SBC Corporation Berhad: Annual Audited Accounts 2002

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

FINANCIAL REPORT
for the financial year ended 31 March 2002

CONTENTS

Page

Directors’ Report.................................................................................................................................................... 1

Statement by Directors......................................................................................................................................10

Statutory Declaration...........................................................................................................................................10

Auditors’ Report....................................................................................................................................................11

Balance Sheets...........................................................................................................................................................13

Income Statements.................................................................................................................................................14

Statements of Changes in Equity.................................................................................................................15

Cash Flow Statements.........................................................................................................................................16

Notes to the Financial Statements..............................................................................................................18


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 2002.

PRINCIPAL ACTIVITIES

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

RESULTS T HE GROUP T HE COMPANY
RM RM

Profit after taxation for the financial year 1,502,621 459,617

DIVIDENDS

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

(i) a dividend of 5.5% less 28% tax amounting to RM270,587 for the Irredeemable Cumulative
Convertible Preference Shares (“ICCPS”) in respect of the previous financial year, in
accordance with the terms of issue of the ICCPS; and

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

For the financial year,

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

(ii) the directors do not recommend the payment of any dividend in respect of the ordinary
shares.

RESERVES AND PROVISIONS

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


I SSUES OF SHARES

During the financial year,

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

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

EMPLOYEE SHARE OPTION SCHEME (“ESOS”)

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

NUMBER OF ORDINARY SHARES OF
RM1 EACH UNDER OPTION

At 1 April 2001 3,563,000
Lapsed during the financial year due to:
- staff resignation (492,000)
- disposal of a subsidiary (1,317,000)

At 31 March 2002 1,754,000

The salient features of the ESOS are as follows:-

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

(ii) the total number of new ordinary shares to be offered under the ESOS shall not exceed 10% of
the total 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;

(iii) the possible allocation for any single eligible employee during the existence of the ESOS shall
not be less than 1,000 or more than 450,000 shares subject to the maximum allowable
allocation according to their respective categories;

(iv) the subscription price shall be based on the weighted average market price of the shares as
shown in the Daily Official List of the Kuala Lumpur Stock Exchange for the five (5) market
days prior to the date of offer with an allowance for a discount of not more than 10%
therefrom or at par value, whichever is higher; and


EMPLOYEE SHARE OPTION SCHEME (“ESOS”) (CONT’D)

(v) 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.

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, other than the existing options under the ESOS and Transferable
Subscription Rights (“TSRs”). The Company has in issue a total of 17,076,200 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 options and subscription rights under the ESOS and TSRs
respectively were exercised.

BAD AND DOUBTFUL DEBTS

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

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

CURRENT ASSETS

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

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 liabilities of the Company are disclosed in Note 40 to the financial statements. At the
date of this report, there does not exist:

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

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

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

CHANGE OF CIRCUMSTANCES

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

I TEMS 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.


DIRECTORS

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

SIA KWEE M OW @ SIA HOK CHAI
SIA T EONG HENG
M UN CHONG SHING @ M UN CHONG T IAN
DATO ’ LIM PHAIK GAN
DR. NORRAESAH BT HAJI M OHAMAD
DATUK SIM PENG CHOON
ABDUL RAHMAN BIN A.SHUKOR (ALTERNATE T O DATUK SIM PENG CHOON )
VINCENT KOH KOK KEE (APPOINTED ON 8.10.2001)
T AN SRI DATO ’ IR M UHAMMAD YUSUFF BIN HAJI M UHAMMAD YUNUS (RETIRED ON 27.9.2001,
APPOINTED ON 30.4.2002)

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

Pursuant to Article 77 of the Articles of Association of the Company, Mun Chong Shing @ Mun
Chong Tian and Datuk Sim Peng Choon retire by rotation at the forthcoming Annual General
Meeting and, being eligible, offer themselves for re-election.

Pursuant to Article 84 of the Articles of Association of the Company, Vincent Koh Kok Kee, who
was appointed since the last annual general meeting, retires at the forthcoming Annual General
Meeting and, being eligible, offers himself for re-election.


DIRECTORS’ I NTERESTS

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

NUMBER OF ORDINARY SHARES OF RM1 EACH
AT AT
1.4.2001 BOUGHT SOLD 31.3.2002
DIRECT INTERESTS
SIA KWEE M OW @ SIA HOK CHAI 3,982,400 - - 3,982,400
SIA T EONG HENG 1,296,400 - - 1,296,400
M UN CHONG SHING @ M UN CHONG T IAN 17,000 - - 17,000
DATO ’ LIM PHAIK GAN 5,000 - - 5,000
DATUK SIM PENG CHOON 10,000 - - 10,000

INDIRECT INTERESTS
SIA T EONG HENG 7,463,832 - - 7,463,832

TSRS
AT AT
1.4.2001 BOUGHT SOLD 31.3.2002
DIRECT INTERESTS
DR. NORRAESAH BT HAJI M OHAMAD 4,000 - - 4,000
M UN CHONG SHING @ M UN CHONG T IAN 12,500 - - 12,500

INDIRECT INTERESTS
SIA T EONG HENG 1,746,780 - - 1,746,780


DIRECTORS’ I NTERESTS (CONT’D)

ICULS WITH NOMINAL VALUE OF RM1 E ACH
AT AT
1.4.2001 BOUGHT M ATURED 31.3.2002
DIRECT INTERESTS
SIA KWEE M OW @ SIA HOK CHAI 2,054,250 - (2,054,250) -
SIA T EONG HENG 1,432,500 - (1,432,500) -
M UN CHONG SHING @ M UN CHONG T IAN 22,000 - (22,000) -
DATUK SIM PENG CHOON 4,000 - (4,000) -

INDIRECT INTERESTS
SIA KWEE M OW @ SIA HOK CHAI 89,693,206 - (89,693,206) -
SIA T EONG HENG 89,693,206 - (89,693,206) -

NUMBER OF ORDINARY SHARES OF RM1 EACH
UNDER OPTION
AT AT
1.4.2001 GRANTED LAPSED 31.3.2002
DIRECT INTERESTS
SIA KWEE M OW @ SIA HOK CHAI 450,000 - - 450,000
SIA T EONG HENG 350,000 - - 350,000
M UN CHONG SHING @ M UN CHONG T IAN 350,000 - (350,000) -

By virtue of their interests in the Company, Sia Kwee Mow @ Sia Hok Chai and Sia Teong Heng
are deemed to have interests in the shares in the 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 interests in shares,
TSRs or options under the ESOS of the Company or its related corporations during the financial
year.


