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

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

The directors hereby submit their report and the audited financial statements of the Group and of theCompany for the financial year ended 31 March 2002.

PRINCIPAL ACTIVITIES

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

RESULTS THE GROUP THE 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 CumulativeConvertible Preference Shares (“ICCPS”) in respect of the previous financial year, inaccordance 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 ordinaryshares in respect of the previous financial year as proposed in the directors’ report of thatfinancial year.

For the financial year,

(i) the directors have declared the payment of a dividend of 5.5% less 28% tax amounting toRM270,587 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 ordinaryshares.

RESERVES AND PROVISIONS

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


ISSUES OF SHARES

During the financial year,

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

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

EMPLOYEE SHARE OPTION SCHEME (“ESOS”)

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

NUMBER OF ORDINARY SHARES OFRM1 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 companywithin 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% ofthe total issued and paid-up ordinary share capital of the Company at any point of timeduring the existence of the ESOS which shall be in force for a period of five (5) years from thedate of offer;

(iii) the possible allocation for any single eligible employee during the existence of the ESOS shallnot be less than 1,000 or more than 450,000 shares subject to the maximum allowableallocation according to their respective categories;

(iv) the subscription price shall be based on the weighted average market price of the shares asshown in the Daily Official List of the Kuala Lumpur Stock Exchange for the five (5) marketdays 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 passuin 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 anyunissued shares in the Company, other than the existing options under the ESOS and TransferableSubscription Rights (“TSRs”). The Company has in issue a total of 17,076,200 TSRs of whichthe expiry date has been extended to 20 February 2004. The TSRs entitle the holders thereof therights to subscribe for new ordinary shares of RM1 each on the basis of 1 new ordinary share ofRM1 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 TSRsrespectively were exercised.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors tookreasonable steps to ascertain that action had been taken in relation to the writing off of bad debts andthe making of provision for doubtful debts, and satisfied themselves that all known bad debts hadbeen 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 requirethe writing off of bad debts, or additional provision for doubtful debts in the financial statements ofthe Group and of the Company.

CURRENT ASSETS

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

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


VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

The contingent liabilities of the Company are disclosed in Note 40 to the financial statements. At thedate 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 ofthe 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 ofthe financial year.

No contingent or other liability of the Group and of the Company has become enforceable or is likelyto become enforceable within the period of twelve months after the end of the financial year which, inthe opinion of the directors, will or may substantially affect the ability of the Group and of theCompany 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 within this report or the financial statements of the Group and of the Company which would render anyamount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

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

There has not arisen in the interval between the end of the financial year and the date of this reportany 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 thefinancial year.


DIRECTORS

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

SIA KWEE M OW @ SIA HOK CHAI

SIA TEONG HENG

M UN CHONG SHING @ MUN CHONG TIAN

DATO’ LIM PHAIK GAN

DR. NORRAESAH BT HAJI M OHAMAD

DATUK SIM PENG CHOON

ABDUL RAHMAN BIN A.SHUKOR (ALTERNATE TO DATUK SIM PENG CHOON)VINCENT KOH KOK KEE (APPOINTED ON 8.10.2001)TAN 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 HajiMuhammad Yunus and Dato’ Lim Phaik Gan retire at the forthcoming Annual General Meeting andoffer themselves for re-election under the provision of Section 129(6) of the said Act to hold officeuntil the next Annual General Meeting of the Company.

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

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


DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the endof 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 31.3.2002DIRECT INTERESTS

SIA KWEE M OW @ SIA HOK CHAI 3,982,400 - - 3,982,400 SIA TEONG HENG 1,296,400 - - 1,296,400 M UN CHONG SHING @ MUN CHONG TIAN 17,000 - - 17,000 DATO’ LIM PHAIK GAN 5,000 - - 5,000 DATUK SIM PENG CHOON 10,000 - - 10,000

INDIRECT INTERESTS

SIA KWEE M OW @ SIA HOK CHAI 7,463,832 - - 7,463,832 SIA TEONG HENG 7,463,832 - - 7,463,832

TSRS

AT AT

1.4.2001 BOUGHT SOLD 31.3.2002DIRECT INTERESTS

SIA KWEE M OW @ SIA HOK CHAI 3,078,500 - - 3,078,500 DR. NORRAESAH BT HAJI M OHAMAD 4,000 - - 4,000 M UN CHONG SHING @ MUN CHONG TIAN 12,500 - - 12,500

INDIRECT INTERESTS

SIA KWEE M OW @ SIA HOK CHAI 1,746,780 - - 1,746,780 SIA TEONG HENG 1,746,780 - - 1,746,780


DIRECTORS’ INTERESTS (CONT’D)

ICULS WITH NOMINAL VALUE OF RM1 EACH

AT AT

1.4.2001 BOUGHT M ATURED 31.3.2002DIRECT INTERESTS

SIA KWEE M OW @ SIA HOK CHAI 2,054,250 - (2,054,250) - SIA TEONG HENG 1,432,500 - (1,432,500) - M UN CHONG SHING @ MUN CHONG TIAN 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 TEONG HENG 89,693,206 - (89,693,206) -

NUMBER OF ORDINARY SHARES OF RM1 EACH

UNDER OPTION

AT AT

1.4.2001 GRANTED LAPSED 31.3.2002DIRECT INTERESTS

SIA KWEE M OW @ SIA HOK CHAI 450,000 - - 450,000 SIA TEONG HENG 350,000 - - 350,000 M UN CHONG SHING @ MUN CHONG TIAN 350,000 - (350,000) -

By virtue of their interests in the Company, Sia Kwee Mow @ Sia Hok Chai and Sia Teong Hengare 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 financialyear.


DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive anybenefit (other than a benefit included in the aggregate amount of emoluments received or due andreceivable by directors as shown in the financial statements, or the fixed salary of a full-timeemployee of the Company) by reason of a contract made by the Company or a related corporationwith the director or with a firm of which the director is a member, or with a company in which thedirector has a substantial financial interest except for any benefits which may be deemed to arise fromtransactions entered into in the ordinary course of business with companies in which certain directorshave 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 anyarrangements whose object is to enable the directors to acquire benefits by means of the acquisition ofshares in or debentures of the Company or any other body corporate except for the existing TSRsheld by certain directors which would enable them to acquire new shares in the Company and theshare options granted pursuant to the ESOS.

SIGNIFICANT EVENTS

The significant events involving the Group and the Company during the current financial year aredisclosed 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 aredisclosed in Note 43 to the financial statements.


AUDITORS

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

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

SIA KWEE MOW @ SIA 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 ofSiah Brothers Corporation Berhad, state that, in the opinion of the directors, the financialstatements set out on pages 13 to 60 are drawn up in accordance with applicable approvedaccounting standards in Malaysia so as to give a true and fair view of the state of affairs of theGroup and of the Company at 31 March 2002 and of their results and cash flows for the financialyear 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 responsiblefor the financial management of Siah Brothers Corporation Berhad, do solemnly and sincerelydeclare that the financial statements set out on pages 13 to 60 are, to the best of my knowledgeand belief, correct, and I make this solemn declaration conscientiously believing the same to be trueand by virtue of the provisions of the Statutory Declarations Act, 1960.

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

SIA KWEE MOW @SIA HOK CHAI

Before me


REPORT OF THE AUDITORS TO THE MEMBERS OF

SIAH BROTHERS CORPORATION BERHADCompany No : 199310 - P

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

We conducted our audit in accordance with approved standards on auditing in Malaysia. Thesestandards require that we plan and perform the audit to obtain reasonable assurance that thefinancial statements are free of material misstatement. Our audit included examining, on a testbasis, evidence relevant to the amounts and disclosures in the financial statements. Our audit alsoincluded an assessment of the accounting principles used and significant estimates made by thedirectors as well as evaluating the overall adequacy of the presentation of information in thefinancial 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 theCompanies Act, 1965 and applicable approved accounting standards in Malaysia so as togive a true and fair view of:-

(i) the state of affairs of the Group and of the Company at 31 March 2002 and theirresults 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 inthe 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 tobe kept by the Company and by the subsidiaries of which we have acted as auditors havebeen properly kept in accordance with the provisions of the said Act.

We have considered the financial statements and the auditors’ reports thereon of the subsidiariesfor 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)Company No : 199310 - P

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

The audit reports on the financial statements of the subsidiaries were not subject to anyqualification 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


BALANCE SHEETS AT 31 MARCH 2002

THE GROUP THE COMPANY 2002 2001 2002 2001

NOTE RM RM RM RM ASSETSInvestment 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 ASSETSInventories 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 LIABILITIESAmount 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


INCOME STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002


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 IN 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

Arising from conversion 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 IN EQUITY



NOTE RM RM RM RM

CASH FLOWS (FOR)/FROM OPERATING ACTIVITIESProfit 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



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 ACTIVITIESDividends 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, plantand 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 ACTIVITIESNet 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 INCOME STATEMENT

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2002 SCHEDULE A

OPERATING EXPENSES

1. GENERAL INFORMATION

The Company is a public company limited by shares and is incorporated under theMalaysian Companies Act, 1965. The domicile of the Company is in Malaysia. Theregistered 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 provisionof management and administrative services to the subsidiaries. The principal activities of thesubsidiaries are disclosed in Note 5 to the financial statements. There have been no significantchanges 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 toinclude other bases of valuation as disclosed in other sections under significant accountingpolicies, 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 theCompany and all its subsidiaries made up to 31 March 2002. A subsidiary is definedas a company in which the parent company holds directly or indirectly more than50% of the equity share capital and has control over the financial and operatingpolicies. Investment in subsidiaries is stated at cost unless in the opinion of theDirectors there has been a permanent diminution in value, in which case provision ismade 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. Underthe acquisition method of accounting, the results of subsidiaries acquired or disposedof are included from the date of acquisition or up to the date of disposal. At the dateof acquisition, the fair value of the subsidiaries’ net assets are determined and thesevalues are reflected in the consolidated financial statements. The excess of the cost ofacquisition over the fair value of the Group’s share of the subsidiaries’ identifiable netassets at the date of acquisition is reflected as goodwill on consolidation. Goodwill orreserve 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. Wherenecessary, adjustments are made to the financial statements of subsidiaries to ensureconsistency of accounting policies with those of the Group.

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

(b) Goodwill On Consolidation

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

Goodwill is stated net of negative goodwill. The net carrying amount of goodwill isreviewed annually, and is written down for impairment where it is considerednecessary. The impairment value of goodwill written off is taken to the incomestatement.




OPERATING EXPENSES4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(c) Associates

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

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

Unrealised gains on transactions between the Group and its associates are eliminatedto the extent of the Group’s interest in the associates; unrealised losses are alsoeliminated unless the transaction provides evidence on impairment of the assettransferred.

