Published on July 10, 2009
SBC CORPORATION BERHAD 199310 P WISMA SIAH BROTHERS, 74 JALAN PAHANG, 53000 KUALA LUMPUR, MALAYSIA t +60 3-4041 8118 f +60 3-4043 5281 e email@example.com w www.sbcgroup.com.my building partnerships since 1954 Annual Report 2008 SBC CORPORATION BERHAD I Annual Report 2008
CORE PURPOSE • To build upon our construction heritage to design and deliver exciting, unique and valuable solutions for buildings and communities. CORE VALUES • Equipping our people to anticipate and respond to the needs of our customers and stakeholders. • Adherence to industry’s highest ethics. • Use of designs and processes that promote standards.
Contents 2 • Corporate Information 4 • Directors’ Proﬁle 12 • Corporate Structure 13 • Group Financial Highlights 14 • Executive Chairman’s Statement 18 • Penyata Pengerusi Eksekutif 22 • Statement of Corporate Governance 31 • Statement on Internal Control 33 • Audit Committee Report 38 • Statement of Directors Responsibilities 39 • Financial Statements 101 • Group Properties 104 • Shareholders Information 107 • Notice of Annual General Meeting 108 • Notice of Dividend Payment 108 • Statement Accompanying Notice of Annual General Meeting • Proxy Form
2 SBC CORPORATION BERHAD Corporate Information BOARD OF DIRECTORS REMUNERATION COMMITTEE SIA KWEE MOW @ SIA HOK CHAI DATO’ ZAINOL ABIDIN BIN HAJI A. HAMID JMN, FFB, FCIOB, FAIB LLB (Hons) Executive Chairman Chairman & Non-Executive Director SIA TEONG HENG DATO’ LIM PHAIK GAN B.Sc. (Eng), M.Sc. DPMP, DMPN, M.A.(Law), FCI, ARB Managing Director Independent Non-Executive Director MUN CHONG SHING @ MUN CHONG TIAN DATO’ DR. NORRAESAH BT. HAJI MOHAMAD Non-Executive Director DSPN, DSDK, PhD., B.Sc.(Econ) Independent Non-Executive Director DATO’ ZAINOL ABIDIN BIN HAJI A. HAMID LLB (Hons) SIA TEONG HENG Non-Executive Director B.Sc. (Eng), M.Sc. Managing Director DATO’ LIM PHAIK GAN DPMP, DMPN, M.A.(Law), FCI, ARB Independent Non-Executive Director NOMINATION COMMITTEE DATO’ DR. NORRAESAH BT. HAJI MOHAMAD DATO’ LIM PHAIK GAN DSPN, DSDK, PhD., B.Sc.(Econ) DPMP, DMPN, M.A.(Law), FCI, ARB Independent Non-Executive Director Chairperson & Independent Non-Executive Director AHMAD FIZAL BIN OTHMAN DATO’ DR. NORRAESAH BT. HAJI MOHAMAD B.Acc & Fin. (Hons) DSPN, DSDK, PhD., B.Sc.(Econ) Independent Non-Executive Director Independent Non-Executive Director AHMAD FIZAL BIN OTHMAN AUDIT COMMITTEE B.Acc & Fin. (Hons) Independent Non-Executive Director DATO’ DR. NORRAESAH BT. HAJI MOHAMAD DSPN, DSDK, PhD., B.Sc.(Econ) MUN CHONG SHING @ MUN CHONG TIAN Chairperson & Independent Non-Executive Director Non-Executive Director DATO’ LIM PHAIK GAN DPMP, DMPN, M.A.(Law), FCI, ARB Independent Non-Executive Director AHMAD FIZAL BIN OTHMAN B.Acc & Fin. (Hons) Independent Non-Executive Director
ANNUAL REPORT 2008 3 Corporate Information SOLICITORS CHEANG & ARIFF 39 Court 39, Jalan Yap Kwan Seng 50450 Kuala Lumpur FOONG & PARTNERS Suite 21-08, Level 21 Plaza 138, 138, Jalan Ampang 50450 Kuala Lumpur LEE, PERARA & TAN 55, Jalan Thambapillai Off Jalan Tun Sambanthan Brickﬁelds, 50470 Kuala Lumpur LIM & YEOH 145-M Jalan Maharajalela 50150 Kuala Lumpur PRINCIPAL BANKERS REGISTERED OFFICE AUDITORS ALLIANCE BANK MALAYSIA BERHAD WISMA SIAH BROTHERS 74A Jalan Pahang HORWATH AL-RAJHI BANKING & INVESTMENT CORPORATION 53000 Kuala Lumpur Chartered Accountants (MALAYSIA) BERHAD Tel: 03-4041 8118 Fax: 03-4043 5281 Level 16 Tower C, Megan Avenue II 12 Jalan Yap Kwan Seng BANGKOK BANK BERHAD 50450 Kuala Lumpur REGISTRARS BANK MUAMALAT MALAYSIA BERHAD TACS CORPORATE SERVICES SDN. BHD. COMPANY SECRETARIES CIMB BANK BERHAD Unit No. 203, 2nd Floor, Block C Damansara Intan CHONG FOOK SIN MALAYAN BANKING BERHAD No. 1, Jalan SS20/27 ATII, MCCS, AFA 47400 Petaling Jaya MIDF AMANAH INVESTMENT BANK BERHAD Tel: 03-7118 2688 Fax:03-7118 2693 KAN CHEE JING ACIS OCBC BANK (MALAYSIA) BERHAD STOCK EXCHANGE LISTING UNITED OVERSEAS BANK (MALAYSIA) BERHAD MAIN BOARD OF BURSA MALAYSIA SECURITIES BERHAD
4 SBC CORPORATION BERHAD Directors’ Proﬁles AS AT 31 JULY 2008 SIA KWEE MOW Sia Kwee Mow @ Sia Hok Chai, a Malaysian, aged 75, is the Executive Chairman of SBC @ SIA HOK CHAI Corporation Berhad (“SBC”). He has been a Director of SBC since its incorporation on Malaysian, Aged 75 14th June, 1990. He has over 54 years of experience in building and civil engineering Executive Chairman contracting and not less than 36 years of experience in plastic engineering since the incorporation of Paling Industries Sdn. Bhd. in 1971. He was actively involved in Master Builders Association Malaysia (“MBAM”) and had served in various capacities including the post of President (1988 to 1994). He was elected as the 29th President (1994 to 1996) of the International Federation of Asian and Western Paciﬁc Contractors’ Associations (“IFAWPCA”) during which he led the IFAWPCA delegation to a meeting between the World Bank and International Contractors Association held at Washington D.C. in November, 1996. In recognition of his vast experience and knowledge in construction and his contribution to the building construction industry, he was awarded or conferred the following : • Johan Mangku Negara by DYMM Yang DiPertuan Agong in 2001 • Honorary Life President by MBAM in 2001 • Fellowship of the Faculty of Building, United Kingdom in 1981 • Fellowship of the Chartered Institute of Building, United Kingdom as a Chartered Builder in 1979 • Fellowship of the Australian Institute of Building by the Australian Royal Charter of Building in 1982 He was also a previous President of both the Selangor Builders Association and Selangor Chinese Plumbing and Sanitary Association. He also sits on the board of several private limited companies in Malaysia, including several subsidiaries of SBC.
