sime annualreport2004

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Sime AnnualReport2004

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  • The Sime Darby Group

    Sime Darby Berhad is Malaysias leading multinational and one of

    Southeast Asias largest conglomerates. Founded in 1910, the Company

    has grown from a single company offering a single product and service

    in one country into a strong and dynamic international Group with a

    comprehensive range of business activities carried out by more than

    24,000 employees in over 260 companies in 20 countries. Known for its

    financial and management capabilities, Sime Darby is listed on the Main

    Board of Bursa Malaysia Securities Berhad with a market capitalisation

    in excess of US$3.4 billion as at 30th June 2004.

    Today, in addition to its original plantations core business activity, Sime

    Darby is also a major player in the motor vehicle distribution, heavy

    equipment distribution, property, and energy industries. While the core

    businesses are located in Malaysia, the Group has extensive trading and

    manufacturing interests in the Peoples Republic of China (including Hong

    Kong SAR and Macau SAR), Singapore and Australia. The Group also

    operates in Negara Brunei Darussalam, Indonesia, Thailand, Vietnam,

    the Philippines, United Kingdom, Egypt, New Zealand, the Solomon

    Islands, Papua New Guinea and New Caledonia.

    Cover RationaleThe close-up of a single palm frond against a white background on the cover ofSime Darby Berhad's 2004 Annual Report represents the Company's clarity andsingle-minded focus on growing its span of business activities and network ofoperations throughout the Asia Pacific region towards increasing shareholdervalue and sustainable long-term growth.

    The palm frond also serves as a reminder of where the Group's growth andwealth began more than 90 years ago - in Plantations, its pioneer core businessactivity.

  • 1Contents

    Notice of Annual General Meeting and 2 - 4 2 - 4

    Statement Accompanying The Notice of Annual General Meeting

    Group Financial Highlights 5

    Corporate Information 6 - 10 6 - 10

    Report On The Audit & Accounts Committee 11 - 13 11 - 13

    Statement On Corporate Governance 14 - 19 14 - 19

    Statement On Internal Control 20 - 21 20 - 21

    Statement On Directors Responsibility 22 22

    Chairmans Statement 23 - 25 23 - 25

    Operations Report 26 - 43 26 - 45

    Financial Statements 44 - 98 48 - 98

    List Of Properties Held 99 - 103 99 -

    Sime Darby Management Team 104 104

    Analysis Of Shareholdings 105 - 106 1 0 5 -

    106

    Financial Calendar & Share Price Movement 107 107

    Form Of Proxy 109

  • Notice of Annual General Meeting

    2

    NOTICE IS HEREBY GIVEN that the Twenty-Sixth Annual General Meeting of Sime Darby Berhad will be held at Nirwana Ballroom1, Mutiara Hotel, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia on Thursday, 4th November 2004 at 11.30 a.m. for thefollowing purposes:-

    AS ORDINARY BUSINESSa. To receive the Directors Report and the Financial Statements for the year ended 30th June 2004 and

    the Auditors Report thereon.

    b. To declare a final dividend for the year ended 30th June 2004.

    c. To consider and, if thought fit, pass the following resolutions pursuant to Section 129(6) of the CompaniesAct, 1965:-

    (i) That, pursuant to Section 129(6) of the Companies Act, 1965, Tunku Tan Sri Dato Seri Ahmad binTunku Yahaya be re-appointed a Director of the Company to hold office until the conclusion of the nextAnnual General Meeting.

    (ii) That, pursuant to Section 129(6) of the Companies Act, 1965, Michael Wong Pakshong be re-appointed a Director of the Company to hold office until the conclusion of the next Annual GeneralMeeting.

    (iii) That, pursuant to Section 129(6) of the Companies Act, 1965, Raja Tan Sri Muhammad Alias binRaja Muhammad Ali be re-appointed a Director of the Company to hold office until the conclusion ofthe next Annual General Meeting.

    d. To elect the following Director:-Dato Ahmad Zubair @ Ahmad Zubir bin Haji Murshid

    e. To re-elect the following Directors:-Tan Sri Dato Seri (Dr.) Ahmad Sarji bin Abdul HamidMartin Giles ManenTan Sri Datuk Dr. Ahmad Tajuddin bin Ali

    f. To re-appoint PricewaterhouseCoopers as Auditors of the Company and to authorise the Directors to fixtheir remuneration.

    AS SPECIAL BUSINESSg. To consider and, if thought fit, pass the following Ordinary Resolution:-

    Authority to Allot and Issue Shares pursuant to Section 132D of the Companies Act, 1965That, subject always to the Companies Act, 1965, the Articles of Association of the Company and theapprovals of the relevant governmental/regulatory authorities, the Directors be and are herebyauthorised, pursuant to Section 132D of the Companies Act, 1965, to allot and issue shares in theCompany at any time until the conclusion of the next Annual General Meeting and upon such terms andconditions and for such purposes as the Directors may, in their absolute discretion, deem fit providedthat the aggregate number of shares to be issued does not exceed ten per centum of the issued sharecapital of the Company for the time being.

    h. To consider and, if thought fit, pass the following Ordinary Resolution:-Proposed Share Buy-backThat, subject to compliance with the Companies Act, 1965 and all other applicable laws, guidelines, rulesand regulations, approval be and is hereby given to the Company to utilise up to an amount not exceedingRM1 billion from the retained profits and share premium account of the Company, to purchase suchamount of ordinary shares of RM0.50 each in the Company as may be determined by the Directors ofthe Company from time to time through Bursa Malaysia Securities Berhad upon such terms andconditions as the Directors may deem fit and expedient in the interests of the Company provided that theaggregate number of shares to be purchased and/or held pursuant to this resolution does not exceed tenper centum of the issued and paid-up ordinary share capital of the Company;

    And that an amount not exceeding a total of RM1 billion, out of the Companys retained profits and sharepremium account be allocated for the proposed share buy-back, using internally generated funds;

    And that such authority shall commence upon the passing of this resolution, until the conclusion of thenext Annual General Meeting of the Company, or the expiry of the period within which the next AnnualGeneral Meeting is required by law to be held at which time the resolution shall lapse, or until theauthority is revoked or varied by Ordinary Resolution of the shareholders of the Company in generalmeeting, whichever occurs first;

    (Resolution 1)

    (Resolution 2)

    (Resolution 3)

    (Resolution 4)

    (Resolution 5)

    (Resolution 6)

    (Resolution 7)(Resolution 8)

    (Resolution 10)

    (Resolution 11)

    (Resolution 9)

  • 3(Resolution 12)

    (Resolution 13)

    (Resolution 14)

    Notice of Annual General Meeting

    And that authority be and is hereby given to the Directors of the Company to decide in their discretion toretain the ordinary shares in the Company so purchased by the Company as treasury shares and/or tocancel them and/or to resell them and/or to distribute them as share dividends;

    And that authority be and is hereby given to the Directors of the Company to take all such steps as arenecessary (including the appointment of stockbroking firms and the opening and maintaining of CentralDepository Accounts designated as Share Buy-back Accounts) and to enter into any agreements,arrangements and guarantees with any party or parties to implement, finalise and give full effect to theaforesaid with full powers to assent to any conditions, modifications, variations and/or amendments (ifany) as may be imposed by the relevant authorities.

    i. To consider and, if thought fit, pass the following Ordinary Resolution:-Proposed Shareholders Mandate for Recurrent Related Party TransactionsThat, subject to the Companies Act, 1965, the Memorandum and Articles of Association of the Companyand the Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given tothe Company and/or its subsidiary companies to enter into all arrangements and/or transactions involvingthe interests of Directors, major shareholders or persons connected with the Directors and/or majorshareholders of the Company and/or its subsidiary companies (Related Parties) as specified in Section2.1 of the Circular to Shareholders dated 11th October 2004 provided that such arrangements and/ortransactions are:-

    (i) recurrent transactions of a revenue or trading nature;(ii) necessary for the day-to-day operations;(iii) carried out in the ordinary course of business on normal commercial terms which are not more

    favourable to the Related Parties than those generally available to the public; and(iv) are not to the detriment of the minority shareholders

    (the Mandate);

    And that the Mandate, unless revoked or varied by the Company in a general meeting, shall continue inforce until the conclusion of the next Annual General Meeting of the Company or the expiration of theperiod within which the next Annual General Meeting is required to be held pursuant to Section 143(1)of the Companies Act, 1965 (but shall not extend to such extensions as may be allowed pursuant toSection 143(2) of the Act);

    And further that the Directors of the Company be authorised to complete and do all such acts and things(including executing all such documents as may be required) as they may consider expedient or necessaryto give effect to the Mandate.

    j. To consider and, if thought fit, pass the following Ordinary Resolution:-Proposed Allocation of Options to Dato Ahmad Zubair @ Ahmad Zubir bin Haji MurshidThat the Board of Directors of the Company be and is hereby authorised at any time and from time totime to offer and to grant to Dato Ahmad Zubair @ Ahmad Zubir bin Haji Murshid, being a full timeexecutive director of the Company, options to subscribe for such number of ordinary shares in the sharecapital of the Company as the Board of Directors deems fit, provided that such number of ordinary sharesshall not exceed his maximum allowable allotment of 350,000 new ordinary shares in the Companypursuant to the Sime Darby Employees Share Option Scheme, subject always to the terms and conditionsof the Bye-Laws of the Scheme and/or any adjustments thereto which may be made in accordance withthe Bye-Laws.

    By Order of the Board

    Yeoh Poh Yew, NancyGroup Secretary

    Kuala Lumpur Saleha binti M. Ramly11th October 2004 Joint Group Secretary

    NoteA member of the Company entitled to attend and vote at this meeting is also entitled to appoint one or more proxies to attend andvote in his stead. A proxy need not be a member of the Company. A Form of Proxy is enclosed herewith and should be completedand deposited at the office of the Share Registrar of the Company not less than 48 hours before the time fixed for the meeting.

