ayamas cover definitions contents letter to shareholders appendix i iv

8/2/2019 Ayamas Cover Definitions Contents Letter to Shareholders Appendix I IV

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Company No.: 139112-H

THIS DOCUMENT IS IMPORTANT.

If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professionaladviser immediately. If you have sold all your ordinary shares in Ayamas Food Corporation Bhd (Ayamas) (139112-H), you should at once hand this AbridgedProspectus (AP) and the accompanying Forms to the stockbroker or agent through whom the sale was effected for transmission to the purchaser. All enquiriesconcerning this Rights Issue with Warrants should be addressed to the Registrars, Dinasti Korporat (M) Sdn Bhd (263930-P), Suite 901, 9th Floor Tower Block, PlazaPekeliling, 2 Jalan Tun Razak, 50400 Kuala Lumpur.

If you are a shareholder with a registered address outside Malaysia, in which the acceptance and renounceability of all or any part of your entitlement would result inthe contravention of the laws of the country or jurisdiction in which you are a resident, in absence of any necessary consent and/or compliance with any registration orother legal requirements or any other reasons, you are not entitled or to apply for excess shares, such purported acceptance or renunciation or application will be

deemed invalid and you will be considered not to have accepted your rights entitlement nor to have applied for excess shares. You should consult you legal adviser inyour country in which you are a resident as to whether the acceptance or renunciation would result in the contravention of any laws of such country or jurisdiction.Ayamas and Aseambankers Malaysia Berhad (Aseambankers) shall not accept any responsibility or liability in the event that any acceptance or renunciation made byentitled shareholders or their renouncees is or shall become illegal, unenforceable, voidable in such countries or jurisdiction.

A copy of this AP has been registered with the Securities Commission (SC) and lodged with the Registrar of Companies, who take no responsibility for the contentsof the document.

Approvals for the Rights Issue with Warrants have been obtained from the SC on 15 August 2001 and from the shareholders of Ayamas at an Extraordinary GeneralMeeting held on 28 June 2001. Approval-in-principle has been obtained from the Kuala Lumpur Stock Exchange (KLSE) vide its letter dated 29 October 2001 forthe Rights Issue with Warrants and to deal in and for quotation for all the new ordinary shares and warrants arising from this Rights Issue with Warrants and such newordinary shares and warrants will be admitted to the Official List of the KLSE and official quotation will commence after receipt of confirmation from MalaysianCentral Depository Sdn Bhd that all the Central Depository System accounts of the entitled holders have been duly credited and notices of allotment have beendespatched to the entitled holders.

Neither the KLSE nor the SC takes any responsibility for the correctness of statements made or opinions expressed herein. Admission to the Official List of theWarrants and quotation of the said new ordinary shares and the Warrants are in no way reflective of the merits of the Rights Issue with Warrants.

All the documentation relating to this Rights Issue with Warrants has been seen and approved by the Directors of Ayamas and they collectively and individually acceptfull responsibility for the accuracy of the information given and confirm that, after having made all reasonable inquiries, and to the best of their knowledge and belief,

there are no false or misleading statements or other facts the omission of which would make any statement in these documents false or misleading.Aseambankers, as the Adviser acknowledges that, based on all available information and to the best of its knowledge and belief, this Abridged Prospectus constitutes afull and true disclosure of all material facts concerning this Rights Issue with Warrants and are satisfied that the consolidated profit estimate (for which the Directors ofAyamas are fully responsible) prepared for inclusion in the prospectus have been stated by the directors after due and careful enquiry and have been duly reviewed bythe Reporting Accountants, Messrs. Ernst & Young.

AYAMAS FOOD CORPORATION BHD

(Company No: 139112-H)(Incorporated in Malaysia under the Companies Act, 1965)

RIGHTS ISSUE

Of

49,750,000 New Ordinary Shares Of RM1.00 Each At An Issue Price Of RM1.00 PerNew Ordinary Share On A Renounceable Basis Together With 49,750,000 Detachable

Free New Warrants On The Basis Of One (1) New Ordinary Share Of RM1.00 Each

Together With One (1) Free New Warrant For Every Two (2) Existing Ordinary Shares

Of RM1.00 Each Held At 5.00 P.M. On 30 November 2001

ADVISER AND MANAGING UNDERWRITER

$VHDPEDQNHUV0DOD\VLD%HUKDG+

IMPORTANT RELEVANT DATES

Entitlement or record date : Friday, 30 November 2001 at 5:00 p.m.

Last day and time for sale of provisional allotment of rights : Monday, 24 December 2001 at 5:00 p.m.

Last day and time for acceptance and payment : Tuesday, 8 January 2002 at 5:00 p.m.

Last day and time for excess shares application and payment : Tuesday, 8 January 2002 at 5:00 p.m.

THIS ABRIDGED PROSPECTUS IS DATED 7 DECEMBER 2001


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THE SECURITIES COMMISSION HAS APPROVED THIS RIGHTS ISSUEWITH WARRANTS AND THE APPROVAL SHALL NOT BE TAKEN TO

INDICATE THAT THE COMMISSION RECOMMENDS THE RIGHTS

ISSUE WITH WARRANTS.

THE SECURITIES COMMISSION SHALL NOT BE LIABLE FOR ANYNON-DISCLOSURE ON THE PART OF THE CORPORATION AND

ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF ANY

STATEMENT MADE OR OPINION OR REPORTS EXPRESSED IN THIS

PROSPECTUS. SHAREHOLDERS/INVESTORS SHOULD RELY ON

THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF

THE INVESTMENT.


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DEFINITIONS

Except where the context otherwise requires, the following definitions shall apply throughout this Abridged

Prospectus, Notice of Provisional Allotment and Rights Subscription Form dated 7 December 2001:-

Acquisition of Land and Buildings : Acquisition of 52,740 square metres of land with a tenure of

99 years expiring on 15 March 2087 comprising the following:-

(a) No. H.S.(D) 56758 No. P.T. 60847, Mukim and District of

Klang;

(b) Pajakan Negeri No. Pendaftaran 8616 Lot No. 59560 Sek.

21, Bandar Port Swettenham, District of Klang (formerly

held under No. H.S.(D) 46165 No. P.T. 46880, Mukim and

District of Klang); and

(c) No. H.S.(D) 56759 No. P.T. 60848, Mukim and District of

Klang,

all in the State of Selangor Darul Ehsan, together with the building

structures thereon, from DSB for a purchase consideration of

RM65,000,000 of which a total cash amount of RM6,500,000 hadbeen paid by Ayamas to DSB and the balance of RM58,500,000 to

be satisfied by way of issuance of approximately 46,800,000 new

ordinary shares of RM1.00 each in Ayamas at an issue price of

RM1.25 per share

Aseambankers : Aseambankers Malaysia Berhad (15938-H)

Ayamas or the Company : Ayamas Food Corporation Bhd (139112-H)

Ayamas Group or the Group : Ayamas and its subsidiary companies as defined in Section 5 of

the Companies Act, 1965

Board : The Board of Directors of Ayamas

Bonus Issue : The bonus issue of 49,750,000 new ordinary shares of RM1.00

each to the existing shareholders of Ayamas on the basis of one (1)

new ordinary share for every one (1) ordinary share held on 29

August 2001 and which was completed on 13 September 2001

Bonus Shares : The 49,750,000 new ordinary shares of RM1.00 each issuedpursuant to the Bonus Issue

Entitlement Date or Books

Closure Date

: 30 November 2001 at 5:00 p.m., being the date and time at which

the Companys Register of Members and/or Record of Depositors

with MCD is closed to determine the entitlement of the

shareholders of the Company to the Rights Issue with Warrants

CDS : Central Depository System

Deed Poll : The deed poll dated 3 December 2001 relating to the Warrants to

subscribe for new ordinary shares of RM1.00 each in Ayamas

DSB : Distrepark Sdn Bhd (215627-K)

EGM : Extraordinary General Meeting

Entitled Shareholders : Shareholders whose names appear on the Register of Members

and/or Record of Depositors on the Entitlement Date

Exercises : The Bonus Issue, the Rights Issue with Warrants, the Acquisition

of Land and Buildings and the Transfer of Listing collectively


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DEFINITIONS (Contd)

KFCH : KFC Holdings (Malaysia) Bhd (65787-T), the holding company ofAyamas

"KLSE" : Kuala Lumpur Stock Exchange (30632-P)

"Market Day" : Day on which the KLSE is open for trading in securities

MCD : Malaysian Central Depository Sdn Bhd (165570-W)

NTA : Net tangible assets

New Purchaser : The person who purchases the electronic provisional allotment

letters from the open market

Price Fixing Date : A date set between the date of SCs approval and the date of the

signing of the underwriting agreement. In this case, it is the date on

27 September 2001 for determining the issue price for the Rights

Issue with Warrants

Rights Issue with Warrants : The rights issue of 49,750,000 new ordinary shares of RM1.00

each at RM1.00 per new ordinary share of RM1.00 each on a

renounceable basis together with 49,750,000 detachable free new

warrants on the basis of one (1) new ordinary share of RM1.00

each together with one (1) free new warrant for every two (2)

existing ordinary shares of RM1.00 each held at 5.00 p.m. on 30

November 2001

Rights Shares : The 49,750,000 new ordinary shares of RM1.00 each to be issued

pursuant to the Rights Issue with Warrants

ROC : Registrar of Companies

RSF : Rights Subscription Form

SC : Securities Commission

Share(s) : Ordinary share(s) of Ringgit Malaysia One (RM1.00) each in the

Company

Transfer of Listing : The transfer of listing of the Companys entire enlarged issued andpaid-up share capital from the Second Board to the Main Board of

the KLSE

Warrant(s) : The 49,750,000 detachable free new warrants to be issued pursuant

to the Rights Issue with Warrants

In this Abridged Prospectus, unless there is something in the subject or context inconsistent herewith, the

singular includes the plural; references to gender include both genders and the neuter.


