2. CORE PURPOSE
• To build upon our construction heritage to design and deliver exciting,
unique and valuable solutions for buildings and communities.
CORE VALUES
• 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.
3. 2 | NOTICE OF ANNUAL GENERAL MEETING |
3 | NOTICE OF DIVIDEND PAYMENT |
3 | STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING |
4 | CORPORATE INFORMATION |
6 | DIRECTORS’ PROFILES |
12 | GROUP FINANCIAL HIGHLIGHTS |
14 | CORPORATE STRUCTURE |
15 | STATEMENT OF DIRECTORS’ RESPONSIBILITIES |
CONTENTS
16 | EXECUTIVE CHAIRMAN’S STATEMENT |
20 | PENYATA PENGERUSI EKSEKUTIF |
24 | STATEMENT OF CORPORATE GOVERNANCE |
33 | STATEMENT ON INTERNAL CONTROL |
35 | AUDIT COMMITTEE REPORT |
41 | FINANCIAL STATEMENTS |
106 | GROUP PROPERTIES |
110 | SHAREHOLDERS’ INFORMATION |
PROXY FORM
4. 2 | S B C C O R P O RATION BERHAD | NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Sixteenth Annual General Meeting of SBC Corporation Berhad will be held at the Ground
Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala Lumpur on Thursday, 28 September 2006 at 11.00 a.m. to
transact the following business:
AGENDA
1. To receive and adopt the Directors’ Report and the Audited Financial Statements for the year (RESOLUTION 1)
ended 31 March 2006 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 (RESOLUTION 2)
2006.
3. To approve the payment of Directors’ fees. (RESOLUTION 3)
4. To re-appoint the following Directors pursuant to Section 129(6) of the Companies Act,
1965:
(a) YBhg. Dato’ Lim Phaik Gan (RESOLUTION 4)
(b) Mr Sia Kwee Mow @ Sia Hok Chai (RESOLUTION 5)
5. To re-elect the following Directors retiring by rotation pursuant to Article 77 of the Articles of
Association of the Company:
(a) YBhg. Dato’ Zainol Abidin Bin Haji A. Hamid (RESOLUTION 6)
(b) Mr Sia Teong Heng (RESOLUTION 7)
6. To re-appoint Messrs. Horwath as Auditors of the Company and to authorise the Directors to (RESOLUTION 8)
fix their remuneration.
7. As Special Business, to consider and, if thought fit, to pass the following Ordinary Resolution: (RESOLUTION 9)
AUTHORITY TO DIRECTORS TO ALLOT AND ISSUE SHARES
“THAT subject always to the Companies Act, 1965, the Articles of Association of the Company
and the approval from the Bursa Malaysia Securities Berhad and other governmental/regulatory
bodies, where such approval shall be necessary, the Directors be and are hereby authorised
pursuant to Section 132D of the Companies Act, 1965, to allot and issue shares in the Company,
at any time and upon such terms and conditions and for such purposes as they may in their
absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to
this resolution does not exceed ten per cent (10%) of the issued capital of the Company for
the time being and that such authority shall continue in force until the conclusion of the next
Annual General Meeting of the Company. ”
8. To consider any other business for which due notice shall have been given.
5. NOTIC E OF DIVIDEND PAYMENT | SBC CORPORATION BERH A D | 3
NOTICE IS HEREBY GIVEN that subject to the approval of the shareholders at the Sixteenth Annual General Meeting of
the Company, the first and final dividend of 1% less 28% income tax for the year ended 31 March 2006 will be paid on
31 October 2006 to Depositors registered in the Record of Depositors on 17 October 2006.
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 17 October 2006 in respect of ordinary
transfers; and
b) shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa
Malaysia Securities Berhad.
By Order of the Board
CHONG FOOK SIN
KAN CHEE JING
Company Secretaries
Kuala Lumpur
5 September 2006
NOTES:
1) Proxy:
A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote instead of him. Where a member appoints
more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. To be
valid, the proxy 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. If the appointor is a corporation, this form must be executed under its common seal or under the hand of its attorney.
2) Resolution 9:
The Company is actively pursuing business opportunities in prospective areas so as to broaden the operating base and earnings potential of the
Company. Such expansion plans may require the issue of new shares not exceeding 10 per cent (10%) of the Company’s issued share capital. With
the passing of the resolution by the shareholders of the Company at the forthcoming Annual General Meeting, the Directors would avoid delay and
cost of convening further general meetings to approve the issue of shares for such purposes.
STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING
pursuant to Paragraph 8.28 (2) of the Listing Requirements of Bursa Malaysia Securities Berhad
(1) The following are the Directors standing for re-appointment or re-election at the Sixteenth 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 the following Directors pursuant to Article 77 of the Articles of Association of the Company:
(i) YBhg. Dato’ Zainol Abidin Bin Haji A. Hamid
(ii) Mr Sia Teong Heng
(2) There were four (4) Directors’ Meetings held during the financial year ended 31 March 2006. Details of attendance of
the Directors are set out in the Statement of Corporate Governance appearing on page 25 of this Annual Report.
(3) The Sixteenth Annual General Meeting will be held at the Ground Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000
Kuala Lumpur on Thursday, 28 September 2006 at 11.00 a.m.
(4) The profile of Directors standing for re-appointment or re-election as mentioned in paragraph 1 above at the Sixteenth
Annual General Meeting are set out in page 6 to 11 of this Annual Report.
6. 4 | S B C C O R P O RATION BERHAD | CORPORATE INFORMATION as at 8 August 2006
| BOARD OF DIRECTORS |
Sia Kwee Mow @ Sia Hok Chai
JMN, FFB, FCIOB, FAIB
Executive Chairman
Sia Teong Heng | REMUNERATION COMMITTEE |
B.Sc. (Eng), M.Sc.
Managing Director Dato’ Zainol Abidin Bin Haji A. Hamid
LLB (Hons)
Mun Chong Shing @ Mun Chong Tian Chairman & Non-Executive Director
Non-Executive Director
Dato’ Lim Phaik Gan
Dato’ Zainol Abidin Bin Haji A. Hamid DPMP, DMPN, M.A.(Law), FCI, ARB
LLB (Hons) Independent Non-Executive Director
Non-Executive Director
Dato’ Dr. Norraesah Bt. Haji Mohamad
Dato’ Lim Phaik Gan DSPN, PhD., B.Sc.(Econ)
DPMP, DMPN, M.A.(Law), FCI, ARB Independent Non-Executive Director
Independent Non-Executive Director
Sia Teong Heng
Dato’ Dr. Norraesah Bt. Haji Mohamad B.Sc. (Eng), M.Sc.
DSPN, PhD., B.Sc.(Econ) Managing Director
Independent Non-Executive Director
Ahmad Fizal Bin Othman | NOMINATION COMMITTEE |
B.Acc & Fin. (Hons)
Independent Non-Executive Director
Dato’ Lim Phaik Gan
DPMP, DMPN, M.A.(Law), FCI, ARB
Chairperson &
Independent Non-Executive Director
Dato’ Dr. Norraesah Bt. Haji Mohamad
DSPN, PhD., B.Sc.(Econ)
Independent Non-Executive Director
Ahmad Fizal Bin Othman
B.Acc & Fin. (Hons)
Independent Non-Executive Director
Mun Chong Shing @ Mun Chong Tian
Non-Executive Director
| AUDIT COMMITTEE | | EXECUTIVE MANAGEMENT |
Dato’ Dr. Norraesah Bt. Haji Mohamad Sia Teong Heng
DSPN, PhD., B.Sc.(Econ)
B.Sc. (Eng), M.Sc.
