SBC Corporation Berhad: Annual Report 2001

SIAH BROTHERS CORPORATION BERHAD

Contents
Notice Of Annual General Meeting 1 Report Of The Auditors 38

Corporate Information 5 Balance Sheets 39

Profile Of The Directors 6 Income Statements 40

Corporate Structure 13 Statements Of Changes In Equity 41

Statement Of Directors’ Responsibilities 14 Cash Flow Statements 42

Chairman’s Statement 15 Notes To The Financial Statements 44

Penyata Pengerusi 19 Group Properties 71

Audit Committee Report 23 Shareholders’ Information 73

Group Financial Highlights 28 TSR Holders’ Information 76

Directors’ Report 31 ICULS Holders’ Information 78

Statement By Directors 37 Appendix 1 82

Statutory Declaration 37 Proxy Form

Notice Of Annual General Meeting
1 SIAH BROTHERS CORPORATION BERHAD

NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting of Siah Brothers Corporation
Berhad will be held at the Penthouse, 5th Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala
Lumpur on Thursday, 27 September, 2001 at 10.30 a.m. to transact the following business :-

AGENDA

1. To receive and adopt the Directors’ Report and the Audited Financial (Resolution 1)
Statements for the year ended 31 March, 2001 together with the Auditors’
Report thereon.

2. To declare a first and final dividend of 1.5% less 28% income tax for the year (Resolution 2)
ended 31 March, 2001.

3. To approve the payment of Directors’ fees. (Resolution 3)

4. To re-appoint YBhg. Dato’ Lim Phaik Gan as a Director pursuant to Section (Resolution 4)
129(6) of the Companies Act, 1965.

5. To re-elect Mr. Sia Teong Heng as a Director retiring by rotation pursuant (Resolution 5)
to Article 80 of the Articles of Association of the Company.

6. To re-elect Mr. Sia Kwee Mow @ Sia Hok Chai as a Director retiring pursuant (Resolution 6)
to the Listing Requirements of the Kuala Lumpur Stock Exchange.

7. To re-appoint Messrs Horwath Mok & Poon as Auditors of the Company (Resolution 7)
and to authorise the Directors to fix their remuneration.

8. As Special Business, to consider and, if thought fit, to pass the following
resolutions :-

(A) ORDINARY RESOLUTION (Resolution 8)
AUTHORITY TO DIRECTORS TO ALLOT AND ISSUE SHARES

"THAT subject always to the Companies Act, 1965, the Articles of
Association of the Company and the approval from the Kuala Lumpur Stock
Exchange and other governmental/regulatory bodies, where such approval
shall be necessary, the Directors be and are hereby authorised pursuant to
Section 132D of the Companies Act, 1965, to allot and issue shares in the
Company, at any time and upon such terms and conditions and for such
purposes as they may in their absolute discretion deem fit, provided that
the aggregate number of shares issued pursuant to this resolution does
not exceed ten per cent (10%) of the issued capital of the Company for the
time being and that such authority shall continue in force until the conclusion
of the next Annual General Meeting of the Company. "

ANNUAL REPORT 2001 2

(B) SPECIAL RESOLUTION
ADOPTION OF NEW ARTICLES OF ASSOCIATION (Resolution 9)

"THAT the Articles of Association of the Company as set out in Appendix
1 to the Annual Report for year 2001 be and are hereby approved and
adopted as the new Articles of Association of the Company in substitution
for and to the exclusion of all the existing Articles of Association of the
Company."

9. To consider any other business for which due notice shall have been given.

NOTICE OF DIVIDEND PAYMENT

NOTICE IS HEREBY GIVEN that subject to the approval of the shareholders at the Eleventh Annual
General Meeting of the Company, the first and final dividend of 1.5% less 28% income tax for the year
ended 31 March, 2001 will be paid on 31 October, 2001 to Depositors registered in the Record of
Depositors on 17 October, 2001.

A Depositor shall qualify for entitlement only in respect of –

(a) shares transferred into the Depositor’s Securities Account before 12.30 p.m. on 17 October, 2001
in respect of ordinary transfers; and

(b) shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement basis according to the
Rules of the Kuala Lumpur Stock Exchange.

By Order of the Board

CHONG FOOK SIN
KAN CHEE JING
Company Secretaries

Kuala Lumpur
3 September, 2001

NOTES :-

1) Proxy -

A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and
vote instead of him. Where a member appoints more than one (1) proxy, the appointment shall be
invalid unless he specifies the proportions of his holdings to be represented by each proxy. To be
valid, the proxy form duly completed must be deposited at the Registered Office of the Company
not less than forty-eight (48) hours before the time for holding the meeting. If the appointor is a
corporation, this form must be executed under its common seal or under the hand of its attorney.


2) Resolution 8 -

The Company is actively pursuing business opportunities in prospective areas so as to broaden the
operating base and earnings potential of the Company. Such expansion plans may require the
issue of new shares not exceeding 10 per cent (10%) of the Company’s issued share capital. With
the passing of the resolution by the shareholders of the Company at the forthcoming Annual General
Meeting, the Directors would avoid delay and cost of convening further general meetings to approve
the issue of shares for such purposes.

3) Resolution 9 -

The proposed Special Resolution is to bring the Articles of Association of the Company to be
consistent with Chapter 7 of the Listing Requirements of the Kuala Lumpur Stock Exchange, the
Securities Industry (Central Depositories) Act 1991, the Rules of the Malaysian Central Depository
Sdn Bhd and other regulatory requirements.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING PURSUANT TO
PARAGRAPH 8.28 (2) OF THE LISTING REQUIREMENTS OF KUALA LUMPUR STOCK EXCHANGE

(1) The following are the Directors standing for re-election at the Eleventh Annual General Meeting to
be held at the Penthouse, 5th Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala Lumpur
on Thursday, 27 September, 2001 at 10.30 a.m.-

(a) Pursuant to Section 129(6) of the Companies Act, 1965

YBhg. Dato’ Lim Phaik Gan

(b) Pursuant to Article 80 of the Articles of Association of the Company

Mr. Sia Teong Heng

(c) Pursuant to the Listing Requirements of the Kuala Lumpur Stock Exchange

Mr. Sia Kwee Mow @ Sia Hok Chai

(2) Number of Board Meetings held during the : Four
financial year ended 31 March 2001

Place of the Meetings : The Penthouse, 5th Floor,
Wisma Siah Brothers, 74, Jalan Pahang,
53000 Kuala Lumpur.

Date and hour of the Meetings : (i) Friday, 26th May, 2000 at 10.20 a.m.
(ii) Friday, 25th August, 2000 at 11.00 a.m.
(iii) Friday, 24th November, 2000 at 11.00 a.m.
(iv) Monday, 26th February, 2001 at 11.36 a.m.


(3) Attendance of Directors at Board Meetings held during the financial year ended 31 March, 2001

Date of Number of
Name of Directors Appointment Meetings attended

Tan Sri Dato’ Ir. Muhammad Yusuff
bin Haji Muhammad Yunus 05.02.1991 4

Sia Kwee Mow @ Sia Hok Chai 14.06.1990 4

Sia Teong Heng 05.02.1991 4

Mun Chong Shing @ Mun Chong Tian 01.04.1996 3

Dato’ Lim Phaik Gan 05.02.1991 2

Dr. Norraesah bt. Haji Mohamad 08.07.1991 2

Datuk Sim Peng Choon 14.05.1993 4

Abdul Rahman bin A. Shukor
(Alternate to Datuk Sim Peng Choon) 05.02.2001 Nil

(4) Further details on the Directors standing for re-election at the Eleventh Annual General Meeting
are set out in pages 6 to 9 of the Annual Report.

