SBC Corporation Berhad: Annual Report 2000

SIAH BROTHERS CORPORATION BERHAD
ANNUAL REPORT 2000

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Tenth Annual General Meeting of Siah Brothers Corporation Berhad
will be held at the Penthouse, 5th Floor, Wisma Siah Brothers, 74, Jalan Pahang, 53000 Kuala Lumpur on
Friday, 22 September, 2000 at 11.00 a.m. to transact the following business :-

AGENDA

1. To receive and adopt the Directors’ Report and the Audited Accounts (Resolution 1)
for the year ended 31 March, 2000 together with the Auditors’ Report thereon.

2. To declare a first and final dividend of 1.5% less 28% income tax for (Resolution 2)
the year ended 31 March, 2000.

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. Tan Sri Dato’ Ir. Muhammad Yusuff bin Haji Muhammad Yunus (Resolution 4)

b. YBhg. Dato’ Lim Phaik Gan (Resolution 5)

5. To re-elect the following Directors retiring by rotation in accordance
with Article 80 of the Articles of Association of the Company -

a. Dr. Norraesah bt. Haji Mohamad (Resolution 6)

b. Mr. Sim Peng Choon (Resolution 7)

6. To re-appoint Messrs Horwath Mok & Poon as Auditors of the Company (Resolution 8)
and to authorise the Directors to fix their remuneration.

7. As special business, to consider and if thought fit, to pass the (Resolution 9)
following Ordinary Resolution:-

" THAT subject always to the Companies Act, 1965, the Articles of Association of the Company
and approval from the Kuala Lumpur Stock Exchange and other government/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. "

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

1

NOTICE OF ANNUAL GENERAL MEETING

NOTICE OF DIVIDEND PAYMENT

NOTICE IS HEREBY GIVEN that subject to the approval of the shareholders at the Tenth Annual General
Meeting of the Company, the first and final dividend of 1.5% less 28% income tax for the year ended
31 March, 2000 will be paid on 20 October, 2000 to Depositors registered in the Record of Depositors on
6 October, 2000.

A Depositor shall qualify for entitlement only in respect of –

(a) shares transferred into the Depositor’s Securities Account before 12.30 p.m. on 6 October, 2000 in
respect of ordinary transfers; and

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

By Order of the Board

CHONG FOOK SIN
KAN CHEE JING
Company Secretaries

Kuala Lumpur
6 September, 2000

NOTES:-

1) Proxy -

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

2) Resolution 9 -

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

2

ANNUAL REPORT 2000

CHAIRMAN ’S STATEMENT

INTRODUCTION

It gives me great privilege to present, on behalf of the Board of Directors, the Annual Report of Siah Brothers
Corporation Berhad ("The Company") and its subsidiary companies ("The Group") for the financial year
ended 31 March 2000.

FINANCIAL REVIEW

The Group recorded a lower turnover of RM114.71
million for the period ended 31 March 2000
(RM149.67 million –31 March 1999). This was
broadly in line with the overall performance of the
Malaysian economy over the same period; each
business division experiencing a, lagged effect
contraction in their results. This is in contrast to the
increase in profit margin from 1.4% in 1999 to 2.2%
International Institute Of Islamic Thought And
in 2000, largely on account of elimination of Civilization (ISTAC)
intermediation costs, better deployment of resources, Persiaran Duta, Taman Duta, Kuala Lumpur
Academic Block
lower cost of finance and improved sentiment to
new housing launches.

OPERATIONAL REVIEW

Housing and Building Division

For the financial year under review, the housing and building division continued as the mainstay of the
Group’s activities, registered a turnover of RM85.43 million (RM121.85 million from the previous year)
accounting for 75% of the Group’s turnover.

Some of the major projects undertaken by the Division during the period under review were :-

a) Campus and academic facilities for the
International Institute of Islamic Thought and
Civilisation at Taman Duta, Kuala Lumpur.

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

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

d) Luxury residential tower at The Peak, Signal Hill,
Bandar Utama, Batang Kali, Selangor Kota Kinabalu, Sabah.
154 units Single Storey Terrace House

3


MANUFACTURING DIVISION

The manufacturing division has recorded a 10.6%
increase in turnover from RM24.94 million to
RM27.57 million in the current financial year with
export sales contributing to more than half of the
increase in volume.

Whilst the existing RM/USD peg has continued to
help the division to sustain and improve its
performance in the export market, the domestic
market has remained depressed on account of the
Taman Mastiara Townville, Kuala Lumpur
anemic performance of the building and
150 units 3 and 4 Storey Townhouse
construction industry.

The division recorded a lower loss of RM61,410 in the year as compared to RM320,005 in the previous
year.

In spite of the increase achieved in the turnover, gross margin was adversely affected by the sharp increases
in raw material cost in the second half of the year when the polymer supply market was squeezed by tight
supply and high crude oil prices.

YEAR 2000 COMPLIANCE

The Group did not experience any disruption in its operations resulting from the Year 2000 issue, as we
have taken adequate measures to avoid any potential hardware and software problems.

PROSPECT

During the period under review, amidst difficult operating conditions, the Group remained profitable. Going
forward, the prospects for the housing and building sectors look positive set against a backdrop of planned
fiscal stimulus and improving consumer sentiment.

Paling’s Products

4

ANNUAL REPORT 2000


Perkampungan Sri Mahkota Aman, Kuantan, Pahang
Double Storey Shop

DIVIDEND Taman Mastiara, Kuala Lumpur
Precinct 5 - 44 units Double Storey Shop

Your Directors are proposing a first and final dividend
of 1.5% less 28% tax for the financial year under
International Institute Of Islamic Thought And
review. Civilization (ISTAC)
Persiaran Duta, Taman Duta, Kuala Lumpr

APPRECIATION

I wish to take this opportunity to thank my fellow
members on the Board for their continuing support
and guidance and to all our shareholders for their
confidence and commitment to the Group.

On behalf of the Board, I like to convey special thanks
to all our staff and the management team for their
dedication and loyalty to the Group. Our appreciation
to various government authorities and agencies, Library Block, Cafeteria and Academic Block
bankers, customers and business associates for their
co-operation and continued support.

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

9 August 2000 Hostel

5

PENYATA PENGERUSI

PENGENALAN

Dengan sukacitanya saya bagi pihak Lembaga Pengarah, membentangkan Laporan Tahunan Siah Brothers
Corporation Berhad ("Syarikat") dan anak-anak Syarikatnya ("Kumpulan") untuk tahun kewangan berakhir
31 Mac 2000.

