SBC Corporation Berhad: Annual Report 2004 960kb

1,447 views

Published on

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

SBC Corporation Berhad: Annual Report 2004 960kb

  1. 1. 2 0 0 4 R E P O R T A N N U A L an adherence to industr y's highest ethics (formerly known as siah brothers corporation berhad) (199310-P) sbc corporation berhad sbc corporation berhad annual repor t 2004 sbc corporation berhad (199310-P) Wisma Siah Brothers, 74A Jalan Pahang, 53000 Kuala Lumpur. Tel: 03 4041 8118 Fax: 03 4043 5281 (formerly known as siah brothers corporation berhad) designed & produced by mintlav@streamyx.com
  2. 2. c o r e p u r p o s e c o r e v a l u e Adherence to industry's highest ethics Use of designs and processes that promote standards Equipping our people to anticipate and respond to the needs of our customers and stakeholders To build upon our construction heritage to design and deliver exciting, unique and valuable solutions for buildings and communities
  3. 3. CONTENTS corporate section notice of annual general meeting 2 notice of dividend payment 3 statement accompanying notice of annual general meeting 3 corporate information 4 directors’ profile 5 corporate structure 11 group financial highlights 12 statement of directors’ responsibilities 13 executive chairman’s statement 14 penyata pengerusi eksekutif 18 statement of corporate governance 22 statement on internal control 30 audit committee report 32 group properties 88 shareholders’ information 90 proxy form financial statements 37 - 87
  4. 4. notice of annual general meeting NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Fourteenth Annual General Meeting of SBC Corporation Berhad (Formerly known as Siah Brothers Corporation Berhad) will be held at the Penthouse, 5th Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala Lumpur on Thursday, 23 September 2004 at 11.00 a.m. to transact the following business: AGENDA 1. To receive and adopt the Directors’ Report and the Audited Financial Statements for the (Resolution 1) year ended 31 March 2004 together with the Auditors’ Report thereon. 2. To declare a first and final dividend of 1% less 28% income tax for the year ended (Resolution 2) 31 March 2004. 3. To approve the payment of Directors’ fees. (Resolution 3) 4. To re-appoint the following Directors pursuant to Section 129(6) of the Companies Act, 1965: (a) YBhg. Dato’ Lim Phaik Gan (Resolution 4) (b) Mr Sia Kwee Mow @ Sia Hok Chai (Resolution 5) 5. To re-elect Mr Sia Teong Heng as a Director retiring by rotation pursuant to Article 77 of (Resolution 6) the Articles of Association of the Company. 6. To re-elect the following Directors retiring pursuant to Article 84 of the Articles of Association of the Company: (a) YBhg. Dato’ Zainol Abidin Bin Haji A. Hamid (Resolution 7) (b) En. Ahmad Fizal Bin Othman (Resolution 8) 7. To re-appoint Messrs. Horwath as Auditors of the Company and to authorise the (Resolution 9) Directors to fix their remuneration. 8. As Special Business, to consider and, if thought fit, to pass the following Ordinary (Resolution 10) Resolution: 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 Bursa Malaysia Securities Berhad 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.” 9. To consider any other business for which due notice shall have been given. P A G E 2
  5. 5. notice of dividend payment NOTICE OF DIVIDEND PAYMENT NOTICE IS HEREBY GIVEN that subject to the approval of the shareholders at the Fourteenth Annual General Meeting of the Company, the first and final dividend of 1% less 28% income tax for the year ended 31 March 2004 will be paid on 29 October 2004 to Depositors registered in the Record of Depositors on 18 October 2004. A Depositor shall qualify for entitlement only in respect of: a) shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 18 October 2004 in respect of ordinary transfers; and b) shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad. NOTES: 1) Proxy: 2) Resolution 10: By Order of the Board A member entitled to attend and vote at the The Company is actively pursuing business Meeting is entitled to appoint a proxy to attend opportunities in prospective areas so as to and vote instead of him. Where a member broaden the operating base and earnings appoints more than one (1) proxy, the potential of the Company. Such expansion plans appointment shall be invalid unless he specifies may require the issue of new shares not CHONG FOOK SIN the proportions of his holdings to be represented exceeding 10 per cent (10%) of the Company’s KAN CHEE JING by each proxy. To be valid, the proxy form duly issued share capital. With the passing of the completed must be deposited at the Registered resolution by the shareholders of the Company at Company Secretaries Office of the Company not less than forty-eight the forthcoming Annual General Meeting, the (48) hours before the time for holding the Directors would avoid delay and cost of meeting. If the appointor is a corporation, this convening further general meetings to approve Kuala Lumpur form must be executed under its common seal or the issue of shares for such purposes. under the hand of its attorney. 30 August 2004 statement accompanying notice of annual general meeting pursuant to paragraph 8.28 (2) of the listing requirements of Bursa Malaysia Securities Berhad (1) The following are the Directors standing for re-appointment and re-election at the Fourteenth Annual General Meeting: (a) Re-appointment of the following Directors pursuant to Section 129(6) of the Companies Act, 1965: (i) YBhg. Dato’ Lim Phaik Gan (ii) Mr Sia Kwee Mow @ Sia Hok Chai (b) Re-election of Mr Sia Teong Heng as a Director pursuant to Article 77 of the Articles of Association of the Company. (c) Re-election of the following Directors pursuant to Article 84 of the Articles of Association of the Company: (i) YBhg. Dato’ Zainol Abidin Bin Haji A. Hamid (ii) En. Ahmad Fizal Bin Othman (2) There were six (6) Directors’ Meetings held during the financial year ended 31 March 2004. Details of attendance of the Directors are set out in the Statement of Corporate Governance appearing on page 23 of P this Annual Report. A (3) The Fourteenth Annual General Meeting will be held at the Penthouse, 5th Floor, Wisma Siah Brothers, G 74, Jalan Pahang, 53000 Kuala Lumpur on Thursday, 23 September 2004 at 11.00 a.m. E 3 (4) The profile of Directors standing for re-appointment and re-election as mentioned in paragraph 1 above at the Fourteenth Annual General Meeting are set out in pages 5 to 10 of this Annual Report.