DIRECTORS’ B ENEFITS

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 38 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 except for the existing TSRs
held by certain directors which would enable them to acquire new shares in the Company and the
share options granted pursuant to the ESOS.

SIGNIFICANT EVENTS

The significant events involving the Group and the Company during the current financial year are
disclosed in Note 42 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

The significant events subsequent to the balance sheet date of the Group and the Company are
disclosed in Note 43 to the financial statements.


AUDITORS

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

SIGNED I N ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

SIA KWEE MOW @ S IA HOK CHAI

DATUK SIM PENG CHOON


STATEMENT BY DIRECTORS

We, Sia Kwee Mow @ Sia Hok Chai and Datuk Sim Peng Choon, being two of the directors of
Siah Brothers Corporation Berhad, state that, in the opinion of the directors, the financial
statements set out on pages 13 to 60 are drawn up in accordance with applicable approved
accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the
Group and of the Company at 31 March 2002 and of their results and cash flows for the financial
year ended on that date.

SIA KWEE MOW @ DATUK SIM PENG CHOON
SIA HOK CHAI

STATUTORY DECLARATION

I, Sia Kwee Mow @ Sia Hok Chai, I/C No. 3290819 (B), being the director primarily responsible
for the financial management of Siah Brothers Corporation Berhad, do solemnly and sincerely
declare that the financial statements set out on pages 13 to 60 are, to the best of my knowledge
and belief, correct, and I make this solemn declaration conscientiously believing the same to be true
and by virtue of the provisions of the Statutory Declarations Act, 1960.

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

SIA KWEE MOW @
SIA HOK CHAI
Before me


REPORT OF THE AUDITORS TO THE MEMBERS OF

We have audited the financial statements set out on pages 13 to 60. The preparation of the
financial statements is the responsibility of the Company’s directors. Our responsibility is to
express an opinion on the financial statements based on our audit.

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

In our opinion,

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

(i) the state of affairs of the Group and of the Company at 31 March 2002 and their
results and cash flows for the financial year ended on that date; and

(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in
the financial statements of the Group and of the Company; and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to
be kept by the Company and by the subsidiaries of which we have acted as auditors have
been properly kept in accordance with the provisions of the said Act.

We have considered the financial statements and the auditors’ reports thereon of the subsidiaries
for which we have not acted as auditors, as indicated in Note 5 to the financial statements.

REPORT OF THE AUDITORS TO THE MEMBERS OF
SIAH BROTHERS CORPORATION BERHAD (CONT’D)

We are satisfied that the financial statements of the subsidiaries that have been consolidated with
the Company’s financial statements are in form and content appropriate and proper for the
purposes of the preparation of the consolidated financial statements and we have received
satisfactory information and explanations required by us for those purposes.

The audit reports on the financial statements of the subsidiaries were not subject to any
qualification and did not include any comments made under Section 174 (3) of the said Act.

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

Kuala Lumpur

Page 12


BALANCE SHEETS AT 31 MARCH 2002

T HE GROUP T HE C OMPANY
2002 2001 2002 2001
NOTE RM RM RM RM
ASSETS
Investment in subsidiaries 5 - - 167,370,110 167,370,110
Interest in associates 6 119,902,566 117,533,764 10,440,450 10,440,450
Property, plant and equipment 7 7,047,290 7,585,596 75,503 102,240
Investment properties 8 21,088,833 22,125,612 - -
Other assets 9 714,168 664,585 - -
Goodwill on consolidation 10 10,245,527 10,245,527 - -

158,998,384 158,155,084 177,886,063 177,912,800

CURRENT ASSETS
Inventories 11 9,269,103 9,740,311 - -
Property development in progress 12 28,591,098 25,755,399 - -
Debtors 13 78,944,793 98,841,811 10,217,217 35,820,414
Amount owing by contract customers 14 1,407,450 2,956,738 - -
Amounts owing by subsidiaries 15 - - 46,676,415 39,231,590
Amounts owing by associates 16 5,448,175 5,644,198 51,883 101,383
Tax recoverable 5,455,217 4,823,668 11,397,290 8,976,735
Short term deposits with a licensed bank 5,042,274 150,000 5,012,274 -
Cash and bank balances 17 1,460,540 1,136,617 1,904 79,070

135,618,650 149,048,742 73,356,983 84,209,192

LESS: CURRENT LIABILITIES
Amount owing to contract customers 14 2,673,438 3,560,562 - -
Creditors 18 31,260,945 34,864,221 245,422 421,539
Amounts owing to subsidiaries 15 - - 21,100,467 23,060,664
Amounts owing to associates 16 65,500 - - -
Amount owing to a director 19 1,967,680 2,918,800 1,967,680 2,918,800
Proposed dividend - 545,065 - 545,065
Dividend payable 270,587 270,587 270,587 270,587
Short term borrowings 20 41,029,726 48,543,794 7,337,727 14,462,435

77,267,876 90,703,029 30,921,883 41,679,090

NET CURRENT ASSETS 58,350,774 58,345,713 42,435,100 42,530,102

217,349,158 216,500,797 220,321,163 220,442,902

FINANCED BY:-

Share capital 21 57,301,943 57,301,943 57,301,943 57,301,943
Share application account 22 115,600,000 - 115,600,000 -
Reserves 23 44,008,427 43,087,162 47,419,220 47,540,959

