SBC Corporation Berhad: Annual Report 2002 2000kb

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SBC Corporation Berhad: Annual Report 2002 2000kb

  1. 1. ReporT Annual SIAH BROTHERS CORPORATION BERHAD 2002 199310-P SIAH BROTHERS CORPORATION BERHAD 199310-P 2002 Annual Report
  2. 2. 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
  3. 3. 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
  4. 4. 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.
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. 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).
  9. 9. 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
  10. 10. 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.
  11. 11. 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
  12. 12. 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.
  13. 13. 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
  14. 14. 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
  15. 15. 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
  16. 16. 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.
  17. 17. One of Malaysia’s most recognised name in Building 16 Annual Report 2002 SIAH BROTHERS CORPORATION BERHAD
  18. 18. 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
  19. 19. 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
  20. 20. 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.
  21. 21. 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
  22. 22. 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.
  23. 23. 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
  24. 24. 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
  25. 25. 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
  26. 26. 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
  27. 27. 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
  28. 28. 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.
  29. 29. 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
  30. 30. 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.
  31. 31. 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
  32. 32. 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.
  33. 33. 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
  34. 34. 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.

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