ANNUAL REPORT 2008 5 Directors’ Proﬁles AS AT 31 JULY 2008 His holdings in the securities of SBC are as follows – Direct Interest Indirect Interest Ordinary shares 1,480,800(a) 19,498,523(b) (a) 1,480,800 shares are held in bare trust by RHB Capital Nominees (Tempatan) Sdn. Bhd. (b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn. Bhd. (5,181,023 shares). By virtue of his interest in SBC, he is deemed to have interest in the securities of SBC’s subsidiaries to the extent of SBC’s interest, in accordance with Section 6A of the Companies Act, 1965. He is the father of Sia Teong Heng, the Managing Director and a major shareholder of SBC. He does not have any conﬂict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended all the four Board Meetings held during the last ﬁnancial year.
6 SBC CORPORATION BERHAD Directors’ Proﬁles AS AT 31 JULY 2008 SIA TEONG HENG Sia Teong Heng, a Malaysian, aged 45, is the Managing Director of SBC Corporation Malaysian, Aged 45 Berhad (“SBC”). He was appointed as a Director of SBC on 5th February, 1991. He is a Managing Director member of the Remuneration Committee of SBC. He graduated with a Bachelor of Science degree in Civil Engineering from Loughborough University, United Kingdom (“UK”) and in 1986 earned a post graduate Masters degree in Management Science from Imperial College, University of London, UK. Between 1986 and 1991, prior to his return to Malaysia, he worked in the investment banking industry based in London and Singapore. He joined SBC in 1991. Presently, he also sits on the boards of several subsidiaries of SBC. His holdings in the securities of SBC are as follows - Direct Interest Indirect Interest Ordinary shares 4,677,992(a) 19,498,523(b) (a) 4,434,000 shares are held in bare trust by Amsec Nominees (Tempatan) Sdn. Bhd. (b) Deemed interest by virtue of his shareholding in LOM Holdings Sdn. Bhd. (14,317,500 shares) and Evergreen Legacy Sdn. Bhd. (5,181,023 shares). By virtue of his interest in SBC, he is deemed to have interest in the securities of SBC’s subsidiaries to the extent of SBC’s interest, in accordance with Section 6A of the Companies Act, 1965. He is a son of Sia Kwee Mow @ Sia Hok Chai, the Executive Chairman and a major shareholder of SBC. He does not have any conﬂict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended three of the four Board Meetings held during the last ﬁnancial year.
ANNUAL REPORT 2008 7 Directors’ Proﬁles AS AT 31 JULY 2008 Mun Chong Shing @ Mun Chong Tian, a Malaysian, aged 71, was appointed as an MUN CHONG SHING Executive Director of SBC Corporation Berhad (“SBC”) on 1st April, 1996 when he was @ MUN CHONG TIAN employed as General Manager of Paling Industries Sdn. Bhd. (“Paling”) from 1987 and Malaysian, Aged 71 appointed as a Director in 1991 and remained in both positions until his retirement on Non-Executive Director 31st December, 2001. On 31st December, 2001, he was redesignated as a Non-Executive Director of SBC. He is a member of the Nomination Committee of SBC. He has received training in Sales Management conducted by the National Productive Centre and the Malaysian Institute of Management and a General Management Programme at the National Productivity Board, Singapore. Prior to his involvement with Paling, he was employed as General Manager in Hume Industries (M) Bhd. where he has had extensive exposure to industrial engineering and management. His holdings in the securities of SBC are as follows - Direct Interest Indirect Interest Ordinary shares 21,782 - He does not hold any securities, direct or indirect, in any of SBC’s subsidiaries. He is a brother-in-law to Sia Kwee Mow @ Sia Hok Chai and an uncle to Sia Teong Heng, both are Directors and major shareholders of SBC. He does not have any conﬂict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended all the four Board Meetings held during the last ﬁnancial year.