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CONTENTS

Page

CORPORATE INFORMATION (i) to (iii)

LETTER TO SHAREHOLDERS CONTAINING:

1. INTRODUCTION ............................................................. .......................................................... .............11.1 Rights Issue With Warrants........................................................................................................21.2 Other Approved Exercises..........................................................................................................5

2. INSTRUCTIONS FOR ACCEPTANCE, PAYMENT, SALE/TRANSFER OF THE PROVISIONALALLOTMENT AND EXCESS SHARES WITH FREE WARRANTS APPLICATION........................62.1 Closing Date For Acceptance / Application ...............................................................................62.2 Acceptance Of Rights.................................................................................................................72.3 Application For Excess Shares With Free Warrants ..................................................................8

2.4 Sale / Transfer Of The Provisional Allotment Of Rights ...........................................................82.5 Notice Of Allotment And Certificates........................................................................................92.6 Laws of Foreign Jurisdictions ............................................................... .....................................9

3. RATIONALE FOR THE RIGHTS ISSUE WITH WARRANTS..........................................................10

4. UTILISATION OF PROCEEDS ARISING FROM THE RIGHTS ISSUE WITH WARRANTS........11

5. INVESTMENT CONSIDERATIONS ............................................................... ....................................125.1 Business Risks..........................................................................................................................125.2 Foreign Exchange Risks...........................................................................................................125.3 Competition..............................................................................................................................12 5.4 Dependence On Key Personnel / Major Shareholders..............................................................13

5.5 Political And Economic Considerations...................................................................................135.6 Governments Policies And Legislations ............................................................................... ..135.7 Profit Estimate And Forecast....................................................................................................135.8 Forward-Looking Statement.....................................................................................................13

6. FINANCIAL EFFECTS ................................................................. ........................................................146.1 Share Capital .............................................................. ............................................................ ..146.2 NTA..........................................................................................................................................14 6.3 Earnings....................................................................................................................................15 6.4 Dividends ........................................................... ........................................................... ...........156.5 Gearing.....................................................................................................................................16

7. FUTURE PROSPECTS..........................................................................................................................16

7.1 Overview And Outlook Of The Malaysian Economy ..............................................................167.2 Prospects Of The Ayamas Group ...................................................................... .......................18

8. WORKING CAPITAL, BORROWINGS AND CONTINGENT LIABILITIES...................................19

9. SHAREHOLDERS UNDERTAKING AND UNDERWRITING ARRANGEMENT.........................19

10. ESTIMATED EXPENSES OF THE RIGHTS ISSUE WITH WARRANTS ........................................20

11. TERMS AND CONDITIONS................................................................................................................20

12. QUOTATION AND DEALINGS ..................................................... .....................................................20

13. ADDITIONAL INFORMATION...........................................................................................................20


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APPENDICES

APPENDIX I EXTRACT OF THE ORDINARY RESOLUTIONS PASSED AT THE EGM HELD ON

28 JUNE 2001 .......................................................... ........................................................ 21

APPENDIX II INFORMATION ON AYAMAS FOOD CORPORATION BHD................................... 22

APPENDIX III CONSOLIDATED PROFIT ESTIMATE OF AYAMAS FOR THE FINANCIAL YEAR

ENDING 31 DECEMBER 2001 TOGETHER WITH THE PRINCIPAL BASES AND

ASSUMPTIONS AND THE REPORTING ACCOUNTANTS LETTER RELATING

THEREON ..................................................... ........................................................... .... 27

APPENDIX IV PROFORMA CONSOLIDATED BALANCE SHEETS OF AYAMAS AS AT 31

DECEMBER 2000 TOGETHER WITH THE REPORTING ACCOUNTANTS

LETTER RELATING THEREON .................................................................... .............. 30

APPENDIX V AUDITED FINANCIAL STATEMENTS OF AYAMAS FOR THE FINANCIAL YEAR

ENDED 31 DECEMBER 2000 TOGETHER WITH THE NOTES TO THE FINANCIAL

STATEMENTS AND THE AUDITORS REPORT THEREON ................................... 34

APPENDIX VI UNAUDITED FINANCIAL STATEMENTS OF AYAMAS FOR THE NINE (9)

MONTHS PERIOD ENDED 30 SEPTEMBER 2001 TOGETHER WITH THE NOTES

TO THE FINANCIAL STATEMENTS .......................................................................... 64

APPENDIX VII DIRECTORS' REPORT...................................... ............................................................. 70

APPENDIX VIII PARTICULARS OF THE WARRANTS ................................................................ ........ 71

APPENDIX IX FURTHER INFORMATION.............. ................................................................ ............. 87


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i

AYAMAS FOOD CORPORATION BHD(Company No. 139112-H)

(Incorporated in Malaysia under the Companies Act, 1965)

CORPORATE INFORMATION

BOARD OF DIRECTORS

Name Of Directors Address Nationality Occupation

Tuan Haji Izhar bin Sulaiman

(Executive Chairman)

No. 2506, 25th Floor

Wisma Cosway

Jalan Raja Chulan

50250 Kuala Lumpur

Malaysian Company Director

YBhg Datuk Haji Abdullah binOmar

(Executive Deputy Chairman)

12-13-4 City GardensPersiaran Raja Chulan

50200 Kuala Lumpur


YBhg Dato Haji Karim bin

Marzuki

(Non-Independent Non-

Executive Director)

No. 6 Jalan 4/6B

40000 Shah Alam


En Bahaman bin Haji Abdul

Hamid

(Independent Non-Executive

Director)

27 Kampung Jelam Durian

Tawar Mengkarak

Temerloh Pahang


YB En Hilmi bin Haji AbdulRashid

(Independent Non-Executive

Director)

1133 Jalan ButterworthKepala Batas

13200 Pulau Pinang


AUDIT COMMITTEE

Name Designation Directorship

YB En Hilmi bin Haji Abdul

Rashid

Chairman Independent Non-Executive Director

Tuan Haji Izhar bin Sulaiman Member Executive Chairman

En Bahaman bin Haji AbdulHamid

Member Independent Non-Executive Director

COMPANY SECRETARY : Toh Chun Wah

(MIA 3145)

42 Jalan SS21/32

Damansara Utama

47400 Petaling Jaya

REGISTERED OFFICE : Level 17 Wisma KFC

Jalan Sultan Ismail50250 Kuala Lumpur

Tel: 03 2026 3388

Web site : kfcholdings.com.myE-mail : [email protected]


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ii

SOLICITOR FOR THE RIGHTS

ISSUE WITH WARRANTS

: Iza Ng Yeoh & Kit

Suite 13-08 13th Floor Plaza 138

No. 138 Jalan Ampang

50450 Kuala Lumpur

REGISTRAR : Dinasti Korporat (M) Sdn Bhd

Suite 901, 9th Floor Tower BlockPlaza Pekeliling

2 Jalan Tun Razak

50400 Kuala Lumpur

Tel: 03 4041 1673

PRINCIPAL BANKERS : Alliance Bank Malaysia Berhad

Menara Multi-Purpose

Capital Square

8 Jalan Munshi Abdullah

50100 Kuala Lumpur

Bumiputra-Commerce Bank Berhad

KL Main Branch6 Jalan Tun Perak

50736 Kuala Lumpur

HSBC Bank Malaysia Berhad

KL Main Branch

2 Leboh Ampang

50100 Kuala Lumpur

Malayan Banking Berhad

KL Main Branch

Menara Maybank

100 Jalan Tun Perak

50050 Kuala Lumpur

Southern Bank Berhad

Ground Floor Wisma KFC

Jalan Sultan Ismail

50250 Kuala Lumpur

AUDITOR AND REPORTING

ACCOUNTANTS

: Ernst & Young

Public Accountants (AF 0039)

4th Floor Kompleks Antarabangsa

Jalan Sultan Ismail

50250 Kuala Lumpur

ADVISER AND MANAGING

UNDERWRITER

: Aseambankers Malaysia Berhad

33rd Floor, Menara Maybank100, Jalan Tun Perak

50050 Kuala Lumpur


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iii

UNDERWRITERS : Aseambankers Malaysia Berhad

33rd Floor, Menara Maybank100, Jalan Tun Perak

50050 Kuala Lumpur

Kuala Lumpur City Securities Sdn Bhd

No. 8 Jalan Binjai

Off Jalan Ampang50450 Kuala Lumpur

PM Securities Sdn Bhd

14th Floor MUI Plaza

Jalan P.Ramlee

50250 Kuala Lumpur

STOCK EXCHANGE LISTING AND

LISTING SOUGHT

: Second Board of the Kuala Lumpur Stock Exchange


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1

AYAMAS FOOD CORPORATION BHD(Company No. : 139112-H)