Shareholders’ equity 216,910,370 100,389,105 220,321,163 104,842,902
Irredeemable convertible
unsecured loan stocks (“ICULS”) 24 - 115,600,000 - 115,600,000
Deferred liabilities 25 438,788 511,692 - -

217,349,158 216,500,797 220,321,163 220,442,902

NET TANGIBLE ASSETS PER SHARE
- Actual 26 396 Sen 165 Sen
- Proforma 26 264 Sen N/A


I NCOME STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002

2002 2001 2002 2001
NOTE RM RM RM RM

TURNOVER 27 81,644,823 92,411,289 10,452,687 9,946,518

COST OF SALES (68,499,179) (81,341,010) - -

GROSS PROFIT 13,145,644 11,070,279 10,452,687 9,946,518

OTHER OPERATING INCOME 28 247,281 12,412,360 59,039 23,475,204

ADMINISTRATIVE EXPENSES (3,863,420) (4,649,999) (1,076,604) (991,785)

OTHER OPERATING EXPENSES (1,651,190) (10,595,543) (352,121) (2,890,016)

PROFIT FROM OPERATIONS 7,878,315 8,237,097 9,083,001 29,539,921

FINANCE COSTS (9,611,991) (9,597,215) (8,529,384) (8,641,329)

SHARE OF PROFIT OF
ASSOCIATES 3,351,575 2,781,304 - -

PROFIT BEFORE TAXATION 29 1,617,899 1,421,186 553,617 20,898,592

TAXATION 30 (115,278) (350,251) (94,000) (640,833)

PROFIT AFTER TAXATION 1,502,621 1,070,935 459,617 20,257,759

Earnings per share (sen) - basic 31 2.4 1.6
- diluted 31 N/A N/A

Dividend per ordinary share (sen) - Final 32 - 1.5


STATEMENTS OF CHANGES I N EQUITY

SHARE
NOTE SHARE APPLICATION SHARE RETAINED CAPITAL
CAPITAL ACCOUNT PREMIUM PROFITS RESERVE TOTAL
THE GROUP RM RM RM RM RM RM

Balance at 1.4.2000 57,301,943 - 21,306,521 18,525,360 2,999,998 100,133,822
Profit after taxation
for the financial year - - - 1,070,935 - 1,070,935
Dividends 32 - - - (815,652) - (815,652)
Realisation on disposal of a
subsidiary - - - 1,799,999 (1,799,999) -

Balance at 31.3.2001/1.4.2001 57,301,943 - 21,306,521 20,580,642 1,199,999 100,389,105

Arising from conversion
of ICULS to ordinary shares - - 1,500 - - 1,500
Share pending allotment arising on expiry
of ICULS 22 - 115,600,000 - - - 115,600,000
Expense incurred on conversion of ICULS - - (312,269) - - (312,269)
Profit after taxation for the financial year - - - 1,502,621 - 1,502,621
Dividends 32 - - - (270,587) - (270,587)

Balance at 31.3.2002 57,301,943 115,600,000 20,995,752 21,812,676 1,199,999 216,910,370

THE COMPANY

Balance at 1.4.2000 57,301,943 - 21,306,521 6,792,331 - 85,400,795
Profit after taxation
for the financial year - - - 20,257,759 - 20,257,759
Dividends 32 - - - (815,652) - (815,652)

Balance at 31.3.2001/1.4.2001 57,301,943 - 21,306,521 26,234,438 - 104,842,902

of ICULS to ordinary shares - - 1,500 - - 1,500
Share pending allotment arising on expiry
of ICULS - 115,600,000 - - - 115,600,000
Expenses incurred on conversion of ICULS - - (312,269) - - (312,269)
Profit after taxation for the financial year - - - 459,617 - 459,617
Dividends 32 - - - (270,587) - (270,587)

Balance at 31.3.2002 57,301,943 115,600,000 20,995,752 26,423,468 - 220,321,163

The retained profits of the Group are attributable to/(absorbed by):-
2002 2001
RM RM

The Company 26,423,468 26,234,438
Subsidiaries (22,134,593) (20,808,795)
Associates 17,523,801 15,154,999

21,812,676 20,580,642


STATEMENTS OF CHANGES I N EQUITY

2002 2001 2002 2001
NOTE RM RM RM RM

CASH FLOWS (FOR)/FROM
OPERATING ACTIVITIES
Profit before taxation 1,617,899 1,421,186 553,617 20,898,592

Adjustments for:-
Advances to joint ventures written off - 3,280,534 - -
Amortisation of deferred expenses - 47,710 - -
Bad debts written off 101,340 335,590 - 327,763
Deferred expenses written off - 42,696 - -
Depreciation and amortisation of property,
plant and equipment 325,978 2,723,640 32,676 56,617
Deposit written off - 150,000 - 150,000
Exceptional (gain)/loss on disposal of
a subsidiary - (10,729,328) - (23,475,000)
Interest expense 9,474,903 9,396,503 8,461,022 8,620,840
Investment in joint ventures written off - 839,020 - -
Plant and equipment written off 2,800 - - -
Preliminary expenses written off - 19,645 - -
Pre-operating expenses written off - 68,866 - -
Provision for doubtful debts 816,507 6,872,514 - 2,352,737
Trademark written off - 436,375 - -
Dividend income - - (8,980,555) (8,944,445)
Interest income (585,124) (318,667) (1,152,687) (708,073)
(Gain)/Loss on disposal of property, plant
and equipment (131,031) (170,656) (59,039) 2,899
Loss/(Gain) on disposal of investment properties 33,015 (766,749) - -
Share of loss in joint ventures written back - (4,163,122) - -
Share of profit in associates (3,351,575) (2,781,304) - -

Operating profit/(loss) before working
capital changes 8,304,712 6,704,453 (1,144,966) (718,070)
Decrease in inventories 471,208 1,461,305 - -
(Increase)/Decrease in property
development-in-progress (1,633,516) 1,818,074 - -
(Increase)/Decrease in trade and other debtors (5,683,694) 5,697,763 (625,803) (205,993)
Decrease in trade and other creditors (3,611,900) (12,322,200) (176,117) (4,654,279)
Increase/(Decrease) in amount owing
to contract customers 298,050 (1,428,568) - -
Increase in deferred expenditure - (47,712) - -

