SBC Corporation Berhad: Annual Audited Accounts 2005

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

DIRECTORS’ REPORT

The directors hereby submit their report and the audited financial statements of the Group and of the
Company for the financial year ended 31 March 2005.

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

RESULTS THE GROUP THE COMPANY
RM RM

Profit after taxation for the financial year 2,250,429 1,237,629

DIVIDENDS
Since the end of the previous financial year, the Company paid a dividend of 5.5% per
Irredeemable Convertible Cumulative Preference Share (“ICCPS”) less 28% tax amounting to
RM270,587 in respect of the previous financial year, in accordance with the terms of issue of the
ICCPS and a first and final dividend of 1% per ordinary share less 28% tax amounting to
RM593,527 in respect of the previous financial year.

For the current financial year,

(a) the directors have declared the payment of a dividend of 5.5% per ICCPS less 28% tax
amounting to RM24,463, in accordance with the terms of issue of the ICCPS; and

(b) the directors recommend the payment of first and final dividend of 1% per ordinary shares
less 28% tax amounting to RM593,527.

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

Page 1


DIRECTORS’ REPORT

ISSUES OF SHARES AND DEBENTURES
During the financial year,
(a) there were no changes in the authorised and issued and paid-up share capital of the
Company except that the ICCPS were converted into 6,833,000 ordinary shares of RM1
each of the Company on their maturity date on 4 May 2004. The new shares which arose
from the conversion of the ICCPS rank pari passu in all respects with the existing shares
of the Company; and

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

EMPLOYEE SHARE OPTION SCHEME (“ESOS”)
Pursuant to the ESOS which was implemented on 14 July 2000, the movement in the options to
subscribe for new shares of RM1 each in the Company at an exercise price of RM1.40 per share
is as follows:-
NUMBER OF
ORDINARY
SHARES OF
RM1 EACH
UNDER OPTION

At 1 April 2004 1,490,000
Exercised during the financial year -
Lapsed during the financial year due to staff resignation (79,000)

At 31 March 2005 1,411,000

The salient features of the ESOS are as follows:-

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

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

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

Page 2


DIRECTORS’ REPORT

EMPLOYEE SHARE OPTION SCHEME (“ESOS”) (CONT’D)
(iv) the subscription price was based on the weighted average market price of the shares as
shown in the Daily Official List of the Bursa Malaysia Securities Berhad for the 5 market days
prior to the date of offer with an allowance for a discount of not more than 10% therefrom or
at par value, whichever is higher; and

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

The ESOS was expired on 13 July 2005.

OPTIONS GRANTED OVER UNISSUED SHARES
During the financial year, no options were granted by the Company to any person to take up any
unissued shares in the Company, other than the existing options under the ESOS.

BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were made out, the directors took
reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts
and the making of allowance for doubtful debts, and satisfied themselves that there are no known
bad debts and that adequate allowance had been made for doubtful debts.

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

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

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

Page 3


DIRECTORS’ REPORT

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

CONTINGENT AND OTHER LIABILITIES
The contingent liability of the Company is disclosed in Note 43 to the financial statements. At the
date of this report, there does not exist:-

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

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

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

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

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

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

Page 4


DIRECTORS’ REPORT

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

SIA KWEE MOW @ SIA HOK CHAI
SIA TEONG HENG
MUN CHONG SHING @ MUN CHONG TIAN
DATO’ LIM PHAIK GAN
DATO’ DR. NORRAESAH BT HAJI MOHAMAD
DATO’ ZAINOL ABIDIN BIN HAJI A. HAMID
AHMAD FIZAL BIN OTHMAN

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

Pursuant to Article 77 of the Articles of Association of the Company, Mun Chong Shing @ Mun
Chong Tian and Dato’ Dr. Norraesah Bt Haji Mohamad retire by rotation at the forthcoming Annual
General Meeting and, being eligible, offer themselves for re-election.

DIRECTORS’ INTERESTS
According to the register of directors’ shareholdings, the interests of directors holding office at the
end of the financial year in shares and options under the ESOS in the Company during the financial
year are as follows:-

NUMBER OF ORDINARY SHARES OF RM1 EACH
AT AT
1.4.2004 BOUGHT SOLD 31.3.2005
DIRECT INTERESTS
SIA KWEE MOW @ SIA HOK CHAI 1,480,800 - - 1,480,800
SIA TEONG HENG 1,327,992 1,190,000 - 2,517,992
MUN CHONG SHING @ MUN CHONG TIAN 21,782 - - 21,782

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

NUMBER OF ORDINARY SHARES OF RM1 EACH
UNDER OPTION
AT AT
1.4.2004 GRANTED EXERCISED 31.3.2005
DIRECT INTERESTS
SIA KWEE MOW @ SIA HOK CHAI 450,000 - - 450,000
SIA TEONG HENG 350,000 - - 350,000

Page 5


DIRECTORS’ REPORT

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

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

DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive
any benefit (other than a benefit included in the aggregate amount of emoluments received or due
and receivable by directors as shown in the financial statements, or the fixed salary of a full-time
employee of the Company) by reason of a contract made by the Company or a related corporation
with the director or with a firm of which the director is a member, or with a company in which the
director has a substantial financial interest except for any benefits which may be deemed to arise
from transactions entered into in the ordinary course of business with companies in which certain
directors have substantial financial interests as disclosed in Note 42 to the financial statements.