Chairperson &
Chairman & Managing Director
Independent Non-Executive Director
Sia Teong Leng
Dato’ Lim Phaik Gan B.A. (Hons) (Law & Econs), M.B.A.
DPMP, DMPN, M.A.(Law), FCI, ARB
Corporate Director
Independent Non-Executive Director
Teh Kai Chua
Ahmad Fizal Bin Othman B.Sc. (Eng)
B.Acc & Fin. (Hons)
General Manager - Technical
Independent Non-Executive Director
Sia Teong Heng
B.Sc. (Eng), M.Sc.
Managing Director
7. | SBC CORPORATION BERH A D | 5
| SOLICITORS |
Cheang & Ariff
39 Court
39, Jalan Yap Kwan Seng
50450 Kuala Lumpur
Lim & Yeoh
145-M Jalan Maharajalela
50150 Kuala Lumpur
Lee, Perara & Tan
55, Jalan Thambapillai
Off Jalan Tun Sambanthan | PRINCIPAL BANKERS |
Brickfields, 50470 Kuala Lumpur
Alliance Bank Malaysia Berhad
Foong & Partners
Suite 21-08, Level 21 Bangkok Bank Berhad
Plaza 138, 138, Jalan Ampang Bumiputra-Commerce Bank Berhad
50450 Kuala Lumpur Malayan Banking Berhad
OCBC Bank (Malaysia) Berhad
| AUDITORS | United Overseas Bank (Malaysia) Berhad
Utama Merchant Bank Berhad
Horwath
Chartered Accountants
Level 16 Tower C, Megan Avenue II | REGISTERED OFFICE |
12 Jalan Yap Kwan Seng
50450 Kuala Lumpur
Wisma Siah Brothers
74A Jalan Pahang
| COMPANY SECRETARIES | 53000 Kuala Lumpur
Tel: 03-4041 8118 Fax: 03-4043 5281
Chong Fook Sin
ATII, MCCS, AFA
| REGISTRARS |
Kan Chee Jing
ACIS Tacs Corporate Services Sdn. Bhd.
Unit No. 203, 2nd Floor, Block C
Damansara Intan
No. 1, Jalan SS 20/27
47400 Petaling Jaya
Tel: 03-7118 2688 Fax: 03-7118 2693
| STOCK EXCHANGE LISTING |
Main Board of
Bursa Malaysia Securities Berhad
8. 6 | S B C C O R P O RATION BERHAD | DIRECTORS’ PROFILES as at 31 July 2006
| SIA KWEE MOW @ SIA HOK CHAI |
Sia Kwee Mow @ Sia Hok Chai, a Malaysian, aged 73, 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 52 years of experience in building and civil engineering contracting
and not less than 34 years of experience in plastic engineering since the incorporation 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 as the 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 and International
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 construction industry, 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 and Sanitary 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)
(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 extent of 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 43 to the financial statements.
He has not been convicted of any offence within the past 10 years.
He attended all the four Board Meetings held during the last financial year.
9. | SBC CORPORATION BERH A D |
| SIA TEONG HENG |
Sia Teong Heng, a Malaysian, aged 43, is the Managing Director of SBC Corporation
Berhad (“SBC”). He was appointed as a Director of SBC on 5 February 1991. He is a member
of the Audit Committee and the Remuneration Committee of SBC. He graduated in 1985
with a degree in Bachelor of Science in Civil Engineering from Loughborough 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. He was a past board member of the Entrepreneurs Organisation
and a recent member of the Young President's Organisation. Presently, he also sits on the
boards of several subsidiaries of SBC.
His holdings in the securities of SBC are as follows:
Direct Interest Indirect Interest
Ordinary shares 2,517,992 (a) 19,498,523 (b)
(a) 2,274,000 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 extent of 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 43 to the financial statements.
He has not been convicted of any offence within the past 10 years.
He attended all the four Board Meetings held during the last financial year.
10. 8 | S B C C O R P O RATION BERHAD |
| MUN CHONG SHING @ MUN CHONG TIAN |
Mun Chong Shing @ Mun Chong Tian, a Malaysian, aged 69, was appointed as an
Executive Director of SBC Corporation 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 retirement on
31 December 2001.
On 31 December 2001, he was redesignated as a Non-Executive Director of SBC. He is a
member of the Nomination Committee of SBC.
He has received training in Sales Management conducted by the National Productive Centre
and the Malaysian Institute 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 he has had extensive exposure to industrial engineering and
management.
His holdings in the securities of SBC are as follows:
Direct Interest Indirect Interest
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 and major shareholders of SBC.
He does not have any conflict of interest with SBC.
He has not been convicted of any offence within the past 10 years.
He attended all the four Board Meetings held during the last financial year.
11. | SBC CORPORATION BERH A D |
| DATO’ LIM PHAIK GAN |
Dato’ Lim Phaik Gan, a Malaysian, aged 86, was appointed as an Independent
Non-Executive Director of SBC Corporation Berhad (SBC) on 5 February 1991. She is the
Senior Independent Non-Executive Director, the Chairperson of the Nomination Committee
and a member of the Audit Committee and the Remuneration Committee of SBC. She is an
advocate and solicitor and was called to the Bar of England and the Bar of Malaysia. She
obtained a Master of Arts degree in Law from the University of Cambridge, United Kingdom
and was in active practice at the Bar 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 of the 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 Deputy Permanent Representative of Malaysia to the United
Nations, and successively as the Malaysian Ambassador to Yugoslavia, Austria, Belgium and
the European Economic Community. She was Malaysia's Permanent Representative to the
United Nations Industrial and Development Organisation and International 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 Director of the Kuala Lumpur Regional Centre for Arbitration, an international
organisation involved in the conduct and administration of international commercial
arbitration for the settlement of disputes arising out of international commercial contracts
and joint ventures, in which capacity she served from 1982 to 2000. She is currently a
member of 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 four Board Meetings held during the last financial year.
12. 1 0 | S B C C O R P O RATION BERHAD |
| DATO’ DR. NORRAESAH BT. HAJI MOHAMAD |
Dato’ Dr. Norraesah Bt. Haji Mohamad, a Malaysian, aged 58, was appointed as an
Independent Non-Executive Director of SBC Corporation Berhad (SBC) on 8 July 1991.
She is the Chairperson of the Audit Committee and a member of the Nomination Committee
and the Remuneration Committee of SBC. She holds a Doctorate Degree in Economics
Science (International Economics and Finance) which she obtained in 1986 from University
of Paris 1, Pantheon Sorbonne, France.
She has over 34 years of working experience in banking, consultancy and international trade
and commerce. She worked with the International Trade Division of the Ministry of Trade
and Industry (now known as the Ministry of International Trade and Industry) from 1972 to
1985 and was later transferred to the Finance Division of the Ministry of 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 the position of Managing Director with a consultant firm
providing financial advisory services. From 1991 to 1998 she was appointed as the Chief
Representative of Credit Lyonnais Bank in Malaysia.
She sits on the board of KESM Industries Berhad, Malaysian Oxygen Berhad, Protasco Berhad,
Ya Horng Electronic (M) Berhad, Adventa 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 three of the four Board Meetings held during the last financial year.
13. | SBC CORPORATION BERH A D | 1 1
| DATO’ ZAINOL ABIDIN BIN HAJI A. HAMID |
Dato’ Zainol Abidin Bin Haji A. Hamid, a Malaysian, aged 64, was appointed as a
Non-Executive Director of SBC Corporation Berhad (SBC) on 10 October 2003, representing
the interest of Permodalan Nasional Berhad. He is the Chairman of the Remuneration
Committee of SBC. He graduated with LLB (Hons) from the University of London in 1995.
