SBC Corporation Berhad, Annual Audited Accounts 2003
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SBC Corporation Berhad, Annual Audited Accounts 2003

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SBC Corporation Berhad, Annual Audited Accounts 2003

SBC Corporation Berhad, Annual Audited Accounts 2003

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SBC Corporation Berhad, Annual Audited Accounts 2003 SBC Corporation Berhad, Annual Audited Accounts 2003 Document Transcript

  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P FINANCIAL REPORT for the financial year ended 31 March 2003 CONTENTS Page Directors’ Report .................................................................................................. 1 Statement by Directors......................................................................................... 9 Statutory Declaration ............................................................................................ 9 Auditors’ Report ....................................................................................................10 Balance Sheets ....................................................................................................12 Income Statements ..............................................................................................13 Statements of Changes in Equity.........................................................................14 Cash Flow Statements .........................................................................................16 Notes to the Financial Statements .......................................................................18
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P 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 2003. PRINCIPAL ACTIVITIES The Company is principally engaged in the business 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 2,010,893 2,378,172 DIVIDENDS Since the end of the previous financial year, the Company paid a dividend of 5.5% per Irredeemable Cumulative Convertible Preference Share (“ICCPS”) less 28% tax amounting to RM270,587 in respect of the previous financial year, in accordance with the terms of issue of the ICCPS. For the financial year, (i) the directors have declared the payment of a dividend of 5.5% per ICCPS less 28% tax amounting to RM270,587, in accordance with the terms of issue of the ICCPS; and (ii) the directors recommend the payment of a first and final dividend of 1% per ordinary share less 28% tax amounting to RM544,334. RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year except as disclosed in the financial statements. Page 1
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT ISSUES OF SHARES AND DEBENTURES During the financial year, (a) there were no changes in the authorised capital of the Company; (b) the Company increased its issued and paid-up capital from RM50,468,943 to RM75,602,000 by way of: (i) the conversion of 115,600,000 Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) of RM1 each into 25,130,057 ordinary shares of RM1 each. The conversion was made on the following basis:- • 25,127,557 new ordinary shares of RM1 each were issued by the tendering of 115,590,000 ICULS with nominal value of RM1 each; • 2,500 new ordinary shares of RM1 each were issued by the tendering of 10,000 ICULS with nominal value of RM1 each and cash subscription of RM1,500. The new shares which arose from the conversion of the ICULS rank pari passu in all respects with the existing shares of the Company. (ii) the exercise of share options by eligible employees pursuant to the Employee Share Option Scheme of 3,000 ordinary shares of RM1 each. The new shares issued rank pari passu in all respects with the existing shares of the Company. (c) the Company issued RM61,961,250 Al-Bai Bithaman Ajil Bonds (ABBA Bonds) comprising RM49,569,000 nominal value Primary Bonds and RM12,392,250 nominal value Secondary Bonds for working capital purposes. EMPLOYEE SHARE OPTION SCHEME (“ESOS”) Pursuant to the ESOS which was implemented on 14 July 2000, the movement in the options to subscribe for new shares of RM1 each in the Company at an exercise price of RM1.40 per share is as follows:- NUMBER OF ORDINARY SHARES OF RM1 EACH UNDER OPTION At 1 April 2002 1,754,000 Lapsed during the financial year due to: - exercised during the financial year (3,000) - staff resignation (87,000) At 31 March 2003 1,664,000 Page 2 View slide
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT EMPLOYEE SHARE OPTION SCHEME (“ESOS”) (CONT’D) 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 at least 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 issued and paid-up ordinary share capital of the Company at any point of time during the existence of the ESOS which shall 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 than 1,000 or more than 450,000 shares subject to the maximum allowable allocation according to their respective categories; (iv) the subscription price was based on the weighted average market price of the shares as shown in the Daily Official List of the Kuala Lumpur Stock Exchange for the 5 market days prior to the date of offer with an allowance for a discount of not more than 10% therefrom or at par value, whichever is higher; and (v) the shares to be alloted upon any exercise of an option will, upon allotment, rank pari passu in all respects with 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 in the Company, other than the existing options under the ESOS and Transferable Subscription Rights (“TSRs”). The Company has in issue a total of 17,076,200 TSRs, the expiry date of which has been extended to 20 February 2004. The TSRs entitle the holders thereof the rights to subscribe for new ordinary shares of RM1 each on the basis of 1 new ordinary 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. 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 all known bad debts had been written off 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 further require the writing off of bad debts, or additional allowance for doubtful debts in the financial statements of the Group and of the Company. Page 3 View slide
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT 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. 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 liabilities of the Company are disclosed in Note 47 to the financial statements. At the date of this report, there does not exist: (i) 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 (ii) 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. Page 4
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT ITEMS OF AN UNUSUAL NATURE (CONT’D) 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. 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’ LIM PHAIK GAN DATO’ DR. NORRAESAH BT HAJI MOHAMAD DATUK SIM PENG CHOON ABDUL RAHMAN BIN A.SHUKOR (ALTERNATE TO DATUK SIM PENG CHOON ) VINCENT KOH KOK KEE ( RESIGNED ON 31.5.2003 ) TAN SRI DATO’ IR MUHAMMAD YUSUFF BIN HAJI MUHAMMAD YUNUS (RESIGNED ON 14.8.2002) Pursuant to Section 129 of the Companies Act, 1965, Sia Kwee Mow @ Sia Hok Chai, Datuk Sim Peng Choon and Dato’ Lim Phaik Gan retire at the forthcoming Annual General Meeting and offer themselves for re-appointment under the provision 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, Dato’ Dr. Norraesah Bt Haji Mohamad retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers herself for re- election. Page 5
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT DIRECTORS’ INTERESTS According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial 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 EACH AT AT 1.4.2002 ALLOTMENT/ SOLD 31.3.2003 BOUGHT DIRECT INTERESTS SIA KWEE MOW @ SIA HOK CHAI 3,982,400 446,576 (2,948,176) 1,480,800 SIA TEONG HENG 1,296,400 1,095,412 (2,056,820) 334,992 MUN CHONG SHING @ MUN CHONG TIAN 17,000 4,782 - 21,782 DATO’ LIM PHAIK GAN 5,000 6,000 - 11,000 DATUK SIM PENG CHOON 10,000 869 - 10,869 INDIRECT INTERESTS SIA KWEE MOW @ SIA HOK CHAI 7,463,832 19,498,523 (7,463,832) 19,498,523 SIA TEONG HENG 7,463,832 19,498,523 (7,463,832) 19,498,523 TSRS AT AT 1.4.2002 BOUGHT SOLD 31.3.2003 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 EACH UNDER OPTION AT AT 1.4.2002 GRANTED LAPSED 31.3.2003 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 interests in shares, TSRs or options under the ESOS of the Company or its related corporations during the financial year. Page 6
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT 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 45 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 of the acquisition of shares in or debentures of the Company or any other body corporate except for the existing TSRs held by certain directors which would enable them to acquire new shares in the Company and the share options granted pursuant to the ESOS. SIGNIFICANT EVENTS The significant events involving the Group and the Company during the current financial year are disclosed in Note 49 to the financial statements. Page 7
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT AUDITORS The auditors, Messrs. Horwath Mok & Poon, who are now practising as Messrs. Horwath with effect from 1 January 2003, have expressed their willingness to continue in office. SIGNED IN ACCORDANCE W ITH A RESOLUTION OF THE DIRECTORS DATED 25 JULY 2003 Sia Kwee Mow @ Sia Hok Chai Mun Chong Shing @ Mun Chong Tian Page 8
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P STATEMENT BY DIRECTORS We, Sia Kwee Mow @ Sia Hok Chai and Mun Chong Shing @ Mun Chong Tian, being two of the directors of Siah Brothers Corporation Berhad, state that, in the opinion of the directors, the financial statements set out on pages 12 to 65 are drawn up in accordance with applicable approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 March 2003 and of their results and cash flows for the financial year ended on that date. SIGNED IN ACCORDANCE W ITH A RESOLUTION OF THE DIRECTORS Dated 25 JULY 2003 Sia Kwee Mow @ Sia Hok Chai Mun Chong Shing @ Mun Chong Tian STATUTORY DECLARATION I, Ng Kee Chye, I/C No. 640324-06-5691, being the officer primarily responsible for the financial management of Siah Brothers Corporation Berhad, do solemnly and sincerely declare that the financial statements set out on pages 12 to 65 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by Ng Kee Chye, I/C No. 640324-06-5691, at Kuala Lumpur in the Federal Territory ON THIS 25 JULY 2003 Ng Kee Chye Before me Haron Hashim (No. W 128) Commissioner for Oaths Kuala Lumpur 25 July 2003 Page 9
