SBC Corporation Berhad: Annual Audited Accounts 2007

SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P

DIRECTORS’ REPORT

The directors hereby submit their report and the audited financial statements of the Group and of the
Company for the financial year ended 31 March 2007.

PRINCIPAL ACTIVITIES
The Company is principally engaged in the businesses of investment holding and the provision of
management and administrative services to the subsidiaries. The principal activities of the
subsidiaries are disclosed in Note 6 to the financial statements. There have been no significant
changes in the nature of these activities during the financial year.

RESULTS THE GROUP THE COMPANY
RM RM

(Loss)/Profit after taxation for the financial year (3,009,272) 676,891

DIVIDENDS
Since the end of the previous financial year, the Company paid a first and final dividend of 1% less
28% tax on the ordinary shares amounting to RM593,527 in respect of the previous financial
year.

For the current financial year, the directors recommend the payment of a first and final dividend of
1% less 27% tax on the ordinary shares amounting to RM601,776 to be approved by the
shareholders at the forthcoming Annual General Meeting.

RESERVES AND PROVISIONS
All material transfers to or from reserves or provisions during the financial year are disclosed in the
financial statements.

ISSUES OF SHARES AND DEBENTURES
During the financial year,
(a) there were no changes in the authorised and issued and paid-up share capital of the
Company; and

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

Page 1


DIRECTORS’ REPORT

OPTIONS GRANTED OVER UNISSUED SHARES
During the financial year, no options were granted by the Company to any person to take up any
unissued shares in the Company.

BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were made out, the directors took
reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts
and the making of allowance for doubtful debts, and satisfied themselves that all known bad debts
had been written off and that adequate allowance had been made for doubtful debts.

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

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.

Page 2


DIRECTORS’ REPORT

CONTINGENT AND OTHER LIABILITIES
The contingent liability of the Company is disclosed in Note 46 to the financial statements. At the
date of this report, there does not exist:-

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

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

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

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

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

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

Page 3


DIRECTORS’ REPORT

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

SIA KWEE MOW @ SIA HOK CHAI
SIA TEONG HENG
MUN CHONG SHING @ MUN CHONG TIAN
DATO’ LIM PHAIK GAN
DATO’ DR. NORRAESAH BT HAJI MOHAMAD
DATO’ ZAINOL ABIDIN BIN HAJI A. HAMID
AHMAD FIZAL BIN OTHMAN

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

Pursuant to Article 77 of the Articles of Association of the Company, Ahmad Fizal bin Othman retires
by rotation 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 in the Company during the financial year are as follows:-

NUMBER OF ORDINARY SHARES OF RM1 EACH
AT AT
1.4.2006 BOUGHT SOLD 31.3.2007
DIRECT INTERESTS
SIA KWEE MOW @ SIA HOK CHAI 1,480,800 - - 1,480,800
SIA TEONG HENG 2,517,992 2,260,000 (100,000) 4,677,992
MUN CHONG SHING @ MUN CHONG TIAN 21,782 - - 21,782

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

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.

Page 4


DIRECTORS’ REPORT

DIRECTORS’ INTERESTS (CONT’D)
None of the other directors holding office at the end of the financial year had any interest in shares
of the Company or its related corporations during the financial year.

DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive
any benefit (other than a benefit included in the aggregate amount of emoluments received or due
and receivable by directors as shown in the financial statements, or the fixed salary of a full-time
employee of the Company) by reason of a contract made by the Company or a related corporation
with the director or with a firm of which the director is a member, or with a company in which the
director has a substantial financial interest except for any benefits which may be deemed to arise
from transactions entered into in the ordinary course of business with companies in which certain
directors have substantial financial interests as disclosed in Note 45 to the financial statements.

Neither during nor at the end of the financial year was the Company or its subsidiaries a party to any
arrangements whose object is to enable the directors to acquire benefits by means of the acquisition
of shares in or debentures of the Company or any other body corporate.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
The significant events during the financial year of the Company are disclosed in Note 51 to the
financial statements.

Page 5


DIRECTORS’ REPORT

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

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS
DATED 30 JULY 2007

Sia Kwee Mow @ Sia Hok Chai

Mun Chong Shing @ Mun Chong Tian

Page 6


STATEMENT BY DIRECTORS

We, Sia Kwee Mow @ Sia Hok Chai and Mun Chong Shing @ Mun Chong Tian, being two of the
directors of SBC Corporation Berhad, state that, in the opinion of the directors, the financial
statements set out on pages 10 to 72 are drawn up in accordance with applicable MASB
approved accounting standards in Malaysia for Entities Other Than Private Entities 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 of the Company at 31 March 2007 and of their results and cash flows for the
financial year ended on that date.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS
DATED 30 JULY 2007

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

STATUTORY DECLARATION

I, Lee Yan Yaw, I/C No. 710315-10-5509, being the officer primarily responsible for the financial
management of SBC Corporation Berhad, do solemnly and sincerely declare that the financial
statements set out on pages 10 to 72 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
Lee Yan Yaw, I/C No. 710315-10-5509,
at Kuala Lumpur in the Federal Territory
on this 30 July 2007

Lee Yan Yaw
Before me

Datin Hajah Raihela Wanchik (W275)
Commissioner for Oaths

Page 7

REPORT OF THE AUDITORS TO THE MEMBERS OF
(Incorporated In Malaysia)

We have audited the financial statements set out on pages 10 to 72. The preparation of the
financial statements is the responsibility of the Company’s directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial
statements and to report our opinion to you, as a body, in accordance with Section 174 of the
Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other
person for the content of this report.