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

SIGNIFICANT EVENT DURING THE FINANCIAL YEAR
The significant event during the financial year of the Company is disclosed in Note 47 to the financial
statements.

Page 6


DIRECTORS’ REPORT

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

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS
DATED 20 JULY 2005

Sia Kwee Mow @ Sia Hok Chai

Mun Chong Shing @ Mun Chong Tian

Page 7


STATEMENT BY DIRECTORS

We, Sia Kwee Mow @ Sia Hok Chai and Mun Chong Shing @ Mun Chong Tian, being two of the
directors of SBC Corporation Berhad, state that, in the opinion of the directors, the financial
statements set out on pages 11 to 67 are drawn up in accordance with applicable approved
accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a
true and fair view of the state of affairs of the Group and of the Company at 31 March 2005 and
of their results and cash flows for the financial year ended on that date.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS
DATED 20 JULY 2005

Sia Kwee Mow @ Sia Hok Chai Mun Chong Shing @ Mun Chong Tian

STATUTORY DECLARATION

I, Ng Kee Chye, I/C No. 640324-06-5691, being the officer primarily responsible for the financial
management of SBC Corporation Berhad, do solemnly and sincerely declare that the financial
statements set out on pages 11 to 67 are, to the best of my knowledge and belief, correct, and I
make this solemn declaration conscientiously believing the same to be true and by virtue of the
provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by
Ng Kee Chye, I/C No. 640324-06-5691,
at Kuala Lumpur in the Federal Territory
on this 20 July 2005

Ng Kee Chye

Before me,

Datin Hajah Raihela Wanchik (W275)
Commissioner for Oaths

Page 8

REPORT OF THE AUDITORS TO THE MEMBERS OF
(Incorporated In Malaysia)

We have audited the financial statements set out on pages 11 to 67. The preparation of the
financial statements is the responsibility of the Company’s directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial
statements and to report our opinion to you, as a body, in accordance with Section 174 of the
Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other
person for the content of this report.

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

In our opinion,

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

(i) the state of affairs of the Group and of the Company at 31 March 2005 and their
results and cash flows for the financial year ended on that date; and

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

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

We have considered the financial statements and the auditors’ reports thereon of the
subsidiaries for which we have not acted as auditors, as indicated in Note 6 to the financial
statements.

Page 9

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

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

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

Horwath Onn Kien Hoe
Firm No: AF 1018 Approval No: 1772/11/06 (J/PH)
Chartered Accountants Partner

Kuala Lumpur
20 July 2005

Page 10


BALANCE SHEETS AT 31 MARCH 2005

THE GROUP THE COMPANY
2005 2004 2005 2004
NOTE RM RM RM RM
NON-CURRENT
ASSETS
Investment in
subsidiaries 6 - - 211,064,785 211,064,785
Interest in associates 7 112,262,828 112,064,656 2,400,000 2,400,000
Property, plant and
equipment 8 35,452,368 36,246,114 17,636 35,428
Investment properties 9 79,718,099 41,391,466 - -
Other assets 10 276,107 247,107 - -
Goodwill on
consolidation 11 27,317,640 27,317,640 - -

255,027,042 217,266,983 213,482,421 213,500,213

CURRENT ASSETS
Inventories 12 4,359,492 8,604,731 - -
Property development
costs 13 54,745,687 50,449,300 - -
Receivables 14 28,150,859 66,593,226 143,077 209,050
Amount owing by
contract customers 15 969,629 4,775,992 - -
Amounts owing by
subsidiaries 16 - - 61,299,355 55,919,091
Amount owing by
associates 17 5,399,534 5,533,926 11,434 11,434
Tax recoverable 18 6,607,700 8,331,990 8,597,916 11,823,151
Short term deposits
with licensed banks 19 1,364,225 1,407,125 1,239,225 1,239,225
Cash and bank
balances 20 5,612,658 3,474,278 4,027,843 2,012,100

107,209,784 149,170,568 75,318,850 71,214,051

CURRENT LIABILITIES
Amount owing to
contract customers 15 8,194 1,601,053 - -
Payables 21 29,491,952 28,718,800 256,127 230,925
Amounts owing to
subsidiaries 16 - - 15,155,558 12,563,323
Amounts owing to
associates 17 547,586 78,236 - -
Amounts owing to
directors 22 1,867,680 2,450,481 1,867,680 1,967,680
Dividend payable - 270,587 - 270,587
Short term borrowings 23 16,749,403 19,301,127 5,000,000 5,000,000
ABBA Bonds 24 2,478,450 2,478,450 2,478,450 2,478,450
Bank overdrafts 25 18,824,019 20,640,185 5,760,593 6,580,169

69,967,284 75,538,919 30,518,408 29,091,134

NET CURRENT ASSETS 37,242,500 73,631,649 44,800,442 42,122,917

292,269,542 290,898,632 258,282,863 255,623,130

The annexed notes form an integral part of these financial statements. Page 11


BALANCE SHEETS AT 31 MARCH 2005 (CONT’D)