  • Notice of Annual General Meeting

    EXPLANATORY NOTES ON SPECIAL BUSINESSES

    (1) Authority to Allot and Issue Shares pursuant to Section 132D of the Companies Act, 1965The Company continues to consider opportunities to broaden the operating base and earnings potential of the Company. If anyof the expansion/diversification proposals involves the issue of new shares, the Directors, under present circumstances, wouldhave to convene a general meeting to approve the issue of new shares even though the number involved may be less than tenper centum of the issued capital.

    In order to avoid any delay and costs involved in convening a general meeting to approve such issue of shares, it is thusconsidered appropriate that the Directors be empowered, as proposed in Resolution 11, to allot and issue shares in theCompany, up to an amount not exceeding in total ten per centum of the issued share capital of the Company for the time being,for such purpose. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AnnualGeneral Meeting of the Company.

    (2) Proposed Share Buy-backThe proposed Resolution 12, if passed, will empower the Directors to purchase the Companys shares of up to ten per centumof the issued and paid-up share capital of the Company by utilising the funds allocated out of the retained profits and the sharepremium account of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusionof the next Annual General Meeting of the Company.

    (3) Proposed Shareholders Mandate for Recurrent Related Party TransactionsThe proposed Resolution 13, if passed, will enable the Company and/or its subsidiaries to enter into recurrent transactionsinvolving the interests of Related Parties, which are of a revenue or trading nature and necessary for the Groups day-to-dayoperations, subject to the transactions being carried out in the ordinary course of business and on terms not to the detrimentof the minority shareholders of the Company.

    Based on the Companys audited financial statements for the year ended 30th June 2004, the Companys retained profits andshare premium account stood at RM976.3 million and RM2,515.4 million respectively.

    (4) Proposed Allocation of Options to Dato Ahmad Zubair @ Ahmad Zubir bin Haji MurshidThe proposed Resolution 14, if passed, will enable the Directors to offer and grant to Dato Ahmad Zubair @ Ahmad Zubir binHaji Murshid, options to subscribe for up to 350,000 new ordinary shares in the Company pursuant to the Sime DarbyEmployees Share Option Scheme.

    Further information on the Proposed Share Buy-back and the Proposed Shareholders Mandate for Recurrent Related PartyTransactions is set out in the Share Buy-back Statement and Circular to Shareholders dated 11th October 2004, despatchedtogether with the Companys 2004 Annual Report.

    Statement Accompanying The Notice of Annual General Meeting

    1. DIRECTORS WHO ARE STANDING FOR RE-APPOINTMENT OR RE-ELECTIONThe Directors standing for re-appointment under Section 129(6) of the Companies Act, 1965, are:-

    (a) Tunku Tan Sri Dato Seri Ahmad bin Tunku Yahaya(b) Michael Wong Pakshong(c) Raja Tan Sri Muhammad Alias bin Raja Muhammad Ali

    The Director standing for election is:-(a) Dato Ahmad Zubair @ Ahmad Zubir bin Haji Murshid

    The Directors standing for re-election are:-(a) Tan Sri Dato Seri (Dr.) Ahmad Sarji bin Abdul Hamid(b) Martin Giles Manen(c) Tan Sri Datuk Dr. Ahmad Tajuddin bin Ali

    The profiles of the above Directors are set out in the section entitled Corporate Information on pages 6 to 10. Their shareholdingsin the Company and its subsidiaries are set out in the section entitled Analysis Of Shareholdings on page 105.

    2. DATE, TIME AND PLACE OF THE ANNUAL GENERAL MEETINGThe Twenty-Sixth Annual General Meeting of Sime Darby Berhad will be held as follows:-Date : Thursday, 4th November 2004Time : 11:30 a.m.Place : Nirwana Ballroom 1, Mutiara Hotel

    Jalan Sultan Ismail50250 Kuala LumpurMalaysia

    4

  • 5Group Financial Highlights

    RM Million 2004 2003 2002 2001 2000 1999 1998

    Revenue 14,903.5 13,717.8 12,053.1 11,817.1 10,971.5 9,910.5 12,075.8

    Profit/(Loss) Before Taxation 1,343.6 1,284.1 1,148.1 1,130.5 1,199.1 1,018.2 (70.7)

    Net Profit/(Loss) 918.7 809.7 742.9 617.0 769.5 821.8 (540.9)

    Net Profit excluding unusual items 836.5 797.8 776.4 695.2 622.3 727.2 682.1

    Shareholders' Funds 8,424.7 7,969.2 7,442.1 6,771.9 6,728.8 6,454.6 5,911.0

    Sen per Share 2004 2003 2002 2001 2000 1999 1998

    Earnings/(Loss) per Share 39.4 34.8 31.9 26.5 33.1 35.3 (23.3)

    Earnings per Shareexcluding unusual items 35.8 34.3 33.3 29.9 26.8 31.3 29.3

    Dividends per Share Net 20.1 19.1 17.0 17.1 17.0 16.0 2.9

  • BOARD OF DIRECTORS

    Tan Sri Dato Seri (Dr.) Ahmad Sarji bin Abdul Hamid

    P.M.N., S.P.M.P., D.G.S.M., S.S.M.T., S.P.N.S., S.P.D.K., S.S.S.A., D.P.C.M., S.I.M.P., P.N.B.S., S.P.M.T., J.M.N., S.M.P., P.J.K.

    (Non-Independent Non-Executive Chairman)

    Tunku Tan Sri Dato Seri Ahmad bin Tunku Yahaya

    P.S.M., S.S.D.K., D.S.D.K., J.M.N., J.S.D.

    (Independent Non-Executive Deputy Chairman)

    Dato Ahmad Zubair @ Ahmad Zubir bin Haji Murshid

    D.S.K.

    (Group Chief Executive)

    Martin Giles Manen

    (Group Finance Director)

    Tan Sri Abu Talib bin Othman

    P.M.N., P.S.M., S.I.M.P., S.S.S.A., D.G.S.M., D.P.M.S., D.M.P.N., D.C.S.M., J.S.M., K.M.N., P.P.T.

    (Independent Non-Executive Director)

    Tan Sri Datuk Dr. Ahmad Tajuddin bin Ali

    P.S.M., P.J.N., S.I.M.P., D.P.C.M., D.P.M.P., J.M.N., A.M.N.

    (Independent Non-Executive Director)

    Datuk Khatijah binti Ahmad

    P.J.N.

    (Independent Non-Executive Director)

    Dr. David Li Kwok Po

    G.B.S., O.B.E., J.P.

    (Independent Non-Executive Director)

    Raja Tan Sri Muhammad Alias bin Raja Muhammad Ali

    P.S.M.

    (Independent Non-Executive Director)

    Michael Wong Kuan Lee

    J.M.N.

    (Independent Non-Executive Director)

    Michael Wong Pakshong

    (Independent Non-Executive Director)

    Corporate Information

    6

    SECRETARIESYeoh Poh Yew, Nancy (Group Secretary)

    Saleha binti M. Ramly (Joint Group Secretary)

    AUDITORSPricewaterhouseCoopers

    REGISTERED OFFICE21st Floor, Wisma Sime Darby,

    Jalan Raja Laut,

    50350 Kuala Lumpur, Malaysia.

    Telephone: 603-26914122

    Telefax: 603-26987398

    Web Site: http://www.simedarby.com

    E-Mail: [email protected]

    SHARE REGISTRARSymphony Share Registrars Sdn Bhd

    (formerly known as Malaysian Share Registration

    Services Sdn Bhd)

    (378993-D)

    Level 26, Menara Multi-Purpose,

    Capital Square, No. 8, Jalan Munshi Abdullah,

    50100 Kuala Lumpur, Malaysia.

    Telephone: 603-27212222

    Telefax: 603-27212530, 603-27212531

  • TAN SRI DATO SERI (DR.) AHMAD SARJI BIN ABDUL HAMID

    YBhg. Tan Sri Dato Seri (Dr.) Ahmad Sarji, 66, a Malaysian, is a Non-Independent Non-Executive Director and the Chairman of Sime

    Darby Berhad. He was appointed to the Board on 4th August 1998. YBhg. Tan Sri Dato Seri is a graduate of the University of

    Malaya, The Institute of Social Studies, The Hague and Harvard University. He was previously the Chief Secretary to the

    Government. Other Malaysian public companies in which he is a director are Permodalan Nasional Berhad, Golden Hope Plantations

    Berhad, MNI Holdings Berhad, NCB Holdings Berhad, Petaling Garden Berhad, Kontena Nasional Berhad, Yayasan Pelaburan

    Bumiputra, Pelaburan Hartanah Nasional Berhad, Amanah Saham Nasional Berhad, Pengurusan Pelaburan ASW 2020 Berhad and

    Pengurusan Pelaburan ASN Berhad. YBhg. Tan Sri Dato Seri chairs the Executive Committee and the Nomination Committee of

    the Board. He does not have any family relationship with any director and/or major shareholder of Sime Darby Berhad, nor any

    personal interest in any business arrangement involving the Company, except that he is also the Chairman of Permodalan Nasional

    Berhad, a major shareholder of Sime Darby Berhad. He attended all of the twelve (12) Board Meetings held in the year ended 30th

    June 2004.

