Annual Report 2007 1600kb

20 0 7
RE P O RT
AN N UA L

S B C C O R P O R AT I O N B E R H A D ANNUAL REPORT 2007

CORE PURPOSE
• To build upon our
construction heritage to
design and deliver exciting,
unique and valuable solutions
for buildings and communities.

CORE VALUES
• Equipping our people to anticipate and respond to the
needs of our customers and stakeholders.

• Adherence to industry’s highest ethics.

• Use of designs and processes that promote standards.

CONTENTS
2 CORPORATE INFORMATION

4 DIRECTORS’ PROFILES

12 CORPORATE STRUCTURE

13 GROUP FINANCIAL HIGHLIGHTS

14 EXECUTIVE CHAIRMAN’S STATEMENT

18 PENYATA PENGERUSI EKSEKUTIF

22 STATEMENT OF CORPORATE GOVERNANCE

31 STATEMENT ON INTERNAL CONTROL

33 AUDIT COMMITTEE REPORT

38 STATEMENT OF DIRECTORS’ RESPONSIBILITIES

39 FINANCIAL STATEMENTS

100 GROUP PROPERTIES

104 SHAREHOLDERS’ INFORMATION

108 NOTICE OF ANNUAL GENERAL MEETING

110 NOTICE OF DIVIDEND PAYMENT

110 STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

111 APPENDIX 1

PROXY FORM

2

CORPORATE INFORMATION

BOARD OF DIRECTORS AUDIT COMMITTEE NOMINATION COMMITTEE

SIA KWEE MOW @ SIA HOK CHAI DATO’ DR. NORRAESAH BT. HAJI MOHAMAD DATO’ LIM PHAIK GAN
JMN, FFB, FCIOB, FAIB DSPN, DSDK, PhD., B.Sc.(Econ) DPMP, DMPN, M.A.(Law), FCI, ARB
Executive Chairman Chairperson & Independent Non-Executive Director Chairperson & Independent Non-Executive Director

SIA TEONG HENG DATO’ LIM PHAIK GAN DATO’ DR. NORRAESAH BT. HAJI MOHAMAD
B.Sc. (Eng), M.Sc. DPMP, DMPN, M.A.(Law), FCI, ARB DSPN, DSDK, PhD., B.Sc.(Econ)
Managing Director Independent Non-Executive Director Independent Non-Executive Director

MUN CHONG SHING @ MUN CHONG TIAN AHMAD FIZAL BIN OTHMAN AHMAD FIZAL BIN OTHMAN
Non-Executive Director B.Acc & Fin. (Hons) B.Acc & Fin. (Hons)
Independent Non-Executive Director Independent Non-Executive Director
DATO’ ZAINOL ABIDIN BIN HAJI A. HAMID
LLB (Hons) SIA TEONG HENG MUN CHONG SHING @ MUN CHONG TIAN
Non-Executive Director B.Sc. (Eng), M.Sc. Non-Executive Director
Managing Director
DATO’ LIM PHAIK GAN
DPMP, DMPN, M.A.(Law), FCI, ARB EXECUTIVE MANAGEMENT
Independent Non-Executive Director REMUNERATION COMMITTEE
SIA TEONG HENG
DATO’ DR. NORRAESAH BT. HAJI MOHAMAD DATO’ ZAINOL ABIDIN BIN HAJI A. HAMID B.Sc. (Eng), M.Sc.
DSPN, DSDK, PhD., B.Sc.(Econ)
LLB (Hons) Chairman & Managing Director
Independent Non-Executive Director
Chairman & Non-Executive Director
SIA TEONG LENG
AHMAD FIZAL BIN OTHMAN DATO’ LIM PHAIK GAN B.A. (Hons) (Law & Econs), M.B.A.
B.Acc & Fin. (Hons)
DPMP, DMPN, M.A.(Law), FCI, ARB Corporate Director
YAP WAI YEE
DATO’ DR. NORRAESAH BT. HAJI MOHAMAD B. Eng, M.Sc.
DSPN, DSDK, PhD., B.Sc.(Econ) Deputy Chief Operating Officer
TEH KAI CHUA
SIA TEONG HENG B.Sc. (Eng)
B.Sc. (Eng), M.Sc. General Manager - Technical
Managing Director

BANGKOK BANK HEADQUARTERS
1954 - 2000

3

CORPORATE INFORMATION

WISMA HLA
1954 - 2000

SOLICITORS PRINCIPAL BANKERS

CHEANG & ARIFF ALLIANCE BANK MALAYSIA BERHAD
39 Court
AL-RAJHI BANKING & INVESTMENT CORPORATION
39, Jalan Yap Kwan Seng
(MALAYSIA) BERHAD
50450 Kuala Lumpur
BANGKOK BANK BERHAD
FOONG & PARTNERS BANK MUAMALAT MALAYSIA BERHAD
Suite 21-08, Level 21
CIMB BANK BERHAD
Plaza 138, 138, Jalan Ampang
50450 Kuala Lumpur MALAYAN BANKING BERHAD
MIDF AMANAH INVESTMENT BANK BERHAD
LEE, PERARA & TAN
OCBC BANK (MALAYSIA) BERHAD
55, Jalan Thambapillai
Off Jalan Tun Sambanthan UNITED OVERSEAS BANK (MALAYSIA) BERHAD
Brickfields, 50470 Kuala Lumpur