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 MASB approved accounting standards in Malaysia
for Entities Other Than Private Entities 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 2007 and their
results and cash flows for the financial year ended on that date; and

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

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

We have considered the financial statements and the auditors’ reports thereon of the
subsidiaries for which we have not acted as auditors, as indicated in Note 6 to the financial
statements.

Page 8

REPORT OF THE AUDITORS TO THE MEMBERS OF
SBC CORPORATION BERHAD (CONT’D)

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 Lee Kok Wai
Firm No: AF 1018 Approval No: 2760/06/08 (J)
Chartered Accountants Partner

Kuala Lumpur

30 July 2007

Page 9


BALANCE SHEETS AT 31 MARCH 2007
THE GROUP THE COMPANY
2007 2006 2007 2006
NOTE RM RM RM RM
(Restated)
NON-CURRENT
ASSETS
Investment in
subsidiaries 6 - - 210,990,785 211,064,785
Interest in associates 7 112,085,613 111,816,402 2,400,000 2,400,000
Investment in joint
venture 8 - - 1,801,128 712,500
Property, plant and
equipment 9 8,549,543 8,242,610 2,657 7,552
Investment properties 10 3,122,452 6,867,925 - -
Land held for property
development 11 87,700,188 87,090,675 - -
Other assets 12 220,300 86,300 - -
Goodwill on
consolidation 13 27,499,451 27,317,640 - -

239,177,547 241,421,552 215,194,570 214,184,837

CURRENT ASSETS
Inventories 14 726,148 1,283,422 - -
Property development
costs 15 59,707,257 55,130,848 - -
Receivables 16 59,332,215 42,574,730 479,393 226,427
Amount owing by
contract customers 17 2,616,779 3,114,994 - -
Amount owing by
subsidiaries 18 - - 58,919,707 65,774,637
Amount owing by
associates 19 5,390,600 5,399,534 2,500 11,434
Amount owing by
joint venture 20 280,727 - 561,454 -
Tax recoverable 21 1,367,292 1,551,225 3,451,474 3,206,127
Short-term deposits
with licensed banks 22 3,334,226 1,364,225 1,239,225 1,239,225
Cash and bank
balances 23 13,918,913 9,205,230 12,077,309 8,150,432

146,674,157 119,624,208 76,731,062 78,608,282

TOTAL ASSETS 385,851,704 361,045,760 291,925,632 292,793,119

The annexed notes form an integral part of these financial statements. Page 10


BALANCE SHEETS AT 31 MARCH 2007 (CONT’D)

2007 2006 2007 2006
NOTE RM RM RM RM
(Restated)
EQUITY AND LIABILITIES
EQUITY
Share capital 24 82,435,000 82,435,000 82,435,000 82,435,000
Reserves 25 130,690,786 134,293,585 133,735,893 133,652,529

TOTAL EQUITY 213,125,786 216,728,585 216,170,893 216,087,529

NON-CURRENT
LIABILITIES
ABBA Bonds 26 - 43,978,499 - 43,978,499
Long-term borrowings 27 33,939,069 30,629,180 - -
Deferred taxation 29 966,746 966,746 - -

34,905,815 75,574,425 - 43,978,499

CURRENT LIABILITIES
Amount owing to
contract customers 17 2,850,429 1,540,444 - -
Payables 30 42,512,894 32,241,497 371,667 244,765
Amount owing to
subsidiaries 18 - - 12,375,674 18,082,756
Amount owing to
associates 19 3,378 16,711 - -
Amount owing to a
director 31 1,867,680 1,867,680 1,867,680 1,867,680
Short-term borrowings 32 14,874,442 15,941,779 5,000,000 5,000,000
ABBA Bonds 26 48,683,146 2,478,450 48,683,146 2,478,450
Bank overdrafts 33 27,028,134 14,656,189 7,456,572 5,053,440

137,820,103 68,742,750 75,754,739 32,727,091

TOTAL LIABILITIES 172,725,918 144,317,175 75,754,739 76,705,590

TOTAL EQUITY AND
LIABILITIES 385,851,704 361,045,760 291,925,632 292,793,119

NET ASSETS
PER ORDINARY
SHARE (RM) 34 2.59 2.63



INCOME STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2007
2007 2006 2007 2006
NOTE RM RM RM RM
(Restated)

REVENUE 35 77,102,946 69,926,734 8,338,611 7,641,913

COST OF SALES 36 (60,499,310) (56,847,233) - -

GROSS PROFIT 16,603,636 13,079,501 8,338,611 7,641,913

OTHER INCOME 1,324,144 1,751,359 203,976 -

ADMINISTRATIVE
EXPENSES (8,315,933) (7,142,456) (1,282,327) (1,154,115)

OTHER EXPENSES (5,382,766) (1,262,033) (407,665) (289,792)

FINANCE COSTS (6,705,397) (5,160,442) (5,868,501) (5,697,750)

SHARE OF PROFITS
OF ASSOCIATES 269,211 103,008 - -

(LOSS)/PROFIT
BEFORE TAXATION 37 (2,207,105) 1,368,937 984,094 500,256

INCOME TAX
EXPENSE 38 (802,167) (321,740) (307,203) (350,436)