    TUNKU TAN SRI DATO SERI AHMAD BIN TUNKU YAHAYA

    YM Tunku Tan Sri Dato Seri Ahmad, 75, a Malaysian, is an Independent Non-Executive Director and the Deputy Chairman of Sime

    Darby Berhad. He was appointed to the Board on 4th January 1979. YM Tunku Tan Sri Dato Seri Ahmad is an honours graduate

    in Economics from the University of Bristol and a Certified Accountant. He joined Dunlop Malaysian Industries Berhad in 1962 and

    served as Managing Director from 1973 until 1978 when he left to join Sime Darby Berhad. He was a director of the Malaysian

    Central Bank for 28 years before retiring in 1995. Other Malaysian public companies in which he is a director are Tractors Malaysia

    Holdings Berhad, KLCC Projeks Berhad, Kuala Lumpur City Centre Development Berhad, Kuala Lumpur City Park Berhad, KLCC

    (Holdings) Berhad and KLCC Property Holdings Berhad. YM Tunku Tan Sri Dato Seri Ahmad is a member of the Executive

    Committee, the Special Committee and the Finance Committee and chairs the Audit & Accounts Committee and the ESOS

    Committee of the Board. He does not have any family relationship with any director and/or major shareholder of Sime Darby Berhad,

    nor any personal interest in any business arrangement involving the Company. He attended eleven (11) out of the twelve (12) Board

    Meetings held in the year ended 30th June 2004.

    DATO AHMAD ZUBAIR @ AHMAD ZUBIR BIN HAJI MURSHID

    YBhg. Dato Ahmad Zubir, 47, a Malaysian, is a Non-Independent Executive Director and the Group Chief Executive of Sime Darby

    Berhad. He was appointed to the Board on 13th June 2004. YBhg. Dato Ahmad Zubir holds a degree in Industrial Engineering

    from the University of Wales. He has held many senior positions in the Sime Darby Berhad Group since joining the Group in 1981.

    Prior to his current appointment as the Group Chief Executive, he was the Managing Director of DMIB Berhad and the Director of

    Sime Darby Berhads Heavy Equipment/Power and Allied Products Group. Other Malaysian public companies in which he is a

    director are Sime UEP Properties Berhad, Tractors Malaysia Holdings Berhad, Sime Engineering Services Berhad, SD Holdings

    Berhad, Sime Malaysia Region Berhad and Port Dickson Power Berhad. YBhg. Dato Ahmad Zubir is a member of the Executive

    Committee and the ESOS Committee of the Board. He does not have any family relationship with any director and/or major

    shareholder of Sime Darby Berhad, nor any personal interest in any business arrangement involving the Company. He attended the

    one (1) Board Meeting held from the date of his appointment on 13th June 2004, to 30th June 2004.

    7

    Corporate Information

  • MARTIN GILES MANEN

    Mr. Manen, 49, a Malaysian, is a Non-Independent Executive Director and the Group Finance Director of Sime Darby Berhad. He

    was appointed to the Board on 30th May 2001. Mr. Manen, a chartered accountant, is a member of the Malaysian Accounting

    Standards Board and the Chairman of the International Fiscal Association - Malaysia Branch. He joined Sime Darby Berhad in 1986

    and served as Group Tax Controller and Group Secretary prior to appointment as the Group Finance Director in April 2001. Other

    Malaysian public companies in which he is a director are DMIB Berhad, Sime UEP Properties Berhad, Tractors Malaysia Holdings

    Berhad, Sime Engineering Services Berhad, Consolidated Plantations Berhad, Kuala Lumpur Golf & Country Club Berhad, SD

    Holdings Berhad and Malaysian Oriental Holdings Berhad. Mr. Manen is a member of the ESOS Committee and the Finance

    Committee of the Board. He does not have any family relationship with any director and/or major shareholder of Sime Darby Berhad,

    nor any personal interest in any business arrangement involving the Company. He attended all of the twelve (12) Board Meetings

    held in the year ended 30th June 2004.

    TAN SRI ABU TALIB BIN OTHMAN

    YBhg. Tan Sri Abu Talib, 65, a Malaysian, is an Independent Non-Executive Director. He was appointed to the Board on 16th

    November 1998. YBhg. Tan Sri Abu Talib is a Barrister-at-law and has served in various capacities in the Judicial and Legal service

    of the Government of Malaysia, including as Attorney-General of Malaysia. Other Malaysian public companies in which he is a

    director are British American Tobacco (Malaysia) Berhad, IGB Corporation Berhad, Alliance Unit Trust Management Berhad, MUI

    Continental Insurance Berhad and CYL Corporation Berhad. YBhg. Tan Sri Abu Talib is a member of the Executive Committee, the

    Remuneration Committee and the Special Committee of the Board. He does not have any family relationship with any director

    and/or major shareholder of Sime Darby Berhad, nor any personal interest in any business arrangement involving the Company. He

    attended eleven (11) out of the twelve (12) Board Meetings held in the year ended 30th June 2004.

    TAN SRI DATUK DR. AHMAD TAJUDDIN BIN ALI

    YBhg. Tan Sri Datuk Dr. Ahmad Tajuddin, 56, a Malaysian, is an Independent Non-Executive Director. He was appointed to the Board

    on 22nd June 2001. He holds a Degree in Mechanical Engineering from Kings College, University of London, a Ph.D in Nuclear

    Engineering from Queen Marys College, University of London and an Honorary Degree of Doctor of Science from Universiti Putra

    Malaysia. YBhg. Tan Sri Datuk Dr. Ahmad Tajuddin was previously the Director-General of SIRIM Berhad and the Executive Chairman

    of Tenaga Nasional Berhad. Other Malaysian public companies in which he is a director are Sime Engineering Services Berhad,

    Tracoma Holdings Berhad, Malaysian Oxygen Berhad, Bangi Golf Berhad and Tronoh Mines Malaysia Berhad. YBhg. Tan Sri Datuk

    Dr. Ahmad Tajuddin is a member of the Audit & Accounts Committee and the ESOS Committee of the Board. He does not have any

    family relationship with any director and/or major shareholder of Sime Darby Berhad, nor any personal interest in any business

    arrangement involving the Company. He attended all of the twelve (12) Board Meetings held in the year ended 30th June 2004.

    Corporate Information

    8

  • DATUK KHATIJAH BINTI AHMAD

    YBhg. Datuk Khatijah, 64, a Malaysian, is an Independent Non-Executive Director. She was appointed to the Board on 13th

    September 1997. YBhg. Datuk Khatijah holds an Honours Degree in Economics from the London School of Economics & Political

    Science of the University of London. She is the Chairman of the KAF group of companies, a financial services group which she

    founded in 1973. Other Malaysian public companies in which she is a director are Sime Engineering Services Berhad, KAF

    Discounts Berhad and KAF-Seagroatt & Campbell Berhad. YBhg. Datuk Khatijah is a member of the Audit & Accounts Committee,

    the Remuneration Committee, the ESOS Committee and the Special Committee, and chairs the Finance Committee of the Board.

    She does not have any family relationship with any director and/or major shareholder of Sime Darby Berhad, nor any personal

    interest in any business arrangement involving the Company. She attended ten (10) out of the twelve (12) Board Meetings held in

    the year ended 30th June 2004.

    DR. DAVID LI KWOK PO

    Dr. Li, 65, a British citizen, is an Independent Non-Executive Director. He was appointed to the Board on 5th September 1992. Dr.

    Li is a Cambridge University Economics and Law graduate and a Fellow of both the Institute of Chartered Accountants in England

    and Wales and the Institute of Bankers. He is presently the Chairman and Chief Executive of The Bank of East Asia Limited. He

    is a director of various companies in the Hong Kong S.A.R. Dr. Li is a member of the Nomination Committee of the Board. He

    does not have any family relationship with any director and/or major shareholder of Sime Darby Berhad, nor any personal interest

    in any business arrangement involving the Company. He attended ten (10) out of the twelve (12) Board Meetings held in the year

    ended 30th June 2004.

    RAJA TAN SRI MUHAMMAD ALIAS BIN RAJA MUHAMMAD ALI

    YM Raja Tan Sri Muhammad Alias, 72, a Malaysian, is an Independent Non-Executive Director. He was appointed to the Board on

    16th November 1998. He graduated with a Bachelor of Arts (Hons) from University Malaya, Singapore and holds a Certificate of

    Public Administration from the Royal Institute of Public Administration, London. He held various positions in Government service

    and was the Chairman of Felda from May 1979 to June 2001. Other Malaysian public companies in which he is a director are

    Consolidated Plantations Berhad, Malayan Banking Berhad, Kuala Lumpur Kepong Berhad, Batu Kawan Berhad, Kumpulan Guthrie

    Berhad, Highlands & Lowlands Berhad and Mayban Fortis Holdings Berhad. YM Raja Tan Sri Muhammad Alias is a member of the

    Executive Committee and the Audit & Accounts Committee and chairs the Remuneration Committee and the Special Committee of

    the Board. He does not have any family relationship with any director and/or major shareholder of Sime Darby Berhad, nor any

    personal interest in any business arrangement involving the Company. He attended eleven (11) out of the twelve (12) Board

    Meetings held in the year ended 30th June 2004.

    9

    Corporate Information

  • MICHAEL WONG KUAN LEE

    Mr. Wong, 66, a Malaysian, is an Independent Non-Executive Director. He was appointed to the Board on 7th September 1991.

    Mr. Wong holds a Law Degree from the University of Singapore. He joined Messrs. Shook Lin & Bok, a legal firm, in 1964 and

    resigned in 1991 as its Chief Executive Partner but remains as a consultant. He previously served as a Senator in the Malaysia

    Parliament and as a director of the Malaysian Central Bank. Other Malaysian public companies in which he is a director are Tractors

    Malaysia Holdings Berhad and Keck Seng (Malaysia) Berhad. He is a member of the Audit & Accounts Committee, the Nomination

    Committee, the Remuneration Committee and the Special Committee of the Board and he is the Senior Independent Director to

    whom all concerns may be conveyed. He does not have any family relationship with any director and/or major shareholder of Sime

    Darby Berhad, nor any personal interest in any business arrangement involving the Company. He attended nine (9) out of the twelve

    (12) Board Meetings held in the year ended 30th June 2004.

