sbc corporation berhad: annual report 2004 960kb

A N N U A L R E P O R T 2 0 0 4

s b c c o r p o r a t i o n b e r h a d (199310-P)(formerly known as siah brothers corporation berhad)

an adherence to industry's highest ethics

designed & produced by [email protected]

Wisma Siah Brothers, 74A Jalan Pahang, 53000 Kuala Lumpur. Tel: 03 4041 8118 Fax: 03 4043 5281 sbc corporation berhad (199310-P)(formerly known as siah brothers corporation berhad)

sbc corporation berhad annual report 2004

c o r e v a l u e

Equipping our people to anticipate and respond to the needs of our customers and stakeholders

Adherence to industry's highest ethics

Use of designs and processes that promote standards

c o r e p u r p o s e

To build upon our construction heritage to design and deliver exciting,

unique and valuable solutions for buildings and communities

CONTENTS

notice of annual general meeting

notice of dividend payment

statement accompanying notice of annual general meeting

corporate information

directors’ profile

corporate structure

group financial highlights

statement of directors’ responsibilities

executive chairman’s statement

penyata pengerusi eksekutif

statement of corporate governance

statement on internal control

audit committee report

group properties

shareholders’ information

proxy form

2

90

88

32

30

22

18

14

13

12

11

5

4

3

3

corporate section

financial statements 37 - 87

NO

TIC

E O

F A

NN

UA

L G

ENER

AL

MEE

TIN

Gnotice of annual general meeting

1. To receive and adopt the Directors’ Report and the Audited Financial Statements for theyear ended 31 March 2004 together with the Auditors’ Report thereon.

2. To declare a first and final dividend of 1% less 28% income tax for the year ended 31 March 2004.

3. To approve the payment of Directors’ fees.

4. To re-appoint the following Directors pursuant to Section 129(6) of the Companies Act,1965:

(a) YBhg. Dato’ Lim Phaik Gan(b) Mr Sia Kwee Mow @ Sia Hok Chai

5. To re-elect Mr Sia Teong Heng as a Director retiring by rotation pursuant to Article 77 ofthe Articles of Association of the Company.

6. To re-elect the following Directors retiring pursuant to Article 84 of the Articles ofAssociation of the Company:

(a) YBhg. Dato’ Zainol Abidin Bin Haji A. Hamid(b) En. Ahmad Fizal Bin Othman

7. To re-appoint Messrs. Horwath as Auditors of the Company and to authorise theDirectors to fix their remuneration.

8. As Special Business, to consider and, if thought fit, to pass the following OrdinaryResolution:

AUTHORITY TO DIRECTORS TO ALLOT AND ISSUE SHARES

“THAT subject always to the Companies Act, 1965, the Articles of Association of theCompany and the approval from the Bursa Malaysia Securities Berhad and othergovernmental/regulatory bodies, where such approval shall be necessary, the Directors beand are hereby authorised pursuant to Section 132D of the Companies Act, 1965, to allotand issue shares in the Company, at any time and upon such terms and conditions andfor such purposes as they may in their absolute discretion deem fit, provided that theaggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of the issued capital of the Company for the time being and that suchauthority shall continue in force until the conclusion of the next Annual General Meetingof the Company.”

9. To consider any other business for which due notice shall have been given.

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)(Resolution 5)

(Resolution 6)

(Resolution 7)(Resolution 8)

(Resolution 9)

(Resolution 10)

NOTICE IS HEREBY GIVEN that the Fourteenth Annual General Meeting of SBC Corporation Berhad (Formerly knownas Siah Brothers Corporation Berhad) will be held at the Penthouse, 5th Floor, Wisma Siah Brothers, 74, Jalan Pahang,53000 Kuala Lumpur on Thursday, 23 September 2004 at 11.00 a.m. to transact the following business:

AGENDA

NO

TIC

E O

F D

IVID

END

PA

YM

ENT

NOTICE IS HEREBY GIVEN that subject to the approval of the shareholders at the Fourteenth Annual General Meetingof the Company, the first and final dividend of 1% less 28% income tax for the year ended 31 March 2004 will bepaid on 29 October 2004 to Depositors registered in the Record of Depositors on 18 October 2004.

A Depositor shall qualify for entitlement only in respect of:

a) shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 18 October 2004 in respect ofordinary transfers; and

b) shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules ofthe Bursa Malaysia Securities Berhad.

By Order of the Board

CHONG FOOK SINKAN CHEE JINGCompany Secretaries

Kuala Lumpur30 August 2004

(1) The following are the Directors standing for re-appointment and re-election at the Fourteenth Annual General Meeting:

(a) Re-appointment of the following Directors pursuant to Section 129(6) of the Companies Act, 1965:

(i) YBhg. Dato’ Lim Phaik Gan(ii) Mr Sia Kwee Mow @ Sia Hok Chai

(b) Re-election of Mr Sia Teong Heng as a Director pursuant to Article 77 of the Articles of Association ofthe Company.

(c) Re-election of the following Directors pursuant to Article 84 of the Articles of Association of theCompany:

(i) YBhg. Dato’ Zainol Abidin Bin Haji A. Hamid(ii) En. Ahmad Fizal Bin Othman

(2) There were six (6) Directors’ Meetings held during the financial year ended 31 March 2004. Details ofattendance of the Directors are set out in the Statement of Corporate Governance appearing on page 23 ofthis Annual Report.

(3) The Fourteenth Annual General Meeting will be held at the Penthouse, 5th Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala Lumpur on Thursday, 23 September 2004 at 11.00 a.m.

(4) The profile of Directors standing for re-appointment and re-election as mentioned in paragraph 1 above at theFourteenth Annual General Meeting are set out in pages 5 to 10 of this Annual Report.

NOTES:

1) Proxy:A member entitled to attend and vote at theMeeting is entitled to appoint a proxy to attendand vote instead of him. Where a memberappoints more than one (1) proxy, theappointment shall be invalid unless he specifiesthe proportions of his holdings to be representedby each proxy. To be valid, the proxy form dulycompleted must be deposited at the RegisteredOffice of the Company not less than forty-eight(48) hours before the time for holding themeeting. If the appointor is a corporation, thisform must be executed under its common seal orunder the hand of its attorney.

2) Resolution 10:The Company is actively pursuing businessopportunities in prospective areas so as tobroaden the operating base and earningspotential of the Company. Such expansion plansmay require the issue of new shares notexceeding 10 per cent (10%) of the Company’sissued share capital. With the passing of theresolution by the shareholders of the Company atthe forthcoming Annual General Meeting, theDirectors would avoid delay and cost ofconvening further general meetings to approvethe issue of shares for such purposes.

notice of dividend payment

statement accompanying notice of annual general meetingpursuant to paragraph 8.28 (2) of the listing requirements of Bursa Malaysia Securities Berhad

Sia Kwee Mow @ Sia Hok ChaiJMN, FFB, FCIOB, FAIB

Executive Chairman

Mun Chong Shing @ Mun Chong TianNon-Executive Director

Dato' Zainol Abidin Bin Haji A. HamidLLB (Hons)

Non-Executive Director

Ahmad Fizal Bin OthmanB.Acc & Fin. (Hons)

Independent Non-Executive Director

Sia Teong HengB.Sc. (Eng), M.Sc.Managing Director

Dato' Lim Phaik GanDPMP, DMPN, M.A.(Law), FCI, ARBIndependent Non-Executive Director

Dato' Dr Norraesah Bt. Haji MohamadDSPN, PhD., B.Sc.(Econ)Independent Non-Executive Director

BOARD OF DIRECTORS

SOLICITORS Cheang & Ariff

39 Court 39, Jalan Yap Kwan Seng, 50450 Kuala Lumpur

Lim & Yeoh145-M Jalan Maharajalela, 50150 Kuala Lumpur

Lee, Perara & Tan55, Jalan Thambapillai, Off Jalan Tun Sambanthan

Brickfields, 50470 Kuala Lumpur

COMPANY SECRETARIES Chong Fook Sin

ATII, MCCS, AFA

Kan Chee JingACIS

REGISTERED OFFICE Wisma Siah Brothers

74A Jalan Pahang, 53000 Kuala Lumpur Tel: 03-4041 8118 Fax: 03-4043 5281

AUDIT COMMITTEE Dato' Dr. Norraesah Bt. Haji Mohamad DSPN, PhD., B.Sc.(Econ)

Chairperson & Independent Non-Executive Director

Dato' Lim Phaik Gan DPMP, DMPN, M.A.(Law), FCI, ARB


Ahmad Fizal Bin Othman B.Acc & Fin. (Hons)


Sia Teong Heng B.Sc. (Eng), M.Sc.

Managing Director

EXECUTIVE MANAGEMENT Sia Teong Heng B.Sc. (Eng), M.Sc.

Chairman & Managing Director

Sia Teong Leng B.A. (Hons) (Law & Econs), M.B.A. Corporate Director

Ng Kee Chye CA., B.Acc (Hons)

Group Chief Financial Officer

Teh Kai Chua B.Sc. (Eng)

General Manager - Technical

REMUNERATION COMMITTEEDato' Zainol Abidin Bin Haji A. HamidLLB (Hons)Chairman & Non-Executive Director

Dato' Lim Phaik GanDPMP, DMPN, M.A.(Law), FCI, ARBIndependent Non-Executive Director


Sia Teong HengB.Sc. (Eng), M.Sc.Managing Director

NOMINATION COMMITTEEDato' Lim Phaik GanDPMP, DMPN, M.A.(Law), FCI, ARBChairperson & Independent Non-Executive Director


Ahmad Fizal Bin OthmanB.Acc & Fin. (Hons)Independent Non-Executive Director

Mun Chong Shing @ Mun Chong TianNon-Executive Director

AUDITORSHorwathChartered AccountantsLevel 16 Tower C, Megan Phileo Avenue12 Jalan Yap Kwan Seng, 50450 Kuala Lumpur

PRINCIPAL BANKERSAffin Merchant Bank BerhadAlliance Bank Malaysia BerhadAseambankers Malaysia BerhadBangkok Bank BerhadBumiputra Commerce Bank BerhadUnited Overseas Bank (Malaysia) BerhadUtama Merchant Bank Berhad

REGISTRARSTacs Corporate Services Sdn. Bhd.Unit No. 203, 2nd Floor, Block C, Damansara IntanNo. 1, Jalan SS 20/27, 47400 Petaling JayaTel: 03-7118 2688 Fax: 03-7118 2693

STOCK EXCHANGE LISTINGMain BoardBursa Malaysia Securities Berhad

PAGE

4

CO

RP

OR

ATE

IN

FOR

MA

TIO

Ncorporate information

as at 10 August 2004

DIR

ECTO

RS’

PR

OFI

LE

directors’ profileas at 30 July 2004

Sia Kwee Mow @ Sia Hok Chai

Sia Kwee Mow @ Sia Hok Chai, a Malaysian, aged 71, is the Executive Chairman of SBC Corporation Berhad (“SBC”).He has been a Director of SBC since its incorporation on 14 June 1990. He has over 50 years of experience in buildingand civil engineering contracting and not less than 32 years of experience in plastic engineering since theincorporation of Paling Industries Sdn. Bhd. in 1971. He was actively involved in Master Builders Association Malaysia(“MBAM”) and had served in various capacities including the post of President (1988 to 1994). He was elected asthe 29th President (1994 to 1996) of the International Federation of Asian and Western Pacific Contractors’Associations (“IFAWPCA”) during which he led the IFAWPCA delegation to a meeting between the World Bank andInternational Contractors Association held at Washington D.C. in November, 1996.

In recognition of his vast experience and knowledge in construction and his contribution to the building constructionindustry, he was awarded or conferred the following:

• Johan Mangku Negara by DYMM Yang DiPertuan Agong in 2001• Honorary Life President by MBAM in 2001• Fellowship of the Faculty of Building, United Kingdom in 1981• Fellowship of the Chartered Institute of Building, United Kingdom as a Chartered Builder in 1979• Fellowship of the Australian Institute of Building by the Australian Royal Charter of Building in 1982

He was also a previous President of both the Selangor Builders Association and Selangor Chinese Plumbing andSanitary Association.

He also sits on the board of several private limited companies in Malaysia, including several subsidiaries of SBC.

His holdings in the securities of SBC are as follows:

Direct Interest Indirect Interest

Ordinary shares 1,480,800 (a) 19,498,523 (b)

Employees’ Shares Option Scheme 450,000 -

(a) 1,480,800 shares are held in bare trust by RHB Capital Nominees (Tempatan) Sdn. Bhd.(b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen

Legacy Sdn. Bhd. (5,181,023 shares).

By virtue of his interests in SBC, he is deemed to have interests in the securities of SBC’s subsidiaries to the extentof SBC’s interest in accordance with Section 6A of the Companies Act, 1965.

He is the father of Sia Teong Heng, the Managing Director and a major shareholder of SBC.

He does not have any conflict of interest with SBC except for those transactions disclosed in Note 42 to the financialstatements.

He has not been convicted of any offence within the past 10 years.

He attended all the six Board Meetings held during the last financial year.

DIR

ECTO

RS’

PR

OFI

LE

Sia Teong Heng

Sia Teong Heng, a Malaysian, aged 41, is the Managing Director of SBC Corporation Berhad (“SBC”). He wasappointed as a Director of SBC on 5 February 1991. He is a member of the Audit Committee and the RemunerationCommittee of SBC. He graduated in 1985 with a degree in Bachelor of Science in Civil Engineering fromLoughborough University, United Kingdom ("UK") and a Master degree in Management Science from Imperial College,University of London, UK in 1986.

His career began in investment banking in 1987 with Morgan Grenfell (Asia) Ltd., Singapore. He joined SBC in 1991.Presently, he also sits on the boards of several subsidiaries of SBC.



Ordinary shares 2,017,992 (a) 19,498,523 (b)

Employees’ Shares Option Scheme 350,000 -

(a) 1,774,000 shares are held in bare trust by Amsec Nominees (Tempatan) Sdn. Bhd.(b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen

Legacy Sdn. Bhd. (5,181,023 shares).

By virtue of his interests in SBC, he is deemed to have interests in the securities of SBC’s subsidiaries to the extentof SBC’s interest in accordance with Section 6A of the Companies Act, 1965.

He is a son of Sia Kwee Mow @ Sia Hok Chai, the Executive Chairman and a major shareholder of SBC.

He does not have any conflict of interest with SBC except for those transactions disclosed in Note 42 to the financialstatements.


He attended five of the six Board Meetings held during the last financial year.

DIR

ECTO

RS’

PR

OFI

LE

Mun Chong Shing @ Mun Chong Tian

Mun Chong Shing @ Mun Chong Tian, a Malaysian, aged 67, was appointed as an Executive Director of SBCCorporation Berhad ("SBC") on 1 April, 1996 when he was employed as General Manager of Paling Industries Sdn.Bhd. (“Paling”) from 1987 and appointed as a Director in 1991 and remained in both positions until his retirementon 31 December 2001.

On 31 December 2001, he was redesignated as a Non-Executive Director of SBC. He is a member of the NominationCommittee of SBC.

He has received training in Sales Management conducted by the National Productive Centre and the MalaysianInstitute of Management and a General Management Programme at the National Productivity Board, Singapore.

Prior to his involvement with Paling, he was employed as General Manager in Hume Industries (M) Bhd. where hehas had extensive exposure to industrial engineering and management.



Ordinary shares 21,782 -

He does not hold any securities, direct or indirect, in any of SBC’s subsidiaries.

He is a brother-in-law to Sia Kwee Mow @ Sia Hok Chai and an uncle to Sia Teong Heng, both are Directors andmajor shareholders of SBC.

He does not have any conflict of interest with SBC.


He attended all the six Board Meetings held during the last financial year.

DIR

ECTO

RS’

PR

OFI

LE

Dato' Lim Phaik Gan

Dato' Lim Phaik Gan, a Malaysian, aged 84, was appointed as an Independent Non-Executive Director of SBCCorporation Berhad ("SBC") on 5 February 1991. She is the Senior Independent Non-Executive Director, theChairperson of the Nomination Committee and a member of the Audit Committee and the Remuneration Committeeof SBC. She is an advocate and solicitor and was called to the Bar of England and the Bar of Malaysia. She obtaineda Master of Arts degree in Law from the University of Cambridge, United Kingdom and was in active practice at theBar of Malaysia from 1954 to 1971 and from 1980 until today.

Since 1955, she has had a distinguished career in both the private and public sectors. In 1970, she was a member ofthe National Economic Consultative Council established when Parliament was suspended as a result of riots in 1969.From 1971 to 1980, she served as ambassador and the Deputy Permanent Representative of Malaysia to the UnitedNations and successively as the Malaysian Ambassador to Yugoslavia, Austria, Belgium and the European EconomicCommunity.

She was Malaysia's Permanent Representative to the United Nations Industrial and Development Organisation andInternational Atomic Energy Agency in Vienna, and served as chairman in various committees.

After her retirement from the Malaysian Foreign Service in 1980, she was appointed by the Government as Directorof the Kuala Lumpur Regional Centre for Arbitration, an international organisation involved in the conduct andadministration of international commercial arbitration for the settlement of disputes arising out of internationalcommercial contracts and joint ventures, in which capacity she served from 1982 to 2000. She is currently a memberof the Board of Trustees of the Institute of Strategic and International Studies.

She does not hold any securities, direct or indirect, in SBC or any of its subsidiaries.

She has no family relationship with any Director and/or major shareholder of SBC.

She does not have any conflict of interest with SBC.

She has not been convicted of any offence within the past 10 years.

She attended all the six Board Meetings held during the last financial year.

DIR

ECTO

RS’

PR

OFI

LE

Dato’ Dr. Norraesah Bt. Haji Mohamad

Dato’ Dr. Norraesah Bt. Haji Mohamad, a Malaysian, aged 56, was appointed as an Independent Non-ExecutiveDirector of SBC Corporation Berhad ("SBC") on 8 July 1991. She is the Chairperson of the Audit Committee and amember of the Nomination Committee and the Remuneration Committee of SBC. She holds a Doctorate Degree inEconomics Science (International Economics and Finance) which she obtained in 1986 from University of Paris 1,Pantheon Sorbonne, France.

She has over 31 years of working experience in banking, consultancy and international trade and commerce. Sheworked with the International Trade Division of the Ministry of Trade and Industry (now known as the Ministry ofInternational Trade and Industry) from 1972 to 1985 and was later transferred to the Finance Division of the Ministryof Finance holding the post of Principal Assistant Secretary dealing with privatisation and debt management.

In 1988, she joined ESSO Production Malaysia, Inc. as Communications Manager and subsequently, in 1990, took theposition of Managing Director with a consultant firm providing financial advisory services. From 1991 to 1998 shewas appointed as the Chief Representative of Credit Lyonnais Bank in Malaysia.

She sits on the board of KESM Industries Berhad, Malaysian Oxygen Berhad and several private limited companies.

She was awarded the distinction of Darjah Setia Pangkuan Negeri on 13 July 2002 by Tuan Yang Terutama Yang di-Pertua Negeri Pulau Pinang on His Excellency’s 64th Birthday.

She does not hold any securities, direct or indirect, in SBC or any of its subsidiaries.

She has no family relationship with any Director and/or major shareholder of SBC.

She does not have any conflict of interest with SBC.

She has not been convicted of any offence within the past 10 years.

She attended all the six Board Meetings held during the last financial year.

DIR

ECTO

RS’

PR

OFI

LE

Dato’ Zainol Abidin Bin Haji A. Hamid

Dato’ Zainol Abidin Bin Haji A. Hamid, a Malaysian, aged 62, was appointed as a Non-Executive Director of SBCCorporation Berhad ("SBC") on 10 October 2003, representing the interest of Permodalan Nasional Berhad. He is theChairman of the Remuneration Committee of SBC. He graduated with LLB (Hons) from the University of London in1995.

He joined the Kedah State Government in 1966 as a civil servant. From 1973 to 1981, he was the District Officer forSik, then Padang Terap and finally Kubang Pasu. He was General Manager and Director of Kedah Cement Sdn Bhdfrom 1981 to 1996 and Managing Director of Kedah Cement Marketing Sdn Bhd form 1990 to 1996.

He sits on the Board of Paragon Union Berhad.

He does not hold any securities, direct or indirect, in SBC or any of its subsidiaries.

He has no family relationship with any Director and/or major shareholder of SBC.

He does not have any conflict of interest with SBC.


He attended all the three Board Meetings held during the last financial year since his appointment to the Board ofSBC.

Ahmad Fizal Bin Othman

Ahmad Fizal Bin Othman, a Malaysian, aged 41, was appointed as an Independent Non-Executive Director of SBCCorporation Berhad ("SBC") on 24 February 2004. He is a member of the Audit Committee and the NominationCommittee of SBC. He graduated with a Bachelor in Accounting and Finance (Hons) from the Middlesex University,London.

He is a well-rounded and experienced businessman and involved in a multitude of industries. Currently, he immerseshimself in retail, multimedia and technology.

He does not hold any securities, direct or indirect, in SBC or any of its subsidiaries.

He has no family relationship with any Director and/or major shareholder of SBC.