CASH (FOR)/FROM OPERATIONS (1,855,140) 1,883,115 (1,946,886) (5,578,342)
Interest paid (10,311,139) (10,054,594) (8,461,022) (8,620,840)
Taxes paid (2,225,772) (3,941,393) - -
Interest received 949,238 685,394 1,152,687 708,073

NET CASH (FOR)/FROM OPERATING
ACTIVITIES CARRIED FORWARD (13,442,813) (11,427,478) (9,255,221) (13,491,109)


CASH FLOW STATEMENTS

2002 2001 2002 2001
NOTE RM RM RM RM

NET CASH (FOR)/FROM OPERATING
ACTIVITIES BROUGHT FORWARD (13,442,813) (11,427,478) (9,255,221) (13,491,109)

CASH FLOWS FROM/(FOR) INVESTING
ACTIVITIES
Dividends received from subsidiaries - - 5,620,000 8,270,000
Net cash outflow on disposal
of subsidiary 33 - (2,192,116) - -
Purchase of property, plant and equipment 34 (115,327) (1,184,381) (15,400) (9,654)
Proceeds from disposal of property, plant
and equipment 183,039 292,999 68,500 3,200
Proceeds from disposal of investment properties 1,164,915 1,647,939 - -
Incidental expenses on investment properties (161,151) - - -
Proceeds from disposal of subsidiary in the
previous financial year 27,075,000 - 27,075,000 -

NET CASH FROM/(FOR) INVESTING
ACTIVITIES 28,146,476 (1,435,559) 32,748,100 8,263,546

CASH FLOWS (FOR)/FROM
FINANCING ACTIVITIES
Net repayment by/(Advances to) associates 261,523 1,147,033 49,500 (73,500)
(Net advances to)/Repayment by subsidiaries - - (9,405,022) 4,851,651
Repayment to a director (951,120) - (951,120) -
Dividend paid to shareholders of the Company (545,065) (545,065) (545,065) (545,065)
Payment of expenses on conversion of ICULS (312,269) (312,269)
Proceeds received for conversion of ICULS 1,500 - 1,500 -
Dividend paid to holder of ICCPS (270,587) (246,864) (270,587) (246,864)
Repayment of revolving credit (1,320,000) (407,181) (1,320,000) -
Repayment of term loans (74,250) (354,424) - -
Repayment to hire purchase creditors (83,130) (44,721) - -

NET CASH (FOR)/FROM FINANCING
ACTIVITIES (3,293,398) (451,222) (12,753,063) 3,986,222

NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS 11,410,265 (13,314,259) 10,739,816 (1,241,341)

CASH AND CASH EQUIVALENTS AT
BEGINNING OF FINANCIAL YEAR (25,751,141) (12,436,882) (7,383,365) (6,142,024)

CASH AND CASH EQUIVALENTS AT
END OF FINANCIAL YEAR 35 (14,340,876) (25,751,141) 3,356,451 (7,383,365)


DETAILED I NCOME STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 SCHEDULE A

OPERATING EXPENSES
1. GENERAL I NFORMATION

The Company is a public company limited by shares and is incorporated under the
Malaysian Companies Act, 1965. The domicile of the Company is in Malaysia. The
registered office, which is also the principal place of business, is Wisma Siah Brothers, 74A,
Jalan Pahang, 53000 Kuala Lumpur.

2. PRINCIPAL ACTIVITIES

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

3. BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention and modified to
include other bases of valuation as disclosed in other sections under significant accounting
policies, and in compliance with applicable approved accounting standards in Malaysia.

4. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the
Company and all its subsidiaries made up to 31 March 2002. A subsidiary is defined
as a company in which the parent company holds directly or indirectly more than
50% of the equity share capital and has control over the financial and operating
policies. Investment in subsidiaries is stated at cost unless in the opinion of the
Directors there has been a permanent diminution in value, in which case provision is
made for the diminution in value.



OPERATING EXPENSES
4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Basis of Consolidation (Cont’d)

All subsidiaries are consolidated using the acquisition method of accounting. Under
the acquisition method of accounting, the results of subsidiaries acquired or disposed
of are included from the date of acquisition or up to the date of disposal. At the date
of acquisition, the fair value of the subsidiaries’ net assets are determined and these
values are reflected in the consolidated financial statements. The excess of the cost of
acquisition over the fair value of the Group’s share of the subsidiaries’ identifiable net
assets at the date of acquisition is reflected as goodwill on consolidation. Goodwill or
reserve arising from consolidation is written off or credited against reserves.

Intragroup transactions, balances and unrealised gains on transactions are eliminated;
unrealised losses are also eliminated unless cost cannot be recovered. Where
necessary, adjustments are made to the financial statements of subsidiaries to ensure
consistency of accounting policies with those of the Group.

Minority interest is measured at the minorities’ share of the post acquisition fair
values of the identifiable assets and liabilities of the acquiree. Separate disclosure is
made of minority interest.

(b) Goodwill On Consolidation

Goodwill represents the excess of the fair value of the purchase consideration over the
Group’s share of the fair values of the separable net assets of subsidiaries at the date
of acquisition. Negative goodwill represents the excess of the Group’s share of the fair
values of the separable net assets of subsidiaries at the date of acquisition over the fair
value of the purchase consideration.

Goodwill is stated net of negative goodwill. The net carrying amount of goodwill is
reviewed annually, and is written down for impairment where it is considered
necessary. The impairment value of goodwill written off is taken to the income
statement.



OPERATING EXPENSES

(c) Associates

Associates are enterprises in which the Group exercises significant influence.
Significant influence is the power to participate in the financial and operating policy
decisions of the associates but not control over those policies. Investments in
associates are accounted for in the consolidated financial statements by the equity
method of accounting.