    MICHAEL WONG PAKSHONG

    Mr. Wong, 73, a Singaporean, is an Independent Non-Executive Director. He was appointed to the Board on 15th April 1981. Mr.

    Wong is a chartered accountant and was formerly the Managing Director of the Monetary Authority of Singapore. Other Malaysian

    public companies in which he is a director are GEL Capital (Malaysia) Berhad, Great Eastern Life Assurance (Malaysia) Berhad,

    Overseas Assurance Corporation (Malaysia) Bhd and Overseas Assurance Corporation (Holdings) Bhd. He does not have any family

    relationship with any director and/or major shareholder of Sime Darby Berhad, nor any personal interest in any business

    arrangement involving the Company. He attended eleven (11) out of the twelve (12) Board Meetings held in the year ended 30th

    June 2004.

    Corporate Information

    10

  • 11

    Report On The Audit & Accounts Committee

    The Board of Directors of Sime Darby Berhad is pleased to present the report on the Audit & Accounts Committee of the Boardfor the year ended 30th June 2004.

    The Audit & Accounts Committee was established by a resolution of the Board on 12th October 1981.

    Members and meetingsThe members of the Audit & Accounts Committee during the year comprised the Directors listed below. During the year ended30th June 2004, the Committee held meetings on 28th August 2003, 28th November 2003, 20th February 2004 and 25th May2004 respectively, a total of four (4) meetings.

    Name Status of directorship Independent Attendance of meetings

    Tunku Tan Sri Dato Seri Non-Executive Director Yes Attended 3 out of 4 meetingsAhmad bin Tunku Yahaya and a Certified

    (appointed as Chairman of the Committee Accountanton 24th February 2004)

    Raja Tan Sri Muhammad Alias Non-Executive Director Yes Attended 4 out of 4 meetings bin Raja Muhammad Ali

    Michael Wong Kuan Lee Non-Executive Director Yes Attended 4 out of 4 meetings

    Tan Sri Datuk Dr. Ahmad Non-Executive Director Yes Attended 4 out of 4 meetingsTajuddin bin Ali

    Datuk Khatijah binti Ahmad Non-Executive Director Yes Attended 1 out of 1 meeting(appointed on 24th February 2004) held from date of appointment

    to 30th June 2004

    Dato Mohamed Azman bin Yahya Non-Executive Director Yes Attended 2 out of 3 meetings(resigned as Chairman and member and a member of the held from 1st July 2003 toof the Committee on 24th February 2004) Malaysian Institute of date of resignation

    Accountants

    Terms of referenceThe terms of reference of the Committee are as follows:-

    MembershipThe Committee shall be appointed by the Board from amongst their number and shall consist of not less than three (3) members,a majority of whom shall be independent Directors and at least one of whom shall be a member of the Malaysian Institute ofAccountants or one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967. TheChairman of the Committee shall be an independent non-executive Director appointed by the Board.

    Meetings and minutesMeetings shall be held not less than four (4) times a year and the Group Chief Executive, Group Finance Director, Chief InternalAudit Manager and a representative of the external auditors shall normally be invited to attend the meetings. Other members ofthe Board may attend the meetings upon the invitation of the Committee. At least once a year, the Committee shall meet theexternal auditors without any executive Directors present. The quorum shall be two (2) members, a majority of whom must beindependent Directors. Minutes of each meeting shall be kept and distributed to each member of the Committee and of the Board.The Chairman of the Committee shall report on each meeting to the Board. The Secretary to the Committee shall be the GroupSecretary.

    AuthorityThe Committee is authorised by the Board:-

    i. to investigate any activity within its terms of reference and shall have unrestricted access to both the internal and externalauditors and to all employees of the Group;

    ii. to have the resources in order to perform its duties as set out in its terms of reference;iii. to have full and unrestricted access to information pertaining to the Group and the Company;iv. to have direct communication channels with the internal and external auditors; andv. to obtain external legal or other independent professional advice as necessary.

    Notwithstanding anything to the contrary hereinbefore stated, the Committee does not have executive powers and shall report tothe Board of Directors on matters considered and its recommendations thereon, pertaining to the Group and the Company.

  • Report On The Audit & Accounts Committee

    ResponsibilityWhere the Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily resolvedresulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad, the Committee has the responsibility topromptly report such matter to Bursa Malaysia Securities Berhad.

    Review of the CommitteeThe performance of the Committee and each of the members shall be reviewed by the Board of Directors at least once every three(3) years to determine whether the Committee and its members have carried out their duties in accordance with their terms ofreference in Corporate Governance Statement.

    DutiesThe duties of the Committee are:-

    a. to consider the appointment, resignation and dismissal of external auditors and the audit fees;

    b. to review the nature and scope of the audit with the internal and external auditors before the audit commences;

    c. to review the quarterly and annual financial statements of the Group and the Company focusing on the matters set out below,and thereafter to submit them to the Board:-

    any changes in accounting policies and practices; significant adjustments arising from the audit; the going concern assumption; compliance with accounting standards and regulatory requirements.

    d. to discuss problems and reservations arising from the interim and final audits, and any matter the external auditors may wishto discuss;

    e. to review the audit reports prepared by the internal and external auditors, the major findings and managements responsesthereto;

    f. to review the adequacy of the scope, functions and resources of the internal and management audit department and whether ithas the necessary authority to carry out its work;

    g. to consider the report, major findings and managements response thereto on any internal investigations carried out by theinternal auditors;

    h. to review any appraisal or assessment of the performance of executives in the internal and management audit department;

    i. to approve any appointment or termination of senior executives in the internal and management audit department;

    j. to be informed of any resignation of executives in the internal and management audit department and to provide the resigningexecutive an opportunity to submit his/her reason for resignation;

    k. to review the evaluation of the systems of internal control with the auditors;

    l. to review the assistance given by the Groups and the Companys employees to the auditors;

    m. to review related party transactions entered into by the Group and the Company to ensure that such transactions are undertakenon the Groups normal commercial terms and that the internal control procedures with regards to such transactions aresufficient; and

    n. any such other functions as may be agreed to by the Committee and the Board.

    Activities of the Committee during the yearIn line with the terms of reference of the Committee, the following activities were carried out by the Committee during the yearended 30th June 2004 in the discharge of its functions and duties:-

    a. review of the audit plans for the year for the Group and the Company prepared by the internal and external auditors;

    b. review of the audit reports for the Group and the Company prepared by the internal and external auditors and consideration ofthe major findings by the auditors and managements responses thereto;

    c. review of the quarterly and annual reports of the Group and the Company prior to submission to the Board of Directors forconsideration and approval;

    d. review of the environmental, safety and health reports for the Group and the Company prepared by the internal auditors andconsideration of their major findings and managements responses thereto;

    12

  • Report On The Audit & Accounts Committee

    e. review of the related party transactions entered into by the Group and the Company and the disclosure of such transactions inthe annual report of the Company;

    f. commissioning of special reviews on specific areas of operations;

    g. review of the minutes of meetings of the audit committees of public listed and other subsidiary companies in the Group;

    h. meeting with the external auditors without any executives present except the Group Secretary;

    i. review of the composition of the audit committees of the Group;

    j. review of the fees of the external auditors;

    k. assessment of the effectiveness of the Internal & Management Audit function in the Group;

    l. approval of the appointment of audit staff; and

    m. review of the list of eligible employees and the allocation of options to be offered to them by the Company pursuant to the SimeDarby Employees Share Option Scheme.

    Internal and management audit functionsThe Company has an Internal and Management Audit Department whose principal responsibility is to undertake regular andsystematic reviews of the systems of controls so as to provide reasonable assurance that such systems continue to operatesatisfactorily and effectively in the Group and the Company. The Department is also responsible for the conduct of regular andsystematic reviews of environmental, safety and health issues in the Group and the Company. The attainment of such objectivesinvolves the following activities being carried out by the Department:-

    a. reviewing and appraising the soundness, adequacy and application of accounting, financial and other controls and promotingeffective control in the Group and the Company at reasonable cost;

    b. ascertaining the extent of compliance with established policies, procedures and statutory requirements;

    c. ascertaining the extent to which the Groups and the Companys assets are accounted for and safeguarded from losses of allkinds;

    d. appraising the reliability and usefulness of information developed within the Group and the Company for management;

    e. recommending improvements to the existing systems of controls;

    f. carrying out audit work in liaison with the external auditors to maximise the use of resources and for effective coverage of auditrisks;

    g. carrying out investigations and special reviews requested by management and/or the Audit & Accounts Committee of theCompany;

    h. carrying out environmental, safety and health audits on the Group and the Company; and

    i. identifying opportunities to improve the operations of and processes in the Group and the Company.

    Statement by the Audit & Accounts CommitteeThe Committee confirms that the allocation of options offered by the Company to eligible employees of the Group complies with theBye-Laws of the Sime Darby Employees Share Option Scheme.

    This report is made in accordance with a resolution of the Board of Directors dated 24th August 2004.

    13

  • The CodeIn March 2000, the Finance Committee on Corporate Governance issued the Malaysian Code on Corporate Governance (theCode). The Code sets out principles and best practices on structures and processes that companies may use in their operationstowards achieving the optimal governance framework.

    The Board of Sime Darby Berhad (Sime Darby or the Company) is committed to ensuring that the highest standards of corporategovernance are practised throughout the Group as a fundamental part of discharging its responsibilities to protect and enhanceshareholder value and the financial performance of Sime Darby.