He joined the Kedah State Government in 1966 as a civil servant. From 1973 to 1981, he
was the District Officer for Sik, then Padang Terap and finally Kubang Pasu. He was General
Manager and Director of Kedah Cement Sdn Bhd from 1981 to 1996 and Managing
Director of Kedah Cement Marketing Sdn Bhd from 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 has not been convicted of any offence within the past 10 years.
He attended all the four Board Meetings held during the last financial year.
| AHMAD FIZAL BIN OTHMAN |
Ahmad Fizal Bin Othman, a Malaysian, aged 43, was appointed as an Independent
Non-Executive Director of SBC Corporation Berhad (SBC) on 24 February 2004. He is a
member of the Audit Committee and the Nomination Committee 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 immerses himself 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 has not been convicted of any offence within the past 10 years.
He attended all the four Board Meetings held during the last financial year.
14. 1 2 | S B C C O R P O RATION BERHAD | GROUP FINANCIAL HIGHLIGHTS for the financial year ended 31 March 2006
2006 2005 2004 2003 2002
(Restated)
RM’000 RM’000 RM’000 RM’000 RM’000
RESULTS
Revenue 69,927 66,867 86,317 69,829 81,645
Profit before taxation 1,533 3,321 6,996 5,149 1,618
Profit after taxation but
before minority interest 1,047 2,250 2,073 2,011 1,174
Profit attributable to shareholders 1,047 2,250 2,073 2,011 1,174
ASSET EMPLOYED
Property, plant and equipment 34,771 35,452 36,246 35,813 7,047
Investments and other assets 183,065 192,257 153,703 152,856 141,705
Net current assets 50,881 37,243 73,632 71,634 56,867
Goodwill and deferred expenditure 27,318 27,318 27,318 27,272 10,246
296,035 292,270 290,899 287,575 215,865
FINANCED BY
Share capital 82,435 82,435 82,435 82,435 57,302
Share application account - - - - 115,600
Reserves 138,026 137,572 135,940 134,682 42,524
ABBA bonds 43,978 41,752 39,712 37,827 -
Deferred liabilities 31,596 30,511 32,812 32,631 439
296,035 292,270 290,899 287,575 215,865
SELECTED RATIOS
Net earnings per share (sen) 1.3 2.7 2.4 2.4 1.8
Net assets per share (sen) 267 267 265 263 376
Gross dividend (%) 1.0 1.0 1.0 1.0 -
16. 1 4 | S B C C O R P O RATION BERHAD | CORPORATE STRUCTURE as at 8 August 2006
| RESIDENTIAL PROPERTY DEVELOPMENT |
100% | Seri Ampangan Realty Sdn Bhd
100% | Sinaran Naga Sdn Bhd
100% | Mixwell (Malaysia) Sdn Bhd
100% | South-East Best Sdn Bhd
| INVESTMENT HOLDING | 100% | Gracemart Resources Sdn Bhd
100% | Aureate Construction Sdn Bhd
100% | Siah Brothers Land Sdn Bhd 100% | Sutrati Development Sdn Bhd
100% | Siah Brothers Properties Sdn Bhd 100% | Siah Brothers Development Sdn Bhd
100% | Siah Brothers Industries Sdn Bhd 100% | Tiara Development Sdn Bhd
100% | SBC Homes Sdn Bhd
100% | Winsome Ventures Sdn Bhd
| BUILD / CONSTRUCTION | 100% | SBC Leisure Sdn Bhd
100% | SBC Towers Sdn Bhd
100% | Syarikat Siah Brothers Trading Sdn Bhd 100% | Siah Brothers Project Management Sdn Bhd
100% | Syarikat Siah Brothers Construction Sdn Bhd 33.3% | Sri Berjaya Development Sdn Bhd
100% | Siah Brothers Enterprise Sdn Bhd 22.2% | Sri Rawang Properties Sdn Bhd
100% | Lifeplus - Siah Brothers Trading JV Sdn Bhd
| STRATEGIC INVESTMENT |
51% | Masahmura Sdn Bhd
51% | Masahmura Sales Service Sdn Bhd
50% | Ligamas Sdn Bhd
50% | Tri-Development Co., Ltd
50% | Varich Industries Sdn Bhd
50% | Sam Lau Plantation Sdn Bhd
40% | Paling Industries Sdn Bhd
40% | Liga Canggih Sdn Bhd
19.6% | Pasti Bumi Sdn Bhd
17. STATEMENT OF DIRECTORS’ RESPONSIBILITIES | SBC CORPORATION BERH A D | 1 5
in 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 accordance
with applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so
as to give a true and fair view of the state of affairs of the Group and the Company as of 31 March 2006 and of
the results and 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 reasonable
accuracy at any time the financial position of the Group and the Company and are kept in accordance with the
Companies Act, 1965. The Directors are also responsible for taking such steps as are reasonably open to them
to safeguard the Group’s assets and to prevent and detect fraud and other irregularities.
18. PJX, PETALING JAYA
1 6 | S B C C O R P O RATION BERHAD |
SIGNAL HILL PARK @ THE PEAK KOTA DAMANSARA, PETALING JAYA SURIA SETAPAK, KUALA LUMPUR SERI MAHKOTA AMAN, KUANTAN
19. EXECUTIVE CHAIRMAN’S STATEMENT | SBC CORPORATION BERH A D | 1 7
On behalf of the Board of Directors of SBC
Corporation Berhad, I have the pleasure of
presenting to you the Annual Report and the
Audited Financial Statements of the Group
and the Company for the financial year ended
31 March 2006.
FINANCIAL REVIEW
The Group revenue improved 5% to RM69.93 million
compared with RM66.87 million a year ago with the
operational profits similar to the previous year’s level; RM6.43
million against RM6.71 million recorded for the last financial
year. Consolidated post tax profit result was however lower
PJX, PETALING JAYA
by RM1.20 million, primarily on account of associates’ lower
performance at RM0.27 million.
OPERATION REVIEW
The building and residential market experienced a
comparatively higher degree of volatility compared to the
previous year, on account of inflationary pressures. The
Group’s strategy of maintaining (project) locational diversity
did provide a buttress, resulting in an even performance for
the year. Meanwhile SBC shall continue to use its building
technology and market knowledge, to rollout more designs
and products that are continuously desired by the market
place.
The group handed over double storey terraces at both Suria
Pendamar, Klang and Seri Mahkota Aman, Kuantan and on
its way to complete Signal Hill’s semi detached park homes in
Kota Kinabalu. Meanwhile works were on schedule for Ministry
of Finance, Sabah’s new Land and Survey headquarters, The
Cube@Metropolitan Park commercial units in Kuala Lumpur
and the fourth phase of Bandar Utama, Ligamas in north
of Selangor. During the year, the Group’s activities were
located at “Seri Mahkota Aman” in East Coast of Malaysia,
“Signal Hill” in Kota Kinabalu, “Bandar Utama Batang Kali” in
north of Selangor and “Metropolitan Park” park edge mixed
development in north Kuala Lumpur.
Looking ahead, two new projects will be added into the
current list, worth RM250 million, consisting of a 34-storey
office tower in Petaling Jaya, Selangor and a multi-use transit
complex in Serdang, Selangor, both of which were signed
during the year and now awaiting planning approval. During
the year, our overseas unit, secured an industrial building
system (IBS) contract with the Thailand government for a
RM96 million “Eua Arthorn” program in Bangkok city.