Equity accounting involves recognising in the income statement the Group’s share of
the results of the associates for the period. The Group’s investment in associates is
carried in the balance sheet at an amount that reflects its share of the assets of the
associates and includes goodwill (net of accumulated amortisation) on acquisition. At
the date of acquisition, the fair value of the associates’ net assets are determined and
these values are reflected in the consolidated financial statements. Equity accounting is
discontinued when the carrying amount of the investment in an associate reaches zero,
unless the Group has incurred obligations or guaranteed obligations in respect of the
associate.

Unrealised gains on transactions between the Group and its associates are eliminated
to the extent of the Group’s interest in the associates; unrealised losses are also
eliminated unless the transaction provides evidence on impairment of the asset
transferred.

Where necessary, in applying the equity method, adjustments are made to the
financial statements of associates to ensure consistency of accounting policies with
those of the Group.

(d) Property, Plant and Equipment

Property, plant and equipment, other than freehold land, are stated at cost less
accumulated depreciation or amortisation. Freehold land is stated at cost and is not
depreciated.



OPERATING EXPENSES

(d) Property, Plant and Equipment (Cont’d)

Depreciation and amortisation is calculated under the straight-line method to write off
the cost of the assets over their estimated useful lives. The principal annual rates used
for this purpose are:-

Plant and machinery, construction machinery and
equipment 5% - 20%
Formwork, scaffoldings and containers 10% - 25%
Office equipment, computers, furniture and fittings,
tools and fittings 5% - 20%
Motor vehicles 20%

(e) Investments

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

(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. The unsold
completed properties 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.



OPERATING EXPENSES

(g) Inventories (Cont’d)

The cost of unsold completed properties comprise the relevant cost of land,
development expenditure and related interest cost incurred during the development
period.

In arriving at net realisable value, due allowance is made for all damaged, obsolete and
slow-moving items.

(h) Property Development-In-Progress

Property development-in-progress comprises land and related development
expenditure incurred plus attributable profits less progress billings and foreseeable
losses, if any.

Land is stated at cost. Development expenditure comprises construction and other
related development costs and administrative overheads relating to the property
development. Interest costs on borrowings taken to finance the relevant development
projects are included in the development expenditure from commencement to the
completion of the development projects.

Attributable profits are determined based on the percentage of completion method, on
sold properties.

(i) Debtors

Debtors are carried at anticipated realisable value. Bad debts are written off in the
period in which they are identified. An estimate is made for doubtful debts based on a
review of all outstanding amounts at the balance sheet date.



OPERATING EXPENSES

(j) Amount Owing By/To Contract Customers

The amount owing by/to contract customers is stated at cost plus profits attributable
to contracts in progress less progress billings and provision for foreseeable losses, if
any. Cost includes direct materials, labour and applicable overheads.

(k) Interest Capitalisation

Interest incurred on borrowings specifically taken to finance the development of
properties is capitalised until they are ready for their intended use, after which such
expense is charged to the income statement.

(l) 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.

(m) 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
income statement.



OPERATING EXPENSES

(n) Assets under Hire Purchase

Equipment acquired under hire purchase are capitalised in the financial statements
and are depreciated in accordance with the policy set out in Note 4(d) above. Each
hire purchase payment is allocated between the liability and finance charges so as
to achieve a constant rate on the finance balance outstanding. Finance charges are
allocated to the income statement over the periods of the respective hire purchase
agreements.

(o) Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits,
bank overdrafts and short term, highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in
value.

(p) Income Recognition

(i) Construction Contracts

Revenue on contracts is recognised on the percentage of completion method
unless the outcome of the contract cannot be reliably determined, in which
case revenue on contracts is only recognised to the extent of contract costs
incurred that are recoverable. Foreseeable losses, if any, are provided for in
full as and when it can be reasonably ascertained that the contract will result
in a loss.

The stage of completion is determined based on surveys of work performed.



OPERATING EXPENSES

(p) Income Recognition (Cont’d)

(ii) Property Development

Revenue from property development is recognised from the sale of completed
and uncompleted development properties.

Revenue from sale of completed properties is recognised when the sale is
contracted.

Revenue on uncompleted properties contracted for sale is recognised based on
the stage of completion method unless the outcome of the development
cannot be reliably determined in which case the revenue on the development is
only recognised to the extent of development costs incurred that are
recoverable.

The stage of completion is determined based on the proportion that the
development costs incurred for work performed to date bear to the estimated
total development costs.

Foreseeable losses, if any, are recognised immediately in the income statement.

Foreseeable losses, if any, are provided for in full as and when it can be
reasonably ascertained that the development will result in a loss.

(iii) Revenue from sales of goods

Sales are recognised upon delivery of goods and customers’ acceptance, and
where applicable, net of returns and trade discounts.

(iv) Revenue from services

Revenue is recognised upon rendering of services and when the outcome of the
transaction can be estimated reliably. In the event the outcome of the
transaction could not be estimated reliably, revenue is recognised to the extent
of the expenses incurred that are recoverable.



OPERATING EXPENSES
(p) Income Recognition (Cont’d)

(v) Management fee and administrative charges

Management fee and administrative charges are recognised on an accrual basis.

(vi) Rental income

Rental income is recognised on an accrual basis.

(vii) Dividend income

Dividend income from investment in subsidiaries and associates are recognised
upon declaration by the subsidiaries and associates.

Dividend income from other investments is recognised when the right to
receive payment is established.

(viii) Interest income

Interest income is recognised on an accrual basis, based on the effective yield
on the investment.

5. I NVESTMENT I N SUBSIDIARIES
T HE COMPANY
2002 2001
RM RM

Unquoted shares, at cost 167,370,110 167,370,110

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

Name of Company Effective Equity Interest Principal
2002 2001 Activities
% %

Syarikat Siah Brothers 100 100 General building
Trading Sdn. Bhd. contractor and
investment holding



OPERATING EXPENSES
5. I NVESTMENT I N SUBSIDIARIES (CONT’D)
Details of the subsidiaries, which are all incorporated in Malaysia, are as follows:-

% %

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

Lifeplus – Siah Brothers Trading 100 100 Project management
JV Sdn. Bhd. and its related
technical services

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

Siah Brothers Land 100 100 Investment holding
Sdn. Bhd.