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

(d) Property, Plant and Equipment

Property, plant and equipment, other than freehold land, are stated at cost lessaccumulated depreciation or amortisation. Freehold land is stated at cost and is notdepreciated.




OPERATING EXPENSES


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

Depreciation and amortisation is calculated under the straight-line method to write offthe cost of the assets over their estimated useful lives. The principal annual rates usedfor 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 opinionthat the diminution is permanent.

(f) Investment Properties

Investment properties are held as long term investments to generate income and forcapital 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 unsoldcompleted properties are stated at the lower of cost and net realisable value. Formanufactured goods, cost is determined on the weighted average basis and includes thecost of materials and incidentals incurred in bringing the inventories to their presentlocation and condition. For finished goods and work-in-progress, cost includes directlabour 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 developmentperiod.

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

(h) Property Development-In-Progress

Property development-in-progress comprises land and related developmentexpenditure incurred plus attributable profits less progress billings and foreseeablelosses, if any.

Land is stated at cost. Development expenditure comprises construction and otherrelated development costs and administrative overheads relating to the propertydevelopment. Interest costs on borrowings taken to finance the relevant developmentprojects are included in the development expenditure from commencement to thecompletion of the development projects.

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

(i) Debtors

Debtors are carried at anticipated realisable value. Bad debts are written off in theperiod in which they are identified. An estimate is made for doubtful debts based on areview 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 attributableto contracts in progress less progress billings and provision for foreseeable losses, ifany. Cost includes direct materials, labour and applicable overheads.

(k) Interest Capitalisation

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

(l) Deferred Taxation

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

(m) Foreign Currencies

Transactions in foreign currencies are converted into Ringgit Malaysia at theapproximate rates of exchange ruling at the transaction dates. Monetary assets andliabilities in foreign currencies at the balance sheet date are translated at theapproximate rates ruling as of that date. All exchange differences are taken to theincome statement.





(n) Assets under Hire Purchase

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

(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 convertibleto known amounts of cash and which are subject to an insignificant risk of changes invalue.

(p) Income Recognition

(i) Construction Contracts

Revenue on contracts is recognised on the percentage of completion methodunless the outcome of the contract cannot be reliably determined, in whichcase revenue on contracts is only recognised to the extent of contract costsincurred that are recoverable. Foreseeable losses, if any, are provided for infull as and when it can be reasonably ascertained that the contract will resultin a loss.

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





(p) Income Recognition (Cont’d)

(ii) Property Development

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

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

Revenue on uncompleted properties contracted for sale is recognised based onthe stage of completion method unless the outcome of the developmentcannot be reliably determined in which case the revenue on the development isonly recognised to the extent of development costs incurred that arerecoverable.

The stage of completion is determined based on the proportion that thedevelopment costs incurred for work performed to date bear to the estimatedtotal 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 bereasonably 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, andwhere applicable, net of returns and trade discounts.

(iv) Revenue from services

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





(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 recognisedupon declaration by the subsidiaries and associates.

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

(viii) Interest income

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

5. INVESTMENT IN SUBSIDIARIESTHE 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 Principal2002 2001 Activities

% %

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

investment holding




OPERATING EXPENSES5. INVESTMENT IN 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 EXPENSES5. INVESTMENT IN 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. INTEREST IN ASSOCIATES

THE GROUP THE COMPANY 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

THE 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 PrincipalName 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. INTEREST IN ASSOCIATES (CONT’D)

Effective Equity PrincipalName 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 managementfinancial statements made up to 31 March 2002.

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

## Held by Paling




OPERATING EXPENSES7. PROPERTY, PLANT AND EQUIPMENT

OFFICEPLANT EQUIPMENT,AND COMPUTERS,

MACHINERY, FURNITURECONSTRUCTION FORMWORK, AND

MACHINERY SCAFFOLDINGS FITTINGS,FREEHOLD AND AND TOOLS AND MOTOR

LAND EQUIPMENT CONTAINERS FITTINGS VEHICLES TOTALTHE 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 31.3.2002Cost 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 31.3.2001Cost 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 EXPENSES7. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

OFFICE EQUIPMENT,COMPUTERS,FURNITURE

THE COMPANY AND FITTINGS MOTOR VEHICLES TOTALRM RM RM

Net book valueAs 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 31.3.2002Cost 370,801 376,950 747,751 Accumulated depreciation (295,299) (376,949) (672,248)

Net book value 75,502 1 75,503

As at 31.3.2001Cost 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 bookvalue of RM402,608 (2001 - RM339,159) at the balance sheet date.




OPERATING EXPENSES8. INVESTMENT PROPERTIES

THE 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) ischarged to a licensed bank for a term loan facility granted to the subsidiary. The lease periodof the leasehold land expires in the year 2086.

Based on a valuation exercise carried out on 27 March 2000 by an independent professionalvaluer, the market value of the investment properties of the Group amounts to approximatelyRM35.58 million (2001 – RM36.91 million). No valuation exercise has been carried out onthe properties since the last exercise in the financial year 2000.

9. OTHER ASSETSTHE GROUP

2002 2001 RM RM

Other assets 521,868 472,285

Other investmentsQuoted 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)THE 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 aftertwelve months from the balance sheet date, upon expiry of the warranty period of therelevant contracts.

10. GOODWILLTHE 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. INVENTORIESTHE GROUP

2002 2001 RM RM

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




OPERATING EXPENSES12. PROPERTY DEVELOPMENT-IN-PROGRESS

THE 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 yearamounting to RM836,236 (2001 - RM658,091).

