Contents :

We refer to your letter dated 21st July 2000.

The qualification expressed by the Auditors in the Report to Members was due to capital deficiency shown in individual subsidiary companies' financial result as highlighted in note 5 of the 1999 annual report.

The capital deficenicy was attributed by prolonged and continued operating lossess experianced by the companies. The adverse financial position has brought about the going concern of the subsidiaries, which resulted such qualifications made to the following companies:-

(1) Soon Hee Goldsmith Jewellery Sdn. Bhd.
A "subject to" qualification in respect of the ability of this subsidiary company to continue as going concern due to accumulated loss of RM716,653 resulting in capital deficiency of RM366,653.

(2) The Brown Boutique Sdn. Bhd
A "subject to" qualification in respect of the ability of this subsidiary company to continue as going concern due to accumulated loss of RM836,148 resulting in capital deficiency of RM836,148.

(3) Victorian Deluxe Sdn. Bhd
A "subject to" qualification in respect of the ability of this subsidiary company to continue as going concern due to accumulated loss of RM2,602,673 resulting in capital deficiency of RM2,502,673.

(4) Luxury Graph Sdn. Bhd
A "subject to" qualification in respect of the ability of this subsidiary company to continue as going concern due to accumulated loss of RM437,513 resulting in capital deficiency of RM337,513.

(5) Variawati Corporation Sdn. Bhd
A "subject to" qualification in respect of the ability of this subsidiary company to continue as going concern due to accumulated loss of RM3,761,793 resulting in capital deficiency of RM3,261,793 and on the recoverability of a deposit of RM12,000,000 paid and development expenditure on land.

(6) Golden Linear Marketing Sdn. Bhd
A "subject to" qualification in respect of the ability of this subsidiary company to continue as going concern due to accumulated loss of RM3,396,895 resulting in capital deficiency of RM2,896,895.

(7) Alfamaxi Sdn. Bhd.
A "subject to" qualification in respect of the ability of this subsidiary company to continue as going concern due to accumulated loss of RM748,217 resulting in capital deficiency of RM748,217.

(8) Media Direction Sdn. Bhd
A "subject to" qualification in respect of the ability of this subsidiary company to continue as going concern due to accumulated loss of RM256,759 resulting in capital deficiency of RM256,757.

The above results form part and parcel of the consolidated financial performance of the group as disclosed in 1999 Annual Report.

The Board of Directors wish to inform the Exchange that currently Special Administrators have been appointed by Danaharta to manage and precure the interest of all shareholders involved. A re-structuring scheme is forthcoming to rectify the financial situation of the company.


Yours Faithfully,
On behalf of the Board of Directors




Frank Low Chan Fai
Executive Directors

Query Letter Contents :

We refer to your Company's Annual Report 1999.
In accordance with the Exchange's requirements, kindly furnish the Exchange
immediately with your detailed explanation(s) on the qualification stated in
the Auditors' Report of your Annual Report 1999 for public release.

Yours faithfully
KUALA LUMPUR STOCK EXCHANGE



LATIFAH HJ MOHD YUSOF TAN YEW ENG
Senior Vice President, Listing Operations Senior Manager, Listing Operations
LMN\
Copy : Securities Commission