KILANG PAPAN SERIBU DAYA BERHAD (SPECIAL ADMINISTRATORS APPOINTED)
(Company No: 173111-D)

1	Basis of Preparation

These interim financial statements are prepared in accordance with the Malaysian Accounting Standards Board ("MASB") Standard No. 26 "Interim Financial Reporting" and paragraph 9.22 of the Bursa Malaysia Listing Requirements and should be read in conjunction with the Group's annual financial statements for the year ended 31 January 2005.

On 11 February 2003, the High Court in Sabah and Sarawak at Kota Kinabalu issued a Winding-Up Order on Padas Hevea Wood Products Sdn Bhd, a subsidiary of the Company.  The directors of the subsidiary company have instructed a firm of solicitors to file an application for a stay of the Winding-up Order in view of the Debt Restructuring Scheme of the Group.  The subsidiary company has received written confirmation of support for the stay application from creditors representing 97.5% of the total creditors of the subsidiary company as at 11 February 2003. Since the Group’s Revised Restructuring Scheme has not been approved by the relevant authorities, the High Court in Sabah and Sarawak at Kota Kinabalu had on 26 January 2004 struck out the stay application of the winding-up proceedings.  Nevertheless, the Company is at liberty to apply for a stay of the winding-up proceedings once the Group’s Revised Restructuring Scheme has been approved by the relevant authorities.  As the Company is at liberty to apply for a fresh application to stay the winding-up proceedings and the application has the support of 97.5 % of the company’s creditors; the financial statements of the Group has been prepared on a going concern basis on the assumption that the subsidiary company's application for a stay of all further proceedings in relation to its winding-up will be granted by the Court. 

2	Qualified Audit Report

The audit report on the annual financial statements for the year ended 31 January 2005 contained the following qualification:

"As stated in note 1 to the financial statements, the financial statements have been prepared on the going concern basis notwithstanding the deficit in shareholders funds.  The use of the going concern basis is on the assumption that the Company’s proposed debt restructuring scheme, which is currently awaiting the approval of the Securities Commission and other relevant authorities, will be approved and implemented in the foreseeable future.

As stated in Note 2 to the financial statements, the subsidiary company, Padas Hevea Wood Products Sdn Bhd (“PHWPSB”) has been issued with a Winding-up Order by the High Court of Sabah and Sarawak at Kota Kinabalu.

Notwithstanding the issuance of the Winding-up order, the financial statements of PHWPSB have been consolidated with those of the Company for the reasons stated in note 5 to the financial statements.”

The status of the Proposed Debt Restructuring Scheme is set out in Note B8 of this report.

3	Seasonality  or Cyclicality Factors

The operations were not effected by any seasonal or cyclical factors.

4	Extraordinary  Items

There were no extraordinary items for the current financial period todate.

5	Changes in Estimates

There were no significant changes in estimates that have had a material effect in the current quarter results.

6	Issuance and Repayment of Debt and Equity Securities

There were no issuance and repayment of debt and equity securities, share buy-backs, share cancellation, shares held as treasury shares and resale of treasury shares for the current financial period to date.

7	Dividend Paid

No dividend was paid in the reporting quarter.

8	Segmental Reporting

The Group only operates in one industry which is based in Sabah.  Therefore there is no disclosure of segmental information as required by MASB 22.

9	Valuation of Property, Plant and Equipment

Valuation of property, plant and equipment has been brought forward without amendments from the annual financial statements for the year ended 31 January 2005. 

10	Subsequent Events

As at the date of this report, there were no other material events subsequent to the end of the period reported on that have not been reflected in the financial statements for the said period.

11	Effect of Changes in the Composition of the Group

There were no changes in the composition of the Group during the current financial period to date including business combination, acquisition of subsidiaries and long term investment, restructuring and discontinuing operations.

12	Contingent Liabilities

There are no changes in contingent liabilities since the last annual balance sheet date as at 31 January 2005.

ADDITIONAL INFORMATION REQUIRED BY THE BURSA MALAYSIA LISTING REQUIREMENT

B1	Review of Performance

For the period ended 30 April 2005, the Group recorded a turnover of RM 0.20 m compared to a turnover of RM0.26 m in the previous quarter.  Turnover continues to be low due to the inability to increase working capital to purchase raw materials until the Proposed Restructuring Scheme is implemented.