  6. 6. corporate information as at 10 August 2004 BOARD OF DIRECTORS CORPORATE INFORMATION Sia Kwee Mow @ Sia Hok Chai Sia Teong Heng JMN, FFB, FCIOB, FAIB B.Sc. (Eng), M.Sc. Executive Chairman Managing Director Mun Chong Shing @ Mun Chong Tian Dato' Lim Phaik Gan Non-Executive Director DPMP, DMPN, M.A.(Law), FCI, ARB Independent Non-Executive Director Dato' Zainol Abidin Bin Haji A. Hamid LLB (Hons) Dato' Dr Norraesah Bt. Haji Mohamad Non-Executive Director DSPN, PhD., B.Sc.(Econ) Independent Non-Executive Director Ahmad Fizal Bin Othman B.Acc & Fin. (Hons) Independent Non-Executive Director AUDIT COMMITTEE REMUNERATION COMMITTEE Dato' Dr. Norraesah Bt. Haji Mohamad Dato' Zainol Abidin Bin Haji A. Hamid Chairperson & Independent Non-Executive Director Chairman & Non-Executive Director DSPN, PhD., B.Sc.(Econ) LLB (Hons) Dato' Lim Phaik Gan Dato' Lim Phaik Gan DPMP, DMPN, M.A.(Law), FCI, ARB DPMP, DMPN, M.A.(Law), FCI, ARB Independent Non-Executive Director Independent Non-Executive Director Ahmad Fizal Bin Othman Dato' Dr Norraesah Bt. Haji Mohamad B.Acc & Fin. (Hons) DSPN, PhD., B.Sc.(Econ) Independent Non-Executive Director Independent Non-Executive Director Sia Teong Heng Sia Teong Heng B.Sc. (Eng), M.Sc. B.Sc. (Eng), M.Sc. Managing Director Managing Director EXECUTIVE MANAGEMENT NOMINATION COMMITTEE Sia Teong Heng Dato' Lim Phaik Gan Chairman & Managing Director Chairperson & Independent Non-Executive Director B.Sc. (Eng), M.Sc. DPMP, DMPN, M.A.(Law), FCI, ARB Sia Teong Leng Dato' Dr Norraesah Bt. Haji Mohamad B.A. (Hons) (Law & Econs), M.B.A. DSPN, PhD., B.Sc.(Econ) Corporate Director Independent Non-Executive Director Ng Kee Chye Ahmad Fizal Bin Othman CA., B.Acc (Hons) B.Acc & Fin. (Hons) Group Chief Financial Officer Independent Non-Executive Director Teh Kai Chua Mun Chong Shing @ Mun Chong Tian B.Sc. (Eng) Non-Executive Director General Manager - Technical SOLICITORS AUDITORS Cheang & Ariff Horwath 39 Court Chartered Accountants 39, Jalan Yap Kwan Seng, 50450 Kuala Lumpur Level 16 Tower C, Megan Phileo Avenue Lim & Yeoh 12 Jalan Yap Kwan Seng, 50450 Kuala Lumpur 145-M Jalan Maharajalela, 50150 Kuala Lumpur PRINCIPAL BANKERS Lee, Perara & Tan Affin Merchant Bank Berhad 55, Jalan Thambapillai, Off Jalan Tun Sambanthan Alliance Bank Malaysia Berhad Brickfields, 50470 Kuala Lumpur Aseambankers Malaysia Berhad Bangkok Bank Berhad COMPANY SECRETARIES Bumiputra Commerce Bank Berhad Chong Fook Sin United Overseas Bank (Malaysia) Berhad ATII, MCCS, AFA Utama Merchant Bank Berhad Kan Chee Jing P ACIS REGISTRARS A G Tacs Corporate Services Sdn. Bhd. REGISTERED OFFICE E Unit No. 203, 2nd Floor, Block C, Damansara Intan Wisma Siah Brothers 4 74A Jalan Pahang, 53000 Kuala Lumpur No. 1, Jalan SS 20/27, 47400 Petaling Jaya Tel: 03-4041 8118 Fax: 03-4043 5281 Tel: 03-7118 2688 Fax: 03-7118 2693 STOCK EXCHANGE LISTING Main Board Bursa Malaysia Securities Berhad
  7. 7. directors’ profile as at 30 July 2004 DIRECTORS’ PROFILE Sia Kwee Mow @ Sia Hok Chai Sia Kwee Mow @ Sia Hok Chai, a Malaysian, aged 71, is the Executive Chairman of SBC Corporation Berhad (“SBC”). He has been a Director of SBC since its incorporation on 14 June 1990. He has over 50 years of experience in building and civil engineering contracting and not less than 32 years of experience in plastic engineering since the incorporation of Paling Industries Sdn. Bhd. in 1971. He was actively involved in Master Builders Association Malaysia (“MBAM”) and had served in various capacities including the post of President (1988 to 1994). He was elected as the 29th President (1994 to 1996) of the International Federation of Asian and Western Pacific Contractors’ Associations (“IFAWPCA”) during which he led the IFAWPCA delegation to a meeting between the World Bank and International Contractors Association held at Washington D.C. in November, 1996. In recognition of his vast experience and knowledge in construction and his contribution to the building construction industry, he was awarded or conferred the following: • Johan Mangku Negara by DYMM Yang DiPertuan Agong in 2001 • Honorary Life President by MBAM in 2001 • Fellowship of the Faculty of Building, United Kingdom in 1981 • Fellowship of the Chartered Institute of Building, United Kingdom as a Chartered Builder in 1979 • 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 1,480,800 (a) 19,498,523 (b) Employees’ Shares Option Scheme 450,000 - (a) 1,480,800 shares are held in bare trust by RHB Capital Nominees (Tempatan) Sdn. Bhd. (b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn. Bhd. (5,181,023 shares). By virtue of his interests in SBC, he is deemed to have interests in the securities of SBC’s subsidiaries to the extent of SBC’s interest in accordance with Section 6A of the Companies Act, 1965. He is the father of Sia Teong Heng, 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 42 to the financial statements. He has not been convicted of any offence within the past 10 years. He attended all the six Board Meetings held during the last financial year. P A G E 5
  8. 8. DIRECTORS’ PROFILE Sia Teong Heng Sia Teong Heng, a Malaysian, aged 41, is the Managing Director of SBC Corporation Berhad (“SBC”). He was appointed as a Director of SBC on 5 February 1991. He is a member of the Audit Committee and the Remuneration Committee of SBC. He graduated in 1985 with a degree in Bachelor of Science in Civil Engineering from Loughborough University, United Kingdom ("UK") and a Master degree in Management Science from Imperial College, University of London, UK in 1986. His career began in investment banking in 1987 with Morgan Grenfell (Asia) Ltd., Singapore. He joined SBC in 1991. Presently, he also sits on the boards of several subsidiaries of SBC. His holdings in the securities of SBC are as follows: Direct Interest Indirect Interest Ordinary shares 2,017,992 (a) 19,498,523 (b) Employees’ Shares Option Scheme 350,000 - (a) 1,774,000 shares are held in bare trust by Amsec Nominees (Tempatan) Sdn. Bhd. (b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn. Bhd. (5,181,023 shares). By virtue of his interests in SBC, he is deemed to have interests in the securities of SBC’s subsidiaries to the extent of SBC’s interest in accordance with Section 6A of the Companies Act, 1965. He is a son of Sia Kwee Mow @ Sia Hok Chai, the Executive Chairman and a major shareholder of SBC. He does not have any conflict of interest with SBC except for those transactions disclosed in Note 42 to the financial statements. He has not been convicted of any offence within the past 10 years. He attended five of the six Board Meetings held during the last financial year. P A G E 6
