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SBC Corporation Berhad: Annual Report 2002 2000kb SBC Corporation Berhad: Annual Report 2002 2000kb Presentation Transcript

  • ReporT Annual SIAH BROTHERS CORPORATION BERHAD 2002 199310-P SIAH BROTHERS CORPORATION BERHAD 199310-P 2002 Annual Report
  • ontent SIAH BROTHERS CORPORATION BERHAD Contents 2 Notice Of Annual General Meeting 5 Corporate Information 42 Directors' Report 6 Directors’ Profile 48 Statement By Directors 13 Corporate Structure 48 Statutory Declaration 14 Group Financial Highlights 49 Report Of The Auditors 15 Statement Of Directors’ Responsibilities In Respect Of The Preparation Of The Financial Statements 50 Balance Sheets 17 Executive Chairman’s Statement 51 Income Statements 23 Penyata Pengerusi Eksekutif 52 Statements Of Changes In Equity 29 Statement Of Corporate Governance 53 Cash Flow Statements 35 Statement On Internal Control 55 Notes To The Financial Statements 36 Audit Committee Report 86 Group Properties 88 Shareholders' Information 91 TSR Holders' Information Proxy Form
  • NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting of Siah Brothers Corporation Berhad will be held at the Penthouse, 5th Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala Lumpur on Thursday, 26 September, 2002 at 10.30 a.m. to transact the following business:- AGENDA 1. To receive and adopt the Directors’ Report and the Audited Financial Statements for the (Resolution 1) year ended 31 March, 2002 together with the Auditors’ Report thereon. 2. To approve the payment of Directors’ fees. (Resolution 2) 3. To re-appoint YBhg. Dato’ Lim Phaik Gan as a Director pursuant to Section 129(6) of the (Resolution 3) Companies Act, 1965. 4. To re-elect the following Directors retiring by rotation pursuant to Article 77 of the Articles of Association of the Company - (a) Mr. Mun Chong Shing @ Mun Chong Tian (Resolution 4) (b) YBhg. Datuk Sim Peng Choon (Resolution 5) 5. To re-elect Mr. Vincent Koh Kok Kee as a Director retiring pursuant to Article 84 of the (Resolution 6) Articles of Association of the Company. 6. To re-appoint Messrs Horwath Mok & Poon as Auditors of the Company and to authorise (Resolution 7) the Directors to fix their remuneration. 7. As Special Business, to consider and, if thought fit, to pass the following Ordinary Resolution :- (Resolution 8) AUTHORITY TO DIRECTORS TO ALLOT AND ISSUE SHARES "THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the approval from the Kuala Lumpur Stock Exchange and other governmental/regulatory bodies, where such approval shall be necessary, the Directors be and are hereby authorised pursuant to Section 132D of the Companies Act, 1965, to allot and issue shares in the Company, at any time and upon such terms and conditions and for such purposes as they may in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per cent (10%) of the issued capital of the Company for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. " 8. To consider any other business for which due notice shall have been given. By Order of the Board CHONG FOOK SIN KAN CHEE JING Company Secretaries Kuala Lumpur 3 September, 2002 2 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 3 NOTICE OF ANNUAL GENERAL MEETING (Cont’d) NOTES :- 1) Proxy - A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote instead of him. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. To be valid, the proxy form duly completed must be deposited at the Registered Office of the Company not less than forty-eight (48) hours before the time for holding the meeting. If the appointor is a corporation, this form must be executed under its common seal or under the hand of its attorney. 2) Resolution 8 - The Company is actively pursuing business opportunities in prospective areas so as to broaden the operating base and earnings potential of the Company. Such expansion plans may require the issue of new shares not exceeding 10 per cent (10%) of the Company’s issued share capital.With the passing of the resolution by the shareholders of the Company at the forthcoming Annual General Meeting, the Directors would avoid delay and cost of convening further general meetings to approve the issue of shares for such purposes. STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING PURSUANT TO PARAGRAPH 8.28 (2) OF THE LISTING REQUIREMENTS OF KUALA LUMPUR STOCK EXCHANGE (1) The following are the Directors standing for re-appointment and re-election at the Twelfth Annual General Meeting:- (a) Re-appointment of YBhg. Dato’ Lim Phaik Gan as a Director pursuant to Section 129(6) of the Companies Act, 1965. (b) Re-election of the following Directors pursuant to Article 77 of the Articles of Association of the Company - (i) Mr. Mun Chong Shing @ Mun Chong Tian (ii) YBhg. Datuk Sim Peng Choon (c) Re-election of Mr. Vincent Koh Kok Kee as a Director pursuant to Article 84 of the Articles of Association of the Company.
  • NOTICE OF ANNUAL GENERAL MEETING (Cont’d) (2) Attendance of Directors at Board Meetings held during the financial year ended 31 March, 2002 are as follows:- Percentage Name of Directors Attendance at of Attendance Meetings (%) Sia Kwee Mow @ Sia Hok Chai 5/5 100 Sia Teong Heng 5/5 100 Mun Chong Shing @ Mun Chong Tian 3/5 60 Dato’ Lim Phaik Gan 4/5 80 Datuk Dr. Norraesah Bt. Haji Mohamad 3/5 60 Datuk Sim Peng Choon 5/5 100 Abdul Rahman Bin A. Shukor 4/5 80 (Alternate to Datuk Sim Peng Choon) Vincent Koh Kok Kee (Appointed: 8.10.2001) 2/2 100 Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Muhammad Yunus 2/3 66.67 (Retired: 27.9.2001, appointed: 30.4.2002, resigned: 14.8.2002) (3) The Twelfth Annual General Meeting will be held at the Penthouse, 5th Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala Lumpur on Thursday, 26 September, 2002 at 10.30 a.m. (4) The profile of Directors standing for re-appointment and re-election as mentioned in paragraph 1 above at the Twelfth Annual General Meeting are set out in pages 6 to 12 of this Annual Report. 4 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 5 CORPORATE INFORMATION AS AT 12 TH AUGUST, 2002 BOARD OF DIRECTORS Sia Kwee Mow @ Sia Hok Chai JMN, FFB, FCIOB, FAIB Executive Chairman Sia Teong Heng Dato’ Lim Phaik Gan B.Sc. (Eng), M.Sc. DPMP, DMPN, M.A.(Law), FCI, ARB Managing Director Independent Non-Executive Director Mun Chong Shing @ Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Mun Chong Tian Muhammad Yunus Non-Executive Director PSM, DIMP, JMN, PJK, B.Sc., P. Eng, FAS Independent Non-Executive Director Datuk Sim Peng Choon Datuk Dr. Norraesah Bt. Haji Mohamad PJN DSPN, PhD., B.Sc. (Econ) Non-Executive Director Independent Non-Executive Director Abdul Rahman Bin A. Shukor Vincent Koh Kok Kee B.Sc (Civil & Environmental Eng.), Executive MBA Independent Non-Executive Director Non-Executive Director (Alternate to Datuk Sim Peng Choon) AUDIT COMMITTEE REGISTERED OFFICE PRINCIPAL BANKERS Datuk Dr. Norraesah Bt. Wisma Siah Brothers Affin Merchant Bank Berhad CORPO- Haji Mohamad 74A Jalan Pahang Alliance Bank Malaysia Berhad DSPN, PhD., B.Sc. (Econ) 53000 Kuala Lumpur Aseambankers Malaysia Berhad Chairperson & Independent Tel : 03-40418118 Bangkok Bank Berhad Non-Executive Director Fax : 03-40435281 Bumiputra Commerce Bank Berhad Commerce International Merchant Tan Sri Dato’ Ir. Muhammad AUDITORS Bankers Berhad Yusuff Bin Haji Muhammad Horwath Mok & Poon RHB Bank Berhad Yunus Public Accountants United Overseas Bank PSM, DIMP, JMN, PJK, B.Sc., P. Eng, Level 16 Tower C (Malaysia) Berhad FAS Megan Phileo Avenue Utama Merchant Bank Berhad Independent Non-Executive 12 Jalan Yap Kwan Seng RATE Director 50450 Kuala Lumpur REGISTRARS Vincent Koh Kok Kee Tacs Corporate Services Sdn. Independent Non-Executive SOLICITORS Bhd. Director Unit No. 203, 2nd Floor Cheang & Ariff Datuk Sim Peng Choon 39 Court Block C, Damansara Intan PJN 39, Jalan Yap Kwan Seng No. 1, Jalan SS 20/27 Non-Executive Director 50450 Kuala Lumpur 47400 Petaling Jaya Tel : 03-71182688 COMPANY SECRETARIES Lim & Yeoh Fax : 03-71182693 145-M Jalan Maharajalela Chong Fook Sin 50150 Kuala Lumpur STOCK EXCHANGE LISTING ATII, MCCS, AFA The Main Board of Kuala Lumpur Kan Chee Jing Stock Exchange ACIS
  • DIRECTORS’ PROFILE AS AT 31 ST JULY, 2002 TAN SRI DATO’ IR. MUHAMMAD YUSUFF BIN HAJI MUHAMMAD YUNUS Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Muhammad Yunus, a Malaysian, aged 74, the Independent Non-Executive Chairman of Siah Brothers Corporation Berhad ("SBC"), was appointed to the Board of Directors of SBC on 5th February, 1991. On 27th September, 2001, he retired as a Director of SBC at the Eleventh Annual General Meeting due to personal reasons and was appointed again as an Independent Non-Executive Director of SBC on 30th April, 2002. He is also a member of the Audit Committee of SBC. He graduated with a Bachelor of Science Degree majoring in Civil Engineering from the University of Wales, United Kingdom in 1954 and is a Chartered Civil Engineer. He served in the Public Works Department ("Jabatan Kerja Raya" or "JKR") from 1955 until his retirement in 1983, holding the last position as the Director-General of JKR. He does not hold any securities, direct or indirect, in SBC or any of its subsidiaries. He has no family relationship with any Director and/or major shareholder of SBC. He does not have any conflict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended two of the three Board Meetings held during the last financial year before his retirement from the Board of SBC. SIA KWEE MOW @ SIA HOK CHAI Sia Kwee Mow @ Sia Hok Chai, a Malaysian, aged 69, is the Managing Director of Siah Brothers Corporation Berhad ("SBC"). He has been a Director of SBC since its incorporation on 14th June, 1990. He has over 48 years of experience in building and civil engineering contracting and not less than 30 years of experience in plastic engineering since the incorporation of Paling Industries Sdn. Bhd. in 1971. He was actively involved in Master Builders Association Malaysia ("MBAM") and had served in various capacities including the post of President (1988 to 1994). He was elected as the 29th President (1994 to 1996) of the International Federation of Asian and Western Pacific Contractors’ Associations ("IFAWPCA") during which he led the IFAWPCA delegation to a meeting between the World Bank and International Contractors Association held at Washington D.C. in November, 1996. In recognition of his vast experience and knowledge in construction and his contribution to the building construction industry, he was awarded or conferred the following : q Johan Mangku Negara by DYMM Yang DiPertuan Agong in 2001 q Honorary Life President by MBAM in 2001 q Fellowship of the Faculty of Building, United Kingdom in 1981 q Fellowship of the Chartered Institute of Building, United Kingdom as a Chartered Builder in 1979 q Fellowship of the Australian Institute of Building by the Australian Royal Charter of Building in 1982 He was also a previous President of both the Selangor Builders Association and Selangor Chinese Plumbing and Sanitary Association. He also sits on the board of several private limited companies in Malaysia, including several subsidiaries of SBC. 6 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 7 DIRECTORS’ PROFILE AS AT 31 ST JULY, 2002 (Cont’d) His holdings in the securities of SBC are as follows – Direct Interest Indirect Interest Ordinary shares 1,480,800(a) 19,498,523(b) Transferable Subscription Rights ("TSR") 3,078,500 1,746,780(c) Employees’ Shares Option Scheme 450,000 - (a) 1,480,800 shares are held in bare trust by RHB Capital Nominees (Tempatan) Sdn. Bhd. (b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn. Bhd. (5,181,023 shares). (c) Deemed interest by virtue of his shareholding in Evergreen Legacy Sdn. Bhd. (1,696,580 TSR) and Perfect Consistence Sdn. Bhd. (50,200 TSR). By virtue of his interests in SBC, he is deemed to have interests in the securities of SBC’s subsidiaries to the extent of SBC’s interest in accordance with Section 6A of the Companies Act, 1965. He is the father of Sia Teong Heng, an Executive Director and a major shareholder of SBC. He does not have any conflict of interest with SBC except for those transactions disclosed in Note 38 to the financial statements. He has not been convicted of any offence within the past 10 years. He attended all the five Board Meetings held during the last financial year. SIA TEONG HENG Sia Teong Heng, a Malaysian, aged 39, was appointed as an Executive Director of Siah Brothers Corporation Berhad ("SBC") on 5th February, 1991. On 27th November, 2001, he resigned as a member of the Audit Committee of SBC. He graduated in 1985 with a degree in Bachelor of Science in Civil Engineering from Loughborough University, United Kingdom ("UK") and a Master degree in Management Science from Imperial College, University of London, UK in 1986. His career began in investment banking in 1987 with Morgan Grenfell (Asia) Ltd., Singapore. He joined SBC in 1991. Presently, he also sits on the boards of several subsidiaries of SBC. His holdings in the securities of SBC are as follows - Direct Interest Indirect Interest Ordinary shares 1,698,812(a) 19,498,523(b) Transferable Subscription Rights ("TSR") - 1,746,780(c) Employees’ Shares Option Scheme 350,000 - (a) 91,000 shares are held in bare trust by TASEC Nominees (Tempatan) Sdn. Bhd. -TA First Credit Sdn. Bhd. (b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn. Bhd. (5,181,023 shares). (c) Deemed interest by virtue of his shareholding in Evergreen Legacy Sdn. Bhd. (1,696,580 TSR) and Perfect Consistence Sdn. Bhd. (50,200 TSR).
  • DIRECTORS’ PROFILE AS AT 31 ST JULY, 2002 (Cont’d) By virtue of his interests in SBC, he is deemed to have interests in the securities of SBC’s subsidiaries to the extent of SBC’s interest in accordance with Section 6A of the Companies Act, 1965. He is a son of Sia Kwee Mow @ Sia Hok Chai, the Managing Director and a major shareholder of SBC. He does not have any conflict of interest with SBC except for those transactions disclosed in Note 38 to the financial statements. He has not been convicted of any offence within the past 10 years. He attended all the five Board Meetings held during the last financial year. MUN CHONG SHING @ MUN CHONG TIAN Mun Chong Shing @ Mun Chong Tian, a Malaysian, aged 65, was appointed as an Executive Director of Siah Brothers Corporation Berhad ("SBC") on 1st April, 1996 when he was employed as General Manager of Paling Industries Sdn. Bhd. ("Paling") from 1987 and appointed as a Director in 1991 and remained in both positions until his retirement on 31st December, 2001. On 31st December, 2001, he was redesignated as a Non-Executive Director of SBC. He has received training in Sales Management conducted by the National Productive Centre and the Malaysian Institute of Management and a General Management Programme at the National Productivity Board, Singapore. Prior to his involvement with Paling, he was employed as General Manager in Hume Industries (M) Bhd. where he has had extensive exposure to industrial engineering and management. His holdings in the securities of SBC are as follows - Direct Interest Indirect Interest Ordinary shares 21,782 - Transferable Subscription Rights 12,500 - He does not hold any securities, direct or indirect, in any of SBC’s subsidiaries. He is a brother-in-law to Sia Kwee Mow @ Sia Hok Chai and an uncle to Sia Teong Heng, both are Directors and major shareholders of SBC. He does not have any conflict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended three of the five Board Meetings held during the last financial year. 8 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 9 DIRECTORS’ PROFILE AS AT 31 ST JULY, 2002 (Cont’d) DATO' LIM PHAIK GAN Dato' Lim Phaik Gan, a Malaysian, aged 82, was appointed as an Independent Non-Executive Director of Siah Brothers Corporation Berhad ("SBC") on 5th February, 1991. She is an advocate and solicitor and was called to the Bar of England and the Bar of Malaysia. She obtained a Master of Arts degree in Law from the University of Cambridge, United Kingdom and was in active practice at the Bar of Malaysia from 1954 to 1971 and from 1980 until today. Since 1955, she has had a distinguished career in both the private and public sectors. In 1970, she was a member of the National Economic Consultative Council established when Parliament was suspended as a result of riots in 1969. From 1971 to 1980, she served as the Deputy Permanent Representative of Malaysia to the United Nations and as the Malaysian Ambassador to Yugoslavia,Austria, Belgium and the European Economic Community. She was Malaysia's Permanent Representative to the United Nations Industrial and Development Organisation and International Atomic Energy Agency in Vienna, and served as chairman in various committees. Since her retirement from the Malaysian Foreign Service in 1980, she has been actively involved in various government bodies and advisory panels. She is currently a member of the Board of the Institute of Strategic and International Studies. She was the Director of the Kuala Lumpur Regional Centre for Arbitration, an international organisation involved in the conduct and administration of international commercial arbitration for the settlement of disputes arising out of international commercial contracts and joint ventures from 1982 to 2000. Her holdings in the securities of SBC are as follows - Direct Interest Indirect Interest Ordinary shares 5,000 - She does not hold any securities, direct or indirect, in any of SBC’s subsidiaries. She has no family relationship with any Director and/or major shareholder of SBC. She does not have any conflict of interest with SBC. She has not been convicted of any offence within the past 10 years. She attended four of the five Board Meetings held during the last financial year. DATUK DR. NORRAESAH BT. HAJI MOHAMAD Datuk Dr. Norraesah Bt. Haji Mohamad, a Malaysian, aged 54, was appointed as an Independent Non-Executive Director of Siah Brothers Corporation Berhad ("SBC") on 8th July, 1991. She is also the Chairperson of the Audit Committee of SBC. She holds a Doctorate Degree in Economics Science (International Economics and Finance) which she obtained in 1986 from University of Paris 1, Pantheon Sorbonne, France. She has over 29 years of working experience in banking, consultancy and international trade and commerce. She worked with the International Trade Division of the Ministry of Trade and Industry (now known as the Ministry of International Trade and Industry) from 1972 to 1985 and was later transferred to the Finance Division of the Ministry of Finance holding the post of Principal Assistant Secretary dealing with privatisation and debt management.