B2	Material Changes in the Quarterly Results Compared to the Results of the Preceding Quarter

The loss for this quarter of  RM4.37 m before taxation is not materially different from the loss of the previous quarter of  RM4.64m. 

B3	Current Year Prospects

The current year prospects will not improve until the Proposed Restructuring Scheme is approved and implemented.

B4	Profit Forecast

	Not applicable as no profit forecast was published.

B5	Taxation

There is no taxation charge for this quarter as the Company is in a tax loss position and has unutilised tax losses as well as unutilised capital allowances.

B6	Profit on Sale of Investments and/or Properties

There was no sale of investment and/or properties for the current quarter. 

B7	Purchase /Disposal of Quoted Investments

	There was no purchase or sales of quoted investments for the current quarter.

B8	Status of Corporate Proposals

 The Proposed Debt  Restructuring Scheme was submitted to the Securities Commission and other relevant authorities on 22 June 2004.  On 27 July 2004, the Ministry of Trade and Industry had approved the revision to the Proposed Restructuring Scheme subject to certain conditions as disclosed in the announcement to Bursa Malaysia on 28 July 2004.  The Company is currently awaiting the decision from the Securities Commission and other relevant authorities.

The Company does not comply with paragraph 3.04 of the Bursa Malaysia Listing requirements as the paid-up share capital is RM19,999,000 instead of RM40,000,000.  This shortfall will be addressed on implementation of the Proposed Debt Restructuring Scheme.

B9	 Group Borrowings and Debt Securities

	  Total group borrowings as at 30 April 2005 are as follows:

  	 Short Term Borrowings				RM'000

	Unsecured		
	Bank borrowings
	-bank overdrafts					 41,380

	Bank loans					 76,583
							----------
	Sub-total					117,963

	Secured

	Bank loans					 106,256

	Hire purchase creditors				       595

	Lease creditors					     2,463
							----------
	Sub- total					109,314 

	Total						227,277

B10	Off Balance Sheet Financial Instruments

The Group does not have any financial instruments with off balance sheet risk as at the date of this quarterly report.

B11	Material litigation

	Legal claims faced by the group are as follows:

(i)	Claims by creditors for outstanding balances amounting to approximately RM6.7 m.

(ii)	Claim by financial institutions requiring the settlement of outstanding balances amounting to RM12.6 m.

Pursuant to Section 41 of the Pengurusan Danaharta Nasional Berhad Act, 1998, no legal actions may be taken against the Company or the guarantors for the liability of the Company except with the written consent of Pengurusan Danaharta Nasional Berhad during the intervening period.

(iii)	On 11 February 2003, the High Court in Sabah and Sarawak at Kota Kinabalu granted a Court Order for the winding-up of Padas Hevea Wood Products Sdn Bhd, a subsidiary of the Group.  The directors of the subsidiary company have instructed a firm of solicitors to file an application for a stay of the Winding-up Order in view of the Debt Restructuring Scheme of the Group.  The subsidiary company has received written confirmation of support for the stay application from creditors representing 97.5% of the total creditors of the subsidiary company as at 11 February 2003.  Since the Group’s Debt Restructuring Scheme has not been approved by the relevant authorities, the High Court in Sabah and Sarawak at Kota Kinabalu had on 26 January 2004 struck-out the stay application of the winding-up proceedings.  Nevertheless, the Company is at liberty to apply for a stay of the winding-up proceedings once the Group’s Debt Restructuring Scheme has been approved by the relevant authorities.     

B12	Dividend

The board of directors do not recommend the payment of any dividend for the quarter under review.

B13	Earnings per share

				       Individual quarter		    Cumulative quarters

				Current 		Preceding	Current	 	Preceding	
				Year		Year		Year		Year
				Quarter		Quarter		Quarter		Quarter
				'000		'000		'000		'000	
				30/4/2005	30/4/2004	30/4/2005	30/4/2004

	Net loss for the period	(4,369)		(4,360)		(4,369)		(4,360)				

	Weighted average no.
	of ordinary shares
in issue			19,999		19,999		19,999		19,999

Basic earnings
Per share (sen)		   (22)		   (22)		   (22)		  (22)