    The Board of Sime Darby is pleased to make a disclosure to shareholders on the manner in which it has applied the principles ofgood governance and the extent to which it has complied with the best practices set out in the Code. These principles and bestpractices have been applied throughout the year ended 30th June 2004 and are regularly audited and reviewed to ensuretransparency and accountability. The only area of non-compliance with the Code is the recommended disclosure of details of theremuneration of each director. Details of the Directors remuneration are set out in Note 2 to the financial statements by applicablebands of RM50,000, which complies with the disclosure requirements under Bursa Malaysia Securities Berhads ListingRequirements. The Board is of the view that the transparency and accountability aspects of corporate governance as applicableto Directors remuneration are appropriately served by the band disclosure made.

    The Board of DirectorsThe Board has the overall responsibility for corporate governance, strategic direction and overseeing the investments of theCompany.

    The Board meets at least five (5) times a year, with additional meetings convened as necessary. During the year ended 30th June2004, twelve (12) Board meetings were held. The members of the Board during the year, and their attendance at the meetings,were as follows:-

    Name of Directors No. of meetings attendedTan Sri Dato Seri (Dr.) Ahmad Sarji bin Abdul Hamid (Chairman) 12 out of 12Tunku Tan Sri Dato Seri Ahmad bin Tunku Yahaya (Deputy Chairman) 11 out of 12Dato Ahmad Zubair @ Ahmad Zubir bin Haji Murshid 1 out of 1

    (appointed as Director and Group Chief Executive on 13th June 2004)Martin Giles Manen (Group Finance Director) 12 out of 12Tan Sri Abu Talib bin Othman 11 out of 12Tan Sri Datuk Dr. Ahmad Tajuddin bin Ali 12 out of 12Datuk Khatijah binti Ahmad 10 out of 12Dr. David Li Kwok Po 10 out of 12Raja Tan Sri Muhammad Alias bin Raja Muhammad Ali 11 out of 12Michael Wong Kuan Lee 9 out of 12Michael Wong Pakshong 11 out of 12Dato Mohamed Azman bin Yahya 8 out of 11

    (resigned on 31st May 2004)Tan Sri Nik Mohamed bin Nik Yaacob 11 out of 11

    (resigned as Director and Group Chief Executive on 12th June 2004)

    Board balanceThe Board currently has eleven (11) members, comprising nine (9) non-executive Directors (including the Chairman) and two (2)executive Directors. Eight (8) of the eleven (11) Directors are independent Directors, which is in excess of Bursa MalaysiaSecurities Berhads requirement of one-third. Together, the Directors have a wide range of legal, business, financial and technicalexperience. This mix of skills and experience is vital for the successful direction of the Group. A brief profile of each Director ispresented on pages 7 to 10.

    There is a clear division of responsibility between the Chairman and the Group Chief Executive to ensure that there is a balance ofpower and authority. The role of the Chairman and the Group Chief Executive are separated and clearly defined. The Chairman isresponsible for ensuring Board effectiveness and conduct whilst the Group Chief Executive has overall responsibilities over theoperating units, organisational effectiveness and implementation of Board policies and decisions. The presence of independent non-executive Directors fulfils a pivotal role in corporate accountability. Although all the Directors have an equal responsibility for theGroups operations, the role of these independent non-executive Directors is particularly important as they provide unbiased andindependent views, advice and judgement to take account of the interests, not only of the Group, but also of shareholders,employees, customers, suppliers and the many communities in which the Group conducts business.

    14

    Statement On Corporate Governance

  • Statement On Corporate Governance

    Supply of informationAll Directors are provided with an agenda and a set of Board papers prior to Board meetings. These are issued in sufficient timeto enable the Directors to obtain further explanations, where necessary, in order to be properly briefed before the meeting. TheBoard papers include, among others, the following:-

    i. quarterly financial report and a report on the Groups cash and borrowings position;ii. minutes of meetings of the Group Management Committee;iii. minutes of meetings of all Committees of the Board;iv. quarterly risk management updates; andv. annual business plans.

    In addition, there is a schedule of matters reserved specifically for the Boards decision, including the approval of corporate plansand annual budgets, acquisitions and disposals of undertakings and properties of a substantial value, major investments andfinancial decisions, and changes to the management and control structure within the Group, including key policies and proceduresand delegated authority limits.

    Directors may obtain independent professional advice in the furtherance of their duties, at the Companys expense.

    All Directors have access to the advice and services of the Group Secretaries in carrying out their duties. The following BoardCommittees have been established to assist the Board in the execution of its responsibilities. Apart from the Executive Committee,the Remuneration Committee and the ESOS Committee, the other Committees listed below do not have executive powers but reportto the Board on all matters considered and their recommendations thereon. The terms of reference of each Committee have beenapproved by the Board and, where applicable, comply with the recommendations of the Code.

    a. Executive CommitteeThe Executive Committee is delegated with such powers to ensure the smooth and effective running of the Company. TheExecutive Committee, as a general rule, meets on a monthly basis except for the months in which the Board has a meetingscheduled. During the year ended 30th June 2004, only two (2) meetings were held due to the increased number of BoardMeetings. The members of the Executive Committee during the year, and their attendance at the meetings, were as follows:-

    Name of member No. of meetings attendedTan Sri Dato Seri (Dr.) Ahmad Sarji bin Abdul Hamid 2 out of 2

    (Chairman of the Executive Committee) Tunku Tan Sri Dato Seri Ahmad bin Tunku Yahaya 2 out of 2Dato Ahmad Zubair @ Ahmad Zubir bin Haji Murshid *

    (appointed on 13th June 2004)Tan Sri Abu Talib bin Othman 2 out of 2Raja Tan Sri Muhammad Alias bin Raja Muhammad Ali 2 out of 2Dato Mohamed Azman bin Yahya 2 out of 2

    (resigned on 31st May 2004)Tan Sri Nik Mohamed bin Nik Yaacob 2 out of 2

    (resigned on 12th June 2004)

    * no meetings were held from the date of his appointment to 30th June 2004.

    b. Audit & Accounts CommitteeThe Audit & Accounts Committee reviews issues of accounting policy and presentation for external financial reporting, monitorsthe work of the internal audit function and ensures an objective and professional relationship is maintained with the externalauditors. The Committee has full access to the auditors both internal and external who, in turn, have access at all times tothe Chairman of the Committee. The Committee meets with the external auditors without any executive present except for theGroup Secretary, at least once a year.

    In line with good corporate governance practice, none of the executive Directors are members of the Audit & AccountsCommittee.

    During the year, the Board reviewed the performance of the Audit & Accounts Committee and its members to ensure that theCommittee and its members have carried out their duties in accordance with their terms of reference.

    The report on the Audit & Accounts Committee is set out on pages 11 to 13.

    15

  • Statement On Corporate Governance

    c. Remuneration CommitteeThe Remuneration Committee is responsible for developing the Groups remuneration policy and determining the remunerationpackages of executive employees of the Sime Darby Group, including that of its Malaysian public listed subsidiaries. TheCommittee recommends to the respective Boards, the remuneration and terms and conditions of service of senior managementand the remuneration to be paid to each Director for his services as a member of the Board as well as Committees of the Board.

    During the year ended 30th June 2004, seven (7) meetings were held. The members of the Remuneration Committee duringthe year, all of whom are non-executive Directors, and their attendance at the meetings, were as follows:-

    Name of member No. of meetings attended

    Raja Tan Sri Muhammad Alias bin Raja Muhammad Ali 7 out of 7(Chairman of the Remuneration Committee)

    Tan Sri Abu Talib bin Othman 6 out of 7Michael Wong Kuan Lee 6 out of 7Datuk Khatijah binti Ahmad *

    (appointed on 7th June 2004)Dato Mohamed Azman bin Yahya 4 out of 7

    (resigned on 31st May 2004)

    * no meetings were held from the date of her appointment to 30th June 2004.

    d. Nomination CommitteeThe Nomination Committee has been charged with identifying and recommending new nominees to the Boards as well ascommittees of the Boards of Sime Darby Berhad and its Malaysian public listed subsidiaries and major subsidiaries. However,all decisions on appointments are made by the respective Boards after considering the recommendations of the Committee.

    The Committee will review the required mix of skills, experience and other qualities including core competencies which non-executive Directors should bring to the Board, evaluate the performance and contribution of each Director, evaluate theeffectiveness of the Board as a whole and identify areas for improvement. During the year ended 30th June 2004, five (5)meetings were held. The members of the Nomination Committee during the year, all of whom are non-executive Directors anda majority of whom are independent, and their attendance at the meetings, were as follows:-

    Name of member No. of meetings attended

    Tan Sri Dato Seri (Dr.) Ahmad Sarji bin Abdul Hamid 5 out of 5(Chairman of the Nomination Committee)

    Dr. David Li Kwok Po 5 out of 5Michael Wong Kuan Lee 5 out of 5

    e. ESOS CommitteeThe ESOS Committee was established on 28th November 2001 to administer the Sime Darby Employees Share Option Schemein accordance with the objectives and regulations thereof and to determine participation eligibility, option offers and shareallocations and to attend to such other matters as may be required. During the year ended 30th June 2004, one (1) meetingwas held. The members of the ESOS Committee during the year, and their attendance at the meeting, were as follows:-

    Name of member No. of meetings attended

    Tunku Tan Sri Dato Seri Ahmad bin Tunku Yahaya 1 out of 1(Chairman of the ESOS Committee)

    Datuk Khatijah binti Ahmad 1 out of 1Tan Sri Datuk Dr. Ahmad Tajuddin bin Ali 1 out of 1Martin Giles Manen 1 out of 1Dato Ahmad Zubair @ Ahmad Zubir bin Haji Murshid *

    (appointed on 13th June 2004)Tan Sri Nik Mohamed bin Nik Yaacob 1 out of 1

    (resigned on 12th June 2004)

    * no meetings were held from the date of his appointment to 30th June 2004.