13. DEBTORS

THE GROUP THE COMPANY2002 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 EXPENSES13. 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”), arelated party. Details of the related party relationship and nature of the transactionsand balances are set out in Note 38 to the financial statements. The amount owing bySH has been outstanding since 1996. Subsequent to the balance sheet date, SH hasproposed to settle the amount owing in the following manner:-

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

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

The proposal by SH is currently being reviewed by the directors (other than thedirectors who are deemed to be interested parties). The directors are of the opinionthat the amount owing by SH will be recovered in full in due course, and as such, noprovision for doubtful is required.

(ii) an amount of RM7,261,672 (2001 – RM7,261,672), net of provision for doubtfuldebt, owing by a third party which has been outstanding since 1994. The third partyhas been placed under Special Administration by Pengurusan Danaharta NasionalBerhad on 27 July 1999. The directors are of the opinion that the net amount duefrom the third party will be recovered in due course, and that no further provision fordoubtful 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 buildingmaterials. The amount owing is unsecured, interest-free, and is to be repaid viadeductions 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 thesub-contractor. The amount owing is unsecured, interest-free, and is to be repaid viadeductions against future claims for work performed by the sub-contractor.




OPERATING EXPENSES

14. AMOUNT OWING BY/(TO ) CONTRACT CUSTOMERSTHE GROUP

2002 2001 RM RM

Amount owing by contract customersContract costs incurred to date 29,952,686 19,280,003 Attributable profits 8,335,542 5,973,843


Amount owing by contract customers 1,407,450 2,956,738

Amount owing to contract customersContract costs incurred to date 173,176,995 177,176,206 Attributable profits 7,214,110 11,000,765


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

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

15. AMOUNTS OWING BY/(TO ) SUBSIDIARIESTHE 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)THE 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. Theinterest 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 ) ASSOCIATES

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 theHousing Developers (Control and Licensing ) Act, 1966.

18. CREDITORSTHE GROUP THE COMPANY

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 BORROWINGSTHE GROUP THE COMPANY

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 byway of a corporate guarantee by the Company, supported by a negative pledge over certainlanded properties of the Group.




OPERATING EXPENSES

21. SHARE CAPITAL THE COMPANY

2002 2001 RM RM

AUTHORISED

Ordinary shares of RM1 eachAt 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 eachAt 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 annumpayable annually in arrears;

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

(c) the holders have the option to convert all ICCPS into ordinary shares at any time afterthe 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 ofreturn of capital on liquidation or otherwise for the par value of the ICCPS plus anyarrears in dividend, provided that there shall be no further right to participate in thesurplus assets or profits of the Company; and

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

22. SHARE APPLICATION ACCOUNT

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

23. RESERVESTHE GROUP THE COMPANY

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 Arising from conversion 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 1992by 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 taxauthorities, the retained profits of the Company are wholly distributable by way ofdividends without the Company incurring any additional tax liabilities.

24. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“ICULS”)

THE 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 issuingnew shares at revised conversion terms and/or cash subscription, details of which are set outin Note 42(a)(ii) to the financial statements.

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

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




OPERATING EXPENSES

24. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (CONT’D)

Subsequent to the balance sheet, the conversion of the ICULS into new ordinary shares ofRM1 each was made on the following basis:-

(i) 25,127,557 new ordinary shares of RM1 each were issued by the tendering of115,590,000 ICULS with nominal value of RM1 each;

(ii) 2,500 new ordinary shares of RM1 each were issued by the tendering of 10,000ICULS with nominal value of RM1 each and cash subscription of RM1,500.

25. DEFERRED LIABILITIESTHE GROUP

2002 2001 RM RM

Long term loans - Note a 215,520 289,770 Hire purchase creditors - Note b 223,268 221,922 Deferred taxation - Note c - -

438,788 511,692

(a) Long term loans

THE GROUP

2002 2001 RM RM

Term loans - secured 327,156 401,406 Repayable within 12 months (Note 20) (111,636) (111,636)

215,520 289,770

The secured term loan represents a bridging loan secured by way of a first legal chargeover the landed property of a subsidiary costing RM2,792,736 (2001 –RM2,792,736). The loan is repayable by 144 equal instalments commencing 15September 1994.

The term loans are subject to interest at rates ranging from 8.95% to 9.45% (2001 –9.45%) per annum.




OPERATING EXPENSES25. DEFERRED LIABILITIES (CONT’D)

(b) Hire purchase creditorsTHE GROUP

2002 2001 RM RM

Future minimum hire purchase payments

- repayable not later than one year 110,916 87,292 - repayable later than one year and not later than five years 282,174 292,808

393,090 380,100 Future finance charges (82,038) (79,018)

Present value of hire purchase liabilities 311,052 301,082

Present value of hire purchase liabilities:-

Not later than one year (Note 18) 87,784 79,160 Later than one year and not later than five years 223,268 221,922

311,052 301,082

(c) Deferred taxation

At 1 April 2001/2000 - 2,250,300 Reduction through the disposal of a subsidiary - (2,250,300)

- -




OPERATING EXPENSES

26. NET TANGIBLE ASSETS PER SHARE

The actual net tangible assets per share is calculated based on the net tangible assets valueof RM199,831,843 (2001 - RM83,310,578) attributable to ordinary shares divided by thenumber of ordinary shares in issue at the balance sheet date of 50,468,943 (2001 -50,468,943) shares.