  9. 9. DIRECTORS’ PROFILE Mun Chong Shing @ Mun Chong Tian Mun Chong Shing @ Mun Chong Tian, a Malaysian, aged 67, was appointed as an Executive Director of SBC Corporation Berhad ("SBC") on 1 April, 1996 when he was employed as General Manager of Paling Industries Sdn. Bhd. (“Paling”) from 1987 and appointed as a Director in 1991 and remained in both positions until his retirement on 31 December 2001. On 31 December 2001, he was redesignated as a Non-Executive Director of SBC. He is a member of the Nomination Committee of SBC. He has received training in Sales Management conducted by the National Productive Centre and the Malaysian Institute of Management and a General Management Programme at the National Productivity Board, Singapore. Prior to his involvement with Paling, he was employed as General Manager in Hume Industries (M) Bhd. where he has had extensive exposure to industrial engineering and management. His holdings in the securities of SBC are as follows: Direct Interest Indirect Interest Ordinary shares 21,782 - He does not hold any securities, direct or indirect, in any of SBC’s subsidiaries. He is a brother-in-law to Sia Kwee Mow @ Sia Hok Chai and an uncle to Sia Teong Heng, both are Directors and major shareholders of SBC. He does not have any conflict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended all the six Board Meetings held during the last financial year. P A G E 7
  10. 10. DIRECTORS’ PROFILE Dato' Lim Phaik Gan Dato' Lim Phaik Gan, a Malaysian, aged 84, was appointed as an Independent Non-Executive Director of SBC Corporation Berhad ("SBC") on 5 February 1991. She is the Senior Independent Non-Executive Director, the Chairperson of the Nomination Committee and a member of the Audit Committee and the Remuneration Committee of SBC. 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 ambassador and the Deputy Permanent Representative of Malaysia to the United Nations and successively 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. After her retirement from the Malaysian Foreign Service in 1980, she was appointed by the Government as 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, in which capacity she served from 1982 to 2000. She is currently a member of the Board of Trustees of the Institute of Strategic and International Studies. She does not hold any securities, direct or indirect, in SBC or any of its 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 all the six Board Meetings held during the last financial year. P A G E 8
  11. 11. DIRECTORS’ PROFILE Dato’ Dr. Norraesah Bt. Haji Mohamad Dato’ Dr. Norraesah Bt. Haji Mohamad, a Malaysian, aged 56, was appointed as an Independent Non-Executive Director of SBC Corporation Berhad ("SBC") on 8 July 1991. She is the Chairperson of the Audit Committee and a member of the Nomination Committee and the Remuneration 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 31 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 sits on the board of KESM Industries Berhad, Malaysian Oxygen Berhad and several private limited companies. She was awarded the distinction of Darjah Setia Pangkuan Negeri on 13 July 2002 by Tuan Yang Terutama Yang di-Pertua Negeri Pulau Pinang on His Excellency’s 64th Birthday. She does not hold any securities, direct or indirect, in SBC or any of its 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 all the six Board Meetings held during the last financial year. P A G E 9
  12. 12. DIRECTORS’ PROFILE Dato’ Zainol Abidin Bin Haji A. Hamid Dato’ Zainol Abidin Bin Haji A. Hamid, a Malaysian, aged 62, was appointed as a Non-Executive Director of SBC Corporation Berhad ("SBC") on 10 October 2003, representing the interest of Permodalan Nasional Berhad. He is the Chairman of the Remuneration Committee of SBC. He graduated with LLB (Hons) from the University of London in 1995. He joined the Kedah State Government in 1966 as a civil servant. From 1973 to 1981, he was the District Officer for Sik, then Padang Terap and finally Kubang Pasu. He was General Manager and Director of Kedah Cement Sdn Bhd from 1981 to 1996 and Managing Director of Kedah Cement Marketing Sdn Bhd form 1990 to 1996. He sits on the Board of Paragon Union Berhad. 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 three Board Meetings held during the last financial year since his appointment to the Board of SBC. Ahmad Fizal Bin Othman Ahmad Fizal Bin Othman, a Malaysian, aged 41, was appointed as an Independent Non-Executive Director of SBC Corporation Berhad ("SBC") on 24 February 2004. He is a member of the Audit Committee and the Nomination Committee of SBC. He graduated with a Bachelor in Accounting and Finance (Hons) from the Middlesex University, London. He is a well-rounded and experienced businessman and involved in a multitude of industries. Currently, he immerses himself in retail, multimedia and technology. 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 did not attend any Board Meeting during the last financial year as there was no such Meeting held after his appointment up to 31 March 2004. P A G E 10
  13. 13. corporate structure as at 10 August 2004 CORPORATE STRUCTURE INVESTMENT HOLDING Siah Brothers Land Sdn Bhd 100% • Siah Brothers Properties Sdn Bhd 100% • Siah Brothers Industries Sdn Bhd 100% • PROPERTY DEVELOPMENT Seri Ampangan Realty Sdn Bhd 100% • Sinaran Naga Sdn Bhd 100% • Mixwell (Malaysia) Sdn Bhd 100% • South-East Best Sdn Bhd 100% • Gracemart Resources Sdn Bhd 100% • Sutrati Development Sdn Bhd 100% • Siah Brothers Development Sdn Bhd 100% • Tiara Development Sdn Bhd 100% • SBC Homes Sdn Bhd 100% • Winsome Ventures Sdn Bhd 100% • SBC Leisure Sdn Bhd 100% • SBC Towers Sdn Bhd 100% • S Brothers Project Management Sdn Bhd iah 100% • Ligamas Sdn Bhd 50% • Sri Berjaya Development Sdn Bhd 33.3% • CONSTRUCTION • 100% Syarikat Siah Brothers Trading Sdn Bhd • 100% Syarikat Siah Brothers Construction Sdn Bhd • 100% Siah Brothers Enterprise Sdn Bhd • 100% Lifeplus - Siah Brothers Trading JV Sdn Bhd PROPERTY INVESTMENT • 100% Aureate Construction Sdn Bhd • 22.2% Sri Rawang Properties Sdn Bhd MANUFACTURING & TRADING • 40% Paling Industries Sdn Bhd • 40% Liga Canggih Sdn Bhd • 51% Masahmura Sdn Bhd • 51% Masahmura Sales & Service Sdn Bhd • 50% Varich Industries Sdn Bhd PLANTATION & NURSERY P A • 50% Sam & Lau Plantation Sdn Bhd G E 11
