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


DIRECTORS’ REPORT


The directors hereby submi...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


DIRECTORS’ REPORT


ISSUES OF SHARES AND DEBEN...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


DIRECTORS’ REPORT


VALUATION METHODS
At the d...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


DIRECTORS’ REPORT


DIRECTORS
The directors wh...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


DIRECTORS’ REPORT


DIRECTORS’ BENEFITS
Since ...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


DIRECTORS’ REPORT


AUDITORS
The auditors, Mes...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P




STATEMENT BY DIRECTORS

We, Sia Kwee Mow @ S...
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SBC CORPORATION BERHAD
(Incorporated In Malaysia)
Company No : 199310 - P

...
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SBC CORPORATION BERHAD (CONT’D)
(Incorporated in Malaysia)
Company No : 199...
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
SBC CORPORATION BERHAD (CONT’D)
(Incorporated in Malaysia)
Company No : 199...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


BALANCE SHEETS AT 31 MARCH 2008
              ...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


BALANCE SHEETS AT 31 MARCH 2008 (CONT’D)


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


INCOME STATEMENTS
FOR THE FINANCIAL YEAR ENDED...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


STATEMENTS OF CHANGES IN EQUITY
FOR THE FINANC...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


STATEMENTS OF CHANGES IN EQUITY
FOR THE FINANC...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


CASH FLOW STATEMENTS
FOR THE FINANCIAL YEAR EN...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


CASH FLOW STATEMENTS
FOR THE FINANCIAL YEAR EN...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


CASH FLOW STATEMENTS
FOR THE FINANCIAL YEAR EN...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC CORPORATION BERHAD
(Incorporated in Malaysia)
Company No : 199310 - P


NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIA...
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
SBC Corporation Berhad: Annual Audited Accounts 2008
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SBC Corporation Berhad: Annual Audited Accounts 2008