8 SBC CORPORATION BERHAD Directors’ Proﬁles AS AT 31 JULY 2008 DATO’ LIM PHAIK GAN Dato’ Lim Phaik Gan, a Malaysian, aged 88, was appointed as an Independent Non- Malaysian, Aged 88 Executive Director of SBC Corporation Berhad (“SBC”) on 5th February, 1991. She is the Independent Non-Executive Director Senior Independent Non-Executive Director, the Chairperson of the Nomination Committee and a member of the Audit Committee and the Remuneration Committee of SBC. She is an advocate and solicitor and was called to the Bar of England and the Bar of Malaysia. She obtained a Master of Arts degree in Law from the University of Cambridge, United Kingdom and was in active practice at the Bar of Malaysia from 1954 to 1971 and from 1980 until today. Since 1955, she has had a distinguished career in both the private and public sectors. In 1970, she was a member of the National Economic Consultative Council established when Parliament was suspended as a result of riots in 1969. From 1971 to 1980, she served as ambassador and Deputy Permanent Representative of Malaysia to the United Nations, and successively as the Malaysian Ambassador to Yugoslavia, Austria, Belgium and the European Economic Community. She was Malaysia’s Permanent Representative to the United Nations Industrial and Development Organisation and International Atomic Energy Agency in Vienna, and served as chairman in various committees. After her retirement from the Malaysian Foreign Service in 1980, she was appointed by the Government as Director of the Kuala Lumpur Regional Centre for Arbitration, an international organisation involved in the conduct and administration of international commercial arbitration for the settlement of disputes arising out of international commercial contracts and joint ventures, in which capacity she served from 1982 to 2000. She does not hold any securities, direct or indirect, in SBC or any of its subsidiaries. She has no family relationship with any Director and/or major shareholder of SBC. She does not have any conﬂict of interest with SBC. She has not been convicted of any offence within the past 10 years. She attended all the four Board Meetings held during the last ﬁnancial year.
ANNUAL REPORT 2008 9 Directors’ Proﬁles AS AT 31 JULY 2008 Dato’ Dr. Norraesah bt. Haji Mohamad, a Malaysian, aged 60, was appointed as an DATO’ DR. NORRAESAH BT. Independent Non-Executive Director of SBC Corporation Berhad (“SBC”) on 8th July, HAJI MOHAMAD 1991. She is the Chairperson of the Audit Committee and a member of the Nomination Malaysian, Aged 60 Committee and the Remuneration Committee of SBC. She holds a Doctorate Degree in Independent Non-Executive Director Economics Science (International Economics and Finance) which she obtained in 1986 from University of Paris 1, Pantheon Sorbonne, France. She has over 36 years of working experience in banking, consultancy and international trade and commerce. She worked with the International Trade Division of the Ministry of Trade and Industry (now known as the Ministry of International Trade and Industry) from 1972 to 1985 and was later transferred to the Finance Division of the Ministry of Finance holding the post of Principal Assistant Secretary dealing with privatisation and debt management. In 1988, she joined ESSO Production Malaysia, Inc. as Communications Manager and subsequently, in 1990, took the position of Managing Director with a consultant ﬁrm providing ﬁnancial advisory services. From 1991 to 1998 she was appointed as the Chief Representative of Credit Lyonnais Bank in Malaysia. She sits on the board of KESM Industries Berhad, Protasco Berhad, Ya Horng Electronic (M) Berhad, Adventa Berhad, My E.G. Services Berhad and several private limited companies. She was awarded the distinction of Darjah Setia Pangkuan Negeri on 13th July, 2002 by Tuan Yang Terutama Yang di-Pertua Negeri Pulau Pinang on His Excellency’s 64th Birthday and the Dato’ Setia DiRaja Kedah on 21st January, 2007 by Kebawah Duli Yang Maha Mulia Tuanku Sultan Darul Aman on His Excellency’s 79th Birthday. She does not hold any securities, direct or indirect, in SBC or any of its subsidiaries. She has no family relationship with any Director and/or major shareholder of SBC. She does not have any conﬂict of interest with SBC. She has not been convicted of any offence within the past 10 years. She attended all the four Board Meetings held during the last ﬁnancial year.
10 SBC CORPORATION BERHAD Directors’ Proﬁles AS AT 31 JULY 2008 DATO’ ZAINOL ABIDIN BIN Dato’ Zainol Abidin bin Haji A. Hamid, a Malaysian, aged 66, was appointed as a HAJI A. HAMID Non-Executive Director of SBC Corporation Berhad (“SBC”) on 10th October, 2003, Malaysian, Aged 66 representing the interest of Permodalan Nasional Berhad. He is the Chairman of the Non-Executive Director Remuneration Committee of SBC. He graduated with LLB (Hons) from the University of London in 1995. He joined the Kedah State Government in 1966 as a civil servant. From 1973 to 1981, he was the District Ofﬁcer for Sik, then Padang Terap and ﬁnally Kubang Pasu. He was General Manager and Director of Kedah Cement Sdn Bhd from 1981 to 1996 and Managing Director of Kedah Cement Marketing Sdn Bhd from 1990 to 1996. He sits on the Board of Paragon Union Berhad. He does not hold any securities, direct or indirect, in SBC or any of its subsidiaries. He has no family relationship with any Director and/or major shareholder of SBC. He does not have any conﬂict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended all the four Board Meetings held during the last ﬁnancial year.
ANNUAL REPORT 2008 11 Directors’ Proﬁles AS AT 31 JULY 2008 Ahmad Fizal bin Othman, a Malaysian, aged 45, was appointed as an Independent Non- AHMAD FIZAL BIN OTHMAN Executive Director of SBC Corporation Berhad (“SBC”) on 24th February, 2004. He is a Malaysian, Aged 45 member of the Audit Committee and the Nomination Committee of SBC. He graduated with Independent Non-Executive Director a Bachelor in Accounting and Finance (Hons) from the Middlesex University, London. He is a well-rounded and experienced businessman and involved in a multitude of industries. Currently, he immerses himself in retail, multimedia and technology. He does not hold any securities, direct or indirect, in SBC or any of its subsidiaries. He has no family relationship with any Director and/or major shareholder of SBC. He does not have any conﬂict of interest with SBC. He has not been convicted of any offence within the past 10 years. He attended all the four Board Meetings held during the last ﬁnancial year.