KAJIAN KEWANGAN

Pada tahun berakhir 31 Mac 2000, Kumpulan telah
mendapat perolehan yang lebih rendah iaitu
sebanyak RM114.71 juta (RM149.67 juta -31 Mac
1999). Ini adalah sejajar dengan kedudukan
ekonomi Malaysia secara keseluruhannya dalam
tempoh yang sama; di mana setiap bahagian
perniagaan telah memperolehi keputusan yang tidak
menggalakkan. Sebaliknya terdapat kenaikan kadar Institut Antarabangsa Pemikiran dan Tamadun Islam
keuntungan dagangan daripada 1.4% pada tahun Persiaran Duta, Taman Duta, Kuala Lumpur
Blok Akademik
1999 kepada 2.2% dalam tahun 2000 di mana
sebahagian besarnya disebabkan oleh penghapusan
kos perantaraan, pengagihan sumber yang lebih baik, kos pinjaman yang lebih rendah dan sambutan yang
memperansangkan terhadap pelancaran rumah baru.

KAJIAN OPERASI

Perumahan dan Pembinaan

Bagi tahun kewangan yang dibentangkan, bahagian
Perumahan dan Pembinaan kekal sebagai aktiviti
utama Kumpulan yang mencatat dagangan sebanyak
RM85.43 juta berbanding RM121.85 juta pada tahun
kewangan lepas. Jumlah dagangan ini menyumbang
sebanyak 75% dari jumlah dagangan Kumpulan.

Berikut adalah sebahagian daripada projek-projek
Bandar Utama, Batang Kali, Selangor yang sedang dijalankan oleh Bahagian bagi tahun
154 unit Rumah Teres Satu Tingkat
yang dibentangkan :

a. Pembinaan kampus dan kemudahan akademik Institut Antarabangsa Pemikiran dan Tamadun Islam,
Taman Duta, Kuala Lumpur.

b. Pembangunan dan pembinaan unit-unit rumah teres di Perkampungan Seri Mahkota Aman, Kuantan,
Pahang dan di Bandar Utama, Batang Kali, Selangor.

c. Pembinaan rumah-rumah bandar dan kedai-kedai pejabat di Taman Mastiara, Jalan Ipoh, Kuala Lumpur.

d. Pembinaan dan pembangunan pangsapuri mewah di The Peak, Signal Hill, Kota Kinabalu, Sabah.

6

ANNUAL REPORT 2000

PENYATA PENGERUSI

BAHAGIAN PENGILANGAN

Bahagian pengilangan mendaftar kenaikan dagangan
sebanyak 10.6% iaitu dari RM24.94 juta pada tahun
kewangan yang lepas kepada RM27.57 juta bagi
tahun kewangan yang dibentangkan. Lebih daripada
separuh peningkatan jumlah disumbangkan oleh
pasaran luar negara.

Walaupun langkah kawalan mata wang asing dan
penetapan nilai ringgit telah membantu Bahagian
untuk bertahan dan terus meningkat dalam pasaran
Taman Mastiara Townville, Kuala Lumpur luar negara, suasana pasaran domestik masih suram
150 units 3 dan 4 Tingkat Rumah Bandar
dengan persembahan lemah yang berterusan dari
industri pembangunan dan pembinaan.

Bahagian ini juga telah mengalami kerugian yang lebih rendah sebanyak RM61,410 pada tahun ini
berbanding RM320,005 pada tahun sebelumnya.

Walaupun perolehan meningkat, pendapatan menurun dengan kenaikan harga bahan-bahan mentah pada
setengah tahun kedua di mana pasaran polimer berkurangan berikutan kekurangan bekalan dan harga
minyak mentah yang tinggi.

PEMATUHAN ALAF TAHUN 2000 (Y2K)

Kumpulan tidak mengalami apa-apa gangguan dalam operasinya dari pepijat alaf tahun 2000 (Y2K)
memandangkan Kumpulan telah mengambil langkah-langkah berkenaan bagi mengatasi segala masalah
perisian dan peralatan.

PROSPEK

Bagi tahun yang dibentangkan, Kumpulan tetap memperolehi keuntungan walaupun terpaksa beroperasi
dalam suasana yang sukar. Walaupun demikian, prospek bagi sektor perumahan dan pembangunan
dianggarkan positif selaras dengan rancangan kewangan kerajaan dan peningkatan sentimen pengguna.

Barangan Keluaran Paling

7

PENYATA PENGERUSI

Perkampungan Sri Mahkota Aman, Kuantan, Pahang
Kedai Dua Tingkat

DIVIDEN Taman Mastiara, Kuala Lumpur
Precinct 5 - 44 units Kedai Dua Tingkat

Lembaga Pengarah mencadangkan dividen pertama
dan akhir sebanyak 1.5% tolak cukai 28% untuk
tahun kewangan yang dibentangkan ini. Institut Antarabangsa Pemikiran dan Tamadun Islam
Persiaran Duta, Taman Duta, Kuala Lumpur

PENGHARGAAN

Saya ingin mengambil kesempatan ini untuk
merakamkan penghargaan saya kepada ahli-ahli
Lembaga ke atas sokongan dan bimbingan mereka
dan penghargaan kepada pemegang saham yang
memberikan keyakinan dan dedikasi mereka kepada
Kumpulan.

Bagi pihak Lembaga Pengarah, saya juga ingin
menyampaikan ribuan terimakasih kepada semua
kakitangan dan pihak pengurusan kami di atas usaha Blok Perpustakaan, Kafeteria dan Blok Akademik
gigih, kesetiaan dan keyakinan mereka kepada
Kumpulan. Pihak kami juga ingin merakamkan
setinggi-tinggi penghargaan kepada agensi-agensi
Kerajaan, pihak bank, pelanggan kami dan rakan
kongsi perniagaan di atas sokongan dan galakkan
mereka.

YBhg. Tan Sri Dato’ Ir. Muhammad Yusuff
Bin Haji Muhammad Yunus
PSM, DIMP, JMN, PJK, BSc., P.Eng, FAS Asrama
Pengerusi

9 Ogos 2000

8

ANNUAL REPORT 2000

AUDIT COMMITTEE

TERMS OF REFERENCE

Membership
The Committee shall be appointed by the Board from amongst the Directors of the Company and shall
consist of not less than 2 Independent Non Executive Directors of the Company and not more than 1
Executive Director of the Company. A quorum shall be 2 members.