  14. 14. group financial highlights GROUP FINANCIAL HIGHLIGHTS for the financial year ended 31 March 2004 2004 2003 2002 2001 2000 (Restated) RM’000 RM’000 RM’000 RM’000 RM’000 RESULTS Turnover 86,317 69,829 81,645 92,411 114,707 Profit before taxation 6,996 5,149 1,618 1,421 2,555 Profit after taxation but before minority interest 2,073 011 1,174 2, 1,071 3,729 Profit attributable to shareholders 2,073 2,011 1,174 1,071 3,729 ASSETS EMPLOYED Property, plant and equipment 36,246 35,813 7,047 7,586 13,090 Investments and other assets 153,703 152,856 141,705 140,323 141,031 Net current assets 73,632 71,634 56,867 58,346 56,393 Goodwill and deferred expenditure 27,318 27,272 10,246 10,246 8,253 290,899 287,575 215,865 216,501 218,767 FINANCED BY Share capital 82,435 82,435 57,302 57,302 57,302 Share application account - - 115,600 - - Reserves 135,940 134,682 42,524 43,087 42,832 Irredeemable Convertible Unsecurred Loan Stocks - - - 115,600 115,600 ABBA Bonds 39,712 37,827 - - - Deferred liabilities 32,812 32,631 439 512 3,033 290,899 287,575 215,865 216,501 218,767 SELECTED RATIOS Net earnings per share (sen) 2.4 2.4 1.8 1.6 6.9 Net tangible assets per share (sen) 244 242 393 165 169 Gross dividend (%) 1.0 1.0 - 1.5 1.5 6,996 290,899 218,375 86,317 287,575 217,117 5,149 69,829 2004 2004 2004 2004 215.426 81,645 215,865 2003 2003 2003 2003 1,618 92,411 216,501 2002 2002 2002 2002 100,389 1,421 114,707 P 218,767 2001 2001 2001 2001 A 100,134 G 2,555 E 12 2000 2000 2000 2000 Profit Before Taxation Assets Employed Turnover Shareholders’ Fund (RM’000) (RM’000) (RM’000) (RM’000)
  15. 15. statement of directors’ responsibilities in respect of the preparation of the financial statements STATEMENT OF DIRECTORS’ RESPONSIBILITIES The Directors are responsible for ensuring that the financial statements of the Group are drawn up in accordance with applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and the Company as of 31 March 2004 and of the results and cash flows of the Group and Company for the financial year ended on that date. In preparing the financial statements, the Directors have: (a) adopted suitable accounting policies and applied them consistently; (b) made judgements and estimates that are prudent and reasonable; (c) ensured the adoption of applicable approved accounting standards; and (d) used the going concern basis for the preparation of the financial statements. The Directors are responsible for ensuring proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the Group and the Company and are kept in accordance with the Companies Act, 1965. The Directors are also responsible for taking such steps as are reasonably open to them to safeguard the Group’s assets and to prevent and detect fraud and other irregularities. P A G E 13
  16. 16. executive chairman’s statement EXECUTIVE CHAIRMAN’S STATEMENT To our shareholders, customers, employees, partners, suppliers and friends, ON BEHALF OF THE BOARD OF DIRECTORS, I AM PLEASED TO PRESENT THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS OF SBC CORPORATION BERHAD FOR THE FINANCIAL YEAR ENDED Kota Damansara, Petaling Jaya 31 MARCH 2004 Financial Review The Group's revenue rose to RM86.32 million, which is an increase of 24% compared with RM69.83 million a year ago. Pre-tax profit increased 36% to RM7.00 million from RM5.15 million achieved in the corresponding period last year, largely attributable to the improved economic environment, completion of projects ahead of schedule and increased residential sales. Perkampungan Seri Mahkota Aman, Kuantan Bandar Utama, Batang Kali P A G E Taman Suria Pendamar, Klang 14
  17. 17. EXECUTIVE CHAIRMAN’S STATEMENT Operations Review The better performance achieved for the current financial year under review was in a large part supported by strong return of retail interest in residential housing and incentives given under the Government's stimulus package and lower interest rates. The Group will continue to be market-driven and with our activities focused on providing good value for our residential homeowners, with continual emphasis on our designs and workmanship. This year saw the handover of Phase 1C, Section 4, Bandar Utama Batang Kali, Selangor and Precinct 4, Block E, Taman Mastiara, Kuala Lumpur. Meanwhile, works have started in Phase 1D & 1E, Section 4, Bandar Utama Batang Kali, Selangor; Phase 2, Taman Suria Pendamar, Klang; Phase 5, Perkampungan Seri Mahkota Aman, Kuantan, Pahang and Signal Hill Park @ The Peak, Kota Kinabalu, Sabah. Construction revenue continues to drive the Group's business activities. The turnkey construction such as the rapid completion of Damansara Emas at Kota Damansara is one such contributor. The Group recognizes that the construction market in Malaysia remains highly competitive at the present moment, and thus continues its policy of selective tendering. Against a background of uncertain global environment, the manufacturing associate, Paling Industries Sdn Bhd achieved significantly higher revenue of RM32.66 million, an increase of 18% over 2003's revenue of RM27.77 million. The increase in turnover was negated by lower margins on account of greater volatility increase in raw material cost and yet higher productivity and production yield targets were met. This resulted in slightly higher profits of RM2.78 million in the year in comparison to RM2.29 million in the previous year. The Group continues with its core business of assisting institutional clients with "Construct & Finance Initiative" as well as selectively building up its list of future development sites (such as its recently concluded debt settlement, effectively increasing the Group's land bank by 66.7 acres, at locations within the Klang Valley/Selangor). Over the years, the Group has also been widening its geographical reach with its formula of facilitating new housing areas, or "SBC Communities", as the Group would prefer to refer them as. To date, we have begun at five (5) locations across the nation such as West Selangor, North Selangor, the capital city KL, Kota Kinabalu and Kuantan, masterplanned as sustainable communities. Taman Mastiara, Kuala Lumpur P A G E 15
