get additional investment information and

advice on securities and derivatives investments from

the KLSE Information Booth set-up at the week long

exhibition.

25 April 2003KLSE-PwC Malaysian Corporate Governance

Survey 2002

The KLSE-PwC Malaysian Corporate Governance

Survey 2002 was launched by the Deputy Minister of

Finance I, YB Dato’ Dr. Haji Shafie Mohd Salleh. The

KLSE-PwC Corporate Governance survey 2002 is a

follow up to the first joint survey conducted in 1998.

10 May 200326th KLSE Annual General Meeting and KLSE AnnualMembers’ Dinner 2003The KLSE’s 26th Annual General Meeting was held on 10 May2003 at the Exchange Square, Bukit Kewangan, while theMembers’ Dinner 2003 was held that evening at MandarinOriental Hotel, Kuala Lumpur. The Members’ Dinner wasgraced by the Minister of Finance II, YB Dato’ Dr Jamaluddinbin Mohd Jarjis.

23 May 2003Primary Listing of AM-Macquarie Sovereign Plus Fund on LFXThe primary listing on LFX of AM-Macquarie Sovereign PlusFund by Australian fund management group, MacquarieInvestment Services Limited served to enhance LFX’s attractionas an offshore exchange that offers a platform for the listing ofa wide range of financial products, both local and international.

26 May 2003Implementation of standard board lot of 100 unitsAll securities listed on the KLSE are traded in standard board lotof 100 units effective 26 May 2003. The conversion exercisewas completed in stages with the first implementation on 7 April2003 which saw the initial conversion of 350 counters on theSecond Board.

11 March 2003KLSE Corporate Awards 2002 Presentation Ceremony

A total of 900 representatives from over 400 public

listed companies attended the third KLSE Corporate

Awards Presentation Ceremony. The event was graced

by the Acting Prime Minister, YAB Dato’ Seri Abdullah Haji

Ahmad Badawi.


13 September 2003Bilateral Golf Tournament between KLSE and SET

The Bilateral Golf Tournament between Kuala Lumpur

Stock Exchange (KLSE) and The Stock Exchange of

Thailand (SET) was held from 12 - 13 September 2003

at The Mines Resort and Golf Club, Sungei Besi. The

objective of the event is to enhance the close working

relationship between the 2 exchanges. First held in

1989, the tournament was put on hold in 1997 due to

the Asian financial crisis and revived in 2002. The 2003

event culminated with a farewell dinner and prize giving

ceremony at the Malaysian Petroleum Club, at KL’s

iconic Petronas Twin Towers.

28 August 2003Visit by YB Dato’ Dr Ng Yen Yen, Deputy Minister of

Finance II and KLSE Group Merdeka Lunch

Deputy Minister of Finance II, YB Dato’ Dr Ng Yen Yen

paid a visit to the KLSE on 28 August 2003. In

conjunction with this visit, a lunch for the KLSE Group

Staff was held to celebrate Merdeka Day. Yayasan

BSKL contributed RM250,000.00 to 25 charitable

organisations from various states in Malaysia. YB Dato’

Dr Ng Yen Yen presented the cheques to the charitable

organisations at the lunch.

101100


12 August 2003Visit by Group of ex-Ministers of Malaysia

KLSE hosted a visit by the Group of ex-Ministers of

Malaysia (GEM) on 12 August 2003. GEM is a group of

former cabinet ministers of Malaysia that meets monthly

for luncheon meetings to apprise themselves of

developments in key sectors of the economy and

government.

9 August 200314th Annual KLSE-FPLC Golf Tournament & Luncheon

The 14th Annual KLSE-FPLC Golf Tournament &

Luncheon was held at the Palm Garden Golf Club, IOI

Resort, Putrajaya on 9 August 2003. SPB Yang

diPertuan Agong, Tuanku Syed Sirajuddin Ibni Al-

Marhum Tuanku Syed Putra Jamalullail was the guest

of honour at the annual tournament.

12 August 2003KL Annual Rat Race 2003

Yayasan BSKL hosted the fourth KL Annual Rat Race

organised by The Edge Malaysia on 12 August 2003. A

total of RM556,000.00 was collected from the Race

and this was subsequently donated to 8 beneficiary

organisations.

24 - 28 August 2003PORIM International Palm Oil Congress (PIPOC)

The Malaysia Derivatives Exchange (MDEX)

participated in the PORIM International Palm Oil

Congress (PIPOC) organised by the Malaysian Palm Oil

Board from 24 - 28 August 2003.

27 July 2003KLSE Signed MoU with Stock Exchange of Thailand

KLSE signed a Memorandum of Understanding (MoU)

with the Stock Exchange of Thailand to facilitate the

development of channels of communication and to foster

continuing relationship between the two exchanges.

29 May 2003Presentation Ceremony for Yayasan BSKL Awardfor Excellent Results and School AssistanceScheme for Children

Yayasan BSKL awarded certificates of academic

excellence and cash prizes to children of KLSE staff

from Standard Six to Form Six who had achieved

excellent results in the UPSR, PMR, SPM and STPM

examinations in 2002.

3 June 2003KLSE Annual Dialogue Sessions

KLSE commenced its annual dialogue sessions with

industry partners on 3 June 2003. A total of 11

sessions were held in 2003. This annual series of

dialogues was initiated for the purpose of discussing

current issues of mutual interest with industry partners.

18 July 2003KLSE - AtosEuronext Alliance for Technology Enhancement

KLSE signed the heads of agreement with AtosEuronext

on 18 July 2003 to form an alliance towards enhancing

the technology development initiatives of the Exchange

and the Malaysian securities industry.

23 July 2003Clearing, Settlement and Depository Conference 2003

The 3rd Clearing, Settlement and Depository

Conference was held on 23 July 2003. In line with this

year’s theme - “CSD : Delivering Market Efficiency” - the

active and constructive discussions on issues facing

the current CSD environment during the conference

resulted in practical and useful ideas towards further

improvement of the marketplace, to be more secure,

efficient and cost-effective.


A N N U A L R E P O R T 2 0 0 3

103102


17 September 2003Launch of Venture Accelerate 2003

Venture Accelerate 2003 was launched by YBhg Dato’

Mustapa Mohamed, Executive Director, National

Economic Action Council (NEAC) on 17 September

2003. Venture Accelerate 2003 is an extension of

Venture 2001 and Venture 2002, the Malaysian

Business Plan Competition.

In contrast to Venture 2001 / 2002, which focused on

helping budding entrepreneurs with the development of

convincing business plans, Venture Accelerate 2003

focuses strongly on coaching a select number of

aspiring entrepreneurs that show strong potential for

funding.

4 October 2003Annual Sukaneka 2003

160 children from 8 homes and an Orang Asli

community and KLSE Group Staff’s children

participated in the Annual Sukaneka 2003 organised by

Yayasan BSKL on 4 October 2003.

5 November 2003KLSE Signs S & P Agreement with Symphony House

on Sale of MSRS

KLSE and Symphony House Berhad (Symphony)

signed a Sale and Purchase Agreement for the

proposed disposal of Malaysian Share Registration

Services Sdn Bhd (MSRS) by KLSE to Symphony.

14 December 2003Badminton Clinic

A Badminton Clinic attended by 60 youths (45 orphans

and 15 KLSE Group Staff children) was organised by

Yayasan BSKL at the Stadium Juara, Bukit Kiara. The

clinic was led by national badminton coach, Misbun

Sidek. The objective of the programme was to create

interest amongst the youths in orphanages in

badminton and to coach them in the skills of the sports

as well as to nurture potential talents.

17 November 2003Majlis Berbuka Puasa and Solat Tarawih

In celebrating the month of Ramadhan, a Majlis

Berbuka Puasa and Solat Tarawih was held at the

Exchange on 17 November 2003. 40 children from

Asrama Kebajikan Anak Yatim Sekendi and 40 students

from Sekolah Tahfiz, Sungai Buloh joined the KLSE

Group Staff at this annual event.

1 December 2003Introduction of Share Splits

KLSE introduced share splits to further enhance the

liquidity and marketability of shares listed on the KLSE.

The introduction of share splits will result in the creation

of new shares, thereby increasing the number of shares

that each shareholder owns, albeit at a lower par value.

Sound Regulations

• Enhanced Disclosure

• Heightened Transparency

• Greater Accountability

• Effective Enforcement

• Increased Protection of Shareholders’ Interest

From Strengthto Strength

105104


106


Corporate Information

Financial Statements

REGISTERED OFFICE

14th Floor, Exchange Square

Bukit Kewangan

50200 Kuala Lumpur

COMMITTEE MEMBERS

Dato’ Mohammed Azlan bin Hashim

Datuk Mohaiyani binti Shamsudin

Yusli bin Mohamed Yusoff

Tan Kim Leong, JP

Abdul Kadir bin Haji Md Kassim

Abdul Jabbar bin Abdul Majid

Peter Leong Tuck Leng

Datin Mariam Prudence bt Yusof

Abdul Rauf bin Ramli

SECRETARY

Azman Shah bin Md. Yaman

AUDITORS

Ernst & Young AF : 0039

Chartered Accountants

107

contentsReport of The Directors 108 - 110 Statement By The Directors 111 Statutory Declaration 111 Report Of The Auditors 112 Income Statements 113 Balance Sheets 114 - 115 Statement Of Changes In Equity 116 - 117 Cash Flow Statements 118 - 119 Notes To The Financial Statements 120 - 148

109108


Report of the Directors

MEMBERSHIP FEES/SHARE CAPITAL (CONTD.)

(iii) During the year, a sum of RM2,836,455 (2002: RM13,157,993) has been charged against the Membership fees for

advisory fees paid for the demutualisation of the Company. The advisory fees incurred are not in the normal course of

operations of the Company.

Following the conversion of the Company to a public company limited by shares subsequent to the end of the financial year

on 5 January 2004, the Company:

(a) created 1,000,000,000 ordinary shares of par value RM0.50 each as authorised share capital of RM500,000,000; and

(b) issued 500,000,000 ordinary shares of par value of RM0.50 each, by way of capitalisation of Membership fees and

accumulated funds, as issued and paid-up share capital of RM250,000,000.

COMMITTEE MEMBERS/DIRECTORS

The names of the Committee Members/Directors of the Company in office since the date of the last report and as at the date

of this report are:

Dato’ Mohammed Azlan bin Hashim

Datuk Mohaiyani binti Shamsudin

Yusli bin Mohamed Yusoff

Tan Kim Leong, JP

Abdul Kadir bin Haji Md Kassim

Abdul Jabbar bin Abdul Majid

Peter Leong Tuck Leng

Datin Mariam Prudence bt Yusof

Abdul Rauf bin Ramli

The Committee Members in office as at 5 January 2004 were deemed to be the inaugural board of directors when the

Company was converted to a public company limited by shares on that date.

DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the

Company was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the

Company or any other body corporate, other than as described in the following immediate paragraph.

Following the demutualisation exercise of the Company and the conversion of the Company to a public company limited by

shares on 5 January 2004, stockbroking companies and remisiers were allotted ordinary shares in the Company. Stockbroking

companies in which Datuk Mohaiyani binti Shamsudin, Datin Mariam Prudence binti Yusof and Peter Leong Tuck Leng have

interest in were allotted shares in the Company. Abdul Rauf bin Ramli being previously a remisier was also allotted shares in

the Company.

Since the end of the previous financial period, no director has received or become entitled to receive a benefit (other than the

fixed salary of a full-time employee of the Company, reimbursement of expenditure incurred in attending committee meetings

in the form of meeting allowances and any other benefits in kind as shown in Note 5 to the financial statements) by reason of

a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a

company in which he has substantial financial interest.

DIRECTORS’ INTERESTS

During the financial year, the Company was a company limited by guarantee and, thus, has no shares in which the directors

could have an interest. Similarly, the Company has not issued any debentures.

None of the directors in office at the end of the financial year had any interest in shares in its related corporations during the

financial year.

MEMBERSHIP FEES/SHARE CAPITAL

As at 31 December 2003:

(i) Membership fees received from past and present Members at RM10,000 each amounted to RM2,960,000 (2002 :

RM2,960,000); and

(ii) a total contribution of RM94,000,000 (2002 : RM94,000,000) was received from Members as follows:

Number of Members Total Contributions1 Jan 31 December Contribution Brought Carried2003 Additions 2003 per Member forward Additions forward

RM’000 RM’000 RM’000 RM’000

5 - 5 5,000 25,000 - 25,000 51 - 51 1,000 51,000 - 51,000 6 - 6 3,000 18,000 - 18,000

62 - 62 94,000 - 94,000

As a result of the consolidation of the stockbroking industry, the number of Members in operation as at the end of the

financial year was 38 (2002: 40).


REPORT OF THE DIRECTORS

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the

Company for the financial year ended 31 December 2003.

PRINCIPAL ACTIVITIES

The principal activities of the Company were to provide, regulate and maintain facilities for conducting the business of a stock

exchange in Malaysia. Following the demutualisation exercise, subsequent to the end of the financial year on 5 January 2004,

the Company's stock exchange business was vested and transferred to Malaysia Securities Exchange Berhad, a wholly

owned subsidiary of the Company. Thereafter, the principal activity of the Company is that of an exchange holding company.

The principal activities of the subsidiaries are described in Note 9 to the financial statements.

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

RESULTSGroup Company

RM RM

Net surplus for the year 59,875,419 58,153,126

There were no material transfers to or from reserves or provisions during the financial year, other than as disclosed in the

statements of changes in equity.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were

not substantially affected by any item, transaction or event of a material and unusual nature, other than the effects arising from

the change in accounting policy as disclosed in Note 28 to the financial statements.

111110


We, DATO' MOHAMMED AZLAN BIN HASHIM and DATUK MOHAIYANI BINTI SHAMSUDIN, being two of the directors of

KUALA LUMPUR STOCK EXCHANGE BERHAD, do hereby state that, in the opinion of the directors, the accompanying

financial statements set out on pages 113 to 148 are drawn up in accordance with applicable Approved Accounting

Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the financial position

of the Group and of the Company as at 31 December 2003 and of the results and the cash flows of the Group and of the

Company for the year then ended.

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

DATO' MOHAMMED AZLAN BIN HASHIM DATUK MOHAIYANI BINTI SHAMSUDIN

Kuala Lumpur, Malaysia

13 February 2004

I, LEW LUP SEONG, being the officer primarily responsible for the financial management of KUALA LUMPUR STOCK

EXCHANGE BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 113

to 148 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by

virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the

abovenamed LEW LUP SEONG

at Kuala Lumpur in the Federal Territory

on 13 February 2004. LEW LUP SEONG

Before me,

Statement by the DirectorsPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

Statutory DeclarationPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

OTHER STATUTORY INFORMATION

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took

reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for

doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had

been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the

ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the Company are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the provision for doubtful debts inadequate to any substantial

extent; and

(ii) the values attributed to current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render

adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or

inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial

statements of the Group and of the Company which would render any amount stated in the financial statements

misleading.

(e) As at the date of this report, there does not exist:

(i) 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 liabilities of any other person; or

(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve

months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet

their obligations when they fall due; and

(ii) other than the change in principal activity of the Company on demutualisation, no item, transaction or event of a material

and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is

likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which

this report is made.

SIGNIFICANT EVENTS

The significant events during the financial year are disclosed in Note 32 to the financial statements.

SUBSEQUENT EVENTS

The subsequent events are disclosed in Note 33 to the financial statements.

AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

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

DATO' MOHAMMED AZLAN BIN HASHIM DATUK MOHAIYANI BINTI SHAMSUDIN


13 February 2004


113112


Income Statementsfor the year ended 31 December 2003

Group Company1.1.2003 1.7.2001 1.1.2003 1.7.2001

to to to to31.12.2003 31.12.2002 31.12.2003 31.12.2002

Note RM RM RM RM

Revenue 3 223,031,166 245,798,926 196,953,083 217,715,736

Other operating income 81,354,360 101,857,437 36,392,730 55,674,415

304,385,526 347,656,363 233,345,813 273,390,151

Staff costs 4 (97,025,569) (129,577,566) (56,053,830) (71,906,743)

Depreciation (18,466,170) (37,415,456) (12,838,065) (28,150,379)

Other operating expenses (93,155,106) (149,708,068) (74,718,072) (113,300,764)

Surplus from operations 5 95,738,681 30,955,273 89,735,846 60,032,265

Finance costs 6 (186,860) (302,479) (6,444) -

Surplus before taxation 95,551,821 30,652,794 89,729,402 60,032,265

Taxation 7 (30,200,393) (12,570,224) (31,576,276) (28,302,978)

Net surplus 65,351,428 18,082,570 58,153,126 31,729,287

Minority interests (5,476,009) (4,529,510) - -

Net surplus for the year/period 59,875,419 13,553,060 58,153,126 31,729,287

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

Report of the Auditors

We have audited the accompanying financial statements set out on pages 113 to 148. 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 applicable Approved Standards on Auditing in Malaysia. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors,

as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable

basis for our opinion.

In our opinion:

(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and

applicable Approved Accounting Standards in Malaysia so as to give a true and fair view of:

(i) the financial position of the Group and of the Company as at 31 December 2003 and of the results and the cash flows

of the Group and of the Company for the year then ended; and

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

(b) the accounting and other records and the registers required by the Act to be kept by the Company and by its subsidiaries

of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

We have considered the financial statements and the auditors' reports thereon of the subsidiaries of which we have not acted

as auditors, as indicated in Note 9 to the financial statements, being financial statements that have been included in the

consolidated financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of

the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial

statements and we have received satisfactory information and explanations required by us for those purposes.

The auditors' reports on the financial statements of the subsidiaries were not subject to any qualification and did not include

any comment required to be made under Section 174(3) of the Act.