    16

  • Statement On Corporate Governance

    f. Special CommitteeThe Special Committee was established on 25th March 2003 to review the organisational structure of the Sime Darby Groupand the succession plan for senior management in the Group.

    During the year ended 30th June 2004, five (5) meetings were held. The members of the Special Committee during the year,all of whom are non-executive Directors, and their attendance at the meetings, were as follows:-

    Name of member No. of meetings attended

    Raja Tan Sri Muhammad Alias bin Raja Muhammad Ali 5 out of 5(Chairman of the Special Committee)

    Tunku Tan Sri Dato Seri Ahmad bin Tunku Yahaya 5 out of 5Tan Sri Abu Talib bin Othman 5 out of 5Datuk Khatijah binti Ahmad 5 out of 5Michael Wong Kuan Lee 3 out of 5Dato Mohamed Azman bin Yahya 4 out of 5

    (resigned on 31st May 2004)

    g. Finance CommitteeThe Finance Committee was established on 24th February 2004 to review certain proposals on capital hedging and interestrate hedging made to the Board and to recommend to the Board the action to be taken. The Finance Committee was dissolvedon 30th March 2004 upon completion of its duties.

    During the year ended 30th June 2004, one (1) meeting was held. The members of the Finance Committee during the year,and their attendance at the meeting, were as follows:-

    Name of member No. of meeting attended

    Datuk Khatijah binti Ahmad 1 out of 1(Chairman of the Finance Committee)

    Tunku Tan Sri Dato Seri Ahmad bin Tunku Yahaya 1 out of 1Martin Giles Manen 1 out of 1Dato Mohamed Azman bin Yahya 1 out of 1

    Appointments to the BoardThe Nomination Committee recommends the appointment of new Directors to the Board.

    There is a familiarisation programme in place for new Board members, including visits to the Groups businesses and meetings withsenior management as appropriate, to facilitate their understanding of the Group.

    Re-election of the DirectorsIn accordance with the Companys Articles of Association, all Directors who are appointed by the Board are subject to election byshareholders at the first Annual General Meeting after their appointment.

    Directors over seventy years of age are required to submit themselves for re-appointment by shareholders annually in accordancewith Section 129(6) of the Companies Act 1965.

    In accordance with the Articles of Association, at least one-third of the remaining Directors are required to submit themselves forre-election by rotation at each Annual General Meeting.

    Directors RemunerationThe objective of the Companys policy on Directors remuneration is to attract and retain the Directors of the calibre needed to runthe Group successfully. In the case of executive Directors, the component parts of the remuneration are structured so as to linkrewards to corporate and individual performance. Performance is measured against profits and other targets set from theCompanys annual budget and plans, and from returns provided to shareholders. In the case of non-executive Directors, the levelof remuneration reflects the experience and level of responsibilities undertaken by the particular non-executive Director concerned.

    The Remuneration Committee recommends to the Board the framework of the executive Directors remuneration and theremuneration package for each executive Director. It is, nevertheless, the ultimate responsibility of the entire Board to approvethe remuneration of these Directors.

    17

  • Statement On Corporate Governance

    The annual fees payable to the non-executive Directors has been fixed by the shareholders of the Company at an amount notexceeding, in aggregate, RM1,000,000. The determination of the fees of each non-executive Director is decided by the Board asa whole. The Company reimburses reasonable expenses incurred by these Directors in the course of their duties as Directors.

    The remuneration package comprises the following elements:-1. Fee

    The fee payable to each of the non-executive Directors is determined by the Board as authorised by the shareholders of theCompany.

    2. Basic salaryThe basic salary for each executive Director is recommended by the Remuneration Committee, taking into account theperformance of the individual, the inflation price index and information from independent sources on the rates of salary forsimilar positions in other comparable companies. Salaries are reviewed annually.

    3. Bonus schemeThe Group operates a bonus scheme for all employees, including the executive Directors. The criteria for the scheme isdependent on various performance measures of the Group, together with an assessment of each individuals performance duringthe period. Bonuses payable to the executive Directors are approved by the Remuneration Committee.

    4. Benefits-in-kindOther customary benefits (such as private medical care, car, etc.) are made available as appropriate.

    5. Retirement arrangementsIn addition to the statutory contributions to the Employees Provident Fund, both the Companys executive Directors participatein the Sime Darby Malaysian Retirement Plan, a defined contribution plan with the objective of providing a lump sum paymentupon retirement or in the event of death in service.

    6. Service contractThe Group Chief Executive has a three-year service contract with the Company. The notice period for termination of hisemployment is three (3) months on either side.

    The Group Finance Director does not have a service contract with the Company. The notice period for termination of hisemployment is twelve (12) months on either side.

    7. Directors share optionsThe movement in Directors share options during the year ended 30th June 2004 is set out on page 48.

    Details of the Directors remuneration are set out on page 60.

    Directors TrainingAll the Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Malaysia Training Sdn Bhd. They alsocontinually attend education programmes and seminars to keep abreast with developments in the market place, such as seminarsaccreditated under Bursa Malaysia Securities Berhads Continuing Education Programme.

    The Company organises in-house training programmes, facilitated by industry experts, for Directors of listed companies in theGroup and senior management. These training programmes are accredited under Bursa Malaysia Securities Berhads ContinuingEducation Programme.

    In addition, most of the directors of the Groups non-listed subsidiaries have attended the Corporate Directors Training Programmeas recommended by the Companies Commission of Malaysia.

    Investor relations & Shareholder communicationThe Board acknowledges the need for shareholders to be informed of all material business matters affecting the Company. Inaddition to various announcements made during the year, the timely release of financial results on a quarterly basis providesshareholders with an overview of the Groups performance and operations. A press conference and an analysts briefing are heldafter the quarterly financial results are released to Bursa Malaysia Securities Berhad. Summaries of the financial results areadvertised in daily newspapers and copies of the full announcement are supplied to shareholders and members of the public uponrequest.

    The Company has been using the Annual General Meeting, usually held in November each year, as a means of communicating withshareholders. Shareholders who are unable to attend are allowed to appoint proxies to attend and vote on their behalf. Members ofthe Board as well as the external auditors of the Company are present to answer questions raised at the meeting. Shareholders arewelcome to raise queries by contacting the Company at any time throughout the year and not just at the Annual General Meeting.

    18

  • In addition, shareholders can obtain up-to-date information on the Groups various activities by accessing its website atwww.simedarby.com. Press releases and the latest quarterly announcement of results of the Company can also be found on thissite.

    Any queries or concerns regarding the Sime Darby Group may be conveyed to the following persons:-

    i. Michael Wong Kuan Lee, Senior Independent DirectorTelephone number : 603-20311788Facsimile number : 603-20311778

    ii. Yeoh Poh Yew, Nancy, Group SecretaryTelephone number : 603-26914122 extension 2268Facsimile number : 603-26987398

    iii. Putri Rafidah Megat Khas, Group Manager - CommunicationsTelephone number : 603-26914122 extension 2269Facsimile number : 603-26987398

    Financial reportingIn presenting the annual financial statements and quarterly announcement of results to shareholders, the Directors aim to presenta balanced and understandable assessment of the Groups financial position and prospects.

    The Directors consider that in preparing the financial statements, the Group has used appropriate accounting policies, consistentlyapplied and supported by reasonable and prudent judgements and estimates. All accounting standards which the Board considersto be applicable have been followed, subject to any explanations and material departures disclosed in the notes to the financialstatements.

    Internal ControlThe Malaysian Code on Corporate Governance requires the Board to maintain a sound system of internal control to safeguardshareholders investment and the Groups assets. Bursa Malaysia Securities Berhads Statement on Internal Control: Guidance forDirectors of Public Listed Companies provides guidance for compliance with these requirements.

    Relationship with the auditorsThrough the Audit & Accounts Committee, the Board has established transparent and appropriate relationships with the Groupsauditors, both external and internal. The Committee meets with the external auditors without the presence of management, exceptfor the Group Secretary, at least once a year.

    This statement is made in accordance with a resolution of the Board of Directors dated 24th August 2004.

    19

    Statement On Corporate Governance

  • Responsibility

    The Board of Directors acknowledges responsibility for maintaining a sound system of internal control and for reviewing its adequacyand integrity. The system of internal control designed to safeguard shareholders investment and the Groups assets, by its naturecan only manage rather than eliminate the risk of failure to achieve business objectives, and inherently can only provide reasonableand not absolute assurance against material misstatement or loss.

    The Board has established procedures to implement in full the recommendations of the Statement on Internal Control: Guidancefor Directors of Public Listed Companies for the Company and its subsidiaries. These procedures are intended to provide anongoing process for identifying, evaluating and managing the significant risks faced by the Group, excluding associated companies.The procedures, which are in place during the financial year ended 30th June 2004, are subject to regular review by the Board ofDirectors.

    Risk management

    Risk policy

    Risk management is regarded by the Board of Directors to be an integral part of the business operations. Management isresponsible for creating a risk-aware culture and for building the necessary knowledge for risk management. They also have theresponsibility for managing risks and internal control associated with the operations and ensuring compliance with the applicablelaws and regulations.

    The main underlying principles of the Groups policy are:

    Informed risk management is an essential element of the Groups business strategy Effective risk management provides greater assurance that the Groups vision and strategy will be achieved without surprises Each Division (and each business unit therein) is expressly responsible for managing the risks associated with its business

    objectives All material risks are to be identified, analysed, treated, monitored and reported.