(Incorporated in Malaysia under Companies Act, 1965)

Registered Office:

Level 17 Wisma KFC

Jalan Sultan Ismail

50250 Kuala Lumpur

7 December 2001

Board Of Directors:

Tuan Haji Izhar bin Sulaiman (Executive Chairman)

YBhg Datuk Haji Abdullah bin Omar (Executive Deputy Chairman)

YBhg Dato Haji Karim bin MarzukiEn Bahaman bin Haji Abdul Hamid

YB En Hilmi bin Haji Abdul Rashid

To : The Shareholders of Ayamas Food Corporation Bhd

Dear Sir/Madam,

RIGHTS ISSUE OF 49,750,000 NEW ORDINARY SHARES OF RM1.00 EACH AT AN ISSUE

PRICE OF RM1.00 PER NEW ORDINARY SHARE OF RM1.00 EACH ON A RENOUNCEABLE

BASIS TOGETHER WITH 49,750,000 DETACHABLE FREE NEW WARRANTS ON THE BASIS

OF ONE (1) NEW ORDINARY SHARE OF RM1.00 EACH TOGETHER WITH ONE (1) FREE

NEW WARRANT FOR EVERY TWO (2) EXISTING ORDINARY SHARES OF RM1.00 EACH

HELD AT 5.00 P.M. ON 30 NOVEMBER 2001

1. INTRODUCTION

Your Directors are pleased to inform that at the EGM convened on 28 June 2001, the shareholders

of Ayamas have approved the following proposals:-

(i) bonus issue of 49,750,000 new ordinary shares of RM1.00 each to be credited as fully

paid-up on the basis of one (1) new ordinary share of RM1.00 each for every one (1)

ordinary share of RM1.00 each held;

(ii) rights issue of 49,750,000 new ordinary shares of RM1.00 each at an issue price to be

determined later on a renounceable basis together with 49,750,000 detachable free new

warrants on the basis of one (1) new ordinary share of RM1.00 each together with one (1)free new warrant for every two (2) existing ordinary shares of RM1.00 each held; and


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2

(iii) acquisition of 52,740 square metres of land with a tenure of 99 years expiring on 15

March 2087 comprising the following:-

(a) No. H.S.(D) 56758 No. P.T. 60847, Mukim and District of Klang;(b) Pajakan Negeri No. Pendaftaran 8616 Lot No. 59560 Sek. 21, Bandar Port

Swettenham, District of Klang (formerly held under No. H.S.(D) 46165 No. P.T.

46880, Mukim and District of Klang); and

(c) No. H.S.(D) 56759 No. P.T. 60848, Mukim and District of Klang,

all in the State of Selangor Darul Ehsan, together with the building structures thereon,

from DSB for a purchase consideration of RM65,000,000 of which a total cash amount of

RM6,500,000 had been paid by Ayamas to DSB and the balance of RM58,500,000 to be

satisfied by way of issuance of approximately 44,656,489 new ordinary shares of

RM1.00 each in Ayamas based on an indicative issue price of RM1.31 per share.

The land is improved with a 2-storey warehouse (No. P.T. 60847), a 1-storey warehouse

(Lot No. 59560) and a 4-storey office building (No. P.T. 60848).

A certified true extract of the ordinary resolution approving the Rights Issue with Warrants at the

above said EGM is attached in Appendix I of this Abridged Prospectus.

1.1 Rights Issue With Warrants

The Rights Issue with Warrants will entail the issuance of 49,750,000 new ordinary

shares of RM1.00 each in Ayamas at an issue price of RM1.00 per share together with

49,750,000 detachable free new warrants on the basis of one (1) new ordinary share with

one (1) free new warrant for every two (2) existing ordinary shares held in Ayamas. The

Rights Issue with Warrants will be offered on a renounceable basis to shareholders of

Ayamas whose names appear on the Register of Members and/or Record of Depositors at

5.00 p.m. on 30 November 2001.

The SC has vide its letter dated 15 August 2001 approved the Rights Issue with Warrants.

Approval from the FIC for the Rights Issue with Warrants was obtained on 19 July 2001

subject to the condition that MITIs approval is obtained.

The MITI has vide its letter dated 14 September 2001 approved the Rights Issue with

Warrants. Its approval is subject to the conditions that FICs and SCs approvals are

obtained.

Approval in-principle has been obtained from the KLSE vide its letter dated 29 October

2001 for admission of the Warrants to the Official List and listing of and quotation for all

the new ordinary shares and warrants arising from this Rights Issue with Warrants and

listing of and quotation for new ordinary shares to be issued pursuant to the exercise of

Warrants. Such securities will be admitted to the Official List of the KLSE and officialquotation will commence after receipt of confirmation from MCD that all securities

accounts of successful applicants have been despatched to all successful applications.

On behalf of Ayamas, Aseambankers, had on 27 September 2001 announced that the

rights issue price has been determined at RM1.00 per new ordinary share with one free

new warrant based on a discount of 25 sen or 20% from the theoretical ex-all price of

RM1.25 after taking into account the weighted average market price of Ayamas shares

for the five (5) Market Days ended 26 September 2001 being one (1) market day prior to

the Price Fixing Date of RM1.38 per share.


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3

For the period commencing from the date of allotment and issue of Rights Shares with

Warrants (Issue Date) and ending at the close of business at 5.00 p.m. on the day

immediately preceding the third (3

rd

) anniversary of the Issue Date (First Expiry Date),the exercise price of the Warrants is RM1.13 per share. The exercise price of the

Warrants of RM1.13 is determined based on a discount of 12 sen or 9.6% from the

theoretical ex-all price of RM1.25 after taking into account the five (5) days weighted

average market price of Ayamas ended 26 September 2001 being one (1) market day

prior to the Price Fixing Date of RM1.38 per share.

For the period commencing from the date immediately following the First Expiry Date

and ending at the close of business at 5.00 p.m. on the last day of the exercise period, the

exercise price of the Warrants is RM1.19 per share, which is determined based on a

discount of 6 sen or 4.8% from the theoretical ex-all price of RM1.25 after taking into

account the five (5) days weighted average market price of Ayamas ended 26 September

2001 being one (1) market day prior to the Price Fixing Date of RM1.38 per share.

The 49,750,000 new ordinary shares of RM1.00 each to be issued pursuant to the Rights

Issue with Warrants shall, upon allotment and issue, rank pari passu in all respects with

the then existing ordinary shares of Ayamas, except that they shall not be entitled to any

dividends, that may be declared prior to the date of allotment and issue of the new

ordinary shares, nor shall they be entitled to any rights, allotments, distributions or such

entitlements for which the record date is prior to the date of allotment and issue of the

new ordinary shares. For the purpose hereof, record date means the date as at the close of

business on which a person must be entered in the Record Of Depositors of the Company

as a shareholder in order to participate in any dividends, rights, allotments or any other

distributions.

The attached Warrants shall be issued to each of the Entitled Shareholders of Ayamas at

no additional cost and will be based on the Entitled Shareholders entitlements to the

rights issue of new ordinary shares and on the acceptance of their respective rightsentitlements.

All the 49,750,000 new ordinary shares of RM1.00 each in Ayamas to be issued upon

exercise of the Warrants shall, upon allotment and issue, rank pari passu in all respects

with the then existing ordinary shares of the Company, except that they shall not be

entitled to any dividends, that may be declared prior to the date of allotment and issue of

the new ordinary shares, nor shall they be entitled to any rights, allotments, distributions

or such entitlements for which the record date is prior to the date of allotment and issue

of the new ordinary shares. For the purpose hereof, record date means the date as at the

close of business on which a person must be entered in the Record Of Depositors of the

Company as a shareholder in order to participate in any dividends, rights, allotments or

any other distributions.

The principal terms of the Warrants as extracted from the Deed Poll are set out below:-

Issuer : Ayamas

Form and

Denomination

: The Warrants, which are issued with the Rights Shares

are immediately detached upon issue and will be

separately traded. The Warrants will be issued in

registered form and constituted by the Deed Poll

executed by the Company on 3 December 2001.


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4

Number of Warrants : A total of 49,750,000 Warrants to be issued in

conjunction with the Proposed Rights Issue with

Warrants of 49,750,000 new ordinary shares of

RM1.00 each to the entitled shareholders of Ayamas ona renounceable basis, on the basis of one (1) Warrant

attached to each new ordinary shares to be issued.

Exercise Price : The exercise price payable in respect of each new

ordinary share of RM1.00 each in Ayamas to which a

Warrant holder will be entitled to subscribe upon

exercise of the Exercise Rights (as defined below) or

such adjusted price as in accordance with the terms and

conditions to be set out in the Deed Poll is as follows:-

(a) for the period commencing from the Issue Date

and ending at the close of business at 5.00 p.m. on

First Expiry Date (both dates inclusive), RM1.13;

and

(b) for the period commencing from the date

immediately following the First Expiry Date and

ending at the close of business at 5.00 p.m. on the

last day of the Exercise Period (as defined below)

(both dates inclusive), RM1.19.

Exercise Period : The Warrants may be exercised at any time within a

period of five (5) years (or such extended period as

may be effected in accordance with the provisions to be

set out in the Deed Poll) including and commencing

from the Issue Date. The Warrants not exercised

during the Exercise Period will thereafter lapse andbecome void.

