Contents :

I have been directed to refer to your letter serial ZO-001113-57596 dated 13th November 2000.

I would like to clarify the position as follows: -

a. Link to Directors/substantial shareholders

I would like to confirm that the article has no links to inputs or disclosures by other Directors or substantial shareholders. Accordingly, it is confirmed that the information for the article was entirely obtained from the interviewee.

b. Basis of Report

In light of item (a) above, the sole source of the information was the interviewee and our due checks have been confined only to the said person.

In our checks, it has been noted that the interviewee's statement have been based on his knowledge of the following: -

(i) the likely size of business support he perceives KN is capable of securing or retaining during year 2000 and 2001;

(ii) the likely scale of revenue that can be generated by the anticipated business support in (i) above.


(i) Size of Business Support

We have made due checks with the interviewee and have been provided with information which he used as the basis for his assessment of the business levels of year 2000 and 2001. In respect of year 2000, it has been indicated that haulage activities which form the back-bone business of KN has increased by 16% in the 9-month period of year 2000, compared against the preceding year.

Accordingly, the anticipated strong finish for year 2000 has been based on actual data for 3 quarters of the year and projected to the end of the year. The continuing strong trend in the core business has also been noted in the month of October and few days of November 2000. Hence year 2000 is expected to finish on a strong note in terms of improvement in throughput of the dominant component of KN business, i.e. haulage.

In respect of year 2001, KN anticipated a somewhat mirror-image situation as was seen in year 2000. KN acknowledges that there will be pressure mounted by new players that will enter the market progressively during the remaining months of 2000 and during 2001. However, the industry recognizes that the build up of competitor fleet of equipment will be taking a good part of year 2001 due to the need to import equipment and mobilize sizeable capital including funding.

In respect of retention of customer support during 2001, KN has been enjoying stable long-term relationship with the core customers that have been giving it most of its business support. This relationship will still be in place throughout year 2000 and is unlikely to be much affected by the partial mobilization of the new players in year 2001. KN's assessment is that their peripheral customers may be drawn away but this will be very well compensated by far stronger gains in business of the long-term customers providing the core support.

(ii) Scale of Revenue

There will be no tariff change during the remaining months of 2000. Hence the business generated during year 2000 will be earning revenue based on the existing tariff rates. Given the much-expanded size of business cake that is likely to be realized during 2000 and no downward change in tariff, KN is realistic in expecting a much-improved revenue despite a lower market share. The outlook of 10% revenue gain is expected to be achievable.

In respect of year 2001, KN's market intelligence indicates that open tariff war is unlikely even with the entry of new players. Given the high cost of procuring assets by the new players and the need to preserve income when the new players seek bank financing for their capital purchases, it is considered unlikely that any player will embark on reckless reduction in the tariff. With their being quite assured of continuing volume improvement during year 2001, and the anticipated sustenance of the same tariff rates for the short-term time frame, KN can reasonably expect a revenue gain of the order of 10%.

It is hoped that the foregoing has adequately clarified the position of the abover matter. Please get in touch with us if you need further clarification.

Thank you.

NORTHPORT CORPORAION BHD


LIM HAN BOON
Joint Company Secretary

Query Letter Contents :

We refer to the above news article appearing in The Edge, pages 18, 19 and 20,
on Monday, 13 November 2000, a copy of which is enclosed for your reference.
In particular, we would like to draw your attention to the underlined sentence
which is reproduced as follows:-
"It is confident that it can stay ahead and is projecting a 10 per cent growth
in its revenue for the financial years 2000 and 2001, ..."
In accordance with the Exchange's Corporate Disclosure Policy, you are
requested to furnish the Exchange with an announcement for public release
confirming or denying the above reported article and in particular the
underlined sentence after due and diligent enquiry with all the directors,
substantial shareholders and all such other persons reasonably familiar with
the matters about which the disclosure is to be made in this respect. In the
event you deny the above sentence or any other part of the above reported
article, you are required to set forth facts sufficient to clarify any
misleading aspects of the same. In the event you confirm the above sentence or
any other part of the above reported article, you are required to set forth
facts sufficient to support the same, including the relevant basis and
assumptions in arriving at the above forecast.
Please furnish the Exchange with your reply within one (1) market day from the
date hereof.

Yours faithfully


LISA LAM
Senior Manager, Listing Operations
KLL/ASL/ZOOS
c.c. Securities Commission (via fax)