directors - The Lion Group

The currency exposure profile of balances owing to subsidiary companies is as follows:
80
The Company
2005 2004
RM’000 RM’000
Ringgit Malaysia 195,612 189,393
United States Dollar 56,730 56,809
(b) Amount owing by an associated company
252,342 246,202
The amount owing by an associated company arose from advances. It is denominated in Renminbi, interestfree
(2004: interest-free) and has no fixed repayment terms.
(c) Financing of up to RM100 million to Amsteel Mills Sdn Bhd
The Company obtained the approval of its shareholders at an Extraordinary General Meeting held on
15 June 2004 to borrow up to RM100 million, for financing required to complete and run the meltshop
facility located in Banting, Selangor Darul Ehsan by Amsteel Mills Sdn Bhd (“AMSB”), a 99% owned
subsidiary company of the Company, from Lion Forest Industries Berhad (“LFIB”), an 83% (subsequently
diluted to 80% as of 30 June 2005) owned subsidiary company of the Company, the sum of which is to be
advanced by Sabah Forest Industries Sdn Bhd (“SFI”), a 98% owned subsidiary company of LFIB.
The amount receivable from AMSB and amount payable to LFIB and the interest income and expense
amounting to RM11.3 million (2004: RM0.2 million) arising therefrom have been offset in the financial
statements as the Company has a legal enforceable right to offset these amounts and also has the intention
to realise the receivable and settle the liability simultaneously. The said amount bears interest at 12%
(2004: 12%) per annum.
(d) Deferred Shares of SFI
As of 30 June 2005, SFI, a subsidiary company, has in issue 146 million deferred shares of RM1.00 each,
held by Avenel Sdn Bhd (“Avenel”). The said deferred shares, which do not carry any entitlement to dividend,
voting rights and rights to receive notice of general meetings, are only entitled to a repayment of capital
after the ordinary shares in the event of a winding-up. The said deferred shares are redeemable at any time
at the option of the subsidiary company. As of the end of the financial year, the said deferred shares
amounting to RM109.5 million (2004: RM109.5 million) pertaining to minority shareholders have been
included as part of the minority interests of the Group.