The Chairman of the Committee shall be appointed by the Board.

Attendance At Meetings
The Finance Director, the Head of Internal Audit, and a representative of the External Auditors shall normally
attend meetings. However, at least once a year the Committee shall meet with the External Auditors without
any Executive Board member present.

The Company Secretary shall be the secretary of the Committee.

Frequency Of Meetings
Meetings shall be held not less than three 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 Committee shall be :

q to consider the appointment of the External Auditors, the audit fee, and any questions of resignation or
dismissal.
q 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.
q to review the quarterly reports and annual financial statements before submission to the Board, focusing
particularly on :
- any changes in accounting policies and practices
- major judgement areas
- significant adjustments resulting from the audit
- the going concern assumption
- compliance with accounting standards
- compliance with stock exchange and legal requirements
q to discuss problems and reservations arising from the interim and final audits, and any matters the
auditor may wish to discuss (in the absence of management where necessary).
q to review the internal audit programme, consider the major findings of internal audit investigations
and management’s response, and ensure co-ordination between the Internal and External Auditors.
q to keep under review the effectiveness of internal control systems, and in particular review the External
Auditors’ management letter and management’s response.
q to consider other topics, as defined.

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

9

CORPORATE I NFORMATION
(as As at 18 th August, 2000

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

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

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

Mun Chong Shing @ Mun Chong Tian
Executive Director

Yeoh Hock Thong
B.Sc. (Hons) Econ, MBA (Finance), MDP
Executive Director

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

Dr. Norraesah Bt. Haji Mohamad
PhD., B.Sc. (Econ)

Sim Peng Choon

Ibrahim bin Awang
MBA (Finance)
(Alternate to Sim Peng Choon)
AUDIT COMMITTEE SOLICITORS
Dr. Norraesah Bt. Haji Mohamad Lee, Perara & Tan
PhD., B.Sc. (Econ) 55, Jalan Thambapillai
Chairperson and Independent Non Executive Director Off Jalan Tun Sambanthan
Brickfields
Tan Sri Dato’ Ir. Muhammad Yusuff 50470 Kuala Lumpur
bin Haji Muhammad Yunus
PSM, DIMP, JMN, PJK, B.Sc., P. Eng, FAS Lim & Yeoh
Independent Non Executive Director 145-M Jalan Maharajalela
50150 Kuala Lumpur
Sia Teong Heng
B.Sc. (Eng), M.Sc. PRINCIPAL BANKERS
Executive Director Amanah Merchant Bank Berhad
Arab Malaysian Merchant Bank Berhad
Sim Peng Choon Aseambankers Malaysia Berhad
Independent Non Executive Director Bangkok Bank Berhad
Bumiputra Commerce Bank Berhad
COMPANY SECRETARIES Commerce International Merchant Bankers Berhad
Chong Fook Sin ATII, AFA (LS0083) Multi-Purpose Bank Berhad
Kan Chee Jing (MAICSA No : 7019764) Overseas Union Bank (M) Berhad

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

AUDITORS Tel : 03-7112688 Fax : 03-7112693
Horwath Mok & Poon
Public Accountants STOCK EXCHANGE LISTING
Level 16 Tower C, Megan Phileo Avenue The Main Board of Kuala Lumpur Stock Exchange
12 Jalan Yap Kwan Seng
50450 Kuala Lumpur

10

ANNUAL REPORT 2000

CORPORATE STRUCTURE
As at 18 th August, 2000

11

GROUP FINANCIAL HIGHLIGHTS

2000 1999 1998 1997 1996
RESULTS RM’000 RM’000 RM’000 RM’000 RM’000
Turnover 114,707 149,669 256,884 234,310 236,640
Profit before taxation 2,555 2,088 13,364 12,229 15,264
Profit after taxation but
before minority interests 3,736 3,923 6,430 8,036 10,913
Profit after minority interests
but before exceptional items 3,736 1,679 2,561 7,948 10,745
Profit attributable to shareholders 3,729 1,679 2,561 7,562 10,826

ASSET EMPLOYED
Fixed Assets 31,271 33,939 31,625 33,793 33,463
Investments 122,733 147,660 147,299 142,942 15,510
Sinking Fund Bank Account - - - 5,216 2,078
Net current assets 56,510 34,687 34,766 59,555 66,789
Goodwill and deferred expenditure 8,253 8,185 8,543 9,061 1,165
218,767 224,471 222,233 250,567 119,005

FINANCED BY
Share capital 57,302 50,469 50,469 50,458 50,329
Reserves 42,832 40,095 38,780 36,610 31,683
Minority interests - 14,897 13,084 10,247 231
Redeemable Unsecured
Guaranteed Bonds - - - 34,157 34,162
Irredeemable Convertible
Unsecured Loan Stocks 115,600 115,600 115,600 115,600 -
Deferred Liabilities 3,033 3,410 4,300 3,495 2,600
218,767 224,471 222,233 250,567 119,005

SELECTED RATIOS
Net earnings per share (sen) 6.90 3.33 5.07 15.76 22.74
Net tangible assets per share (sen) 182.00 163.23 159.91 154.60 160.64
Gross dividend (%) 1.50 1.00 1.00 7.00 7.00

PROFIT BEFORE ASSETS EMPLOYED TURNOVER SHAREHOLDERS’ FUNDS
TAXATION

12

ANNUAL REPORT 2000

SBC Berhad ……. We provide "Solutions for Building Co-Ventures"

One of SBC's main activities is in the turnkey development of buildings in
co-venture with landowners. Our trademarks include arriving at solutions which
add value to buildability, design, project finance and marketing. As our acronym
implies, at S.B.C., we are in the business of providing
"Solutions for Building Co-ventures".

Some of our esteemed partners include:

- Sabah State Government;
- Selangor State Government;
- TA Enterprise Berhad.

13

Financial Statement
For the year ended 31st March 2000

ANNUAL REPORT 2000

DIRECTORS ’ REPORT

The directors hereby submit their report and the audited accounts of the Group and of the Company for the
financial year ended 31 March 2000.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding and the provision of management
and administrative services to the subsidiary companies. The principal activities of the subsidiary companies
are disclosed in Note 3 to the accounts. There have been no significant changes in the nature of these
activities during the financial year.