Seri Ampangan Realty 100 100 Property development
Sdn. Bhd.

Sinaran Naga Sdn. Bhd. 100 100 Property development

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

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

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

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



OPERATING EXPENSES
5. I NVESTMENT I N SUBSIDIARIES (CONT’D)

% %

Winsome Ventures 100100Intended property
Sdn. Bhd. management

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

Aureate Construction 100 100 Property investment
Sdn. Bhd.*

SBC Leisure Sdn. Bhd.* 100 100 Property development

SBC Towers Sdn. Bhd.* 100 100 Property development

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

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

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

* Not audited by Horwath Mok & Poon.



OPERATING EXPENSES
6. I NTEREST I N ASSOCIATES
2002 2001 2002 2001
RM RM RM RM

Unquoted shares, at cost 10,760,451 10,760,451 10,440,450 10,440,450
Unquoted shares at Group cost 91,618,314 91,618,314 - -
Share of post acquisition reserves 17,523,801 15,154,999 - -

119,902,566 117,533,764 10,440,450 10,440,450

T HE GROUP
2002 2001
RM RM
The interest in associates comprises:-

Group’s share of net tangible assets - at cost 73,886,596 71,517,794
- at fair value 45,952,003 45,952,003
Group’s share of intangible assets 63,967 63,967

119,902,566 117,533,764

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

Effective Equity Principal
Name of Company Interest Activities
2002 2001
% %

Ligamas Sdn. Bhd.** 50.0 50.0 Property development

Varich Industries 50.0 50.0 Proposed quarrying
Sdn. Bhd.#

Paling Industries Sdn. Bhd.** 40.0 40.0 Manufacturing of
plastic building
materials



OPERATING EXPENSES
6. I NTEREST I N ASSOCIATES (CONT’D)

Effective Equity Principal
Name of Company Interest Activities
2002 2001
% %

Liga Canggih Sdn. Bhd.## 40.0 40.0 Dormant

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

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

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

** Share of results of these associates are based on the latest available unaudited management
financial statements made up to 31 March 2002.

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

## Held by Paling



OPERATING EXPENSES
7. PROPERTY, P LANT AND EQUIPMENT
OFFICE
P LANT EQUIPMENT,
AND C OMPUTERS,
MACHINERY, F URNITURE
C ONSTRUCTION F ORMWORK, AND
MACHINERY S CAFFOLDINGS F ITTINGS,
F REEHOLD AND AND T OOLS AND MOTOR
LAND EQUIPMENT C ONTAINERS F ITTINGS VEHICLES T OTAL
T HE GROUP RM RM RM RM RM RM
Net book value
as at 1.4.2001 6,114,092 102,480 28,382 966,023 374,619 7,585,596
Additions - 490 - 104,930 103,007 208,427
Disposals - (7,057) - (20,489) (24,462) (52,008)
Written off - - - (2,800) - (2,800)
Transfer to
development land (365,947) - - - - (365,947)
Depreciation charge - (17,914) (13,072) (243,651) (51,341) (325,978)
Net book value
as at 31.3.2002 5,748,145 77,999 15,310 804,013 401,823 7,047,290

As at 31.3.2002
Cost 5,748,145 4,373,622 4,316,916 3,626,222 1,594,753 19,659,658
Accumulated
depreciation - (4,295,623) (4,301,606) (2,822,209) (1,192,930) (12,612,368)
Net book value 5,748,145 77,999 15,310 804,013 401,823 7,047,290

As at 31.3.2001
Cost 6,114,092 4,653,839 4,316,916 3,604,328 1,741,982 20,431,157
Accumulated
depreciation - (4,551,359) (4,288,534) (2,638,305) (1,367,363) (12,845,561)
Net book value 6,114,092 102,480 28,382 966,023 374,619 7,585,596



OPERATING EXPENSES
7. PROPERTY, P LANT AND EQUIPMENT (CONT’D)
OFFICE EQUIPMENT,
C OMPUTERS,
F URNITURE
T HE C OMPANY AND F ITTINGS MOTOR VEHICLES T OTAL
RM RM RM
Net book value
As at 1.4.2001 92,778 9,462 102,240
Additions 15,400 - 15,400
Disposals - (9,461) (9,461)
Depreciation charge (32,676) - (32,676)
Net book value
as at 31.3.2002 75,502 1 75,503

As at 31.3.2002
Cost 370,801 376,950 747,751
Accumulated depreciation (295,299) (376,949) (672,248)

Net book value 75,502 1 75,503

As at 31.3.2001
Cost 355,401 516,550 871,951
Accumulated depreciation (262,623) (507,088) (769,711)

Net book value 92,778 9,462 102,240

The motor vehicles of the Group acquired under hire purchase terms were carried at net book
value of RM402,608 (2001 - RM339,159) at the balance sheet date.



OPERATING EXPENSES
8. I NVESTMENT PROPERTIES
T HE GROUP
2002 2001
RM RM

Leasehold land 4,979,933 4,979,933
Expenditure on land 318,927 157,776

5,298,860 5,137,709

Freehold land and buildings 16,987,903 17,869,093
Disposed during the financial year (1,197,930) (881,190)

15,789,973 16,987,903

21,088,833 22,125,612

Freehold land and building of a subsidiary costing RM2,792,736 (2001 – RM2,792,736) is
charged to a licensed bank for a term loan facility granted to the subsidiary. The lease period
of the leasehold land expires in the year 2086.

Based on a valuation exercise carried out on 27 March 2000 by an independent professional
valuer, the market value of the investment properties of the Group amounts to approximately
RM35.58 million (2001 – RM36.91 million). No valuation exercise has been carried out on
the properties since the last exercise in the financial year 2000.