20. THE CUBE, KUALA LUMPUR
1 8 | S B C C O R P O RATION BERHAD |
METROPOLITAN PARK, KUALA LUMPUR BANDAR LIGAMAS SURIA PENDAMAR, KLANG PALING’S PRODUCTS
21. | SBC CORPORATION BERH A D | 1 9
Paling Industries Sdn Bhd, our manufacturing associate,
operating under a series of price increases of its raw material,
oil-based PVC resins, reported a low result. Export earnings
as a percentage of turnover however continued to improve,
rising to 30%, primarily to its principal markets of Australia,
Hong Kong, Pakistan, Ghana and England.
ECONOMIC AND BUSINESS OUTLOOK
In the short term, we expect operating conditions to
continue challenging our project management and building BANDAR UTAMA BATANG KALI
design skills to deliver the best possible building solution to
our consumers and partners alike. The Group remain upbeat
about the longer term prospects, where both within Malaysia
as well as regionally, SBC is well positioned to take advantage
of improving living standards and demographics favorable
towards better infrastructure.
DIVIDEND
The Board has recommended the payment of a first and
final dividend of 1% per ordinary share less 28% tax for
the financial year ended 31 March 2006 subject to the
shareholders’ approval at the forthcoming Annual General
Meeting of the Company.
APPRECIATION AND ACKNOWLEDGEMENT
On behalf of the Board of Directors, I would like to thank
our valued shareholders, business partners, bankers and
government for their continued support.
I would also like to add our appreciation to our customers
and supporters of SBC’s products and services, all of whom
have place much trust with us, as custodian to their home
and property investments.
Lastly, I would like to thank the SBC management team for
going the extra mile.
Thank you.
Sia Kwee Mow @ Sia Hok Chai
JMN,FFB,FCIOB,FAIB
Executive Chairman
8 August 2006
22. PJX, PETALING JAYA
2 0 | S B C C O R P O RATION BERHAD |
SIGNAL HILL PARK @ THE PEAK KOTA DAMANSARA, PETALING JAYA SURIA SETAPAK, KUALA LUMPUR SERI MAHKOTA AMAN, KUANTAN
23. PENYATA PENGERUSI EKSEKUTIF | SBC CORPORATION BERH A D | 2 1
Bagi pihak Lembaga Pengarah, saya dengan bangganya
membentangkan Laporan Tahunan berserta Penyata
Kewangan Kumpulan dan Syarikat bagi tahun kewangan
berakhir 31 Mac 2006.
ULASAN KEWANGAN
Perolehan Kumpulan telah mencapai RM69.93 juta dengan
peningkatan sebanyak 5% berbanding dengan RM66.87 juta
pada tahun lepas, manakala keuntungan operasi berada di tahap
yang sama iaitu RM6.43 juta berbanding RM6.71 juta bagi tahun
kewangan lepas. Bagaimanapun, keuntungan Kumpulan selepas
cukai telah merosot sebanyak RM1.20 juta, khususnya berpunca
daripada pencapaian yang rendah oleh rakan niaga pada RM0.27
juta.
ULASAN OPERASI
Pasaran pembangunan dan perumahan mengalami kadar PJX, PETALING JAYA
pertukaran yang agak tinggi berbanding tahun lepas berpunca
daripada asakan dan tekanan inflasi. Bagaimanapun, strategi
Kumpulan dalam memperluas dan mempelbagaikan lokasi projek
telah menyeimbangkan pencapaian prestasi tahun ini. Di samping
itu, SBC akan terus menggunakan kemahiran teknologi pembinaan
dan ilmu pengetahuan pasaran untuk menghasilkan lebih banyak
rekabentuk baru dan produk yang baik untuk memenuhi permintaan
pasaran yang selanjutnya.
Kumpulan telah menyiapserahkan rumah berteres dua tingkat di
Suria Pendamar, Kelang dan Seri Mahkota Aman, Kuantan, dan
dalam usahanya untuk menyempurnakan projek pembinaan rumah
kembar bertaman Signall Hill di Kota Kinabalu. Sementara itu, kerja-
kerja pembinaan ibu pejabat baru Tanah dan Ukur di Sabah untuk
Kementerian Kewangan, unit-unit komersial di The Cube@Metropolitan
Park di Kuala Lumpur dan projek fasa keempat Bandar Utama, Ligamas,
di utara Selangor sedang berjalan dengan lancar dalam jangkamasa
yang ditetapkan. Dalam tahun kewangan ini, aktiviti-aktiviti Kumpulan
telah tertumpu di “Seri Mahkota Aman” di bahagian pantai timur
Malaysia, “Signal Hill” di Kota Kinabalu, “Bandar Utama Batang Kali”
di bahagian utara negeri Selangor dan “Taman Metropolitan” di utara
Bandaraya Kuala Lumpur.
Menuju ke hadapan, Kumpulan akan melaksanakan dua projek baru
bernilai RM250 juta yang melibatkan pembinaan bangunan pejabat
setinggi 34 tingkat di Bandaraya Petaling Jaya dan juga sebuah kompleks
transit pelbagaigunaan di Serdang, Selangor. Cadangan pembinaan
kedua-dua projek ini telah diperakui dalam tahun kewangan ini dan kini
hanya menunggu pengesahan perancangan. Dalam tahun kewangan
ini juga, unit pelaburan luar negeri kami telah berjaya mendapatkan
kontrak daripada kerajaan Thailand bagi projek pembinaan program
“Eua Arthorn” di Bandaraya Bangkok dengan penggunaan sistem IBS.
Projek ini bernilai sebanyak RM96 juta.
24. THE CUBE, KUALA LUMPUR
2 2 | S B C C O R P O RATION BERHAD |
TAMAN METROPOLITAN, KUALA LUMPUR BANDAR LIGAMAS SURIA PENDAMAR, KELANG PRODUK PALING
25. | SBC CORPORATION BERH A D | 2 3
Syarikat perkilangan bersekutu kami, Paling Industries Sdn Bhd,
telah menunjukkan prestasi yang rendah berpunca daripada asakan
kenaikan harga bahan-bahan mentah dan damar PVC beralas minyak.
Bagaimanapun, pendapatan daripada aktiviti ekspot telah berjaya
menunjukkan pencapaian yang semakin baik dengan kenaikan
sebanyak 30%, khususnya berpunca daripada pasaran utamanya di
Australia, Hong Kong, Pakistan, Ghana dan England.
ULASAN EKONOMI DAN PERNIAGAAN
Dalam masa yang singkat, kami berharap keadaan operasi akan
BANDAR UTAMA BATANG KALI
terus memberi cabaran yang positif terhadap pengurusan projek
dan skil rekabentuk pembinaan dalam usaha menghasilkan prestasi
yang terbaik dalam aspek penyelesaian pembangunan kepada para
pelanggan dan rakan bersekutu. Keupayaan SBC sebagai operator
yang kukuh dan stabil dalam sektor pembinaan dari segi peningkatan
taraf hidup dan demografi memberi peluang yang cerah terhadap
pembangunan infrastruktur.
DIVIDEN
Lembaga Pengarah dengan sukacitanya mencadangkan pembayaran
dividen pertama dan akhir sebanyak 1% sesaham tolak cukai 28%
untuk tahun kewangan berakhir 31 Mac 2006. Pembayaran dividen ini
akan diumumkan tertakluk kepada persetujuan para pemegang saham
pada Mesyuarat Agung Tahunan akan datang.