RESULTS

THE GROUP THE COMPANY
RM RM

Profit after taxation for the financial year 3,729,157 994,056

DIVIDENDS

Since the end of the previous financial year, the Company paid a final dividend of 1% less tax at 28%
amounting to RM363,376 in respect of the previous financial year as proposed in the directors’ report of
that financial year.

For the financial year,

(i) the directors have declared the payment of a dividend of 5.5% less 28% tax amounting to RM246,864
for the Irredeemable Cumulative Convertible Preference Shares ("ICCPS"), in accordance with the
terms of issue of the ICCPS; and

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

RESERVES AND PROVISIONS

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

ISSUES OF SHARES
During the financial year,

(a) the Company amended its authorised capital from 200,000,000 ordinary shares of RM1 each to
193,167,000 ordinary shares of RM1 each and 6,833,000 ICCPS of RM1 each;

(b) the Company increased its paid-up capital from RM50,468,943 comprising 50,468,943 ordinary shares
of RM1 each to RM57,301,943 by an allotment of 6,833,000 ICCPS of RM1 each for cash at par; and

The main terms of the ICCPS are disclosed in Note 20 to the accounts.

15


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.

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

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

BAD AND DOUBTFUL DEBTS

Before the profit and loss accounts and balance sheets of the Group and of the Company were made out,
the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of
bad debts and the making of provision for doubtful debts, and have satisfied themselves that there are no
known bad debts and that adequate provision had been made for doubtful debts.

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

CURRENT ASSETS

Before the profit and loss accounts and balance sheets 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 accounts 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.

16

ANNUAL REPORT 2000


CONTINGENT AND OTHER LIABILITIES

Other than the contingent liabilities as disclosed in Note 37 to the accounts, at the date of this report, there
does not exist:-

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

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

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

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this
report or the accounts of the Group and of the Company which would render any amount stated in the
accounts 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 except as disclosed in Note 28 to the accounts.

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

DIRECTORS

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

TAN SRI DATO’ IR MUHAMMAD YUSUFF BIN HAJI MUHAMMAD YUNUS
SIA KWEE MOW @ SIA HOK CHAI
SIA TEONG HENG
MUN CHONG SHING @ MUN CHONG TIAN
DATO’ LIM PHAIK GAN
DR. NORRAESAH BT HAJI MOHAMAD
SIM PENG CHOON
IBRAHIM BIN AWANG (ALTERNATE TO SIM PENG CHOON)
YEOH HOCK THONG

17


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

Pursuant to Article 80 of the Articles of Association of the Company, Mr. Sim Peng Choon and Dr. Norraesah
Bt. Haji Mohamad retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer
themselves for re-election.

DIRECTORS’ INTERESTS

In accordance with the register of directors’ shareholdings, the interests of directors in office at the end of
the financial year, in shares, TSRs and Irredeemable Convertible Unsecured Loan Stocks ("ICULS") in the
Company during the financial year are as follows:-

NUMBER OF ORDINARY SHARES OF RM1 EACH
AT AT
1.4.1999 BOUGHT SOLD 31.3.2000
DIRECT INTEREST
SIA KWEE MOW @ SIA HOK CHAI 3,982,400 - - 3,982,400
SIM PENG CHOON 10,000 - - 10,000
SIA TEONG HENG 1,296,200 200 - 1,296,400
MUN CHONG SHING @ MUN CHONG TIAN 17,000 - - 17,000
DATO’ LIM PHAIK GAN 10,000 - 5,000 5,000

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

TRANSFERABLE SUBSCRIPTION RIGHTS
AT AT
1.4.1999 BOUGHT SOLD 31.3.2000
DIRECT INTEREST
DATO’ LIM PHAIK GAN - - - -
DR NORRAESAH BT HAJI MOHAMAD 4,000 - - 4,000

TRANSFERABLE SUBSCRIPTION RIGHTS
AT AT
1.4.1999 BOUGHT SOLD 31.3.2000
INDIRECT INTEREST
SIA TEONG HENG 1,746,780 - - 1,746,780

18

ANNUAL REPORT 2000


IRREDEEMABLE CONVERTIBLE UNSECURED
LOAN STOCKS
AT AT
1.4.1999 BOUGHT SOLD 31.3.2000
DIRECT INTEREST
SIM PENG CHOON 4,000 - - 4,000
SIA TEONG HENG 1,432,500 - - 1,432,500

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

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

None of the other directors had any interests in shares, TSRs or ICULS of the Company and its related
corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any
benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable
by directors as shown in the accounts, 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 35 to the
accounts.

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

19


AUDIT COMMITTEE

The members of the audit committee are:-

DR NORRAESAH BT HAJI MOHAMAD
TAN SRI DATO’ IR MUHAMMAD YUSUFF BIN HAJI MUHAMMAD YUNUS
SIA TEONG HENG
SIM PENG CHOON

The functions of the Audit Committee are to review the accounting policies, internal controls and annual
accounts of the Company and its subsidiary companies on behalf of the Board of Directors.

In performing its function, the committee reviews the overall scope of the external auditors and meets them
to discuss the results of their examination and their evaluation of the system of internal accounting controls
of the Company and its subsidiary companies.

The Committee also reviews the quarterly report and the annual consolidated accounts of the Group and
the accounts of the Company as well as the auditors’ report thereon, prior to their submission to the Board
of Directors for adoption.

The Audit Committee has recommended to the Board of Directors that the auditors, Messrs Horwath Mok &
Poon, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the
Company.

SIGNIFICANT EVENTS

The following are the significant events involving the Group and the Company during the financial year
under review:-

(a) On 28 March 1997, the Company acquired an 80% equity interest in Mixwell (M) Sdn Bhd (Mixwell)
on the condition that the main vendors and a guarantor provide profit guarantees on the pre-tax profits
of Mixwell for the financial years ending 31 March 1997 to 31 March 2000. The Company has entered
into a settlement agreement dated 30 November 1998 with the main vendors and a guarantor which
was approved by the shareholders of the Company at an Extraordinary General Meeting held on 5
April 1999 and the Securities Commission on 5 July 1999. Pursuant to the terms of the aforesaid
settlement agreement, the main vendors transferred to the Company the balance of the 20% equity
interest in Mixwell and 26 acres of a piece of freehold development land in the Mukim of Batang Kali,
District of Hulu Selangor, Selangor in consideration for the full settlement of the guaranteed pre-tax
profits for the two financial years ended 31 March 1999 and 31 March 2000 of RM35 million and
RM45 million respectively.