LIM & YEOH REGISTERED OFFICE
145-M Jalan Maharajalela
50150 Kuala Lumpur WISMA SIAH BROTHERS
74A Jalan Pahang
53000 Kuala Lumpur
AUDITORS Tel: 03-4041 8118 Fax: 03-4043 5281

HORWATH
Chartered Accountants REGISTRARS
Level 16 Tower C, Megan Avenue II
12 Jalan Yap Kwan Seng TACS CORPORATE SERVICES SDN. BHD.
50450 Kuala Lumpur Unit No. 203, 2nd Floor, Block C
Damansara Intan
No. 1, Jalan SS 20/27
COMPANY SECRETARIES 47400 Petaling Jaya
Tel: 03-7118 2688 Fax: 03-7118 2693
CHONG FOOK SIN
ATII, MCCS, AFA
STOCK EXCHANGE LISTING
KAN CHEE JING
ACIS MAIN BOARD OF
BURSA MALAYSIA SECURITIES BERHAD

4

DIRECTORS’ PROFILES
AS AT 31 JULY 2007

SIA KWEE MOW @ SIA HOK CHAI
MALAYSIAN, AGED 74 • EXECUTIVE CHAIRMAN

Sia Kwee Mow @ Sia Hok Chai has been a Director of SBC Corporation Berhad (“SBC”) since
its incorporation on 14 June 1990. He has over 53 years of experience in building and civil
engineering contracting and not less than 35 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.

BANK NEGARA MALAYSIA HEADQUARTERS
1954 - 2000

5

AS AT 31 JULY 2007

His holdings in the securities of SBC are as follows:

Direct Interest Indirect Interest

Ordinary shares 1,480,800 (a) 19,498,523 (b)

(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
45 to the financial statements.

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.

KOTA RAYA SHOPPING COMPLEX
1954 - 2000

6

AS AT 31 JULY 2007

SIA TEONG HENG
MALAYSIAN, AGED 44 • MANAGING DIRECTOR

Sia Teong Heng was appointed as a Director of SBC Corporation Berhad (“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. He was a past board member of the Entrepreneurs Organisation and a
member of the Young President’s Organisation. Presently, he also sits on the boards of several
subsidiaries of SBC.



Ordinary shares 4,677,992 (a) 19,498,523 (b)

(a) 4,434,000 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
45 to the financial statements.



7

AS AT 31 JULY 2007

MUN CHONG SHING @ MUN CHONG TIAN
MALAYSIAN, AGED 70 • NON-EXECUTIVE DIRECTOR

Mun Chong Shing @ Mun Chong Tian 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 a General Manager in Hume Industries
(M) Bhd. where he has had extensive exposure to industrial engineering and management.



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

WISMA LEE RUBBER
1954 - 2000

8

AS AT 31 JULY 2007

MALAYSIAN, AGED 87 • INDEPENDENT NON-EXECUTIVE DIRECTOR

Dato’ Lim Phaik Gan 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
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 three of the four Board Meetings held during the last financial year.

9

AS AT 31 JULY 2007

DATO’ DR. NORRAESAH BT. HAJI MOHAMAD

Dato’ Dr. Norraesah Bt. Haji Mohamad 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 35 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, Protasco Berhad,
Ya Horng Electronic (M) Berhad, Adventa Berhad, My E.G. Services Berhad and several private
limited companies.

She was awarded the distinction of Darjah Setia Pangkuan Negeri on 13th July, 2002 by Tuan
Yang Terutama Yang di-Pertua Negeri Pulau Pinang on His Excellency’s 64th Birthday and the
Dato’ Setia DiRaja Kedah on 21st January, 2007 by Kebawah Duli Yang Maha Mulia Tuanku
Sultan Darul Aman on His Excellency’s 79th 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 four Board Meetings held during the last financial year.

CENTRAL MARKET
1954 - 2000

10

AS AT 31 JULY 2007

MALAYSIAN, AGED 65 • NON-EXECUTIVE DIRECTOR

Dato’ Zainol Abidin Bin Haji A. Hamid 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 from 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 attended three of the four Board Meetings held during the last financial year.

FRENCH EMBASSY (In Malaysia)
1954 - 2000

11

AS AT 31 JULY 2007

AHMAD FIZAL BIN OTHMAN

Ahmad Fizal Bin Othman 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.