Corporate Information
As at 15 th August, 2001
(as
BOARD OF DIRECTORS

Tan Sri Dato’ Ir. Muhammad Yusuff Bin
Haji Muhammad Yunus
PSM, DIMP, JMN, PJK, B.Sc., P. Eng, FAS
Chairman and Independent Non Executive Director

Sia Kwee Mow @ Sia Hok Chai
JMN, FFB, FCIOB, FAIB
Group Managing Director

Sia Teong Heng
B.Sc. (Eng), M.Sc.
Executive Director

Mun Chong Shing @ Mun Chong Tian
Executive Director

Dato’ Lim Phaik Gan
DPMP, DMPN, M.A.(Law), FCI, ARB
Independent Non Executive Director

Dr. Norraesah Bt. Haji Mohamad
PhD., B.Sc. (Econ)
Independent Non Executive Director

Datuk Sim Peng Choon
PJN
Non Executive Director

Abdul Rahman Bin A. Shukor
B.Sc (Civil & Environmental Eng.), Executive MBA
Non Executive Director
(Alternate to Datuk Sim Peng Choon)

AUDIT COMMITTEE SOLICITORS
Dr. Norraesah Bt. Haji Mohamad Lee, Perara & Tan
PhD., B.Sc. (Econ) 55, Jalan Thambapillai
Chairperson & Independent Non Executive Director Off Jalan Tun Sambanthan
Brickfields
Tan Sri Dato’ Ir. Muhammad Yusuff 50470 Kuala Lumpur
Bin Haji Muhammad Yunus
PSM, DIMP, JMN, PJK, B.Sc., P. Eng, FAS Lim & Yeoh
Independent Non Executive Director 145-M Jalan Maharajalela
50150 Kuala Lumpur
Sia Teong Heng
B.Sc. (Eng), M.Sc. PRINCIPAL BANKERS
Executive Director Alliance Bank Malaysia Berhad
Aseambankers Malaysia Berhad
Datuk Sim Peng Choon Bangkok Bank Berhad
PJN Bumiputra Commerce Bank Berhad
Non Executive Director Commerce International Merchant Bankers Berhad
Overseas Union Bank (M) Berhad
COMPANY SECRETARIES RHB Bank Berhad
Chong Fook Sin ATII, MCCS, AFA Utama Merchant Bank Berhad
Kan Chee Jing ACIS

REGISTERED OFFICE REGISTRARS
Wisma Siah Brothers Tacs Corporation Sdn Bhd
74A Jalan Pahang Unit No. 203, 2nd Floor
53000 Kuala Lumpur Block C, Damansara Intan
No. 1, Jalan SS 20/27
Tel : 03-40418118 Fax : 03-40435281 47400 Petaling Jaya

AUDITORS Tel : 03-71182688 Fax : 03-71182693
Horwath Mok & Poon
Public Accountants STOCK EXCHANGE LISTING
Level 16 Tower C, Megan Phileo Avenue The Main Board of Kuala Lumpur Stock Exchange
12 Jalan Yap Kwan Seng
50450 Kuala Lumpur

Profile Of The Directors

(A) DIRECTORS’ PROFILE AS AT 31ST JULY, 2001

Tan Sri Dato’ Ir. Muhammad Yusuff bin Haji Muhammad Yunus, a Malaysian, aged 73, the
Independent Non-Executive Chairman of Siah Brothers Corporation Berhad ("SBC"), was appointed
to the Board of Directors of SBC on 5th February, 1991. He is also a member of the Audit Committee
of SBC. He graduated with a Bachelor of Science Degree majoring in Civil Engineering from the
University of Wales, United Kingdom in 1954 and is a Chartered Civil Engineer.

He served in the Public Works Department ("Jabatan Kerja Raya" or "JKR") from 1955 until his
retirement in 1983, holding the last position as the Director-General of JKR. Presently, he also sits
on the board of Projek Lebuhraya Utara Selatan Berhad and several private limited companies in
Malaysia.

He does not hold any securities, direct or indirect, in SBC or any of its subsidiaries.

He has no family relationship with any Director and/or major shareholder of SBC.

He does not have any conflict of interest with SBC.

He has not been convicted of any offence within the past 10 years.

He attended all the four Board Meetings held during the last financial year.

Sia Kwee Mow @ Sia Hok Chai, a Malaysian, aged 68, is the Managing Director of Siah Brothers
Corporation Berhad ("SBC"). He has been a Director of SBC since its incorporation on 14th June,
1990. He has over 47 years of experience in building and civil engineering contracting and not less
than 29 years of experience in plastic engineering since the incorporation of Paling Industries Sdn.
Bhd. in 1971. He was actively involved in Master Builders Association ("MBAM") and had served in
various capacities including the post of President (1988 to 1994). He was elected as the 29th
President (1994 to 1996) of the International Federation of Asian and Western Pacific Contractors’
Associations ("IFAWPCA") during which he led the IFAWPCA delegation to a meeting between the
World Bank and International Contractors Association held at Washington D.C. in November, 1996.

In recognition of his vast experience and knowledge in construction and his contribution to the
building construction industry, he was awarded or conferred the following :

q Johan Mangku Negara by DYMM Yang DiPertuan Agong in 2001
q Honorary Life President by MBAM in 2001
q Fellowship of the Faculty of Building, United Kingdom in 1981
q Fellowship of the Chartered Institute of Building, United Kingdom as a Chartered Builder in
1979
q Fellowship of the Australian Institute of Building by the Australian Royal Charter of Building in
1982

He was also a previous President of both the Selangor Builders Association and Selangor Chinese
Plumbing and Sanitary Association.


He also sits on the board of several private limited companies in Malaysia, including several
subsidiaries of SBC.

His holdings in the securities of SBC are as follows –

Direct Interest Indirect Interest

Ordinary shares 3,982,400 7,463,832(a)
Transferable Subscription Rights 3,078,500 1,746,780(b)
Irredeemable Convertible Unsecured Loan Stocks 2,054,250 89,693,206(a)
Employees’ Shares Option Scheme 450,000 -

(a)
Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. and Evergreen
Legacy Sdn. Bhd.
(b)
Deemed interest by virtue of his shareholding in Evergreen Legacy Sdn. Bhd. and Perfect
Consistence Sdn. Bhd.

He does not hold any securities, direct or indirect, in any of SBC subsidiaries.

He is the father of Sia Teong Heng, an Executive Director and a major shareholder of SBC.

He does not have any conflict of interest with SBC except for those transactions disclosed in Note
36 to the financial statements.



Sia Teong Heng, a Malaysian, aged 38, was appointed as an Executive Director of Siah Brothers
Corporation Berhad ("SBC") on 5th February, 1991. He is also a member of the Audit Committee
of SBC. He graduated in 1985 with a degree in Bachelor of Science in Civil Engineering from
Loughborough University, United Kingdom ("UK") and a Master degree in Management Science
from Imperial College, University of London, UK in 1986.

His career began in investment banking in 1987 with Morgan Grenfell (Asia) Ltd., Singapore. He
joined SBC in 1991. Presently, he also sits on the board of several subsidiaries of SBC.

His holdings in the securities of SBC are as follows -


Ordinary shares 1,296,400 7,463,832(a)
Transferable Subscription Rights - 1,746,780(b)
Irredeemable Convertible Unsecured Loan Stocks 1,432,500 89,693,206(a)

(a)
Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. and Evergreen
Legacy Sdn. Bhd.
(b)
Deemed interest by virtue of his shareholding in Evergreen Legacy Sdn. Bhd. and Perfect
Consistence Sdn. Bhd.



He is a son of Sia Kwee Mow @ Sia Hok Chai, the Managing Director and a major shareholder of
SBC.

He does not have any conflict of interest with SBC except for those transactions disclosed in Note
36 to the financial statements.



Mun Chong Shing @ Mun Chong Tian, a Malaysian, aged 64, was appointed as an Executive
Director of Siah Brothers Corporation Berhad ("SBC") on 1st April, 1996. He completed his
secondary education up to GCE A Level and has attended courses in Sales Management conducted
by National Productive Centre and Malaysia Institute of Management as well as a General
Management Programme at the National Productivity Board, Singapore.

He joined Hume Industries (M) Bhd. ("Hume") in 1961 and held various management positions
rising to the level of General Manager. During his tenure with Hume, he gained extensive experience
in all aspects of the manufacturing business including sales management, general management
and industrial engineering.

He joined Paling Industries Sdn. Bhd. in 1987 as General Manager with overall responsibility for
the company's business. Overall, he has approximately 40 years of experience in manufacturing
with specific emphasis on piping and construction building materials.



Ordinary shares 17,000 -
Transferable Subscription Rights 12,500 -
Irredeemable Convertible Unsecured Loan Stocks 22,000 -


He is a brother-in-law to Sia Kwee Mow @ Sia Hok Chai and an uncle to Sia Teong Heng, both are
Directors and major shareholders of SBC.



He attended three of the four Board Meetings held during the last financial year.


Dato' Lim Phaik Gan (P.G. Lim), a Malaysian, aged 81, was appointed as an Independent Non-
Executive Director of Siah Brothers Corporation Berhad ("SBC") on 5th February, 1991. She is an
advocate and solicitor and was called to the Bar of England and the Bar of Malaysia. She obtained
a Master of Arts degree in Law from the University of Cambridge, United Kingdom and was in
active practice at the Bar of Malaysia from 1954 to 1971 and from 1980 until today.

Since 1955, she has had a distinguished career in both the private and public sectors. In 1970, she
was a member of the National Economic Consultative Council established when Parliament was
suspended as a result of riots in 1969. From 1971 to 1980, she served as the Deputy Permanent
Representative of Malaysia to the United Nations and as the Malaysian Ambassador to Yugoslavia,
Austria, Belgium and the European Economic Community. She was Malaysia's Permanent
Representative to the United Nations Industrial and Development Organisation and International
Atomic Energy Agency in Vienna, and served as chairman in various committees.