9. OTHER ASSETS
T HE GROUP
2002 2001
RM RM

Other assets 521,868 472,285

Other investments
Quoted shares in Malaysia, at cost 12,300 12,300
Unquoted shares, at cost 180,000 180,000

192,300 192,300

714,168 664,585



OPERATING EXPENSES

9. OTHER ASSETS (CONT’D)
T HE GROUP
2002 2001
RM RM

Market value of quoted shares 5,850 6,390

Other assets are retention monies relating to amounts which are due and receivable after
twelve months from the balance sheet date, upon expiry of the warranty period of the
relevant contracts.

10. GOODWILL
T HE GROUP
2002 2001
RM RM

At 1 April 2001/2000 10,245,527 7,511,884
Reduction in negative goodwill arising from
the divestment of equity interest in a subsidiary - 2,733,643

At 31 March 10,245,527 10,245,527

11. I NVENTORIES
T HE GROUP
2002 2001
RM RM

Unsold completed properties, at cost 9,269,103 9,740,311



OPERATING EXPENSES
12. PROPERTY DEVELOPMENT-I N-PROGRESS
T HE GROUP
2002 2001
RM RM

Freehold land, at cost 14,547,886 14,553,404
Leasehold land, at cost 801,805 801,805
Land and development expenditure 46,155,119 29,385,833

61,504,810 44,741,042
Attributable profits 8,665,215 3,526,038

70,170,025 48,267,080
Progress billings (41,578,927) (22,511,681)

28,591,098 25,755,399

Included in development expenditure is interest expense capitalised during the financial year
amounting to RM836,236 (2001 - RM658,091).

13. DEBTORS
2002 2001 2002 2001
RM RM RM RM

Trade debtors 58,910,469 58,244,261 - -
Retention receivable 10,081,043 8,309,049 - -

Total trade debtors 68,991,512 66,553,310 - -
Provision for doubtful debts (6,803,879) (6,086,972) - -

62,187,633 60,466,338 - -

Other debtors, deposits and
prepayments 19,439,592 40,958,305 8,753,954 35,203,151
Provision for doubtful debts (2,682,432) (2,582,832) (2,352,737) (2,352,737)

16,757,160 38,375,473 6,401,217 32,850,414

Dividend receivable - - 3,816,000 2,970,000

78,944,793 98,841,811 10,217,217 35,820,414



OPERATING EXPENSES
13. DEBTORS (CONT’D)

Included in trade debtors at the balance sheet date are the following balances:-

(i) RM37,720,372 (2001 – RM37,788,454) owing by Smart Home Sdn. Bhd. (“SH”), a
related party. Details of the related party relationship and nature of the transactions
and balances are set out in Note 38 to the financial statements. The amount owing by
SH has been outstanding since 1996. Subsequent to the balance sheet date, SH has
proposed to settle the amount owing in the following manner:-

• transfer of several parcels of land with development potential for a total
consideration of RM35,216,406; and

• the balance is to be settled by cash and/or other consideration to be mutually
agreed between SH and the Group.

The proposal by SH is currently being reviewed by the directors (other than the
directors who are deemed to be interested parties). The directors are of the opinion
that the amount owing by SH will be recovered in full in due course, and as such, no
provision for doubtful is required.

(ii) an amount of RM7,261,672 (2001 – RM7,261,672), net of provision for doubtful
debt, owing by a third party which has been outstanding since 1994. The third party
has been placed under Special Administration by Pengurusan Danaharta Nasional
Berhad on 27 July 1999. The directors are of the opinion that the net amount due
from the third party will be recovered in due course, and that no further provision for
doubtful debt is required.

Included in other debtors are the following balances:-

(a) RM4,582,518 (2001 - Nil) due from sub-contractors for the purchase of building
materials. The amount owing is unsecured, interest-free, and is to be repaid via
deductions against future claims for work performed by the sub-contractors; and

(b) RM2,500,000 (2001 - Nil) due from a sub-contractor for advances provided to the
sub-contractor. The amount owing is unsecured, interest-free, and is to be repaid via
deductions against future claims for work performed by the sub-contractor.



OPERATING EXPENSES
14. AMOUNT OWING BY/(TO ) C ONTRACT CUSTOMERS
T HE GROUP
2002 2001
RM RM

Amount owing by contract customers
Contract costs incurred to date 29,952,686 19,280,003

38,288,228 25,253,846
Amount owing by contract customers 1,407,450 2,956,738

Amount owing to contract customers
Contract costs incurred to date 173,176,995 177,176,206

180,391,105 188,176,971

Amount owing to contract customers (2,673,438) (3,560,562)

Included in costs incurred on contract works is interest income capitalised during the financial
year of RM364,114 (2001 – RM366,727).

15. AMOUNTS OWING BY/(TO ) SUBSIDIARIES
T HE COMPANY
2002 2001
RM RM
Amounts owing by:
Non-trade
- Interest bearing 6,996,470 6,996,470
- Interest free 39,679,945 32,235,120

46,676,415 39,231,590



OPERATING EXPENSES
15. AMOUNTS OWING BY/(TO ) SUBSIDIARIES (CONT’D)
T HE COMPANY
2002 2001
RM RM

Amounts owing to:
Non-trade
- Interest bearing 12,740,618 17,640,618
- Interest free 8,359,849 5,420,046

21,100,467 23,060,664

The above amounts owing are unsecured and not subject to fixed terms of repayment. The
interest bearing amounts are subject to interest at rates ranging from 8.65% to 9.05% (2001 -
7.0% to 9.3%) per annum.

16. AMOUNTS OWING BY/(TO ) A SSOCIATES

The amounts owing are unsecured, interest-free and not subject to fixed terms of repayment.

17. CASH AND BANK BALANCES

Included in the cash and bank balances of the Group is RM686,692 (2001 - RM472,184)
maintained under the Housing Development Account pursuant to Section 7A of the
Housing Developers (Control and Licensing ) Act, 1966.