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P REPORT OF THE AUDITORS TO THE MEMBERS OF SIAH BROTHERS CORPORATION BERHAD Company No : 199310 - P We have audited the financial statements set out on pages 12 to 65. The preparation of the financial statements is the responsibility of the Company’s directors. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. Our audit included examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. Our audit also included an assessment of the accounting principles used and significant estimates made by the directors as well as evaluating the overall adequacy of the presentation of information in the financial 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, 1965 and 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 2003 and their results and cash flows for 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 financial statements 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 the Company and by the subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act. We have considered the financial statements and the auditors’ reports thereon of the subsidiaries for which we have not acted as auditors, as indicated in Note 6 to the financial statements. Page 10
  • REPORT OF THE AUDITORS TO THE MEMBERS OF SIAH BROTHERS CORPORATION BERHAD (CONT ’D) Company No : 199310 - P We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comments made under Section 174 (3) of the said Act. Horwath Mok & Poon Onn Kien Hoe Firm No: AF 0995 Approval No: 1772/11/04 (J/PH) Chartered Accountants Partner Kuala Lumpur Page 11
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P BALANCE SHEETS AT 31 MARCH 2003 THE GROUP THE COMPANY 2003 2002 2003 2002 (Restated) (Restated) NOTE RM RM RM RM ASSETS Investment in subsidiaries 6 - - 211,064,785 167,370,110 Interest in associates 7 110,700,175 119,902,566 2,400,000 10,440,450 Property, plant and equipment 8 35,812,639 7,047,290 53,152 75,503 Investment properties 9 41,774,547 21,088,833 - - Other assets 10 382,107 714,168 - - Goodwill on consolidation 11 27,271,844 10,245,527 - - 215,941,312 158,998,384 213,517,937 177,886,063 CURRENT ASSETS Inventories 12 14,109,911 9,269,103 - - Property development in progress 13 54,738,163 28,591,098 - - Receivables 14 68,079,974 78,944,793 123,962 6,401,217 Amount owing by contract customers 15 685,256 1,407,450 - - Amounts owing by subsidiaries 16 - - 52,644,365 46,676,415 Amounts owing by associates 17 5,525,184 5,448,175 11,434 51,883 Tax recoverable 18 5,350,142 3,971,217 11,265,166 9,913,290 Short term deposits with licensed banks 19 1,422,125 5,042,274 1,239,225 5,012,274 Cash and bank balances 20 6,084,094 1,460,540 5,201,131 1,904 155,994,849 134,134,650 70,485,283 68,056,983 LESS: CURRENT LIABILITIES Amount owing to contract customers 15 4,769,567 2,673,438 - - Payables 21 26,618,315 31,260,945 331,492 245,422 Amounts owing to subsidiaries 16 - - 12,635,183 21,100,467 Amounts owing to associates 17 65,500 65,500 - - Amounts owing to directors 22 2,450,481 1,967,680 1,967,680 1,967,680 Dividend payable 270,587 270,587 270,587 270,587 Short term borrowings 23 47,707,856 41,029,726 11,413,736 7,337,727 ABBA Bonds 24 2,478,450 - 2,478,450 - 84,360,756 77,267,876 29,097,128 30,921,883 NET CURRENT ASSETS 71,634,093 56,866,774 41,388,155 37,135,100 287,575,405 215,865,158 254,906,092 215,021,163 FINANCED BY:- Share capital 25 82,435,000 57,301,943 82,435,000 57,301,943 Share application account 26 - 115,600,000 - 115,600,000 Reserves 27 134,681,876 42,524,427 134,643,948 42,119,220 Shareholders’ equity 217,116,876 215,426,370 217,078,948 215,021,163 ABBA Bonds 24 37,827,144 - 37,827,144 - Deferred liabilities 28 32,631,385 438,788 - - 287,575,405 215,865,158 254,906,092 215,021,163 NET TANGIBLE ASSETS PER ORDINARY SHARE - Actual 32 242 sen 393 sen - Proforma 32 N/A 262 sen The annexed notes form an integral part of these financial statements. Page 12
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P INCOME STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 THE GROUP THE COMPANY 2003 2002 2003 2002 (Restated) (Restated) NOTE RM RM RM RM TURNOVER 33 69,828,919 81,644,823 8,982,613 9,277,687 COST OF SALES 34 (48,699,540) (68,499,179) - - GROSS PROFIT 21,129,379 13,145,644 8,982,613 9,277,687 OTHER OPERATING INCOME 3,097,647 247,281 - 59,039 ADMINISTRATIVE EXPENSES (6,793,398) (3,863,420) (1,069,681) (1,076,604) OTHER OPERATING EXPENSES (9,417,624) (1,651,190) (156,715) (352,121) PROFIT FROM OPERATIONS 8,016,004 7,878,315 7,756,217 7,908,001 FINANCE COSTS (6,793,334) (9,611,991) (4,464,721) (8,529,384) SHARE OF PROFIT OF ASSOCIATES 3,926,816 3,351,575 - - PROFIT/(LOSS) BEFORE TAXATION 35 5,149,486 1,617,899 3,291,496 (621,383) TAXATION 36 (3,138,593) (444,278) (913,324) (94,000) PROFIT/(LOSS) AFTER TAXATION 2,010,893 1,173,621 2,378,172 (715,383) Earnings per share - basic 37 2.4 sen 1.8 sen - diluted 37 N/A N/A Dividend per ordinary share - Final 38 1 sen - The annexed notes form an integral part of these financial statements. Page 13
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 SHARE SHARE CAPITAL A PPLICATION RETAINED PROFITS NOTE A CCOUNT SHARE PREMIUM CAPITAL RESERVE TOTAL THE GROUP RM RM RM RM RM RM Balance at 1.4.2001 (as previously reported) 57,301,943 - 21,306,521 20,580,642 1,199,999 100,389,105 Prior year adjustments 39 - - - (1,155,000) - (1,155,000 ) Balance at 1.4.2001 (as restated) 57,301,943 - 21,306,521 19,425,642 1,199,999 99,234,105 Arising from conversion of Irredeemable Convertible Unsecured Loan Stock (“ICULS”) to ordinary shares - - 1,500 - - 1,500 Shares pending allotment arising on expiry of ICULS - 115,600,000 - - - 115,600,000 Expenses incurred on conversion of ICULS - - (312,269) - - (312,269 ) Profit after taxation for the financial year (as restated) - - - 1,173,621 - 1,173,621 Dividends 38 - - - (270,587) - (270,587 ) Balance at 31.3.2002/1.4.2002 57,301,943 115,600,000 20,995,752 20,328,676 1,199,999 215,426,370 Issuance of shares 25,133,057 - - - - 25,133,057 Reversal of share application account - (115,600,000) - - - (115,600,000 ) Share premium arising from issuance of shares - - 90,471,143 - - 90,471,143 Expenses incurred on conversion of ICULS - - (54,000) - - (54,000 ) Profit after taxation for the financial year - - - 2,010,893 - 2,010,893 Dividends 38 - - - (270,587) - (270,587 ) Balance at 31.3.2003 82,435,000 - 111,412,895 22,068,982 1,199,999 217,116,876 The annexed notes form an integral part of these financial statements. Page 14
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 SHARE SHARE CAPITAL A PPLICATION RETAINED PROFITS NOTE A CCOUNT SHARE PREMIUM CAPITAL RESERVE TOTAL THE COMPANY RM RM RM RM RM RM Balance at 1.4.2001 (as previously reported) 57,301,943 - 21,306,521 26,234,438 - 104,842,902 Prior year adjustments 39 - - - (4,125,000) - (4,125,000 ) Balance at 1.4.2001 (as restated) 57,301,943 - 21,306,521 22,109,438 - 100,717,902 Arising from conversion of ICULS to ordinary shares - - 1,500 - - 1,500 Shares pending allotment arising on expiry of ICULS - 115,600,000 - - - 115,600,000 Expenses incurred on conversion of ICULS - - (312,269) - - (312,269 ) Loss after taxation for the financial year (as restated) - - - (715,383) - (715,383) Dividends 38 - - - (270,587) - (270,587 ) Balance at 31.3.2002/1.4.2002 57,301,943 115,600,000 20,995,752 21,123,468 - 215,021,163 Issuance of shares 25,133,057 - - - - 25,133,057 Reversal of share application account - (115,600,000) - - - (115,600,000 ) Share premium arising from issuance of shares - - 90,471,143 - - 90,471,143 Expenses incurred on conversion of ICULS - - (54,000) - - (54,000 ) Profit after taxation for the financial year - - - 2,378,172 - 2,378,172 Dividends 38 - - - (270,587) - (270,587 ) Balance at 31.3.2003 82,435,000 - 111,412,895 23,231,053 - 217,078,948 The retained profits of the Group are attributable to/(absorbed by):- 2003 2002 RM RM The Company 23,231,053 21,123,468 Subsidiaries (16,643,931) (18,318,593) Associates 15,481,860 17,523,801 22,068,982 20,328,676 The annexed notes form an integral part of these financial statements. Page 15
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 THE GROUP THE COMPANY 2003 2002 2003 2002 (Restated) NOTE RM RM RM RM CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES Profit/(Loss) before taxation 5,149,486 1,617,899 3,291,496 (621,383) Adjustments for:- Allowance for doubtful debts 8,625,447 816,507 - - Amortisation of bonds expenses 134,364 - 134,364 - Bad debts written off 110,965 101,340 - - Depreciation and amortisation of property, plant and equipment 406,603 325,978 22,351 32,676 Interest expense 6,407,721 9,474,903 4,442,243 8,461,022 Loss on disposal of investment properties 150,154 33,015 - - Plant and equipment written off - 2,800 - - Dividend income - - (8,090,000) (7,805,555) Gain on disposal of property, plant and equipment (7,302) (131,031) - (59,039) Interest income (110,604) (585,124) (622,613) (1,152,687) Writeback of diminution in value of inventory (6,527) - - - Writeback of allowance for doubtful debts (1,988,813) - - - Share of profit in associates (3,926,816) (3,351,575) - - Operating profit/(loss) before working capital changes 14,944,678 8,304,712 (822,159) (1,144,966) Decrease in inventories 10,089,220 471,208 - - Increase in property development-in-progress (15,568,195) (1,633,516) - - Decrease/(Increase) in trade and other receivables 11,175,302 (5,683,694) 6,277,255 (625,803) (Decrease)/Increase in trade and other payables (8,910,013) (3,611,900) 86,070 (176,117) Increase in amount owing to contract customers 2,287,849 298,050 - - CASH FROM/(FOR) OPERATIONS 14,018,841 (1,855,140) 5,541,166 (1,946,886) Interest paid (4,702,299) (10,311,139) (1,880,098) (8,461,022) Taxes paid (3,377,151) (2,225,772) - - NET CASH FROM/(FOR) OPERATING ACTIVITIES CARRIED FORWARD 5,939,391 (14,392,051) 3,661,068 (10,407,908) The annexed notes form an integral part of these financial statements. Page 16