CENTRAL SQUARE
1954 - 2000

13

GROUP FINANCIAL HIGHLIGHTS
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2007

EMPIRE TOWER
1954 - 2000

2007 2006 2005 2004 2003
RM’000 RM’000 RM’000 RM’000 RM’000
(Restated)

RESULTS

Turnover 77,103 69,927 66,867 86,317 69,829
Profit before taxation (2,207) 1,369 3,321 6,996 5,149
Profit after taxation but before minority interest (3,009) 1,047 2,250 2,073 2,011
Profit attributable to shareholders (3,009) 1,047 2,250 2,073 2,011

ASSET EMPLOYED

Property, plant and equipment 8,550 8,243 35,452 36,246 35,813
Investments and other assets 203,129 205,861 192,257 153,703 152,856
Net current assets 8,854 50,881 37,243 73,632 71,634
Goodwill and deferred expenditure 27,499 27,318 27,318 27,318 27,272

248,032 292,303 292,270 290,899 287,575

FINANCED BY

Share capital 82,435 82,435 82,435 82,435 82,435
Reserves 130,691 134,294 137,572 135,940 134,682
ABBA bonds - 43,978 41,752 39,712 37,827
Deferred liabilities 34,906 31,596 30,511 32,812 32,631

248,032 292,303 292,270 290,899 287,575

SELECTED RATIOS

Net earnings per share (sen) (3.7) 1.3 2.7 2.4 2.4
Net assets per share (sen) 259 263 267 265 263
Gross dividend (%) 1.0 1.0 1.0 1.0 1.0

14

EXECUTIVE CHAIRMAN’S STATEMENT

On behalf of the
Board of Directors of
SBC Corporation Berhad,
I have the pleasure of
presenting to you the
Annual Report and
the Audited Financial
Statements of the Group
and the Company for the
financial year ended
31 March 2007. EUA ARTHRON BANGKOK

FINANCIAL REVIEW

The Group recorded a RM77.10 million revenue representing an increase of 10.3%
over RM69.93 million in the previous year. This result represents both remarkable
MENARA MESINIAGA progress of our turnkey construction activities in Thailand as well as lower
1954 - 2000
contribution from the Malaysian property side on account of longer than expected
gestation period in obtaining building permits.

The overall negative financial results were due to prudent measures undertaken to
provide for possible impairment loss as well as financial accounting adjustment for
unamortised goodwill.

OPERATIONS REVIEW

The property sector within which the group operates continue to fare well; largely
targeting to owner occupiers and referrals from existing customers. With our turnkey
clients, mainly the government, we continue to maintain a selective presence where
we are able to provide value added services.

15


During the year, Kuantan’s phase 4A and 6A consisting of double-storey and single
storey terrace homes were handed over at our Seri Mahkota Aman project. Similarly
at Kota Kinabalu’s Signal Hill Park semi-detached homes. In Klang, the second phase
of Suria Pendamar’s double-storey terrace homes were also handed over. The state
land and survey building in Sabah was completed three months ahead of schedule.
Meanwhile the iconic Cube shop offices at Metpark are progressing well, as is the
Suria Setapak Homes & Commercial precinct off Jalan Gombak. In Bandar Ligamas
at the foothills of Genting Highlands, work on the fourth phase of double-storey
terrace homes continue to progress well.

As at today, site work has just commenced on the 34-storey PJX, a purpose built
commercial building in the heart of Petaling Jaya’s CBD. This is also the case with the
third phase of our Kota Kinabalu project, in the manner of The Peak Suites and we
are hopeful of being able to move on to our fourth phase.

Paling Industries Sdn Bhd, our manufacturing associate in water pipes
and fittings continues to look beyond Malaysia shores in an effort to
achieve profitability.

JAYA SHOPPING COMPLEX
1954 - 2000

16


SURIA SETAPAK

ECONOMIC AND BUSINESS OUTLOOK

The outlook for the industry is promising given the continued stable business
environment propagated by the government and the slew of construction activities
slated for the next few years. The group is eminently positioned to partake in this
optimism towards improving our top line growth.

DIVIDEND

The Board is pleased to recommend a first and final dividend of 1% per ordinary share
less 27% tax for the financial year ended 31 March 2007 subject to the shareholders’
approval at the forthcoming Annual General Meeting of the Company.

CONFERENCE HALL & SURAU ~ ISTAC
1954 - 2000

17


SERI MAHKOTA AMAN

APPRECIATION AND ACKNOWLEDGEMENT

On behalf of the Board of Directors, I would like to thank our valued shareholders,
joint venture partners, business associates, bankers and government authorities for INTAN KENNY CONDOMINIUM
their conﬁdence, understanding and continued support for the SBC Group. 1954 - 2000

I would also like to add our appreciation to our customers and supporters of SBC’s
products and services, all of whom have place much trust with us, as custodian to
their home and property investments.

Lastly, I would like to thank the SBC management team and employees of the Group
for their continuous hard work and commitment in the ever-changing business
environment towards the success of the Group.

Thank you.

JMN,FFB,FCIOB,FAIB
Executive Chairman

18

PENYATA PENGERUSI EKSEKUTIF

Saya bagi pihak
Lembaga Pengarah
SBC Corporation Berhad
dengan bangganya
membentangkan
Laporan Tahunan serta
Penyata Kewangan
Kumpulan dan Syarikat
bagi tahun kewangan
berakhir 31 Mac 2007.