Ernst & Young Wong Kang Hwee

AF: 0039 No. 1116/01/06(J)

Chartered Accountants Partner


13 February 2004

TO THE SHAREHOLDERS OFKUALA LUMPUR STOCK EXCHANGE BERHAD (Incorporated in Malaysia)

115114



Balance Sheetsas at 31 December 2003

Group Company2003 2002 2003 2002

Note RM RM RM RM

FINANCED BY:

Membership fees 21 80,965,552 83,802,007 80,965,552 83,802,007

Accumulated funds 1,329,118,544 1,269,243,125 938,019,593 879,866,467

Capital reserve 22 15,149,962 14,949,963 - -

Foreign exchange reserve (5,300) (6,101) - -

1,425,228,758 1,367,988,994 1,018,985,145 963,668,474

Minority interest 14,638,198 18,287,342 - -

1,439,866,956 1,386,276,336 1,018,985,145 963,668,474

Retirement benefit obligations 23 24,937,167 24,644,877 14,961,619 16,053,676

Deferred income 24 2,831,203 2,831,203 - -

Long term borrowings 25 1,098,500 1,318,200 - -

Long term liability 26 47,797,254 48,335,815 47,797,254 48,335,815

76,664,124 77,130,095 62,758,873 64,389,491

1,516,531,080 1,463,406,431 1,081,744,018 1,028,057,965

Balance Sheetsas at 31 December 2003


Group Company2003 2002 2003 2002

Note RM RM RM RM

NON-CURRENT ASSETS

Property, plant and equipment 8 311,547,195 323,526,405 306,777,812 312,208,738

Investment in subsidiaries 9 - - 124,702,498 66,131,704

Loan stocks from subsidiary 10 - - 2,000,000 2,000,000

Other investments 11 248,986,359 212,639,581 150,874,108 89,174,621

Staff loans receivable 12 41,463,813 44,548,171 40,234,021 42,779,495

Net goodwill 13 51,092,071 51,957,581 33,179,972 35,023,304

Deferred tax assets 14 3,967,957 5,995,905 1,357,759 4,543,552

657,057,395 638,667,643 659,126,170 551,861,414

CURRENT ASSETS

Cash and bank balances 16,087,789 11,853,665 12,323,063 117,237

Short term deposits 15 792,321,347 798,091,901 210,554,907 360,864,675

Receivables 16 57,562,272 36,082,653 21,181,573 12,552,282

Tax recoverable 10,277,658 6,067,947 8,701,828 -

Short term investments 17 206,674,239 161,847,087 206,668,104 161,847,087

Due from Compensation Funds 4,006,829 5,414,694 3,001,000 4,820,732

Due from subsidiaries 18 - - 14,635,635 8,440,259

1,086,930,134 1,019,357,947 477,066,110 548,642,272

CURRENT LIABILITIES

Short term borrowings 25 219,700 219,700 - -

Due to subsidiaries 19 - - 3,467,106 3,539,151

Taxation 8,829,493 37,492,388 - 37,443,613

Trade payables 20 153,214,548 111,986,167 - -

Sundry payables 65,192,708 44,920,904 50,981,156 31,462,957

227,456,449 194,619,159 54,448,262 72,445,721

NET CURRENT ASSETS 859,473,685 824,738,788 422,617,848 476,196,551

1,516,531,080 1,463,406,431 1,081,744,018 1,028,057,965

Company Statement of Changes in Equityfor the year ended 31 December 2003

Membership AccumulatedFees Funds Total

RM RM RM

At 1 July 2001

As previously stated 96,960,000 844,088,982 941,048,982

Prior year adjustment (Note 28) - 4,048,198 4,048,198

At 1 July 2001 (restated) 96,960,000 848,137,180 945,097,180

Demutualisation cost (Note 21) (13,157,993) - (13,157,993)

Net surplus for the period (restated) - 31,729,287 31,729,287

At 31 December 2002 83,802,007 879,866,467 963,668,474

At 1 January 2003

As previously stated 83,802,007 875,322,915 959,124,922

Prior year adjustment (Note 28) - 4,543,552 4,543,552

At 1 January 2003 (restated) 83,802,007 879,866,467 963,668,474

Demutualisation cost (Note 21) (2,836,455) - (2,836,455)

Net surplus for the year - 58,153,126 58,153,126

At 31 December 2003 80,965,552 938,019,593 1,018,985,145

A N N U A L R E P O R T 2 0 0 3

The accompanying notes form an integral part of the financial statements.117116


Consolidated Statement of Changes in Equityfor the year ended 31 December 2003

ForeignMembership Capital Exchange Accumulated

Fees Reserve Reserve Funds TotalRM RM RM RM RM

At 1 July 2001

As previously stated 96,960,000 13,749,969 (6,099) 1,250,312,419 1,361,016,289

Prior year adjustment (Note 28) - - - 5,377,646 5,377,646

At 1 July 2001 (restated) 96,960,000 13,749,969 (6,099) 1,255,690,065 1,366,393,935

Currency translation differences - - (2) - (2)

Demutualisation cost (Note 21) (13,157,993) - - - (13,157,993)

Net surplus for the period (restated) - - - 13,553,060 13,553,060

Issuance of preference shares (Note 22) - 1,199,994 - - 1,199,994

At 31 December 2002 83,802,007 14,949,963 (6,101) 1,269,243,125 1,367,988,994

At 1 January 2003

As previously stated 83,802,007 14,949,963 (6,101) 1,263,332,539 1,362,078,408

Prior year adjustment (Note 28) - - - 5,910,586 5,910,586

At 1 January 2003 (restated) 83,802,007 14,949,963 (6,101) 1,269,243,125 1,367,988,994

Currency translation differences - - 801 - 801

Demutualisation cost (Note 21) (2,836,455) - - - (2,836,455)

Net surplus for the year - - - 59,875,419 59,875,419

Issuance of preference share (Note 22) - 199,999 - - 199,999

At 31 December 2003 80,965,552 15,149,962 (5,300) 1,329,118,544 1,425,228,758


119118


Cash Flow Statements

Group Company1.1.2003 1.7.2001 1.1.2003 1.7.2001

to to to to31.12.2003 31.12.2002 31.12.2003 31.12.2002

RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of unquoted bonds, net (66,308,155) (99,503,439) (104,256,277) (69,553,933)

Increase in investment in subsidiaries - - (48,080,794) (14,370,097)

Acquisition of business operations of MESDAQ** - (17,937,260) - (17,937,260)

Purchase of additional shares in subsidiaries fromminority shareholders (10,490,000) (12,000,000) (10,490,000) (12,000,000)

Purchase of club memberships - (150,200) - -

Repayment from/(disbursement for) staff loans, net 3,084,358 (5,625,024) 2,545,474 (5,742,107)

Purchase of loan stock from subsidiary - - - (2,000,000)

Interest received 46,257,003 51,879,591 26,275,181 39,092,927

Purchase of property, plant and equipment (7,971,291) (10,683,957) (7,767,059) (8,125,069)

Proceeds from sale of property, plant and equipment 1,403,459 6,266,551 347,716 3,443,664

Net cash used in investing activities (34,024,626) (87,753,738) (141,425,759) (87,191,875)

CASH FLOWS FROM FINANCING ACTIVITIES

Payment of dividend to minority shareholders (720,006) (2,196,000) - -

Transfer from/(to) Compensation Funds 4,458,865 (3,499,143) 4,870,732 (4,820,732)

Decrease in long term borrowings/liability (758,261) (977,960) - (538,560)

Preference shares issued 199,999 1,199,994 - -

Demutualisation cost (2,836,455) (13,157,993) (2,836,455) (13,157,993)

Net cash generated from/(used in) financing activities 344,142 (18,631,102) 2,034,277 (18,517,285)

NET DECREASE IN CASH AND CASH EQUIVALENTS (1,536,430) (76,905,520) (138,103,942) (58,869,013)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR/PERIOD 809,945,566 886,851,086 360,981,912 419,850,925

CASH AND CASH EQUIVALENTS AT END OF YEAR/PERIOD 808,409,136 809,945,566 222,877,970 360,981,912

CASH AND CASH EQUIVALENTS COMPRISE:

Cash and bank balances 16,087,789 11,853,665 12,323,063 117,237

Short term deposits (Note 15) 792,321,347 798,091,901 210,554,907 360,864,675

808,409,136 809,945,566 222,877,970 360,981,912

**Net cash outflow from acquisition of business operations of MESDAQ RM

Property, plant and equipment 558,853

Sundry receivables 135,997

Sundry payables (19,624,226)

Net assets acquired (18,929,376)

Goodwill on acquisition 36,866,636

Net cash outflow from acquisition of business operations 17,937,260

for the year ended 31 December 2003


Group Company1.1.2003 1.7.2001 1.1.2003 1.7.2001

to to to to31.12.2003 31.12.2002 31.12.2003 31.12.2002

RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES


Adjustment for:

Depreciation 18,466,170 37,415,456 12,838,065 28,150,379

Property, plant and equipment written off 374,422 30,643 359,920 -

Impairment losses on property, plant and equipment - 28,245,200 - 25,170,147

Amortisation of goodwill net of reserve on consolidation 2,921,187 2,549,213 1,843,332 1,843,332

Net (reversal)/provision for bad and doubtful debts (198,577) 761,808 (333,452) 995,531

Bad debts written off 1,403,749 - 1,400,000 -

Net gain on sale of property, plant and equipment (293,550) (2,523,633) (347,716) (2,244,091)

Provision for diminution in value of investments 2,987,340 - 2,984,009 -

Recreational club membership benefits written off 75,100 225,158 - -

Amortisation of premium less accretion of discount 507,897 637,076 821,992 905,894

Provision for retirement benefits 4,825,730 14,214,877 2,770,433 9,490,761

Net gain on disposal of investments (18,406,315) (20,672,872) (6,070,229) (8,288,730)

Interest income (51,922,479) (59,091,872) (29,375,887) (40,870,364)

Interest expense 143,885 232,981 6,444 -

Gross dividend income - - (70,000,000) (67,105,556)

Operating surplus before working capital changes 56,436,380 32,676,829 6,626,313 8,079,568

(Increase)/decrease in receivables (17,019,315) 26,671,883 (4,504,526) 9,072,741

Increase/(decrease) in payables 61,500,185 (8,547,682) 16,889,031 (17,517,978)

Changes in subsidiaries balances - - (6,267,421) 31,992,108

Cash generated from operations 100,917,250 50,801,030 12,743,397 31,626,439

Retirement benefits paid (4,533,441) (3,611,806) (3,862,490) (2,820,825)

Dividend received - - 50,400,000 48,316,000

Interest paid (143,885) (232,981) (6,444) -

Taxes paid, net refund (64,095,870) (17,476,923) (57,986,923) (30,281,467)

Net cash generated from operating activities 32,144,054 29,479,320 1,287,540 46,840,147

Cash Flow Statementsfor the year ended 31 December 2003

121120


Notes to the Financial Statements31 December 2003

(b) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries.

Subsidiaries are those companies in which the Group has a long term equity interest and where it has power to

exercise control over the financial and operating policies so as to obtain benefits therefrom.

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of

accounting, the results of subsidiaries acquired or disposed of during the year are included in the consolidated income

statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. The assets and

liabilities of a subsidiary are measured at their fair values at the date of acquisition and these values are reflected in

the consolidated balance sheet. The difference between the cost of an acquisition and the fair value of the Group's

share of the net assets of the acquired subsidiary at the date of acquisition is included in the consolidated balance

sheet as goodwill or negative goodwill arising on consolidation.

Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated

financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs

cannot be recovered.

The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group's share

of its net assets together with any unamortised balance of goodwill and exchange differences which were not

previously recognised in the consolidated income statement. Minority interest is measured at the minorities' share of the

post acquisition fair values of the identifiable assets and liabilities of the acquiree.

(c) Goodwill

Goodwill represents the excess of the cost of acquisition over the Group's or the Company's interest in the fair value of

the identifiable assets and liabilities at the date of acquisition.

Goodwill is stated at cost less accumulated amortisation and impairment losses. The policy for the recognition and

measurement of impairment losses is in accordance with Note 2(l). Goodwill is presented separately in the balance sheet

and is amortised on a straight-line basis over its estimated useful life of 20 years.

(d) Investment in Subsidiaries

The Company's investment in subsidiaries are stated at cost less impairment losses. The policy for the recognition and

measurement of impairment losses is in accordance with Note 2(l).

On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is recognised

in the income statement.

(e) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The policy for the

recognition and measurement of impairment losses is in accordance with Note 2(l).

Long term leasehold land is depreciated over the period of the lease of 99 years. Depreciation of other property, plant

and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the

estimated useful life at the following annual rates:

Freehold and leasehold building and office lots 2%

Renovations 20%

Office equipment, electrical installation, furniture and fittings 10% - 20%

Computers and office automation 20% - 33.33%

Motor vehicles 20%

The leasehold building and office lots have a term of 99 years.

Upon the disposal of an item of property, plant or equipment, the difference between the net disposal proceeds and the

net carrying amount is recognised in the income statement.


1. CORPORATE INFORMATION

The principal activities of the Company were to provide, regulate and maintain facilities for conducting the business of a stock

exchange in Malaysia. Following the demutualisation exercise, subsequent to the end of the financial year on 5 January 2004,

the Company's stock exchange business was vested and transferred to Malaysia Securities Exchange Berhad, a wholly

owned subsidiary of the Company. Thereafter, the principal activity of the Company is that of an exchange holding company.

The principal activities of the subsidiaries are described in Note 9.

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

The Company was incorporated under the Companies Act, 1965 on 14 December 1976 as a company limited by guarantee

and did not have a share capital. As disclosed in Note 33, the Company was converted to a public company limited by shares on

5 January 2004.

The registered office of the Company is located at 6th Floor, Exchange Square, Bukit Kewangan, 50200 Kuala Lumpur.

The number of employees in the Group and in the Company at the end of the financial year were 1,089 (2002: 1,108) and

523 (2002: 501) respectively.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors

on 13 February 2004 .

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

The financial statements of the Group and of the Company have been prepared under the historical cost convention

and comply with the provisions of the Companies Act, 1965 and applicable Approved Accounting Standards in Malaysia.

During the financial year ended 31 December 2003, the Group and the Company adopted the following MASB

Standards for the first time:

MASB 25: Income Taxes

MASB 27: Borrowing Costs

MASB 28: Discontinuing Operations

MASB 29: Employee Benefits

The effects of adopting MASB 25 are summarised in the Statements of Changes in Equity and further information is

disclosed in Note 28 to the financial statements. The adoption of MASB 27, MASB 28 and MASB 29 have not given

rise to any adjustments to the opening balances of accumulated funds of the prior period and current year or to

changes in comparatives.

123122



(i) Income Tax

Income tax on the surplus or deficit for the year comprises current and deferred tax. Current tax is the expected amount

of income taxes payable in respect of the taxable surplus for the year and is measured using the tax rates that have been

enacted at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the

tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities

are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary

differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available

against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred

tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of

an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither

accounting surplus nor taxable surplus.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability

is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is

recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in

which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination

that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

Prior to the adoption of MASB 25: Income Taxes on 1 January 2003, deferred tax was provided for using the liability

method in respect of significant timing differences and deferred tax assets were not recognised unless there was

reasonable expectation of their realisation. This change in accounting policy has been accounted for retrospectively and

the effects of this change are disclosed in Note 28.

(j) Foreign Currencies

Transactions in foreign currencies are initially recorded in Ringgit Malaysia at rates of exchange ruling at the date of

transaction. At each balance sheet date, foreign currency monetary items are translated into Ringgit Malaysia at

exchange rates ruling at that date. Non-monetary items initially denominated in foreign currencies, which are carried at

historical cost are translated using the historical rate as of the date of acquisition and non monetary items which are

carried at fair value are translated using the exchange rate that existed when the values were determined. All exchange

rate differences are taken to the income statement.

The USD denominated financial statements of a subsidiary is translated at year-end exchange rate with respect to the

assets and liabilities, and at the exchange rate at the dates of the transactions with respect to the income statement. All

resulting translation differences are included in the foreign exchange reserve.

Goodwill and fair value adjustment arising on the acquisition of the USD denominated subsidiary are treated as assets

and liabilities of the Group and translated at the exchange rate ruling at the date of the acquisition.

The exchange rate ruling for USD denominated balances at both balance sheet dates is RM3.80: USD1.00.

(k) Revenue Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the

enterprise and the amount of the revenue can be measured reliably.

(i) Dividend income is recognised when the right to receive payment is established.

(ii) Grants received by Malaysian Derivatives Clearing House Berhad (“MDCH”), a subsidiary, from the Securities

Commission, are recognised as income over the periods necessary to match them with the related costs which they

are intended to compensate, on a systematic basis.


(f) Cash and Cash Equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at banks and short

term deposits.

(g) Provisions for Liabilities

Provisions for liabilities are recognised when the Group or the Company has a present obligation as a result of a past

event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation,

and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to

reflect the current best estimate. Where the effect of the time value of the money is material, the amount of the provision

is the present value of the expenditure expected to be required to settle the obligation.

(h) Employee Benefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the

associated services are rendered by employees of the Group. Short term accumulating compensated absences such

as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future

compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised

when the absences occur.

Prior to the adoption of MASB 29: Employee Benefits on 1 January 2003, no liability was recognised for the

obligations in respect of short term employee benefits in the form of accumulating compensated absences. The

effects of the change in accounting policy is accounted for in the current financial year and not applied retrospectively

as it is not material.

(ii) Defined contribution plans

As required by law, companies in Malaysia make contributions to the national pension scheme, the Employees

Provident Fund ("EPF"). Such contributions are recognised as an expense in the income statement as incurred.

(iii) Defined benefit plans

The Group operates a funded, defined benefit Retirement Benefit Scheme ("the Scheme") for its eligible employees.

The Group's obligations under the Scheme are determined based on actuarial valuation where the amount of benefit

that employees have earned in return for their service in the current and prior years is estimated. That benefit is

discounted using the Projected Unit Credit Method in order to determine its present value. Actuarial gains or losses

are recognised as income or expense over ten years when the cumulative unrecognised actuarial gains or losses for

the Scheme at the end of the previous financial year exceed 10% of the higher of the present value of the defined

benefit obligation and the fair value of plan assets. Past service cost is recognised immediately to the extent that the

benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the

amended benefits become vested.

Previously, actuarial gains and losses are recognised in full as income or expense in the financial year they arise. This

change in accounting policy is not applied retrospectively as the amounts relating to prior years are not reasonably

determinable.