2005 2004 2005 2004
NOTE RM RM RM RM

FINANCED BY:-
Share capital 26 82,435,000 82,435,000 82,435,000 82,435,000
Reserves 27 137,572,393 135,939,954 134,096,236 133,476,597

Shareholders’ equity 220,007,393 218,374,954 216,531,236 215,911,597
ABBA Bonds 24 41,751,627 39,711,533 41,751,627 39,711,533
Non-current liabilities 28 29,543,776 31,845,399 - -
Deferred taxation 31 966,746 966,746 - -

292,269,542 290,898,632 258,282,863 255,623,130

NET TANGIBLE ASSETS
PER ORDINARY
SHARE (RM) 32 2.34 2.44



INCOME STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2005

2005 2004 2005 2004
NOTE RM RM RM RM

TURNOVER 33 66,867,133 86,316,639 8,905,128 7,220,737

COST OF SALES 34 (52,428,581) (68,900,779) - -

GROSS PROFIT 14,438,552 17,415,860 8,905,128 7,220,737

OTHER OPERATING
INCOME 1,026,365 3,911,925 50,850 -

ADMINISTRATIVE
EXPENSES (7,541,549) (7,420,741) (1,200,429) (891,180)

OTHER OPERATING
EXPENSES (1,215,804) (3,270,390) (293,501) (326,746)

PROFIT FROM
OPERATIONS 6,707,564 10,636,654 7,462,048 6,002,811

FINANCE COSTS (4,953,038) (7,263,617) (5,602,597) (5,533,390)

SHARE OF PROFITS
OF ASSOCIATES 1,566,728 3,623,112 - -

PROFIT BEFORE
TAXATION 35 3,321,254 6,996,149 1,859,451 469,421

TAXATION 36 (1,070,825) (4,923,154) (621,822) (821,855)

PROFIT/(LOSS)
AFTER TAXATION 2,250,429 2,072,995 1,237,629 (352,434)

Earnings per share
- basic 37 2.7 sen 2.4 sen
- diluted 37 N/A N/A

Dividend per ordinary
share
- final 38 - 1 sen



STATEMENTS OF CHANGES IN EQUITY

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

Balance at 1.4.2003 82,435,000 111,412,895 22,068,982 1,199,999 217,116,876

Profit after taxation for the
financial year - - 2,072,995 - 2,072,995

Dividends 38 - - (814,917) - (814,917)

Balance at 31.3.2004/
1.4.2004 82,435,000 111,412,895 23,327,060 1,199,999 218,374,954

financial year - - 2,250,429 - 2,250,429

Dividends 38 - - (617,990) - (617,990)

Balance at 31.3.2005 82,435,000 111,412,895 24,959,499 1,199,999 220,007,393

THE COMPANY

Balance at 1.4.2003 82,435,000 111,412,895 23,231,053 - 217,078,948

Loss after taxation for the
financial year - - (352,434) - (352,434)

Dividends 38 - - (814,917) - (814,917)

Balance at
31.3.2004/1.4.2004 82,435,000 111,412,895 22,063,702 - 215,911,597

financial year - - 1,237,629 - 1,237,629

Dividends 38 - - (617,990) - (617,990)

Balance at 31.3.2005 82,435,000 111,412,895 22,683,341 - 216,531,236

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

2005 2004
RM RM

The Company 22,683,341 22,063,702
Subsidiaries (15,098,921) (15,582,983)
Associates 17,375,079 16,846,341

24,959,499 23,327,060



CASH FLOW STATEMENTS

2005 2004 2005 2004
NOTE RM RM RM RM
CASH FLOWS FROM/
(FOR) OPERATING ACTIVITIES
Profit before taxation 3,321,254 6,996,149 1,859,451 469,421

Adjustments for:-
Allowance for doubtful debts - 828,553 - -
Amortisation of bonds
expenses 275,709 303,272 275,709 303,272
Depreciation of
property, plant
and equipment 459,128 446,060 17,792 23,474
Interest expense/
finance charges 4,844,740 7,110,435 5,583,651 5,506,995
Impairment loss on
interest in an
associate 330,565 - - -
Plant and equipment
written off - 13,663 - -
Other investment
written off 45,000 135,000 - -
Dividend income - - (5,404,800) (4,928,000)
Loss/(Gain) on disposal
of property, plant and
equipment 19,177 (313,882) - -
(Gain)/Loss on disposal of
investment properties (15,082) 1,557,400 - -
Interest income (203,425) (107,322) (1,389,168) (612,688)
Write-back of allowance
for doubtful debts (58,356) - (50,850) -
Share of profits in
associates (1,566,728) (3,623,112) - -

Operating profit before
working capital
changes 7,451,982 13,346,216 891,785 762,474
Decrease in inventories 4,245,239 5,505,180 - -
(Increase)/Decrease in property
development costs (3,028,141) 4,712,161 - -
Decrease/(Increase) in
receivables 598,481 658,195 116,823 (85,088)
Increase/(Decrease) in
payables 1,291,820 1,707,814 25,202 (100,567)
Net decrease/(increase) in amount
owing by contract customers 2,213,504 (7,259,250) - -