  • DIRECTORS’ PROFILE AS AT 31 ST JULY, 2002 (Cont’d) In 1988, she joined ESSO Production Malaysia, Inc. as Communications Manager and subsequently, in 1990, took the position of Managing Director with a consultant firm providing financial advisory services. From 1991 to 1998 she was appointed as the Chief Representative of Credit Lyonnais Bank in Malaysia. She is currently the Group Chairman of MIDAS Group of Engineering Colleges and also sits on the board of KESM Industries Berhad, a company listed on the Second Board of the Kuala Lumpur Stock Exchange and several private limited companies. She was awarded the distinction of Darjah Setia Pangkuan Negeri on 13th July, 2002 by Tuan Yang Terutama Yang di- Pertua Negeri Pulau Pinang on His Excellency’s 64th Birthday. Her holdings in the securities of SBC are as follows - Direct Interest Indirect Interest Transferable Subscription Rights 4,000 - She does not hold any securities, direct or indirect, in any of SBC’s subsidiaries. She has no family relationship with any Director and/or major shareholder of SBC. She does not have any conflict of interest with SBC. She has not been convicted of any offence within the past 10 years. She attended three of the five Board Meetings held during the last financial year. DATUK SIM PENG CHOON Datuk Sim Peng Choon, a Malaysian, aged 70, was appointed as a Non-Executive Director of Siah Brothers Corporation Berhad ("SBC") on 14th May, 1993. He is also a member of the Audit Committee of SBC. He graduated with a Senior Cambridge Certificate from the Anglo Chinese School in Ipoh, Perak Darul Ridzuan in 1951. He started his career in 1951 with Barlow & Co. Ltd., Kuala Lumpur, an agent for consumer goods as their representative. In 1953 to 1956, he joined Allen & Hansbury Ltd., a manufacturer of vitamin products, antibiotics and surgical instruments as a Medical Representative for Singapore. From 1957 to 1963, he was a Director and Manager of H Rogers & Co. Ltd., Kuala Lumpur. In 1964, he established Polychem (M) Sdn. Bhd. He is also currently the Chairman of N.P. King (HK) Ltd., Hong Kong and N.P. King Pte. Ltd., Singapore, both act as agents for manufacturers of hardware and industrial products. He is also active in several social organisations, acting as the Vice-Chairman of Kwan Inn Teng Foundation of Malaysia since 1980 and a Director and the Deputy Treasurer of Tung Shin Hospital, Kuala Lumpur since 1981 and 1986 respectively. He is a life member of Chee Kim Thong Pugilistic & Health Society in 1964. Presently, he sits on the Board of Cabot Malaysia Sdn. Bhd. and SKF Bearing Industries Malaysia Sdn. Bhd. 10 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 11 DIRECTORS’ PROFILE AS AT 31 ST JULY, 2002 (Cont’d) He was awarded the distinction of Panglima Jasa Negara on 2nd June, 2001 by the Yang Di-Pertuan Agung on His Majesty’s 75th Birthday. His holdings in the securities of SBC are as follows - Direct Interest Indirect Interest Ordinary shares 10,869 - He does not hold any securities, direct or indirect, in any of SBC’s subsidiaries. He has no family relationship with any Director and/or major shareholder of SBC. He does not have any conflict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended all the five Board Meetings held during the last financial year. VINCENT KOH KOK KEE Vincent Koh Kok Kee, a Malaysian, aged 42, was appointed as an Independent Non-Executive Director of Siah Brothers Corporation Berhad ("SBC") on 8th October, 2001. He is also a member of the Audit Committee of SBC. He is an accountant by training and a member of Malaysian Institute of Certified Public Accountants. He has about 20 years of experience in auditing and management consulting, including 13 years of service at two of the accounting profession’s "Big Five" firms. Starting off in auditing, he spent 10 years performing and supervising the audits of clients in a wide range of industries before moving into management consulting. He was then involved in numerous assignments covering financial and business planning and review, corporate restructuring, systems design and implementation, computerisation and corporatisation and privatisation. Since September 1995, he has been a freelance consultant, undertaking assignments in the same fields of experience as well as branching out into customer service strategy and implementation, organisational restructuring and human resource management. He does not hold any securities, direct or indirect, in SBC or any of its subsidiaries. He has no family relationship with any Director and/or major shareholder of SBC. He does not have any conflict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended all the two Board meetings held during the last financial year since his appointment to the Board of SBC.
  • DIRECTORS’ PROFILE AS AT 31 ST JULY, 2002 (Cont’d) ABDUL RAHMAN BIN A. SHUKOR Abdul Rahman Bin A. Shukor, a Malaysian, aged 40, was appointed to the Board of Directors of Siah Brothers Corporation Berhad ("SBC") as a Non-Executive Director alternate to Datuk Sim Peng Choon on 5th February, 2001. He graduated in 1985 with a degree in Bachelor of Science in Civil & Environmental Engineering from the University of Wisconsin at Madison, USA. He started his career in 1985 with Machinta Sdn. Bhd. as a Site Engineer, and subsequently joined the Department of Environment ("DOE") as an Environmental Controller in 1986. Before he left the DOE, he was involved in the Planning Department, specifically on the aspect of Environmental Impact Assessment. In 1992, he joined PNB Equity Resource Corporation Sdn. Bhd., a wholly owned subsidiary company of PNB, as an Assistant Manager in its Venture Capital Business. In 1997, he went to the United States to pursue the Executive Master of Business Administration program from the University of New Haven at Connecticut. At the same time, he has also sat and passed the First and Second of the three levels Examination of the Chartered Financial Analysis ("CFA") Program organised by the Association of Investment Management and Research ("AIMR"), USA. The CFA Program is a distinguished professional chartership for the financial & investment communities in the USA, and have following through the establishment of AIMR charters all around the world. Upon the completion of his studies in 1999, he was assigned as a Manager in the Corporate Services Department of Permodalan Nasional Berhad ("PNB"). Presently, he sits on the Board of GKN Driveshafts (Malaysia) Sdn. Bhd., representing PNB. He does not hold any securities, direct or indirect, in SBC or any of its subsidiaries. He has no family relationship with any Director and/or major shareholder of SBC. He does not have any conflict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended four of the five Board meetings held during the last financial year. 12 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 13 CORPORATE STRUCTURE AS AT 12 TH AUGUST, 2002 CORPO- 100% Lifeplus - Siah Brothers Trading JV Sdn. Bhd. 100% Syarikat Siah Brothers 33.3% Sri Berjaya Development Sdn Bhd Trading Sdn Bhd 22.2% Sri Rawang Properties Sdn Bhd 100% Syarikat Siah Brothers RATE Construction Sdn Bhd 100% Seri Ampangan Really Sdn Bhd 100% Siah Brothers Enterprise Sdn Bhd 100% Sinaran Naga Sdn Bhd 100% Siah Brothers Land 100% Siah Brothers Develoment Sdn Bhd Sdn Bhd 100% Tiara Development Sdn Bhd 100% Siah Brothers Project 100% SBC Homes Sdn Bhd Management Sdn Bhd STRUCTURE 100% Winsome Ventures Sdn Bhd 100% Mixwell (Malaysia) Sdn Bhd 50% Ligamas Sdn Bhd 100% Gracemart Resources Sdn Bhd SIAH BROTHERS 100% South-East Best Sdn Bhd 100% Sutrati Development Sdn Bhd CORPO- CORPORATION BERHAD 50% Sam & Lau Plantation Sdn Bhd 100% Aureate Construction Sdn Bhd 100% Siah Brothers Properties 100% SBC Leisure Sdn Bhd Sdn Bhd RATE 100% SBC Towers Sdn Bhd 40% Paling Industries 100% Liga Canggih Sdn Bhd Sdn Bhd 51% Masahmura Sdn Bhd 100% Siah Brothers Industries 50% Varich Industries Sdn Bhd Sdn Bhd 51% Masahmura Sales & STRUCTURE Service Sdn Bhd Investment Holding Property Development Manufacturing & Trading Construction Property Investment Plantation & Nursery
  • GROUP FINANCIAL HIGHLIGHTS GROUP 2002 2001 2000 1999 1998 RM'000 RM'000 RM'000 RM'000 RM'000 RESULTS Turnover 81,645 92,411 114,707 149,669 256,884 Profit before taxation 1,618 1,421 2,555 2,088 13,364 Profit after taxation but before minority interests 1,503 1,071 3,729 3,923 6,430 Profit attributable to shareholders 1,503 1,071 3,729 1,679 2,561 ASSETS EMPLOYED Property, plant and equipment 7,047 7,586 13,090 15,789 31,625 Investments and other assets 141,705 140,323 141,031 165,810 147,299 Net current assets 58,351 58,346 56,393 34,687 34,766 FINAN- Goodwill and deferred expenditure 10,246 10,246 8,253 8,185 8,543 217,349 216,501 218,767 224,471 222,233 FINANCED BY Share capital 57,302 57,302 57,302 50,469 50,469 Share application account 115,600 - - - - Reserves 44,008 43,087 42,832 40,095 38,780 Minority interests - - - 14,897 13,084 Irredeemable Convertible Unsecured Loan Stocks - 115,600 115,600 115,600 115,600 Deferred Liabilities 439 512 3,033 3,410 4,300 217,349 216,501 218,767 224,471 222,233 SELECTED RATIOS Net earnings per share (sen) 2.4 1.6 6.9 3.3 5.1 Net tangible assets per share (sen) 396 165 169 163 160 Gross dividend (%) - 1.5 1.5 1.0 1.0 CIAL Profit Before Taxation (RM'000) Assets Employed (RM'000) 2002 1,618 2002 217,349 2001 1,421 2001 216,501 2000 2,555 2000 218,767 1999 2,088 1999 224,471 1998 13,364 1998 222,233 HIGHLIGHT 0 3 6 9 12 15 0 50 100 150 200 250 Thousands Thousands Turnover (RM'000) Shareholders' Fund (RM'000) 2002 81,645 2002 216,910 2001 92,411 2001 100,389 2000 114,707 2000 100,134 1999 149,669 1999 90,564 1998 256,884 1998 89,249 0 60 120 180 240 300 0 50 100 150 200 250 Thousands Thousands 14 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 15 STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE PREPARATION OF THE FINANCIAL STATEMENTS The Directors are responsible for ensuring that the financial statements of the Group are drawn up in accordance with applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and the Company as of 31 March 2002 and of the results and cash flows of the Group and Company for the financial year ended on that date. In preparing the financial statements, the Directors have:- (a) adopted suitable accounting policies and applied them consistently; (b) made judgements and estimates that are prudent and reasonable; (c) ensured the adoption of applicable approved accounting standards; and (d) used the going concern basis for the preparation of the financial statements. The Directors are responsible for ensuring proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the Group and the Company, and are kept in accordance with the Companies Act, 1965.The Directors are also responsible for taking such steps as are reasonably open to them to safeguard the Group’s assets and to prevent and detect fraud and other irregularities.
  • One of Malaysia’s most recognised name in Building 16 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 17 EXECUTIVE CHAIRMAN’S STATEMENT O n behalf of the Board of Directors, I am pleased to present the Annual Report and Financial Statements of Siah Brothers Corporation Berhad for the financial year ended 31 March 2002. OPERATING BACKGROUND The Malaysian economy rebounded in 2002 with a projected 3.5% GDP growth with economic growth dominated by public expenditure from the RM28.4 billion development funds allocated for 2002 – 2003. The bulk of the expenditure is to be spent on infrastructure, education and training, housing, health services as well as industrial, agriculture and rural developments. After the slowdown in the 4th Quarter of 2001 due to the effect of unfavourable external events, there is now a sense that normality has returned since January 2002 when demand for the Group’s activities has increased in momentum. FINANCIAL REVIEW The fiscal year 2002 had been very challenging for Siah Brothers Corporation Berhad. Despite the national and global slow down in economic growth in 2001, caused partly by the September 11 incident, the Group continues to perform reasonably well in its operations, outperforming the results of the previous financial year. The Group registered a higher gross profit of RM13.15 million as compared to RM11.07 million in the previous financial year. Despite the slight decrease in turnover, the gross profit margin was better at 16% as against 12% in the preceding year as a result of the better contribution from the housing and building construction projects undertaken by the Group during the year as well as the on-going rationalisation programmes. The Group’s performance continues to be dominated by its two core activities of housing and building construction, the main contributor to the Group’s turnover and earnings, registered a 55% growth in revenue to RM80.94 million. The Group’s shareholders’ funds increased two- fold from RM100.39 million as at the end of March 2001 to RM216.91 million as at 31 March 2002, with the net tangible assets per share of the Group rising to RM2.64 from RM1.65 previously. Share capital also rose from RM50.47 million to RM75.60 million on 10 April 2002. OPERATIONAL REVIEW Housing The improved industry environment stimulated by the continuous Government’s efforts to encourage the development of affordable residential properties, and increased disposable income has led to a positive growth of the residential sub-sector in 2001. Growth was supported by strong underlying demand for residential units, particularly affordable and conventional housing in choice locations with good accessibility. The current low interest rate environment with financial institutions offering competitive housing loan packages
  • EXECUTIVE CHAIRMAN’S STATEMENT (Cont’d) with lower margin requirements and longer tenure provided additional impetus. Other incentives included withdrawals of EPF funds for the purchase of a second house ; exemption from stamp duty ; lifting of limitations for financial institutions to bridge finance the construction of residential properties priced above RM250,000 each and shop houses within residential areas ; and liberalisation of usage of proceeds from private debt securities to bridge finance the development of such properties 4 Storey Shop Office Suites Cum Apartments provided they achieve break-even sales in value Taman Mastiara, Kuala Lumpur terms. Further, the stamp duty exemption for the purchase of properties from developers has resulted in an improvement in the property overhang situation and potential buyers who had previously held back purchases in anticipation of price reduction do realise that prices had bottomed out. The Group’s housing development sector was a hive of activity during the financial year with launching of new phases by Seri Ampangan Realty Sdn Bhd , Sinaran Naga Sdn Bhd, Mixwell (Malaysia) Sdn Bhd and its 50% owned associate company, Ligamas Sdn Bhd. For fiscal year 2002, the housing development sector continues to perform well, and an increase in contribution towards the Group’s future revenue and profitability can be expected from this sector. Seri Ampangan Realty has to date launched 8 phases of its housing development project at Taman Mastiara, 5th Mile, Jalan Ipoh residential neighbourhoods, Kuala Lumpur.The phases launched comprise double-storey link houses, three-storey shop offices, three-storey townhouses, double-storey shop offices and four- storey shop office suites cum apartments. The cumulative sales since its maiden phase launched in 1993 is RM177.2 million. Completed Townville At Taman Mastiara, Kuala Lumpur Sinaran Naga, which is developing Kuantan’s largest mixed township namely Perkampungan Seri Mahkota Aman, alongside the dual carriageway Jalan Kuantan Gambang and next to TUDM Air Force base and Kuantan Airport, is performing equally well. Cumulative sales to date since the maiden launch in 1997 is RM60.5 million. With the anticipated opening of the East-West Highway in 2004, demand for both commercial and residential properties will be further enhanced. The success of Perkampungan Single Storey Terrace Houses Seri Mahkota Aman have been attributed to location, pricing Perkampungan Seri Mahkota Aman, Kuantan and the government’s ongoing policy of home ownership as well as stemmed from the air armed forces personnel, given the proximity of an army camp located a mere two kilometres from the development site. 18 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 19 EXECUTIVE CHAIRMAN’S STATEMENT (Cont’d) During the financial year, Mixwell has launched and commenced construction works of the 400 units of low cost apartments at Taman Selat Sutera, Klang, generating a total sales revenue of RM16.7 million.This project is a joint venture development with TA Group, a financial institution. The second phase comprises 294 units of double-storey link houses will be launched later part of the year and its contribution in terms of sales value is approximately RM39.7 million. Construction Of Low Cost Apartments In Progress Taman Selat Sutera, Klang Ligamas Sdn Bhd, a joint venture company with Perbadanan Kemajuan Negeri Selangor, is developing a new town centre known as Bandar Utama in Batang Kali with a land bank of approximately 1,877 acres. More than 4,000 units of mixed commercial and residential properties have been built and delivered to date. The completed properties comprise low cost terrace houses, shop offices, single and double-storey terrace houses, semi-detached houses and bungalows. The project has to date in total contributed sales value more than RM250 Double Storey Terrace Houses million since its maiden launch about 7 years ago. Bandar Utama, Batang Kali The ongoing success of Taman Mastiara, Perkampungan Seri Mahkota Aman, Taman Selat Sutera and Bandar Utama, Batang Kali gives the Group somewhat of an important diversity in its portfolio of income, especially during this recovery phase of the economy. Construction Syarikat Siah Brothers Trading Sdn Bhd, a PKK ‘A’ license builder and Syarikat Siah Brothers Construction Sdn Bhd spearhead the Group’s construction activities. Construction sector has achieved a commendable performance in the fiscal year 2002. The balance of construction order book brought forward from the previous financial year, coupled with new contracts secured during the year were instrumental in maintaining the Group’s busy construction activities for the financial period. Amongst the major construction contracts undertaken by the construction sector during the financial year under review include :- q Campus and academic facilities for the International Institute of Islamic Thought and Civilisation at Taman Duta, Kuala Lumpur. q Traditional single-storey and double-storey terrace houses at Bandar Utama, Batang Kali, Selangor. q Road upgrading of Jalan Batu Caves-Simpang Road Upgrading At Jalan Batu Caves-Simpang Tiga Tiga for Jabatan Kerja Raya Selangor.
  • EXECUTIVE CHAIRMAN’S STATEMENT(Cont’d) The Group’s construction activities were also boosted by the launching of new phases of the Group’s housing development activities. Going forward, the Group was recently the successful bidder in the tender for the turnkey construction of 293 units of double-storey terrace houses at Taman Damansara Emas, Kota Damansara, Kuala Lumpur worth a contract value of RM60 million. Physical works have started in the third quarter of 2002, with a construction period of 18 months. In July 2002, Syarikat Siah Brothers Trading Sdn Bhd was awarded with the 30 years Excellent Service Award by Master Builders Association Malaysia for its contribution to the construction industry in the last 30 years. Manufacturing The Group’s 40% associate in Paling Industries Sdn Bhd in partnership with Brussels based Etex S.A., currently the world largest plastic building materials manufacturer, is achieving encouraging results. Etex’s vast research and development experience and wide product range seem to have an immediate impact on the bottom line of Paling Industries. Going forward, we expect more opportunities for the Group in terms of bargaining strength and transfering of advanced technology and most importantly a regional business model in the making, continually contributing to the growth of the Group’s bottom line. Paling’s Products CORPORATE DEVELOPMENT During the year under review, the Group has undertaken to issue RM61,961,250 nominal value Al-Bai Bithaman Ajil Bonds ("Proposed ABBA Bonds") comprising RM49,569,000 nominal value Primary ABBA Bonds and RM12,392,250 nominal value Secondary ABBA Bonds via a private placement exercise, with a tenure of 5 years from the date of issue. The application of the Proposed ABBA Bonds was submitted to the Securities Commission ("SC") on 20 June 2002, and the SC had vide its letter dated 19 July 2002 approved the Proposed ABBA Bonds. Paling’s Products The year under review also saw the Company entering into Share Sale Agreements to acquire the remaining 80% equity interest in its associate company, South-East Best Sdn Bhd. The acquisition will enable the Group to expand its existing construction and housing development business and its existing market coverage to East Malaysia, as well as to enhance the financial performance of the Group for the future.The acquisition had been approved by the shareholders at the Extraordinary General Meeting convened on 30 April 2002. With the completion of the acquisition, South-East Best has been transformed from a 20% owned associated company to a wholly-owned subsidiary of the Company. As for the fund raising exercise involving the proposed rights issue and proposed special issue which were approved by the SC on 2 October 2000 and 26 February 2001 respectively, the Board of Directors of the Company had on 6 September 2001 and 23 October 2001 decided to abort both the proposed issues, in view of the prevailing weak equity market condition and its uncertain outlook at that point of time. 20 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 21 EXECUTIVE CHAIRMAN’S STATEMENT (Cont’d) EMPLOYEES’ SHARE OPTION SCHEME During the financial year ended 31 March 2001, options to subscribe for 3,563,000 shares were granted to eligible employees of the Group. At the end of year 2002, 492,000 options and 1,317,000 options had lapsed pursuant to the Scheme as a result of staff resignations and divestment of its equity interest in Paling Industries Sdn Bhd respectively. As at 31 March 2002, 1,754,000 options remain unexercised under the Scheme. CHANGE IN DIRECTORATE It is my great pleasure to welcome our new Board member, Mr Vincent Koh Kok Kee who was appointed as an Independent Non-Executive Director on 8 October 2001. Mr Vincent Koh brings with him a wealth of experience from the field of auditing, internal control and management consulting. His experience will enhance the current diversity of expertise that the Board possesses and as a member of our Audit Committee, his background as an accountant by training is invaluable. I would also like to take this opportunity to thank Tan Sri Dato’ Ir. Muhammad Yusuff bin Haji Muhammad Yunus, who retired from the Board on 27 September 2001 and was reappointed as an Independent Non-Executive Director on 30 April 2002, for his guidance and invaluable contributions to the Group during his tenure as Chairman of the Company. FUTURE OUTLOOK The economic outlook for 2002 / 2003 is that of optimism. The Government’s projected GDP growth of 3% to 4% for the year 2002 is expected to be led by domestic consumption and investment. The growth will be on the back of an anticipated recovery in world economy, which is forecasted to materialize in the later part of the year. Under the Eighth Malaysian Plan 2001-2005, the Government has estimated housing needs of approximately 160,000 units per annum. With Malaysia’s strong demographics, demand for affordable houses are expected to remain steady and in line with the Government’s objective, the Group will continue to provide affordable homes to meet the housing needs of the population . In the construction sector, the Group is encouraged by the Government’s recognition of the need to further boost the flagging construction sector, one of the main drivers of growth. With the extensive experience in constructing high-rise buildings and housing estates, the Group hopes to win a fair share of International Institute Of Islamic Thought And Civilization (ISTAC) the contracts and projects that will be available Persiaran Duta, Taman Duta, Kuala Lumpur for bidding.