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 THE GROUP THE COMPANY 2003 2002 2003 2002 (Restated) NOTE RM RM RM RM NET CASH FROM/(FOR) OPERATING ACTIVITIES BROUGHT FORWARD 5,939,391 (14,392,051) 3,661,068 (10,407,908) CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES Interest received 641,078 949,238 622,613 1,152,687 Dividends received from subsidiaries - - 3,816,000 5,620,000 Dividends received from associate 2,116,800 - 2,008,800 - Net cash outflow on acquisition of subsidiary 40 (34,835,444) - (35,000,000) - Expenses incurred on acquisition of subsidiary - - (654,225) - Purchase of property, plant and equipment 41 (201,665) (115,327) - (15,400) Purchase of investment properties (3,438,068) - - - Hotel development expenditure (386,797) - - - Proceeds from disposal of property, plant and equipment 149,222 183,039 - 68,500 Proceeds from disposal of investment properties 952,000 1,164,915 - - Incidental expenses on investment properties (42,589) (161,151) - - Proceeds from disposal of subsidiary - 27,075,000 - 27,075,000 Placement of cash in sinking fund account 20 (5,198,398) - (5,198,398) - NET CASH (FOR)/FROM INVESTING ACTIVITIES (40,243,861) 29,095,714 (34,405,210) 33,900,787 CASH FLOWS FROM/(FOR) FINANCING ACTIVITIES Proceeds from issuance of shares 4,200 - 4,200 - Proceeds from bonds 24 38,848,310 - 38,848,310 - Repayment of bonds 24 (1,239,225) - (1,239,225) - Net repayment by/(Advances to) associates (42,209) 261,523 40,449 49,500 Net advances to subsidiaries - - (14,433,234) (9,405,022) Repayment to a director - (951,120) - (951,120) Dividend paid to shareholders of the Company - (545,065) - (545,065) Payment of expenses on conversion of ICULS (54,000) (312,269) (54,000) (312,269) Proceeds received for conversion of ICULS - 1,500 - 1,500 Dividend paid to holder of ICCPS (270,587) (270,587) (270,587) (270,587) Repayment of revolving credit (3,280,000) (1,320,000) (680,000) (1,320,000) Repayment of loans (4,103,454) (74,250) - - Repayment to hire purchase payables (87,784) (83,130) - - NET CASH FROM/(FOR) FINANCING ACTIVITIES 29,775,251 (3,293,398) 22,215,913 (12,753,063) NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (4,529,219) 11,410,265 (8,528,229) 10,739,816 CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR (14,340,876) (25,751,141) 3,356,451 (7,383,365) CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 42 (18,870,095) (14,340,876) (5,171,778) 3,356,451 The annexed notes form an integral part of these financial statements. Page 17
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 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 of business, is at Wisma Siah Brothers, 74A, Jalan Pahang, 53000 Kuala Lumpur. 2. PRINCIPAL ACTIVITIES The Company is principally engaged in the business 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. 3. FINANCIAL RISK MANAGEMENT POLICIES The Group's financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group's business whilst managing its currency, interest rate, market, credit, liquidity and cash flow risks. The Group operates within defined guidelines that are approved by the Board and the policies 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 not exposed 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 most favourable 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. The Group does not use derivative instruments to manage equity risk. . Page 18
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 3. FINANCIAL RISK MANAGEMENT POLICIES(CONT’D) (d) Credit Risk The Group's exposure to credit risks, or the risk of counterparties defaulting, arises mainly from cash deposits and receivables. The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the balance sheet reduced by the effects of any netting arrangements with counterparties. The Group does not have any major concentration of credit risk related to any individual customer or counterparty except for 61% of trade debts due from a major customer, details of which are set out in Note 14 to the financial statements. The Group manages its exposure to credit risk by investing its cash assets safely and profitably, and by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. (e) Liquidity and Cash Flow Risk The Group's exposure to liquidity and cashflow risks arises mainly from general funding and business activities. It practises prudent liquidity risk management by maintaining sufficient cash balances and the availability 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 bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with applicable approved accounting standards in Malaysia. The new applicable approved accounting standard adopted in these financial statements is MASB 19 – Events After Balance Sheet Date. Comparative figures have been adjusted to conform with changes in presentation due to the requirements of the new MASB that have been applied retrospectively. Save for the adoption of MASB 19 as stated in Note 39 to the financial statements, there are no other changes to the accounting policies adopted by the Company. . Page 19
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 5. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Consolidation The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries made up to 31 March 2003. A subsidiary is defined as a company in which the parent company holds directly or indirectly more than 50% of the equity share capital and has control over the financial and operating policies. All subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair value of the subsidiaries’ net assets are determined and these values are reflected in the consolidated financial statements. Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group. (b) Goodwill or Negative Goodwill On Consolidation Goodwill represents the excess of the fair value of the purchase consideration over the Group’s share of the fair values of the separable net assets of subsidiaries at the date of acquisition. Negative goodwill represents the excess of the Group’s share of the fair values of the separable net assets of subsidiaries at the 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 goodwill written off is taken to the income statement. . Page 20
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (c) Associates Associates are enterprises in which the Group exercises significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the associates but not control over those policies. Investments in associates are accounted for in the consolidated financial statements by the equity method of accounting. Equity accounting involves recognising in the income statement the Group’s share of the results of the associates for the period. The Group’s investment in associates is carried in the balance sheet at an amount that reflects its share of the assets of the associates and includes goodwill (net of accumulated amortisation) on acquisition. At the date of acquisition, the fair value of the associates’ net assets are determined and these values are reflected in the consolidated financial statements. Equity accounting is discontinued when the carrying amount of the investment in an associate reaches zero, unless the Group has 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 of the Group’s interest in the associates; unrealised losses are also eliminated unless the transaction provides evidence on impairment of the asset transferred. Where necessary, in applying the equity method, adjustments are made to the financial statements of associates 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 depreciation or 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-amortisation of 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 the assets over their estimated useful lives. The principal annual rates used for this purpose are:- 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% . Page 21
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (d) Property, Plant and Equipment (Cont’d) The Group does not have a policy for frequent revaluation of the properties. Surpluses arising from the revaluation of the properties are credited to a revaluation reserve. Deficits arising from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are charged to the income statement. (e) Impairment of Assets The carrying amounts of assets, other than those to which MASB Standard 23 Impairment of Assets does not apply, are reviewed at each balance sheet date for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying amounts of the assets with their recoverable amounts. An impairment loss is charged to the income statement immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent 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 determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to the revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognised as income in the income statement. (f) Investments The investment in subsidiaries, associates and joint ventures are initially stated at cost in the balance sheet of the Company, and are reviewed for impairment at the end of the financial year if events or changes in circumstances indicate that their carrying values may not be recoverable. (g) Investment Properties Investment properties are held as long term investments to generate income and for capital gain, and are stated at cost. These properties are not depreciated. . Page 22
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (h) Inventories Inventories are stated at the lower of cost and net realisable value. The unsold completed properties are stated at the lower of cost and net realisable value. For finished goods and work-in-progress, cost includes direct labour and appropriate production overheads. The cost of unsold completed properties comprise the relevant cost of land, development expenditure and related interest cost incurred during the development period. In arriving at net realisable value, due allowance is made for all damaged, obsolete and slow-moving items. (i) Property Development-In-Progress Property development-in-progress comprises land and related development expenditure incurred plus attributable profits less progress billings and foreseeable losses, if any. Land is stated at cost. Development expenditure comprises construction and other related development costs and administrative overheads relating to the property development. Interest costs on borrowings taken to finance the relevant development projects are included in the development expenditure from commencement to the completion of the development projects. Attributable profits are determined based on the percentage of completion method, on sold properties. (j) Receivables Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date. (k) Amount Owing By/To Contract Customers The amount owing by/to contract customers is stated at cost plus profits attributable to contracts in progress less progress billings and provision for foreseeable losses, if any. Cost includes direct materials, labour and applicable overheads. (l) Payables Trade and other payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. . Page 23