The proforma net tangible assets per share is calculated based on the net tangible assetsvalue of RM199,831,843 attributable to ordinary shares divided by the proforma enlargednumber of ordinary shares of 75,599,000 after taking into account the allotment of newordinary shares pursuant to the mandatory conversion of the ICULS.

27. TURNOVERTHE GROUP THE COMPANY

2002 2001 2002 2001 RM RM RM RM

Revenue from construction contracts 56,858,840 31,998,641 - - Proportionate sales value of development properties 24,084,755 20,232,647 - - Sale of goods and services supplied - 39,981,431 - - Rental income 119,300 146,091 - - Dividend income - - 9,300,000 8,944,445 Interest income 536,328 6,879 533,461 - Other interest income - - 619,226 708,073 Management and administrativecharges 45,600 45,600 - 294,000

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

28. OTHER OPERATING INCOME

Included in other operating income of the Group and the Company of the previousfinancial year, were the amounts of RM10,729,328 and RM23,475,000, respectivelyrepresenting the gain on disposal of equity interest in a subsidiary during the previousfinancial year.




OPERATING EXPENSES29. PROFIT BEFORE TAXATION

Profit before taxation is arrived at after charging/(crediting):-THE GROUP THE COMPANY

2002 2001 2002 2001 RM RM RM RM

Advances to joint ventures written off - 3,280,534 - - Amortisation- leasehold land and buildings - 53,783 - - - deferred expenses - 47,710 - - Auditors’ remuneration 51,500 61,600 11,000 11,000 Bad debts written off 101,340 335,590 - 327,763 Contract costs 65,941,186 38,591,139 - - Deferred expenses written off - 42,696 - - Depreciation of plant and equipment 325,978 2,669,857 32,676 56,617 Deposit written off - 150,000 - 150,000 Directors’ benefits-in-kind 31,875 49,441 29,625 45,441 Directors’ fees 46,000 110,400 46,000 50,400 Directors’ remuneration 594,500 899,300 419,625 467,625 Dividend income over-recognised 319,445 - 319,445 - Interest expense- bank borrowings 3,175,729 3,106,808 1,354,608 1,464,669 - hire purchase 21,884 11,737 - - - ICULS 5,717,576 5,780,000 5,717,576 5,780,000 - loans 197,918 81,414 1,388,838 1,376,171 - others 361,796 416,544 - - Investment in joint ventures written off - 839,020 - - Plant and equipment written off 2,800 - - - Provision for doubtful debts 816,507 6,872,514 - 2,352,737 Preliminary expenses written off - 19,645 - - Pre-operating expenses written off - 68,866 - - Rental expense- premises - 8,100 55,930 55,930 - machinery and equipment 14,883 15,588 - - Staff costs 1,996,604 4,617,235 149,581 111,381 Trademark written off - 436,375 - - Gross dividend income- subsidiaries (unquoted) - - (9,300,000) (8,944,445) Interest income- licensed financial institutions (533,461) (125,269) (533,461) - - subsidiaries - - (619,226) (708,073) - others (51,663) (193,263) - - Management and administrative charges (45,600) (45,600) - (294,000) Gain on foreign exchange (realised) - (227) - - Loss/(Gain) on disposal of investment properties 33,015 (766,749) - - (Gain)/Loss on disposal of property, plant and equipment (131,031) (170,656) (59,039) 2,899 Rental of premises (284,414) (431,254) - - Share of loss in joint ventures written back - (4,163,122) - -




OPERATING EXPENSES30. TAXATION


Current (867,495) (420,370) 94,000 680,575 Share of associates’ taxation 982,773 810,363 - -

115,278 389,993 94,000 680,575 Overprovision in previous financial year - (39,742) - (39,742)

115,278 350,251 94,000 640,833

The taxation charge for the Company is lower than the statutory rate of tax applicablemainly due to certain income which is not taxable.

Subject to agreement with the tax authorities, the Group has unutilised tax losses andunabsorbed capital allowances of approximately RM3,741,000 (2001 – RM6,392,000) andRM563,000 (2001 – RM574,000) respectively available at the balance sheet date to becarried forward for offset against future taxable business income.

The potential deferred taxation benefits, arising from timing differences, that have not beenaccounted for in the financial statements are as follows:-

TAX LOSSES OTHER TOTAL

RM RM RM

At 1 April 2000 1,122,000 178,000 1,300,000 Arising/(Reversal) during the financial year 666,000 (16,000) 650,000

At 31 March 2001/1 April 2001 1,788,000 162,000 1,950,000 Reversal during the financial year (742,000) (5,000) (747,000)

At 31 March 2002 1,046,000 157,000 1,203,000




OPERATING EXPENSES

31. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is arrived at by dividing the profit after taxationattributable to shareholders after deducting preference dividend of RM270,587 (2001 -RM270,587) by the number of 50,468,943 (2001 - 50,468,943) ordinary shares of theCompany in issue during the financial year.

The computation of diluted EPS is not applicable as the effects of conversion of each classof potential ordinary shares are anti-dilutive.