Since her retirement from the Malaysian Foreign Service in 1980, she has been actively involved in
various government bodies and advisory panels. She is currently a member of the Board of the
Institute of Strategic and International Studies. She was the Director of the Kuala Lumpur Regional
Centre for Arbitration, an international organisation involved in the conduct and administration of
international commercial arbitration for the settlement of disputes arising out of international
commercial contracts and joint ventures from 1982 to 2000.

Her holdings in the securities of SBC are as follows -



She does not hold any securities, direct or indirect, in any of SBC subsidiaries.

She has no family relationship with any Director and/or major shareholder of SBC.

She does not have any conflict of interest with SBC.

She has not been convicted of any offence within the past 10 years.

She attended two of the four Board Meetings held during the last financial year.

Dr. Norraesah bt. Haji Mohamad, a Malaysian, aged 53, was appointed as an Independent Non-
Executive Director of Siah Brothers Corporation Berhad ("SBC") on 8th July, 1991. She is also the
Chairperson of the Audit Committee of SBC. She holds a Doctorate Degree in Economics Science
(International Economics and Finance) which she obtained in 1986 from University of Paris 1,
Pantheon Sorbonne, France.

She has over 28 years of working experience in banking, consultancy and international trade and
commerce. She worked with the International Trade Division of the Ministry of Trade and Industry
(now known as the Ministry of International Trade and Industry) from 1972 to 1985 and was later
transferred to the Finance Division of the Ministry of Finance holding the post of Principal Assistant
Secretary dealing with privatisation and debt management.


In 1988, she joined ESSO Production Malaysia, Inc. as Communications Manager and subsequently,
in 1990, took the position of Managing Director with a consultant firm providing financial advisory
services. From 1991 to 1998 she was appointed as the Chief Representative of Credit Lyonnais
Bank in Malaysia.

She is currently the Group Chairman of MIDAS Group of Engineering Colleges, the Chairman of
Bank Kerjasama Rakyat Malaysia Berhad and also sits on the board of KESM Industries Berhad, a
company listed on the Second Board of the Kuala Lumpur Stock Exchange and several private
limited companies.

Her holdings in the securities of SBC are as follows -


Transferable Subscription Rights 4,000 -

She does not hold any securities, direct or indirect, in any of SBC subsidiaries.

She has no family relationship with any Director and/or major shareholder of SBC.

She does not have any conflict of interest with SBC.

She has not been convicted of any offence within the past 10 years.

She attended two of the four Board Meetings held during the last financial year.

Datuk Sim Peng Choon, a Malaysian, aged 69, was appointed as a Non-Executive Director of Siah
Brothers Corporation Berhad ("SBC") on 14th May, 1993. He is also a member of the Audit
Committee of SBC. He graduated with a Senior Cambridge Certificate from the Anglo Chinese
School in Ipoh, Perak Darul Ridzuan in 1951.

He started his career in 1951 with Barlow & Co. Ltd., Kuala Lumpur, an agent for consumer goods
as their representative. From 1957 to 1963, he was a Director and Manager of H Rogers & Co. Ltd.,
Kuala Lumpur. In 1968, he joined Allen & Hansbury Ltd., a manufacturer of vitamin products,
antibiotics and surgical instruments as a Medical Representative in Singapore. In 1964, he established
Polychem (M) Sdn. Bhd. He is also currently the Chairman of N.P. King (HK) Ltd., Hong Kong and
N.P. King Pte. Ltd., Singapore, both act as agents for manufacturers of hardware and industrial
products.

He is also active in several social organisations, acting as the Vice-Chairman of Kwan Inn Teng
Foundation of Malaysia since 1980 and a Director and the Deputy Treasurer of Tung Shin Hospital,
Kuala Lumpur since 1981 and 1986 respectively. He is a life member of Chee Kim Thong Pugilistic
& Health Society in 1964.

Presently, he also sits on the Board of Cabot Malaysia Sdn. Bhd. and SKF Bearing Industries Malaysia
Sdn. Bhd.

He was awarded the distinction of Panglima Jasa Negara on 2nd June, 2001 by the Yang Di-
Pertuan Agung on his Majesty’s 75th Birthday.




Irredeemable Convertible Unsecured Loan Stocks 4,000 -






Abdul Rahman bin A. Shukor, a Malaysian, aged 39, was appointed to the Board of Directors of
Siah Brothers Corporation Berhad ("SBC") as a Non-Executive Director alternate to Datuk Sim
Peng Choon on 5th February, 2001. He graduated in 1985 with a degree in Bachelor of Science in
Civil & Environmental Engineering from the University of Wisconsin at Madison, USA.

He started his career in 1985 with Machinta Sdn. Bhd. as a Site Engineer, and subsequently joined
the Department of Environment ("DOE") as an Environmental Controller in 1986. Before he left
the DOE, he was involved in the Planning Department, specifically on the aspect of Environmental
Impact Assessment.

In 1992, he joined PNB Equity Resource Corporation Sdn. Bhd., a wholly owned subsidiary company
of PNB, as an Assistant Manager in its Venture Capital Business. In 1997, he went to the United
States to pursue the Executive Master of Business Administration program from the University of
New Haven at Connecticut. At the same time, he has also sat and passed the First and Second of
the three levels Examination of the Chartered Financial Analysis ("CFA") Program organised by the
Association of Investment Management and Research ("AIMR"), USA. The CFA Program is a
distinguished professional chartership for the financial & investment communities in the USA, and
have following through the establishment of AIMR charters all around the world.

Upon the completion of his studies in 1999, he was assigned as a Manager in the Corporate Services
Department of Permodalan Nasional Berhad ("PNB"). Presently, he sits on the Board of GKN
Driveshafts (Malaysia) Sdn. Bhd., representing PNB.

He does not hold any securities, direct or indirect, in SBC or any of its subsidiaries.




He did not attend any of the Board Meetings held during the last financial year.


(B) DIRECTORS’ REMUNERATION FOR THE YEAR ENDED 31ST MARCH, 2001

(i) Aggregate Remuneration

Executive Non-Executive
Remuneration Directors Directors Total
RM RM RM

Fee 60,000 50,400 110,400

Salary 832,800 - 832,800

Bonus 66,500 - 66,500

Benefits in kind 46,772 - 46,772

Total 1,006,072 50,400 1,056,472

(ii) Analysis of Remuneration

Size by Remuneration No. of No. of Non-
RM Executive Directors Executive Directors

1 – 50,000 - 4

50,001 – 100,000 - -

100,001 – 150,000 1 -

150,001 – 200,000 1 -

200,001 – 250,000 1 -

250,001 – 300,000 - -

300,001 – 350,000 - -

350,001 – 400,000 - -

400,001 – 450,000 - -

450,001 – 500,000 1 -

Corporate Structure
As at 15 th August, 2001

Statement Of Directors’ Responsibilities
In Respect Of The Audited Financial Statements

The Directors are required to ensure that financial statements for each financial year are properly drawn
up in accordance with the provisions of the Companies Act, 1965 and approved accounting standards
in Malaysia so as to give a true and fair view of the state of affairs and results of the Group and the
Company for the financial year then ended.

In preparing those financial statements, the Directors have :

q adopted suitable accounting policies and then apply them consistently ;

q made judgements and estimates that are prudent and reasonable ;

q ensured applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements ; and

q prepared the financial statements on the going concern basis unless it is inappropriate to presume
that the Group and the Company will continue in business.

The Directors are responsible for ensuring proper accounting records are kept which disclose with
reasonable accuracy at any time the financial position of the Group and of the Company and to enable
them to ensure that the financial statements comply with the Companies Act, 1965. The Directors are
also responsible for safeguarding the assets of the Group and of the Company and, hence, for taking
reasonable steps for the prevention and detection of fraud and other irregularities.

Chairman’s Statement

O n behalf of the Board of Directors, it is my pleasure to present the Annual Report and Financial
Statements of Siah Brothers Corporation Berhad for the financial year ended 31 March 2001.

Financial Review

The Group recorded a profit before taxation and provision for doubtful debts of RM8.74 million for the
financial year ended 31 March 2001. The provisions of RM7.32 million were made on account of
outstanding debts owed primarily from the turnkey construction of Plaza Phoenix, Empire Tower and
Princess Hotel.

Housing development, a core business of the Group, remained an important contributor to the Group’s
earnings. The construction division witnessed a reduction in turnover on account of the completion of
the campus and academic facilities for the International Institute of Islamic Thought and Civilization at
Taman Duta, Kuala Lumpur and the luxury residential tower at The Peak, Signal Hill, Kota Kinabalu,
Sabah.