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (m) Interest-bearing Borrowings Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received, net of transaction costs. Borrowing costs directly attributable to the acquisition and construction of development properties and property, plant and equipment are capitalized as part of the cost of those assets, until such time as the assets 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 they are incurred. (n) Bonds Bonds issued by the Company and the Group are initially recognised based on proceeds received, net of issuance expenses incurred and are adjusted in subsequent years for amortization of premium and/or accretion of discount to maturity, using the effective yield method. The premium amortised and/or discount accreted is recognised in the income statement over the period of the bonds. (o) Deferred Taxation Deferred taxation is provided using the liability method on all material timing differences except where no liability is expected to arise in the foreseeable future. Deferred tax benefit is only recognised when there is reasonable expectation of realisation in the foreseeable future. (p) Foreign Currencies Transactions in foreign currencies are converted into Ringgit Malaysia at the approximate rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the balance sheet date are translated at the approximate rates ruling as of that date. All exchange differences are taken to the income statement. (q) Assets under Hire Purchase Equipment acquired under hire purchase are capitalised in the financial statements and are depreciated in accordance with the policy set out in Note 5(d) above. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are allocated to the income statement over the periods of the respective hire purchase agreements. . Page 24
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (r) Equity Instruments Ordinary shares and convertible preference shares are classified as equity. (s) Dividends Dividends on equity are recognised as liabilities when declared. (t) Cash and Cash Equivalents Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financial institutions, bank overdrafts and short term, highly liquid investments that are readily convertible 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 the contractual provisions of the instruments. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Company has a legally enforceable right to offset and intends to 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 statement associated with each item. . Page 25
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (v) Income Recognition (i) Construction Contracts Revenue on contracts is recognised on the percentage of completion method unless the outcome of the contract cannot be reliably determined, in which case revenue on contracts is only recognised 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 result in 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 uncompleted development 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 of completion method unless the outcome of the development cannot be reliably determined in which case the revenue on the development is only recognised to the extent of development costs incurred that are recoverable. The stage of completion is determined based on the proportion that the development costs incurred for 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 that the 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, net of returns and trade discounts. (iv) Revenue from Services Revenue is recognised upon rendering of services and when the outcome of the transaction can be estimated 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. . Page 26
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (v) Income Recognition (Cont’d) (v) Management Fee and Administrative Charges Management fee and administrative charges are recognised on an accrual basis. (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. Dividend income was recognised upon declaration by the subsidiaries and associates in previous financial years. During the financial year, there was a change in the accounting policy with regards to the revenue recognition of dividends to conform with the requirements of MASB 19 – Events After The Balance Sheet Date. The change in the accounting policy has an effect of increasing the profit before taxation of the Company for the current financial year by RM5,300,000 and decreasing the profit before taxation for the previous financial year by RM1,175,000. It also has the effect of decreasing the taxation of the Group for the current financial year by RM1,484,000 and increasing the taxation for the previous financial year by RM329,000. The change in the accounting policy is made retrospectively and the effect on previous financial years has been accounted for as prior year adjustments. (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 joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of property, plant and equipment (net of accumulated depreciation, 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 assets and liabilities do not include income tax assets and liabilities respectively. . Page 27
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (w) Segmental Information (Cont’d) Segment revenues, expenses and results include transfers between segments. The prices charged on intersegment transactions are based on normal commercial terms. These transfers are eliminated on consolidation. 6. INVESTMENT IN SUBSIDIARIES THE COMPANY 2003 2002 RM RM Unquoted shares, at cost At 1 April 2002/2001 167,370,110 167,370,110 Additions during the financial year 43,694,675 - At 31 March 211,064,785 167,370,110 Details of the subsidiaries, which are all incorporated in Malaysia, are as follows:- Name of Company Effective Equity Interest Principal 2003 2002 Activities % % Syarikat Siah Brothers 100 100 General building Trading Sdn. Bhd. contractor and investment holding Syarikat Siah Brothers 100 100 Building and civil Construction Sdn. Bhd. engineering works Lifeplus – Siah Brothers Trading 100 100 Project management JV Sdn. Bhd. and its related technical services Siah Brothers Enterprise 100 100 Building contractor Sdn. Bhd. * Siah Brothers Land 100 100 Investment holding Sdn. Bhd. Seri Ampangan Realty 100 100 Property development Sdn. Bhd. Sinaran Naga Sdn. Bhd. 100 100 Property development . Page 28
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 6. INVESTMENT IN SUBSIDIARIES (CONT’D) Details of the subsidiaries, which are all incorporated in Malaysia, are as follows:- Name of Company Effective Equity Interest Principal 2003 2002 Activities % % Siah Brothers Development 100 100 Proposed property Sdn. Bhd. * development Tiara Development 100 100 Proposed property Sdn. Bhd.* development SBC Homes Sdn. Bhd.* 100 100 Proposed property development Mixwell (Malaysia) 100 100 Project management Sdn. Bhd. and property development Winsome Ventures 100 100 Intended property Sdn. Bhd. management Siah Brothers Properties 100 100 Investment holding Sdn. Bhd.* Aureate Construction 100 100 Property investment Sdn. Bhd.* SBC Leisure Sdn. Bhd.* 100 100 Property development SBC Towers Sdn. Bhd.* 100 100 Property development Siah Brothers Project 100 100 Provision of Management Sdn. Bhd.* management services Siah Brothers Industries 100 100 Investment holding Sdn. Bhd. * South-East Best 100 20 Property development Sdn. Bhd.# . Page 29
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 6. INVESTMENT IN SUBSIDIARIES (CONT’D) Name of Company Effective Equity Interest Principal 2003 2002 Activities % % Gracemart Resources 100 20 Property development Sdn. Bhd.## Sutrati Development Sdn. Bhd.## 100 20 Dormant Masahmura Sdn. Bhd.* 51 51 Manufacturing of material handling equipment and metal frames Masahmura Sales & 51 51 Trading of light Service Sdn. Bhd. industrial handling equipment and metal frames * Not audited by Horwath # During the financial year, the Company acquired the remaining 80% of its equity interest in South-East Best Sdn. Bhd. (“SEB”) thereby resulting in SEB becoming a subsidiary. ## Held by SEB . Page 30
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 7. INTEREST IN ASSOCIATES THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Unquoted shares, at cost 3,600,001 10,760,451 2,400,000 10,440,450 Unquoted shares at Group cost 91,618,314 91,618,314 - - Share of post acquisition reserves 15,481,860 17,523,801 - - 110,700,175 119,902,566 2,400,000 10,440,450 THE GROUP 2003 2002 RM RM The interest in associates comprises:- Group’s share of net tangible assets - at cost 64,684,205 73,886,596 - at fair value 45,952,003 45,952,003 Group’s share of intangible assets 63,967 63,967 110,700,175 119,902,566 Details of the associates, which are all incorporated in Malaysia, are as follows:- Effective Equity Principal Name of Company Interest Activities 2003 2002 % % Ligamas Sdn. Bhd.# 50.0 50.0 Property development Varich Industries 50.0 50.0 Proposed quarrying Sdn. Bhd.* Paling Industries Sdn. Bhd.# 40.0 40.0 Manufacturing of plastic building materials . Page 31
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 7. INTEREST IN ASSOCIATES (CONT’D) Effective Equity Principal Name of Company Interest Activities 2003 2002 % % Liga Canggih Sdn. Bhd.*## 40.0 40.0 Dormant Sri Berjaya Development 33.3 33.3 Investment and Sdn. Bhd.* development of landed properties Sri Rawang Properties 22.2 22.2 Investment in properties Sdn. Bhd.* and rubber estates Sam & Lau Plantation 50.0 - Tree plantation and Sdn. Bhd.*### nursery operators South-East Best - 20.0 Property development Sdn. Bhd.^ Gracemart Resources - 20.0 Property development Sdn. Bhd.### Sutrati Development Sdn. Bhd.### - 20.0 Dormant * The results of these associates have not been equity accounted as the amounts involved are insignificant. # Share of results of these associates are based on the latest available unaudited management financial statements made up to 31 March 2003. ## Held by Paling ### Held by SEB ^ During the financial year, the Company acquired the remaining 80% of its equity interest in South-East Best Sdn. Bhd. (“SEB”) thereby resulting in SEB becoming a subsidiary. . Page 32
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 8. PROPERTY , PLANT AND EQUIPMENT THE GROUP TRANSFER TO ACQUISITION DEVELOPMENT DEPRECIATION AT 1.4.2002 OF SUBSIDIARY ADDITIONS DISPOSAL LAND CHARGE AT 31.3.2003 NET BOOK VALUE RM RM RM RM RM RM RM Freehold land 5,748,145 - - (30,000) (979,312) - 4,738,833 Land and hotel development expenditure - 29,489,968 386,797 - - - 29,876,765 Plant and machinery, construction machinery and equipment 77,999 - 635 - - (15,282) 63,352 Formwork, scaffoldings and containers 15,310 - - - - (4,848) 10,462 Office renovation, office equipment, computers, furniture and fittings, tools and fittings 804,013 214,754 201,030 (111,919) - (269,301) 838,577 Motor vehicles 401,823 - - (1) - (117,172) 284,650 Total 7,047,290 29,704,722 588,462 (141,920) (979,312) (406,603) 35,812,639 . Page 33