(LOSS)/PROFIT
AFTER TAXATION (3,009,272) 1,047,197 676,891 149,820

ATTRIBUTABLE TO:-
Equity holders of
the Company (3,009,272) 1,047,197 676,891 149,820

(Loss)/Earnings per
share
- basic 39 (3.7) sen 1.3 sen
- diluted 39 N/A N/A

Dividend per ordinary
share
- final 40 1 sen 1 sen



STATEMENTS OF CHANGES IN EQUITY

SHARE SHARE RETAINED CAPITAL
CAPITAL PREMIUM PROFITS RESERVE TOTAL
NOTE RM RM RM RM RM
THE GROUP

Balance at 1.4.2005
- as previously reported 82,435,000 111,412,895 24,959,499 1,199,999 220,007,393
- prior year adjustments 49 - - (3,732,478) - (3,732,478)

- as restated 82,435,000 111,412,895 21,227,021 1,199,999 216,274,915

Loss after taxation for the
financial year - - 1,047,197 - 1,047,197

Dividend 40 - - (593,527) - (593,527)

Balance at 31.3.2006/
1.4.2006 82,435,000 111,412,895 21,680,691 1,199,999 216,728,585

Loss after taxation for the
financial year - - (3,009,272) - (3,009,272)

Dividend 40 - - (593,527) - (593,527)

Balance at 31.3.2007 82,435,000 111,412,895 18,077,892 1,199,999 213,125,786

THE COMPANY

Balance at 1.4.2005 82,435,000 111,412,895 22,683,341 - 216,531,236

Profit after taxation for the
financial year - - 149,820 - 149,820

Dividend 40 - - (593,527) - (593,527)

Balance at
31.3.2006/1.4.2006 82,435,000 111,412,895 22,239,634 - 216,087,529

Profit after taxation for the
financial year - - 676,891 - 676,891

Dividend 40 - - (593,527) - (593,527)

Balance at 31.3.2007 82,435,000 111,412,895 22,322,998 - 216,170,893



CASH FLOW STATEMENTS

2007 2006 2007 2006
NOTE RM RM RM RM
(Restated)
CASH FLOWS (FOR)/
FROM OPERATING ACTIVITIES
(Loss)/Profit before taxation (2,207,105) 1,368,937 984,094 500,256
Adjustments for:-
Amortisation of bonds
expenses 277,770 279,708 277,770 279,708
Bad debts written off 697,574 - - -
Depreciation of
property, plant
and equipment 580,160 424,695 4,895 10,084
Interest expense/
finance charges 6,564,396 5,058,620 5,817,195 5,671,876
Impairment loss on
interest in an
associate - 549,434 - -
Impairment loss on
investment properties 2,074,556 - - -
Impairment loss on
land held for property
development 1,858,834 - - -
Investment in
subsidiaries
written off - - 125,000 -
Loss/(Gain) on disposal of
investment properties 413,987 (812,642) - -
Waiver of debts (211,269) (448,845) (203,976) -
Dividend income - - (5,000,000) (5,000,000)
Gain on disposal of
property, plant and
equipment (155,791) (132,283) - -
Interest income (513,693) (261,016) (768,966) (1,214,091)
Share of profits in
associates (269,211) (103,008) - -

Operating profit before
working capital changes 9,110,208 5,923,600 1,236,012 247,833
Decrease in inventories 557,274 3,076,070 - -
(Increase)/Decrease in property
development costs (4,273,713) 6,171,242 - -
Increase in receivables (17,243,790) (13,785,219) (252,966) (83,350)
Increase/(Decrease) in
payables 10,272,117 2,695,419 126,902 (11,362)
Net decrease/(increase) in amount
owing by contract customers 1,808,200 (613,115) - -

CASH FROM OPERATIONS 230,296 3,467,997 1,109,548 153,121
Interest paid (2,077,587) (571,134) (1,330,386) (1,184,390)
Net tax (paid)/refunded (618,234) 4,734,735 797,450 6,441,353

NET CASH (FOR)/FROM
OPERATING ACTIVITIES
CARRIED FORWARD (2,465,525) 7,631,598 577,012 5,410,084



FOR THE FINANCIAL YEAR ENDED 31 MARCH 2007 (CONT’D)

2007 2006 2007 2006
NOTE RM RM RM RM
(Restated)
NET CASH (FOR)/FROM
OPERATING ACTIVITIES
BROUGHT FORWARD (2,465,525) 7,631,598 577,012 5,410,084

CASH FLOWS (FOR)/FROM
INVESTIING ACTIVITIES
Acquisition of joint venture - - (1,088,628) (712,500)
Additional investment in
subsidiaries (181,811) - - -
Repayment from/
(Advances to) subsidiaries - - 7,254,414 (3,466,050)
Interest received 513,693 261,016 369,482 204,859
Dividends received
from subsidiaries - - 3,650,000 3,600,000
Advances to
joint venture (280,727) - (561,454) -
Incidental cost for
investment properties (117,070)
Payment for land held
for development (2,468,347) (466,545) - -
Purchase of property,
plant and equipment 41 (1,204,262) (194,106) - -
Purchase of investment
in subsidiaries - - (51,000) -
Proceeds from
disposal of property,
plant and equipment 170,264 132,370 - -
Proceeds from
disposal of investment
properties 1,374,000 4,211,187 - -
Investment in club
membership (134,000) - - -
Placement of cash in
sinking fund account (3,877,963) (4,097,229) (3,877,963) (4,097,229)
Repayment from
associates 8,934 - 8,934 -