(b) On 30 September 1999, Syarikat Siah Brothers Trading Sdn. Bhd. ("SSBT"), a subsidiary company,
disposed of its entire 75% equity interest in SBC Design and Engineering Sdn. Bhd., for a total cash
consideration of RM700,000. The disposal resulted in an exceptional gain of RM512,500 in the accounts
of SSBT and an exceptional loss of RM6,508 to the Group.

20

ANNUAL REPORT 2000


SUBSEQUENT EVENT

The shareholders of the Company, at an Extraordinary General Meeting held on 7 April 2000, approved the
implementation of an Employee Share Option Scheme ("ESOS"). The main features of the ESOS are as
follows:-

(a) eligible employees are employees who have served in the employment of any company within the
Group for at least one financial year;

(b) the total number of new ordinary shares to be offered under the ESOS shall not exceed 10% of the
issued and paid-up ordinary share capital of the Company at any point of time during the existence of
the ESOS which shall be in force for a period of five (5) years from the date of offer;

(c) the maximum possible allocation for any single eligible employee during the existence of the ESOS
shall not be less than 1,000 nor more than 450,000 shares subject to the maximum allowable allocation
according to their respective categories;

(d) the subscription price shall be based on the weighted average market price of the shares as shown in
the Daily Official List issued by the Kuala Lumpur Stock Exchange for the five (5) market days prior to
the date of offer or at par value, whichever is higher; and

(e) the shares to be alloted upon any exercise of an option will, upon allotment, rank pari passu in all
respects with the existing issued and paid-up ordinary shares of the Company.

No options have been granted to eligible employees under the ESOS as of the date of this report.

AUDITORS

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

ON BEHALF OF THE BOARD

TAN SRI DATO’ IR MUHAMMAD YUSUFF BIN
HAJI MUHAMMAD YUNUS

SIA KWEE MOW @ SIA HOK CHAI

21

BALANCE SHEETS AT 31 MARCH 2000

2000 1999 2000 1999
NOTE RM RM RM RM

FIXED ASSETS 2 31,271,271 33,938,545 155,302 282,762
INVESTMENT IN SUBSIDIARY
COMPANIES 3 - - 173,370,110 186,880,110
INTEREST IN ASSOCIATE
COMPANIES 4 104,715,489 129,641,985 8,040,450 8,040,450
OTHER INVESTMENTS 5 148,732 148,732 - -
INVESTMENT PROPERTIES 6 17,869,093 17,869,093 - -
GOODWILL ON CONSOLIDATION 7,511,884 7,511,884 - -

CURRENT ASSETS
Inventories held for resale 7 16,785,581 16,398,271 - -
Property development in progress 8 26,915,382 16,706,447 - -
Contract work-in-progress 9 173,124,445 122,503,390 - -
Trade debtors 10 82,906,205 97,613,209 - -
Other debtors, deposits
and prepayments 11 11,760,753 12,681,196 15,513,044 13,213,907
Dividend receivable - - 4,800,000 4,500,000
Amounts owing by subsidiary companies 12 - - 21,022,577 -
Amounts owing by associate companies 13 6,791,231 3,809,538 27,883 27,733
Short term deposits with a licensed bank 14 3,272,665 5,596,446 - -
Cash and bank balances 1,563,932 1,815,107 81,157 1,092,491

323,120,194 277,123,604 41,444,661 18,834,131

LESS: CURRENT LIABILITIES
Trade creditors 15 38,690,521 49,996,151 - -
Other creditors and accruals 10,015,469 17,285,679 5,075,818 2,452,640
Lease and hire purchase creditors 16 - 186,896 - -
Proposed dividend 545,065 363,376 545,065 363,376
Dividend payable 246,864 - 246,864 -
Provision for taxation - 4,054,365 - -
Bank borrowings 17 39,403,957 43,807,510 13,223,181 13,618,973
Progress billings 174,790,110 123,823,839 - -
Amount owing to a director 18 2,918,800 2,918,800 2,918,800 2,918,800
Amounts owing to subsidiary companies 12 - - - 517,490

266,610,786 242,436,616 22,009,728 19,871,279

NET CURRENT ASSETS/(LIABILITIES) 56,509,408 34,686,988 19,434,933 (1,037,148)

INTANGIBLE ASSETS 19 740,781 673,558 - -

218,766,658 224,470,785 201,000,795 194,166,174

22

ANNUAL REPORT 2000

BALANCE SHEETS AT 31 MARCH 2000
(C ONT’D)

2000 1999 2000 1999
NOTE RM RM RM RM

FINANCED BY:-

SHARE CAPITAL 20 57,301,943 50,468,943 57,301,943 50,468,943
RESERVES 21 42,831,879 40,095,157 28,098,852 28,097,231

SHAREHOLDERS’ FUNDS 100,133,822 90,564,100 85,400,795 78,566,174
IRREDEEMABLE CONVERTIBLE
UNSECURED LOAN STOCKS 22 115,600,000 115,600,000 115,600,000 115,600,000
MINORITY INTERESTS 23 - 14,896,775 - -
DEFERRED LIABILITIES 24 3,032,836 3,409,910 - -

218,766,658 224,470,785 201,000,795 194,166,174

NET TANGIBLE ASSETS PER SHARE 25 182 Sen 163 Sen

The annexed notes from an integral part of these accounts.

23

PROFIT AND LOSS ACCOUNTS
(F OR THE FINANCIAL YEAR ENDED 31 MARCH 2000)
ST

2000 1999 2000 1999
NOTE RM RM RM RM

TURNOVER 26 114,707,092 149,669,322 11,573,740 13,924,385

COST OF SALES 97,786,539 131,191,329 - -

(LOSS)/PROFIT FROM OPERATIONS 27 (1,197,493) (2,590,265) 1,502,056 1,533,008

SHARE OF PROFIT OF
ASSOCIATE COMPANIES 3,759,401 4,677,786 - -

PROFIT BEFORE TAXATION
AND BEFORE EXCEPTIONAL ITEM 2,561,908 2,087,521 1,502,056 1,533,008
EXCEPTIONAL ITEM 28 (6,508) - - -

PROFIT BEFORE TAXATION 2,555,400 2,087,521 1,502,056 1,533,008

TAXATION 29 1,173,757 1,835,619 (508,000) (705,000)