CASH FROM OPERATIONS 12,772,885 18,670,316 1,033,810 576,819
Interest paid (544,034) (3,402,444) (1,282,945) (1,375,706)
Tax refundable/(paid) 1,256,001 (6,780,583) 4,116,757 -

NET CASH FROM/(FOR)
OPERATING ACTIVITIES
CARRIED FORWARD 13,484,852 8,487,289 3,867,622 (798,887)



FOR THE FINANCIAL YEAR ENDED 31 MARCH 2005 (CONT’D)

2005 2004 2005 2004
NOTE RM RM RM RM

NET CASH FROM/
(FOR) OPERATING
ACTIVITIES
BROUGHT FORWARD 13,484,852 8,487,289 3,867,622 (798,887)

CASH FLOWS (FOR)/
FROM INVESTIING
ACTIVITIES
Interest received 203,425 107,322 1,389,168 612,688
Dividends received
from subsidiaries - - 3,456,000 2,304,000
Dividends received
from associates 435,456 1,526,883 435,456 1,244,160
Purchase of property,
plant and equipment (408,819) (924,876) - (5,750)
Purchase of
investment properties (1,640,541) (3,110,115) - -
Proceeds from
disposal of property,
plant and equipment 7,700 345,560 - -
Proceeds from
disposal of investment
properties 556,200 1,910,000 - -
Incidental expenses
on investment
properties (424,603) (20,000) - -
(Placement)/Withdrawal
of cash in sinking fund
account (2,015,883) 3,188,398 (2,015,883) 3,188,398

NET CASH (FOR)/FROM
INVESTING ACTIVITIES (3,287,065) 3,023,172 3,264,741 7,343,496

BALANCE CARRIED
FORWARD 10,197,787 11,510,461 7,132,363 6,544,609



FOR THE FINANCIAL YEAR ENDED 31 MARCH 2005 (CONT’D)

2005 2004 2005 2004
Note RM RM RM RM

BALANCE BROUGHT
FORWARD 10,197,787 11,510,461 7,132,363 6,544,609

CASH FLOWS FOR
FINANCING ACTIVITIES
Payment of bonds
expenses (57,871) (71,722) (57,871) (71,722)
Repayment of bonds 24 (2,478,450) (2,478,450) (2,478,450) (2,478,450)
Repayment to directors (582,801) - (100,000) -
Net repayment by
associates 603,742 3,994 - -
Net advances to
subsidiaries - - (2,788,029) (3,346,586)
Dividend paid to
shareholders of the
company (593,527) (544,330) (593,527) (544,330)
Dividend paid to
holders of ICCPS (295,050) (270,587) (295,050) (270,587)
Repayment of revolving credit (1,350,000) (500,000) - -
Repayment of loans (3,460,283) (6,460,269) - -
Repayment to hire
purchase payables (87,784) (87,784) - -

NET CASH FOR
FINANCING ACTIVITIES (8,302,024) (10,409,148) (6,312,927) (6,711,675)

NET INCREASE/(DECREASE)
IN CASH AND CASH
EQUIVALENTS 1,895,763 1,101,313 819,436 (167,066)

CASH AND CASH
EQUIVALENTS AT
BEGINNING OF FINANCIAL
YEAR (17,768,782) (18,870,095) (5,338,844) (5,171,778)

CASH AND CASH
EQUIVALENTS AT
END OF THE
FINANCIAL YEAR 39 (15,873,019) (17,768,782) (4,519,408) (5,338,844)



NOTES TO FINANCIAL STATEMENTS

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

The financial statements were authorised for issue by the Board of Directors in
accordance with a resolution of the directors dated 20 July 2005.

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

3. FINANCIAL RISK MANAGEMENT POLICIES
The Group's financial risk management policy seeks to ensure that adequate financial
resources are available for the development of the Group's business whilst managing its
foreign currency, interest rate, market, credit, liquidity and cash flow risks. The policies in
respect of the major areas of treasury activity are as follows:-

(a) Foreign Currency Risk

The Group does not have material foreign currency transactions, assets or
liabilities and hence is not exposed to any significant or material currency risks.

(b) Interest Rate Risk

The Group obtains financing through bank borrowings and hire purchase facilities.
Its policy is to obtain the most favourable interest rates available.

Surplus funds are placed with licensed financial institutions at the most favourable
interest rates.

Page 18



3. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)
(c) Market Risk

The Group’s principal exposure to market risks arises mainly from changes in
quoted equity prices. The Group does not use derivative instruments to manage
equity risk.

(d) Credit Risk

The Group's exposure to credit risks, or the risk of counterparties defaulting,
arises mainly from receivables. The maximum exposure to credit risks is
represented by the total carrying amount of these financial assets in the balance
sheet reduced by the effects of any netting arrangements with counterparties.

The Group does not have any major concentration of credit risk related to any
individual customer or counterparty.

The Group manages its exposure to credit risk by investing its cash assets safely
and profitably, and by the application of credit approvals, credit limits and
monitoring procedures on an ongoing basis.

