(a)   As indicated in our announcement for 1998 full year results dated 31 March 1999, the Company had on 11 March 1999 entered into a Sale and Purchase Agreement with Insight Gem Sdn Bhd for the disposal by the Company of 6,300,000 ordinary shares of RM1 each representing the Company’s entire 70% equity interest in Autobelt Sdn Bhd ("Autobelt"), a 70% owned seat belt manufacturing subsidiary of the Company, for a cash consideration based on 70% of the adjusted consolidated net tangible assets of Autobelt plus a premium of RM 5.35 million; and

On the same day, a subsidiary company, Brimal Holdings Sdn Bhd ("Brimal") had entered into an agreement with Insight Gem Sdn Bhd, for the disposal by Brimal to Insight Gem Sdn Bhd, relating to the assets used in the manufacture of car seatbelts and seatbelt related products for a cash consideration based on the book value of the assets plus a premium of RM650,000.

All necessary approvals from the relevant authorities have been obtained and the above sale is pending the finalisation of the due diligence audit by the purchaser.

(b)     As announced on 10 May 1999, Brimal had entered into two Share Sale Agreements with two individual purchasers namely Mohamad Nor Bin Abu Bakar and Mohd Zainorlizam bin Kordi for the disposal of 715,105 and 306,474 ordinary shares of RM1.00 each respectively representing 100% equity interest in Brimal Stampress Engineering Sdn Bhd ("BSE") for a cash consideration of RM450,000.

The completion of the disposal is pending the approval from the Foreign Investment Committee.

(c)     On 28 June 1999, the Company had announced its proposals to:

• issue Replacement Warrants to holders of the existing AIC warrants 1998/2003 at an issue price of RM0.20 per Replacement Warrant on the basis of one (1) Replacement Warrant in substitution and upon the surrender and cancellation of one (1) existing warrant held on a date to be determined and announced later;

• issue New Warrants to the existing shareholders of AIC at an issue price of RM0.20 Per New Warrant on the basis of one (1) New Warrant for every five (5) existing AIC share held on a date to be determined and announced later;

• increase the authorised share capital from RM50 million comprising 50 million ordinary shares of RM1.00 each to RM100 million comprising 100 million ordinary shares of RM1.00 each.

The existing AIC warrants 1998/2003 ("Existing Warrants") were issued together with the RM50 million nominal value 5-year 2.5% coupon redeemable unsecured bank guaranteed bonds ("Bonds").

The Replacement Warrants and New Warrants will have an exercise price closer to the prevailing market price of AIC shares and are more likely to be exercised compared to the Existing Warrants. Therefore, the above proposals will increase the ability of the Group to raise funds to redeem the Bonds.

The above proposals is subject to approvals from the relevant authorities and the shareholders of the Company.

(vii)     The following events had taken place after the period end :

(a)     As announced on 27 August 1999, the Company had on 26 August 1999 entered into a Sale and Purchase Agreement ("SPA") with Sierra Way Sdn Bhd ("SWSB") for the purchase of 1,800,000 ordinary shares of RM1.00 each and 4,200,000 convertible redeemable preference shares of RM1.00 each from SWSB, representing their entire 4.86% and 15% interest in the issued and paid-up ordinary shares and preference shares in AIC Semiconductor Sdn Bhd ("AICS") respectively for a total cash consideration of RM4,050,000. ("Share Purchase")

Upon completion of the SPA, AIC will offer part of the said AICS shares to the other shareholders of AICS, namely Atmel Corporation, USA and AIC Technology Sdn Bhd according to their proportionate shareholdings in AICS on the same terms as offered to AIC.

The Share Purchase will allow the Group to increase its shareholdings in AICS, which operate an integrated circuits assembly and test facility in Kulim Hi-Tech Park, Kedah. The Group aims to consolidate and concentrate more of its resources, both financial and non-financial, on its high technology and related businesses.

(b)     As announced on 17 September 1999, AIC Properties Sdn Bhd ("AICP"), a subsidiary of AIC had on the same date, entered into a Joint Venture Agreement ("JVA") with Prosper Place Sdn Bhd ("PPSB") for the divestment by AICP of its development rights to PPSB ("the Divestment"), to develop four parcels of freehold land located in Mukim of Hulu Kelang, Daerah Gombak, Selangor Darul Ehsan measuring approximately 20.6 acres in aggregate ("the Land").

The cash consideration for the grant by AICP to PPSB of the right to develop the Land is RM24 million payable over 36 months from the date of fulfilment of all conditions precedent.

The Divestment will enable the Group to realise its investment in the said Land and concentrate more of its resources on its high technology and related businesses. In addition, it will also enable the Group to reduce its gearing as the consideration from the Divestment will be utilised to repay its bank borrowings.

(c)     Subsequent to period end, the issued and paid-up share capital of the Company was increased from RM31,801,673 to RM32,107,673 via the issuance of 306,000 new ordinary shares of RM1.00 each under the Company’s Employee Share Option Scheme.

(ix)     On the back of an improved GDP for the country, a more favourable business environment and the recovery of the global semiconductor business, the Group had in the first half of 1999 registered an overall profit performance. The major contributing factors for the reversal in performance as compared to first half last year are as follows:

• Most of the short term borrowings in the first half year of 1998 were retired with the cash proceeds from the Bonds, Rights and Warrants Issue which was completed in August 1998. Together with a decline in banks’ lending rate, the borrowing costs of the Group had been substantially reduced;

• With a smoother production ramping and increased capacity utilisation, the assembly and testing of integrated circuits facility in Kulim had continued to register increasing operational profits since July 1998.

• Improved performance of our subsidiaries in the automotive industry due to larger market share and improved automotive market and thus increased orders from Proton as compared to first half of 1998 and a larger market share; and

• Positive contributions from our Information Technology subsidiary which was acquired in July, 1998. Thus, there were no contributions to the first half profit in 1998 as compared to first half of 1999.

(x)     The proposed disposal of Autobelt and assets of Brimal and the divestment by AICP of its development rights effectively marks the group’s exit from the safety restraint business comprising both seat belt and airbag related businesses and the property business respectively. This will enable the group to concentrate more on its semiconductor and related high technology businesses.

With an expected upswing in the world wide semiconductor industry in 1999, we expect the Semiconductor Division to be the driving force for the Group’s future growth beyond the next millennium. Barring any unforeseen circumstances, the Directors are of the opinion that the results for the second half year will continue to be favourable.

(xi)     The Directors do not recommend any interim dividend for the six month period ended 30 June 1999.

Further to our announcement dated 23 July 1999, the Board wishes to update the disclosure on the progress of the Y2K compliance. AIC and its group of companies has completed upgrading its internal business systems and equipment for Y2K readiness as certified by the respective vendors and to our best endeavours to ensure all systems and equipment are Y2K ready. The internal systems of the Group is now Y2K ready as at 23 September 1999.

At this stage, the Group has taken steps to address its third-party Y2K readiness which include major trade suppliers, service providers and customers. However, due to the inherent complexity and nature of the Y2K problem, there can be no absolute assurance nor possible for the Group to represent, guarantee or make warranties that it has achieved complete Y2K readiness.

Following our announcement for our 1998 results dated 31 March 1999 regarding the profit guarantee given by the Nucleus Electronics Pte Ltd ("NEPL") vendors, the Board wish to inform that the shortfall in the profit guarantee for the years ended 31 March 1998 and 31 March 1999 amounting to RM88,200 and RM770,723 respectively had been fully compensated by the vendors of NEPL.

UNQUOTE"