12 SBC CORPORATION BERHAD Corporate Structure AS AT 11 AUGUST 2008 Syarikat Siah Brothers 33.3% Sri Berjaya Development Sdn Bhd ★ 100% Trading Sdn Bhd ● 28.5% Sri Rawang Properties Sdn Bhd ★ Syarikat Siah Brothers 100% Construction Sdn Bhd ● Mixwell (Malaysia) 100% Sdn Bhd ★ 50% Ligamas Sdn Bhd ▲ South-East Best 100% Sdn Bhd ★ 100% Gracemart Resources Sdn Bhd ★ Siah Brothers Land 100% Seri Ampangan Realty Sdn Bhd ★ 100% Sdn Bhd ◆ 100% Sinaran Naga Sdn Bhd ★ 100% SBC Towers Sdn Bhd ★ Siah Brothers Properties 100% Sdn Bhd ◆ 100% Aureate Construction Sdn Bhd ★ 100% SBC Leisure Sdn Bhd ★ 100% Masahmura Sdn Bhd ▲ Siah Brothers Industries 100% Sdn Bhd ◆ 50% Varich Industries Sdn Bhd ▲ 100% Masahmura Sales & Service Sdn Bhd ▲ 51% Kiara Amalan Sdn Bhd ★ 50% Tri-Development Co., Ltd ★ 100% Liga Canggih Sdn Bhd ▲ 40% Paling Industries Sdn Bhd ▲ 49% Pasti Bumi Sdn Bhd ▲ 30% Built SBC Co., Ltd ★ ▲ Strategic Investment ★ Residential Property Development 30% Kanyara Co., Ltd ★ ◆ Investment Holding ● Build / Construction
ANNUAL REPORT 2008 13 Group Financial Highlights FOR THE FINANCIAL YEAR ENDED 31 MARCH 2008 2008 2007 2006 2005 2004 (Restated) RM’000 RM’000 RM’000 RM’000 RM’000 RESULTS Turnover 107,055 77,103 69,927 66,867 86,317 Proﬁt before taxation 4,487 (2,207) 1,369 3,321 6,996 Proﬁt after taxation but before minority interest 3,504 (3,009) 1,047 2,250 2,073 Proﬁt attributable to shareholders 3,514 (3,009) 1,047 2,250 2,073 ASSET EMPLOYED Property, plant and equipment 7,405 8,550 8,243 35,452 36,246 Investments and other assets 190,639 203,129 205,861 192,257 153,703 Net current assets 24,380 8,854 50,881 37,243 73,632 Goodwill and deferred expenditure 27,499 27,499 27,318 27,318 27,318 249,923 248,032 292,303 292,270 290,899 FINANCED BY Share capital 82,435 82,435 82,435 82,435 82,435 Reserves 133,603 130,691 134,294 137,572 135,940 Minority Interests 39 - - - - ABBA bonds - - 43,978 41,752 39,712 Deferred liabilities 33,846 34,906 31,596 30,511 32,812 249,923 248,032 292,303 292,270 290,899 SELECTED RATIOS Net earnings per share (sen) 4.3 (3.7) 1.3 2.7 2.4 Net assets per share (sen) 262 259 263 267 265 Gross dividend (%) 1.5 1.0 1.0 1.0 1.0
14 SBC CORPORATION BERHAD Executive Chairman’s Statement On behalf of the Board of Directors, I am pleased to present the Annual Report and the Audited Financial Statements of the Group and the Company for the ﬁnancial year ended 31 March 2008. FINANCIAL REVIEW The Group recorded a higher revenue of RM 107.05 million compared to the preceding year of RM 77.10 million; an annual increase of 38.8%, reﬂecting contributions from larger projects, primarily PJX, Petaling Jaya’s tallest commercial building and Eua Arthron, the industrialized housing complex in Bangkok. OPERATIONS REVIEW During the year, Group successfully launched three projects; two within its ongoing ﬂagship locations of Sabah and Kuantan with the third being a 34 storey commercial building PJX, Petaling Jaya
ANNUAL REPORT 2008 15 Executive Chairman’s Statement 51 Blocks - 2,287 Units Walk-up Apartment (Eua Arthron Program, Bangkok) in Petaling Jaya. The Group also delivered two phases (4th and 6th) in Kuantan, Suria Setapak’s mixed development and the industrial housing complex in Bangkok. ECONOMIC AND BUSINESS OUTLOOK With higher oil prices and comprehensive drawback of subsidies, real estate dynamics are expected to operate within a higher cost regime. Such a structural shift in cost base will present both opportunities and threats for industry players, underlying the urgency and indeed reafﬁrming SBC’s quest to continue innovating well designed and value enhancing building solutions. DIVIDEND The Board is pleased to recommend a ﬁrst and ﬁnal dividend of 1.5% per ordinary share less 25% tax for the ﬁnancial year ended 31 March 2008 subject to the shareholders’ approval at the forthcoming Annual General Meeting of the Company.
16 SBC CORPORATION BERHAD Executive Chairman’s Statement The Peak Vista, Kota Kinabalu APPRECIATION AND ACKNOWLEDGEMENT On behalf of the Board of Directors, I would like to thank our valued shareholders, joint venture partners, business associates, bankers and government authorities for their conﬁdence, understanding and continued support with the Board and the management of the SBC Group. I would also like to add our appreciation to our customers and supporters of SBC’s products and services, all of whom have place much trust with us, as custodian to their home and property investments.