The amount recognised in the balance sheet represents the present value of the defined benefit obligations adjusted

for unrecognised actuarial gains and losses and unrecognised past service cost, and reduced by the fair value of plan

assets. Any asset resulting from this calculation is limited to the net total of any unrecognised actuarial losses and past

service cost, and the present value of any economic benefits in the form of refunds or reductions in future

contributions to the plan.

Effective 1 September 2003, the Scheme was closed to new entrants. Members who opted to join a separate

new defined contribution plan cease to accrue benefits under the Scheme in respect of Pensionable Service after

31 August 2003.

125124




(iii) Interest income comprises interest income recognised on short term deposits and unquoted bonds. Interest income

of the Group also includes interest earned on MCD Compensation Fund’s deposits and investments. Interest is

recognised on a time proportion basis that reflects the effective yield on the asset.

(iv) Accretion of discounts and amortisation of premiums on investments are recognised on an effective yield basis.

(v) All other revenue is recognised on an accrual basis.

(l) Impairment of Assets

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any

indication of impairment. If any such indication exists, impairment is measured by comparing the carrying values of the

assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use, which is

measured by reference to discounted future cash flows.

An impairment loss is recognised as an expense in the income statement immediately. Reversal of impairment losses

recognised in prior years is recorded when the impairment losses recognised for the asset no longer exist or have

decreased. The reversal is recognised to the extent of the carrying amount of the asset that would have been determined

(net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income

statement immediately.

(m) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual

provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual

arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as

expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a

net basis or to realise the asset and settle the liability simultaneously.

(i) Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off when identified. Provision for

doubtful debts is made on trade debts which are six months or older, or on debts which recoverability is considered

doubtful.

(ii) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services

received.

(iii) Investments

(i) Short term investments comprise unquoted securities which are managed by external fund managers for the

purpose of short term capital gains. These unquoted securites are stated at the lower of cost or market value or

indicative market value determined on an aggregate basis. Cost is determined on the weighted average basis.

Increases or decreases in the carrying amount of short term investments are recognised in the income statement.

On disposal of short term investments, the difference between net disposal proceeds and the carrying amount is

recognised in the income statement.

(ii) Other investments comprise unquoted bonds that are acquired and held for yield or capital growth and are usually

held to maturity. Unquoted bonds are stated at cost adjusted for amortisation of premium or net of accretion of

discounts where applicable, to maturity dates. Provision is made for permanent diminution in value, where

considered appropriate. On disposal of such investments, the differences between the net disposal proceeds and

their carrying amounts are recognised in the income statement.

(iii) Investments in loan stocks of a subsidiary are stated at cost less provision for any permanent diminution in value.

A N N U A L R E P O R T 2 0 0 3

(n) Subscriptions

The rates for monthly subscription fees are as follows:2003 2002

RM RM

Participating organisation (formerly known as voting members) 1,000 1,000

Registered person (executive/directors)(formerly known as dealing members) 300 300

Registered person (corporate/individual)(formerly known as non-dealing members) 300 300

Registered person (non-executive directors)(formerly known as non-dealing members) 100 100

Trainee dealers’ representatives 50 50

3. REVENUE

Revenue of the Group consists of the following:Group

1.1.2003 1.7.2001to to

31.12.2003 31.12.2002RM RM

Clearing fees 117,738,461 110,021,197

SCORE fees 9,694,293 8,658,962

Members’ subscription 3,664,363 4,012,722

Listing fee 13,684,245 14,923,293

Equipment rental income 23,989,715 29,944,610

Other income/fees derived from operations of the Group 54,260,089 78,238,142

223,031,166 245,798,926

Revenue of the Company consists of the following:

Company

SCORE fees 9,694,293 8,658,962

Members’ subscriptions 1,147,650 2,087,100

Listing fee 13,607,370 14,923,293

Equipment rental income 18,645,795 25,861,770

Significant income from subsidiaries:

- Commitment income 120,000 60,000

- Dividend income 70,000,000 67,105,556

- Office rental 8,003,897 8,877,244

- Royalty income* 51,675,806 48,684,954

- Cost recoveries 15,309,750 26,892,967

Other income/fees derived from operations of the Company 8,748,522 14,563,890

196,953,083 217,715,736

* Royalty income represents royalty receivable from SCANS, a wholly owned subsidiary.

127126



4. STAFF COSTS

Group Company

1.1.2003 1.7.2001 1.1.2003 1.7.2001to to to to

31.12.2003 31.12.2002 31.12.2003 31.12.2002RM RM RM RM

Wages and salaries 56,426,560 65,709,787 31,585,805 41,501,747

Social security costs 379,278 527,275 187,413 297,336

Short term accumulating compensated absences 1,272,298 - 690,983 -

Termination benefits - 2,597,515 - -

Pension costs - defined contribution plans 9,769,317 8,413,185 5,569,410 4,815,684

Pension costs - defined benefit plan (Note 23) 4,825,730 14,214,877 2,770,433 9,490,761

Other staff related expenses 24,352,386 38,114,927 15,249,786 15,801,215

97,025,569 129,577,566 56,053,830 71,906,743

5. SURPLUS FROM OPERATIONS

Surplus from operations is stated after charging/(crediting):

Group Company1.1.2003 1.7.2001 1.1.2003 1.7.2001

to to to to31.12.2003 31.12.2002 31.12.2003 31.12.2002

RM RM RM RM

Property, plant and equipment

- Impairment losses on property, plant and equipment - 28,245,200 - 25,170,147

- Property, plant and equipment written off 374,422 30,643 359,920 -

- Net gain on sale of property, plant and equipment (293,550) (2,523,633) (347,716) (2,244,091)

Investments

- Provision for diminution in value of investments 2,987,340 - 2,984,009 -

- Net gain on disposal of investments (18,406,315) (20,672,872) (6,070,229) (8,288,730)

- Interest income (including MCD's Compensation Fund income of RM2,022,197 (2002: RM3,322,729)) 51,922,479) (59,091,872) (29,375,887) (40,870,364)

- Amortisation of premium less accretion of discount(including MCD's Compensation Fund amortisation of RM33,500 (2002: RM22,071)) 507,897 637,076 821,992 905,894

Remuneration of* :

Directors of the Company

- Fees 356,000 458,333 - -

- Other emoluments 2,305,765 2,478,760 - -

Other directors of subsidiaries

- Fees 380,162 337,800 - -

- Other emoluments 1,813,942 836,307 - -

Auditors’ remuneration:

- Statutory audit 183,400 193,400 45,000 50,000


5. SURPLUS FROM OPERATIONS (CONTD.)

Group Company1.1.2003 1.7.2001 1.1.2003 1.7.2001

to to to to31.12.2003 31.12.2002 31.12.2003 31.12.2002

RM RM RM RM

Amortisation of goodwill 2,921,187 2,549,213 1,843,332 1,843,332

Net (reversal)/provision for bad and doubtful debts (198,577) 761,808 (333,452) 995,531

Bad debts written off 1,403,749 - 1,400,000 -

Office rental

- Subsidiary - - - 18,340

- Others 1,310,315 2,180,318 1,216,775 1,694,301

Securities Commission levy 21,531,586 20,244,396 - -

Facilities management charges by a subsidiary - - 11,285,897 8,694,291

Rental of equipment 492,500 1,024,815 - -

Recreational club memberships benefit to directors** 75,100 225,158 - -

Gross dividend income from subsidiaries - - (70,000,000) (67,105,556)

Property management and other service chargesby a subsidiary - - 7,230,642 10,862,146

* The estimated monetary value of other benefits not included in the above received by directors of the Group and Company were RM123,457 (2002: RM215,952) and RM14,048 (2002: RM20,250) respectively.

** This represents cost of recreational club memberships, purchased for the use of directors of a subsidiary, written off.

6. FINANCE COST

Included in finance cost is:

Group Company1.1.2003 1.7.2001 1.1.2003 1.7.2001

to to to to31.12.2003 31.12.2002 31.12.2003 31.12.2002

RM RM RM RM

Interest expense 143,885 232,981 6,444 -

129128




7. TAXATION

Group Company1.1.2003 1.7.2001 1.1.2003 1.7.2001

to to to to31.12.2003 31.12.2002 31.12.2003 31.12.2002

RM RM RM RM

Current year's provision 27,681,807 28,167,622 27,513,000 30,932,778

Deferred taxation relating to:

- Origination and reversal of temporarydifferences (Note 14) 2,027,948 (652,259) 3,185,793 (495,354)

Under/(over) provision of taxation in prior years 490,638 (14,945,139) 877,483 (2,134,446)

30,200,393 12,570,224 31,576,276 28,302,978

Income tax is calculated at the Malaysian statutory tax rate of 28% (2002: 28%) of the estimated assessable profit for the year.

A reconciliation of income tax expense applicable to surplus before taxation at the statutory income tax rate to income taxexpense at the effective income tax rate of the Group and the Company is as follows:

Group Company1.1.2003 1.7.2001 1.1.2003 1.7.2001

to to to to31.12.2003 31.12.2002 31.12.2003 31.12.2002

RM RM RM RM


Taxation at Malaysian statutory tax rate of28% (2002 : 28%) 26,754,510 8,582,782 25,124,233 16,809,034

Expenses not deductible for tax purposes 7,103,041 16,240,220 5,590,640 11,229,841

Income not subject to tax (3,534,946) (1,951,557) (16,080) -

Effect of lower tax rate at 20% on chargeableincome of up to RM100,000 (8,000) - - -

Deferred tax assets not recognised during the year 747,044 780,973 - -

Utilisation of previously unrecognised unabsorbed capital allowances (1,366,709) (394,269) - -

Underprovision of deferred tax in respect of prior years 14,815 - - -

Overprovision of taxation for the period - 4,257,214 - 2,398,706

Under/(over) provision of taxation in prior years 490,638 (14,945,139) 877,483 (2,134,603)

Tax expense for the year/period 30,200,393 12,570,224 31,576,276 28,302,978

Tax losses are analysed as follows:

Tax savings recognised during the year arisingfrom utilisation of current year losses - 19,735 - -

Unutilised tax losses carried forward 25,968,767 26,434,767 - -

Unabsorbed capital allowances are analysed as follows:

Tax savings recognised during the year arising from:

- Utilisation of current year unabsorbed capital allowances 214,002 369,344 - -

- Utilisation of unabsorbed capital allowances brought forward 1,366,709 394,269 - -

Unabsorbed capital allowances carried forward 36,083,061 41,492,069 - -

8. PROPERTY, PLANT AND EQUIPMENTOffice

equipment,electrical

Land and installation, Computersbuildings furniture and office Motor Note 8(a) and fittings automation vehicles Total

GROUP RM RM RM RM RM

Cost

At 1 January 2003 381,710,429 74,111,142 306,700,410 3,488,622 766,010,603

Additions 1,700,398 2,657,540 3,613,353 - 7,971,291

Disposals (1,187,341) (4,090) (3,581) (1,245,537) (2,440,549)

Written off (47,411) (91,325) (42,545,496) - (42,684,232)

At 31 December 2003 382,176,075 76,673,267 267,764,686 2,243,085 728,857,113

Accumulated Depreciation and Impairment Losses

At 1 January 2003 71,290,953 67,297,793 301,102,756 2,792,696 442,484,198

Depreciation charge for the year 6,702,760 4,685,221 6,830,750 247,439 18,466,170

Disposals (193,932) (3,319) (3,579) (1,129,810) (1,330,640)

Written off (47,411) (76,928) (42,185,471) - (42,309,810)

At 31 December 2003 77,752,370 71,902,767 265,744,456 1,910,325 417,309,918

Net Book Value

At 31 December 2003 304,423,705 4,770,500 2,020,230 332,760 311,547,195

At 31 December 2002 310,419,476 6,813,349 5,597,654 695,926 323,526,405

Depreciation charge for 2002 11,810,648 13,980,100 9,983,997 1,640,711 37,415,456

COMPANY

Cost

At 1 January 2003 366,639,582 67,789,812 236,301,092 1,775,196 672,505,682

Additions 1,680,132 2,637,922 3,449,005 - 7,767,059

Disposals - - - (730,759) (730,759)

Written off - - (7,628,265) - (7,628,265)

At 31 December 2003 368,319,714 70,427,734 232,121,832 1,044,437 671,913,717


At 1 January 2003 62,724,083 61,908,430 234,184,850 1,479,581 360,296,944

Depreciation charge for the year 6,171,570 4,315,508 2,240,955 110,032 12,838,065

Disposals - - - (730,759) (730,759)

Written off - - (7,268,345) - (7,268,345)

At 31 December 2003 68,895,653 66,223,938 229,157,460 858,854 365,135,905

Net Book Value

At 31 December 2003 299,424,061 4,203,796 2,964,372 185,583 306,777,812

At 31 December 2002 303,915,499 5,881,382 2,116,242 295,615 312,208,738

Depreciation charge for 2002 10,096,138 12,822,006 3,993,019 1,239,216 28,150,379

131130



8. PROPERTY, PLANT AND EQUIPMENT (CONTD.)8(a). LAND AND BUILDINGS

Leasehold Freehold building building

Leasehold land* and office lots and office lots Renovation TotalGROUP RM RM RM RM RM

Cost

At 1 January 2003 60,817,500 287,147,823 29,313,194 4,431,912 381,710,429

Additions - - - 1,700,398 1,700,398

Disposals - (1,187,341) - - (1,187,341)

Written off - - - (47,411) (47,411)

At 31 December 2003 60,817,500 285,960,482 29,313,194 6,084,899 382,176,075


At 1 January 2003 8,716,325 51,989,209 6,648,240 3,937,179 71,290,953

Depreciation charge for the year 810,153 4,909,718 385,915 596,974 6,702,760

Disposals - (193,932) - - (193,932)

Written off - - - (47,411) (47,411)

At 31 December 2003 9,526,478 56,704,995 7,034,155 4,486,742 77,752,370

Net Book Value

At 31 December 2003 51,291,022 229,255,487 22,279,039 1,598,157 304,423,705

At 31 December 2002 52,101,175 235,158,614 22,664,954 494,733 310,419,476

Depreciation charge for 2002 921,476 8,921,743 619,594 1,347,835 11,810,648

COMPANY

Cost

At 1 January 2003 60,817,500 285,960,482 19,861,600 - 366,639,582

Additions - - - 1,680,132 1,680,132

At 31 December 2003 60,817,500 285,960,482 19,861,600 1,680,132 368,319,714


At 1 January 2003 8,716,325 51,822,982 2,184,776 - 62,724,083

Depreciation charge for the year 810,153 4,882,013 280,899 198,505 6,171,570

At 31 December 2003 9,526,478 56,704,995 2,465,675 198,505 68,895,653

Net Book Value

At 31 December 2003 51,291,022 229,255,487 17,395,925 1,481,627 299,424,061

At 31 December 2002 52,101,175 234,137,500 17,676,824 - 303,915,499

Depreciation charge for 2002 921,476 8,578,814 595,848 - 10,096,138

Office lots represent offices and car park spaces in multistorey buildings.

*Long term leasehold land of the Group and Company costing RM53,317,500 is pledged as security for borrowings as referred to in Note 26.


9. INVESTMENT IN SUBSIDIARIES

Company2003 2002

RM RM

Unquoted shares, at cost 163,442,898 104,872,104

Impairment losses (38,740,400) (38,740,400)

124,702,498 66,131,704

Details of the subsidiaries are as follows:OrdinaryPaid Up

Capital as atEquity Interest Held (%) 31.12.2003 Principal

Name of Subsidiaries 2003 2002 RM Activities

Incorporated in Malaysia:

Securities Clearing 100 100 300,000,000 Providing clearingAutomated Network facilities for contractsServices Sdn. Bhd. between clearing("SCANS") members.

KLSE Information Services 100 100 250,002 Compiling, providingSdn. Bhd. ("KLSE IS") and disseminating

real-time share price andother relevant financial/economic informationfrom the Company tovarious subscribers.

Malaysian Central 75 55 25,000,000 Maintaining andDepository Sdn. Bhd. operating a central("MCD") depository in respect of

securities listed on thestock exchange inMalaysia.

Malaysian Share 100 51 2,000,000 Providing and/orRegistration Services undertaking shareSdn. Bhd.("MSRS") registration services.

KLSE Property Management 100 100 1,000,000 Providing buildingSdn. Bhd. (“KPM”) management and

security services.

Malaysian Central 75 55 2 Acting as nominees forDepository Nominees Malaysian CentralSdn. Bhd. Depository Sdn. Bhd.

and to receive securitiesand property on depositor for safe-custody ormanagement.

KLSE Technology Sdn. Bhd. 100 100 39,998,002 Provision of information(“KLSE TECH”) and communications

technology services.

A N N U A L R E P O R T 2 0 0 3


9. INVESTMENT IN SUBSIDIARIES (CONTD.)OrdinaryPaid Up

Capital as atEquity Interest Held (%) 31.12.2003 Principal

Name of Subsidiaries 2003 2002 RM Activities

Incorporated in Malaysia:

Malaysia Derivatives 100 100 50,000,000 To establish, maintain, Exchange Bhd. conduct, operate and (“MDEX”) promote a market for the

trading of futures and options contracts and facilities for the registration of dealings and settlement of trades in such contracts.

KLOFFE Information 100 100 2 Dormant - intended Systems Sdn. Bhd. principal activities are to (“KIS”) provide information

technology and management services.

Labuan International 100 100 USD5,500,000 To provide, regulate andFinancial Exchange Inc. * maintain facilities for("LFX") conducting the business

of an offshore stockexchange in Labuan.

Commodity and Monetary ^ ^ ^ DormantExchange of Malaysia**(“COMMEX”)

Malaysian Derivatives 100 100 20,000,000 Providing clearing,Clearing House Berhad settlement and("MDCH")** guaranteeing of futures

and options contractsexecuted on derivativesexchanges and theadministration andenforcement of itsbusiness rules.

Malaysia Monetary 100 100 1,000,000 DormantExchange Berhad**

KLSE Training Sdn. Bhd.(Formerly known as I-MESDAQ Sdn. Bhd.) 100 100 2 Dormant

Malaysia Securities Exchange 100 - 2 Took over the stockBerhad ("MSEB") exchange business of the

Company on 5 January2004.