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 8. PROPERTY , PLANT AND EQUIPMENT (CONT’D) THE GROUP ACCUMULATED AT 31.3.2003 AT COST DEPRECIATION NET BOOK VALUE RM RM RM Freehold land 4,738,833 - 4,738,833 Land and hotel development 29,876,765 - 29,876,765 expenditure Plant and machinery, construction machinery and equipment 4,374,257 (4,310,905) 63,352 Formwork, scaffoldings and containers 4,316,916 (4,306,454) 10,462 Office renovation, office equipment, computers, furniture and fittings, tools and fittings 4,161,954 (3,323,377) 838,577 Motor vehicles 1,946,651 (1,662,001) 284,650 49,415,376 (13,602,737 ) 35,812,639 ACCUMULATED AT 31.3.2002 AT COST DEPRECIATION NET BOOK VALUE RM RM RM Freehold land 5,748,145 - 5,748,145 Plant and machinery, construction machinery and equipment 4,373,622 (4,295,623) 77,999 Formwork, scaffoldings and containers 4,316,916 (4,301,606) 15,310 Office renovation, office equipment, computers, furniture and fittings, tools and fittings 3,626,222 (2,822,209) 804,013 Motor vehicles 1,594,753 (1,192,930) 401,823 19,659,658 (12,612,368 ) 7,047,290 Land and hotel development expenditure consists of: 31.3.2003 31.3.2002 RM RM Long leasehold land, at cost 27,691,066 - Hotel development expenditure 2,185,699 - 29,876,765 - Page 34
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 8. PROPERTY , PLANT AND EQUIPMENT (CONT’D) THE COMPANY AT DEPRECIATION AT 1.4.2002 CHARGE 31.3.2003 NET BOOK VALUE RM RM RM Office equipment, computers, furniture and fittings 75,502 (22,351) 53,151 Motor vehicles 1 - 1 75,503 (22,351) 53,152 AT ACCUMULATED NET COST DEPRECIATION BOOK VALUE At 31.3.2003 RM RM RM Office equipment, computers, furniture and fittings 370,801 (317,650) 53,151 Motor vehicles 376,950 (376,949) 1 747,751 (694,599) 53,152 AT ACCUMULATED NET COST DEPRECIATION BOOK VALUE At 31.3.2002 RM RM RM Office equipment, computers, furniture and fittings 370,801 (295,299) 75,502 Motor vehicles 376,950 (376,949) 1 747,751 (672,248) 75,503 The motor vehicles of the Group acquired under hire purchase terms were carried at net book value of RM231,384 (2002 – RM402,608) at the balance sheet date. Page 35
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 8. PROPERTY , PLANT AND EQUIPMENT (CONT’D) The carrying value of certain property, plant and equipment that are charged to financial institutions to secure banking facilities granted to the Group are as follows:- THE GROUP 2003 2002 RM RM Furniture and fittings 107,183 - Office and other equipment 4,951 - Land and hotel development expenditure 29,876,765 - Office equipment 9,976 - 29,998,875 - 9. INVESTMENT PROPERTIES THE GROUP 2003 2002 RM RM Leasehold land 19,778,424 4,979,933 Expenditure on land 4,202,191 318,927 23,980,615 5,298,860 Freehold land and buildings 15,812,472 16,987,903 Leasehold land and buildings 3,041,025 - 18,853,497 16,987,903 Disposed during the financial year (1,059,565) (1,197,930) 17,793,932 15,789,973 41,774,547 21,088,833 Freehold land and building of a subsidiary costing RM2,792,736 in the previous financial year was charged to a licensed bank for a term loan facility granted to the subsidiary. The lease period of the leasehold land expires in the year 2086. Based on valuation exercises carried out on 27 March 2000 and 2 January 2002 by an independent professional valuer, the market value of certain investment properties of the Group amounts to approximately RM54.61 million (2002 – RM35.58 million). No valuation exercise has been carried out on the properties since the last exercise in the financial year 2002. Page 36
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 10. OTHER ASSETS THE GROUP 2003 2002 RM RM Other assets 189,807 521,868 Other investments Quoted shares in Malaysia, at cost 12,300 12,300 Unquoted shares, at cost 180,000 180,000 192,300 192,300 382,107 714,168 Market value of quoted shares 4,455 5,850 Other assets are retention monies relating to amounts which are due and receivable after twelve months from the balance sheet date, upon expiry of the warranty period of the relevant contracts. 11. GOODWILL THE GROUP 2003 2002 RM RM At 1 April 2002/2001 10,245,527 10,245,527 Goodwill arising from the acquisition of equity interest in a subsidiary 17,026,317 - At 31 March 27,271,844 10,245,527 12. INVENTORIES THE GROUP 2003 2002 RM RM Unsold completed properties, at cost 14,109,911 9,269,103 Certain inventories costing RM1,423,220 (2002 – Nil) are charged to a third party for the issuance of bonds granted to the Company. Certain inventories costing RM11,528,558 (2002 – Nil) are charged to licensed banks and financial institutions for banking facilities granted to a subsidiary. None of the inventories are carried at net realisable value. Page 37
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 13. PROPERTY DEVELOPMENT-IN-PROGRESS THE GROUP 2003 2002 RM RM Freehold land, at cost 15,406,955 14,547,886 Leasehold land, at cost 8,340,583 801,805 Land and development expenditure 41,721,744 46,155,119 65,469,282 61,504,810 Attributable profits 3,709,493 8,665,215 69,178,775 70,170,025 Progress billings (14,440,612) (41,578,927) 54,738,163 28,591,098 Included in development expenditure is interest expense capitalised during the financial year amounting to RM856,723 (2002 – RM836,236). Leasehold land of a subsidiary costing RM7,674,555 (2002 – Nil) is charged to a licensed bank for a term loan facility granted to the subsidiary. 14. RECEIVABLES The Group The Company 2003 2002 2003 2002 RM RM RM RM Trade receivables 69,665,907 58,910,469 - - Retention receivable 5,709,953 10,081,043 - - Total trade receivables 75,375,860 68,991,512 - - Allowance for doubtful debts At 1 April 2002/2001 (6,803,879) (5,987,372) - - Acquisition of subsidiary (22,819) - Additions (8,216,602) (816,507) - - Write-back 1,988,813 - - - At 31 March (13,054,487) (6,803,879) - - Net trade receivables 62,321,373 62,187,633 - - Other receivables, deposits and prepayment 8,849,878 19,439,592 2,476,699 8,753,954 Allowance for doubtful debts At 1 April 2002/2001 (2,682,432) (2,682,432) (2,352,737) (2,352,737) Additions (408,845) - - - At 31 March (3,091,277) (2,682,432) (2,352,737) (2,352,737) Net other receivables, deposits and prepayment 5,758,601 16,757,160 123,962 6,401,217 Total receivables 68,079,974 78,944,793 123,962 6,401,217 Page 38
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 14. RECEIVABLES (CONT’D) Included in trade receivables at the balance sheet date is RM37,720,372 (2002 – RM37,720,372) owing by Smart Home Sdn. Bhd. (“SH”), a related party. Details of the related party relationship and nature of the transactions and balances are set out in Note 45 to the financial statements. The amount owing by SH has been outstanding since 1996. During the financial year, SH has proposed to settle the amount owing in the following manner:- (i) transfer of several parcels of land with development potential for a total consideration of RM34,760,000; and (ii) the balance is to be settled by cash and/or other consideration to be mutually agreed between SH and the Group. The Board of Directors, assisted by independent advisers, are reviewing the terms of the settlement as well as the valuation of the land offered for settlement, and a decision is expected to be made in the next financial year. The directors are of the opinion that the amount owing by SH will be recovered in full in due course, and as such, no allowance for doubtful debt is required. Included in other receivables is RM2,647,103 (2002 – RM4,582,518) due from sub- contractors for the purchase of building materials. The amount owing is unsecured, interest-free, and is to be repaid via deductions against future claims for work performed by the sub-contractors. Also included in other receivables is an amount owing by a related party of RM500,000 (2002 – Nil). The details of the transaction and the balance are disclosed in Note 45 to the financial statements. Credit terms of trade receivables, other than the amount owed by SH, range from 14 to 30 days. 15. AMOUNT OWING BY /(TO) CONTRACT CUSTOMERS THE GROUP 2003 2002 RM RM Amount owing by contract customers Contract costs incurred to date 8,090,361 29,952,686 Attributable profits 241,371 8,335,542 8,331,732 38,288,228 Progress billings (7,646,476) (36,880,778) Amount owing by contract customers 685,256 1,407,450 Amount owing to contract customers Contract costs incurred to date 184,168,929 173,176,995 Attributable profits 8,802,347 7,214,110 192,971,276 180,391,105 Progress billings (197,740,843) (183,064,543) Amount owing to contract customers (4,769,567) (2,673,438) Page 39
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 15. AMOUNT OWING BY /(TO) CONTRACT CUSTOMERS (CONT’D) Included in costs incurred on contract works is interest income capitalised during the financial year of RM530,474 (2002 – RM364,114). 16. AMOUNTS OWING BY /(TO) SUBSIDIARIES THE COMPANY 2003 2002 RM RM Amounts owing by: Non-trade - Interest-bearing 6,582,470 6,996,470 - Interest-free 46,061,895 39,679,945 52,644,365 46,676,415 Amounts owing to: Non-trade - Interest-bearing 3,797,629 12,740,618 - Interest-free 8,837,554 8,359,849 12,635,183 21,100,467 The above amounts owing are unsecured and not subject to fixed terms of repayment. The interest-bearing amounts are subject to interest at rates ranging from 8.4% to 8.65% (2002 - 8.65% to 9.05%) per annum. 17. AMOUNTS OWING BY /(TO) ASSOCIATES The amounts owing are unsecured, interest-free and not subject to fixed terms of repayment. 18. TAX RECOVERABLE Subject to agreement with the tax authorities, the Company has tax recoverable of RM11,265,166 at the balance sheet date in respect of the financial years ended 31 March 1997 to 31 March 2003. At the date of this report, the amount is still pending agreement with the tax authorities. 19. SHORT TERM DEPOSITS W ITH LICENSED BANKS The weighted average effective interest rates of deposits at the balance sheet date were as follows: THE GROUP THE COMPANY 2003 2002 2003 2002 % % % % Licensed bank 2.84 3.20 2.77 3.20 Page 40