PROFIT AFTER TAXATION 3,729,157 3,923,140 994,056 828,008

PROFIT ATTRIBUTABLE
TO MINORITY INTERESTS - (2,244,388) - -

PROFIT ATTRIBUTABLE
TO SHAREHOLDERS 3,729,157 1,678,752 994,056 828,008

RETAINED PROFITS BROUGHT
FORWARD 16,878,130 15,562,754 4,880,204 4,415,572

PROFITS AVAILABLE FOR
APPROPRIATION 20,607,287 17,241,506 5,874,260 5,243,580

DIVIDENDS 30 (791,929) (363,376) (791,929) (363,376)

RETAINED PROFITS CARRIED
FORWARD 19,815,358 16,878,130 5,082,331 4,880,204

Attributable to:-

The Company 5,082,331 4,880,204
Subsidiary companies 14,733,027 11,997,926

19,815,358 16,878,130

Earnings per share (sen) - basic 31 6.9 3.3
- diluted 31 9.7 7.7


24

ANNUAL REPORT 2000

CONSOLIDATED CASH FLOW STATEMENT
ST

THE GROUP
2000 1999
NOTE RM RM

CASH FLOWS (FOR)/FROM OPERATING ACTIVITIES
Profit before taxation and before exceptional item 2,561,908 2,087,521
Exceptional item (6,508) -

Profit before taxation 2,555,400 2,087,521

Adjustments for:-
Amortisation of deferred expenditure 51,818 221,512
Deferred expenditure written off 126,221 84,193
Depreciation and amortisation of fixed assets 3,161,054 3,696,424
Exceptional loss on disposal of a subsidiary company 6,508 -
Fixed assets written off - 78,570
Goodwill written off - 220,066
Interest expense 9,788,675 12,181,976
Loss on joint ventures - 1,007,842
Provision for doubtful debts 998,000 600,000
Dividend income (135) (585)
Gain on foreign exchange - (23,742)
Interest income (1,470,881) (2,307,547)
Profit on disposal of condominium - (1,711,521)
Profit on disposal of fixed assets (340,412) (78,318)
Profit on disposal of investment properties - (18,099)
Share of profit in associate companies (3,759,401) (4,677,786)

Operating profit before working capital changes 11,116,847 11,360,506
(Increase)/Decrease in inventories (387,310) 2,540,149
Decrease in property development-in-progress, net 3,301,065 3,939,945
Decrease in trade and other debtors 12,859,888 7,650,469
Increase in contract work in progress (56,235,537) (43,685,230)
Decrease in trade and other creditors (16,841,837) (543,209)
Increase in progress billings 56,804,790 45,230,229
Increase in deferred expenditure (245,262) (139,280)

CASH FROM OPERATIONS 10,372,644 26,353,579
Interest paid (9,788,675) (12,181,976)
Taxes paid (2,616,474) (4,881,476)
Interest received 1,470,881 2,307,547

NET CASH (FOR)/FROM OPERATING ACTIVITIES
CARRIED FORWARD (561,624) 11,597,674


25

CONSOLIDATED CASH FLOW STATEMENT
ST

THE GROUP
2000 1999
NOTE RM RM

NET CASH (FOR)/FROM OPERATING ACTIVITIES
BROUGHT FORWARD (561,624) 11,597,674

CASH FLOWS FOR INVESTING ACTIVITIES
Acquisition of fixed assets (1,007,695) (6,066,471)
Additional expenses incurred for acquiring a
subsidiary company in prior year - (29,040)
Dividend income from quoted investment 135 585
Dividends received from associate companies - 1,610,021
Net cash inflow on disposal of subsidiary company 32 460,325 -
Proceeds from disposal of fixed assets 419,001 56,407
Proceeds from disposal of investment properties - 3,249,790

NET CASH FOR INVESTING ACTIVITIES (128,234) (1,178,708)

CASH FLOWS FROM/(FOR) FINANCING ACTIVITIES
(Advance to)/Repayment by associate companies (2,981,693) 181,545
Dividend paid to minority shareholders (230,000) (432,000)
Dividend paid to shareholders of the Company (363,376) (363,376)
Expenses incurred on issuance of Irredeemable
Cumulative Convertible Preference Shares ("ICCPS") (200,506) -
Proceeds from issuance of ICCPS 6,833,000 -
Redemption of bonds - (34,157,400)
Repayment from joint ventures - 53,820
Repayment of long term loans (327,694) (819,192)
Repayment to hire purchase creditors (186,896) (98,179)
Sinking fund - 10,611,141

NET CASH FROM/(FOR) FINANCING ACTIVITIES 2,542,835 (25,023,641)

NET INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS 1,852,977 (14,604,675)

CASH AND CASH EQUIVALENTS AT BEGINNING
OF FINANCIAL YEAR (36,134,259) (21,529,584)

CASH AND CASH EQUIVALENTS AT END
OF FINANCIAL YEAR 33 (34,281,282) (36,134,259)


26

ANNUAL REPORT 2000

NOTES TO THE ACCOUNTS
ST

1. SIGNIFICANT ACCOUNTING POLICIES

(a) Accounting Convention

The accounts are prepared under the historical cost convention, modified to include the revaluation
of certain long leasehold land and buildings and in compliance with applicable approved
accounting standards in all material respects.

(b) Basis of Consolidation

The consolidated accounts incorporate the accounts of the Company and all its subsidiary
companies made up to 31 March 2000. The subsidiary companies are consolidated using the
acquisition method. The results of subsidiary companies acquired or disposed during the financial
year are dealt with in the consolidated profit and loss account from the effective dates of acquisition
or disposal. Transactions within the Group are eliminated on consolidation and the consolidated
accounts reflect external transactions only.

In the event where the cost of investment is higher than the fair value of net assets acquired, the
excess consideration paid represents goodwill. Goodwill arising on the acquisition of subsidiary
companies is retained in the consolidated balance sheet at cost and is written down only when
the directors are of the opinion that there is a permanent diminution in its value.

(c) Associate Companies

Associate companies are those companies in which the Group has a long term equity interest of
between 20% to 50% and where the Group exercises significant influence through Board
representation.

The Group’s share of profit and loss of associate companies is included in the consolidated profit
and loss account and the Group’s share of post acquisition retained profits and reserves is added
to the cost of investment in the consolidated balance sheet.

(d) Fixed Assets and Depreciation

Freehold land is stated at cost and is not depreciated. Other fixed assets are stated at cost less
accumulated depreciation.