    The implementation of the policy and risk management framework that includes the strategy, culture, people and technology is theresponsibility of the Group Chief Executive and members of the Management Committee.

    Risk reporting

    The Groups risk management framework provides for regular review and reporting. The reports include an assessment of thedegree of risk, an evaluation of the effectiveness of the controls in place and the requirements for further controls. The keyelements of the process are:

    Presentation of a summary of significant risks to the Board of Directors on a quarterly basis Reporting of significant risks by subsidiaries in their annual management plan Reporting of significant risks by Divisions to Sime Darby Berhad on a quarterly basis Review and discussion of key risks during the management meetings of the business units.

    Control structure and environment

    The Board of Directors is committed to maintaining a strong control structure and environment for the proper conduct of theGroups business operations. The key elements are:

    Operating structure with clearly defined lines of responsibility and delegated authorityThe operating structure includes defined delegation of responsibilities to the committees of the Board, the management of GroupHead Office and the operating units.

    Independence of the Audit & Accounts CommitteeThe Audit & Accounts Committee comprises non-executive members of the Board, with the majority being independent directors.The Committee has full access to both internal and external auditors and it meets with the external auditors without any executivepresent, except for the Group Secretary, at least once a year.

    20

    Statement On Internal Control

  • Statement On Internal Control

    Written policies and procedures on the limits of delegated authorityThe limits of delegated authority are clearly defined and set out in the Group Procedures and Authorities and theDivisional/Operating Unit Standard Operating Procedures. These policies and procedures are reviewed regularly and updated whennecessary.

    Corporate valuesCorporate values, which emphasise ethical behaviour, are set out in the Group Business Code.

    Comprehensive information systemThis information system includes preparation and submission of annual management plans, budgets and other information to theBoard of Directors. Budgets prepared by operating units are regularly updated and explanation of variances is incorporated in themonthly management reports. The Sime Darby Management Committee comprising the Group Chief Executive, the Group FinanceDirector and all Divisional/Regional directors review the performance and results of operating units on a monthly basis.

    Employee competencyEmphasis is placed on the quality and abilities of employees with continuing education, training and development being activelyencouraged through a wide variety of schemes and programmes.

    Internal and Management AuditThe internal audit function, which reports directly to the Audit & Accounts Committee, conducts reviews on systems of control andthe effectiveness of the processes management has in place to identify, manage and report risks. The audit department isadequately staffed by employees who are qualified to carry out their work.

    Monitoring and review of the effectiveness of the system of internal control

    The processes adopted to monitor and review the effectiveness of the system of internal control are:

    regular confirmation by the chief executive officer and chief financial officer of the respective operating units on the effectivenessof the system of internal control, highlighting any weaknesses and changes in risk profile. The same confirmation is providedby the Group Chief Executive and Group Finance Director to the Board annually.

    implementation of Control Self-Assessment (CSA) during the year by selected operating units using the questionnaireapproach. The focus of the CSA is to ascertain compliance to procedures.

    periodic examination of business processes and the state of internal control including control over quality, environmental, safetyand health issues by the internal and management audit function. Reports on the reviews carried out by the internal andmanagement audit function are submitted on a regular basis to the management and the Audit & Accounts Committee.

    The monitoring, review and reporting arrangements in place give reasonable assurance that the structure of controls and itsoperations are appropriate to the Groups operations and that risks are at an acceptable level throughout the Groups businesses.Such arrangements, however, do not eliminate the possibility of human error or deliberate circumvention of control procedures byemployees and others.

    This statement is made in accordance with a resolution of the Board of Directors dated 24th August 2004.

    21

  • The Directors are required by the Companies Act, 1965 (the Act) to prepare financial statements for each financial year which

    give a true and fair view of the state of affairs of the Group and the Company at the end of the year and the results of the Group

    and the Company for the year. As required by the Act and the Listing Requirements of Bursa Malaysia Securities Berhad, the

    financial statements have been prepared in accordance with the applicable approved accounting standards in Malaysia and the

    provisions of the Act.

    The Directors consider that in preparing the financial statements for the year ended 30th June 2004 set out on pages 50 to 96,

    the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and

    estimates. The Directors have responsibility for ensuring that the Group and the Company keep accounting records which disclose

    with reasonable accuracy the financial position of the Group and the Company and enable them to ensure that the financial

    statements comply with the Act. The Directors have the general responsibility for taking such steps as are reasonably open to

    them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

    This statement is made in accordance with a resolution of the Board of Directors dated 24th August 2004.

    22

    Statement On Directors Responsibility

  • Chairmans Statement

    23

    On behalf of the Board of Directors of Sime Darby Berhad, it is my pleasure to present the Annual Report,incorporating the Financial Statements of the Group and the Company for the year ended 30th June 2004.

    Board of DirectorsI am pleased to announce the appointment of Dato Ahmad Zubir Hj Murshid as the new Group Chief Executive with effect from 13thJune 2004. Dato Zubir has served the Group in various capacities over the last 23 years. Tan Sri Nik Mohamed bin Nik Yaacobretired from his position as Group Chief Executive on 12th June 2004 after having served the Group for 19 years, the last 11 yearsas Group Chief Executive. He has also resigned from the Board and from the Boards of all Group companies with effect from thesame date. The Board wishes to express its thanks and appreciation for his services to the Group. The Board also wishes toexpress its thanks and appreciation to Dato Mohamed Azman bin Yahya, who resigned as a Director on 31st May 2004, for hisservices to the Group.

    Review of OperationsThe Group achieved a profit before tax of RM1,343.6 million for the year, representing an increase of 5% over the figure for theprevious year. Overall, despite a challenging year for all core businesses, the performance of the Group has been good with highercontribution mainly from the Property and Energy Divisions. The profit for the year was boosted by surpluses on disposals ofassociated and subsidiary companies, properties and investments, partly offset by the provisions for claims and foreseeablecontract losses. The Group continued to undertake measures to improve operating efficiencies and financial performance of itsbusinesses and to compete more effectively in the business environment.

    Net profit for the year of RM918.7 million was 13% higher than the profit for the previous year mainly due to the higher pre-taxprofit and lower taxation and minority interests.

    ANALYSIS OF NET PROFIT

    (Amounts in RM million) 2004 % 2003 %

    Plantations 285.1 21.7 283.7 22.1

    Property 358.1 27.3 255.4 19.9

    Heavy Equipment Distribution 243.6 18.6 248.9 19.4

    Motor Vehicle Distribution 204.0 15.6 257.8 20.0

    Energy 185.9 14.2 170.7 13.3

    General Trading, Services and Others 34.5 2.6 68.4 5.3

    1,311.2 100.0 1,284.9 100.0

    Unusual items 50.2 12.6

    Unallocated corporate expenses (23.1) (29.3)

    Investment and interest income (net) 5.3 15.9

    Profit before taxation 1,343.6 1,284.1

    Taxation (328.2) ( 339.5)

    Profit after taxation 1,015.4 944.6

    Minority interests (96.7) (134.9)

    Group net profit for the year 918.7 809.7

    The Operations Report is set out on pages 26 to 43 of the Annual Report.

  • Chairmans Statement

    Major Corporate Proposals and Changes in the Composition of the GroupSime Engineering Services Berhad (SES), in which the Group has a 70% equity interest, was listed on the Main Board of Bursa

    Malaysia Securities Berhad on 28th August 2003. SES is an investment holding company and its subsidiary companies are involved

    in contracting and project management for the oil & gas industry, and system integration and trading.

    On 5th September 2003, the Group disposed of its entire 22% equity interest in IOI Oleochemical Industries Berhad (formerly

    known as Palmco Holdings Berhad).

    On 1st October 2003, Continental Aktiengesellschaft (Continental) completed the Subscription Agreement for the subscription by

    Continental of a 30% equity interest in Continental Sime Tyre Sdn Bhd (CST) (formerly known as SDC Tyre Sdn Bhd) which is the

    holding company of DMIB Berhad and Sime Tyres International (M) Sdn Bhd, and a Call and Put Option Agreement for the acquisition

    by Continental of a further 21% interest in CST from Sime Darby Berhad resulting in Continental having a 51% equity interest in

    CST.

    On 6th November 2003, the Group acquired a 50% equity interest in Island Power Holdings Pte Ltd (IPH). IPH is developing a

    763 MW combined cycle gas turbine power plant located in Jurong Island, Singapore.

    On 18th June 2004, Berjaya Group Berhad (BGroup) and certain selling shareholders procured by BGroup entered into separate

    conditional sale and purchase agreements with the Group for the acquisition by the Group of a 51% equity interest in Hyundai-

    Berjaya Corporation Berhad (HBCorp) and 51% of the total warrants issued by HBCorp, a 51% equity interest in Hyumal Motors

    Sdn Bhd, and a 51% equity interest in Inokom Corporation Sdn Bhd. The Group will undertake a mandatory take-over offer to

    acquire the remaining shares and warrants in HBCorp upon completion of the acquisition, in accordance with the Malaysian Code

    on Take-Overs and Mergers, 1998.

    On 30th June 2004, the Group acquired the entire issued and paid-up share capital of the following New Zealand subsidiaries of

    the Jardine Cycle & Carriage Limited group:

    i. Truck Investments Limited (TIL) and its subsidiaries

    ii. UD Truck Distributors (NZ) Limited (UDTD)

    iii. Cycle & Carriage (City) Limited (CCC)

    iv. Cycle & Carriage (Pakuranga) Limited (CCP)

    v. Cycle & Carriage (North Shore) Limited (CCNS)

    The TIL Group distributes Hino, Renault and Mack vehicles. It has the only nationwide parts and service network for trucks and

    commercial vehicles in New Zealand. UDTD, CCC, CCP and CCNS operate the Nissan diesel heavy truck and Kia vehicle

    distributorships and the Nissan, Mitsubishi, Kia and Suzuki vehicle dealerships in New Zealand.