SIGNAL HILL PARK

ULASAN KEWANGAN

Kumpulan mencatat pendapatan sejumlah RM77.10 juta menunjukkan kenaikan
sebanyak 10.3% berbanding RM69.93 juta pada tahun lepas. Perolehan ini
menunjukkan pertumbuhan yang positif daripada aktiviti-aktiviti pembinaan
CONCORDE HOTEL
1954 - 2000
turnkey di Thailand, dan juga sumbangan yang rendah daripada sektor hartanah di
Malaysia akibat penggunaan masa yang lebih lama dari yang dijangkakan dalam isu
pemilikan permit pembangunan.

Keseluruhan prestasi kewangan yang negatif ini adalah akibat daripada penggunaan
piawaian kiraan secara waspada dalam aspek kerugian kemerosotan nilai, dan juga
penyesuaian sistem perakaunan kewangan atas muhibbah penyatuan tidak terlunas.

TINJAUAN OPERASI

Sektor hartanah yang diusahakan oleh pihak Kumpulan terus mencapai keputusan
yang memuaskan. Sebahagian besar pendapatan ini datang daripada penghuni asal
serta rujukan-rujukan oleh pelanggan sedia ada. Dengan adanya sokongan daripada
pelanggan turnkey khususnya pihak kerajaan, kami berupaya untuk kekal pada
kedudukan yang baik dan selesa untuk terus membekalkan perkhidmatan yang
berkualiti.

19


Dalam tempoh tahun kewangan, projek rumah berteres dua tingkat dan satu tingkat
Fasa 4A dan 6A di Seri Mahkota Aman, Kuantan, berserta projek rumah berkembar
di Signal Hill Park, Kota Kinabalu telahpun disiapserahkan. Projek rumah berteres
THE PEAK CONDOMINIUM
dua tingkat fasa kedua di Suria Pendamar, Kelang juga telah disiapserahkan.
1954 - 2000
Di Sabah pula, kerja pembinaan ibu pejabat baru Tanah dan Ukur Negeri telah
siap disempurnakan tiga bulan lebih awal dari yang dijadualkan. Sementara itu,
projek pembinaan unit komersial The Cube di Metpark dan projek Perumahan dan
Komersial di Suria Setapak di persekitaran Jalan Gombak turut berjalan lancar, begitu
juga dengan aktiviti pembinaan fasa keempat rumah berteres dua tingkat di Bandar
Ligamas di kaki bukit Genting Highlands.

Sehingga kini, kerja tapak baru sahaja dimulakan ke atas projek PJX, sebuah kompleks
komersial pelbagaigunaan setinggi 34 tingkat yang terletak di Perbandaran Petaling
Jaya. Di Kota Kinabalu pula, kami dengan sesungguhnya berharap projek The Peak
Suites akan dapat dilanjutkan daripada fasa ini ke tahap fasa keempat.

Paling Industries Sdn Bhd, syarikat perkilangan bersekutu kami dalam bidang paip
dan kelengkapan perairan terus berusaha meninjau peluang emas di luar Malaysia
untuk mencapai hasil keuntungan yang lebih tinggi.

20


MASTIARA CUBE

TINJAUAN EKONOMI DAN PERNIAGAAN

Masa depan industri ini akan semakin cerah dengan kestabilan suasana perniagaan
yang dimantapkan oleh pihak kerajaan dengan adanya serangkaian aktiviti-aktiviti
pembinaan yang akan dilaksanakan dalam tahun-tahun akan datang. Kumpulan
amat positif terhadap keupayaan kami untuk terus mempertingkatkan pencapaian
dan mutu pengeluaran dalam industri pembinaan ini.

DIVIDEN

Pihak Lembaga Pengarah dengan sukacitanya mencadangkan pembayaran dividen
pertama dan akhir sebanyak 1% sesaham tolak cukai 27% bagi tahun kewangan
berakhir 31 Mac 2007. Pembayaran dividen ini adalah tertakluk kepada persetujuan
para pemegang saham pada Mesyuarat Agung Tahunan akan datang.

DAMANSARA EMAS
2001 - 2004

21


BATANG KALI PRODUK PALING

PENGHARGAAN DAN PENGAKUAN

Bagi pihak Lembaga Pengarah, saya ingin mengucapkan ribuan terima kasih kepada
para pemegang saham, rakan-rakan bersekutu dan niaga, ahli-ahli bank dan pihak
kerajaan atas kepercayaan, timbang rasa dan sokongan berterusan mereka terhadap
Kumpulan SBC.

Saya juga ingin merakamkan rasa penghargaan ikhlas kami kepada para pelanggan
dan penyokong SBC yang selama ini memberikan kepercayaan tidak berbelah bahagi
kepada Kumpulan dalam bidang pelaburan hartanah dan perumahan.

Akhirnya, saya ingin berterima kasih kepada pihak pengurusan SBC berserta
kakitangannya yang telah meyumbangkan usaha dan sokongan yang tidak ternilai
ke arah kejayaan Kumpulan.

Sekian, terima kasih.