* Incorporated in the Federal Territory of Labuan, Malaysia.** Audited by another firm of auditors.^ COMMEX is a company limited by guarantee with membership fees of RM7,060,000. MDEX and the Company are regarded as COMMEX’s immediate and

ultimate holding company respectively. MDEX is the sole member of COMMEX.

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10.LOAN STOCKS FROM SUBSIDIARY

During the financial period ended 31 December 2002, the Company purchased 2,000,000 of 5 year 4% Redeemable

Convertible Unsecured Loan Stocks 2002/2007 (RCULS) at a nominal value of RM1 each from MSRS, a subsidiary. These

loan stocks were disposed subsequent to the end of the financial year as disclosed in Note 33(b).

11.OTHER INVESTMENTS

Group Company2003 2002 2003 2002

RM RM RM RM

At cost:

Unquoted bonds 249,076,800 212,762,242 151,210,490 89,200,992

Amortisation of premiums less accretion of discounts (99,641) (206,961) (336,382) (26,371)

248,977,159 212,555,281 150,874,108 89,174,621

Recreational club memberships 84,300 159,258 - -

Add: Acquired during the year/period - 150,200 - -

Less: Written off (75,100) (225,158) - -

9,200 84,300 - -

248,986,359 212,639,581 150,874,108 89,174,621

Indicative market value of unquoted bonds 253,502,500 217,555,528 150,564,000 90,389,200

Maturities and weighted average yield to maturity per annum of the unquoted bonds as at the balance sheet date were

as follows:

Group Company

Maturity Weighted WeightedAverage Yield Average Yield

to Maturity to MaturityRM % RM %

2003

< 1 year 14,976,350 3.7 14,975,500 3.7

1 – 5 years 171,975, 909 5.2 102,887,308 4.4

> 5 years 62,024,900 6.0 33,011,300 5.8

248,977,159 150,874,108

2002

< 1 year 5,038,584 4.8 5,038,584 4.8

1 – 5 years 82,977,738 6.0 67,977,738 5.8

> 5 years 124,538,959 6.6 16,158,299 6.2

212,555,281 89,174,621

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12.STAFF LOANS RECEIVABLE

Group Company2003 2002 2003 2002

RM RM RM RM

Housing loans 43,907,185 44,528,520 42,311,464 43,025,206

Vehicle loans 980,874 1,436,749 739,426 1,200,542

Computer loans 742,870 942,278 551,285 627,798

Staff Advances 53,540 7,558 5,055 7,241

45,684,469 46,915,105 43,607,230 44,860,787

Portion repayable within twelve months includedin sundry receivables (4,220,656) (2,366,934) (3,373,209) (2,081,292)

41,463,813 44,548,171 40,234,021 42,779,495

The staff housing and vehicle loans are secured against the properties and vehicles of the borrowers respectively. The staffloans bear interest of 2% to 4% per annum computed on monthly rest basis.

The maturity structure of the staff loans receivable as at the end of the financial year/period were as follows:

Group Company2003 2002 2003 2002

RM RM RM RM

Within 1 year 4,220,656 2,366,934 3,373,209 2,081,292

More than 1 year and less than 5 years 13,720,761 14,941,572 12,490,969 13,172,896

5 years or more 27,743,052 29,606,599 27,743,052 29,606,599

45,684,469 46,915,105 43,607,230 44,860,787

13. NET GOODWILL

Group Company2003 2002 2003 2002

RM RM RM RM

Goodwill

At 1 January 2003/1 July 2001 57,249,501 17,346,021 36,866,636 -

Arising from acquiring additional shares in subsidiary 2,055,677 3,036,844 - -

Arising from transfer of business operations - 36,866,636 - 36,866,636

At 31 December 59,305,178 57,249,501 36,866,636 36,866,636

Accumulated amortisation and impairment losses

At 1 January 2003/1 July 2001 (5,291,920) (1,995,794) (1,843,332) -

Amortisation for the year (2,921,187) (3,296,126) (1,843,332) (1,843,332)

At 31 December (8,213,107) (5,291,920) (3,686,664) (1,843,332)

Reserve arising on consolidation

At beginning/end of year/period (9,958,835) (9,958,835) - -

Accumulated amortisation and impairment losses

At 1 January 2003/1 July 2001 9,958,835 9,211,922 - -

Amortisation for the year - 746,913 - -

At 31 December 9,958,835 9,958,835 - -

Net goodwill 51,092,071 51,957,581 33,179,972 35,023,304

Goodwill is stated at cost less accumulated amortisation and impairment losses. Goodwill net of reserve arising onconsolidation is amortised on a straight-line basis over its estimated useful life of 20 years.

14.DEFERRED TAXATION

Group Company2003 2002 2003 2002

RM RM RM RM

At 1 January 2003/1 July 2001, previously stated (105,500) (34,000) - -

Prior year adjustment (Note 28) 6,101,405 5,377,646 4,543,552 4,048,198

At 1 January 2003/1 July 2001, restated 5,995,905 5,343,646 4,543,552 4,048,198

Recognised in the income statement (Note 7) (2,027,948) 652,259 (3,185,793) 495,354

At 31 December 3,967,957 5,995,905 1,357,759 4,543,552 The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:

Deferred Tax Assets of the Group:Depreciation Provision Provisionin excess of for for

capital retirement doubtful Otherallowances benefits debts provisions Total

RM RM RM RM RM

At 1 January 2003 (276,270) (6,624,394) (736,456) (467,206) (8,104,326)

Recognised in the income statement (Note 7) 33,821 74,853 93,366 184,672 386,712

At 31 December 2003 (242,449) (6,549,541) (643,090) (282,534) (7,717,614)

Deferred Tax Liabilities of the Group:Accelerated

capitalallowances Receivables Others Total

RM RM RM RM

At 1 January 2003 926,885 1,174,206 7,330 2,108,421

Recognised in the income statement (Note 7) 2,822,772 (1,174,206) (7,330) 1,641,236

At 31 December 2003 3,749,657 - - 3,749,657

Deferred Tax Assets of the Company:Provision Provision

for forretirement doubtful Other

benefits debts provisions TotalRM RM RM RM

At 1 January 2003 (4,495,029) (736,456) (236,921) (5,468,406)

Recognised in the income statement (Note 7) 305,776 93,366 (35,280) 363,862

At 31 December 2003 (4,189,253) (643,090) (272,201) (5,104,544)

Deferred Tax Liabilities of the Company:Accelerated

capitalallowances Total

RM RM

At 1 January 2003 924,854 924,854

Recognised in the income statement (Note 7) 2,821,931 2,821,931

At 31 December 2003 3,746,785 3,746,785

Deferred tax asset has not been recognised in respect of the following items:Group

2003 2002RM RM

Retirement benefit obligations 378,158 215,127

Provision for bonus - 26,347

Provision for unutilised leave 90,864 -

Unutilised capital allowances 10,103,257 11,617,779

Unutilised tax losses 7,271,255 7,401,735

The unutilised tax losses are available indefinitely for offset against future taxable profits of the respective subsidiariessubject to agreement with Inland Revenue Board. Deferred tax asset has not been recognised thereof, as it is not probablethat future taxable income will be available against which they may be utilised.

137136



The weighted average interest rates per annum during the financial year and the average maturities of deposits as at

balance sheet date were as follows:

Group CompanyWeighted WeightedAverage Average Average Average

Interest Rates Maturities Interest Rates Maturities% Days % Days

2003

Licensed banks 2.8 189 3.4 224

Licensed finance companies 2.1 117 3.0 77

Licensed discount houses 1.9 13 2.8 12

Licensed merchant banks 0.9 76 2.8 32

2002

Licensed banks 3.1 157 3.0 156

Licensed finance companies 3.3 175 3.2 184

Licensed discount houses 2.8 54 2.8 92

Licensed merchant banks 2.9 102 2.9 95

15. SHORT TERM DEPOSITS

Group Company2003 2002 2003 2002

RM RM RM RM

Deposits with:

Licensed banks 351,380,475 401,732,706 40,428,490 200,686,831

Licensed finance companies 284,996,776 254,073,255 90,129,732 90,930,000

Licensed discount houses 76,673,599 33,520,567 70,252,817 6,470,344

Licensed merchant banks 73,351,629 102,743,784 4,500,000 62,500,000

786,402,479 792,070,312 205,311,039 360,587,175

Repurchase agreement with a discount house 5,918,868 6,021,589 5,243,868 277,500

792,321,347 798,091,901 210,554,907 360,864,675

Included in short term deposits are:Group Company

2003 2002 2003 2002RM RM RM RM

Deposits pledged with licensed banks for banking facilities granted 51,200,000 51,200,000 1,200,000 1,200,000

Short term deposits of the Company and of the Group amounting to RM22,897,908 (2002: RM4,416,677) are managed

by external fund managers.


16. RECEIVABLES

Group Company2003 2002 2003 2002

RM RM RM RM

Trade receivables 32,427,685 16,452,538 12,190,143 7,755,037

Interest receivables 11,935,313 6,945,540 5,270,969 2,186,889

Other sundry receivables 16,750,265 16,600,083 6,017,208 5,240,555

61,113,263 39,998,161 23,478,320 15,182,481

Provision for doubtful debts (3,550,991) (3,915,508) (2,296,747) (2,630,199)

57,562,272 36,082, 653 21,181,573 12,552,282

The movement of provision for doubtful debts is as follows:

At 1 January 2003/1 July 2001 3,915,508 4,841,835 2,630,199 1,635,568

Net (writeback)/provision for doubtful debts (198,577) 761,808 (333,452) 995,531

Amount written off (165,940) (1,688,135) - (900)

At 31 December 3,550,991 3,915,508 2,296,747 2,630,199

The Group’s and the Company’s normal trade credit term ranges from 7 to 30 days.

The Group and the Company have no significant concentration of credit risk that may arise from exposures to a single

debtor or to groups of debtors.

17. SHORT TERM INVESTMENTS

Group Company2003 2002 2003 2002

RM RM RM RM

Malaysian Government Securities (“MGS”) at cost/valuation - 4,306,640 - 4,306,640

Unquoted bonds, at cost 209,652,113 157,540,447 209,652,113 157,540,447

Less: Provision for diminution in value (2,984,009) - (2,984,009) -

206,668,104 157,540,447 206,668,104 157,540,447

Quoted shares, at cost 9,466 - - -

Less: Provision for diminution in value (3,331) - - -

6,135 - - -

Total 206,674,239 161,847,087 206,668,104 161,847,087

Group and Company2003 2002

RM RM

Market value of MGS - 4,040,900

Indicative market value of unquoted bonds 206,668,104 162,917,512

Market value of quoted shares 6,135 -

Short term investments of the Company and of the Group are managed by external fund managers.

139138



17. SHORT TERM INVESTMENTS (CONTD.)

Maturities and weighted average yield to maturity per annum of the short term investments as at the balance sheet date wereas follows:

Group and CompanyWeighted Weighted

Average Yield Average Yield2003 to Maturity 2002 to Maturity

RM % RM %

Maturity

MGS

< 1 year - - 2,012,040 2.9

1 – 5 years - - 2,294,600 3.0

Unquoted bonds

< 1 year 3,070,100 3.4 10,211,000 4.8

1 – 5 years 118,787,957 5.1 98,536,566 5.4

> 5 years 84,810,047 6.4 48,792,881 6.2

206,668,104 161,847,087

18. DUE FROM SUBSIDIARIES

The amounts due from subsidiaries are unsecured, interest free and have no fixed terms of repayment.

19.DUE TO SUBSIDIARIES

The amounts due to subsidiaries are unsecured, interest free and have no fixed terms of repayment.

20.TRADE PAYABLES

Included in trade payables of the Group is RM150,990,812 (2002: RM111,399,495) relating to amounts due to futures

and options brokers. The amount arises principally from accruals made for margin payable by MDCH.

21.MEMBERSHIP FEES

As at 31 December 2003

(i) Membership fees received from past and present members at RM10,000 each amounted to RM2,960,000 (2002:RM2,960,000); and

(ii) a total contribution of RM94,000,000 (2002: RM94,000,000) was received from Members as follows:

Contribution Number of membersper member 1 January 31 December

RM’000 2003 Addition 2003

5,000 5 - 5

1,000 51 - 51

3,000 6 - 6

62 62

As a result of the consolidation of the stockbroking industry, the number of Members in operation as at the end of the financialyear was 38 (2002: 40)

Contribution Total contribution (RM’000)per member 1 January 31 December

RM’000 2003 Addition 2003

5,000 25,000 - 25,000

1,000 51,000 - 51,000

3,000 18,000 - 18,000

94,000 94,000

During the year, a sum of RM2,836,455 (2002: RM13,157,993) has been charged against the Membership fees for advisoryfees paid for the demutualisation of the Company. The advisory fees incurred are not in the normal course of operations of theCompany.


22. CAPITAL RESERVEGroup

2003 2002RM RM

Group’s portion of accumulated funds capitalised from redemption of preference shares (Note a) 2,750,000 2,750,000

Share premium from MDEX (Note b) 12,399,962 12,199,963

15,149,962 14,949,963

(a) This relates to the Group’s portion of accumulated funds capitalised arising from the redemption of 5,000,000 5%

redeemable cumulative preference shares of RM1 each by a subsidiary, MCD.

(b) In the financial year ended 30 June 2001, MDEX issued 16 non-cumulative “B” preference shares and 15 non

cumulative “C” preference shares of RM1 each at a total premium of RM10,999,969 as part consideration for the

merger of business operations of COMMEX and MDEX. The share premium arising from the above issue is regarded

as capital reserve of the Group and is not distributable. The “B” and “C” preference shares have been accounted for

as part of the Group’s minority interest.

In the previous financial period ended 31 December 2002, MDEX increased its issued and fully paid-up share capital

by way of the issuance of 6 non-cumulative “C” preference shares of RM1 each at a total premium of RM1,199,994.

During the current financial year, MDEX further increased its issued and fully paid-up share capital by way of the

issuance of 1 non-cumulative “C” preference shares of RM1 each at a premium of RM199,999.

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A N N U A L R E P O R T 2 0 0 3


26. LONG TERM LIABILITYGroup and Company

2003 2002RM RM

Long term liability 48,335,815 48,874,376

Less: Portion repayable within twelve months included in sundry payables (538,561) (538,561)

47,797,254 48,335,815

Long term liability relates to the amount payable to the Government of Malaysia for the purchase of leasehold land. Theamount is interest free, payable in 99 annual instalments of RM538,561 each and secured on the leasehold land.

23.RETIREMENT BENEFIT OBLIGATIONS

The Group operates a funded, defined benefit retirement Benefit Scheme (“the Scheme”) for its eligible employees.

Contributions to the Scheme are to be made to a separately administered fund. Under the Scheme, eligible employees

are entitled to benefits upon leaving service, of a lump sum, calculated based on the multiplication of 2 times the Final

Scheme Salary, Pensionable Service and a variable factor based on service year, less EPF offset.

Effective 1 September 2003, the Scheme was closed to new entrants. Members who opted to join a separate new defined

contribution plan cease to accrue benefits under the Scheme in respect of Pensionable Service after 31 August 2003.

The amounts identified as at 31 December 2003 are determined as follows:

Group CompanyRM RM

Present value of funded defined benefit obligations 41,780,100 25,528,700

Fair value of plan assets (11,040,942) (6,746,314)

Unrecognised actuarial losses (5,801,991) (3,820,767)

Net liability 24,937,167 14,961,619

Present value of funded defined benefit obligations analysed as:

Current 20,000 5,600

Non-current:

Later than 1 year but not later than 2 years 684,200 684,200

Later than 2 years but not later than 5 years 3,482,300 3,293,400

Later than 5 years 37,593,600 21,545,500

41,760,100 25,523,100

41,780,100 25,528,700

The amounts recognised in the income statement during the year are as follows:

Group CompanyRM RM

Current services cost 3,469,931 1,935,791

Interest cost 2,545,254 1,659,448

Expected return on plan assets (1,025,340) (658,211)

Over provision of cost in previous year (164,115) (166,595)

Total, included in staff costs (Note 4) 4,825,730 2,770,433

The actual loss on the plan assets of the Group and of the Company were RM2,698,877 and RM2,170,306 respectively.

23.RETIREMENT BENEFIT OBLIGATIONS (CONTD.)

Movements in the net liability in the current year were as follows:Group Company

2003 2002 2003 2002RM RM RM RM

At 1 January 2003/1 July 2001 24,644,877 14,041,806 16,053,676 9,383,740

Amount recognised in the income statement (Note 4) 4,825,731 14,214,877 2,770,433 9,490,761

Contributions paid (4,533,441) (3,611,806) (3,862,490) (2,820,825)

At 31 December 24,937,167 24,644,877 14,961,619 16,053,676

Principal actuarial assumptions used:2003 2002

% %

Discount rate 7.0 7.0

Expected return on plan assets 7.0 7.0

Expected rate of salary increase 5.0 5.0

24.DEFERRED INCOME

Deferred income of the Group relates to grants received by a subsidiary, MDCH, from the Securities Commission and is

recognised as income over the period necessary to match them with the related costs which they are intended to

compensate on a systematic basis.

25. LONG TERM BORROWINGSGroup

2003 2002RM RM

Long term borrowings 1,318,200 1,537,900

Less: Portion repayable within twelve months included as short term borrowings (219,700) (219,700)

1,098,500 1,318,200

Long term borrowings of the Group relate to amounts payable to the Government of Malaysia and comprise two interest-

free unsecured loans of RM697,000 and RM1,500,000. Each loan is repayable in ten equal annual instalments,

repayments of which commenced on 30 November 2000.