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 19. SHORT TERM DEPOSITS W ITH LICENSED BANKS (CONT’D) Deposits of the Company and the Group have average maturities of 30 days (2002 – 30 days). The deposit of the Company in respect of the current financial year has been charged as security for the issuance of ABBA Bonds as disclosed in Note 24 to the financial statements. 20. CASH AND BANK BALANCES THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Cash and bank balances 885,696 1,460,540 2,733 1,904 Sinking fund account (Note 42) 5,198,398 - 5,198,398 - 6,084,094 1,460,540 5,201,131 1,904 Included in the cash and bank balances of the Group is RM518,922 (2002 – RM686,692) maintained under the Housing Development Accounts pursuant to Section 7A of the Housing Development (Control and Licensing ) Act, 1966. The sinking fund account is maintained with a financial institution and has been charged as security for the repayment of the ABBA Bonds. 21. PAYABLES THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Trade payables 20,217,451 18,180,622 - - Retention payable 5,680,103 6,310,023 - - Total trade payables 25,897,554 24,490,645 - - Other payables and accruals 632,977 6,682,516 331,492 245,422 Hire purchase payables (Note 28a) 87,784 87,784 - - 26,618,315 31,260,945 331,492 245,422 Credit terms of trade payables range from 30 to 60 days. Included in other payables is an amount owing to a related party of RM108,222 (2002 - RM160,534). The details of the transaction and the balance are disclosed in Note 45 to the financial statements. Page 41
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 22. AMOUNTS OWING TO DIRECTORS THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Sia Kwee Mow @ Sia Hok Chai 1,967,680 1,967,680 1,967,680 1,967,680 Sia Teong Heng 482,801 - - - 2,450,481 1,967,680 1,967,680 1,967,680 The above amounts owing are unsecured and not subject to fixed terms of repayment. The amount owing to Sia Kwee Mow @ Sia Hok Chai bears interest at 5.5% (2002 – 5.5%) per annum. 23. SHORT TERM BORROWINGS THE GROUP 2003 2002 Secured Unsecured Total Secured Unsecured Total RM RM RM RM RM RM Bridging loans (Note 8,167,060 - 8,167,060 - - - 30) Term loans (Note 29) 1,568,480 - 1,568,480 111,636 - 111,636 Revolving credits - 16,794,400 16,794,400 - 20,074,400 20,074,400 Bank overdrafts (Note 42) - 21,177,916 21,177,916 - 20,843,690 20,843,690 9,735,540 37,972,316 47,707,856 111,636 40,918,090 41,029,726 THE COMPANY 2003 2002 Secured Unsecured Total Secured Unsecured Total RM RM RM RM RM RM Bridging loans (Note - - - - - - 30) Term loans (Note 29) - - - - - - Revolving credits - 5,000,000 5,000,000 - 5,680,000 5,680,000 Bank overdrafts (Note 42) - 6,413,736 6,413,736 - 1,657,727 1,657,727 - 11,413,736 11,413,736 - 7,337,727 7,337,727 Page 42
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 23. SHORT TERM BORROWINGS (CONT’D) The weighted average effective interest rates at the balance sheet date for borrowings (excluding hire purchase) which bear interest at floating rates, were as follows: THE GROUP THE COMPANY 2003 2002 2003 2002 % % % % Bridging loans 7.87 - - - Term loans 7.94 - - - Revolving credits 6.05 6.06 7.55 7.58 Bank overdrafts 8.45 8.14 8.68 8.80 24. ABBA BONDS THE GROUP/THE COMPANY 2003 2002 RM RM Al-Bai Bithaman Ajil Bonds (nominal value) 61,961,250 - Less : ABBA Bonds issuance expenses (1,151,690) - Finance charges on bonds issue (21,961,250) - Net proceeds 38,848,310 - Cumulation of amortisation of ABBA Bonds issuance expenses 134,364 - Cumulation of amortisation of finance charges on ABBA Bonds issue 2,562,145 - Net proceeds 41,544,819 - Less : Repayment during the financial year (1,239,225) - 40,305,594 - Representing ABBA Bonds: - Due within 12 months 2,478,450 - - Due after 12 months 37,827,144 - 40,305,594 - Analysis of the ABBA Bonds: - Not later than one year 2,478,450 - - Later than one year and not later than five years 59,482,800 - 61,961,250 - Page 43
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 24. ABBA BONDS (CONT’D) During the 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 Bonds with RM12,392,250 nominal value. The Primary Bonds are redeemable at maturity. Each Primary Bond is supported by 10 Secondary Bonds which are redeemable in semi-annual instalments commencing 6 months from the date of first issue of the Secondary Bonds. The ABBA Bonds were placed out to a licensed financial institution via a private placement. The tenure of the ABBA Bonds is 5 years from the date of issue. The profit margin on the ABBA Bonds is at a fixed percentage of 5.00% per annum, payable in arrears on a semi-annual basis represented by 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 for the placement of all monies received from dividends, unappropriated profits and bonus shares accruing to a subsidiary; and (iv) by a first party charge over a sinking fund account and a Mudharabah Account of the Company. 25. SHARE CAPITAL THE COMPANY 2003 2002 RM RM AUTHORISED Ordinary shares of RM1 each At 1 April/31 March 193,167,000 193,167,000 5.5% ICCPS of RM1 each At 1 April/31 March 6,833,000 6,833,000 Total authorised share capital 200,000,000 200,000,000 Page 44
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 25. SHARE CAPITAL (CONT’D) THE COMPANY 2003 2002 RM RM ISSUED AND FULLY PAID-UP Ordinary shares of RM1 each At 1 April 2002/2001 50,468,943 50,468,943 Allotment during the financial year 25,133,057 - At 31 March 75,602,000 50,468,943 5.5% ICCPS of RM1 each At 1 April/31 March 6,833,000 6,833,000 Total issued and fully paid-up share capital 82,435,000 57,301,943 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 in arrears; (b) the ICCPS shall mature after 5 years from the date of issue of 5 May 1999 and will be automatically converted 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 issue until 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 on liquidation or otherwise for the par value of the ICCPS plus any arrears in dividend, provided that there shall 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 reducing the capital, or winding up, or sanctioning a sale of undertaking, or where the proposition directly affects the rights and privileges of the holders of the ICCPS. Page 45
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 25. SHARE CAPITAL (CONT’D) During the financial year, the Company increased its issued and paid-up capital from RM50,468,943 to RM75,602,000 by way of: (i) the conversion of 115,600,000 Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) of RM1 each into 25,130,057 ordinary shares of RM1 each. The conversion was made on the following basis:- • 25,127,557 new ordinary shares of RM1 each were issued by the tendering of 115,590,000 ICULS with nominal value of RM1 each; • 2,500 new ordinary shares of RM1 each were issued by the tendering of 10,000 ICULS with nominal value of RM1 each and cash subscription of RM1,500. The new shares which arose from the conversion of the ICULS rank pari passu in all respects with the existing shares of the Company. (ii) the exercise of share options by eligible employees pursuant to the Employee Share Option Scheme of 3,000 ordinary shares of RM1 each. The new shares issued rank pari passu in all respects with the existing shares of the Company. 26. SHARE APPLICATION ACCOUNT The share application account represents the sum arising from the mandatory conversion of the ICULS. 27. RESERVES THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Share premium reserve (Note a) At 1 April 2002/2001 20,995,752 21,306,521 20,995,752 21,306,521 Arising from conversion of ICULS to ordinary shares - 1,500 - 1,500 Arising from issuance of shares 90,471,143 - 90,471,143 - Set-off against expenses incurred on conversion of ICULS (54,000) (312,269) (54,000) (312,269) At 31 March 111,412,895 20,995,752 111,412,895 20,995,752 Capital reserve (Note b) 1,199,999 1,199,999 - - Retained profits (Note c) 22,068,982 20,328,676 23,231,053 21,123,468 134,681,876 42,524,427 134,643,948 42,119,220 Page 46
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 27. RESERVES (CONT’D) (a) The share premium reserve 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 (2002 – RM233,000) available for the purpose of paying tax-exempt dividends; and (ii) tax credit under Section 108 of the Income Tax Act, 1967 to frank the payment of dividends of approximately RM11,366,000 (2002 – RM11,366,000) out of its entire retained profits without incurring any additional tax liability. 28. DEFERRED LIABILITIES THE GROUP 2003 2002 RM RM Term loans - Note 29 2,460,155 215,520 Hire purchase payables - Note a 135,484 223,268 Deferred taxation - Note 31 966,746 - Amount owing to Sabah State Government – Note b 29,069,000 - 32,631,385 438,788 (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 171,258 282,174 282,174 393,090 Future finance charges (58,906) (82,038) Present value of hire purchase liabilities 223,268 311,052 Page 47
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 28. DEFERRED LIABILITIES (CONT’D) THE GROUP 2003 2002 RM RM Present value of hire purchase liabilities:- Not later than one year (Note 21) 87,784 87,784 Later than one year and not later than five years 135,484 223,268 223,268 311,052 The hire purchase liabilities at the balance sheet date bore interest at between 5.25% to 5.35% (2002 – 5.25% to 5.35%) per annum. (b) Amount owing to Sabah State Government The amount owing to the Sabah State Government arose from the acquisition of a subsidiary, SEB. The details of the investment are disclosed in Note 49 to the financial statements. The amount owing to the Sabah State Government shall be paid in the form of 130 units of the property to be completed within a period of five years from the commencement of their construction as consideration in kind pursuant to a joint venture contract entered into by SEB with the State Government. The contract, dated 5 September 1994, states that the subsidiary is committed to jointly develop with the Sabah State Government a parcel of state land covering an area of approximately 26 acres into residential apartments, townhouses, condominiums and a hotel. On 16 July 2002, the Sabah State Government agreed to execute the change of their entitlement that had not been settled amounting RM29,069,000 by the construction of an office building for the Land and Survey Department ( Jabatan Tanah dan Ukur) and part of a building for the Ministry of Finance at the same value by the subsidiary. On 21 October 2002, the subsidiary was requested to prepare the Contract Document and Estimation for the above project. To-date, the subsidiary is in the process of finalising the details of the project with the Sabah State Government. Page 48