PENGHARGAAN DAN PENGAKUAN
Bagi pihak Lembaga Pengarah, saya ingin mengucapkan ribuan
terima kasih kepada para pemegang saham, rakan-rakan perkongsian
dan perniagaan, ahli-ahli bank dan pihak kerajaan atas sokongan
mereka yang berterusan.
Saya juga ingin merakamkan rasa penghargaan kami terhadap para
pelanggan dan penyokong SBC yang selama ini telah memberikan
kepercayaan yang ikhlas dan sepenuhnya kepada Kumpulan dalam
aspek pelaburan hartanah dan perumahan.
Akhirnya, saya ingin berterima kasih kepada pihak pengurusan dan
kakitangan Kumpulan ini yang telah menyumbangkan usaha dan
sokongan yang tidak ternilai di sepanjang tahun ini.
Sekian, terima kasih.
Sia Kwee Mow @ Sia Hok Chai
JMN,FFB,FCIOB,FAIB
Pengarah Eksekutif
8 Ogos 2006
26. 2 4 | S B C C O R P O RATION BERHAD | STATEMENT OF CORPORATE GOVERNANCE as at 8 August 2006
The Board of Directors of SBC Corporation Berhad remains firmly committed towards ensuring the highest standard of
corporate governance is maintained throughout the Company and its subsidiaries (“the Group”). Hence, the Board is fully
dedicated to continuously evaluating the Group’s corporate governance practices and procedures with a view to ensure the
principles and best practices in corporate governance as promulgated by the Malaysian Code on Corporate 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 of the 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
The Board as at the date of this statement has 7 members, comprising 3 Independent Non-Executive Directors, 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, who are Independent Directors.
The Directors have a wide range of experience and skills and are from diverse backgrounds relevant to managing and directing
the Group’s operations. The Executive Directors are responsible for implementing policies of the Board, overseeing the Group’s
operations and developing the Group’s business strategies. The role of the Independent Non-Executive Directors is to provide
objective and independent judgement to the decision making of the Board and as such, provide an effective check and
balance to the Board’s decision making process.
The Board is satisfied that the current Board composition fairly reflects the investment of minority shareholders in the
Company and represents the needed mix of skills and experience required to discharge the Board’s duties and responsibilities.
Furthermore, no individual Director or group of Directors can dominate the Board’s decision making process.
The profiles of the members of the Board are set out in this Annual Report under the section named Directors' Profiles.
Duties and Responsibilities
The Board recognises its key role in charting the strategic direction, development and control of the Group and has adopted the
specific responsibilities that are listed in the Code, which facilitates the discharge of the Board’s stewardship responsibilities.
The roles of the Chairman and Managing Director are clearly distinct to ensure that there is a balance of power and authority.
The Chairman is primarily responsible for the orderly conduct and working of the Board whilst the Managing Director is
responsible for the day-to-day running of the business and implementation of Board policies and decisions adopted by the
Board.
Dato’ Lim Phaik Gan is the Senior Independent Non-Executive Director to whom concerns may be conveyed.
27. | SBC CORPORATION BERH A D | 2 5
Board Meetings
The Board meets on a scheduled basis once every quarter with additional meetings held as and when urgent issues and
important decisions are required to be taken between the scheduled meetings. During the financial year ended 31 March
2006, the Board met 4 times where it deliberated on and considered matters relating to the Group’s financial performance,
significant investments, corporate development, strategic issues and business plan.
Details of each Director’s attendance of Board meetings are set out as follows:
No. of meetings
held during
the financial
year ended No. of meetings
Name of Director 31 March 2006 attended
Sia Kwee Mow @ Sia Hok Chai (Executive Chariman) 4 4
Sia Teong Heng (Managing Director) 4 4
Mun Chong Shing @ Mun Chong Tian (Non-Executive Director) 4 4
Dato’ Zainol Abidin Bin Haji A. Hamid (Non-Executive Director) 4 4
Dato’ Lim Phaik Gan (Independent Non-Executive Director) 4 4
Dato’ Dr. Norraesah Bt. Haji Mohamad (Independent Non-Executive Director) 4 3
Ahmad Fizal Bin Othman (Independent Non-Executive Director) 4 4
The Board members have unrestricted and timely access to all information necessary for the discharge of their responsibilities.
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 decision making and effective discharge of
their duties. These documents are comprehensive and include qualitative and quantitative information to enable the Board
members to make informed decisions. Notice of Board Meetings and board papers are provided to Directors in advance so
that meaningful deliberation and sound decisions can be made at 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 decisions. 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 of the Company
Secretary. If required, the Directors may engage independent professionals at the Group’s expense, in the furtherance of their
duties.
28. 2 6 | S B C C O R P O RATION BERHAD |
BOARD OF DIRECTORS (CONT'D)
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 from office and
be eligible for re-election at the annual general meeting and all Directors appointed by the Board are subject to re-election
by shareholders at the first opportunity after their appointment. Furthermore, each Director shall retire from office at least
once in every three years. Directors who are of or over the age of seventy years shall also retire from office and be eligible for
re-appointment at the annual general meeting pursuant to Section 129 (6) of the Companies Act, 1965.
Directors’ Training
All members of the Board have attended the Mandatory Accreditation Programme. Pursuant to Paragraph 15.09 of the
Bursa Securities Listing Requirements, the Board is responsible to identify the training needs of its Directors which will aid
them in the discharge of their duties on a continuous basis. The Board noted that the Nomination Committee is satisfied
that the Board comprises qualified people with professional background, expertise in various fields and practical experience.
Nevertheless, the Board encourages its Directors to go for training on their own initiative from time to time in order to keep
them abreast of the latest developments in the market-place as well as the current changes in the laws, regulations and
accounting standards.
For new Directors, a familiarisation program will be conducted for them. This includes a presentation of the Group’s operations
by senior management and visits to the existing project sites.
Board Committees
The Board has delegated certain of its responsibilities to the three Committees, namely the Audit, the Nomination and
the Remuneration Committees with clearly defined terms of reference in assisting the Board to discharge its duties and
responsibilities effectively.
AUDIT COMMITTEE
The report of the Audit Committee is set out on pages 35 to 40 of this annual report.
29. | SBC CORPORATION BERH A D | 2 7
NOMINATION COMMITTEE (“NC”)
The NC has held one meeting during the financial year ended 31 March 2006. The attendance of the members of the NC at
the meeting is as follows:
No. of meetings
held during
the financial
year ended No. of meetings
Name of members 31 March 2006 attended
Dato’ Lim Phaik Gan – Chairperson (Independent Non-Executive Director) 1 1
Dato’ Dr. Norraesah Bt. Haji Mohamad (Independent Non-Executive Director) 1 1
Ahmad Fizal Bin Othman (Independent Non-Executive Director) 1 1
Mun Chong Shing @ Mun Chong Tian (Non-Executive Director) 1 1
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 consist exclusively
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 an independent
director.
In order to form a quorum in respect of a meeting of the Committee, the members present must be wholly or a 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 the Committee.
(c) Authority
The Committee is to recommend new nominees for the Board and the board committees and to assess Directors on
an on-going basis. The actual decision as to who shall be nominated should be the responsibility of the full Board after
considering the recommendations of the Committee.
30. 2 8 | S B C C O R P O RATION BERHAD |
NOMINATION COMMITTEE (“NC”) (CONT'D)
(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 to
shareholders 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 also be 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 meeting of the NC during the financial year ended 31 March 2006, the following matters were considered and
resolved:
(a) re-appointment and re-election of Directors at the Sixteenth Annual General Meeting;
(b) mix of skills, experience and qualities of all Directors; and
(c) the effectiveness of the Board and the contribution from each Board member.