JMN,FFB,FCIOB,FAIB
Pengerusi Eksekutif

22

STATEMENT OF CORPORATE GOVERNANCE

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

The Board as at the date of this statement has 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 Directors have a wide range of experience and skills and are from diverse backgrounds 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 Directors’ Profiles.

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 orderly conduct and working of the Board whilst the Managing Director is responsible for
the day-to-day running of the business and implementation of Board policies and decisions adopted by the Board.

Dato’ Lim Phaik Gan is the Senior Independent Non-Executive Director to whom concerns may be conveyed.

SBC CORPORATION BERHAD

23


Board Meetings

The Board meets on a scheduled basis once every quarter with additional meetings held as and when urgent issues and important
decisions are required to be taken between the scheduled meetings. During the financial year ended 31 March 2007, the Board
met 4 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 as follows:

No. of meetings
held during the
financial year ended No. of meetings
Name of Director 31 March 2007 attended

Sia Kwee Mow @ Sia Hok Chai (Executive Chariman) 4 4

Sia Teong Heng (Managing Director) 4 4

Mun Chong Shing @ Mun Chong Tian (Non-Executive Director) 4 3

Dato’ Zainol Abidin Bin Haji A. Hamid (Non-Executive Director) 4 3

Dato’ Lim Phaik Gan (Independent Non-Executive Director) 4 3

Dato’ Dr. Norraesah Bt. Haji Mohamad (Independent Non-Executive Director) 4 4

Ahmad Fizal Bin Othman (Independent Non-Executive Director) 4 4

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 decisions. 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.


24


BOARD OF DIRECTORS (cont’d)

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.

Directors’ Training

All members of the Board have attended the Mandatory Accreditation Programme. Pursuant to Paragraph 15.09 of the Bursa
Securities Listing Requirements, the Board is responsible to identify the training needs of its Directors which will aid them in
the discharge of their duties on a continuous basis. The Board noted that the Nomination Committee is satisfied that the Board
comprises qualified people with professional background, expertise in various fields and practical experience. Nevertheless, the
Board encourages its Directors to go for training on their own initiative from time to time in order to keep them abreast of the
latest developments in the market-place as well as the current changes in the laws, regulations and accounting standards.

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 the three Committees, namely the Audit, the Nomination and the
Remuneration Committees with clearly defined terms of reference in assisting the Board to discharge its duties and responsibilities
effectively.

AUDIT COMMITTEE

The report of the Audit Committee is set out on pages 33 to 37 of this annual report.


25


NOMINATION COMMITTEE (“NC”)

The NC has held one meeting during the financial year ended 31 March 2007. The attendance of the members of the NC at the
meeting is as follows:

No. of meetings
held during the
Name of Members 31 March 2007 attended

Dato’ Lim Phaik Gan – Chairperson (Independent Non-Executive Director) 1 1

Dato’ Dr. Norraesah Bt Haji Mohamad (Independent Non-Executive Director) 1 1


Mun Chong Shing @ Mun Chong Tian (Non-Executive Director) 1 1

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.

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 independent 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 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.


26


NOMINATION COMMITTEE (“NC”) (cont’d)

(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 meeting of the NC during the financial year ended 31 March 2007, the following matters were considered and resolved:

(a) re-appointment and re-election of Directors at the Seventeenth Annual General Meeting;
(b) mix of skills, experience and qualities of all Directors; and
(c) the effectiveness of the Board and the contribution from each Board member.

REMUNERATION COMMITTEE (“RC”)

The members of the RC at the date of this report and their attendance at the meeting convened during the financial year ended
31 March 2007 are as follows:

No. of meetings
held during the

Dato’ Zainol Abidin Bin Haji A. Hamid - Chairman (Non-Executive Director) 1 1


Dato’ Dr. Norraesah Bt Haji Mohamad (Independent Non-Executive Director) 1 1



27


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


During the financial year ended 31 March 2007, the RC met once to consider the remuneration of the Executive Chairman and
Managing Director for 2007.


28


DIRECTORS’ REMUNERATION

The details of the remuneration of each Director during the financial year ended 31 March 2007 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 520,800 98,000 - 16,925 - 635,725
Sia Teong Heng 453,600 84,000 - - - 537,600

Non-Executive

Mun Chong Shing @ Mun Chong Tian - - 19,500 - 1,200 20,700
Dato’ Zainol Abidin Bin Haji A. Hamid - - 20,500 - 1,200 21,700
Dato’ Lim Phaik Gan - - 20,500 - 2,400 22,900
Dato’ Dr. Norraesah Bt. Haji Mohamad - - 20,500 - 3,000 23,500
Ahmad Fizal Bin Othman - - 19,500 - 2,700 22,200

Total 974,400 182,000 100,500 16,925 10,500 1,284,325

(b) Directors’ remuneration by bands

Executive Non-Executive Total

RM1 to RM50,000 - 5 5
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 - - -
RM350,001 to RM400,000 - - -
RM400,001 to RM450,000 - - -
RM450,001 to RM500,000 - - -
RM500,001 to RM550,000 1 - 1
RM550,001 to RM600,000 - - -
RM600,001 to RM650,000 1 - 1

Total 2 5 7


29


ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board aims to convey a balanced and understandable assessment of the Group’s financial position and prospects through the
quarterly results and annual reports/financial statements to the Company’s shareholders and regulators.