Exercise Rights : Each Warrant entitles the registered holder during the

Exercise Period to subscribe for one (1) new ordinary

share of RM1.00 each in the share capital of the

Company at the Exercise Price.

Deed Poll : The Warrants will be constituted by a Deed Poll to be

executed by Ayamas.

Board Lot : For purpose of trading on the KLSE, a board lot of

Warrants will be 1,000 Warrants carrying the right to

subscribe for 1,000 new ordinary shares of RM1.00each.


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5

Status of New Ordinary

Shares to be Issued

Pursuant to the Exercise

of Warrants

: All the new ordinary shares of RM1.00 each in

Ayamas to be issued upon exercise of the Warrants

shall, on allotment and issue, rank pari passu in all

respects with the then existing ordinary shares of theCompany except that they shall not be entitled to any

dividends, that may be declared prior to the date of

allotment and issue of the new Ayamas ordinary

shares, nor shall they be entitled to any distributions or

such entitlements for which the record date is prior to

the allotment and issue of the new ordinary shares.

Listing : Application will be made for the admission to the

Official List of the KLSE for the listing of and

quotation for the Warrants and the new ordinary shares

to be issued arising from the exercise of the Warrants.

In accordance with the terms of the Rights Issue with Warrants as approved by the SC

and the shareholders of the Company, Ayamas has provisionally allotted 49,750,000 new

ordinary shares of RM1.00 each together with 49,750,000 free new warrants for

subscription by shareholders whose names appear on Ayamass Record of Depositors at

5.00 p.m. on 30 November 2001 in the proportion of one (1) new ordinary share together

with one (1) free new warrant for every two (2) existing ordinary shares of RM1.00 each

held.

As your name appeared in the Record Of Depositors of the Company as a shareholder on

the Book Closure Date, you will find enclosed with this Abridged Prospectus, the Notice

of Provisional Allotment in respect of the number of new ordinary shares with free

warrants for which you are entitled to subscribe under the terms of this Abriged

Prospectus and RSF.

1.2 Other Approved Exercises

The SC, FIC and MITI have vide their letters dated 15 August 2001, 19 July 2001 and 14

September 2001 respectively, approved the acquisition of 52,740 square metres of land

together with the building structures situated in Mukim and District of Klang, State of

Selangor Darul Ehsan for a purchase consideration of RM65,000,000.

The SC has also vide its letter dated 15 August 2001 approved the transfer of listing of

the Companys entire enlarged issued and paid-up share capital from the Second Board to

the Main Board of the KLSE.


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6

2. INSTRUCTIONS FOR ACCEPTANCE, PAYMENT, SALE/TRANSFER OF THE

PROVISIONAL ALLOTMENT AND EXCESS SHARES WITH FREE WARRANTS

APPLICATION

2.1 Closing Date For Acceptance / Application

The RSF, together with the Notes and Instructions thereon issued pursuant to the Rights

Issue with Warrants is deemed to form part of this Abridged Prospectus.

The RSF is valid for acceptance until 5.00 p.m. on 8 January 2002, or such later time and

day as may be decided and announced by the Board of Directors of the Company.

If acceptance and payment(s) in the manner specified herein are not received by the

Registrar, Dinasti Korporat (M) Sdn Bhd, Suite 901, 9th Floor Tower Block, Plaza

Pekeliling, 2 Jalan Tun Razak, 50400 Kuala Lumpur, by 5.00 p.m. on 8 January 2002 (or

such later time and day as may be announced) for any part of the new ordinary shares

provisionally allotted to you, such provisional allotment will be deemed to have been

declined and will be cancelled. The Board will then have the right to allot the new

ordinary shares not taken up in such manner as they deem fit in the interest of the

Company.

FULL INSTRUCTIONS FOR THE ACCEPTANCE AND PAYMENT FOR THE NEW

ORDINARY SHARES PROVISIONALLY ALLOTTED TO YOU AND THE

PROCEDURES TO BE FOLLOWED SHOULD YOU WISH TO DISPOSE OF YOUR

RIGHTS TO ALL OR ANY OF THE NEW ORDINARY SHARES ARE SET OUT IN

THE NOTICE OF PROVISIONAL ALLOTMENT. YOU ARE ADVISED TO READ

THE RSF AND THE INSTRUCTIONS THEREIN CAREFULLY.

ACCEPTANCE WHICH DO NOT STRICTLY CONFORM TO THE TERMS OF THIS

PROSPECTUS OR RSF OR NOTES AND INSTRUCTIONS PRINTED THEREIN ORWHICH ARE ILLEGIBLE MAY NOT BE ACCEPTED AT THE ABSOLUTE

DISCRETION OF THE COMPANY.

The Notice of Provisional Allotment, RSF, together with this Abridged Prospectus will

be sent by the Registrars, Dinasti Korporat (M) Sdn Bhd, Suite 901, 9 th Floor Tower

Block, Plaza Pekeliling, 2 Jalan Tun Razak, 50400 Kuala Lumpur, by ordinary post to the

Entitled Shareholders who have, prior to the close of business at 5.00 p.m. on 30

November 2001, registered addresses in Malaysia at the Entitled Shareholders own risk.

Entitled Shareholders without registered addresses in Malaysia as at the aforementioned

date may collect the Notice of Provisional Allotment, RSF, together with the Abridged

Prospectus from the Dinasti Korporat (M) Sdn Bhd, Suite 901, 9th Floor Tower Block,

Plaza Pekeliling, 2 Jalan Tun Razak, 50400 Kuala Lumpur, in which event, the Registrarshall be entitled to request for such evidence as they deem necessary to satisfy themselves

as to the identity and authority of the person collecting the documents. Such collection

may be done during normal business hours from Monday to Friday (except public

holidays) from the date hereof till 8 January 2002. The Entitled Shareholders or their

renouncees who require another copy of the RSF may obtain additional copies from their

stockbrokers or from the KLSE website (http://www.klse.com.my)


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2.2 Acceptance Of Rights

If you wish to accept the new ordinary shares provisionally allotted to you, pleasecomplete Part I and Part III of the RSF and return the RSF, together with the appropriate

remittance made in Ringgit Malaysia by Bankers Draft/Cashiers Order/Money Order or

Postal Order drawn on a Bank or Post Office in Malaysia and made payable to

AYAMAS RIGHTS ISSUE ACCOUNT and crossed ACCOUNT PAYEE ONLY

and endorsed on the reverse side with your name and address in block letters, for the full

amount payable for the new ordinary shares accepted, to be received by the Registrar,

Dinasti Korporat (M) Sdn Bhd, Suite 901, 9th Floor Tower Block, Plaza Pekeliling, 2

Jalan Tun Razak, 50400Kuala Lumpur, at or before 5.00 p.m. on 8 January 2002 (orsuch later time and day as may be announced). Any excess or insufficient payment may

be rejected at the absolute discretion of the Directors. Personal cheques or any other

modes of payment not mentioned above will be rejected.

The remittance must be made for the exact amount payable for the new ordinary shares

accepted (rounded up to the nearest sen). No acknowledgement of the receipt of the RSF

or application monies will be made by the Company or the Registrar but a Notice of

Allotment will be despatched to the Entitled Shareholders and/or their renouncees by

ordinary post to the addresses stated in the MCDs record at your own risk within fifteen

(15) market days from the last date for acceptance and payment for the Rights Shares and

Warrants.

The Board reserve the right to allot the unsubscribed securities applied for under the

excess shares in such manner that the incident of odd lots would be minimised and as

they may deem fit and expedient in the interest of the Company. In determining the

respective shareholders entitlements to the Rights Issue with Warrants, fractional

entitlements of a Rights Share will be disregarded. Any Rights Shares representing

fractional entitlements shall be dealt with in such manner as the Directors of Ayamas in

their absolute discretion and conditions as they may decide.

ENTITLED SHAREHOLDERS AND THEIR RENOUNCEES SHOULD NOTE

THAT ALL RSF AND REMITTANCES SO LODGED WITH THE SHARE

REGISTRAR SHALL BE IRREVOCABLE AND SHALL NOT BE

WITHDRAWN.

WHERE APPLICATION IS NOT ACCEPTED, THE FULL AMOUNT PAID ON

APPLICATION WILL BE REFUNDED WITHOUT INTEREST AND SHALL BE

DESPATCHED TO THE APPLICANT WITHIN FIFTEEN (15) MARKET DAYS

FROM THE LAST DATE OF ACCEPTANCE AND PAYMENT OF RIGHTS

SHARES BY REGISTERED POST TO THE APPLICANT AT THE ADDRESS

STATED IN THE MCDS RECORD AT THE APPLICANTS OWN RISK.

WHERE AN APPLICATION IS ACCEPTED IN PART ONLY, THE SURPLUSOF THE APPLICATION MONIES WILL BE REFUNDED WITHOUT

INTEREST AND SHALL BE DESPATCHED TO THE APPLICANT BY

REGISTERED POST TO THE ADDRESS STATED IN THE MCDS RECORD

AT THE APPLICANTS OWN RISK WITHIN FIFTEEN (15) MARKET DAYS

FROM THE LAST DATE OF ACCEPTANCE AND PAYMENT.