32. DIVIDENDSTHE COMPANY

2002 2001 RM RM

Declared – dividend of 5.5% less 28% tax on the ICCPS (2001 - 5.5%

less 28% tax on ICCPS) 270,587 270,587

Proposed – first and final dividend of Nil (2001 - 1.5% less 28% tax) on the ordinary shares - 545,065

270,587 815,652




OPERATING EXPENSES

33. SUMMARY OF EFFECTS OF DISPOSAL OF A SUBSIDIARY

The effect of the disposal of the subsidiary on the financial results of the Group for thefinancial year was as follows:-

THE GROUP

2002 2001 RM RM

Turnover - 38,777,804 Cost of Sales - (35,212,832)

Gross Profit - 3,564,972 Other operating income - 27,922 Gain on disposal of subsidiary - 10,729,328 Less: Operating expensesAdministrative expenses - (3,172,585) Other operating expenses - (79,808)

Profit from operations - 11,069,829 Finance costs - (187,088)

Increase in net profit of the Group - 10,882,741

The effect of the disposal of the subsidiary on the financial position of the Group at thefinancial year end was as follows:-

THE GROUP

2002 2001 RM RM

Property, plant and equipment - 17,232,167 Other assets - 173,201 Current assets - 17,135,797 Current liabilities - (2,375,662) Deferred liabilities - (2,238,854) Minority interest - (10,847,334)

- 19,079,315 Reduction in reserve on consolidation from disposal - (2,733,643)

Increase in net assets of the Group - 16,345,672

33. SUMMARY OF EFFECTS OF DISPOSAL OF A SUBSIDIARY (CONT’D)




OPERATING EXPENSES

T HE GROUP T HE COMPANY2002 2001 2002 2001 RM RM RM RM

Property, plant and equipment - 17,232,167 - - Other assets - 173,201 - - Current assets - 17,135,797 - - Current liabilities - (2,375,662) - - Deferred liabilities - (2,238,854) - - Minority interest - (10,847,334) - -

Net assets in subsidiary disposed - 19,079,315 - - Reduction in reserve on consolidation from disposal - (2,733,643) - -

Net cost of investment to the Group - 16,345,672 - - Gain on disposal - 10,729,328 - -

Disposal consideration - 27,075,000 - 27,075,000 Cash and cash equivalents disposed - (2,192,116) - -

Net cash inflow on disposal of subsidiary - 24,882,884 - 27,075,000 Amount received after the balance sheet date - (27,075,000) - (27,075,000)

Net cash outflow on disposal of subsidiary - (2,192,116) - -




OPERATING EXPENSES

34. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT


Purchase of property, plant and equipment 208,427 1,530,184 15,400 9,654 Amount financed through hire purchase arrangements (93,100) (345,803) - -

Cash disbursed for the purchase of property, plant and equipment 115,327 1,184,381 15,400 9,654

35. CASH AND CASH EQUIVALENTS

For the purpose of the cash flow statement, cash and cash equivalents comprise thefollowing:-


Short term deposits 5,042,274 150,000 5,012,274 - Cash and bank balances 1,460,540 1,136,617 1,904 79,070 Bank overdrafts (20,843,690) (27,037,758) (1,657,727) (7,462,435)

(14,340,876) (25,751,141) 3,356,451 (7,383,365)




OPERATING EXPENSES

36. DIRECTORS’ REMUNERATION

The aggregate amount of emoluments received and receivable by Directors of the Companyduring the financial year are as follows:-

THE GROUP THE COMPANY2002 2001 2002 2001

RM RM RM RM

DIRECTORS’ FEE:-

1. Mun Chong Shing @ Mun Chong Tian 3,000 60,000 3,000 - 2. Dato’ Lim Phaik Gan 12,000 12,000 12,000 12,000 3. Dr. Norraesah Bt Haji Mohamad 13,000 12,000 13,000 12,000 4. Datuk Sim Peng Choon 12,000 12,000 12,000 12,000 5. Vincent Koh Kok Kee 6,000 - 6,000 - 6. Tan Sri Dato’ Ir Muhammad

Yusuff Bin Haji Muhammad Yunus - 14,400 - 14,400

46,000 110,400 46,000 50,400

DIRECTORS’ NON-FEE EMOLUMENTS:-

1. Sia Kwee Mow @ Sia Hok Chai 396,000 414,000 396,000 414,000 2. Sia Teong Heng 180,000 195,000 15,750 29,250 3. Mun Chong Shing @ Mun Chong Tian 300 127,800 300 - 4. Dato’ Lim Phaik Gan 900 - 900 - 5. Dr. Norraesah Bt Haji Mohamad 1,500 - 1,500 - 6. Datuk Sim Peng Choon 2,100 - 2,100 - 7. Vincent Koh Kok Kee 1,200 - 1,200 - 8. Yeoh Hock Thong 12,500 162,500 1,875 24,375

594,500 899,300 419,625 467,625

Apart from the amounts disclosed under directors’ remuneration above, the estimatedmonetary value of other benefits-in-kind received by the following directors during thefinancial year, otherwise than in cash are as follows:-


RM RM RM RM

1. Sia Kwee Mow @ Sia Hok Chai 16,925 16,925 16,925 16,925 2. Sia Teong Heng 13,500 19,125 11,250 19,125 3. Mun Chong Shing @ Mun Chong Tian - 4,000 - - 4. Yeoh Hock Thong 1,450 9,391 1,450 9,391

31,875 49,441 29,625 45,441




OPERATING EXPENSES

37. RELATED COMPANY TRANSACTIONS

THE COMPANY

2002 2001 RM RM

Interest paid to subsidiaries 1,228,304 1,216,076 Rental paid to a subsidiary 55,930 55,930 Administration fee received from a subsidiary - 294,000 Dividend income received/receivable from subsidiaries 9,300,000 8,944,945 Interest received from subsidiaries 619,226 708,073

38. RELATED PARTY TRANSACTIONS/BALANCES

NAME OF NATURE OF GROUPRELATED PARTY NOTE TRANSACTION 2002 2001

RM RM

South East Best (a) Progress billings received/receivable 1,897,361 2,106,698 Sdn. Bhd.