The Responsibility Statement by the Directors pursuant to Bursa Securities Listing Requirements is set out on page 38.

Internal Control

The Board acknowledges its responsibility for maintaining a sound internal controls system, which provides reasonable assurance
in ensuring the effectiveness and efficiency of operations and the safeguard of assets and interest in compliance with laws and
regulations as well as with internal financial administration procedures and guidelines.

The Group’s Statement on Internal Control is set out on pages 31 and 32.

Relationship with Auditors

The Board maintains a close and transparent professional relationship with the Group’s internal and external auditors through
the Audit Committee. In the course of audit of the Group’s operations, the internal and external auditors have highlighted all
important matters to the Audit Committee. The Audit Committee will then bring up the matters for the Board’s attention if it is
necessary.

The Group has paid RM 93,250 of non-audit fees to the external auditors for the financial year ended 31 March 2007.

Relationship with Shareholders and Investors

The primary tools of communication with the shareholders of the Company are through the annual report, announcements
through Bursa Securities and circulars. All queries from shareholders and members of public received through phone calls or letters
are handled by the Executive Directors, Group Financial Controller and Company Secretary.

At the annual general meeting and extraordinary general meeting, the Chairman gives shareholders ample opportunity to
participate through questions on the prospects, performance of the Group and other matters of concern to them with the Board.


30


ADDITIONAL COMPLIANCE INFORMATION

In conformance with the requirements of Bursa Securities, the following compliance information is provided:

1. Revaluation Policy on Landed Properties

The Group’s landed properties are stated at cost. There is no policy of regular revaluation of its landed properties as at the end
of the financial year ended 31 March 2007.

2. Materials Contracts

There were no material contracts entered into by the Company and its subsidiaries which involved the directors’ and major
shareholders’ interests subsisting at the end of the financial year ended 31 March 2007 or entered into since the end of the
previous financial year.

3. Utilisation of Proceeds

There were no proceeds raised from any proposals by the Company during the financial year.

4. Share Buy-backs

There were no share buy-backs by the Company during the financial year.

5. Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities issued by the Company during the financial year.

6. American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”)

During the financial year, the Company did not sponsor any ADR or GDR programme.

7. Sanctions and / or Penalties

There were no sanctions and / or penalties imposed on the Company and its subsidiaries, Directors or Management by the
relevant regulatory bodies during the financial year.

8. Variation in Results

There is a deviation of more than 10% between the profit after tax and minority interest of RM1,825,000 stated in the
unaudited results announced on 18 May 2007 and the loss after tax and minority interest of RM3,009,000 stated in the
Audited Financial Statements of the Group for the year ended 31 March 2007. The reconciliation and explanation of the
deviation are set out below:
RM’000 RM’000

Profit after tax and minority interest stated in the unaudited results 1,825

Less: Impairment loss for investment properties (3,933)
Reversal of revaluation surplus (618)
Overstatement of gain on disposal of investment properties (305) (4,856)

(3,031)
Add: Others 22

Loss after tax and minority interest stated in the Audited Financial Statements (3,009)

9. Profit Guarantee

There was no profit guarantee given by the Company in respect of the financial year.


31

STATEMENT ON INTERNAL CONTROL

INTRODUCTION

Pursuant to paragraph 15.27 (b) of Bursa Malaysia Securities Berhad Listing Requirements, the Board of Directors of SBC Corporation
Berhad is pleased to provide the following statement on the state of internal control of the Group for the financial year ended
31 March 2007, which has been prepared in accordance with the Statement on Internal Control: Guidance for Directors of Public
Listed Companies.

BOARD RESPONSIBILITY

The Board of Directors acknowledges and recognizes its overall responsibility for the Group’s systems of internal controls and risk
management, as well as reviewing the adequacy and integrity of the internal control system to ensure that the Group’s assets and
shareholders’ interests are safeguarded. The responsibility for reviewing the adequacy and integrity of the internal control system
has been delegated to the Audit Committee and this committee obtains the assurance of the adequacy and integrity of the internal
control system through independent reviews conducted by the internal audit function, external auditors and Management.

As there are inherent limitations in any internal control system, such systems put in place by Management can only manage rather
than eliminate all risks that may impede the achievement of the Group’s business objectives. Accordingly, the internal control
system established by Management can only provide reasonable and not absolute assurance against material misstatement or
losses.

RISK MANAGEMENT FRAMEWORK

Risk management is seen as an integral part of the Group’s business operations by the Board. The Group has in place an ongoing
process for identifying, evaluating and managing the significant risks faced by the Group, throughout the financial year under
review. Senior management will assess and appraise the cost and benefits, impact on the Group, review the financial implications
before any investment or significant expenditrure is made.

This ongoing process is undertaken for all the major subsidiaries of the Group and the processes, findings, and actions taken by the
Management are all reviewed regularly by the Board.