Depreciation of fixed assets is calculated under the straight-line method to write off the cost or
revalued amount of the assets over their estimated useful lives. The principal annual rates used
for this purpose are:-
Long leasehold land and buildings Over 99 years
Factory 2% - 3%
Plant and machinery 10%
Construction machinery and equipment 5% - 20%
Formwork 12%
Scaffoldings and containers 10% - 25%
Factory equipment 10%
Moulds and dies 16%
Office equipment, computers, furniture and fittings 5% - 20%
Motor vehicles 20%
Tools and fittings 10%

27

ST

(e) Investments

Investments held on a long term basis are stated at cost. Provision for diminution in the value of
the investments is only made if the directors are of the opinion that the diminution is permanent
in nature.

(f) Investment Properties

Investment properties are held as long term investments to generate income and for capital gain,
and are stated at cost. These properties are not depreciated.

(g) Inventories

Inventories are stated at the lower of cost and net realisable value. For manufactured goods, cost
is determined on the weighted average basis and includes the cost of materials and incidentals
incurred in bringing the inventories to their present location and condition. For finished goods
and work-in-progress, cost includes direct labour and appropriate production overheads.

(h) Development-In-Progress

Development-in-progress is stated at cost plus profit attributable to the stage of completion for
sold properties less progress billings and foreseeable losses, if any. Cost comprises construction
and other related development costs and administrative overheads relating to the projects.
Completed and unsold properties are transferred to inventories for resale upon completion.

(i) Contract Work-In-Progress

Contract work-in-progress is stated at cost plus profit attributable to contracts in progress less
foreseeable losses, if any. Cost comprises construction and other related costs and administrative
overheads relating to the projects.

(j) Leased Assets

Assets acquired through finance leases being leases which transfer substantially all the risks and
benefits incidental to ownership of the leased assets to the lessee are capitalised at the value
equivalent to the cost of the assets. The interest element of the lease rentals is charged to the
profit and loss account on a straight line basis over the period of the lease.

(k) Deferred Taxation

Deferred taxation is provided using the liability method on all material timing differences except
where no liability is expected to arise in the foreseeable future. Deferred tax benefit is only
recognised when there is reasonable expectation of realisation in the foreseeable future.

(l) Foreign Currencies

Transactions in foreign currencies are converted into Ringgit Malaysia at the approximate rates
of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies
at the balance sheet date are translated at the approximate rates ruling as of that date. All exchange
differences are taken to the profit and loss account.

28

ANNUAL REPORT 2000

ST

(m) Recognition of Profits

Profits from property development are recognised from the sale of completed and uncompleted
development-in-progress. Profits on uncompleted properties contracted for sale are recognised
based on the percentage-of-completion method unless the outcome of the project cannot be
reliably determined, in which case the income from projects will only be recognised to the
extent of project costs incurred that are recoverable. Profits from construction contracts are
recognised based on the percentage-of-completion method, where the outcome can be reliably
estimated. Foreseeable losses, if any, are provided for in full as and when it can be reasonably
ascertained that the development or contract will result in a loss.

(n) Intangible Assets

(i) Preliminary and pre-operating expenses

Incorporation expenses incurred are shown as preliminary expenses while expenses incurred
subsequent to the date of incorporation but before the commencement of operations are
shown as pre-operating expenses. Both preliminary and pre-operating expenses are amortised
over a period of four to five years.

(ii) Deferred expenses

Deferred expenses comprise expenditure incurred on certain plant and machinery to extend
their useful lives. The deferred expenses are amortised over two years.

(iii) Trademark

This represents the agreed cost of a trademark for the use on certain products of the Group.
Amortisation is based on annual production against expected total capacity.

29

ST

2. FIXED ASSETS (CONT’D)

OFFICE EQUIPMENT,
COMPUTERS,
FURNITURE
THE COMPANY MOTOR VEHICLES AND FITTINGS TOTAL
RM RM RM
COST
At 1.4.1999 670,745 342,079 1,012,824
Additions - 15,868 15,868
Disposals (154,195) - (154,195)

At 31.3.2000 516,550 357,947 874,497

ACCUMULATED DEPRECIATION
At 1.4.1999 539,609 190,453 730,062
Charge for the financial year 102,753 40,574 143,327
Disposal (154,194) - (154,194)

At 31.3.2000 488,168 231,027 719,195

NET BOOK VALUE AT
- 31.3.2000 28,382 126,920 155,302
- 31.3.1999 131,136 151,626 282,762

Depreciation charge for the
financial year ended 31.3.1999 103,590 41,548 145,138

In respect of the previous financial year, fixed assets of the Group acquired under hire purchase
arrangements carried a net book value of RM228,254.

3. INVESTMENT IN SUBSIDIARY COMPANIES
THE COMPANY
2000 1999
RM RM

Unquoted shares, at cost 173,370,110 186,880,110

32

ANNUAL REPORT 2000

ST

3. INVESTMENT IN SUBSIDIARY COMPANIES (CONT’D)

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

Name of Company Effective Equity Interest Principal
2000 1999 Activities
% %

Syarikat Siah Brothers 100 100 General building
Trading Sendirian Berhad contractor and
investment holding

Syarikat Siah Brothers 100 100 Building and civil
Construction Sdn. Bhd. engineering works

Paling Industries Sdn. Bhd.* 100 100 Manufacturing of
plastic building
materials

Siah Brothers Enterprise 100 100 Building
Sdn. Bhd. * contractor

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

Siah Brothers Land 100 100 Investment
Sdn. Bhd. holding

Siah Brothers Project 100 100 Provision of
Management management
Sdn. Bhd.* services

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

Mixwell (Malaysia) 100 80 Project
Sdn. Bhd. management
and property
development

33

ST


% %

Siah Brothers 100 100 Proposed property
Development development
Sdn. Bhd. *

Sinaran Naga 100 100 Property
Sdn. Bhd. development

Tiara Development 100 100 Proposed
Sdn. Bhd.* property
development

SBC Homes Sdn. Bhd.* 100 100 Proposed property
development

SBC Design & Engineering - 75 Mechanical and
Sdn. Bhd.* electrical
installation

SBC Civil & Structural 100 100 Project
and its related
technical services

Seri Ampangan Realty 100 100 Property
Sdn. Bhd. development

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

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

34

ANNUAL REPORT 2000

ST


% %

SBC Leisure Sdn. Bhd.* 100 100 Property
development

SBC Towers Sdn. Bhd.* 100 100 Property
development

Aureate Construction 100 100 Property
Sdn. Bhd.* investment

Winsome Ventures 100 100 Intended property

Liga Canggih Sdn. Bhd.* 100 100 Dormant

* Subsidiary companies not audited by Horwath Mok & Poon.