Ligamas Sdn. Bhd. (a) Progress billings received/receivable 17,559,960 3,344,635

Gross dividend income received - 900,000

Paling Industries (a) Purchase of material 181,113 67,268 Sdn. Bhd.

Smart Home (b) Subcontract charges Sdn. Bhd. paid/payable - 51,196

Sia Teong Leng (c ) Property sold 600,000 -

Wong Hon Kum (c ) Retainer fee paid 42,000 -




OPERATING EXPENSES

38. RELATED PARTY TRANSACTIONS/BALANCES (CONT’D)

RECEIVABLE PAYABLENAME OF GROUP GROUPRELATED PARTIES NOTE 2002 2001 2002 2001

RM RM RM RM

South East Best Sdn. Bhd. (a) 7,745,003 6,406,597 - -

Ligamas Sdn. Bhd. (a) 10,258,378 6,652,464 - -

Paling Industries Sdn. Bhd. (a) - - 38,543 11,352

Smart Home Sdn. Bhd. (b) 37,720,372 37,788,454 - -

(a) Associates

(b) A company in which Sia Kwee Mow @ Sia Hok Chai, who is a director of the Company, has directinterest.

(c) A director of certain related companies

In the opinion of the directors, the above transactions have been entered into in the ordinarycourse of business on terms established by arm’s length negotiations between the parties.

39. CAPITAL COMMITMENTTHE COMPANY

2002 2001 RM RM

Approved capital commitment contracted but not provided for 29,050,000 -

The capital commitment relates to the balance of consideration payable for the acquisition of80% equity interest in South East Best Sdn. Bhd..




OPERATING EXPENSES40. CONTINGENT LIABILITIES

THE COMPANY

2002 2001 RM RM

Corporate guarantee (unsecured) given to banks and other licensed financial institutions for credit facilities granted to subsidiaries- funded facilities 30,352,000 29,223,000 - non-funded facilities 4,472,000 4,042,000

34,824,000 33,265,000

41. SEGMENTAL REPORTING

The Group operates wholly within Malaysia. The analysis of the Group’s operations bybusiness activities for the financial year ended 31 March 2002 is as follows:-

(LOSS)/PROFIT BEFORE TOTAL ASSETS

TURNOVER TAXATION EMPLOYED

RM RM RM2002The Company and its subsidiaries:-Construction and property development 80,884,556 6,621,208 148,551,217 Manufacturing and trading - (8,006) 57,552 Investment 760,267 (8,346,878) 26,105,699

81,644,823 (1,733,676) 174,714,468 Associates:-Construction and property development - 1,511,621 107,770,794 Manufacturing and trading - 1,839,954 12,131,772

81,644,823 1,617,899 294,617,034




OPERATING EXPENSES41. SEGMENTAL REPORTING (CONT’D)

(LOSS)/PROFIT BEFORE TOTAL ASSETS

TURNOVER TAXATION EMPLOYED

RM RM RM

2001The Company and its subsidiaries:-Construction and property development 52,377,824 (9,337,571) 144,647,695 Manufacturing and trading 38,514,701 (261,029) 66,001 Investment 1,518,764 8,238,482 44,956,366

92,411,289 (1,360,118) 189,670,062 Associates:-Construction and property development - 2,781,304 106,726,759 Manufacturing and trading - - 10,807,005

92,411,289 1,421,186 307,203,826

42. SIGNIFICANT EVENTS

The following are the significant events involving the Group and the Company:-

(a) On 14 June 2000, the Company announced the following proposals:-

(i) Proposed Renounceable Rights Issue of up to 52,277,289 new ordinary sharesof RM1.00 each in the Company credited as fully paid-up at an issue price ofRM1.00 per share on the basis of one (1) new share for every two (2) sharesheld (“Proposed Rights Issue”); and

(ii) Proposed Special Issue of up to 80,920,000 new shares in the Company inconsideration of an offer by the Company to replace from the holders of theexisting 1997/2002 5% Irredeemable Convertible Unsecured Loan Stocks(“ICULS”) their respective ICULS holdings on the basis of seven (7) newshares in the Company for every RM10.00 nominal value of ICULSsurrendered for cancellation, together with a cash consideration of RM2.00(“Proposed Offer”).




OPERATING EXPENSES

42. SIGNIFICANT EVENTS (CONT’D)

On 2 October 2000, the Securities Commission (“SC”) approved the Proposed RightsIssue based on the above terms but rejected the terms of the Proposed Offer. TheCompany subsequently revised the terms of the Proposed Offer and resubmitted anapplication to the SC on 19 December 2000. On 26 February 2001, the SC approvedthe Proposed Offer based on the following terms:-

(i) If the Proposed Offer is undertaken before 28 March 2001, being the paymentdate of the ICULS interest (“Cut-off Date”), the Proposed Offer willcomprise an offer to acquire 120 ICULS in consideration for 36 new shares inthe Company, together with a restricted issue to the said ICULS holders of 24new shares in the Company at an issue price of RM1.00 per share payable infull for cash.

(ii) In the event that the Proposed Offer is undertaken after the Cut-off Date, theProposed Offer will comprise an offer to acquire 120 ICULS in considerationfor 30 new shares in the Company, together with a restricted issue of 30 newshares in the Company at an issue price of RM1.00 per share payable in fullfor cash.