REMUNERATION COMMITTEE (“RC”)
The members of the RC at the date of this report and their attendance at the meeting convened during the financial year
ended 31 March 2006 are as follows:
No. of meetings
held during
the financial
year ended No. of meetings
Name of members 31 March 2006 attended
Dato’ Zainol Abidin Bin Haji A. Hamid - Chairman (Non-Executive Director) 1 1
Dato’ Lim Phaik Gan (Independent Non-Executive Director) 1 1
Dato’ Dr. Norraesah Bt. Haji Mohamad (Independent Non-Executive Director) 1 1
Sia Teong Heng (Managing Director) 1 1
31. | SBC CORPORATION BERH A D | 2 9
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 consist of 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 or a 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 the Committee.
(c) Authority
The Committee is authorized to draw from outside advice as and when necessary in forming its recommendation to the
Board on the remuneration of the executive directors in all its forms. Executive directors should play no part in decisions
on their own remuneration and should abstain from discussion of their own remuneration.
The determination of the remuneration packages of the non-executive directors, including non-executive chairman,
should be a matter for the Board as a whole. The individuals concerned should abstain from discussion of their own
remuneration.
(d) Duties
The duty of the Committee is to recommend to the Board the structure and level of remuneration of executive
directors.
(e) Reporting procedures
The Company Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.
During the financial year ended 31 March 2006, the RC met once to consider the remuneration of the Executive Chairman
and Managing Director for 2006.
32. 3 0 | S B C C O R P O RATION BERHAD |
DIRECTORS’ REMUNERATION
The details of the remuneration of each Director during the financial year ended 31 March 2006 are as follows:
(a) Total Remuneration
Basic Benefits- Attendance
Salary Bonuses Fees in-kind Fee Total
RM RM RM RM RM RM
Executive
Sia Kwee Mow
@ Sia Hok Chai 510,720 78,400 - 16,925 - 606,045
Sia Teong Heng 443,520 67,200 - - - 510,720
Non-Executive
Mun Chong Shing
@ Mun Chong Tian - - 18,000 - 1,500 19,500
Dato’ Zainol Abidin
Bin Haji A. Hamid - - 19,000 - 1,500 20,500
Dato’ Lim Phaik Gan - - 19,000 - 3,000 22,000
Dato’ Dr. Norraesah
Bt. Haji Mohamad - - 19,000 - 2,400 21,400
Ahmad Fizal Bin Othman - - 18,000 - 2,700 20,700
Total 954,240 145,600 93,000 16,925 11,100 1,220,865
(b) Directors’ remuneration by bands
Executive Non-Executive Total
RM1 to RM50,000 - 5 5
RM50,001 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 - - -
RM350,001 to RM400,000 - - -
RM400,001 to RM450,000 - - -
RM450,001 to RM500,000 - - -
RM500,001 to RM550,000 1 - 1
RM550,001 to RM600,000 - - -
RM600,001 to RM650,000 1 - 1
Total 2 5 7
33. | SBC CORPORATION BERH A D | 3 1
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board aims to convey a balanced and understandable assessment of the Group’s financial position and prospects through
the quarterly results and annual reports/financial statements to the Company’s shareholders and regulators.
The Responsibility Statement by the Directors pursuant to Bursa Securities Listing Requirements is set out on page 15.
Internal Control
The Board acknowledges its responsibility for maintaining a sound internal controls system, which provides reasonable
assurance in ensuring the effectiveness and efficiency of operations and the safeguard of assets and interest in compliance
with laws and regulations as well as with internal financial administration procedures and guidelines.
The Group’s Statement on Internal Control is set out on pages 33 to 34.
Relationship with Auditors
The Board maintains a close and transparent professional relationship with the Group’s internal and external auditors through
the Audit Committee. In the course of audit of the Group’s operations, the internal and external auditors have highlighted
all important matters to the Audit Committee. The Audit Committee will then bring up the matters for the Board’s attention
if it is necessary.
The Group does not paid any amount of non-audit fees to the external auditors for the financial year ended 31 March 2006.
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 received through phone calls or
letters are handled by the Executive Directors, Group Financial Controller and Company Secretary.
At the annual general meeting and extraordinary general meeting, the Chairman gives shareholders ample opportunity to
participate through questions on the prospects, performance of the Group and other matters of concern to them with the
Board.
34. 3 2 | S B C C O R P O RATION BERHAD |
ADDITIONAL COMPLIANCE INFORMATION
In conformance with the requirements of Bursa Securities, the following compliance information is provided:
1. 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 as at
the end of the financial year ended 31 March 2006.
2. Materials Contracts
There were no material contracts entered into by the Company and its’ subsidiaries which involved the directors’ and
substantial shareholders’ interests subsisting at the end of the financial year ended 31 March 2006 or entered into since
the end of the previous financial year.
3. Utilisation of Proceeds
There were no proceeds raised from any proposals by the Company during the financial year.
4. Share Buy-backs
There were no share buy-backs by the Company during the financial year.
5. Options, Warrants or Convertible Securities
There were no options, warrants or convertible securities issued by the Company during the financial year.
6. American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”)
During the financial year, the Company did not sponsor any ADR or GDR programme.
7. Sanctions and / or Penalties
There were no sanctions and / or penalties imposed on the Company and its subsidiaries, Directors or Management by
the relevant regulatory bodies during the financial year.
8. Variation in Results
There was no material variation between the results for the financial year and the unaudited results previously
announced.
9. Profit Guarantee
There was no profit guarantee given by the Company in respect of the financial year.
35. STATEMENT ON INTERNAL CONTROL | SBC CORPORATION BERH A D | 3 3
INTRODUCTION
This Statement on Internal Control is made pursuant to paragraph 15.27 (b) of the Bursa Malaysia Securities Berhad Listing
Requirements. The Board of Directors (“the Board”) of SBC Corporation Berhad is pleased to present below the Group’s
Statement on Internal Control for the financial year ended 31 March 2006, prepared in accordance with the Statement on
Internal Control: Guidance for Directors of Public Listed Companies.
BOARD RESPONSIBILITY
The Board affirms its responsibility in maintaining a sound system of internal controls to safeguard shareholders’ investments
and the Group assets. A sound system of internal control is designed to identify and manage risks facing the Group in pursuit
of its business objectives. However, due to inherent limitations to any systems of internal control, such a system can only
provide reasonable and not absolute assurance against material misstatements or losses.
The Audit Committee has been delegated, in accordance with its terms of reference, for reviewing the adequacy and the
integrity of the company internal control systems and management information systems, including compliance with applicable
laws, regulations, rules, directives and guidelines.
RISK MANAGEMENT FRAMEWORK
Risk management is seen as an integral part of the Group’s business operations by the Board. The Group has in place an
ongoing process for identifying, evaluating and managing the significant risks faced by the Group, throughout the financial
year under review. Senior management will assess and appraise the cost and benefits, impact on the Group, review the
financial implications before any investment or significant expenditure is made.
This ongoing process is undertaken for all the major subsidiaries of the Group and the processes, findings, and actions taken
by the Management are all reviewed regularly by the Board.
INTERNAL CONTROL
As the Board has entrusted the Audit Committee with the responsibility of reviewing the adequacy and integrity of the
internal control system, the Audit Committee assesses the adequacy and integrity of the system of internal control through
independent reviews on reports received from management, external auditors and the outsourced internal audit function.