He does not have any conflict of interest with SBC


He did not attend any Board Meeting during the last financial year as there was no such Meeting held after hisappointment up to 31 March 2004.

INVESTMENT HOLDING Siah Brothers Land Sdn Bhd 100% • Siah Brothers Properties Sdn Bhd 100% • Siah Brothers Industries Sdn Bhd 100% •

PROPERTY DEVELOPMENT Seri Ampangan Realty Sdn Bhd 100% • Sinaran Naga Sdn Bhd 100% • Mixwell (Malaysia) Sdn Bhd 100% • South-East Best Sdn Bhd 100% • Gracemart Resources Sdn Bhd 100% • Sutrati Development Sdn Bhd 100% • Siah Brothers Development Sdn Bhd 100% • Tiara Development Sdn Bhd 100% • SBC Homes Sdn Bhd 100% • Winsome Ventures Sdn Bhd 100% • SBC Leisure Sdn Bhd 100% • SBC Towers Sdn Bhd 100% • Siah Brothers Project Management Sdn Bhd 100% • Ligamas Sdn Bhd 50% • Sri Berjaya Development Sdn Bhd 33.3% •

CONSTRUCTION• 100% Syarikat Siah Brothers Trading Sdn Bhd• 100% Syarikat Siah Brothers Construction Sdn Bhd• 100% Siah Brothers Enterprise Sdn Bhd• 100% Lifeplus - Siah Brothers Trading JV Sdn Bhd

PROPERTY INVESTMENT• 100% Aureate Construction Sdn Bhd• 22.2% Sri Rawang Properties Sdn Bhd

MANUFACTURING & TRADING• 40% Paling Industries Sdn Bhd• 40% Liga Canggih Sdn Bhd• 51% Masahmura Sdn Bhd• 51% Masahmura Sales & Service Sdn Bhd• 50% Varich Industries Sdn Bhd

PLANTATION & NURSERY• 50% Sam & Lau Plantation Sdn Bhd

PAGE

11

CO

RP

OR

ATE

STR

UC

TUR

E

corporate structureas at 10 August 2004

2004 2003 2002 2001 2000(Restated)

RM’000 RM’000 RM’000 RM’000 RM’000RESULTSTurnover 86,317 69,829 81,645 92,411 114,707Profit before taxation 6,996 5,149 1,618 1,421 2,555Profit after taxation but before minority interest 2,073 2,011 1,174 1,071 3,729Profit attributable to shareholders 2,073 2,011 1,174 1,071 3,729

ASSETS EMPLOYEDProperty, plant and equipment 36,246 35,813 7,047 7,586 13,090Investments and other assets 153,703 152,856 141,705 140,323 141,031Net current assets 73,632 71,634 56,867 58,346 56,393Goodwill and deferred expenditure 27,318 27,272 10,246 10,246 8,253

290,899 287,575 215,865 216,501 218,767

FINANCED BYShare capital 82,435 82,435 57,302 57,302 57,302Share application account - - 115,600 - -Reserves 135,940 134,682 42,524 43,087 42,832Irredeemable Convertible Unsecurred Loan Stocks - - - 115,600 115,600ABBA Bonds 39,712 37,827 - - -Deferred liabilities 32,812 32,631 439 512 3,033

290,899 287,575 215,865 216,501 218,767

SELECTED RATIOSNet earnings per share (sen) 2.4 2.4 1.8 1.6 6.9Net tangible assets per share (sen) 244 242 393 165 169Gross dividend (%) 1.0 1.0 - 1.5 1.5

Profit Before Taxation(RM’000)

2000

2001

2002

2004

6,996

2003

5,149

1,618

1,421

2,555

Assets Employed(RM’000)

2002

2003

2004

290,899

287,575

215,865

2001

216,501

2000

218,767

Turnover(RM’000)

2002

2004

86,317

2003

69,829

81,645

2001

92,411

2000

114,707

Shareholders’ Fund(RM’000)

2002

2004

218,375

2003

217,117

215.426

2001

100,389

2000

100,134PAGE

12

GR

OU

P F

INA

NC

IAL

HIG

HLI

GH

TSgroup financial highlights

for the financial year ended 31 March 2004

STA

TEM

ENT

OF

DIR

ECTO

RS’

RES

PO

NSI

BIL

ITIE

S

statement of directors’ responsibilitiesin respect of the preparation of the financial statements

The Directors are responsible for ensuring that the financial statements of the Group are drawn up in accordancewith applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as togive a true and fair view of the state of affairs of the Group and the Company as of 31 March 2004 and of the resultsand cash flows of the Group and Company for the financial year ended on that date.

In preparing the financial statements, the Directors have:

(a) adopted suitable accounting policies and applied them consistently;

(b) made judgements and estimates that are prudent and reasonable;

(c) ensured the adoption of applicable approved accounting standards; and

(d) used the going concern basis for the preparation of the financial statements.

The Directors are responsible for ensuring proper accounting records are kept which disclose with reasonableaccuracy at any time the financial position of the Group and the Company and are kept in accordance with theCompanies Act, 1965. The Directors are also responsible for taking such steps as are reasonably open to them tosafeguard the Group’s assets and to prevent and detect fraud and other irregularities.

EXEC

UTI

VE

CH

AIR

MA

N’S

STA

TEM

ENT

To our shareholders, customers, employees, partners, suppliers and friends,

ON BEHALF OF THE BOARD OFDIRECTORS, I AM PLEASED TOPRESENT THE ANNUAL REPORTAND AUDITED FINANCIALSTATEMENTS OF SBCCORPORATION BERHAD FOR THE FINANCIAL YEAR ENDED 31 MARCH 2004

Financial Review

The Group's revenue rose to RM86.32 million,which is an increase of 24% compared withRM69.83 million a year ago. Pre-tax profitincreased 36% to RM7.00 million from RM5.15million achieved in the corresponding period lastyear, largely attributable to the improvedeconomic environment, completion of projectsahead of schedule and increased residential sales.

executive chairman’s statement

Bandar Utama, Batang Kali

Taman Suria Pendamar, Klang

Perkampungan Seri Mahkota Aman, Kuantan

Kota Damansara, Petaling Jaya

EXEC

UTI

VE

CH

AIR

MA

N’S

STA

TEM

ENT

Operations Review

The better performance achieved for the current financial year under review was in a large part supported by strongreturn of retail interest in residential housing and incentives given under the Government's stimulus package andlower interest rates.

The Group will continue to be market-driven and with our activities focused on providing good value for ourresidential homeowners, with continual emphasis on our designs and workmanship.

This year saw the handover of Phase 1C, Section 4, Bandar Utama Batang Kali, Selangor and Precinct 4, Block E,Taman Mastiara, Kuala Lumpur. Meanwhile, works have started in Phase 1D & 1E, Section 4, Bandar Utama BatangKali, Selangor; Phase 2, Taman Suria Pendamar, Klang; Phase 5, Perkampungan Seri Mahkota Aman, Kuantan, Pahangand Signal Hill Park @ The Peak, Kota Kinabalu, Sabah.

Construction revenue continues to drive the Group's business activities. The turnkey construction such as the rapidcompletion of Damansara Emas at Kota Damansara is one such contributor. The Group recognizes that theconstruction market in Malaysia remains highly competitive at the present moment, and thus continues its policy ofselective tendering.

Against a background of uncertain global environment, the manufacturing associate, Paling Industries Sdn Bhdachieved significantly higher revenue of RM32.66 million, an increase of 18% over 2003's revenue of RM27.77million. The increase in turnover was negated by lower margins on account of greater volatility increase in rawmaterial cost and yet higher productivity and production yield targets were met. This resulted in slightly higherprofits of RM2.78 million in the year in comparison to RM2.29 million in the previous year.

The Group continues with its core business ofassisting institutional clients with "Construct &Finance Initiative" as well as selectively building upits list of future development sites (such as itsrecently concluded debt settlement, effectivelyincreasing the Group's land bank by 66.7 acres, atlocations within the Klang Valley/Selangor). Overthe years, the Group has also been widening itsgeographical reach with its formula of facilitatingnew housing areas, or "SBC Communities", as theGroup would prefer to refer them as. To date, wehave begun at five (5) locations across the nationsuch as West Selangor, North Selangor, the capitalcity KL, Kota Kinabalu and Kuantan, masterplannedas sustainable communities.

Taman Mastiara, Kuala Lumpur

EXEC

UTI

VE

CH

AIR

MA

N’S

STA

TEM

ENT

Corporate Development

The Company and its wholly-owned subsidiaries, Syarikat Siah Brothers Construction Sdn Bhd ("SSBC") and Mixwell(Malaysia) Sdn Bhd ("Mixwell"), had on 16 January 2004 entered into a deed settlement with Smart Home Sdn Bhd("SHSB") whereby SHSB has agreed to settle the entire indebtedness amounting to RM37,720,372 owing by SHSB toSSBC and Mixwell collectively. SHSB shall settle in kind by transferring and/or procuring the transfer of six (6) parcelsof land located at Batang Kali, Hulu Yam and Gombak of Selangor; and Setapak and Sungei Besi of Kuala Lumpur.

The Proposed Debt Settlement was approved by the shareholdersof the Company at the Extraordinary General Meeting held on 16April 2004. The Foreign Investment Committee has also via itsletter dated 6 April 2004 notified that it has no objection to theProposed Debt Settlement.

As part of the Group's objective to broaden its identity (as itcurrently covers its activity beyond pure building trade), whilstretaining the anchor brand within its wholly owned buildingsubsidiary, it has changed the parent/investment holdingcompany’s name to SBC Corporation Berhad accompanied by anupdated version of its logo.

Boardroom Change

I would like to thank Datuk SimPeng Choon (a nominee Director forPermodalan Nasional Berhad) andEncik Abdul Rahman Bin A. Shukorwho was appointed as alternateDirector to Datuk Sim Peng Choon,who have retired and ceased to bedirectors from the Boardrespectively, for their invaluablecontribution to the development ofthe Group during their terms inoffice.

I would also like to take this opportunity towelcome on Board, Dato' Zainol Abidin Bin Haji A.Hamid and Encik Ahmad Fizal Bin Othman as anominee Non-Executive Director for PermodalanNasional Berhad and Independent Non-ExecutiveDirector respectively.

Signal Hill Park, Kota Kinabalu



EXEC

UTI

VE

CH

AIR

MA

N’S

STA

TEM

ENT

Economic And Business Outlook

The external environment and global economic outlook will continue to be affected by geopolitical and economicuncertainties. The Malaysian economy is expected to register a moderation in GDP growth of about 6.0% and 6.5%in 2004-05, driven by higher exports and domestic demand, primarily from private sector, as the Government's pro-growth fiscal and monetary measures start bearing fruit.

The construction industry meanwhile is expected to grow at a moderate rate of 1.5%. The favourable election resultsat the recently concluded general election in Malaysia will also boost business sentiment and optimism. And thisaugurs well for the business community on the whole.

With the brighter economic outlook, the prospects for a revitalized property sector are conducive to the Group'soperating and business environment. The Group will keep to its strategy of offering a comprehensive range ofbuilding products from affordable housing to high-end niche projects for house buyers. Nevertheless, the Groupstrives to differentiate its products through progressive designs, timely completion, quality finishing and valuepricing. We anticipate our performance to be satisfactory in the coming year.

Dividend

The Board is pleased to recommend a first and finaldividend of 1% per ordinary share less 28% tax forthe financial year ended 31 March 2004. Subject tothe shareholders' approval at the forthcomingAnnual General Meeting of the Company, thepayment of the dividend will be made to theshareholders on a date to be announced later.

Appreciation and Acknowledgement

I would like to take this opportunity to thank everyone within theSBC Group. Your effective execution of SBC corporate strategiesthrough sheer hard work, commitment and team work in ademanding and challenging business environment have certainlycontributed much to the success of the Group.

Finally, I would also like to thank our shareholders, customers,joint venture partners, business associates, bankers andgovernment authorities for their confidence in the Board and themanagement.

Thank you.

Sia Kwee Mow @ Sia Hok ChaiJMN, FFB, FCIOB, FAIBExecutive Chairman

10 August 2004Paling’s Products

PEN

YA

TA P

ENG

ERU

SI E

KSE

KU

TIF

Kepada para pemegang saham, pelanggan, kakitangan, rakan kongsi, pembekal

dan rakan-rakan seperjuangan,

SAYA BAGI PIHAK LEMBAGAPENGARAH DENGAN SUKACITANYAMEMPERSEMBAHKAN LAPORANTAHUNAN DAN PENYATAKEWANGAN SBC CORPORATIONBERHAD BAGI TAHUN KEWANGANBERAKHIR 31 MAC 2004.

Ulasan Kewangan

Perolehan Kumpulan telah mencapai RM86.32juta, dengan peningkatan sebanyak 24%berbanding dengan RM69.83 juta pada tahunlepas. Keuntungan sebelum cukai meningkatsebanyak 36% kepada RM7.00 juta berbandingRM5.15 juta yang telah dicapai pada masa yangsama tahun lepas, berpunca daripada keadaanekonomi yang bertambah baik, penyempurnaanawal projek sebelum tarikh matang dan jugadaripada peningkatan dalam jualan perumahan.

penyata pengerusi eksekutif

Bandar Utama, Batang Kali

Taman Suria Pendamar, Klang


Kota Damansara, Petaling Jaya

PEN

YA

TA P

ENG

ERU

SI E

KSE

KU

TIF

Ulasan Operasi

Pencapaian prestasi yang lebih baik pada tahun kewangan ini disumbangkan sebahagian besarnya oleh pulanganfaedah runcit yang kukuh hasil daripada skim jualan perumahan dan juga insentif-insentif yang ditawarkan dalampakej perangsang Kerajaan berserta kadar faedah yang lebih rendah.

Kumpulan akan terus menumpukan perhatian pada kehendak pasaran, dan memfokuskan kegiatan-kegiatan kamidengan menghasilkan mutu yang tinggi untuk para pemilik rumah, dengan penumpuan ke atas rekacipta dan kualitikerja.

Kumpulan telah berjaya dalam penyempurnaan dan penyerahan Fasa 1C, Seksyen 4, Bandar Utama Batang Kali,Selangor dan Precinct 4, Blok E, Taman Mastiara, Kuala Lumpur pada tahun ini. Pada masa yang sama, kerja-kerjajuga telah dimulakan di Fasa ID & IE, Seksyen 4, Bandar Utama Batang Kali, Selangor; Fasa 2, Taman Suria Pendamar,Klang; Fasa 5, Perkampungan Seri Makhota Aman, Kuantan, Pahang dan Signal Hill Park @ The Peak, Kota Kinabalu,Sabah.

Pendapatan daripada sektor pembinaan adalah pendorong utama bagi aktiviti-aktiviti Kumpulan. Pembinaan‘turnkey’ seperti penyempurnaan yang cepat dalam projek Damansara Emas di Kota Damansara merupakan satupenyumbang besar. Kumpulan sedar bahawa saingan yang hebat masih wujud dalam sektor pembinaan di pasaranMalaysia pada masa ini, maka Kumpulan akan terus berpegang pada polisinya dalam pemilihan tendernya.

Di sebalik keadaan ekonomi global yang tidak stabil, syarikat bersekutu sektor pembuatan kami, Paling Industries SdnBhd, telah mencatatkan perolehan yang lebih tinggi sebanyak RM32.66 juta, iaitu peningkatan sebanyak 18%berbanding dengan perolehan sebanyak RM27.77 juta pada tahun 2003. Peningkatan dalam perolehan inidikurangkan oleh margin yang lebih rendah akibat daripada ketidaktentuan dalam peningkatan kos bahan mentah;walaubagaimanpun penghasilan produktiviti berjaya dicapai dengan kadar produktiviti yang tinggi. Keadaan ini telahmenyumbangkan keuntungan yang lebih tinggi sebanyak RM2.78 juta pada tahun ini berbanding RM2.29 juta padatahun lepas.

Kumpulan akan meneruskan tumpuan ke atasaktiviti utama perniagaannya dengan membantupara pelanggan dari institusi yang berkaitanmelalui “Inisiatif Pembinaan dan Kewangan”, serta menyediakan secara terperinci senaraikawasan-kawasan untuk pembangunan masadepan (sebagai contohnya, penyelesaian hutangyang disempurnakan baru-baru ini telahmembantu menambahkan jumlah keluasan tanahKumpulan seluas 66.7 ekar, di lokasi-lokasi dalampersekitaran Lembah Klang/Selangor). Pada tahun-tahun kebelakangan ini, Kumpulan jugatelah memperluaskan lingkungan geografikalnyamelalui formula penempatan kawasan perumahanbaru, atau “Komuniti SBC”, sepertimana yang lebihdikenali oleh Kumpulan. Kini, kami telahmemulakan usaha ini di lima (5) lokasi di seluruhnegara seperti di kawasan Selangor Barat, SelangorUtara, ibukota Kuala Lumpur, Kota Kinabalu danKuantan, yang mengutamakan rancanganpembangunan komuniti yang kukuh.

Taman Mastiara, Kuala Lumpur

Signal Hill Park, Kota Kinabalu

PEN

YA

TA P

ENG

ERU

SI E

KSE

KU

TIF

Perkembangan Korporat

Syarikat ini bersama dengan anak-anak syarikatnya, Syarikat Siah Brothers Construction Sdn Bhd (“SSBC”) danMixwell (Malaysia) Sdn Bhd (“Mixwell”) telah menandatangani perjanjian dengan Smart Home Sdn Bhd (SHSB) pada16 Januari 2004, di mana SHSB telah berjanji untuk melangsaikan kesemua hutangnya kepada SSBC dan Mixwellyang berjumlah sebanyak RM37,720,372. Hutang tersebut akan diselesaikan dengan memindahkan dan/atau berjayamemperolehi pemindahan enam (6) tapak pembinaan yang terletak di Batang Kali, Hulu Yam dan Gombak, Selangor;serta Setapak dan Sungai Besi di Kuala Lumpur.

Cadangan Penyelesaian Hutang ini telah diluluskan oleh para pemegang saham syarikat di Mesyuarat Agung LuarBiasa yang diadakan pada 16 April 2004. Jawatankuasa Pelaburan Asing juga telah melalui suratnya yang bertarikh6 April 2004 menyatakan bahawa ia tidak mempunyai bantahan terhadap Cadangan Penyelesaian Hutang tersebut.

Sebagai sebahagian daripada objektif Kumpulan untuk memperkembangkan identitinya, (memandangkan aktivitiKumpulan kini telah menjangkaui perniagaan sektor pembinaan), dan pada masa yang sama telah mengekalkanjenama utamanya di kalangan anak-anak syarikat dalam sektor ini, maka Kumpulan telah mengubah nama syarikatinduk/syarikat pelaburan kepada SBC Corporation Berhad bersampingan dengan versi logo yang terbaru.

Perubahan Lembaga Pengarah

Saya ingin merakamkan penghargaan ikhlas dan terimakasih kepada Datuk Sim Peng Choon (Pengarah nominibagi Permodalan Nasional Berhad) dan Encik AbdulRahman Bin A. Shukor yang telah dipilih sebagai Pengarahalternate kepada Datuk Sim Peng Choon, yang telahbersara dan berhenti sebagai ahli Lembaga Pengarahmasing-masing, atas sumbangan mereka yang tidakterhingga terhadap kejayaan Kumpulan sepanjangperkhidmatan mereka.

Saya juga ingin mengambil kesempatan ini untukmengalu-alukan kehadiran Dato’ Zainol Abidin Bin Haji A.Hamid, selaku Pengarah Bukan Eksekutif untukPermodalan Nasional Berhad, dan Encik Ahmad Fizal BinOthman sebagai Pengarah Bebas Bukan EksekutifKumpulan ini.

Tinjauan Ekonomi Dan Perniagaan

Persekitaran luaran dan ekonomi global akan terus dipengaruhi oleh keadaan geopolitik dan ekonomi yang tidakstabil. Ekonomi Malaysia dianggarkan akan mencatat Keluaran Dalam Negeri Kasar yang sederhana iaitu 6.0%hingga 6.5% dalam tahun 2004-05, yang berpunca daripada kenaikan eksport dan peningkatan permintaan dalaman,terutamanya daripada sektor swasta, sementara tindakan pro-pembangunan fiskal dan perangkaan kewangan olehpihak kerajaan telah menunjukkan hasilnya.

Industri pembinaan pula dijangka akan meningkat pada kadar 1.5%. Keputusan yang disambut baik dalampilihanraya umum yang diadakan baru-baru ini telah memberi kesan positif serta menaikkan lagi sentimenperniagaan. Keadaan ini mendatangkan kesan yang baik kepada keseluruhan komuniti perniagaan.

Dengan tinjauan ekonomi yang lebih ceria, prospek untuk sektor pembinaan yang lebih cerah adalah sehaluandengan keadaan operasi dan perniagaan Kumpulan. Kumpulan akan terus menuruti strateginya untuk menawarkanproduk-produk pembinaan yang komprehensif daripada perumahan yang mampu dimiliki semua ke projek-projekbertaraf tinggi untuk para pembeli rumah. Namun demikian, Kumpulan akan terus berusaha sedaya upayamembezakan hasil keluarannya daripada yang lain dari segi rekabentuk, penyempurnaan dalam masa yangditetapkan, kemasan bermutu berserta harga yang kompetitif. Kami mengharapkan pencapaian yang memuaskandalam tahun akan datang.