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A N N U A L R E P O R T 2 0 0 3

29. CAPITAL COMMITMENTS

Group Company2003 2002 2003 2002

RM RM RM RM

Approved and contracted for:

- Office equipment, furniture and fittings 97,735 15,935 97,735 15,935

- Computer and office automation 2,538,894 570,901 2,538,894 563,811

- Renovation 12,000 - 12,000 -

2,648,629 586,836 2,648,629 579,746

Approved but not contracted for:

- Office equipment, furniture and fittings - 321,442 - 321,442

- Computer and office automation 5,670,000 61,143,099 5,000,000 61,143,099

- Motor vehicles - 3,546,643 - 3,546,643

5,670,000 65,011,184 5,000,000 65,011,184

30. CONTINGENT LIABILITIES - UNSECURED

(a) A claim for an approximate sum of RM 12,000,000 being lease line charges omitted from billing since 1994 was made

against the Company by a local telecommunications company. Both parties are having discussion and currently in the

process of verifying the said amount claimed in order to ascertain the Company's actual liability to the

telecommunications company. No provision in respect of the claim has been made in the financial statements as

negotiations are in process and an amicable settlement has yet to be reached between the parties and corresponding

billings by the Company to participating organisations in respects of the same are still pending.

(b) A demand for RM7,206,000 has been made by a local bank againsst MSRS, a subsidiary, for allegedly breaching

terms of a Letter of Undertaking issued by MSRS to the said bank. The directors of the subsidiary have sought legal

advice on the matter. Based on the legal advice received by MSRS, no provision has been made in the financial

statements as it is not probable that there will be an outflow of resources.

Following the sale of MSRS by the Company to Symphony House Berhad on 5 January 2004, the Company has given

an undertaking to assume all losses or damages suffered by MSRS, if any, resulting from the said claim.


28.PRIOR YEAR ADJUSTMENT (CONTD.)

Comparative amounts as at 31 December 2002 have been restated as follows:

PreviouslyStated Adjustment Restated

RM RM RM

Group

Deferred tax liabilities/(assets) (34,000) 6,029,905 5,995,905

Minority interests (18,096,523) (190,819) (18,287,342)

Company

Deferred tax assets - 4,543,552 4,543, 552

27.MCD COMPENSATION FUND

In 1997, pursuant to the provisions of Section 5(1)(b)(vii) of the Securities Industry (Central Depositories) Act, 1991, MCD,

a subsidiary, established a scheme of compensation for the purpose of settling claims by depositors against MCD, its

authorised depository agents and Malaysian Central Depository Nominees Sdn Bhd. The scheme comprises the

Compensation Fund and insurance policies. MCD’s policy is to maintain the balance in the Compensation Fund at

RM50,000,000. In consideration for the above, all revenue accruing to the Compensation Fund deposits and investments

are to be credited to MCD and all expenditure incurred for and on behalf of the Compensation Fund will be absorbed by

MCD.

The MCD Compensation Fund is segregated from the financial statements of the Group and accounted for separately.

28.PRIOR YEAR ADJUSTMENT

During the financial year, the Group and the Company adopted four new MASB Standards, which became effective from

1 January 2003, and accordingly modified certain accounting policies. The adoption of MASB 25: Income Taxes resulted

in a prior year adjustment.

Under MASB 25, deferred tax liabilities are recognised for all taxable temporary differences. Previously, deferred tax

liabilities were provided for on account of timing differences only to the extent that a tax liability was expected to materialise

in the foreseeable future. In addition, the Group and the Company have commenced recognition of deferred tax assets for

all deductible temporary differences, when it is probable that sufficient taxable surplus will be available against which the

deductible temporary differences can be utilised. Previously, deferred tax assets were not recognised unless there was

reasonable expectation of their realisation.

This change in accounting policy has been applied retrospectively and comparatives have been restated. The effects of

this change in accounting policy are as follows:

Group Company2003 2002 2003 2002

RM RM RM RM

Effects on accumulated funds:

At beginning of year/period, previously stated 1,263,332,539 1,250,312,419 875,322,915 844,088,982

Effects of adopting MASB 25: Deferred tax 6,101,405 5,377,646 4,543,552 4,048,198

Minority interests (190,819) - - -

At beginning of year/period, (restated) 1,269,243,125 1,255,690,065 879,866,467 848,137,180

Effects on net surplus for the year/period:

Net surplus before changes in accounting policy 61,903,367 12,900,801 61,338,919 31,233,933

Effects of adopting MASB 25: Deferred tax (2,027,948) 652,259 (3,185,793) 495,354

Net surplus for the year/period 59,875,419 13,553,060 58,153,126 31,729,287

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A N N U A L R E P O R T 2 0 0 3

31. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTD.)

The directors are of the opinion that with the exception of dividends, the above transactions have been established on

terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

32. SIGNIFICANT EVENTS

During the financial year,

(a) The Company acquired additional 5,000,000 ordinary shares, representing additional 20% equity interest in MCD, for

a cash consideration of RM10,000,000, thus increasing the Company's equity interest in MCD to 75%.

(b) The Company acquired additional 980,000 ordinary shares, representing additonal 49% equity interest in MSRS, a

subsidiary for a cash consideration of RM490,000, thus increasing the Company's equity interest in MSRS to 100%.

(c) A wholly owned subsidiary, LFX, increased its issued and paid-up share capital from USD3,000,000 to USD5,500,000

through the issuance of 2,500,000 ordinary shares of USD1 each for a cash consideration of USD2,500,000. The

shares were fully subscribed by the Company.

(d) A wholly owned subsidiary, MDEX, increased its issued and paid-up share capital from RM11,426,708 to

RM50,000,000 through the issuance of 38,573,292 ordinary shares of RM1 each for a cash consideration of

RM38,573,292. The shares were fully subscribed by the Company.

(e) During the year, authorised share capital of a wholly owned subsidiary of SCANS, MDCH, amounting to RM25,000,000

divided into 15,000,000 ordinary shares of RM1 each and 10,000,000 redeemable preference shares of RM 1 each

has been reclassified into 20,000,000 ordinary shares of RM1 each and 5,000,000 redeemable preference shares of

RM1 each. On 31 December 2003, MDCH increased its issued and paid-up share capital from RM8,000,000 to

RM20,000,000 through the issuance of 12,000,000 ordinary shares of RM1 each. The shares were fully subscribed

by SCANS.

(f) On 20 November 2003, members of the Company passed special resolutions at an Extraordinary General Meeting

approving the conversion of the Company from a company limited by guarantee to a company limited by shares, and

the adoption of amended Memorandum and Article of Association.

(g) A new company, Malaysia Securities Exchange Berhad ("MSEB") was incorporated with RM50,500,000 authorised

share capital divided into 50,000,000 ordinary shares of RM 1 each and 50,000,000 Redeemable Convertible

Preference Shares of RM0.01 each, and issued and paid-up share capital of RM 2 comprising 2 ordinary shares of

RM1 each. As at 5 January 2004, MSEB increased its issued and paid-up share capital from RM 2 to RM25,250,000,

through the issuance of 24,999,998 ordinary shares of RM1 each at par and 25,000,000 Redeemable Convertible

Preference Shares of RM0.01 each at a premium of RM0.99 each, for a total cash consideration of RM49,999,998.


31. SIGNIFICANT RELATED PARTY TRANSACTIONSCompany

1.1.2003 1.7.2001to to

31.12.2003 31.12.2002RM RM

Royalty income from a subsidiary, SCANS 51,675,806 48,684,954

Cost recoveries from subsidiaries

- SCANS 3,291,275 5,419,667

- MCD 5,734,763 14,882,945

- KLSE IS 460,953 1,510,707

- MSRS 522,142 2,889,739

- MDEX 2,646,466 1,174,295

- LFX 300,559 198,535

- MDCH 745,882 8,194

- KLSE TECH 1,253,566 695,344

- KPM 223,491 108,170

15,179,097 26,887,596

Office rental income from subsidiaries

- SCANS 1,380,850 1,432,804

- MCD 1,607,495 4,005,202

- KLSE IS 108,740 54,000

- MSRS 359,154 373,512

- MDEX 716,008 977,310

- LFX 155,446 95,108

- MDCH 62,349 -

- KLSE TECH 3,143,563 1,613,832

- KPM 224,299 325,476

7,757,904 8,877,244

Dividend income from subsidiaries

- SCANS 60,000,000 60,000,000

- MCD 3,000,000 2,200,000

- KLSE IS 5,000,000 4,305,556

- KPM 2,000,000 600,000

70,000,000 67,105,556

Property management and other service charges by asubsidiary, KPM. (7,230,642) (10,862,146)

Facilities management division charges by a subsidiary,KLSE TECH. (11,285,897) (8,694,291)

147146



A N N U A L R E P O R T 2 0 0 3


36. FINANCIAL INSTRUMENTS (CONTD.)

(c) Liquidity Risk

The Group actively manages its operating cash flows and the availability of funding so as to ensure that all funding

needs are met. As part of its overall liquidity management, the Group maintans sufficient levels of cash or cash

convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available

banking facilities of a reasonable level to meet its operational needs.

(d) Credit Risk

Credit risks, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and

monitoring procedures. The Group has in place procedures to deal in default situations. Trade receivables are

monitored on an ongoing basis via Group management reporting procedures. The Group does not have any significant

exposure to any individual customer or conterparty nor does it have any major concentration of credit risk related to

any financial instrument.

(e) Fair Values

The aggregate net fair values of financial assets and financial liabilities which are not carried at fair value on the balance

sheets of the Group and of the Company are represented as follows:

Group CompanyCarrying CarryingAmount Fair Value Amount Fair Value

Note RM RM RM RM

At 31 December 2003

Financial Assets

Loan Stocks from subsidiary 10 - - 2,000,000 ^

Other investments

- unquoted bonds 11 248,977,159 253,502,500 150,874,108 150,564,000


Due from Compensation Funds 4,006,829 ^ 3,001,000 ^

Due from subsidiaries 18 - - 14,635,635 ^

Financial Liabilities

Due to subsidiaries 19 - - 3,467,106 ^

33. SUBSEQUENT EVENTS

(a) On 2 January 2004, the Demutualisation (Kuala Lumpur Stock Exchange) Act 2003 came into force. On 5 January

2004, the Company was converted into a public company limited by shares. With this conversion, on the same date,

the Company vested and transferred its stock exchange business to MSEB and thereafter became an exchange

holding company.

(b) On 5 January 2004, the Company disposed 2,000,000 ordinary shares of RM 1 each representing the Company’s

100% equity interest in MSRS, and the Company's investment in MSRS's 2,000,000 redeemable convertible

unsecured loan stocks of RM1 each to Symphony House Berhad for a total cash consideration of RM6,000,000.

(c) On 1 January 2004, KLSE Training Sdn. Bhd (formerly known as I-Mesdaq Sdn. Bhd.), a wholly owned subsidiary,

acquired the business, assets and liabilities of Research Institute of Investment Analysts Malaysia, a company limited

by guarantee, for a cash consideration of RM1.

(d) On 2 January 2004, KLSE Training Sdn. Bhd. (formerly know as I-Mesdaq Sdn Bhd.) increased its issued and paid

up share capital from RM2 to RM1,000,000 through the Issuance of 999,998 new ordinary shares of RM1 each for a

cash consideration of RM1,000,000. The shares were fully subscribed by the Company.

34. KLSE COMPENSATION FUND

The financial statements of the KLSE Compensation Fund for the year ended 31 December 2003 are as attached and

have been accounted for separately from all other properties of the Exchange as required by Section 61 of the Securites

Industy Act, 1983 (Amended 1997).

35. COMPARATIVES

Comparative amounts for the income statements, statements of changes in equity, cash flow statements and the related

notes are for the 18 months period from 1 July 2001 to 31 December 2002.

36. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policies

The Group's financial risk management policy seeks to ensure that adequate financial resources are available for the

development of the Group's businesses whilst managing its interest rate, liquidity and credit risks. The Group operates

within clearly defined guidelines that are approved by the board of directors and the Group's policy is to not engage

in speculative transactions.

(b) Interest Rate Risk

The Group has no interest-bearing debt. However, the Group has substantial short and long term interest-bearing

financial assets as at 31 December 2003. The investments in financial assets are not held for speculative purposes but

have been mostly placed in fixed deposits or invested in commercial papers. The information on maturity dates and

effective interest rates of financial assets are disclosed in their respective notes.

KLSE Committees

AUDIT COMMITTEE

Objectives

• Assist the KLSE Board in discharging its responsibilities relating to accounting practices ofKLSE and its Group of Companies.

• Ensure the adequacy, efficiency and effectiveness of the Group’s administrative, operatingand accounting controls and procedures.

• Oversee and evaluate the quality of the audits conducted both by the Group’s internal andexternal auditors.

Members1. Tan Kim Leong, JP (Chairman)2. Datuk Dr. Abdul Samad Hj Alias 3. Datuk Mohaiyani Shamsudin4. Datuk Mohamed Adnan Ali 5. Philip T.N.Koh

INDEX COMMITTEE

Objectives

• Responsible for the construction and establishment of new indices as directed by theKLSE Board or whenever necessary.

• Assist in other related securities areas, if possible, as determined by the KLSE Board.

Members1. Dato’ Mohammed Azlan Hashim

(Chairman)2. Yusli Mohamed Yusoff3. Dato’ Azim Mohd Zabidi 4. Dr. Aziz Abu Hassan 5. Dr. Kok Kim Lian6. Dr. Zaha Rina Zahari 7. Jamiah Abdul Hamid8. Yoon Mun Thim9. YM Tunku Afwida Tunku Abdul Malek10. Fathi Ridzuan Ahmad Fauzi

BUDGET AND INVESTMENT COMMITTEE

Objectives

• Ensure that the KLSE and its Group of Companies have a proper budgetary system inplace that will help to plan, co-ordinate, evaluate and control financial activities effectively.

• Ensure that proper allocations are made to enable effective and efficient:-

- operations of the KLSE and its Group of Companies;

- implementation of the development plans of the KLSE and its Group of Companies; and

- utilisation of financial resources.

• Review and monitor the financial position of the KLSE and its Group of Companies.

• Ensure that the cash of the KLSE and its Group of Companies is preserved and secured.

• Ensure that the funds are properly invested and maintained with the view to maximisereturn/yields on investment.

• Appoint appropriate advisors in managing its surplus funds.

• Formulate policies and guidelines for the investment of the KLSE and its Group ofCompanies’ surplus funds.

• Review the investment policy of the KLSE and its Group of Companies to ensure thatoptimal yield is achieved with minimum risk exposure to the funds.


(Chairman)2. Yusli Mohamed Yusoff3. Abdul Rauf Ramli4. YM Raja Ahmad Raja Jallaludin5. Harry K. Menon6. Jimmy Lee Soon Teck 7. Peter Leong Tuck Leng8. Radzman Hafiza Abu Zarim

DEVELOPMENT COMMITTEE

Objectives

• Review changes, revisions or additions to the KLSE Rules and Regulations to determineif they are consistent with the mission and objectives of the KLSE.

• Review the role and direction of the KLSE and its Group of Companies in line with itsmission and vision.


(Chairman)2. Yusli Mohamed Yusoff3. Dato’ Ahmad Johan Raslan4. Ching Yew Chye5. Dato’ Seri Hwang Sing Lue 6. Datuk Mohaiyani Shamsudin 7. Dato’ Seri Hj Megat Najmuddin

Datuk Seri Dr. Hj. Megat Khas8. T. Jeyaratnam9. Yang Shu Yin10. Dato’ Azmi Abdullah

149148

A N N U A L R E P O R T 2 0 0 3K U A L A L U M P U R S T O C K E X C H A N G E B E R H A D


36. FINANCIAL INSTRUMENTS (CONTD.)

(e) Fair Values (contd.)

Group CompanyCarrying CarryingAmount Fair Value Amount Fair Value

Note RM RM RM RM

At 31 December 2002

Financial Assets

Loan stocks from subsidiary 10 - - 2,000,000 ^

Other investments

-unquoted bonds 11 212,555,281 217,555,528 89,174,621 90,389,200


Short term investments 17 161,847,087 166,958,412 161,847,087 166,958,412

Due from Compensation Funds 5,414,694 ^ 4,820,732 ^

Due from subsidiaries 18 - - 8,440,259 ^

Financial Liabilities

Due to subsidiaries 19 - - 3,539,151 ^

^ It is not practical to estimate the fair values of amounts due to/from subsidiaries and Compensation Funds due principally to a lackof fixed repayment term entered into by the parties involved. However, the Group does not anticipate the carrying amounts recordedat the balance sheet date to be significantly different from the values that would eventually be received or settled.

Group CompanyNominal NominalAmount Fair Value Amount Fair Value

Note RM RM RM RM

At 31 December 2003

Contingent liabilities 30 19,206,000 * 12,000,000 *

At 31 December 2002

Contingent liabilities 30 25,541,000 * 18,335,000 *

* It is not practical to estimate the fair value of contingent liabilities reliably due to the uncertainties of timing, costs and eventualoutcome.

The following methods and assumptions are used to estimate the fair values of the following classes of financial

instruments:

(i) Cash and Cash Equivalents, Trade and Other Receivables/Payables and Short Term Borrowings

The carrying amounts approximate fair values due to the relatively short term maturity of these financial instruments.

(ii) Other Investments and Short Term Investments

The fair value of MGS are estimated based on quoted market prices. The fair value of unquoted bonds is determined

by reference to a reasonable estimate of fair value that has been calculated based on the indicative rates obtained from

third parties at the close of the business on the balance sheet date.

(iii) Staff Loans Receivable

The fair value of staff loans receivable is estimated by discounting the expected future cash flows using the current

interest rates for loans with similar risk profiles.

37.CURRENCY

All amounts are stated in Ringgit Malaysia.