  1. 1. 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 2008. PRINCIPAL ACTIVITIES The Company is principally engaged in the businesses of investment holding and the provision of management and administrative services to the subsidiaries. The principal activities of the subsidiaries are disclosed in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. RESULTS THE GROUP THE COMPANY RM RM Profit after taxation for the financial year 3,503,533 204,163 Attributable to:- Equity holders of the Company 3,513,519 204,163 Minority interests (9,986) - 3,503,533 204,163 DIVIDENDS Since the end of the previous financial year, the Company paid a first and final dividend of 1% less 27% tax on the ordinary shares amounting to RM601,773 in respect of the previous financial year. For the current financial year, the directors recommend the payment of a first and final dividend of 1.5% less 25% tax on the ordinary shares amounting to RM927,394 to be approved by the shareholders at the forthcoming Annual General Meeting. This dividend will be accounted for as an appropriation of retained profits in the period when it is approved by shareholders. RESERVES AND PROVISIONS All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements. Page 1
  2. 2. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT ISSUES OF SHARES AND DEBENTURES During the financial year, (a) there were no changes in the authorised and issued and paid-up share capital of the Company; and (b) there were no issues of debentures by the Company. OPTIONS GRANTED OVER UNISSUED SHARES During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company. BAD AND DOUBTFUL DEBTS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and satisfied themselves that 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 the 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. Page 2
  3. 3. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT VALUATION METHODS At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. CONTINGENT AND OTHER LIABILITIES The contingent liability of the Company is disclosed in Note 47 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
  4. 4. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P 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 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 and its related corporations during the financial year are as follows:- NUMBER OF ORDINARY SHARES OF RM1 EACH AT AT 1.4.2007 BOUGHT SOLD 31.3.2008 DIRECT INTERESTS SIA KWEE MOW @ SIA HOK CHAI 1,480,800 - - 1,480,800 SIA TEONG HENG 4,677,992 - - 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. 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. Page 4
  5. 5. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P DIRECTORS’ REPORT DIRECTORS’ BENEFITS Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with companies in which certain directors have substantial financial interests as disclosed in Note 45 to the financial statements. Neither during nor at the end of the financial year was the Company or its subsidiaries a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR The significant events during the financial year are disclosed in Note 51 to the financial statements. Page 5
  6. 6. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P 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 28 JULY 2008 Sia Kwee Mow @ Sia Hok Chai Mun Chong Shing @ Mun Chong Tian Page 6
  7. 7. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P STATEMENT BY DIRECTORS We, Sia Kwee Mow @ Sia Hok Chai and Mun Chong Shing @ Mun Chong Tian, being two of the directors of SBC Corporation Berhad, state that, in the opinion of the directors, the financial statements set out on pages 11 to 80 are drawn up in accordance with applicable approved Financial Reporting 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 of the Company at 31 March 2008 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 28 JULY 2008 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 11 to 80 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 28 July 2008. Lee Yan Yaw Before me Mohd Radzi Bin Yasin (W327) Commissioner for Oaths Page 7
  8. 8. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SBC CORPORATION BERHAD (Incorporated In Malaysia) Company No : 199310 - P Report on the Financial Statements We have audited the financial statements of SBC Corporation Berhad, which comprise the balance sheets as at 31 March 2008 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 11 to 80. Directors’ Responsibility for the Financial Statements The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Page 8
  9. 9. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SBC CORPORATION BERHAD (CONT’D) (Incorporated in Malaysia) Company No : 199310 - P Opinion In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 March 2008 and of their financial performance and cash flows for the year then ended. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:- (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act; (b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 6 to the financial statements; (c) We are satisfied that the accounts 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 financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes; and (d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. Page 9
  10. 10. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SBC CORPORATION BERHAD (CONT’D) (Incorporated in Malaysia) Company No : 199310 - P Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Horwath James Chan Kuan Chee Firm No: AF 1018 Approval No: 2271/10/09 (J) Chartered Accountants Partner Kuala Lumpur 28 July 2008 Page 10