  18. 18. EXECUTIVE CHAIRMAN’S STATEMENT Corporate Development The Company and its wholly-owned subsidiaries, Syarikat Siah Brothers Construction Sdn Bhd ("SSBC") and Mixwell (Malaysia) Sdn Bhd ("Mixwell"), had on 16 January 2004 entered into a deed settlement with Smart Home Sdn Bhd ("SHSB") whereby SHSB has agreed to settle the entire indebtedness amounting to RM37,720,372 owing by SHSB to SSBC and Mixwell collectively. SHSB shall settle in kind by transferring and/or procuring the transfer of six (6) parcels of land located at Batang Kali, Hulu Yam and Gombak of Selangor; and Setapak and Sungei Besi of Kuala Lumpur. The Proposed Debt Settlement was approved by the shareholders of the Company at the Extraordinary General Meeting held on 16 April 2004. The Foreign Investment Committee has also via its letter dated 6 April 2004 notified that it has no objection to the Proposed Debt Settlement. As part of the Group's objective to broaden its identity (as it currently covers its activity beyond pure building trade), whilst retaining the anchor brand within its wholly owned building subsidiary, it has changed the parent/investment holding company’s name to SBC Corporation Berhad accompanied by an Signal Hill Park, Kota Kinabalu updated version of its logo. Boardroom Change I would like to thank Datuk Sim Peng Choon (a nominee Director for Permodalan Nasional Berhad) and Encik Abdul Rahman Bin A. Shukor who was appointed as alternate Director to Datuk Sim Peng Choon, who have retired and ceased to be directors from the Board Perkampungan Seri Mahkota Aman, Kuantan respectively, for their invaluable contribution to the development of the Group during their terms in office. I would also like to take this opportunity to welcome on Board, Dato' Zainol Abidin Bin Haji A. Hamid and Encik Ahmad Fizal Bin Othman as a nominee Non-Executive Director for Permodalan Nasional Berhad and Independent Non-Executive Director respectively. Perkampungan Seri Mahkota Aman, Kuantan P A G E 16
  19. 19. EXECUTIVE CHAIRMAN’S STATEMENT Economic And Business Outlook The external environment and global economic outlook will continue to be affected by geopolitical and economic uncertainties. The Malaysian economy is expected to register a moderation in GDP growth of about 6.0% and 6.5% in 2004-05, driven by higher exports and domestic demand, primarily from private sector, as the Government's pro-growth fiscal and monetary measures start bearing fruit. The construction industry meanwhile is expected to grow at a moderate rate of 1.5%. The favourable election results at the recently concluded general election in Malaysia will also boost business sentiment and optimism. And this augurs well for the business community on the whole. With the brighter economic outlook, the prospects for a revitalized property sector are conducive to the Group's operating and business environment. The Group will keep to its strategy of offering a comprehensive range of building products from affordable housing to high-end niche projects for house buyers. Nevertheless, the Group strives to differentiate its products through progressive designs, timely completion, quality finishing and value pricing. We anticipate our performance to be satisfactory in the coming year. Dividend The Board is pleased to recommend a first and final dividend of 1% per ordinary share less 28% tax for the financial year ended 31 March 2004. Subject to the shareholders' approval at the forthcoming Annual General Meeting of the Company, the payment of the dividend will be made to the shareholders on a date to be announced later. Appreciation and Acknowledgement I would like to take this opportunity to thank everyone within the SBC Group. Your effective execution of SBC corporate strategies through sheer hard work, commitment and team work in a demanding and challenging business environment have certainly contributed much to the success of the Group. Finally, I would also like to thank our shareholders, customers, joint venture partners, business associates, bankers and government authorities for their confidence in the Board and the management. Thank you. P A G Sia Kwee Mow @ Sia Hok Chai JMN, FFB, FCIOB, FAIB E 17 Executive Chairman Paling’s Products 10 August 2004
  20. 20. penyata pengerusi eksekutif PENYATA PENGERUSI EKSEKUTIF Kepada para pemegang saham, pelanggan, kakitangan, rakan kongsi, pembekal dan rakan-rakan seperjuangan, SAYA BAGI PIHAK LEMBAGA PENGARAH DENGAN SUKACITANYA MEMPERSEMBAHKAN LAPORAN TAHUNAN DAN PENYATA KEWANGAN SBC CORPORATION BERHAD BAGI TAHUN KEWANGAN BERAKHIR 31 MAC 2004. Kota Damansara, Petaling Jaya Ulasan Kewangan Perolehan Kumpulan telah mencapai RM86.32 juta, dengan peningkatan sebanyak 24% berbanding dengan RM69.83 juta pada tahun lepas. Keuntungan sebelum cukai meningkat sebanyak 36% kepada RM7.00 juta berbanding RM5.15 juta yang telah dicapai pada masa yang sama tahun lepas, berpunca daripada keadaan ekonomi yang bertambah baik, penyempurnaan awal projek sebelum tarikh matang dan juga Perkampungan Seri Mahkota Aman, Kuantan daripada peningkatan dalam jualan perumahan. Bandar Utama, Batang Kali P A G E Taman Suria Pendamar, Klang 18