INTERNAL AUDIT

The Group outsourced its internal audit function to a professional services firm to provide the Audit Committee and the Board
with the assurance they require pertaining to the adequacy and effectiveness of internal control systems. The results of the
audits and recommendations for improvement co-developed with Management were presented at the quarterly Audit Committee
Meetings. Although a number of internal control weaknesses were identified during the internal audit review process, none of
the weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Group’s
annual report.

In addition, the internal audit function also carried out follow up visits to ensure that recommendations for improvement to the
internal control systems are satisfactorily implemented.


32

STATEMENT ON INTERNAL CONTROL

OTHER KEY ELEMENTS OF INTERNAL CONTROL

The other key elements of the Company’s internal control systems are:

• An organizational structure, which clearly defines the lines of responsibility, proper segregation of duties and delegation of
authority;

• Established internal policies and procedures for key business units within the Group;

• Rigorous review of key information such as financial performance, key business indicators, management accounts and detailed
budgets by the Board and Audit Committee;

• Experienced and dedicated team of personnel across the key functional units;

• Regular management meetings are held to discuss the Group’s performance, business operational and management issues as
well as formulate appropriate measures to address them;

• The Executive Directors are closely involved in the running of business and operations of the Group and they report to the
Board on significant changes in the business and external environment, which affect the operations of the Group at large;
and

• Regular and comprehensive information are provided to the Board and Senior Management for performance monitoring.

ASSURANCE

The Board is of the view that the Group’s system of internal controls is adequate and effective to safeguard shareholders’ investment
and the Group’s assets. However, the internal control systems must continue to evolve to meet the changing and challenging
business environment. In this regard, regular reviews of the internal control system by Management and auditors would ensure its
continued relevance in mitigating risks.


33

AUDIT COMMITTEE REPORT

The Board of SBC Corporation Berhad is pleased to present the Audit Committee Report for the financial year ended 31 March
2007.

COMPOSITION AND MEETINGS

The Audit Committee comprises four members, three of whom are Independent Non-Executive Directors and one is the Managing
Director. The name of the members and their attendance at meetings held during the financial year ended 31 March 2007 are as
follows:

No. of meetings
held during the

Dato’ Dr. Norraesah Bt Haji Mohamad - Chairperson (Independent Non-Executive Director) 4 3




The Audit Committee normally meets four times a year with additional meetings convened between scheduled meetings, if
necessary, to deliberate on urgent and significant matters.

The Group Financial Controller and the representatives of the outsourced Internal Auditors and the External Auditors attended the
meetings at the invitation of the Audit Committee, where considered necessary.

The Company Secretary is responsible for distributing the notice of the meetings and relevant papers to the Audit Committee
members prior to their meetings and recording the proceedings of the meetings thereat.

INTERNAL AUDIT FUNCTION

The internal audit function of the Group has been outsourced to Audex Governance Sdn. Bhd. The principal role of the Internal
Auditor is to undertake independent, regular and systematic review of the Group’s systems of internal control so as to provide
reasonable assurance that such systems continue to operate efficiently and effectively. It is the responsibility of the Internal
Auditor to provide the Audit Committee with independent and objective reports on the state of internal control of various
operating units within the Group and the extent of compliance of the units with Group’s established policies and procedures as
well as relevant statutory requirements.


34


SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

In line with the terms of reference of the Audit Committee, the following activities were carried out by the Audit Committee
during the financial year ended 31 March 2007:

a) Discussed and reviewed the Audit Planning Memorandum which cover the external auditor’s plan, scope and nature of
work.

b) Reviewed the Audit Review Memorandum in relation to their findings and accounting issues arising from the audit of the
Group’s annual financial results.

c) Reviewed the unaudited quarterly report on the consolidated results of the Group for the quarters ended 31 March 2006, 30
June 2006, 30 September 2006 and 31 December 2006.

d) Assessed the Group’s financial performance.

e) Reviewed related party transactions and conflicts of interest situation that may arise within the Group.

f) Reviewed and approved the internal audit plan and the internal audit reports and followed up on the remedial actions
implemented by the Management in respect of the internal control weaknesses identified.

g) Reviewed the Group’s risk management policy and framework.

h) Reviewed the Group’s compliance with the applicable approved accounting standards issued by the Malaysian Accounting
Standards Board and other relevant legal and regulatory requirements.

SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION

During the financial year ended 31 March 2007, the Internal Auditor has:

a) Presented a risk-based annual audit plan and risk assessment policy for the Audit Committee’s review and approval;

b) Performed company-wide operation and special audits giving due attention to high and medium risk area of concerns;

c) Followed up on the status of rectification with regards to significant issues and kept the Audit Committee abreast of the
current status; and

d) Furnished internal audit reports to the Audit Committee on quarterly basis as an updates of the internal audit activities.