(e) Liquidity and Cash Flow Risk
The Group's exposure to liquidity and cashflow risks arises mainly from general
funding and business activities.
It practises prudent liquidity risk management by maintaining sufficient cash
balances and the availability of funding through certain committed credit facilities.

4. BASIS OF ACCOUNTING
The financial statements are prepared under the historical cost convention and modified to
include other bases of valuation as disclosed in other sections under significant accounting
policies, and in compliance with applicable approved accounting standards in Malaysia and
the provisions of the Companies Act, 1965.

Page 19



5. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the
Company and all its subsidiaries made up to 31 March 2005.

A subsidiary is defined as an enterprise in which the Company has the power,
directly or indirectly, to exercise control over the financial and operating policies so as
to obtain benefits from its activities.

All subsidiaries are consolidated using the acquisition method of accounting. Under
the acquisition method of accounting, the results of subsidiaries acquired or disposed
off are included from the date of acquisition or up to the date of disposal. At the date
of acquisition, the fair value of the subsidiaries’ net assets are determined and these
values are reflected in the consolidated financial statements.

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

(b) Goodwill or Negative Goodwill On Consolidation

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

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

Page 20



5. 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 policy
decisions of the associates but not control over those policies. Interest in associates
are accounted for in the consolidated financial statements by the equity method of
accounting.
Equity accounting involves recognising in the income statement the Group’s share of
the results of the associates for the period. The Group’s interest in associates is
carried in the balance sheet at an amount that reflects its share of the assets of the
associates and includes goodwill on acquisition. At the date of acquisition, the fair
values of the associates’ net assets are determined and these values are reflected in
the consolidated financial statements. Equity accounting is discontinued when the
carrying amount of the interest in an associate reaches zero, unless the Group has
incurred obligations or guaranteed obligations in respect of the associate.
Unrealised gains on transactions between the Group and its associates are
eliminated to the extent of the Group’s interest in the associates; unrealised losses
are also eliminated unless the transaction provides evidence on impairment of the
asset transferred.
Where necessary, in applying the equity method, adjustments are made to the
financial statements of associates to ensure consistency of accounting policies with
those of the Group.

(d) Property, Plant and Equipment
Property, plant and equipment, other than freehold land, are stated at cost less
accumulated depreciation and impairment loss, if any. Freehold land is stated at cost
and is not depreciated.
The long term leasehold land has an unexpired term of more than fifty years and is
not amortised. The non-amortisation of the long term leasehold land has no material
effect on the financial statements.
Depreciation is calculated under the straight-line method to write off the cost of the
assets over their estimated useful lives. The principal annual rates used for this
purpose are:-

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

Page 21



(e) Land and Hotel Development Expenditure

Land is stated at cost or revalued amount less impairment losses, if any.
Development expenditure comprises construction and other related development
costs and administrative overheads relating to the property development. Interest
costs on borrowings taken to finance the relevant development projects are included
in the development expenditure from commencement to the completion of the
development projects.

(f) Impairment of Assets

The carrying amounts of assets, other than those to which MASB 23 - Impairment
of Assets does not apply, are reviewed at each balance sheet date for impairment
when there is an indication that the assets might be impaired. Impairment is
measured by comparing the carrying values of the assets with their recoverable
amounts.

An impairment loss is charged to the income statement immediately unless the
asset is carried at its revalued amount. Any impairment loss of a revalued asset is
treated as a revaluation decrease to the extent of a previously recognised
revaluation surplus for the same asset.

In respect of assets other than goodwill, and when there is a change in the
estimates used to determine the recoverable amount, a subsequent increase in
the recoverable amount of an asset is treated as a reversal of the previous
impairment loss and is recognised to the extent of the carrying amount of the
asset that would have been determined (net of amortisation and depreciation) had
no impairment loss been recognised. The reversal is recognised in the income
statement immediately, unless the asset is carried at its revalued amount. A
reversal of an impairment loss on a revalued asset is credited directly to the
revaluation surplus. However, to the extent that an impairment loss on the same
revalued asset was previously recognised as an expense in the income
statement, a reversal of that impairment loss is recognised as income in the
income statement.

(g) Investments

The investments in subsidiaries, associates and joint ventures are initially stated at
cost in the balance sheet of the Company, and are reviewed for impairment at the
end of the financial year if events or changes in circumstances indicate that their
carrying values may not be recoverable.

Page 22



(h) Investment Properties

Investment properties consist of investments in land and buildings that are not
substantially occupied for use by, or in the operations, of the Company/Group.

Investment properties are treated as long term investments. They are initially stated
at cost and are subject to revaluations which are carried out by an independent
valuer on a regular basis. Any revaluation increase is recognised in equity as a
revaluation surplus; any decrease is first offset against any unutilised previously
recognised revaluation surplus in respect of the same investment property, and the
balance is thereafter recognised as an expense. A revaluation increase is recognised
as income to the extent that it reverses a revaluation decrease of the same property
previously recognised as an expense.

On disposal of an investment, the difference between the net disposal proceeds and
the carrying amount is charged to the income statement; any amount in revaluation
reserve relating to that investment property is transferred to retained earnings.