ANNUAL REPORT 2008 17 Executive Chairman’s Statement Metpark, Kuala Lumpur Lastly, I would like to thank the SBC management team and employees of the Group. Your effective execution of corporate strategies through sheer hard work, commitment and team work in a demanding and ever-changing business environment have certainly contributed much to the success of the Group. Thank you. SIA KWEE MOW @ SIA HOK CHAI JMN,FFB,FCIOB,FAIB Executive Chairman
18 SBC CORPORATION BERHAD Penyata Pengerusi Eksekutif Bagi pihak Lembaga ULASAN KEWANGAN Pengarah, saya Kumpulan telah merekodkan perolehan yang lebih tinggi iaitu sebanyak RM107.05 juta dengan sukacitanya berbanding RM77.10 juta pada tahun sebelumnya; peningkatan tahunan sebanyak 38.8%, membayangkan sumbangan daripada kerja-kerja projek yang lebih besar, membentangkan Laporan terutamanya PJX, bangunan komersial tertinggi di Petaling Jaya dan Eua Arthron, Tahunan dan Penyata perumahan perindustrian di Bangkok. Kewangan yang telah diaudit untuk Kumpulan ULASAN OPERASI dan Syarikat bagi tahun Sepanjang tahun ini, Kumpulan berjaya melancarkan tiga projek; dua projek merupakan kewangan berakhir 31 sambungan pelancaran di lokasi Sabah dan Kuantan. Sementara projek yang ketiga Mac 2008. adalah sebuah bangunan komersial 34 tingkat di Petaling Jaya. Kumpulan juga telah menyiapserahkan dua fasa (4 dan 6) di Kuantan, pembangunan komersial dan perumahan Suria Setapak serta perumahan perindustrian di Bangkok. The Peak Suites, Kota Kinabalu
ANNUAL REPORT 2008 19 Penyata Pengerusi Eksekutif Mastiara Cube, Kuala Lumpur Suria Setapak, Gombak TINJAUAN EKONOMI DAN PERNIAGAAN Dengan peningkatan harga minyak dan pengurangan subsidi oleh kerajaan, sektor harta tanah dijangka akan beroperasi di dalam persekitaran kos tinggi yang mencabar. Perubahan struktur asas kos sedemikian akan menawarkan peluang kepada pelabur- pelabur harta tanah. Dalam keadaan yang genting ini, SBC pasti terus berusaha inovasi ke atas reka bentuk yang terbaik dan penyelesaian yang bermutu tinggi. DIVIDEN Lembaga Pengarah dengan sukacitanya mencadangkan pembayaran dividen pertama dan akhir sebanyak 1.5% sesaham tolak cukai 25% bagi tahun kewangan berakhir 31 Mac 2008. Pembayaran dividen ini adalah tertakluk kepada persetujuan para pemegang saham pada Mesyuarat Agung Tahunan syarikat yang akan datang.
20 SBC CORPORATION BERHAD Penyata Pengerusi Eksekutif Seri Mahkota Aman, Kuantan PENGHARGAAN DAN PENGAKUAN Bagi pihak Lembaga Pengarah, saya ingin mengucapkan ribuan terima kasih kepada para pemegang saham, rakan-rakan bersekutu dan niaga, ahli-ahli bank dan pihak kerajaan di atas keyakinan, persefahaman dan sokongan berterusan mereka terhadap Lembaga Pengarah dan pihak pengurusan Kumpulan SBC. Saya juga ingin mengucapkan terima kasih kepada para pelanggan dan penyokong produk dan perkhidmatan SBC, semua yang telah meletakkan sepenuh kepercayaan kepada kumpulan dalam bidang pelaburan harta dan kediaman.
ANNUAL REPORT 2008 21 Penyata Pengerusi Eksekutif Bandar Ligamas, Batang Kali Akhirnya, saya ingin mengucapkan terima kasih kepada pengurusan dan para pekerja SBC. Pelaksanaan strategi korporat yang berkesan melalui usaha bersungguh-sungguh, komitmen dan kerja sama, terutama di dalam persekitaran perniagaan yang mencabar dan sentiasa berubah, tentunya banyak menyumbangkan kepada kejayaan Kumpulan. Terima kasih. Sia Kwee Mow @ Sia Hok Chai JMN,FFB,FCIOB,FAIB Pengerusi Eksekutif
22 SBC CORPORATION BERHAD Statement of Corporate Governance The Board of Directors of SBC Corporation Berhad remains ﬁrmly committed towards ensuring the highest standard of corporate governance is maintained throughout the Company and its subsidiaries (“the Group”). Hence, the Board is fully dedicated to continuously evaluating the Group’s corporate governance practices and procedures with a view to ensure the principles and best practices in corporate governance as promulgated by the Malaysian Code on Corporate Governance (“the Code”) is applied and adhered to in the best interests of the stakeholders. This disclosure statement sets out the manner in which the Group has applied and complied with the Principles of the Code and the extent of compliance with Best Practices as set out in Part 1 and 2 of the Code. BOARD OF DIRECTORS Composition and Balance The Board as at the date of this statement has 7 members, comprising 3 Independent Non-Executive Directors, 2 Non-Executive Directors and 2 Executive Directors which satisﬁes Bursa Malaysia Securities Berhad (“Bursa Securities”) Listing Requirements of having at least 2 Directors or 1/3 of the Board whichever is higher, who are Independent Directors. The Directors have a wide range of experience and skills and are from diverse backgrounds relevant to managing and directing the Group’s operations. The Executive Directors are responsible for implementing policies of the Board, overseeing the Group’s operations and developing the Group’s business strategies. The role of the Independent Non-Executive Directors is to provide objective and independent judgement to the decision making of the Board and as such, provide an effective check and balance to the Board’s decision making process. The Board is satisﬁed that the current Board composition fairly reﬂects the investment of minority shareholders in the Company and represents the needed mix of skills and experience required to discharge the Board’s duties and responsibilities. Furthermore, no individual Director or group of Directors can dominate the Board’s decision making process. The proﬁles of the members of the Board are set out in this Annual Report under the section named Proﬁle of the Directors. Duties and Responsibilities The Board recognises its key role in charting the strategic direction, development and control of the Group and has adopted the speciﬁc responsibilities that are listed in the Code, which facilitates the discharge of the Board’s stewardship responsibilities. The roles of the Chairman and Managing Director are clearly distinct to ensure that there is a balance of power and authority. The Chairman is primarily responsible for the orderly conduct and working of the Board whilst the Managing Director is responsible for the day-to-day running of the business and implementation of Board policies and decisions adopted by the Board. Dato’ Lim Phaik Gan is the Senior Independent Non-Executive Director to whom concerns may be conveyed.
