On behalf of the Board of Directors of Versatile Creative
Berhad (VCB, formerly known as Quinquick Sdn Bhd and
Versatile Creative Sdn Bhd), I have pleasure in presenting
the first Annual Report and Financial Statements of the
Company and its subsidiaries for the financial period ended
31 December 2003.

Year in Review
The Group achieved a significant milestone with the listing
of VCB shares on the Main Board of the Bursa Malaysia
Securities Berhad (formerly known as Malaysia Securities
Exchange Berhad) on 18th December 2003.
Versatile Creative Berhad (VCB) was the white knight for Tai Wah Garments Manufacturing Berhad (TWGB) which was listed on the Bursa Malaysia under the PN4 category. VCB issued a total of 100.58 million new ordinary shares of RM1.00 each. Of the total, 5.3 million shares were issued to shareholders of TWGB, 17.25 million shares to TWGB¡¯s creditors and 78.03 million shares to acquire the entire equity interest in Versatile Paper Boxes Sdn Bhd (¡°VPB¡±). Concurrently, VCB had also completed the Private Placement of 10.058 million new ordinary shares resulting in an enlarged share capital of RM110.64 million. The listing status of TWGB was transferred to VCB and the new VCB shares were listed on the Main Board of the Bursa Malaysia on 18 December 2003. The funds raised were utilized to repay bank borrowings, for working capital and expenses incurred for the listing exercise.

Financial Performance
As the acquisition of VPB was completed on 27 October 2003, the Group has only consolidated the financial performance of VPB and its subsidiaries for the two (2) month period ended 31 December 2003.

For the period under review, the Group recorded a turnover of RM8.7 million and a profit after tax of RM0.8 million. After writing off the listing premium of RM22.6 million, the Group recorded a loss after tax of RM21.8 million.

The listing premium of RM22.6 million arose from the reverse take-over of TWGB and essentially represented the settlement of TWGB¡¯s creditors in exchange for the transfer of its listing status to VCB.

At the operational level, VPB and its subsidiaries recorded a turnover of RM54.4 million and a profit before tax of RM9.7 million for the financial year.

Shareholders¡¯ funds at 31 December 2003 amounted to RM88.8 million.

The Malaysian Economy and Developments
The Malaysian economy ended the year on an upbeat note despite the dampener at the beginning of the year resulting from the Iraq war and Severe Acute Respiratory Syndrome (SARS). The global economy while showing signs that the worst has passed did not rebound as strongly as anticipated. The major economies recovered on a modest scale with sedate growth in Europe and Japan.

Although the impact of SARS on the economic activities in parts of Asia was severe, the effect in Malaysia was less harsh. Other than the SARS-related industries, the rest of the economy has been largely unaffected. Nevertheless, the threat of terrorist attacks, further geopolitical developments and the possible return of SARS pose a destabilising risk to economic recovery world-wide.

In response to such uncertainties in the global environment, the Malaysian government unveiled an economic package to address structural and organisational issues in order to sustain economic growth in the medium and longer term. The strategic measures were targeted at mitigating adverse effects on the domestic economy, to boost confidence necessary to increase consumption and investment as well as to ease the financial pain of SARS-affected industries.

During 2003, the Group put in place measures to address the challenges posed by both domestic and global developments. These measures include focused marketing strategies, improving the fundamental efficiencies in our operations as well as striving to achieve higher margins by containing costs without jeopardizing our commitment to quality.

Prospects
The outlook for 2004 remains positive as Malaysia¡¯s economic indicators are encouraging. Export growth shows no signs of contraction leading to a favourable balance of trade. The landslide victory by the Barisan Nasional in the recent general election has fortified the government thrust to stimulate growth, maintain employment and attract foreign direct investment. The growth forecast for the country has been revised upwards to 6.5%. Manufacturing will continue to be the main engine of growth while the agriculture sector will see renewed focus. In the wake of an improving economy, the problem of escalating prices of raw materials is of concern. This coupled with the tight supply situation of key raw materials can impact adversely on margins.

The Group will continue its strategy of capitalising on its profitable core businesses as a One-Stop Integrated Printing and Packaging Solutions Provider and to pursue new measures for improving its profit margins. Steps to ensure positive contributions to the bottom line will continue to be a key feature in the Group¡¯s business stance in the light of rising raw material costs and ever-present competition.

Being customer-driven, the Group is committed to seeking business excellence through various world class management initiatives. It has established programmes like 5S, Kaizan, TPM, GMP, HACCP, ISO 2000:1900 to enhance the cost effectiveness and optimisation of operational effectiveness. It seeks to remain in the forefront of innovation through selective investment in equipment and the latest technology. Over the last 2 years, the Group has invested RM15 million in new equipment and technology such as one unit of New Heidelberg Speedmaster Five-colour Offset Press model CD 102-5LX, 8 units of new Injection Moulding machines and one unit of Scitex Dolev 800 V3. The Group is also looking at the fully-integrated technology of in-mould labeling for plastic products.

The Group also plans to grow organically as well as through mergers and acquisitions. We are actively seeking to expand our business overseas and are exploring suitable related businesses to set up joint ventures in the region.

Global developments and their impact on our economy will pose challenges to the Group¡¯s prospects for 2004. However, with the strategic initiatives put in place, we are optimistic that the Group¡¯s performance will meet expectations.

Appreciation
The journey to where we are today has not been easy and on behalf of the Board of Directors, I would like to take this opportunity to extend our deepest appreciation to our customers, suppliers, business associates and the regulatory authorities for their strong support. I would also like to thank my fellow directors, management and staff for their dedication and contribution during the past years without which the Group would not have been able to achieve its success over the years. Last but not least, I wish to express my gratitude to our shareholders for their strong commitment and confidence in the Group.

Shahabuddin Bin Abdullah @ Lee Seng Pun
Chairman