  • EXECUTIVE CHAIRMAN’S STATEMENT (Cont’d) With the economy firmly on an upward trend, we expect housing and construction sentiment to finally begin to move in an upward cycle improving sentiments in both of our business areas of housing and building. The Board of Directors are optimistic in achieving a satisfactory financial performance for the forthcoming financial years. DIVIDEND In spite of a fair result for the fiscal year 2002, the Board of Directors have chosen to take a prudent stance to conserve cashflow and thus, no dividend is recommended for the financial year ended 31 March 2002. ACKNOWLEDGEMENT The Group’s achievement in the face of adversity is a reflection of the strength of the management team, wise counsel from the fellow Board members and the competency and enthusiasm of all employees. On behalf of the Board of Directors, I wish to record my sincere appreciation and gratitude to the shareholders, joint venture partners, valued business associates, bankers, lawyers, auditors and government authorities for their confidence and support to the Group. With the stoic loyalty and commitment of the management and employees and the continuous support of the shareholders, customers and business associates, I am positive of the Group’s capability to continue to grow by riding on the economic recovery. Thank you. Sia Kwee Mow @ Sia Hok Chai JMN, FFB, FCIOB, FAIB Executive Chairman 12 August 2002 22 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 23 PENYATA PENGERUSI EKSEKUTIF S aya bagi pihak Lembaga Pengarah dengan sukacitanya membentangkan Laporan Tahunan dan Penyata Kewangan Siah Brothers Corporation Berhad bagi tahun kewangan berakhir 31 Mac 2002. MAKLUMAT OPERASI Pemulihan ekonomi Malaysia dalam tahun 2002 dengan jangkaan pertumbuhan KDNK sebanyak 3.5% berpunca terutamanya dari perbelanjaan awam yang berjumlah RM28.4 bilion, dari dana pembangunan yang diperuntukkan bagi tahun 2002-2003. Sebahagian besar peruntukkan ini dijangka akan dibelanjakan bagi sektor infrastruktur, pendidikan dan latihan, perumahan, perkhidmatan kesihatan serta sektor perindustrian, pertanian dan pembangunan luar bandar. Selepas kemerosotan ekonomi bagi suku ke-empat tahun 2001 akibat keadaan ekonomi asing yang kurang memuaskan, Kumpulan kini berpendapat bahawa keadaan ekonomi telah beransur pulih berasaskan permintaan untuk aktiviti- aktiviti Kumpulan yang telah meningkat semenjak Januari 2002. TINJAUAN KEWANGAN Tahun kewangan 2002 merupakan tahun yang begitu mencabarkan bagi Siah Brothers Corporation Berhad. Walaupun pertumbuhan ekonomi dalam tahun 2001 terjejas akibat insiden 11 September, Kumpulan masih berupaya menunjukkan prestasi yang memuaskan dari segi operasi dan mencapai peningkatan keuntungan berbanding dengan tahun sebelumnya. Kumpulan mencatat keuntungan kasar yang lebih tinggi berjumlah RM13.15 juta berbanding dengan RM11.07 juta bagi tahun sebelumnya. Pengurangan perolehan langsung tidak menjejaskan keuntungan kasar malah margin keuntungan kasar telah meningkat ke 16% berbanding dengan 12% bagi tahun sebelumnya, hasil dari sumbangan projek-projek perumahan dan pembinaan yang diusahakan oleh Kumpulan bagi tahun ini serta program-program rasionalisasi yang masih dilaksanakan. Keputusan Kumpulan terus didominasi oleh dua aktiviti utama iaitu perumahan dan pembinaan. Hasil dari penjana utama perolehan dan pendapatan ini, perolehan Kumpulan telah mencatat pertumbuhan sebanyak 55% ke RM80.94 juta. Dana pemegang saham telah meningkat dua kali ganda dari RM100.39 juta pada akhir tahun 31 Mac 2001 ke RM 216.91 juta pada akhir tahun 31 Mac 2002. Sejurus itu, aset nyata bersih sesaham Kumpulan telah meningkat ke RM2.64 berbanding dengan RM1.65 tahun sebelumnya. Pada 10 April 2002, modal saham juga meningkat dari RM50.47 juta ke RM75.60 juta. TINJAUAN OPERASI Perumahan Pemulihan keadaan industri hasil dari usaha-usaha lanjutan Kerajaan yang menggalakkan pembangunan perumahan kos mampu milik serta peningkatan keupayaan perbelanjaan umum telah menghasilkan pertumbuhan yang positif bagi sub-sektor perumahan dalam tahun 2001. Permintaan yang kian menggalakkan terutamanya bagi unit-unit perumahan kos mampu milik konvensional di lokasi-lokasi pilihan
  • PENYATA PENGERUSI EKSEKUTIF (Samb.) diiringi dengan infrastruktur pengangkutan yang sempurna merupakan faktor-faktor utama pertumbuhan ini. Pertumbuhan ini turut disokong oleh institusi-institusi perbankan yang menawarkan pelbagai pinjaman perumahan kompetitif yang berfaedah rendah, syarat-syarat pinjaman perumahan yang dilonggarkan serta jangkamasa pembayaran yang lebih panjang. Insentif-insentif lain termasuk pengeluaran dari dana KWSP untuk pembelian rumah kedua; pengecualian duti setem; pelonggaran had-had tertentu bagi institusi kewangan dalam pembiayaan pembangunan hartanah kediaman yang berharga RM250,000 ke atas serta rumah-kedai di kawasan kediaman; dan liberalisasi dalam penggunaan dana dari securiti-securiti hutang persendirian untuk pembiayaan pembangunan hartanah berkenaan, dengan syarat pembangunan tersebut mencapai titik pulangan jualan. Pengecualian duti setem bagi pembelian hartanah dari pihak pemaju dan kesedaran pembeli-pembeli berpotensi bahawa harga hartanah telah mencapai dasarnya Rumah Bandar Yang Siap Dibina juga telah mengaktifkan semula aktiviti-aktiviti jualan hartanah. Taman Mastiara, Kuala Lumpur Tahun ini, sektor pembangunan perumahan Kumpulan sememangnya menunjukkan kemajuan dengan pelancaran fasa baru oleh Seri Ampangan Realty Sdn Bhd, Sinaran Naga Sdn Bhd, Mixwell (Malaysia) Sdn Bhd dan syarikat bersekutu 50%, Ligamas Sdn Bhd. Bagi tahun kewangan 2002, prestasi dalam sektor pembangunan perumahan terus menunjukkan keputusan yang meransangkan dan sumbangan dari segi perolehan dan keuntungan dalam sektor ini dijangka akan berterusan di masa depan. Hingga kini, Seri Ampangan Realty telah melancarkan 8 fasa projek pembangunan perumahan di Taman Mastiara, Batu 5, Jalan Ipoh, Kuala Lumpur. Fasa-fasa yang telah dilancarkan terdiri daripada rumah teres dua tingkat, kedai pejabat dua dan tiga tingkat, rumah bandar tiga tingkat dan kedai pejabat/pangsapuri empat tingkat. Sejak pelancaran yang pertama dalam tahun 1993, jumlah nilai jualan setakat ini telah mencapai angka RM177.2 juta. Kedai Pejabat / Pangsapuri 4 Tingkat Taman Mastiara, Kuala Lumpur Sinaran Naga yang kini giat membangunkan perbandaran terbesar di Kuantan, Perkampungan Seri Mahkota Aman yang terletak di sepanjang lebuhraya Jalan Kuantan Gambang dan berjiran dengan kem Tentera Udara TUDM dan Lapangan Terbang Kuantan juga menunjukkan prestasi yang memuaskan. Sejak pelancaran ulungnya dalam tahun 1997, jumlah nilai jualan setakat ini telah mencapai angka RM60.5 juta. Pembinaan Lebuhraya Timur-Barat yang dijangka siap dalam tahun 2004 akan dapat meningkatkan lagi permintaan terhadap hartanah perumahan dan komersial. Kejayaan projek Perkampungan Seri Mahkota Aman adalah berasaskan ciri- ciri lokasinya, harga yang berpatutan dan dasar lanjutan pemilikan Rumah Teres Satu Tingkat Perkampungan Seri Mahkota Aman, Kuantan perumahan oleh Kerajaan serta potensi jualan kepada kakitangan Tentera Udara berdasarkan jarak tapak pembangunan yang tidak melebihi dua kilometer dari kem tentera. 24 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 25 PENYATA PENGERUSI EKSEKUTIF (Samb.) Dalam tahun kewangan ini, Mixwell telah melancar dan memulakan kerja-kerja pembinaan untuk 400 unit apartmen kos rendah yang akan menjanakan nilai jualan berjumlah RM16.7 juta, di Taman Selat Sutera, Klang. Projek ini adalah pembangunan usahasama dengan Kumpulan TA, sebuah institusi kewangan. Fasa kedua yang terdiri daripada 294 unit rumah teres dua tingkat dijangka akan dilancarkan pada penghujung tahun ini. Sumbangan dari segi nilai jualan untuk fasa kedua ini dianggarkan berjumlah RM39.7 juta. Kerja-kerja Pembinaan Apartmen Kos Rendah Sedang Giat Dijalankan, Taman Selat Sutera, Klang Ligamas Sdn Bhd, syarikat usahasama dengan Perbadanan Kemajuan Negeri Selangor kini terus giat membangunkan bandar baru yang dikenali sebagai Bandar Utama di Batang Kali atas tanah seluas 1,877 ekar. Sehingga kini, syarikat ini telah berjaya menyampaikan lebih daripada 4,000 unit hartanah komersial dan kediaman yang terdiri daripada rumah teres kos rendah, rumah-kedai, rumah teres satu dan dua tingkat, rumah berkembar dan banglo kepada pembelinya. Pada masa ini, projek ini telah Rumah Teres Satu Tingkat menyumbangkan nilai jualan lebih dari RM250 juta sejak Bandar Utama, Batang Kali pelancaran ulungnya 7 tahun yang lalu. Kejayaan yang dicapai dalam projek-projek yang telah dilaksanakan di Taman Mastiara, Perkampungan Seri Mahkota Aman, Taman Selat Sutera dan Bandar Utama, Batang Kali membawa kepelbagaian dari segi sumber pendapatan terutamanya pada fasa pemulihan ekonomi ini. Pembinaan Syarikat Siah Brothers Trading Sdn Bhd dengan lesen PKK “A” dan Syarikat Siah Brothers Construction Sdn Bhd menerajui aktiviti pembinaan Kumpulan. Prestasi sektor pembinaan bagi tahun kewangan 2002 adalah memuaskan. Baki buku tempahan dari tahun lepas bersama dengan kontrak-kontrak baru yang diperolehi membolehkan Kumpulan mengekalkan aktiviti-aktiviti pembinaan yang aktif bagi tahun kewangan ini. Antara kontrak-kontrak pembinaan utama yang dikendalikan oleh sektor pembinaan dalam tahun kewangan ini adalah seperti berikut :- q Kampus dan kemudahan akademik Institusi Antarabangsa Pemikiran dan Tamadun Islam di Taman Duta, Kuala Lumpur. q Rumah teres tradisional satu dan dua tingkat di Bandar Utama, Batang Kali, Selangor. q Menaik-taraf lebuhraya Jalan Batu Caves-Simpang Tiga bagi pihak Jabatan Kerja Raya Selangor. Pencapaian dalam aktiviti pembinaan juga berasaskan pelancaran fasa- fasa baru projek-projek pembangunan perumahan yang diusahakan oleh anak-anak syarikat Kumpulan. Menaik-taraf Lebuhraya Jalan Batu Caves- Simpang Tiga
  • PENYATA PENGERUSI EKSEKUTIF (Samb.) Kumpulan telah berjaya memperolehi tender pembinaan turnkey 293 unit rumah teres dua tingkat di Taman Damansara Emas, Kota Damansara, Kuala Lumpur yang bernilai RM60 juta. Kerja-kerja fizikal telah bermula sejak suku ke-tiga tahun 2002 dan jangkamasa pembinaan dijangka mengambil masa selama 18 bulan. Dalam bulan Julai 2002, Syarikat Siah Brothers Trading Sdn Bhd telah dianugerahkan Anugerah Servis Cemerlang 30 Tahun oleh Persatuan Pemborong Binaan Malaysia sebagai tanda penghargaan atas sumbangannya terhadap industri pembinaan untuk tempoh 30 tahun ini. Perkilangan Syarikat bersekutu 40% Paling Industries Sdn Bhd adalah satu usahasama dengan Etex S.A., sebuah pengilang bahan-bahan binaan plastik yang terbesar di dunia, yang beroperasi di Brussel. Usahasama ini telah mencapai keputusan yang menggalakkan. Ilmu pengetahuan dan pengalaman yang luas dalam kerja-kerja penyelidikan dan pembangunan serta kepelbagaian bahan-bahan jualannya telah memberikan kesan-kesan yang positif atas keputusan Paling Industries. Menerusi usahasama ini, Kumpulan juga Barangan Keluaran Paling berupaya mengukuhkan daya rundingannya, membolehkan pemindahan pengetahuan teknologi yang canggih dan yang lebih penting, ianya kini berpotensi membina satu model perniagaan di rantau ini yang akan terus menyumbang kepada keuntungan Kumpulan. PERKEMBANGAN KORPORAT Dalam tahun kewangan ini, Kumpulan telah mengambil langkah untuk menerbitkan RM61,961,250 nilai nominal Bon Al-Bai Bithaman Ajil ("Penerbitan Bon ABBA") yang terdiri dari RM49,569,000 nilai nominal Barangan Keluaran Paling Bon ABBA Pertama dan RM12,392,250 nilai nominal Bon ABBA Kedua menerusi pelaksanaan penempatan persendirian untuk tempoh 5 tahun dari tarikh terbitan. Permohonan untuk Penerbitan Bon ABBA ini telah diserahkan kepada Suruhanjaya Sekuriti ("SS") pada 20 Jun 2002 dan SS telah memberikan persetujuannya menerusi surat yang bertarikh 19 Julai 2002. Dalam tahun kewangan ini juga, Syarikat telah menandatangani Perjanjian Jualan Saham untuk memperolehi baki 80% ekuiti saham dalam syarikat bersekutunya, South-East Best Sdn Bhd. Perolehan ini akan membolehkan Kumpulan mengembangkan aktiviti-aktiviti pembinaan dan pembangunan perumahan dan sekaligus memperluaskan pasarannya ke Malaysia Timur serta meningkatkan prestasi kewangan Kumpulan untuk masa kelak. Perolehan ini telah diluluskan oleh ahli-ahli pemegang saham dalam Mesyuarat Agung Luarbiasa pada tarikh 30 April 2002. Sejurus selepas perolehan ini, South-East Best berubah dari syarikat bersekutu 20% milikan kepada anak syarikat dimiliki penuh oleh Syarikat. Pada 6 September 2001 dan 23 Oktober 2001, Lembaga Pengarah telah mengambil keputusan untuk menggugurkan cadangan pelaksanaan penambahan dana iaitu termasuk cadangan terbitan hak dan cadangan terbitan khas yang diluluskan oleh SS pada 2 Oktober 2000 dan 26 Februari 2001 masing-masing, memandangkan keadaan pasaran ekuiti yang agak lemah dan ketidakpastian terhadap haluannya pada masa itu. 26 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 27 PENYATA PENGERUSI EKSEKUTIF (Samb.) SKIM OPSYEN SYER PEKERJA Dalam tahun kewangan berakhir 31 Mac 2001, opsyen untuk melanggan 3,563,000 syer telah diberikan kepada kakitangan Kumpulan yang layak. Pada akhir tahun 2002, 492,000 opsyen dan 1,317,000 opsyen ini telah ditarikbalik mengikut peraturan yang tertakluk di bawah Skim ini atas sebab perletakan jawatan kakitangan dan pelupusan pelaburan dalam Paling Industries Sdn Bhd masing-masing. Pada akhir tahun 31 Mac 2002, baki opsyen yang masih belum dilanggan di bawah Skim ini adalah 1,754,000. PERUBAHAN LEMBAGA PENGARAH Saya dengan sukacitanya mengalu-alukan penyertaan ahli Lembaga yang baru, En.Vincent Koh Kok Kee yang dilantik sebagai Pengarah Bukan Eksekutif Bebas pada 8 Oktober 2001. En.Vincent Koh membawa bersama beliau pengalamannya dari bidang odit, kawalan dalaman dan penasihat pengurusan. Pengalaman beliau memperluaskan lagi pelbagai bidang kepakaran yang dimiliki oleh para-para Lembaga dan sebagai ahli Jawatankuasa Odit, latarbelakangnya sebagai seorang akauntan terlatih amat dihargai. Saya juga mengambil kesempatan ini untuk mengucapkan ribuan terima kasih kepada Tan Sri Dato’ Ir. Muhammad Yusuff bin Haji Muhammad Yunus, yang telah bersara pada 27 September 2001 dan menyertai semula pada 30 April 2002 sebagai Pengarah Bukan Eksekutif Bebas, atas pimpinan dan sumbangan beliau kepada Kumpulan sepanjang tempoh beliau menjawati Pengerusi Kumpulan. Institut Antarabangsa Pemikiran dan Tamadun Islam, Persiaran Duta,Taman Duta, Kuala Lumpur PROSPEK MASA HADAPAN Kumpulan adalah optimistik terhadap prospek ekonomi untuk tahun 2002 / 2003. Kerajaan menganggar pertumbuhan KDNK sebanyak 3% ke 4% bagi tahun 2002 akan diterajui oleh perbelanjaan dalam negara dan pelaburan. Pertumbuhan ini juga berasaskan pemulihan ekonomi dunia yang dijangka akan dicapai pada penghujung tahun ini. Mengikut Rancangan Malaysia Ke-lapan 2001-2005, Kerajaan telah menganggarkan keperluan tahunan untuk perumahan dalam linkungan 160,000 unit. Mengikut daftar perangkaan Malaysia, permintaan terhadap perumahan mampu milik akan berkekalan. Sejajar dengan objektif Kerajaan, Kumpulan akan terus berusaha untuk membekalkan unit-unit perumahan yang mampu dimiliki oleh semua lapisan masyarakat. Bagi sektor pembinaan, Kumpulan amat mengalu-alukan hasrat Kerajaan untuk mengaktifkan lagi sektor ini, yang dianggap sebagai pengemudi pertumbuhan. Kumpulan dengan pengalamannya yang luas dalam bidang pembinaan bangunan-bangunan cakar langit dan estet perumahan, mengharapkan ia berdaya saing untuk kontrak-kontrak atau projek-projek yang bakal ditawarkan.