APPLICATION SHALL NOT BE DEEMED TO HAVE BEEN ACCEPTED BY

REASON OF REMITTANCE BEING PRESENTED FOR PAYMENT.


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THE LAST AND DAY FOR ACCEPTANCE AND PAYMENT FOR THE RIGHTS

ISSUE WITH WARRANTS IS 5.00 P.M. ON 8 JANUARY 2002 OR SUCH LATER

TIME AND DAY AS THE DIRECTORS OF AYAMAS IN THEIR ABSOLUTEDISCRETION MAY DECIDE. WHERE THE CLOSING DATE FOR

ACCEPTANCE AND PAYMENT IS EXTENDED FROM THE ORIGINAL

CLOSING DATE, THE NOTICE OF SUCH EXTENSION(S) WILL BE MADE

NOT LESS THAN TWO (2) MARKET DAYS BEFORE THE ORIGINAL

CLOSING DATE.

2.3 Application For Excess Shares With Free Warrants

If you wish to apply for the new ordinary shares in addition to those provisionally allotted

to you, please complete Part II of the RSF (in addition to Parts I and III) and forward this

RSF, with a separate remittance made in Ringgit Malaysia by Bankers Draft/Money

Order Postal Order drawn on a Bank or Post Office in Malaysia and made payable to

AYAMAS EXCESS SHARES APPLICATION ACCOUNT and crossed

ACCOUNT PAYEE ONLY and endorsed on the reverse side with your name and

address in block letters, for the full amount payable for the excess shares with free

warrants applied for, to be received by the Registrar, Dinasti Korporat (M) Sdn Bhd,

Suite 901, 9th

Floor Tower Block, Plaza Pekeliling, 2 Jalan Tun Razak, 50400 KualaLumpur, at or before 5.00 p.m. on 8 January 2002 (or such later time and day as may be

announced).

No acknowledgement will be issued but Notices of Allotment will be despatched to the

successful applicants by ordinary post to the addresses stated in the MCDs record at their

own risk within fifteen (15) market days from the last date of acceptance and payment of

the excess shares.

If no excess shares are allotted to you, the amount paid on application therefore will be

returned in full without interest by registered post to the address shown in the MCDrecord at your own risk within fifteen (15) market days from the last date of acceptance

and payment of the excess shares. Where an application is accepted in part only, the

surplus of the application monies will be refunded without interest and shall be

despatched to the applicant by registered post to the address stated in the MCDs record

at the applicants own risk within fifteen (15) market days from the last date for

application and payment for the excess shares.

The Board reserves the right to accept any application or accept any application in part

only, without assigning any reason thereof.

2.4 Sale / Transfer Of The Provisional Allotment Of Rights

If you wish to sell all or part of your provisional allotment of rights or sell all yourprovisional allotment of rights to more than one person, you may do so through your

stockbroker for the period up to the last day for trading of the provisional allotment of

rights. You may immediately sell or transfer your provisional allotment of rights (in

accordance with the rules of the MCD) in full or in part without first having to request the

Company for a splitting of your provisional allotment of rights.

In selling all or part of your provisional allotment of rights, you need not deliver any

document, including the RSF, to the stockbroker. However, you must ensure that you

have sufficient provisional allotment of the new ordinary shares standing to the credit of

your CDS account that are available for settlement of the sale.


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The New Purchaser(s) can collect a copy of the Abridged Prospectus and RSF for the

acceptance of his/her/their rights from his/her/their stockbrokers, the Registrars office or

the Registered Office of the Company. The Abridged Prospectus and RSF are alsoavailable on the KLSE website (http://www.klse.com.my).

If you have sold only part of the provisional allotment of the new ordinary shares, you

may still accept the balance of your provisional allotment of the new ordinary shares by

completing Parts I and III of the RSF.

Entitled Shareholders should note that all RSF and remittances so lodged with the

Registrars will be irrevocable and cannot subsequently be withdrawn.

THE LATEST TIME AND DATE FOR ACCEPTANCE AND PAYMENT FOR

THE NEW ORDINARY SHARES WITH FREE WARRANTS UNDER THE

RIGHTS ISSUE WITH WARRANTS WILL BE 5.00 P.M. ON 8 JANUARY 2002.

2.5 CDS Accounts And Notice Of Allotment

The KLSE has already prescribed the securities of Ayamas listed on the Second Board of

the KLSE to be deposited with MCD. Accordingly, the new ordinary shares and new

warrants arising from the Rights Issue with Warrants are prescribed securities and as

such, all dealings of the said Rights Shares and Warrants will be subject to the Securities

Industry (Central Depositories) Act, 1991 and the rules of MCD, including any

amendments or reenactments thereof.

All Rights Shares and Warrants shall be credited into your CDS account. No physical

certificate will be issued to you in respect of the Rights Shares with Warrants. However,

a notice of allotment of the Rights Shares with Warrants will be despatched to you at the

address stated in the MCDs record by ordinary post within fifteen (15) market days from

the final application closing date.

2.6 Laws Of Foreign Jurisdictions

This Abridged Prospectus, the Notice of Provisional Allotment and RSF are not (and will

not be) intended to be issued to comply with the laws of any foreign jurisdictions, and

have not been (and will not be) lodged, registered or approved pursuant to or under any

legislation of (or with or by any regulatory authorities or other relevant bodies of) any

foreign jurisdictions, and the Rights Issue with Warrants will not be made or offered in

any foreign jurisdictions.

An Entitled Shareholder or New Purchaser may only accept or sell/transfer all or any part

of their entitlements and exercise any other rights in respect of the Rights Issue with

Warrants to the extent that it would be lawful to do so, and Aseambankers, other expertsand Ayamas and its Directors and officers would not, in connection with the Rights Issue

with Warrants, be in breach of the laws of any jurisdictions to which that entitled

shareholder or New Purchaser is or might be subject to. The Entitled Shareholders and

New Purchaser(s) (if any), shall be solely responsible to seek advice as to the laws of

jurisdictions to which they are or might be subject to. Aseambankers, other experts and

Ayamas and its Directors and officers shall not accept any responsibility or liability in the

event that any acceptance or sale/transfer made or Rights Shares and Warrants applied by

any Entitled Shareholder or New Purchaser(s), is or shall become unlawful,

unenforceable, voidable or void in any such jurisdictions.


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By signing any of the forms accompanying this Abridged Prospectus and RSF, the

Entitled Shareholder or the New Purchaser (if any) is deemed to have represented,

acknowledged and declared in favour of (and which representations, acknowledgementsand declarations will be relied upon by) Aseambankers, other experts and Ayamas and its

Board and officers that:-

(i) The Company would not, by acting on the acceptance or sale/transfer in

connection with the Rights Issue with Warrants, be in breach of the laws of any

jurisdiction to which that Entitled Shareholder or New Purchaser (if any) is or

might be subject to;

(ii) The Entitled Shareholder or New Purchaser (if any) has complied with the laws

to which the Entitled Shareholder or New Purchaser (if any) is or might be

subject to in connection with the acceptance or sale/transfer of the Rights Issue

with Warrants;

(iii) The Entitled Shareholder or New Purchaser (if any) is not a nominee or agent of

a person in respect of whom the Company would, by acting on the acceptance or

sale/transfer, be in breach of the laws of any jurisdiction to which that person is

or might be subject to;

(iv) The Entitled Shareholder or New Purchaser (if any) is aware that the Rights

Shares with Warrants can only be transferred, sold or otherwise disposed of, or

charged, hypothecated or pledged in accordance with all applicable laws;

(v) The Entitled Shareholder or New Purchaser (if any) has received a copy of this

Abridged Prospectus and has had access to such financial and other information

and has been afforded the opportunity to ask such questions of the

representatives of the Company and receive answers thereto as the entitled

shareholder or New Purchaser (if any) deems necessary in connection withhis/her decision to subscribe for or purchase the Rights Shares with Warrants;

and

(vi) The Entitled Shareholder or New Purchaser (if any) has sufficient knowledge

and experience in financial and business matters to be capable of evaluating the

merits and risks of subscribing or purchasing the Rights Shares with Warrants

and is and will be able, and is prepared to bear the economic and financial risks

of investing in and holding the Rights Shares with Warrants.

3. RATIONALE FOR THE RIGHTS ISSUE WITH WARRANTS

The rationale for the Rights Issue with Warrants is as follows:-

(i) to expand Ayamas business activities to improve its productive capacity and to enhance

its profitability;

(ii) to further increase Ayamas capital to a level reflective of the scale of its present and

future activities; and


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11

(iii) to provide the shareholders of Ayamas an opportunity to further increase their equity

participation in the Company.

The detachable free Warrants are issued as a sweetener for the Rights Shares and to partly raise

future additional working capital for Ayamas Group via potential exercise of Warrants into shares.