  11. 11. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P BALANCE SHEETS AT 31 MARCH 2008 THE GROUP THE COMPANY 2008 2007 2008 2007 NOTE RM RM RM RM ASSETS NON-CURRENT ASSETS Investment in subsidiaries 6 - - 210,990,785 210,990,785 Interest in associates 7 113,032,417 112,085,613 3,993,865 2,400,000 Investment in joint venture 8 - - 1,801,128 1,801,128 Property, plant and equipment 9 7,405,096 8,549,543 387,635 2,657 Investment properties 10 - 3,122,452 - - Land held for property development 11 77,385,675 87,700,188 - - Other assets 12 220,300 220,300 - - Goodwill on consolidation 13 27,499,451 27,499,451 - - 225,542,939 239,177,547 217,173,413 215,194,570 CURRENT ASSETS Inventories 14 659,001 726,148 - - Property development costs 15 55,151,791 59,707,257 - - Receivables 16 38,191,784 59,332,215 893,608 479,393 Amount owing by contract customers 17 2,354,585 2,616,779 - - Amount owing by subsidiaries 18 - - 57,297,883 58,919,707 Amount owing by associates 19 6,571,977 5,390,600 237,184 11,434 Amount owing by joint venture 20 72,520 280,727 72,520 552,520 Tax recoverable 21 1,286,456 1,367,292 3,639,260 3,451,474 Short-term deposits with licensed banks 22 985,000 3,334,226 - 1,239,225 Cash and bank balances 23 10,015,198 13,918,913 2,510,961 12,077,309 115,288,312 146,674,157 64,651,416 76,731,062 TOTAL ASSETS 340,831,251 385,851,704 281,824,829 291,925,632 The annexed notes form an integral part of these financial statements. Page 11
  12. 12. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P BALANCE SHEETS AT 31 MARCH 2008 (CONT’D) THE GROUP THE COMPANY 2008 2007 2008 2007 NOTE RM RM RM RM EQUITY AND LIABILITIES EQUITY Share capital 24 82,435,000 82,435,000 82,435,000 82,435,000 Reserves 25 133,602,532 130,690,786 133,338,283 133,735,893 SHAREHOLDERS’ EQUITY 216,037,532 213,125,786 215,773,283 216,170,893 MINORITY INTEREST 39,014 - - - TOTAL EQUITY 216,076,546 213,125,786 215,773,283 216,170,893 LIABILITIES NON-CURRENT LIABILITIES Long-term borrowings 26 32,879,564 33,939,069 24,314,819 - Deferred taxation 29 966,746 966,746 - - 33,846,310 34,905,815 24,314,819 - CURRENT LIABILITIES Amount owing to contract customers 17 4,932,581 2,850,429 - - Payables 30 37,673,403 42,512,894 285,918 371,667 Amount owing to subsidiaries 18 - - 19,397,294 12,375,674 Amount owing to associates 19 78,236 3,378 - - Amount owing to a director 31 1,867,680 1,867,680 1,867,680 1,867,680 Short-term borrowings 32 23,981,994 14,874,442 17,735,306 5,000,000 ABBA Bonds 33 - 48,683,146 - 48,683,146 Bank overdrafts 34 22,374,501 27,028,134 2,450,529 7,456,572 90,908,395 137,820,103 41,736,727 75,754,739 TOTAL LIABILITIES 124,754,705 172,725,918 66,051,546 75,754,739 TOTAL EQUITY AND LIABILITIES 340,831,251 385,851,704 281,824,829 291,925,632 NET ASSETS PER ORDINARY SHARE (RM) 35 2.62 2.59 The annexed notes form an integral part of these financial statements. Page 12
  13. 13. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P INCOME STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 THE GROUP THE COMPANY 2008 2007 2008 2007 NOTE RM RM RM RM REVENUE 36 107,054,789 77,102,946 10,296,801 8,338,611 COST OF SALES 37 (87,834,953) (60,499,310) - - GROSS PROFIT 19,219,836 16,603,636 10,296,801 8,338,611 OTHER INCOME 2,202,590 1,324,144 29,999 203,976 ADMINISTRATIVE EXPENSES (8,964,127) (8,315,933) (4,336,804) (1,282,327) OTHER EXPENSES (1,008,602) (5,382,766) (233,310) (407,665) FINANCE COSTS (6,316,002) (6,705,397) (5,054,663) (5,868,501) SHARE OF (LOSS)/PROFIT OF ASSOCIATES (647,061) 269,211 - - PROFIT/(LOSS) BEFORE TAXATION 38 4,486,634 (2,207,105) 702,023 984,094 INCOME TAX EXPENSE 39 (983,101) (802,167) (497,860) (307,203) PROFIT/(LOSS) AFTER TAXATION 3,503,533 (3,009,272) 204,163 676,891 ATTRIBUTABLE TO:- Equity holders of the Company 3,513,519 (3,009,272) 204,163 676,891 Minority interests (9,986) - - - 3,503,533 (3,009,272) 204,163 676,891 Earnings/(Loss) per share - basic 40 4.3 sen (3.7) sen - diluted 40 N/A N/A Dividend per ordinary share - final 41 1 sen 1 sen The annexed notes form an integral part of these financial statements. Page 13
  14. 14. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY SHARE SHARE RETAINED CAPITAL MINORITY TOTAL NOTE CAPITAL PREMIUM PROFITS RESERVE TOTAL INTERESTS EQUITY RM RM RM RM RM RM RM THE GROUP Balance at 1.4.2006 82,435,000 111,412,895 21,680,691 1,199,999 216,728,585 - 216,728,585 Loss after taxation for the financial year - - (3,009,272) - (3,009,272) - (3,009,272) Dividend 41 - - (593,527) - (593,527) - (593,527) Balance at 31.3.2007/1.4.2007 82,435,000 111,412,895 18,077,892 1,199,999 213,125,786 - 213,125,786 Profit after taxation for the financial year - - 3,513,519 - 3,513,519 (9,986) 3,503,533 Subscription for shares in a subsidiary - - - - - 49,000 49,000 Dividend 41 - - (601,773) - (601,773) - (601,773) Balance at 31.3.2008 82,435,000 111,412,895 20,989,638 1,199,999 216,037,532 39,014 216,076,546 The annexed notes form an integral part of these financial statements. Page 14
  15. 15. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 (CONT’D) SHARE REVALUATION RETAINED CAPITAL RESERVE PROFITS TOTAL THE COMPANY NOTE RM RM RM RM Balance at 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 41 - - (593,527) (593,527) Balance at 31.3.2007/1.4.2007 82,435,000 111,412,895 22,322,998 216,170,893 Profit after taxation for the financial year - - 204,163 204,163 Dividend 41 - - (601,773) (601,773) Balance at 31.3.2008 82,435,000 111,412,895 21,925,388 215,773.283 The annexed notes form an integral part of these financial statements. Page 15