For the year under review, cost cutting and rationalization measures continued to be implemented in
order to reduce the effects of the current economic conditions. In the spirit of corporate governance
and transparency, the Board had also implemented a policy to continuously review the recoverability of
debts and the carrying value of investment.

Operational Review

Housing Development and Construction Division

Considering the competitive operating and business environment in which the division is operating,
financial year 2001 was a fulfilling year for the division as it recorded satisfactory performance.

During the year under review, the construction division was awarded with the construction of upgrading
the Jalan Batu Caves-Simpang Tiga from Jabatan Kerja Raya Selangor. Currently, we are actively
negotiating for several Government projects which we hope will give the Group good returns over the
next few years.

Aerial View Of Taman Mastiara, Kuala Lumpur


v Bandar Utama, Batang Kali, Selangor
Single Storey Terrance House

Amongst the major projects undertaken by the housing development division during the year under
review and which are still on-going include :-

q Townville apartments and supportive shops at Taman Mastiara, Jalan Ipoh, Kuala Lumpur.

q Traditional terrace houses at Perkampungan Sri Mahkota Aman, Kuantan, Pahang and Bandar Utama,
Batang Kali, Selangor.

In addition, the division had also entered into a joint venture project development agreement with TA
Properties Sdn Bhd. Under the joint venture development, the division undertakes to develop 400 units
of low cost apartment and 294 units of medium cost terrace house at Persiaran Selat Selatan, Pandamaran,
Pelabuhan Kelang, Selangor, which is expected to commence in September 2001.

Manufacturing Division

Despite a very competitive business environment, the manufacturing division achieved significantly
higher revenue of RM38.5 million, a 40% increase over 2000’s revenue of RM27.6 million. However, in
spite of the increase achieved in the turnover, the division recorded a slightly higher loss of RM261,000
in the year in comparison to RM61,000 in the previous year. This was mainly due to a trademark of
RM436,000 which is used for a 51% owned manufacturing subsidiary’s product, was written off as it is no
longer expected to generate income in the foreseeable future.

On 31 March 2001, the deal on the 60% equity participation in Paling Industries Sdn Bhd
("Paling") by Etex S. A., which is among the world renowned largest plastic building materials
manufacturer in Europe with global network, was completed.

Among the advantages that Paling will benefit from the equity participation by Etex S. A. are :-

q Paling will be Etex’s main conduit for Etex products coming into Malaysia which will
result in growth of business turnover.

q Paling will benefit from inter-trading within the Etex Group to obtain the most cost-
effective product mix.

q Paling is to be developed by Etex into its ASEAN centre for production and
v Paling Product distribution.

q Paling will have access to patented technology and ready know-how in
production techniques to achieve world-class standards.
q Paling will select Etex products (with potential in ASEAN market) that will be
localised and manufactured by Paling.
Paling Product


q Paling will leverage off Etex’s bargaining
strength for preferential rates on machinery and
raw materials.

Corporate Development

In February 2001, the Group received approval
from the Securities Commission for its :-

(i) Proposed Renounceable Rights Issue of up to v Perkampungan Sri Mahkota Aman, Kuantan, Pahang
52,277,289 new ordinary shares of RM1.00 each Single Storey House
in the Company credited as fully paid-up at an
issue price of RM1.00 per share on the basis of one (1) new share for every two (2) shares held; and

(ii) Proposed Special Issue of up to 80,920,000 new shares in the Company in consideration of an offer
by the Company to replace from the holders of the existing 1997/2002 5% Irredeemable Convertible
Unsecured Loan Stocks ("ICULS") their respective ICULS holdings on the basis of 120 ICULS in
consideration of 30 new shares in the Company, together with a restricted issue of 30 new shares in
the Company at an issue price of RM1.00 per share payable in full for cash.

On 23 March 2001, the shareholders of the Company approved the divestment of 2,700,000 ordinary
shares of RM1.00 each, representing 60% of the entire issued and paid-up share capital in Paling
Industries Sdn Bhd to Etex Holding B.V. for a total cash consideration of RM27,075,000. The divestment
resulted in an exceptional gain of RM10,729,328 and RM23,475,000 to the Group and the Company,
respectively.

Employees’ Share Option Scheme ("ESOS")

In February and April 2000, the Group received approval from the Securities Commission and shareholders
respectively for its proposed ESOS of 3,563,000 ordinary shares. The relevant documents pertaining to
the ESOS have been lodged with the Registrar of Companies on 19 May 2000 and on 14 July 2000, the
Group has offered the ESOS to its eligible employees at an exercise price of RM1.40 per share.

Boardroom Change

I would like to welcome on Board Encik Abdul
Rahman bin A. Shukor who was appointed as
alternate Director to Datuk Sim Peng Choon (a
nominee Director for Permodalan Nasional Berhad)
in the year 2001. I would also like to thank Encik
Ibrahim bin Awang and Mr Yeoh Hock Thong who
have both retired as Directors for their invaluable
v Taman Mastiara, Kuala Lumpur contribution to the development of the Group
Double Storey Shop
during their terms in office.

Prospect

The Malaysian economy is expected to register a moderation in GDP growth of about 5% in 2001. The
growth momentum built over the last two years, strength of economic fundamentals and the
implementation of new pre-emptive measures by the Government to cushion the economic against a
global slowdown are expected to generate sufficient impetus to sustain a respectable rate of growth of
economic activities.


The regulations to purchase and own property by foreigners have also been relaxed by the Government
in order to encourage foreign direct investments and enhance the property market sector.

The Group will continue to consolidate its position and restructure its operations to be leaner and more
efficient. It will continue to focus on value-added activities such as strategic joint ventures with landowners ;
while still sustaining its own housing development activities on its land bank.

The construction sector in the Group’s principal markets are expected to be competitive in the forthcoming
year. However, in view of the country’s continued economic recovery and with the Group’s diversification
into East Malaysia’s projects, the Group expects to remain competitive in its existing businesses. The
Group will also continue to seek and explore new avenues and opportunities both in Peninsular Malaysia
and East Malaysia.

v Bandar Utama Batang Kali
Double Storey Terrace

Under this macro economy backdrop, the Group is confident of achieving another satisfactory
performance for the coming financial year in the Group’s housing development as well as construction
divisions, both in Peninsular Malaysia and East Malaysia.

Dividend

The Board of Directors has recommended a first and final dividend of 1.5% less 28% tax in respect of
the financial year ended 31 March 2001.

Appreciation

On behalf of the Board, I would like to extend my sincere gratitude to my fellow members on the Board,
management and staff for their continuing support, confident, commitment and contribution to the
performance of the Group. Our satisfactory performance in this financial year would also not have been
possible without the support from our shareholders, clients, sub-contractors, suppliers and business
associates of the Group. Here, I wish to express my appreciation to the above parties.

I would also like to thank the Kuala Lumpur Stock Exchange, the Registrar of Companies, the Securities
Commission, our bankers, lawyers, auditors and agencies for their constant assistance throughout the
year.

YBhg. Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Muhammad Yunus
PSM, DIMP, JMN, PJK, B.Sc., P.Eng.,FAS
Chairman of the Board of Directors

15 August 2001

Penyata Pengerusi

Pengenalan

D engan sukacitanya saya bagi pihak Lembaga Pengarah membentangkan Laporan Tahunan Siah
Brothers Corporation Berhad untuk tahun kewangan berakhir 31 Mac 2001.

Kajian Kewangan

Kumpulan telah mencatat keuntungan sebelum cukai dan peruntukan hutang ragu sebanyak RM8.74
juta bagi tahun kewangan yang berakhir pada 31 Mac 2001. Jumlah hutang ragu sebanyak RM7.32 juta
diperuntukkan setelah mengambilkira hutang-hutang yang belum dibayar bagi pembinaan secara pukal
Plaza Phoenix, Empire Tower dan Hotel Princess.

Pembangunan hartanah & perumahan, yang kekal sebagai aktiviti utama Kumpulan adalah penyumbang
utama kepada perolehan Kumpulan. Walaubagaimanapun, bahagian pembinaan telah mengalami
penurunan dalam perolehannya setelah kampus dan kemudahan akademi untuk Institut Antarabangsa
Pemikiran dan Tamadun Islam di Taman Duta, Kuala Lumpur dan juga pangsapuri mewah The Peak,
Signal Hill, di Kota Kinabalu, Sabah siap dibina.

Bagi tahun yang dibentangkan, Kumpulan meneruskan langkah-langkah rasional dan pengurangan kos
bagi mengurangkan kesan-kesan daripada situasi ekonomi masa kini. Dengan semangat budaya korporat
dan ketelusan, Lembaga Pengarah telahpun melaksanakan satu polisi untuk sentiasa menjalankan kajian
menyeluruh untuk mendapatkan kembali hutang-hutang dan mangetahui nilai pelaburan semasa.