PEN

YA

TA P

ENG

ERU

SI E

KSE

KU

TIF

Dividen

Lembaga Pengarah telah mencadangkanpembayaran dividen tahunan sebanyak 1%sesaham tolak cukai 28% untuk tahunkewangan berakhir 31 Mac 2004. Pembayaranuntuk dividen ini akan diumumkan tertaklukkepada persetujuan para pemegang sahampada Mesyuarat Agung Tahunan akan datang.

Penghargaan

Saya ingin mengambil kesempatan ini untukmengucapkan ribuan terima kasih kepada paratenaga pekerja di Kumpulan SBC. Kegigihananda dalam melaksanakan strategi korporatSBC melalui usaha yang tidak berbelah bahagi,komitmen serta kebolehan bekerja secarakumpulan dalam situasi perniagaan yangpenuh dengan cabaran telah menyumbangkankejayaan yang tinggi kepada Kumpulan ini.

Akhirnya, saya juga ingin menyatakanpenghargaan kami kepada para pemegangsaham, para pelanggan, rakan-rakanperkongsian, rakan-rakan perniagaan, ahli-ahlibank dan pihak kerajaan atas kepercayaan dansokongan mereka terhadap pihak Lembaga danpengurusan.

Sekian, terima kasih.

Sia Kwee Mow @ Sia Hok Chai JMN, FFB, FCIOB, FAIB Pengarah Eksekutif

10 Ogos 2004

Produk-produk Keluaran Paling

STA

TEM

ENT

OF

CO

RP

OR

ATE

GO

VER

NA

NC

Estatement of corporate governance

as at 8 August 2004

The Board of Directors of SBC Corporation Berhad remains firmly committed towards ensuring the highest standardof corporate governance is maintained throughout the Company and its subsidiaries (“the Group”). Hence, the Boardis fully dedicated to continuously evaluating the Group’s corporate governance practices and procedures with a viewto ensure the principles and best practices in corporate governance as promulgated by the Malaysian Code onCorporate Governance (“the Code”) is applied and adhered to in the best interests of the stakeholders.

This disclosure statement sets out the manner in which the Group has applied and complied with the Principles ofthe Code and the extent of compliance with Best Practices as set out in Part 1 and 2 of the Code.

BOARD OF DIRECTORS

Composition and Balance

As at the date of this statement, the Board consists of 7 members, comprising 3 independent non-executiveDirectors, 2 non-executive Directors and 2 executive Directors which satisfies Bursa Malaysia Securities Berhad(“Bursa Securities”) Listing Requirements of having at least 2 Directors or 1/3 of the Board whichever is higher, whoare independent Directors.

The Group is led by an experienced Board. The Directors are from diverse backgrounds and have a wide range of skillsand experience relevant to managing and directing the Group’s operations. The Executive Directors are responsiblefor implementing policies of the Board, overseeing the Group’s operations and developing the Group’s businessstrategies. The role of the Independent Non-Executive Directors is to provide objective and independent judgementto the decision making of the Board and as such, provide an effective check and balance to the Board’s decisionmaking process.

The Board is satisfied that the current Board composition fairly reflects the investment of minority shareholders inthe Company and represents the needed mix of skills and experience required to discharge the Board’s duties andresponsibilities. Furthermore, no individual Director or group of Directors can dominate the Board’s decision makingprocess.

The profiles of the members of the Board are set out in this Annual Report under the section named Profile of theDirectors.

Duties and Responsibilities

The Board recognises its key role in charting the strategic direction, development and control of the Group and hasadopted the specific responsibilities that are listed in the Code, which facilitates the discharge of the Board’sstewardship responsibilities.

The roles of the Chairman and Managing Director are clearly distinct to ensure that there is a balance of power andauthority. The Chairman is primarily responsible for the working of the Board, its membership and participation ofthe members at the Board meetings. The Managing Director is responsible for the daily management of the Group’sbusiness operations and implementation of policies and strategies adopted by the Board.

Dato’ Lim Phaik Gan is the senior independent non-executive director to whom concerns may be conveyed.

STA

TEM

ENT

OF

CO

RP

OR

ATE

GO

VER

NA

NC

E

Board Meetings

Normally, the Board meets at least 4 times in a financial year with additional meetings convened to deliberate onurgent and significant matters where decisions need to be taken between the scheduled Board meetings. During thefinancial year ended 31 March 2004, the Board met 6 times where it deliberated on and considered matters relatingto the Group’s financial performance, significant investments, corporate development, strategic issues and businessplan. Details of each Director’s attendance of Board meetings are set out below.

Name of Director Designation No. of meetings attendedSia Kwee Mow @ Sia Hok Chai Executive Chairman 6Sia Teong Heng Managing Director 5Mun Chong Shing @ Mun Chong Tian Non-Executive Director 6Dato’ Lim Phaik Gan Independent Non-Executive Director 6Dato’ Dr. Norraesah Bt. Haji Mohamad Independent Non-Executive Director 6Dato’ Zainol Abidin Bin Haji A. Hamid Non-Executive Director 3

(appointed on 10 October 2003)Ahmad Fizal Bin Othman Independent Non-Executive Director Not Applicable

(appointed on 24 February 2004)Datuk Sim Peng Choon Non-Executive Director 1

(resigned on 19 August 2003)Abdul Rahman Bin A. Shukor Non-Executive Director Nil

(ceased on 19 August 2003)(alternate to Datuk Sim Peng Choon)

Vincent Koh Kok Kee Independent Non-Executive Director 1(resigned on 31 May 2003)

The Board members have unrestricted and timely access to all information necessary for the discharge of theirresponsibilities. All Directors are provided with all relevant information and reports on financial, operational,corporate, regulatory, business development by way of Board papers or upon specific request for informed decisionmaking and effective discharge of their duties. These documents are comprehensive and include qualitative andquantitative information to enable the Board members to make informed decisions. Notice of Board Meetings andboard papers are provided to directors in advance so that meaningful deliberation and sound decisions can be madeat Board meetings. All proceedings of the Board meetings are minuted by the Company Secretary.

There is a formal schedule of matters reserved specifically for Board’s decision, these include approval of key policies,significant acquisitions and disposals of assets, significant investments and approval of budgets and corporate plans.

To assist in the discharge of their responsibilities and duties, all Directors have access to the advice and services ofthe Company Secretary. If required, the Directors may engage independent professionals at the Group’s expense, inthe furtherance of their duties.

Re-election and Re-appointment of Directors

In accordance with the Company’s Articles of Association, one third of the Directors shall retire by rotation fromoffice and be eligible for re-election at the annual general meeting and all Directors appointed by the Board aresubject to re-election by shareholders at the first opportunity after their appointment. Furthermore, each Directorshall retire from office at least once in every three years. Directors who are of or over the age of seventy years shallalso retire from office and be eligible for re-appointment at the annual general meeting pursuant to Section 129 (6)of the Companies Act, 1965.

BOARD OF DIRECTORS (CONT’D)

Directors’ Training

All members of the Board have attended the Mandatory Accrediation Programme (MAP). The Board will ensure thatall its members continue to attend training programmes and seminars to keep abreast with the relevantdevelopments on a continuous basis in compliance with the Bursa Securities Practice Note No. 15/2003.

For new Directors, a familiarisation program will be conducted for them. This includes a presentation of the Group’soperations by senior management and visits to the existing project sites.

Board Committees

The Board has delegated certain of its responsibilities to three committees. These are the Audit, the Nomination andthe Remuneration Committees. All Board committees are provided with written terms of reference.

AUDIT COMMITTEE

The report of the Audit Committee is set out on pages 32 to 36 of this annual report.

NOMINATION COMMITTEE (“NC”)

The members of the NC at the date of this report and their attendance at the meetings held during the financial yearended 31 March 2004 are as follows:

No. of meetings held during the No. of

financial year ended meetings 31 March 2004 attended

Dato’ Lim Phaik Gan - Chairperson (Independent Non-Executive Director) 2 2Dato’ Dr Norraesah Bt Haji Mohamad (Independent Non-Executive Director) 2 2Mun Chong Shing @ Mun Chong Tian (Non-Executive Director) 2 2Ahmad Fizal Bin Othman (Independent Non-Executive Director) 2 Not Applicable

(appointed on 24 February 2004)Vincent Koh Kok Kee (Independent Non-Executive Director) 2 1

(resigned on 31 May 2003)

The terms of reference of the NC are as follows:

(a) Membership

The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consistexclusively of Non-Executive Directors, with a minimum of 3, a majority of whom are independent.

The members of the Committee shall elect the Chairman from among their number who shall be anIndependent Director.

In order to form a quorum in respect of a meeting of the Committee, the members present must be wholly ora majority of whom must be Independent Directors.

(b) Frequency of meetings

Meetings shall be held not less than once a year. The Company Secretary shall be the Secretary of theCommittee.

STA

TEM

ENT

OF

CO

RP

OR

ATE

GO

VER

NA

NC

E

NOMINATION COMMITTEE (“NC”) (CONT’D)

(c) Authority

The Committee is to recommend new nominees for the Board and the board committees and to assess Directorson an on-going basis. The actual decision as to who shall be nominated should be the responsibility of the fullBoard after considering the recommendations of the Committee.

(d) Duties

The duties of the Committee shall be:

(i) to recommend to the Board, candidates for all directorships and in doing so, preference shall be given toshareholders or existing Board members and candidates proposed by the Chief Executive Officer and,within the bounds of practicability, by any other senior executive or any director or shareholder may alsobe considered.

(ii) to recommend to the Board, Directors to fill the seats on board committees.

(iii) to review annually, on behalf of the Board, the required mix of skills, experience and other qualities,including core competencies, which Non-Executive Directors should bring to the Board.

(iv) to carry out annually, on behalf of the Board, the assessment of the effectiveness of the Board as a whole,the board committees and the contribution of each Director.

(e) Reporting procedures

The Company Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.

At the meetings of the NC during the financial year ended 31 March 2004, the Chairperson was elected fromamongst its members and the following matters were considered and resolved:

(a) re-appointment and re-election of Directors at the Annual General Meeting;(b) mix of skills, experience and qualities of all Directors;(c) the effectiveness of the Board and the contribution from each Board member; and (d) nominees for appointment to the Board and board committees

REMUNERATION COMMITTEE (“RC”)

The members of the RC at the date of this report and their attendance at the meetings convened during the financialyear ended 31 March 2004 are as follows:

No. of meetingsheld during the No. of

financial year ended meetings 31 March 2004 attended

Dato’ Zainol Abidin Bin Haji A. Hamid (Non-Executive Director) 1 Not Applicable(appointed on 24 February 2004 andwas elected Chairman on 27 May 2004)

Dato’ Dr Norraesah Bt Haji Mohamad (Independent Non-Executive Director) 1 1Dato’ Lim Phaik Gan (Independent Non-Executive Director) 1 1Datuk Sim Peng Choon (Non-Executive Director) 1 Not Applicable

(resigned on 19 August 2003)Sia Teong Heng (Managing Director) 1 1

STA

TEM

ENT

OF

CO

RP

OR

ATE

GO

VER

NA

NC

E

STA

TEM

ENT

OF

CO

RP

OR

ATE

GO

VER

NA

NC

E

REMUNERATION COMMITTEE (“RC”) (CONT’D)

The terms of reference of the RC are as follows:

(a) Membership

The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consistof at least 3 directors, wholly or a majority of whom are Non-Executive Directors.

The members of the Committee shall elect the Chairman from among their number who shall be a Non-Executive Director.

In order to form a quorum in respect of a meeting of the Committee, the members present must be wholly ora majority of whom must be Non-Executive Directors.

(b) Frequency of meetings

Meetings shall be held not less than once a year. The Company Secretary shall be the Secretary of theCommittee.

(c) Authority

The Committee is authorized to draw from outside advice as and when necessary in forming itsrecommendation to the Board on the remuneration of the Executive Directors in all its forms. ExecutiveDirectors should play no part in decisions on their own remuneration and should abstain from discussion oftheir own remuneration.

The determination of the remuneration packages of the Non-Executive Directors, including Non-ExecutiveChairman, should be a matter for the Board as a whole. The individuals concerned should abstain fromdiscussion of their own remuneration.

(d) Duties

The duty of the Committee is to recommend to the Board the structure and level of remuneration of ExecutiveDirectors.

(e) Reporting procedures


During the financial year ended 31 March 2004, the RC met once to consider the remuneration of the ExecutiveChairman and Managing Director for 2004.

STA

TEM

ENT

OF

CO

RP

OR

ATE

GO

VER

NA

NC

E

DIRECTORS’ REMUNERATION

The details of the remuneration of each Director during the financial year ended 31 March 2004 are as follows:

(a) Total Remuneration

Basic Benefits- AttendanceSalary Bonuses Fees in-kind Fee TotalRM RM RM RM RM RM

Executive

Sia Kwee Mow @ Sia Hok Chai 443,520 - - 16,925 - 460,445Sia Teong Heng 336,000 - - - 336,000

Non Executive

Mun Chong Shing @ Mun Chong Tian - - 12,000 - 2,400 14,400Dato’ Lim Phaik Gan - - 12,000 - 3,600 15,600Dato’ Dr. Norraesah Bt. Haji Mohamad - - 13,000 - 3,900 16,900Dato’ Zainol Abidin Bin Haji A. Hamid - - 6,000 - 600 6,600

(appointed on 10 October 2003)Ahmad Fizal Bin Othman - - 2,000 - - 2,000

(appointed on 24 February 2004)Datuk Sim Peng Choon - - 5,000 - 600 5,600

(resigned on 19 August 2003)Abdul Rahman Bin A. Shukor - - - - - -

(ceased on 19 August 2003)(alternate to Datuk Sim Peng Choon)

Vincent Koh Kok Kee - - 2,000 - 900 2,900(resigned on 31 May 2003)

Total 779,520 - 52,000 16,925 12,000 860,445

(b) Directors’ remuneration by bands

Executive Non-Executive Total

Nil - - -RM1 to RM50,000 - 7 7RM50,001 to RM100,000 - - -RM100,001 to RM150,000 - - -RM150,001 to RM200,000 - - -RM200,001 to RM250,000 - - -RM250,001 to RM300,000 - - -RM300,001 to RM350,000 1 - 1RM350,001 to RM400,000 - - -RM400,001 to RM450,000 - - -RM451,000 to RM500,000 1 - 1

Total 2 7 9

STA

TEM

ENT

OF

CO

RP

OR

ATE

GO

VER

NA

NC

E

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is responsible for presenting a balanced and meaningful assessment of the Group’s financial performanceand prospects primarily through the annual report/financial statements and quarterly announcements of the Group’sresults.

The Responsibility Statement by the Directors pursuant to Bursa Securities Listing Requirements is set out on page13.

Internal Control

The Group’s Statement on Internal Control is set out on pages 30 to 31.

Relationship with Auditors

The role of the Audit Committee in relation to the external auditors is explained in the Audit Committee Report.

The Group has paid RM25,000 of non-audit fees to the external auditors for the financial year ended 31 March 2004.

Relationship with Shareholders and Investors

The primary tools of communication with the shareholders of the Company are through the annual report,announcements through Bursa Securities and circulars. All queries from shareholders and members of public receivedthrough phone calls or letters are handled by the Executive Directors, Group Chief Financial Officer and CompanySecretary.

At the annual general meeting and extraordinary general meeting, the Chairman gives shareholders ampleopportunity to participate through questions on the prospects, performance of the Group and other matters ofconcern to them with the Board.

ADDITIONAL COMPLIANCE INFORMATION

In conformance with the requirements of Bursa Securities, the following compliance information is provided:

Revaluation Policy on Landed Properties

The Group’s landed properties are stated at cost. There is no policy of regular revaluation of its landed properties asat the end of the financial year ended 31 March 2004.

Material Contracts Involving Directors’ and Substantial Shareholders’ Interest

Proposed Debts Settlement Totalling RM37,720,372 By Smart Home Sdn Bhd To Syarikat Siah Brothers ConstructionSdn Bhd And Mixwell (Malaysia) Sdn Bhd, being wholly-owned Subsidiaries Of SBC Corporation Berhad (“ProposedDebt Settlement”).

SBC Corporation Berhad (“SBC”) and its wholly-owned subsidiaries, Syarikat Siah Brothers Construction Sdn Bhd(“SSBC”) and Mixwell (Malaysia) Sdn Bhd (“Mixwell”), had on 16 January 2004 entered into a deed of settlementwith Smart Home Sdn Bhd (“SHSB”) whereby SHSB has agreed to settle the entire indebtedness amounting toRM37,720,372 (“Indebtedness”) owing by SHSB to Mixwell and SSBC collectively.

STA

TEM

ENT

OF

CO

RP

OR

ATE

GO

VER

NA

NC

E

ADDITIONAL COMPLIANCE INFORMATION (CONT’D)

Material Contracts Involving Directors’ and Substantial Shareholders’ Interest (Cont’d)

Mr Sia Kwee Mow @ Sia Hok Chai (“SKM”) is the Executive Chairman and a major shareholder of SBC. He is also amajor shareholder of SHSB. Accordingly, he is deemed interested in the Proposed Debt Settlement.

Mr Sia Teong Heng (“STH”) is the son of SKM. He is the Managing Director and also a major shareholder of SBC.Accordingly, he is deemed interested in the Proposed Debt Settlement by virtue of him being a person connected toSKM pursuant to Section 122A of the Companies Act, 1965.

LOM Holdings Sdn Bhd (“LOM”) is a major shareholder of SBC and is connected to SKM and STH by virtue of Section122A of the Companies Act, 1965 as SKM and STH are major shareholders of LOM. Evergreen Legacy Sdn Bhd(“Evergreen”), a wholly-owned subsidiary of LOM, is also a major shareholder of SBC. Accordingly, LOM and Evergreenare deemed interested in the Proposed Debt Settlement.

The Indebtedness was mainly in relation to a property development project of residential houses undertaken inBandar Utama Batang Kali for which Mixwell, as the turnkey contractor for the said project, appointed SHSB as themain contractor and SHSB in turn appointed SSBC as the works contractor. The indebtedness comprises thefollowing:

Indebtedness Owing To Amount Owing (RM)

Construction work done by SSBC for SHSB SSBC 8,224,762Payments made on behalf of SHSB by Mixwell to subcontractors

of SHSB for construction work done for SHSB Mixwell 20,173,275Management fees payable by SHSB to Mixwell Mixwell 8,700,000Payments made on behalf of SHSB by Mixwell for operating

expenses incurred by SHSB Mixwell 622,335

37,720,372

SHSB shall settle the indebtedness in kind by transferring and/or procuring the transfer of six (6) parcels of landlocated at Batang Kali, Selangor; Setapak, Kuala Lumpur; Gombak, Selangor; Hulu Yam, Selangor; and Sungei Besi,Kuala Lumpur totaling RM37,828,242, to SBC and/or its nominee(s).

The Proposed Debt Settlement was approved by the shareholders of the Company at the Extraordinary GeneralMeeting held on 16 April 2004. The Foreign Investment Committee (“FIC”) has via its letter dated 6 April 2004, whichwas received on 6 May 2004, notified that it has no objection to the Proposed Debt Settlement.

STA

TEM

ENT

ON

IN

TER

NA

L C

ON

TRO

L

INTRODUCTION

In accordance with paragraph 15.27 (b) of the Listing Requirements of Bursa Malaysia Securities Berhad (“BursaSecurities”), the Board of SBC Corporation Berhad (“herein known as the Company”) is pleased to include a statementon the state of the Company’s internal controls as guided by the Bursa Securities’ Statement on Internal Control:Guidance for Directors of Public Listed Companies (“the Guidance”). The statement below outlines the nature andscope of the internal controls of the Group during the financial year ended 31 March 2004.

BOARD RESPONSIBILITY

The Board affirms its responsibility for the Company’s system of internal controls, inclusive of the risk managementframework, and for reviewing the adequacy and integrity of the internal control system to ensure that shareholders’interests and investment are safeguarded. In this regard, the responsibility of reviewing the adequacy and integrityof the internal control system has been delegated to the Audit Committee, which is empowered by its terms ofreference to seek the assurance on the adequacy and integrity of the internal control system through independentreviews conducted by the internal audit function, external auditors and management.

Due to inherent limitations to any system on internal controls, Management can only put into effect an internalcontrol system which is designed to reduce rather than eliminate all the risks that may impede the achievement ofthe Company’s business objectives. Therefore, the internal control system can only provide reasonable and notabsolute assurance against material misstatement or loss.

RISK MANAGEMENT FRAMEWORK

The Board maintains an ongoing commitment to strengthen the Group’s control environment and processes. Key risksrelating to the Group’s operations and strategic and business plans are addressed at daily / weekly / monthlymeetings attended by Senior Management and key staff. The responsibility of managing the risks of each departmentlies with the respective Heads of Department and it is during these meetings, significant risks identified and thecorresponding internal controls implemented are communicated to Senior Management.