During the financial year, the Company effected the settlement of the shortfall in the profit guarantee
in relation to the acquisition of a subsidiary company, Mixwell (Malaysia) Sdn. Bhd. ("Mixwell") in
accordance with the terms of settlement as approved by the shareholders of the Company and the
Securities Commission on 5 April 1999 and 5 July 1999, respectively. Under the terms of the settlement,
the main vendors of Mixwell transferred a piece of freehold development land and the remaining
equity interest in Mixwell to the Company as consideration for the full settlement of the shortfall in the
profit guarantee for the financial years ended 31 March 1999 and 2000. The cost of investment in
Mixwell was accordingly reduced by the value of the property of RM13,510,000 based on the valuation
by an independent professional valuer.

4. INTEREST IN ASSOCIATE COMPANIES

2000 1999 2000 1999
RM RM RM RM

Unquoted shares, at cost 8,360,451 8,360,451 8,040,450 8,040,450
Unquoted shares at Group cost (Note a) 91,618,304 119,580,729 - -
Share of post acquisition reserves 4,736,734 1,700,805 - -

104,715,489 129,641,985 8,040,450 8,040,450

35

ST

4. INTEREST IN ASSOCIATE COMPANIES (CONT’D)
THE GROUP
2000 1999
RM RM
The interest in associate companies comprises:-

Group’s share of net tangible assets 58,699,519 55,663,590
Group’s share of intangible assets 63,967 63,967
Revaluation of Group cost
(net of deferred taxation) (Note b) 45,952,003 73,914,428

104,715,489 129,641,985

(a) Unquoted shares at Group cost
THE GROUP
2000 1999
RM RM

At 1 April 1999/1998 119,580,739 119,580,729
Reduction through transfer of land (13,510,000) -
Reduction through transfer of
equity interest in Mixwell (14,452,425) -

91,618,314 119,580,729

(b) Revaluation of Group cost

At 1 April 1999/1998 73,914,428 75,903,528
Write-off upon disposal of land * - (1,989,100)
Reduction to Group cost arising from the
settlement of the short fall in the profit
guarantee by the main vendor and a
guarantor for the purchase of Mixwell
by the Company by way of:-
- transfer of land (13,510,000) -
- transfer of equity interest in Mixwell (14,452,425) -

45,952,003 73,914,428

*Annual write off of the revaluation surplus is based on the acreage of land disposed by an associate company.

36

ANNUAL REPORT 2000

ST

4. INTEREST IN ASSOCIATE COMPANIES (CONT’D)

The associate companies, all incorporated in Malaysia, are as follows:-

% %

Ligamas Sdn. Bhd.* 50.0 40.0 Property
development

Varich Industries 50.0 50.0 Proposed
Sdn. Bhd.# quarrying

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

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

South East Best 20.0 20.0 Property
Sdn. Bhd.* development

*Share of results of these associated companies are based on the latest available management accounts.

#The results of these associate companies have not been equity accounted as the amounts involved are insignificant.

5. OTHER INVESTMENTS
THE GROUP
2000 1999
RM RM

Quoted shares in Malaysia, at cost 12,300 12,300
Unquoted shares, at cost 180,000 180,000
Joint ventures
- Investment 839,020 839,020
- Advances 3,280,534 3,280,534
- Share of loss (4,163,122) (4,163,122)

148,732 148,732

Market value of quoted shares 36,225 5,130

37

ST

6. INVESTMENT PROPERTIES
THE GROUP
2000 1999
RM RM

Freehold land and buildings 17,869,093 19,389,263
Disposed during the year - (1,520,170)

17,869,093 17,869,093

A landed property of a subsidiary company is charged to a bank for a term loan granted to a subsidiary
company.

7. INVENTORIES HELD FOR RESALE
THE GROUP
2000 1999
RM RM

Unsold completed properties 9,616,166 11,221,698

Manufacturing inventories
- Raw materials 3,598,826 1,737,620
- Finished goods 3,508,356 3,339,848
- Packing materials 22,658 24,931
- Work-in-progress 39,575 74,174

7,169,415 5,176,573

16,785,581 16,398,271

8. PROPERTY DEVELOPMENT-IN-PROGRESS
THE GROUP
2000 1999
RM RM

Freehold land, at cost 14,989,258 1,827,070
Leasehold land, at cost 1,003,272 1,454,242
Development expenditure 31,608,834 19,376,630

47,601,364 22,657,942
Attributable profits accrued on
uncompleted properties 2,547,854 130,641

50,149,218 22,788,583
Progress billings (23,233,836) (6,082,136)

26,915,382 16,706,447

38

ANNUAL REPORT 2000

ST

8. PROPERTY DEVELOPMENT-IN-PROGRESS (CONT’D)

Included in development expenditure is interest cost capitalised amounting to RM347,064 (1999 –
RM2,176,266) for the Group. Development on freehold land amounting to RM13,510,000 (1999 –
Nil) is scheduled to commence in the next financial year.

9. CONTRACT WORK-IN-PROGRESS
THE GROUP
2000 1999
RM RM

Cost incurred on contract works 158,488,569 116,221,556
Attributable profits accrued on contract
work-in-progress 14,635,876 6,281,834

173,124,445 122,503,390

Included in cost incurred on contract works is interest cost capitalised during the financial year of
RM64,085 (1999 – RM100,352).

10. TRADE DEBTORS
THE GROUP
2000 1999
RM RM

Trade debtors 36,404,248 42,960,416
Progress billings receivable 38,164,253 42,435,465
Retention receivable 10,165,422 13,222,231

84,733,923 98,618,112

Provision for doubtful debts (1,827,718) (1,004,903)

82,906,205 97,613,209

Included in trade debtors is an amount of RM29,630,310 (1999 – RM26,970,436) owing by a company
in which a director has interest, of which RM20,308,305 (1999 – RM18,510,436) represents payments
made to sub-contractors on behalf of the same to expedite the construction of a special low cost
housing project.

39

SBC Corporation Berhad: Annual Report 2000

SBC Corporation Berhad: Annual Report 2000

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