Kajian Operasi

Bahagian Pembanguan Hartanah & Perumahan dan Pembinaan

Bahagian ini telah memperolehi pencapaian yang memuaskan dalam tahun kewangan 2001 walaupun
beroperasi dalam suasana operasi dan urusniaga yang mencabar dan bersaing.

Bagi tahun kewangan yang dibentangkan, bahagian pembinaan telah diberi tender oleh Jabatan Kerja
Raya, Selangor untuk menaik-tarafkan Jalan Batu Caves – Simpang Tiga. Kami juga sedang dalam
rundingan dengan pihak-pihak yang tertentu untuk mendapatkan beberapa projek kerajaan yang diharap
akan dapat menyumbangkan pulangan yang menguntungkan kepada Kumpulan buat beberapa tahun
akan datang.

Di antara projek-projek utama yang dimajukan dan juga sedang dijalankan oleh bahagian pembangunan
hartanah & perumahan bagi tahun yang dibentangkan adalah:-

q Apatmen-apatmen bandar dan kedai-kedai pejabat di Taman Mastiara, Jalan Ipoh, Kuala Lumpur.

Institut Antarabangsa Pemikiran dan Tamadun Islam

Penyata Pengerusi

q Rumah-rumah teres di Perkampungan Sri Mahkota Aman, Kuantan, Pahang dan di Bandar Utama,
Batang Kali, Selangor.

Selain dari itu, bahagian ini juga telah menandatangani satu perjanjian pembangunan usahasama dengan
TA Properties Sdn Bhd. Di bawah pembangunan usahasama ini, bahagian ini akan membangunkan 400
unit apatmen kos rendah dan 294 unit rumah teres kos sederhana di Persiaran Selat Selatan, Pandamaran,
Pelabuhan Kelang, Selangor. Pembangunan ini dijangka akan bermula pada bulan September 2001.

Bahagian Pengilangan

Walaupun berada dalam suasana urusniaga yang bersaing, bahagian pengilangan masih mencapai
perolehan sebanyak RM38.5 juta iaitu kenaikan sebanyak 40% berbanding perolehan sebanyak RM27.6
juta pada tahun 2000. Namun demikian, bahagian ini mengalami kerugian sebanyak RM261,000
berbanding dengan RM61,000 pada tahun sebelumnya. Ini disebabkan kos tanda
perniagaan berjumlah RM436,000 yang digunakan untuk produk pengilangan anak syarikat
yang dimiliki 51% telah dilupuskan kerana dijangka tidak akan mendatangkan pendapatan
di masa akan datang.

Perjanjian telah dimeterai pada 31 Mac 2001 dengan persetujuan perkongsian ekuiti
sebanyak 60% dalam Paling Industries Sdn Bhd ("Paling") oleh Etex S.A, salah sebuah
pengilang bahan-bahan binaan plastik yang terkemuka di Eropah.

Di antara kelebihan-kelebihan yang akan dinikmati oleh Paling dari perkongsian ekuiti
oleh Etex S. A. adalah :-

q Paling akan dijadikan saluran utama bagi produk-produk Etex yang dibawa masuk
ke Malaysia secara langsung yang akan meningkatkan perolehan perniagaannya.

q Paling akan berpeluang untuk berurusniaga dalaman sesama Kumpulan Etex untuk
memperolehi produk campuran dengan kos yang lebih efektif.
v Barangan Keluaran Paling
q Paling akan dipermajukankan oleh Etex sebagai pusat pembuatan dan
pemasaran di sekitar ASEAN.

q Paling akan diberi pendedahan kepada teknologi tercipta dan teknik
pengeluaran yang canggih untuk mencapai mutu keluaran yang diiktiraf
seluruh dunia.

q Paling akan memilih produk-produk Etex yang berpotensi di pasaran ASEAN
yang akan dikeluarkan daripada kilang Paling. v Barangan Keluaran Pali

q Paling akan menggunakan sepenuhnya kelebihan Etex untuk mendapatkan kadar-kadar yang terbaik
ke atas kelengkapan mesin dan bahan-bahan mentah.

Perkembangan Korporat

Pada bulan Februari 2001, Kumpulan telah menerima kelulusan daripada Suruhanjaya Sekuriti bagi :-

(i) Cadangan Terbitan Hak Boleh Diisytihar Semula sebanyak 52,277,289 saham-saham biasa baru yang
bernilai RM1.00 setiap satu dalam Syarikat dikreditkan sebagai dibayar sepenuhnya dengan harga
terbitan RM1.00 setiap satu atas dasar satu saham biasa untuk setiap dua saham yang dimiliki ; dan

(ii) Cadangan Terbitan Istimewa sebanyak 80,920,000 saham baru dalam Syarikat dengan
mempertimbangkan tawaran Syarikat untuk menggantikan daripada pemegang-pemegang 1997/

Penyata Pengerusi

2002 5% Stok Pinjaman Tidak Boleh Ditebus, Boleh
Diubah Dan Tidak Bercagar ("ICULS") pada masa kini
dengan ICULS yang masing-masing dipegang atas dasar
120 ICULS ditukarkan dengan 30 saham-saham baru
dalam Syarikat, dan dengan terbitan terhad sebanyak 30
saham baru dengan harga RM1.00 setiap satu, yang akan
dibayar sepenuhnya secara tunai.

Pada 23 Mac 2001, para pemegang-pemegang saham
Syarikat telah meluluskan pelupusan sebanyak 2,700,000
saham biasa bernilai RM1.00 setiap satu, yang mewakili 60% v Taman Mastiara Townnville, Kuala Lumpur
150 units 3 dan 4 Tingkat Rumah Bandar
daripada keseluruhan modal saham terbitan dan berbayar
Paling Industries Sdn Bhd kepada Etex Holding B.V. dengan harga pelupusan secara tunai berjumlah
RM27,075,000. Pelupusan tersebut telah mencatat keuntungan luarbiasa sebanyak RM10,729,328 dan
RM23,475,000 kepada Kumpulan dan Syarikat masing-masing.

Skim Opsyen Saham Pekerja ("ESOS")

Pada bulan Febuari dan April 2000, para pemegang-pemegang saham
Syarikat dan Suruhanjaya Sekuriti masing-masing telah meluluskan
cadangan penerbitan ESOS sebanyak 3,563,000 saham biasa.
Dokumen-dokumen yang berkenaan telahpun didaftarkan di pejabat
Pendaftar Syarikat pada 19 Mei 2000. Pada 14 Julai 2000, Kumpulan
telah menawarkan ESOS kepada pekerja-pekerja Kumpulan yang
berkelayakan untuk membeli saham-saham biasa baru dengan nilainya
RM1.40 setiap satu.
v Perkampungan Sri Mahkota, Kuantan
Rumah Teres Satu Tingkat

Perubahan Lembaga Pengarah

Bagi pihak Lembaga Pengarah, saya ingin mengalu-alukan Encik Abdul Rahman bin A. Shukor yang
telah menyertai Lembaga Pengarah sebagai pengarah alternatif kepada Datuk Sim Peng Choon (
Pengarah nomini bagi Permodalan Nasional Berhad) pada tahun 2001. Saya juga ingin merakamkan
penghargaan terhadap sumbangan berharga yang telah diberikan oleh Encik Ibrahim bin Awang dan
Encik Yeoh Hock Thong sepanjang penggal mereka sebagai Pengarah Syarikat, bagi pembangunan
dan pertumbuhan Kumpulan.

Prospek

Ekonomi Malaysia dijangka akan mencatat kesederhanaan dalam pertumbuhan Pendapatan Kasar Negara
iaitu sebanyak 5% dalam tahun 2001. Dengan momentum pertumbuhan yang dibina dalam masa dua
tahun yang lepas, kekuatan asas ekonomi dan pelaksanaan langkah-langkah baru oleh kerajaan untuk
mempertahankan ekonomi daripada kemelesetan global dijangka akan merangsangkan kadar
pertumbuhan aktiviti-aktiviti ekonomi.

Kerajaan juga telah melonggarkan syarat-syarat pembelian dan pemilikan hartanah oleh orang-orang
asing bagi menggalakkan pelaburan asing secara langsung serta meningkatkan sektor pasaran hartanah.

Kumpulan akan terus mengukuhkan kedudukannya dan menyusun semula operasinya agar lebih efisyen
dan berkesan. Tumpuan akan terus diberikan kepada aktiviti-aktiviti yang mempunyai nilai tambahan
seperti usahasama yang strategik dengan tuan-tuan tanah sementara masih meneruskan pembangunan
hartanah & perumahan di atas tanah yang dimiliki.