Management with the existence of external consultants has updated risk profile of the Group. The updated riskprofile was presented to the Audit Committee on 24 August 2004.

The above is the description of the processes adopted by Management to identify and manage the Group’s risks.

statement on internal control

STA

TEM

ENT

ON

IN

TER

NA

L C

ON

TRO

L

OTHER KEY ELEMENTS OF INTERNAL CONTROLS

The other key elements of the Group’s internal control systems are:

• The independent internal audit function reports directly to the Audit Committee. Based on their review duringthe financial year ended 31 March 2004, the Board is pleased to report that there were no major weaknessesnoted in the areas audited. All recommendations proposed by the internal audit function in improving theinternal controls are considered and implemented in concert with Management.

• Monthly management meetings convened to discuss the Group’s operations and performance. This includes themonthly monitoring of results against budget, with significant variance explained and appropriate actiontaken.

• Daily/weekly staff meetings convened to discuss the progress of projects.

• Clear lines of responsibilities and authority limits of all departments. This internal control acts as a check andbalance.

• Tender Committee approves the involvement of the Group in any property development and constructionprojects. A minimum number of three quotations are called for and tenders are awarded based on factors suchas track record, quality and speed of delivery.

• A sound financial system that captures every single financial transaction. From this data captured, the Groupproduces consolidated monthly management accounts and quarterly performances, which allow themanagement to focus on areas of concern.

• Regular site visits by members of the senior management team.

audit committee report

The Board of SBC Corporation Berhad is pleased to present the Audit Committee Report for the financial year ended31 March 2004.

COMPOSITION AND MEETINGS

At the date of this report, the Audit Committee comprises of the following members and details of attendance ofeach member at the Audit Committee meetings held during the financial year ended 31 March 2004 are as follows:

Number of meetings heldduring the financial year Attendance ended 31 March 2004 of meetings

Chairperson: Dato’ Dr. Norraesah Bt. Haji Mohamad 4 4(Independent Non-Executive Director)

Members: Dato’ Lim Phaik Gan (appointed on 19 August 2003) 4 3(Independent Non-Executive Director)

Sia Teong Heng (appointed on 19 August 2003) 4 3(Managing Director)

Ahmad Fizal Bin Othman (appointed on 24 February 2004) 4 Not Applicable(Independent Non-Executive Director)

Datuk Sim Peng Choon (resigned on 19 August 2003) 4 1(Non-Executive Director)

Vincent Koh Kok Kee (resigned on 31 May 2003) 4 1(Independent Non-Executive Director)

The Audit Committee, normally, meets 4 times during the financial year with additional meetings convened betweenscheduled meetings, if necessary, to deliberate on urgent and significant matters.

The Group Chief Financial Officer, the outsourced internal auditor and the external auditors attended the meetingsat the invitation of the Audit Committee, where considered necessary. The Company Secretary is responsible fordistributing the agenda of the meetings and relevant information to the Audit Committee members well in advanceof their meetings, and recording the proceedings of the Audit Committee meetings.

AU

DIT

CO

MM

ITTE

E R

EPO

RT

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The following activities were undertaken by the Audit Committee during the financial year ended 31 March 2004:

(a) Discussed and reviewed the external auditors’ plan, scope and nature of work, results of their audit.

(b) Reviewed the report of the external auditors in relation to their findings and accounting issues arising fromthe audit of the Group’s annual financial results.

(c) Reviewed the unaudited quarterly report on the consolidated results of the Group for the quarters ended 31March 2003, 30 June 2003, 30 September 2003 and 31 December 2003.

(d) Reviewed related party transactions and conflicts of interest situation that may arise within the Group.

(e) Approved the internal audit plan and reviewed the internal audit reports prepared by the outsourced internalaudit function in conjunction with their execution of the approved internal audit plan and the follow up onthe remedial actions implemented by Management in respect of the internal control weaknesses identified.

(f) Noted new developments in accounting standard issued by the Malaysian Accounting Standards Board.

(g) Reviewed compliance with certain government and authorities regulations.

(h) Assessed the performance of the Company’s financial management.

SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION

The internal audit function of the Group is outsourced to external consultants and they are responsible for assistingthe Audit Committee through the execution of the approved internal audit plan to ensure that the Group’s internalcontrols system is adequately and operating effectively.

During the financial year ended 31 March 2004, the areas reviewed by the internal audit function were as follows:

(a) Documentation maintenance and custodian;

(b) Launch of projects;

(c) Sales administration processing;

(d) Progress of construction;

(e) Processing of collections;

(f) Property management;

(g) Reviewed and updated the risk profile of the Group; and

(h) Cash flow management.

A number of minor internal control weaknesses were identified, all of which have been appropriately addressed andnone have resulted in material losses, contingencies or uncertainties that would require disclosure in the annualreport.

AU

DIT

CO

MM

ITTE

E R

EPO

RT

AU

DIT

CO

MM

ITTE

E R

EPO

RT

SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION (CONT’D)

The internal audit plan for 2004/2005 was presented to the Audit Committee for review and approval subsequent tothe financial year ended 31 March 2004 and covers the following areas:

(i) Procurement of services;

(ii) Pre-development processes;

(iii) Sales administration processes;

(iv) Monitoring of the progress of construction;

(v) Handover procedures and complaint management;

(vi) Billings and collection procedures;

(vii) Related party transactions;

(viii) Property management; and

(ix) Assist in the update of the risk profile.

The abovementioned areas to be reviewed are applicable for the Group’s projects which are located in Kuantan, KotaKinabalu, Klang and Jalan Ipoh, Kuala Lumpur.

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

Membership

The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of atleast 3 directors, a majority of whom are independent. At least one member of the Committee must be:

(i) a member of the Malaysian Institute of Accountants (“MIA”); or

(ii) if he is not a member of the MIA, he must have at least 3 years working experience and• he must have passed the examinations specified in Part I of the 1st Schedule to the Accountant Act,

1967; or

• he must be a member of one of the associations of accountants specified in Part II of the 1st Scheduleto the Accountants Act, 1967.

The members of the Committee shall elect a Chairman from amongst their number who shall be an independentdirector. In order to form a quorum in respect of a meeting of the Committee, the majority of the members presentmust be independent directors.

Attendance At Meeting

The Group Chief Financial Officer, the Head of Internal Audit and a representative of the external auditors shallnormally attend meetings. Other directors and employees of the Company may attend meetings at the Committee’sinvitation. However, at least once a year the Committee shall meet with the external auditors without any executivedirector present.

The Company Secretary shall be the secretary of the Committee.

AU

DIT

CO

MM

ITTE

E R

EPO

RT

TERMS OF REFERENCE OF THE AUDIT COMMITTEE (CONT’D)

Frequency Of Meetings

Meetings shall be held not less than four times a year. The external auditors may request a meeting if they considerthat one is necessary.

Authority

The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorisedto seek any information it requires from any employee and all the employees are directed to cooperate with anyrequest made by the Committee.

The Committee is authorised by the Board to obtain outside legal or other independent professional advice and tosecure the attendance of an outsider with relevant experience and expertise, if it considers this necessary.

Duties

The duties of the Audit Committee shall be:

(1) To consider the appointment of the external auditors, the audit fees and any questions of nomination,resignation or dismissal.

(2) To discuss with the external auditors before the audit commences the nature and scope of the audit and ensureco-ordination where more than one audit firm is involved.

(3) To discuss with the external auditors the evaluation of the system of internal controls, audit report and ensureassistance given by the employees to the external auditors.

(4) To review the quarterly and year-end financial statements before submission to the Board, focusing particularlyon:

• any changes or implementation of charges in accounting policies and practices;• major judgement areas;• significant adjustments arising from the audit;• significant and unusual events;• the going concern assumption;• compliance with accounting standards; and• compliance with stock exchange and legal requirements.

(5) To discuss problems and reservations arising from the interim and final audits and any matters the externalauditor may wish to discuss in the absence of management, where necessary.

(6) To review the external auditors’ management letter and management’s response.

AU

DIT

CO

MM

ITTE

E R

EPO

RT

TERMS OF REFERENCE OF THE AUDIT COMMITTEE (CONT’D)

Duties (Cont’d)

(7) To do the following where an internal audit function exists:• review the adequacy of the scope, functions and resources of the internal audit function and that it has

the necessary authority to carry out its work.

• review the internal audit programme and processes and results of the internal audit programme,processes and investigation and where necessary, ensure that appropriate action is taken on therecommendations of the internal audit function.

• review any appraisal or assessment of the performance of the members of the internal audit function.

• approve the appointment or termination of senior staff members of the internal audit function.

• inform itself of resignations of internal audit staff members and provide the resigning staff member anopportunity to submit his reasons for resigning.

(8) To consider any related party transactions and conflict of interest situations that may arise within the Companyor Group including any transaction, procedure or course of conduct that raises questions of managementintegrity.

(9) To consider the findings of internal investigations and management’s response and ensure co-ordinationbetween internal and external auditors.

(10) To consider other topics, as defined by the Board.

Reporting Procedure


directors’ report

statement by directors

statutory declaration

report of the auditors

balance sheets

income statements

statements of changes in equity

cash flow statements

notes to the financial statements

38

53

50

49

48

46

45

44

44

financial statements

DIR

ECTO

RS’

REP

OR

Tdirectors’ report

The directors hereby submit their report and the audited financial statements of the Group and of the Company forthe financial year ended 31 March 2004.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding and the provision of management andadministrative services to the subsidiaries. The principal activities of the subsidiaries are disclosed in Note 6 to thefinancial statements. There have been no significant changes in the nature of these activities during the financialyear.

CHANGE OF NAME

On 21 October 2003, the Company changed its name from Siah Brothers Corporation Berhad to SBC CorporationBerhad.

RESULTS

THE GROUP THE COMPANYRM RM

Profit/(Loss) after taxation for the financial year 2,072,995 (352,434)

DIVIDENDS

Since the end of the previous financial year, the Company paid a dividend of 5.5% per Irredeemable ConvertibleCumulative Preference Share (“ICCPS”) less 28% tax amounting to RM270,587 in respect of the previous financialyear, in accordance with the terms of issue of the ICCPS and a first and final dividend of 1% per ordinary share less28% tax amounting to RM544,330 in respect of the previous financial year.

For the current financial year,

(a) the directors have declared the payment of a dividend of 5.5% per ICCPS less 28% tax amounting toRM270,587, in accordance with the terms of issue of the ICCPS; and

(b) the directors recommend the payment of first and final dividend of 1% per ordinary share less 28% taxamounting to RM593,532.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year except as disclosed in thefinancial statements.

ISSUES OF SHARES AND DEBENTURES

During the financial year,

(a) there were no changes in the authorised and issued and paid-up capital of the Company; and

(b) there were no issues of debentures by the Company.

DIR

ECTO

RS’

REP

OR

T

EMPLOYEE SHARE OPTION SCHEME (“ESOS”)

Pursuant to the ESOS which was implemented on 14 July 2000, the movement in the options to subscribe for newshares of RM1 each in the Company at an exercise price of RM1.40 per share is as follows:

NUMBER OF ORDINARY SHARES OFRM1 EACH UNDER OPTION

At 1 April 2003 1,664,000

Lapsed during the financial year due to:- exercised during the financial year -- staff resignation (174,000)

At 31 March 2004 1,490,000

The salient features of the ESOS are as follows:

(i) eligible employees are employees who have served in the employment of any company within the Group for atleast one year of continuous service;

(ii) the total number of new ordinary shares to be offered under the ESOS shall not exceed 10% of the total issuedand paid-up ordinary share capital of the Company at any point of time during the existence of the ESOS whichshall be in force for a period of 5 years from the date of offer;

(iii) the possible allocation for any single eligible employee during the existence of the ESOS shall not be less than1,000 or more than 450,000 shares subject to the maximum allowable allocation according to their respectivecategories;

(iv) the subscription price was based on the weighted average market price of the shares as shown in the DailyOfficial List of the Bursa Malaysia Securities Berhad for the 5 market days prior to the date of offer with anallowance for a discount of not more than 10% therefrom or at par value, whichever is higher; and

(v) the shares to be allotted upon any exercise of an option will, upon allotment, rank pari passu in all respectswith the existing issued and paid-up ordinary shares of the Company.

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares inthe Company, other than the existing options under the ESOS and Transferable Subscription Rights (“TSRs”). TheCompany issued a total of 17,076,200 TSRs, the expiry date of which had been extended to 20 February 2004. TheTSRs entitle the holders thereof the right to subscribe for new ordinary shares of RM1 each on the basis of 1 newordinary share of RM1 each for every TSR held at a pre-determined subscription price of RM3.50 per share.

During the financial year, none of the subscription rights under the TSRs were exercised and the TSRs expired on 20 February 2004.

DIR

ECTO

RS’

REP

OR

T

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable stepsto ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance fordoubtful debts, and satisfied themselves that there are no known bad debts and that adequate allowance had beenmade for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would require the writing off of baddebts, or additional allowance for doubtful debts in the financial statements of the Group and of the Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable stepsto ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course ofbusiness, including their values as shown in the accounting records of the Group and of the Company, have beenwritten down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributedto the current assets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which renderadherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleadingor inappropriate.

CONTINGENT AND OTHER LIABILITIES

The contingent liabilities of the Company are disclosed in Note 43 to the financial statements. At the date of thisreport, there does not exist:

(a) any charge on the assets of the Group and of the Company that has arisen since the end of the financial yearwhich secures the liabilities of any other person; or

(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

No contingent or other liability of the Group and of the Company has become enforceable or is likely to becomeenforceable within the period of twelve months after the end of the financial year which, in the opinion of thedirectors, will or may substantially affect the ability of the Group and of the Company to meet their obligations whenthey fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this reportor the financial statements of the Group and of the Company which would render any amount stated in the financialstatements misleading.

DIR

ECTO

RS’

REP

OR

T

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company during the financial year were not, in the opinion ofthe directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item,transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantiallythe results of the operations of the Group and of the Company for the financial year.

DIRECTORS

The directors who served since the date of the last report are as follows:

SIA KWEE MOW @ SIA HOK CHAI SIA TEONG HENGMUN CHONG SHING @ MUN CHONG TIANDATO’ LIM PHAIK GANDATO’ DR. NORRAESAH BT HAJI MOHAMADDATUK SIM PENG CHOON (RESIGNED ON 19.8.2003)ABDUL RAHMAN BIN A. SHUKOR (ALTERNATE TO DATUK SIM PENG CHOON; CEASED ON 19.8.2003)DATO’ ZAINOL ABIDIN BIN HAJI A. HAMID (APPOINTED ON 10.10.2003)AHMAD FIZAL BIN OTHMAN (APPOINTED ON 24.2.2004)

Pursuant to Section 129 of the Companies Act, 1965, Sia Kwee Mow @ Sia Hok Chai and Dato’ Lim Phaik Gan retireat the forthcoming Annual General Meeting and offer themselves for re-appointment under the provisions of Section129(6) of the said Act to hold office until the next Annual General Meeting of the Company.

Pursuant to Article 77 of the Articles of Association of the Company, Sia Teong Heng retires by rotation at theforthcoming Annual General Meeting and, being eligible, offers himself for re-election.

Pursuant to Article 84 of the Articles of Association of the Company, Dato’ Zainol Abidin Bin Haji A. Hamid andAhmad Fizal Bin Othman retire at the forthcoming Annual General Meeting and offer themselves for re-election.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of thefinancial year, in shares, TSRs and options under the ESOS in the Company during the financial year are as follows:

NUMBER OF ORDINARY SHARES OF RM1 EACHAT AT

1.4.2003 BOUGHT SOLD 31.3.2004

DIRECT INTERESTS

SIA KWEE MOW @ SIA HOK CHAI 1,480,800 - - 1,480,800SIA TEONG HENG 334,992 993,000 - 1,327,992MUN CHONG SHING @ MUN CHONG TIAN 21,782 - - 21,782DATO’ LIM PHAIK GAN 11,000 - (11,000) -

INDIRECT INTERESTS

SIA KWEE MOW @ SIA HOK CHAI 19,498,523 - - 19,498,523SIA TEONG HENG 19,498,523 - - 19,498,523

DIR

ECTO

RS’

REP

OR

T

DIRECTORS’ INTERESTS (CONT’D)

TSRsAT AT

1.4.2003 BOUGHT EXPIRED 31.3.2004

DIRECT INTERESTS

SIA KWEE MOW @ SIA HOK CHAI 3,078,500 - (3,078,500) -DATO’ DR. NORRAESAH BT HAJI MOHAMAD 4,000 - (4,000) -MUN CHONG SHING @ MUN CHONG TIAN 12,500 - (12,500) -

INDIRECT INTERESTS

SIA KWEE MOW @ SIA HOK CHAI 1,746,780 - (1,746,780) - SIA TEONG HENG 1,746,780 - (1,746,780)

NUMBER OF ORDINARY SHARES OF RM1 EACHUNDER OPTION

AT AT1.4.2003 GRANTED EXERCISED 31.3.2004

DIRECT INTERESTS

SIA KWEE MOW @ SIA HOK CHAI 450,000 - - 450,000SIA TEONG HENG 350,000 - - 350,000

By virtue of their interests in the Company, Sia Kwee Mow @ Sia Hok Chai and Sia Teong Heng are deemed to haveinterests in the shares in the subsidiaries to the extent of the Company’s interests, in accordance with Section 6A ofthe Companies Act, 1965.

None of the other directors holding office at the end of the financial year had any interests in shares, TSRs or optionsunder the ESOS of the Company or its related corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (otherthan a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shownin the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract madeby the Company or a related corporation with the director or with a firm of which the director is a member, or witha company in which the director has a substantial financial interest except for any benefits which may be deemedto arise from transactions entered into in the ordinary course of business with companies in which certain directorshave substantial financial interests as disclosed in Note 42 to the financial statements.

Neither during nor at the end of the financial year was the Company or its subsidiaries a party to any arrangementswhose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures ofthe Company or any other body corporate except for the share options granted pursuant to the ESOS.

DIR

ECTO

RS’

REP

OR

T

SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

The significant event subsequent to the balance sheet date involving the Group and the Company is disclosed in Note 45 to the financial statements.

AUDITORS

The auditors, Messrs. Horwath, have expressed their willingness to continue in office.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

Sia Kwee Mow @ Sia Hok Chai

Mun Chong Shing @ Mun Chong Tian

Kuala Lumpur20 July 2004

STA

TEM

ENT

BY

DIR

ECTO

RS

STA

TUTO

RY

DEC

LAR

ATI

ON

We, Sia Kwee Mow @ Sia Hok Chai and Mun Chong Shing @ Mun Chong Tian, being two of the directors of SBC Corporation Berhad (formerly known as Siah Brothers Corporation Berhad), state that, in the opinion of thedirectors, the financial statements set out on pages 46 to 87 are drawn up in accordance with applicable approvedaccounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair viewof the state of affairs of the Group and of the Company at 31 March 2004 and of their results and cash flows forthe financial year ended on that date.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

Sia Kwee Mow @ Sia Hok Chai Mun Chong Shing @ Mun Chong Tian


I, Ng Kee Chye, I/C No. 640324-06-5691, being the officer primarily responsible for the financial management ofSBC Corporation Berhad (formerly known as Siah Brothers Corporation Berhad), do solemnly and sincerely declarethat the financial statements set out on pages 46 to 87 are, to the best of my knowledge and belief, correct, and Imake this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of theStatutory Declarations Act, 1960.

Subscribed and solemnly declared byNg Kee Chye, I/C No. 640324-06-5691,at Kuala Lumpur in the Federal Territory on this 20 July 2004

Ng Kee Chye

Before me,

Haron Hashim (W128)Commissioner for Oaths


statement by directors

statutory declaration

REP

OR

T O

F TH

E A

UD

ITO

RS

We have audited the financial statements set out on pages 46 to 87. The preparation of the financial statements isthe responsibility of the Company’s directors. Our responsibility is to express an opinion on the financial statementsbased on our audit.

We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards requirethat we plan and perform the audit to obtain reasonable assurance that the financial statements are free of materialmisstatement. Our audit included examining, on a test basis, evidence relevant to the amounts and disclosures in thefinancial statements. Our audit also included an assessment of the accounting principles used and significantestimates made by the directors as well as evaluating the overall adequacy of the presentation of information in thefinancial statements. We believe our audit provides a reasonable basis for our opinion.

In our opinion,

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965and applicable approved accounting standards in Malaysia so as to give a true and fair view of:

(i) the state of affairs of the Group and of the Company at 31 March 2004 and their results and cash flowsfor the financial year ended on that date; and

(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financialstatements of the Group and of the Company; and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by theCompany and by the subsidiaries of which we have acted as auditors have been properly kept in accordancewith the provisions of the said Act.

We have considered the financial statements and the auditors’ reports thereon of the subsidiaries for which we havenot acted as auditors, as indicated in Note 6 to the financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’sfinancial statements are in form and content appropriate and proper for the purposes of the preparation of theconsolidated financial statements and we have received satisfactory information and explanations required by us forthose purposes.