NET CASH (FOR)/FROM
INVESTING ACTIVITIES (6,197,289) (153,307) 5,703,785 (4,470,920)

BALANCE CARRIED
FORWARD (8,662,814) 7,478,291 6,280,797 939,164



FOR THE FINANCIAL YEAR ENDED 31 MARCH 2007 (CONT’D)

2007 2006 2007 2006
Note RM RM RM RM
(Restated)
BALANCE BROUGHT
FORWARD (8,662,814) 7,478,291 6,280,797 939,164

CASH FLOWS FOR
FINANCING ACTIVITIES
Payment of bonds
expenses (59,932) (61,872) (59,932) (61,872)
Repayment of bonds 26 (2,478,450) (2,478,450) (2,478,450) (2,478,450)
Net repayment by
associates (13,333) (530,875) - -
(Repayment to)/Advances
from subsidiaries - - (5,503,106) 2,927,198
Dividend paid to
shareholders of the
company (593,527) (593,527) (593,527) (593,527)
Repayment of revolving credit (1,050,000) (1,600,000) - -
Drawdown of term loans 6,400,068 3,600,000 - -
Repayment of term loans (3,007,129) (2,077,764) - -
Repayment of hire
purchase obligations (101,107) (72,630) - -

NET CASH FOR
FINANCING ACTIVITIES (903,410) (3,815,118) (8,635,015) (206,651)

NET (DECREASE)/INCREASE
IN CASH AND CASH
EQUIVALENTS (9,566,224) 3,663,173 (2,354,218) 732,513

CASH AND CASH
EQUIVALENTS AT
BEGINNING OF THE
FINANCIAL YEAR (12,209,846) (15,873,019) (3,786,895) (4,519,408)

CASH AND CASH
EQUIVALENTS AT
END OF THE
FINANCIAL YEAR 42 (21,776,070) (12,209,846) (6,141,113) (3,786,895)



NOTES TO FINANCIAL STATEMENTS

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 Malaysia. The registered
office, which is also the principal place of business, is at Wisma Siah Brothers, 74A, Jalan
Pahang, 53000 Kuala Lumpur.

The financial statements were authorised for issue by the Board of Directors in
accordance with a resolution of the directors dated 30 July 2007.

2. PRINCIPAL ACTIVITIES
The Company is principally engaged in the businesses of investment holding and the
provision of management and administrative services to the subsidiaries. The principal
activities of the subsidiaries are disclosed in Note 6 to the financial statements. There have
been no significant changes in the nature of these activities during the financial year.

3. FINANCIAL RISK MANAGEMENT POLICIES
The Group's financial risk management policy seeks to ensure that adequate financial
resources are available for the development of the Group's business whilst managing its
market, credit, liquidity and cash flow risks. The policies in respect of the major areas of
treasury activity are as follows:-

(a) Market Risk

(i) Foreign Currency Risk

The Group is exposed to foreign exchange risk on investments and bank
balances that are denominated in foreign currencies.

The Group’s foreign currency transactions and balances are substantially
denominated in Thai Baht.

The Group does not seek to hedge this exposure as the Group is of the
opinion that the fluctuations of the Thai Baht do not have a significant
impact on the financial statements.

Page 17



3. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)
(a) Market Risk (Cont’d)

(ii) Interest Rate Risk

The Group obtains financing through bank borrowings and hire purchase
facilities. Its policy is to obtain the most favourable interest rates available.

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

(iii) Price Risk

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

(b) Credit Risk

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

The Group does not have any major concentration of credit risk related to any
individual customer or counterparty.

The Group manages its exposure to credit risk by the application of credit
approvals, credit limits and monitoring procedures on an ongoing basis.

(c) Liquidity and Cash Flow Risk
The Group's exposure to liquidity and cashflow risks arises mainly from general
funding and business activities.
It practises prudent liquidity risk management by maintaining sufficient cash
balances and the availability of funding through certain committed credit facilities.

Page 18



4. BASIS OF PREPARATION
The financial statements of the Group and of the Company 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
MASB approved accounting standards in Malaysia for Entities Other Than Private Entities
and the provisions of the Companies Act, 1965.

In the current financial year, the Company has adopted all the new and revised Financial
Reporting Standards (“FRS”) issued by the Malaysian Accounting Standards Board which
are relevant to its operations and effective for financial periods beginning on or after 1
January 2006.

The adoption of these new and revised FRS does not have any material effects on the
financial statements of the Company.

The following FRS have been issued and are effective for financial periods beginning on or
after 1 October 2006 and will be effective for the Group’s and the Company’s financial
statements for the financial year ending 31 March 2008:-

FRS 117 Leases
FRS 124 Related Party Disclosures

The following revised FRS have been issued and are effective for financial periods beginning
on or after 1 July 2007 and will be effective for the Group’s and the Company’s financial
statements for the financial year ending 31 March 2009:-

FRS 107 Cash Flow Statements
FRS 111 Construction Contracts
FRS 112 Income Taxes
FRS 118 Revenue
FRS 121 The Effects of Changes in Foreign Exchange Rates
FRS 134 Interim Financial Reporting
FRS 137 Provisions, Contingent Liabilities and Contingent Assets

FRS 139 - Financial Instruments: Recognition and Measurement has been issued and the
effective date has yet to be determined by the MASB. This new standard establishes
principles for recognising and measuring financial assets, financial liabilities and some
contracts to buy and sell non-financial items. The Group and the Company will apply this
standard when it becomes effective.