    FinanceThe Group remains sound financially with net cash of RM203.3 million and marketable securities of RM608.4 million as at 30th

    June 2004. The Group had started the year with net cash of RM55.3 million and marketable securities of RM680.2 million. About

    RM462.2 million was invested in marketable securities and RM534.0 million worth of marketable securities were sold at a profit

    during the year.

    The Groups net cash and marketable securities at year end have been earmarked to meet the payments of proposed final dividends

    and purchase consideration due for pending acquisitions.

    24

  • Chairmans Statement

    DividendsThe Board has recommended a higher final dividend of 16.0 sen gross per share less Malaysian tax at 28% and 5.0 sen per share

    tax exempt which with the interim dividend already paid of 5.0 sen gross per share, makes the total dividend for the year 26.0 sen

    gross per share. This represents an increase of 1.0 sen per share over the total dividend of 25.0 sen gross per share for the

    previous year, an increase of 4%. For the year, shareholders will receive a net dividend of 20.12 sen per share in total compared

    to the total net dividend of 19.12 sen per share last year.

    The total dividend to be paid out for the year ended 30th June 2004 will be RM473.7 million, compared with RM444.7 million for

    the previous year.

    EmployeesTotal staff strength of the Group at 30th June 2004 was 24,405 compared with 27,484 at the previous year end. The Board

    would like to thank all employees of the Group for their contribution to the results for the year. The employees have continued to

    work hard to improve quality, efficiency and productivity of the Group businesses and they have responded positively to the

    performance improvement measures implemented by the Management.

    The Group continues to emphasise training and development of staff at all levels with training conducted mainly at the Sime Darby

    Human Resources Development Centre in Merlimau, an approved training centre. During this year, 2,713 executives and other

    employees attended the training courses.

    Under the Employees Share Option Scheme (ESOS) which came into effect on 10th December 2001 for a period of five years,

    options over 24,374,000 of the Companys unissued shares were granted to all eligible Malaysian employees as well as eligible

    foreign executives during the year. The ESOS is expected to continue to motivate employees to further improve their performance

    for the benefit of the shareholders and other stakeholders.

    Corporate GovernanceThe application of and compliance with the principles and best practices as set out in the Code on Corporate Governance has been

    disclosed in the Annual Report, which also includes a Statement on Internal Control as required under Bursa Malaysia Securities

    Berhads Listing Requirements.

    The Board is committed to ensuring that the highest standards of corporate governance are practised throughout the Group.

    Future ProspectsThe Group continues to look for investment opportunities, including acquisitions which will complement or increase its involvement

    in the core businesses of the Group. Concurrently, business operations are under review with a view to divestment of under-

    performing business units.

    Whilst the trend of the price of palm oil will remain a major factor affecting the Groups performance, the Board is cautiously

    optimistic that the results for the new financial year will remain satisfactory given the measures taken to strengthen the Groups

    businesses.

    Tan Sri Dato Seri (Dr.) Ahmad Sarji bin Abdul HamidChairman24th August 2004

    25

  • 26

    PLANTATIONSThe strong performance by the Plantations Division was largely due to higher prices of crudepalm oil (CPO) and palm kernel (PK), increased production of fresh fruit bunches (FFB) inSabah and Kalimantan and improved process efficiency.

    The strong global demand for CPO throughout most of the year gave rise to higher palm productprices. The average selling prices realised by the Division during the year were RM1,661 pertonne (2003 : RM1,458 per tonne) and RM844 per tonne (2003 : RM728 per tonne) for CPOand PK respectively.

    During the year, FFB production was affected by crop losses due to floods in the northern statesof Peninsular Malaysia. Efforts to source crops from non-Group estates to cover this shortfallkept the level of FFB processed at similar levels to the previous year.

    The contribution from Kalimantan, Indonesia doubled against the previous year as more plantedareas became fully mature adding to the improvement in yield. During the year, an additional2,400 hectares was acquired and planting work is currently in progress.

    Plantations (including Kalimantan estates) 2004 2003FFB production (tonnes)

    Own crop 1,496,984 1,495,770Deduct : Crop Sold Unprocessed (81,049) (57,954)Outside Purchases 355,280 293,911Total FFB Processed 1,771,215 1,731,727

    Average Selling PricePalm Oil - Net of Duty (RM per tonne) 1,661 1,458Palm Kernel - Ex-Mill (RM per tonne) 844 728FFB - Ex-Estate (RM per tonne) 317 277Rubber - Net of Duty (RM per kg) 3.85 3.14

    Sales (tonnes)Palm Oil 342,781 343,024Palm Kernel 94,360 93,265FFB 81,049 57,954Rubber 80 219

    Area (Planted Hectares)Oil Palm 80,150 80,264Rubber 706 713

    Plantations

  • Facing Page:Sime Freshs

    aeroponic vegetablefarm in Labu, Negeri

    Sembilan, Malaysia

    Above Left:Analysis and Process

    Laboratory at the newKempas R&D Centre

    Above Right:Part of the marine fish

    experimental projecton Langkawi Island,

    Malaysia

    Operations Report

    27

    A new CPO mill in Devon, Melaka was commissioned in March 2004 and a 22-year old mill at Rengam,Johor was closed down in June 2004 as part of a mill rationalisation programme aimed at optimising theoverall mill utilisation and lowering costs for the Division.

    On 5th September 2003, the Group disposed of its entire 22% shareholding in IOI OleochemicalIndustries Berhad (formerly known as Palmco Holdings Berhad), which resulted in a gain of RM70.6million.

    OIL AND FATSThe division is involved in the refining and processing of edible oils such as palm, soya, corn and sunflowerin Malaysia, Singapore, Thailand and Egypt. It also packs, distributes and markets the oils under its ownbrand names such as Sunbeam, Chief, Morakot and Golden Drop. Results for the division during theyear were adversely affected by higher CPO price which translated to higher raw material costs and lowermargins.

    During the year, Morakot Industries Public Company Limited embarked on a RM70 million plant expansionprogramme in Thailand. This is expected to come on-stream towards the end of the new financial year.The new plant will cater for Thailands growing domestic demand for edible oils as well as help boost theplants edge in quality, cost competitiveness and productivity.

    In order to maximise growth and improve its contribution, the division is evaluating new markets andinvestment opportunities in the United States, Europe and China.

    AGRI-FOODSThis new division seeks to exploit the large horticulture, aquaculture, livestock and processed foodmarkets. Pilot programmes were initated in the year to examine the viability of commercialising marinefish and other food crops. The agri-food business should help reduce the Divisions dependency on oil palmin the future.

  • 28

    MALAYSIADuring the year, the market for residential properties in the Klang Valley improved on the backof stabilising domestic and world economies. Some industrial land sales were recorded duringthe year reflecting a slight improvement in that sub-sector but the persistent overhang of unsoldshophouses, shop offices, apartments and condominiums underlined the continued sluggishnessin those sub-sectors.

    Demand for Sime UEP Properties Berhads residential properties continued to be encouragingand reasonable sales were recorded during the year. Putra Heights, the third townshipdeveloped by Sime UEP, is fast developing into a vibrant investment and preferred location forexclusive contemporary living. Residents from the various development phases in Stages I, IIand III are settling down into the comforts of their completed homes. During the year underreview, seven phases of double-storey linkhomes totalling 618 units and 8 units of low-costshops were handed over. Another 1,411 units were launched, comprising 809 units of double-storey linkhomes with plot sizes of 20 x 70, 24 x 75 and 26 x 75, 28 units of double-storeyneighbourhood shop offices and 54 units of shop offices in the Putra Heights town centre. Aspart of the companys social obligation to the nation, 520 units of low-cost apartments cateringto the needs of the lower income earners were also launched.

    During the year, Sime UEP handed over all the 776 units of residential properties in its USJ 3development. In October 2003, the company also launched 81 units of double-storey linkhomesin Pinggiran USJ to cater to the housing needs of the industrial workforce in the neighbouringareas. Plans have also been submitted to the authorities to develop more residential propertiesin the northern portion adjoining Pinggiran USJ.

    In June 2004, Sime UEP launched 181 units of double-storey linkhomes in UEP Subang Jaya.The use of autoclaved concrete blocks that provide better heat insulation in walls and sisalationsheets for roofing which deflect solar heat away from the house was also introduced for thesephases. The products received encouraging response from home buyers during its launch.

    During the year under review, Sime UEP noted a slight improvement in the overall marketsentiment for industrial properties within its development. Besides completing the sale of 9.5acres of vacant industrial land in Taman Perindustrian UEP Subang Jaya, the company alsoentered into a sale and purchase agreement to sell the 11-storey office building, Wisma UEP,during the year. The sale of the building is expected to be completed in the new financial year.

    In the Bandar Bukit Raja township, 724 units of residential properties comprising single-storey,double-storey and one-and-a-half-storey linkhomes and low-cost apartments were launched. The

    Property

  • Operations Report

    township is developed on a site owned by Prominent Acres Sdn Bhd, a 50:50 joint venture between SimeUEP and Consolidated Plantations Berhad. Sime UEP is engaged by Prominent Acres Sdn Bhd asdeveloper and project manager for the township.

    Three phases of double-storey linkhomes totalling 515 units, 48 units of double-storey semi-detachedhomes and 240 units of medium-cost apartments were launched in the Ara Damansara township, forwhich Sime UEP acts as project manager. In June 2004, 33 units of double-storey bungalows werelaunched in the Imperial Avenue neighbourhood of the Ara Damansara township. The take-up rate forthese launches continued to be very good. With the encouraging demand for premium residentialproperties in Ara Damansara, more new phases are targetted for lau