  • PENYATA PENGERUSI EKSEKUTIF (Samb.) Dengan pemulihan keadaan ekonomi yang jelas, Kumpulan menjangka sentimen perumahan dan pembinaan akan terus maju dan ianya merupakan petanda yang baik bagi pengembangan perniagaan utama Kumpulan. Lembaga Pengarah yakin Kumpulan akan mencapai keputusan yang memuaskan bagi tahun kewangan akan datang. DIVIDEN Walaupun Kumpulan telah mencapai keputusan yang memuaskan bagi tahun kewangan 2002, namun Lembaga Pengarah berpendapat bahawa langkah yang cermat perlu diambil untuk mengekalkan dana Kumpulan. Oleh itu, Lembaga mengesyorkan tiada dividen diisytiharkan bagi tahun kewangan berakhir 31 Mac 2002. PENGHARGAAN Pencapaian Kumpulan di sebalik segala rintangan yang diharungi menunjukkan kewibawaan pihak pengurusan, nasihat yang arif dari para ahli Lembaga dan kecekapan dan semangat semua kakitangan. Bagi pihak Lembaga Pengarah, saya ingin merakamkan penghargaan saya kepada para pemegang saham, rakan usahasama, ahli rakan perniagaan yang dihargai, bank, peguam, juruodit dan pihak berkuasa Kerajaan atas keyakinan dan sokongan mereka terhadap Kumpulan. Dengan kesetiaan dan amanat kukuh kesemua ahli pengurusan dan kakitangan serta sokongan berlanjutan dari pemegang saham, pelanggan dan rakan perniagaan, saya yakin Kumpulan akan terus maju dan berkembang bersama dengan pemulihan ekonomi negara. Sekian, terima kasih. Sia Kwee Mow @ Sia Hok Chai JMN, FFB, FCIOB, FAIB Pengerusi Eksekutif 12 Ogos 2002 28 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 29 STATEMENT OF CORPORATE GOVERNANCE AS AT 12 TH AUGUST, 2002 The Board of Siah Brothers Corporation Berhad is pleased to report to shareholders on the manner the Group has applied the Principles and the extent of compliance with the Best Practices in Corporate Governance as set out in Part 1 and Part 2 respectively of the Malaysian Code on Corporate Governance ("the Code"). The Board welcomes the recommendations of the Code which sets out the principles and best practices on structures and processes that companies may use in their operations towards achieving the optimal governance framework. Throughout the financial year ended 31 March 2002, the Company has applied the best practices of the Code.The yet to be complied best practices of the Code and the related reasons are set out below. Provision of the Details Reasons Code Part 2, AA VII Senior independent non-executive Since the Chairman of each Board meeting director to whom concerns may encourages the full participation of each and be conveyed. every Board member, the Board considered that it was not necessary to appoint a senior independent non-executive director to whom concerns may be conveyed. However, the Board takes cognizance of the recommendation of the best practices of the Code and will review this in due course. Part 2, AA VIII Nomination Committee The Nomination Committee has yet to be established.The Board takes cognizance of the recommendation of the best practices of the Code and will review this in due course. Part 2, AA XXIV Remuneration Committee The Remuneration Committee has yet to be established.The Board takes cognizance of the recommendation of the best practices of the Code and will review this in due course. Set out in the ensuing paragraphs, are descriptions of how the Group has applied the principles and best practices of the Code. BOARD OF DIRECTORS Composition And Balance As at the date of this statement, the Board consists of 9 members, comprising 4 independent non-executive Directors, 3 non-executive Directors and 2 executive Directors. With this Board composition, the Company complies with paragraph 15.02 of the Listing Requirement of the Kuala Lumpur Stock Exchange where at least 2 Directors or 1/3 of the Board whichever is higher, are independent Directors.
  • STATEMENT OF CORPORATE GOVERNANCE AS AT 12 TH AUGUST, 2002 (Cont’d) Composition And Balance (Cont’d) The Directors from different backgrounds and specialisations, collectively bring depth and diversity in experience to the Group’s operations. The independent Non-Executive Directors are independent from Management and have no relationships that could interfere with the exercise of their independent judgment. They bring to bear objective and independent judgement to the decision making of the Board and provide an effective check and balance for the Executive Directors. The Board is satisfied that the current Board composition fairly reflects the investment of minority shareholders in the Company and represents the needed mix of skills and experience required to discharge the Board’s duties and responsibilities. The profiles of the members of the Board are set out in this Annual Report under the section named Directors’ Profile. Duties And Responsibilities The Board of Siah Brothers Corporation Berhad is primarily responsible for:- q Reviewing and adopting a strategic plan for the Group; q Overseeing the conduct of the Company’s business to evaluate whether the business is being properly managed; q Identifying principal risk and ensure the implementation of appropriate systems to manage these risks; q Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing senior management; q Developing and implementing an investor relations program or shareholder communications policy for the Company; and q Reviewing the adequacy and the integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines. The roles of the Managing Director and Chairman are clearly distinct to ensure that there is a balance of power and authority.The Chairman is primarily responsible for the working of the Board, its membership and participation of the members at Board meetings.The Managing Director is responsible for the daily management of the Group’s business operations and implementation of policies and strategies adopted by the Board. On 27 September 2001, Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Muhammad Yunus, the Chairman, retired and the role of the Chairman was vacant until the recent appointment of Mr Sia Kwee Mow, Managing Director, as Executive Chairman on 8 August 2002. Upon his appointment as Executive Chairman, Mr Sia Kwee Mow vacated his position as the Managing Director of the Company. Effective the same date, Mr Sia Teong Heng, Executive Director, has been appointed by the Board of Directors to assume the role of Managing Director of the Company. 30 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 31 STATEMENT OF CORPORATE GOVERNANCE AS AT 12 TH AUGUST, 2002 (Cont’d) Board Meetings During the financial year ended 31 March 2002, the Board met 5 times where it deliberated on and considered matters relating to the Group’s financial performance, significant investments, corporate development, strategic issues and business plans. Details of each Director’s attendance of Board meetings are set out below. Name of Director No. of meetings attended Sia Kwee Mow @ Sia Hok Chai 5/5 Sia Teong Heng 5/5 Mun Chong Shing @ Mun Chong Tian 3/5 Dato’ Lim Phaik Gan 4/5 Datuk Dr. Norraesah Bt. Haji Mohamad 3/5 Datuk Sim Peng Choon 5/5 Abdul Rahman Bin A. Shukor (Alternate to Datuk Sim Peng Choon) 4/5 Vincent Koh Kok Kee (Appointed on 8 October 2001) 2/2 Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Muhammad Yunus (Retired on 27 September 2001, appointed on 30 April 2002) 2/3 All Directors are furnished with the meeting agenda and other documents on matters requiring their consideration prior to and in advance of each meeting.The documents are comprehensive and include qualitative and quantitative information to enable the Board members to make informed decisions. Senior management is invited to attend these meetings to explain and clarify matters being tabled. In addition, there is a formal schedule of matters reserved specifically for the Board’s decisions. These include approval of key policies, significant acquisitions and disposals of assets, significant investments and approval of budgets and corporate plans. All Directors have access to the advice and services of the Company Secretary. If required, the Directors may engage independent professionals at the Group’s expense, in the furtherance of their duties. Re-Election And Re-Appointment Of Directors In accordance with the Company’s Articles of Association, one third of the Directors shall retire from office and be eligible for re-election at the annual general meeting. Furthermore, each Director shall retire from office at least once in every three years. Directors who are of or over the age of seventy years shall also retire from office and be eligible for re-appointment at the annual general meeting pursuant to the Section 129 (6) of the Companies Act, 1965. Directors’ Training All members of the Board have attended the Mandatory Accrediation Programme conducted by the Research Institute of Investment Analysts Malaysia except for Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Muhammad Yunus who was appointed to the Board as Independent Non-Executive Director on 30 April 2002.The Board will ensure that all its members attend such training programs as prescribed by the Kuala Lumpur Stock Exchange.
  • STATEMENT OF CORPORATE GOVERNANCE AS AT 12 TH AUGUST, 2002 (Cont’d) Directors’ Training (Cont’d) The Code does not have a formal training program for its new Directors but the Board is mindful of the recommendations of the Code and will review the necessity for formal training from time to time. AUDIT COMMITTEE The Board has on 20 July 1994 established the Audit Committee. The present Audit Committee comprises 4 members. Please refer to the Audit Committee Report for further details. DIRECTORS’ REMUNERATION The details of the remuneration of each Director during the financial year ended 31 March 2002 are as follows:- (a) Total Remuneration Basic Bonus Fee Benefits Attendance Salary -In-Kind Fee Total RM RM RM RM RM RM Executive Sia Kwee Mow @ Sia Hok Chai 396,000 - - 16,925 - 412,925 Sia Teong Heng 180,000 - - 13,500 - 193,500 Yeoh Hock Thong (Resigned on 2 April 2001) 12,500 - - 1,450 - 13,950 Non-Executive Mun Chong Shing @ Mun Chong Tian - - 3,000 - 300 3,300 Dato’ Lim Phaik Gan - - 12,000 - 900 12,900 Datuk Dr. Norraesah Bt. Haji Mohamad - - 13,000 - 1,500 14,500 Datuk Sim Peng Choon - - 12,000 - 2,100 14,100 Abdul Rahman Bin A. Shukor (Alternate to Datuk Sim Peng Choon) - - - - - - Vincent Koh Kok Kee (Appointed on 8 October 2001) - - 6,000 - 1,200 7,200 Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Muhammad Yunus (Retired on 27 September 2001, appointed on 30 April 2002) - - - - - - Total 588,500 - 46,000 31,875 6,000 672,375 32 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 33 STATEMENT OF CORPORATE GOVERNANCE AS AT 12 TH AUGUST, 2002 (Cont’d) DIRECTORS’ REMUNERATION (Cont’) (b) Directors’ remuneration by bands Executive Non-Executive Total Nil - 2 2 RM1 to RM50,000 - 5 5 RM50,001 to RM100,000 - - - RM100,001 to RM150,000 - - - RM150,001 to RM200,000 1 - 1 RM200,001 to RM250,000 - - - RM250,001 to RM300,000 - - - RM300,001 to RM350,000 - - - RM350,001 to RM400,000 - - - RM400,001 to RM450,000 1 - 1 ACCOUNTABILITY AND AUDIT Financial Reporting The Board is responsible for presenting a balanced and meaningful assessment of the Group’s financial performance and prospects primarily through the annual report/financial statements and quarterly announcements of the Group’s results. The Responsibility Statement by the Directors pursuant to the Kuala Lumpur Stock Exchange Listing Requirements is set out on page 15. Internal Control The Group’s Statement on Internal Control is set out on page 35. Relationship With Auditors The role of the Audit Committee in relation to the external auditors is described in the Audit Committee Report. The Group has paid RM42,333 non-audit fees to the external auditors for the financial year ended 31 March 2002.
  • STATEMENT OF CORPORATE GOVERNANCE AS AT 12 TH AUGUST, 2002 (Cont’d) Relationship With Shareholders And Investors The primary tools of communication with the shareholders of the Company are through the annual report, announcements through Kuala Lumpur Stock Exchange and circulars. All queries from shareholders and members of public received through phone calls or letters are handled by the Executive Directors, Group Financial Controller and Company Secretary. At the annual general meeting and extraordinary general meeting, the Chairman gives shareholders ample opportunity to participate through questions on the prospects, performance of the Group and other matters of concern to them with the Board. ADDITIONAL COMPLIANCE INFORMATION In conformance with the requirements of the KLSE, the following compliance information is provided :- Material Contracts Involving Directors’ And Substantial Shareholders’ Interest Save as disclosed hereunder, there were no material contracts entered into by the Company and its subsidiaries which involve Directors’ and substantial shareholders’ interests since the previous financial year and during the financial year ended 31 March 2002 :- On 27 April 2001, the Company entered into two conditional Share Sale Agreements ("SSA") with Joyway Properties Limited, Chow Soon Tat @ Chew Soon Tat (deceased), Sia Kwee Mow @ Sia Hok Chai, Tan Ah Kaw @ Tan Kim Hong, Goh Soo Hong @ Woo Cheng San and Wong Ah Leong (hereinafter collectively referred to as "the Vendors") for the proposed acquisition of the remaining 80% equity interest comprising 500,000 ordinary shares of RM1.00 each fully paid in South-East Best Sdn Bhd ("SEB") ("Proposed Acquisition") for a total cash consideration of RM45 million. On 28 January 2002, the Company entered into two Supplemental Share Sale Agreements to the conditional SSAs with the Vendors to revise the purchase consideration for the Proposed Acquisition to RM35 million and to grant an extension of three months for all the conditions precedent to the conditional SSAs to be fulfilled. Sia Kwee Mow @ Sia Hok Chai, the Executive Chairman (the then Managing Director) and a substantial shareholder of the Company, is a director and was a substantial shareholder of SEB. Sia Teong Heng, the Managing Director (the then Executive Director) and a substantial shareholder of the Company, is a director of SEB. Sia Kwee Mow @ Sia Hok Chai and Sia Teong Heng were therefore deemed interested in the Proposed Acquisition. At the Extraordinary General Meeting of the Company held on 30 April 2002, the shareholders approved the Proposed Acquisition. On 25 July 2002, the Vendors agreed to a further extension of three months from 30 July 2002 for the settlement of the purchase consideration by the Company. Revaluation Policy On Landed Properties The Group’s landed properties are stated at cost.There is no policy of regular revaluation of its landed properties as at the end the financial year ended 31 March 2002. 34 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 35 STATEMENT ON INTERNAL CONTROL Introduction The Malaysian Code on Corporate Governance requires the Board to maintain a sound system of internal control to safeguard shareholders’ investment and the Group’s assets. The Board is pleased to include a statement on the state of the Group’s internal controls in accordance with paragraph 15.27 (b) of the KLSE Listing Requirements and as guided by the KLSE’s Statement on Internal Control: Guidance for Directors of Public Listed Companies ("the Guidance"). Board Responsibility The Board affirms its responsibility for the Group’s systems of internal controls and risk management, and for reviewing the adequacy and integrity of the internal control system. However, such a system is designed to manage rather than eliminate the risk that may impede the achievement of the Group’s business objectives. It can only provide reasonable and not absolute assurance against material misstatement or loss. During the current financial year, the Board outsourced its internal audit function to external consultants to review the effectiveness of the Group’s system of internal control. Please refer to the Audit Committee Report for a summary of the activities of the internal audit function. Risk Management Framework During the current financial year, the management with the assistance of the external consultants commenced the development of the risk profile of the Group.This initiative currently involved the identification of key risks of the sales administration and property development & construction departments, as well as documenting the existing controls that have been in place for managing the risks and assessing the effectiveness of the internal controls.The management updates the risk profile on an annual basis and this would thus serve as an ongoing process used to identify, evaluate and manage significant risks. The internal audit plan was developed based on the key risk profile mentioned above. Other Key Elements Of Internal Controls The other key elements of the Group’s internal control systems are:- q The independent internal audit function reports directly to the Audit Committee. Based on their review during the financial year ended 31 March 2002, the Board is pleased to report that there were no major weaknesses noted in the areas audited. All recommendations proposed by the internal audit function in improving the internal controls are considered and implemented in concert with the management. q Monthly management meetings are convened to discuss the Group’s operations and performance.This includes the monthly monitoring of results against budgets, with significant variances explained and appropriate actions taken. q Clear lines of responsibilities and authority limits of all departments.This internal control acts as a check and balance. q Tender Committee approves the involvement of the Group in any property development and construction projects. A minimum number of three quotations are called for and tenders are awarded based on factors such as track record, quality and speed of delivery. q Implementation of a financial system that captures every single financial transaction. From this data captured, the Group produces consolidated monthly management accounts and quarterly performances, which allow the management to focus on areas of concern. q Regular site visits by members of the senior management team.