4. UTILISATION OF PROCEEDS ARISING FROM THE RIGHTS ISSUE WITH

WARRANTS

Details of the proposed utilisations of the proceeds arising from the Rights Issue with Warrants are

as follows:-

Amount

(RM)

Investments in subsidiary companies to be identified by

Ayamas

25,000,000

Additional working capital mainly for on-going and future

development of the Group

23,250,000

Estimated expenses 1,500,000

Total 49,750,000

Notes:-

(i) SCs approval is required for any variation to the abovementioned utilisation of proceeds

other than for the core business of Ayamas;

(ii) Shareholders of Ayamas approval is required for the abovementioned utilisation of

proceeds and for any variation of 25% or more of the original utilisation of proceeds. In

the event the variation is less than 25%, appropriate disclosure should be made to the

shareholders of Ayamas;

(iii) Any extension of time from the period determined by Ayamas for the utilisation of

proceeds must be approved via a clear resolution by the Board of Directors of Ayamas

and fully disclosed to the KLSE; and

(iv) An appropriate disclosure of the status of utilisation of proceeds is required in the

Quaterly Report and Annual Report of Ayamas until the proceeds are fully utilised.

The net proceeds of the Rights Issue with Warrants after deducting the estimated expenses of

RM1,500,000 are RM48,250,000. Ayamas has proposed to utiliseRM25,000,000 for investment

in subsidiary companies for the purpose of expansion of the Groups core business activities. The

Group plans to enhance the image of existing Ayamas outlets, upgrade its processing plant

facilities and expand the network of Rasa Gourmet restaurants, Seattles Best Coffee and SabangRestaurants. The Company also intends to utilise RM23,250,000 of the proceeds for the working

capital purposes of Ayamas to support its on-going and future development of the Group.

The total proceeds raised from the Rights Issue with Warrants is expected to be fully utilised

within 24 months.


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5. INVESTMENT CONSIDERATIONS

Notwithstanding the prospects of the industry and the Ayamas Group as described in Section 7below, the Rights Issue with Warrants and the business activities of the Ayamas Group are

exposed to certain risks. Among the factors (which may not be exhaustive) that may have an

impact on the shareholders of the Company and the Ayamas Group are as follows:-

5.1 Business Risks

The business activities of the Ayamas Group consists of investment holding, poultry

processing, further processing, operations of convenience food stores and restaurant

chain. Hence, the Group is subject to the risks inherent in the livestock and food industry.

These include supply of labour and raw materials, changes in costs of labour and raw

materials, changes in general economic, business and credit conditions, changes in

government policies and regulations. These business risks are prevalent for all economic

entities and any changes to these factors will definitely have implications to the Groups

business operations.

Ayamas Group has recently expanded its restaurant chain business and ventured into the

operation of gourmet coffee outlets. Whilst Ayamas will continue to implement effective

measures such as ensuring good quality products and services and developing innovative

marketing strategies, these investments are still subject to inherent risks of new

businesses especially in its gestation period. One of the risks includes facing competition

from players which products already have market acceptance such as Coffee Bean & Tea

Leaf, Starbucks Coffee and Gloria Jeans Coffee. However, the Directors of Ayamas

believe that Ayamas being an established company with proactive management is

positioned to manage such risks in the ever-changing business environment.

5.2 Foreign Exchange Risks

Ayamas exposure to overseas markets through imports and exports subjects the

Company to foreign exchange fluctuations. Ayamas minimizes its foreign exchange risk

by denominating its exports in foreign currency mainly Singapore Dollar which provides

a hedge against its imports in other foreign currencies. Any change in the government

policies in respect of the current peg of RM3.80/US Dollar may impact the Ayamas

Group.

5.3 Competition

The Group faces competition from various competitors which include other private and

public listed companies. Players in the industry compete on the basis of product quality,

pricing, range of products, marketing strength and financial backing. The Group is one ofthe key players in the poultry processing industry and the Ayamas brand is one of the

leading local brand. Despite such competitive advantage which Ayamas Group has in the

poultry processing industry, no assurance can be given that the Group will be able to

maintain its favourable position in the market or its competitive advantage in the future.


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5.4 Dependence On Key Personnel / Major Shareholder

The Group believes that its continued success will depend to a significant extent upon theabilities and continued efforts of its existing Directors and senior management. To a

certain extent, the loss of key Directors and key members of the senior management may

have an adverse effect on the smooth running of the Groups operations especially in the

short term when they leave. However, the continuous training and development program

for supporting employees in all key functions of the Groups operation will help to

mitigate this problem. In addition, the Groups future success will also depend upon the

ability to attract and retain skilled personnel within the Group.

KFCH, a major shareholder of Ayamas and the KFCH group of companies involved in

the upstream poultry businesses and restaurant businesses, are key suppliers and

customers of the Group. However, Ayamas may still source its supplies from third parties

if need arises. The Group has also expanded its customer base including exports and

invested heavily in the latest technology to raise the barriers of entry.

5.5 Political And Economic Considerations

Adverse developments in political and economic conditions in Malaysia and/or export

markets of the Group which are principally the Asian countries could materially and

adversely affect the financial prospects of the Group. Other political and economic

uncertainties include risks of wars, expropriations, nationalisation, renegotiation or

nullification of existing contracts, changes in exchange rates, method of taxation and

currency exchange controls.

5.6 Governments Policies And Legislations

The financial performance of the Group is subject to changes in the Governments

policies and legislations such as imposition of control prices, changes in interest rates,methods of taxation or introduction of new regulations. No assurance can be given that

these factors will not have a material adverse effect on the Groups business.

5.7 Profit Estimate

This Abriged Prospectus contains an estimate of the profitability for the Group for the

financial year ending 31 December 2001 based on certain stated assumptions that are

subject to uncertainties, therefore, there can be no assurance that the forecast results

contained herein will be realised. Actual results may be materially different from those

shown. Shareholders will be deemed to have read and understood the descriptions of the

assumptions and uncertainties underlying the estimate contained herein.

5.8 Forward-Looking Statements

Other than statements of historical facts, such as the audited financial statements as at 31

December 2000, this Abriged Prospectus contains forward-looking statements such as the

outlook of the Group. Although the Group believes that the expectations reflected in such

future statements are reasonable at this time, there can be no assurance that such

expectations will be realised. Any differences in the expectations of the Group from its

actual performance may result in the Groups financial and business performance and

plans to be materially different from those anticipated.


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6. FINANCIAL EFFECTS

The financial effects of the Rights Issue with Warrants on the share capital, net tangible assets,earnings, dividends and gearings of Ayamas and the Group are as follows:

6.1 Share Capital

The issued and paid-up share capital of Ayamas will be increased pursuant to the

Exercises as follows:-

No. Of Ordinary

Shares Of

RM1.00 Each

Existing as at 26 November 2001 99,500,000To be issued pursuant to:-Rights Issue with Warrants 49,750,000

Acquisition of Land and Buildings 46,800,000(1)

196,050,000

Upon full exercise of the Warrants 49,750,000

Enlarged share capital after the Exercises 245,800,000

Note:-

(1) Based on the issue price of RM1.25 per share. The issue price was based on the

theoretical ex-all price of Ayamas shares of RM1.25 based on the five (5) days weighted

average market price ended 26 September 2001 of RM1.38 per share.

6.2 NTA

The proforma effects of the Exercises on the consolidated NTA and NTA per share of

Ayamas Group based on the audited financial statements as at 31 December 2000 are asfollows:-

(I)

Audited

as at

31/12/2000

RM000

(II)

After (I)

and the

Bonus

Issue

RM000

(III)

After (II)

and the

Rights Issue

with

Warrants

RM000

(IV)

After (III)

and the

Acquisition

of Land and

Buildings

RM000

(V)

After (IV)

and full

exercise of

Warrants

RM000

Share capital 49,750 99,500 149,250 196,050 245,800

Share premium - - -

10,200(1)

16,668(2)

Retained profits 65,098 15,348 15,348 15,348 15,348Reserve onconsolidation

1,599 1,599 1,599 1,599 1,599

Shareholders

fund

116,447 116,447 166,197 223,197 279,415

Less : Deferredexpenditure

(678) (678) (678) (678) (678)

NTA 115,769 115,769 165.519 222,519 278,737

NTA per share 2.33 1.16 1.11 1.14 1.13


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Notes :-

(1) Based on the issue price of RM1.25 which is the theoretical ex-all price of Ayamas shares

based on the five (5) days weighted average market price ended 26 September 2001 of

RM1.38 per share and after deducting estimated expenses of approximately RM1,500,000.

(2) Based on the exercise price of Warrants of RM1.13 per new ordinary share or 9.6%

discount from the theoretical ex-all price of RM1.25 per share based on the five (5) days

weighted average market price ended 26 September 2001 of RM1.38 per share.

Please refer to Appendix IV for further details.

6.3 Earnings

The Proposals are expected to contribute positively to the future earnings of the new

Ayamas Group. On the assumption that the Proposals will be completed on 31 December

2001, the proforma Earnings Per Share (EPS) is expected to be diluted due to the

increase in the issued and paid-up share capital as follows:-

(I)

Financial

year ending

31/12/2001

(II)

After (I) and

the Rights

Issue with

Warrants

(III)

After (II) and

the Acquisition

of Land and

Buildings

Estimated profit after taxation (RM000) 16,712 16,712 16,712

No. of shares in issue (000)

Weighted average share capital 99,500 99,500 99,500

Enlarged share capital 99,500 149,250 196,050

Net earnings per share (sen)

Based on weighted average sharecapital

16.8 16.8 16.8

Based on enlarged share capital 16.8 11.2 8.5

* On the assumption that none of the Warrants will be exercised.

Please refer to Appendix III for further details.