Page 19



5. SIGNIFICANT ACCOUNTING POLICIES
(a) Critical Accounting Estimates And Judgements

Estimates and judgements are continually evaluated by the directors and
management and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the
circumstances. The estimates and judgements that affect the application of the
Group’s accounting policies and disclosures, and have a significant risk of causing a
material adjustment to the carrying amounts of assets, liabilities, income and
expenses are discussed below:-

(i) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation
charges for the property, plant and equipment are based on commercial and
production factors which could change significantly as a result of technical
innovations and competitors’ actions in response to the market conditions.

The Group anticipates that the residual values of its property, plant and
equipment will be insignificant. As a result, residual values are not being
taken into consideration for the computation of the depreciable amount.

Changes in the expected level of usage and technological development could
impact the economic useful lives and the residual values of these assets,
therefore future depreciation charges could be revised.

(ii) Income Taxes

There are certain transactions and computations for which the ultimate tax
determination may be different from the initial estimate. The Group
recognises tax liabilities based on its understanding of the prevailing tax laws
and estimates of whether such taxes will be due in the ordinary course of
business. Where the final outcome of these matters is different from the
amounts that were initially recognised, such difference will impact the income
tax and deferred tax provisions in the period in which such determination is
made.

(iii) Impairment of Assets

When the recoverable amount of an asset is determined based on the
estimate of the value-in-use of the cash-generating unit to which the asset is
allocated, the Group is required to make an estimate of the expected future
cash flows from the cash-generating unit and also to apply a suitable discount
rate in order to determine the present value of those cash flows.

Page 20



5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a) Critical Accounting Estimates And Judgements (Cont’d)

(iv) Property Development
The Group recognises property development revenue and expenses in the
income statement by using the stage of completion method. The stage of
completion is determined by the proportion that the property development
costs incurred for work performed to date bear to the estimated total property
development costs.

Significant judgement is required in determining the stage of completion, the
extent of the property development costs incurred, the estimated total
property development revenue and costs, as well as the recoverability of the
development projects. In making the judgement, the Group evaluates based
on past experience and by relying on the work of specialists.

(v) Construction Contracts

Construction contracts accounting requires reliable estimation of the costs to
complete the contract and reliable estimation of the stage of completion.

(i) Contract Revenue

Construction contracts accounting requires that variation claims and
incentive payments only be recognised as contract revenue to the
extent that it is probable that they will be accepted by the customers. As
the approval process often takes some time, a judgement is required to
be made of its probability and revenue recognised accordingly.

(ii) Contract Costs

Using experience gained on each particular contract and taking into
account the expectations of the time and materials required to
complete the contract, management estimates the profitability of the
contract on an individual basis at any particular time.

Page 21



(a) Critical Accounting Estimates And Judgements (Cont’d)

(vi) Allowance for Doubtful Debts of Receivables

The Group makes allowance for doubtful debts based on an assessment of
the recoverability of receivables. Allowances are applied to receivables where
events or changes in circumstances indicate that the carrying amounts may
not be recoverable. Management analyses historical bad debt, customer
concentrations, customer creditworthiness, current economic trends and
changes in customer payment terms when making a judgement to evaluate
the adequacy of the allowance for doubtful debts of receivables. Where the
expectation is different from the original estimate, such difference will impact
the carrying value of receivables.

(b) Financial Instruments

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

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

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

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

Page 22



(c) Functional and Foreign Currency

(i) Functional and Presentation Currency

The functional currency of the Group is measured using the currency of the
primary economic environment in which the Group operates.

The consolidated financial statements are presented in Ringgit Malaysia
(“RM”) which is the parent’s functional and presentation currency.

(ii) Transactions and Balances

Transactions in foreign currency are converted into the respective functional
currencies on initial recognition, using the exchange rates approximating
those ruling at the transaction dates. Monetary assets and liabilities at the
balance sheet date are translated at the rates ruling as of that date. Non-
monetary assets and liabilities are translated using exchange rates that
existed when the values were determined. All exchange differences are taken
to the income statement.

(iii) Foreign Operations

The results and financial position of all the Group entities that have a
functional currency different from the presentation currency are translated into
the presentation currency as follows:-

(i) assets and liabilities for each balance sheet presented are translated
at the closing rate at the date of the balance sheet;

(ii) income and expense for the income statement are translated at the
average exchange rates for the year; and

(iii) all resulting exchange differences are recognised as a separate
component of equity, as a foreign currency translation reserve. On
disposal, accumulated translation differences are recognised in the
consolidated income statements as part of the gain or loss on sale.

Page 23



(d) Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the
Company and all its subsidiaries made up to 31 March 2007.

A subsidiary is defined as an enterprise in which the Company has the power,
directly or indirectly, to exercise control over the financial and operating policies so as
to obtain benefits from its activities.