18. CREDITORS
2002 2001 2002 2001
RM RM RM RM

Trade creditors 18,180,622 16,586,849 - -
Retention payable 6,310,023 9,616,610 - -

Total trade creditors 24,490,645 26,203,459 - -

Other creditors and accruals 6,682,516 8,581,602 245,422 421,539
Hire purchase creditors (Note 25b) 87,784 79,160 - -

31,260,945 34,864,221 245,422 421,539



OPERATING EXPENSES
18. CREDITORS (CONT’D)

Included in other creditors and accruals of the Group is an advance payment of RM1,166,884
(2001 - RM1,770,000) received from contract customers.

19. AMOUNT OWING TO A DIRECTOR

The amount owing to Sia Kwee Mow@ Sia Hok Chai is unsecured, bears interest at 5.5%
(2001 – 5.5%) per annum and is not subject to fixed terms of repayment.

20. SHORT TERM BORROWINGS
2002 2001 2002 2001
RM RM RM RM

Current portion of term loans
- secured (Note 25a) 111,636 111,636 - -
Revolving credits - secured 14,394,400 14,394,400 - -
- unsecured 5,680,000 7,000,000 5,680,000 7,000,000
Bank overdrafts - secured - - - -
- unsecured 20,843,690 27,037,758 1,657,727 7,462,435

41,029,726 48,543,794 7,337,727 14,462,435

The revolving credits and bank overdrafts bear interest at rates ranging from 5.15% to 9.3%
(2001 – 5.35% to 9.3%) per annum.

The secured portion of the revolving credits and bank overdrafts of the Group are secured by
way of a corporate guarantee by the Company, supported by a negative pledge over certain
landed properties of the Group.



OPERATING EXPENSES
21. SHARE CAPITAL T HE COMPANY
2002 2001
RM RM
AUTHORISED

Ordinary shares of RM1 each
At 1 April/31 March 193,167,000 193,167,000

5.5% ICCPS of RM1 each

At 1 April/31 March 6,833,000 6,833,000

Total authorised share capital 200,000,000 200,000,000

ISSUED AND FULLY PAID-UP

Ordinary shares of RM1 each
At 1 April/31 March 50,468,943 50,468,943

5.5% ICCPS of RM1 each

At 1 April/31 March 6,833,000 6,833,000

Total issued and fully paid-up share capital 57,301,943 57,301,943

The main terms of the 5.5% ICCPS are as follows:-

(a) entitlement to receive a fixed cumulative preferential dividend of 5.5% per annum
payable annually in arrears;

(b) the ICCPS shall mature after five (5) years from the date of issue of 5 May 1999 and
will be automatically converted into ordinary shares of the Company on the maturity
date of 4 May 2004;

(c) the holders have the option to convert all ICCPS into ordinary shares at any time after
the date of issue until the maturity date. The ICCPS are not redeemable for cash;

(d) the conversion price into ordinary shares is fixed at RM1.00 per share;



OPERATING EXPENSES
21. SHARE CAPITAL (CONT’D)

(e) the ICCPS shall rank in priority to the ordinary shares of the Company in respect of
return of capital on liquidation or otherwise for the par value of the ICCPS plus any
arrears in dividend, provided that there shall be no further right to participate in the
surplus assets or profits of the Company; and

(f) there are no voting rights other than the rights to vote at meetings convened for the
purpose of reducing the capital, or winding up, or sanctioning a sale of undertaking, or
where the proposition directly affects the rights and privileges of the holders of the
ICCPS.

22. SHARE APPLICATION ACCOUNT

The share application account represents the sum arising from the mandatory conversion
of the 5% Irredeemable Convertible Unsecured Loan Stocks 1997/2002 (“ICULS”). Details
of the conversion of the ICULS are disclosed in Note 24 to the financial statements.

23. RESERVES
2002 2001 2002 2001
RM RM RM RM

Share premium reserve (Note a)
At 1 April 2001/2000 21,306,521 21,306,521 21,306,521 21,306,521
of ICULS to ordinary shares 1,500 - 1,500 -
Set off against expenses incurred on
conversion of ICULS (312,269) - (312,269) -

At 31 March 20,995,752 21,306,521 20,995,752 21,306,521

Capital reserve (Note b) 1,199,999 1,199,999 - -
Retained profits (Note c) 21,812,676 20,580,642 26,423,468 26,234,438

44,008,427 43,087,162 47,419,220 47,540,959



OPERATING EXPENSES
23. RESERVES (CONT’D)

(a) The share premium reserve is not available for distribution by way of dividends.

(b) The capital reserve arises from a bonus issue of ordinary shares on 21 August 1992
by a former subsidiary, and is not available for distribution by way of dividends.

(c) Based on estimated Section 108 tax credits and subject to agreement with the tax
authorities, the retained profits of the Company are wholly distributable by way of
dividends without the Company incurring any additional tax liabilities.

24. I RREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“ICULS”)

T HE GROUP/THE COMPANY
2002 2001
RM RM

At 1 April 115,600,000 115,600,000
Transferred to Share Application Account
upon maturity of the ICULS (115,600,000) -

At 31 March - 115,600,000

In the previous financial year, the Company had proposed to replace the ICULS by issuing
new shares at revised conversion terms and/or cash subscription, details of which are set out
in Note 42(a)(ii) to the financial statements.

On 6 September 2001 and 23 October 2001, the Board of Directors of the Company decided
to abort the proposed revision to the terms of conversion of the ICULS in view of the
prevailing weak capital market condition and its uncertain outlook.

The ICULS matured on 28 March 2002, and the amount due to the ICULS was transferred to
a Share Application Account pending the completion of the mandatory conversion of the
ICULS into new ordinary shares of the Company.

SBC Corporation Berhad: Annual Audited Accounts 2002

SBC Corporation Berhad: Annual Audited Accounts 2002

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SBC Corporation Berhad: Annual Audited Accounts 2002