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 29. TERM LOANS THE GROUP 2003 2002 RM RM Term loans 4,028,635 327,156 Less : Portion repayable within twelve months (Note 23) (1,568,480) (111,636) Portion repayable after twelve months (Note 28) 2,460,155 215,520 The long term loans are repayable as follows: Not later than one year 1,568,480 111,636 Later than one year and not later than five years 2,029,475 215,520 Later than five years 430,680 - 4,028,635 327,156 Details of the term loans outstanding at the balance sheet date are as follows:- THE GROUP 2003 2002 Term loan RM RM 1 - 327,156 2 3,541,663 - 3 486,972 - 4,028,635 327,156 Number of Monthly Interest Rate Date of Term loan Monthly Instalment Per Annum Commencement Instalments Amount % of Repayment RM 1 162 39,429 1.5% + BLR September 1994 2 25 141,667 8.15% to 8.55% May 2003 3 264 3,617 6.4% January 2003 Page 49
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 29. TERM LOANS (CONT’D) 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 by one of the directors of the Company. 30. BRIDGING LOAN THE GROUP 2003 2002 RM RM Not later than one year (Note 23) 8,167,060 - The syndicated bridging loan from three licensed financial institutions is subject to interest at 1.125% to 1.750% (2002 – Nil) per annum above the bank’s base lending rate / cost of funds of the respective lenders 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 and construction guarantees from a related company of a subsidiary; and (iv) the joint and several guarantees 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, or in 12 quarterly instalments commencing from April 2001, whichever is earlier. Page 50
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 31. DEFERRED TAXATION THE GROUP 2003 2002 RM RM At 1 April 2002/2001 - - Addition through the revaluation surplus on leasehold land of a subsidiary 966,746 - 966,746 - 32. NET TANGIBLE ASSETS PER SHARE The actual net tangible assets per share is calculated based on the net tangible assets value of RM183,012,032 (2002 - RM198,347,843) attributable to ordinary shares divided by the number of ordinary shares in issue at the balance sheet date of 75,602,000 (2002 - 50,468,943) shares. The proforma net tangible assets per share of the previous financial year is calculated based on the net tangible assets value of RM198,347,843 attributable to ordinary shares divided by the proforma enlarged number of ordinary shares of 75,599,000 after taking into account the allotment of new ordinary shares pursuant to the mandatory conversion of the ICULS. 33. TURNOVER THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Revenue from construction contracts 35,362,729 56,858,840 - - Proportionate sales value of development properties 34,366,715 24,084,755 - - Rental income 64,200 119,300 - - Dividend income - - 8,090,000 8,125,000 Interest income 35,275 536,328 35,275 533,461 Other interest income - - 587,338 619,226 Management and administrative charges - 45,600 270,000 - 69,828,919 81,644,823 8,982,613 9,277,687 Continuing operations: -existing 65,260,219 81,644,823 8,982,613 9,277,687 -new acquisition 4,568,700 - - - 69,828,919 81,644,823 8,982,613 9,277,687 Page 51
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 34. COST OF SALES THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Construction costs 37,647,813 65,941,186 - - Land and development expenditure 10,913,140 2,339,143 - - Direct costs 88,062 162,878 - - Management and administrative charges 50,525 55,972 - - 48,699,540 68,499,179 - - 35. PROFIT/(LOSS) BEFORE TAXATION THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Profit/(Loss) before taxation is arrived at after charging/(crediting):- Allowance for doubtful debts 8,625,447 816,507 - - Amortisation of bond expenses 134,364 - 134,364 - Auditors’ remuneration - for the financial year 59,700 51,500 13,000 11,000 - underprovision in previous financial year 2,000 - 2,000 - Bad debts written off 110,965 101,340 - - Contract costs 37,647,814 65,941,186 - - Depreciation of property, plant and equipment 406,603 325,978 22,351 32,676 Directors’ benefits-in-kind 16,925 31,875 16,925 29,625 Directors’ fees 67,000 46,000 67,000 46,000 Directors’ remuneration 752,400 594,500 516,900 419,625 Dividend income over-recognised - 319,445 - 319,445 Finance charges on bonds 2,562,145 - 2,562,145 - Interest expense - bank borrowings 3,178,494 3,175,729 1,093,069 1,354,608 - hire purchase 23,132 21,884 - - - ICULS - 5,717,576 - 5,717,576 - loans 113,476 197,918 787,029 1,388,838 - others 530,474 361,796 - - Loss on disposal of investment properties 150,154 33,015 - - Plant and equipment written off - 2,800 - - Rental expense - premises - - 60,000 55,930 - machinery and equipment 15,651 14,883 - - Staff costs 2,598,056 1,996,604 72,786 149,581 Gross dividend income - subsidiaries (unquoted) - - (5,300,000) (8,125,000) - associate - - (2,790,000) - Interest income - licensed financial institutions (36,891) (533,461) (35,275) (533,461) - subsidiaries - - (587,338) (619,226) - others (73,713) (51,663) - - Management and administrative charges (45,600) (45,600) - - Gain on disposal of property, plant and equipment (7,302) (131,031) - (59,039) Rental of premises (315,672) (284,414) - - Page 52
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 35. PROFIT/(LOSS) BEFORE TAXATION (CONT’D) THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Writeback of allowance for doubful debts (1,988,813) - - - Writeback of diminution in value of inventory (6,527) - - - 36. TAXATION THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Current 982,916 (538,495) 913,324 94,000 Share of associates’ taxation 1,100,935 982,773 - - 2,083,851 444,278 913,324 94,000 Underprovision in previous financial year 1,054,742 - - - 3,138,593 444,278 913,324 94,000 The effective tax rate of the Company is higher than the statutory tax rate mainly due to certain expenses being disallowed for taxation purposes. Similarly, the effective tax rate of the Group is higher due to losses of certain subsidiaries not being utilised against the taxable profit of other subsidiaries as no group relief is available in Malaysia. Subject to agreement with the tax authorities, the Group has unutilised tax losses and unabsorbed capital allowances of approximately RM5,834,000 (2002 – RM4,682,000) and RM725,000 (2002 – RM689,000) respectively available at the balance sheet date to be carried forward for offset against future taxable business income. The potential deferred taxation benefits, arising from timing differences, that have not been accounted for in the financial statements are as follows:- UNUTILITISED UNABSORBED TAX CAPITAL LOSSES A LLOWANCES OTHERS TOTAL At 1 April 2001 979,000 150,000 - 1,129,000 Arising during the financial year 331,000 41,000 611,000 983,000 At 31 March 2002/1 April 2002 1,310,000 191,000 611,000 2,112,000 Arising during the financial year 323,000 11,000 275,000 609,000 At 31 March 2003 1,633,000 202,000 886,000 2,721,000 Page 53
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 37. EARNINGS PER SHARE Basic earnings per share (“EPS”) is arrived at by dividing the profit after taxation attributable to shareholders after deducting preference dividend of RM270,587 (2002 - RM270,587) by the weighted average number of ordinary shares in issue during the financial year of approximately 73,507,579 (2002 – 50,468,943). The computation of diluted EPS is not applicable as the effects of conversion of each class of potential ordinary shares are anti-dilutive. 38. DIVIDENDS THE COMPANY 2003 2002 RM RM Declared – dividend of 5.5% per ICCPS less 28% tax (2002 - 5.5% per ICCPS less 28% tax) 270,587 270,587 At the forthcoming Annual General Meeting, a final dividend in respect of the financial year ended 31 March 2003 of 1 sen per ordinary share of RM1 each less 28% tax (2002 - Nil) amounting to RM544,334 (2002 - Nil) will be tabled for shareholders’ approval. These financial statements do not reflect this final dividend which will be accrued as a liability upon approval by shareholders. This represents a change in accounting treatment with respect to the recognition of liabilities in compliance with the new MASB 19 - Events After The Balance Sheet Date. 39. PRIOR YEAR ADJUSTMENTS The prior year adjustments are in respect of the change in the accounting policy with regards to revenue recognition for dividend income as explained in Note 5(v) to the financial statements. The comparative figures have been restated accordingly as disclosed in Note 51 to the financial statements. 40. SUMMARY OF EFFECTS OF ACQUISITION OF A SUBSIDIARY During the financial year, the Company paid RM35,000,000 in cash to acquire an 80% equity interest in South-East Best Sdn. Bhd.. Page 54
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 40. SUMMARY OF EFFECTS OF ACQUISITION OF A SUBSIDIARY (CONT’D) The effect of the acquisition of the subsidiary on the financial results of the Group for the financial year was as follows:- THE GROUP 2003 2002 RM RM Turnover 4,568,700 - Cost of sales (3,855,913) - Gross Profit 712,787 - Other operating income 509,312 - Less: 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) - The effect of the acquisition of the subsidiary on the financial position of the Group at the financial year end is as follows:- THE GROUP 2003 2002 RM RM Investment in associate 880,000 - Property, plant and equipment 29,998,876 - Properties held for future development 18,537,782 - Current assets 25,836,655 - Current liabilities (3,878,840) - Deferred liabilities (42,231,441) - Increase in net assets of the Group 29,143,032 - Page 55
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 40. SUMMARY OF EFFECTS OF ACQUISITION OF A SUBSIDIARY (CONT’D) THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM 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 - 35,000,000 - Cash and cash equivalents acquired (818,781) - - - Net cash outflow on acquisition of subsidiary 34,835,444 - 35,000,000 - 41. PURCHASE OF PROPERTY , PLANT AND EQUIPMENT THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Purchase of property, plant and equipment 201,665 208,427 - 15,400 Amount financed through hire purchase arrangements - (93,100) - - Cash disbursed for the purchase of property, plant and equipment 201,665 115,327 - 15,400 Page 56