All subsidiaries are consolidated using the purchase method. Under the purchase
method, 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 values of
the subsidiaries’ net assets are determined and these values are reflected in the
consolidated financial statements. The cost of acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets given, liabilities
incurred or assumed, and equity instruments issued by the Group in exchange for
control of the acquiree, plus any costs directly attributable to the business
combination.

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.

(e) Goodwill On Consolidation

Goodwill on consolidation represents the excess of the fair value of the purchase
consideration over the Group's share of the fair values of the identifiable net assets of
the subsidiaries at the date of acquisition.

Goodwill is measured at cost less accumulated impairment losses, if any. The
carrying value of goodwill is reviewed for impairment annually. The impairment value
of goodwill is recognised immediately in the consolidated income statement. An
impairment loss recognised for goodwill is not reversed in a subsequent period.

If, after reassessments, the Group's interest in the fair values of the identifiable net
assets of the subsidiaries exceeds the cost of the business combinations, the excess
is recognised immediately in the consolidated income statement.

Page 24



(f) Investments

(i) Investments in Subsidiaries, Associates and Joint Ventures

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

On the disposal of the investments in subsidiaries, associates and joint
ventures, the difference between the net disposal proceeds and the carrying
amount of the investments is taken to the income statement.

(ii) Investments in Club Membership

The investment in club membership is stated at cost and is reviewed for
impairment at the end of the financial year if events or changes in
circumstances indicate that its carrying value may not be recovered.

(g) Associates

An associate is an entity in which the Company has a long-term equity interest and
where it exercises significant influence over the financial and operating policies.

The investments in associates in the consolidated financial statements are accounted
for under the equity method, based on the financial statements of the associates
made up to 31 March 2007. The Company's share of the post acquisition profits of
the associates is included in the consolidated income statement and the Company's
interest in associates is stated at cost plus the Company's share of the post-
acquisition retained profits and reserves.

Unrealised gains on transactions between the Company and the associates are
eliminated to the extent of the Company's interest in the associate. Unrealised losses
are eliminated unless cost cannot be recovered.

Page 25



(h) Investment in Joint Venture

A joint venture represents a business arrangement formed under contract with a
third party to undertake specific projects.

The investment in the joint venture is accounted for using the proportionate
consolidation method whereby assets, liabilities and the income statement of the
joint venture are consolidated in the Group's financial statements in the
proportion of the Group's interest in the venture.

(i) Property, Plant and Equipment
Property, plant and equipment, other than freehold land, are stated at cost less
accumulated depreciation and impairment loss, if any. Freehold land is stated at cost
and is not depreciated.

Depreciation is calculated under the straight-line method to write off the cost of the
assets over their estimated useful lives. Depreciation of an asset does not cease
when the asset becomes idle or is retired from active use unless the asset is fully
depreciated. The principal annual rates used for this purpose are:-

Building Remaining useful life of 20 years
Plant and machinery, construction machinery and
equipment, formwork, scaffoldings and containers 5% - 25%
Office renovation, office equipment, computers,
furniture and fittings, tools and sales office 5% - 20%
Motor vehicles 20%

The depreciation method, useful life and residual values are reviewed, and adjusted if
appropriate, at each balance sheet date to ensure that the amount, method and
period of depreciation are consistent with previous estimates and the expected
pattern of consumption of the future economic benefits embodied in the items of the
property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no
future economic benefits are expected from its use. Any gain or loss arising from
derecognition of the asset is included in the income statement in the year the asset is
derecognised.

(j) Land Held for Property Development

Land held for property development is carried at cost less any accumulated
impairment losses. Where land held for property development had previously been
recorded at a revalued amount, the revalued amount is retained as its surrogate
cost.

Page 26




(j) Land Held for Property Development (Cont’d)

Land held for property development is classified as non-current asset where no
development activities are carried out or where development activities are not
expected to be completed within the normal operating cycle.

Costs associated with the acquisition of land include the purchase price of the land,
professional fees, stamp duties, commissions, conversion fees and other relevant
levies. Pre-acquisition costs are charged to the income statement as incurred unless
such costs are directly identifiable to the consequent property development activity.

Land held for property development is transferred to current asset when
development activities have commenced and where it can be demonstrated that the
development activities can be completed within the normal operating cycle.

(k) Impairment of Assets

The carrying values of assets, other than those to which FRS 136 - Impairment of
Assets does not apply, are reviewed at each balance sheet date for impairment
when there is an indication that the assets might be impaired. Impairment is
measured by comparing the carrying values of the assets with their recoverable
amounts. The recoverable amount of the assets is the higher of the assets' net
selling price and their value-in-use, which is measured by reference to discounted
future cash flow.

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

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

Page 27



(l) Assets under Hire Purchase

Property, plant and equipment acquired under hire purchase are capitalised in the
financial statements and are depreciated in accordance with the policy set out in
Note 5(i) 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.

(m) Investment Properties

Investment properties are property held either to earn rental income or for capital
appreciation or for both. Investment properties are stated at cost less accumulated
depreciation and impairment losses, if any, consistent with the accounting policy for
property, plant and equipment as stated in the financial statements.

Investment properties are derecognised when they have either been disposed of or
when the investment property is permanently withdrawn from use and no future
benefit is expected from its disposal.

On the derecognition of an investment property, the difference between the net
disposal proceeds and the carrying amount is charged to the income statement.

(n) Inventories

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

The cost of unsold completed properties comprises 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.