  16. 16. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 THE GROUP THE COMPANY 2008 2007 2008 2007 NOTE RM RM RM RM CASH FLOWS (FOR)/ FROM OPERATING ACTIVITIES Profit/(Loss) before taxation 4,486,634 (2,207,105) 702,023 984,094 Adjustments for:- Allowance for doubtful debts 214,034 - - - Amortisation of bond expenses 144,265 277,770 144,265 277,770 Bad debts written off 74,922 697,574 4,626 - Depreciation of property, plant and equipment 717,935 580,160 98,804 4,895 Interest expense/ finance charges 6,201,668 6,564,396 5,009,169 5,817,195 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 Property, plant and equipment written off 8,303 - - - Waiver of debts (211,269) - (203,976) Dividend income - - (6,500,000) (5,000,000) (Gain)/Loss on disposal of investment properties (48,248) 413,987 - - Gain on disposal of land held for future development (383,552) - - - Gain on disposal of property, plant and equipment (71,949) (155,791) (29,999) - Interest income (823,441) (513,693) (206,714) (768,966) Share of loss/(profit) in associates 647,061 (269,211) - - Operating profit/(loss) before working capital changes 11,167,632 9,110,208 (777,826) 1,236,012 Decrease in inventories 67,147 557,274 - - Decrease/(Increase) in property development costs 11,762,574 (4,273,713) - - Increase in receivables (8,217,525) (17,243,790) (418,841) (252,966) (Decrease)/Increase in payables (4,914,691) 10,272,117 (160,949) 126,902 Net decrease in amount owing by contract customers 2,344,346 1,808,200 - - CASH FROM/(FOR) OPERATIONS 12,209,483 230,296 (1,357,616) 1,109,948 Interest paid (4,208,853) (2,077,587) (3,016,354) (1,330,386) Net tax (paid)/refunded (902,265) (618,234) (70,526) 797,450 NET CASH FROM/(FOR) OPERATING ACTIVITIES CARRIED FORWARD 7,098,365 (2,465,525) (4,444,496) 577,012 The annexed notes form an integral part of these financial statements. Page 16
  17. 17. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 (CONT’D) THE GROUP THE COMPANY 2008 2007 2008 2007 NOTE RM RM RM RM NET CASH FROM/(FOR) OPERATING ACTIVITIES BROUGHT FORWARD 7,098,365 (2,465,525) (4,444,496) 577,012 CASH FLOWS (FOR)/FROM INVESTIING ACTIVITIES Acquisition of associates (1,593,865) - (1,593,865) - Acquisition of joint venture - - - (1,088,628) Additional investment in subsidiaries 49,000 (181,811) - (51,000) Repayment from subsidiaries - - 1,621,824 7,254,414 Interest received 823,441 513,693 206,714 369,482 Dividends received from subsidiaries - - 4,810,000 3,650,000 Repayment from/ (Advances to) joint venture 208,207 (280,727) 480,000 (561,454) Incidental cost for investment properties - (117,070) - - Payment for land held for development (2,941,967) (2,468,347) - - Purchase of property, plant and equipment 42 (287,778) (1,204,262) (107,783) - Proceeds from disposal of land held for future development 7,514,910 - - - Proceeds from disposal of property, plant and equipment 71,950 170,264 30,000 - Proceeds from disposal of investment properties 3,170,700 1,374,000 - - Investment in club membership - (134,000) - - Withdrawal/(Placement) of cash in sinking fund account 11,129,109 (3,877,963) 12,001,075 (3,877,963) (Advances to)/Repayment from associates (1,181,377) 8,934 (225,750) 8,934 NET CASH FROM/(FOR) INVESTING ACTIVITIES 16,962,330 (6,197,289) 17,222,215 5,703,785 BALANCE CARRIED FORWARD 24,060,695 (8,662,814) 12,777,719 6,280,797 The annexed notes form an integral part of these financial statements. Page 17
  18. 18. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 (CONT’D) THE GROUP THE COMPANY 2008 2007 2008 2007 Note RM RM RM RM BALANCE BROUGHT FORWARD 24,060,695 (8,662,814) 12,777,719 6,280,797 CASH FLOWS FOR FINANCING ACTIVITIES Payment of bond expenses (12,001) (59,932) (12,001) (59,932) Repayment of bonds 33 (50,808,225) (2,478,450) (50,808,225) (2,478,450) Advances from/ (Repayment to) associates 74,858 (13,333) - - Advances from/ (Repayment to) subsidiaries - - 8,096,500 (5,503,106) Dividend paid to shareholders of the Company (601,773) (593,527) (601,773) (593,527) Repayment of revolving credit (2,994,400) (1,050,000) - - Drawdown of term loans 44,636,915 6,400,068 40,000,000 - Repayment of term loans (4,698,460) (3,007,129) (3,219,340) - Repayment of hire purchase obligations (127,808) (101,107) (31,335) - NET CASH FOR FINANCING ACTIVITIES (14,530,894) (903,410) (6,576,174) (8,635,015) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 9,529,801 (9,566,224) 6,201,545 (2,354,218) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR (21,776,070) (12,209,846) (6,141,113) (3,786,895) CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 43 (12,246,269) (21,776,070) 60,432 (6,141,113) The annexed notes form an integral part of these financial statements. Page 18
  19. 19. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 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 28 July 2008. 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 any significant impact on the financial statements. Page 19
  20. 20. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 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 cash flow 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 20