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 42. CASH AND CASH EQUIVALENTS For the purpose of the cash flow statements, cash and cash equivalents comprise the following:- THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM Short term deposits (Note 19) 1,422,125 5,042,274 1,239,225 5,012,274 Cash and bank balances (Note 20) 6,084,094 1,460,540 5,201,131 1,904 Bank overdrafts (Note 23) (21,177,916) (20,843,690) (6,413,736) (1,657,727) (13,671,697) (14,340,876) 26,620 3,356,451 Less: Cash placed in sinking fund account (Note 20) (5,198,398) - (5,198,398) - (18,870,095) (14,340,876) (5,171,778) 3,356,451 43. DIRECTORS’ REMUNERATION The aggregate amount of emoluments received and receivable by directors of the Company during the financial year are as follows:- THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM DIRECTORS’ FEES:- 1. Mun Chong Shing @ Mun Chong Tian12,000 3,000 12,000 3,000 2. Dato’ Lim Phaik Gan 12,000 12,000 12,000 12,000 3. Dato’ Dr. Norraesah Bt Haji Mohamad 13,000 13,000 13,000 13,000 4. Datuk Sim Peng Choon 12,000 12,000 12,000 12,000 5. Vincent Koh Kok Kee 12,000 6,000 12,000 6,000 6. Tan Sri Dato’ Ir Muhammad Yusuff Bin Haji Muhammad Yunus 6,000 - 6,000 - 67,000 46,000 67,000 46,000 Page 57
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 43. DIRECTORS’ REMUNERATION (CONT’D) THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM DIRECTORS’ NON-FEE EMOLUMENTS:- 1. Sia Kwee Mow @ Sia Hok Chai 486,000 396,000 486,000 396,000 2. Sia Teong Heng 255,000 180,000 19,500 15,750 3. Mun Chong Shing @ Mun Chong Tian 1,200 300 1,200 300 4. Dato’ Lim Phaik Gan 1,200 900 1,200 900 5. Dato’ Dr. Norraesah Bt Haji Mohamad 2,400 1,500 2,400 1,500 6. Datuk Sim Peng Choon 3,000 2,100 3,000 2,100 7. Vincent Koh Kok Kee 3,000 1,200 3,000 1,200 8. Tan Sri Dato’ Ir Muhammad Yusuff Bin Haji Muhammad Yunus 600 - 600 - 9. Yeoh Hock Thong - 12,500 - 1,875 752,400 594,500 516,900 419,625 Apart from the amounts disclosed under directors’ remuneration above, the estimated monetary value of other benefits-in-kind received by the following directors during the financial year, otherwise than in cash are as follows:- THE GROUP THE COMPANY 2003 2002 2003 2002 RM RM RM RM 1. Sia Kwee Mow @ Sia Hok Chai 16,925 16,925 16,925 16,925 2. Sia Teong Heng - 13,500 - 11,250 3. Yeoh Hock Thong - 1,450 - 1,450 16,925 31,875 16,925 29,625 44. RELATED COMPANY TRANSACTIONS THE COMPANY 2003 2002 RM RM Interest paid to subsidiaries 678,807 1,228,304 Rental paid to a subsidiary 60,000 55,930 Dividend income received/receivable from subsidiaries 5,300,000 8,125,000 Interest received from subsidiaries 587,338 619,226 Management fee received from subsidiaries 270,000 - Page 58
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 45. RELATED PARTY TRANSACTIONS/BALANCES NAME OF NATURE OF GROUP RELATED PARTY NOTE TRANSACTION 2003 2002 RM RM Ligamas Sdn. Bhd. (a) Progress billings received/receivable 19,114,882 17,559,960 Paling Industries (a) Purchase of material 58,873 181,113 Sdn. Bhd. Gross dividend income received 2,790,000 - Sri Rawang Properties Sdn. Bhd. (a) Gross dividend income received 150,000 - Sia Teong Leng (c) & (d) Property sold - 600,000 Wong Hon Kum (c) Retainer fee paid 42,000 42,000 Sia Poh Eng (d) Property sold 550,000 - Sia Kwee Mow @ Sia Hok Chai (e) Interest paid/payable 108,222 160,534 RECEIVABLE PAYABLE NAME OF GROUP GROUP RELATED PARTIES NOTE 2003 2002 2003 2002 RM RM RM RM Ligamas Sdn. Bhd. (a) 9,886,903 10,258,378 - - Paling Industries Sdn. Bhd. (a) - - - 38,534 Smart Home Sdn. Bhd. (b) 37,720,372 37,720,372 - - Sia Poh Eng (d) 500,000 - - - Sia Kwee Mow @ Sia Hok Chai (e) - - 108,222 160,534 (a) Associates (b) A company in which Sia Kwee Mow @ Sia Hok Chai, who is a director of the Company, has direct interest. (c) A director of certain related companies (d) A person connected to Sia Kwee Mow @ Sia Hok Chai and Sia Teong Heng (e) A director of the Company In the opinion of the directors, the above transactions have been entered into in the ordinary course of business on terms established by arm’s length negotiations between the parties. Page 59
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 46. CAPITAL COMMITMENT THE COMPANY 2003 2002 RM RM Approved capital commitment contracted but not provided for - 29,050,000 The capital commitment in the previous financial year relates to the balance of the consideration payable for the acquisition of an 80% equity interest in South-East Best Sdn. Bhd.. 47. CONTINGENT LIABILITIES THE COMPANY 2003 2002 RM RM Corporate guarantee (unsecured) given to banks and other licensed financial institutions for credit facilities granted to subsidiaries - funded facilities 26,616,000 30,352,000 - non-funded facilities 3,907,000 4,472,000 30,523,000 34,824,000 48. SEGMENTAL REPORTING THE GROUP 2003 PROPERTY MANUFACTURING CONSTRUCTIO DEVELOPMENT INVESTMENT A ND TRADING ELIMINATIONS GROUP N RM RM RM RM RM RM REVENUE: External revenue 35,362,729 34,366,715 99,475 - - 69,828,919 Intersegment 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) 8,016,004 Finance 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 Page 60
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 48. SEGMENTAL REPORTING (CONT’D) THE GROUP 2003 PROPERTY MANUFACTURING CONSTRUCTION DEVELOPMENT INVESTMENT A ND TRADING GROUP RM RM RM RM RM Other information Segment assets 39,398,622 287,381,500 26,959,851 12,846,046 366,586,019 Unallocated assets 5,350,142 371,936,161 Segment liabilities 43,876,909 55,859,860 14,750,259 26,663 114,513,691 Unallocated 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 THE GROUP 2002 PROPERTY MANUFACTURING CONSTRUCTIO DEVELOPMENT INVESTMENT A ND TRADING ELIMINATIONS GROUP N RM RM RM RM RM RM REVENUE: External revenue 56,858,840 24,084,755 701,228 - 81,644,823 Intersegment revenue 16,644,238 - 10,161,626 - (26,805,864) - Total revenue 73,503,078 24,084,755 10,862,854 - (26,805,864) 81,644,823 Results: Segment results 6,503,527 4,025,639 8,947,252 (8,006) (11,590,097) 7,878,315 Finance costs (9,611,991) Share of results of associates - 1,511,621 - 1,839,954 - 3,351,575 Profit from ordinary activities before taxation 1,617,899 Taxation (444,278) Profit from ordinary activities after taxation 1,173,621 Page 61
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 48. SEGMENTAL REPORTING (CONT’D) THE GROUP 2002 PROPERTY MANUFACTURING CONSTRUCTION DEVELOPMENT INVESTMENT A ND TRADING GROUP RM RM RM RM RM Other information Segment assets 47,120,266 214,434,561 15,417,666 12,189,324 289,161,817 Unallocated assets 3,971,217 293,133,034 Segment liabilities 53,795,745 13,105,051 10,776,147 29,721 77,706,664 Capital expenditure 70,088 122,099 16,240 - 208,427 Depreciation 208,060 72,489 42,341 3,088 325,978 No geographical analysis has been prepared as the Group operates wholly in Malaysia. 49. SIGNIFICANT EVENTS The following are the significant events involving the Group and the Company:- (a) At the Extraordinary General Meeting convened on 30 April 2002, the shareholders of the Company approved the acquisition by the Company of 500,000 ordinary shares of RM1 each in South-East Best Sdn. Bhd., representing an 80% equity interest in SEB for a cash consideration of RM35,000,000. (b) On 18 June 2002, the nominal value of the ABBA Bonds initially approved by the Board of Directors on 27 September 2001, was revised to RM61,961,250 comprising RM49,569,000 nominal value Primary Al-Bai Bithaman Ajil Bonds (“Primary ABBA Bonds”) and RM12,392,250 nominal value Secondary Al-Bai Bithaman Ajil Bonds (“Secondary ABBA Bonds”). The proposed ABBA Bonds were placed out to a licensed financial institution via a private placement exercise. The ABBA Bonds have a tenure of five (5) years from the date of issue. The profit margin on the ABBA Bonds is at a fixed percentage of 5.00% per annum, payable in arrears on a semi-annual basis represented by the Secondary ABBA Bonds. The ABBA Bonds are secured in the manner disclosed in Note 24 to the financial statements. Page 62
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 49. SIGNIFICANT EVENTS (CONT’D) The Company submitted the application in relation to the proposed ABBA Bonds to the Securities Commission (“SC”) on 20 June 2002. The application was approved by the SC on 19 July 2002. 50. NUMBER OF EMPLOYEES THE GROUP THE COMPANY 2003 2002 2003 2002 Number of employees at the balance sheet date 90 55 9 8 51. COMPARATIVE FIGURES Following the adoption of MASB 19, “Events After The Balance Sheet Date”, in the preparation of this set of financial statements the presentation and classification of dividends in the financial statements have been changed. Accordingly, comparative amounts for dividends have been reclassified to ensure comparability with the current financial year’s presentation. The following comparative figures of the Group and of the Company have been reclassified to conform with the current financial year’s presentation: AS PREVIOUSLY AS RESTATED REPORTED THE GROUP THE COMPANY THE GROUP THE COMPANY RM RM RM RM BALANCE SHEETS (EXTRACT): Receivables - 6,401,217 - 10,217,217 Tax recoverable 3,971,217 9,913,290 5,455,217 11,397,290 Reserves 42,524,427 42,119,220 44,008,427 47,419,220 Page 63
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 51. COMPARATIVE FIGURES (CONT’D) AS PREVIOUSLY AS RESTATED REPORTED THE GROUP THE COMPANY THE GROUP THE COMPANY RM RM RM RM INCOME STATEMENTS (EXTRACT): Turnover - 9,277,687 - 10,452,687 Taxation (444,278) - (115,278) - Profit after taxation 1,173,621 - 1,502,621 - CASH FLOW STATEMENTS (EXTRACT): (Loss)/Profit before taxation - (621,383) - 553,617 Dividend income - (7,805,555) - (8,980,555) 52. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced or liquidation sale. Fair values are obtained from quoted market prices, discounted cash flow models and option pricing models as appropriate. The following methods and assumptions are used to estimate the fair value of each class of financial instruments: (i) Bank balances and other liquid funds and short term receivables The carrying amounts approximate the fair value due to the relatively short term maturity of these instruments. (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 quoted market prices and the assumptions used in valuation models to value these investments cannot be reasonably determined. Page 64
  • SIAH BROTHERS CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2003 52. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES (CONT’D) (ii) Short term borrowings and other current liabilities The carrying amounts approximate the fair values because of the short period to maturity of these instruments. (iv) Long term bank loans The carrying amounts approximate the fair values as these instruments bear interest at variable rates. (v) Lease obligations The fair value of lease obligations is determined by discounting the relevant cash flow using current interest rates for similar instruments at the balance sheet date. There is no disclosure of fair value for investments in subsidiaries and associate, and borrowings under the basis of Islamic banking principles as these are excluded from MASB 24 – Financial Instruments: Disclosure and Presentation. Page 65