The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did notinclude any comments made under Section 174 (3) of the said Act.

Horwath Oon Kien HoeFirm No: AF 1018 Approval No: 1772/11/04 (J/PH)Chartered Accountants Partner


report of the auditorsto the members of SBC Corporation Berhad

(Formerly known as Siah Brothers Corporation Berhad)

BA

LAN

CE

SHEE

TS

The annexed notes form an integral part of these financial statements.

balance sheetsat 31 March 2004

THE GROUP THE COMPANY2004 2003 2004 2003

NOTE RM RM RM RM

ASSETS

Investment in subsidiaries 6 - - 211,064,785 211,064,785Interest in associates 7 112,064,656 110,700,175 2,400,000 2,400,000Property, plant and equipment 8 36,246,114 35,812,639 35,428 53,152Investment properties 9 41,391,466 41,774,547 - -Other assets 10 247,107 382,107 - -Goodwill on consolidation 11 27,317,640 27,271,844 - -

217,266,983 215,941,312 213,500,213 213,517,937

CURRENT ASSETS

Inventories 12 8,604,731 14,109,911 - -Property development in progress 13 50,449,300 54,738,163 - -Receivables 14 66,593,226 68,079,974 209,050 123,962Amount owing by contract customers 15 4,775,992 685,256 - -Amounts owing by subsidiaries 16 - - 55,919,091 52,644,365Amount owing by associates 17 5,533,926 5,525,184 11,434 11,434Tax recoverable 18 8,331,990 5,350,142 11,823,151 11,265,166Short term deposits with licensed banks 19 1,407,125 1,422,125 1,239,225 1,239,225Cash and bank balances 20 3,474,278 6,084,094 2,012,100 5,201,131

149,170,568 155,994,849 71,214,051 70,485,283

LESS: CURRENT LIABILITIES

Amount owing to contract customers 15 1,601,053 4,769,567 - -Payables 21 28,718,800 26,618,315 230,925 331,492Amounts owing to subsidiaries 16 - - 12,563,323 12,635,183Amounts owing to associates 17 78,236 65,500 - -Amounts owing to directors 22 2,450,481 2,450,481 1,967,680 1,967,680Dividend payable 270,587 270,587 270,587 270,587Short term borrowings 23 39,941,312 47,707,856 11,580,169 11,413,736ABBA Bonds 24 2,478,450 2,478,450 2,478,450 2,478,450

75,538,919 84,360,756 29,091,134 29,097,128

NET CURRENT ASSETS 73,631,649 71,634,093 42,122,917 41,388,155

290,898,632 287,575,405 255,623,130 254,906,092

BA

LAN

CE

SHEE

TS



NOTE RM RM RM RM

FINANCED BY:

Share capital 25 82,435,000 82,435,000 82,435,000 82,435,000Reserves 26 135,939,954 134,681,876 133,476,597 134,643,948

Shareholders’ equity 218,374,954 217,116,876 215,911,597 217,078,948ABBA Bonds 24 39,711,533 37,827,144 39,711,533 37,827,144Deferred liabilities 27 32,812,145 32,631,385 - -

290,898,632 287,575,405 255,623,130 254,906,092

NET TANGIBLE ASSETS PER ORDINARY SHARE (RM) 31 244 sen 242 sen

INC

OM

E ST

ATE

MEN

TSincome statements

for the financial year ended 31 March 2004



NOTE RM RM RM RM

TURNOVER 32 86,316,639 69,828,919 7,220,737 8,982,613

COST OF SALES 33 (68,900,779) (48,699,540) - -

GROSS PROFIT 17,415,860 21,129,379 7,220,737 8,982,613

OTHER OPERATING INCOME 3,911,925 3,097,647 - -

ADMINISTRATIVE EXPENSES (7,420,741) (6,793,398) (891,180) (1,069,681)

OTHER OPERATING EXPENSES (3,270,390) (9,417,624) (326,746) (156,715)

PROFIT FROM OPERATIONS 10,636,654 8,016,004 6,002,811 7,756,217

FINANCE COSTS (7,263,617) (6,793,334) (5,533,390) (4,464,721)

SHARE OF PROFIT OF ASSOCIATES 3,623,112 3,926,816 - -

PROFIT BEFORE TAXATION 34 6,996,149 5,149,486 469,421 3,291,496

TAXATION 35 (4,923,154) (3,138,593) (821,855) (913,324)

PROFIT/(LOSS) AFTER TAXATION 2,072,995 2,010,893 (352,434) 2,378,172

Earnings per share- basic 36 2.4 sen 2.4 sen- diluted 36 N/A N/A

Dividend per ordinary share- final 37 - 1 sen

STA

TEM

ENTS

OF

CH

AN

GES

IN

EQ

UIT

Y

statements of changes in equityfor the financial year ended 31 March 2004


SHARESHARE APPLICATION SHARE RETAINED CAPITAL

CAPITAL ACCOUNT PREMIUM PROFITS RESERVE TOTALNOTE RM RM RM RM RM RM

THE GROUP

Balance at 1.4.2002 57,301,943 115,600,000 20,995,752 20,328,676 1,199,999 215,426,370Issuance of shares 25,133,057 - - - - 25,133,057Reversal of share

application account - (115,600,000) - - - (115,600,000)Share premium arising

from issuance of shares - - 90,471,143 - - 90,471,143Expenses incurred on

conversion of ICULS - - (54,000) - - (54,000)Profit after taxation for

the financial year - - - 2,010,893 - 2,010,893Dividends 37 - - - (270,587) - (270,587)

Balance at 31.3.2003/1.4.2003 82,435,000 - 111,412,895 22,068,982 1,199,999 217,116,876Profit after taxation for


Balance at 31.3.2004 82,435,000 - 111,412,895 23,327,060 1,199,999 218,374,954

THE COMPANY

Balance at 1.4.2002 57,301,943 115,600,000 20,995,752 21,123,468 - 215,021,163Issuance of shares 25,133,057 - - - - 25,133,057Reversal of share

application account - (115,600,000) - - - (115,600,000)Share premium arising

from issuance of shares - - 90,471,143 - - 90,471,143Expenses incurred on

conversion of ICULS - - (54,000) - - (54,000)Profit after taxation for


Balance at 31.3.2003/1.4.2003 82,435,000 - 111,412,895 23,231,053 - 217,078,948Loss after taxation for

the financial year - - - (352,434) - (352,434)Dividends 37 - - - (814,917) - (814,917)

Balance at 31.3.2004 82,435,000 - 111,412,895 22,063,702 - 215,911,597

The retained profits of the Group are attributable to/(absorbed by):2003 2004RM RM

The Company 22,063,702 23,231,053Subsidiaries (15,582,983) (16,643,931)Associates 16,846,341 15,481,860

23,327,060 22,068,982

CA

SH F

LOW

STA

TEM

ENTS

cash flow statementsfor the financial year ended 31 March 2004



NOTE RM RM RM RM

CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES

Profit before taxation 6,996,149 5,149,486 469,421 3,291,496

Adjustments for:Allowance for doubtful debts 828,553 8,625,447 - -Amortisation of bonds expenses 303,272 134,364 303,272 134,364Bad debts written off - 110,965 - -Depreciation and amortisation of

property, plant and equipment 446,060 406,603 23,474 22,351Interest expense / finance charges 7,110,435 6,407,721 5,506,995 4,442,243Loss on disposal of investment

properties 1,557,400 150,154 - -Plant and equipment written off 13,663 - - -Other investment written off 135,000 - - -Dividend income - - (4,928,000) (8,090,000)Gain on disposal of property,

plant and equipment (313,882) (7,302) - -Interest income (107,322) (110,604) (612,688) (622,613)Writeback of diminution in

value of inventory - (6,527) - -Writeback of allowance for

doubtful debts - (1,988,813) - -Share of profit in associates (3,623,112) (3,926,816) - -

Operating profit/(loss) before working capital changes 13,346,216 14,944,678 762,474 (822,159)

Decrease in inventories 5,505,180 10,089,220 - -Decrease/(Increase) in property

development-in-progress 4,712,161 (15,568,195) - -Decrease/(Increase) in trade

and other receivables 658,195 11,175,302 (85,088) 6,277,255Increase/(Decrease) in trade

and other payables 1,707,814 (8,910,013) (100,567) 86,070(Decrease)/Increase in amount

owing to contract customers (7,259,250) 2,287,849 - -

CASH FROM OPERATIONS 18,670,316 14,018,841 576,819 5,541,166

Interest paid (3,402,444) (4,702,299) (1,375,706) (1,880,098)Taxes paid (6,780,583) (3,377,151) - -

NET CASH FROM/(FOR) OPERATING ACTIVITIES 8,487,289 5,939,391 (798,887) 3,661,068

CA

SH F

LOW

STA

TEM

ENTS



NOTE RM RM RM RM

CASH FLOWS FROM/(FOR) INVESTIING ACTIVITIES

Interest received 107,322 641,078 612,688 622,613Dividends received from subsidiaries - - 2,304,000 3,816,000Dividends received from associates 1,526,883 2,116,800 1,244,160 2,008,800Net cash outflow on acquisition of

subsidiary 38 - (34,835,444) - (35,000,000)Expenses incurred on acquisition

of subsidiary - - - (654,225)Purchase of property, plant and

equipment (924,876) (201,665) (5,750) -Purchase of investment properties (3,110,115) (3,438,068) - -Hotel development expenditure - (386,797) - -Proceeds from disposal of property,

plant and equipment 345,560 149,222 - -Proceeds from disposal of

investment properties 1,910,000 952,000 - -Incidental expenses on

investment properties (20,000) (42,589) - -Withdrawal/(Placement) of cash

in sinking fund account 3,188,398 (5,198,398) 3,188,398 (5,198,398)

NET CASH FROM/(FOR) INVESTING ACTIVITIES 3,023,172 (40,243,861) 7,343,496 (34,405,210)

CASH FLOWS (FOR)/FROM FINANCING ACTIVITIES

Payment of bonds expenses (71,722) - (71,722) -Proceeds from issuance of shares - 4,200 - 4,200Proceeds from bonds 24 - 38,848,310 - 38,848,310Repayment of bonds 24 (2,478,450) (1,239,225) (2,478,450) (1,239,225)Net repayment by/(Advances to)

associates 3,994 (42,209) - 40,449Net advances to subsidiaries - - (3,346,586) (14,433,234)Dividend paid to shareholders

of the Company (544,330) - (544,330) -Payment of expenses on

conversion of ICULS - (54,000) - (54,000)Dividend paid to holders of ICCPS (270,587) (270,587) (270,587) (270,587)Repayment of revolving credit (500,000) (3,280,000) - (680,000)Repayment of loans (6,460,269) (4,103,454) - -Repayment to hire purchase payables (87,784) (87,784) - -

CA

SH F

LOW

STA

TEM

ENTS



NOTE RM RM RM RM

NET CASH (FOR)/FROM FINANCING ACTIVITIES (10,409,148) 29,775,251 (6,711,675) 22,215,913

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,101,313 (4,529,219) (167,066) (8,528,229)

CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR (18,870,095) (14,340,876) (5,171,778) 3,356,451

CASH AND CASH EQUIVALENTS ATEND OF THE FINANCIAL YEAR 39 (17,768,782) (18,870,095) (5,338,844) (5,171,778)

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

1. GENERAL INFORMATION

The Company is a public company limited by shares and is incorporated under the Malaysian Companies Act,1965. The domicile of the Company is in Malaysia. The registered office, which is also the principal place ofbusiness, is at Wisma Siah Brothers, 74A, Jalan Pahang, 53000 Kuala Lumpur.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolutionof the directors dated 20 July 2004.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding and the provision of managementand administrative services to the subsidiaries. The principal activities of the subsidiaries are disclosed in Note6 to the financial statements. There have been no significant changes in the nature of these activities duringthe financial year.

3. FINANCIAL RISK MANAGEMENT POLICIES

The Group's financial risk management policy seeks to ensure that adequate financial resources are availablefor the development of the Group's business whilst managing its currency, interest rate, market, credit, liquidityand cash flow risks. The Group operates within defined guidelines that are approved by the Board and thepolicies in respect of the major areas of treasury activity are as follows:

(a) Currency Risk

The Group does not have material foreign currency transactions, assets or liabilities and hence is notexposed to any significant or material currency risks.

(b) Interest Rate Risk

The Group obtains financing through bank borrowings and hire purchase. Its policy is to obtain the mostfavourable interest rates available without increasing its foreign currency exposure.

Surplus funds are placed with reputable financial institutions at the most favourable interest rates.

(c) Market Risk

The Group’s principal exposure to market risks arises mainly from changes in quoted equity prices. TheGroup does not use derivative instruments to manage equity risk.

(d) Credit Risk

The Group's exposure to credit risks, or the risk of counterparties defaulting, arises mainly from cashdeposits and receivables. The maximum exposure to credit risks is represented by the total carryingamount of these financial assets in the balance sheet reduced by the effects of any netting arrangementswith counterparties.

The Group does not have any major concentration of credit risk related to any individual customer orcounterparty except for the amount owing by a major customer which constitutes approximately 61%of trade receivables. The details pertaining to the aforesaid amount are set out in Note 14 to the financialstatements.

The Group manages its exposure to credit risk by investing its cash assets safely and profitably, and bythe application of credit approvals, credit limits and monitoring procedures on an ongoing basis.

notes to the financial statementsfor the financial year ended 31 March 2004

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

3. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(e) Liquidity and Cash Flow Risk

The Group's exposure to liquidity and cashflow risks arises mainly from general funding and businessactivities.

It practises prudent liquidity risk management by maintaining sufficient cash balances and theavailability of funding through certain committed credit facilities.

4. BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention and modified to include other basesof valuation as disclosed in other sections under significant accounting policies, and in compliance withapplicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.

MASB 32 - Property Development Activities has been adopted in the financial statements of the Group priorto its effective date.

5. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and all itssubsidiaries made up to 31 March 2004.

A subsidiary is defined as a company in which the parent company holds directly or indirectly more than50% of the equity share capital and has the power to exercise control over its financial and operatingpolicies.

All subsidiaries are consolidated using the acquisition method of accounting. Under the acquisitionmethod of accounting, the results of subsidiaries acquired or disposed off are included from the date ofacquisition or up to the date of disposal. At the date of acquisition, the fair value of the subsidiaries’ netassets are determined and these values are reflected in the consolidated financial statements.

Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised lossesare also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to thefinancial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(b) Goodwill or Negative Goodwill On Consolidation

Goodwill represents the excess of the fair value of the purchase consideration over the Group’s share ofthe fair values of the separable net assets of subsidiaries at the date of acquisition. Negative goodwillrepresents the excess of the Group’s share of the fair values of the separable net assets of subsidiaries atthe date of acquisition over the fair value of the purchase consideration.

Goodwill is stated net of negative goodwill. The net carrying amount of goodwill is reviewed annually,and is written down for impairment where it is considered necessary. The impairment value of goodwillis taken to the consolidated income statement.

(c) Associates

Associates are enterprises in which the Group exercises significant influence. Significant influence is thepower to participate in the financial and operating policy decisions of the associates but not control overthose policies. Investments in associates are accounted for in the consolidated financial statements bythe equity method of accounting.

Equity accounting involves recognising in the income statement the Group’s share of the results of theassociates for the period. The Group’s investment in associates is carried in the balance sheet at anamount that reflects its share of the assets of the associates and includes goodwill (net of accumulatedamortisation) on acquisition. At the date of acquisition, the fair value of the associates’ net assets aredetermined and these values are reflected in the consolidated financial statements. Equity accounting isdiscontinued when the carrying amount of the investment in an associate reaches zero, unless the Grouphas incurred obligations or guaranteed obligations in respect of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent ofthe Group’s interest in the associates; unrealised losses are also eliminated unless the transactionprovides evidence on impairment of the asset transferred.

Where necessary, in applying the equity method, adjustments are made to the financial statements ofassociates to ensure consistency of accounting policies with those of the Group.

(d) Property, Plant and Equipment

Property, plant and equipment, other than freehold land, are stated at cost less accumulated depreciationor amortisation. Freehold land is stated at cost and is not depreciated.

Leasehold land having an unexpired term of more than fifty years is not amortised. The non-amortisationof the long term leasehold land has no material effect on the financial statements.

Depreciation and amortisation is calculated under the straight-line method to write off the cost of theassets over their estimated useful lives. The principal annual rates used for this purpose are:

Sales office 20%Plant and machinery, construction machinery and equipment 5% - 20%Formwork, scaffoldings and containers 10% - 25%Office renovation, office equipment, computers, furniture and fittings, tools and fittings 5% - 20%Motor vehicles 20%

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS


(e) Impairment of Assets

The carrying amounts of assets, other than those to which MASB Standard 23 Impairment of Assets doesnot apply, are reviewed at each balance sheet date for impairment when there is an indication that theassets might be impaired. Impairment is measured by comparing the carrying values of the assets withtheir recoverable amounts.

An impairment loss is charged to the income statement immediately unless the asset is carried at itsrevalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to theextent of a previously recognised revaluation surplus for the same asset.

In respect of assets other than goodwill, and when there is a change in the estimates used to determinethe recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as areversal of the previous impairment loss and is recognised to the extent of the carrying amount of theasset that would have been determined (net of amortisation and depreciation) had no impairment lossbeen recognised. The reversal is recognised in the income statement immediately, unless the asset iscarried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directlyto the revaluation surplus. However, to the extent that an impairment loss on the same revalued assetwas previously recognised as an expense in the income statement, a reversal of that impairment loss isrecognised as income in the income statement.

(f) Investments

Investments in subsidiaries, associates and joint ventures are initially stated at cost in the balance sheetof the Company, and are reviewed for impairment at the end of the financial year if events or changesin circumstances indicate that their carrying values may not be recoverable.

(g) Investment Properties

Investments properties consist of investments in land and buildings that are not substantially occupiedfor use by, or in the operations, of the Company/Group.

Investments properties are treated as long term investment. They are initially stated at cost and aresubject to revaluations which are carried out by an independent valuer on a regular basis. Any revaluationincrease is recognised in equity as a revaluation surplus; any decrease is first offset against any unutilisedpreviously recognised revaluation surplus in respect of the same investment property, and the balance isthereafter recognised as an expense. A revaluation increase is recognised as income to the extent that itreverses a revaluation decrease of the same property previously recognised as an expense.

On disposal of an investment, the difference between the net disposal proceeds and the carrying amountis charged to the income statement; any amount in revaluation reserve relating to that investmentproperty is transferred to retained earnings.

(h) Inventories

Inventories are stated at the lower of cost and net realisable value. The unsold completed properties arestated at the lower of cost and net realisable value. For finished goods and work-in-progress, costincludes direct labour and appropriate production overheads.

The cost of unsold completed properties comprise the relevant cost of land, development expenditure andrelated interest cost incurred during the development period.

In arriving at net realisable value, due allowance is made for all damaged, obsolete and slow-movingitems.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS


(i) Property Development Costs

Property development costs comprise costs associated with the acquisition of land and all costs that aredirectly attributable to development activities or that can be allocated on a reasonable basis to suchactivities.

Property development costs that are not recognised as an expense are recognised as an asset and carriedat the lower of cost and net realisable value.

When the financial outcome of a development activity can be reliably estimated, the amount of propertyrevenues and expenses recognised in the income statement are determined by reference to the stage ofcompletion of development activity at the balance sheet date.

When the financial outcome of a development activity cannot be reliably estimated, the propertydevelopment revenue is recognised only to the extent of property development costs incurred that willbe recoverable. The property development costs on the development units sold are recognised as anexpense in the period in which they are incurred.

Where it is probable that property development costs will exceed property development revenue, anyexpected loss is recognised as an expense immediately, including costs to be incurred over the defectsliability period.

The financial effects on the change in accounting policy with respect to the treatment of propertydevelopment costs is considered not material.

(j) Amount Owing By/To Contract Customers

The amount owing by/to contract customers is stated at cost plus profits attributable to contracts inprogress less progress billings and provision for foreseeable losses, if any. Cost includes direct materials,labour and applicable overheads.

(k) Receivables

Receivables are carried at anticipated realisable value. Bad debts are written off in the period in whichthey are identified. An estimate is made for doubtful debts based on a review of all outstanding amountsat the balance sheet date.

(l) Payables

Trade and other payables are stated at cost which is the fair value of the consideration to be paid in thefuture for goods and services received.

(m) Interest-bearing Borrowings

Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received, net oftransaction costs.

Borrowing costs directly attributable to the acquisition and construction of development properties andproperty, plant and equipment are capitalised as part of the cost of those assets, until such time as theassets are ready for their intended use or sale.

All other borrowing costs are charged to the income statement as an expense in the period in which theyare incurred.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS


(n) Bonds

Bonds issued by the Company and the Group are initially recognised based on proceeds received, net ofissuance expenses incurred and are adjusted in subsequent years for amortisation of premium and/oraccretion of discount to maturity, using the effective yield method. The premium amortised and/ordiscount accreted is recognised in the income statement over the period of the bonds.