ANNUAL REPORT 2008 23 Statement of Corporate Governance BOARD OF DIRECTORS (cont’d) Board Meetings The Board meets on a scheduled basis once every quarter with additional meetings held as and when urgent issues and important decisions are required to be taken between the scheduled meetings. During the ﬁnancial year ended 31 March 2008, the Board met 4 times where it deliberated on and considered matters relating to the Group’s ﬁnancial performance, signiﬁcant investments, corporate development, strategic issues and business plan. Details of each Director’s attendance of Board meetings are set out as follows: No. of meetings held during the ﬁnancial year ended No. of meetings Name of Director 31 March 2008 attended Sia Kwee Mow @ Sia Hok Chai (Executive Chairman) 4 4 Sia Teong Heng (Managing Director) 4 3 Mun Chong Shing @ Mun Chong Tian (Non-Executive Director) 4 4 Dato’ Zainol Abidin bin Haji A. Hamid (Non-Executive Director) 4 4 Dato’ Lim Phaik Gan (Independent Non-Executive Director) 4 4 Dato’ Dr. Norraesah bt. Haji Mohamad (Independent Non-Executive Director) 4 4 Ahmad Fizal bin Othman (Independent Non-Executive Director) 4 4 The Board members have unrestricted and timely access to all information necessary for the discharge of their responsibilities. All Directors are provided with all relevant information and reports on ﬁnancial, operational, corporate, regulatory, business development by way of Board papers or upon speciﬁc request for informed decision making and effective discharge of their duties. These documents are comprehensive and include qualitative and quantitative information to enable the Board members to make informed decisions. Notice of Board Meetings and board papers are provided to Directors in advance so that meaningful deliberation and sound decisions can be made at Board meetings. All proceedings of the Board meetings are minuted by the Company Secretary. There is a formal schedule of matters reserved speciﬁcally for Board’s decisions. These include approval of key policies, signiﬁcant acquisitions and disposals of assets, signiﬁcant investments and approval of budgets and corporate plans. To assist in the discharge of their responsibilities and duties, all Directors have access to the advice and services of the Company Secretary. If required, the Directors may engage independent professionals at the Group’s expense, in the furtherance of their duties.
24 SBC CORPORATION BERHAD Statement of Corporate Governance BOARD OF DIRECTORS (cont’d) Re-election and Re-appointment of Directors In accordance with the Company’s Articles of Association, one third of the Directors shall retire by rotation from ofﬁce and be eligible for re-election at the annual general meeting and all Directors appointed by the Board are subject to re-election by shareholders at the ﬁrst opportunity after their appointment. Furthermore, each Director shall retire from ofﬁce at least once in every three years. Directors who are of or over the age of seventy years shall also retire from ofﬁce and be eligible for re-appointment at the annual general meeting pursuant to Section 129 (6) of the Companies Act, 1965. Directors’ Training All members of the Board have attended the Mandatory Accreditation Programme. Pursuant to Paragraph 15.09 of the Bursa Securities Listing Requirements, the Board is responsible to identify the training needs of its Directors which will aid them in the discharge of their duties on a continuous basis. The Board noted that the Nomination Committee is satisﬁed that the Board comprises qualiﬁed people with professional background, expertise in various ﬁelds and practical experience. Nevertheless, the Board encourages its Directors to go for training on their own initiative from time to time in order to keep them abreast of the latest developments in the market-place as well as the current changes in the laws, regulations and accounting standards. During the ﬁnancial year, all the members of the Board attended a half-day training course entitled “Boardroom Brieﬁng for PLC directors / CEO’s”. For new Directors, a familiarisation program will be conducted for them. This includes a presentation of the Group’s operations by senior management and visits to the existing project sites. Board Committees The Board has delegated certain of its responsibilities to the three Committees, namely the Audit, the Nomination and the Remuneration Committees with clearly deﬁned terms of reference in assisting the Board to discharge its duties and responsibilities effectively. AUDIT COMMITTEE The report of the Audit Committee is set out on pages 33 to 37 of this annual report.