Page 28



(o) Property Development Costs

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

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

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

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

Where it is probable that property development costs will exceed property
development revenue, any expected loss is recognised as an expense in the income
statement immediately, including costs to be incurred over the defects liability period.

(p) Progress Billings/Accrued Billings

In respect of progress billings:-

(i) where revenue recognised in the income statement exceeds the billings to
purchasers, the balance is shown as accrued billings under current assets;
and

(ii) where billings to purchasers exceed the revenue recognised to the income
statement, the balance is shown as progress billings under current liabilities.

(q) 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 allowance for foreseeable losses, if
any. Cost includes direct materials, labour and applicable overheads.

Page 29



(r) Receivables

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

(s) Cash and Cash Equivalents

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

(t) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in
the future for goods and services received.

(u) Interest-bearing Borrowings

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

Borrowing costs directly attributable to the acquisition and construction of
development properties and property, plant and equipment are capitalised as part of
the cost of those assets, until such time as the assets are ready for their intended use
or sale. Capitalisation of borrowing costs is suspended during extended periods in
which active development is interrupted.

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

(v) Bonds

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

Page 30



(w) Income Taxes

Income taxes on the profit or loss for the financial year comprises current and
deferred tax. Current tax is the expected amount of income taxes payable in respect
of the taxable profit for the year and is measured using the tax rates that have been
enacted or substantially enacted at the balance sheet date.

Deferred taxation is provided in full, using the liability method, on all material
temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than
those that arise from goodwill or excess of the acquirer's interest in the net fair value
of the acquiree's identifiable assets, liabilities and contingent liabilities over the
business combination costs or from the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of the transaction,
affects neither accounting profit nor taxable profit.

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

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

Deferred tax is recognised in the income statement, except when it arises from a
transaction which is recognised directly in equity, in which case the deferred tax is
also charged or credited directly to equity, or when it arises from a business
combination that is an acquisition, in which case the deferred tax is included in the
resulting goodwill or excess of the acquirer's interest in the net fair value of the
acquiree's identifiable assets, liabilities and contingent liabilities over the business
combination costs. The carrying amounts of deferred tax assets are reviewed at each
balance sheet date and reduced to the extent that it is no longer probable that
sufficient future taxable profits will be available to allow all or part of the deferred tax
assets to be utilised.

Page 31



(x) Equity Instruments

Ordinary shares are classified as equity. Incremental costs directly attributable to the
issue of new shares or options are shown in equity as a deduction, net of tax, from
proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for
appropriation.

(y) Employee Benefits

(i) Short-term Benefits

Wages, salaries, paid annual leave, bonuses and social security contributions
are recognised as an expense in the year in which the associated services
are rendered by employees of the Group. Short-term accumulating
compensated absences such as paid annual leave are recognised when
services are rendered by employees that increase their entitlement to future
compensated absences, and short-term non-accumulating compensated
absences such as sick leave are recognised when the absences occur.

(ii) Defined Contribution Plans

The Group’s contributions to a defined contribution plan are charged to the
income statement in the period to which they relate. Once the contributions
have been paid, the Group has no further liability in respect of the defined
contribution plan. A foreign subsidiary of the Group makes contributions to its
respective country’s pension schemes. Such contributions are recognised as
an expense in the income statement as incurred.

(z) Contingent Liabilities and Contingent Assets

A contingent liability is a possible obligation that arises from past events and
whose existence will only be confirmed by the occurrence of one or more
uncertain future events not wholly within the control of the Group. It can also be a
present obligation arising from past events that is not recognised because it is not
probable that an outflow of economic resources will be required or the amount of
obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial
statements. When a change in the probability of an outflow occurs so that the outflow
is probable, it will then be recognised as a provision.

Page 32



(z) Contingent Liabilities and Contingent Assets (Cont’d)

A contingent asset is a probable asset that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of one or more
uncertain events not wholly within the control of the Company.

(aa) Revenue Recognition

(i) Construction Contracts

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

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

(ii) Property Development

Revenue from property development is recognised from the sale of
completed and uncompleted development properties.
Revenue from the sale of completed properties is recognised when the sale is
contracted.
Revenue on uncompleted properties contracted for sale is recognised based
on the stage of completion method unless the outcome of the development
cannot be reliably determined in which case the revenue on the development
is only recognised to the extent of development costs incurred that are
recoverable.

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

(iii) Revenue from Sale of Goods

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

Page 33



(aa) Revenue Recognition (Cont’d)

(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 investments is recognised when the right to receive
payment is established.
(viii) Interest Income
Interest income is recognised on an accrual basis, based on the effective
yield on the investment.
Interest income on late payment is recognised on a receipt basis.

(ab) Segmental Information

Segment revenues and expenses are those directly attributable to the segments and
include any joint revenue and expenses where a reasonable basis of allocation
exists. Segment assets include all assets used by a segment and consist principally
of property, plant and equipment (net of accumulated depreciation, where
applicable), other investments, inventories, receivables, and cash and bank
balances.
Most segment assets can be directly attributed to the segments on a reasonable
basis. Segment assets and liabilities do not include income tax assets and liabilities
respectively.
Segment revenues, expenses and results include transfers between segments. The
prices charged on intersegment transactions are based on normal commercial terms.
These transfers are eliminated on consolidation.