35


SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION (cont’d)

In accordance with the approved audit plan for 2006/2007, the areas reviewed by the internal audit function were as follows:

a) Management and operational review of companies within the Group;

b) Projects status and cost monitoring;

c) Manage contractor performance;

d) Progress claims processing;

e) Manage the issuance of work orders and variation orders;

f) Review of relevant policies and procedures;

g) Post construction service and maintenance;

h) Project performance reviews and evaluation;

i) Related party transactions; and

j) Property management.

A number of minor internal control weaknesses were identified during the year, all of which have been addressed by the
Management. None of the weaknesses has resulted in any material losses, contingencies or uncertainties that would require
disclosure in the Group’s annual report.

The annual internal audit plan for 2007/2008 was presented to the Audit Committee for review and approval subsequent to the
financial year ended 31 March 2007. The activities of the internal audit function cover the following areas:

a) Management and operational review of companies within the Group;

b) Projects performance reviews and evaluation;

c) Pre-qualification and contractor performance management;

d) Progress claims processing;

e) Manage the issuance of work orders and variation orders;

f) Post construction service and maintenance;

g) Review of relevant policies and procedures;

h) Related party transactions;

i) Human resource management; and

j) Property management.

The above reviews cover all the offices and project sites which are located in Kuala Lumpur, Kuantan and Kota Kinabalu.


36


TERMS OF REFERENCE OF THE AUDIT COMMITTEE

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 must be:

(i) a member of the Malaysian Institute of Accountants (“MIA”); or

(ii) if he is not a member of the MIA, he must have at least 3 years working experience and

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

• 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 a Chairman from amongst 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 the members present must be independent
directors.

Attendance At Meeting

The Group Financial Controller and the representatives of the outsourced internal auditors and 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.

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.

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.

Duties

The duties of the Audit Committee shall be:

(1) to consider the appointment of the external auditors, the audit fees 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.


37


TERMS OF REFERENCE OF THE AUDIT COMMITTEE (cont’d)

Duties (cont’d)

(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; and

• compliance with stock exchange and legal requirements.

(5) to discuss problems and reservations arising from the interim and final audits and any matters the external 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 the members of the internal audit function.

• approve the 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 the Group
including any transaction, procedure or course of conduct that raises questions of management integrity.

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

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

Reporting



38

STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE PREPARATION OF THE FINANCIAL STATEMENTS

The Directors are responsible for ensuring that the financial statements of the Group are drawn up in accordance with applicable
approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the
state of affairs of the Group and the Company as of 31 March 2007 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.


FINANCIAL
STATEMENTS
40 DIRECTORS’ REPORT

44 STATEMENT BY DIRECTORS

44 STATUTORY DECLARATION

45 REPORT TO THE AUDITORS

46 BALANCE SHEETS

48 INCOME STATEMENTS

49 STATEMENTS OF CHANGES IN EQUITY

51 CASH FLOW STATEMENTS

54 NOTES TO THE FINANCIAL STATEMENTS

40

DIRECTORS’ REPORT

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

PRINCIPAL ACTIVITIES

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

RESULTS
THE GROUP THE COMPANY
RM RM

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

DIVIDENDS

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

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

RESERVES AND PROVISIONS

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

ISSUES OF SHARES AND DEBENTURES

During the financial year,

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

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

OPTIONS GRANTED OVER UNISSUED SHARES

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

BAD AND DOUBTFUL DEBTS

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

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


41

DIRECTORS’ REPORT

CURRENT ASSETS

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

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

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

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

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

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

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

CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

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

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


42

DIRECTORS’ REPORT

DIRECTORS

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

SIA TEONG HENG
MUN CHONG SHING @ MUN CHONG TIAN
DATO’ DR. NORRAESAH BT HAJI MOHAMAD
AHMAD FIZAL BIN OTHMAN

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

Pursuant to Article 77 of the Articles of Association of the Company, Ahmad Fizal bin Othman retires by rotation at the forthcoming
Annual General Meeting and, being eligible, offers himself for re-election.

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in
shares in the Company during the financial year are as follows:

NUMBER OF ORDINARY SHARES OF RM1 EACH

AT AT
1.4.2006 BOUGHT SOLD 31.3.2007

DIRECT INTERESTS

SIA KWEE MOW @ SIA HOK CHAI 1,480,800 - - 1,480,800
SIA TEONG HENG 2,517,992 2,260,000 (100,000) 4,677,992
MUN CHONG SHING @ MUN CHONG TIAN 21,782 - - 21,782

INDIRECT INTERESTS

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

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

None of the other directors holding office at the end of the financial year had any interest in shares of the Company or its related
corporations during the financial year.

43

DIRECTORS’ REPORT

DIRECTORS’ BENEFITS

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

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

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The significant events during the financial year of the Company are disclosed in Note 51 to the financial statements.

AUDITORS

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

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

Sia Kwee Mow @ Sia Hok Chai

Mun Chong Shing @ Mun Chong Tian

Kuala Lumpur
30 July 2007

Annual Report 2007 1600kb

Recommandé

Recommandé

Contenu connexe

En vedette

En vedette (16)

Plus de sbc.corporation

Plus de sbc.corporation (16)

Dernier

Dernier (19)

Annual Report 2007 1600kb