Penyata Pengerusi

Sektor pembinaan Kumpulan dijangka akan terus bersaing dalam pasaran utama pada tahun yang akan
datang. Walaubagaimanapun, memandangkan situasi ekonomi yang memberangsangkan dan
kepelbagaian aktiviti Kumpulan yang melibatkan projek-projek di Malaysia Timur, Kumpulan dijangka
akan terus bersaing dalam urusniaga sediaada. Kumpulan akan terus berusaha untuk mencari dan
memperkembangkan peluang-peluang baru yang ada di Semenanjung Malaysia dan juga Malaysia Timur.

Dalam situasi ekonomi makro, Kumpulan yakin akan meraih pencapaian yang memuaskan bagi tahun
kewangan akan datang dalam bahagian hartanah & perumahan dan pembinaan Kumpulan di
Semenanjung Malaysia dan Malaysia Timur.

Rumah Kedai Dua Tingkat

Rumah Teres Satu Tingkat
Dividen

Lembaga Pengarah mencadangkan dividen pertama dan terakhir sebangyak 1.5% selepas cukai 28%
bagi tahun kewangan berakhir 31 Mac 2001..

Penghargaan

Bagi pihak Lembaga Pengarah, saya mengambil kesempatan ini untuk merakamkan penghargaan saya
kepada ahli-ahli Lembaga Pengarah atas sokongan dan tunjukajar mereka serta penghargaan kepada
para pemegang-pemegang saham yang memberikan keyakinan dan dedikasi kepada Kumpulan.

Saya juga ingin meyampaikan ribuan terima kasih kepada semua kakitangan dan pihak pengurusan
kami di atas usaha gigih, kesetiaan dan keyakinan mereka kepada Kumpulan.

Pihak kami juga ingin merakamkan setinggi-tinggi penghargaan kepada agensi-agensi kerajaan, pihak
bank, peguam-peguam, juruaudit, rakan kongsi perniagaan, penasihat dan pelanggan kami di atas
sokongan dan galakan mereka.

YBhg. Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Muhammad Yunus
PSM, DIMP, JMN, PJK, B.Sc., P.Eng., FAS
Pengerusi Lembaga Pengarah

15 Ogos 2001

Audit Committee Report

The Board of Siah Brothers Corporation Berhad is pleased to present the Audit Committee Report for
the financial year ended 31 March 2001.

(i) COMPOSITION OF THE AUDIT COMMITTEE

The Audit Committee comprises the following:-

Chairperson : Dr. Norraesah Bt. Haji Mohamad
PhD., B.Sc. (Econ)
(Independent Non-Executive Director)

Members : Tan Sri Dato’ Ir. Muhammad Yusuff Bin Haji Muhammad Yunus
PSM, DIMP, JMN, PJK, B.Sc., P.Eng, FAS
(Independent Non-Executive Director)

Datuk Sim Peng Choon
PJN
(Non-Executive Director)

Sia Teong Heng
B.Sc. (Eng), M.Sc.
(Executive Director)

Secretaries : Chong Fook Sin
ATII, MCCS, AFA

Kan Chee Jing
ACIS

(ii) MEETING OF THE AUDIT COMMITTEE

The Audit Committee met four times during the financial year ended 31 March 2001 and the details
of the attendance of each member of the Audit Committee are as follows:-

No. of Meetings
Name of Members attended

Dr. Norraesah Bt. Haji Mohamad 2

Tan Sri Dato’ Ir. Muhammad Yusuff
Bin Haji Muhammad Yunus 4

Datuk Sim Peng Choon 4

Sia Teong Heng 4


(iii) ACTIVITIES OF THE AUDIT COMMITTEE

In a proactive move towards ensuring the promotion of high standards of corporate governance,
accountability, due diligence and integrity, the Audit Committee had undertaken the following
activities in the financial year ended 31 March 2001:-

1. reviewed the annual plan with the External Auditors in terms of the nature of the audit procedures,
significant accounting and auditing problems, impact of new or proposed changes in the
accounting standards and regulatory requirements;

2. ensured that sufficient audit coverage was accorded on all areas of the Group’s business and
activities;

3. reviewed the audit programme, performance and findings of the Internal Audit Department
("IAD") as well as monitored the implementation of IAD’s Audit Programme;

4. assessed the capacity of IAD to fulfil its responsibilities for reviewing, amongst other thing, the
scope of IAD’s charter;

5. reviewed the Company’s compliance with certain government regulations; and

6. assessed the performance of the Company’s financial management.

At the Audit Committee Meetings held on 26 May 2000 and 25 August 2000, IAD tabled its audit
report to the Audit Committee for deliberation. Weaknesses of procedures were identified and the
respective Heads of Department were asked to take the necessary actions to rectify those weaknesses
and to put proper procedures and control mechanism in place to prevent future occurrences of a
similar nature.

During the year, IAD focused on:

x Housing Development Division’s receipt and payment systems
- Seri Ampangan Realty Sdn Bhd; and
- Sinaran Naga Sdn Bhd,

x Construction Division’s appointment & awarding of sub-contractors and payment systems
- Syarikat Siah Brothers Trading Sdn Bhd; and
- Syarikat Siah Brothers Construction Sdn Bhd,

which collectively contributed more than 50% of the Group’s turnover.

It is also the Audit Committee’s normal practice that External Auditors are invited to present their
views to the Audit Committee in respect of the Company’s annual financial results before the Audit
Committee submits its recommendation to the Board for approval.

Minutes of each Audit Committee Meeting were distributed to all members of the Board for notation.
Recommendations of the Audit Committee were also considered by the Board.

The Company has paid RM10,000 non-audit fees to the External Auditors for the financial year
ended 31 March 2001.


(iv) TERMS OF REFERENCE OF THE AUDIT COMMITTEE

(a) Membership

The committee shall be appointed by the Board from amongst the Directors of the Company
and shall consist of at least 3 directors, a majority of whom are independent. At least one
member of the Committee:-

1. must be a member of the Malaysian Institute of Accountants; or

2. if he is not a member of the Malaysian Institute of Accountants, he must have at least 3
years’ working experience and

x he must have passed the examinations specified in Part I of the 1st Schedule to the
Accountants Act, 1967; or

x he must be a member of one of the associations of accountants specified in Part II of
the 1st Schedule to the Accountants Act, 1967.

The members of the Committee shall elect the Chairman from among their number who shall
be an independent director.

In order to form a quorum in respect of a meeting of the Committee, the majority of members
present must be independent directors.

(b) Attendance At Meetings

The Finance Director, the Head of Internal Audit and a representative of the external auditors
shall normally attend meetings. Other directors and employees of the Company may attend
meetings at the Committee’s invitation. However, at least once a year the Committee shall
meet with the external auditors without any executive director present.

The Company Secretary shall be the secretary of the Committee.

(c) Frequency Of Meetings

Meetings shall be held not less than four times a year. The external auditors may request a
meeting if they consider that one is necessary.

(d) Authority

The Committee is authorised by the Board to investigate any activity within its terms of reference.
It is authorised to seek any information it requires from any employee and all the employees
are directed to cooperate with any request made by the Committee.

The Committee is authorised by the Board to obtain outside legal or other independent
professional advice and to secure the attendance of an outsider with relevant experience and
expertise if it considers this necessary.


(e) Duties

The duties of the Committee shall be

1. to consider the appointment of the external auditors, the audit fee, and any questions of
nomination, resignation or dismissal.

2. to discuss with the external auditors before the audit commences the nature and scope of
the audit and ensure co-ordination where more than one audit firm is involved.

3. to discuss with the external auditors the evaluation of the system of internal controls, audit
report and ensure assistance given by the employees to the external auditors.

4. to review the quarterly and year-end financial statements before submission to the Board,
focusing particularly on –

- any changes or implementation of changes in accounting policies and practices

- major judgement areas

- significant adjustments arising from the audit

- significant and unusual events

- the going concern assumption

- compliance with accounting standards

- compliance with stock exchange and legal requirements

5. to discuss problems and reservations arising from the interim and final audits and any
matters the auditor may wish to discuss (in the absence of management where necessary).

6. to review the external auditors’ management letter and management’s response.

7. to do the following where an internal audit function exists –

- review the adequacy of the scope, functions and resources of the internal audit function
and that it has the necessary authority to carry out its work

- review the internal audit programme and processes and results of the internal audit
programme, processes and investigation and where necessary, ensure that appropriate
action is taken on the recommendations of the internal audit function

- review any appraisal or assessment of the performance of members of the internal
audit function

- approve any appointment or termination of senior staff members of the internal audit
function


- inform itself of resignations of internal audit staff members and provide the resigning
staff member an opportunity to submit his reasons for resigning

8. to consider any related party transactions and conflict of interest situations that may arise
within the company or group including any transaction, procedure or course of conduct
that raises questions of management integrity.