  21. 21. PENYATA PENGERUSI EKSEKUTIF Ulasan Operasi Pencapaian prestasi yang lebih baik pada tahun kewangan ini disumbangkan sebahagian besarnya oleh pulangan faedah runcit yang kukuh hasil daripada skim jualan perumahan dan juga insentif-insentif yang ditawarkan dalam pakej perangsang Kerajaan berserta kadar faedah yang lebih rendah. Kumpulan akan terus menumpukan perhatian pada kehendak pasaran, dan memfokuskan kegiatan-kegiatan kami dengan menghasilkan mutu yang tinggi untuk para pemilik rumah, dengan penumpuan ke atas rekacipta dan kualiti kerja. Kumpulan telah berjaya dalam penyempurnaan dan penyerahan Fasa 1C, Seksyen 4, Bandar Utama Batang Kali, Selangor dan Precinct 4, Blok E, Taman Mastiara, Kuala Lumpur pada tahun ini. Pada masa yang sama, kerja-kerja juga telah dimulakan di Fasa ID & IE, Seksyen 4, Bandar Utama Batang Kali, Selangor; Fasa 2, Taman Suria Pendamar, Klang; Fasa 5, Perkampungan Seri Makhota Aman, Kuantan, Pahang dan Signal Hill Park @ The Peak, Kota Kinabalu, Sabah. Pendapatan daripada sektor pembinaan adalah pendorong utama bagi aktiviti-aktiviti Kumpulan. Pembinaan ‘turnkey’ seperti penyempurnaan yang cepat dalam projek Damansara Emas di Kota Damansara merupakan satu penyumbang besar. Kumpulan sedar bahawa saingan yang hebat masih wujud dalam sektor pembinaan di pasaran Malaysia pada masa ini, maka Kumpulan akan terus berpegang pada polisinya dalam pemilihan tendernya. Di sebalik keadaan ekonomi global yang tidak stabil, syarikat bersekutu sektor pembuatan kami, Paling Industries Sdn Bhd, telah mencatatkan perolehan yang lebih tinggi sebanyak RM32.66 juta, iaitu peningkatan sebanyak 18% berbanding dengan perolehan sebanyak RM27.77 juta pada tahun 2003. Peningkatan dalam perolehan ini dikurangkan oleh margin yang lebih rendah akibat daripada ketidaktentuan dalam peningkatan kos bahan mentah; walaubagaimanpun penghasilan produktiviti berjaya dicapai dengan kadar produktiviti yang tinggi. Keadaan ini telah menyumbangkan keuntungan yang lebih tinggi sebanyak RM2.78 juta pada tahun ini berbanding RM2.29 juta pada tahun lepas. Kumpulan akan meneruskan tumpuan ke atas aktiviti utama perniagaannya dengan membantu para pelanggan dari institusi yang berkaitan melalui “Inisiatif Pembinaan dan Kewangan”, serta menyediakan secara terperinci senarai kawasan-kawasan untuk pembangunan masa depan (sebagai contohnya, penyelesaian hutang yang disempurnakan baru-baru ini telah membantu menambahkan jumlah keluasan tanah Kumpulan seluas 66.7 ekar, di lokasi-lokasi dalam persekitaran Lembah Klang/Selangor). Pada tahun-tahun kebelakangan ini, Kumpulan juga telah memperluaskan lingkungan geografikalnya Taman Mastiara, Kuala Lumpur melalui formula penempatan kawasan perumahan baru, atau “Komuniti SBC”, sepertimana yang lebih dikenali oleh Kumpulan. Kini, kami telah memulakan usaha ini di lima (5) lokasi di seluruh negara seperti di kawasan Selangor Barat, Selangor Utara, ibukota Kuala Lumpur, Kota Kinabalu dan Kuantan, yang mengutamakan rancangan pembangunan komuniti yang kukuh. P A G E Signal Hill Park, Kota Kinabalu 19
  22. 22. PENYATA PENGERUSI EKSEKUTIF Perkembangan Korporat Syarikat ini bersama dengan anak-anak syarikatnya, Syarikat Siah Brothers Construction Sdn Bhd (“SSBC”) dan Mixwell (Malaysia) Sdn Bhd (“Mixwell”) telah menandatangani perjanjian dengan Smart Home Sdn Bhd (SHSB) pada 16 Januari 2004, di mana SHSB telah berjanji untuk melangsaikan kesemua hutangnya kepada SSBC dan Mixwell yang berjumlah sebanyak RM37,720,372. Hutang tersebut akan diselesaikan dengan memindahkan dan/atau berjaya memperolehi pemindahan enam (6) tapak pembinaan yang terletak di Batang Kali, Hulu Yam dan Gombak, Selangor; serta Setapak dan Sungai Besi di Kuala Lumpur. Cadangan Penyelesaian Hutang ini telah diluluskan oleh para pemegang saham syarikat di Mesyuarat Agung Luar Biasa yang diadakan pada 16 April 2004. Jawatankuasa Pelaburan Asing juga telah melalui suratnya yang bertarikh 6 April 2004 menyatakan bahawa ia tidak mempunyai bantahan terhadap Cadangan Penyelesaian Hutang tersebut. Sebagai sebahagian daripada objektif Kumpulan untuk memperkembangkan identitinya, (memandangkan aktiviti Kumpulan kini telah menjangkaui perniagaan sektor pembinaan), dan pada masa yang sama telah mengekalkan jenama utamanya di kalangan anak-anak syarikat dalam sektor ini, maka Kumpulan telah mengubah nama syarikat induk/syarikat pelaburan kepada SBC Corporation Berhad bersampingan dengan versi logo yang terbaru. Perubahan Lembaga Pengarah Saya ingin merakamkan penghargaan ikhlas dan terima kasih kepada Datuk Sim Peng Choon (Pengarah nomini bagi Permodalan Nasional Berhad) dan Encik Abdul Rahman Bin A. Shukor yang telah dipilih sebagai Pengarah alternate kepada Datuk Sim Peng Choon, yang telah bersara dan berhenti sebagai ahli Lembaga Pengarah masing-masing, atas sumbangan mereka yang tidak Perkampungan Seri Mahkota Aman, Kuantan terhingga terhadap kejayaan Kumpulan sepanjang perkhidmatan mereka. Saya juga ingin mengambil kesempatan ini untuk mengalu-alukan kehadiran Dato’ Zainol Abidin Bin Haji A. Hamid, selaku Pengarah Bukan Eksekutif untuk Permodalan Nasional Berhad, dan Encik Ahmad Fizal Bin Othman sebagai Pengarah Bebas Bukan Eksekutif Kumpulan ini. Tinjauan Ekonomi Dan Perniagaan Perkampungan Seri Mahkota Aman, Kuantan Persekitaran luaran dan ekonomi global akan terus dipengaruhi oleh keadaan geopolitik dan ekonomi yang tidak stabil. Ekonomi Malaysia dianggarkan akan mencatat Keluaran Dalam Negeri Kasar yang sederhana iaitu 6.0% hingga 6.5% dalam tahun 2004-05, yang berpunca daripada kenaikan eksport dan peningkatan permintaan dalaman, terutamanya daripada sektor swasta, sementara tindakan pro-pembangunan fiskal dan perangkaan kewangan oleh pihak kerajaan telah menunjukkan hasilnya. Industri pembinaan pula dijangka akan meningkat pada kadar 1.5%. Keputusan yang disambut baik dalam pilihanraya umum yang diadakan baru-baru ini telah memberi kesan positif serta menaikkan lagi sentimen perniagaan. Keadaan ini mendatangkan kesan yang baik kepada keseluruhan komuniti perniagaan. P A Dengan tinjauan ekonomi yang lebih ceria, prospek untuk sektor pembinaan yang lebih cerah adalah sehaluan G dengan keadaan operasi dan perniagaan Kumpulan. Kumpulan akan terus menuruti strateginya untuk menawarkan E produk-produk pembinaan yang komprehensif daripada perumahan yang mampu dimiliki semua ke projek-projek 20 bertaraf tinggi untuk para pembeli rumah. Namun demikian, Kumpulan akan terus berusaha sedaya upaya membezakan hasil keluarannya daripada yang lain dari segi rekabentuk, penyempurnaan dalam masa yang ditetapkan, kemasan bermutu berserta harga yang kompetitif. Kami mengharapkan pencapaian yang memuaskan dalam tahun akan datang.