(o) Taxation

Taxation for the year comprises current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the yearand is measured using the tax rates that have been enacted or substantially enacted at the balance sheetdate.

Previously, deferred taxation was provided using the liability method on all material timing differencesexcept where no liability was expected to arise in the foreseeable future. Deferred tax benefit was onlyrecognised when there was reasonable expectation of realisation in the foreseeable future.

During the financial year, the accounting policy for deferred taxation has been changed to comply withMASB 25 - Income Taxes. Deferred taxation is now provided in full, using the liability method, ontemporary differences arising between the tax bases of assets and liabilities and their carrying amountsin the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arisefrom goodwill or negative goodwill or from the initial recognition of an asset or liability in a transactionwhich is not a business combination and at the time of the transaction, affects neither accounting profitnor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unusedtax credits to the extent that it is probable that taxable profit will be available against which thedeductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the periodwhen the asset is realised or the liability is settled, based on the tax rates that have been enacted orsubstantially enacted at the balance sheet date.

Deferred tax is recognised in the income statement, except when it arises from a transaction which isrecognised directly in equity, in which case the deferred tax is also charged or credited directly in equity,or when it arises from a business combination that is an acquisition, in which case the deferred tax isincluded in the resulting goodwill or negative goodwill. The carrying amounts of deferred tax assets arereviewed at each balance sheet date and reduced to the extent that it is no longer probable thatsufficient taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

The financial effect on the change in accounting policy with respect to the treatment of deferredtaxation is considered not material.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS


(p) Foreign Currencies

Transactions in foreign currencies are converted into Ringgit Malaysia at the approximate rates ofexchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at thebalance sheet date are translated at the rates ruling as of that date. All exchange differences are takento the income statement.

(q) Assets under Hire Purchase

Equipment acquired under hire purchase are capitalised in the financial statements and are depreciatedin accordance with the policy set out in Note 5(d) above. Each hire purchase payment is allocatedbetween the liability and finance charges so as to achieve a constant rate on the finance balanceoutstanding. Finance charges are allocated to the income statement over the periods of the respectivehire purchase agreements.

(r) Equity Instruments

Ordinary shares and convertible preference shares are classified as equity.

(s) Dividends

Dividends on equity are recognised as liabilities when declared and approved.

(t) Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged withfinancial institutions, bank overdrafts and short term, highly liquid investments that are readilyconvertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(u) Financial Instruments

Financial instruments are recognised in the balance sheet when the Company has become a party to thecontractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of thecontractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classifiedas a liability, are reported as expense or income. Distributions to holders of financial instrumentsclassified as equity are charged directly to equity.

Financial instruments are offset when the Company has a legally enforceable right to offset and intendsto settle either on a net basis or to realise the asset and settle the liability simultaneously.

Financial instruments recognised in the balance sheet are disclosed in the individual policy statementassociated with each item.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS


(v) Income Recognition

(i) Construction Contracts

Revenue on contracts is recognised on the percentage of completion method unless the outcomeof the contract cannot be reliably determined, in which case revenue on contracts is onlyrecognised to the extent of contract costs incurred that are recoverable. Foreseeable losses, if any,are provided for in full as and when it can be reasonably ascertained that the contract will resultin a loss.

The stage of completion is determined based on surveys of work performed.

(ii) Property Development

Revenue from property development is recognised from the sale of completed and uncompleteddevelopment properties.

Revenue from the sale of completed properties is recognised when the sale is contracted.

Revenue on uncompleted properties contracted for sale is recognised based on the stage ofcompletion method unless the outcome of the development cannot be reliably determined in whichcase the revenue on the development is only recognised to the extent of development costsincurred that are recoverable.

The stage of completion is determined based on the proportion that the development costs incurredfor work performed to date bear to the estimated total development costs.

Foreseeable losses, if any, are recognised immediately in the income statement.

Foreseeable losses, if any, are provided for in full as and when it can be reasonably ascertained thatthe development will result in a loss.

(iii) Revenue from Sales of Goods

Sales are recognised upon delivery of goods and customers’ acceptance, and where applicable, netof returns and trade discounts.

(iv) Revenue from Services

Revenue is recognised upon rendering of services and when the outcome of the transaction can beestimated reliably. In the event the outcome of the transaction could not be estimated reliably,revenue is recognised to the extent of the expenses incurred that are recoverable.

(v) Management Fee and Administrative Charges

Management fee and administrative charges are recognised on an accrual basis.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS


(v) Income Recognition (Cont’d)

(vi) Rental Income

Rental income is recognised on an accrual basis.

(vii) Dividend Income

Dividend income from investments is recognised when the right to receive payment is established.

(viii) Interest Income

Interest income is recognised on an accrual basis, based on the effective yield on the investment.

Interest income on late payment is recognised on a receipt basis.

(w) Segmental Information

Segment revenues and expenses are those directly attributable to the segments and include any jointrevenue and expenses where a reasonable basis of allocation exists. Segment assets include all assetsused by a segment and consist principally of property, plant and equipment (net of accumulateddepreciation, where applicable), other investments, inventories, receivables, and cash and bank balances.

Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assetsand liabilities do not include income tax assets and liabilities respectively.

Segment revenues, expenses and results include transfers between segments. The prices charged onintersegment transactions are based on normal commercial terms. These transfers are eliminated onconsolidation.

6. INVESTMENT IN SUBSIDIARIES

THE COMPANY2004 2003RM RM

Unquoted shares, at cost

At 1 April 2003/2002 211,064,785 167,370,110Additions during the financial year - 43,694,675

At 31 March 211,064,785 211,064,785

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

6. INVESTMENT IN SUBSIDIARIES (CONT’D)

Details of the subsidiaries, which are all incorporated in Malaysia, are as follows:

Effective Equity Interest2004 2003

Name of Company % % Principal Activities

Syarikat Siah Brothers Trading 100 100 General building contractor and Sdn. Bhd. investment holding

Syarikat Siah Brothers 100 100 Building and civil engineering Construction Sdn. Bhd. works

Lifeplus - Siah Brothers Trading 100 100 Project management and its relatedJV Sdn. Bhd. technical services

Siah Brothers Enterprise Sdn. Bhd. * 100 100 Building contractor

Siah Brothers Land Sdn. Bhd. 100 100 Investment holding

Seri Ampangan Realty Sdn. Bhd. 100 100 Property development

Sinaran Naga Sdn. Bhd. 100 100 Property development

Siah Brothers Development Sdn. Bhd. * 100 100 Proposed property development

Tiara Development Sdn. Bhd.* 100 100 Proposed property development

SBC Homes Sdn. Bhd.* 100 100 Proposed property development

Mixwell (Malaysia) Sdn. Bhd. 100 100 Project management and propertydevelopment

Winsome Ventures Sdn. Bhd. 100 100 Proposed property management

Siah Brothers Properties Sdn. Bhd.* 100 100 Investment holding

Aureate Construction Sdn. Bhd.* 100 100 Property investment

SBC Leisure Sdn. Bhd.* 100 100 Property development

SBC Towers Sdn. Bhd.* 100 100 Property development

Siah Brothers Project Management 100 100 Provision of management servicesSdn. Bhd.*

Siah Brothers Industries Sdn. Bhd. * 100 100 Investment holding

South-East Best Sdn. Bhd. 100 100 Property development

Gracemart Resources Sdn. Bhd. 100 100 Property development

Sutrati Development Sdn. Bhd. 100 100 Dormant

Masahmura Sdn. Bhd.* 51 51 Manufacturing of material handlingequipment and metal frames

Masahmura Sales & Service Sdn. Bhd. 51 51 Trading of light industrial handlingequipment and metal frames

* Not audited by Horwath

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

7. INTEREST IN ASSOCIATES

THE GROUP THE COMPANY2004 2003 2004 2003RM RM RM RM

Unquoted shares, at cost 3,600,001 3,600,001 2,400,000 2,400,000Unquoted shares, at Group cost 91,618,314 91,618,314 - -Share of post acquisition reserves 16,846,341 15,481,860 - -

112,064,656 110,700,175 2,400,000 2,400,000

THE GROUP2004 2003RM RM

The interest in associates comprises:

Group’s share of net tangible assets- at cost 66,048,686 64,684,205- at fair value 45,952,003 45,952,003

Group’s share of intangible assets 63,967 63,967

112,064,656 110,700,175

Details of the associates, which are all incorporated in Malaysia, are as follows:

Effective Equity Interest2004 2003

Name of Company % % Principal Activities

Ligamas Sdn. Bhd.# 50.0 50.0 Property development

Varich Industries Sdn. Bhd.* 50.0 50.0 Proposed quarrying

Paling Industries Sdn. Bhd.# 40.0 40.0 Manufacturing of plastic building materials

Liga Canggih Sdn. Bhd.*## 40.0 40.0 Dormant

Sri Berjaya Development Sdn. Bhd.* 33.3 33.3 Investment and development of landed properties

Sri Rawang Properties Sdn. Bhd.* 22.2 22.2 Investment in properties and rubber estates

Sam & Lau Plantation Sdn. Bhd.*### 50.0 50.0 Tree plantation and nursery operators

* The results of these associates have not been equity accounted as the amounts involved are insignificant.

# The share of results of these associates is based on the latest available unaudited management financial statementsmade up to 31 March 2004.

## Held by Paling Industries Sdn. Bhd.

### Held by South-East Best Sdn. Bhd. (“SEB”)

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

8. PROPERTY, PLANT AND EQUIPMENT

THE GROUP

AT WRITTEN DEPRECIATION AT1.4.2003 ADDITIONS DISPOSALS OFF CHARGE 31.3.2004

NET BOOK VALUE RM RM RM RM RM RM

Freehold land 4,738,833 - - (11,000) - 4,727,833Land and hotel development

expenditure 29,876,765 147,589 - - - 30,024,354Sales office - 148,676 - - (29,883) 118,793Plant and machinery,

construction machinery and equipment 63,352 1,700 (1) - (14,109) 50,942

Formwork, scaffoldings and containers 10,462 - - - (4,014) 6,448

Office renovation, office equipment, computers,furniture and fittings, tools and fittings 838,577 536,911 (31,676) (2,663) (273,882) 1,067,267

Motor vehicles 284,650 90,000 (1) - (124,172) 250,477

Total 35,812,639 924,876 (31,678) (13,663) (446,060) 36,246,114

ACCUMULATED NET BOOKAT COST DEPRECIATION VALUE

RM RM RM

AT 31.3.2004

Freehold land 4,727,833 - 4,727,833Land and hotel development expenditure 30,024,354 - 30,024,354Sales office 148,676 (29,883) 118,793Plant and machinery, construction machinery

and equipment 4,343,457 (4,292,515) 50,942Formwork, scaffoldings and containers 4,316,916 (4,310,468) 6,448Office renovation, office equipment, computers,

furniture and fittings, tools and fittings 4,633,477 (3,566,210) 1,067,267Motor vehicles 2,005,751 (1,755,274) 250,477

50,200,464 (13,954,350) 36,246,114

AT 31.3.2003

Freehold land 4,738,833 - 4,738,833Land and hotel development expenditure 29,876,765 - 29,876,765Plant and machinery, construction machinery

and equipment 4,374,257 (4,310,905) 63,352Formwork, scaffoldings and containers 4,316,916 (4,306,454) 10,462Office renovation, office equipment, computers

furniture and fittings, tools and fittings 4,161,954 (3,323,377) 838,577Motor vehicles 1,946,651 (1,662,001) 284,650

49,415,376 (13,602,737) 35,812,639

Land and hotel development expenditure consists of:2004 2003RM RM

Long leasehold land, at cost 27,691,066 27,691,066Hotel development expenditure 2,333,288 2,185,699

30,024,354 29,876,765

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

8. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

THE COMPANY

AT DEPRECIATION AT1.4.2003 ADDITIONS CHARGE 31.3.2004

NET BOOK VALUE RM RM RM RM

Office equipment, computers, furniture and fittings 53,151 5,750 (23,474) 35,427

Motor vehicles 1 - - 1

53,152 5,750 (23,474) 35,428

AT ACCUMULATED NET BOOKCOST DEPRECIATION VALUERM RM RM

AT 31.3.2004

Office equipment, computers, furniture and fittings 376,551 (341,124) 35,427Motor vehicles 376,950 (376,949) 1

753,501 (718,073) 35,428

AT 31.3.2003

Office equipment, computers, furniture and fittings 370,801 (317,650) 53,151Motor vehicles 376,950 (376,949) 1

747,751 (694,599) 53,152

The motor vehicles of the Group acquired under hire purchase terms were carried at net book value ofRM125,997 (2003 - RM231,384) at the balance sheet date.

The carrying value of certain property, plant and equipment charged to financial institutions to secure bankingfacilities granted to the Group are as follows:


Sales office 118,793 -Furniture and fittings 137,332 107,183Office and other equipment 102,092 4,951Land and hotel development expenditure 30,024,354 29,876,765Office renovation 5,664 9,976

30,388,235 29,998,875

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

9. INVESTMENT PROPERTIES


Leasehold land, at cost 19,778,424 19,778,424Expenditure on land 4,500,413 4,202,191

24,278,837 23,980,615

Freehold land and buildings, at cost 15,213,507 15,812,472Leasehold land and buildings, at cost 5,366,522 3,041,025

20,580,029 18,853,497Disposed during the financial year (3,467,400) (1,059,565)

17,112,629 17,793,932

41,391,466 41,774,547

Certain investment properties are charged to financial institutions for banking facilities granted to thecompany.

10. OTHER ASSETS


Other assets 189,807 189,807

Other investmentsQuoted shares in Malaysia, at cost 12,300 12,300Unquoted shares, at cost 45,000 180,000

57,300 192,300

247,107 382,107

Market value of quoted shares 4,590 4,455

Other assets are retention monies relating to amounts which are due and receivable after twelve months fromthe balance sheet date, upon expiry of the warranty period of the relevant contracts.

11. GOODWILL ON CONSOLIDATION


At 1 April 2003/2002 27,271,844 10,245,527Goodwill arising from the acquisition of equity interest in a subsidiary - 17,026,317Goodwill arising from the acquisition of equity interest in a subsidiary

in the previous financial year not accounted for 45,796 -

At 31 March 27,317,640 27,271,844

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

12. INVENTORIES


Unsold completed properties, at cost 8,604,731 14,109,911

In the previous financial year, certain inventories costing RM1,423,220 were charged to a third party for theprocurement of bonds issued by the Company.

In the previous financial year, certain inventories costing RM11,528,558 were charged to licensed banks andfinancial institutions for banking facilities granted to a subsidiary.

None of the inventories are carried at net realisable value.

13. PROPERTY DEVELOPMENT COST


Balance at beginning of the financial year:- land 31,209,528 24,624,246- development costs 34,259,753 45,015,434

65,469,281 69,639,680Cost incurred during the year:

- land - 6,400,000- development costs 19,138,472 27,255,572

84,607,753 103,295,252Development cost for completed projects - (5,683,038)

84,607,753 97,612,214

Cost recognised as an expense in the income statement:- previous year (10,731,119) (30,643,740)- current year (23,019,919) (12,163,165)

(33,751,038) (42,806,905)

Sub-total 50,856,715 54,805,309Transfer to inventories (407,415) (67,146)

50,449,300 54,738,163

Included in development expenditure is interest expense capitalised during the financial year amounting toRM423,298 (2003 - RM856,723).

Leasehold land of a subsidiary costing RM7,674,555 (2003 - RM7,674,555) is charged to a licensed bank for aterm loan facility granted to the subsidiary.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

14. RECEIVABLES


Trade receivables 69,536,316 69,665,907 - -Retention receivable 5,547,621 5,709,953 - -

Total trade receivables 75,083,937 75,375,860 - -

Allowance for doubtful debtsAt 1 April 2003/2002 (13,054,487) (6,803,879) - -Acquisition of subsidiary - (22,819) - -Additions (419,708) (8,216,602) - -Write-back - 1,988,813 - -

At 31 March (13,474,195) (13,054,487) - -

Net trade receivables 61,609,742 62,321,373 - -

Other receivables, deposits and prepayments 8,483,606 8,849,878 2,561,787 2,476,699

Allowance for doubtful debts At 1 April 2003/2002 (3,091,277) (2,682,432) (2,352,737) (2,352,737)Additions (408,845) (408,845) - -

At 31 March (3,500,122) (3,091,277) (2,352,737) (2,352,737)

Net other receivables, deposits and prepayments 4,983,484 5,758,601 209,050 123,962

Total receivables 66,593,226 68,079,974 209,050 123,962

Included in trade receivables at the balance sheet date are RM37,720,372 (2003 - RM37,720,372) andRM11,021,388 (2003 - RM9,886,903) owing by Smart Home Sdn. Bhd. (“SH”) and Ligamas Sdn. Bhd.respectively, both of which are related parties. Details of the related party relationship and the nature of thetransactions and balances are set out in Note 42 to the financial statements. The amount owing by SH hasbeen outstanding since 1996. During the financial year, SH proposed to settle the amount owing through thetransfer of six parcels of development land for a total consideration of RM37,828,242. The proposed debtsettlement was approved by the shareholders of the Company at an extraordinary general meeting convenedon 16 April 2004, and this is elaborated in Note 45 to the financial statements.

Included in other receivables is RM1,552,059 (2003 - RM2,647,103) due from sub-contractors for the purchaseof building materials. The amount owing is unsecured, interest-free, and is to be repaid via deductions againstfuture claims for work to be performed by the sub-contractors. Also included in other receivables in theprevious financial year, was an amount owing by a related party of RM500,000. The details of the transactionand the balance are disclosed in Note 42 to the financial statements.

Credit terms of trade receivables, other than the amount owed by SH, range from 14 days to 90 days.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

15. AMOUNT OWING BY/(TO) CONTRACT CUSTOMERS


Amount owing by contract customersContract costs incurred to date 45,035,273 8,090,361Attributable profits 7,522,655 241,371

52,557,928 8,331,732Progress billings (47,781,936) (7,646,476)

Amount owing by contract customers 4,775,992 685,256

Amount owing to contract customersContract costs incurred to date 211,960,362 184,168,929Attributable profits 8,757,050 8,802,347

220,717,412 192,971,276Progress billings (222,318,465) (197,740,843)

Amount owing to contract customers (1,601,053) (4,769,567)

16. AMOUNTS OWING BY/(TO) SUBSIDIARIES


Amounts owing by:

Non-trade- Interest-bearing 6,272,445 6,582,470- Interest-free 49,646,646 46,061,895

55,919,091 52,644,365

Amounts owing to:

Non-trade- Interest-bearing 2,677,629 3,797,629- Interest-free 9,885,694 8,837,554

12,563,323 12,635,183

The above amounts owing are unsecured and not subject to fixed terms of repayment. The interest-bearingamounts are subject to interest at 3.20% to 8.50% (2003 - 8.40% to 8.65%) per annum.

17. AMOUNTS OWING BY/(TO) ASSOCIATES

The amounts owing are unsecured, interest-free and not subject to fixed terms of repayment.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

18. TAX RECOVERABLE

Subject to agreement with the tax authorities, the Company has tax recoverable of RM11,823,151 at thebalance sheet date in respect of the financial years ended 31 March 1997 to 31 March 2004. At the date ofthis report, the amount is still pending agreement with the tax authorities.

19. SHORT TERM DEPOSITS WITH LICENSED BANKS

The weighted average effective interest rate of deposits at the balance sheet date was as follows:


% % % %

Licensed bank 2.81 2.84 2.77 2.77

Deposits of the Group and the Company have an average maturity period of 30 days (2003 - 30 days).

The deposits of the Company have been charged as security for the issuance of ABBA Bonds as disclosed inNote 24 to the financial statements.

20. CASH AND BANK BALANCES


Cash and bank balances 1,464,278 885,696 2,100 2,733Sinking fund account (Note 39) 2,010,000 5,198,398 2,010,000 5,198,398

3,474,278 6,084,094 2,012,100 5,201,131

Included in the cash and bank balances of the Group is RM1,158,751 (2003 – RM518,922) maintained underthe Housing Development Accounts pursuant to Section 7A of the Housing Development (Control andLicensing) Act, 1966.

The sinking fund account is maintained with a financial institution and has been charged as security for therepayment of the ABBA Bonds.

21. PAYABLES


Trade payables 19,943,924 20,217,451 - -Retention payable 8,228,498 5,680,103 - -

Total trade payables 28,172,422 25,897,554 - -

Other payables and accruals 458,594 632,977 230,925 331,492Hire purchase payables (Note 27a) 87,784 87,784 - -

28,718,800 26,618,315 230,925 331,492

Credit terms of trade payables range from 30 days to 60 days.

Included in other payables is an amount owing to a related party of RM108,519 (2003 - RM108,222). Thedetails of the transaction and the balance are disclosed in Note 42 to the financial statements.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

22. AMOUNTS OWING TO DIRECTORS


Sia Kwee Mow @ Sia Hok Chai 1,967,680 1,967,680 1,967,680 1,967,680Sia Teong Heng 482,801 482,801 - -

2,450,481 2,450,481 1,967,680 1,967,680

The above amounts owing are interest free, unsecured and not subject to fixed terms of repayment except forthe amount owing to Sia Kwee Mow @ Sia Hok Chai which bears interest at 5.5% (2003 - 5.5%) per annum.