(i) Inventories

Inventories are stated at the lower of cost and net realisable value. The unsold
completed properties are stated at the lower of cost and net realisable value. For
finished goods and work-in-progress, cost includes direct labour and appropriate
production overheads.

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

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

(j) Property Development Costs

Property development costs comprise costs associated with the acquisition of land
and all costs that are directly attributable to development activities or that can be
allocated on a reasonable basis to such activities.

Property development costs that are not recognised as an expense are
recognised as an asset and carried at the lower of cost and net realisable value.

Page 23



(j) Property Development Costs (Cont’d)

When the financial outcome of a development activity can be reliably estimated,
the amount of property revenues and expenses recognised in the income
statement are determined by reference to the stage of completion of development
activity at the balance sheet date.

When the financial outcome of a development activity cannot be reliably
estimated, the property development revenue is recognised only to the extent of
property development costs incurred that will be recoverable. The property
development costs on the development units sold are recognised as an expense
in the period in which they are incurred.

Where it is probable that property development costs will exceed property
development revenue, any expected loss is recognised as an expense immediately,
including costs to be incurred over the defects liability period.

(k) Progress Billings/Accrued Billings

In respect of progress billings:-

(i) where revenue recognised in the income statement exceeds the billings to
purchasers, the balance is shown as accrued billings under current assets;
and

(ii) where billings to purchasers exceed the revenue recognised to the income
statement, the balance is shown as progress billings under current liabilities.

(l) Amount Owing By/To Contract Customers

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

(m) Receivables

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

Page 24



(n) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in
the future for goods and services received.

(o) Interest-bearing Borrowings

Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds
received, net of transaction costs.

Borrowing costs directly attributable to the acquisition and construction of
development properties and property, plant and equipment are capitalised as part of
the cost of those assets, until such time as the assets are ready for their intended use
or sale.

All other borrowing costs are charged to the income statement as an expense in the
period in which they are incurred.

(p) Bonds

Bonds issued by the Company and the Group are initially recognised based on
proceeds received, net of issuance expenses incurred and are adjusted in
subsequent years for amortisation of premium and/or accretion of discount to
maturity, using the effective yield method. The premium amortised and/or discount
accreted is recognised in the income statement over the period of the bonds.

(q) Taxation

Taxation for the year comprises current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable
profit for the year and is measured using the tax rates that have been enacted or
substantially enacted at the balance sheet date.

Deferred taxation is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements.
Deferred tax liabilities are recognised for all taxable temporary differences other than
those that arise from goodwill or negative goodwill or from the initial recognition of an
asset or liability in a transaction which is not a business combination and at the time
of the transaction, affects neither accounting profit nor taxable profit.

Page 25



(q) Taxation (Cont’d)

Deferred tax assets are recognised for all deductible temporary differences, unused
tax losses and unused tax credits to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, unused tax
losses and unused tax credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply in the period when the asset is realised or the liability is settled, based on the
tax rates that have been enacted or substantially enacted at the balance sheet date.

Deferred tax is recognised in the income statement, except when it arises from a
transaction which is recognised directly in equity, in which case the deferred tax is
also charged or credited directly in equity, or when it arises from a business
combination that is an acquisition, in which case the deferred tax is included in the
resulting goodwill or negative goodwill. The carrying amounts of deferred tax assets
are reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the
deferred tax assets to be utilised.

(r) Foreign Currencies

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

(s) Assets under Hire Purchase

Equipment acquired under hire purchase are capitalised in the financial
statements and are depreciated in accordance with the policy set out in Note 5(d)
above. Each hire purchase payment is allocated between the liability and finance
charges so as to achieve a constant rate on the finance balance outstanding.
Finance charges are allocated to the income statement over the periods of the
respective hire purchase agreements.

Page 26



(t) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are
recognised as liabilities when declared before the balance sheet date. A dividend
proposed or declared after the balance sheet date, but before the financial
statements are authorised for issue, is not recognised as a liability at the balance
sheet date but as an appropriation from retained earnings and treated as a
separate component of equity. Upon the approval of the proposed dividend, it will
be accounted for as a liability.

(u) Cash and Cash Equivalents

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

(v) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group and the
Company has become a party to the contractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the
substance of the contractual arrangement. Interest, dividends, gains and losses
relating to a financial instrument classified as a liability, are reported as expense or
income. Distributions to holders of financial instruments classified as equity are
charged directly to equity.

Financial instruments are offset when the Group and the Company has a legally
enforceable right to offset and intends to settle either on a net basis or to realise the
asset and settle the liability simultaneously.

Financial instruments recognised in the balance sheet are disclosed in the individual
policy statement associated with each item.

Page 27



(w) Employee Benefits

(i) Short-term Benefits

Wages, salaries, paid annual leave, bonuses and non-monetary benefits are
accrued in the period in which the associated services are rendered by
employees of the Company.

(ii) Defined Contribution Plans

The Company’s contributions to defined contribution plans are charged to the
income statement in the period to which they relate. Once the contributions
have been paid, the Company has no further liability in respect of the defined
contribution plans.