6.4 Dividends

For the financial year ended 31 December 2000, the Company has declared a first and

final tax-exempt dividend of 10% amounting to RM4,975,000.

Barring any unforeseen circumstances, for the financial year ending 31 December 2001,

the Board of Directors of Ayamas expects that the Company will be able to declare the

same quantum of dividend paid in the previous financial year.


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6.5 Gearing

Based on the consolidated balance sheet as at 31 December 2000 the gearing of theGroup before and after the Exercises is as follows:-

(I)

Financial

year ended

31/12/2000

RM000

(II)

After (I)

and the

Bonus

Issue

RM000

(III)

After (II) and

the Rights

Issue with

Warrants

RM000

(IV)

After (III) and

the Acquisition

of Land and

Buildings

RM000

Term loans and bankborrowings 15,564 15,564 15,564 15,564

Shareholders funds* 116,447 116,447 166,197 223,197

Gearing ratio (times) 0.13 0.13 0.09 0.07

* On the assumption that none of the warrants will be exercised.

7. FUTURE PROSPECTS

7.1 Overview And Outlook Of The Malaysian Economy

The Malaysian economy registered a real GDP growth of 0.5% in the second quarter of

2001 (3.1% in the first quarter). The manufacturing sector, notably the electronics

industry, was adversely affected by the downturn in the global electronics cycle, which

was more pronounced than anticipated. Growth in all the other sectors remained in the

positive territory. The effects of the Governments expansionary fiscal and monetary

policies have begun to filter through the economy in terms of stronger growth in the

construction and services sectors. This together with positive performance in the

agriculture and mining sectors contributed to sustain the overall Gross Domestic Product

(GDP) growth of the economy.

Notwithstanding the slower growth in the second quarter, Malaysias macroeconomic

conditions remain fundamentally strong. The current account surplus remains large and

inflation remains low at 1.6%. In addition, Foreign Direct Investment (FDI) inflows

were higher than in the first quarter. The external reserves of Bank Negara Malaysia

(BNM) has returned to a rising trend and the external debt has been capped at below 50%

of GNP. Monetary conditions continued to support the expansion in domestic economic

activities, with stronger increases in loan growth and Private Debts Securities (PDS)

issues. The marginal increase in Non Performing Loans (NPLs) is supported by astronger capitalisation of the banking system, which continued to register unaudited pre-

tax profits in the second quarter. The revival in activity in the KLSE has also helped to

bolster consumer confidence.


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Looking ahead, the Malaysian economy will continue to be subject to the vagaries of the

global business cycle. As an open, trade-oriented economy, the slowdown in the external

environment will have an impact on the domestic economy. While slower growth is amatter of some concern, it is important to recognise that Malaysias underlying economic

fundamentals remain on track for sustainable long-term growth. The Governments

growth strategies will continue to emphasise the contribution of domestic demand to

broaden the sources of growth and to develop a more diversified and resilient economy.

The conduct of macroeconomic policy will remain focused on ensuring that no

imbalances arise. The priority will be on maintaining low inflation and strong external

liquidity position that will avoid a misalignment of the exchange rate and that will

provide a conducive environment for sustainable growth. At the same time, stronger

measures have been introduced to expedite corporate reforms. Recent measures include

initiatives to further deleverage corporate debt and to improve operational restructuring.

A strong and efficient corporate sector together with a strong and competitive banking

system would constitute an important element in supporting the further growth of the

Malaysian economy. This would provide the foundation for the Malaysian economy to

respond promptly and effectively to the upturn in the global business cycle.

(Source : Bank Negara Malaysia, Second Quarter Report, 23 August 2001)

Food Industry

As for the food industry, under the Eighth Malaysia Plan 2001-2005, food production

will be expanded substantially to cater for the growing demand in the domestic market

and with the objective of reduction in the import bill as well as for exports. Value added

of the subsector is expected to grow, mainly due to the increase in the production of

major food commodities, namely fisheries, livestock, padi as well as fruits and

vegetables. The increase in production will be achieved through new hectarage, greater

land intensity as well as improvements in efficiency and productivity. In addition, a wideradoption of new technologies and the use of high yielding seeds and biotechnology will

also contribute to the increase in food production. Toward this end, the participation of

private sector in medium and large-scale commercial operations will be enhanced

through the establishment of more permanent production areas such as agro-technology

and urban-horticulture parks as well as satellite farms. Supporting infrastructure facilities

and services such as farm collection and distribution centers, packing house facilities,

cold rooms and wholesale markets as well as transportation services will also be

upgraded.

(Source : Eighth Malaysia Plan 2001 2005, page 223)

As a result of rising population which is expected to reach 23.8 million by 2001 (Source :

Bank Negara Malaysia Annual Report, 2000) and enhanced purchasing power, theoutlook of the food industry is expected to be favourable. In the recent Budget 2002

announced on 19 October 2001, the government has proposed, inter-alia, individual tax

cut by 1%-2% which would increase the disposable income of taxpayers. This will, inter-

alia, expand the demand for food and stimulate the production of food products to meet

the increasing demand.

By giving 100% tax allowance on capital expenditure as proposed in the Budget 2002 to

encourage food production on large scale for export and import substitution purposes, the

industry is expected to contribute significantly to the economy and to penetrate

international markets.


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18

7.2 Prospects Of The Ayamas Group

The improved economy in the year 2000 resulted in increased trade volume for AyamasGroup which registered a turnover of RM372.4 million in the year under review,

representing an increase of 7.5% over the previous corresponding period. Pre-tax profit

attained was RM20.3 million against the previous years RM17.4 million. The improved

results were attributed to an increase in consumer spending, higher sales mix of the better

margin further processed halal poultry products and the Companys focus on

productivity improvements and cost efficiencies.

To capitalise on the growing consumer demand for value and convenient food, the

Groups marketing and sales department has been expanded to further improve brand

awareness and market penetration into other trade and food service categories.

Ayamas future plans include enhancing the image of existing Ayamas outlets,

upgrading its processing plant facilities and expanding its restaurant chain business by

opening new Rasa Gourmet restaurants, Seattles Best Coffee outlets and Sabang

Restaurants.

The Company is continuously committed to its Research and Development (R&D) in

new diversified and more innovative processed products. Recent launches include

Ayamas Fillo Nuggets, Ayamas Canned Curry Chickens and Ayamas Mamak Fried

Chicken Parts. New product innovation is the key performance for the Companys R&D

for year 2002 to bring Ayamas brand name to a greater height. Ayamas is also constantly

upgrading the facilities and technology in its Port Klang plant and placing its operations

under review to gain better pricing structures, productivity improvements and a

strengthened ability to absorb external shocks more effectively.

The Company is supported by the vertically integrated poultry operations of KFCH

which include operations in feedmill, breeder farms and hatchery. The integrated poultrydivision is essential to the KFCH Groups operations as it provides a stable source of

supply of quality chickens at competitive prices for its operations, outlets and also able to

tap into the fast expanding poultry market, both locally and abroad. In addition, its also

enables the Group to ensure consistent supply, cost and quality control of poultry

products to the market.

Besides Ayamas own restaurants, kiosks and outlets styled to place greater emphasis on

the sale of high-margin ready-to-eat gourmet chicken products, Ayamas has tied-up with

hypermarkets and petrol stations around Malaysia to distribute and sell its products.

Recently Ayamas launched its freezers to further penetrate the rural market and widen its

distribution network.

Other than strengthening its domestic market share, Ayamas is committed to securingrecognition in the global market place. The Company continues to explore its export

market to countries such as Singapore, Brunei, Hong Kong, United Arab Emirates and

East Timur, which are the main focus of globalisation for year 2002 and strives to

compete more effectively post ASEAN Free Trade Area.

With the completion of the Acquisition of Land and Buildings, the Group is also in a

position to further expand its processing and further processing facilities and to centralize

its operations. This will lead to cost efficiencies, i.e. transportation cost, management cost

and achieve economies of scale.


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19

Although the Malaysian economy rebounded in year 2000, the economic slowdown in

the United States (US) is expected to stifle Malaysian economy in year 2001. Business

conditions and consumers confidence in the first quarter of the year 2001 hasdeteriorated when compared to the fourth quarter of the 2000. Against the backdrop of

the weak stock market and less encouraging economic conditions, the Government had

announced several measures to pump-prime the economy in an attempt to counter the

negative effects of the cyclical slowdown of the US economy. In this regard, the financial

performance of Ayamas would depend on the performance of the Malaysian economy.

8. WORKING CAPITAL, BORROWINGS AND CONTINGENT LIABILITIES

The Directors of Ayamas are of the opinion that, after taking into account the proceeds to be raised

from the Rights Issue with Warrants and funds generated from its existing operations, the Group

will have adequate working capital to facilitate its present and foreseeable future requirements.

As at 30 September 2001 (being the latest practicable date prior to the printing of this Abridged

Prospectus), the Ayamas Group has total borrowings of approximately RM12.997 million. The

total outstanding borrowings are categorised as follows:

Types of borrowings RM000Long term borrowings

- Interest-bearing 8,175

- Non-interest bearings -

Short term borrowings

- Interest-bearing 4,822

- Non-interest bearings -

Total outstanding borrowings 12,997

There are no material contingent liabilities by reason of any guarantees given by the Group, otherthan those incurred in the ordinary course of business.