  • AUDIT COMMITTEE REPORT The Board of Siah Brothers Corporation Berhad is pleased to present the Audit Committee Report for the financial year ended 31 March 2002. COMPOSITION OF THE AUDIT COMMITTEE As at 12 August 2002, the Audit Committee comprises the following: - Chairperson : Datuk Dr. Norraesah Bt. Haji Mohamad DSPN, PhD., B.Sc. (Econ) (Independent Non-Executive Director) Members : Tan Sri Dato’ Ir. Muhammad Yusuff Bin Hj. Muhammad Yunus PSM, DIMP, JMN, PJK, B.Sc., P.Eng, FAS (Independent Non-Executive Director) Datuk Sim Peng Choon PJN (Non-Executive Director) Vincent Koh Kok Kee (Independent Non-Executive Director) Secretaries : Chong Fook Sin ATII, MCCS, AFA Kan Chee Jing ACIS MEETING OF THE AUDIT COMMITTEE The Audit Committee met four times during the financial year ended 31 March 2002 and the details of the attendance of each member of the Audit Committee are as follows: - Number of meetings attended Datuk Dr. Norraesah Bt. Haji Mohamad 4/4 Tan Sri Dato’ Ir. Muhammad Yusuff Bin Hj. Muhammad Yunus 2/2 (Retired from the Audit Committee on 27 September 2001, appointed on 30 May 2002) Datuk Sim Peng Choon 4/4 Vincent Koh Kok Kee 2/2 (Appointed on 8 October 2001) Sia Teong Heng - (Resigned on 27 November 2001) 36 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 37 AUDIT COMMITTEE REPORT (Cont’d) An Executive Director, the Group Financial Controller and the Company Secretary attended all meetings. The external consultant to whom the internal audit function was outsourced to, attended all the meetings of the Audit Committee subsequent to their appointment during the financial year. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE In a proactive move towards ensuring the promotion of corporate governance, accountability, due diligence and integrity, the following activities were undertaken by the Audit Committee during the financial year ended 31 March 2002:- (a) Reviewed the audit plan of the external auditors, in terms of the nature of the audit procedures, significant accounting and auditing issues, impact of new or proposed changes in the accounting standards and regulatory requirements. (b) Reviewed the unaudited quarterly report on the consolidated results of the Group for the quarters ended 31 March 2001, 30 June 2001, 30 September 2001 and 31 December 2001. (c) Reviewed the external auditors’ reports in relation to their audit findings and the accounting issues arising from the audit of the Company’s annual financial results before submitting its recommendations to the Board for approval. (d) Reviewed related party transactions and conflict of interest situation that may arise within the Group. (e) Reviewed the recovery of certain major doubtful debts. (f) Recommended the outsourcing and appointment of an external consultant to assume the role of the internal audit function for the Board’s approval. (g) Approved the internal audit plan and reviewed the findings of the internal auditors, management’s response, remedial actions taken and follow-ups. (h) Noted new developments in accounting standards issued by the Malaysian Accounting Standards Board. (i) Reviewed the Company’s compliance with certain government and authorities regulations. (j) Assessed the performance of the Company’s financial management. SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION An external consultant was appointed during the financial year to assume the internal audit function so as to assist the Audit Committee in ensuring the adequacy and effectiveness of the internal controls systems of the Group. The work performed by them subsequent to their appointment included :- (a) identifying the key risk areas and their corresponding controls as well as setting up the risk management framework for both the sales administration and construction & property development departments; (b) developing an internal audit plan for 2002 which was approved by the Audit Committee; and
  • AUDIT COMMITTEE REPORT (Cont’d) SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION (Cont’d) (c) reviewed the sale and purchase agreement processing, progress billings and collections of the Sales Administration Department, where the main source of revenue of the Group is generated from these processes. A number of minor internal control weaknesses were identified during the financial year, all of which have been appropriately addressed. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Group’s annual report. Going forward, the areas that would be covered under the approved audit plan would involve a review of the following procedures :- (i) assessing the saleability of projects and approving projects for development. (ii) development of the construction project budget. (iii) obtaining the necessary licences and permits. (iv) close monitoring of project against the construction timetable, building plan and budget. (v) timely issuance of the consultants’ certification and certificate of fitness. (vi) assessment of the suitability of third party sub-contractors and the monitoring of their construction work. (vii) ordering of supplies. Generally, internal control weaknesses noted would be revisited by the Internal Auditor at a later date to ensure that the agreed upon recommendations for improvement have been implemented. TERMS OF REFERENCE OF THE AUDIT COMMITTEE Membership The committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of at least 3 directors, a majority of whom are independent. At least one member of the Committee: - 1. must be a member of the Malaysian Institute of Accountants; or 2. if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and q he must have passed the examination specified in Part I of the 1st Schedule to the Accountants Act, 1967; or q he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule to the Accountants Act, 1967. The members of the Committee shall elect the Chairman from among their number who shall be an independent director. In order to form a quorum in respect of a meeting of the Committee, the majority of members present must be independent directors. 38 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 39 AUDIT COMMITTEE REPORT (Cont’d) Attendance At Meetings The Group Financial Controller, the Head of Internal Audit and a representative of the external auditors shall normally attend meetings. Other directors and employees of the Company may attend meetings at the Committee’s invitation. However, at least once a year the Committee shall meet with the external auditors without any executive director present. The Company Secretary shall be the secretary of the Committee. Frequency Of Meetings Meetings shall be held not less than four times a year. The external auditors may request a meeting if they consider that one is necessary. Authority The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all the employees are directed to cooperate with any request made by the Committee. The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of an outsider with relevant experience and expertise if it considers this necessary. Duties The duties of the Committee shall be 1. to consider the appointment of the external auditors, the audit fee, and any questions of nomination, resignation or dismissal. 2. to discuss with the external auditors before the audit commences the nature and scope of the audit and ensure co-ordination where more than one audit firm is involved. 3. to discuss with the external auditors the evaluation of the system of internal controls, audit report and ensure assistance given by the employees to the external auditors. 4. to review the quarterly and year-end financial statements before submission to the Board, focusing particularly on – - any changes or implementation of changes in accounting policies and practices - major judgement areas - significant adjustments arising from the audit - significant and unusual events
  • AUDIT COMMITTEE REPORT (Cont’d) Duties (Cont’d) - the going concern assumption - compliance with accounting standards - compliance with stock exchange and legal requirements 5. to discuss problems and reservations arising from the interim and final audits and any matters the auditor may wish to discuss (in the absence of management where necessary). 6. to review the external auditors’ management letter and management’s response. 7. to do the following where an internal audit function exists – - review the adequacy of the scope, functions and resources of the internal audit function and that it has the necessary authority to carry out its work - review the internal audit programme and processes and results of the internal audit programme, processes and investigation and where necessary, ensure that appropriate action is taken on the recommendations of the internal audit function - review any appraisal or assessment of the performance of members of the internal audit function - approve any appointment or termination of senior staff members of the internal audit function - inform itself of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning 8. to consider any related party transactions and conflict of interest situations that may arise within the company or group including any transaction, procedure or course of conduct that raises questions of management integrity. 9. to consider the major findings of internal investigations and management’s response and ensure co-ordination between the internal and external auditors. 10. to consider other topics, as defined by the Board. Reporting Procedures The Company Secretary shall circulate the minutes of meetings of the Committee to all members of the Board. 40 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 41 Financial S t a t e m e n t FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002
  • 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 2002. 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 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. RESULTS THE GROUP THE COMPANY RM RM Profit after taxation for the financial year 1,502,621 459,617 DIVIDENDS Since the end of the previous financial year, the Company paid the following dividends:- (i) a dividend of 5.5% less 28% tax amounting to RM270,587 for the Irredeemable Cumulative Convertible Preference Shares ("ICCPS") in respect of the previous financial year, in accordance with the terms of issue of the ICCPS; and (ii) a first and final dividend of 1.5% less 28% tax amounting to RM545,065 for the ordinary shares in respect of the previous financial year as proposed in the directors’ report of that financial year. For the financial year, (i) the directors have declared the payment of a dividend of 5.5% less 28% tax amounting to RM270,587 for the ICCPS, in accordance with the terms of issue of the ICCPS; and (ii) the directors do not recommend the payment of any dividend in respect of the ordinary shares. 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. ISSUES OF SHARES During the financial year, (a) there were no changes in the authorised and issued and paid-up capital of the Company; and (b) there were no issues of debentures by the Company. 42 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 43 DIRECTORS’ REPORT 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 at an exercise price of RM1.40 per share is as follows:- NUMBER OF ORDINARY SHARES OF RM1 EACH UNDER OPTION At 1 April 2001 3,563,000 Lapsed during the financial year due to: - staff resignation (492,000) - disposal of a subsidiary (1,317,000) At 31 March 2002 1,754,000 The salient features of the ESOS are as follows:- (i) eligible employees are employees who have served in the employment of any company within the Group for 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 five (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 shall be 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 five (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 of which the expiry date 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 options and subscription rights under the ESOS and TSRs respectively 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 provision for doubtful debts, and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts.
  • DIRECTORS’ REPORT BAD AND DOUBTFUL DEBTS (Cont’d) 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 provision for doubtful debts in the financial statements of the Group and of the Company. CURRENT ASSETS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their values as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected so to realise. At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading. 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 40 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. 44 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 45 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 DR. NORRAESAH BT HAJI MOHAMAD DATUK SIM PENG CHOON ABDUL RAHMAN BIN A. SHUKOR (ALTERNATE TO DATUK SIM PENG CHOON) VINCENT KOH KOK KEE (APPOINTED ON 8.10.2001) TAN SRI DATO’ IR MUHAMMAD YUSUFF BIN HAJI MUHAMMAD YUNUS (RETIRED ON 27.9.2001, APPOINTED ON 30.4.2002) Pursuant to Section 129 of the Companies Act, 1965,Tan Sri Dato’ Ir Muhammad Yusuff bin Haji Muhammad Yunus and Dato’ Lim Phaik Gan retire at the forthcoming Annual General Meeting and offer themselves for re-election 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, Mun Chong Shing @ Mun Chong Tian and Datuk Sim Peng Choon retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election. Pursuant to Article 84 of the Articles of Association of the Company, Vincent Koh Kok Kee, who was appointed since the last annual general meeting, retires at the forthcoming Annual General Meeting and, being eligible, offers himself for re-election. DIRECTORS’ INTERESTS According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year, in shares, TSRs, Irredeemable Convertible Unsecured Loan Stocks ("ICULS") and options under the ESOS in the Company during the financial year are as follows:- NUMBER OF ORDINARY SHARES OF RM1 EACH AT AT 1.4.2001 BOUGHT SOLD 31.3.2002 DIRECT INTERESTS SIA KWEE MOW @ SIA HOK CHAI 3,982,400 - - 3,982,400 SIA TEONG HENG 1,296,400 - - 1,296,400 MUN CHONG SHING @ MUN CHONG TIAN 17,000 - - 17,000 DATO’ LIM PHAIK GAN 5,000 - - 5,000 DATUK SIM PENG CHOON 10,000 - - 10,000 INDIRECT INTERESTS SIA KWEE MOW @ SIA HOK CHAI 7,463,832 - - 7,463,832 SIA TEONG HENG 7,463,832 - - 7,463,832
  • DIRECTORS’ REPORT DIRECTORS’ INTERESTS (Cont’d) TSRs AT AT 1.4.2001 BOUGHT SOLD 31.3.2002 DIRECT INTERESTS SIA KWEE MOW @ SIA HOK CHAI 3,078,500 - - 3,078,500 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 ICULS WITH NOMINAL VALUE OF RM1 EACH AT AT 1.4.2001 BOUGHT MATURED 31.3.2002 DIRECT INTERESTS SIA KWEE MOW @ SIA HOK CHAI 2,054,250 - (2,054,250) - SIA TEONG HENG 1,432,500 - (1,432,500) - MUN CHONG SHING @ MUN CHONG TIAN 22,000 - (22,000) - DATUK SIM PENG CHOON 4,000 - (4,000) - INDIRECT INTERESTS SIA KWEE MOW @ SIA HOK CHAI 89,693,206 - (89,693,206) - SIA TEONG HENG 89,693,206 - (89,693,206) - NUMBER OF ORDINARY SHARES OF RM1 EACH UNDER OPTION AT AT 1.4.2001 GRANTED LAPSED 31.3.2002 DIRECT INTERESTS SIA KWEE MOW @ SIA HOK CHAI 450,000 - - 450,000 SIA TEONG HENG 350,000 - - 350,000 MUN CHONG SHING @ MUN CHONG TIAN 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. 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 38 to the financial statements. 46 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 47 DIRECTORS’ REPORT DIRECTORS’ BENEFITS (Cont’d) 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 42 to the financial statements. SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE The significant events subsequent to the balance sheet date of the Group and the Company are disclosed in Note 43 to the financial statements. AUDITORS The auditors, Messrs. Horwath Mok & Poon, have expressed their willingness to continue in office. SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS SIA KWEE MOW @ SIA HOK CHAI DATUK SIM PENG CHOON 22 July 2002
  • STATEMENT BY DIRECTORS We, Sia Kwee Mow @ Sia Hok Chai and Datuk Sim Peng Choon, 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 50 to 85 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 2002 and of their results and cash flows for the financial year ended on that date. SIA KWEE MOW @ SIA HOK CHAI DATUK SIM PENG CHOON 22 July 2002 STATUTORY DECLARATION I, Sia Kwee Mow @ Sia Hok Chai, I/C No. 3290819 (B), being the director primarily responsible for the financial management of Siah Brothers Corporation Berhad, do solemnly and sincerely declare that the financial statements set out on pages 50 to 85 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 Sia Kwee Mow @ Sia Hok Chai, I/C No. 3290819 (B), at Kuala Lumpur in the Federal Territory on this 22nd day of July, 2002. SIA KWEE MOW @ SIA HOK CHAI Before me Haron Hashim No. W 128 Commissioner for Oaths Kuala Lumpur 22 July 2002 48 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 49 REPORT OF THE AUDITORS TO THE MEMBERS OF SIAH BROTHERS CORPORATION BERHAD We have audited the financial statements set out on pages 50 to 85.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 2002 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 5 to the financial statements. 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: 1772/11/02 (J) Chartered Accountants Partner of Firm Kuala Lumpur 22 July 2002
  • BALANCE SHEETS AT 31 MARCH 2002 THE GROUP THE COMPANY 2002 2001 2002 2001 NOTE RM RM RM RM ASSETS Investment in subsidiaries 5 - - 167,370,110 167,370,110 Interest in associates 6 119,902,566 117,533,764 10,440,450 10,440,450 Property, plant and equipment 7 7,047,290 7,585,596 75,503 102,240 Investment properties 8 21,088,833 22,125,612 - - Other assets 9 714,168 664,585 - - Goodwill on consolidation 10 10,245,527 10,245,527 - - 158,998,384 158,155,084 177,886,063 177,912,800 CURRENT ASSETS Inventories 11 9,269,103 9,740,311 - - Property development in progress 12 28,591,098 25,755,399 - - Debtors 13 78,944,793 98,841,811 10,217,217 35,820,414 Amount owing by contract customers 14 1,407,450 2,956,738 - - Amounts owing by subsidiaries 15 - - 46,676,415 39,231,590 Amounts owing by associates 16 5,448,175 5,644,198 51,883 101,383 Tax recoverable 5,455,217 4,823,668 11,397,290 8,976,735 Short term deposits with a licensed bank 5,042,274 150,000 5,012,274 - Cash and bank balances 17 1,460,540 1,136,617 1,904 79,070 135,618,650 149,048,742 73,356,983 84,209,192 LESS: CURRENT LIABILITIES Amount owing to contract customers 14 2,673,438 3,560,562 - - Creditors 18 31,260,945 34,864,221 245,422 421,539 Amounts owing to subsidiaries 15 - - 21,100,467 23,060,664 Amounts owing to associates 16 65,500 - - - Amount owing to a director 19 1,967,680 2,918,800 1,967,680 2,918,800 Proposed dividend - 545,065 - 545,065 Dividend payable 270,587 270,587 270,587 270,587 Short term borrowings 20 41,029,726 48,543,794 7,337,727 14,462,435 77,267,876 90,703,029 30,921,883 41,679,090 NET CURRENT ASSETS 58,350,774 58,345,713 42,435,100 42,530,102 217,349,158 216,500,797 220,321,163 220,442,902 FINANCED BY:- Share capital 21 57,301,943 57,301,943 57,301,943 57,301,943 Share application account 22 115,600,000 - 115,600,000 - Reserves 23 44,008,427 43,087,162 47,419,220 47,540,959 Shareholders’ equity 216,910,370 100,389,105 220,321,163 104,842,902 Irredeemable convertible unsecured loan stocks ("ICULS") 24 - 115,600,000 - 115,600,000 Deferred liabilities 25 438,788 511,692 - - 217,349,158 216,500,797 220,321,163 220,442,902 NET TANGIBLE ASSETS PER SHARE - Actual 26 396 Sen 165 Sen - Proforma 26 264 Sen N/A The annexed notes form an integral part of these financial statements. 50 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 51 INCOME STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 THE GROUP THE COMPANY 2002 2001 2002 2001 NOTE RM RM RM RM TURNOVER 27 81,644,823 92,411,289 10,452,687 9,946,518 COST OF SALES (68,499,179) (81,341,010) - - GROSS PROFIT 13,145,644 11,070,279 10,452,687 9,946,518 OTHER OPERATING INCOME 28 247,281 12,412,360 59,039 23,475,204 ADMINISTRATIVE EXPENSES (3,863,420) (4,649,999) (1,076,604) (991,785) OTHER OPERATING EXPENSES (1,651,190) (10,595,543) (352,121) (2,890,016) PROFIT FROM OPERATIONS 7,878,315 8,237,097 9,083,001 29,539,921 FINANCE COSTS (9,611,991) (9,597,215) (8,529,384) (8,641,329) SHARE OF PROFIT OF ASSOCIATES 3,351,575 2,781,304 - - PROFIT BEFORE TAXATION 29 1,617,899 1,421,186 553,617 20,898,592 TAXATION 30 (115,278) (350,251) (94,000) (640,833) PROFIT AFTER TAXATION 1,502,621 1,070,935 459,617 20,257,759 Earnings per share (sen) - basic 31 2.4 1.6 - diluted 31 N/A N/A Dividend per ordinary share (sen) - Final 32 - 1.5 The annexed notes form an integral part of these financial statements.
  • STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 SHARE NOTE SHARE APPLICATION SHARE RETAINED CAPITAL CAPITAL ACCOUNT PREMIUM PROFITS RESERVE TOTAL THE GROUP RM RM RM RM RM RM Balance at 1.4.2000 57,301,943 - 21,306,521 18,525,360 2,999,998 100,133,822 Profit after taxation for the financial year - - - 1,070,935 - 1,070,935 Dividends 32 - - - (815,652) - (815,652) Realisation on disposal of a subsidiary - - - 1,799,999 (1,799,999) - Balance at 31.3.2001/1.4.2001 57,301,943 - 21,306,521 20,580,642 1,199,999 100,389,105 Arising from conversion of ICULS to ordinary shares - - 1,500 - - 1,500 Share pending allotment arising on expiry of ICULS 22 - 115,600,000 - - - 115,600,000 Expenses incurred on conversion of ICULS - - (312,269) - - (312,269) Profit after taxation for the financial year - - - 1,502,621 - 1,502,621 Dividends 32 - - - (270,587) - (270,587) Balance at 31.3.2002 57,301,943 115,600,000 20,995,752 21,812,676 1,199,999 216,910,370 THE COMPANY Balance at 1.4.2000 57,301,943 - 21,306,521 6,792,331 - 85,400,795 Profit after taxation for the financial year - - - 20,257,759 - 20,257,759 Dividends 32 - - - (815,652) - (815,652) Balance at 31.3.2001/1.4.2001 57,301,943 - 21,306,521 26,234,438 - 104,842,902 Arising from conversion of ICULS to ordinary shares - - 1,500 - - 1,500 Share 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 - - - 459,617 - 459,617 Dividends 32 - - - (270,587) - (270,587) Balance at 31.3.2002 57,301,943 115,600,000 20,995,752 26,423,468 - 220,321,163 The retained profits of the Group are attributable to/(absorbed by):- 2002 2001 RM RM The Company 26,423,468 26,234,438 Subsidiaries (22,134,593) (20,808,795) Associates 17,523,801 15,154,999 21,812,676 20,580,642 The annexed notes form an integral part of these financial statements. 52 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 53 CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 THE GROUP THE COMPANY 2002 2001 2002 2001 NOTE RM RM RM RM CASH FLOWS (FOR)/FROM OPERATING ACTIVITIES Profit before taxation 1,617,899 1,421,186 553,617 20,898,592 Adjustments for:- Advances to joint ventures written off - 3,280,534 - - Amortisation of deferred expenses - 47,710 - - Bad debts written off 101,340 335,590 - 327,763 Deferred expenses written off - 42,696 - - Depreciation and amortisation of property, plant and equipment 325,978 2,723,640 32,676 56,617 Deposit written off - 150,000 - 150,000 Exceptional (gain)/loss on disposal of a subsidiary - (10,729,328) - (23,475,000) Interest expense 9,474,903 9,396,503 8,461,022 8,620,840 Investment in joint ventures written off - 839,020 - - Plant and equipment written off 2,800 - - - Preliminary expenses written off - 19,645 - - Pre-operating expenses written off - 68,866 - - Provision for doubtful debts 816,507 6,872,514 - 2,352,737 Trademark written off - 436,375 - - Dividend income - - (8,980,555) (8,944,445) Interest income (585,124) (318,667) (1,152,687) (708,073) (Gain)/Loss on disposal of property, plant and equipment (131,031) (170,656) (59,039) 2,899 Loss/(Gain) on disposal of investment properties 33,015 (766,749) - - Share of loss in joint ventures written back - (4,163,122) - - Share of profit in associates (3,351,575) (2,781,304) - - Operating profit/(loss) before working capital changes 8,304,712 6,704,453 (1,144,966) (718,070) Decrease in inventories 471,208 1,461,305 - - (Increase)/Decrease in property development-in-progress (1,633,516) 1,818,074 - - (Increase)/Decrease in trade and other debtors (5,683,694) 5,697,763 (625,803) (205,993) Decrease in trade and other creditors (3,611,900) (12,322,200) (176,117) (4,654,279) Increase/(Decrease) in amount owing to contract customers 298,050 (1,428,568) - - Increase in deferred expenditure - (47,712) - - CASH (FOR)/FROM OPERATIONS (1,855,140) 1,883,115 (1,946,886) (5,578,342) Interest paid (10,311,139) (10,054,594) (8,461,022) (8,620,840) Taxes paid (2,225,772) (3,941,393) - - Interest received 949,238 685,394 1,152,687 708,073 NET CASH (FOR)/FROM OPERATING ACTIVITIES CARRIED FORWARD (13,442,813) (11,427,478) (9,255,221) (13,491,109) The annexed notes form an integral part of these financial statements.
  • CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 THE GROUP THE COMPANY 2002 2001 2002 2001 NOTE RM RM RM RM NET CASH (FOR)/FROM OPERATING ACTIVITIES BROUGHT FORWARD (13,442,813) (11,427,478) (9,255,221) (13,491,109) CASH FLOWS FROM/(FOR) INVESTING ACTIVITIES Dividends received from subsidiaries - - 5,620,000 8,270,000 Net cash outflow on disposal of subsidiary 33 - (2,192,116) - - Purchase of property, plant and equipment 34 (115,327) (1,184,381) (15,400) (9,654) Proceeds from disposal of property, plant and equipment 183,039 292,999 68,500 3,200 Proceeds from disposal of investment properties 1,164,915 1,647,939 - - Incidental expenses on investment properties (161,151) - - - Proceeds from disposal of subsidiary in the previous financial year 27,075,000 - 27,075,000 - NET CASH FROM/(FOR) INVESTING ACTIVITIES 28,146,476 (1,435,559) 32,748,100 8,263,546 CASH FLOWS (FOR)/FROM FINANCING ACTIVITIES Net repayment by/(Advances to) associates 261,523 1,147,033 49,500 (73,500) (Net advances to)/Repayment by subsidiaries - - (9,405,022) 4,851,651 Repayment to a director (951,120) - (951,120) - Dividend paid to shareholders of the Company (545,065) (545,065) (545,065) (545,065) Payment of expenses on conversion of ICULS (312,269) - (312,269) - Proceeds received for conversion of ICULS 1,500 - 1,500 - Dividend paid to holder of ICCPS (270,587) (246,864) (270,587) (246,864) Repayment of revolving credit (1,320,000) (407,181) (1,320,000) - Repayment of term loans (74,250) (354,424) - - Repayment to hire purchase creditors (83,130) (44,721) - - NET CASH (FOR)/FROM FINANCING ACTIVITIES (3,293,398) (451,222) (12,753,063) 3,986,222 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 11,410,265 (13,314,259) 10,739,816 (1,241,341) CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR (25,751,141) (12,436,882) (7,383,365) (6,142,024) CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 35 (14,340,876) (25,751,141) 3,356,451 (7,383,365) The annexed notes form an integral part of these financial statements. 54 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 55 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 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 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 5 to the financial statements.There have been no significant changes in the nature of these activities during the financial year. 3. 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. 4. 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 2002. 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. Investment in subsidiaries is stated at cost unless in the opinion of the Directors there has been a permanent diminution in value, in which case provision is made for the diminution in value. 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. The excess of the cost of acquisition over the fair value of the Group’s share of the subsidiaries’ identifiable net assets at the date of acquisition is reflected as goodwill on consolidation. Goodwill or reserve arising from consolidation is written off or credited against reserves. 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. Minority interest is measured at the minorities’ share of the post acquisition fair values of the identifiable assets and liabilities of the acquiree. Separate disclosure is made of minority interest. (b) 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.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (b) Goodwill On Consolidation (Cont’d) 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. (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. 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 equipment, computers, furniture and fittings, tools and fittings 5% - 20% Motor vehicles 20% (e) Investments Investments other than associates are held on a long term basis and are stated at cost. Provision for diminution in the value is only made if the directors are of the opinion that the diminution is permanent. (f) 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. 56 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 57 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (g) 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 manufactured goods, cost is determined on the weighted average basis and includes the cost of materials and incidentals incurred in bringing the inventories to their present location and condition. 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. (h) 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. (i) Debtors Debtors 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. (j) 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. (k) Interest Capitalisation Interest incurred on borrowings specifically taken to finance the development of properties is capitalised until they are ready for their intended use, after which such expense is charged to the income statement. (l) 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.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (m) 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. (n) 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 4(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. (o) Cash and Cash Equivalents Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, 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. (p) 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 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. 58 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 59 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (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. (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 investment in subsidiaries and associates are recognised upon declaration by the subsidiaries and associates. Dividend income from other investments is recognised when the right to receive payment is established. (viii) Interest income Interest income is recognised on an accrual basis, based on the effective yield on the investment. 5. INVESTMENT IN SUBSIDIARIES THE COMPANY 2002 2001 RM RM Unquoted shares, at cost 167,370,110 167,370,110 Details of the subsidiaries, which are all incorporated in Malaysia, are as follows:- Name of Company Effective Equity Interest Principal Activities 2002 2001 % % Syarikat Siah Brothers 100 100 General building contractor Trading Sdn. Bhd. and investment holding Syarikat Siah Brothers 100 100 Building and civil engineering Construction Sdn. Bhd. works
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 5. 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 Activities 2002 2001 % % Lifeplus – Siah Brothers Trading 100 100 Project management and its JV Sdn. Bhd. related technical services Siah Brothers Enterprise Sdn. Bhd. * 100 100 Building contractor Siah Brothers Land Sdn. Bhd. 100 100 Investment holding Seri Ampangan Realty Sdn. Bhd. 100 100 Property development Sinaran Naga Sdn. Bhd. 100 100 Property development Siah Brothers Development Sdn. Bhd. * 100 100 Proposed property development Tiara Development Sdn. Bhd.* 100 100 Proposed property development SBC Homes Sdn. Bhd.* 100 100 Proposed property development Mixwell (Malaysia) Sdn. Bhd. 100 100 Project management and property development Winsome Ventures Sdn. Bhd. 100 100 Intended property management Siah Brothers Properties Sdn. Bhd.* 100 100 Investment holding Aureate Construction Sdn. Bhd.* 100 100 Property investment SBC Leisure Sdn. Bhd.* 100 100 Property development SBC Towers Sdn. Bhd.* 100 100 Property development Siah Brothers Project 100 100 Provision of management Management Sdn. Bhd.* services Siah Brothers Industries Sdn. Bhd. * 100 100 Investment holding Masahmura Sdn. Bhd.* 51 51 Manufacturing of material handling equipment and metal frames Masahmura Sales & Service Sdn. Bhd. 51 51 Trading of light industrial handling equipment and metal frames * Not audited by Horwath Mok & Poon. 60 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 61 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 6. INTEREST IN ASSOCIATES THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Unquoted shares, at cost 10,760,451 10,760,451 10,440,450 10,440,450 Unquoted shares at Group cost 91,618,314 91,618,314 - - Share of post acquisition reserves 17,523,801 15,154,999 - - 119,902,566 117,533,764 10,440,450 10,440,450 THE GROUP 2002 2001 RM RM The interest in associates comprises:- Group’s share of net tangible assets - at cost 73,886,596 71,517,794 - at fair value 45,952,003 45,952,003 Group’s share of intangible assets 63,967 63,967 119,902,566 117,533,764 Details of the associates, which are all incorporated in Malaysia, are as follows:- Name of Company Effective Equity Interest Principal Activities 2002 2001 % % Ligamas Sdn. Bhd.** 50.0 50.0 Property development Varich Industries Sdn. Bhd.# 50.0 50.0 Proposed quarrying Paling Industries Sdn. Bhd.** 40.0 40.0 Manufacturing of plastic building materials Liga Canggih Sdn. Bhd.## 40.0 40.0 Dormant Sri Berjaya Development Sdn. Bhd.# 33.3 33.3 Investment and development of landed properties Sri Rawang Properties Sdn. Bhd.# 22.2 22.2 Investment in properties and rubber estates South-East Best Sdn. Bhd.** 20.0 20.0 Property development ** Share of results of these associates are based on the latest available unaudited management financial statements made up to 31 March 2002. # The results of these associates have not been equity accounted as the amounts involved are insignificant. ## Held by Paling Industries Sdn. Bhd.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 7. PROPERTY, PLANT AND EQUIPMENT OFFICE PLANT EQUIPMENT, AND COMPUTERS, MACHINERY, FURNITURE CONSTRUCTION FORMWORK, AND MACHINERY SCAFFOLDINGS FITTINGS, FREEHOLD AND AND TOOLS AND MOTOR LAND EQUIPMENT CONTAINERS FITTINGS VEHICLES TOTAL RM RM RM RM RM RM THE GROUP Net book value as at 1.4.2001 6,114,092 102,480 28,382 966,023 374,619 7,585,596 Additions - 490 - 104,930 103,007 208,427 Disposals - (7,057) - (20,489) (24,462) (52,008) Written off - - - (2,800) - (2,800) Transfer to development land (365,947) - - - - (365,947) Depreciation charge - (17,914) (13,072) (243,651) (51,341) (325,978) Net book value as at 31.3.2002 5,748,145 77,999 15,310 804,013 401,823 7,047,290 As at 31.3.2002 Cost 5,748,145 4,373,622 4,316,916 3,626,222 1,594,753 19,659,658 Accumulated depreciation - (4,295,623) (4,301,606) (2,822,209) (1,192,930) (12,612,368) Net book value 5,748,145 77,999 15,310 804,013 401,823 7,047,290 As at 31.3.2001 Cost 6,114,092 4,653,839 4,316,916 3,604,328 1,741,982 20,431,157 Accumulated depreciation - (4,551,359) (4,288,534) (2,638,305) (1,367,363) (12,845,561) Net book value 6,114,092 102,480 28,382 966,023 374,619 7,585,596 62 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 63 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 7. PROPERTY, PLANT AND EQUIPMENT (Cont’d) OFFICE EQUIPMENT, COMPUTERS, FURNITURE MOTOR THE COMPANY AND FITTINGS VEHICLES TOTAL RM RM RM Net book value As at 1.4.2001 92,778 9,462 102,240 Additions 15,400 - 15,400 Disposals - (9,461) (9,461) Depreciation charge (32,676) - (32,676) Net book value as at 31.3.2002 75,502 1 75,503 As at 31.3.2002 Cost 370,801 376,950 747,751 Accumulated depreciation (295,299) (376,949) (672,248) Net book value 75,502 1 75,503 As at 31.3.2001 Cost 355,401 516,550 871,951 Accumulated depreciation (262,623) (507,088) (769,711) Net book value 92,778 9,462 102,240 The motor vehicles of the Group acquired under hire purchase terms were carried at net book value of RM402,608 (2001 - RM339,159) at the balance sheet date. 8. INVESTMENT PROPERTIES THE GROUP 2002 2001 RM RM Leasehold land 4,979,933 4,979,933 Expenditure on land 318,927 157,776 5,298,860 5,137,709 Freehold land and buildings 16,987,903 17,869,093 Disposed during the financial year (1,197,930) (881,190) 15,789,973 16,987,903 21,088,833 22,125,612 Freehold land and building of a subsidiary costing RM2,792,736 (2001 – RM2,792,736) is 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.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 8. INVESTMENT PROPERTIES (Cont’d) Based on a valuation exercise carried out on 27 March 2000 by an independent professional valuer, the market value of the investment properties of the Group amounts to approximately RM35.58 million (2001 – RM36.91 million). No valuation exercise has been carried out on the properties since the last exercise in the financial year 2000. 9. OTHER ASSETS THE GROUP 2002 2001 RM RM Other assets 521,868 472,285 Other investments Quoted shares in Malaysia, at cost 12,300 12,300 Unquoted shares, at cost 180,000 180,000 192,300 192,300 714,168 664,585 Market value of quoted shares 5,850 6,390 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. 10. GOODWILL THE GROUP 2002 2001 RM RM At 1 April 2001/2000 10,245,527 7,511,884 Reduction in negative goodwill arising from the divestment of equity interest in a subsidiary - 2,733,643 At 31 March 10,245,527 10,245,527 11. INVENTORIES THE GROUP 2002 2001 RM RM Unsold completed properties, at cost 9,269,103 9,740,311 64 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 65 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 12. PROPERTY DEVELOPMENT-IN-PROGRESS THE GROUP 2002 2001 RM RM Freehold land, at cost 14,547,886 14,553,404 Leasehold land, at cost 801,805 801,805 Land and development expenditure 46,155,119 29,385,833 61,504,810 44,741,042 Attributable profits 8,665,215 3,526,038 70,170,025 48,267,080 Progress billings (41,578,927) (22,511,681) 28,591,098 25,755,399 Included in development expenditure is interest expense capitalised during the financial year amounting to RM836,236 (2001 - RM658,091). 13. DEBTORS THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Trade debtors 58,910,469 58,244,261 - - Retention receivable 10,081,043 8,309,049 - - Total trade debtors 68,991,512 66,553,310 - - Provision for doubtful debts (6,803,879) (6,086,972) - - 62,187,633 60,466,338 - - Other debtors, deposits and prepayments 19,439,592 40,958,305 8,753,954 35,203,151 Provision for doubtful debts (2,682,432) (2,582,832) (2,352,737) (2,352,737) 16,757,160 38,375,473 6,401,217 32,850,414 Dividend receivable - - 3,816,000 2,970,000 78,944,793 98,841,811 10,217,217 35,820,414
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 13. DEBTORS (Cont’d) Included in trade debtors at the balance sheet date are the following balances:- (i) RM37,720,372 (2001 – RM37,788,454) 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 38 to the financial statements. The amount owing by SH has been outstanding since 1996. Subsequent to the balance sheet date, SH has proposed to settle the amount owing in the following manner:- q transfer of several parcels of land with development potential for a total consideration of RM35,216,406; and q the balance is to be settled by cash and/or other consideration to be mutually agreed between SH and the Group. The proposal by SH is currently being reviewed by the directors (other than the directors who are deemed to be interested parties). The directors are of the opinion that the amount owing by SH will be recovered in full in due course, and as such, no provision for doubtful debts is required. (ii) an amount of RM7,261,672 (2001 – RM7,261,672), net of provision for doubtful debts, owing by a third party which has been outstanding since 1994.The third party has been placed under Special Administration by Pengurusan Danaharta Nasional Berhad on 27 July 1999.The directors are of the opinion that the net amount due from the third party will be recovered in due course, and that no further provision for doubtful debts is required. Included in other debtors are the following balances:- (a) RM4,582,518 (2001 - Nil) 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; and (b) RM2,500,000 (2001 - Nil) due from a sub-contractor for advances provided to the sub-contractor. The amount owing is unsecured, interest-free, and is to be repaid via deductions against future claims for work performed by the sub-contractor. 66 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 67 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 14. AMOUNT OWING BY/(TO) CONTRACT CUSTOMERS THE GROUP 2002 2001 RM RM Amount owing by contract customers Contract costs incurred to date 29,952,686 19,280,003 Attributable profits 8,335,542 5,973,843 38,288,228 25,253,846 Progress billings (36,880,778) (22,297,108) Amount owing by contract customers 1,407,450 2,956,738 Amount owing to contract customers Contract costs incurred to date 173,176,995 177,176,206 Attributable profits 7,214,110 11,000,765 180,391,105 188,176,971 Progress billings (183,064,543) (191,737,533) Amount owing to contract customers (2,673,438) (3,560,562) Included in costs incurred on contract works is interest income capitalised during the financial year of RM364,114 (2001 – RM366,727). 15. AMOUNTS OWING BY/(TO) SUBSIDIARIES THE COMPANY 2002 2001 RM RM Amounts owing by: Non-trade - Interest bearing 6,996,470 6,996,470 - Interest free 39,679,945 32,235,120 46,676,415 39,231,590 Amounts owing to: Non-trade - Interest bearing 12,740,618 17,640,618 - Interest free 8,359,849 5,420,046 21,100,467 23,060,664 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 8.65% to 9.05% (2001 - 7.0% to 9.3%) per annum.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 16. AMOUNTS OWING BY/(TO) ASSOCIATES The amounts owing are unsecured, interest-free and not subject to fixed terms of repayment. 17. CASH AND BANK BALANCES Included in the cash and bank balances of the Group is RM686,692 (2001 - RM472,184) maintained under the Housing Development Account pursuant to Section 7A of the Housing Developers (Control and Licensing ) Act, 1966. 18. CREDITORS THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Trade creditors 18,180,622 16,586,849 - - Retention payable 6,310,023 9,616,610 - - Total trade creditors 24,490,645 26,203,459 - - Other creditors and accruals 6,682,516 8,581,602 245,422 421,539 Hire purchase creditors (Note 25b) 87,784 79,160 - - 31,260,945 34,864,221 245,422 421,539 Included in other creditors and accruals of the Group is an advance payment of RM1,166,884 (2001 - RM1,770,000) received from contract customers. 19. AMOUNT OWING TO A DIRECTOR The amount owing to Sia Kwee Mow@ Sia Hok Chai is unsecured, bears interest at 5.5% (2001 – 5.5%) per annum and is not subject to fixed terms of repayment. 20. SHORT TERM BORROWINGS THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Current portion of term loans - secured (Note 25a) 111,636 111,636 - - Revolving credits - secured 14,394,400 14,394,400 - - - unsecured 5,680,000 7,000,000 5,680,000 7,000,000 Bank overdrafts - secured - - - - - unsecured 20,843,690 27,037,758 1,657,727 7,462,435 41,029,726 48,543,794 7,337,727 14,462,435 68 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 69 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 20. SHORT TERM BORROWINGS (Cont’d) The revolving credits and bank overdrafts bear interest at rates ranging from 5.15% to 9.3% (2001 – 5.35% to 9.3%) per annum. The secured portion of the revolving credits and bank overdrafts of the Group are secured by way of a corporate guarantee by the Company, supported by a negative pledge over certain landed properties of the Group. 21. SHARE CAPITAL THE COMPANY 2002 2001 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 ISSUED AND FULLY PAID-UP Ordinary shares of RM1 each At 1 April/31 March 50,468,943 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 57,301,943 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 five (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.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 22. SHARE APPLICATION ACCOUNT The share application account represents the sum arising from the mandatory conversion of the 5% Irredeemable Convertible Unsecured Loan Stocks 1997/2002 ("ICULS"). Details of the conversion of the ICULS are disclosed in Note 24 to the financial statements. 