9. to consider the major findings of internal investigations and management’s response and
ensure co-ordination between the internal and external auditors.

10. to consider other topics, as defined by the Board.

(f) Reporting Procedures

The Company Secretary shall circulate the minutes of meetings of the Committee to all members
of the Board.

Group Financial Highlights

2001 2000 1999 1998 1997
RM'000 RM'000 RM'000 RM'000 RM'000

RESULTS
Turnover 92,411 114,707 149,669 256,884 234,310
Profit before taxation 1,421 2,555 2,088 13,364 12,229
Profit after taxation but
before minority interests (9,658) 3,736 3,923 6,430 8,036
Profit after minority interests
but before exceptional items (9,658) 3,736 1,679 2,561 7,948
Profit attributable to shareholders 1,071 3,729 1,679 2,561 7,562

ASSET EMPLOYED
Property, plant and equipment 12,723 31,271 33,939 31,625 33,793
Investments and other assets 135,186 122,850 147,660 147,299 142,942
Sinking Fund Bank Account - - - - 5,216
Net current assets 58,346 56,393 34,687 34,766 59,555
Goodwill and deferred expenditure 10,246 8,253 8,185 8,543 9,061

216,501 218,767 224,471 222,233 250,567

FINANCED BY
Share capital 57,302 57,302 50,469 50,469 50,458
Reserves 43,087 42,832 40,095 38,780 36,610
Minority interests - - 14,897 13,084 10,247
Redeemable Unsecured
Guaranteed Bonds - - - - 34,157
Irredeemable Convertible
Unsecured Loan Stocks 115,600 115,600 115,600 115,600 115,600
Deferred Liabilities 512 3,033 3,410 4,300 3,495

216,501 218,767 224,471 222,233 250,567

SELECTED RATIOS
Net earnings per share (sen) 1.60 6.90 3.33 5.07 15.76
Net tangible assets per share (sen) 165.07 168.52 163.23 159.91 154.60
Gross dividend (%) 1.50 1.50 1.00 1.00 7.00

PROFIT BEFORE TAXATION (RM’000) ASSETS EMPLOYED (RM’000)

TURNOVER (RM’000) SHAREHOLDERS’ FUNDS (RM’000)

Financial
Statement
For the year ended 31st March 2001

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 2001.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding and the provision of
management and administrative services to the subsidiary companies. The principal activities of the
subsidiary companies are disclosed in Note 5 to the financial statements. There have been no significant
changes in the nature of these activities during the financial year.

RESULTS
THE GROUP THE COMPANY
RM RM

Profit after taxation for the financial year 1,070,935 20,257,759

DIVIDENDS

Since the end of the previous financial year, the Company paid the following dividends:-

(i) dividend of 5.5% less 28% tax amounting to RM246,864 for the Irredeemable Cumulative Convertible
Preference Shares ("ICCPS") in respect of the previous financial year, in accordance with the terms
of issue of the ICCPS; and

(ii) first and final dividend of 1.5% less 28% tax amounting to RM545,065 for the ordinary shares in
respect of the previous financial year as proposed in the directors’ report of that financial year.

For the financial year,

(i) the directors have declared the payment of a dividend of 5.5% less 28% tax amounting to RM270,587
for the ICCPS, in accordance with the terms of issue of the ICCPS; and

(ii) the directors recommend the payment of a first and final dividend of 1.5% less 28% tax amounting
to RM545,065 in respect of the ordinary shares.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year except as
disclosed in the financial statements.

ISSUES OF SHARES

During the financial year,

(a) there were no changes in the authorised and issued and paid-up capital of the Company; and

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

Directors’ Report

EMPLOYEE SHARE OPTION SCHEME ("ESOS")

Pursuant to the ESOS which was implemented on 14 July 2000, the movement in the options to subscribe
for new shares of RM1 each at an exercise price of RM1.40 per share is as follows:-

NUMBER OF ORDINARY SHARES OF
RM1 EACH UNDER OPTION

At 14 July 2000 (date of implementation) 3,563,000
Exercised during the financial year -

At 31 March 2001 3,563,000

The salient features of the ESOS are disclosed in Note 40 to the financial statements.

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 except for the share options granted pursuant to the ESOS.

The Company however has in issue a total of 17,076,200 Transferable Subscription Rights ("TSRs") of
which the expiry date has been extended to 20 February 2004. The TSRs entitle the holders thereof the
rights to subscribe for new ordinary shares of RM1 each on the basis of 1 new ordinary share of RM1
each for every TSR held at a pre-determined subscription price of RM3.50 per share.

During the financial year, none of the subscription rights under the TSRs were exercised.

BAD AND DOUBTFUL DEBTS

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

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

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took
reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised
in the ordinary course of business, including their values as shown in the accounting records of the
Group and of the Company, have been written down to an amount which they might be expected so to
realise.

Directors’ Report

At the date of this report, the directors are not aware of any circumstances which would render the
values attributed to the current assets in the financial statements of the Group and of the Company
misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which
render adherence to the existing methods of valuation of assets or liabilities of the Group and of the
Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

Other than the contingent liabilities as disclosed in Note 38 to the financial statements, at the date of
this report, there does not exist:

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

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

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

CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company during the financial year were not, in
the opinion of the directors, substantially affected by any item, transaction or event of a material and
unusual nature other than as disclosed in Note 28 to the financial statements.

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

Directors’ Report

DIRECTORS

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

TAN SRI DATO’ IR MUHAMMAD YUSUFF BIN HAJI MUHAMMAD YUNUS
SIA KWEE MOW @ SIA HOK CHAI
SIA TEONG HENG
MUN CHONG SHING @ MUN CHONG TIAN
DATO’ LIM PHAIK GAN
DR. NORRAESAH BT HAJI MOHAMAD
DATUK SIM PENG CHOON
ABDUL RAHMAN BIN A.SHUKOR (ALTERNATE TO DATUK SIM PENG CHOON,
APPOINTED ON 5.2.2001)
IBRAHIM BIN AWANG (ALTERNATE TO DATUK SIM PENG CHOON, RESIGNED ON 3.1.2001)
YEOH HOCK THONG (RESIGNED ON 2.4.2001)

Pursuant to Section 129 of the Companies Act, 1965, Tan Sri Dato’ Ir. Muhammad Yusuff bin Haji
Muhammad Yunus and Dato’ Lim Phaik Gan retire at the forthcoming Annual General Meeting and offer
themselves for re-election under the provision of Section 129(6) of the said Act to hold office until the
next Annual General Meeting of the Company.

Pursuant to Article 80 of the Articles of Association of the Company, Sia Teong Heng retires by rotation
at the forthcoming Annual General Meeting and, being eligible, offers himself for re-election.

Pursuant to the Listing Requirements of the Kuala Lumpur Stock Exchange, Sia Kwee Mow @ Sia Hok
Chai retires at the forthcoming Annual General Meeting and, being eligible, offers himself for re-election.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end
of the financial year, in shares, TSRs, Irredeemable Convertible Unsecured Loan Stocks ("ICULS") and
options under the ESOS in the Company during the financial year are as follows:-

NUMBER OF ORDINARY SHARES OF RM1 EACH
AT AT
1.4.2000 BOUGHT SOLD 31.3.2001
DIRECT INTEREST
SIA KWEE MOW @ SIA HOK CHAI 3,982,400 - - 3,982,400
SIA TEONG HENG 1,296,400 - - 1,296,400
MUN CHONG SHING @ MUN CHONG TIAN 17,000 - - 17,000
DATO’ LIM PHAIK GAN 5,000 - - 5,000
DATUK SIM PENG CHOON 10,000 - - 10,000

INDIRECT INTEREST
SIA TEONG HENG 7,463,832 - - 7,463,832

Directors’ Report

TRANSFERABLE SUBSCRIPTION RIGHTS
AT AT
1.4.2000 BOUGHT SOLD 31.3.2001
DIRECT INTEREST
DR. NORRAESAH BT HAJI MOHAMAD 4,000 - - 4,000

TRANSFERABLE SUBSCRIPTION RIGHTS
AT AT
1.4.2000 BOUGHT SOLD 31.3.2001
INDIRECT INTEREST
SIA TEONG HENG 1,746,780 - - 1,746,780

IRREDEEMABLE CONVERTIBLE UNSECURED
LOAN STOCKS
AT AT
1.4.2000 BOUGHT SOLD 31.3.2001
DIRECT INTEREST
SIA TEONG HENG 1,432,500 - - 1,432,500
DATUK SIM PENG CHOON 4,000 - - 4,000

INDIRECT INTEREST
SIA TEONG HENG 89,693,206 - - 89,693,206

NUMBER OF ORDINARY SHARES OF RM1 EACH
UNDER OPTION
AT AT
1.4.2000 GRANTED EXERCISED 31.3.2001
DIRECT INTEREST
SIA KWEE MOW @ SIA HOK CHAI - 450,000 - 450,000
SIA TEONG HENG - 350,000 - 350,000
MUN CHONG SHING @ MUN CHONG TIAN - 350,000 - 350,000
YEOH HOCK THONG - 350,000 - 350,000

By virtue of their interests in the Company, Sia Kwee Mow @ Sia Hok Chai and Sia Teong Heng are
deemed to have interests in the shares in the subsidiary companies to the extent of the Company’s
interest, in accordance with Section 6A of the Companies Act, 1965.