  21. 21. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 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 approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965. During the current financial year, the Group and the Company have adopted the following new and revised Financial Reporting Standards (“FRSs”) issued by the Malaysian Accounting Standards Board (“MASB”): (a) FRSs issued and effective for financial periods beginning on or after 1 October 2006: FRS 117 Leases FRS 124 Related Party Disclosures (b) FRSs issued and effective for financial periods beginning on or after 1 January 2007: FRS 6 Exploration for and Evaluation of Mineral Resources FRS 1192004 Amendment to FRS 1192004 Employee Benefits - Actuarial Gains and Losses, Group Plans and Disclosures The adoption of FRS 124 only impacts the form and content of disclosures presented in the financial statements. FRS 117, FRS 6 and FRS 1192004 are not relevant to the Group and the Company’s operations. Framework for the Preparation and Presentation of Financial Statements has been issued and is effective immediately. This Framework sets out the concepts that underlie the preparation and presentation of financial statements for external users. It is not a MASB approved accounting standard and hence, does not define standards for any particular measurement or disclosure issue. The Group and the Company have applied this Framework from the financial year ended 31 March 2008 onwards. Page 21
  22. 22. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 4. BASIS OF PREPARATION (CONT’D) The Group and the Company have not adopted FRS 139 - Financial Instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 as the effective date is deferred to a date to be announced by the MASB. FRS 139 establishes the principles for the recognition and measurement of financial assets and financial liabilities including circumstances under which hedge accounting is permitted. By virtue of the exemption provided under paragraph 103AB of FRS 139, the impact of applying FRS 139 on its financial statements upon initial application of the standard as required by paragraph 30(b) of FRS 108 is not disclosed. The following FRSs have been issued and are effective for financial periods beginning on or after 1 July 2007 and will be effective for the Group 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 120 Accounting for Government Grants and Disclosure of Government Assistance FRS 134 Interim Financial Reporting FRS 137 Provisions, Contingent Liabilities and Contingent Assets The above FRSs align the MASB’s FRSs with the equivalent International Accounting Standards (”IASs”), both in terms of form and content. The adoption of these standards will only impact the form and content of disclosures presented in the financial statements. FRS 120 is not relevant to the Group and the Company’s operations. The Group and the Company will apply these FRSs from the financial year ending 31 March 2009 onwards. Amendment to FRS 121 - The Effects of Changes in Foreign Exchange Rates Net Investment in a Foreign Operation has been issued and is effective for financial periods beginning on or after 1 July 2007. This amendment results in exchange differences arising from a monetary item that forms part of the Group’s net investment in a foreign operation to be recognised in equity irrespective of the currency in which the monetary item is denominated and whether the monetary item results from a transaction with the Company or any of its subsidiaries/associates/joint ventures. Previously, exchange differences arising from such transactions between the Company and its subsidiaries/associates/joint ventures would be accounted for in the income statement or in equity depending on the currency of the monetary item. The Group and the Company will apply this amendment from the financial year ending 31 March 2009 onwards. Page 22
  23. 23. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 4. BASIS OF PREPARATION (CONT’D) The following IC Interpretations have been issued and are effective for financial periods beginning on or after 1 July 2007 but are not relevant for the Group and the Company’s operations: IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities IC Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments IC Interpretation 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds IC Interpretation 6 Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment IC Interpretation 7 Applying the Restatement Approach under FRS 1292004 Financial Reporting in Hyperinflationary Economies IC Interpretation 8 Scope of FRS 2 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 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. Page 23
  24. 24. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (a) Critical Accounting Estimates And Judgements (Cont’d) (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. (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. Page 24
  25. 25. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (a) Critical Accounting Estimates And Judgements (Cont’d) (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. (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. (vii) Allowance for Inventories Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories. Page 25
  26. 26. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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. (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. Page 26
  27. 27. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (c) Functional and Foreign Currency (Cont’d) (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. (d) Basis of Consolidation The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries made up to 31 March 2008. 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. Page 27