ANNUAL REPORT 2008 25 Statement of Corporate Governance NOMINATION COMMITTEE (“NC”) The NC has held one meeting during the ﬁnancial year ended 31 March 2008. The attendance of the members of the NC at the meeting is as follows:- No. of meetings held during the ﬁnancial year ended No. of meetings Name of members 31 March 2008 attended Dato’ Lim Phaik Gan – Chairperson (Independent Non-Executive Director) 1 1 Dato’ Dr. Norraesah bt Haji Mohamad (Independent Non-Executive Director) 1 1 Ahmad Fizal bin Othman (Independent Non-Executive Director) 1 1 Mun Chong Shing @ Mun Chong Tian (Non-Executive Director) 1 1 The terms of reference of the NC are as follows: (a) Membership The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist exclusively of non- executive Directors, with a minimum of 3, a majority of whom are independent. The members of the Committee shall elect the Chairman from among their number who shall be an independent director. In order to form a quorum in respect of a meeting of the Committee, the members present must be wholly or a majority of whom must be independent directors. (b) Frequency of meetings Meetings shall be held not less than once a year. The Company Secretary shall be the Secretary of the Committee. (c) Authority The Committee is to recommend new nominees for the Board and the board committees and to assess Directors on an on-going basis. The actual decision as to who shall be nominated should be the responsibility of the full Board after considering the recommendations of the Committee.
26 SBC CORPORATION BERHAD Statement of Corporate Governance NOMINATION COMMITTEE (“NC”) (cont’d) (d) Duties The duties of the Committee shall be: (i) to recommend to the Board, candidates for all directorships and in doing so, preference shall be given to shareholders or existing Board members and candidates proposed by the Chief Executive Ofﬁcer and, within the bounds of practicability, by any other senior executive or any director or shareholder may also be considered. (ii) to recommend to the Board, directors to ﬁll the seats on board committees. (iii) to review annually, on behalf of the Board, the required mix of skills, experience and other qualities, including core competencies, which non-executive directors should bring to the Board. (iv) to carry out annually, on behalf of the Board, the assessment of the effectiveness of the Board as a whole, the board committees and the contribution of each director. (e) Reporting procedures The Company Secretary shall circulate the minutes of meetings of the Committee to all members of the Board. At the meeting of the NC during the ﬁnancial year ended 31 March 2008, the following matters were considered and resolved: (a) re-appointment and re-election of Directors at the Eighteenth Annual General Meeting; (b) mix of skills, experience and qualities of all Directors; and (c) the effectiveness of the Board and the contribution from each Board member. REMUNERATION COMMITTEE (“RC”) The members of the RC at the date of this report and their attendance at the meeting convened during the ﬁnancial year ended 31 March 2008 are as follows: No. of meetings held during the ﬁnancial year ended No. of meetings Name of members 31 March 2008 attended Dato’ Zainol Abidin bin Haji A. Hamid - Chairman (Non-Executive Director) 1 1 Dato’ Lim Phaik Gan (Independent Non-Executive Director) 1 1 Dato’ Dr. Norraesah bt Haji Mohamad (Independent Non-Executive Director) 1 1 Sia Teong Heng (Managing Director) 1 1
ANNUAL REPORT 2008 27 Statement of Corporate Governance The terms of reference of the RC are as follows: (a) Membership The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of at least 3 directors, wholly or a majority of whom are non-executive directors. The members of the Committee shall elect the Chairman from among their number who shall be a non-executive director. In order to form a quorum in respect of a meeting of the Committee, the members present must be wholly or a majority of whom must be non-executive directors. (b) Frequency of meetings Meetings shall be held not less than once a year. The Company Secretary shall be the Secretary of the Committee. (c) Authority The Committee is authorized to draw from outside advice as and when necessary in forming its recommendation to the Board on the remuneration of the executive directors in all its forms. Executive directors should play no part in decisions on their own remuneration and should abstain from discussion of their own remuneration. The determination of the remuneration packages of the non-executive directors, including non-executive chairman, should be a matter for the Board as a whole. The individuals concerned should abstain from discussion of their own remuneration. (d) Duties The duty of the Committee is to recommend to the Board the structure and level of remuneration of executive directors. (e) Reporting procedures The Company Secretary shall circulate the minutes of meetings of the Committee to all members of the Board. During the ﬁnancial year ended 31 March 2008, the RC met once to consider the remuneration of the Executive Chairman and Managing Director for 2008.
28 SBC CORPORATION BERHAD Statement of Corporate Governance DIRECTORS’ REMUNERATION The details of the remuneration of each Director during the ﬁnancial year ended 31 March 2008 are as follows: (a) Total Remuneration Basic Beneﬁts Attendance Salary Bonuses Fees -in-kind Fee Total RM RM RM RM RM RM Executive Sia Kwee Mow @ Sia Hok Chai 555,510 191,520 - 16,925 - 763,955 Sia Teong Heng 487,725 166,320 - - - 654,045 Non-Executive Mun Chong Shing @ Mun Chong Tian - - 24,000 - 1,500 25,500 Dato’ Zainol Abidin bin Haji A. Hamid - - 25,000 - 1,500 26,500 Dato’ Lim Phaik Gan - - 25,000 - 3,000 28,000 Dato’ Dr. Norraesah bt. Haji Mohamad - - 25,000 - 3,000 28,000 Ahmad Fizal bin Othman - - 24,000 - 2,700 26,700 Total 1,043,235 357,840 123,000 16,925 11,700 1,552,700 (b) Directors’ remuneration by bands Executive Non-Executive Total RM1 to RM50,000 - 5 5 RM50,001 to RM100,000 - - - RM100,001 to RM150,000 - - - RM150,001 to RM200,000 - - - RM200,001 to RM250,000 - - - RM250,001 to RM300,000 - - - RM300,001 to RM350,000 - - - RM350,001 to RM400,000 - - - RM400,001 to RM450,000 - - - RM450,001 to RM500,000 - - - RM500,001 to RM550,000 - - - RM550,001 to RM600,000 - - - RM600,001 to RM650,000 - - - RM650,001 to RM700,000 1 - 1 RM700,001 to RM750,000 - - - RM750,001 to RM800,000 1 - 1 Total 2 5 7
ANNUAL REPORT 2008 29 Statement of Corporate Governance ACCOUNTABILITY AND AUDIT Financial Reporting The Board aims to convey a balanced and understandable assessment of the Group’s ﬁnancial position and prospects through the quarterly results and annual reports/ﬁnancial statements to the Company’s shareholders and regulators. The Responsibility Statement by the Directors pursuant to Bursa Securities Listing Requirements is set out on page 38. Internal Control The Board acknowledges its responsibility for maintaining a sound internal controls system, which provides reasonable assurance in ensuring the effectiveness and efﬁciency of operations and the safeguard of assets and interest in compliance with laws and regulations as well as with internal ﬁnancial administration procedures and guidelines. The Group’s Statement on Internal Control is set out on pages 31 to 32. Relationship with Auditors The Board maintains a close and transparent professional relationship with the Group’s internal and external auditors through the Audit Committee. In the course of audit of the Group’s operations, the internal and external auditors have highlighted all important matters to the Audit Committee. The Audit Committee will then bring up the matters for the Board’s attention if it is necessary. The Group has paid RM169,200 of non-audit fees to the external auditors for the ﬁnancial year ended 31 March 2008. Relationship with Shareholders and Investors The primary tools of communication with the shareholders of the Company are through the annual report, announcements through Bursa Securities and circulars. All queries from shareholders and members of public received through phone calls or letters are handled by the Executive Directors, Group Financial Controller and Company Secretary. At the annual general meeting and extraordinary general meeting, the Chairman gives shareholders ample opportunity to participate through questions on the prospects, performance of the Group and other matters of concern to them with the Board.