  23. 23. PENYATA PENGERUSI EKSEKUTIF Dividen Lembaga Pengarah telah mencadangkan pembayaran dividen tahunan sebanyak 1% sesaham tolak cukai 28% untuk tahun kewangan berakhir 31 Mac 2004. Pembayaran untuk dividen ini akan diumumkan tertakluk kepada persetujuan para pemegang saham pada Mesyuarat Agung Tahunan akan datang. Penghargaan Saya ingin mengambil kesempatan ini untuk mengucapkan ribuan terima kasih kepada para tenaga pekerja di Kumpulan SBC. Kegigihan anda dalam melaksanakan strategi korporat SBC melalui usaha yang tidak berbelah bahagi, komitmen serta kebolehan bekerja secara kumpulan dalam situasi perniagaan yang penuh dengan cabaran telah menyumbangkan kejayaan yang tinggi kepada Kumpulan ini. Akhirnya, saya juga ingin menyatakan penghargaan kami kepada para pemegang saham, para pelanggan, rakan-rakan perkongsian, rakan-rakan perniagaan, ahli-ahli bank dan pihak kerajaan atas kepercayaan dan sokongan mereka terhadap pihak Lembaga dan pengurusan. Sekian, terima kasih. Sia Kwee Mow @ Sia Hok Chai JMN, FFB, FCIOB, FAIB Pengarah Eksekutif 10 Ogos 2004 Produk-produk Keluaran Paling P A G E 21
  24. 24. statement of corporate governance STATEMENT OF CORPORATE GOVERNANCE as at 8 August 2004 The Board of Directors of SBC Corporation Berhad remains firmly committed towards ensuring the highest standard of corporate governance is maintained throughout the Company and its subsidiaries (“the Group”). Hence, the Board is fully dedicated to continuously evaluating the Group’s corporate governance practices and procedures with a view to ensure the principles and best practices in corporate governance as promulgated by the Malaysian Code on Corporate Governance (“the Code”) is applied and adhered to in the best interests of the stakeholders. This disclosure statement sets out the manner in which the Group has applied and complied with the Principles of the Code and the extent of compliance with Best Practices as set out in Part 1 and 2 of the Code. BOARD OF DIRECTORS Composition and Balance As at the date of this statement, the Board consists of 7 members, comprising 3 independent non-executive Directors, 2 non-executive Directors and 2 executive Directors which satisfies Bursa Malaysia Securities Berhad (“Bursa Securities”) Listing Requirements of having at least 2 Directors or 1/3 of the Board whichever is higher, who are independent Directors. The Group is led by an experienced Board. The Directors are from diverse backgrounds and have a wide range of skills and experience relevant to managing and directing the Group’s operations. The Executive Directors are responsible for implementing policies of the Board, overseeing the Group’s operations and developing the Group’s business strategies. The role of the Independent Non-Executive Directors is to provide objective and independent judgement to the decision making of the Board and as such, provide an effective check and balance to the Board’s decision making process. The Board is satisfied that the current Board composition fairly reflects the investment of minority shareholders in the Company and represents the needed mix of skills and experience required to discharge the Board’s duties and responsibilities. Furthermore, no individual Director or group of Directors can dominate the Board’s decision making process. The profiles of the members of the Board are set out in this Annual Report under the section named Profile of the Directors. Duties and Responsibilities The Board recognises its key role in charting the strategic direction, development and control of the Group and has adopted the specific responsibilities that are listed in the Code, which facilitates the discharge of the Board’s stewardship responsibilities. The roles of the Chairman and Managing Director are clearly distinct to ensure that there is a balance of power and authority. The Chairman is primarily responsible for the working of the Board, its membership and participation of the members at the Board meetings. The Managing Director is responsible for the daily management of the Group’s business operations and implementation of policies and strategies adopted by the Board. Dato’ Lim Phaik Gan is the senior independent non-executive director to whom concerns may be conveyed. P A G E 22
  25. 25. STATEMENT OF CORPORATE GOVERNANCE Board Meetings Normally, the Board meets at least 4 times in a financial year with additional meetings convened to deliberate on urgent and significant matters where decisions need to be taken between the scheduled Board meetings. During the financial year ended 31 March 2004, the Board met 6 times where it deliberated on and considered matters relating to the Group’s financial performance, significant investments, corporate development, strategic issues and business plan. Details of each Director’s attendance of Board meetings are set out below. Name of Director Designation No. of meetings attended Sia Kwee Mow @ Sia Hok Chai Executive Chairman 6 Sia Teong Heng Managing Director 5 Mun Chong Shing @ Mun Chong Tian Non-Executive Director 6 Dato’ Lim Phaik Gan Independent Non-Executive Director 6 Dato’ Dr. Norraesah Bt. Haji Mohamad Independent Non-Executive Director 6 Dato’ Zainol Abidin Bin Haji A. Hamid Non-Executive Director 3 (appointed on 10 October 2003) Ahmad Fizal Bin Othman Independent Non-Executive Director Not Applicable (appointed on 24 February 2004) Datuk Sim Peng Choon Non-Executive Director 1 (resigned on 19 August 2003) Abdul Rahman Bin A. Shukor Non-Executive Director Nil (ceased on 19 August 2003) (alternate to Datuk Sim Peng Choon) Vincent Koh Kok Kee Independent Non-Executive Director 1 (resigned on 31 May 2003) The Board members have unrestricted and timely access to all information necessary for the discharge of their responsibilities. All Directors are provided with all relevant information and reports on financial, operational, corporate, regulatory, business development by way of Board papers or upon specific request for informed decision making and effective discharge of their duties. These documents are comprehensive and include qualitative and quantitative information to enable the Board members to make informed decisions. Notice of Board Meetings and board papers are provided to directors in advance so that meaningful deliberation and sound decisions can be made at Board meetings. All proceedings of the Board meetings are minuted by the Company Secretary. There is a formal schedule of matters reserved specifically for Board’s decision, these include approval of key policies, significant acquisitions and disposals of assets, significant investments and approval of budgets and corporate plans. To assist in the discharge of their responsibilities and duties, all Directors have access to the advice and services of the Company Secretary. If required, the Directors may engage independent professionals at the Group’s expense, in the furtherance of their duties. Re-election and Re-appointment of Directors In accordance with the Company’s Articles of Association, one third of the Directors shall retire by rotation from office and be eligible for re-election at the annual general meeting and all Directors appointed by the Board are subject to re-election by shareholders at the first opportunity after their appointment. Furthermore, each Director shall retire from office at least once in every three years. Directors who are of or over the age of seventy years shall also retire from office and be eligible for re-appointment at the annual general meeting pursuant to Section 129 (6) of the Companies Act, 1965. P A G E 23
  26. 26. STATEMENT OF CORPORATE GOVERNANCE BOARD OF DIRECTORS (CONT’D) Directors’ Training All members of the Board have attended the Mandatory Accrediation Programme (MAP). The Board will ensure that all its members continue to attend training programmes and seminars to keep abreast with the relevant developments on a continuous basis in compliance with the Bursa Securities Practice Note No. 15/2003. For new Directors, a familiarisation program will be conducted for them. This includes a presentation of the Group’s operations by senior management and visits to the existing project sites. Board Committees The Board has delegated certain of its responsibilities to three committees. These are the Audit, the Nomination and the Remuneration Committees. All Board committees are provided with written terms of reference. AUDIT COMMITTEE The report of the Audit Committee is set out on pages 32 to 36 of this annual report. NOMINATION COMMITTEE (“NC”) The members of the NC at the date of this report and their attendance at the meetings held during the financial year ended 31 March 2004 are as follows: No. of meetings held during the No. of financial year ended meetings 31 March 2004 attended Dato’ Lim Phaik Gan - Chairperson (Independent Non-Executive Director) 2 2 Dato’ Dr Norraesah Bt Haji Mohamad (Independent Non-Executive Director) 2 2 Mun Chong Shing @ Mun Chong Tian (Non-Executive Director) 2 2 Ahmad Fizal Bin Othman (Independent Non-Executive Director) 2 Not Applicable (appointed on 24 February 2004) Vincent Koh Kok Kee (Independent Non-Executive Director) 2 1 (resigned on 31 May 2003) The terms of reference of the NC are as follows: (a) Membership The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist exclusively of Non-Executive Directors, with a minimum of 3, a majority of whom are independent. The members of the Committee shall elect the Chairman from among their number who shall be an Independent Director. P In order to form a quorum in respect of a meeting of the Committee, the members present must be wholly or A a majority of whom must be Independent Directors. G E (b) Frequency of meetings 24 Meetings shall be held not less than once a year. The Company Secretary shall be the Secretary of the Committee.