9. SHAREHOLDERS UNDERTAKING AND UNDERWRITING ARRANGEMENT

The substantial shareholders of Ayamas, KFCH and Perbadanan Kemajuan Pertanian Selangor

have provided their irrevocable and unconditional written undertaking to subscribe and/or procure

subscription in full for their entitlement amounting to a total of 40,569,500 new ordinary shares of

RM1.00 each together with 40,569,500 Warrants at the rights issue price of RM1.00 per new

ordinary share. Their entitlements represents 81.55% of the Rights Issue with Warrants, details are

as follows :-

Shareholdings as at

26 November 2001

Undertakings to subscribe for Rights

Issue with warrants

Name of shareholder

No. of

shares held %

No. of Rights

Shares

No. of

Warrants %KFCH 69,969,000 70.32 34,984,500 34,984,500 70.32

Perbadanan Kemajuan

Pertanian Selangor

11,170,000 11.23 5,585,000 5,585,000 11.23

Total 81,139,000 81.55 40,569,500 40,569,500 81.55


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20

The remaining 9,180,500 new ordinary shares of RM1.00 each to be issued pursuant to the Rights

Issue with Warrants, representing 18.45% thereof, have been underwritten by a consortium of

underwriters, namely, Aseambankers, Kuala Lumpur City Securities Sdn Bhd and PM SecuritiesSdn Bhd, at an underwriting commission of 1.75% on the rights issue price. The underwriting

commission will be fully borne by the Company.

10. ESTIMATED EXPENSES OF THE RIGHTS ISSUE WITH WARRANTS

The total expenses relating to the Rights Issue with Warrants estimated at approximately

RM1,500,000 will be borne by the Company.

11. TERMS AND CONDITIONS

The issue of new ordinary shares and warrants pursuant to the Rights Issue with Warrants is

governed by the terms and conditions as set out in this Abridged Prospectus and the RSF enclosed

herewith.

12. QUOTATION AND DEALINGS

Approval in-principle has been obtained from the KLSE vide its letter dated 29 October 2001 for

the admission to the Official List for the Warrants arising from the Rights Issue With Warrants

and the listing of and quotation for new ordinary shares and Warrants to be issued pursuant to the

Rights Issue with Warrants and the new ordinary shares to be issued pursuant to the exercise of the

Warrants. Such securities will be admitted to the Official List of the KLSE and official quotation

will commence after receipt of confirmation from MCD that all securities accounts of the

successful applicants have been duly credited and notices of allotment have been despatched to all

the successful applicants.

13. ADDITIONAL INFORMATION

Other financial, general and statutory information relating to the Rights Issue with Warrants are

provided in the attached Appendices.

Yours faithfully,

For and on behalf of the Board

AYAMAS FOOD CORPORATION BHD

Hj. Izhar Bin SulaimanExecutive Chairman


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APPENDIX I

EXTRACT OF THE ORDINARY RESOLUTION PASSED AT THE EXTRAORDINARY GENERAL

MEETING HELD ON 28 JUNE 2001

At the Extraordinary General Meeting of the Company held on 28 June 2001, the following Ordinary Resolution

pertaining to the Rights Issue with Warrants was passed.

ORDINARY RESOLUTION 2 PROPOSED RIGHTS ISSUE WITH WARRANTS

THAT subject to the approval being obtained from the Securities Commission and any other relevant

authorities as well as the Kuala Lumpur Stock Exchange for the listing of and quotation for all new ordinary

shares to be issued hereunder, the Directors be and are hereby authorised and directed to allot and issue by way

of a renounceable rights issue of 49,750,000 new ordinary shares of RM1.00 each together with 49,750,000

detachable free new warrants at an issue price to be determined later on the basis of one (1) new ordinary shareof RM1.00 each together with one (1) free new warrant for every two (2) ordinary shares held after the Proposed

Bonus Issue and that all fraction of new ordinary shares and warrants, if any to be disregarded and that such new

ordinary shares and warrants, if any which represent fractional interests shall be dealt with by the Directors in

such manner and on such terms as they may deem beneficial to Ayamas AND THAT all the warrants to be

issued together with the new ordinary shares of RM1.00 each under the Proposed Rights Issue with Warrants be

in registered form and be constituted by a Deed Poll under which each warrant would entitle its holder to

subscribe for one (1) new ordinary share of RM1.00 each in the Company and the exercise price of the warrantsshall be as determined on a basis consistent with Section 4.3.2 of the Circular to Shareholders dated 12 June

2001 AND THAT the Directors be and are hereby authorised and directed to issue such additional warrants as a

result of any adjustments under the provisions of the Deed Poll and to allot and issue such shares in the

Company as are required to be issued pursuant to any exercise of any such warrants (including, any arising from

any adjustment to their number under the provisions of the Deed Poll) all such new ordinary shares shall uponallotment and issue, rank pari passu in all respects with the then existing ordinary shares of the Company, except

that they will not be entitled to the dividends that may be declared in respect of the financial year ending 31

December 2000 prior to the date of allotment and issue of new ordinary shares, nor shall they be entitled to any

rights, allotments, distributions or such entitlements for which the record date is prior to the date of allotment of

the new ordinary shares AND THAT the Directors of Ayamas be and are hereby further authorised to give

effect to the aforesaid Proposed Rights Issue with Warrants with full power to assent to any conditions,

modifications, variations and/or amendments in any manner as may be required by the relevant authorities and

to take steps as they may deem necessary or expedient in order to implement, finalise and give full effect to theaforesaid Proposed Rights Issue with Warrants.


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APPENDIX II

INFORMATION ON AYAMAS FOOD CORPORATION BHD

1. History and Business

Ayamas was incorporated in Malaysia on 27 April 1985 as a private limited company under theCompanies Act, 1965 under the name of Raswira Sdn Bhd. On 18 May 1987, the Company changedits name to KFC Food Processing Sdn Bhd and subsequently changed its name to Ayamas FoodCorporation Sdn Bhd on 19 November 1993. On 13 December 1993, the Company was converted intoa public company and assumed its present name. The Company was listed on the Second Board of theKLSE on 3 November 1994. The principal activities of the Company are poultry processing, furtherprocessing and investment holding. The subsidiary companies are primarily engaged in the operationsof convenience food store, restaurant chain and investment holding.

2. Share Capital As At 26 November 2001The present authorised share capital of Ayamas is RM250,000,000 divided into 250,000,000 ordinary

shares of RM1.00 each. Its present issued and paid-up share capital as at 26 November 2001 isRM99,500,000 comprising 99,500,000 ordinary shares of RM1.00 each.

Date of

Allotment

No. of

Ordinary

Shares

Allotted

Par

Value

RM

Consideration

Cumulative

Issued and Paid-

up Share Capital

RM27.04.1985 2 1.00 Cash (Subscribers shares) 207.05.1987 4,999,998 1.00 Cash 5,000,00010.01.1990 1,000,000 1.00 Cash 6,000,00029.07.1994 1,000,000 1.00 Issued pursuant to the acquisition of Ayamas

Convenience Stores Sdn Bhd7,000,000

01.09.1994 7,900,000 1.00 Issued pursuant to a bonus issue on the basisof 79 new ordinary shares for every 70

existing ordinary shares of RM1.00 each

14,900,000

18.10.1994 5,000,000 1.00 Issued pursuant to a public issue 19,900,00011.07.1996 29,850,000 1.00 Issued pursuant to a bonus issue on the basis

of 3 new ordinary shares for every 2 existingordinary shares of RM1.00 each

49,750,000

30.08.2001 49,750,000 1.00 Issued pursuant to a bonus issue on the basisof 1 new ordinary share for every 1 existingordinary share of RM1.00 each

99,500,000

3. Present Substantial Shareholders

Based on the Record of Depositors and/or Notice of Substantial Shareholders as at 26 November 2001,the shareholdings of the substantial shareholders are as follows:-

No. Of Ordinary Shares Held Before

Rights Issue and Warrants

No. Of Ordinary Shares Held After

Rights Issue And Warrants*

Shareholder Direct % Indirect %Direct % Indirect %

KFCH 69,969,000 70.32 - - 104,953,500 70.32 - -Perbadanan KemajuanPertanian Selangor

11,170,000 11.23 - - 16,755,000 11.23 - -

CI Enterprise Sdn Bhd - - 69,969,000(1) 70.32 - - 104,953,500(1) 70.32Employees ProvidentFund

- - 69,969,000(1) 70.32 - - 104,953,500(1) 70.32

CI Holdings Berhad - - 69,969,000(2) 70.32 - - 104,953,500(2) 70.32

Notes:-

* Before exercise of warrants.

(1) Held through KFCH(2) Held through CI Enterprise Sdn Bhd


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APPENDIXII

INFORMATIONONAYAMASFOODCORPO

RATIONBHD(Contd)

23

4.

ParticularsofDirectors

ParticularsOfDirectorsAndTheirSha

reholdingsBasedOnTheRegister

ofDirectors

S

hareholdingsAsAt

26November2001

Occupation

Designation

No.

OfOrdinarySharesHeldBefore

RightsIssueandWarrants

No.

OfOrdin

arySharesHeldAfter

RightsIssueAndWarrants

NameOfDirectors

Address

Age

Nationality

Direct

ayamas cover definitions contents letter to shareholders appendix i iv

Documents