None of the other directors holding office at the end of the financial year had any interests in shares,
TSRs, ICULS or options under the ESOS of the Company or its related corporations during the financial
year.

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 36 to the financial statements.

Neither during nor at the end of the financial year was the Company or its subsidiary companies a party
to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition
of shares in or debentures of the Company or any other body corporate except for the existing TSRs
and ICULS held by certain directors which would enable them to acquire new shares in the Company
and the share options granted pursuant to the ESOS.

SIGNIFICANT EVENTS

The significant events involving the Group and the Company during the current financial year are disclosed
in Note 40 to the financial statements.

SUBSEQUENT EVENT

The significant subsequent event of the Group and the Company is disclosed in Note 41 to the financial
statements.

AUDITORS

The auditors, Messrs. Horwath Mok & Poon, have expressed their willingness to continue in office.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

TAN SRI DATO’ IR MUHAMMAD YUSUFF BIN
HAJI MUHAMMAD YUNUS


25 July 2001

Statement By Directors

We, Tan Sri Dato’ Ir Muhammad Yusuff Bin Haji Muhammad Yunus and Sia Kwee Mow @ Sia Hok
Chai, being two of the directors of Siah Brothers Corporation Berhad, state that, in the opinion of the
directors, the financial statements set out on pages 39 to 70 are drawn up in accordance with applicable
approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the
Group and of the Company at 31 March 2001 and of their results and cash flows for the financial year
ended on that date.

TAN SRI DATO’ IR MUHAMMAD YUSUFF
BIN HAJI MUHAMMAD YUNUS


25 July 2001

Statutory Declaration
I, Sia Kwee Mow @ Sia Hok Chai, I/C No. 3290819 (B), being the director primarily responsible for the
financial management of Siah Brothers Corporation Berhad, do solemnly and sincerely declare that
the financial statements set out on pages 39 to 70 are, to the best of my knowledge and belief, correct,
and I make this solemn declaration conscientiously believing the same to be true and by virtue of the
provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by Sia Kwee Mow @ Sia Hok Chai, I/C No. 3290819 (B), at Kuala
Lumpur in the Federal Territory on this 25th day of July, 2001.

Before me

Haron Hashim No. W 128
Commissioner for Oaths
Kuala Lumpur
25 July 2001

Report Of The Auditors To The Members Of
Siah Brothers Corporation Berhad

We have audited the financial statements set out on pages 39 to 70. The preparation of the financial
statements is the responsibility of the Company’s directors. Our responsibility is to express an opinion
on the financial statements based on our audit.

We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards
require that we plan and perform the audit to obtain reasonable assurance that the financial statements
are free of material misstatement. Our audit included examining, on a test basis, evidence relevant to
the amounts and disclosures in the financial statements. Our audit also included an assessment of the
accounting principles used and significant estimates made by the directors as well as evaluating the
overall adequacy of the presentation of information in the financial statements. We believe our audit
provides a reasonable basis for our opinion.

In our opinion,

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies
Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair
view of:-

(i) the state of affairs of the Group and of the Company at 31 March 2001 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 subsidiary companies 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 subsidiary companies
for which we have not acted as auditors, as indicated in Note 5 to the financial statements.

We are satisfied that the financial statements of the subsidiary companies 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 subsidiary companies were not subject to any
qualification and did not include any comments made under Section 174 (3) of the said Act.

HORWATH MOK & POON ONN KIEN HOE
Firm No: AF 0995 Approval No: 1772/11/02 (J)
Public Accountants Partner of Firm

Kuala Lumpur
25 July 2001

Balance Sheets At 31 March 2001

2001 2000 2001 2000
NOTE RM RM RM RM
ASSETS
Investment in subsidiary companies 5 - - 167,370,110 173,370,110
Interest in associate companies 6 117,533,764 104,715,489 10,440,450 8,040,450
Property, plant and equipment 7 12,723,305 31,271,271 102,240 155,302
Investment properties 8 16,987,903 17,869,093 - -
Other assets 9 664,585 264,799 - -
Goodwill on consolidation 10 10,245,527 7,511,884 - -
Intangible assets 11 - 740,781 - -

158,155,084 162,373,317 177,912,800 181,565,862

CURRENT ASSETS
Inventories 12 9,740,311 16,785,581 - -
Property development in progress 13 25,755,399 26,915,382 - -
Debtors 14 103,665,479 94,550,891 44,797,149 20,313,044
Amounts owing by subsidiary companies 15 - - 16,170,926 21,022,577
Amounts owing by associate companies 16 5,644,198 6,791,231 101,383 27,883
Short term deposits with a licensed bank 150,000 3,272,665 - -
Cash and bank balances 1,136,617 1,563,932 79,070 81,157

146,092,004 149,879,682 61,148,528 41,444,661

LESS: CURRENT LIABILITIES
Amount owing to contract customers 17 603,824 1,665,665 - -
Creditors 18 34,864,221 48,705,990 421,539 5,075,818
Amount owing to a director 19 2,918,800 2,918,800 2,918,800 2,918,800
Proposed dividend 545,065 545,065 545,065 545,065
Dividend payable 270,587 246,864 270,587 246,864
Short term borrowings 20 48,543,794 39,403,957 14,462,435 13,223,181

87,746,291 93,486,341 18,618,426 22,009,728

NET CURRENT ASSETS 58,345,713 56,393,341 42,530,102 19,434,933

216,500,797 218,766,658 220,442,902 201,000,795

FINANCED BY:-

SHARE CAPITAL 21 57,301,943 57,301,943 57,301,943 57,301,943
RESERVES 22 43,087,162 42,831,879 47,540,959 28,098,852

SHAREHOLDERS’ EQUITY 100,389,105 100,133,822 104,842,902 85,400,795
IRREDEEMABLE CONVERTIBLE
UNSECURED LOAN STOCKS 23 115,600,000 115,600,000 115,600,000 115,600,000
DEFERRED LIABILITIES 24 511,692 3,032,836 - -

216,500,797 218,766,658 220,442,902 201,000,795

NET TANGIBLE ASSETS PER SHARE 25 165 Sen 168 Sen

The annexed notes from an integral part of these financial Statements.

Income Statements
(FOR THE FINANCIAL YEAR ENDED 31 MARCH 2001)
ST

2001 2000 2001 2000
NOTE RM RM RM RM

TURNOVER 26 92,411,289 114,707,092 9,946,518 11,548,616

COST OF SALES (81,341,010) (97,786,539) - -

GROSS PROFIT 11,070,279 16,920,553 9,946,518 11,548,616

OTHER OPERATING INCOME 1,683,032 2,414,798 204 25,124

ADMINISTRATIVE AND OTHER
OPERATING EXPENSES (15,245,542) (10,834,433) (3,881,801) (1,386,298)

(LOSS)/PROFIT FROM OPERATIONS (2,492,231) 8,500,918 6,064,921 10,187,442

FINANCIAL EXPENSES (9,597,215) (9,698,411) (8,641,329) (8,685,386)

SHARE OF PROFIT OF
ASSOCIATE COMPANIES 2,781,304 3,759,401 - -

(LOSS)/PROFIT BEFORE TAXATION
AND EXCEPTIONAL ITEM 27 (9,308,142) 2,561,908 (2,576,408) 1,502,056
EXCEPTIONAL ITEM 28 10,729,328 (6,508) 23,475,000 -

PROFIT BEFORE TAXATION 1,421,186 2,555,400 20,898,592 1,502,056

TAXATION 29 (350,251) 1,173,757 (640,833) (508,000)

PROFIT AFTER TAXATION 1,070,935 3,729,157 20,257,759 994,056

Earnings per share (sen) - basic 30 1.6 6.9
- diluted 30 N/A 6.5

The annexed notes from an integral part of these financial statements.

SBC Corporation Berhad: Annual Report 2001

SBC Corporation Berhad: Annual Report 2001

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (17)

Similar to SBC Corporation Berhad: Annual Report 2001

Similar to SBC Corporation Berhad: Annual Report 2001 (20)

More from sbc.corporation

More from sbc.corporation (17)

Recently uploaded

Recently uploaded (20)

SBC Corporation Berhad: Annual Report 2001