  27. 27. STATEMENT OF CORPORATE GOVERNANCE NOMINATION COMMITTEE (“NC”) (CONT’D) (c) Authority The Committee is to recommend new nominees for the Board and the board committees and to assess Directors on an on-going basis. The actual decision as to who shall be nominated should be the responsibility of the full Board after considering the recommendations of the Committee. (d) Duties The duties of the Committee shall be: (i) to recommend to the Board, candidates for all directorships and in doing so, preference shall be given to shareholders or existing Board members and candidates proposed by the Chief Executive Officer and, within the bounds of practicability, by any other senior executive or any director or shareholder may also be considered. (ii) to recommend to the Board, Directors to fill the seats on board committees. (iii) to review annually, on behalf of the Board, the required mix of skills, experience and other qualities, including core competencies, which Non-Executive Directors should bring to the Board. (iv) to carry out annually, on behalf of the Board, the assessment of the effectiveness of the Board as a whole, the board committees and the contribution of each Director. (e) Reporting procedures The Company Secretary shall circulate the minutes of meetings of the Committee to all members of the Board. At the meetings of the NC during the financial year ended 31 March 2004, the Chairperson was elected from amongst its members and the following matters were considered and resolved: (a) re-appointment and re-election of Directors at the Annual General Meeting; (b) mix of skills, experience and qualities of all Directors; (c) the effectiveness of the Board and the contribution from each Board member; and (d) nominees for appointment to the Board and board committees REMUNERATION COMMITTEE (“RC”) The members of the RC at the date of this report and their attendance at the meetings convened during the financial year ended 31 March 2004 are as follows: No. of meetings held during the No. of financial year ended meetings 31 March 2004 attended Dato’ Zainol Abidin Bin Haji A. Hamid (Non-Executive Director) 1 Not Applicable (appointed on 24 February 2004 and was elected Chairman on 27 May 2004) Dato’ Dr Norraesah Bt Haji Mohamad (Independent Non-Executive Director) 1 1 P Dato’ Lim Phaik Gan (Independent Non-Executive Director) 1 1 A Datuk Sim Peng Choon (Non-Executive Director) 1 Not Applicable G E (resigned on 19 August 2003) Sia Teong Heng (Managing Director) 1 1 25
  28. 28. STATEMENT OF CORPORATE GOVERNANCE REMUNERATION COMMITTEE (“RC”) (CONT’D) The terms of reference of the RC are as follows: (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, wholly or a majority of whom are Non-Executive Directors. The members of the Committee shall elect the Chairman from among their number who shall be a Non-Executive Director. In order to form a quorum in respect of a meeting of the Committee, the members present must be wholly or a majority of whom must be Non-Executive Directors. (b) Frequency of meetings Meetings shall be held not less than once a year. The Company Secretary shall be the Secretary of the Committee. (c) Authority The Committee is authorized to draw from outside advice as and when necessary in forming its recommendation to the Board on the remuneration of the Executive Directors in all its forms. Executive Directors should play no part in decisions on their own remuneration and should abstain from discussion of their own remuneration. The determination of the remuneration packages of the Non-Executive Directors, including Non-Executive Chairman, should be a matter for the Board as a whole. The individuals concerned should abstain from discussion of their own remuneration. (d) Duties The duty of the Committee is to recommend to the Board the structure and level of remuneration of Executive Directors. (e) Reporting procedures The Company Secretary shall circulate the minutes of meetings of the Committee to all members of the Board. During the financial year ended 31 March 2004, the RC met once to consider the remuneration of the Executive Chairman and Managing Director for 2004. P A G E 26
  29. 29. STATEMENT OF CORPORATE GOVERNANCE DIRECTORS’ REMUNERATION The details of the remuneration of each Director during the financial year ended 31 March 2004 are as follows: (a) Total Remuneration Basic Benefits- Attendance Salary Bonuses Fees in-kind Fee Total RM RM RM RM RM RM Executive Sia Kwee Mow @ Sia Hok Chai 443,520 - - 16,925 - 460,445 Sia Teong Heng 336,000 - - - 336,000 Non Executive Mun Chong Shing @ Mun Chong Tian - - 12,000 - 2,400 14,400 Dato’ Lim Phaik Gan - - 12,000 - 3,600 15,600 Dato’ Dr. Norraesah Bt. Haji Mohamad - - 13,000 - 3,900 16,900 Dato’ Zainol Abidin Bin Haji A. Hamid - - 6,000 - 600 6,600 (appointed on 10 October 2003) Ahmad Fizal Bin Othman - - 2,000 - - 2,000 (appointed on 24 February 2004) Datuk Sim Peng Choon - - 5,000 - 600 5,600 (resigned on 19 August 2003) Abdul Rahman Bin A. Shukor - - - - - - (ceased on 19 August 2003) (alternate to Datuk Sim Peng Choon) Vincent Koh Kok Kee - - 2,000 - 900 2,900 (resigned on 31 May 2003) Total 779,520 - 52,000 16,925 12,000 860,445 (b) Directors’ remuneration by bands Executive Non-Executive Total Nil - - - RM1 to RM50,000 - 7 7 RM50,001 to RM100,000 - - - RM100,001 to RM150,000 - - - RM150,001 to RM200,000 - - - RM200,001 to RM250,000 - - - RM250,001 to RM300,000 - - - RM300,001 to RM350,000 1 - 1 RM350,001 to RM400,000 - - - RM400,001 to RM450,000 - - - RM451,000 to RM500,000 1 - 1 Total 2 7 9 P A G E 27

×