23. SHORT TERM BORROWINGS

2004 2003SECURED UNSECURED TOTAL SECURED UNSECURED TOTAL

RM RM RM RM RM RM

THE GROUP

Bridging loan (Note 29) 2,993,580 - 2,993,580 8,167,060 - 8,167,060Term loans (Note 28) 13,147 - 13,147 1,568,480 - 1,568,480Revolving credits - 16,294,400 16,294,400 - 16,794,400 16,794,400Bank overdrafts (Note 39) - 20,640,185 20,640,185 - 21,177,916 21,177,916

3,006,727 36,934,585 39,941,312 9,735,540 37,972,316 47,707,856

THE COMPANY

Bridging loan (Note 29) - - - - - -Term loans (Note 28) - - - - - -Revolving credits - 5,000,000 5,000,000 - 5,000,000 5,000,000Bank overdrafts (Note 39) - 6,580,169 6,580,169 - 6,413,736 6,413,736

- 11,580,169 11,580,169 - 11,413,736 11,413,736

The weighted average effective interest rates at the balance sheet date for borrowings which bear interest atfloating rates, were as follows:


% % % %

Bridging loan 7.76 7.87 - -Term loans 7.55 7.94 - -Revolving credits 6.03 6.05 7.55 7.55Bank overdrafts 8.21 8.45 8.28 8.68

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

24. ABBA BONDS

THE GROUP/THE COMPANY2004 2003RM RM

Al-Bai Bithaman Ajil Bonds (nominal value) 61,961,250 61,961,250Less: ABBA Bonds issuance expenses (1,151,690) (1,151,690)

Finance charges on bonds issue (21,961,250) (21,961,250)

Net proceeds 38,848,310 38,848,310Additional ABBA Bonds issuance expenses (71,722) -

38,776,588 38,848,310Cumulation of amortisation of ABBA Bonds issuance expenses 437,636 134,364Cumulation of amortisation of finance charges on ABBA Bonds issue 6,693,434 2,562,145

Net proceeds 45,907,658 41,544,819

Repayment made in previous financial year (1,239,225) -Repayment made during the year (2,478,450) (1,239,225)

Total repayments (3,717,675) (1,239,225)

42,189,983 40,305,594

Analysis of the ABBA Bonds:- Not later than one year 2,478,450 2,478,450- Later than one year and not later than five years 39,711,533 37,827,144

42,189,983 40,305,594

In the previous financial year, the Company issued RM61,961,250 nominal value Al-Bai Bithaman Ajil Bonds(ABBA Bonds) comprising RM49,569,000 nominal value Primary Bonds and 10 equal tranches Secondary Bondswith RM12,392,250 nominal value. The Primary Bonds are redeemable at maturity. Each Primary Bond issupported by 10 Secondary Bonds which are redeemable in semi-annual instalments commencing 6 monthsfrom the date of the first issue of the Secondary Bonds. The ABBA Bonds were placed out to a licensed financialinstitutions via a private placement. The tenure of the ABBA Bonds is 5 years from the date of issue. The profitmargin on the ABBA Bonds is fixed at 5% per annum, payable in arrears on a semi-annual basis representedby the Secondary Bonds. The ABBA Bonds are issued based on a 10% per annum yield to maturity.

The ABBA Bonds are secured in the following manner:

(i) by a third party first legal charge over certain properties of a subsidiary;

(ii) by a third party first legal charge over all the shares held by a wholly owned subsidiary in an associate;

(iii) by a first party charge over a reserve account which is an Islamic banking account has been opened forthe placement of all monies received from dividends, unappropriated profits and bonus shares accruingto a subsidiary; and

(iv) by a first party charge over a sinking fund account and a Mudharabah Account of the Company.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

25. SHARE CAPITAL

THE COMPANY2004 2003 2004 2003NUMBER OF SHARES RM RM

AUTHORISED

Ordinary Shares of RM1 eachAt 1 April/31 March 193,167,000 193,167,000 193,167,000 193,167,000

5.5% ICCPS of RM1 eachAt 1 April/31 March 6,833,000 6,833,000 6,833,000 6,833,000

Total authorised share capital 200,000,000 200,000,000 200,000,000 200,000,000

ISSUED AND FULLY PAID-UP

Ordinary Shares of RM1 eachAt 1 April/31 March 75,602,000 50,468,943 75,602,000 50,468,943Allotment during the financial year - 25,133,057 - 25,133,057

At 31 March 75,602,000 75,602,000 75,602,000 75,602,000

5.5% ICCPS of RM1 eachAt 1 April/31 March 6,833,000 6,833,000 6,833,000 6,833,000

Total issued and fully paid-up share capital 82,435,000 82,435,000 82,435,000 82,435,000

The main terms of the 5.5% ICCPS are as follows:

(a) entitlement to receive a fixed cumulative preferential dividend of 5.5% per annum payable annually inarrears;

(b) the ICCPS shall mature after 5 years from the date of issue on 5 May 1999 and will be automaticallyconverted into ordinary shares of the Company on the maturity date of 4 May 2004;

(c) the holders have the option to convert all ICCPS into ordinary shares at any time after the date of issueuntil the maturity date. The ICCPS are not redeemable for cash;

(d) the conversion price into ordinary shares is fixed at RM1.00 per share;

(e) the ICCPS shall rank in priority to the ordinary shares of the Company in respect of return of capital onliquidation or otherwise for the par value of the ICCPS plus any dividends in arrears, provided that thereshall be no further right to participate in the surplus assets or profits of the Company; and

(f) there are no voting rights other than the rights to vote at meetings convened for the purpose of reducingthe capital, or winding up, or sanctioning a sale of undertaking, or where the proposition directly affectsthe rights and privileges of the holders of the ICCPS.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

26. RESERVES


Share premium (Note a)

At 1 April 2003/2002 111,412,895 20,995,752 111,412,895 20,995,752Arising from issuance of shares - 90,471,143 - 90,471,143Set-off against expenses incurred on

conversion of ICULS - (54,000) - (54,000)

At 31 March 111,412,895 111,412,895 111,412,895 111,412,895

Capital reserve (Note b) 1,199,999 1,199,999 - -Retained profits (Note c) 23,327,060 22,068,982 22,063,702 23,231,053

135,939,954 134,681,876 133,476,597 134,643,948

(a) The share premium is not available for distribution by way of dividends.

(b) The capital reserve arose from a bonus issue of ordinary shares on 21 August 1992 by a former subsidiary,and is not available for distribution by way of dividends.

(c) Subject to agreement with the tax authorities, at the balance sheet date, the Company has:

(i) tax-exempt income of approximately RM233,000 (2003 - RM233,000) available for the purpose ofpaying tax-exempt dividends; and

(ii) tax credit under Section 108 of the Income Tax Act, 1967 to frank the payment of dividends ofapproximately RM11,366,000 (2003 - RM11,366,000) out of its entire retained profits withoutincurring any additional tax liability.

27. DEFERRED LIABILITIES


Term loans (Note 28) 2,728,699 2,460,155Hire purchase payables (Note a) 47,700 135,484Deferred taxation (Note 30) 966,746 966,746Amount owing to the Sabah State Government (Note b) 29,069,000 29,069,000

32,812,145 32,631,385

(a) Hire purchase payables

Future minimum hire purchase payments:- repayable not later than one year 110,916 110,916- repayable later than one year and not later than five years 60,342 171,258

171,258 282,174Future finance charges (35,774) (58,906)

Present value of hire purchase liabilities 135,484 223,268

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

27. DEFERRED LIABILITIES (CONT’D)


(a) Hire purchase payables (Cont’d)

Present value of hire purchase liabilities:

Not later than one year (Note 21) 87,784 87,784Later than one year and not later than five years 47,700 135,484

135,484 223,268

The hire purchase liabilities at the balance sheet date were subject to interest at rates ranging from 5.25% to5.35% (2003 - 5.25% to 5.35%) per annum.

(b) Amount owing to the Sabah State Government

The amount owing arose from the acquisition of a subsidiary, South-East Best Sdn. Bhd. (“SEB”) and shallbe paid in the form of 130 units of the property to be completed within a period of five years from thecommencement of their construction as consideration in kind pursuant to a joint venture contractentered into by SEB with the State Government.

The contract, dated 5 September 1994, states that the subsidiary is committed to jointly develop withthe Sabah State Government a parcel of state land covering an area of approximately 26 acres intoresidential apartments, townhouses, condominiums and a hotel.

On 16 July 2002, the Sabah State Government agreed to execute the change of their entitlement for theoutstanding amount of RM29,069,000. The change of entitlement is in the form of the construction ofan office building for the Land and Survey Department (Jabatan Tanah dan Ukur) and part of a buildingfor the Ministry of Finance at a value equivalent to the amount outstanding of RM29,069,000.

On 21 October 2002, the subsidiary was requested to prepare the Contract Document and Estimation forthe above project. To-date, the subsidiary is in the process of finalising the details of the project with theSabah State Government.

28. TERM LOANS


Term loans 2,741,846 4,028,635Less: Portion repayable within twelve months (Note 23) (13,147) (1,568,480)

Portion repayable after twelve months (Note 27) 2,728,699 2,460,155

The long term loans are repayable as follows:

Not later than one year 13,147 1,568,480Later than one year and not later than five years 2,329,435 2,029,475Later than five years 399,264 430,680

2,741,846 4,028,635

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

28. TERM LOANS (CONT’D)

Details of the term loans outstanding at the balance sheet date are as follows:

THE GROUP2004 2003

Term loan RM RM

1 2,267,272 3,541,6632 474,574 486,972

2,741,846 4,028,635

MonthlyNumber of Instalment Interest Rate Date ofMonthly Amount Per Annum Commencement

Term loan Instalments RM % of Repayment

1 25 141,667 7.75% May 2003 *2 264 3,673 6.60% January 2003

* The bank has agreed to defer seventeen monthly principal installments of RM141,667 each for eighteen months commencing 1 May 2004 and the subsequent installments shall commence from 1 November 2005.

The term loans are secured as follows:

(a) by way of a first legal charge over 3 pieces of converted residential land of a subsidiary;

(b) by way of a third party legal charge over 2 units of the inventories of a subsidiary; and

(c) by the personal guarantee of one of the directors of the Company.

29. BRIDGING LOAN


Not later than one year (Note 23) 2,993,580 8,167,060

The syndicated bridging loan from three licensed financial institutions is subject to interest at rates disclosedin Note 23 to the financial statements and is secured by way of:

(i) a first fixed charge over the properties of a subsidiary;

(ii) a debenture incorporating a fixed and floating charge over all present and future assets of a subsidiary;

(iii) an assignment of all present and future rights, title and interest under a construction contract andconstruction guarantees from a related company of a subsidiary; and

(iv) the joint and several guarantee of a director of a subsidiary and the Company.

The loan is repayable by way of redemption of the individual units of a subsidiary’s development property, orin 7 quarterly instalments commencing July 2003, whichever is earlier.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

30. DEFERRED TAXATION


At 1 April 2003/2002 966,746 -Addition through the revaluation surplus on leasehold land of a subsidiary - 966,746

966,746 966,746

31. NET TANGIBLE ASSETS PER SHARE

The actual net tangible assets per share is calculated based on the net tangible assets value of RM184,224,314 (2003 - RM183,012,032) attributable to ordinary shares divided by the number of ordinary shares in issue atthe balance sheet date of 75,602,000 (2003 - 75,602,000) shares.

32. TURNOVER


Revenue from construction contracts 49,919,830 35,362,729 - - Proportionate sales value of development

properties 36,270,464 34,366,715 - - Rental income 73,600 64,200 - - Dividend income - - 4,928,000 8,090,000Interest income 52,745 35,275 52,745 35,275Other interest income - - 559,943 587,338Management and administrative charges - - 1,680,049 270,000

86,316,639 69,828,919 7,220,737 8,982,613

Continuing operations:- existing 86,316,639 65,260,219 7,220,737 8,982,613- new acquisition - 4,568,700 - -

86,316,639 69,828,919 7,220,737 8,982,613

33. COST OF SALES


Construction costs 56,131,953 37,647,813 - -Land and development expenditure 12,625,057 10,913,140 - -Direct costs 88,062 88,062 - -Management and administrative charges 55,707 50,525 - -

68,900,779 48,699,540 - -

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

34. PROFIT BEFORE TAXATION


Profit before taxation is arrived at after charging/(crediting):

Allowance for doubtful debts 828,553 8,625,447 - - Amortisation of bond expenses 303,272 134,364 303,272 134,364Auditors’ remuneration

- for the financial year 67,600 59,700 13,000 13,000- underprovision in the previous

financial year 4,200 2,000 - 2,000Bad debts written off - 110,965 - -Contract costs 56,131,953 37,647,813 - -Depreciation of property, plant and

equipment 446,060 406,603 23,474 22,351Directors’ benefits-in-kind 16,925 16,925 16,925 16,925Directors’ fees 52,000 67,000 52,000 67,000Directors’ remuneration 791,520 752,400 489,120 516,900Finance charges on bonds 4,131,289 2,562,145 4,131,289 2,562,145Interest expense

- bank borrowings 2,845,495 3,178,494 1,042,298 1,093,069- hire purchase 23,132 23,132 - -- loans 108,519 113,476 333,408 787,029- others 2,000 530,474 - -

Loss on disposal of investment properties 1,557,400 150,154 - -Plant and equipment written off 13,663 - - -Rental expense

- premises 3,600 - 12,000 60,000- machinery and equipment 8,207 15,651 - -

Staff costs 3,069,674 2,598,056 160,107 72,786Gross dividend income

- subsidiaries (unquoted) - - (3,200,000) (5,300,000)- associate - - (1,728,000) (2,790,000)

Interest income- licensed financial institutions (59,137) (36,891) (52,745) (35,275)- subsidiaries - - (559,943) (587,338)- others (48,185) (73,713) - -

Gain on disposal of property, plant and equipment (313,882) (7,302) - -

Rental of premises (316,621) (315,672) - -Writeback of allowance for doubtful debts - (1,988,813) - -Writeback of diminution in value of

inventory - (6,527) - -

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

35. TAXATION


Current 2,000,589 982,916 228,520 913,324Share of associates’ taxation 1,014,472 1,100,935 - -

3,015,061 2,083,851 228,520 913,324Underprovision in the previous financial years 1,908,093 1,054,742 593,335 -

4,923,154 3,138,593 821,855 913,324

Subject to agreement with the tax authorities, the Group has unutilised tax losses and unabsorbed capitalallowances of approximately RM2,308,400 (2003 – RM5,834,000) and RM317,000 (2003 – RM725,000)respectively available at the balance sheet date to be carried forward for offset against future taxable businessincome.

A reconciliation of the income tax expense applicable to the profit before taxation at the statutory tax rate tothe income tax expense at the effective tax rate of the Group and of the Company is as follows:


Profit before taxation 6,996,149 5,149,486 469,421 3,291,496

Tax at applicable tax rates 1,958,921 1,441,856 131,438 921,619

Tax effects of:Non-deductible expenses 1,119,212 692,513 251,606 61,352Non-taxable gains (1,835) (557,000) - - Deferred tax assets not recognised during

the financial year 358,834 806,161 - 5,953Underprovision in the previous financial years 1,908,093 1,054,742 593,335 -Reversal of deferred tax assets not recognised

in the previous financial year (510,880) - (154,524) -Tax losses disallowed during the

financial year 1,016 2,810 - -Others 89,793 (302,489) - (75,600)

4,923,154 3,138,593 821,855 913,324

36. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is arrived at by dividing the profit after taxation attributable to shareholdersafter deducting the preference dividend of RM270,587 (2003 - RM270,587) by the weighted average numberof ordinary shares in issue at the balance sheet date of 75,602,000 (2003 - 73,507,579).

The computation of diluted EPS is not applicable as the effects of conversion of each class of potential ordinaryshares are anti-dilutive.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

37. DIVIDENDS

2004 2003RM RM

Declared - dividend of 5.5% per ICCPS less 28% tax 270,587 270,587(2003 - 5.5% per ICCPS less 28% tax)

Paid - dividend of 1% per ordinary share less 28% tax (2003 - Nil) 544,330 -

814,917 270,587

At the forthcoming Annual General Meeting, a final dividend in respect of the financial year ended 31 March2004 of 1 sen per ordinary share of RM1 each less 28% tax (2003 - 1 sen per ordinary share of RM1 each less28% tax) amounting to RM593,532 (2003 - RM544,330) will be tabled for shareholders’ approval. Thesefinancial statements do not reflect this final dividend which will be accrued as a liability only upon approvalby shareholders.

38. SUMMARY OF EFFECTS OF ACQUISITION OF A SUBSIDIARY

In the previous financial year, the Company paid RM35,000,000 in cash to acquire an 80% equity interest inSouth-East Best Sdn. Bhd.

The effect of the acquisition of the subsidiary on the financial results of the Group for the financial year wasas follows:


Turnover - 4,568,700Cost of sales - (3,855,913)

Gross profit - 712,787Other operating income - 509,312Less: Operating expenses

Administrative expenses - (653,287)Selling and distribution expenses - (250,750)Other operating expenses - (1,245,105)

Loss from operations - (927,043)Finance costs - (709,550)

Loss before taxation - (1,636,593)Pre-acquisition loss - 149,996

Decrease in net profit of the Group - (1,486,597)

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

38. SUMMARY OF EFFECTS OF ACQUISITION OF A SUBSIDIARY (CONT’D)

The effect of the acquisition of the subsidiary on the financial position of the Group at the financial year endis as follows:


Investment in associate - 880,000Property, plant and equipment - 29,998,876Properties held for future development - 18,537,782Current assets - 25,836,655Current liabilities - (3,878,840)Deferred liabilities - (42,231,441)

Increase in net assets of the Group - 29,143,032

The details of net assets acquired and cashflow arising from the acquisition of the subsidiaries are as follows:


Property, plant and equipment - 29,704,722 - -Investment in associate - 880,000 - -Properties held for future development - 27,050,046 - -Current assets - 22,503,103 - -Current liabilities - (8,879,842) - -Deferred liabilities - (41,735,746) - -

Net assets in subsidiary acquired - 29,522,283 - -Reduction in net assets arising from

acquisition - (10,894,375) - -

Net assets - 18,627,908 - -Goodwill on acquisition - 17,026,317 - -

Purchase consideration - 35,654,225 - 35,000,000Cash and cash equivalents acquired - (818,781) - -

Net cash outflow on acquisition of subsidiary - 34,835,444 - 35,000,000

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

39. CASH AND CASH EQUIVALENTS

For the purpose of the cash flow statements, cash and cash equivalents comprise the following:


Short term deposits (Note 19) 1,407,125 1,422,125 1,239,225 1,239,225Cash and bank balances (Note 20) 3,474,278 6,084,094 2,012,100 5,201,131Bank overdrafts (20,640,185) (21,177,916) (6,580,169) (6,413,736)

(15,758,782) (13,671,697) (3,328,844) 26,620Less: Cash placed in sinking fund

account (Note 20) (2,010,000) (5,198,398) (2,010,000) (5,198,398)

(17,768,782) (18,870,095) (5,338,844) (5,171,778)

40. DIRECTORS’ REMUNERATION

The aggregate amount of emoluments received and receivable by the directors of the Company during thefinancial year are as follows:


DIRECTORS’ FEES:

1. Mun Chong Shing @ Mun Chong Tian 12,000 12,000 12,000 12,0002. Dato’ Lim Phaik Gan 12,000 12,000 12,000 12,0003. Dato. Dr. Norraesah Bt Haji Mohamad 13,000 13,000 13,000 13,0004. Datuk Sim Peng Choon 5,000 12,000 5,000 12,0005. Vincent Koh Kok Kee 2,000 12,000 2,000 12,0006. Dato’ Zainol Abidin Bin Haji A. Hamid 6,000 - 6,000 - 7. Ahmad Fizal Bin Othman 2,000 - 2,000 - 8. Tan Sri Dato’ Ir Muhammad Yusuff Bin

Haji Muhammad Yunus - 6,000 - 6,000

52,000 67,000 52,000 67,000

DIRECTORS’ NON-FEES EMOLUMENTS:

1. Sia Kwee Mow @ Sia Hok Chai 443,520 486,000 443,520 486,0002. Sia Teong Heng 336,000 255,000 33,600 19,5003. Mun Chong Shing @ Mun Chong Tian 2,400 1,200 2,400 1,2004. Dato’ Lim Phaik Gan 3,600 1,200 3,600 1,2005. Dato’ Dr. Norraesah Bt Haji Mohamad 3,900 2,400 3,900 2,4006. Datuk Sim Peng Choon 600 3,000 600 3,0007. Vincent Koh Kok Kee 900 3,000 900 3,0008. Tan Sri Dato’ Ir Muhammad Yusuff Bin

Haji Muhammad Yunus - 600 - 6009. Dato’ Zainol Abidin Bin Haji A. Hamid 600 - 600 -

791,520 752,400 489,120 516,900

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

40. DIRECTORS’ REMUNERATION (CONT’D)

Apart from the amounts disclosed under directors’ remuneration above, the estimated monetary value of otherbenefits-in-kind received by the following directors during the financial year, otherwise than in cash are asfollows:


1. Sia Kwee Mow @ Sia Hok Chai 16,925 16,925 16,925 16,925

41. RELATED COMPANY TRANSACTIONS


Interest paid to subsidiaries 224,889 678,807Rental paid to a subsidiary 12,000 60,000Dividend income received/receivable from subsidiaries 3,200,000 5,300,000Interest received from subsidiaries 559,943 587,338Management fee received from subsidiaries 1,680,049 270,000

42. RELATED PARTY TRANSACTIONS/BALANCES

GROUP2004 2003

NAME OF RELATED PARTY NOTE NATURE OF TRANSACTION RM RM

Ligamas Sdn. Bhd. (a) Progress billings received/receivable 49,919,830 19,114,882

Paling Industries Sdn. Bhd. (a) Purchase of materials 93,652 58,873

Gross dividend income 1,728,000 2,790,000received

Sri Rawang Properties Sdn. Bhd. (a) Gross dividend income 150,005 150,000received

Sri Berjaya Development Sdn. Bhd. (a) Gross dividend income 242,666 -received

LOM Holdings Sdn. Bhd. (e) Acquisition of a motor 90,000 -vehicle

Sia Poh Eng (c) Property sold - 550,000

Sia Kwee Mow @ Sia Hok Chai (d) Interest paid/payable 108,519 108,222

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

42. RELATED PARTY TRANSACTIONS/BALANCES (CONT’D)

RECEIVABLE PAYABLEGROUP GROUP

2004 2003 2004 2003NAME OF RELATED PARTIES NOTE RM RM RM RM

Ligamas Sdn. Bhd. (a) 12,021,388 9,886,903 - -

Smart Home Sdn. Bhd. (b) 37,720,372 37,720,372 - -

Sia Poh Eng (c) - 500,000 - -

Sia Kwee Mow @ Sia Hok Chai (d) - - 108,519 108,222

Peak Marketing Sdn. Bhd. (f) - - 66,645 66,645

(a) Associates

(b) A company in which Sia Kwee Mow @ Sia Hok Chai, who is a director of the Company, has a direct interest.