(x) Income Recognition

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

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

Page 28



(x) Income Recognition (Cont’d)

(ii) Property Development

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

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

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

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

(iii) Revenue from Sales of Goods

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

(iv) Revenue from Services

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

Page 29



(x) 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 investments is recognised when the right to receive
payment is established.
(viii) Interest Income
Interest income is recognised on an accrual basis, based on the effective
yield on the investment.
Interest income on late payment is recognised on a receipt basis.

(y) Segmental Information
Segment revenues and expenses are those directly attributable to the segments and
include any joint revenue and expenses where a reasonable basis of allocation
exists. Segment assets include all assets used by a segment and consist principally
of property, plant and equipment (net of accumulated depreciation, where
applicable), other investments, inventories, receivables, and cash and bank
balances.
Most segment assets can be directly attributed to the segments on a reasonable
basis. Segment assets and liabilities do not include income tax assets and liabilities
respectively.
Segment revenues, expenses and results include transfers between segments. The
prices charged on intersegment transactions are based on normal commercial terms.
These transfers are eliminated on consolidation.

Page 30



6. INVESTMENT IN SUBSIDIARIES
THE COMPANY
2005 2004
RM RM

Unquoted shares, at cost 211,064,785 211,064,785

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

Name of Company Effective Equity Interest Principal
2005 2004 Activities
% %

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

Page 31



6. INVESTMENT IN SUBSIDIARIES (CONT’D)
Name of Company Effective Equity Interest Principal
2005 2004 Activities
% %
Mixwell (Malaysia) 100 100 Project management
Sdn. Bhd. and property
development.
Winsome Ventures 100 100 Proposed 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. *

South-East Best 100 100 Property development.
Sdn. Bhd.

Gracemart Resources 100 100 Property development.
Sdn. Bhd.

Sutrati Development Sdn. Bhd. 100 100 Dormant.

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 Messrs. Horwath

Page 32



7. INTEREST IN ASSOCIATES
2005 2004 2005 2004
RM RM RM RM

Unquoted shares,
at cost 3,600,001 3,600,001 2,400,000 2,400,000
Impairment loss (330,566) - - -

3,269,435 3,600,001 2,400,000 2,400,000
Unquoted shares, at
Group cost 91,618,314 91,618,314 - -
Share of post
acquisition reserves 17,375,079 16,846,341 - -

112,262,828 112,064,656 2,400,000 2,400,000

THE GROUP
2005 2004
RM RM
The interest in associates comprises:-

Group’s share of net tangible assets
- at cost 66,246,858 66,048,686
- at fair value 45,952,003 45,952,003
Group’s share of intangible assets 63,967 63,967

112,262,828 112,064,656

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

Effective Equity Principal
Name of Company Interest Activities
2005 2004
% %

Ligamas Sdn. Bhd.# 50.0 50.0 Property development.

Varich Industries 50.0 50.0 Dormant.
Sdn. Bhd.*

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

Page 33



7. INTEREST IN ASSOCIATES (CONT’D)
Effective Equity Principal
Name of Company Interest Activities
2005 2004
% %

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.

Sam & Lau Plantation 50.0 50.0 Tree plantation and
Sdn. Bhd.*### nursery operators.

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

# The share of results of these associates is based on the latest available unaudited
management financial statements made up to 31 March 2005.

## Held by Paling Industries Sdn. Bhd.

### Held by South-East Best Sdn. Bhd. (“SEB”).

Page 34



8. PROPERTY, PLANT AND EQUIPMENT
TRANSFER TO
AT DEVELOPMENT DEPRECIATION AT
1.4.2004 ADDITIONS DISPOSALS COST CHARGE 31.3.2005
RM RM RM RM RM RM
THE GROUP

NET BOOK VALUE

Freehold land 4,727,833 - - (716,560) - 4,011,273
Land and hotel
development expenditure 30,024,354 119,190 - - - 30,143,544
Sales office 118,793 34,081 - - (37,004) 115,870
Plant and machinery,
construction machinery
and equipment 50,942 270 - - (13,223) 37,989
Formwork, scaffoldings
and containers 6,448 - - - (2,503) 3,945
Office renovation, office
equipment, computers,
furniture and fittings, tools
and fittings 1,067,267 200,770 (26,877) - (272,106) 969,054
Motor vehicles 250,477 54,508 - - (134,292) 170,693

Total 36,246,114 408,819 (26,877) (716,560) (459,128) 35,452,368

AT ACCUMULATED NET BOOK
COST DEPRECIATION VALUE
RM RM RM
AT 31.3.2005

Freehold land 4,011,273 - 4,011,273
Land and hotel development expenditure 30,143,544 - 30,143,544
Sales office 182,757 (66,887) 115,870
Plant and machinery, construction machinery
and equipment 4,343,727 (4,305,738) 37,989
Formwork, scaffoldings and containers 4,316,916 (4,312,971) 3,945
Office renovation, office equipment, computers, furniture
and fittings, tools and fittings 4,576,896 (3,607,842) 969,054
Motor vehicles 2,020,927 (1,850,234) 170,693