23. RESERVES THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Share premium reserve (Note a) At 1 April 2001/2000 21,306,521 21,306,521 21,306,521 21,306,521 Arising from conversion of ICULS to ordinary shares 1,500 - 1,500 - Set off against expenses incurred on conversion of ICULS (312,269) - (312,269) - At 31 March 20,995,752 21,306,521 20,995,752 21,306,521 Capital reserve (Note b) 1,199,999 1,199,999 - - Retained profits (Note c) 21,812,676 20,580,642 26,423,468 26,234,438 44,008,427 43,087,162 47,419,220 47,540,959 (a) The share premium reserve is not available for distribution by way of dividends. (b) The capital reserve arises 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) Based on estimated Section 108 tax credits and subject to agreement with the tax authorities, the retained profits of the Company are wholly distributable by way of dividends without the Company incurring any additional tax liabilities. 24. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS ("ICULS") THE GROUP/THE COMPANY 2002 2001 RM RM At 1 April 115,600,000 115,600,000 Transferred to Share Application Account upon maturity of the ICULS (115,600,000) - At 31 March - 115,600,000 70 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 71 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 24. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS ("ICULS") (Cont’d) In the previous financial year, the Company had proposed to replace the ICULS by issuing new shares at revised conversion terms and/or cash subscription, details of which are set out in Note 42(a)(ii) to the financial statements. On 6 September 2001 and 23 October 2001, the Board of Directors of the Company decided to abort the proposed revision to the terms of conversion of the ICULS in view of the prevailing weak capital market condition and its uncertain outlook. The ICULS matured on 28 March 2002, and the amount due to the ICULS was transferred to a Share Application Account pending the completion of the mandatory conversion of the ICULS into new ordinary shares of the Company. Subsequent to the balance sheet date, the conversion of the ICULS into new ordinary shares of RM1 each was made on the following basis:- (i) 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; (ii) 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. 25. DEFERRED LIABILITIES THE GROUP 2002 2001 RM RM Long term loans - Note a 215,520 289,770 Hire purchase creditors - Note b 223,268 221,922 Deferred taxation - Note c - - 438,788 511,692 (a) Long term loans THE GROUP 2002 2001 RM RM Term loans - secured 327,156 401,406 Repayable within 12 months (Note 20) (111,636) (111,636) 215,520 289,770 The secured term loan represents a bridging loan secured by way of a first legal charge over the landed property of a subsidiary costing RM2,792,736 (2001 – RM2,792,736).The loan is repayable by 144 equal instalments commencing 15 September 1994. The term loans are subject to interest at rates ranging from 8.95% to 9.45% (2001 – 9.45%) per annum.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 25. DEFERRED LIABILITIES (Cont’d) (b) Hire purchase creditors THE GROUP 2002 2001 RM RM Future minimum hire purchase payments - repayable not later than one year 110,916 87,292 - repayable later than one year and not later than five years 282,174 292,808 393,090 380,100 Future finance charges (82,038) (79,018) Present value of hire purchase liabilities 311,052 301,082 Present value of hire purchase liabilities:- Not later than one year (Note 18) 87,784 79,160 Later than one year and not later than five years 223,268 221,922 311,052 301,082 (c) Deferred taxation At 1 April 2001/2000 - 2,250,300 Reduction through the disposal of a subsidiary - (2,250,300) - - 26. NET TANGIBLE ASSETS PER SHARE The actual net tangible assets per share is calculated based on the net tangible assets value of RM199,831,843 (2001 - RM83,310,578) attributable to ordinary shares divided by the number of ordinary shares in issue at the balance sheet date of 50,468,943 (2001 - 50,468,943) shares. The proforma net tangible assets per share is calculated based on the net tangible assets value of RM199,831,843 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. 72 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 73 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 27. TURNOVER THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Revenue from construction contracts 56,858,840 31,998,641 - - Proportionate sales value of development properties 24,084,755 20,232,647 - - Sale of goods and services supplied - 39,981,431 - - Rental income 119,300 146,091 - - Dividend income - - 9,300,000 8,944,445 Interest income 536,328 6,879 533,461 - Other interest income - - 619,226 708,073 Management and administrative charges 45,600 45,600 - 294,000 81,644,823 92,411,289 10,452,687 9,946,518 28. OTHER OPERATING INCOME Included in other operating income of the Group and the Company of the previous financial year, were the amounts of RM10,729,328 and RM23,475,000, respectively representing the gain on disposal of equity interest in a subsidiary during the previous financial year.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 29. PROFIT BEFORE TAXATION Profit before taxation is arrived at after charging/(crediting):- THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Advances to joint ventures written off - 3,280,534 - - Amortisation - leasehold land and buildings - 53,783 - - - deferred expenses - 47,710 - - Auditors’ remuneration 51,500 61,600 11,000 11,000 Bad debts written off 101,340 335,590 - 327,763 Contract costs 65,941,186 38,591,139 - - Deferred expenses written off - 42,696 - - Depreciation of plant and equipment 325,978 2,669,857 32,676 56,617 Deposit written off - 150,000 - 150,000 Directors’ benefits-in-kind 31,875 49,441 29,625 45,441 Directors’ fees 46,000 110,400 46,000 50,400 Directors’ remuneration 594,500 899,300 419,625 467,625 Dividend income over-recognised 319,445 - 319,445 - Interest expense - bank borrowings 3,175,729 3,106,808 1,354,608 1,464,669 - hire purchase 21,884 11,737 - - - ICULS 5,717,576 5,780,000 5,717,576 5,780,000 - loans 197,918 81,414 1,388,838 1,376,171 - others 361,796 416,544 - - Investment in joint ventures written off - 839,020 - - Plant and equipment written off 2,800 - - - Provision for doubtful debts 816,507 6,872,514 - 2,352,737 Preliminary expenses written off - 19,645 - - Pre-operating expenses written off - 68,866 - - Rental expense - premises - 8,100 55,930 55,930 - machinery and equipment 14,883 15,588 - - Staff costs 1,996,604 4,617,235 149,581 111,381 Trademark written off - 436,375 - - Gross dividend income - subsidiaries (unquoted) - - (9,300,000) (8,944,445) Interest income - licensed financial institutions (533,461) (125,269) (533,461) - - subsidiaries - - (619,226) (708,073) - others (51,663) (193,263) - - Management and administrative charges (45,600) (45,600) - (294,000) Gain on foreign exchange (realised) - (227) - - Loss/(Gain) on disposal of investment properties 33,015 (766,749) - - (Gain)/Loss on disposal of property, plant and equipment (131,031) (170,656) (59,039) 2,899 Rental of premises (284,414) (431,254) - - Share of loss in joint ventures written back - (4,163,122) - - 74 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 75 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 30. TAXATION THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Current (867,495) (420,370) 94,000 680,575 Share of associates’ taxation 982,773 810,363 - - 115,278 389,993 94,000 680,575 Overprovision in previous financial year - (39,742) - (39,742) 115,278 350,251 94,000 640,833 The taxation charge for the Company is lower than the statutory rate of tax applicable mainly due to certain income which is not taxable. Subject to agreement with the tax authorities, the Group has unutilised tax losses and unabsorbed capital allowances of approximately RM3,741,000 (2001 – RM6,392,000) and RM563,000 (2001 – RM574,000) 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:- TAX LOSSES OTHER TOTAL RM RM RM At 1 April 2000 1,122,000 178,000 1,300,000 Arising/(Reversal) during the financial year 666,000 (16,000) 650,000 At 31 March 2001/1 April 2001 1,788,000 162,000 1,950,000 Reversal during the financial year (742,000) (5,000) (747,000) At 31 March 2002 1,046,000 157,000 1,203,000 31. 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 (2001 - RM270,587) by the number of 50,468,943 (2001 - 50,468,943) ordinary shares of the Company in issue during the financial year. The computation of diluted EPS is not applicable as the effects of conversion of each class of potential ordinary shares are anti-dilutive.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 32. DIVIDENDS THE COMPANY 2002 2001 RM RM Declared – dividend of 5.5% less 28% tax on the ICCPS (2001 - 5.5% less 28% tax on ICCPS) 270,587 270,587 Proposed – first and final dividend of Nil (2001 - 1.5% less 28% tax) on the ordinary shares - 545,065 270,587 815,652 33. SUMMARY OF EFFECTS OF DISPOSAL OF A SUBSIDIARY The effect of the disposal of the subsidiary on the financial results of the Group for the financial year was as follows:- THE GROUP 2002 2001 RM RM Turnover - 38,777,804 Cost of Sales - (35,212,832) Gross Profit - 3,564,972 Other operating income - 27,922 Gain on disposal of subsidiary - 10,729,328 Less: Operating expenses Administrative expenses - (3,172,585) Other operating expenses - (79,808) Profit from operations - 11,069,829 Finance costs - (187,088) Increase in net profit of the Group - 10,882,741 76 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 77 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 33. SUMMARY OF EFFECTS OF DISPOSAL OF A SUBSIDIARY (Cont’d) The effect of the disposal of the subsidiary on the financial position of the Group at the financial year end was as follows:- THE GROUP 2002 2001 RM RM Property, plant and equipment - 17,232,167 Other assets - 173,201 Current assets - 17,135,797 Current liabilities - (2,375,662) Deferred liabilities - (2,238,854) Minority interest - (10,847,334) - 19,079,315 Reduction in reserve on consolidation from disposal - (2,733,643) Increase in net assets of the Group - 16,345,672 THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Property, plant and equipment - 17,232,167 - - Other assets - 173,201 - - Current assets - 17,135,797 - - Current liabilities - (2,375,662) - - Deferred liabilities - (2,238,854) - - Minority interest - (10,847,334) - - Net assets in subsidiary disposed - 19,079,315 - - Reduction in reserve on consolidation from disposal - (2,733,643) - - Net cost of investment to the Group - 16,345,672 - - Gain on disposal - 10,729,328 - - Disposal consideration - 27,075,000 - 27,075,000 Cash and cash equivalents disposed - (2,192,116) - - Net cash inflow on disposal of subsidiary - 24,882,884 - 27,075,000 Amount received after the balance sheet date - (27,075,000) - (27,075,000) Net cash outflow on disposal of subsidiary - (2,192,116) - -
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 34. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Purchase of property, plant and equipment 208,427 1,530,184 15,400 9,654 Amount financed through hire purchase arrangements (93,100) (345,803) - - Cash disbursed for the purchase of property, plant and equipment 115,327 1,184,381 15,400 9,654 35. CASH AND CASH EQUIVALENTS For the purpose of the cash flow statement, cash and cash equivalents comprise the following:- THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM Short term deposits 5,042,274 150,000 5,012,274 - Cash and bank balances 1,460,540 1,136,617 1,904 79,070 Bank overdrafts (20,843,690) (27,037,758) (1,657,727) (7,462,435) (14,340,876) (25,751,141) 3,356,451 (7,383,365) 36. 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 2002 2001 2002 2001 RM RM RM RM DIRECTORS’ FEE:- 1. Mun Chong Shing @ Mun Chong Tian 3,000 60,000 3,000 - 2. Dato’ Lim Phaik Gan 12,000 12,000 12,000 12,000 3. Dr. Norraesah Bt Haji Mohamad 13,000 12,000 13,000 12,000 4. Datuk Sim Peng Choon 12,000 12,000 12,000 12,000 5. Vincent Koh Kok Kee 6,000 - 6,000 - 6. Tan Sri Dato’ Ir Muhammad Yusuff Bin Haji Muhammad Yunus - 14,400 - 14,400 46,000 110,400 46,000 50,400 78 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 79 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 36. DIRECTORS’ REMUNERATION (Cont’d) THE GROUP THE COMPANY 2002 2001 2002 2001 RM RM RM RM DIRECTORS’ NON-FEE EMOLUMENTS:- 1. Sia Kwee Mow @ Sia Hok Chai 396,000 414,000 396,000 414,000 2. Sia Teong Heng 180,000 195,000 15,750 29,250 3. Mun Chong Shing @ Mun Chong Tian 300 127,800 300 - 4. Dato’ Lim Phaik Gan 900 - 900 - 5. Dr. Norraesah Bt Haji Mohamad 1,500 - 1,500 - 6. Datuk Sim Peng Choon 2,100 - 2,100 - 7. Vincent Koh Kok Kee 1,200 - 1,200 - 8. Yeoh Hock Thong 12,500 162,500 1,875 24,375 594,500 899,300 419,625 467,625 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 2002 2001 2002 2001 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 19,125 11,250 19,125 3. Mun Chong Shing @ Mun Chong Tian - 4,000 - - 4. Yeoh Hock Thong 1,450 9,391 1,450 9,391 31,875 49,441 29,625 45,441 37. RELATED COMPANY TRANSACTIONS THE COMPANY 2002 2001 RM RM Interest paid to subsidiaries 1,228,304 1,216,076 Rental paid to a subsidiary 55,930 55,930 Administration fee received from a subsidiary - 294,000 Dividend income received/receivable from subsidiaries 9,300,000 8,944,945 Interest received from subsidiaries 619,226 708,073
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 38. RELATED PARTY TRANSACTIONS/BALANCES NAME OF NATURE OF THE GROUP RELATED PARTY NOTE TRANSACTION 2002 2001 RM RM South-East Best (a) Progress billings received/receivable 1,897,361 2,106,698 Sdn. Bhd. Ligamas Sdn. Bhd. (a) Progress billings received/receivable 17,559,960 3,344,635 Gross dividend income received - 900,000 Paling Industries (a) Purchase of material 181,113 67,268 Sdn. Bhd. Smart Home (b) Subcontract charges Sdn. Bhd. paid/payable - 51,196 Sia Teong Leng (c ) Property sold 600,000 - Wong Hon Kum (c ) Retainer fee paid 42,000 - RECEIVABLE PAYABLE NAME OF THE GROUP THE GROUP RELATED PARTIES NOTE 2002 2001 2002 2001 RM RM RM RM South-East Best Sdn. Bhd. (a) 7,745,003 6,406,597 - - Ligamas Sdn. Bhd. (a) 10,258,378 6,652,464 - - Paling Industries Sdn. Bhd. (a) - - 38,543 11,352 Smart Home Sdn. Bhd. (b) 37,720,372 37,788,454 - - (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 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. 80 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 81 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 39. CAPITAL COMMITMENT THE COMPANY 2002 2001 RM RM Approved capital commitment contracted but not provided for 29,050,000 - The capital commitment relates to the balance of consideration payable for the acquisition of 80% equity interest in South-East Best Sdn. Bhd.. 40. CONTINGENT LIABILITIES THE COMPANY 2002 2001 RM RM Corporate guarantee (unsecured) given to banks and other licensed financial institutions for credit facilities granted to subsidiaries - funded facilities 30,352,000 29,223,000 - non-funded facilities 4,472,000 4,042,000 34,824,000 33,265,000 41. SEGMENTAL REPORTING The Group operates wholly within Malaysia. The analysis of the Group’s operations by business activities for the financial year ended 31 March 2002 is as follows:- (LOSS)/ TOTAL PROFIT BEFORE ASSETS TURNOVER TAXATION EMPLOYED RM RM RM 2002 The Company and its subsidiaries:- Construction and property development 80,884,556 6,621,208 148,551,217 Manufacturing and trading - (8,006) 57,552 Investment 760,267 (8,346,878) 26,105,699 81,644,823 (1,733,676) 174,714,468 Associates:- Construction and property development - 1,511,621 107,770,794 Manufacturing and trading - 1,839,954 12,131,772 81,644,823 1,617,899 294,617,034
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 41. SEGMENTAL REPORTING (Cont’d) (LOSS)/ TOTAL PROFIT BEFORE ASSETS TURNOVER TAXATION EMPLOYED RM RM RM 2001 The Company and its subsidiaries:- Construction and property development 52,377,824 (9,337,571) 144,647,695 Manufacturing and trading 38,514,701 (261,029) 66,001 Investment 1,518,764 8,238,482 44,956,366 92,411,289 (1,360,118) 189,670,062 Associates:- Construction and property development - 2,781,304 106,726,759 Manufacturing and trading - - 10,807,005 92,411,289 1,421,186 307,203,826 42. SIGNIFICANT EVENTS The following are the significant events involving the Group and the Company:- (a) On 14 June 2000, the Company announced the following proposals:- (i) Proposed Renounceable Rights Issue of up to 52,277,289 new ordinary shares of RM1.00 each in the Company credited as fully paid-up at an issue price of RM1.00 per share on the basis of one (1) new share for every two (2) shares held ("Proposed Rights Issue"); and (ii) Proposed Special Issue of up to 80,920,000 new shares in the Company in consideration of an offer by the Company to replace from the holders of the existing 1997/2002 5% Irredeemable Convertible Unsecured Loan Stocks ("ICULS") their respective ICULS holdings on the basis of seven (7) new shares in the Company for every RM10.00 nominal value of ICULS surrendered for cancellation, together with a cash consideration of RM2.00 ("Proposed Offer"). On 2 October 2000, the Securities Commission ("SC") approved the Proposed Rights Issue based on the above terms but rejected the terms of the Proposed Offer. The Company subsequently revised the terms of the Proposed Offer and resubmitted an application to the SC on 19 December 2000. On 26 February 2001, the SC approved the Proposed Offer based on the following terms:- (i) If the Proposed Offer is undertaken before 28 March 2001, being the payment date of the ICULS interest ("Cut-off Date"), the Proposed Offer will comprise an offer to acquire 120 ICULS in consideration for 36 new shares in the Company, together with a restricted issue to the said ICULS holders of 24 new shares in the Company at an issue price of RM1.00 per share payable in full for cash. (ii) In the event that the Proposed Offer is undertaken after the Cut-off Date, the Proposed Offer will comprise an offer to acquire 120 ICULS in consideration for 30 new shares in the Company, together with a restricted issue of 30 new shares in the Company at an issue price of RM1.00 per share payable in full for cash. 82 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 83 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 42. SIGNIFICANT EVENTS (Cont’d) (iii) The holders of the ICULS shall have the option of either taking up the Proposed Offer or to continue holding the ICULS based on the existing terms until the maturity date of 28 March 2002, or a combination of both. On 6 September 2001 and 23 October 2001, the Board of Directors of the Company decided to abort the Proposed Rights Issue and Proposed Offer, respectively in view of the prevailing weak capital market condition and its uncertain outlook. (b) On 27 September 2001, the Board of Directors of the Company approved the issuance of RM 92,562,500 nominal value Al-Bai Bithaman Ajil Bonds ("ABBA Bonds").The terms of the ABBA Bonds were subsequently revised on 18 June 2002 and are disclosed in Note 43(b) to the financial statements. 43. SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE The following are the subsequent 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 share of RM1 each in South East Best Sdn. Bhd. ("SEB"), representing 80% equity interest in SEB for a cash consideration of RM35,000,000. At the date of this report, the acquisition of SEB has not been completed pending the settlement of the purchase consideration. (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 will be placed out to a licensed financial institution via a private placement exercise.The ABBA Bonds shall 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 to be 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 the reserved account; and (iv) by a first party charge over a sinking fund account and a Mudharabah Account. 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 subject to the following conditions:- (i) any change in the terms and conditions of the proposed ABBA Bonds is subject to the approval by the SC; (ii) the submission of Borang FMF/JPB (Facility Maintenance File) to the SC and Bank Negara Malaysia; and (iii) the submission of a certified true copy of the Trust Deed and final rating and rating rationale of the ABBA Bonds to the SC.
  • NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 44. NUMBER OF EMPLOYEES THE GROUP THE COMPANY 2002 2001 2002 2001 Number of employees at the balance sheet date 55 57 8 11 45. COMPARATIVE FIGURES 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): Amount owing by subsidiaries - 39,231,590 - 16,170,926 Amount owing to subsidiaries - (23,060,664) - - Property, plant and equipment 7,585,596 - 12,723,305 - Investment properties 22,125,612 - 16,987,903 - Gross trade debtors 58,244,261 - 59,398,219 - Provision for doubtful debts (6,086,972) - (4,719,543) - Gross other debtors, deposits and prepayments 40,958,305 - 38,206,823 - Provision for doubtful debts (2,582,832) - (2,352,737) - Debtors 98,841,811 35,820,414 103,665,479 44,797,149 Tax recoverable 4,823,668 8,976,735 - - Amount owing by contract customers 2,956,738 - - - Amount owing to contract customers (3,560,562) - (603,824) - 84 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 85 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 45. COMPARATIVE FIGURES (Cont’d) AS PREVIOUSLY AS RESTATED REPORTED THE GROUP THE COMPANY THE GROUP THE COMPANY RM RM RM RM INCOME STATEMENTS (EXTRACT): Exceptional item - - 10,729,328 23,475,000 Other operating income 12,412,360 23,475,204 1,683,032 204 Administrative expenses 4,649,999 991,785 15,245,542 3,881,801 Other operating expenses 10,595,543 2,890,016 - - CASH FLOW STATEMENTS (EXTRACT): Decrease in amount owing to contract customers (1,428,568) - (695,114) - Interest paid (10,054,594) - (10,421,321) - Interest received 685,394 - 318,667 - Advances to joint ventures written off 3,280,534 - - - Investment in joint ventures written off 839,020 - - - Share of loss in joint ventures written back (4,163,122) - - - Operating profit before working capital changes 6,704,453 - 6,748,021 - Decrease in trade and other debtors 5,697,763 - 5,654,195 - Increase in trade and other debtors - (205,993) - (2,069,605) Taxes paid - - - (640,833) Dividends received from subsidiaries - 8,270,000 - 10,774,445
  • GROUP PROPERTIES AS AT 31 ST MARCH 2002 Location Tenure/ Land/ Audited Description Date of (Age of (Built-Up) Net Book Value Acquisition */ building or Area As At 31. 3. 2002 Revaluation date of expiry) Sq. Ft. RM 1. Lot 172, Section 85 Freehold 2,102/ 426,750 4 storey 29/3/2000 Town & District of (27 years) (6,404) Shophouse Kuala Lumpur, for rental Wilayah Persekutuan (Nos. 422, 422A, 422B & 422C, Jalan Pahang, Kuala Lumpur) 2. Lot 128, 129, 130, Freehold 5,513/ 3,739,156 6 I/2 storey 28/3/2000 Section 47, Town of (22-24 years) (38,238) commercial Kuala Lumpur, building for Wilayah Persekutuan office (Wisma Siah Brothers, headquarters No. 74, Jalan Pahang, and for rental Kuala Lumpur) 3. Lot 31 & 32,Village Freehold 4,792/ 400,000 3 storey 29/3/2000 of Ulu Klang, (14 years) (5,340) commercial District of Gombak, building for Selangor Darul Ehsan factory 4. Lot 53, Pekan Rembia, Freehold 1,851 30,000 Vacant land 27/3/2000 District of Alor Gajah, for future Melaka development 5. Lot 54, Pekan Rembia, Freehold 3,584 11,000 Vacant land 27/3/2000 District of Alor Gajah, for future Melaka development 6. No. B3-4, B4-3, Freehold (3,313) 1,234,325 Condominium 27/3/2000 Sri Bukit Tunku, (9 years) units for Kuala Lumpur rental 7. Unit B2, B3, C1, Freehold (11,290) 2,792,737 Condominium 27/3/2000 C3, C5, C6 (8 years) units for rental Intan Kenny Condominiums 29, Persiaran Bukit Tunku, Bukit Tunku, 50480 Kuala Lumpur 8. GM 2414, Freehold 8,902 483,523 Vacant land 28/3/2000 Lot No. 9332 for future Mukim Batu, Daerah development and Negeri Wilayah Persekutuan 86 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 87 GROUP PROPERTIES AS AT 31 ST MARCH 2002 (Cont’d) Location Tenure/ Land/ Audited Description Date of (Age of (Built-Up) Net Book Value Acquisition */ building or Area As At 31. 3. 2002 Revaluation date of expiry) Sq. Ft. RM 9. P.T. 8995, 8997, 9006, Leasehold 683,753 473,197 Vacant land 28/3/2000 9077 Mukim Batu, expiring for future Daerah and Negeri on development Wilayah Persekutuan 22/4/2086 10. P.T. 9004 Mukim Batu, Leasehold 230,770 176,851 Land currently 28/3/2000 Daerah and Negeri expiring on under Wilayah Persekutuan 22/4/2086 development 11. P.T. 41543-41550, Freehold 148,101/ 7,983,911 1 1/2 storey 30/3/2000 41552, 41555, 41558- (7 years) (112,500) light industrial 41576, 41578-41585, building 41588-41589, 41595, 41599-41602 and 41606, Jalan Gambang, Mukim Kuala Kuantan, District of Kuantan, Pahang Darul Makmur 12. P.T. 57232, 57238 and Freehold 7,869/ 685,193 2 storey 30/3/2000 57242-57244 (7 years) (13,659) shop office Jalan Gambang, Mukim Kuala Kuantan, District of Kuantan, Pahang Darul Makmur 13. P.T. 42031, 42042-42056 Freehold 2,472,039 5,675,090 Vacant land 16/12/1993 * Mukim Kuala Kuantan, for future District of Kuantan, development Pahang Darul Makmur 14. P.T. 42029 Mukim Freehold 49,051 156,321 Vacant land for 30/3/2000 Kuala Kuantan, future District of Kuantan, development Pahang 15. P.T. 42036 Freehold 186,429 597,048 Land currently 30/03/2000 Mukim Kuala Kuantan, under District of Kuantan, development Pahang 16. P.T. 9076 & 9005 Leasehold 519,164 18,150,000 Vacant land 28/3/2000 Mukim Batu, expiring on for future Daerah and Negeri 22/4/2086 development Wilayah Persekutuan 17. Lot No. 2398, Mukim Freehold 1,132,637 13,510,000 Vacant land 5/4/1999 * of Batang Kali, District for future of Hulu Selangor development
  • SHAREHOLDERS’ INFORMATION AS AT 31 ST JULY, 2002 Authorised Shares Capital : RM200,000,000 Issued and Fully Paid Up Capital : RM82,435,000 Class of Shares - Ordinary shares of RM1 each : 75,602,000 - 5.5% Irredeemable Cumulative Convertible Preference : 6,833,000 Shares of RM1 each Voting Right : 1 vote per ordinary share DISTRIBUTION SCHEDULE Shareholding No. of % of % of Issued Category Shareholders Shareholders No. of Shares Capital 1 - 999 295 7.11 93,154 0.12 1,000 - 10,000 3,484 83.99 9,492,711 12.56 10,001 - 100,000 326 7.86 8,793,353 11.63 100,001 - 3,780,099 39 0.94 20,182,259 26.70 3,780,100 - 75,602,000 4 0.10 37,040,523 48.99 Total 4,148 100.00 75,602,000 100.00 THIRTY LARGEST SHAREHOLDERS (As per Register of Members) Name of Shareholders No. of Shares % of Issued Held Capital 1. TASEC Nominees (Tempatan) Sdn Bhd 14,317,500 18.94 - TA First Credit Sdn Bhd For LOM Holdings Sdn Bhd 2. Malayan Banking Berhad 9,000,000 11.90 3. Amanah Raya Nominees (Tempatan) Sdn Bhd 8,542,000 11.30 - Skim Amanah Saham Bumiputera Permodalan Nasional Berhad 4. TASEC Nominees (Tempatan) Sdn Bhd 5,181,023 6.85 - TA First Credit Sdn Bhd For Evergreen Legacy Sdn Bhd 5. DB (Malaysia) Nominee (Asing) Sdn Bhd 2,600,000 3.44 - Deutsche Bank AG Singapore PBD For Southwark Limited 6. TASEC Nominees (Asing) Sdn Bhd 2,570,400 3.40 - TA First Credit Sdn Bhd For Penfold Holdings Limited 7. RHB Capital Nominees (Tempatan) Sdn Bhd 1,480,800 1.96 - Pledged Securities Account For Sia Kwee Mow @ Sia Hok Chai (STH 981069) 8. Sia Teong Heng 1,435,921 1.90 9. Malayan Banking Berhad 1,412,008 1.87 10. Nican Asia Limited 1,106,478 1.46 11. Chay Kwai Gong @ Siah Kwee Swee 809,830 1.07 12. TASEC Nominees (Tempatan) Sdn Bhd 751,800 0.99 - TA First Credit Sdn Bhd For Mun Oi @ Mun Oi Lin 13. UOBM Nominees (Tempatan) Sdn Bhd 722,000 0.96 - Pledged Securities Account For Siah Chong Hock (T147-6110560936) 88 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 89 SHAREHOLDERS’ INFORMATION AS AT 31 ST JULY, 2002 (Cont’d) Name of Shareholders No. of Shares % of Issued Held Capital 14. TASEC Nominees (Tempatan) Sdn Bhd 693,000 0.92 - TA First Credit Sdn Bhd For Pua Kim Kian 15. Siah Teong Woei 561,407 0.74 16. Sia Tian Soong @ Sia Tong Sang 533,000 0.71 17. Siah Chong Ong 432,400 0.57 18. Siah Teong Yin 328,723 0.43 19. Citicorp Nominees (Tempatan) Sdn Bhd - Pledged Securities Account For Siah Teong Woei (471465) 316,304 0.42 20. Sia Tzu Lung 314,592 0.42 21. United Overseas Nominees (Tempatan) Sdn Bhd - Pledged Securities Account For Siah Teong Chein (KL) 303,723 0.40 22. Wong Chee Choon 280,000 0.37 23. Siah Chong Guan 257,400 0.34 24. Chew Siew Ying 249,000 0.33 25. Phang Fook Kiun @ Phan Fook Kiun 217,000 0.29 26. Chan Wan Moi 211,000 0.28 27. Indar Kaur a/p Dan Singh 203,000 0.27 28. Poo Choo @ Ong Poo Choi 198,000 0.26 29. Sia Poh Choo @ Sia Swee Choo 195,500 0.26 30. Lok Huey Yen 190,000 0.25 TOTAL 55,413,809 73.30 DIRECTORS’ SHAREHOLDINGS (As per Register of Directors’ Shareholdings) Direct Interest Indirect Interest Name of Directors Shareholdings % Shareholdings % Tan Sri Dato’ Ir. Muhammad Yusuff bin Haji Muhammad Yunus - - - - Sia Kwee Mow @ Sia Hok Chai 1,480,800(a) 1.96 19,498,523(b) 25.79 Sia Teong Heng 1,698,812(c) 2.25 19,498,523(b) 25.79 Mun Chong Shing @ Mun Chong Tian 21,782 0.03 - - Dato’ Lim Phaik Gan 5,000 0.007 - - Datuk Dr. Norraesah bt. Haji Mohamad - - - - Datuk Sim Peng Choon 10,869 0.01 - - Vincent Koh Kok Kee - - - - Abdul Rahman bin A. Shukor - - - - (Alternate to Datuk Sim Peng Choon) Notes – (a) 1,480,800 shares are held in bare trust by RHB Capital Nominees (Tempatan) Sdn. Bhd. (b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn. Bhd. (5,181,023 shares). (c) 91,000 shares are held in bare trust by TASEC Nominees (Tempatan) Sdn. Bhd. - TA First Credit Sdn.Bhd.
  • SHAREHOLDERS’ INFORMATION AS AT 31 ST JULY, 2002 (Cont’d) SUBSTANTIAL SHAREHOLDERS (excluding bare trustees) (As per Register of Substantial Shareholders) No. of shares held or % of beneficially interested in Issued Capital Name of Substantial Shareholders Direct Indirect Direct Indirect Pemegang Amanah Raya Malaysia - Skim Amanah Saham Bumiputera 8,542,000 - 11.30 - Sia Kwee Mow @ Sia Hok Chai 1,480,800(a) 19,498,523(b) 1.96 25.79 Sia Teong Heng 1,698,812(c) 19,498,523(b) 2.25 25.79 LOM Holdings Sdn. Bhd. 14,317,500(d) 5,181,023(e) 18.94 6.85 Evergreen Legacy Sdn. Bhd. 5,181,023(f) - 6.85 - Malayan Banking Berhad 10,412,008 - 13.77 - Notes – (a) 1,480,800 shares are held in bare trust by RHB Capital Nominees (Tempatan) Sdn. Bhd. (b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn. Bhd. (5,181,023 shares) (c) 91,000 shares are held in bare trust by TASEC Nominees (Tempatan) Sdn. Bhd. - TA First Credit Sdn. Bhd. (d) 14,317,500 shares are held in bare trust by TASEC Nominees (Tempatan) Sdn. Bhd. - TA First Credit Sdn. Bhd. (e) Deemed interest by virtue of its shareholding in Evergreen Legacy Sdn. Bhd. (5,181,023 shares). (f) 5,181,023 shares are held in bare trust by TASEC Nominees (Tempatan) Sdn. Bhd. - TA First Credit Sdn. Bhd. 90 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD Annual Report 2002 91 TRANSFERABLE SUBSCRIPTION RIGHTS ("TSR") HOLDERS’ INFORMATION AS AT 31 JULY, 2002 ST No. of TSR : 17,076,200 Exercise Price : RM3.50 for one ordinary share of RM1.00 each Exercise Period : 21st February, 1994 to 20th February, 2004 Exercise Rights : Each TSR entitles the holder to subscribe for one ordinary share of RM1.00 each TSR exercised during the year : None ended 31st March, 2002 DISTRIBUTION SCHEDULE TSR holding No. of TSR % of TSR Category Holders Holders No. of TSR % of TSR 1 - 999 148 11.34 70,480 0.41 1,000 - 10,000 963 73.79 3,142,080 18.40 10,001 - 100,000 182 13.95 4,589,100 26.88 100,001 - 853,809 9 0.69 2,025,160 11.86 853,810 - 17,076,200 3 0.23 7,249,380 42.45 Total 1,305 100.00 17,076,200 100.00 THIRTY LARGEST TSR HOLDERS (As per Register of TSR Holders) Name of TSR Holders No. of TSR % of TSR Held 1. Sia Kwee Mow @ Sia Hok Chai 3,078,500 18.03 2. Permodalan Nasional Berhad 2,769,800 16.22 3. Mayban Nominees (Tempatan) Sdn Bhd - Pledged Securities Account For Evergreen Legacy Sdn Bhd (414570222432) 1,401,080 8.20 4. DB (Malaysia) Nominee (Asing) Sdn Bhd - Deutsche Bank AG Singapore PBD For Southwark Limited 600,000 3.51 5. Evergreen Legacy Sdn Bhd 295,500 1.73 6. Tan Yong Tian 242,000 1.42 7. Siah Chong Hock 204,580 1.20 8. Bey Leang Seng 189,000 1.11 9. Tan Ping Chye 134,000 0.78 10. Kenanga Nominees (Asing) Sdn Bhd - Joyway Investment Limited 129,000 0.76 11. Sia Tzu Lung 121,080 0.71 12. Mayban Nominees (Tempatan) Sdn Bhd - Pledged Securities Account For Tang Huong Kiong (211AW1320) 110,000 0.64 13. Lee Ying Yee 84,000 0.49 14. Amsec Nominees (Tempatan) Sdn Bhd - Pledged Securities Account For Cham Chee Khim 81,000 0.47 15. Ong Hock Lye 80,000 0.47
  • TRANSFERABLE SUBSCRIPTION RIGHTS ("TSR") HOLDERS’ INFORMATION AS AT 31 JULY, 2002 (Cont’d) ST Name of Shareholders No. of TSR % of TSR Held 16. Siah Teong Woei 77,000 0.45 17. Lim Kee Yek 71,000 0.42 18. Mun Oi @ Mun Oi Lin 70,000 0.41 19. Wong Ah Loke @ Wong Heng Loke 70,000 0.41 20. Tiew Siok Tuan 55,000 0.32 21. Siah Teong Chein 53,000 0.31 22. Siah Teong Ban 52,000 0.30 23. Perfect Consistence Sdn Bhd 50,200 0.29 24. Suhaimi bin Ishak 50,000 0.29 25. Ong Cho Ho 50,000 0.29 26. Mayban Securities Nominees (Tempatan) Sdn. Bhd. -Pledged Securities Account for Chow Wai Ken (Rem 609-Margin) 50,000 0.29 27. Mayban Securities Nominees (Tempatan) Sdn. Bhd. -Pledged Securities Account for Wong Sing Kuong (28G) 50,000 0.29 28. Tok Hock Bang 50,000 0.29 29. RHB Capital Nominees (Tempatan) Sdn. Bhd. -Pledged Securities Account for Koh Tip Pee (CEB) 50,000 0.29 30. Kenanga Nominees (Tempatan) Sdn. Bhd. -Pledged Securities Account for Chai Tze Yat 47,000 0.28 TOTAL 10,364,740 60.67 DIRECTORS’ INTEREST IN TSR (As per Register of Directors’ TSR Holdings) Direct Interest Indirect Interest Name of Directors TSR holdings % TSR holdings % Tan Sri Dato’ Ir. Muhammad Yusuff - - - - bin Haji Muhammad Yunus Sia Kwee Mow @ Sia Hok Chai 3,078,500 18.03 1,746,780(a) 10.23 Sia Teong Heng - - 1,746,780(a) 10.23 Mun Chong Shing @ Mun Chong Tian 12,500 0.07 - - Dato’ Lim Phaik Gan - - - - Datuk Dr. Norraesah bt. Haji Mohamad 4,000 0.02 - - Datuk Sim Peng Choon - - - - Vincent Koh Kok Kee - - - - Abdul Rahman bin A. Shukor - - - - (Alternate to Datuk Sim Peng Choon) Note – (a) Deemed interest by virtue of his shareholding in Evergreen Legacy Sdn. Bhd. (1,696,580 TSR) and Perfect Consistence Sdn. Bhd. (50,200 TSR). 92 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  • SIAH BROTHERS CORPORATION BERHAD PROXY FORM Annual Report 2002 93 SIAH BROTHERS CORPORATION BERHAD Company No: 199310-P (Incorporated in Malaysia) I/We, ___________________________________________________________________________________________________________________________________________________________________________________________________________ of ________________________________________________________________________________________________________________________________________________________________________________________________________________________ being a member/members of the abovenamed Company do hereby appoint ______________________________________________________________ _____________________________________________________________________________________________ of _____________________________________________________________________________________________________________________ _____________________________________________________________________ or failing whom, _________________________________________________________________________________________________________________ of ___________________________________________________________________________________________________________________________________________________________________________________________________________________ as my/our proxy to vote for me/us and on my/our behalf at the Twelfth Annual General Meeting of the Company to be held at the Penthouse, 5th Floor,Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala Lumpur on Thursday, 26 September, 2002 at 10.30 a.m. and at any adjournment thereof in the manner indicated below:- No. Resolution For Against 1. Adoption of Reports and Financial Statements 2. Payment of Directors’ fees 3. Re-appointment of Director: YBhg. Dato’ Lim Phaik Gan 4. Re-election of Director: Mr. Mun Chong Shing @ Mun Chong Tian 5. Re-election of Director: YBhg. Datuk Sim Peng Choon 6. Re-election of Director: Mr. Vincent Koh Kok Kee 7. Re-appointment of Auditors 8. Authority to Directors to allot and issue shares (Please indicate with an ‘X’ in the appropriate box against each resolution how you wish your proxy to vote. If no instruction is given, this form will be taken to authorise the proxy to vote at his/her discretion.) Dated this __________________________________________ day of ________________________________ , 2002 Number of Shares held __________________________________________________________________________ Signature of Member(s) NOTES: A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote instead of him. To be valid, this form duly completed must be deposited at the Registered Office of the Company not less than forty-eight (48) hours before the time for holding the meeting. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. If the appointor is a corporation, this form must be executed under its common seal or under the hand of the attorney.
  • Fold this flap for sealing Then fold here STAMP The Company Secretaries SIAH BROTHERS CORPORATION BERHAD Wisma Siah Brothers, 74A, Jalan Pahang, 53000 Kuala Lumpur. First fold here