30 SBC CORPORATION BERHAD Statement of Corporate Governance ADDITIONAL COMPLIANCE INFORMATION In conformance with the requirements of Bursa Securities, the following compliance information is provided: 1. Revaluation Policy on Landed Properties The Group’s landed properties are stated at cost. There is no policy of regular revaluation of its landed properties as at the end of the ﬁnancial year ended 31 March 2008. 2. Materials Contracts There were no material contracts entered into by the Company and its subsidiaries which involved the directors’ and major shareholders’ interests subsisting at the end of the ﬁnancial year ended 31 March 2008 or entered into since the end of the previous ﬁnancial year. 3. Utilisation of Proceeds There were no proceeds raised from any proposals by the Company during the ﬁnancial year. 4. Share Buy-backs There were no share buy-backs by the Company during the ﬁnancial year. 5. Options, Warrants or Convertible Securities There were no options, warrants or convertible securities issued by the Company during the ﬁnancial year. 6. American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) During the ﬁnancial year, the Company did not sponsor any ADR or GDR programme. 7. Sanctions and / or Penalties There were no sanctions and / or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the ﬁnancial year. 8. Variation in Results There was no material variation between the results for the ﬁnancial year and the unaudited results previously announced. 9. Proﬁt Guarantee There was no proﬁt guarantee given by the Company in respect of the ﬁnancial year. 10. Corporate Social Responsibility There were no corporate social responsibility activities undertaken by the Company and its subsidiaries during the ﬁnancial year.
ANNUAL REPORT 2008 31 Statement of Internal Control INTRODUCTION The Board of Directors of SBC Corporation Berhad is pleased to present its Statement on Internal Control as a Group, made in compliance with Paragraph 15.27 (b) of the Listing Requirements of Bursa Malaysia Securities Berhad and the Statement on Internal Control: Guidance for Directors of Public Listed Companies. BOARD RESPONSIBILITY The Board has an overall responsibility for the Company’s system of internal controls, which includes the establishment of an appropriate control environment and framework, and the review of its effectiveness, adequacy and integrity. This includes identifying the major business risks faced by the Group and determining the appropriate course of action to manage those risks. In this regard, the Board has delegated such responsibilities to the Audit Committee. Only signiﬁcant internal control issues are brought to the attention of the Board by the Audit Committee. In view of the inherent limitations in any system of internal controls, the system designed can only manage rather than eliminate all risks of failure to achieve the business objectives of the Group. Accordingly, the established system of internal control can only provide reasonable but not absolute assurance against material misstatement or losses, fraud or breaches of law or regulations. RISK MANAGEMENT FRAMEWORK Risk management is seen as an integral part of the Group’s business operations by the Board. The Group has in place an ongoing process for identifying, evaluating and managing the signiﬁcant risks faced by the Group, throughout the ﬁnancial year under review. Senior management will assess and appraise the cost and beneﬁts, impact on the Group, review the ﬁnancial implications before any investment or signiﬁcant expenditure is made. This ongoing process is undertaken for all the major subsidiaries of the Group and the processes, ﬁndings and actions taken by the Management are all reviewed regularly by the Board. INTERNAL AUDIT The Group’s internal control systems are continually being reviewed and enhanced to ensure that changes in the Group’s business and operating environment are adequately managed. The Board currently obtains regular assurance on the adequacy and effectiveness of the internal control system through independent appraisals performed by the outsourced internal audit function. During the ﬁnancial year under review, the outsourced internal audit function conducted reviews based on an approved internal audit plan and the results of these reviews are tabled at the Audit Committee’s meetings. In addition, the internal audit function carried out follow-up visits to ensure that recommendations for improving the internal control systems are satisfactorily implemented.
32 SBC CORPORATION BERHAD Statement of Internal Control KEY ELEMENTS OF INTERNAL CONTROL The key processes that the Board has established in reviewing the adequacy and integrity of the Group’s system of internal control include the following:- 1. A well deﬁned organisational structure with proper segregation of duties, clear lines of accountability and which has a documented delegation of authority that sets out the decisions that need to be taken and the appropriate authority levels of management including matters that require Board approval;
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