(iii) The holders of the ICULS shall have the option of either taking up theProposed Offer or to continue holding the ICULS based on the existing termsuntil the maturity date of 28 March 2002, or a combination of both.

On 6 September 2001 and 23 October 2001, the Board of Directors of theCompany decided to abort the Proposed Rights Issue and Proposed Offer,respectively in view of the prevailing weak capital market condition and itsuncertain outlook.

(b) On 27 September 2001, the Board of Directors of the Company approved theissuance of RM92,562,500 nominal value Al-Bai Bithaman Ajil Bonds (“ABBABonds”). The terms of the ABBA Bonds were subsequently revised on 18 June2002 and are disclosed in Note 43(b) to the financial statements.




OPERATING EXPENSES43. SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

The following are the subsequent events involving the Group and the Company:-

(a) At the Extraordinary General Meeting convened on 30 April 2002, the shareholdersof the Company approved the acquisition by the Company of 500,000 ordinaryshare of RM1 each in South East Best Sdn. Bhd. (“SEB”), representing 80% equityinterest in SEB for a cash consideration of RM35,000,000. At the date of this report,the acquisition of SEB has not been completed pending the settlement of the purchaseconsideration.

(b) On 18 June 2002, the nominal value of the ABBA Bonds initially approved by theBoard of Directors on 27 September 2001, was revised to RM61,961,250 comprisingRM49,569,000 nominal value Primary Al-Bai Bithaman Ajil Bonds (“PrimaryABBA Bonds”) and RM12,392,250 nominal value Secondary Al-Bai Bithaman AjilBonds (“Secondary ABBA Bonds”). The proposed ABBA Bonds will be placed outto a licensed financial institution via a private placement exercise. The ABBA Bondsshall have a tenure of five (5) years from the date of issue. The profit margin on theABBA Bonds is at a fixed percentage of 5.00% per annum, payable in arrears on asemi-annual basis represented by the Secondary ABBA Bonds. The ABBA Bondsare to be secured in the following manner:-

(c) (i) by a third party first legal charge over certain properties of a subsidiary;

(ii) by a third party first legal charge over all the shares held by a wholly ownedsubsidiary in an associate;

(iii) by a first party charge over the reserved account; and

(iv) by a first party charge over a sinking fund account and a MudharabahAccount.

The Company submitted the application in relation to the proposed ABBA Bonds tothe Securities Commission (“SC”) on 20 June 2002. The application was approvedby the SC on 19 July 2002 subject to the following conditions:-

(i) any change in the terms and conditions of the proposed ABBA Bonds issubject to the approval by the SC;

(ii) the submission of Borang FMF/JPB (Facility Maintenance File) to the SC andBank Negara Malaysia; and

(iii) the submission of a certified true copy of the Trust Deed and final rating andrating rationale of the ABBA Bonds to the SC.




OPERATING EXPENSES44. NUMBER OF EMPLOYEES


Number of employees at the balance sheet date 55 57 8 11

45. COMPARATIVE FIGURES

The following comparative figures of the Group and of the Company have been reclassified toconform with the current financial year’s presentation:

AS PREVIOUSLYAS RESTATED REPORTED

THE GROUP THE COMPANY THE GROUP THE COMPANYRM RM RM RM

BALANCE SHEETS (EXTRACT):

Amount owing by subsidiaries - 39,231,590 - 16,170,926 Amount owing to subsidiaries - (23,060,664) - -

Property, plant and equipment 7,585,596 - 12,723,305 - Investment properties 22,125,612 - 16,987,903 -

Gross trade debtors 58,244,261 - 59,398,219 - Provision for doubtful debts (6,086,972) - (4,719,543) - Gross other debtors, deposits and prepayments 40,958,305 - 38,206,823 - Provision for doubtful debts (2,582,832) - (2,352,737) -

Debtors 98,841,811 35,820,414 103,665,479 44,797,149 Tax recoverable 4,823,668 8,976,735 - -

Amount owing by contract customers 2,956,738 - - - Amount owing to contract customers (3,560,562) - (603,824) -




OPERATING EXPENSES

45. COMPARATIVE FIGURES (CONT’D)

AS PREVIOUSLYAS RESTATED REPORTED

THE GROUP THE COMPANY THE GROUP THE COMPANYRM RM RM RM

INCOME STATEMENTS (EXTRACT):

Exceptional item - - 10,729,328 23,475,000 Other operating income 12,412,360 23,475,204 1,683,032 204

Administrative expenses 4,649,999 991,785 15,245,542 3,881,801 Other operating expenses 10,595,543 2,890,016 - -

CASH FLOW STATEMENTS (EXTRACT):

Decrease in amount owing to contract customers (1,428,568) - (695,114) - Interest paid (10,054,594) - (10,421,321) - Interest received 685,394 - 318,667 -

Advances to joint ventures written off 3,280,534 - - - Investment in joint ventures written off 839,020 - - - Share of loss in joint ventures written back (4,163,122) - - - Operating profit before working capital changes 6,704,453 - 6,748,021 - Decrease in trade and other debtors 5,697,763 - 5,654,195 -

Increase in trade and other debtors - (205,993) - (2,069,605) Taxes paid - - - (640,833) Dividends received from subsidiaries - 8,270,000 - 10,774,445




OPERATING EXPENSES

SBC Corporation Berhad: Annual Audited Accounts 2002

Investor Relations

Transcript of SBC Corporation Berhad: Annual Audited Accounts 2002