As part of the process, the external auditors provide assurance in the form of their annual statutory audit of the Group’s
financial statements. Areas of improvement identified by external auditors during the course of the statutory audit are brought
to the attention of the Audit Committee through management letters or are articulated at Audit Committee meetings.
The Group’s internal audit function was outsourced to external consultant in the third quarter of 2005. During the financial
year under review, the internal audit function conducted internal audit visits on certain key business activities in accordance
with the internal audit plan approved by the Audit Committee for the purposes of assessing the adequacy and effectiveness of
the internal control systems within these business entities. The results of the audits and recommendations for improvement
co-developed with Management were presented at the quarterly Audit Committee Meeting.
36. 3 4 | S B C C O R P O RATION BERHAD |
OTHER KEY FEATURES OF INTERNAL CONTROL SYSTEM
The Group has put in place the following key elements of internal control:
• Organizational Structure
An organization structure with clearly defined delegation of responsibilities to the Board Committees, the Management
and operating units of the Group. The clearly defined authority limits have been established for all aspects of the businesses
and are subject to periodic review for their continued relevance.
• Financial Performance Review
Annual financial and operational forecast are prepared by the Management and approved by the Executive Directors.
The monitoring of actual performance against budgeted is performed on a timely basis. When significant variances are
identified, further investigation will be performed and follow-up management actions will be taken where necessary.
• Operational Review
Project coordination and management meetings were conducted on a periodical basis. Relevant progress and performance
reports are presented to the Executive Directors for review and discussion. The matters that are discussed are as follows:
- Feedback on the progress of development projects undertaken by the individual subsidiary and highlights on the
shortcomings or problems together with proposed corrective actions;
- Progress on billings, collections and loan documentation processes; and
- Financing and cash flow performance.
In addition, Senior Management staff attend site meetings on a periodic basis as part of their close monitoring of status of the
individual projects.
CONCLUSION
Based on the assessment of internal controls within the Group, the Board is pleased to disclose that the Group’s internal
control systems are adequate and there were no internal control weaknesses which have resulted in any material losses that
would require separate disclosure in the Annual Report. However, the Board will ensure that the internal control system of the
Group will continuously be improved to meet the changing and challenging business and operating environments.
This Statement on Internal Control is made in accordance with a resolution passed by the Board of Directors on 8 August
2006.
37. AUDIT COMMITTEE REPORT | SBC CORPORATION BERH A D | 3 5
The Board of SBC Corporation Berhad is pleased to present the Audit Committee Report for the financial year ended 31 March
2006.
COMPOSITION AND MEETINGS
The Audit Committee comprises four members, three of whom are Independent Non-Executive Directors and one is the
Managing Director. The name of the members and their attendance at meetings held during the financial year are as
follows:
No. of meetings
held during
the financial
year ended No. of meetings
Name of members 31 March 2006 attended
Dato’ Dr. Norraesah Bt. Haji Mohamad - Chairperson
(Independent Non-Executive Director) 4 3
Dato’ Lim Phaik Gan (Independent Non-Executive Director) 4 4
Ahmad Fizal Bin Othman (Independent Non-Executive Director) 4 4
Sia Teong Heng (Managing Director) 4 4
The Audit Committee normally meets four times a year with additional meetings convened between scheduled meetings, if
necessary, to deliberate on urgent and significant matters.
The Group Financial Controller and the representatives of the outsourced Internal Auditors and the External Auditors attended
the meetings at the invitation of the Audit Committee, where considered necessary.
The Company Secretary is responsible for distributing the notice of the meetings and relevant papers to the Audit Committee
members prior to their meetings and recording the proceedings of the meetings thereat.
INTERNAL AUDIT FUNCTION
The Company has outsourced internal audit function to Audex Governance Sdn Bhd during the financial year. The principal
role of the Internal Auditor is to undertake independent, regular and systematic review of the Group’s systems of internal
control so as to provide reasonable assurance that such systems continue to operate efficiently and effectively. It is the
responsibility of the Internal Auditor to provide the Audit Committee with independent and objective reports on the state of
internal control of various operating units within the Group and the extent of compliance of the units with Group’s established
policies and procedures as well as relevant statutory requirements.
38. 3 6 | S B C C O R P O RATION BERHAD |
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE
In line with the terms of reference of the Audit Committee, the following activities were carried out by the Audit Committee
during the financial year ended 31 March 2006:
a) Discussed and reviewed the Audit Planning Memorandum which cover the external auditor’s plan, scope and nature of
work.
b) Reviewed the Audit Review Memorandum in relation to their findings and accounting issues arising from the 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 31 March
2005, 30 June 2005, 30 September 2005 and 31 December 2005.
d) Assessed the Group’s financial performance.
e) Reviewed related party transactions and conflicts of interest situation that may arise within the Group.
f) Reviewed and approved the internal audit plan and the internal audit reports and followed up on the remedial actions
implemented by the Management in respect of the internal control weaknesses identified.
g) Reviewed the Group’s risk management policy and framework.
h) Reviewed the Group’s compliance with the applicable approved accounting standards issued by the Malaysian
Accounting Standards Board and other relevant legal and regulatory requirements.
SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION
During the financial year ended 31 March 2006, the Internal Auditor has:
a) Presented a risk-based annual audit plan and risk assessment policy for the Audit Committee’s review and approval;
b) Performed company-wide operation and special audits giving due attention to high and medium risk area of
concerns;
c) Followed up on the status of rectification with regards to significant issues and kept the Audit Committee abreast of the
current status; and
d) Furnished internal audit reports to the Audit Committee on quarterly basis as an updates of the internal audit
activities.
In accordance with the approved audit plan for 2005/2006, the areas reviewed by the internal audit function were as
follows:
a) Management and operational review of companies within the Group;
b) Procurement of services;
c) Pre-development processes;
39. | SBC CORPORATION BERH A D | 3 7
SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION (CONT'D)
d) Sales administration processes;
e) Monitoring of the progress of construction;
f) Handover procedures and complaint management;
g) Billings and collection procedures;
h) Related party transactions;
i) Property management; and
j) Update of the risk profile.
A number of minor internal control weaknesses were identified during the year, all of which have been addressed by the
Management. None of the weaknesses has resulted in any material losses, contingencies or uncertainties that would require
disclosure in the Group’s annual report.
The annual internal audit plan for 2006/2007 was presented to the Audit Committee for review and approval subsequent to
the financial year ended 31 March 2006. The activities of the internal audit function cover the following areas:
a) Management and operational review of companies within the Group;
b) Projects status and cost monitoring;
c) Manage contractor performance;
d) Progress claims processing
e) Manage the issuance of work orders and variation orders
f) Review of relevant policies and procedures;
g) Post construction service and maintenance;
h) Project performance reviews and evaluation;
i) Related party transactions;
j) Property management; and
k) Update of the risk profile.
The above reviews cover all the offices and project sites which are located in Kuala Lumpur, Klang, Kuantan and Kota
Kinabalu.
40. 3 8 | S B C C O R P O RATION BERHAD |
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 at least
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 Schedule to the
Accountants Act, 1967.
The members of the Committee shall elect a Chairman from amongst their number who shall be an independent director. In
order to form a quorum in respect of a meeting of the Committee, the majority of the members present must be independent
directors.
Attendance At Meeting
The Group Financial Controller and the representatives of the outsourced internal auditors and the external auditors shall
normally attend meetings. Other directors and employees of the Company may attend meetings at the Committee’s invitation.