(c) A person connected to Sia Kwee Mow @ Sia Hok Chai and Sia Teong Heng

(d) A director of the Company

(e) A substantial shareholder of the Company

(f) A company in which Sia Teong Heng, who is a director of the company, has a direct interest.

In the opinion of the directors, the above transactions have been entered into in the ordinary course of businesson terms established by arm’s length negotiations between the parties.

43. CONTINGENT LIABILITIES


Corporate guarantee (unsecured) given to banks and other licensed financial institutions for credit facilities granted to subsidiaries 49,444,912 30,523,000

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

44. SEGMENTAL REPORTING

THE GROUP2004

PROPERTY MANUFACTURINGCONS- DEVELOP- AND

TRUCTION MENT INVESTMENT TRADING ELIMINATIONS GROUPRM RM RM RM RM RM

REVENUE:

External revenue 49,919,830 36,270,464 126,345 - - 86,316,639Intersegment revenue 16,693,194 - 7,746,381 - (24,439,575) -

Total revenue 66,613,024 36,270,464 7,872,726 - (24,439,575) 86,316,639

Results:Segment results 8,288,220 2,590,585 6,291,718 (7,987) (6,525,882) 10,636,654Finance costs (7,263,617)Share of results of associates - 2,512,271 - 1,110,841 - 3,623,112

Profit from ordinary activities before taxation 6,996,149

Taxation (4,923,154)

Profit from ordinary activities after taxation 2,072,995


TRUCTION MENT INVESTMENT TRADING GROUPRM RM RM RM RM

Other information

Segment assets 31,821,441 290,967,684 23,771,453 11,544,983 358,105,561Unallocated assets 8,331,990

366,437,551

Segment liabilities 42,636,445 48,802,170 14,355,639 78,360 105,872,614Unallocated liabilities 42,189,983

148,062,597

Capital expenditure 333,977 584,399 6,500 - 924,876Depreciation 172,645 239,203 33,535 677 446,060

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

44. SEGMENTAL REPORTING (CONT’D)

THE GROUP2003


TRUCTION MENT INVESTMENT TRADING ELIMINATIONS GROUPRM RM RM RM RM RM

REVENUE:

External revenue 35,362,729 34,366,715 99,475 - - 69,828,919Intersegment revenue 15,298,779 - 6,401,224 - (21,700,003) -

Total revenue 50,661,508 34,366,715 6,500,699 - (21,700,003) 69,828,919

Results:Segment results 7,690,175 2,510,945 4,884,004 (15,190) (7,053,930) 8,016,004Finance costs (6,793,334)Share of results of associates - 1,884,741 - 2,042,075 3,926,816

Profit from ordinary activities before taxation 5,149,486

Taxation (3,138,593)

Profit from ordinary activities after taxation 2,010,893


TRUCTION MENT INVESTMENT TRADING GROUPRM RM RM RM RM

Other information

Segment assets 39,398,622 287,381,500 26,959,851 12,846,046 366,586,019Unallocated assets 5,350,142

371,936,161

Segment liabilities 43,876,909 55,859,860 14,750,259 26,663 114,513,691Unallocated liabilities 40,305,594

154,819,285

Capital expenditure 7,700 580,762 - - 588,462

Depreciation 142,474 229,114 32,016 2,999 406,603

No geographical analysis has been prepared as the Group operates wholly in Malaysia.

45. SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

During the financial year, Smart Home Sdn. Bhd. proposed to settle its debts owing to Mixwell (Malaysia) Sdn.Bhd. and Syarikat Siah Brothers Construction Sdn. Bhd. amounting to RM37,720,372 in aggregate, through thetransfer of six parcels of development land with an aggregate market value of RM37,828,242 (“The ProposedDebt Settlement”). On 16 April 2004, the Proposed Debt Settlement was approved by the shareholders of theCompany at an extraordinary general meeting.

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS

46. NUMBER OF EMPLOYEES


Number of employees at the balance sheet date 100 90 9 9

47. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

Fair value is defined as the amount at which the financial instrument could be exchanged in a currenttransaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced saleor liquidation. Fair values are obtained from quoted market prices, discounted cash flow models and optionpricing models as appropriate.

The following methods and assumptions are used to estimate the fair value of each class of financialinstruments:

(i) Bank balances and other liquid funds and short term receivables

The carrying amounts approximate the fair values due to the relatively short term maturity of theseinstruments.

(ii) Quoted and unquoted investments

The fair values of quoted investments are estimated based on quoted market prices for these investments.

For unquoted investments, it is not practicable to determine the fair values because of the lack of quotedmarket prices and the assumptions used in valuation models to value these investments cannot bereasonably determined.

(iii) Short term borrowings and other current liabilities

The carrying amounts approximate the fair values because of the short period to maturity of theseinstruments.

(iv) Long term bank loans

The carrying amounts approximate the fair values as these instruments bear interest at variable rates.

(v) Hire purchase obligations

The fair value of hire purchase obligations is determined by discounting the relevant cash flow usingcurrent interest rates for similar instruments at the balance sheet date.

There is no disclosure of fair value for investments in subsidiaries and associates, and borrowings under thebasis of Islamic banking principles as these are excluded from MASB 24 - Financial Instruments: Disclosure andPresentation.

GR

OU

P P

RO

PER

TIES

Location Tenure/ Land/ Net Book Value(Age of (Built-Up) As At Date of

building or Area 31. 03. 2004 Acquisition */ date of expiry) Sq. Ft. RM Description Revaluation

1. Lot 172, Section 85 Freehold 2,102/ 426,750 4 storey 29/03/2000 Town & District of Kuala Lumpur (29 years) (6,404) ShophouseWilayah Persekutuan for rental(Nos. 422, 422A, 422B & 422C Jalan Pahang, Kuala Lumpur)

2. Lot 128, 129, 130, Freehold 5,513/ 3,739,156 6 I/2 storey 28/03/2000 Section 47 (24-26 years) (38,238) commercialTown of Kuala Lumpur building forWilayah Persekutuan office(Wisma Siah Brothers headquartersNo. 74, Jalan Pahang and for rentalKuala Lumpur)

3. Lot 31 & 32, Freehold 4,792/ 400,000 3 storey 29/03/2000 Village of Ulu Klang, (16 years) (5,340) commercial District of Gombak building forSelangor Darul Ehsan factory

4. No. B4-3, Freehold (1,672) 635,360 Condominium 27/03/2000 Sri Bukit Tunku (11 years) units for rentalKuala Lumpur

5. Unit B2, B3, C1, C3, C5, C6 Freehold (11,290) 2,792,737 Condominium 27/03/2000 Intan Kenny Condominiums (10 years) units for rental29 Persiaran Bukit Tunku, Bukit Tunku, 50480 Kuala Lumpur

6. GM 2414, Lot No. 9332 Freehold 8,902 483,523 Vacant land 28/03/2000 Mukim Batu, Daerah and (8 years) for futureNegeri Wilayah Persekutuan development

7. P.T. 8995, 8997, 9006, 9077 Leasehold 683,762 473,197 Vacant land 28/03/2000 Mukim Batu Daerah and expiring on for futureNegeri Wilayah Persekutuan 22/4/2086 development

8 P.T. 42031, 42042-42050, Freehold 2,006,367 4,309,468 Vacant land 16/12/1993*42052-42056, for futureMukim Kuala Kuantan, developmentDistrict of Kuantan,Pahang Darul Makmur

9 P.T. 42029 Freehold 49,051 156,321 Vacant land 30/03/2000 Mukim Kuala Kuantan for futureDistrict of Kuantan, Pahang development

10 P.T. 42051 Freehold 465,672 1,365,622 Land currently 30/03/2000 Mukim Kuala Kuantan underDistrict of Kuantan, Pahang development

11 P.T. 9076 & 9005 Leasehold 519,164 18,150,000 Vacant land 28/03/2000 Mukim Batu Daerah and expiring on for futureNegeri Wilayah Persekutuan 22/4/2086 development

12 Lot No. 2398, Freehold 1,132,637 13,510,000 Vacant land 05/04/1999 *Mukim of Batang Kali for futureDistrict of Hulu Selangor development

group propertiesas at 31 March 2004

GR

OU

P P

RO

PER

TIES

Location Tenure/ Land/ Net Book Value(Age of (Built-Up) As At Date of

building or Area 31. 03. 2004 Acquisition */ date of expiry) Sq. Ft. RM Description Revaluation

13 Lot 2 (TL017546495) Leasehold 232,163 9,942,632 Vacant land 30/04/2002*Signal Hill, Tanjung Lipat, expiring on for futureDistrict of Kota Kinabalu 31/12/2093 developmentState of Sabah

14 Lot 3 (TL017546486) Leasehold 195,139 29,500,000 Vacant land 30/04/2002*Signal Hill, Tanjung Lipat, expiring on for futureDistrict of Kota Kinabalu 31/12/2093 developmentState of Sabah of hotel

15 Lot 4 (TL017546511) Leasehold 96,263 4,123,169 Vacant land 30/04/2002*Signal Hill, Tanjung Lipat, expiring on for futureDistrict of Kota Kinabalu 31/12/2093 developmentState of Sabah

16 CL015162026 Leasehold 104,103 2,687,670 Vacant land 30/04/2002*Signal Hill/Likas Bay expiring on for futureDistrict of Kota Kinabalu 16/09/2911 developmentState of Sabah



19 3 units at Block K, Leasehold (3,591) 908,400 Condominium 02/12/1999*The Peak Condominium expiring on units for sale Signal Hill, Tanjung Lipat, Likas 31/12/2093 and for rentalDistrict of Kota KinabaluState of Sabah

20 A24, Ground Floor, Desa Kudalari, Freehold (800) 300,000 Condominium 26/09/2002*Sec 63, Town of Kuala Lumpur (2 years) unit Wilayah Persekutuan

21 H.S.(D) No. 7727, Lot 438, Freehold 48,846 732,690 Vacant land 24/08/1998* Mukim of Serendah, for futureUlu Selangor, Selangor development

22 Parcel C1 Storey 24, C1 25, Freehold (2,824) 857,000 Condominium 12/12/2003*C2 27 & A1 7 Phase 2A (1 year) unitsGeran 56704, Lot 547,Mukim 17, Daerah TimurLaut Negeri Pulau Pinang

SHA

REH

OLD

ERS’

IN

FOR

MA

TIO

N

Authorised Shares Capital : RM200,000,000Issued and Fully Paid Up Capital : RM 82,435,000Class of Shares- Ordinary shares of RM1 each : 82,435,000Voting Right : 1 vote per ordinary share

DISTRIBUTION SCHEDULE

No. of % of % ofShareholding Category Shareholders Shareholders No. of Shares Issued Capital

1 - 99 131 3.31 5,303 0.01100 - 1,000 1,241 31.42 1,058,356 1.28

1,001 - 10,000 2,189 55.42 7,697,346 9.3410,001 - 100,000 347 8.78 9,892,244 12.00

100,001 - 4,121,749 37 0.94 16,405,400 19.904,121,750 - 82,435,000 5 0.13 47,376,351 57.47

Total 3,950 100.00 82,435,000 100.00

THIRTY LARGEST SHAREHOLDERS (As per Record of Depositors)

No. of % of Name of Shareholders Shares Held Issued Capital

1. LOM Holdings Sdn Bhd 14,317,500 17.372. Mayban Nominees (Tempatan) Sdn. Bhd. 12,468,828 15.13

- Mayban Investment Management Sdn. Bhd. for Malayan Banking Berhad (GRM-230592)

3. Amanah Raya Nominees (Tempatan) Sdn Bhd 8,542,000 10.36- Skim Amanah Saham Bumiputera

4. Permodalan Nasional Berhad 6,867,000 8.335. Evergreen Legacy Sdn Bhd 5,181,023 6.286. DB (Malaysia) Nominee (Asing) Sdn Bhd 2,170,400 2.63

- Deutsche Bank AG Singapore PBD for Penfold Holdings Limited7. Amsec Nominees (Tempatan) Sdn Bhd 1,774,000 2.15

- Pledged Securities Account for Sia Teong Heng 8. RHB Capital Nominees (Tempatan) Sdn Bhd 1,480,800 1.80

- Pledged Securities Account for Sia Kwee Mow @ Sia Hok Chai (STH 981069)9. Nican Asia Limited 1,106,478 1.3410. Siah Teong Weoi 877,711 1.0611. Chay Kwai Gong @ Siah Kwee Swee 757,830 0.9212. Mun Oi @ Mun Oi Lin 755,800 0.9213. Siah Chong Hock 722,000 0.8814. Southwark Limited 607,000 0.7415. Amsec Nominees (Tempatan) Sdn Bhd 500,000 0.61

- Pledged Securities Account for Pua Kim Kian 16. Penfold Holdings Limited 400,000 0.4917. Siah Chong Ong 372,400 0.4518. Siah Teong Yin 328,723 0.4019. Poo Choo @ Ong Poo Choi 324,100 0.3920. Sia Tzu Lung 314,592 0.38

shareholders’ informationas at 30 July 2004

SHA

REH

OLD

ERS’

IN

FOR

MA

TIO

N

THIRTY LARGEST SHAREHOLDERS (As per Record of Depositors) (Cont’d)

No. of % of Name of Shareholders Shares Held Issued Capital

21. United Overseas Nominees (Tempatan) Sdn Bhd 307,723 0.37- Pledged Securities Account for Siah Teong Chein (KL)

22. Affin-ACF Nominees (Tempatan) Sdn Bhd 290,000 0.35- Pledged Securities Account for Siow Sing Heng

23. Chan Wan Moi 275,000 0.3324. Siah Chong Guan 257,400 0.3125. Chew Siew Ying 244,000 0.3026. Wong Chee Choon 213,200 0.2627. Lem Kim Seong 200,000 0.2428. Sia Poh Choo @ Sia Swee Choo 179,700 0.2229. Goh Chye Keat 175,000 0.2130. Sia Teong Heng 171,891 0.21

TOTAL 62,182,099 75.43

DIRECTORS’ SHAREHOLDINGS (As per Register of Directors’ Shareholdings)

Direct Interest Indirect InterestName of Directors Shareholdings % Shareholdings %

Sia Kwee Mow @ Sia Hok Chai 1,480,800 (a) 1.80 19,498,523 (b) 23.65Sia Teong Heng 2,017,992 (c) 2.45 19,498,523 (b) 23.65Mun Chong Shing @ Mun Chong Tian 21,782 0.03 - -Dato’ Lim Phaik Gan - - - -Dato’ Dr. Norraesah Bt. Haji Mohamad - - - -Dato’ Zainol Abidin Bin Haji A. Hamid - - - -Ahmad Fizal Bin Othman - - - -

Notes:

(a) 1,480,800 shares are held in bare trust by RHB Capital Nominees (Tempatan) Sdn. Bhd.

(b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn.Bhd. (5,181,023 shares).

(c) 1,774,000 shares are held in bare trust by Amsec Nominees (Tempatan) Sdn. Bhd.

SHA

REH

OLD

ERS’

IN

FOR

MA

TIO

N

SUBSTANTIAL SHAREHOLDERS (excluding bare trustees) (As per Register of Substantial Shareholders)

No. of shares held or % ofbeneficially interested in Issued Capital

Name of Substantial Shareholders Direct Indirect Direct Indirect

Pemegang Amanah Raya Malaysia 8,542,000 - 10.36 -- Skim Amanah Saham BumiputeraSia Kwee Mow @ Sia Hok Chai 1,480,800 (a) 19,498,523 (b) 1.80 23.65Sia Teong Heng 2,017,992 (c) 19,498,523 (b) 2.45 23.65LOM Holdings Sdn. Bhd. 14,317,500 5,181,023 (d) 17.37 6.28Evergreen Legacy Sdn. Bhd. 5,181,023 - 6.28 -Malayan Banking Berhad 12,468,828 - 15.13 -Permodalan Nasional Berhad 6,867,000 - 8.33 -Yayasan Pelaburan Bumiputra - 6,867,000 (e) - 8.33

Notes:

(a) 1,480,800 shares are held in bare trust by RHB Capital Nominees (Tempatan) Sdn. Bhd.

(b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn.Bhd. (5,181,023 shares)

(c) 1,774,000 shares are held in bare trust by Amsec Nominees (Tempatan) Sdn. Bhd.

(d) Deemed interest by virtue of its shareholding in Evergreen Legacy Sdn. Bhd.

(e) Deemed interest by virtue of its shareholding in Permodalan Nasional Berhad

proxy form

SBC CORPORATION BERHAD(Formerly known as Siah Brothers Corporation Berhad)(199310-P)

(Incorporated in Malaysia)

I/We, ______________________________________________________________________________________

of ________________________________________________________________________________________

being a member/ members of the abovenamed Company do hereby appoint ______________________________

___________________________________________ of ___________________________________________

______________________________________ or failing whom, ______________________________________

of ________________________________________________________________________________________

as my/our proxy to vote for me/us and on my/our behalf at the Fourteenth Annual General Meeting of the Companyto be held at the Penthouse, 5th Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala Lumpur on Thursday, 23 September 2004 at 11.00 a.m. and at any adjournment thereof in the manner indicated below:

No. Resolution For Against

1. Adoption of Reports and Audited Financial Statements [ ] [ ]

2. Declaration of a first and final dividend [ ] [ ]

3. Payment of Directors’ fees [ ] [ ]

4. Re-appointment of Director : YBhg. Dato’ Lim Phaik Gan [ ] [ ]

5. Re-appointment of Director : Mr Sia Kwee Mow @ Sia Hok Chai [ ] [ ]

6. Re-election of Director : Mr Sia Teong Heng [ ] [ ]

7. Re-election of Director : YBhg. Dato’ Zainol Abidin Bin Haji A. Hamid [ ] [ ]

8. Re-election of Director : En. Ahmad Fizal Bin Othman [ ] [ ]

9. Re-appointment of Auditors [ ] [ ]

10. Authority to Directors to allot and issue shares [ ] [ ]

(Please indicate with an ‘X’ in the appropriate box against each resolution how you wish your proxy to vote. If noinstruction is given, this form will be taken to authorise the proxy to vote at his/her discretion.)

Dated this _____________________________ day of _____________________________, 2004

_____________________________Signature of Member(s)

NOTES:

A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote instead of him.

To be valid, this form duly completed must be deposited at the Registered Office of the Company not less than forty-eight(48) hours before the time for holding the meeting. Where a member appoints more than one (1) proxy, the appointmentshall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

If the appointor is a corporation, this form must be executed under its common seal or under the hand of the attorney.

Number ofShares held

FOLD THIS FLAP FOR SEALING

THEN FOLD HERE

The Company SecretariesSBC CORPORATION BERHAD (199310-P)

(Formerly known as Siah Brothers Corporation Berhad)Wisma Siah Brothers,74A, Jalan Pahang,

53000 Kuala Lumpur.

AffixStamp

FIRST FOLD HERE