  28. 28. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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. (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. Page 28
  29. 29. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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 2008. 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. (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% Page 29
  30. 30. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (i) Property, Plant and Equipment (Cont’d) 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. 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. Page 30
  31. 31. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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. (l) Assets under Hire Purchase Assets 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. Page 31
  32. 32. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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. Where necessary, due allowance is made for all damaged, obsolete and slow- moving items. Page 32
  33. 33. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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 33
  34. 34. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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 expenses 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 34
  35. 35. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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 35
  36. 36. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (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. Page 36
  37. 37. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (z) Related Parties For the purposes of these financial statements, a party is considered to be related if:- (i) directly, or indirectly through one or more intermediaries, the party:- • controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries); • has an interest in the entity that gives it significant influence over the entity; or • has joint control over the entity; (ii) the party is an associate of the entity; (iii) the party is a joint venture in which the entity is a venturer; (iv) the party is a member of the key management personnel of the entity or its parent; (v) the party is a close member of the family of any individual referred to in (i) or (iv); (vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or (vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity. Close members of the family of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity. Page 37
  38. 38. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (aa) 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. 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. (ab) 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. Page 38
  39. 39. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (ab) Revenue Recognition (Cont’d) (ii) Property Development (Cont’d) 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 Revenue is recognised upon delivery of goods and customers’ acceptance, and where applicable, net of returns and trade discounts. (iv) Revenue from Services Revenue is recognised upon rendering of services and when the outcome of the transaction can be estimated reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable. (v) Management Fee and Administrative Charges Management fee and administrative charges are recognised on an accrual basis. (vi) Rental Income Rental income is recognised on an accrual basis. (vii) Dividend Income Dividend income from 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. Page 39
  40. 40. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (ac) 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. 6. INVESTMENT IN SUBSIDIARIES THE COMPANY 2008 2007 RM RM Unquoted shares, at cost 210,990,785 210,990,785 Details of the subsidiaries, which are all incorporated in Malaysia, are as follows:- Name of Company Effective Equity Interest Principal 2008 2007 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 contractor. Siah Brothers Land 100 100 Investment holding. Sdn. Bhd. Seri Ampangan Realty 100 100 Property development. Sdn. Bhd. Page 40
  41. 41. SBC CORPORATION BERHAD (Incorporated in Malaysia) Company No : 199310 - P NOTES TO FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 6. INVESTMENT IN SUBSIDIARIES (CONT’D) Name of Company Effective Equity Interest Principal 2008 2007 Activities % % Sinaran Naga Sdn. Bhd. 100 100 Property development. Mixwell (Malaysia) 100 100 Project development and Sdn. Bhd. property development. Siah Brothers Properties 100 100 Investment holding. Sdn. Bhd.* Aureate Construction 100 100 Property investment. Sdn. Bhd.* SBC Leisure Sdn. Bhd.* 100 100 Investment holding. SBC Towers Sdn. Bhd.* 100 100 Investment holding. Siah Brothers Industries 100 100 Investment holding. Sdn. Bhd. * South-East Best 100 100 Project development and Sdn. Bhd. property investment. Gracemart Resources 100 100 Property development. Sdn. Bhd. Masahmura Sdn. Bhd.* 100 100 General building contractor and trading of construction materials. Masahmura Sales & 100 100 Trading in material Service Sdn. Bhd. handling equipment, selling of spare parts and providing general services. Kiara Amalan Sdn. Bhd. 51 51 Dormant. * Not audited by Messrs. Horwath. Page 41

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