KLSE Monthly High, Low and Close Indices*

EMAS

High Low Close

165.62 153.21 161.83

162.43 156.98 156.98

157.38 150.35 153.98

155.46 151.84 153.54

163.84 152.96 163.84

170.23 163.83 170.23

182.03 170.71 178.91

185.80 178.29 184.95

186.22 180.41 182.03

202.43 183.03 202.43

202.75 189.76 193.67

197.86 189.25 195.57

Composite

*Based on closing index

High Low Close

Jan-03 675.87 625.13 664.77

Feb-03 668.18 646.80 646.80

Mar-03 649.22 619.22 635.72

Apr-03 640.35 624.18 630.37

May-03 672.05 627.26 671.46

Jun-03 691.96 671.84 691.96

Jul-03 730.40 693.58 720.56

Aug-03 746.49 718.91 743.30

Sep-03 756.48 733.45 733.45

Oct-03 817.12 737.43 817.12

Nov-03 815.99 765.95 779.28

Dec-03 797.80 766.59 793.94

Consumer Products

High Low Close

169.81 164.92 167.08

168.17 165.04 165.28

168.49 162.60 168.49

168.70 166.21 168.70

179.96 168.65 179.96

183.29 179.16 182.22

193.75 182.99 192.49

200.64 193.95 198.24

198.50 193.64 194.15

209.67 194.36 209.67

213.38 206.90 212.87

216.29 210.55 216.29

Industrial

High Low Close

Jan-03 1,408.34 1,329.13 1,400.07

Feb-03 1,411.03 1,369.23 1,369.23

Mar-03 1,388.78 1,337.99 1,388.78

Apr-03 1,392.28 1,358.07 1,390.70

May-03 1,450.54 1,390.07 1,450.54

Jun-03 1,478.73 1,440.54 1,478.73

Jul-03 1,542.65 1,474.95 1,525.01

Aug-03 1,637.88 1,532.66 1,637.88

Sep-03 1,683.96 1,610.47 1,612.26

Oct-03 1,788.85 1,623.11 1,788.85

Nov-03 1,809.53 1,721.62 1,742.86

Dec-03 1,780.64 1,734.39 1,772.39

A N N U A L R E P O R T 2 0 0 3

MSEB Committees

LISTING COMMITTEE(Formerly known as Listing Sub-Committee of KLSE)

Objectives

• Assist the MSEB Board in discharging all matters relating to listing and post-listingfunctions of the MSEB in a speedy and efficient manner.

Members1. Dato' Mohammed Azlan

Hashim (Chairman)2. Yusli Mohamed Yusoff3. Dato' Abdul Hamidy Hafiz4. Datuk Mohaiyani Shamsudin5. Dato’ Seri Hj Megat Najmuddin

Datuk Seri Dr. Hj Megat Khas6. Abdul Kadir Hj Md Kassim 7. Azzat Kamaludin8. Iskander Ismail9. Peter Leong Tuck Leng10. Md Nor Ahmad

PARTICIPATION COMMITTEE(Formerly known as Membership Sub-Committee of KLSE)

Objectives

• To consider and recommend to the MSEB Board applications for Participation ofthe MSEB pursuant to the MSEB’s Articles of Association and Rules, after havingduly interviewed the individual applicant, proposed Dealing Members and Non-Dealing Members, as the case may be.

Members1.Datin Mariam Prudence Yusof

(Chairperson)2.Yusli Mohamed Yusoff3.Peter Leong Tuck Leng4.Dato’ Seri Hj Megat Najmuddin

Datuk Seri Dr. Hj Megat Khas5.Datuk Teh Ghee Kok 6. Izlan Izhab7.Zaiton Md Hassan

DISCIPLINARY COMMITTEE(Formerly known as Disciplinary Sub-Committee of KLSE)

Objectives

• Consider matters relating to disputes among Participating Organisations.

• Consider disciplinary actions against Participants, Participating Organisations andDealers’ Representatives of MSEB.

Members1.Abdul Kadir Hj Md Kassim

(Chairman)2.Yusli Mohamed Yusoff3.Tan Kim Leong, JP4.Datin Mariam Prudence Yusof

151150


153152



Construction

High Low Close

167.41 148.03 162.39

164.03 154.75 154.96

155.55 145.97 147.43

148.26 141.56 143.45

158.29 142.17 156.99

170.10 157.21 170.10

186.57 172.31 184.40

190.81 181.31 189.67

193.32 181.96 190.90

212.93 192.63 212.39

213.42 193.66 195.82

200.58 180.15 187.97

Industrial Products

High Low Close

Jan-03 67.98 62.53 67.18

Feb-03 67.64 64.64 64.64

Mar-03 64.88 62.61 64.57

Apr-03 64.54 63.13 64.26

May-03 67.74 64.12 67.74

Jun-03 70.38 67.70 70.38

Jul-03 77.02 70.72 75.35

Aug-03 78.74 74.71 78.20

Sep-03 79.23 76.22 76.22

Oct-03 83.98 76.62 83.98

Nov-03 84.63 78.83 79.74

Dec-03 82.07 78.53 81.39

Finance

High Low Close

5,188.23 4,783.85 5,037.96

5,059.68 4,919.66 4,922.97

4,931.00 4,744.24 4,884.81

4,948.50 4,742.92 4,807.59

5,277.95 4,787.62 5,277.95

5,507.98 5,250.76 5,507.98

5,998.95 5,519.20 5,912.88

6,231.80 5,873.70 6,200.83

6,247.82 6,039.36 6,088.59

6,718.45 6,074.52 6,718.45

6,727.08 6,206.04 6,389.22

6,525.66 6,262.76 6,472.17

Trading/Services

High Low Close

Jan-03 103.14 94.17 101.44

Feb-03 101.76 97.93 97.93

Mar-03 98.17 93.27 95.20

Apr-03 96.25 93.24 95.03

May-03 99.83 94.10 99.72

Jun-03 103.21 99.98 102.74

Jul-03 108.30 102.98 105.90

Aug-03 109.77 105.54 109.08

Sep-03 110.63 106.58 106.58

Oct-03 120.19 107.53 120.19

Nov-03 119.97 112.27 114.28

Dec-03 116.93 111.66 115.34

KLSE Monthly High, Low and Close Indices*


Technology

High Low Close

46.11 42.39 42.80

42.39 37.65 37.65

38.29 34.21 36.29

39.91 36.48 38.58

45.18 38.19 45.18

48.94 45.11 48.84

56.10 48.60 52.53

54.18 52.11 53.66

56.45 52.22 54.33

61.83 55.23 61.37

64.56 58.55 59.46

61.96 57.92 60.30

Second Board

High Low Close

Jan-03 105.96 97.02 100.31

Feb-03 99.46 95.10 95.19

Mar-03 95.00 90.55 93.00

Apr-03 96.25 91.99 92.44

May-03 97.87 90.53 97.87

Jun-03 108.96 97.57 108.96

Jul-03 130.33 113.10 118.87

Aug-03 125.92 115.44 121.69

Sep-03 126.13 110.72 122.03

Oct-03 144.68 125.30 144.65

Nov-03 154.73 137.73 144.71

Dec-03 151.29 133.57 140.64

MESDAQ Market

High Low Close

Jan-03 94.66 80.83 84.84

Feb-03 85.71 79.65 80.57

Mar-03 79.56 73.57 75.12

Apr-03 77.29 74.07 75.12

May-03 86.57 72.89 84.35

Jun-03 102.67 82.18 102.67

Jul-03 122.90 103.49 118.85

Aug-03 161.63 119.39 161.22

Sep-03 156.80 135.04 143.58

Oct-03 157.41 143.90 157.41

Nov-03 165.08 148.16 156.72

Dec-03 161.95 143.66 152.25

A N N U A L R E P O R T 2 0 0 3

Market Indicators

J0

A S O N D J F M A M J J A S O N D J F M A

JULY 1999 - Dec 2003M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

1000

800

600

400

200

1200

Composite Index Composite Index Moving Average

KLSE COMPOSITE INDEXMONTHLY CLOSING & 200 DAYS MOVING AVERAGE

Opening Closing Index Index

2000 833.89 679.642001 666.63 696.092002 682.83 646.322003 632.43 793.94

J0

A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

30

25

20

15

10

5

1800

2000

1600

1400

1200

1000

800

600

400

200

0

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE INDUSTRIAL INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 1432.77 1217.282001 1204.76 1348.222002 1313.63 1349.372003 1332.44 1772.39

J0.0


2.5

2.0

1.5

1.0

0.5

400

450

350

300

250

200

150

100

50

0

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE CONSUMER PRODUCTS INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 168.44 146.582001 142.69 167.142002 163.68 167.942003 165.25 216.29

J0


350

300

250

200

150

100

50

400

JULY 1999 - Dec 2003

EMAS Index EMAS Index Moving Average

KLSE EMAS INDEXMONTHLY CLOSING & 200 DAYS MOVING AVERAGE


2000 214.24 159.772001 155.61 165.232002 163.23 157.252003 154.43 195.57

155154


FYE 2000 FYE 2001 FYE 2002 FYE 2003Highest Lowest Highest Lowest Highest Lowest Highest Lowest

EMAS Index 255.63 174.81 200.40 139.29 192.90 144.57 202.43 153.54EMAS Moving Average 217.49 155.44 221.67 160.99 176.56 148.90 176.82 158.38


Composite Index 982.24 675.45 798.83 572.88 793.99 600.07 817.12 630.37Composite Moving Average 846.69 611.03 868.82 675.64 729.66 622.46 717.13 649.86


Consumer Products Index 191.02 138,34 168.06 142.48 186.76 149.07 216.29 165.28Volume (mil) 778 82 71 34 254 54 428 51Value (RM mil) 2,013 459 487 239 1,105 314 1,380 333


Industrial Index 1,683.24 1,207.07 1,429.92 1,119.59 1,504.50 1,196.78 1,788.85 1,369.23Volume (mil) 10,623 1,299 1,693 669 3,980 878 6,152 1,153Value (RM mil) 25,760 5,005 6,179 2,023 10,278 2,689 14,715 2,969

157156


Market Indicators

J0


9

8

7

6

5

4

3

2

1

100

120

80

60

40

20

0

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE INDUSTRIAL PRODUCTS INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 91.05 65.352001 63.81 67.602002 66.49 65.642003 63.38 81.39

J0


300

250

200

150

100

50

350

400

300

250

200

150

100

50

0

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE MINING INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 241.81 193.382001 186.84 204.092002 206.39 193.752003 196.06 338.70

160

180

140

120

200

100

80

60

40

20

0J

0A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

16

6

8

10

12

14

4

2

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE TRADING/SERVICES INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 131.45 103.322001 100.77 103.772002 101.51 97.472003 95.41 115.34

500

600

400

300

200

100

0J


6

5

4

3

2

1

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE CONSTRUCTION INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 250.79 156.262001 150.75 177.352002 174.44 150.842003 149.55 187.97


Construction Index 312.79 202.52 224.46 132.72 215.54 150.84 212.39 143.45Volume (mil) 1,890 191 382 91 844 155 1,055 279Value (RM mil) 4,806 611 1,085 172 1,697 300 2,637 391


Industrial Products Index 113.43 76.96 84.55 59.23 74.54 58.39 83.98 64.26Volume (mil) 2,341 202 299 112 693 147 1,730 164Value (RM mil) 8,190 587 821 159 1,081 343 2,297 423


Mining Index 329.01 198.74 265.36 174.18 315.71 188.02 344.07 191.32Volume (mil) 128 9 21 4 63 4 38 1Value (RM mil) 239 18 42 4 188 7 75 4


Trading/Services Index 154.97 106.53 124.04 83.20 118.60 88.88 120.19 95.03Volume (mil) 5.620 802 941 401 2,390 473 3,160 614Value (RM mil) 13,729 2.956 4,061 1,412 6,406 1,639 8,501 1,791

159158


Market Indicators

10000

8000

600

4000

2000

12000

0J


9

3

4

5

6

7

8

2

1

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE FINANCE INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 6728.01 5070.622001 4957.61 5095.672002 5111.26 4857.542003 4816.29 6472.17

J0


1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

2000

2500

1500

1000

500

0

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE PLANTATION INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 1696.31 1361.592001 1324.28 1615.352002 1600.02 1852.702003 1812.68 2209.75

J0


12

10

8

6

4

2

300

350

250

200

150

100

50

0

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE SECOND BOARD INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 194.05 132.982001 127.89 134.132002 135.12 98.242003 97.18 140.64

J0


7

6

5

4

3

2

1

2500

3000

2000

1500

1000

500

0

Volu

me

& V

alue

(Bill

ion) Index

JULY 1999 - Dec 2003

Volume Value Index

KLSE PROPERTY INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 1079.37 632.542001 606.97 599.642002 600.83 540.912003 536.06 750.70


Property Index 1,274.90 950.21 951.93 552.67 728.60 534.41 777.15 510.68Volume (mil) 3,530 224 207 94 1,340 227 2,837 307Value (RM mil) 6,236 335 286 68 1,320 115 2,836 253


Finance Index 8,344.93 5,209.09 6,431.32 4,171.21 6,273.34 4,398.66 6,718.45 4,807.59Volume (mil) 2,307 366 556 205 1,297 355 1,829 286Value (RM mil) 7,765 1,648 2,301 849 3,549 899 4,898 787


Plantation Index 1,951.09 1,475.63 1,806.89 1,298.47 2,005.18 1,427.73 2,222.09 1,729.51Volume (mil) 390 55 97 28 268 52 384 66Value (RM mil) 1,373 151 247 64 818 195 1,076 253


Second Board Index 298.50 153.60 213.06 104.21 140.55 98.24 144.71 92.44Volume (mil) 2,417 88 468 101 5,797 295 3,594 369Value (RM mil) 9,822 240 1,368 128 9,304 316 6,622 435

161160


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Volume Value Index

A N N U A L R E P O R T 2 0 0 3

Market Indicators

0M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

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Volume Value Index

KLSE TECHNOLOGY INDEX*, VOLUME & VALUEMONTHLY CLOSING


2000 109.85 53.632001 50.59 54.842002 55.35 45.042003 43.22 60.30

KLSE MESDAQ MARKET INDEX*, VOLUME & VALUEMONTHLY CLOSING


2002 117.59 83.252003 81.12 152.25

J0


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8

6

4

2

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JULY 1999 - Dec 2003

Volume Value Index

KLSE SYARIAH INDEX, VOLUME & VALUEMONTHLY CLOSING


2000 131.50 104.642001 101.98 107.652002 105.87 99.732003 97.39 122.86

*Officially launched on 15.5.2000 *Merge with KLSE on 18.3.2000


MESDAQ Market 106.25 53.44 95.00 66.84 174.75 73.64 161.22 75.12Volume (mil) 0.8 0.01 2 0.003 93 0.01 2,428 46Value (RM mil) 2 0.01 3 0.004 50 0.01 1,486 19


Technology Index 166.05 129.35 137.54 38.46 70.75 39.65 61.37 36.29Volume (mil) 10 4 30 2 120 23 1,699 55Value (RM mil) 207 76 227 17 546 105 1,257 133


Syariah Index 160.50 106.26 137.54 88.96 119.56 94.17 126.58 96.81Volume (mil) 2,129 123 436 32 3,605 601 6,099 1,133Value (RM mil) 6,043 443 1,633 114 8,798 2,200 12,955 2,707

Enhanced Infrastructure

• Electronic Trading

• T+3 Settlement

• DVP Environment

• Immobilised Securities

• LINK - Online Corporate Disclosure

From Improvements to Growth

163162


No Company Board Listing date Sector Paid-up capital in 2003 when listed (RM)

14 Scomi Group Berhad Second Board 13 May Industrial Products 50,000,000

15 KL Infrastructure Main Board 28 May Infrastructure 260,000,000Group Bhd Project Companies

16 Orisoft Technology MESDAQ 10 June Technology 5,000,000Berhad Market

17 Parade Season Berhad Second Board 18 June Industrial Products 42,000,000

18 Cybertowers Berhad MESDAQ 10 July Technology 10,000,000Market

19 Astino Berhad Second Board 18 July Industrial Products 58,000,000

21 Pentamaster Second Board 23 July Technology 40,000,000Corporation Berhad

22 Infortech Alliance MESDAQ 28 July Technology 6,000,000Berhad Market

23 LNG Resources Berhad MESDAQ 29 July Industrial Products 9,000,002Market

24 IFCA MSC Berhad MESDAQ 30 July Technology 27,620,000Market

25 Caely Holdings Bhd Second Board 31 July Consumer Products 40,000,000

26 APP Industries Berhad Second Board 6 August Consumer Products 40,000,000

27 Englotechs Holding Bhd Second Board 7 August Industrial Products 53,000,000

28 Protasco Berhad Main Board 8 August Construction 150,000,000

29 KNM Group Berhad Second Board 11 August Industrial Products 44,000,000

20 BLD Plantation Bhd Main Board 21 July Plantation 85,000,000

165164


New Companies Listedon KLSE and MESDAQ Market in 2003


1 CIMB Berhad Main Board 8 January Finance 850,000,000

2 Karensoft MESDAQ 24 January Technology 6,800,000Technology Berhad Market

3 AKN Messaging MESDAQ 27 January Technology 9,000,000Technologies Berhad Market

4 Portrade MESDAQ 28 January Technology 9,330,000dotcom Berhad Market

5 Ornapaper Berhad Main Board 29 January Industrial Products 62,000,000

6 Baswell Second Board 30 January Consumer Products 48,000,000Resources Berhad

8 Symphony MESDAQ 14 February Trading/Services 28,000,000House Berhad Market

9 UBS Corporation MESDAQ 26 March Technology 10,000,000Berhad Market

10 GHL Systems Berhad MESDAQ 9 April Technology 25,015,178Market

11 Global Soft (MSC) Bhd MESDAQ 15 April Technology 4,280,000Market

12 CYL Corporation Bhd Second Board 21 April Industrial Products 50,000,000

13 NTPM Holdings Berhad Main Board 25 April Consumer Products 62,400,000

7 SKP Resources Berhad Second Board 10 February Industrial Products 48,000,000

PENTAMASTER

167166


New Companies Listedon KLSE and MESDAQ Market in 2003


31 Pembinaan Jayabumi Second Board 14 August Industrial Products 50,000,000(Sarawak) Berhad

30 Coastal Contracts Berhad Main Board 13 August Industrial Products 66,800,000

32 NOVA MSC Berhad MESDAQ 19 August Technology 25,590,000Market

33 Hiap Teck Venture Berhad Main Board 2 September Industrial Products 163,700,000

34 Luster Industries Bhd Main Board 11 September Industrial Products 60,000,000

35 Naim Cendera Main Board 12 September Properties 250,000,000Holdings Berhad

36 DXN Holdings Bhd Main Board 30 September Consumer Products 60,000,000

38 Dominant Second Board 20 October Industrial Products 43,000,000Enterprise Berhad

39 Century Bond Bhd Second Board 23 October Industrial Products 40,000,000

40 LFE Corporation Berhad Second Board 27 October Trading/Services 52,000,002

41 Astro All Asia Networks plc Main Board 29 October Trading/Services £191,875,846.10

42 Johore Tin Berhad Second Board 31 October Industrial Products 43,986,000

37 Furniweb Industrial Second Board 16 October Industrial Products 40,000,000Products Berhad


44 Digistar Corporation MESDAQ 7 November Technology 8,343,532.5Berhad Market

43 PMB Technology Berhad Second Board 5 November Industrial Products 40,000,000

45 Toyo Ink Group Berhad Second Board 10 November Industrial Products 40,000,000

46 eBworx Malaysia MESDAQ 17 November Technology 20,685,000Berhad Market

47 Plenitude Berhad Main Board 18 November Properties 135,000,000

48 Scope Industries Berhad MESDAQ 19 November Industrial Products 25,000,000Market

49 Malaysian Bulk Main Board 2 December Trading/Services 230,000,000Carriers Berhad

51 Sunway Main Board 17 December Infrastructure 90,000,002Infrastructure Berhad Project Companies

52 KBES Berhad Main Board 23 December Trading/Services 63,000,000

53 Poly Tower Ventures Berhad Second Board 17 December Industrial Products 40,000,000

54 TPC Plus Berhad Second Board 18 December Consumer Products 40,000,000

55 FTEC Resources Berhad MESDAQ 19 December Technology 16,999,900Market

56 MOL AccessPortal MESDAQ 22 December Technology 4,800,000Berhad Market

57 CAB Cakaran Second Board 22 December Consumer Products 40,000,000Corporation Berhad

58 Opcom Holdings Berhad MESDAQ 23 December Industrial Products 17,200,000Market

50 JSPC i-Solutions Berhad MESDAQ 3 December Trading/Services 18,300,000Market

D X N

w reBworx

TM

the future of technology

TM

169168


Membership Report

During the year under review (1 January 2003 to 31 December 2003):-

(1) Cessation of Two Member Companies (Voting Members), viz:

No. Member Company Date of Cessation

1 Straits Securities Sdn Bhd 27.01.20032 Borneo Securities Sdn Bhd 17.11.2003

(2) Three Corporations were admitted as Non-Dealing Members of the Exchange (Corporate Shareholders), via the following Member Companies, viz:

No. New Non-Dealing Member Name of Member Date of Admission(Corporate Shareholder)

1 BNP Paribas Mohaiyani Securities Sdn Bhd 08.04.20032 Segmen Cahaya Sdn Bhd Thong & Kay Hian Securities Sdn Bhd 11.11.20033 Enrogetz Sdn Bhd Mercury Securities Sdn Bhd 09.12.2003

(3) Three Corporations resigned as Non-Dealing Members of the Exchange (Corporate Shareholders), via the following Member Companies, viz:

No. Non-Dealing Member Name of Member Date of Resignation(Corporate Shareholder)

1 Straits Assets Holdings Sdn Bhd Straits Securities Sdn Bhd 27.01.20032 Paribas Mohaiyani Securities Sdn Bhd 08.04.20033 Borneo Securities Holdings Sdn Bhd Borneo Securities Sdn Bhd 17.11.2003

(4) Four individuals were admitted as Dealing Members, viz:

No Name Member Company Date of Admission

1 Tan Giap How Kuala Lumpur City Securities Sdn Bhd 21.04.20032 Zulazman bin Zulkifli Kuala Lumpur City Securities Sdn Bhd 11.09.20033 Sim Cheng Khuan Malacca Securities Sdn Bhd 10.11.20034 Chin Wooi Meng PM Securities Sdn Bhd 12.11.2003

(5) Eleven individuals resigned / ceased as Dealing Members, viz:

No Name Member Company Date ofResignation/Cessation

1 Goh Choon Hock Straits Securities Sdn Bhd 27.01.20032 Ahmad Ezzanee Azizan bin Mohd Ali Azizan Straits Securities Sdn Bhd 27.01.20033 Ignatius Luke Jr. Tan Keng Hee TA Securities Berhad 01.02.20034 Datin Tan Kuay Fong TA Securities Berhad 01.02.20035 Lee Seong Chong @ Lee Seong Cheong UT Securities Sdn Bhd 10.02.20036 Tan Sri Abdul Rashid Hussain RHB Securities Sdn Bhd 23.02.20037 Haji Mat Zuki bin Mahmud Mercury Securities Sdn Bhd 18.05.20038 Ee Beng Wat Botly Securities Sdn Bhd 23.06.20039 Awang bin Ahmad @ Awang Ariffin InnoSabah Securities Berhad 14.09.200310 Tan Mee Mee Borneo Securities Sdn Bhd 17.11.200311 Yeo Khee Nam Avenue Securities Sdn Bhd 31.12.2003

(6) Twenty individuals were admitted as Non-Dealing Members of the Exchange (Non-Executive Directors), viz:


1 Lee Boon Leong @ Lee Boon Kim Kuala Lumpur City Securities Sdn Bhd 08.01.20032 Tan Sri Samshuri bin Arshad Avenue Securities Sdn Bhd 09.01.20033 Datin Tan Kuay Fong TA Securities Berhad 01.02.20034 Dato' Seri Khalid Ahmad bin Sulaiman HLG Securities Sdn Bhd 07.02.20035 Tengku Syarif Bendahara Perlis Syed Hwang-DBS Securities Berhad 28.02.2003

Badarudin Jamalullail Ibni Almarhum TuankuSyed Putra Jamalullail

6 Dato' Yeoh Chin Kee PB Securities Sdn Bhd 31.03.20037 Haji Abdul Aziz bin Omar PB Securities Sdn Bhd 31.03.20038 Dato' Yaacob bin Haji Daud Affin-UOB Securities Sdn Bhd 15.04.20039 Lee Seong Chong @ Lee Seong Cheong UT Securities Sdn Bhd 23.05.200310 Datuk Burhanuddin bin Ahmad Tajudin BIMB Securities Sdn Bhd 27.05.200311 Dato' Dr. Ismail bin Saad BIMB Securities Sdn Bhd 01.07.200312 David William Berry Aka Dayan Wazir K&N Kenanga Berhad 01.07.200313 Dato Sri Sulaiman Abdul Rahman bin Abdul Taib RHB Securities Sdn Bhd 16.07.200314 Zahardin bin Omardin CIMB Securities Sdn Bhd 28.07.200315 Soh Pick Har JF Apex Securities Berhad 08.10.200316 Haji A. Rahman bin Safar Mercury Securities Sdn Bhd 27.10.200317 Ng Ko Chee Malacca Securities Sdn Bhd 10.11.200318 Haji Mansor bin Salleh Inter-Pacific Securities Sdn Bhd 10.11.200319 Mohd Najib bin Abdul Aziz Avenue Securities Sdn Bhd 04.12.200320 Izzat bin Othman Affin-UOB Securities Sdn Bhd 15.12.2003

(7) Twenty-five individuals resigned as Non-Dealing Members of the Exchange (Non-Executive Directors), viz:

No Name Member Company Date of Resignation

1 Seah Fook Chin Straits Securities Sdn Bhd 27.01.20032 Rosely Ahmad Straits Securities Sdn Bhd 27.01.20033 Datuk Oh Chong Peng RHB Securities Sdn Bhd 08.03.20034 Robert Yong Kuen Loke Eng Securities Sdn Bhd 17.03.20035 Robert Yong Kuen Loke Inter-Pacific Securities Sdn Bhd 17.03.20036 Izlan bin Izhab RHB Securities Sdn Bhd 26.03.20037 Ismail bin Ibrahim PB Securities Sdn Bhd 27.04.20038 Zulkifli bin Mohd Ali PB Securities Sdn Bhd 27.04.20039 Datin Tan Kuay Fong Botly Securities Sdn Bhd 23.06.200310 Dato' Kalimullah bin Masheerul Hassan Botly Securities Sdn Bhd 23.06.200311 Datin Tan Kuay Fong TA Securities Berhad 23.06.200312 Dato' Kalimullah bin Masheerul Hassan TA Securities Berhad 23.06.200313 Albert Chan Huat Cheng K & N Kenanga Berhad 01.07.200314 Jeffri Salim Davidson K & N Kenanga Berhad 14.08.200315 Haji Mohd Ariff bin Taib FA Securities Sdn Bhd 31.08.200316 Dato' Hilmey bin Haji Mohd Taib Mayban Securities Sdn Bhd 22.10.200317 Khoo Bee Lin PM Securities Sdn Bhd 05.11.200318 Dr Shafiq Sit bin Abdullah SimeSecurities Sdn Bhd 07.11.200319 Lim Peng Cheong Malacca Securities Sdn Bhd 10.11.200320 Tan Sri Dato' Seri Megat Junid bin Megat Ayob Borneo Securities Sdn Bhd 17.11.200321 Engak @ Richard Wil Anak Uban Borneo Securities Sdn Bhd 17.11.200322 Henry Lian Aran Borneo Securities Sdn Bhd 17.11.200323 Clement Jamal Anak Eddy Borneo Securities Sdn Bhd 17.11.200324 Datuk Joseph Salang Anak Gandum Borneo Securities Sdn Bhd 17.11.200325 Seah Sen Leang InnoSabah Securities Bhd 31.12.2003

(8) One individual admitted as Non-Dealing Member of the Exchange (Individual Shareholder), viz:


1 Estate of Tuan Haji Mat Zuki bin Mahmud Mercury Securities Sdn Bhd 18.05.2003

A N N U A L R E P O R T 2 0 0 3

171170


(9) Five individuals resigned as Non-Dealing Members of the Exchange (Individual Shareholders), viz:

No Name Member Company Date of Resignation

1 Faidzan bin Hassan InnoSabah Securities Berhad 15.01.20032 Kong Kok Keong InnoSabah Securities Berhad 15.01.20033 Estate of Datuk Haji Ali bin Esa Thong & Kay Hian Securities Sdn Bhd 11.11.20034 Dato' Leong Kok Wah PM Securities Sdn Bhd 04.12.20035 Estate of Tuan Haji Mat Zuki bin Mahmud Mercury Securities Sdn Bhd 09.12.2003

(10) Changes of Member Companies' Business Address - New Branch Offices, Electronic Access Facilities (EAF) and Electronic Access Facilities with Permitted Activities (EAF-PA)

No. Member Company Business Address Effective Date

1 K & N Kenanga Berhad Tingkat Bawah 06.01.2003(Tangkak EAF-PA) No. 4, Jalan Dataran 1

Taman Bandar Tangkak84900 TangkakJohor

2 RHB Securities Sdn Bhd Lot 1,2, 5-14, Tingkat 1 27.01.2003(Melaka Branch) Lot 1-4, 6-8, 10-12, 13A, 13B, 14-16,

Tingkat 2, Bangunan Tabung HajiJalan Banda Kaba75000 MelakaTel. No: 06-283 3362Fax. No: 06-284 9886

3 Kuala Lumpur City Securities Sdn Bhd Tingkat Bawah, Tingkat Satu & Tingkat Dua 27.01.2003(Desa Sri Hartamas EAF-PA) No. 33, Plaza Crystalville

Jalan 23/70 ADesa Sri Hartamas50480 Kuala Lumpur

4 PM Securities Sdn Bhd Tingkat Bawah & Tingkat Satu 18.02.2003(Batu Pahat EAF-PA) No. 43 & 43A

Jalan Penjaja 3Taman Kim's Park Business Centre83000 Batu PahatJohor

5 K & N Kenanga Berhad Tingkat Bawah & Tingkat Satu 24.02.2003(Sibu EAF-PA) No. 11-12

Lorong Kampung Datu 396000 SibuSarawak

6 Kuala Lumpur City Securities Sdn Bhd Tingkat Satu 24.03.2003(Mentakab EAF) No. 62, Jalan Temerloh

28400 MentakabPahang Darul Makmur

7 PM Securities Sdn Bhd Tingkat Bawah 18.04.2003(Segamat EAF-PA) No. 118, Jalan Genuang

85000 SegamatJohor

8 Hwang-DBS Securities Berhad Bilik 7-03, Tingkat 7 21.04.2003(Bukit Bintang, KL Branch) Bilik 12-02 & Bilik 12-01 (Sebahagian),

Tingkat 12, Menara Keck Seng 203 Jalan Bukit Bintang55100 Kuala LumpurTel. No: 03-2711 6888Fax. No: 03-2711 3928

9 Avenue Securities Sdn Bhd Tingkat Bawah 05.05.2003(Yong Peng EAF-PA) No. 234

Jalan BesarTaman Semberong Baru83700 Yong PengJohor

10 OSK Securities Berhad Tingkat Bawah dan Tingkat Satu 26.05.2003(Johor Jaya EAF-PA) No. 1 & 1-01

Jalan Rosmerah 2/11Taman Johor Jaya81100 Johor BahruJohor

11 Affin-UOB Securities Sdn Bhd Tingkat 3 & 4, Wisma Amsteel 05.06.2003(Klang Branch) No. 1, Lintang Pekan Baru

Off Jalan Meru41050 KlangSelangor Darul Ehsan

12 Hwang-DBS Securities Berhad No. 15, Tingkat Atas 16.06.2003(Sekinchan EAF) Jalan Peria

45400 SekinchanSelangor Darul EhsanTel. No: 03-3241 5025Fax. No: 03-3241 5023

13 Hwang-DBS Securities Berhad No. 10 Tingkat Atas 15.09.2003(Pantai Remis EAF) Jalan Pantai Jaya 1

34900 Pantai RemisPerak Darul RidzuanTel. No: 05-677 5142Fax No: 05-677 5143

14 OSK Securities Berhad No. 72, Tingkat Bawah 13.10.2003(Kampar EAF-PA) Jalan Idris

31900 KamparPerak Darul Ridzuan

15 Botly Securities Sdn Bhd 12G, H & I, Jalan Kampung Datu 17.11.2003(Sibu Branch) 96000 Sibu

SarawakTel. No: 084-319 998Fax No: 084-313193

16 OSK Securities Berhad No. 37, Jalan Semenyih 17.11.2003(Kajang EAF-PA) 43000 Kajang

Selangor

17 K&N Kenanga Berhad Lot 1.02 Aras Satu 01.12.2003(Penang EAF-PA) Menara KWSP

38 Jalan Sultan Ahmad Shah10050 Penang

18 Kuala Lumpur City Securities Sdn Bhd No. 62, Tingkat 1 08.12.2003(Mentakab EAF-PA) Jalan Temerloh

28400 MentakabPahang Darul Makmur

19 OSK Securities Berhad Tingkat Bawah & Tingkat Mezanin 22.12.2003(Port Dickson EAF-PA) No. 346 & 347

Batu 1/2, Jalan Pantai71000 Port DicksonNegeri Sembilan

20 OSK Securities Berhad Tingkat Bawah & Tingkat Satu 22.12.2003(Rawang EAF-PA) No. 15, Jalan Bandar Rawang 4

48000 RawangSelangor

Membership Report

173172


VOTING MEMBERS FEDERAL TERRITORY OF KUALA LUMPUR

AMSECURITIES 8th, 9th, 12th, 13th, Dealing Members: Non-Dealing Members:SDN BHD 14th, 15th & 16th Floor 1. Hj Ismail bin Abdullah 1. AmSecurities Holdings Sdn Bhd

Bangunan AmBank Group 2. Mustafa bin Hj Mohd Nor 2. Dato' Hj Azlan Hashim55 Jalan Raja Chulan 3. Chang Tuck Chee @ 3. Cheah Tek Kuang50200 Kuala Lumpur Philip Chang 4. Lee Siang Korn @ Lee Siang Chin

4. Ahmad bin Bachok 5. Mohamed Azmi bin MahmoodTelephone: 03-20782788 / 99Facsimile: 03-20783162 / 03175

AFFIN-UOB Level 3, Menara Keck Seng Dealing Member: Non-Dealing Members:SECURITIES 203 Jalan Bukit Bintang Saiful Bahri bin Zainudin 1. Affin-UOB Holdings Sdn BhdSDN BHD 55100 Kuala Lumpur 2. Yu Choong Cheong

3. Gen. (B) Dato' Ismail HassanTelephone: 03-21438668 4. Michael Sng Beng HockFacsimile: 03-21433663 5. Dato' Yaacob bin Haji Daud

6. Izzat bin Othman

AVENUE SECURITIES Ground Floor & Level 1, THB Satu Dealing Members: Non-Dealing Members:SDN BHD Jalan Damansara Endah 1. Wee Hoe Soon @ 1. Avenue Assets Bhd

Damansara Heights Gooi Hoe Soon 2. Abdul Rahim bin Awang50490 Kuala Lumpur 2. Abdul Rauf bin Ramli 3. Tan Sri Samshuri bin Arshad

3. Ooi Hun Pin 4. Mohd Najib bin Abdul AzizTelephone: 03-20951111 Facsimile: 03-20937733

BBMB SECURITIES Level 2, 3, 4 & 15 Dealing Members: Non-Dealing Members:SDN BHD Menara Olympia 1. Hassan bin Jaafar 1. Khazanah Nasional Bhd

Letter Box No. 2 2. Rashidan Shah bin 2. Nik Hassan bin Nik Mohd AminNo. 8 Jalan Raja Chulan Abdul Rahim 3. Dato' Anwar bin Haji @ Aji50200 Kuala Lumpur 4. Othman bin Abdul Jalal

5. Badrul Feisal bin Abdul RahimTelephone: 03-20319900 6. Ab. Rahim bin HaronFacsimile: 03-20341582

BIMB SECURITIES 1st & 2nd Floor, Dealing Member: Non-Dealing Members:SDN BHD Podium Block, Bangunan AMDB Dato' Dr Abdul Halim bin 1. BIMB Securities (Holdings) Sdn Bhd

No. 1, Jalan Lumut Haji Ismail 2. Permodalan Nasional Bhd50400 Kuala Lumpur 3. Dato' Hj Mohamad bin Shafie

4. Mustafa bin HamatTelephone: 03-40433533 5. Datuk Burhanuddin bin Facsimile: 03-40413433 / 2622 / 40414159 Hj Ahmad Tajudin

6. Dato' Dr Ismail bin Saad

CIMB SECURITIES 9th Floor, Commerce Square Dealing Member: Non-Dealing Members:SDN BHD Jalan Semantan Yusli bin Mohamed Yusoff 1. CIMB Holdings Sdn Bhd