Total 49,596,040 (14,143,672) 35,452,368

AT 31.3.2004

Freehold land 4,727,833 - 4,727,833
Land and hotel development expenditure 30,024,354 - 30,024,354
Sales office 148,676 (29,883) 118,793
Plant and machinery, construction machinery
and equipment 4,343,457 (4,292,515) 50,942
Formwork, scaffoldings and containers 4,316,916 (4,310,468) 6,448
Office renovation, office equipment, computers, furniture
and fittings, tools and fittings 4,633,477 (3,566,210) 1,067,267
Motor vehicles 2,005,751 (1,755,274) 250,477

Total 50,200,464 (13,954,350) 36,246,114

Page 35



8. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Land and hotel development expenditure consists of:-
2005 2004
RM RM

Long leasehold land, at cost 27,691,066 27,691,066

Hotel development expenditure, at cost 2,452,478 2,333,288

30,143,544 30,024,354

AT DEPRECIATION AT
1.4.2004 CHARGE 31.3.2005
RM RM RM
THE COMPANY

NET BOOK VALUE

Office equipment, computers, furniture
and fittings 35,427 (17,792) 17,635
Motor vehicles 1 - 1

35,428 (17,792) 17,636

AT ACCUMULATED NET BOOK
COST DEPRECIATION VALUE
RM RM RM
AT 31.3.2005
and fittings 376,551 (358,916) 17,635
Motor vehicles 376,950 (376,949) 1

753,501 (735,865) 17,636

AT 31.3.2004
and fittings 376,551 (341,124) 35,427
Motor vehicles 376,950 (376,949) 1

753,501 (718,073) 35,428

The motor vehicles of the Group acquired under hire purchase terms were carried at a total
net book value of RM20,602 (2004 - RM125,997) at the balance sheet date.

Page 36



8. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
The carrying values of certain property, plant and equipment charged to financial
institutions to secure banking facilities granted to the Group are as follows:-

THE GROUP
2005 2004
RM RM

Sales office - 118,793
Furniture and fittings - 137,332
Office and other equipment - 102,092
Land and hotel development expenditure - 30,024,354
Office renovation - 5,664

- 30,388,235

9. INVESTMENT PROPERTIES
THE GROUP
2005 2004
RM RM

Leasehold land, at cost 20,607,424 19,778,424
Expenditure on land 4,710,272 4,500,413

25,317,696 24,278,837

Freehold land and buildings, at cost 52,810,544 16,070,507
Leasehold land and buildings, at cost 2,803,145 4,509,522

55,613,689 20,580,029
Disposed of during the financial year (661,600) (3,467,400)
Transfer to property development costs (551,686) -

54,400,403 17,112,629

79,718,099 41,391,466

Included in investment properties is a leasehold land amounting to RM8,486,514 (2004 -
RM8,422,970) which are charged to a financial institution for the issuance of ABBA Bonds
granted to the Company.

Page 37



10. OTHER ASSETS
THE GROUP
2005 2004
RM RM

Other assets 189,807 189,807

Other investments, at cost
Quoted shares in Malaysia 12,300 12,300
Unquoted shares - 45,000
Investment in club membership 74,000 -

86,300 57,300

276,107 247,107

Market value of quoted shares 5,400 4,590

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

11. GOODWILL ON CONSOLIDATION
THE GROUP
2005 2004
RM RM

At 1 April 2004/2003 27,317,640 27,271,844
Goodwill arising from the acquisition of equity interest
in a subsidiary in the previous financial year not
accounted for - 45,796

At 31 March 27,317,640 27,317,640

12. INVENTORIES
THE GROUP
2005 2004
RM RM

Unsold completed properties, at cost 4,359,492 8,604,731

None of the inventories are carried at net realisable value.

Page 38



13. PROPERTY DEVELOPMENT COSTS
THE GROUP
2005 2004
RM RM
Balance at beginning of the financial year:
- land 30,903,465 31,209,528
- development costs 43,978,441 34,259,753

74,881,906 65,469,281
Cost incurred during the year:
- transferred from investment properties 551,686 -
- transferred from property, plant and equipment 716,560 -
- land 151,034 -
- development costs 41,773,802 19,138,472

118,074,988 84,607,753
Disposal of land during the year (315,040) -

117,759,948 84,607,753

Reversal in development costs of completed
project during the year:
- land - (306,063)
- development costs - (9,012,369)

- (9,318,432)

Cost recognised as an expense in the income
statement:
- previous year (24,432,606) (10,731,119)
- current year (38,581,655) (23,019,919)
- adjustment to completed project during the year - 9,318,432

(63,014,261) (24,432,606)

Sub-total 54,745,687 50,856,715
Transfer to inventories - (407,415)

54,745,687 50,449,300

Included in development expenditure is interest expense capitalised during the financial year
amounting to RM1,846,203 (2004 - RM585,454).

Leasehold land of a subsidiary costing RM7,674,555 (2004 - RM7,674,555) is charged to a
licensed bank for a term loan facility granted to the subsidiary.

Page 39

SBC Corporation Berhad: Annual Audited Accounts 2005

SBC Corporation Berhad: Annual Audited Accounts 2005

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