However, at least once a year the Committee shall meet with the external auditors without any executive director present.
The Company Secretary shall be the secretary of the Committee.
Frequency Of Meetings
Meetings shall be held not less than four times a year. The external auditors may request a meeting if they consider that one
is necessary.
Authority
The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any
information it requires from any employee and all the employees are directed to cooperate with any request made by the
Committee.
The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the
attendance of an outsider with relevant experience and expertise, if it considers this necessary.
41. | SBC CORPORATION BERH A D | 3 9
TERMS OF REFERENCE OF THE AUDIT COMMITTEE (CONT'D)
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 ensure
co-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 ensure assistance
given by the employees to the external auditors.
(4) To review the quarterly and year-end financial statements before submission to the Board, focusing particularly on:
• any changes or implementation of changes 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 external auditor may
wish to discuss in the absence of management, where necessary.
(6) to review the external auditors’ management letter and management’s response.
(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 the recommendations 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 an opportunity
to submit his reasons for resigning.
42. 4 0 | S B C C O R P O RATION BERHAD |
TERMS OF REFERENCE OF THE AUDIT COMMITTEE (CONT'D)
Duties (Cont'd)
(8) to consider any related party transactions and conflict of interest situations that may arise within the Company or the
Group including any transaction, procedure or course of conduct that raises questions of management integrity.
(9) to consider the findings of internal investigations and management’s response and ensure co-ordination between
internal and external auditors.
(10) to consider other topics, as defined by the Board.
Reporting
The Company Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.
43. 42 | DIRECTORS’ REPORT |
48 | STATEMENT BY DIRECTORS |
48 | STATUTORY DECLARATION |
49 | REPORT TO THE AUDITORS |
50 | BALANCE SHEETS |
52 | INCOME STATEMENTS |
53 | STATEMENTS OF CHANGES IN EQUITY |
54 | CASH FLOW STATEMENTS |
57 | NOTES TO THE FINANCIAL STATEMENTS |
FINANCIAL
STATEMENTS
44. 4 2 | S B C C O R P O RATION BERHAD | DIRECTORS’ REPORT
The directors hereby submit their report and the audited financial statements of the Group and of the Company for the
financial year ended 31 March 2006.
PRINCIPAL ACTIVITIES
The Company is principally engaged in the businesses of investment holding and the provision of management and
administrative services to the subsidiaries. The principal activities of the subsidiaries are disclosed in Note 6 to the
financial statements. There have been no significant changes in the nature of these activities during the financial year.
RESULTS
THE GROUP THE COMPANY
RM RM
Profit after taxation for the financial year 1,047,197 149,820
DIVIDENDS
Since the end of the previous financial year, the Company paid the following dividends:
(a) a dividend of 5.5% less 28% tax on the Irredeemable Convertible Cumulative Preference Shares (“ICCPS”)
amounting to RM24,463 in respect of the previous financial year, in accordance with the terms of issue of the
ICCPS; and
(b) a first and final dividend of 1% less 28% tax on the ordinary shares amounting to RM593,527 in respect of the
previous financial year.
For the current financial year, the directors recommend the payment of a first and final dividend of 1% less 28% tax on
the ordinary shares amounting to RM593,527.
RESERVES AND PROVISIONS
All material transfers to or from reserves or provisions during the financial year are disclosed in the financial
statements.
45. | SBC CORPORATION BERH A D | 4 3
ISSUES OF SHARES AND DEBENTURES
During the financial year,
(a) there were no changes in the authorised and issued and paid-up share capital of the Company; and
(b) there were no issues of debentures by 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 in
the Company.
BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps
to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for
doubtful debts, and satisfied themselves that there are no known bad debts and that adequate allowance had been
made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances that would require the writing off of bad
debts, 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
steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course
of business, including their values as shown in the accounting records of the Group and of the Company, have been
written 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 attributed
to the current assets in the financial statements of the Group and of the Company misleading.
46. 4 4 | S B C C O R P O RATION BERHAD |
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render
adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or
inappropriate.
CONTINGENT AND OTHER LIABILITIES
The contingent liability of the Company is disclosed in Note 44 to the financial statements. At the date of this report,
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 year
which 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 become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors,
will or may substantially affect the ability of the Group and of the Company to meet their obligations when they 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 report or
the financial statements of the Group and of the Company which would render any amount stated in the financial
statements misleading.
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 of the
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 substantially the
results of the operations of the Group and of the Company for the financial year.
47. | SBC CORPORATION BERH A D | 4 5
DIRECTORS
The directors who served since the date of the last report are as follows:
SIA KWEE MOW @ SIA HOK CHAI
SIA TEONG HENG
MUN CHONG SHING @ MUN CHONG TIAN
DATO’ ZAINOL ABIDIN BIN HAJI A. HAMID
DATO’ LIM PHAIK GAN
DATO’ DR. NORRAESAH BT HAJI MOHAMAD
AHMAD FIZAL BIN OTHMAN
Pursuant to Section 129 of the Companies Act, 1965, Sia Kwee Mow @ Sia Hok Chai and Dato’ Lim Phaik Gan retire
at the forthcoming Annual General Meeting and offer themselves for reappointment under the provisions of Section
129(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 and Dato’ Zainol Abidin Bin
Haji A. Hamid retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for
re-election.
DIRECTORS’ INTERESTS
According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial
year in shares and options under the Employee Share Option Scheme in the Company during the financial year are as
follows:
NUMBER OF ORDINARY SHARES OF RM1 EACH
AT AT
1.4.2005 BOUGHT SOLD 31.3.2006
DIRECT INTERESTS
SIA KWEE MOW @ SIA HOK CHAI 1,480,800 - - 1,480,800
SIA TEONG HENG 2,517,992 - - 2,517,992
MUN CHONG SHING @ MUN CHONG TIAN 21,782 - - 21,782
INDIRECT INTERESTS
SIA KWEE MOW @ SIA HOK CHAI 19,498,523 - - 19,498,523
SIA TEONG HENG 19,498,523 - - 19,498,523
48. 4 6 | S B C C O R P O RATION BERHAD |
DIRECTORS’ INTERESTS (CONT'D)
NUMBER OF ORDINARY SHARES OF RM1 EACH
UNDER OPTION
AT AT
1.4.2005 GRANTED EXPIRED 31.3.2006
DIRECT INTERESTS
SIA KWEE MOW @ SIA HOK CHAI 450,000 - (450,000) -
SIA 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 have
interests in the shares in the subsidiaries to the extent of the Company’s interest, in accordance with Section 6A of the
Companies Act, 1965.
None of the other directors holding office at the end of the financial year had any interest in shares 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 (other
than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown
in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made
by the Company or a related corporation with the director or with a firm of which the director is a member, or with
a company in which the director has a substantial financial interest except for any benefits which may be deemed to
arise from transactions entered into in the ordinary course of business with companies in which certain directors have
substantial financial interests as disclosed in Note 43 to the financial statements.
Neither during nor at the end of the financial year was the Company or its subsidiaries a party to any arrangements
whose object is to enable the directors to acquire benefits by means for the acquisition of shares in or debentures of
the Company or any other body corporate.
SIGNIFICANT EVENT DURING THE FINANCIAL YEAR
The significant event during the financial year of the Company is disclosed in Note 49 to the financial statements.
49. | SBC CORPORATION BERH A D | 4 7
SIGNIFICANT EVENT SUBSEQUENT TO BALANCE SHEET DATE
The significant event subsequent to the balance sheet date of the Company is disclosed in Note 50 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 Lumpur
20 July 2006