Damansara Heights 2. Dato' Mohamed Nazir bin 50490 Kuala Lumpur Abd Razak

3. Robert Chiem Dau MengTelephone: 03-20849999 4. Dato' Halim @ Ahmad bin Facsimile: 03-20849888 Muhamat

5. Zahardin bin Omardin

HLG SECURITIES Level 1 - 7, Menara HLA Dealing Members: Non-Dealing Members:SDN BHD No. 3, Jalan Kia Peng 1. Omar bin Zolkifli 1. HLG Capital Bhd

50450 Kuala Lumpur 2. Alewi bin Ariffin 2. Dato' Seri Khalid Ahmad bin Sulaiman

Telephone: 03-21681168/27101168Facsimile: 03-21615900

INTER-PACIFIC Tingkat 6 - 8 dan 11 Dealing Members: Non-Dealing Members:SECURITIES Menara Prime 1. Pang Poh Ping 1. Inter-Pacific Capital Sdn Bhd SDN BHD No. 30, Jalan Sultan Ismail 2. Abdul Majid bin 2. Chan Kien Sing

50250 Kuala Lumpur Hj Mohd Harun 3. Datuk Hj Mohd Fatmi bin Hj Che Salleh

Telephone: 03-21441888 4. Haji Mansor bin SallehFacsimile: 03-21441686

JUPITER 7th, 8th & 9th Floor Dealing Members: Non-Dealing Members:SECURITIES Menara Olympia 1. Mohamad Saleh bin Md Yusof 1. Olympia Industries BhdSDN BHD 8 Jalan Raja Chulan 2. Lo Kok Kee 2. Koperasi Polis Di Raja Malaysia Bhd

50200 Kuala Lumpur 3. Johari bin Hassan 3. Looi Kheng Hwa4. Ishak bin Hassan

Telephone: 03-20341888 5. Zahar Hj AriffinFacsimile: 03-20342288 6. Yap Wee Keat

7. Tun Dato' Seri Abdul Hamid Omar8. Mohamed Azahari bin Mohamed

Kamil

K & N 801, 8th Floor Dealing Members: Non-Dealing Members:KENANGA BHD Kenanga International 1. Tengku Dato' Paduka 1. K & N Kenanga Holdings Bhd

Jalan Sultan Ismail Noor Zakiah binti Tengku Ismail 2. Raja Dato' Seri Abdul Aziz bin 50250 Kuala Lumpur 2. Tuan Hj Abdul Aziz bin Hashim Raja Salim

3. Dato' Ramli bin Ismail 3. David Williams Berry aka DayanTelephone: 03-21649080/21624190 WazirFacsimile: 03-21614990/21635927 4. Erdman Richard Georg Vogt

KAF-SEAGROATT & 30th Floor, The Weld Tower Dealing Member: Non-Dealing Member:CAMPBELL 76, Jalan Raja Chulan Dato' Ahmad bin Kadis KAF-Seagroatt & Campbell Bhd SECURITIES SDN 50200 Kuala LumpurBHD

Telephone: 03-20201600Facsimile: 03-20723464

KUALA LUMPUR No. 8 Jalan Binjai Dealing Members: Non-Dealing Members:CITY SECURITIES Off Jalan Ampang 1. Hashimah bt Ismail 1. Assedina Sdn BhdSDN BHD 50450 Kuala Lumpur 2. Tan Giap How 2. Khadijah bt Abdul Khalid

3. Zulazman bin Zulkifli 3. Lee Boon Leong @ Lee Boon KimTelephone: 03-21667922Facsimile: 03-21667909

LEONG & COMPANY Level 18 & 19, Wisma Cyclecarri Dealing Members: Non-Dealing Members:SDN BHD 288 Jalan Raja Laut 1. Leong Kun Kay 1. Ceria Alam Sdn Bhd

50350 Kuala Lumpur 2. Anne Leong Sau Leng 2. Edaran Otomobil Nasional Bhd3. Christine Leong Yuen Leng 3. Musa bin Haji Mohd Dahan

Telephone: 03-26928899 4. Peter Leong Tuck LengFacsimile: 03-26949088 5. Yu Kwei Sim

6. Fauzi Hj Omar

MAYBAN Tingkat 5 - 13, MaybanLife Tower Dealing Member: Non-Dealing Members:SECURITIES Dataran Maybank Hamzah bin Mahmood 1. Mayban Securities (Holdings) SDN BHD No. 1 Jalan Maarof Sdn Bhd

59000 Kuala Lumpur 2. Tan Sri Dato' Mohamed Basir binAhmad

Telephone: 03-22978888 3. Mohammad bin AbdullahFacsimile: 03-22825136 4. Hj Mohd Hashir Hj Abdullah

5. Dato' Ahmad Badri bin Mohd Basir6. Dato' Mohammed bin

Hj Che Hussein7. Md Agil bin Mohd Natt

A N N U A L R E P O R T 2 0 0 3

KLSE Members as at 31 December 2003

175174


MIDF SISMA 17th & 18th Floor, Empire Tower Dealing Member: Non-Dealing Members:SECURITIES 182, Jalan Tun Razak Datin Mariam Prudence bte Yusof 1. MIDF Sisma Holdings Sdn BhdSDN BHD 50400 Kuala Lumpur 2. Dato' Mohamed Ghaus bin

Badioze ZamanTelephone: 03-21668888 3. Allen N LopezFacsimile: 03-21669999 4. Datuk Dr Abdul Aziz bin Muhamad

5. Dato' Mohd Sallehuddin bin Othman6. Datuk Wira Mohamed Said bin

Mohamed Ali

OSK SECURITIES 10th Floor, Plaza OSK Dealing Members: Non-Dealing Members:BHD Jalan Ampang 1. Dato' Nik Mohamed bin 1. OSK Holdings Bhd

50450 Kuala Lumpur Nik Yahya 2. Loy Tuan Bee2. Chin Cheng Mei 3. Dato' Mohamed Tarmizi bin

Telephone: 03-21624388 3. Wong Chong Kim Mohd TahirFacsimile: 03-21618254 4. Ong Leong Huat @

Wong Joo Hwa5. Nik Halim @ Nik Ghazi bin

Haji Nik Daud6. Mohd Idris bin Ahmad Jais

PB SECURITIES 27th Floor, Bangunan Public Bank Dealing Member: Non-Dealing Members:SDN BHD No. 6 Jalan Sultan Sulaiman Teoh Cheng Soon 1. Public Consolidated

50000 Kuala Lumpur Holdings Sdn Bhd 2. Tan Sri Dato' Dr Teh Hong Piow

Telephone: 03-20313011 3. Dato' Lee Kong LamFacsimile: 03-20312533 4. Dato' Yeoh Chin Kee

5. Haji Abdul Aziz bin Omar

PM SECURITIES Tingkat Bawah dan Tingkat 1 Dealing Members: Non-Dealing Members:SDN BHD Plaza MUI 1. Noorjehan Rahima bt 1. PM Asset Management Sdn Bhd

Jalan P. Ramlee Abdul Hamid Jumat 2. Datin Munirah binti Abdullah Ng 50250 Kuala Lumpur 2. Chin Wooi Meng 3. Dato' Abdul Raman bin Suliman

3. Ramli bin Mahmudin 4. Zainal Rashid bin Zainal AbidinTelephone: 03-21463000 5. Dato' Seri Dr Ting Chew PehFacsimile: 03-21456345

RHB SECURITIES Level 9, Tower One Dealing Members: Non-Dealing Members:SDN BHD RHB Centre 1. Haji Tajul Ariffin bin Mohd Tahir 1. RHB Sakura Merchant Bankers Bhd

Jalan Tun Razak 2. Junaida bt Abdul Jalal 2. Dato Sri Sulaiman Abdul50400 Kuala Lumpur Rahman bin Abdul Taib

Telephone: 03-92852233 Facsimile: 03-92855522

SIMESECURITIES 21st Floor, Bangunan Sime Bank Dealing Member: Non-Dealing Members:SDN BHD 4, Jalan Sultan Sulaiman No appointment as at 1. SimeSecurities Holdings Sdn Bhd

50000 Kuala Lumpur 31.12.2003 2. Nik Din bin Nik Sulaiman3. Tunku Tan Sri Dato' Seri

Telephone : 03-22749288/778 Ahmad bin Tunku YahyaFacsimile: 03-22749907 4. Thavarajah a/l Chinniah

TA Menara TA One Dealing Member: Non-Dealing Members:SECURITIES BHD 22, Jalan P Ramlee Attan Akmar Masbah 1. TA Enterprise Berhad

50250 Kuala Lumpur 2. U Chin Wei


KLSE Members as at 31 December 2003 VOTING MEMBER SELANGOR DARUL EHSAN - KAJANG

JF APEX 3rd, 5th, 6th and 10th Floor Dealing Members: Non-Dealing Members:SECURITIES BHD Menara Apex Off Jalan Semenyih 1. Chan Guan Seng 1. Apex Equity Holdings Bhd

Bukit Mewah 2. Ng Seng Leong 2. J.P Morgan Services (M) Sdn Bhd43000 Kajang 3. Kharul Hurri bin Khalid Abbas 3. Soh Pick HarSelangor Darul Ehsan


VOTING MEMBER SELANGOR DARUL EHSAN - PETALING JAYA

MOHAIYANI 1st, 2nd & 3rd Floor Dealing Members: Non-Dealing Members:SECURITIES Plaza Damansara Utama 1. Datuk Mohaiyani bt Shamsudin 1. BNP ParibasSDN BHD No. 2 Jalan SS21/60 2. Abdul Hamid bin Abdul Samad 2. Christian Georges Henri

Damansara Utama 3. Nik Aminaldin bin Nik Jaafar Gautier De Charnace47400 Petaling Jaya 4. Chin Kok Keng 3. Abdul Ghani bin AhmadSelangor Darul Ehsan 4. Adam Ghani Ahmad bin

Abdul Ghani5. Amir Ghani Ahmad bin Abdul Ghani


VOTING MEMBER SELANGOR DARUL EHSAN - SUBANG JAYA

SJ SECURITIES Level 3, Holiday Villa Dealing Members: Non-Dealing Members:SDN BHD No 9, Jalan SS12/1 1. Ahmad Azman bin Abdul Manaf 1. Carta Bintang Sdn Bhd

47500 Subang Jaya 2. Lim Poh Ho 2. Dato' Ahmad Sebi BakarSelangor Darul Ehsan 3. Yong Teck Ming


VOTING MEMBERS SELANGOR DARUL EHSAN - SHAH ALAM

OMEGA 15th Floor Dealing Members: Non-Dealing Member:SECURITIES Plaza Perangsang 1. Abdullah bin Ayub Omega Holdings BhdSDN BHD Persiaran Perbandaran 2. Tiah Thee Peng

40990 Shah Alam 3. Yeo Lee Hoe(Dealer's licence Selangor Darul Ehsanrevoked by the Securities Commissionon 5 June 1998)

VOTING MEMBERS JOHOR DARUL TAKZIM - JOHOR BAHRU

ENG SECURITIES 95, Jalan Tun Abdul Razak Dealing Member: Non-Dealing Member:SDN BHD 80000 Johor Bahru Lim Khuan Eng 1. Inter-Pacific Capital Sdn Bhd

Johor Darul Takzim 2. Datuk Hj Mohd Fatmi bin Hj Che Salleh

Telephone: 07-2231211/8212 3. Azlan Meah bin Hj Ahmad MeahFacsimile: 07-2246266 4. Chan Kien Sing

A. A. ANTHONY Suite 8.2 Level 8 Dealing Members: Non-Dealing Members:SECURITIES Menara Sarawak Enterprise 1. Idris bin Osman 1. Dynamic Pearl Sdn BhdSDN BHD No. 5 Jalan Bukit Meldrum 2. Loong Sze Tung 2. Dato' Wong Pui Lam

80300 Johor Bahru 3. Lim Tiong Chin 3. Chuah Seong PhaikJohor Darul Takzim 4. Haji Abdul Rahman bin Ahmad


177176


KLSE Members as at 31 December 2003VOTING MEMBER KELANTAN DARUL NAIM

KOTA BHARU 298 Jalan Tok Hakim Dealing Member: Non-Dealing Members:SECURITIES 15000 Kota Bharu Mohamad bin Ab Aziz 1. Pakatan Canggih Sdn BhdSDN BHD Kelantan Darul Naim 2. Mohd Faiz bin Abdullah

3. Chan Gak KeongTelephone: 09-7432288 4. Wong Hong MengFacsimile: 09-7485366

VOTING MEMBERS MELAKA

MALACCA No. 1, 3 & 5, Jalan PPM 9 Dealing Members: Non-Dealing Members:SECURITIES Plaza Pandan Malim 1. Sim Swee Tin 1. T.M. Lim Sdn BhdSDN BHD Business Park, Balai Panjang 2. Sim Cheng Khuan 2. Kuala Lumpur City Corporation Bhd

75250 Melaka 3. Dato' Mohamed Zain bin Mohamed Yusof

Telephone: 06-3371533 4. Ng Ko CheeFacsimile: 06-3371550/3371577

VOTING MEMBERS PENANG

HWANG-DBS Level 2, 3, 4, 7 & 8 Dealing Members: Non-Dealing Members:SECURITIES BHD Wisma Sri Pinang 1. Dato' Seri Hwang Sing Lue 1. Hwang-DBS (Malaysia) Berhad

60 Green Hall 2. Tunku Dato' Seri 2. Tunku Tan Sri Imran ibni Tuanku 10200 Penang Nadzaruddin Ibni Tuanku Ja'afar Ja'afar

3. Hwang Lip Teik 3. Ong Eng KooiTelephone: 04-2636996 4. Tengku Syarif BendaharaFacsimile: 04-2639597 Perlis Syed Badarudin

Jamalullail ibni AlmarhumTuanku Syed Putra Jamalullail

THONG & KAY HIAN Wisma Sri Pinang Dealing Members: Non-Dealing Members:SECURITIES Level 5 & 6, 60 Green Hall And 1. Thong Wai Loen 1. UOB Kay Hian (M) HoldingsSDN BHD Level 4, Mutiara I & P 2. Thong Yue Leong Sdn Bhd

No. 47, Green Hall 3. Thong Miew Peng 2. Segmen Cahaya Sdn Bhd10200 Penang 3. Wee Ee Chao

4. Tang Wee LokeTelephone: 04-2635481Facsimile: 04-2635741/2622852

UT SECURITIES 6th, 10th & 12th Floor Dealing Members: Non-Dealing Members:SDN BHD Bangunan Mayban Trust 1. Frederick Ng Kweng Chan 1. Rentak Wira Sdn Bhd

3 Penang Street 2. Ling Hee Keat 2. Goh Choon Lye10200 Penang 3. Dato' Kamaruddin bin Jaafar

4. Lee Seong Chong @ Telephone: 04-2626644/6660 Lee Seong CheongFacsimile: 04-2644166

VOTING MEMBER BUTTERWORTH

MERCURY Ground, 1st, 2nd & 3rd Floor Dealing Member: Non-Dealing Members:SECURITIES Wisma UMNO Chew Sing Guan 1. Hj Shuaib LazimSDN BHD Lorong Bagan Luar Dua 2. Haji A. Rahman bin Safar

12000 Butterworth 3. Enrogetz Sdn BhdSeberang Perai

Telephone: 04-3322123Facsimile: 04-3231813/ 3312195

VOTING MEMBERS PERAK DARUL RIDZUAN

BOTLY SECURITIES 1st Floor, Plaza Teh Teng Seng Dealing Member: Non-Dealing Members:SDN BHD 227, Jalan Kampar Ahmad Sabri bin Harun 1. TA Entereprise Berhad

30250 Ipoh 2. U Chin WeiPerak Darul Ridzuan

Telephone: 05-2531313 Facsimile: 05-2536785/2557950

M & A SECURITIES M & A Building Dealing Members: Non-Dealing Members:SDN BHD 52A, Jalan Sultan Idris Shah 1. Choo Sen Yoong 1. Insas Bhd

30000 Ipoh 2. Dato' Thong Kok Yoon 2. Alias bin Haji AhmadPerak Darul Ridzuan


SBB SECURITIES 51 - 53 Persiaran Greenhill Dealing Members: Non-Dealing Members:SDN BHD 30450 Ipoh, 1. Raja Puan Sri Dato' Noora 1. SBB Capital Markets Sdn Bhd

Perak Darul Ridzuan Ashikin bt Raja Abdullah 2. Ramuda Sdn Bhd2. Lee Seang Seng 3. Nordin bin Yahaya

Telephone: 05-2530888 4. Dato' Tan Teong HeanFacsimile: 05-2537666

VOTING MEMBERS TERENGGANU DARUL IMAN

FA SECURITIES No. 51 & 51A, Ground, Mezzanine Dealing Member: Non-Dealing Members:SDN BHD dan Tingkat 1 Isa bin Mustapha 1. FA Peninsular Bhd

Jalan Tok Lam 2. Perbadanan Menteri Besar 20100 Kuala Terengganu Terengganu Terengganu Darul Iman 3. Dato' Muhamad Fasri bin Samsudin


PTB SECURITIES Tingkat 1, 2 & 3 Dealing Member: Non-Dealing Members:SDN BHD No. 61 Jalan Sultan Ismail Ismail bin Nik Man 1. PTB Securities Holdings Sdn Bhd

Peti Surat 151 2. Mat Zaid bin IbrahimPejabat Pos Besar 3. Dato' Mazlan @ Mohd Nanri bin

Hashim 20700 Kuala Terengganu 4. Hj Yusoff bin Hj TahirTerengganu Darul Iman


VOTING MEMBER SABAH

INNOSABAH 11 Equity House, Block K Dealing Member: Non-Dealing Members:SECURITIES Sadong Jaya, Karamunsing N/A 1. Kretam Holdings BhdBHD 88100 Kota Kinabalu 2. Seah Sen Leang

Sabah 3. Lee Swi Heng


Number of Members Companies (Voting Members): 39Number of Dealing Members: 83Number of Non-Dealing Members: 151

m/ship-rpt 31 December 2003 (Annual Report)Last update - 30/12/2003

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