Page 34



6. INVESTMENT IN SUBSIDIARIES
THE COMPANY
2007 2006
RM RM

Unquoted shares, at cost 210,990,785 211,064,785

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

Name of Company Effective Equity Interest Principal
2007 2006 Activities
% %

Syarikat Siah Brothers 100 100 General building
Trading Sdn. Bhd. contractor and
investment holding.
Syarikat Siah Brothers 100 100 Building and civil
Construction Sdn. Bhd. engineering works.

Lifeplus - Siah Brothers Trading - 100 Under members’
JV Sdn. Bhd. voluntary liquidation.

Siah Brothers Enterprise - 100 Under members’
Sdn. Bhd. * voluntary liquidation.

Siah Brothers Land 100 100 Investment holding.
Sdn. Bhd.

Seri Ampangan Realty 100 100 Property development.
Sdn. Bhd.

Sinaran Naga Sdn. Bhd. 100 100 Property development.

Siah Brothers Development - 100 Under members’

Tiara Development - 100 Under members’

SBC Homes Sdn. Bhd.* - 100 Under members’
Voluntary liquidation.

Mixwell (Malaysia) 100 100 Property development.
Sdn. Bhd.

Page 35



6. INVESTMENT IN SUBSIDIARIES (CONT’D)
% %

Winsome Ventures - 100 Under members’
Sdn. Bhd. voluntary liquidation.

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

Aureate Construction 100 100 Property investment.
Sdn. Bhd.*

SBC Leisure Sdn. Bhd.* 100 100 Property development.

SBC Towers Sdn. Bhd.* 100 100 Property development.

Siah Brothers Project - 100 Under members’
Management Sdn. Bhd.* voluntary liquidation.

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

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

Gracemart Resources 100 100 Property development.
Sdn. Bhd.

Sutrati Development Sdn. Bhd. - 100 Under members’
voluntary liquidation.

Masahmura Sdn. Bhd.* 100 51 Manufacturing of
material handling
equipment and
metal frames.

Masahmura Sales & 100 51 Trading of light
Service Sdn. Bhd. industrial handling
equipment and
metal frames.

Kiara Amalan Sdn. Bhd.* 51 - Dormant.

* Not audited by Messrs. Horwath.

Page 36



7. INTEREST IN ASSOCIATES
2007 2006 2007 2006
RM RM RM RM

Unquoted shares,
at cost 2,720,001 3,600,001 2,400,000 2,400,000
Impairment loss - (880,000) - -

2,720,001 2,720,001 2,400,000 2,400,000
Unquoted shares, at
group cost 91,618,314 91,618,314 - -
Share of post
acquisition reserves 17,747,298 17,478,087 - -

112,085,613 111,816,402 2,400,000 2,400,000

THE GROUP
2007 2006
RM RM
The interest in associates comprises:-

Group’s share of net tangible assets
- at cost 66,069,643 65,800,432
- at fair value 45,952,003 45,952,003
Group’s share of intangible assets 63,967 63,967

112,085,613 111,816,402

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

Effective Equity Principal
Name of Company Interest Activities
2007 2006
% %

Ligamas Sdn. Bhd.# 50.0 50.0 Property development.

Varich Industries 50.0 50.0 Dormant.
Sdn. Bhd.*

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

Page 37



7. INTEREST IN ASSOCIATES (CONT’D)
Details of the associates, which are all incorporated in Malaysia, are as follows:-

Effective Equity Principal
Name of Company Interest Activities
2007 2006
% %

Pasti Bumi Sdn. Bhd.* ## 19.6 19.6 Sales of plastic
building materials.

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

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

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

Sam & Lau Plantation - 50.0 Under members’
Sdn. Bhd.*### voluntary liquidation.

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

# The share of results of these associates is based on the latest available unaudited
management financial statements made up to 31 March 2007.

## Held by Paling Industries Sdn. Bhd.

### Held by South-East Best Sdn. Bhd.

The summarised financial information of the associates are as follows:-

THE GROUP
2007 2006
RM RM
Assets and liabilities
Total assets 149,845,853 143,650,486
Total liabilities 16,653,116 10,429,579

Results
Revenue 54,261,998 44,690,040
Profit for the year 299,072 47,200

Page 38



8. INVESTMENT IN JOINT VENTURE
THE COMPANY
2007 2006
RM RM
Unquoted shares, at cost 1,801,128 712,500

Details of the joint venture, which is incorporated in Thailand, are as follows:-

% %

Tri-Development Co., Ltd 50 50 Property development.

The share of results of the joint venture is based on the unaudited financial statements
made up to 31 March 2007.
The Group’s aggregate share of the current assets, non-current assets, current liabilities,
non-current liabilities, income and expenses of the joint venture is as follows:-

2007 2006
RM RM
Assets and liabilities
Non-current assets 591,715 -
Current assets 9,220,742 805,280

Total assets 9,812,457 805,280

Non-current liabilities -
Current liabilities (4,256,916) (93,595)

Total liabilities (4,256,916) (93,595)

Results
Revenue 17,761,423 -
Other income 62,923 -
Expenses, including finance costs and taxation (13,993,150) (143)

Page 39

SBC Corporation Berhad: Annual Audited Accounts 2007

SBC Corporation Berhad: Annual Audited Accounts 2007

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SBC Corporation Berhad: Annual Audited Accounts 2007